1958-07-02

PRIVILEGE


Mr. Frank Howard (Skeena):: Mr. Speaker, I wish to raise a question of privilege which affects every member of this House of Commons and every member of the other place. Would you, Mr. Speaker, in conjunction with the honourable the Speaker of the other place, and on behalf of the houses of parliament of Canada, express in the warmest possible terms our sincere appreciation of the unprecedented courtesy and honour that the Argentine house of deputies paid to Canada by suspending its sitting yesterday in tribute to our 91st birthday?



MR. FISHER-REFERENCE TO ANSWER TO STARRED QUESTION

Mr. D. M. Fisher (Pori Arthur):: Mr. Speaker, I rise on a question of privilege. A week ago an answer was given to starred question 27, part 1, by the Minister of Transport. I have received sworn testimony from one of the persons involved in that question, and it indicates that the minister's reply was incorrect. I wanted to bring this matter to his attention. I will forward him the information so that, if this testimony should be true, he can make the proper correction.



ESTIMATES


[Stage Direction]
Mr. A. R. Smith (Calgary South) presented the third report of the standing committee on estimates, and moved that the report be concurred in.
Motion agreed to.


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, with the consent of the house I should like to make a brief statement on the British Columbia coastal shipping strike involving the Canadian Pacific Steamships
operations. As hon. members are aware, this strike has now been going on for about six weeks. I have today received word from the commissioner of inquiry, Mr. Eric Taylor, who is still in Vancouver, to the effect that after further strenuous efforts over the week end and up to late last night, he feels there is nothing more that he can do to bring the parties together.
In view of this he has recommended that arrangements be made forthwith for the resumption of the operation of the ships of the company in the interests of the community, on the understanding that the disputes which arose out of failure of the parties to agree upon the amendments to be made to the collective agreements which expired in the case of the S.I.U. on September 15, 1957, and in the case of both the Canadian merchant seamen's guild and the national association of marine engineers on September 1, 1957, be referred to arbitration by an arbitrator appointed by the Minister of Labour of Canada for the purpose of resolving the matters in issue and the making of a decision thereon by August 15, 1958.
I am conveying these recommendations to the parties concerned and urging them to give them their favourable consideration.



PRIVATE BILL


Mr. R. J. McCleave (Halifax) moved:: That the petition of Beverley Georgina Berry Turpin for a bill of divorce, presented on June 30. 1958, together with the clerk of petitions' report thereon of July 1, 1958, be referred to the standing committee on standing orders for such recommendations as may be deemed advisable.


[Stage Direction]
Motion agreed to.


Hon. Sidney E. Smith (Secretary of State for External Affairs):: Mr. Speaker, I desire to table an exchange of notes between the United States government and the Canadian government. This exchange has to do with the conditions which will govern the establishment, maintenance and operation of aerial refuelling facilities at certain bases in Canada.

Canada-U.S.-Aerial Refuelling Facilities
Mr. Speaker, you will recall that the Prime Minister informed the house on June 10 of the intention of the two governments to complete a formal agreement on this subject. This agreement has resulted from extended discussions between the two governments. The purpose of the establishment of the refuelling facilities is to strengthen the readiness capability of the United States strategic air command, which constitutes the free world's main deterrent against aggression. These refuelling facilities are designed to contribute to the ability of that deterrent force to react quickly in the face of the reduced time of warning which must now be contemplated in the event of an act of aggression against this continent.
[Later: ]
On the orders of the day:


Hon. Paul Martin (Essex East):: Mr. Speaker, may I ask the Secretary of State for External Affairs whether with regard to the exchange of notes, now constituting an agreement between Canada and the United States, any construction of air refuelling facilities in this country pursuant to the agreement will be performed by Canadian workmen; and will the conditions relating to the construction and procurement of construction equipment likewise be confined to Canadian sources?


Sidney Earle Smith: Mr. Speaker, I would refer to paragraphs 5 and 6 of the annex to the note I have tabled. With respect to construction, it is provided that procedures for awarding contracts for construction of the air refuelling facilities, and so forth, shall be determined by agreement between appropriate agencies of the two governments. Then there are set out in paragraph 6 with respect to procurement of equipment certain provisions in that regard. I can assure the house, Mr. Speaker, that the interests of Canadian contractors will be safeguarded as much as possible.


Paul Joseph James Martin: May I ask a supplementary question. Is the Secretary of State for External Affairs in a position to say whether or not this covers the use of labour, by the United States, or is it the intention that only Canadian labour will be employed? Are we to construe from what the minister has just said about the interpretation of article 5 and following articles of the annex that the construction work may be awarded to American contractors?


Sidney Earle Smith: The
agreement that is referred to in paragraph 5 of the annex has not as yet been worked out. I can only reiterate the assurance that I gave.



EQUIPPING OF MISSILE TESTING STATION IN CANADA

[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: would like to direct a question to the Minister of National Defence. As Canada does not produce any missile weapons and, to our knowledge, our armed forces are not equipped with the same, could the minister make any comment on recent allegations that a contract has been awarded for the equipment for a missile testing station in Canada?


Hon. G. R. Pearkes (Minister of National Defence):: I will take that question as notice and give the hon. member an answer tomorrow.


Harold Edward Winch: As a supplementary question, would the minister also check as to whether or not a contract has been awarded to Computing Devices of Canada, which has its headquarters in Ottawa, for the supplying of equipment for the purpose I have mentioned?


George Randolph Pearkes: Mr. Speaker, I will also take that question as notice.



FISHERIES


Hon. Howard  C.. Green@Minister of Public Works: That items numbered 130 to 153 inclusive, as listed in the main estimates of 1958-59, and items numbered 555 to 565 inclusive, as listed in the supplementary estimates for the fiscal year ending March 31, 1959, relating to the Department of Fisheries, be withdrawn from the committee of supply and be referred to the standing committee on marine and fisheries, saving always the powers of the committee of supply in relation to the voting of public moneys.


[Stage Direction]
Motion agreed to.


Hon. Howard C. Green (Minister of Public Works) moved:: That items numbered 193 to 218 inclusive, as listed in the main estimates 1958-59 and items numbered 575 to 577 inclusive, as listed in the supplementary estimates for the fiscal year ending March 31, 1959, relating to the Department of Mines and Technical Surveys, be withdrawn from the committee of supply and be referred to the standing committee on mines, forests and waters, saving always the powers of the committee of supply in relation to the voting of public moneys.


[Stage Direction]
Motion agreed to.


Howard Charles Green: Mr. Speaker, I have one more motion

which I did not mention last night, but in view of the report of the standing committee on estimates, which has been concurred in, I am moving this additional motion today:
That items numbered 78 to 84 inclusive, as listed in the main estimates 1958-59, and item No. 541, as listed in the supplementary estimates for the fiscal year ending March 31, 1959, relating to the Department of Defence Production, be withdrawn from the committee of supply and be referred to the standing committee on estimates, saving always the powers of the committee of supply in relation to the voting of public moneys.


[Stage Direction]
Motion agreed to.


Mr. Pickersgill: 1.	When was Mr. Carson Stroud selected as adviser on employment to the officials of the Terra Nova national park?
2.	Who recommended his appointment?
3.	What are his qualifications to serve as adviser?
4.	Who selected the temporary and casual employees in the park before Mr. Stroud became adviser?
5.	Were there any complaints about the selection of employees before Mr. Stroud became adviser?


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: Mr. Speaker, the answer to the first question is April, 1958.
The answer to the second question is that there is no appointment. I will take responsibility for suggesting that he be among those asked for advice.
The answer to the third question is that Mr. Stroud is a leading citizen in the area and is highly regarded.
The answer to question 4 is as follows. The only previous adviser of whom the department is aware was Captain M. Berry who is, I believe, a personal friend of the hon. member for Bonavista-Twillingate, and any additional information will have to come from him in that regard.
With regard to question 5, some complaints were received between the time I became minister of the department and before Mr. Stroud's selection. I believe his advice will help the park authorities to handle employment questions at the park in the best interests of the local people. No complaints have been received from local residents about selection of employees since the department has had Mr. Stroud's advice.



QUESTIONS PASSED AS ORDERS FOR RETURNS


TRANSPORT DEPARTMENT


Mr. Fisher: 1.	Did any minister of the crown use Department of Transport planes for other than government business between February 1 and March 31, 1958?
Motions for Papers
2.	If so, what ministers, for what flights?
3.	What remuneration did the department receive for any such flights?
4.	What was the institutional or personal source of such remuneration?



COAL TENDERS, P.E.I.

Mr. Robichaud: 1.	Have public tenders been called for the supplying of coal for Department of Transport, Department of Public Works, and national defence buildings, in Prince Edward Island, for the fiscal year 1958-59?
2.	If so, who submitted tenders, what was the amount of each tender and the grade of coal in each case?



GOVERNMENT PURCHASES IN U.K.

Mr. Godin: What was the value of goods purchased by the Canadian government in the United Kingdom in each month from July, 1957, to date?



MOTIONS FOR PAPERS

[Stage Direction]
EFFECTS OF ATOMIC RADIATION Motion No. 11-Mr. Argue:
For a copy of any reports or submissions exchanged between the Canadian government or any of its departments, and the United Nations or any of its agencies, between January 1, 1957, and the present, dealing with the effects of atomic radiation.
Hen. J. W. Monleith (Minister of National Health and Welfare): Mr. Speaker, I realize that this is not debatable, but I am suggesting some modifications. Since January 1, 1957, the Canadian government, as a member of the 15-nation UN scientific committee on the effects of atomic radiation, has submitted four reports dealing with different aspects of atomic radiation. Copies of these four reports will be tabled.
During the same period one copy only of papers and reports received by the UN scientific committee from the other member countries of the committee has been made available to the Canadian government. These copies are on file in my department. These reports now total about 230, most of which are of a highly scientific nature and run to as much as 2,000 pages. In view of their number and strictly scientific content, I respectfully suggest that instead of having copies made of these voluminous reports for tabling purposes, they be made available to the hon. member for his perusal in my department. I believe the hon. member is agreeable to this.
Mr. Speaker:: May I record this motion as having been otherwise dealt with and withdrawn by leave of the house?


Some hon. Members:: Agreed.
Order discharged and motion withdrawn.
1826	HOUSE OF
Inquiries of the Ministry



BEAM STATION ROAD, TERRACE AIRPORT, B.C.

[Stage Direction]
Motion No. 20-Mr. Howard:
For a copy of all correspondence, telegrams and other documents exchanged between the federal government, or any of its departments, and the government of British Columbia or any other organization or person, dealing with the use of the beam station road at the Terrace airport by the British Columbia provincial government or by any other person.
Hon. George H. Hees (Minister of Transport):: Mr Speaker, I wonder if the hon. member would mind allowing this motion to stand until I have an opportunity to discuss it with him.
Motion stands.



FEDERAL ELECTION EXPENSES, 1958

[Stage Direction]
Motion No. 21-Mr. Howard:
For a return showing the total amount of election expenses on behalf of each candidate, by constituencies, in the general election of March 31, 1958, as indicated in the return respecting election expenses submitted by the official agent of each candidate, as required under the provisions of section 63 of the Canada Elections Act; and showing also the names of any candidates, by constituencies, on whose behalf election expense returns have not been submitted.
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 Minister of Trade and Commerce if he would comment on a report which appears in the press this morning to the effect that as a result of discussions in Paris the list of prohibited exports to the Soviet union and communist China has been reduced and, if this is the case, could the minister indicate the nature of the relaxation?


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, I have no comment to make at this moment because I have not received an official report with regard to the changes that may have been made.



URANIUM


[Stage Direction]
On the orders of the day:
Gordon Minto Churchill: Mr. Speaker, on June 24 the Leader of the Opposition addressed a question to me with respect to the effect on Canada's position, as a supplier of uranium to Japan, of an agreement signed June 6 between Japan and the United States for the supply over a 10-year period of 2,700 kilograms of uranium to Japan by the United States.
[Mr. Speaker.)

The agreement in question is an agreement for co-operation in the civil uses of atomic energy, and provides, among other things, that the United States will sell or lease, as may be agreed, to the government of Japan enriched uranium containing up to a total of 2,700 kilograms of U-235. This material will be supplied up to this total quantity only in such amounts as will be required from time to time over a 10-year period for the fuelling of certain nuclear reactors which the government of Japan, in consultation with the United States, decides to construct or to authorize private organizations to construct in Japan. The material in question is, of course, enriched uranium which Canada is not in a position to supply.
As my colleague the minister of external affairs stated in the house a few days ago, we understand that the Japanese authorities are anxious to co-operate with Canada in the peaceful uses of atomic energy, and we hope they will shortly be in a position to begin negotiations toward an agreement for such co-operation. This agreement will contain a provision permitting the supply by Canada of natural uranium in commercial quantities to Japan in the coming years. Our present information is that the Japanese nuclear power program will in due course require substantial quantities of natural uranium, and as one of the world's leading uranium producers we hope that much of this will be provided by Canada.



