1958-06-25

LIBRARY OF PARLIAMENT


Hon. Henri Courlemanche (Secretary of State) moved:: That the report of the civil service commission concerning the staff of the library of parliament, laid upon the table of the house June 20, 1958, be now approved.


[Stage Direction]
Motion agreed to.


Hon. E. D. Fulton (Minister of Justice) moved: for leave to introduce Bill No. C-32, to amend the Criminal Code (slaughtering of animals).


Some hon. Members:: Explain.


Edmund Davie Fulton: Mr. Speaker, the house will recall that during the last parliament a bill dealing with the subject of the slaughtering of animals was introduced and given first reading. At that time attorneys general and all interested organizations were invited to make suggestions and comments. A good many have been received, and as a result the bill now being introduced represents some slight change from the form in which it was previously introduced. The changes, we believe, will make it more effective to accomplish its object.
Motion agreed to and bill read the first time.



STARRED QUESTIONS


Mr. Benidickson: Since July 1, 1957, how many applications for the privilege, or for extension of the privilege, to work in Canada on pipe-line construction from or on behalf of non-residents have been approved by the government?


Hon. Ellen L. Fairclough (Acting Minister of Labour):: Mr. Speaker, the answer to this question is 2,480.


HUNGARIAN REFUGEES, ONTARIO
Mr. Pickersgill: 1.	Has the government reached an agreement with the government of Ontario regarding the expenditures made by the provincial authorities to assist in the settlement of Hungarian refugees?
2.	If so, what is the basis of the agreement?


Ellen Louks Fairclough: Mr. Speaker, the answer to part 1 of the question is yes.
In answer to part 2 I will outline the basis of the agreement, which is as follows:
1.	The federal government will pay to the Ontario government the sum of $3 per day for each Hungarian refugee given board and lodging in the Toronto reception centre.
2.	The federal government will reimburse the Ontario government for any disbursements made for board and lodging for refugees in accommodation outside the reception centre where such arrangements have been necessary and where the refugees have been in Canada less than one year.
3.	The federal government will absorb all the costs of transportation of refugees from Europe to Canada and, within Canada, to the place of destination and/or place of employment.
4.	The Ontario government will absorb the costs of medical examination, X-ray and vaccination of Hungarian refugees, which may have been made upon arrival of the Hungarian refugees in the province.
5.	For those Hungarian refugees who require hospitalization, medical treatment, nursing assistance and social assistance, the federal government will reimburse the Ontario government for expenses incurred during the first year after arrival in Canada; for those Hungarian refugees requiring these services beyond the first 12 months after arrival, these services will be provided by the Ontario government at no cost to the federal government.
6.	The federal government will reimburse the Ontario government for the purchase of clothing on behalf of Hungarian refugees.
7.	The provisions of the existing agreement regarding language and citizenship classes will apply in the case of Hungarian refugees.
It should be noted, Mr. Speaker, that the term "Hungarian refugee" for the purpose of this agreement means a Hungarian national who fled Hungary as a direct result of the

Questions
revolt in that country of October, 1956, and who has been brought to Canada at the expense of the federal government.


Mr. Pickersgill:: Mr. Speaker, has the hon. lady the date of that agreement?


Ellen Louks Fairclough: No, I do not appear to have that date, Mr. Speaker, but I will be glad to procure it should the hon. member wish it.


OPEN PLACEMENT IMMIGRATION
Mr. Pickersgill: 1.	What are the occupations for which immigrants are admitted for open placement at the present time?
2.	How many open placement Immigrants have been admitted to Canada since January 1, 1958?


Ellen Louks Fairclough: Mr. Speaker, the actual reply to this question is not very long, but it is supported by a copy of the occupational counselling guide, which is rather voluminous. I would suggest, if the hon. member agrees, that this be made an order for return.


John Whitney Pickersgill: Mr. Speaker, I wonder if the hon. lady could not give the answer to the question. I would be quite happy to have the supporting document tabled.


Ellen Louks Fairclough: Surely. The answer to the first part of the question is that an open placement immigrant under present selection criteria must have to a high degree the personal qualities of suitability, adaptability and determination, and in addition be highly qualified in a trade or occupation in which opportunities for placement or establishment exist and which will permit him to become satisfactorily established in Canada within a reasonable time after his admission. The attached schedule, which is amended from time to time as may be required, is used by selection officers abroad as a general guide in the selection and counselling of prospective immigrants.
The answer to the second part of the question is that 5,608 open placement immigrant workers were admitted to Canada from January 1, 1958, to April 30, 1958.


Mr. Speaker:: In order that the answer and the supporting document may all be in one place is it agreeable that the answer and the document be made an order for return?


Some hon. Members:: Agreed.


TERRA NOVA NATIONAL PARK, NFLD.
Mr. Pickersgill: Have instructions been given by the Minister of Northern Affairs and National Resources or any member of his staff or official of his department to the park engineer, park superintendent or any

member of the staff of the Terra Nova national park that applicants for jobs in the park must be interviewed or recommended or approved by Mr. Carson Stroud of Glovertown?


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: Mr. Speaker, the answer to the question asked by the hon. member for Bonavista-Twillingate is as follows. No instructions have been issued that applicants for jobs at Terra Nova national park be interviewed by Mr. Carson Stroud of Glovertown. Instructions have been issued that Mr. Stroud's advice be sought. Terra Nova is a long distance from the nearest office of the national employment service, and advice from officers of this service is, for practical purposes, unavailable.
We have made it a point to ask the advice of all those who are qualified in those areas and who know the needs of the people and the local skills. An example in Cape Breton is that we have accepted advice from local members of the clergy. The department welcomes recommendations from persons who are well qualified to make them. As a matter of interest I might mention that I just recently received a recommendation from the hon. member who asked this question, and I at once asked the department to consider the person recommended just as soon as a suitable vacancy occurred. I did this because I knew the hon. member would not make such a recommendation unless he knew the person was well qualified and in need of the work.


C.B.C. SATELLITE TRANSMITTERS
Mr. Benidickson: 1.	At what locations is the Canadian Broadcasting Corporation providing any transmission of T.V. programs by satellite transmitters?
2.	Has the Canadian Broadcasting Corporation commenced construction of any such satellite transmitters? If so, at what locations?


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, I am advised by the Canadian Broadcasting Corporation that the answer to the first question is none. With regard to the second question, the corporation has not commenced construction of any television satellite transmitters, but is currently carrying out studies and surveys on proposals for satellites, or relay stations working by connection to the microwave network or by television recordings, at Corner Brook, Liverpool-Shelbume-Yarmouth, Moncton (French), Kenora, St. Boniface (French), Trail.


MINAKI-KENORA ROAD  FEDERAL CONTRIBUTION
Mr. Benidickson: 1. Has the federal government been asked by the government of Ontario to contribute to the construction of a road between Minaki and Kenora?

2. Has the federal government made a contribution to costs of road construction since February 10, 1958, between Kenora and Minaki? If so, what was the amount of the contribution?


Francis Alvin George Hamilton: Mr. Speaker, in reply to the first question, no specific request has been received from the government of the province of Ontario relative to the construction of a road from Minaki to Kenora. The province has, however, indicated its interest in obtaining assistance under the roads to resources program for a road leading south from Minaki toward route 17.


Mr. Benidickson:: Which is the same thing.


Francis Alvin George Hamilton: The hon. member, knowing the district as well as I do, knows it is really the same thing. I should also point out that negotiations between the government of Ontario and the federal government are still under way concerning a roads to resources program in that province, and it is possible that when the details of this program have been agreed upon it may include roads in the region in which the hon. member is interested. No decision, however, has yet been reached. I should also mention that under the forest access roads program, which began January 2 and ends June 30, the province of Ontario has been constructing certain forest access roads in the Minaki region. These roads are not, of course, part of any provincial highway system.
In reply to the second question I should point out that between January 2 and March 31, 1958, the federal government's share of the cost of forest access road work in the Minaki area was $24,421.75.


William Moore Benidickson: Why did it stop on March 31?


Francis Alvin George Hamilton: Final payments will not be made known to us until the end of this month, and at that time I will give the hon. member a full answer. But under the roads to resources agreement, no payments have been made because no agreement has yet been signed.



WELLAND CANAL


Mr. Fisher: 1.	Have the Welland canal authorities fined any foreign ships for breaking canal regulations since May 1, 1958?
2.	If so. what foreign ships, when, and for what breaches?
3.	Did these ships have pilots? If so, what were their names, addresses, and qualifications?


Hon. George H. Hees (Minister of Transport):: The answer to this question is that no foreign ships have been fined by the
Orders for Returns
Welland canal authorities for breaking canal regulations since May 1, 1958.



REMOVAL OF U.S. PILOT, CARDINAL, ONT.

Mr. Fisher: 1.	Did a Department of Transport official have an American pilot removed from a ship at Cardinal, Ontario, during May, 1958?
2.	If so, did the American authorities make any protest about this occurrence?
3.	What form did this protest take and what reply was given by what Canadian authorities?


George Harris Hees: Mr. Speaker, the answer to part 1 is that an unlicensed pilot was superseded by a licensed pilot at Cardinal, Ontario, on May 11, 1958, as provided by the Canada Shipping Act.
Regarding parts 2 and 3 of the question, the answer is no.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Pickersgill: 1.	What are the occupations for which immigrants are admitted for open placement at the present time?
2.	How many open placement immigrants have been admitted to Canada since January 1, 1958?


TRANS-CANADA PIPE LINES DIRECTORS
Mr. Fisher: 1.	Has Trans-Canada Pipe Lines Limited any contractual relationship with the government or government corporations?
2.	Who are the directors of Trans-Canada Pipe Lines Limited?
3.	Are any directors of Trans-Canada Pipe Lines Limited directors of Quebec Natural Gas Corporation?
4.	If so, which of them?


PROHIBITED EXPORTS TO COMMUNIST COUNTRIES
Mr. Argue: What commodities and materials are on the prohibited list for export to (a) the U.S.S.R.; (b) China; (c) Bulgaria; (d) Czechoslovakia; (e) Hungary; (f) Poland; (g) Roumania; (h) Yugoslavia; (i) East Germany?


CANADIAN PURCHASES IN U. K.
Mr. Martin (Essex East): 1.	What purchases have been made by the government of Canada in the United Kingdom, since June 25, 1957?
2.	What purchases were made by the government of Canada in the United Kingdom for the 12 months' period prior to June 25, 1957?


GAGETOWN CAMP, N.B.  EMPLOYMENT
Mr. Michaud: 1.	How many persons were employed in connection with construction work at Gagetown camp, New Brunswick, on June 1, 1957?
2.	How many persons were employed on this work as of June 1, 1958?

Motions for Papers



INDIAN AFFAIRS


Mr. Howard: 1.	In British Columbia during the years 1956, 1957 and 1958 to date, have any fires occurred on Indian reserves or to schools, hospitals or other buildings on Indian reserves or to such buildings which are used by Indians and which are near Indian reserves?
2.	If so, (a) how many and upon which dates did such fires occur; (b) on or near which reserves were they; (c) how many fatalities, if any, occurred to Indians as a result of each fire?
3.	Have any instructions been issued by the Indian affairs branch to Indian superintendents or to others regarding measures to be taken for fire prevention and protection?
4.	If so, (a) what were the instructions; (b) when were they issued; (c) what developments arose out of such instructions?



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 14-Mr. Martin (Essex East):
For a copy of all correspondence and other documents exchanged between the Minister of National Health and Welfare or the ministers of finance and labour or any officials of the said departments with any minister of any provincial government or officials thereof in the matter of the Hospital Insurance and Diagnostic Services Act, since January 1, 1958.
Hon. J. W. Monteith (Minister of National Health and Welfare):: Mr. Speaker, I have discussed this with the hon. member and pointed out that to give the complete information requested would entail quite an expenditure of money. I have also suggested to him that if there are any particular items of correspondence we would be very pleased to have them provided.


Mr. Martin (Essex East):: Mr. Speaker, the minister is quite correct in saying that he did discuss the matter with me. Unfortunately he did not fully understand my immediate reaction. I thought we had agreed that correspondence and documents exchanged between the minister and/or the ministers of finance and labour, or any correspondence with any members of the provincial governments, would be passed as an order, but we would not require exchanges between the officials of the various departments of government.


Jay Waldo Monteith: Yes, that is quite all right.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion as amended in accordance with the agreement between the mover and the minister?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 18-Mr. Bourget:
For a copy of all telegrams, correspondence and other documents exchanged since July 1, 1957, between the federal government and any of its departments or agencies and the municipal councils of Quebec, Levis, Lauzon, and other public bodies and persons, relating to the request made by Industrial Freighting Limited for the construction of a warehouse on the federal government wharf at Levis, east of the landing place used by Levis Ferry Limited.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, I should like to ask the Prime Minister whether he would care to comment on the reported request made to the United Nations by the head of the Lebanese government for an emergency police force to be sent to that country to patrol its borders with Syria.


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, in view of the uncertain situation in the Middle East, and in Lebanon in particular, and the fact that Mr. Hammarskjold is there at the present time on a mission on behalf of the United Nations, I think it would be untimely to make any statement at this time. However, as soon as there is any degree of certainty respecting the situation and the nature of the alleged request has been made clear, the Secretary of State for External Affairs will make a statement.


SECURITY ARRANGEMENTS FOR CANADIAN
[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: May I ask
the Secretary of State for External Affairs if he has any comments to make about published reports on the character of the security arrangements being made with respect to the Canadian embassy in Moscow?


Hon. Sidney E. Smith (Secretary of State for External Affairs):: I have nothing to observe in that regard except that we have learned that additional police protection has been offered by the Soviet government.


PUBLIC SERVICE
[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to address a question

to the Secretary of State. In view of the serious implications of featherbedding and oversecurity of tenure in the civil service which have been raised by the statements of the head of Central Mortgage and Housing Corporation in stressing why his organization was able to fire staff and reduce its budget, would the minister call senior officials of the civil service associations and the head of the civil service commission before a commons committee to present the civil service side of the matter?


Henri Courtemanche: I will take that question as notice.



