1959-04-17

Hon. Paul Hellyer (Trinity):: Mr. Speaker, I rise on a question of privilege affecting the members of this house. Yesterday in reply to a question from the hon. member for Vancouver East (Mr. Winch), the Prime Minister (Mr. Diefenbaker) is quoted in this morning's Globe and Mail as having said:
There have been reports indicating that some manufacturers and vendors of some products affected by the commodity tax changes announced in the budget are raising prices to the public and increasing them inexcusably by amounts in excess of the increase in the tax.
In Hansard of April 16, Mr. Speaker, the same part of the Prime Minister's reply is as follows:
There have been reports indicating that some manufacturers and the vendors of some products affected by the commodity tax changes announced in the budget are raising prices to the public, and increasing them by amounts in excess of the increase in the tax.
In the interests of clarity and accuracy, Mr. Speaker, I think the Prime Minister should tell the house which report is correct.


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I know the hon. gentleman is a model of accuracy and for that reason I would like the opportunity to say this. The blue copy which was sent down by Hansard is exactly as it appears today in yesterday's Hansard. I do not make it a habit to change Hansard in order to alter what appears there, except in so far as changes are made by my staff in the ordinary run of things. Yesterday when the blue was brought to my attention it did not contain the word "inexcusably". However, I recall having said that, but I would not alter Hansard in order to change the meaning or purport of the context prepared by Hansard. The word "inexcusably" was said by me yesterday but it did not appear in Hansard; therefore I would not change the record as it was.



CONGRATULATIONS TO MR. SPEAKER ON ANNIVERSARY OF BIRTHDAY

Mr. Frank Howard (Skeena):: Mr. Speaker, I too rise on a question of privilege, and I feel that all members of the house are involved and interested in it. The question of privilege relates to an event that will be taking place between now and the time this house meets again on Monday next. I would like to express my own thoughts, which I am sure coincide with the thoughts of all hon. members, and extend to you, sir, the very best wishes on the celebration of your birthday on Sunday, April 19. Naturally I hope also there will be many more such events ahead.



EXTERNAL AFFAIRS


John George Diefenbaker: Mr. Speaker, as I indicated in my reply to the question asked by the Leader of the Opposition on Tuesday in connection with the food for peace conference, the Canadian government has accepted an invitation to participate in the meetings with representatives of the United States and other major wheat exporting countries to consider the proposals outlined in the President's farm message to congress on January 29. The invitation was extended by the United States secretary of agriculture, Mr. Benson, to whom the President entrusted the task of pursuing the proposals which he advanced in his message. The other countries taking part will be Australia, Argentina and France. The director general of the food and agriculture organization will also be present.
The meetings will take place in two stages. Officials will meet from April 27 to April 29 to prepare material for consideration at a ministerial meeting on May 5. In his address to congress the President proposed that a new approach should be made to endeavour to make better use of the free world's agricultural abundance in the interests of reinforcing peace and the well-being of friendly peoples throughout the world; in short, to use food for the purposes of advancing peace and
2788	HOUSE OF
Proposed Food for Peace Conference peaceful objectives. The United States suggested that attention might be turned first to problems in wheat distribution and indicated that at a later date consideration might be given to other agricultural commodities. It is proposed at these meetings to review problems affecting products and trade in wheat and surplus disposal programs now in effect. Consideration will also be given to the possibilities of improving present programs in order to make more effective use of current agricultural surpluses.
I need hardly add to what I said the other day, namely that the Canadian government is wholeheartedly in support of the objectives outlined in the President's address and welcomes the opportunity to discuss problems in wheat distribution and marketing with other major exporting countries. The suggestions I have made on other occasions looking to the establishment of a food bank for the assistance of countries whose populations are short of necessary food, either because of crop failures or natural disasters or for long term reasons such as economic underdevelopment, were directed to very much the same objectives as those outlined by the President. The Washington meetings will provide an opportunity to examine these suggestions as well as other suggestions put forward, and the Canadian representatives will endeavour to play a constructive role in seeking to advance the humanitarian objectives outlined by the President.
The success of any food for peace program will depend on finding ways to increase consumption in the food deficit countries. At the same time they will seek to ensure that in any proposals that may develop, adequate provisions are made to ensure that normal commercial markets are safeguarded. The elaboration of detailed proposals is not an easy task, and I should like to endorse the remarks of Secretary Benson that soundness of approach is essential and should take precedence over speed, important as speed is.
The Canadian government will be represented at the ministerial level on May 5. The composition of the Canadian delegation to the two meetings will be announced shortly, and the house will be given full information as to the results of these meetings. I think that is about as far as I can go at this time in answer to the hon. gentleman's question. I hope I will be in a position almost immediately to announce the composition of the delegation.


Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, this conference
bids fair to be one of the most important international economic meetings to be held
[Mr. Diefenbaker.l

for some time, and I think it is quite appropriate, indeed it is essential, that Canada should be represented by a minister as the Prime Minister has just indicated will be the case.
The Prime Minister has stated that the conference will deal with wheat and other food products. Perhaps the commodity which will be of most importance to Canada in any such discussions under present circumstances would be wheat. The importance of such a subject at a conference of this kind is obvious when we realize that the world wheat surplus is large and perhaps increasing, and that national measures for the disposal of such surpluses have been shown to be inadequate and unsatisfactory. An international approach to this problem might therefore be an advantage for all concerned as well as a means of assisting underdeveloped countries by international action.
As the Prime Minister has mentioned, it is very important that the steps which can be taken in this field should be taken with a minimum of dislocation of established commercial markets, because if it were not done in this way Canada would probably suffer relatively more rthan the other countries which will be represented at the conference. It is always important to keep in mind-and we had evidence of this the other day in the reply to a question which appears at page 2652 of Hansard for April 13-what chaotic and strange results can ensue when exports are subsidized in the way that some of our food exports have been subsidized in recent months.
I hope this conference will have good results nationally for Canada, and good results internationally.


Mr. Hazen Argue (Assiniboia):: For Canada this is a critical conference. I am very pleased that it is to take place, because for many years when others were laying great emphasis on the United States export program I was saying that instead of making such loud protests it would probably be more effective if we were to sit down in conference with the United States and other countries involved to work out a common program to deal with this common problem.
Canada's wheat surplus (at the present time is not as large as it has been, mainly because our wheat acreage has been reduced and because in recent years we have not had such large crops as we had previously.


Mr. Churchill:: There have been increases in sales, too, you know.


Hazen Robert Argue: However, the situation today makes such a conference as this essential.