PRAIRIE FARM ASSISTANCE


[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Prime Minister. I wonder if the Prime Minister would care to comment on his inspection of the very serious conditions on the prairies and tell us whether or not the government contemplates any emergency action arising out of that inspection, particularly in respect of an increase in the rate of payments under the Prairie Farm Assistance Act?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, in so far as government plans are concerned they will be communicated to the house as soon as any decision is made. However, in reply to the earlier portion of the question I would say this. In Manitoba and Saskatchewan I had an opportunity of doing that which is very necessary to be done at all times by one who has my responsibility-to know at first hand what is actually taking place.

In the province of Manitoba, according to the information I received, and that was supported by what I personally saw in the particular areas I visited, some 700 townships this year will require to be inspected under the Prairie Farm Assistance Act. In the province of Saskatchewan, while yesterday and also the day before when I was In Brandon several localities received rain for the first time-


Hazen Robert Argue: What was the amount?


John George Diefenbaker: While changes could take place in consequence of a continuance of reasonable precipitation, at the present time the picture is anything but one that would please the hearts of those who are familiar with conditions that have obtained in past years and the regularity with which drought has stricken certain portions of Saskatchewan ever since the white man first visited those areas.
In Saskatchewan the position seems to be that of the 3,000 townships in that province,
2,000	will be subject to the necessity of inspection under the Prairie Farm Assistance Act, which gives some indication of the extremely serious condition prevalent in that province at the moment.


Hazen Robert Argue: Mr. Speaker, I thank the Prime Minister for his statement. I realize that any government policy will be announced in due course, but I wonder whether the Prime Minister can say if a study is continuing in the whole field of crop insurance. That question comes very much to the fore with conditions as they now are.


John George Diefenbaker: As the house has been advised on previous occasions, that study is being continued.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Minister of Justice. Has the minister's attention been drawn to a Canadian Press news report dated June 23, entitled "Judge Blasts Federal Men on Not Giving Arrest Reason", which reports Mr. Justice H. W. Mclnnes, of the supreme court of British Columbia, as criticizing senior officials of the minister's department for issuing a defective warrant for the rearrest of a man who faced the prospect of imprisonment for the remainder of his natural life. In view of the public interest in this unusual situation, is the minister prepared to give an explanation of the circumstances to the house?
Inquiries of the Ministry


Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, I want to thank the hon. member for giving me notice of his question. The case referred to was that of an inmate of the British Columbia penitentiary who was serving an indeterminate sentence as a result of a finding by a criminal court that he was an habitual criminal. After he had served 10 years of this sentence he was released on licence under the Ticket of Leave Act in January of this year. I should point out that his sentence had not been remitted, but that he was only granted a licence to serve the remainder of his sentence outside of prison for so long only as the conditions of the licence were complied with.
In June of this year it became apparent that this man was not complying with the terms of the licence under which he had been released from the institution; that for the protection of society it was desirable that the licence should be revoked and that, as required by the Ticket of Leave Act, he should be returned to the penitentiary. My colleague the Solicitor General, who is responsible for the administration of the Ticket of Leave Act, advised His Excellency that the licence should be revoked and it was revoked accordingly.
The Ticket of Leave Act provides that, where a licence under the act is revoked, the appropriate minister of the crown shall signify to the commissioner of the Royal Canadian Mounted Police that the licence has been revoked, and require the commissioner to issue his warrant for the apprehension of the licensee. This procedure was followed in the case to which the hon. member refers. However, the warrant that was issued by the commissioner of the R.C.M. Police indicated on its face that the ticket of leave licence in question had been revoked, but did not indicate that the appropriate minister of the crown had signified that fact to the commissioner of the R.C.M. Police. I should say that the commissioner's warrant in this case followed the form that has been used for such warrants since the Ticket of Leave Act came into force in 1895.
However, when the licensee was taken into custody under the commissioner's warrant, his counsel made successive applications by way of habeas corpus to two judges of the supreme court of British Columbia. Both these applications were refused. However, upon application to the third judge, Mr. Justice Mclnnes, the commissioner's warrant was held to be invalid on the ground that it did not contain a recital to the effect that the appropriate minister of the crown had signified to the commissioner of the R.C.M. Police that the licence had been revoked.

Inquiries of the Ministry
I might add that appropriate steps have been taken to ensure that in the future any warrant that is issued by the commissioner of the R.C.M. Police upon the revocation of a licence under the Ticket of Leave Act will not be defective, in the sense in which the commissioner's warrant was found to be defective in the case to which the hon. member referred.
With regard to the observations made as to the lack of reasons, I might point out that one of the basic provisions of the Ticket of Leave Act is that, where a man on ticket of leave is found to be not observing the conditions of the licence under which he is at liberty to serve the rest of his sentence outside the institution, that man should be immediately apprehended and recommitted, for the protection of society, and indeed, in many cases, in his own best interests. This is the scheme of the Ticket of Leave Act, which, with certain modifications, will be carried forward into the new proposed national parole act, of which notice has been given on the order paper. There will be an opportunity then for a fuller discussion if it should be desired at that time.



HEALTH INSURANCE


[Stage Direction]
On the orders of the day:
Mr. W. H. McMillan (Welland):: I should like to direct a question to the Minister of National Health and Welfare. According to press reports the minister of health of British Columbia stated that that province signed the federal hospital insurance agreement under protest. What was the reason for the protest, and did other provinces make similar protests?


Hon. J. W. Monteilh (Minister of National Health and Welfare):: I also noticed the article, which I may state comes as a complete surprise to me. I should like to examine the correspondence and whatever there may be on file, so I think I shall take this question as notice.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. J. R. Tucker (Trinity-Conception):: should like to ask the Minister of Labour if there have been any recent changes in the unemployment insurance regulations so far as fishermen are concerned. If so, would he indicate the precise effect of these changes?


Michael Starr: I wish to thank the hon. member for giving me notice of this question. In answer I might say that fishermen became eligible to receive benefits on December 1, 1957. An order in council relating to fishermen's benefits was passed to this effect in November, 1957, and there has been no change in the regulations in so far as fishermen are concerned since that time.


Hon. J. W. Pickersgill (Bonavisia-Twillingate):: May I ask a supplementary question. Has the minister seen a report in the newspapers of Newfoundland to the effect that the Minister without Portfolio announced there had been a change?


Michael Starr: No, I have not, Mr. Speaker.



THETFORD MINES


[Stage Direction]
On the orders of the day:
Mr. Gabriel Roberge (Megantic):: I wish to direct a question to the Minister of Labour. Did the minister receive a telegram from the municipal authorities of Thetford Mines regarding unemployment and asking that seasonal benefits be paid to the unemployed for a further period? I am sorry I did not have an opportunity to send the minister notice of the question.


Michael Starr: Mr. Speaker, I am not aware of any such telegram, but I will look into the departmental files and provide an answer to the question for the hon. member.



REQUEST FOR SEASONAL BENEFIT PAYMENT FIGURES

[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: I have a supplementary question, Mr. Speaker. May I ask the Minister of Labour whether he has yet had an opportunity to get the figures I asked the acting minister for a day or two ago, with respect to the number of persons receiving seasonal benefits at the time seasonal benefits stopped on June 28?


Michael Starr: I understand that takes about two weeks to compute, Mr. Speaker. As soon as the figures are available I will convey them to the hon. member.


John Whitney Pickersgill: Is the minister going to be in a position to give the actual number of persons receiving benefits or the number of claimants? He indicated some time ago that he hoped to have the actual figures of beneficiaries.


Michael Starr: I am not certain I can, but I will endeavour to comply with the wishes of the hon. member.


Inquiries of the Ministry IRRIGATION



ALLEGED REMOVAL OF FLAG FROM OFFICE BY R.C.M. POLICE

[Stage Direction]
On the orders of the day:
Mr. Samuel Boulanger (Drummond-Arthabaska):: I should like to direct a question to the Minister of Justice. Will the minister inform the house upon whose instructions an officer of the Royal Canadian Mounted Police acted in requesting that a flag be removed from an office in the parliament buildings?


Edmund Davie Fulton: I am unaware that any officer of the Royal Canadian Mounted Police acted under such instructions.


Hon. Lionel Chevrier (Laurier):: Will the minister look into the case and ascertain the facts?


Edmund Davie Fulton: I will be glad to, but I should have thought it would be within the knowledge of the hon. member asking the question that the control of the parliament buildings rests with the protective staff of the respective houses.


Paul Joseph James Martin: Is the minister not aware that there was a radio report this morning to the effect that the removal of the flag in question was performed at the instance of a Royal Canadian Mounted Police officer?


Edmund Davie Fulton: No, I did not hear that report, but I will inquire into the circumstances and let the house know.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. C. W. Carter (Burin-Burgeo):: May I
direct a question to the Minister of Transport. I regret not being able to give him notice, but I do not believe he will be unduly handicapped. Is the minister correctly reported in today's Gazette to the effect that the Canadian National ferry William Carson is expected to start using the new harbour at Port aux Basques by the end of this summer? If so, can the minister be a little more specific as to when the trial runs may begin?


George Harris Hees: The trials are expected to start shortly, and are to be carried out this month. It is hoped by the management of the Canadian National that the Carson will start operating into Port aux Basques by the end of this month.



SOUTH SASKATCHEWAN RIVER


[Stage Direction]
On the orders of the day:
Mr. J. E. Pascoe (Moose Jaw-Lake Cenlre):: In view of the fact the Prime Minister has just returned from Saskatchewan, is he in a position to make any statement in regard to the South Saskatchewan dam?


John George Diefenbaker: Mr. Speaker, the only connection between my visit and that dam is that climatic conditions in Saskatchewan this year indicate how necessary it was that this dam and irrigation project should have been proceeded with at least six or seven years ago.
However, the general position of affairs with regard to the matter is as follows. There has been transmitted to the government of Saskatchewan a draft agreement setting out the basis upon which the national government is prepared to join in the construction of the dam. Possibly I could do no better than to refer to the various items in connection with that draft agreement.
First, the dominion government will pay 75 per cent of the cost of construction of the dam, with 25 per cent being the responsibility of the provincial government except where the cost exceeds $100 million, in which case the national government will provide the total amount of that excess. Furthermore, in so far as the share of the government of Saskatchewan is concerned in the construction of the dam, that is the 25 per cent to which I have just made reference, we have agreed to finance half of Saskatchewan's share by accepting 20-year obligations of the province.
Third, we have agreed to pay 25 per cent of the cost of penstocks to provide a minimum of 200,000 horsepower.
We have agreed to transfer the ownership of the dam to Saskatchewan when it is completed and filled to the extent which will permit operation to produce a minimum of
200,000	horsepower of electrical energy.
We have further undertaken to assume the entire cost of engineering and legal services and supervision.
As to the future after the dam is constructed, we have agreed at the sole expense of Canada to correct all defects which may develop within the first 10 years after turning the dam over to Saskatchewan. We have also agreed to maintain the dam for a period of 10 years, for six years entirely at the expense of Canada and for the final four years with the expense being shared equally with the province.
In order to assure that the dam will be properly constructed, a construction board

Inquiries of the Ministry is to be set up with dominion and provincial representatives to review plans and so on during the time the construction of the dam is going forward, and also a maintenance and operation board during the period in which we will maintain the dam, but its operation will be in the hands of Saskatchewan. And for a period of 25 years from the time Saskatchewan takes over the dam where, by reason of a failure in the structure of the reservoir that is attributable to faulty design or construction, damage is caused which in the opinion of the Minister of Agriculture and the premier of the province of Saskatchewan is of the magnitude of a disaster, we have agreed that Canada will indemnify the province in respect of all claims of third parties arising out of such failure.
From the foregoing it will be seen that many of those things that in the past held back any agreement have now been removed by the acceptance on the part of this government of the need of the dam being proceeded with as a national venture in co-operation with the province of Saskatchewan. My hope is that at the earliest possible date this agreement will be signed, to the end that the work may be started within the next few weeks.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Samuel Boulanger: I should like to direct a question to the Minister of Agriculture; I regret that I did not send him notice. I should like to ask the minister whether he has replied to the representations of the syndicate catholique de l'U.C.C., des cooperatives agricoles et du conseil de l'administration de la federation de l'U.C.C. de la province de Quebec, pointing out that the price support for cheese is a half cent higher in Ontario than in Quebec in general, and one cent higher in Ontario than in the Saguenay region? Does the minister propose to take any action to rectify the situation?


Hon. D. S. Harkness (Minister of Agriculture):: Mr. Speaker, I do not recall receiving representations from the organization which the hon. member mentioned, though I may have done so. However, the situation with regard to the support price of cheese is this. Under the provisions of the act we provide a support price which is fixed on the basis of the average price for the preceding 10 years at representative markets. As it happens, during the past 10 years the average price at Montreal has been less than the average price at Toronto and other Ontario points. That is

the reason there is the half cent difference in the support price provided for Quebec cheese as compared with Ontario cheese.