INTERNATIONAL TRADE FAIR


[Stage Direction]
On the orders of the day:
Mr. Maurice Bourgel (Levis):: I should like to ask the Minister of Trade and Commerce a question or, in his absence, the acting minister. The question is based on a story published in the Toronto Star on June 24, to the effect that the Canadian pavilion at the world's trade fair at Brussels suffers from lack of money, lack of administration and lack of morale.
My question is, has the minister, as alleged in the newspaper story, curtly accepted the resignation of Madame Valmore Bienvenue, chaperone of the university students who are acting as guides at the Canadian pavilion, and would the minister comment on the whole situation?


Hon. J. A. MacLean (Acting Minister of Trade and Commerce):: I will see that this is brought to the attention of the Minister of Trade and Commerce so that a reply can be given later.


Mr. G. J. Mcllraiih (Ottawa West):: May I
ask a supplementary question of the Prime Minister. Would the Prime Minister tell us whether or not he has received the letter alleged to have been written to him by the guides, according to the same story?


John George Diefenbaker: I do not know what the story is, but I know that this morning a letter was received by me written by certain university students who affixed their signatures, in respect of this matter.


George James McIlraith: Will the Prime Minister tell us what action is being taken on the matter?


John George Diefenbaker: As my hon. friend will realize, having received the letter this morning and having had a cabinet meeting as well this morning, there has not been any time to give any consideration whatever to this question. As I recall the letter, it refers to the 57071-3-102
Inquiries of the Ministry resignation of Madame Valmore Bienvenue, and in general to the matters to which allusion has been made by the hon. member for Levis.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: May I
direct a question to the Minister of Finance. In making the proposal to permit a husband to give his wife, or vice versa, up to $10,000 as a tax-free gift, did the government give consideration to the fact it would not benefit a taxpayer in Quebec?


Mr. Speaker:: Does not the hon. member think that matter would more properly be brought up in the budget debate? It concerns an item about which an announcement was made in the budget speech, and which will be under discussion during the consideration of the budget resolution?


Lionel Chevrier: The matter is of some urgency, and the resolutions may not be debated for another ten days.


Mr. Speaker:: I take it there is no urgency so far as anybody is concerned until the matter has been decided by the house. It seems to me it would be more appropriately dealt with at that time.



BRITISH COLUMBIA


[Stage Direction]
On the orders of the day:
Mr. M. A. Hardie (Mackenzie River):: I
should like to direct a question to the Minister of Agriculture. In view of the extremely low market price of 6 cents per pound paid to British Columbia raspberry producers, will the minister consider bringing raspberries under the price stabilization act to enable these producers to take off their present crop?


Hon. D. S. Harkness (Minister of Agriculture):: I am very pleased to see the interest shown in the British Columbia raspberry growers by the hon. member for Mackenzie River. I think perhaps he has been back in the northern fastness too long, because this matter was dealt with last week. Assistance was provided under the stabilization act for the raspberry growers in British Columbia which will ensure that they will be paid a minimum of 9 cents per pound for the poorest type of raspberry which is produced there. I should perhaps add that of course more will be paid for the better varieties.
1610	HOUSE OF COMMONS
Inquiries of the Ministry


Mr. H. W. Herridge (Koolenay West):: May
I ask a supplementary question. Will the same principle apply when floor prices are established for B.C. tree fruits for the 1957 crop?


Douglas Scott Harkness: If the hon. member, by
saying "the same principle," means the principle of doing the best we can in order to improve the position of the fruit growers and assist other farmers of this country, certainly that is the case.



SUGGESTED MEETING TO DISCUSS GREATER CANADIAN MARKET

[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: May I address a question to the Prime Minister, arising out of the continued cut-backs in Canadian oil production. Is a meeting scheduled between the government and the heads of the integrated Canadian oil companies to see whether a larger part of the Canadian market may be made available for Canadian oil production?


John George Diefenbaker: Mr. Speaker, I know of no such projected meeting.


Hazen Robert Argue: May I ask a supplementary question: whether any consideration has recently been given by the government to the advantages which might accrue from the pipe-lining or the shipment of crude to the Montreal area?


John George Diefenbaker: That question is always receiving attention and consideration as between the experts in various departments of the government and the provincial representatives. When a decision is arrived at, the house, of course, will be made aware of it.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: May I ask the Secretary of State for External Affairs whether the Canadian government has made representations to the United States government concerning amendments to the United States atomic energy act, approved by the Senate in Washington on Monday, which would prevent Canada from obtaining United States nuclear weapons of any kind, and would make it illegal for the United States even to supply the information to enable Canada to design such weapons for use by our navy, army or air force?


Sidney Earle Smith: I thank the Leader of the Opposition for having sent a copy of the question he has just addressed to me. This I received at 1.45 p.m., and as the answer will involve several departments I will take the question as notice.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: May I ask the
Secretary of State a question of which notice has been given. In view of the fact that there are five public bills on the order paper indicating desired changes in the Canada Elections Act, in addition to two notices of motions by government party private members indicating a similar desire, will the minister undertake to recommend to the house that the Canada Elections Act be referred to the standing committee on privileges and elections in order that proposed amendments may be studied by that committee?


Henri Courtemanche: I wish to thank the hon. member for having given me notice of his question. In view of the very heavy program of legislation on the agenda for this session I can only say at this time that the government has given consideration to this problem, and intends to refer the study of the Canada Elections Act to the committee at a later date.



TRANSPORT


[Stage Direction]
On the orders of the day:
George Harris Hees: With reference to the points regarding pilotage which were raised yesterday by the Leader of the Opposition, the hon. member for Laurier and the hon. member for Port Arthur, I believe I can now offer some clarification.
We are contemplating certain amendments to the shipping act which would give us the necessary authority to deal with pilotage matters within Canadian waters on the great lakes. The United States also has certain legislation pending in this regard, and it would therefore be premature to discuss the situation in further detail until we know exactly what legislation will be approved by the United States.
I can, however, state that there have been several discussions between Canadian and

United States authorities with respect to this matter. Each is fully aware of the views of the other and it is expected that satisfactory reciprocal arrangements can be worked out. Although the exact situation with regard to pilotage requirements in Canadian waters and in United States waters may not be necessarily identical, provision would be made for each to recognize the licence or certificate of competency issued by the other authority, and for continuing liaison in the matter of technical standards and requirements.
With respect to the international section of the seaway, our jurisdiction would apply only to Canadian waters, of course, and here again while we now have in existence a pilotage system covering this portion of the St. Lawrence river up to lake Ontario, if the United States should impose any new requirements in regard to United States waters in this section of the river we would of course have to make appropriate reciprocal arrangements with them along the lines of the foregoing.


Lionel Chevrier: May I ask
the minister as a supplementary question if he thinks it is possible to have mandatory pilotage on the United States side, for instance, and voluntary pilotage on the Canadian side of the international section?


George Harris Hees: That is something we will have to work out when we discover what the United States is going to do.


Douglas Mason Fisher: Could the minister inform the house of the dates when these discussions between the United States and Canadian officials took place?


George Harris Hees: No, Mr. Speaker. There have been several discussions in the past few months, and I do not see any particular merit in the question of the hon. member as to the dates of those discussions. They were informal but very full and useful discussions.


Douglas Mason Fisher: Mr. Speaker, I had a supplementary question as to whether the Canadian government had made representations during the last few months, and the date given by the Secretary of State for External Affairs was March 20. I was seeking to find out whether more recent representations had been made.


George Harris Hees: Mr. Speaker, we have made no representations. The discussions between our authorities and those in the United States have taken place as a means of getting information, on both sides, as to what each country had in mind. We have made no representations.
57071-3-102J
Inquiries of the Ministry TRADE



LEAD AND ZINC


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: May
I address a question to the Acting Minister of Trade and Commerce. In doing so may I say that I have not been able to give him notice as early as I would have liked-


Some hon. Members:: Order.


Herbert Wilfred Herridge: Mr. Speaker, I have something quite legitimate to explain. My messenger came back five times this morning because the minister was not in his House of Commons office, and I feel that some arrangement should be made so that a minister will get a question in good time when we send him notice.


Some hon. Members:: Order.


Herbert Wilfred Herridge: I am making a suggestion which I feel is to the advantage of the ministers.


Mr. Pallell:: About as useful as your other suggestions.


Mr. Speaker:: May I remind hon. members that the hon. member for Kootenay West has the floor.


Herbert Wilfred Herridge: Has the minister been informed of and has he given consideration to the possibilities and implications of the proposed global plan to regulate the flow of lead and zinc to world markets, supported by the state department of the United States? If so, could the minister inform the house of the government's attitude to this proposal?


John Angus MacLean: I will bring this question to the attention of the Minister of Trade and Commerce for an answer at a later time.



TRANSFER OF CF-100 AIRCRAFT TO BELGIUM

[Stage Direction]
On the orders of the day:
George James McIlraith: May I
ask a question of the Acting Minister of Trade and Commerce based on a press dispatch in the Toronto Globe and Mail of June 25, 1958, but before doing so I would mention that I had a somewhat similar difficulty to that related by the hon. member for Kootenay West with respect to notice. In view of that fact, perhaps this question could be treated as notice and dealt with tomorrow.
Would the minister give the house the cost to Canada of the transfer of CF-100 jet aircraft to Belgium, and would he also indicate

Inquiries of the Ministry what part of this cost is included in the export figures for the month of May which were yesterday released tc the press?


John Angus MacLean: On behalf of the Minister of Trade and Commerce I will take that question as notice.



AUTOMOBILES


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, I should like to ask the Secretary of State for External Affairs a question, notice of which was sent to his office just before noon, as to whether or not he can enlighten the house as to the nature of the preliminary conversations, and on what level they were held, mentioned in the answer made yesterday by the Minister of Trade and Commerce when asked whether or not representations had been made to the government of the United States with regard to the attempt on the part of someone in Canada to sell Canadian-manufactured automobiles to a country in Asia.


Sidney Earle Smith: I thank the hon. member for having given me notice of this question. In view of the reply that was made yesterday by my colleague the Minister of Trade and Commerce, he has undertaken to answer this question. In his absence I will accept this as notice.


Paul Joseph James Martin: May I ask a supplementary question. My question was: what was the nature of the conversations to date, and on what level were they conducted? What the Minister of Trade and Commerce undertook to do was to give consideration as to whether or not representations would be made from government to government in the matter.


Sidney Earle Smith: I have nothing to add to my answer.



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:
Mr. C. R. Granger (Grand Falls-White Bay-Labrador):: May I ask the Minister of Finance if the government has yet received the report of the royal commission on the revision of the terms of union with Newfoundland?


Hon. Donald M. Fleming (Minister of Finance):: No, sir.
(Translation):



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mr. Azellus Denis (St. Denis):: Mr. Speaker, I want to ask a question-I thank hon. members for this applause. I see that our Cerberus is properly minding his job in this house, keeping tab of his colleagues who are present and of those who are away. Personal freedom is such a small thing, after all, or the respect of-


Some hon. Members:: Question! Question!


Azellus Denis: I should like to ask the
Secretary of State (Mr. Courtemanche) a question. I am sorry I failed to give him notice that I would do so, but as it concerns a matter of which I was not informed until this morning, it was then too late.
Is it true that the civil service commission no longer accepts applications for employment unless there is a vacancy.
If so, could the Secretary of State comment on this subject? We have made recommendations to the civil service commission on behalf of persons who wish to work in a post office or elsewhere, but their application forms were returned with the statement that no more applications were being entertained, for the reason I have mentioned.


Henri Courtemanche: I am not aware of the situation referred to by my hon. friend, but after due inquiry, I shall be pleased to reply later.
(Text):



SUGGESTED CHANGE IN METHOD OF DEALING WITH DIVORCE QUESTIONS

[Stage Direction]
On the orders of the day:
Mr. M. W. Martin (Timmins):: May I ask
the Minister of Justice if it is the intention of the government, either at this session or during other sessions of this parliament, to take the necessary steps to remove divorce cases from this House of Commons?


Edmund Davie Fulton: Mr. Speaker, we have not made any plans in that connection.



CANADIAN PACIFIC STEAMSHIPS


[Stage Direction]
On the orders of the day:
Frank Howard: May I address a question to the Acting Minister of Labour. I regret not having been able to give her notice, but I am sure that in view of the seriousness of the situation she has her fingers on the pulse of this matter.
Has the minister received any report from industrial inquiry commissioner Taylor with respect to the dispute between the S.I.U. and the C.P.R. on the coast of British Columbia?


Ellen Louks Fairclough: Mr. Speaker, the final report
has not yet come in and I have no report to make to the house at this time, but I constantly hope that an amicable solution will be reached.


Frank Howard: When is it to be expected
that the commissioner may be able to give us some details of his experiences out there on this trip?


Ellen Louks Fairclough: I believe the commissioner makes just one report, that is his final report, the report for publication. I do not anticipate that it will be received within the immediately foreseeable future because I hope the report he will make will be to the effect that he has been successful in promoting a settlement of the dispute.


Mr. Erhart Regier (Burnaby-Coquitlam):: May I ask a supplementary question. Would the minister say whether the government is prepared to follow the example set by the government of British Columbia in its dealings with the Black Ball ferries, in that it might consider taking over the operation of the Canadian Pacific ships until a settlement has been reached?


Mr. Speaker:: I think the hon. member is
asking for a declaration of policy, and he can hardly expect his question to be answered extemporaneously.


Erhart Regier: In that case may I reword
my question. Has the government given any consideration to the adoption of the course I have mentioned?


Ellen Louks Fairclough: I am not prepared to
answer that question at the present time.



IRRIGATION


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I wish to direct a question to the Prime
The Budget-Mr. MacLellan Minister or to the Minister of Agriculture.
I wonder if the house could be brought up to date on the progress being made toward the signing of an agreement for the construction of the South Saskatchewan river project, and told what consideration is being given to the Saskatchewan application for a loan for power development.


Douglas Scott Harkness: Mr. Speaker, I can tell the hon. member and the house that excellent progress is being made in regard to negotiations leading, we expect, in the very near future to the signing of an agreement.