There are disturbing indications that the United States is making very rapid progress in increasing its exports of wheat while Canada's wheat exports have fallen to some extent.
I hope this conference will be followed by other conferences dealing with other agricultural products. We have many products in surplus in Canada today. Large inventories are held by the agricultural prices stabilization board, and unless action is taken at both the international and domestic levels to deal with food surpluses and make them available to people who need them, I think our agricultural industry at home will be in great danger.
The Leader of the Opposition said that a recent return showed what chaotic conditions can be brought about when exports are subsidized. I do not agree with the Leader of the Opposition that this situation has been brought about by the subsidization of Canadian exports. This problem must be dealt with in a co-operative manner such as is being contemplated by this conference.
In the international situation today I believe that food is more important than ever. It is important not only in the sense that it must be made available to people who are hungry and in great need, but I also believe it is an important instrument in the arsenal of democracy, an instrument that may be used to feed undernourished people and in turn help underdeveloped countries improve their economies. We welcome this conference and express the hope that it meets with success.



ATOMIC ENERGY


John George Diefenbaker: Mr. Speaker, yesterday the hon. member for Winnipeg North Centre asked as to whether I could comment on recent press reports concerning the proposals made by the United States and the United Kingdom at the resumed negotiations in Geneva on nuclear tests. In reply I wish to advise that the Canadian government has been informed of the stand taken by the United Kingdom and United States representatives at the Geneva negotiations with respect to the approach they are making to the Soviet representations at that conference.
What is perhaps not clear from some of the published reports is that the western powers have not proposed abandoning the attempt to reach a comprehensive agreement and of substituting for it an agreement confined to nuclear tests in the upper atmosphere. They
Atomic Energy-Nuclear Tests have proposed that the main effort continue, but that since the major stumbling block has been the question of on-site inspection in the case of unidentified subterranean events, and since discussion last summer of the techniques of detection in outer space was not pursued to agreed technical conclusions, as an interim measure the existing area of agreement might be consolidated. The negotiations would then continue with respect to explosions underground and in outer space.
This suggestion was put forward by the two countries as an alternative procedure. If the Soviet union were not for the present prepared to change its position on the veto in respect of procedures for on-site inspection and on early discussion of practical measures for high altitude detection, at least the alternative proposed, if implemented, would provide the means for avoiding further contamination of the atmosphere with artificial radioactivity should the nuclear powers decide to resume weapons tests. It would also enable a start to be made on the establishment of a control system. It would, however, leave for the future the achievement of the important objectives of arresting competition in the development of nuclear weapons and in restricting the capability of manufacturing them.


Lester Bowles Pearson: Mr. Speaker, the other day when he was in Hamilton at the inauguration of the first reactor in Canada, the Prime Minister expressed the hope that some constructive results would be achieved in the vitally important discussions that are now taking place in Geneva on nuclear tests, and perhaps the reception to or the results of these new proposals will indicate whether these hopes are to be realized.
These new proposals do run the risk of being misinterpreted, misrepresented and indeed distorted by those who are opposed to any international action in this field. This risk is the greater because of certain statements that have been made in Washington during recent months to the effect that underground tests cannot be detected by any control agency although, I should add, there are other United States experts who have denied this. This is one of the reasons, of course, for the confusion of laymen in a field of this importance. But the confusion which does exist has given ammunition and argument to the opponents of a ban of all tests in the U.S.S.R. and in the U.S.A.
I realize, as the Prime Minister has pointed out, that the Russian position in regard to control and inspection, which are a vital part of this whole effort, has been intransigent

Inquiries of the Ministry on their insistence on the use of the veto. I suggest, however, and perhaps this is a point which will be in the minds of those who are taking part in these discussions, that perhaps the western position would be stronger in reply to this Russian position if there could be no big power representation of any kind on any control agency which might be set up, and if that could be left to the United Nations where it could be effectively done.
This new proposal, Mr. Speaker, I hope will not toe interpreted by public opinion in any country as a withdrawal from the ultimate position which the west has taken, to the effect that all nuclear tests must be banned. If this could be put forward as a stage, it might be easier for the Russians to accept because the ban would be confined to atmospheric tests. Some of the controls which would be required in other forms of tests would not be necessary here. If it could be put forward in this sense, as one stage, it might be useful and helpful in the achievement of the ultimate objective of a total ban. If, however, it is going to be misinterpreted and misrepresented as a departure on our side from that ultimate objective, then, Mr. Speaker, we shall all suffer.


John George Diefenbaker: That was the point I was trying to make. I thank the hon. member.


Lester Bowles Pearson: I realize that.


Hazen Robert Argue: The C.C.F. for years has taken the position that nuclear tests should be abandoned. Of course the best possible arrangement is to have international control and inspection. I think there is a growing body of evidence that continuing nuclear tests endanger the very existence of mankind. The position Canada should take is that we should encourage and endeavour to persuade all nations in the world to cease nuclear tests. I myself feel very strongly that the western nations should take this lead, and should say to the Soviet union, "our testing is over", that we should cease testing nuclear weapons, particularly on this continent, at least until such time as we see what action or what measure of co-operation will be forthcoming from the Soviet union after we have said that our nuclear tests are ceasing.
There is disturbing evidence that the increase of strontium 90 is endangering human welfare and could lead to very serious results for the human race in generations to come. I submit that Canada has an opportunity to take the lead by insisting on ceasing and endeavouring to persuade all nations to cease nuclear tests.



MANITOBA


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I should like to address a question to the Prime Minister. Can he tell the house whether the government has completed its study of the material provided by the premier of Manitoba in connection with the plan for flood control on the Red river? If so, has a decision been reached to provide federal assistance for this plan?


John George Diefenbaker: Mr. Speaker, I think the question is answered by its first part. The government has not yet completed its examination.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to direct a question to the Prime Minister. In view of the reported concern of the British government and the British public with respect to the high altitude flights of the United States air force to Berlin, can the Prime Minister inform the house whether the Canadian government is prepared to extend its good offices toward settlement of this unfortunate and hazardous situation?


John George Diefenbaker: Mr. Speaker, the hon. gentleman brought this question to my attention. The Canadian government is aware that certain high altitude flights have been made to and from West Berlin by aircraft of the United States. It has received the text of the reply of the United States of America of April 13 to a Soviet protest about such flights. The text of that reply, of course, has appeared in the press as well.
The United States is making these flights as one of the occupying powers in West Berlin with certain rights of access and with certain requirements of supplying the western garrisons there. Having regard to all the circumstances I would not like to make any extended comment, indeed any comment, at this time, in respect of the question asked.



ATOMIC ENERGY


[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: Mr. Speaker, I would like to address a question to the Minister of National Defence. I apologize for not

having given him notice. Will the minister advise the house whether Canada has received an invitation to attend a meeting to be held in London this week, as reported in the London Times of April 13, to discuss existing and future collaboration under the Anglo-American agreement for co-operation on the use of atomic energy for defence purposes?