Samuel Boulanger: I have a supplementary question. The price is a cent lower in the Saguenay region than it is in Ontario because cheese is shipped to Montreal instead of being graded in the Saguenay region. That is why the price is a cent lower than it is in Ontario and a half cent lower than it is in Montreal.


Douglas Scott Harkness: Mr. Speaker, I am not aware of the fact that it is a cent lower. As a matter of fact, my understanding is that the Quebec cheese people are much better off now than they have ever been. The Kraft cheese people have made a contract with the Quebec cheese producers to take their production off the market at, I believe, the same price as the support price in Ontario, namely 34 cents. If there is a cent difference it may well be because of the fact that the handlers, the co-operatives or those who are handling this cheese, are taking bigger handling charges than they should really be entitled to. However, I have no personal knowledge of that particular situation.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Harold Edward Winch: I should like to direct a question to the Minister of Labour, in view of the statement that was made in this house yesterday by the government house leader to the effect that the Minister of Labour was absent in Europe on important business affecting the Department of Labour. Is it the intention of the Minister of Labour, now that he has returned, to make a report to parliament on his recent tour, as is the usual custom when a member of the cabinet is away on a prolonged visit overseas while the house is sitting?


Michael Starr: Mr. Speaker, I realized yesterday, as I do again today, how greatly concerned the hon. member is with respect to my work and my activities. I assure him that at all times I try to discharge my duties and responsibilities conscientiously and well.
As to the detailed report on the international labour congress which lasted from June 4 to June 25, I shall be glad to give it in detail but I assure you, Mr. Speaker, and hon. members of this house that it will take three to four hours. If that is what the hon. member desires I shall be glad to do it. However, if he wishes to have an accounting

with regard to the ILO congress, I shall be glad to give it to him privately any time he has two or three hours to spare.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Hon. Henri Courlemanche (Secretary of State):: Mr. Speaker, on June 25 the hon. member for Port Arthur inquired whether senior officials of the civil service associations and the head of the civil service commission would be called before a committee of the house in connection with recent allegations made concerning staff reductions in a certain crown corporation.
As hon. members are aware, the civil service commission is presently engaged in a thorough review of the Civil Service Act and civil service regulations, and it is anticipated that the commission's recommendations on all aspects of federal personnel administration will be submitted by the end of this year. The commissioners will be considering such matters as those referred to in the hon. member's question.
For this reason the government believes that if action along the lines suggested by the hon. member's question is to be taken, it would be more useful to parliament if it were taken at a later stage.


Douglas Mason Fisher: I would like to ask a supplementary question of the Prime Minister arising out of the answer given by the Secretary of State. While the statement is welcome and we will look forward to the report of the civil service commission, would the Prime Minister consider taking some steps to allay the considerable disquiet which has developed as a result of the situation in Central Mortgage and Housing Corporation and in the civil service with respect to statements which have been made?


John George Diefenbaker: Mr. Speaker, I think everything which could be said on this subject has been said.


Some hon. Members:: Oh, no.
(Translation):



STATEMENT AS TO ALLEGED NEW POLICY REGARDING APPLICATIONS FOR EMPLOYMENT

[Stage Direction]
On the orders of the day:
Henri Courtemanche: While I have the floor, Mr. Speaker, I should like to reply to an inquiry made by the hon. member for St. Denis (Mr. Denis) on June 25 last. His question was:
Inquiries of the Ministry
Is it true that the civil service commission no longer accepts applications for employment unless there is a vacancy?
The answer to this question is yes. Last year, the civil service commission made a detailed study of the administrative methods and procedures used by the commission. The purpose of that study was twofold. The first objective was to improve as much as possible the efficiency of the services which the commission must give to the public and to various government departments. Secondly, the commission wished to make sure that it was making the best possible use of its staff.
In the course of that study, it was determined that every day the commission received about 40 applications, often of a general character, referring to no specific competition. Two or three clerks spent their whole time answering all such applications. Moreover, some officials of the commission's personnel selection branch had to devote a large part of their time to that same procedure. On the other hand, experience has shown rather conclusively that, notwithstanding all the time which the staff of the commission was spending on such applications, the results achieved were far from substantial.
The commission also felt it was hardly fair to grant this special treatment to people sending general applications when that same treatment was not granted applicants for duly advertised competitions.
Finally, not only are the notices of the commission posted in post offices throughout the country, in the offices of the national employment service and in the district offices of the commission, but they are continuously being published in newspapers from Newfoundland to British Columbia. Consequently, any Canadian wishing to enter the civil service, with the possible exception of very few people who live in remote areas, can easily know from day to day about the employment possibilities in the civil service and about the examinations advertised by the commission.
For all these reasons, the commission has come to the conclusion that the public money which was used to answer the general applications just referred to could more properly be used elsewhere and, as a consequence, the commission no longer answers those requests except in cases where the applications deal with fields of employment where there is still a lack of qualified candidates.

Inquiries of the Ministry


Mr. Azellus Denis (St. Denis):: Mr. Speaker, I would like to direct another question to the hon. Secretary of State. In his opinion, does it require more work to accept and file an application than to take the trouble of replying to the application, returning the form and informing the candidate by letter that no further applications are being accepted?
On the other hand, Mr. Speaker, if some people want to put in applications for employment in the Post Office Department, for instance, the way to take part in an examination for a postman's job would be simply to read the daily paper...


An hon. Member:: Question!


Azellus Denis: I am asking the hon. Secretary of State if the new policy of the civil service commission might not prevent hundreds of people from getting employment in the civil service. I have put the question, and I now request an answer from the hon. Secretary of State.


Henri Courtemanche: The hon. member for St. Denis has too much experience to ask such a question. He knows that while the Secretary of State is spokesman for the civil service commission, he has nothing to do with the administration of any rulings of that body.


Azellus Denis: Mr. Speaker, I should like to ask a supplementary question. If the civil service commission makes wrong decisions and states a wrong policy, does the Secretary of State have to put up with it, in view of the fact the civil service commission is under his jurisdiction?


An hon. Member:: We have put up with it for 22 years!


Henri Courtemanche: It is a commission which was instituted by the former government, and I have to suffer the consequences. (Text):


Mr. Speaker:: Not having the advantage of simultaneous translation, I am afraid I am missing some of this debate.



POST OFFICE DEPARTMENT

[Stage Direction]
SPECIAL ISSUE TO COMMEMORATE 50tH ANNIVERSARY OF FIRST COMMONWEALTH AIR FLIGHT
On the orders of the day:
Mr. Robert Muir (Cape Breton North and Victoria):: May I direct a question to the Postmaster General. Has the Post Office Department any plans to issue a stamp to commemorate the 50th anniversary of the first powered flight of a heavier than air

machine in the British commonwealth, which occurred in Baddeck, Nova Scotia, on February 23, 1909? This may not seem a very urgent question, but it is one of vital importance to the citizens of the town of Baddeck.


Hon. W. M. Hamilton (Postmaster General):: Yes, Mr. Speaker, this subject was selected by the post office as a very suitable one to be so marked, and the design is now in the process of development. It is probable that it will include a representation of the first aircraft which flew at Baddeck, piloted by Mr. J. A. D. McCurdy almost 50 years ago.



THE BUDGET


[Stage Direction]
The house resumed, from Friday, June 27, 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.
Lionel Chevrier: Mr. Speaker-


Mr. Speaker:: Had the hon. member for St. Antoine-Westmount (Mr. Webster) completed his remarks?


Lionel Chevrier: When the debate adjourned last Friday I thought the official opposition had the right to resume the debate at this time.


Mr. Speaker:: I had a note from the clerk that that hon. member had the floor, and I did not want to do him any injustice.
(Translation):


Lionel Chevrier: Mr. Speaker, in the few moments I have at my disposal today, I should like to devote part of my speech to a matter of the greatest importance to me and especially to the province of Quebec. In fact, the budget speech did not mention the matter, or barely touched upon it. I refer to the question of federal-provincial relations.
Mr. Speaker, momentous as the question is, the budget speech gives no clue as to the government's intention in that regard. Indeed the budget gives no clue as to what the government might be planning with respect to this important question, and I am inclined to believe that if provincial premiers happened to come to Ottawa, no one would be more embarrassed than the hon. Minister of Finance (Mr. Fleming) himself. Since he has announced no policy whatever on that question, I am therefore convinced that the hon.

member for Bonavista-Twillingate (Mr. Pick-ersgill) was perfectly right, the other day, when he said: "I am convinced that neither the Minister of Finance nor the government, for that matter, has any intention of convening a federal-provincial conference in Ottawa, in 1958".
Mr. Speaker, this question was one of the main themes of the last electoral campaign in the province of Quebec. According to the former supporters of the Union Nationale and the new Conservative members of that province, the Liberal party and its chief were the very incarnation of centralization, whereas the Conservative party and its chief were in favour of decentralization and provincial autonomy.


Some hon. Members:: Hear! Hear!


Lionel Chevrier: Mr. Speaker, I am glad that the hon. members have applauded this statement, and I wonder how the hon. member for Quebec-Montmorency (Mr. Lafreniere) could state here some time ago, that his chief was the saviour of confederation. I should like to know on what basis the hon. member made such a statement. Surely not on the basis of the famous telegrams which were sent by the federal government, several of which never reached their destination. Now then, what is his basis for that statement?
Mr. Speaker, these new Conservatives from the province of Quebec have been going through the province under the standard of the Union Nationale claiming that the rights of our minority had been wronged by the policy of the former federal government. They told the people of Quebec that they were great champions who would stand against this threat, against such tactics of invasion of the provincial field on the part of the then federal government.
Although, Mr. Speaker, I could, in this regard, quote the utterances and promises of a good many Conservative members from the province of Quebec, I will merely take up some statements of the member for Belle-chasse (Mr. Dorion), who not very long ago was referred to in Le Devoir as the new Conservative lieutenant for Quebec province at the federal level. I should rather imagine that his colleagues from the province of Quebec who sit in this house must have frowned on reading this statement in Le Devoir. The hon. member himself, furthermore, claimed in this house that he was speaking on behalf of the Conservatives of the province of Quebec.
There was a time, Mr. Speaker, when the hon. member knew of no better way of con-57071-3-116
The Budget-Mr. Chevrier demning the Liberals than to accuse them of being Conservatives themselves.
In an article published in Le Temps, on January 17, 1947, the hon. gentleman wrote as follows:
It is generally admitted that the Liberal party has drawn so heavily on the Tory party for inspiration that, at the present time, it is little else than a carbon copy of the Conservative party.
This proves then, that, in those days, he had no great liking for the Conservative party. He even spoke of it derisively. In fact, I almost feel like asking: "When did he see the light?"
Previously, the hon. member, in a radio speech delivered in March 1943 and bearing on the terms of confederation, made particular reference to what had happened in 1867, and stated the following:
The basic powers which the provinces had reserved for themselves were such as to give rise to the highest hopes. The constitution had granted them exclusive rights of legislation, within their own territory, in respect of agriculture, colonization, immigration, municipal institutions, internal transport, property, civil rights, education, incorporation of companies, organization of the courts, administration of justice, social and industrial organization. From the economic point of view, the provinces retained ownership and administration of crown lands and of natural resources, whereas, from the fiscal point of view, they were granted the right to levy direct taxes, that is, real estate taxes, income tax, sales tax, succession duties, etc.
In other words, whereas the federal state was to be concerned with the external policy of the country and with its customs policy, the provincial State was to enjoy sole responsibility for its own internal policy, within its own territory. To such a degree of emancipation, then, were we led by the constitution of 1867.
That is how Quebec, half whittled away through the Act of Union of 1841, reasserted itself, resumed the machinery of direction, and, in short, came into its own again.
Mr. Speaker, what that amounts to can be summed up roughly as follows: matters concerning the country's foreign policy and customs policy fall within the purview of the federal government, and the rest comes under provincial jurisdiction.
In short, I would say that this can only be held to mean that the constitution of 1867 was purely confederate in nature, as distinct from federal, because the central government was supposed to deal only with external questions, whereas the provinces had the responsibility of internal ones.
Considering these former statements-and I could quote many more-and remembering the presumption of his former chief, Mr. Duplessis, who said that the provinces had a priority right with regard to taxation matters and that under a Liberal government Ottawa had seized a fiscal

The Budget-Mr. Chevrier power to which it was not entitled, it is difficult to understand the views recently expressed by the hon. member in this house.
As a matter of fact, the learned argument he submitted at that time mainly consisted, to my mind-and I am saying so with all due respect-in breaking through open doors, but in doing so, the hon. member implicitly stated how much his political philosophy had evolved, and how much his position with regard to political principles had changed since he abandoned the Union Nationale party and his chief, Mr. Duplessis.
The first point raised by the hon. member concerns federal subsidies or grants to the provinces. On this point, his argumentation is not very clear to me. I have read and reread that part of his speech several times and, to my mind, it can only mean either that federal subsidies to the provinces, barring those which are specifically ordered by the constitution, are unconstitutional or that the subsidies process must not be taken as a general principle and as the only means of financing provinces.
If the hon. member's thought is in accord with the first interpretation, then his words and his deeds disagree because, since the beginning of this session, he has already voted in favour of federal subsidies to provinces, such as the hospital insurance subsidies which surely are not ordered by the constitution, and he will no doubt have to do likewise many times in his stay in this house, no matter how short it be. On the other hand, if the second interpretation is the right one-


Mr. Dorion:: Is the hon. member expressing a desire or a wish?