Hazen Robert Argue: I wonder if I might have an answer to the question concerning what progress has been made with regard to the Saskatchewan application for the loan for power development. This question might be answered by the Minister for Northern Affairs and National Resources. Perhaps I might ask the Prime Minister whether such an application is before the government and, if so, what consideration is being given to it?


John George Diefenbaker: Mr. Speaker, an application was made in that connection, and there has been an exchange of ideas in reference to that application. I think a final decision will be made in a letter to be transmitted to the premier of Saskatchewan within the next couple of days. In so far, however, as the request for financial assistance is concerned, whether it is granted or not I am sure I can say, with the Minister of Agriculture, that we expect to secure shortly the execution of that agreement to which the people of Saskatchewan have looked forward for so many years.



THE BUDGET


[Stage Direction]
The house resumed, from Tuesday, June 24, 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. Benidickson, and the amendment to the amendment of Mr. Argue.
Mr. R. S. MacLellan (Inverness-Richmond):: Mr. Speaker, last evening when the house adjourned I was speaking of the necessity of establishing industry in the Atlantic provinces to bring up the standard of living of our people. Our provincial governments are doing everything possible, and providing every incentive they can, to attract industrial investment. However, our geographical

The Budget-Mr. MacLellan location is such that we must face the stark fact that an industrial venture is not as likely to succeed in our region as in other more central areas of the nation.
The central manufacturer can look to a large consuming public in his own province. When he has supplied that market for his primary profits he can sell east and west. The east coast manufacturer selling to a small population cannot meet primary costs out of local sales. From the outset he must find a market in Quebec and Ontario and farther west. Not only does this mean higher transportation costs, it means higher selling, accounting and collecting costs added to the price of the goods. A sales force far from the factory is more expensive, and less efficient and productive. The maritime industrialist, to provide delivery service in competition, must warehouse his products and his repair parts over a wide area far from home.
At the same time, Atlantic industry can be at a disadvantage even in its home market. A factory producing for our local consumption must of necessity be small. Goods manufactured in much larger quantities in central Canadian factories can be produced at a substantially lower per unit cost. The larger factory can afford extensive advertising and promotion of its goods. It can establish a brand name to catch the shopper's eye. Then these goods take advantage of maritime freight rate assistance to appear in Nova Scotia or New Brunswick or the other provinces at a lower cost than we can produce them. The maritime industrialist is pierced by both swords. He is at a disadvantage trading at home and at a disadvantage in the Canadian market at large.
We do not have too good a proposition to offer an industrialist who would like to establish in eastern Canada. Industry will settle where it has the best chance of profit. In our present position we have great difficulty in coaxing industry to our towns and cities. Every year we see more of the few manufacturing and processing industries we have closing down, and very few new ones starting. Every community has the scar of a local enterprise which was purchased by larger competition and shut down, or which could no longer stand the pressure of competition as central Canadian factories grew larger and could produce cheaper.
Mr. Speaker, the Atlantic region must have a comprehensive special program which will assist us to help ourselves. Grants in aid and subventions are futile to meet the basic problem. The Atlantic program must be generous and far reaching, and if necessary a drastic departure from some of the past concepts of national policy.

I submit that a program of Atlantic industrial development should provide the following incentives to attract industry to our provinces: First there should be a special corporate tax concession to Atlantic industry, particularly to manufacturing and processing industries.
Because of our geographical position a manufacturer is likely to make less profits. To make up for lower profits the corporate tax rate should be reduced to equalize his profit with that which he would earn in a more favoured location. In addition to this equalization concession, new industry should be offered an extra tax bonus for the first 10 years of operation, while it consolidates.
I believe that in some distressed areas of the United States such concessions are made to encourage the settlement of industry. The island of Puerto Rico, because it levies no corporate tax, is building up a flourishing industrial complex.
Recently the Minister of Northern Affairs and National Resources spoke of the advantage that Nova Scotia, with its great coal reserves, could offer to a big steel industry which wished to capitalize on Atlantic iron ore deposits. With all due respect, I fear that without some extra profit incentive a steel producer would prefer to transport iron ore and coal many miles for the advantage of manufacturing close to his market. A big steel industry could be the salvation of Nova Scotia and the maritimes. I am afraid that in the ordinary course of affairs we may never see it. But give such an industry a tax concession and it will start tomorrow looking for a site.
Second, we should have such transportation assistance as will allow our goods to enter the Canadian market without a transportation penalty. At the same time, freight rate assistance on goods coming into the maritimes should not provide cheap transportation for products competitive with those being manufactured or processed in the Atlantic region.
Third, where foreign industry wishes to relocate in the Atlantic region, machinery and tools presently in use in the industry at its foreign site should be permitted entry to the Atlantic area free of tariff.
Fourth, as suggested by the report of the royal commission on Canada's economic prospects, where possible defence orders and other federal purchases should give a preference to manufacturers in the Atlantic area.
Mr. Speaker, we hope this government will provide to the Atlantic region the equality of opportunity we have always sought. What does "equality of opportunity" mean? It

means that we should have money enough to pave our highways and to build schools. It means that our coal should have the subventions it must have to meet the competition of foreign fuels in our natural markets. And to this extent this government has given Nova Scotia and the other Atlantic provinces more Canadian equality than any other government since confederation.
But "equality of opportunity" must mean more than that. It must mean the chance to produce goods, and to sell them on a footing equal to that of other Canadians. It must mean a chance to enjoy a gross product equal to that of the national average.
At the moment there is a crisis in the Nova Scotian coal industry, not an unusual situation I am sorry to say. The crisis reflects the position of many of our industries and businesses, and is the direct result of all those years of the negative policy of the former administration. I am confident that the present government will not continue that policy. There can be no solution to the problem of our coal industry in subventions alone. The only worth-while solution is to assist the development of a maritime industrial life that will use that coal. And if coal miners must be displaced because of insufficient markets, then other local industries should be provided to employ them.
I am confident that this government will attack the Atlantic problem realistically, with a comprehensive program to help provide an economic climate which will attract industry to the Atlantic region. I submit, sir, that by so doing more could be accomplished in the next 10 years to provide Atlantic equal opportunity and self-sufficiency than has been achieved in the 91 years since confederation. The Atlantic provinces need federal expenditures. But above all we need industrial investment that only special and unusual federal tax consideration can bring to us.
(Translation):


Mr. Armand Dumas (Villeneuve):: Mr. Speaker, "a protectionist and deficit budget, unprecedented in peace time, with no appreciable tax relief".
"The Progressive Conservative government's first full budget is offering Canadians hardly anything in the way of tax cuts, and forecasts record government spending."
Both those comments, Mr. Speaker, sum up the reaction of most Canadian newspapers, last week, to the first full budget brought down in this house by the Minister of Finance (Mr. Fleming). A deficit, hardly any tax cuts,
The Budget-Mr. Dumas and the prospect of all-time high expenditures. Who would have thought our hon. friends opposite capable of such a performance?
When our hon. friends sat in opposition, they never tired of repeating that, if ever they came to power, they would cut taxes not by 100 or 200 million, but by 500 million dollars. But, what happened last Tuesday? Not only did the minister admit his inability to reduce taxes, but was compelled to announce a record breaking peacetime deficit.
"Every right-thinking Canadian should feel concern at this complete failure to reduce the crushing burden of corporation taxation, especially when industrial profits are dropping.
"The best remedy for business, for the individual taxpayer and for this country's economy would have been some sort of encouragement, in the form of substantial tax reductions which would have been far less inflationary than the belated effects of higher government spending."
Those words were spoken by the president of the Canadian Manufacturers' Association, commenting on last Tuesday's budget.
About the excise tax on cars, the president of the Canadian Automobile Association said:
Only the complete abolition of that tax would have removed the long standing injustice of this obsolete, unwarranted tax.
This comment, by the way is an almost verbatim echo of statements made by the Prime Minister prior to June 10, 1957.
Quite obviously, Mr. Speaker, the government has finally come to the realization that it cannot have its cake and eat it too.
About customs tariff and related subjects, the hon. minister, in his budget speech, pointed out,-and to some extent rightly,- the need for meeting the legitimate requirements of Canadian industry, for protecting Canadian producers and workers against certain unfair trade practices. However, Mr. Speaker, while the hon. minister soft pedalled the whole thing, the fact remains that this trend toward a growingly protectionist policy must make us pause and put us on our guard.
This is hardly the time for the government to introduce protectionist measures, however trifling. The minister may well disclaim any attempt to bring down a protectionist budget, but the facts are there, and cannot be disputed. His denials lose much of their force when his budget speech intimates that similar provisions are being considered regarding other imports.
1616	HOUSE OF
The Budget-Mr. Dumas
We are hardly in a position to adopt measures of this kind, especially when we consider that, more than ever, we have to rely on foreign markets for the sale of a major part of our forest, mine and other products. Recourse to higher tariffs might entail dire consequences for Canada. It would be a mistake to imagine that affected countries will overlook such measures.
In the field of monetary policy, the minister made much of the fact that more capital is available, that banks now grant any reasonable request for commercial and personal credit and that interest rates are somewhat lower than they have been.
But how long will it thus be easier to borrow? That remains to be seen. Are inflationary trends completely out of the picture? Are not production costs and prices in Canada still going up? In both cases, it is quite doubtful that the minister can reply to those questions in the affirmative.
Then again, in 1958-1959 the government will have to borrow the fabulous amount of $2,350 million! Obviously, to float so huge a loan, the government will have to appeal to all who have money put aside, to individuals, to lending institutions and corporations. The minister soon realized the magnitude of the problem because, just after his budget speech, he hastened to ask the stockbrokers association and its members to help the government in this respect.
Mr. Speaker, I hope the minister will succeed in his attempts. However, the day after his budget speech, newspapers reported that government bonds were already going down. Today, they are reported down a few points.
I hope the minister will do his best to call upon the public, and all people who have savings, even if he has to pay a higher interest rate to induce them to buy government bonds.
If the government experiences difficulty in floating those loans in Canada, will it seek help elsewhere, on foreign markets for instance? We may rightly doubt that. It would then be left to the Bank of Canada to issue new money, and we may ask ourselves if such a measure would not be inflationary.
I am now coming to the premium on the Canadian dollar. In 1950, the government of the day took all necessary steps to allow our dollar to fluctuate freely. In 1952, I did not fail to protest against the high premium on the Canadian dollar although at the time it was only about half of what it is today.


From 1952 to 1956 inclusive, the average premium on the Canadian dollar over the U.S. dollar fluctuated as follows: in 1952, it was 2.1 per cent; in 1953, 1.65 per cent, and in 1954, 1955 and 1956, it was respectively 2.65, 1.4 and 1.6 per cent. In 1957, the annual average for the premium reached a record rate of 4.1 per cent, and afterwards fell to 1 per cent for a short time. On June 21 last, the premium on the Canadian dollar was about 3f per cent.
In last Tuesday's speech, the hon. Minister of Finance spoke at quite some length about the value of the Canadian dollar as compared to the American dollar. However, he entirely forgot to mention that it was within his power to take the necessary steps to stabilize the value of our dollar.
It is unfortunate, Mr. Speaker, that the minister did not announce that his government would take the necessary steps to completely remove the premium on the Canadian dollar in relation to U.S. currency, or at least keep it to a minimum. Against this course, the minister held the view that:
-some advantages of the kind would accrue to certain industries but at the same time we would lose other advantages which are assured us through a high rate of exchange.
And the minister went on to state:
The weakening of our rate of exchange would be unfavourable to us in our exchange relations and, to that extent, we would pay more for our imports and get less for our exports.
Such arguments deserve consideration. They have serious implications. But what do they mean exactly in so far as our export trade and our industry are concerned? There is no need to be an expert to know that when our dollar is at a premium, our export trade suffers and our manufacturers have to face hard competition.
Whether we export wood, pulp, newsprint, copper, nickel, aluminum, lead, zinc or any other goods, processed or not, prices are quoted in terms of foreign currency and more often than not, in terms of U.S. dollars.
Of course, the minister would be right if we were in a position to set for our exports prices based on the value of the Canadian dollar. However, this is not the case, and the minister is well aware of it.
For our Canadian manufacturers, an increase in value of our dollar has the same effect as a lowering of tariffs, if there are any tariffs. Importers benefit from the higher value of the Canadian dollar, at the expense of our industries. It is as simple as that.