Hon. G. R. Pearkes (Minister of National Defence):: If such an invitation had been received it would have passed through the department of the Secretary of State for External Affairs.



CRIMINAL LAW


[Stage Direction]
On the orders of the day:
Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, yesterday I was asked when I would be tabling the McRuer report on criminal sexual psychopaths. I am glad to be able to advise the house that this report was tabled in both English and French yesterday afternoon, and that in accordance with the previous undertaking sufficient copies are available so that members can obtain them.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. M. W. Martin (Timmins):: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of the Prime Minister's remarks in answer to a question from the hon. member for Vancouver East, to the effect that some manufacturers and vendors are increasing their prices inexcusably by amounts in excess of the increase in taxes, could the Prime Minister inform the house if he thinks it would be excusable if they only raised their prices by such an amount as to offset the tax?


Mr. Speaker:: Order. In view of the answer yesterday, which raised a question of jurisdiction, I suggest to the hon. member that it is questionable whether this is a matter of administrative responsibility of the federal government.


John George Diefenbaker: Mr. Speaker, might I now, having known that this question was going to be asked, ask leave of the house to have the word "inexcusably" added to the Hansard record at page 2739?
66968-9-178
Inquiries of the Ministry


Mr. Speaker:: Has the Prime Minister leave to have the word "inexcusably" added to the record?


Some hon. Members:: Agreed.
ILater:']


Murdo William Martin: Mr. Speaker, now that the Prime Minister has been kind enough to clear up any misunderstanding, I wonder whether he would answer a supplementary question. Would the Prime Minister deem it equally excusable if the trade unions of Canada were to follow the same automatic practice of the companies?


Mr. Speaker:: The hon. member is getting into the realm of hypothesis now, and I do not think I can allow the question.



NATURAL RESOURCES


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to direct a question to the Minister of Northern Affairs and National Resources which is the result of a rather restless night. In view of the minister's criticism of United States financial control of the Canadian iron ore industry at the annual dinner of the Canadian Institute of Mining and Metallurgy, would the minister inform the house if he is correctly reported as having given his blessing to the $50 million iron ore development in Ungava proposed by the Krupp and Eaton interests?


Mr. Fulfon:: You must have had a restless night.


Mr. Speaker:: Before the minister replies, I think there is also a question of jurisdiction involved here, with respect to whether the development of iron ore resources in Ungava is not solely a matter of provincial concern. However, I do not want to prevent an answer if the minister wishes to reply.


Hon. Alvin Hamilion (Minister of Northern Affairs and National Resources):: Mr. Speaker, I was handed this question as I came into the house. I should like to say first of all that I am very pleased that the hon. member is taking an interest in the speeches I am making. I did not have time to bring a copy of the speech with me, but I can assure him that I made no reference in my speech to any iron ore development in Ungava. However, I will go to my office later, obtain a copy of the speech and send it to the hon. member.

The Budget-Mr. Howard LABOUR CONDITIONS



LAY-OFF OF RAILWAY WORKERS-SUGGESTED INVESTIGATION BY PROPOSED ROYAL COMMISSION

[Stage Direction]
On the orders of the day:
Frank Howard: I should like to direct a question to the Prime Minister, and I regret that I was not able to give him notice of it. It arises out of a news item in this morning's Globe and Mail to the effect that during 1958 Canada's two major railways had dismissed 18,000 workers, and the article also contains a suggestion that the proposed royal commission on freight rates should have included in its terms of reference the question of the lay-off of railway employees and the effect of technological changes or automation. Has this request been communicated to the Prime Minister, and what degree of consideration will be given to it?


John George Diefenbaker: I have no knowledge at the moment of this matter having been brought directly to my attention or to the attention of any member of the government. I did read the item in question, and when the enunciation of the powers of the royal commission is made I think there will be an answer to the question the hon. gentleman has asked.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: I should like to direct a question to the Prime Minister; I regret that I was unable to give him notice. It has to do with a report in this morning's Montreal Gazette to the effect that the government's legislation to establish a national energy board may not be introduced during the present session. Can the Prime Minister say whether we will be dealing with this legislation this session, or whether it is awaiting some clarification of United States policy as far as Canadian oil exports are concerned?


John George Diefenbaker: There is no foundation for the statement that the legislation will not be introduced at this session. It will be introduced and proceeded with.


Mr. Benidickson:: Soon?



THE BUDGET


[Stage Direction]
The house resumed, from Thursday, April 16, consideration of the motion of Hon. Donald

M. Fleming (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Benidickson, and the amendment to the amendment of Mr. Regier.
Frank Howard: Mr. Speaker, I seem to be getting a fair amount of exercise today in rising and sitting down. Last evening as we were approaching ten o'clock I had begun to relate my opinion as to the attitude which exists in Canada today regarding the effect that wage increases may have upon price increases. I had said there were varying opinions, some to the effect that the workingman is completely to blame. Others are more enlightened, and say that while wage increases may have had some effect there are also other causes.
I mentioned that the hon. member for Acadia in his discussion of the estimates of the Department of Agriculture, had left the impression that the rising level of wages in the agricultural implement industry was directly responsible for the increases in the prices of farm machinery. He made reference to a 6 per cent increase instituted by the farm implement companies last fall, and left the impression that this was the direct result of an increase in wages paid to employees working in the agricultural implement industry.
I would point out that in this instance I do not think the comparison is quite correct. The real reason that prices were increased was the Tories' $1 an acre program and the fact that the farm machinery manufacturers wanted to capitalize on this extra income. With respect to the movement of farm machinery prices, it is a pretty well-known fact that for at least 50 years some sort of price fixing arrangements have existed in the agricultural implement field and that there has been relatively little competition and in many years no competition in the prices for farm machinery. In fact in 1937 a committee of the house considered the question of farm implement production, and one conclusion it came to was that there had been little or no competition in the farm implement industry for quite a number of years.
We know that annually for at least the past five years and probably for some number of years before that the companies in the farm implement industry have been making regular and almost automatic increases in the prices of the machinery they sell, amounting to approximately 6 per cent each year. I have some statistical information compiled by the dominion bureau of statistics respecting average annual hourly earnings in the agricultural implement industry. I am only taking the figures from 1953 to 1958, as