Lionel Chevrier: It does not matter; it does not affect my argument in any way.


An hon. Member:: What you are saying is true.


Lionel Chevrier: On the other hand, Mr. Speaker, if the second interpretation is the right one, I am then under the impression, as I have already said, that the hon. member has been smashing down an open door because, even if, in fact, federal subsidies have been the main source of revenue for the provinces during many years, I do not know anybody, especially today, who would claim that federal subsidies must be the only source of provincial financing, nor the general rule.
The second point to which the hon. member referred is that of direct taxation. In my opinion, this question is of particular

importance. In this regard, I am convinced that he is not unaware, as he would have had us believe in his speech that in some Quebec quarters which he knows well, it is claimed that when the federal government started, in 1917, to impose the income tax, it had taken over sources of income which did not belong to it. He knows several individuals who, on this point, have talked of restitution. If those people asked for restitution, they must have felt there had been a theft, in which case, the federal government had no right in the first place to impose such tax. If the hon. member wants names, I can supply him with a whole list of them. But I do not want to insist further on this point, since the hon. member himself later admitted that, nowadays, there is concurrent jurisdiction in the field of direct taxation. What baffles me in connection with his present attitude is the fact that he states on the one hand, the principle of concurrent jurisdiction and that, on the other hand, he ignores the principle of priority of provincial rights, which, precisely, he has often stood up for, with his own chief the Hon. Mr. Duplessis.
What baffles me also, Mr. Speaker, is the fact that he devoted the major part of his speech to proving that, according to our constitution, each province has the exclusive right to direct taxation within the province, as income for provincial purposes. To hear him talk, we would be inclined to believe that some Canadians deny this right, which has been so clearly established by our constitution. Once again, I am under the impression that the hon. member was merely breaking through a wide open door.
In fact, when the hon. member states that "any federal government that collects direct taxes for provincial purposes is shying away from the letter and the spirit of the constitution", he is attacking the Bennett government and its social legislation, and not the Liberal government.
Mr. Bennett wanted then to impose a direct tax in order to finance an unemployment insurance fund without prior constitutional amendment. That is one of the reasons why his legislation was declared unconstitutional in 1937, thanks to the initiative of some Liberals who had then referred it to the courts. Under the Liberal regimes, only two bills were introduced in parliament, one providing for a direct tax for provincial purposes, i.e. unemployment insurance, in 1941; and then old age security, in 1950. In both cases, the constitution had been amended previously with the unanimous consent of the provinces.


Noël Dorion: Would the hon. member permit a question? Could he tell us if, in fact, the

province of Quebec, then under the leadership of the Hon. Mr. Godbout, had previously adopted some legislation to authorize the federal government to deal with the Old Age Security Act?


Lionel Chevrier: No, Mr. Speaker, but what I shall-


Noël Dorion: Then the provincial government of Quebec, as such, had not agreed at the time?


Lionel Chevrier: -what I said, Mr. Speaker, is that the government of the province of Quebec agreed in both cases: the government of the Hon. Mr. Duplessis, in one case, and the Liberal government, in the other. In both cases they have agreed to that amendment.
That is why I say that the hon. member is perfectly right in criticizing the Bennett administration for attempted encroachments upon provincial rights. He is not, however, when he criticizes Mr. Godbout by intimating that the former Liberal premier had laid aside the doctrine according to which the provinces have a right to direct taxation.
The hon. member should remember that Mr. Godbout was the first to levy a provincial personal income tax in 1939. Moreover, in 1952, when he decided to sign an agreement and to lease, for a definite period and for specified amounts, the rights of the province in the field of direct taxation, that agreement, as the hon. member for Bellechasse himself recognized later in his speech:
-clearly confirmed the existence of a provincial power of taxation.
Why then charge Mr. Godbout with laying aside the constitutional doctrine in that field?
While the hon. member unjustly criticizes Mr. Godbout, he lightly absolves Mr. Bennett by stating:
Up to 1937, it can be said that successive governments in this house respected provincial rights.
No doubt he has also forgotten that Sir John A. Macdonald was in favour of legislative union in Canada. After that, how can the hon. member dare say:
If there Is a problem which should be above political partisanship, which should not be affected by the heat of electoral campaigns, as he himself stated, it is that one.


Noël Dorion: Would the hon. member,-I must apologize once more-


Lionel Chevrier: Certainly.


Noël Dorion: -allow me another remark? 57071-3-116J
The Budget-Mr. Chevrier


Some hon. Members:: No, no; no remark; just a question.


Lionel Chevrier: I will permit the hon. member another question, but no remark, as this would be out of order.


Noël Dorion: Is the hon. member for Laurier really stating that Sir John A. Macdonald was in favour of legislative union or did he not rather abandon that first idea on account of some particular situation then obtaining in Lower Canada?


Lionel Chevrier: What I have said has been clearly understood and appears in the official report; the hon. member can easily check my statements.
Later on in his speech, the hon. member shows that he himself has not been above political partisanship when he said, speaking about the wartime fiscal agreements:
An agreement implies the free and voluntary consent of the parties; if the parties are not free to accept, it is no longer an agreement, it is oppression, dictatorship. And that is exactly what we have been witnessing at some conferences which have been held between the provinces and the then federal government.
In fact, if the hon. member had wished to remain above political partisanship, he would have admitted that the then fiscal agreements were becoming inevitable not because of the whims of the federal government but because of the state of war and the exigencies of war. It is true that this important aspect of the situation may not have been understood by the hon. member who, I say it without malice, was at that time-and I state it without any fear of being contradicted- devoting his energies mostly to fighting against the war effort of the Canadian government.


Some hon. Members:: Hear, hear!


Noël Dorion: On a point of order, Mr. Speaker.


Lionel Chevrier: I do not understand what the hon. member is saying.


Noël Dorion: Mr. Speaker, I am sorry, but I think it is my duty to raise a point of order. The remarks just made by the hon. member do not correspond to the truth as far as I am concerned.
Moreover, I must say that I had the opportunity to take part in some social movements, precisely-
(Text):


Mr. Speaker:: Order. May I remind the hon. member for Bellechasse (Mr. Dorion) that it is contrary to the standing orders to interrupt the hon. member who has the floor unless the hon. member who is speaking
1836	HOUSE OF
The Budget-Mr. Chevrier gives way to answer a question. If he disagrees, or wishes to make a correction with respect to what is said, it would be the better course to leave that until the hon. member who is speaking has finished, and then he will be given an opportunity to do so.
(Translation):


Lionel Chevrier: Mr. Speaker, I have not
the least objection to these questions being asked, but, on the other hand, I think that it is irregular for an hon. member to interpolate remarks during a speech.
However, with the consent of this house and of the hon. member, I would like to go on with my speech.
Then, if he wanted to be objective, after accusing the government of the day of being oppressors and dictators, how would he qualify the present government's attitude when fiscal arrangements were changed last year by sending telegrams, partly in lieu of discussions, and when, in some cases, those telegrams did not even reach their destination?
Obviously, Mr. Speaker, the attitude of the hon. member and of some other ministers is entirely different, and contrary to what it was before, and I ask hon. members to express their views on a speech heard two days ago in this house. In fact, in all the years I have had the honour to sit in this house, I never heard so centralizing a speech as the one made by the Minister of Northern Affairs and National Resources (Mr. Hamilton)-
Mr. Pallet!: That is not true.


Lionel Chevrier: This speech, Mr. Speaker, clearly shows the disregard of this government for the provincial attitude and its disrespect for provincial rights.
I particularly urge hon. members to read the statement made by the minister as it appears on page 1760 of Hansard of June 30, 1958. He stated clearly that the policy laid down by the previous minister of northern affairs and national resources with respect to federal-provincial relations and natural resources was diametrically opposed to the policy of this government.
In fact, I can say this, and it would be too long to quote his words-


An hon. Member:: What page did you refer to, please?


Lionel Chevrier: Page 1760. If I may, I should like to read the pertinent part of that statement. The present Minister of Northern


Affairs and National Resources was then quoting what his predecessor, the Hon. Jean Lesage, had said in a speech, in Toronto. I quote:
The fact that the British North America Act places resources under the control of the provinces is not a matter of accident or coincidence, it is rather a reflection of the basic facts of our national existence. Resource problems are generally regional problems or local problems and must be handled on a regional or local basis. Thus it is that the facts dictate, and our constitution requires, that our resource management be in the hands of the provinces. This is the framework and background in which we must see the problems of resource management and development in Canada. Accordingly, to advocate a "national policy" on a national basis as a responsibility of the national government is to misread the facts of our economy and the spirit and letter of our constitution.


John Whitney Pickersgill: Does the hon. gentleman agree with those views?


Francis Alvin George Hamilton: Those are the words of my predecessor in office and I am merely using them as an example of a policy that is diametrically opposed to the policy I advocate. I believe that statement by the responsible minister in the previous government lays down a philosophy which is foreign to the whole history of this country.
Well, Mr. Speaker, I urge hon. members to comment on that statement because to my mind, it is diametrically opposed to what they said during the election campaign.
(Text):
If I may, I should like to conclude my remarks by referring to another portion of the remarks made by the hon. member for Belle-chasse. In referring to certain Liberals on this side of the house he said that they had been purged by the provincial Liberal party because they had deviated in their thinking from the party line. My hon. friend should have been the last one to raise this point and to accuse the Quebec Liberal party of being dictatorial because, after having served the Union Nationale and Mr. Duplessis for so many years, he should know in fact what is a real dictator. I venture to say that during those years he made no attempt to deviate from the party line and that if he had he certainly would have suffered the consequences.
As to the party that my hon. friend joined recently, I do not think it will have to make any purge because the Conservative members, in my humble opinion, will not dare to deviate from the party line. When the hon. member and his colleagues first came into this house it was clear that they were trying very hard to dissociate themselves from the Union Nationale party and I am sure they had good reasons for this.


An hon. Member:: You are jumping to conclusions.


Lionel Chevrier: But as to this repudiation of an evident association that existed for some time and that was responsible in no small measure and in a large part for the election of a substantial number of members in this house, I do say this-


Mr. Pallell:: Are you talking about Ontario or Quebec at the moment?


Lionel Chevrier: I do say that my hon. friends were not showing in that attitude much gratitude to the leader of their party in the federal house who was responsible more than anyone for their election to this house.
I must admit that at first we on this side of the house had some difficulty in understanding the position of our Conservative friends from the province of Quebec. We had difficulty because we realized how rapidly they were dissociating themselves from their old friends. But we began to understand the cause of their sudden shift in allegiance when we read Le Devoir during the last 10 days. When we read that newspaper we realized why it was our friends decided to run for cover.
However, we understood still better when we read the press reports of the speeches made a week ago Friday to commemorate the first anniversary in office of the Conservative party. According to the Journal, which I have before me, the Prime Minister (Mr. Diefenbaker), who spoke after the hon. member for York East (Mr. McGregor), is reported to have said that young members could learn politics in the raw from the hon. member for York East. What did the hon. member for York East say?


John Cameron Pallett: He made a better speech than you are making right now.


Lionel Chevrier: In the first place, I doubt if my hon. friend understood much of the speech I am making and, in the second place, let us see whether or not he agrees with what the hon. member for York East said. I realize that hon. gentlemen do not like this, but I am afraid they will have to take it. The hon. member for York East said this to the Conservative members attending this function:
Stay 100 per cent with the party, and do not say something in the House of Commons you will be sorry for later. Anybody who goes against the party is not going to get very far.
Well, that is a fair warning. No one took the warning more swiftly than my hon. friends from Quebec province. Here we now have a full explanation of the sudden shift of the Conservative members from Quebec. Some of them had served a very intransigent master in that province for many years, and
The Budget-Mr. Chevrier they knew full well what it meant if they deviated from the party line. However, when they came to Ottawa as new federal members, they discovered that they had another strong master. They also learned very rapidly that they could not serve these two masters; that they had to make a choice. Well, today they have made their choice, and that is why they are so annoyed at us when we make statements such as I have made, and when statements were made not only during the debate on the speech from the throne but on the occasion of the budget debate concerning their association and their connection with the Union Nationale party.


Mr. Fleming (Eglinton):: They are not annoyed, they are simply amused.


Mr. Ricard:: Why are you so much concerned about it?