I must admit that if I am so utterly opposed to the fact that our dollar is at a premium over the American dollar, it is because the industries of my area are adversely affected by that state of affairs, beginning with our gold mines which have to accept lower prices. The same holds true for the lumber industry and the base metals industry.
It must be admitted also that there is no simple formula to set matters right in this regard and that we would not always be well advised to reverse trends which prove to be persistent. The Minister of Finance has emphasized that point. However, the government can, to a certain extent, hold that premium on the Canadian dollar at a much lower level than is at present the case. In such circumstances, the government must see to it that steps are taken to lighten the load on our export trade.
I was very happy to hear the Minister of Finance's statement with regard to the Emergency Gold Mining Assistance Act. This 25 per cent increase is certainly welcome, and the retroactive effect which the government intends giving to that legislation will offset, to a certain extent, the considerable losses which the industry has suffered because of the premium on the Canadian dollar.
This government program, involving the amendments which I have just mentioned, was welcomed by everyone in the gold mining industry, including the miners themselves, who derive their livelihood and that of their families from that industry. The government is making no mistake in accepting, in part at least, the representations of the leaders of the industry itself and those of the municipalities which quite recently sent an impressive delegation to the Minister of Finance and the Minister of Mines and Technical Surveys (Mr. Comtois).
I do not mean to act the part of a chronic grouch, but I must say I am somewhat disappointed, having honestly believed that the government would be a little more generous. The government should have gone a bit further. It did not have to fear being accused of setting a precedent in raising the gold mining assistance to 50 per cent, for instance, instead of 25 per cent as it proposes because, for the year 1955, the Canadian government paid $16,225,000 in subsidies to gold mines.
Nor do I propose to dwell over-long on this topic because there will be further opportunity to deal with it when the bill introducing proposed amendments comes before us. However, if it is true that one 57071-3-103
The Budget-Mr. Dumas must strike while the iron is hot, I should now like to make a suggestion which should please the government.
For many years, mine operators, the authorities of the municipalities concerned and, indeed, anyone who has anything to do with gold mining have been saying that amendments to the act should extend over more years. It has become a habit or a rule that every time the duration of the act is extended, it is never extended for more than two years.
It is true that the coming amendments will be retroactive to the beginning of 1958 but it will none the less become ineffective on December 31, 1960, a little more than two years from now. Why not extend the act to December 31, 1961 or, better still, to December 31, 1962? It would not cost more to the government and would be so helpful to the industry and municipalities concerned. First, it would allow better planning of development and exploration work by mine specialists, and of course this would lead to more economical working of the mines. Secondly, municipalities could administer themselves more efficiently, more economically and, moreover, capital investments required in this field and in others could be forecast more intelligently.
In the past, Liberal governments have shown generosity with respect to gold mining assistance. The hon. Minister of Finance, who was then sitting on this side of the house, used to repeat that more should be done for the industry. He now has all the freedom he wants to implement what he was then advocating, and I do not see how he can refuse to implement that request that the house approve an extension period of three or four years, instead of having the act remain in force for only two years. The enactment of such an amendment was urged by the Canadian Metal Mining Association and the municipalities concerned.
The expansion of the mining industry which was substantial between 1945 and 1957 unfortunately shows a marked decline during the last twelve months. It is therefore only due to the increased production of uranium, iron ore and oil products that the total value of our mining production in 1957 was substantially higher than in 1956. The demand for our base metals especially is slight and, of course, prices are much lower. It therefore follows that the marginal mines must close their doors, and that a number of others are forced or will be forced to reduce their output considerably.
1618	HOUSE OF
The Budget-Mr. Dumas
We can only hope that this slackening of our mining production will not continue. I read in the newspapers of last week that the only base metal mine in New Brunswick which had succeeded up to now in maintaining its operations had finally been forced to shut down. In Nova Scotia, some 9,000 miners must take an enforced holiday because of an accumulated surplus of 1,400,000 tons of coal of which the companies have not been able to dispose rapidly. In my area, the employees of one base metal mine had to accept a wage cut to keep their jobs. We sincerely hope that this difficult situation will stop there and that prosperity will return to the mining industry.
In all mining areas in the country, pros-pection, exploration and development work is slowing down. Of course, this slowing down process is similar to that which prevails elsewhere. Budgets normally earmarked for those types of works are much lower than they used to be. However, in spite of the present adverse conditions, one must not be led to believe that the mining industry is faced with bankruptcy.
Industrial leaders, those who are more particularly interested in the development of our mineral resources-and fortunately they are numerous-are optimistic and they realize that, in that field, the future of Canada is well-nigh unlimited.
In fact, in my province, in the districts of Wabush, mount Wright and mount Reed on the north coast, considerable work is now in process with a view to the development of iron deposits in those areas. In the course of the next three years, more than $400 million will be spent in the operation of those mines. In the district of Mattagami, the Noranda and associated companies will engage in considerable diamond-drilling to test a recent sensational discovery in that area.
In Ontario, Manitoba and in the western provinces, though prospection has somewhat slackened, large capital investments are contemplated for the next few years in order to develop large mineral deposits of all kinds.
On May 21 last, during the discussion of the address, I said that Canada could not fail to get an ever-growing share in the world demand for metals and minerals, and I maintained that Canadian producers could put their trust in long term deals. I added that, in the meantime, everything would have


to be done to keep our mining industry in as good a shape as possible. If I stress this point again today, it is because the government, more than ever, is supporting an industry which is bound to become the most significant in this country, in the very near future.
If the government cannot cure all the ills from which the mining industry is suffering from time to time, it certainly can alleviate the difficulties by which its expansion is slowed	down. First	of all, it	can do	sothrough sound fiscal measures. Here is a simple	example of	what can be done	bythe government to	lighten the	burden	ofsome mines that find themselves in a very special	situation. I	have dealt with this
during the debate on the address. On May 21 last, I called the attention of the minister on a request forwarded to him by the Canadian Metal Mining Association and I said this:
Another step which should be taken by the government at this time is the introduction of a measure to ease the situation for some of the base metal mines by amending the regulations granting a three year tax exemption to a new mine, in a way which would make it possible for a mine to elect to defer its tax exemption for 1958 and to carry it over to the end of the normal 36 months' period. This question was brought to the attention of the government by the Canadian Metal Mining Association and in proposing such an amendment the association submitted the following argument.
And then, I quoted what the association said:
Some dozen mining companies, operating within the first three years of commercial production, find themselves in the position of having to decide whether or not to close operations as a result of the fall in base metal prices. It is felt that such an amendment as proposed would induce such companies to remain in operation and to retain the services of their employees at a time of seriously mounting unemployment throughout Canada.
And this, Mr. Speaker, without the government having to lose a single cent. It would be sufficient to extend by twelve months the period during which a mine can benefit from that legislation which has done so much good to our industry and which has not only allowed but encouraged exploration work and the production of huge quantities of metal. In addition, it has meant some revenue for the government in the form of personal income tax and corporation income tax. The Minister of Finance made no mention of it in his budget. He possibly thinks that it is a matter of minor importance. It may be also that he intends to

introduce an amendment to the act. In my opinion, he would make a mistake by doing nothing. I repeat that it would not deprive the government of any revenue. It is simply a matter of delaying for a period of twelve months the payment of taxes by mines that have benefited from an exemption during a period of 36 months.
Secondly, the government could also avoid the adoption of measures of protection which could incite our best customers to retaliate when they feel that they have been wronged by a policy such as, for example, higher tariffs. This is very important, for Canada is particularly vulnerable to any reaction along that line on the part of the nations which are normally our best customers.
Thirdly, by increasing the subsidies, if necessary. Nobody likes to receive subsidies. No one dares insist on getting some from the government. However, when it is necessary, the government should not hesitate to increase these subsidies.
The coal mines of Nova Scotia are in a very serious situation. In fact 9,000 men will have to take enforced vacations until the end of September. It is possible that some of these mines will close down indefinitely. There is food for thought in that, especially in view of the fact that prior to June 10, 1957, and prior to March 31, 1958, the present government had given a very firm commitment to the people of Nova Scotia, promising that there would be no work stoppages in the mines during the following months. However, these people now see that, in spite, perhaps, of its good intentions, the government has been in no position to carry out this very solemn promise.
There would also be another way for the government to help the mining industry in a more material way, and it is this.
The government could also do a great deal for the industry through the Department of Mines and Technical Surveys. It could, for instance, accelerate research, geological surveys, map making and geophysical surveys.
Finally, it could put within the reach of producers more economical processing methods, facilitate the sale of their products by finding new uses for those products and also put within the reach of prospectors and exploration companies more advanced and detailed basic data. In this field, it would be advisable to supplement the capacity of the provinces which, more often than not, do not have the technological facilities of the federal government.
57071-3-103J
The Budget-Miss Aitken
Professional officers and technicians of the department do a great job with the budget at their disposal. It would be advisable to raise considerably the amount of money voted each year for the department of mines and technical surveys.
(Text):


Miss Margaret Aitken (York-Humber):: Mr. Speaker, first I want to congratulate the Minister of Finance (Mr. Fleming) not only on his budget but on his presentation of it. It seems to me that this budget was presented in about as clear a way as I ever heard a budget presented. Certainly, it was clear to those who are not initiated in the complexities of finance. I notice that no name has been given to this budget, no catch-name. It is true the financial spokesman for the opposition tried to introduce the phrase "the blue budget". It did not seem to me it caught on, either here in the house or with the press. Speaking for myself, Mr. Speaker, I rather favour this phrase "the blue budget", because it is certainly my favourite colour. It is a clean-cut colour. It is an accommodating colour in that it suits everybody. It seems to me that the blue of the sky certainly always augurs well for fine weather ahead. I am quite happy to call this "the blue budget".
One reason for my approval of this budget is that it seems to me it has corrected a great many injustices that do not particularly affect powerful people but that affect the little people who perhaps have not got pressure groups to speak for them. The first injustice that was corrected was concerned with the exemption of the estates for widows. In the past there was a $50,000 exemption on an estate of $50,000 or less, and if the estate was more than that were was a $20,000 exemption for the widow. This seemed to me to be a gross injustice, and now it has been corrected. There is a true exemption of $60,000 for a widow, plus $10,000 for every child under 21. I know the minister has received many suggestions with regard to this matter of amending the estates act, but I believe that one brief that has been presented to him from the national council of women contains a clause which it seems to me has merit. Perhaps other organizations have submitted the same suggestion. It is a suggestion for adjustment in regard to pension benefit. I should like to put this particular clause on the record.
When pension benefits are included in the value of a taxable estate passing to a widow for children of the deceased, an allowance should be made for
1620	HOUSE OF
The Budget-Miss Aitken subsequent income tax payments in order to avoid double taxation. The amount of the allowance could be calculated in accordance with the life expectancy of the widow. The present value of pension benefits or annuities is calculated on the number of years or life expectancy of the widow in such instances. If a deduction be allowed on account of succession duties for income tax that would be paid over this number of years, then the problem of double taxation would be alleviated to some extent. In preference, it is submitted the method of taxing such annuity and pension benefits when they were received would be more equitable than the present method of calculating the present value of the annuity, or pension fund. Then the widow would pay tax on only what she actually receives and not on what she might receive.
I hope the Minister of Finance will give consideration to this suggestion.
Another injustice that has been corrected in this budget concerns a husband's tax exemption. In the past, if a wife's income exceeded $1,000 the husband's exemption immediately dropped by $250 for his income tax. Now if a wife's income is $10 over the $1,000, the decrease in the husband's exemption is only $10 instead of $250.
One former injustice that has been brought to my attention many times by constituents and which, I in turn, brought to the attention of the previous minister of finance, concerns the husband and wife who are separated. The former minister agreed this provision was an injustice, but he did nothing about it. When there is no divorce or written separation agreement, but where a court order exists directing the husband to pay so much to his wife and dependents, then husband can now deduct the amount paid for such support and the recipient, his wife, as I understand it declares the allowance in her income and deducts for the dependents. This seems to me to be a fairer method than that which was formerly used.
The promised amendment which will permit corporations to make tax-free gifts up to 10 per cent of profits is another good move on behalf of charity and universities. The Minister of Finance has said that he hopes this amendment will swell the flow of funds to the support of higher education in Canada. I believe that the time has come when industry must shoulder more responsibility for the support of higher education, because certainly industry benefits greatly from the products of our universities and benefits from the scientific discoveries, benefits through the supply of trained personnel, benefits in greater production. Industry should, therefore, shoulder part of the burden of higher education. I hope that, as a result of this


added incentive, tax-free gifts up to 10 per cent of the profits, industry will accept the challenge and take up its share of the financial burden of higher education.
Yesterday, in the Toronto Globe and Mail it was pointed out that so far corporations had not taken full advantage of even the 5 per cent limit and that $9 million was given last year to universities by corporations. The editorial goes on to say:
Universities are indeed an investment. They are an investment in the nation's future; and as such they are a national concern, deserving of national support.
I would like to make another suggestion to the Minister of Finance also with respect to the subject of education which I hope he will consider. There is another injustice which I would like to see corrected in respect of the youth of today. Their industry and energy are being penalized to a certain extent. A boy or girl may earn $950 per year for the purpose of their education, but in respect of any sum over that amount their father will immediately lose part of the deduction he may claim for that child as a dependant. I believe a boy or girl should be allowed to earn at least enough to cover their university fees, which $950 will certainly not do. They should certainly be able to cover their fees and the cost of their books before the father is excluded from claiming them as dependants.
Another matter which I would like to draw to the attention of the minister is one which I am sure he will recall came to light several years ago. This is a particularly ridiculous situation, in respect of income tax deductions, which was brought to the attention of the former minister of finance but he merely produced a lot of legalistic arguments and nothing further was done. I refer to the situation in which a man whose wife was so ill that it was necessary for him to hire a full-time attendant to look after her, made a claim for the salary of that attendant, but the deduction was refused. This was in spite of the fact that the doctor had said the wife was in fact bedridden. As it turned out, the wife had got up for a couple of hours during the afternoons to sit in a rocking chair, and according to the act, if she had sat in a wheel chair the exemption would have been allowed as a full deduction for a full-time attendant. I hope the minister will also rectify that nonsensical situation in the not too distant future.

In conclusion, I would like to commend the minister for removing the 20 per cent advertising tax on foreign magazines published in this country. As we of the Conservative party pointed out when the tax was imposed by the former government, this was a discriminatory tax and was an infringement on the rights and freedom of the press. It was an irritating tax because it interfered with the public's choice of reading matter and it was also a nuisance tax. As the minister pointed out when presenting his budget, when we were on the opposite side of the house we repeatedly warned that this tax would prove to be both unjust and ineffective. Experience has confirmed our view, and one reason why it was ineffective was because the burden of the tax-as is the case in most taxes-fell on the consumer. This was because the magazines immediately raised their advertising rates and also the price of the magazine and, as usual, the consumer paid the shot. I hope that these magazines which raised their prices will remove the increase now that the tax has been removed and that the retail price will resume its former level.
I am an enthusiastic booster of our Canadian publications and I believe that they take a place second to none in relation to magazines across the border. I think they are doing a fine job in interpreting the Canadian scene and the Canadian mind and I am sure that no one in this house wants to see them suffer unduly from unfair competition but, a discriminatory tax-no matter what the reason for its imposition-is, as the minister has said, unjust and is bound to be ineffective.