being relatively recent. Over that five-year period we find that wages increased in this industry by 18.01 per cent, but we also find that the prices charged by the agricultural implement industry increased by some 30 per cent. That means twice as much increase in price percentagewise as compared with the increase in wages over that same period.
At one time it used to be quite popular to be against sin. Then there was an anti-Quebec feeling; people from Quebec were on the short end of the stick. The Jewish people have been subjected to the same sort of thing. It was popular to be against communism. Now it is popular to be against unions, or anti-union. The spread of this propaganda of an anti-union nature takes many people down a blind alley and leads them to the conclusion that anything which unions do is of no value and should be condemned. I know from personal experience, as I related to some extent during last year's debate on departmental estimates-and I intend to comment also on this at a later stage in the proceedings-that unions sometimes do things which are not too sensible and which we should not regard as too helpful to our economy. It is true that in some negotiations which have been conducted by the unions, their attitude, approach and demands are sometimes just not reasonable. But that does not give us the right to condemn everything the unions do.
Mr. Speaker, I would like to relate two or three instances where international unions have acted in a manner which is most responsible toward society, and whereby they gave full consideration to the effect of their negotiations upon other sections of society apart from those in which they were directly involved. I would like to relate an instance of an attitude which has been prevalent in the united packing house workers of America for some years. Negotiations between the U.P.W.A. and the packing house industry have an effect on farmers, and for some time the packing house workers in their negotiations with the meat packing industry have asked the industry to guarantee a certain floor price to the farmers for the commodities the meat packers buy. They have been concerned enough about the farmers to attempt to protect them as much as they can in that way, but they have been told time after time by the meat packing industry to mind their own business. They said, "The price we pay the farmer for hogs or other animals which we buy has nothing to do with you." So the U.P.W.A. has expressed this desire to protect the farmers and the commodities they sell to the meat packers of Canada, but they have been told it is none of their business and that they should pay 66968-9-1785
The Budget-Mr. Howard attention to the wage rates and other conditions of their members in the packing plants.
Recently the united automobile workers under Walter Reuther made a similar proposal to the automobile manufacturers asking them to act sensibly in the prices charged for their cars and trucks and so on to consumers, and Walter Reuther was told again by the automobile industry to keep his nose out of the companies' business, that they would charge whatever prices they liked.
On January 20 of this year the united steel workers of America, which is another international union organized on behalf of one of the basic industries in our country, indeed in the world, being so concerned about the effect of increases in steel prices over the past number of years, presented a memorandum to the Prime Minister. They asked in that memorandum if the government would undertake to conduct an independent survey into increases by steel manufacturers in the prices they were charging the consumers, and asked for a study of the relationship between the charges made in the steel industry and the prices charged by the steel corporations.
The steel workers union suggested that they would be prepared to co-operate with the government in any way if the government would institute such an investigation and study; and if it was discovered that wages paid to the steel workers were pushing up steel prices, the steel workers' union would take that into consideration in its negotiations for wages and it would affect the wages paid in the steel industry. They are asking for an independent survey because they do not know what the position is. That is another instance of a union which has the welfare of society at heart and is attempting to find ways and means of assuring that other sections of our Canadian society are protected to the greatest possible extent.
I would suggest that generally speaking wage increases have relatively little effect on price increases. The Prime Minister made reference yesterday, and again today, to the inexcusable action of certain manufacturers in raising their prices. It had nothing to do with wage increases and nothing to do with negotiation. It merely had to do with an opportunity to boost prices by using the tax increases as an excuse. The attitude of the Prime Minister was that this action is inexcusable, and I am sure he would extend those remarks to price increases in other fields as well.
We know that our corporate structure in Canada, and indeed in other parts of the world, has been for quite a number of years

The Budget-Mr. Howard now developing more and more toward a monopoly or oligopoly position. More and more throughout this century there have been arrangements between companies within a nation with regard to fixing prices, the automatic raising of prices, the reducing of production and the records in the combines investigation branch of the Department of Justice are full of different practices which have been studied by the restrictive trade practices commission. More and more international cartels have been established to carve up the world into markets and assure that the highest possible income will accrue to those cartels.
We have been moving toward bigger and bigger industries, more and more price fixing arrangements, and control over our economy by outside forces. International cartels do not exist in a legal or corporate sense. In many instances they exist only by gentlemen's agreements or even by written contractual agreements, and the position is such that it is impossible for a nation to take any corrective measures to ensure that the consumer gets the fullest possible benefit from the goods produced by those particular industries.
This is one of the fields to which we should be directing a great deal of thought, as to how our Canadian governmental agencies can effectively deal with the steadily increasing cost of living and the increasing prices of goods and commodities, rather than following this blind lead which has been given to us that the unions and their members and working class people generally are entirely to blame for every price increase which takes place.
I am not in any way trying to say that unions are lily white and pure in every sense.
But unless and until the government undertakes to move in this direction and considers the necessity of instituting statutes and regulations to ensure that the consumers of Canada get the best possible deal they can in terms of price, quality of goods produced and services offered, we will continue to have the control of our society, our industry and our very economy resting in the hands of people not responsible to parliament or to the government. This government will be most derelict in its duty if it does not move in this direction.
In the speech from the throne it was indicated that changes are proposed in the combines investigation laws some time during the present session. I sincerely hope these problems are taken into consideration when this legislation is drafted, so the authorities within the combines investigation branch will be able to deal with them in a most effective way. But as long as we continue to allow the

control of our economy to rest in hands not responsible to the government, to parliament and to Canadian citizens, we will continue to be caught concurrently in depressions, inflation and out and out thievery from the pockets of the people of Canada.
Perhaps I can sum up very briefly by saying this. During the debate on the budget which was presented last year I was able to develop an anagram on the letters of the last name of the Minister of Finance. It was quite appropriate, but this particular budget does not allow me to use the last letters of the minister's name. I must therefore content myself with his initials, which I think are most appropriate, and declare the budget to be distasteful, mean and foolish.


Hon. J. A. MacLean (Minister of Fisheries):: Mr. Speaker, as I rise to make a brief contribution to this debate I should like to draw your attention and that of the house to a trend which has been very noticeable in this country, and probably in every country, over the years. In the last three quarters of a century the place of government generally in the lives of Canadians and in the economy of the country has become very much greater than it used to be. For example, there are many emanations in the administrative field, and many departments, whose annual budget is now much greater than was the total budget of the federal government in the days of our grandfathers.
This is not due entirely to the development of the country and the increase which has taken place in the population, because the per capita importance of government has increased tremendously in the same period of time. During the last few years the per capita expenditure of the dominion government has been in the neighbourhood of $300 annually, whereas 75 years ago it was only $7 or $8 per capita. So it can clearly be seen that the impact of government policy, be it good or bad, is bound to have a much greater effect on the economy of the country in this day and age than it had in the days of our grandfathers.
As a matter of fact this trend has been increasing with the passing of time. In the years since 1945 the total expenditures of all governments at all levels in this country has increased by about 96 per cent. This is understandable, because governments at all levels offer a great number of services, welfare payments and projects of infinite variety which were never offered in the days of our grandfathers; some of them, indeed, could not even have existed. For example, the annual budget of the Canadian Broadcasting Corporation today is much greater than the total national budget was in the days of Sir John