Lionel Chevrier: If you were not annoyed
you would sit in peace and listen to what I have to say. The greatest proof of your annoyance is that the hon. member for Belle-chasse interrupted, as he had a right on several occasions, and the hon. members to my immediate left are not even interrupting but are making loud noises that no one can understand.
I should like to say that before the general election our friends from Quebec made positive commitments to the population of that province on several very important and vital political problems, especially on the problem I have been discussing this afternoon, namely that of federal-provincial relations. Now that they have made their choice, now that they have decided to stay 100 per cent in the fold, 100 per cent with the Conservative party, I hope that they will rise in their places and make positive and precise statements on their new attitudes about these problems which so vitally concern the electors. I invite them, in all sincerity, to comment on the speech made yesterday by the minister of northern affairs. In my opinion, and I repeat it, that was one of the most centralizing speeches that has ever been made in this house. This speech was made despite the fact that during the course of the previous election campaign the Conservatives made it quite clear in their advertising, made it quite clear in their pronouncements that my leader, the leader of the Liberal party, was in favour of centralization, whereas the leader of the Conservative party and his colleagues were for decentralization. I hope hon. members who will rise in due course will indicate one instance of decentralization by the Conservative government.
1838	HOUSE OF
The Budget-Mr. Chevrier
If I may, I should like now to deal with a matter which I hope will not be as contentious or as offensive to my hon. friends to my immediate left. Since the March general election-


Mr. Johnson:: Would the hon. member for Laurier permit a question?


Lionel Chevrier: Yes.


Paul Léo Maurice Johnson: Would he consent to the reading of the text of the speech?
(Translation):
Then he read the following in French:
I believe that statement by the responsible minister in the previous government-
(Text):


Some hon. Members:: Order, order. (Translation):


Paul Léo Maurice Johnson: No, I am merely asking a question.
(Text):


Some hon. Members:: Order! Order!


Lionel Chevrier: Mr. Speaker, the answer to the request that I place on the record the words of the minister is that if my hon. friend wants to make a speech in reply to mine he can cite any part of the speech made by the minister. However, notwithstanding the subsequent words that he is asking me to mention, there is no doubt in my mind that those words, even if read, would not derogate one iota from the fact that was a centralizing speech.
I had started to say that there were other matters I wanted to discuss which I hoped would not be nearly as contentious as those which I had mentioned earlier.


An hon. Member:: But just as serious?


Lionel Chevrier: Yes, I can tell my hon. friend that I am extremely serious in what I said. I have given careful thought to what was said, I have analysed as carefully as I could the speech made by the hon. member for Bellechasse, and it was after careful reflection and study that I came to the conclusion that the remarks made by myself applied to that speech.
If I may get back to what I intended to say on two occasions already, I should like to say that since the March general election the behaviour of the government has been mainly characterized by contradictions of the Prime Minister and a number of humiliations suffered by his ministers. I do not need to recall the sudden change in the Prime Minister's attitude on NORAD and the very difficult position in which he placed the Secretary of State for External Affairs (Mr. Smith).


Donald Methuen Fleming: I rise on a point of order. It surely is the best known of all the rules of the house that it is not permissible, when one debate is closed in a session, to refer back to it later in the same session.


Mr. Habel:: Especially when it hurts.


Lionel Chevrier: May I be heard on the point of order? I am not referring to the debate. I am not citing anything that has been said in an earlier debate. What I am commenting upon is the attitude of the Prime Minister with reference to one of his ministers, the Secretary of State for External Affairs. I submit, with deference, I have a right to do that, and to discuss any other matters of a general nature on the budget speech.


Mr. Speaker:: Certainly, a very broad range is allowed in the budget debate. The hon. member has taken it and enjoyed it. His remarks refer to the relations of members of the government in another debate. The hon. member is proscribed from entering into a matter that has been settled, but I have not seen that, as yet, he is getting into the subject of a previous debate.


Lionel Chevrier: Thank you, Mr. Speaker. I was simply going on to say that I wanted to recall the sudden change of attitude of the Prime Minister with reference to NORAD and the position in which the Secretary of State for External Affairs was left following that decision, as well as the Minister of National Defence (Mr. Pearkes), both of whom found themselves in difficult and embarrassing positions because of the change of mind of the Prime Minister.
This also can be said in the field of trade. There the Prime Minister decided, after the election, to change his position with reference to the diversion of 15 per cent of trade. We all know of the discussions we had in this house with reference to that matter. We all know that following his trip to the United Kingdom the Prime Minister made his position in that respect quite clear; and notwithstanding the questions that we have asked on this side of the house repeatedly with reference to this 15 per cent diversion trade, we have received little or no information. The Prime Minister has changed his position suddenly with respect to the 15 per cent so-called diversion. But this time humiliation has been suffered by the Minister of Trade and Commerce (Mr. Churchill) who finds himself without any policy on trade.
Then we had the famous statement at the beginning of the election campaign about a special public works program. There was to be a tremendous public works program of one billion and some hundreds of millions of dollars. After the election, however, when the main estimates were tabled, it became

clear that such a special program did not exist and that the public expenditures for that purpose in 1958-59 were nothing more than the ordinary estimates. It became clear also that the Minister of Public Works (Mr. Green) was extremely embarrassed and that is why he tried at great length to avoid the point on the question and to stress housing. He was at great pains to show that this special housing program was going to be of tremendous benefit to the country, and I have no doubt that it will be of some benefit. But no attempt was made, either by him or by anybody else, to explain away the special program of public works announced in the early part of the election by the Prime Minister.
Then again there is the question of contradiction in the field of federal-provincial relations. Before the election there was the positive promise to decentralize. After the election and during this session not one measure is being introduced to this effect. In fact, the subject is not even mentioned. Here the most obvious victim is probably the Solicitor General (Mr. Balcer) who made it quite clear on one occasion that he did not approve the formula adopted by the previous government and that a different formula would be followed by the new government. However,-


Mr. Speaker:: Order. I am sorry to interrupt the hon. member but I must advise him that his time has more than expired. I have allowed him a couple of extra minutes in view of the interruptions. Before he takes his seat I should like to give an opportunity to the hon. member for Bellechasse (Mr. Dorion), if he wishes to take it, to make correction of any wrong impression which he thinks was made with respect to what he had said.
(Translation):


Noël Dorion: Mr. Speaker, if I may, I should like to stand before the seat next to mine, because I want to be heard as well as possible.
I first wish to thank the hon. member for Laurier for the importance he gave to my words and specially for the pains he took to be able to-
(Text):


Mr. Speaker:: Order. Before the hon. member goes further, may I say that I am not giving him the floor to speak. I understood that he took exception to an interpretation put on something he had said. If he wishes to deal with that matter briefly, he has the opportunity now to do so but his remarks, of course, must be brief.
(Translation):


Noël Dorion: Such being the case, if you will allow me, I shall wait until the text has
The Budget-Mr. Beech been given me, and then, with the Speaker's permission, I shall see whether it is proper to make some remarks in connection with the observations made by the hon. member for Laurier.


Mr. Rouleau:: You are not in Quebec here. Mr. Dorion: Who said that?


Guy Rouleau: The member for Dollard.


Paul Léo Maurice Johnson: It is his finest speech.


Noël Dorion: They are the first words I have heard him utter.


Mr. Maurice Allard (Sherbrooke):: I have two questions to direct to the hon. member for Laurier (Mr. Chevrier) if he would be kind enough to answer them.
Could the hon. member for Laurier tell the house what is the present position of the Liberal party with regard to the direct taxes referred to in paragraph 2, section 92, of the British North America Act?


Lionel Chevrier: If the hon. member will read my speech attentively, for obviously he did not listen very closely to my remarks, he will find the answer there.


Maurice Allard: I must say that this answer is not satisfactory.
My second question is this: the hon. member for Laurier mentioned the rental by the provinces of the field of direct taxation to the federal government during the last world war. Would he be kind enough to tell this house at what date, according to him, the war ended with regard to the rental of the direct tax field?


Lionel Chevrier: Mr. Speaker, this information may be quite easily found in the debates of this house by the hon. member if he takes the trouble to look up the official record.
(Text):


Mr. W. G. Beech (York South):: Mr. Speaker, in rising to say a few words in this debate, may I first of all extend to you my congratulations on your re-election and my best wishes for a successful tenure of that high office. May I also add that we note with great satisfaction that you are living up to our highest expectations.
It has been suggested that as this is the budget debate, we must say something about the budget. While there may be some difference of opinion as to the merits of the budget, I believe that all hon. members of the house will agree-particularly in view of the fact that it was the first effort on the part of the Minister of Finance (Mr. Fleming) - that the presentation was everything that could be desired. As to the budget itself,
1840	HOUSE OF
The Budget-Mr. Beech I think there is one aspect of it that should give comfort to every hon. member of this house. I refer to the assurance which it gives that there is not going to be an election this year.
Personally, I believe that it is a realistic budget. The important thing is that the people have the money to spend in order to pay their way. I believe that most people do not object to paying taxes as long as they have the money with which to pay them. Thus we have the money that is included in this budget and spent to bring about that result. I think that procedure is preferable to that of reducing taxes and then not making some provision to give the people the wherewithal to pay those taxes.
It has been suggested that the people should be allowed to spend their own money. I think most of us are in accord with that suggestion. However, it must also be borne in mind that the immediate effects of tax reduction will take some time to be felt whereas the program suggested by the government will place money in the hands of the people much more quickly. It has also been suggested by some hon. members of the opposition that while deficits were all right during the war years, they are not so good in peacetime.
I should like to submit that we are at war; we are at war with unemployment and while the estimated deficit may give some cause for alarm, it should be remembered that it is only an estimate and if the money being placed into the economy by the government's plan has the desired effect, then I am sure those fears will be unfounded. It is to be expected that there will be some who are disappointed with the budget. As a matter of fact, I may say that I am disappointed at being unable to find provision in the estimates for a project which concerns my own riding.
The riding of South York, which I have the honour to represent, had a problem for as many years as I can remember. It concerns a little matter of recognition, or lack of recognition, by federal governments down through the years of this most historic riding. Here we have a township with a population of 120,000 and the village of Forest Hill with another 30,000 inhabitants. Neither of these great municipalities have a federal office of any kind. It is true there are some sub-post offices tucked away in grocery stores or other like establishments but these do not provide the facilities which the residents of such municipalities have a right to expect, and which are available in much smaller communities.
For over 20 years departmental officials have been telling us that the post office 

facilities are perfectly adequate. Today, despite the fact that the population has doubled, we are being told the same thing. The other day, however, a prominent citizen walked into one of these sub-post offices and asked to register a letter. It was ten minutes after twelve noon and he was told he could not do so because the postmaster had gone out to lunch. He came back at ten minutes after four but was told it was too late because this post office could not accept registered mail after four o'clock. All this in a municipality of over 100,000 people which in two world wars had the highest per capita enlistment in Canada and which contributes millions of dollars in taxes each year to the federal coffers. It is not very flattering to these citizens to know that they have to go outside their municipality to secure the services of a federal department and they are hoping that this government will take immediate steps to correct this unfair and ridiculous situation.
It was very interesting to listen to the hon. member for Bonavista-Twillingate (Mr. Pickersgill) read his long list of requests during the debate on the estimates of the Minister of Public Works (Mr. Green). These requests indicated to me that the hon. member had in fact neglected his constituents while he was a minister of the crown. There seems to have been a tendency on the part of some former ministers to become so engrossed in the business of running their departments that they forgot about the constituents who elected them and the constituents of other members whose election made it possible for them to be appointed as cabinet ministers. I believe this helped in no small way to bring about the defeat of the Liberal government and I sincerely hope this government will not make the same mistake.
I would like to congratulate the government on the forthright manner in which it has tackled the housing problem and upon the introduction of these additional funds into the economy. This has certainly played a large part in checking the current recession and will eventually bring about a return to prosperity in this country.
It is, however, about another aspect that I wish to speak, and that is the fact that thousands of Canadians are now being provided with homes which are more in keeping with the standards which should obtain in this country. There is no doubt that the high price of land is the reason for most of the increase in the cost of housing, particularly in urban areas. Nor can it be denied that most of these higher prices have been brought about by the operations of land speculators. The unearned income created by such speculation must in the final analysis be paid for by the purchasers or the tenants