Murdo William Martin: Mr. Speaker, after the hectic events of the past thirteen months it is sometimes rather difficult to realize that so many of us are still relatively new members of this house. This has been particularly brought home to me in the last few days, since this is the first budget of which I have had the opportunity to witness the presentation.
I learned while very young that one of the most dangerous things one can do is to disagree with the ladies but unfortunately I find myself in that position, for I must disagree with the hon. member for York-Humber (Miss Aitken). I had in mind her comments to the effect that the budget was very clear to all new members, but I must say that I have spent considerable time in studying and trying to understand this budget.
The Budget-Mr. M. W. Martin I am afraid I have had to reach the conclusion that it is very much like the popular song of a few years ago entitled, "Crazy Mixed-up Song".
One advantage of speaking rather late in a debate of this kind is that you have the opportunity of listening to many other members as they present various points in the budget which may have escaped your attention, with some of which you will agree and, of course, with some you will disagree. I was quite interested, for example, in listening to the hon. member for Compton-Frontenac (Mr. Stearns), who is a new Conservative member of this house and who represents the riding in which I was born and raised in the eastern townships of the province of Quebec. I must say that times must be getting really bad back in the eastern townships because I left there in the year 1934 and never since that time have they had to resort to the election of a Conservative member. I might say that the Tories were instrumental in chasing me out of my home town in 1934-


Some hon. Members:: Hear, hear.


Murdo William Martin: -and perhaps 1 should return the compliment and try to reverse the position.
One thing that appears to be very prevalent among members on the government side is the accusation that the Liberals frittered away our markets. I hold no brief for the Liberal party, in fact they are far too much like the Conservative party to suit me and, as I have mentioned before, in that part of the country from which I come they run on the same ticket. However, I would like to know just what markets prime minister Bennett bequeathed to the Liberal party which they frittered away over the last 22 years. This is something which has to my knowledge never been explained by any member from the government side.
Another theory which is creeping in a little more than it did last year, particularly in speeches of hon. members of cabinet rank, is that the blame is being slightly shifted and now we find the lately discredited Liberals are no longer to blame for our hard times and recession and so forth. We find the blame is moving a little more towards the United States. The United States is the big bad bogeyman at the present time and I would forecast that this trend will continue and increase as time goes on. The Tories, of course, like Caesar's wife, must always be beyond reproach.

The Budget-Mr. M. W. Martin
The hon. member for Fortage-Neepawa (Mr. Fairfield) did clarify one point for me when he spoke recently. This was in respect to the fact that you can now deduct the cost of eye glasses from your income tax.
I think I have finally found one reason why this particular measure can be justified at this time, and it is because of the extremely high cost which must have been entailed by members of the Conservative party in buying eyeglasses in the last few months. To begin with, they all had to get one set of dark glasses to present themselves being blinded by "the vision" and then, just before the introduction of this new budget, they had to get themselves a pair of rose-coloured glasses so that they might be able to look on it with favour.
I was interested to find that we have finally got one man who, after 22 years or so, has had the courage to stand up and say he is proud of the former Bennett government. That is something which the hon. member for Carleton (Mr. Bell) has done, and maybe it is setting a new trend.
(Translation):
Mr. Speaker, I would like at this time to compliment the hon. Minister of Finance. He made a particular point of deviating from what he says has been a tradition of this house.
I am referring, of course, to the incident where the hon. minister proceeded to give part of the budget address in the French language which, happily, he speaks flawlessly. I would like to compliment the minister both on the new practice which he has adopted, and also on the ease and dispatch with which he spoke in the other of our two official languages in this country.
However, it was perhaps unfortunate that he should have chosen such an unhappy budget as this one, to establish the custom of presenting it in both languages.
I know of many words which the hon. minister could have used at this time which would have gladdened the hearts of the Canadians who speak the French language. Nothing is nothing whether it is said in French, English or any other language, and that is exactly what the Minister of Finance has offered the Canadian people.
For example how much better would it have sounded to the French-speaking people of this country if the finance minister of Canada had chosen the occasion of the first budget speech in French to announce that


the basic income tax exemption had been raised to $1500 for single people and $3000 for married couples, in order for people on low incomes to try to meet today's cost of living.
How much sweeter it would have sounded to our French-speaking families, as they struggle to make ends meet, if the minister had taken the occasion of the first budget address in the French tongue to announce that the children's allowance was going to be increased sufficiently to give it the same purchasing power it had when first implemented in 1945.
I overheard one hon. member say that this was the first time in the history of the Canadian parliament that we had been granted a deficit in French, and all in all the fact that it was given in their mother tongue is a very poor candy coating for such a bitter pill.
Let us hope that the next time the hon. Minister of Finance proceeds to give a budget speech in French, that it has some good measures in it, rather than just good words.
(Text):
I believe this budget was one of the best examples of a political step dance, the like of which has never before been seen in this house. I suggest that on future occasions, if the budget follows the pattern of this one, we should put the Minister of Finance (Mr. Fleming) on the table so that even though we might not agree with his words we might at least enjoy the political dance he is putting on.
Now on page 1231 of Hansard the minister used these words with reference to the rapid increase in the population over the past few years. He said, and I quote:
It provides a greater market for our agricultural produce and for the products of our factories and reduces our vulnerability to changes in external demand. It brings us a greater diversity of talent and the means of employing it to better advantage. It reduces the per capita cost of supplying essential services in this great land. There can be no doubt that the population growth of the postwar period has had these effects.
I should like to know, if this growth in population has reduced costs how it is that today we are burdened by the highest cost of living we have ever had in this country. I will simply say that this is one of the illusions of this society of ours. This is the theory. But this theory has never worked out in practice. Unfortunately in this country cost of production has never had any close relationship with the cost which consumers have had to pay. The only relationship is that established by what the traffic will bear.
I should like to give just one illustration of what happened. Everyone will recall the last big steel strike in the United States just over a year ago. After the strike had gone

on for approximately three weeks a settlement was reached, I believe, in accordance with which the cost of fringe benefits, pay increases and so forth amounted to a package deal of approximately 30 cents an hour, which, multiplied by the numbers of steel workers in the United States, meant an increase in steel costs of $4,500,000 a week. What happened? The price of steel was raised by $6 or $8 a ton-I do not recall which-with the expressed purpose of meeting these additional costs. But the increase in the price of steel meant the difference of $17 million a week. I would say this is a perfect example of what actually happens, regardless of what the theory may be.
The Minister of Finance referred glibly in passing to the rapid growth at home of population and income. I believe the figures show that the population has increased, but in the light of the number of unemployed we had at the end of last year I doubt if he could convince very many people that the growth in income had kept pace with the growth of our population. As a matter of fact, if there has indeed been such a rapid growth in income how is it that the minister himself forecasts a reduction of income tax receipts next year of $129 million in spite of this rapid growth of population. The figures are contained in the table on page 1241.
Again, I find on page 1232, a brief statement by the minister:
Transfer payments especially rose rapidly and for the latter half of the year they were an important element in sustaining and increasing personal income and consumer demand.
It is gratifying to note that the minister has finally agreed with the theory long expressed by our party that income placed in the hands of the disabled and unfortunate people of this country has a marked effect in sustaining and increasing consumer demand. In other words, it is better to place this money in the hands of the people who need it and who will spend it in such a way as to bolster our economy, and I am glad that the Minister of Finance in his address endorsed that theory.
Again, on page 1233, we find another small item which the minister passed over very briefly. He said, and I quote from Hansard:
There was some weakening in the demand for forest products.
I would say that that is probably the greatest understatement which has been made here for some considerable time. I know that, in the area from which I come, the lack of demand for forest products is responsible for about 90 per cent of the unemployment. I should like to know because I searched in vain in the budget to find if any steps have been taken or if any action is contemplated
25, 1958	1623
The Budget-Mr. M. W. Martin by this government to restore the lost markets for forest products. I believe it was the hon. member for Restigouche-Madawaska (Mr. Van Horne) who discovered some of the reasons why we have lost these markets. Certainly one of the major ones was the fact that countries which used to purchase from Canada now send their orders to Russia and the amazing part of it is that they pay more for the Russian product than they did for the Canadian. The explanation for this change in the placing of orders is because these countries could not secure a guaranteed delivery from Canada. As soon as a slightly more lucrative market developed somewhere else in the world Canada dropped the commitments it had with its established markets in order to make a fast dollar in a short period of time. Today we realize the folly of those actions.
In the budget speech of the Minister of Finance we find evidence of another fast shuffle on page 1233 of Hansard where he is reported as saying:
Wheat sales although lower for the year as a whole began to pick up in the last quarter and since December they have forged ahead on a year-to-year comparison.
I would like to know how many years we compare; one, three or five? Before proceeding to the subject of unemployment as referred to in the budget I recall to mind that yesterday the hon. member for Saint John-Albert (Mr. Bell) chose to place some poetry on the pages of Hansard and I should like to follow his example to the extent of placing on the record a few verses which in jpy view have a direct relationship to the present attitude of the government with regard to unemployment. These words are contained in the famous poem by J. D. Ketchum entitled "Hymn to the Glory of Free Enterprise" and the verses I wish to
cite are as follows:
At periods when Free Enterprise may not provide
employment	___
We dread the thought of hungry men-it lessens our enjoyment;	.	...	...
The government must then step in, with this consideration:	.
That any public works proposed do not increase
taxation.
Depressions, after all, my friends, much as we deplore them,
Are acts of God; who ever heard of blaming
Kucinncc for tVlPTTl?
Chorus:
Then hail we now Free Enterprise,
Extol and give It praise 1
Of course, when profits shrink in size.
To lay men off is only wise;
We dearly love Free Enterprise-
But only when it pays.
Conspirators on every side Free Enterprise have slandered,
Forgetting that it's given us the world's best living standard;
1624	HOUSE OF
The Budget-Mr. M. W. Martin We eat and drink supremely well at Royal York and Rideau,
And no one drives more Cadillacs or bigger ones than we do.
How blind the socialist who plots this way of life to shatter!
Free Enterprise brings wealth to all-at least, to all who matter.
Chorus:
Then hail we now Free Enterprise,
Extol and give it praise!
The working man must recognize That, if in want he lives and dies,
It's just his lack of enterprise-
The enterprise that pays!
At page 1233 the Minister of Finance is also reported as saying:
The reduction of the pressures and demands which characterize 1956 led to a mood of greater caution with regard to new capital ventures and was reflected in a declining rate of increase in job opportunities.
What a delightful euphemism for recession or depression. The minister required four lines and I do not know how many words to say what could have been said in one word. This is just another shining example of this doubletalk the minister employed throughout the budget address. Every situation has been twisted around in an effort to give it an optimistic slant.
Throughout the budget speech we find a strange maze of comparisons. In one case we compare one month with another, in another case we compare the same month with the previous year and in another case we have to go back to 1954 in order to find a favourable comparison. The minister must have used rose-coloured glasses, tax-free, in preparing his budget and in drawing what he fondly hopes is a favourable picture of the situation in Canada. It is small wonder that the budget was delayed last year and not brought in until now.
The minister went on to say as recorded at page 1233:
For 1957 as a whole the number of people with jobs averaged 135,000 or 2.4 per cent higher than in 1956, an increase which compares quite well with the increases in employment during 1955 and 1956.
In this instance we have a comparison between 1957, 1956 and 1955. Another choice item in the minister's address is this:
The labour force increased by 210,000, about double the average annual rate of the preceding five years.
In this instance the minister had to go back five years in order to find a favourable comparison. Then we find this gem:
As employment was higher through 1957 than through 1956, so also was unemployment.
What a beautiful way of expressing it.
I do not know how much comfort it is going to give the unemployed to know that while there are more of them, the unemployed, 

there are more of us, the employed. In fact, one hon. member of the cabinet said just yesterday, I believe, that the unemployed in Windsor do not have too much to kick about. He said in effect, "Look across at Detroit and you will really see some problems." When he said this I was reminded of a sergeant by the name of Pat Patterson whom I knew in my army days and if the minister had spoken in jest I would have understood him. The sergeant of whom I am speaking was in the habit of indulging somewhat excessively in alcoholic beverages in the evening with the usual bad results in the morning. When the men would appear for sick parade he would ask what the trouble was and chided them by saying, "Do you think you feel bad? How do you think I feel?" That seems to be the attitude that was taken by the hon. minister yesterday, "If you think you are badly done by you should look across the street and you will find guys worse off than you are."
At page 1234 the minister was reported as saying:
From October to December there was a pause in the upward movement in aggregate labour income, although for the year as a whole the rise in labour incomes amounted to 7] per cent, but early in 1958 the upward trend in aggregate labour income reasserted itself.
On page 1233 these words of the minister appear:
-in January, February and March of 1958, employment was slightly lower than a year earlier.
This is possibly the best example yet of the minister's twisting around of situations in order to present them in the best possible light. I have taken the trouble to check the figures. The information I received expressed in round figures is as follows:
October	
208,000	unemployedNovember	
292,000	unemployedDecember	
286,000	unemployedJanuary	
520,000	unemployedFebruary	
555,000	unemployedMarch	
590,000	unemployed
Despite this the minister told us that early in 1958 the upward trend in aggregate labour income reasserted itself. The minister went on to point out:
As a percentage of the labour force, unemployment in 1957 averaged 4.3 per cent, equalling the rate of 1954.
I do not know why 1954 sneaked in here, but I presume the only reason for it was that we had to go back that far before we could find anything that looked good even through rose-coloured glasses.
The minister has some sobering news as to the amount we are going to be required to borrow in the coming year. I should like to