A. Macdonald in the last years of the nineteenth century. Thus it should readily be realized that the role of government in the everyday life of the average citizen is much greater than it used to be.
In addition to the facts I have just mentioned we are, of course, in this era of cold war faced with the necessity for spending vast amounts of money and effort on defence. There are generous payments made to other levels of government, on a scale which was unequalled in former years. The increased importance of government, with its correspondingly greater effect on the economic forces of the country means that the responsibilities which rest on any present-day government in the economic field are much greater than they used to be.
With due deference to economists, trained experts and self-appointed experts, the business of predicting the effect of any particular policy on the economy of a country is far from being an exact science, and one of the notable things about any measures which are taken is that there is a considerable time lag, usually between a year and a year and a half, between treatment and recovery.
In this connection I am struck, as a former pilot, by the close analogy between this and flying an aircraft with primary instruments. The thing that has to be learned is that when a trend shows, even to the slightest degree, corrective action must be taken early. If a trend develops, the tendency is to overcorrect when the full impact of the trend becomes apparent. We have heard repeated references in this house to unemployment. Unemployment is an unfortunate thing and is a matter of serious consequence in our economy. Nevertheless it must be realized that after the treatment is applied some time is necessary before the effects begin to appear.
There is another analogy which occurs to me from the medical field, when repeated demands arise for this or that cure in a certain situation. We do not want to be in the position of the relatives of a patient who would insist, when that patient was very ill with pneumonia, that he be given doses of penicillin every five minutes because he did not appear to be recovering. There has to be time for the treatment to take effect. In this day and age foresight is of prime importance.
When this government came to power, it found immediately that there were evidences, and sometimes danger signs, of unsatisfactory trends as far as the economy of the country was concerned. There was the prospect, the forecast, of sharply increased unemployment. There was inadequate social security, and the country was faced with a considerable decline in home building, a slowing up of the
17, 1959
The Budget-Hon. J. A. MacLean growth in personal income, an increasing disparity in the standards of government services as between provinces, increasing stocks of agricultural surpluses and many other indications of difficulties ahead.
This government acted quickly to apply treatment to some of these unsatisfactory trends. One of the earliest things it did was to stimulate home building in order to provide not only homes for Canadians but also jobs for those who build them and for the service industries which supply all the innumerable things which go into a modern home, its furnishing as well as its construction. The result was that after a decline of 8 per cent in 1957, expenditures on home building in this country rose in 1958 to $353 million or 25 per cent.
The government expanded its own capital expenditure in order to stimulate the economy and provide jobs. In addition, in co-operation with the provinces, it embarked on various projects designed to create employment quickly in certain fields, and last winter it embarked on a policy in co-operation with the provinces which allowed the municipalities to put in hand essential public works projects which, in addition to being beneficial in themselves, did at the same time provide employment for thousands of people. It will be remembered, too, that this government on coming into office immediately increased old age pensions, disabled persons' pensions, veterans' pensions and many other social benefits, besides extending hospital insurance programs to the provinces. Perhaps most important of all, it reduced taxes to those in the low income group. It increased payments to the provinces, with special adjustment grants to the Atlantic provinces, to go some considerable way, as I have already mentioned, toward eliminating the disparity between the levels of services which those provinces are able to offer as compared with most other provinces in the country.
The transfer payments of the federal government to other levels of government increased in 1958 over 1956 by $177 million. This government also placed restrictions on some types of farm products which were coming into Canada at depressed prices and glutting our own markets for Canadian producers. The government also embarked on a vigorous program of wheat sales, with the result that the wheat surplus has been cut to some extent.
In the present budget the government took further action to better the position of the Canadian farmer in his own markets by imposing reasonable duties on fruit and vegetables coming into this country, including potatoes. I am very pleased indeed to see

The Budget-Hon. J. A. MacLean this come into effect because for many years my own province, where the growing of potatoes is vitally important, was in the position of having its potatoes go into its chief market, the United States, over a duty of 37J cents per hundredweight whereas for many years United States potatoes came into Canadian markets duty free for most of the year. Two or three years ago a change was made to increase the length of time during which the duty was payable, but the present action by the government puts the Canadian producer on an even footing with his United States counterpart as far as entry into each other's market is concerned.
What are the effects of some of these policies that have been applied? I believe all Canadians are pleased to realize that during the last couple of months-for the first time in approximately 18 months, I believe- the level of unemployment is less than it was 12 months previously. There are other encouraging trends, too. Home building, which declined in 1957, rose by 25 per cent in 1958, in which year there were 164,000 starts made to establish an all-time record by 26,000 units. Net farm income, which went into a rather sharp decline in 1957, rose in 1958 by $234 million, or 24 per cent. Cash farm income rose by 8 per cent. When it is realized that the number of people engaged in agriculture declined during the same period and has been declining for many years, it will be appreciated that in 1958 the per capita cash income of people engaged in agriculture established an all-time record. The gross national product in 1958 as compared with the previous year rose by $778 million. Unincorporated non-farm business income rose by 7 per cent in 1958.
These policies which the government embarked upon were not, of course, without cost. Anyone who imagines that services and benefits can be created out of thin air is deceiving himself or the public, or both. In a rich country such as ours it is my belief and that of the government that investment in Canada and in the welfare of Canadians is money well spent. No wise government, with the conditions which have existed over the last few months would, I believe, have attempted to balance the budget, because under those circumstances such a balance would not be in the public interest.
The past year was a period when the economy of the country needed stimulation. It received that stimulation and is now responding. With the increased tempo of the economy generally it was reasonable then, to make a small increase in taxes-and it

is a relatively small increase-affecting those who are best able to carry the load. I should like to point out here and now that the income taxes paid by the low income groups in Canada, representing approximately four-fifths of the income taxpayers, have not been raised on this occasion. The income taxes paid by a vast number of Canadians are still lower than they were two years ago.
It was felt that with a gradually brightening situation steps should be taken to bring the budget more nearly into balance. That is what has been done. Those who would cry ruin because for a short period deficits have been shown are not realistic. It must be remembered that the ability of a country to carry its debt is made up of many factors. To begin with, the per capita debt of Canada is much lower at this time than it has been for long periods in the past. The development of our country, which brings our whole economy more into balance and thereby renders it able to carry with ease tax burdens which would have been completely unsupportable 40 or 50 years ago, is another consideration.
I have great confidence in our country's future. We are rich in natural resources and are blessed with one of the finest collections of racial stock that exists on the face of the earth. We live in the temperate zone in the northern regions of the world, regions which since the dawn of history have produced the greatest stimulation to human endeavour. I am convinced that Canadians in all walks of life can look forward with great confidence and optimism not only to their own immediate future but to the future of their children and their children's children.
(Translation):


Mr. Guy Rouleau (Dollard):: Mr. Speaker, in rising to take part in the budget debate, I would have liked to congratulate the Minister of Finance (Mr. Fleming) on last week's budget speech. Unfortunately, I am unable to do so under the circumstances, and instead I would like to tender a message of sympathy. I sympathize with the Minister of Finance for having had to bring down last week's budget. He was obliged to meet the inconsiderate expenses made during the session between the last two general elections. As a matter of fact, during that session, the Minister of Finance had to meet the expenses resulting from inconsiderate promises made during the 1957 elections and, Mr. Speaker, people in Canada now realize that they have to pay for alleged gifts.