of the homes erected. This burden in addition to the already high cost of housing has had the effect of increasing the percentage of income now being paid for shelter to the point where it is uneconomical and is forcing our citizens to do without the services, appliances and sometimes the food necessary to maintain a decent standard of living. The payment of these considerable sums of money into channels for which there is no adequate return is having a detrimental effect upon our economy and is one of the main reasons for the present recession.
In addition, I would suggest that various levels of government should investigate the possibility of the imposition of a land tax to discourage the holding of lands for speculative purposes. Such taxes have proved most beneficial in some of our western cities, in Australia, New Zealand, Denmark and other countries. There is no difficulty for the people who have the money to pay for them to obtain homes, but the government has now taken steps to make homes available for those in the lower income brackets who find it difficult, if not impossible, to obtain homes on the open market. The reduction in down payments, the increase in the percentage of income to be paid for shelter and the provision of public money for low cost housing have been responsible for a considerable increase in this type of housing. However, despite the fact that homes are being built at the rate of 180,000 per year as compared with 86,000 this time last year, there are today fewer homes for sale than there were at this time last year. There is an ever-increasing need to take care of the backlog and the demands created by new family formations and immigration.
Building under the limited dividend section of the National Housing Act has been greatly accelerated by the government; in fact there has been more building under this section during the last year than was done by the former government since the inception of Central Mortgage and Housing Corporation. As a matter of fact, I have some figures which show that out of 2,742 units built for elderly persons since 1946, 1,416 were built in 1957 and out of a total value of $13,757,856-that is the value of homes built for elderly persons since 1946-$8,006,182 was spent in 1957. This would indicate how this type of housing has been accelerated by the present government and we are given to understand that this acceleration will be even greater during the current year.
There is another provision under this section of the act which is not too well known and which I believe should be given far more publicity. I have in mind the section which 57071-3-117
The Budget-Mr. Beech makes it possible for limited dividend companies to erect rental housing for low income groups such as elderly persons or those living on old age pensions or low fixed incomes. Under this section service groups such as the Canadian Legion, Rotary and Lions' clubs and similar organizations, may form companies to build homes for elderly persons by providing 10 per cent of the equity with the federal government putting up the other 90 per cent. Some provincial governments make outright grants to such projects and in most cases the municipal governments pay all taxes over and above a certain amount so that a fixed rent may be charged during the period of amortization. Time will not permit me to go into details with respect to these projects but Central Mortgage and Housing Corporation have all the information and, as a matter of fact, are preparing a new brochure which they are willing to make available upon request.
These projects are a challenge to every service club worthy of the name and existing projects built by the Canadian Legion and other organizations in various cities across Canada are shining examples ot what can be accomplished in this regard, and I commend them to all those with a sense of community service.
There are thousands of these senior citizens living in attics or back rooms, or living with their sons and daughters many of whom have difficulty paying the way for their own families, with a resulting feeling on the part of the old folks that they are not wanted. These projects take these people who have played such a large part in the development of our country and place them in self-contained homes with their own front doors; tenants pay their own rents and live out their lives together in comfort and security. Anyone who has visited these projects cannot help but be impressed by the happy and contented people who occupy them and I feel sure that several years are added to their lives.
The Metropolitan Housing Company of Toronto has erected several projects for metropolitan Toronto-as a matter of fact it opened a new one last Friday in Scarborough -and other municipalities have similar developments in progress, and it is on behalf of all those interested in such projects that I urge the government to give consideration to fixing the interest rate on new projects at 3 per cent. My first reason for asking this is the immediate need of the tenants concerned. Secondly, it is essential, in order to maintain the character of these projects, that the rents should be kept as low as possible, and I believe the ceiling of $40 per month originally set by C.M.H.C. was plenty high


Mr. Alan Macnaughton (Mount Royal):: At
the outset I should like to commend the Minister of Finance (Mr. Fleming) on the hard work he has undoubtedly put into his budget address. I am quite sure he would not expect me to continue my congratulations much further.
In his analysis of the economic conditions and prospects I was startled to hear him say,

as reported at page 1235 of Hansard: "There are hopeful signs that we have reached the end of the recent decline." And, further on, he said: "I have no hesitation in budgeting on the basis of a resumption in the rise of incomes and production."
I should like to ask the Minister of Finance whether in the light of present day conditions this was not, surely, an over optimistic statement of the situation we have in this country at the present time. I think it is much more accurate and much more factual to use the words which the opposition has used in its amendment to the effect that the government in its budget proposals-and I summarize briefly-has failed to cope satisfactorily with the problem of the recession in spite of the largest peacetime deficit in Canadian history, that it is moving toward greater trade restriction at a time when other countries of the western world are moving in the opposite direction. In fact, the economic policy of this government is still very uncertain. In the June 21st issue of the Economist under the heading "Canadian Tories First Budget" we find these words referring to the hon. Minister of Finance:
He took slightly more than two hours to present his first budget which involves the largest deficit Canada has had since the war. Statisticians are still arguing about how long the statement would have been without the platitudes, but it is an unrealistic argument since the fact that the Conservative government has still not determined its economic policy could not have been concealed without them.
It is incredible but true that this government is not imposing its will on economic conditions. It is submitting to them. Nowhere in the budget speech did I see any
policy of action outlined which would attempt to secure full employment, a stable dollar and to ensure the economic growth of the country. There is no statement of economic policy, but only a policy of drift.
We have a deficit because it is fashionable to suppose that deficits cure unemployment. But a deficit does not by itself cure unemployment any more than an investment is bound to yield dividends and profits. The businessman knows how carefully he must be in planning his investments, managing his capital and directing his operations, to be successful. In the same way a government, if its objective is to incur expenditures in order to increase employment, should plan those outlays so that they will give employment. It is one thing to have a budget deficit which has been incurred deliberately to create new jobs; it is quite another thing to have a deficit or loss on current account. The government is operating at a loss and it is a loss which has not itself created any new jobs. Nowhere do I see any evidence

of planning. Nowhere do I see any direct relationship between this deficit and any overall planned make-work projects. I do see, however, a rather smug and happy acceptance of this large deficit-unplanned but welcome-this policy of drift.
One of the ends of economic policy is to provide business and the country with confidence in the value of its dollar. In fact, there is every indication that the government's need for additional new funds- $3,400 million of which $1,400 million is new money-will force the creation of new money and cause another disastrous inflation. And yet, in his budget speech appearing in Hansard at page 1234 the Minister of Finance said:
Inflation remains a very real danger against which we must remain on guard.
Referring to Canada's large deficit we find the following words in the Economist of June 21:
Since trade and tariff policy are still left completely indeterminate by the budget speech, with some things for all men, Canadian attention is more attracted by the size of the deficit. Even that is not genuine. Mr. Fleming declared it to be $648 million, with additional new financing to cover loans and advances amounting to $1,400 million in the fiscal year. This is by long odds the largest program of public financing undertaken by Canada since the war. Three hundred and fifty million dollars of new money has already been raised in connection with the refunding operation on May 1, and none of it has come out of public savings. It is fully covered by the increases in bank deposits which the Bank of Canada has engineered. In the experts' view, "it is a matter of nice judgment how much of the remaining financing should be achieved by expanding bank deposits," or-as one investment dealer remarked-by the modern and sophisticated method of printing new money.
The reason why the deficit figure of $648 million is not genuine is that Mr. Fleming has laid hands on a nice little nest egg which the Liberal government had preserved since 1950. It is known as the "National Defence Equipment Account". It consists of credits given to the armed forces for the replacement of equipment left over from the second world war that was given to NATO countries. It gives Mr. Fleming an additional $165 million which he does not have to show in the budgetary accounts, and helps to conceal the full extent-more than $800 million-of the expected gap between revenue and expenditure this year.
We all know the end result of inflation is the destruction of personal savings and the value of our dollar. Here again the government seems to be waiting on events. This is a policy of drift.
I should like to refer for a few brief moments to the economic growth of this country. I believe it is well understood among us that Canada's economic growth depends on capital investment and the strength and buoyancy of its export industries. Capital investment in Canada this year will be less than it has been for several years past. There is no doubt that part of this decline can be 57071-3-1171
The Budget-Mr. Macnaughton attributed to uncertainty among businessmen concerning government policy, or as would be more correct to say, the lack of any overall economic policy. Investment decisions can only be made when business has every confidence in the economic policy of the government.
Planned capital expenditures are declining more rapidly than current expenditures. Where are any new large scale projects such as the St. Lawrence seaway development, the Aluminum Company's Kitimat development, the trans-Canada pipe line construction and the iron ore developments in Labrador and Ungava that gave so much impetus to the economy. All of these projects which are now completed or nearing completion served to strengthen Canada's transportation and industrial growth.
When we undertake to divert trade or impose tariff barriers we are making things very difficult for our export industries. Nowhere in the budget has there been any indication that the government has been even remotely concerned with the problems of our export firms. The Financial Post in its June 21, 1958, issue under the heading "Nation's Business -The New Budget" had this to say:
One of the most astonishing assertions in the budget speech is that which, by implication, declares our export industries to be of little or no importance. And here we refer to Mr. Fleming's satisfaction with the continuing premium on the Canadian dollar over the American dollar.


Donald Methuen Fleming: May I ask my hon.
friend where in the budget speech he will find any warrant or justification whatever for the extraordinary statements made in the editorial he is now reading. Apparently the editorial is written by someone who did not read the budget speech.


Alan Aylesworth Macnaughton: I certainly have read the budget speech.


Donald Methuen Fleming: My hon. friend misunderstood me. I was referring to the author of the editorial.


Alan Aylesworth Macnaughton: 
version and restriction? I submit that this is no time to revert to a restrictive policy of protection and a policy of drift.
If I have time I should like to speak briefly about foreign investment in Canada. In his remarks as recorded at page 1237 of Hansard the Minister of Finance said:
Canada's rapid economic growth of recent years could not have been sustained by Canadian resources alone, and the large capital influx and the accompanying large trading deficit, reflect the extent to which we have had to draw on foreign resources to accomplish our spectacular economic progress.
So much was said during the last election about the dangers of foreign investment that perhaps a few words about the benefits of foreign investment might be in order. Let us take a quick look at the reasons for the economic development of the United States because to a considerable degree the same conditions apply to Canada. It is true that much of the success of the United States was due to the good fortune of having a vast continent, plenty of natural resources, people imbued with the spirit of private enterprise and people equipped with skills and the political maturity to use those advantages.
But this was not the entire reason for the successful economic development of the United States. The United States was also aided in the 18th and 19th centuries economic development of their country by foreign investment from that source of capital which in those days was the outstanding place for obtaining capital investment, namely Europe. By 1860, for example, the European investors had invested in the United States $700 million in railroads, factories, enterprises of all kinds. By 1900, European investors had poured in $3 billion more, and it was mainly British and European money and capital which built the United States roads, factories and railways, which developed her resources, opened her markets and financed her trade.
Did the United States fear British and European domination? Are they in fact now dominated by the British and European capitalists or capital money? I ask this question: does this Tory government really fear United States investment or do they lack confidence in the Canadian ingenuity, enterprise and imagination to make use of these funds to build our industries, develop our resources and open up our markets? Because with these funds we can increase our own industrial might and out of enhanced income which all Canadians will enjoy we can pay the small dividend or interest return which investors have a right to expect and still set aside enough to buy back or redeem those securities.
As we grow richer we ourselves will invest more in other less-developed nations and