draw to the attention of the house something that seems to come close to the amount that we are going to be required to borrow. According to the minister's figures, the average number of unemployed in the whole of last year was 254,000 people. If we multiply this number by the average annual wage in this country we find that it amounts to in excess of $750 million. This amount has been lost in production because our people have been unemployed.
It is also safe to say, Mr. Speaker, that the minister used the most favourable figures he could find to arrive at the average of 254,000. I think anyone would have done so in his position. It is also safe to say that to get a proper grasp of the over-all picture we could very easily triple this figure, if we took into account the number of people who are not registered, who never appear in those statistics, and combine them with the number of people who have been working less than full time. If we tie those together we find that the loss of production in this country through unemployment will amount to just about the figure that we are going to have to borrow in the next year.
I should like to add this. We must not forget that the first six months of last year were the favourable months, the ones that brought down the average to 254,000, but we have no such thing to look forward to this year. If the first six months of this year are the favourable months heaven help us next winter.
Then we come to another item that I find very difficult to understand. It has to do with savings in this country. The minister said:
Nevertheless the total savings out of current income were almost as high as in 1956 and amounted to about $6 billion. Personal savings was down about 5 per cent and accounted for almost one-quarter of total saving.
I find that very strange because when I was home last weekend I picked up a full-page advertisement in the Timmins Press which contained a quotation from the Prime Minister's (Mr. Diefenbaker) address to the Canadian congress of labour convention in Winnipeg on April 24, 1958. I was at that congress convention as a delegate when the Prime Minister addressed it. I do not remember what he said word for word and I have not been able to acquire a copy of his speech to verify this, but this is what the Prime Minister is reported to have said:
I would like to see started an aggressive buying drive to put money into circulation. Bank savings are up by 5.6 per cent over a year ago.
There may be a difference between bank savings and personal savings but I would assume they would be one and the same thing or pretty nearly one and the same
25, 1958
The Budget-Mr. M. W. Martin thing. I wonder whether the Minister of Finance and the Prime Minister could get together and iron out this difference of 10.6 per cent in their analysis of the savings situation in this country, because the figures of the Minister of Finance indicate that $26.5 million has disappeared some place. To return to the remarks of the Minister of Finance, I find that he said:
Pressures generated in 1956 did not have their full effect on prices until 1957. Thus, the consumer price index which began to rise in mid-1956 continued upward until last October, and experienced another short period of increase in the first four months of this year.
Here again we have our favourite whipping boy. We find that the Liberals are still to blame not only for the delayed effect of the pressures generated last year but also for the effect we are experiencing at the present time. I would think it is time to get a new whipping boy or try to do something to put a stop to this everlasting rise in the cost of living.
I should like to deal with another matter which appears to be the cure for something, I do not know just what. I should like to read from the same newspaper to which I referred a moment ago, namely the Timmins Press of Thursday, June 19, 1958, which contains a telegram from the Prime Minister to the chairman of the Timmins automobile dealers association. The telegram reads:
Congratulations to Timmins automobile dealers, the daily Press and radio station CKGB in starting "You auto buy now" sales campaign in response to my suggestion that more buying will stimulate business. Best wishes for success in your campaign which I hope will be duplicated across the country.
John Diefenbaker.
Of course, the reply is on the back page of the Timmins Press of June 21, and reads as follows:
O.K. John.
I find a very strange thing, Mr. Speaker; at the bottom of the advertisement in small print appear the following firms:
The following finance companies have pledged their support to this campaign:
Industrial Acceptance Corporation Limited Canadian Acceptance Corporation Limited Traders Finance Corporation Limited General Motors Acceptance Corporation
I do not know whether the savings are up 5 per cent, as the Prime Minister is supposed to have said, or whether they are down 5 per cent as the Minister of Finance has said. This is definitely not something that we should have sent across the country. The Prime Minister of Canada should not be used by the finance companies to try to rope in a few more people. If the Prime Minister has not done anything about it I suggest that he should. If the Prime Minister of this country is to be used as a selling feature from
1626	HOUSE OF
The Budget-Mr. M. W. Martin coast to coast he may find that he is something like a tune on the hit parade, which is used by every disc jockey in the country. Like these tunes he may soon find that he will drop from the top ten.
The planned outlays for business this year will be 11 per cent below the 1957 level; the planned outlays for housing, government departments and institutional services on the other hand are 14 per cent higher, according to the minister. I believe these words are meant to be reassuring to the house and to the country as a whole, and are meant to try to establish the fact that one more or less balances the other. Unfortunately, I could not find any figures anywhere to tell me what the 11 per cent and the 14 per cent referred to; 11 per cent of what? fourteen per cent of what? As a result, I for one do not find any comfort in those figures.
At page 1327 of Hansard the minister said:
I am confident that with more stable rates of growth and the increased production which will flow from our recent large investment we shall have the capacity, to an increasing extent, to meet our investment needs more nearly out of our own resources.
I thought it was rather strange that we have here again another new and very deceiving word for a recession. Now it is a more stable rate of growth.
I should like to take this opportunity to compliment the Minister of Finance on giving some assistance to the gold mining industry. However, before going too far in that direction I should like to have some assurance as to just what form the assistance is going to take. When the minister dealt with the matter in his budget address he said, as found on page 1239 of Hansard of June 17:
The serious problems of adjustment confronting this industry, going back as far as the war years, have adversely affected the northern mining communities which are dependent on it.
That is quite true, and as long as the purpose of this subsidy paid by the Canadian people is to render some relief to the gold mining communities I will give it 100 per cent support and co-operation. Unfortunately, however, the minister went on to say:
It is my hope that this measure will contribute to maintaining the level of gold production in Canada and in this way promote the well-being of our northern gold mining communities.
That is an entirely different thing, Mr. Speaker. It may seem possible to expect that a chip thrown in a little brook will wind up at a wharf in Montreal but unfortunately such is not the case. There is not more than one chance in a hundred million of that happening. We had a good example of that when the price of gold was increased the last time. I believe the price was increased from $20
[Mr. Martin (Timmins) .1

odd to $35 an ounce and at that time the gold miners received an increase of 5 cents per hour.


Mr. Nasserden:: I wonder whether the hon. member would tell us how much a gold miner gets an hour at the present time.


Murdo William Martin: The base rates in the gold mines at Timmins are as low as $1.19 an hour.


Edward Nasserden: How high do they go?


Murdo William Martin: The highest is $1.39 an hour.


Mr. Winch:: That will shut you up, won't it?


Murdo William Martin: I realize that many aspects of gold mining administration come under provincial jurisdiction, especially matters having to do with the workmen's compensation board and so on, but I believe that when gold miners are required to subsidize the industry twice through the federal government the federal government definitely has the authority to step in and try to correct matters. The miners are subsidizing the industry first of all through substandard wages as low as half of what men are getting for similar work in other industries. In addition, I should like to outline a case that came to my attention last week end. It has to do with the widow of a miner who for eight years had been on a full pension of $187 a month for silicosis. One lung was completely blocked and the other was badly damaged. On March 24 of this year he died of a coronary heart attack at the breakfast table. His widow was immediately cut off without one cent of pension because he did not die from silicosis but from a heart attack.


Mr. Deputy Speaker:: Order. It is with
regret that I must interrupt the hon. member but his time has expired.


Mr. O. H. Phillips (Prince):: Mr. Speaker, my first words must be words of congratulation to the Minister of Finance (Mr. Fleming) for the budget and his excellent presentation of it. Seldom does one hear such a factual explanation of the difficulties and problems facing a government. The minister made no effort to gloss over the problems of recession, and if all Canadians would take as frank a look at the economy it would go a long way to easing our problems.
The hon. member who has just spoken referred to the various coloured glasses used and the exemption on eye glasses announced in the budget. I can understand his concern because as a typical socialist he keeps his eyes closed to the problems of today and therefore will not require glasses.

The hon. member for Kenora-Rainy River (Mr. Benidickson), the financial critic of the official opposition, had to find something wrong with the budget. After advocating a number of so-called cures that his party used to precipitate the recession, he complained bitterly that the budget did not cure the recession. If the Minister of Finance could repair all the damage that the hon. member's party managed to cause he would rank as the world's outstanding plastic surgeon but unfortunately the wounds and scars left by the former Liberal administration do not heal that easily.
I find it rather strange that hon. members opposite should take the attitude that the budget is expected to be a cure-all for the economic ills of the country. Budget debates as recorded in Hansard reveal that when they sat on this side of the house they had an entirely different viewpoint. The debate of 1954 shows that no less a person than the former member for Inverness-Richmond adopted such an attitude at that time. As found on page 4017 of Hansard of April 12, 1954, the former member said:
-it is true that a surplus or a deficit is neither necessarily good nor bad in itself, but derives its virtue from its accommodation to the need of the economy. Of recent origin also is the belief that the budget can be used as a defensive and offensive weapon in maintaining balance in the economy.
It is interesting to note that the budget debate also contained a great deal about unemployment. Hon. members will realize that the former member for Inverness-Richmond is still held in high regard by the Leader of the Opposition (Mr. Pearson) who recently placed him in Liberal headquarters as a combination spiritualist and script writer for the melodramas originating from their part of the house.
I am very pleased that the government has embarked upon a program of public works and defence spending to put more money into circulation and to provide jobs. Formerly the government was very economy-minded and was striving to attain a balanced budget, but I am pleased that they have chosen a deficit and jobs in preference to a balanced budget and recession.
My constituency is well represented in the estimates of both the public works and defence departments, and while I sometimes get impatient that these projects are not progressing more rapidly one must remember the huge amount of work involved in preparing plans, tenders and the calling of tenders. Recently I called officials of the Department of Public Works to inquire when tenders would be called on a project in my
The Budget-Mr. Phillips constituency. I was impressed by the amount of work being done by the senior officials of the department.
The budget speech also forecast a higher deficit for the C.N.R. in the present fiscal year. This fact, plus the increased wage demands being put forward by C.N.R. employees should cause all hon. members to be greatly concerned about the future of the C.N.R. This is especially true of maritime and western members. It was expressly written in the terms of confederation that a railway was to be constructed and it was clearly understood that the cost of rail transportation was to be reasonable.
At the time of confederation most of the transportation was by water and moved in a north-south direction. The railway was built to encourage the movement of trade in an east-west direction, and it was understood that rail transportation would be at reasonable rates and competitive with water transportation at all times. Freight rates have increased to such an extent that any resemblance to water competition has been lost. The maritime provinces were pleased when this government disallowed the last increase in freight rates. However, we would still appreciate a thorough study of the freight rate problem and further reductions.
Perhaps some improvement in Canadian National operations could be achieved by restoring to parliament a certain amount of
control over that railway. I am sure that all hon. members of this house have received complaints from the public with regard to the Canadian National; that is only natural because the public feels they own the Canadian National. However, when a member passes on these complaints he runs into a blank wall and the reply that the Canadian National is independent and out of the control of parliament. Frankly, I am rather tired of these stock answers that the Canadian National is independent. If any organization that is independent of this house is allowed to run up a deficit of over $2 million per month, then that organization should be required to go elsewhere to make up that deficit. I do not think I am alone in this view. A number of hon. members on this side of the house have expressed the same view.
I have one more comment on the Canadian National, and then I shall move on to other aspects of the budget. We hear a great deal of talk in this house concerning reductions in the staff of the Canadian National. Strangely enough we never hear this talk in connection with the employees in the higher income brackets. If this were in

The Budget-Mr. Phillips private industry I think they would find it necessary to dispense with some of those in the higher income brackets.
Transportation is extremely important to my small province, especially transportation across the Northumberland strait. Recently the government authorized a survey to determine if a causeway linking Prince Edward Island with the mainland is feasible. The survey, in itself, has certain advantages, but I am afraid it has thrown a smoke-screen over our immediate needs. A traffic to our province and through our province has been satisfactory and has been increasing over the past number of years. The facilities we have now are taxed during the rush periods. It is often necessary to be in line for as long as six to eight hours on a holiday. Let us assume that a causeway is feasible, and no one who is an authority on the subject has said that a causeway is feasible, but if it were it would require several years to complete. I do not believe it is an exaggeration to say it would require ten years to complete the causeway. It is logical also to assume that our present load of traffic will continue to increase. This will leave our province in greater transportation difficulties.
I would urge the government to give consideration to placing another ferry on the Borden to Cape Tormentine run. If a causeway is built later on, then the ferry could be used as an icebreaker or could be put into service on some other run such as the Bar Harbor service. I would not like my remarks to be interpreted as being opposed to the causeway. All the island members are anxious to receive the report on the feasibility of the causeway.
While on the subject of transportation, perhaps I should say a few words about roads. I believe the day has arrived when the federal government will have to consider giving aid to provinces in connection with the construction of highways. This could be achieved, either through an extension of the trans-Canada highway policy or through giving assistance on main highways other than the trans-Canada. The main highway through my constituency is in a deplorable condition. I should like to see federal assistance given for rebuilding this highway, either under the trans-Canada highway plan or through the roads to resources program.
It was very gratifying to the maritime provinces to learn that the roads to resources program was to be extended to the maritime provinces. We were all pleased when the Prime Minister (Mr. Diefenbaker) announced in Halifax in March of this year that tourist areas would be considered as natural resources in the maritime areas. This is

another example of the interest shown in the maritimes by the present Prime Minister and his government. We are all pleased that this attitude and assistance continues.
The opposition has complained that dominion-provincial relations were forgotten in the budget. It will take some time for the people of Prince Edward Island to forget the dominion-provincial relations of the Liberal administration. If I may offer some advice to hon. members opposite, it would be simply to keep clear of the subject of dominion-provincial relations because their own record in that regard was anything but satisfactory. Before the election of June 10 our provincial government was required to repay a considerable sum of money as the result of overpayments under the tax rental scheme. The provincial premier, accompanied by a couple of the cabinet ministers, came to Ottawa to request the cancellation of the overpayment. Naturally they did not receive that, but they came back home and said they had received generous treatment.
Immediately after the election of the Progressive Conservative government the provincial government decided they needed an additional $5 million in order to finance provincial affairs. Last fall this government awarded our province $2.5 million annually under the special grants to the Atlantic provinces. In addition to that, $lg million will be offered under the roads to resources program. This makes a total of $4 million more that is available to our province than was given to it under the former government. It is amazing that those who specialized in being indifferent, inefficient and inconsiderate have now become the experts in dominion-provincial affairs. We in the Atlantic provinces all prefer the so-called neglect we are receiving from this government to the affection that was shown to us by the former government.
The budget intimates that some payments will be required under the farm prices stabilization act. I hope that considerable payments will be made to the farmers under this act. I know that the minister is faced with many problems in setting up and administering the act and in attempting to arrive at payments that are fair to all concerned. We should give the hon. gentleman some time to solve his many problems before we become too critical.
However, I think it would be only fair to warn him that the farmers of Canada expect and are entitled to something better than the type of slide rule thinking which was formerly characteristic of, and I am sorry to say is still exhibited by his department. I would hate to see this government spoil its record