This reminds me of a particular fact. When the present Minister of Finance was sitting in the opposition, and the Liberal government had increased the price of postage stamps by one cent after the 1953 general election, he stated, as can be seen on page 1132 of Hansard, volume II, "The chickens are coming home . .
(Text):
-the chickens are coming home to roost-
(Translation):
Yes, Mr. Speaker, the chickens are coming home to roost. We must today pay the piper, and that is what the Minister of Finance had to do last week.
When the Minister of Finance entered this house last week, I was reminded somehow of the prodigal son. The Canadian people had entrusted the Conservative party with the government of this country. The Liberal party, which had preceded the Conservative administration had left well-filled coffers. The Minister of Finance and the Conservative government have spent our legacy and today, the Minister of Finance comes back to us smiling, but empty handed, and asks us to fill his pockets again.
Mr. Speaker, the honeymoon is over. The Canadian people, which has allowed itself to be taken in by the Conservative party, now realizes, on its return from the honeymoon trip, that the magnificent engagement ring which it had been given is not even paid for. The Canadian people also have noticed that the magnificent house which had been held out as their future home was only a mirage and that the vision of stable employment at all times does not exist.
Mr. Speaker, the present government also reminds me of those used cars we buy in garages. When a buyer appears, the salesman points out the good features of the car, makes him look at all the chrome fittings, and, once the sale is made, the buyer soon realizes he is stuck with a "lemon".
Well, Mr. Speaker, the Canadian people are now stuck with a "lemon", the Conservative government.
Mr. Speaker, this budget reminds me of the man standing on the highway between Ottawa and Montreal waiting for the bus to go to Montreal. After many hours, he sees a bus coming at last. He waves to the driver to stop and gets into the bus. After a while, he notices that the bus driver takes all possible roads without seeming to know exactly where he is going. The fellow gets up and asks the conductor: "Where are we going?" and the conductor replies: "But, sir, don't you know this bus is not going anywhere in
The Budget-Mr. Rouleau particular?" Well, Mr. Speaker, this government gives us the same impression, the feeling that it is not going anywhere.
Mr. Speaker, as I said just now, the honeymoon is over. Today, the government is facing the people, but the encounter is not the same as the one we saw last week on television.
At this stage of my remarks, I address my remarks particularly to the hon. Minister of National Revenue (Mr. Nowlan), and I should like to refer to this matter incidentally, because it comes under parliament and has to do with programs put on the national network of television, for which Canadians are paying the bills.
On April 12 last, at 10.30 p.m., we were given a program entitled "Aifrontement" (Encounter) which was nothing of the sort. In fact, before coming to the house this morning, I took the trouble of looking up in the Larousse the exact definition of the word "affrontement". Well, according to the dictionary, "affrontement", means "action d'af-fronter". Now, "affronter" means "to attack with intrepidity, to brave". You should have seen, Mr. Speaker, with what intrepidity the provincial member for Jeanne-Mance, Mr. Maurice Custaud, and Mr. Julien Morissette, a well-known supporter of the Union Nationale, were facing each other. Incidentally, the provincial member for Jeanne-Mance is a member of the Union Nationale and one of the parliamentary secretaries of the Union Nationale government. By the way, may I inform the house that the Union Nationale government has appointed parliamentary secretaries, which must arouse the envy of many backbenchers in this house, many of whom just now are perspiring, pining, hoping and hankering after the position of parliamentary secretary in Ottawa.
Mr. Speaker, it should be noted that on that program there was no actual encounter of participants. All it amounted to was fulsome praise of the Quebec government. If such programs are to be continued, in spite of protests from the people of the province of Quebec, it would be a good idea to retitle the program "Thwacks with handkerchiefs".


Mr. Pigeon:: Or "Jean-Louis Gagnon", one or the other.


Guy Rouleau: Yes, the program might well be called "Thwacks with handkerchiefs" and, as a topic for the first program they might well deal with the usefulness of parliamentary

The Budget-Mr. Rouleau secretaries in the parliament of Canada. Furthermore, I would suggest that the first two participants in the program be the hon. member for Roberval (Mr. Tremblay) and the member for Joliette-l'Assomption-Mont-calm (Mr. Pigeon). It would be quite interesting to hear those two members discuss that matter.


Mr. Tremblay:: Certainly.


Guy Rouleau: Instead of making continuous interjections, the hon. member for Roberval would be well advised to do like the member for Lake St. John (Mr. Parizeau) and follow personality courses. Perhaps he could find a sponsor and get paid for making advertisements. He could advertise Ex-Lax and say: "While I felt sick, I took Ex-Lax tablets and today I feel just fine".


Louis-Joseph Pigeon: We never hear you addressing Maurice Lamontagne.


Léonard-David Sweezey Tremblay: Nor Father Levesque.


Guy Rouleau: Mr. Speaker, when looking over the interjections made by the hon. member for Roberval, one finds he spends most of his time calling others ignoramuses. In making such a remark, he is probably referring to all the other members in the house. I agree that we are not as well read as he is, since we did not have the opportunity to read les Malheurs de Sophie, Aurore, I'enfant martyre, nor Le voyage de M. Pleurnichard.
Mr. Speaker, I would also suggest that the panelists on the second telecast of the program "Thwacks with handkerchiefs" should be the Minister of Citizenship and Immigration (Mrs. Fair dough) and the Minister of National Revenue; they could talk about the national anthem "O Canada".
On the third telecast, the panelists could be the hon. member for Restigouche-Mada-waska (Mr. Van Horne) and Mrs. Gil-berte Cote-Mercier; they could deal with complete tax exemption in Canada. This would no doubt please the Minister of Finance (Mr. Fleming) who is obliged to tax the Canadian people.
Again on the program "Affrontement" if it should be decided to retain that name, I suggest that the panelists on the fourth telecast could be the Minister of Finance and the Canadian taxpayers. Following the budget which was introduced by the minister, we would certainly witness a real encounter.
Instead of taking pleasure in just sitting on the government benches and instead of showing smug smiles of satisfaction, members of the cabinet should endeavour to listen to the complaints of the people of Canada.
[Mr. Rouleau.!