acquire more of our own assets held by people outside this country. United States investment has brought a great deal of know-how and the advantage of science to this country. We are now equipped to compete in markets that were at one time beyond our reach. The alert, the proud, the strong and the aggressive do not fear change; they make the most of it. They profit by it and so will Canadians.
The bulk of United States money which is spent in Canada is spent in employing Canadian labour, using Canadian supplies, and many new industries which it has created, create in turn a whole host of small businesses that supply it or spring from it. I am thinking of one oil company which established itself in the eastern portion of Montreal a short time ago and which, among other things, decided to manufacture alcohol from gasoline. In consequence the price of alcohol was reduced considerably for industrial purposes, much to the benefit of local industry. Or putting it another way, the United States capital generates a demand for Canadian goods.
A good example of a United States-con-trolled company and how its income is spent in this country is to be found in the annual report of Imperial Oil Limited, 1957, at page 20 under the heading, "Disposition of Each Dollar of Income". There we find, assuming that we take $1 of income earned, the cost of purchased raw materials, including freight -and I give the round figures-is 55 cents; operating and administrative expenses, 22 cents. Ninety-nine per cent of the operating and administrative expenses is probably paid to Canadian employees. Depreciation is given at 4 cents; taxes, 9 cents; dividends, 4 cents; earnings retained and used in the business, 3 cents. It is interesting to note that the government received twice as much in taxes, with no equity interest in the company at all, as did the shareholders who owned the company.
We all know the reasons for the desire of foreign capital to invest in this country, namely the political stability of the country, the wealth of our natural resources and the managerial ability of our people. To me it is very clear from the present budget that Canadians have not the money in sufficient quantities to meet the demand for capital investment in this country.
The point is that when the Minister of Finance states that he will need to find or refund this year money to the extent of $3.4 billion, that is to say, $1,400 million new money and $2 billion for refinancing purposes, where are we likely to find another $6 billion for capital investment in plant and equipment if we do not resort to foreign
The Budget-Mr. Macnaughton capital? The Montreal Star, in its issue of Saturday, June 21, under the heading "Effects on the United States of Fleming Budget" goes on to say in part:
Mr. Fleming outlined various steps which the government proposes to take, and undoubtedly this will be the part of the budget which will receive most attention in Washington.
What are these steps?
(1)	"We intend to press for wider access on reasonable terms to the United States market".
This is really a quotation from the budget address. I continue:
(2)	"We will encourage the United Kingdom, the commonwealth and other overseas countries to seek out wider opportunities to supply Canadian import requirements ... on the basis of normal market forces."
(3)	"We will continue to foster the growth and diversification of efficient Canadian industries so that a constantly larger supply of our requirements may be met economically from domestic production."
This can be an effective suggestion. When a government says it will foster industry in order to give domestic producers a larger share of the home market, it has the power to do it-by import quotas, by import licensing, by embargoes, by subsidy and by tariffs. There are many weapons to hand.
Then, in the last paragraph, referring to Washington:
They will therefore concentrate on the implications of Mr. Fleming's third point to the effect that domestic producers are to be given more protection. They will remember too that the new anti-dumping legislation is to be discriminatory. They will not be too happy about any of it, and it would not be surprising if they began to plan some counter-campaign of their own.
Therefore, I say that the protectionist policy can sometimes be justified to protect infant industry, but does the present government not realize that we have long since grown out of this stage of infancy in this country? How can the fourth trading nation in the world justify this attitude toward our export industry? Again, I say this budget is not a budget of action but only a policy of drift.
I would like to return very briefly to trade with the United Kingdom. When the Prime Minister (Mr. Diefenbaker) suggested that we should divert 15 per cent of our trade from the United States to the United Kingdom did he ever really mean this? Certainly the British thought so and they offered him free trade. Again, the Economist, on June 21, referring to this matter, had this to say:
One thing that remains quite mysterious is in which direction the government's trade policy is aimed. Mr. Fleming made an impassioned case-all his utterances tend to be impassioned-for reducing "the chronic trade deficit with the United States." Yet he and the Prime Minister, Mr. Diefenbaker, still insist on regarding the British offer of free trade as though it were an improper suggestion. The Canadians have not yet digested Mr. Macmillan's pointed and twice-repeated declaration that the proposal "lies on the table for
1846	HOUSE OF
The Budget-Mr. Macnaughton
consideration either in whole or in part". On present form, the Diefenbaker government will again pretend, ostrich-like, that he never said it.
Certainly, the people are entitled to ask, where do we go from here because now we see the pattern of tariffs and protectionism evolving with this increase in the tariff wall. Here we are back again with the old Tory policy of privilege and protection, taking care of selected industries and injuring the whole nation. And now when one group has succeeded where will it stop? What about the other groups lining up at the door asking that they be given subsidies or protection? Again I ask the question, will England reply, will she retaliate? Here are the facts. Exports to Great Britain in 1957 were approximately $742 million, while imports from Great Britain in 1957 were approximately $522 million. Consequently, there is a difference in our favour of $220 million a year.
If we are going to adopt this policy of tariff protection, then why adopt it towards a country with whom we have a favourable trade balance? Great Britain is already paying more than we do. Do we want to make the terms of trade with Great Britain worse? Do we want to improve them? Then, I also ask the question, will the United Kingdom save the dollars she cannot earn by buying from Russia some pulp, paper, aluminum and asbestos? Will she buy her minerals some place else? Will she buy wheat elsewhere, which she can easily do in this world situation of excess supply? The cost of yielding to pressure groups must be borne somewhere. The strong export industry on which Canada depends will suffer. Which industry, which companies will suffer only time will tell. We do not know at present. So I ask, when the whole world is moving slowly towards freer trade is Canada, whose present and future standard of living depends upon exports, to reverse that movement?
We shall regret this trend towards protectionism. Our copper and nickel industries are having a tough time, but their position can be more difficult if their customers buy elsewhere. The pulp and paper groups are not working at capacity, and could be further damaged by a decrease in Britain's purchase of forest products from Canada, while increasing her purchases of these products from Russia and Scandinavia. As we all know, recently Russia has taken orders in Great Britain away from our own aluminum industry. We all know how much our agricultural community depends on British markets for the sale of their wheat, barley and other grains. A stiffening in the British attitude could very easily reduce our total exports of 


Donald Methuen Fleming: Mr. Speaker, having now, like former ministers of finance, sat through a budget debate, at the close of its seventh day, I have some appreciation, as I am sure they had, of what it means to be a captive audience. At least when the speeches are equally divided in number, as in this debate, between government and opposition the Minister of Finance listens to half which belabour him and his budget. It has been at least an interesting experience, Mr. Speaker. I rejoice now to feel free to make a comment on the course of the budget debate and some of the things that have been said in that debate by hon. members opposite.
I have heard a good many budget debates and I think that this one deserves to be regarded as unique because clearly the opposition speeches have had nothing of a constructive nature to put forward. Never, I venture to say, have the opposition speeches
contradictions.
Here we see the Liberal opposition, now more than three months after election date, still going on fighting the last general election. Mr. Speaker, when are they going to reach the point of recognizing the fact that the people did speak on March 31, that that is the starting point and that from that point on they should guide their course and not be going back and trying to fight the general election all over again. Their procedure in terms of usefulness to parliament now becomes a waste of time. Let us now have from hon. gentlemen opposite something constructive.
The second feature that has impressed me is that, notwithstanding some things that I shall have to say in the course of my remarks, there has not been a suggestion from hon. members opposite of the means of saving one dollar. Not one hon. member opposite has put forward a suggestion for saving even a single dollar.
Mr. Speaker, you have heard incessantly from hon. members opposite discussions of dominion-provincial relations. It is quite true-and there is no secret about it-that I did not discuss dominion-provincial relations in the course of the budget speech. The reason was perfectly obvious. If hon. members opposite had wanted a reference or discussion on the part of the Minister of Finance to dominion-provincial relations they certainly would have had it had they not chosen to foreclose that course on the part of the minister. For Mr. Speaker, it will not be forgotten, I trust, that on June 2 no less a person than the Leader of the Opposition (Mr. Pearson) himself on a government supply motion introduced an amendment dealing with the very subject. May I recall to you, sir, the words of that amendment. They are found at page 733 of Hansard and read:
This house regrets that the government has failed to call a federal-provincial conference to discuss unemployment and other urgent problems of common concern to federal and provincial authorities; and that the government has failed to give assurance that it would maintain or improve the principle of equalization of direct tax revenues of the provinces embodied in the existing law.
1848	HOUSE OF
The Budget-Hon. D.M. Fleming You will recall, Mr. Speaker, that on that day and the following day there followed a two-day debate on dominion-provincial relations. In the face of that I must confess that I feel-and I say this with all humility -greatly flattered that, after listening to my remarks in the course of that debate, hon. gentlemen opposite should deplore the fact that I did not give them a repetition of the same speech when I spoke in the course of delivering the budget two weeks ago tonight. It is subtle flattery. We have had so much time spent on this subject that it seems to me as though it is the only thing that hon. members opposite think they have to talk about.
We had an extraordinary speech this afternoon from the hon. member for Laurier (Mr. Chevrier). He undertook to say of a speech made in this house yesterday-and of course he had no right to refer to it-that it was the most centralizing speech heard in the Canadian parliament. The hon. member for Laurier ought to know the meaning of the word "centralizing". But if the truth is told, the fact is that there never was a less centralizing speech made in this house than the speech made by my colleague the Minister of Northern Affairs and National Resources (Mr. Hamilton) yesterday. Are these the words of a centralizing speech?
We believe that the resources of Canada belong to the provinces and that we operate in the territories to the north of those provinces only in the sense that we hold them in trust for the people who will live there in the future.
Does that sound like a centralizing speech? To me it sounds like a speech which suggests the fullest degree of recognition of the rights of the provinces under the constitution of this country. If that were not enough, there is more; listen to this:
That explains why this government on many fronts is offering co-operative plans of resource development with each of the provinces in order that they may best be able to develop their own resources and best look after themselves. There is no question whatever of infringement on constitutional responsibilities. In fact, we lean over backwards in an effort not to force our will in any way at all even to the choice of roads or any other project on which we are co-operating.


Paul Joseph James Martin: What page is that?


Donald Methuen Fleming: (Eglinlon): Mr. Speaker, that is to be found at page 1761 of Hansard. Far from being a speech justifying what was said of it by the hon. member for Laurier, it contradicts in the flattest terms the charges that were so improperly and so unfairly made this afternoon by the hon. member for Laurier.


Lionel Chevrier: They were not improperly or unfairly made.


Donald Methuen Fleming: There is proof. The hon. member can talk about centralizing but if he will look at what was said and not content himself with using adjectives that have no relation to the fact, he will learn, I hope, in time what "centralizing" means.


Lionel Chevrier: Let me tell my hon. friend that I will not learn anything from him.


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


Donald Methuen Fleming: I say this to the hon. member and to others opposite. When they attempt now to adopt the provinces, I would tell them that the provinces are of full age and that the provinces have not chosen to be adopted by those who treated them so harshly when they sat in the seats of government. The provinces know that had there not been a change of government a year ago they would still be forced to carry on with the provision made under the federal-provincial tax-sharing arrangements act which, when it was legislated in this house, we said was inadequate and was unfair to the provinces and to the municipalities. That is why, in fulfilment of the undertaking given then, we moved as we did at the last session of parliament to ease greatly the financial burdens of all the provinces of this country, and in particular the four provinces in the Atlantic area.


John Whitney Pickersgill: Would the minister permit a question?


Donald Methuen Fleming: No; I am under
pressure and my time is limited. When the hon. member for Laurier today seeks to turn the House of Commons into a debating society in order to discuss Quebec provincial politics all I have to say to him is that when he speaks about Conservative members running for cover, I should like to ask him what he has to say, speaking of running for cover, about what happened in the last election campaign when neither the hon. member for Essex East (Mr. Martin) nor the former hon. member for Coast-Capilano, both members of the former Liberal government and one of them a candidate for the leadership of the Liberal party last January, used the word "Liberal" on any of their advertising.


Lionel Chevrier: Mr. Speaker-.


Some hon. Members:: Sit down.


Donald Methuen Fleming: I was in both of those constituencies in the campaign and, believe me, I took careful note of the billboards. I could not find the word "Liberal" on one of them.


Lester Bowles Pearson: I thought we were not supposed to fight the last election all over again?


Donald Methuen Fleming: Another feature of the budget debate is that thus far the magazine tax has not once been mentioned. There is a conspiracy of silence opposite. There is embarrassed silence, of course on the part of those who were the fathers of this tax. Where is the father? The child is here waiting, claiming a parent; but the parent has fled. Silence prevails. Hon. members may run away from this child of theirs. They may regret the paternity of this ugly duckling. But while they can ignore it in debate I can assure them that they will have an opportunity of voting on the issue and there will be no avoiding that opportunity.
I have one final comment of this preliminary nature. It is with regard to gold. No hon. member of this house has yet said a word expressive of even the slightest measure of disapproval of what we have proposed by way of an increase in assistance under the Emergency Gold Mining Assistance Act. But among those who have importuned the Minister of Finance in the last year on this subject have been the hon. member for Villeneuve (Mr. Dumas) and the hon. member for Timmins (Mr. Martin). Did they express joy that the government had moved to increase assistance by 25 per cent?


Joseph-Alphonse-Anaclet Habel: Yes; they did.


Donald Methuen Fleming: No, they were withholding their comment. They were not going to be heard as expressing approbation. All I have to say on this subject is that I hope their constituents will take note that this increase in the assistance under this act apparently kindled no enthusiasm or appreciation in the minds or the bosoms of their respective members.


Lester Bowles Pearson: It is the next election which the minister is fighting now.


Donald Methuen Fleming: I know that the hon. gentleman is shaking in his boots at the very thought of the next election.
In a matter of 24 minutes we shall be voting on the following amendment introduced on behalf of the official opposition by my friend the hon. member for Kenora-Rainy River (Mr. Benidickson). This amendment invites the house to condemn the government in these terms:
This house regrets that the government, in its budget proposals, has failed to cope satisfactorily with the problems of the recession-
That is No. 1.
-in spite of the largest peacetime deficit in Canadian history-
That is No. 2.
-that it is moving towards greater trade restrictions at a time when other countries in the western world are moving in the opposite direction.
The Budget-Hon. D. M. Fleming
That is No. 3.
If this amendment has any significance then I think it attempts to belabour the government on three issues and it is those three issues which I now propose to discuss.
We are told in the first place that the government ought to be condemned because it has failed to cope satisfactorily with the problems of the recession. Let us get some facts straight.
This budget-and I tried to make this very clear-was compiled in a spirit of confidence in Canada and in Canada's future. We believe that confidence is not at all divorced from reality; it is a confidence based upon incontestable evidence, and that evidence I endeavoured to set forth. I gave chapter and verse-our expectations of an increase in the gross national product; our exports for 1957; an all-time Canadian record with the exports for the first five months of 1958 already exceeding those for the first five months of 1957. If the figures are required, here they are as released by the dominion bureau of statistics during this last week: During the first five months of 1957 exports totalled $1,936 million and in the first five months of 1958 they totalled $1,952 million.


Paul Joseph James Martin: Inflation.


Donald Methuen Fleming: This is an increase in exports, if I must explain this in detail to my hon. friend-


Paul Joseph James Martin: It is because prices are higher.


Donald Methuen Fleming: I must assure my dear and hon. friend that this pose of a school grade 2 mentality on his part does not befit him; he is too bright for that.
Some hon. members in the opposition profess to believe that as a result of this course of action somehow or other there is a contraction in purchasing power, but the figures just do not bear that out. The fact is that consumer purchasing in Canada has been maintained and two weeks ago I quoted figures to illustrate how much better off we were in this respect and also in respect to capital investment than is the country to our south.
Here is a dispatch from Washington dated June 10 stating that proposed capital expenditures in the United States for 1958 have been reduced to $30.7 billion from the earlier projection of $32 billion. In Canada we estimated that capital expenditures this year would be $8.5 billion or more than one-quarter of those of the entire United States which has an economy generally measured in terms of about 15 times the size of the Canadian economy. There is concrete evidence of the confidence we have expressed.