by destroying the trust which any class of Canadian, especially the farmers, has placed in it. I am sure all hon. members will watch the Minister of Agriculture (Mr. Harkness) as he moves to implement the policies of his government as contained in the farm prices stabilization legislation.
In my own constituency the main farm product is of potatoes. Last year we had an extremely heavy crop of potatoes and although we sold more than in any previous year, a large portion of that crop remained unsold. The potato growers approached the farm stabilization board for assistance and I must confess I am somewhat disappointed in the assistance offered to them. I believe a new approach is imperative with respect to assistance to farmers and I feel the stabilization board must make some attempt to interpret the spirit of the act as passed through this house.
Last December the Prime Minister proposed to the NATO countries a plan calling for the establishment of a food bank and I hope the member nations can establish such an organization, which would serve a dual purpose. Firstly it would help to counteract communist leanings in the underprivileged countries of the world and secondly it would provide a market for our surplus agricultural and fisheries products. We quite often hear complaints from the hon. members opposite concerning government proposals for greater trade with Great Britain, and during the last election campaign the premier of my province denounced this policy as one creating disaster for our United States markets. We were going to lose our outlet for lobsters and other fisheries products as the result of United States retaliation for this policy. The ballot boxes were still hot when our Grit premier announced that he was going to England along with the other premiers of the Atlantic provinces to stimulate increased trade with Great Britain. He either retracted his prior statement or decided that as one of the few elected Liberal officials left in this country he would be safer on the other side of the Atlantic.
On Monday evening the hon. member for Gloucester (Mr. Robichaud) addressed the house. I must congratulate the hon. member. After representing a maritime constituency for a number of years he has finally discovered that the maritimes are actually part of Canada. This is a rather unusual achievement for one of his political affiliation, and I venture to say he is probably the first Grit since confederation to realize this fact. However, he apparently does not like the idea of national unity as he recommended the establishment of a commission to look after maritime affairs. This commission would not be
The Budget-Mr. Carter responsible to parliament but would assume all the responsibilities of parliament. He was probably bringing out the Grit doctrine of destroying parliament.
The hon. member further complains that certain projects of the former government, such as the trans-Canada pipe line, were detrimental to the maritimes. I would like to know how the hon. member voted on that issue; no doubt he was one of the gang working on the railroad. I appreciate his interest and desire to assist the maritimes, but may I suggest to him that he work with us to achieve that objective through parliament and through the Progressive Conservative government.


Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, I have a great deal of personal esteem and affection for the Minister of Finance (Mr. Fleming), and I wish I could honestly congratulate him on the presentation of his first budget in this house, but in view of the situation in which our country today finds itself and the total failure of the government to come to grips with that situation, I must confess I find it very difficult to discover anything in the budget upon which to congratulate him.
True the budget does have some notable features-it is perhaps the longest and wordiest budget ever presented in this house. It also proposes the largest peacetime expenditure and the largest peacetime deficit in the history of our country but, in view of the fact that not only is this budget the first presented by the minister but is also the first Conservative budget for over 20 years, I believe the people of Canada expected something more. This is particularly so having regard to the fact that the budget was so long expected and so long delayed as to be almost nine months overdue. Yet the presentation, when it came, was something of an anti-climax, and I do not think it could be described as either inspired or inspiring.
With respect to the deficit, the budget of course follows the traditional pattern set by the Conservative party over the years. The Minister without Portfolio, the hon. member for Greenwood (Mr. Macdonnell), described the budget the other day as putting into words what everybody already knew, and by that I presume he meant that the budget was not intended to contain anything startling or surprising.
It certainly did not contain any surprises for anyone who understood the financial consequences of the promises and commitments which were made by the Conservative party in the course of the last two elections. It certainly was no surprise for anyone in the Liberal party because we recognized the

The Budget-Mr. Carter economic nonsense which was being talked at those elections and we went so far as to point out to the people of Canada that if these promises were put into effect the financial consequences would be a deficit up to $1 billion. But it must have come as a shock to those people who took the Progressive Conservative platform seriously and who actually believed statements made by the Prime Minister and his colleagues during the two elections to the effect that it was possible to spend more money, collect less in taxes, and balance the budget at the same time.
The Prime Minister and his colleagues in the cabinet travelled the length and breadth of Canada pointing a finger at the Liberal government and accusing it of waste and extravagance and of overtaxing the people, and ridiculing any Liberal who dared point out that you cannot spend more and collect less without going into the red. It must be something of a shock to those people who believed the charge that the Liberals were guilty of large scale waste and extravagance to find Conservative cabinet ministers standing up one after another in this house as they did in the last parliament and admitting that they had not been able to find any waste or extravagance whatever. It must be an even greater shock for them to find the Minister of Finance himself admitting in his budget speech that not only has his government been unable to reduce expenditure as promised but that instead they have actually increased expenditure to the tune of over $200 million. And it must be a surprise to those people who believed that the Liberals had overtaxed them by $500 million a year to learn that all the tax relief they can expect now amounts only to about $200 million, and that in order to provide this relief the country has to incur a deficit of between $800 million and $1 billion.
Over and over again, this statement was made during the election campaign; people were told that families were being overtaxed at the rate of $120 a year. Another variation was that they were being overtaxed by $10 a month, and still another variation spoke of $30 for every man, woman and child in Canada. If that was true then, they are still being overtaxed today by $70 a year, by $6 a month and by $20 per head.
And I think it must have come as a surprise to the Prime Minister himself to discover that his program of increased expenditure which he himself assessed at $300 million at a press conference in Saskatoon on May 27 has generated a net deficit of over $600 million.
Apart from the effect that these surprises may have on the people of Canada, they do


give members of this party the comfort of knowing that the predictions which were made by Liberals during the last two elections have now been substantiated.


An hon. Member:: What predictions?


Mr.   Carier@: The predictions that the
promises and commitments which were being made would only result in a very substantial deficit.
The budget reveals a very grave situation in that we are faced at the same time with the twin dangers of inflation and recession and I do not think this situation has ever occurred at any previous time in our history. The government and the nation today are very much in the position of old Ulysses running the gauntlet between the floating islands of Scylla and Charybdis and trying to avoid being crushed. Today the country has to steer a course between depression and inflation and try to keep the economy intact as well. I think most of us admit that this is a problem which is beyond human wisdom to solve. Certainly the problem cannot be solved by the government alone. The government has a role to play but it is a very minor one. The major role must be played by the people of Canada themselves and without their full co-operation very little can be done to effect any solution to the problems which now face us. Especially is this true of management and organized labour. A new spirit must be created in our country, one of unity and unselfishness, because the best cure for inflation is to reverse the forces that produce it.
Wealth today is created by men and machines. There was a time when the bulk of wealth was created by man's labour alone. Technological progress has made it possible for more and more wealth to be produced by machines and with the advent of automation we have reached a phase when the bulk of wealth will in future be produced by machines. For many years there has been a constant struggle between management on the one hand and labour on the other for a greater share of the wealth which has been produced in this way. Somewhere there must be a dividing line for what is fair and honest both with regard to profits and with regard to wages. That dividing line can only be found in the spirit of what is actually best for the country as a whole. It can never be determined in the present atmosphere of suspicion and mistrust. Unity and unselfishness are essential and it is the duty of the government to do everything it can to create this spirit and this atmosphere.
I believe it is possible for management and labour to come to an agreement to share the benefits of automation and technological

progress with all the people of Canada. That would involve voluntary freezing of profits and wages and using the extra wealth produced to lower prices because unless prices can be stabilized there is no hope of ever curing inflation. That, I believe, is the greatest danger to Canada today and certainly it is the thing on which our enemies are depending to undermine our economy and weaken our defences. If we can stabilize and reduce prices everybody will win, everybody will be better off and our trade position will be greatly strengthened.
I believe the time has come when the impact of automation on the cost of production and employment makes necessary a complete overhaul of our monetary system. I made this suggestion when the Gordon commission was being set up but a study of the effects of automation was not included in their terms of reference. In a country like Canada with a sizeable increase in the labour force occurring at a time when automation is tending to displace labour at an unprecedented rate we must do everything possible to determine exactly the magnitude of the problem that will result and how it can best be met.
I believe the time has arrived when we must take a new look at our methods of creating new money and of injecting it into our monetary system. What are the effects of our present system of money management? In this connection I should like to ask the minister to tell us what will be the effects of his refinancing of the $3 million or $4 million about which he spoke in the budget. Will this money be taken from the people of Canada or will it be procured through the Bank of Canada and the chartered banks? If the latter course is followed what will be the inflationary effects of this procedure?
I believe we should have an investigation of our methods of determining interest rates. Can money be treated as a commodity and still perform its function as a means of distribution? Is there a better way of regulating the rate of expansion of our economy? Can a way be found in the future to avoid depressions? The best way to avoid a depression is to avoid the boom that caused it and if we are to do that, it is necessary for us to know what rate of expansion is best suited to our markets, to our available manpower, our population increase and our supply of materials. In other words what are the upper and lower limits of our rate of expansion? I believe the expansion of an economy such as Canada's involves control very much like that involved in driving a car. If you drive a car too fast you are in danger of running off the road. On the other hand if you drive it
The Budget-Mr. Carter too slowly there is a danger of stalling and blocking the traffic behind you. Somewhere there is a proper and safe speed for the car and there is a proper and safe rate of expansion for our economy.
I would like to see a royal commission or a parliamentary committee set up to study this question. Once this information is available then it should be possible for the government to call together a conference of industrialists, management and labour and map out a long-range program of capital investment for the orderly expansion of our economy. There is no reason why such a conference might not in time develop an integrated system of pensions and social security based on our economy which would replace the one we now have and take it completely out of politics.
If such a planning group could be set up successfully on a national scale I see no reason why it could not be extended to groups of nations such as the nations of the commonwealth and of NATO because we must raise our sights and look forward to a world community of nations if our economy is going to continue to expand and meet the pressures and dangers which await it in the future particularly from totalitarian countries which can utilize all the benefits of mechanization to dump goods on any market of the world without regard either to price or cost. Whatever the findings of such a body might be nothing substantial will be accomplished until a new spirit is created among all the people of Canada.
If it were to be set up, this commission should also study the tight money controversy because it is important that the people should know the truth about this matter. At the present time they do not know what to believe. The present government blamed the former Liberal administration for instituting tight money. Then the present Minister of Finance last session took credit for loosening money. The governor of the Bank of Canada then told us that there was no tight money and later on a group of economic professors criticized him and said he was just quibbling about words and that there had been in fact tight money. Obviously they cannot all be right.
Although the Minister of Finance took credit earlier for easing the supply of money he did admit in his budget address that there was such a thing as supply and demand and that these factors did have some influence on the money market. The story of tight money reminds me very much of a tale that used to be in school books long ago concerning two young boys who found themselves in an argument concerning a lobster. One lad was

The Budget-Mr. Carter the son of a fisherman and he said a lobster was black. The other chap who was the son of a man who sold cooked lobsters claimed that a lobster was red. Just as they were getting into a fight another man came along and pointed out to them that they were both right because the lobster is black until he is cooked and then he turns red. I would think that is pretty much like tight money. There was tight money. There was no tight money for the big fellow; it was only more costly money, but there was tight money for the little fellow who could not afford to pay the high rates.


Mr. Baskin:: The hon. member should know all about tight money.


Lionel Chevrier: Why does the hon. member not ask the governor of the Bank of Canada? He told of how it was brought about, and that was confirmed by the Minister of Finance the other day.


Donald Methuen Fleming: Nonsense.


Chesley William Carter: Whether there was tight money or not, I think we perhaps have some indication of this when we see the results of the methods used by the minister to refinance the loans, as he proposes doing in his budget. Whether there is tight money or not, there must be a more flexible system to give more protection to the little man.
I would suggest to the Minister of Finance that the operations of the Industrial Development Bank of Canada might be expanded to provide cheap working capital, if necessary, for small businessmen who perhaps might otherwise become the victims of the higher interest rates. At the present time the Industrial Development Bank operates in pretty much the same way as other banks. It is difficult to get any money from them unless you prove that you do not actually need it.
The most discouraging thing about the present budget is that it makes no provision to stimulate our economy and to help cure our unemployment problems. On Friday last the hon. member for Carleton (Mr. Bell) sought to obscure this point by indulging in speculation as to what would have happened had the Liberals been returned last June. Instead of indulging in idle speculation and allowing his imagination to run riot, it would have been much more profitable for the hon. member if he had consulted history and looked up Hansard and thereby discovered what actually had happened under a Liberal government in similar circumstances. Had the Liberals been re-elected in June there would not have been any rushing off to have another election in March.


Mr. Hodgson:: They would have swallowed the C.C.F.


Mr. Cardiff:: They would have choked.


Chesley William Carter: Had the Liberals been elected at the election in June, this house would have been presented with a budget, a bold, courageous budget such as-


Donald Methuen Fleming: What nonsense! Did Mr. Harris not bring down a budget last year?


Chesley William Carter: We would have brought in measures to deal with conditions just as Mr. Harris did once before. We would have done what the minister of finance did in 1954, 1955 and 1956.


Clayton Wesley Hodgson: We had one budget.


Chesley William Carter: He planned then for a deficit of $160 million, but it was a planned deficit to stimulate the economy of Canada, and he reduced taxes by $148 million. That is one thing that would have happened had the Liberals been returned in June. We could have come to grips with and boldly faced this problem of inflation, and we would have reduced taxes.


Donald Methuen Fleming: What utter nonsense!


James William Baskin: The Liberals had 22 years to
do it.


Chesley William Carter: My hon. friends make a lot of capital out of that, as though the Liberals had never reduced taxes in 22 years. That was the impression they sought to give the country all during the two election campaigns. They talked about over-taxation. We all know about that, $120 a year, $30 for every man, woman and child. For 10 months we heard that. What have you done? How much have you taken off? If we were overtaxed then, we are still over-taxed $500 million. How much are you taking off?


James William Baskin: What about our senior citizens?


Mr.   Carler@: Mr. Harris reduced taxes.


James William Baskin: "Six Dollar" Harris.