Mr. Speaker, last Monday, the hon. member for Sherbrooke (Mr. Allard) said that he was glad that he did not have to sit any more in front of the opposition. He also added that since he was seated further from the opposition, he was closer to the people. May I advise him to be careful, for the right hon. Prime Minister (Mr. Diefenbaker), in his vision, perhaps has felt that the hon. member for Sherbrooke would not stay long in this house and has placed him closer to the exit, as the hon. member for Beauce (Mr. Racine) said yesterday.
If the hon. member for Sherbrooke would get closer to the people, he would see that the people of Canada are suffering and he would hear them protesting loudly against the heavy burden of taxes they now have to bear.
Mr. Speaker, is there a more revolting sight than to see the men who now occupy the government benches-those who, for years, have been criticizing and saying that the people were too heavily taxed-unduly tax the Canadian people? When they were in the opposition, they used to tell us that taxes were too high in Canada, and now that they govern the country, they increase those taxes.
At the time they were in the opposition, they used to tell us that there was too much taxation in Canada; and now that they are in power, they tax us some more.
Mr. Speaker, during the last two election campaigns, the hon. ministers and the members who sit on the government side of the house, like the juvenile heads, the "wonder boys" they wanted to be, roved all over Canada promising tax cuts, lower expenditure, a lowering of the national debt and full employment everywhere in the country. Let me refer to only a few of the promises made by the leader of the Conservative party, the present Prime Minister (Mr. Diefenbaker), in Toronto on April 25, 1957. This is what the Prime Minister said on that occasion, and I quote from the Montreal Star of April 26, 1957:
(Text):
It is time to take the unrepentant tax-masters off the backs of the Canadian people. No one can deny that present rates of taxation penalize success, neutralize incentive and diminish production.
(Translation):
And in Quebec, on April 27, 1957, as reported by the Ottawa Journal of April 29, the Prime Minister said:
(Text):
Don't you think you have been overtaxed long enough by this government?

(Translation):
In Vancouver, over the national broadcasting system on May 24, 1957, the Prime the Prime Minister said:
(Text):
Are you satisfied with the policy of the Liberal over-taxation?
(Translation):
Today, Mr. Speaker, it is the people of Canada who are putting the same question to this government, and particularly to the Minister of Finance who is responsible for introducing in the house the budget agreed to by the government. Today, the people of Canada are asking the government: "You used to say that we were overtaxed, but what are you doing now? You are taxing us even more. We, the people of Canada, now ask you: what are you leading us into?"
Canada's present financial position is the result of a lack of administrative judgment on the part of the government, of its lack of administrative foresight and its policy of indifference and neglect.
During the campaigns which preceded the election of this parliament, the people of Canada had been promised new records of achievement. We had been promised a racing car that would take us to the highest peaks and records. But all we have now is a stock-car, headed for disaster. We do hold records, but of the wrong kind, for instance the record of unemployment, the record for peacetime government expenditure, the record for peacetime taxation, and the record for peacetime increase in the national debt. We also hold the record for peacetime deficit.
Yesterday I was listening to the speech made in this house by the member for Iles-de-la-Madeleine (Mr. Keays), in which he stated that at the Canadian mining convention he had met manufacturers who said to him, and I quote from page 2778 of yesterday's Hansard:
He admitted that everyone was surprised that when the experts on administration and financial affairs spoke, every one of them said there was no other course to follow and that they endorsed the courage of the Minister of Finance (Mr. Fleming).
Well, to disprove that statement of the member for Iles-de-la-Madeleine I need only quote from the Northern Miner of February 19, 1959:
(Text):
The continuation of big deficits at Ottawa, knocking bond values down to a level that creates interest rates that stifle new capital-raising; the tax pinch on provinces and municipalities forcing them to curtail improvements; a high-cost economy that scares away foreign capital that has had so much to do with Canada's recent boom; constantly recurring big gobs of unemployment requir-
The Budget-Mr. Rouleau
ing expensive relief; all these are plain signs that the Canadian people should stop, look and investigate.
That goes for the government too. The government should stop, look and investigate. (Translation):
Mr. Speaker, when we criticize the government, government members either laugh or shower us with insults, or say to us: "What would you do in our place" Or again, "it is the fault of the former government".
Well, Mr. Speaker, I should like to refer to an editorial which appeared in Maclean's on 28 February 1959, and I quote:
(Text):
It seems fair to suggest that the time has now come for getting on with the job, instead of proving all over again that the Grits are to blame for whatever ails us.
(Translation):
And, in conclusion, the writer said this: (Text):
Conservatives will get the credit for the good things that happen to Canada in the next four years. They will have to take the blame for the bad things.
(Translation):
So, Mr. Speaker, I need not tell you that the picture is pretty dark in Canada at this time. People are realizing that things are bad, and the blame rests on this government, and this government alone. If things are had in Canada, it is, as I said before, because of poor administration. The opposition does not have to run this country; this is a responsibility of the government. And if Canada is in a bad way right now, the government is to blame. When 1 say that things are bad in Canada, I am not stating my own opinion, nor that of the opposition, but the opinion of the people of Canada, as reflected in every newspaper across the country.
Here is what we find in Le Droit of April 8, 1959:
Biggest deficit ever-Living standard down.
This from the Gazette of April 10, 1957: (Text):
Income, Sales Taxes Up; Also Liquor, Cigarettes. (Translation):
There was another interesting article in Le Droit of April 2, 1959:
Mr. Fleming's headache.
In La Presse of Wednesday, April 8, 1959, another article appeared under the headline':
$617,000,000 deficit.
And here are other headlines which appeared in the April 8, 1959 edition of La Presse:
Increased public debt
Lower purchasing power in 1959
Debt $685 per capita
Defence Fund exhausted
Deficit of Old Age Security Fund
2800	HOUSE OF
The Budget-Mr. Rouleau
Decreased Unemployment Insurance Fund Consumer pays the bill.
And, finally, I have here another article which appeared in Le Droit of April 15, 1959: CNR deficit largest since the depression.
This in an editorial of La Presse on Thursday, April 9, 1959:
Situation far from bright.
Finally, from an article in Le Devoir for April 10, 1959. This is striking, for it is headed:
All taxes up.
And just under the heading, there is a picture of a smiling minister of finance who seems to be grinning at the nice trick he pulled on the people of Canada.
Those are, Mr. Speaker, some of the headlines that appeared in the press across the country. They clearly show that the situation in Canada is bad. And yet, at the same time, during the same month, the British government managed to reduce taxes while budgeting for a surplus. La Presse for April 8, published a news report from London, stating that:
Mr. Amory (Chancellor of the Exchequer) estimates that the reductions (of taxes) will cost the government $826 million for the current year and that without those reductions the budget would have shown a surplus of $1,111,600,000. But despite those reductions, Mr. Amory forecasts a surplus of $285,600,000.
This government, through its leader the present Prime Minister, always a great admirer of anything British or coming from the Commonwealth, should have come to some understanding with the ministers when he was drawing up this year's budget. He should have followed the pattern set by England for the management of the people's money and, instead of a deficit budget involving tax increases, he should have announced a surplus budget with no increase in taxes.
This year's budget, Mr. Speaker, is an anti-family budget. In support of this statement, let me quote from an article in Le Devoir of Saturday April 11, 1959, under the by-line of Paul Sauriol:
-our income tax does not make sufficient allowance for essential family expenditures.
The budget submitted last week by the Minister of Finance weighs especially upon small Canadian families. The Conservative party which has always been the party of big business, was again unmindful in its budget this year of those who toil or suffer.
Last night, in his speech, the hon. member for the Magdalen Islands (Mr. Keays) gave a striking illustration of the Conservative approach when he recalled how the Prime Minister last year in Winnipeg had 