The Budget-Hon. D. M. Fleming
I ask the house to consider the course taken by hon. members opposite in this respect. If ever a course was calculated to destroy confidence it is the course which has been followed throughout by the members of the opposition. They have been undisguisedly unhappy in the face of the continued strength of our economy. Just as during the last session and in the campaign following it they magnified the extent of the unemployment problem, so today, even in the face of facts, they are glorying in gloom.
There was a reference the other day to the attitude of some members opposite when it was said that they whined. All I can say, after listening to the members of the opposition throughout seven days of debate, is that what we have heard from them is a wail and it is a wail unworthy of Canadians. The Canadian people well know the bold and determined efforts taken by this government to cope with the recession. They have approved of those efforts and this government has scrupulously adhered to the undertakings given to the people in this respect.
I wish now to say a word about the second part of the amendment. I recall the words of the amendment "in spite of the largest peacetime deficit in Canadian history". That expression may have been artfully phrased, but I think if it is to be taken seriously as part of a want of confidence motion it can bear only one interpretation and that is that hon. gentlemen opposite deplore the extent of the deficit. They deplore that we have to have so large a deficit. Otherwise their amendment on this point surely is meaningless.
Let us now examine the situation. I submitted to the house that after certain proposed tax changes for this fiscal year we shall incur a deficit of $648 million. This deficit was estimated following a careful review of the facts with the benefit of all the assistance available to a minister of finance and considering all the factors that bear on such a computation. Look at the United States. We have statements these days from the United States that that country next year expects a deficit of between $9 billion and $12 billion, which is more than 15 times the deficit for which we are budgeting.
I do not need to recall that the hon. gentlemen opposite are unhappy with my estimate. They are unhappy with it because they want to enlarge it, and if hon. members opposite succeed in the course they have been following in this debate, in destroying confidence in this country, the deficit could well be larger. I hope it will not; I hope the Canadian people will continue, and I am quite satisfied they will continue, to show the good sense they

have exhibited in recent months and will not pay attention to the statements of opposition members.
I would recall to this house that the financial critic for the opposition was determined that this deficit would be very much larger and things progressed until, on June 27, the hon. member for Sudbury (Mr. Mitchell) raised the figure to $1 billion. Not to be outdone by the hon. member for Sudbury, along came the hon. member for Outremont-St. Jean (Mr. Bourque) that same afternoon and he managed to get the figure up to $2,167 million. That is not arithmetic; that represents what I believe to be astronomical flights into the realm of fancy, but Canada's credit is not helped by irresponsible statements of that kind. The statement of the hon. member for Outremont-St. Jean is irresponsible to the point of irrationality when he says that we are going to have a deficit in such figures as he mentioned.
I listened this afternoon with much interest to my hon. friend, the hon. member for Mount Royal (Mr. Macnaughton) when he was pleading for confidence in the value of the Canadian dollar and I applaud the rebuke he delivered to his colleagues who sit behind him, the hon. members for Sudbury and Outremont-St. Jean, as well as to the financial spokesman for the opposition.
It was not long ago that we heard loud voices from the Liberal party pleading for deficit financing. It will not be forgotten that during the Liberal convention in January the then financial spokesman for that party stated in categorical terms that we should deliberately embark upon such a policy and during the campaign, of course, the Leader of the Opposition (Mr. Pearson), not to be outdone, very strongly urged a policy of deficit financing. He was prepared to increase the deficit we would otherwise have had by proposing a $400 million slash in taxes, which the Canadian people rejected because they realized that would mean a tremendous increase in the deficit and they were prepared to be more responsible in their financial thinking than was the Leader of the Opposition.
Hon. members opposite, with all their beating around bushes, all their double talk and all the talk out of both sides of their mouths in the course of this debate, must face up to this question which is inescapable. Do they want a larger deficit? Let us have no more pretence by talking on both sides of the question. Do they want a larger deficit or not?


An hon. Member:: We want action. We want a new administration.


Donald Methuen Fleming: You wanted a new administration last January and you see what you got.

And now, Mr. Speaker, as bearing on the answer for which I am waiting, and which hon. members opposite will not give-you may be very sure of that; they will not give it in this debate, for they will not face up to that question-let me put these matters before the house. When they talk about a billion dollar deficit, let me point out, first of all, that they have not brought forward a single suggestion for saving as much as one dollar or reducing the budget by as much as one dollar. Second, they have already voted to increase the deficit. Those who voted for the C.C.F. amendment to the amendment several days ago cannot possibly support an amendment now which undertakes to deplore the large deficit, so I can only assume, from the fact that all Liberal members of the house voted in this blind way the other night for the C.C.F. amendment, which would have increased the deficit by an astronomical amount, that they have decided not to vote for their own amendment this evening. They certainly cannot vote for both unless they want big deficits, in which case they do not mean what they say in this present amendment.
In the third place, they have talked about our proposal to liquidate the national defence equipment account. But in this respect we are simply following what they did for three years. Liberal ministers of finance had recourse to this account for sums of money which were used for the purpose of reducing net budget expenditures. And so, in the face of precedents such as this, it surely does not lie in the mouths of hon. members opposite to -criticize us for having recourse to the same procedure. But we have gone one step further, and we have proposed that this account be liquidated so that parliament will have full control, full knowledge, in respect of the voting of expenditures and of the approval of expenditures of public money.
In the fourth place, their denunciation of a large budget deficit means, again, that they are still opposed to the increases which we brought about in the social security payments, and all their sniping does not hide the fact that it springs from an ill disguised hostility towards these increases in the social security payments which they had the opportunity to bring about when they were in office but whi-ch they did not bring about because they were afflicted with the $46 a month mentality.
Also, Mr. Speaker, there is the matter of inflation. Until the hon. member for Mount Royal spoke this afternoon not one Liberal member, or for that matter, not one member of the C.C.F. party, who had spoken in this debate had given the faintest inkling
The Budget-Hon. D. M. Fleming of the recognition of the danger of inflation. So I can only refer back to the words which the Leader of the Opposition uttered in this house on May 13, when he said, as recorded at page 31 of Hansard:
Inflation, therefore, remains a menace in the midst of the recession. That is the dilemma which faces the government today. It must deal simultaneously with inflation and recession.
All the Liberal members who spoke in the course of this debate, with the exception of the hon. member who spoke last this afternoon for the opposition, completely ignored the danger of inflation when they followed the course of suggesting additions to the deficit and thus increased the danger of inflation which would have resulted from the huge increases in the budget deficit which their proposals would have created.


John Whitney Pickersgill: I suppose the Minister of Finance would not permit a question at this point?


Donald Methuen Fleming: On this matter of tax reductions, may I point out-


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


Donald Methuen Fleming: No. My time is limited. I usually accommodate the hon. gentleman whose evident, shall I say, uneasiness must be attributed to a pricking conscience.


John Whitney Pickersgill: I could have asked a question in that time.


Donald Methuen Fleming: Well, it will have to be after 5.45.
Mr. Speaker, whatever may be the deficit, the money must be found and the electorate has passed on this question in the plainest of terms.
And now, with my time slipping by so quickly, I turn to the third branch of the amendment which purports, if you please, to invite the house to condemn the government because, so it says, the government is moving toward greater trade restrictions while the other countries in the western world are moving in the opposite direction.
I hope that the other countries of the world are moving in the direction of relaxing the restrictions which have impeded the flow of trade, because Canadian trade has been faced with barriers which have not been confined simply to old fashioned tariffs. We have had to move Canadian goods through restrictions and discriminations of various kinds. But saying, as hon. members have been saying, and as some of the Liberal press such as the Winnipeg Free Press and other Sifton papers have been saying, that this is a budget which moves the policy of Canada in the direction

The Budget-Hon. D. M. Fleming of protectionism, is very untruthful. And here I must mention the hon. member for Bonavista-Twillingate (Mr. Pickersgill) and his stirring speech in this house. How he wept over the policies he alleged in this budget on tariffs and dominion-provincial relations. The crocodile tears flowed. They were copious; they went in all directions. It was a flood, Mr. Speaker. And then, as if it were not bad enough to have to witness this lachrymose scene, the hon. member in his most mournful tone reminded the house that he had once been a Conservative, but did not like the Conservative policy because, he said, the Conservatives thought trade was wrong. He said that as if it was going to be greeted with tears on this side of the house. I can assure the hon. member in all good part and all friendliness that we do not regret the fact that he is not in the Conservative party, and if he wants us to weep he has got to give us more cause than that.
He put before us in the most stirring terms the ancient Liberal cult of the import. Mr. Speaker, we do not look down on exports in this party. We take a great deal of satisfaction from the fact that since this government came to office exports from this country have risen.
We have no apologies to make about what we have said with regard to trade relations with the United States. None whatever. Apparently it is all right when others make such remarks, but not right for Conservatives to make them. Here is what the Leader of the Opposition said as quoted in the Ottawa JouTnaX on June 9 in a speech at Poughkeepsie, New York:
Canadians were prone to feel aggrieved at certain U.S. policies.
"In trade, don't fence us out, and in politics don't take us benevolently for granted", said the former minister of external affairs.
Mr. Speaker, what are the hon. gentleman's supporters in the house going to say in the face of these words? Are not these words going to give offence to the country with which Canada does its biggest trade? Are his supporters not going to shiver when they read remarks like this, when they consider what effect they may have on the relations between Canada and the United States? Oh, Mr. Speaker, what the Leader of the Opposition has done to Liberal policy with regard to trade! Why, it is going to bring our relations with the United States into the most serious plight imaginable. Oh, Mr. Speaker, this grieves us all very deeply.


John Whitney Pickersgill: Mr. Speaker, when will the hon. minister leave for Stratford?


Donald Methuen Fleming: When would you
like to go?
[Mr. Fleming (Eglinton) .1
Mr. Speaker, let us be quite clear about this. The record of the government in this respect is crystal clear. First, when it came to taking steps to protect the interests of Canadian producers in the domestic market those whose claim had the first consideration of the government were the farmers of Canada. I invite hon. members to examine what we did last year in the matter of safeguarding the interests of the producers of turkey and fowl and dried skim milk. I have received many requests for protective action. Those from whom I have received the most requests are members of the textile industry, in the face of their difficulties, and Canadian agriculturists.
Second, all of the major proposals that are contained with respect to tariff action here are based upon reports of the tariff board, reports of investigations that were ordered by the former Liberal government.


Some hon. Members:: No, no.


Donald Methuen Fleming: Where is their
sincerity of purpose? Do its members disown now the reports of the tariff board to which it referred the references?


John Whitney Pickersgill: That is not a fact.


Mr. Benidickson:: You changed the recommendations contained in the report of the tariff board.


Donald Methuen Fleming: These were matters that were left on our doorstep as part of the ugly heritage of neglect left to us by our predecessors in office.
In the third place we followed scrupulously the procedures prescribed by the GATT; and, fourth, in respect of the proposed increase in the tariff on woollen goods, let me tell the hon. member for Bonavista-Twillingate that he twists and distorts the truth when he talks about this slight increase as having a symbolic significance. That statement is completely untrue.
And finally, we are now proceeding with preparations for the commonwealth trade and economic conference that will assure its success.


Mr. Speaker:: Order. It being 5.45 o'clock p.m., it is my duty, pursuant to section 5 of standing order 58, to interrupt these proceedings and put forthwith the question on the amendment now before the house.


Lester Bowles Pearson: I should like to move the adjournment of the debate.


Mr. Speaker:: It being after six o'clock, it is unnecessary to move the adjournment of a debate. It is adjourned automatically by the rules.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I ask the leader what the business is for tomorrow?


Howard Charles Green: Tomorrow, we shall conclude the budget debate and on Friday go into estimates, finishing off the estimates of the Department of Public Works and then going into agriculture.


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

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


Mr. McWilliam: 1.	Has there been an increase or decrease in civilian personnel since 1st January, 1958 to date, in each of the naval ammunition depots in Canada?
2.	If so, what classifications were effected?
Answer by: Hon. G. R. Pearkes (Minister of National Defence):
1.	Kamloops, nil; Rocky Point, decrease 1; Bedford, nil; Renous, decrease 27.
2.	Rocky Point, clerk; Renous, assistant technician 3, 1; clerical assistant, 1; ammunition workers, 11; chauffeurs, 3; tractor operators, 6; carpenters, 3; trades helpers, 2.
NOTE: These figures refer to positions deleted from the authorized continuing complement. With four exceptions the employees concerned have either been reassigned to vacant positions on the reduced complement or employed temporarily on short-term projects. Of the four individuals laid off, two were over the normal retiring age of 65 years.

Thursday, July 3, 1958