Chesley William Carter: Mr. Harris reduced taxes by $148 million, and he planned for a deficit of $160 million but it was not like the present deficit. The present deficit is just a deficit to cover increased expenditures. Mr. Harris' deficit was a planned deficit to stimulate the economy and it worked. If my hon. friends will go back and look at Hansard they will find that it was successful and that instead of the deficit being $160 million it was $33.1 million. That is the difference between a planned deficit and the kind of deficit which we have today.


James William Baskin: What about this month?


The Acting Speaker (Mr. Rea):: I must remind hon. gentlemen that we are not in committee of the whole. Mr. Speaker is in the chair.


Chesley William Carter: Mr. Speaker, the most alarming part of this budget so far as our province is concerned is its policy of a return to trade restrictions, in view of our great dependence on world trade. Trade is the key to employment, because trade is the key to capital investment outlay and therefore to production. Who wants to produce goods that cannot be sold?
On June 23 the dominion bureau of statistics bulletin informed us that for the first quarter of this year there had been a 2 per cent drop in volume in our non-farm production. In the face of this information how does the minister justify his 2 per cent increase in the gross national product for the year? I believe the minister is indulging in a little over-optimism at the present time. If our gross national product declines, as indicated by the figures for the first quarter, or even if it remains stationary, it must result in an even bigger deficit than the $640 million net which the minister estimated. When all the other bits and pieces are added on to something around $1 billion. How grow to something around $1 billion. How discouraging must this news be to the unemployed of Canada whose representatives marched up to see us yesterday? This falling off in capital investment outlay means one thing, namely no extra jobs to take care of the 200,000 increase in our labour force. The only conclusion I can come to is that next year unemployment will be far worse than it was last winter.


An hon. Member:: Gloom and doom.


Chesley William Carter: As far as Newfoundland is
concerned, the tendency of the Conservative party to divert trade from the United States and to restrict trade with other countries, particularly European countries to which we sell fish, is fraught with very grave consequences for our fishermen. The merchant marine and fisheries committee of the house of representatives in the United States is at the present time considering a $43 million support program for United States fish producers. This represents an incentive payment of one cent a pound to the fishermen, one-third of a cent per pound to the plants for every fish handled, payments for technical improvements to boats and equipment and to processing equipment, and in addition ten-year loans at three per cent. This bill is receiving very wide support both in the
25, 1958	1633
The Budget-Mr. Martineau house of representatives and the senate and there is very little doubt that it will be recommended.
If the bill is recommended it is going to have two effects which can be very serious not only for Newfoundland but for the fishing industry of all the Atlantic provinces. One effect of it must be to increase fish production which will mean that their imports will be correspondingly less. The second result can be even more serious because under the bill fish will come under section 22 of the United States agricultural adjustment act which is the import restriction section. With the heavy government subsidy it will be much easier for the fishing interests of the United States to get import restrictions under this section than through the tariff commission where they have tried unsuccessfully in the past. As far as Newfoundland is concerned, both for the unemployed, whose number is double this year what it was last, and for the sake of the fishing industry it is important that this trade diversion and restriction policy be reversed at the earliest possible moment.
Finally, Mr. Speaker, while the budget is not very reassuring to the people of Canada, it does bring a measure of comfort to the Liberal party because it tends to refute most of the claims made by the Conservatives during the election campaign. It vindicates Mr. Harris' courageous, bold and sound budget. It confirms what the Liberals told the people would happen if a Progressive Conservative government were elected and it proves that our warnings were justified.
(Translation):


Mr. Paul Martineau (Ponliac-Timiskaming):: Mr. Speaker, my first remarks will be directed to congratulating the Minister of Finance (Mr. Fleming) who has managed to present in clear, precise and concise form the fiscal policy of the government and who has also managed to frame appropriate measures to solve the serious problems of the day.
I have noticed that when it came time for them to criticize the budget certain members of the opposition were so short of ideas, that the better part of their speeches was given over to accusing government members of having nothing to say about the budget except to congratulate the Minister of Finance.
Well, Mr. Speaker, I feel that the budget speech of the minister is certainly worthy of the tradition of the great ministers of finance who have occupied that post in this house. As far as we are concerned, we have no hesitation whatever not only in congratulating him at this time, but in renewing those congratulations at every possible opportunity.
1634	HOUSE OF
The Budget-Mr. Martineau
One innovation which was certainly most welcomed by many hon. members and more particularly by all members from the province of Quebec was the presentation of some parts of the budget speech in French by the Minister of Finance. The minister made his remarks in flawless French, and I commend him not only on my behalf but on behalf of all my colleagues of the province of Quebec.
Mr. Speaker, it is also said that that budget is a blue budget. Personally, I have no prejudice against this colour because as the hon. member for York-Humber (Miss Aitken) so aptly put it, it is a colour which reminds us of heaven. Indeed, it is appreciated not only on this side of the house but throughout our country, as shown by the results of the last election.
I should like to outline how the achievements of this government and the budget proposals are particularly adapted to the constituency I have the honour to represent in this house.
In fact, the riding of Pontiac-Timiskaming is not only a constituency, it is almost an empire. Its area is as great as that of the province of Nova Scotia and about two-thirds of the area of old Scotland. It is a very diversified district from the point of view not only of its landscapes but also of its population. Its limits are within a few short miles of the national capital; in fact, parts of the riding are within the federal district. I am particularly glad to see that the government has decided to introduce a new Federal District Commission Act during this session and I hope that the limits of the national capital will thus be enlarged to open to the population of the capital and to its numerous visitors an area endowed with a great panoramic beauty, the constituency of Pontiac.
Extending along the shores of the Ottawa river, the limits of my constituency go up to the very head of the Ottawa river, in the area of the great lake Victoria. Leaving Pontiac and going west, we come to the riding of Timiskaming which is not as old as Pontiac but whose beginning goes back more than a century.
The settlers who ventured hundreds of miles in virgin forest to settle on the shores of Timiskaming lake, which in Indian language means "deep waters", had a remarkable spirit of adventure and of individualism. It was not because of the stimulus of need that they ventured in areas which were then very wild, but rather because of the appeal of the great adventure, and especially the appeal of new land. Those people settled in the constituency of Timiskaming on the


shores of that lake, close to Fathers' bay, and from there they spread deeper into the surrounding area and opened up a whole constituency made up of several now flourishing parishes. Incidentally, the Fathers' bay district, and particularly the location of the old fort, deserves to be pointed out as an historic site, and the historic sites commission should turn its attention to that area and preserve it for future generations.
This year, the chamber of commerce of Ville-Marie is celebrating the 50th anniversary of its founding. This body initiated the development, not only of Ville-Marie itself, but of all the riding of Timiskaming, and, August 3rd and 4th of this year will be dedicated to the celebration of this truly memorable anniversary in the annals of the riding of Timiskaming.
This riding, which originated in 1885, is the cradle of northwestern Quebec, and I invite all hon. members who would like to take advantage of a holiday, to go and, together with me, I hope, take part in the feasts and celebrations which will take place on this occasion.
Mr. Speaker, as you no doubt realize, by what I have just said, the people of Timiskaming do not expect that the government should support them; they merely ask the authorities to assure them the proper economic climate to develop according to their own standards, and also to share in the prosperity and grandeur of our country. It is precisely what the government has tried to do up to now, and I also believe that the budgetary measures will enhance the progress we now enjoy.
A good part of the people of Timiskaming are farmers, living off the land. I had the opportunity recently of visiting several of those communities, and everywhere I went, the farmers were glad to tell me that things were now turning for the better for them. Things are going better, first because of the enactment of the Agricultural Stabilization Act which gave the farmer a sense of security he had never enjoyed before. Thus, through the legislation announced by the government, he can now expect more generous credit facilities.
I submit that one of the measures most likely to increase the revenue of the farmers -I do not mean that it is perfect, it is only a beginning-is the Agricultural Stabilization Act; it should however include, among other things, pulpwood, which is essentially a normal agricultural product at least in my constituency. So I suggest that the

government should give generous subsidies to farmers who, for instance, have to start undertakings such as cold storage and slaughter houses and also that a system should be adopted to help farmers who, for instance, would need subsidies to purchase seeds and other things of this kind.
The Minister of Finance (Mr. Fleming) said that one of the ways to restore prosperity in our country was to extend the period of social benefits.
The people were very gratified by the increase of old age pensions.
I suggest that it would be advisable to consider raising family allowances. Surely that is also one way of increasing the social capital in circulation and the consumer's purchasing power. That is why I am happy to join with the numerous hon. members who have requested early implementation of legislation designed to increase family allowances instituted in 1944 and which have not been increased at that time, save by the token sum of $1, last year.
25, 1958
The Budget-Mr. Martineau
Mr. Speaker, in the constituency of Timis-kaming, we have huge resources which have hardly been tapped. One of the most attractive planks in the Conservative platform is its development program for our natural resources. The constituency of Timiskaming, and the constituency of Pontiac also, are rich in mineral resources of all kinds.


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


Paul Raymond Martineau: I move the adjournment of the debate, Mr. Speaker.
(Text):



BUSINESS OF THE HOUSE

Lionel Chevrier: May I ask the leader of the house if he can impart any information about Monday?


Mr. Green:: I am not in a position to give any further information as yet.


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

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

Mr. Mcllraiih: How much wheat was disposed of in the last fiscal year by the Canadian government, or any of its agencies, through long-term credit or gifts?
Answer by: Hon. Gordon Churchill (Minister of Trade and Commerce):
The following quantities of wheat were sold by the Canadian wheat board during the period April 1, 1957-March 31, 1958:
Bushels
Grants under regular Canadian
Colombo plan	program	 6,198,294.6
Grants to Colombo plan countries (over and above regular program)	 3,036,271.6
Ten-year loan	to	India	 14,933,333.3
Gift of flour to UNWRA (wheat
equivalent)		 979,009.0
Sale on three-year credit arrangements (repayment guaranteed by Canadian government)	 12,387,759.0


COMPULSORY SAVINGS REFUNDS NOT RETURNED
Mr. Houck: 1.	What is the total amount of compulsory savings refunds not yet returned?
2.	What is the total number of persons to whom such refunds have not yet been made?
3.	What steps has the government taken to get these refunds to the persons to whom they belong?
Answer by: Hon. George C. Nowlan (Minister of National Revenue):
1.	$2,902,417.07.
2.	62,927.
3.	Although no action is being taken to locate individuals entitled to refunds of this nature, all inquiries received and claims made during each year are carefully investigated and refunds issued where warranted. In this regard it may be said that, of the total number of cases investigated in the last few years, approximately 80 per cent have shown that the taxpayer has either already received his refund or is not entitled to one.


UNEMPLOYMENT STATISTICS, QUEBEC AND ONTARIO
Mr. Deschaieleis: 1.	How many unemployed persons were registered as at June 1, 1958 in (a) the province of Quebec: (b) the Montreal area; (c) the Quebec area?
2.	How many unemployed persons were registered as at June 1, 1958 in (a) the province of Ontario; (b) the Toronto area; (c) the Hamilton area?
3.	What amount of benefits was paid from June 1, 1957 to June 1, 1958 in (a) the province of Quebec; (b) the Montreal area; (c) the Quebec area; (d) the province of Ontario; (e) the Toronto area; (f) the Hamilton area?
4.	How many applications for employment were filed with the various employment offices of the unemployment insurance commission by persons not receiving benefits, between June 1, 1957 and June 1, 1958 in (a) the province of Quebec; (b) the Montreal area; (c) the Quebec area; (d) the province of Ontario; (e) the city of Toronto?
5.	What was the amount of the unemployment insurance fund as of June 1, 1957 and June 1, 1958?
Answer by: Hon. Ellen L. Fairclough (Acting Minister of Labour):
1.	Number of persons registered for employment at local offices of the unemployment insurance commission on May 29, 1958, the date closest to June 1, 1958, for which data are available were: (a) In the province of Quebec, 197,191; (b) in the Montreal area, 68,200; (c) in the Quebec area, 13,002.
2.	(a) In the province of Ontario, 185,524; (b) in the Toronto area, 52,846; (c) in the Hamilton area, 15,630.
3.	(a) Province of Quebec, $137,660,436;
(b)	Montreal local office area, $41,525,811.67;
(c)	Quebec local office area, $9,460,798.02; (d) province of Ontario, $137,057,103; (e) Toronto local office area, $32,396,516.40; (f) Hamilton local office area, $10,737,207.07.
4.	Breakdown of data requested not available.
5.	May 31, 1957, $846,819,435.32; May 31, 1958 (preliminary), $653,501,427.


MILITARY COLLEGE GRADUATES
Mr. Fisher: 1.	Do graduated cadets of the military colleges have the option of going on reserve list after a certain period of active service?
2.	If so, how long has this been in effect, how many cadets have had the option, and how many have taken advantage of the option?
Answer by: Hon. G. R. Pearkes (Minisier of National Defence):
1.	Yes. Three years after completion of academic training.
2.	This policy has been in effect since September 1952. Of the 141 graduates who have been eligible to exercise this option 26 have done so.


ANODIZED ALUMINUM IMPORTS FROM U.S.
Mr. Martin (Essex East): 1.	Has the government received protests from any organization or trade union against the importation of anodized aluminum from the United States?
2.	If so, has the government taken any action to protect this industry in Canada against alleged unfair competition?
Answer by: Hon. George C. Nowlan (Minisier of Nalional Revenue):
1. Yes.

Questions
2. The Department of National Revenue is presently investigating the fair market value of anodized aluminum entering Canada, with a view to ensuring that it is being imported in accordance with the provisions of the Customs Act and the Customs Tariff Act.


MARINE RAILWAY CONSTRUCTION, SHIPPEGAN, N.B.
Mr. Robichaud: 1.	Has the Minister of Fisheries received any representation requesting that a marine railway or haul-up be constructed at Shippegan, Gloucester county, New Brunswick?
2.	If so, what action has been taken in connection with such request?
Answer by: Hon. J. A. MacLean (Minister of Fisheries):
1.	Yes.
2.	Matter is receiving consideration.

Thursday, June 26, 1958