urged workers and especially the National Labour Council not to press for higher wages. The member for the Magdalen Islands said last night that higher wages would hurt corporate profits and that it was important to make sure in the first place that corporations operate at a profit before workers' wages are allowed to go up.
Mr. Speaker, after hearing those words of the member for the Magdalen Islands, I wondered about his background. I looked up the current edition of the Parliamentary Guide and I realized why the hon. member had spoken in that vein.
According to the Parliamentary Guide the hon. member styles himself an "Industrialist". Furthermore, he is the president of Gaspe Equipment & Transport Limited; president of the South Bay Lumber Limited; president of the Gaspe Shipbuilding Limited; and vicepresident of the Peninsula Construction Company Limited. Mr. Speaker, as I said, this is the stand which has always been taken by the Conservative party, protect big business and forget about the workers and the small Canadian families.
As for the Liberal party, when it held power and managed the public funds, it always tried to protect the average Canadian, the worker, the ordinary people, the small wage earner. The Liberal party, through its social legislation which benefits everyone in Canada, enacted legislation such as the Family Allowances Act, the Disabled Persons Act, the Old Age Pension Act, and all the other welfare legislation which is part of the Canadian pattern.
This year's budget, Mr. Speaker, bears down economically and financially on the workers and, strangely, but unfortunately, reminds us of the hardships of the years 1930-35. The budget presented to us last week by the Minister of Finance makes no mention, Mr. Speaker, of a matter of interest to all people of Canada, namely dominion-provincial relations.
And yet during the recent election campaigns, the present Prime Minister had promised to settle once and for all every tax matter having to do with the allocation of taxes between the different governments. To this effect, may I be allowed to quote certain formal statements made by the present Prime Minister. In Toronto, on April 25, 1957, the Prime Minister stated:
(Text):
We intend to form a government to immediately convene a dominion-provincial conference to bring about a settlement of these problems not in the

spirit of arrogant domination as displayed by the present government, but in the spirit of unity and amity and with mutual tolerance and respect. (Translation):
I have here a report of the newspaper Le Soleil, dated April 30, 1957, dealing with a statement made in Charlottetown by the Prime Minister on April 29, 1957, and I quote:
During a speech in Charlottetown, Prince Edward Island's capital, Mr. Diefenbaker promised that, if he should be entrusted with federal authority, he would immediately call a conference for the redistribution of fields of taxation.
Maybe that was another fleeting vision of the Prime Minister's. The present government is nothing but a government by postponement. The government has not achieved anything in the field of federal-provincial relations. It does not wish to solve that problem for fear of having to face it. Tax relations between the provinces and the central government are the best proof of this government being a government by postponement. During the 1957 pre-electoral campaign the present Prime Minister promised, if he was called upon to lead parliament, to convene a federal-provincial conference as early as September 1957. The leader of the Conservative party became Prime Minister, but he has called no such conference; he found excuses for not convening it in September. The conference took place in November 1957, in the shape of a preliminary conference to another conference which he had promised for 1958.
Everybody knows that this conference was never called.
And now, Mr. Speaker, there is talk of calling a conference of provincial treasurers, not for the purpose of settling fiscal problems but to draft a research plan which could be put into effect by a committee of officials.
Yet in 1957, the premiers of the provinces had made concrete suggestions. Why should the provincial premiers meet in Ottawa, if it is to set up a committee of officials to study those problems? In my opinion, the establishment of such a commission is useless.
As I said a moment ago, the provinces, Ontario and Manitoba particularly, made concrete suggestions during the 1957 federal-provincial conference. I feel that the federal government has had plenty of time to study those proposals, and that it should now make its intentions known to parliament, to the provinces and to the Canadian people at large.
The provinces of Ontario and Manitoba, together with the other provinces with the possible exception of Quebec, suggested to the federal government the 15-15-50 formula, which provided a deduction of 15 per cent from the individual income tax collected by the
The Budget-Mr. Rouleau provinces, of 15 per cent from the corporation income tax also collected by the provinces, and 50 per cent from the succession duties levied by the provinces.
Why does this government persist in its refusal to tell us that it is ready to accept that formula? As I said just now, there is hardly any need for a survey by officials to determine whether the federal government has the financial means to accept provincial requests and to carry out their suggestions.
Mr. Speaker, I think and I am even firmly convinced, that federalism is the only possible system in Canada. Federalism should comprise several states. We now have in this country, under our federal system, eleven states, with ten provincial governments and a central government, which means that several of those states could make some compromise, as there is a distribution of legislative power and of fiscal power.
If the federal system is essential to the Canadian nation, it has also some drawbacks which must be accepted, including some necessary compromise arrangements in the taxation field, and those arrangements should be periodically adjusted to meet economic changes in this country.
In 1955, the Liberal government and the provinces jointly found a formula which, at that time, was the best and most likely to rally all parties. I admit that the formula might be improved in the light of new needs that are now felt. In order to do this, a federal-provincial conference should be called as soon as possible in order to settle the significant matter of federal-provincial relations.
Should a federal-provincial conference be held, another matter could be dealt with, in my opinion, and it is that of indirect taxation.
As you know, under the constitution, only the federal government has a right to levy indirect taxes. And, as Mr. Duplessis, premier of Quebec, would say the provinces, all over the country, I believe, have encroached to some extent upon the field of indirect taxation. To levy indirect taxes the provinces have entrusted to the retailers, in many cases, the function of levying taxes on behalf of the provincial government. In my opinion, this is only an expedient, and the whole field of indirect taxation should be open to the provinces.
If the provinces used that method of taxation, sincerely and honestly, they could benefit from several advantages, of which the most important would be, in my opinion, the decentralization of indirect taxation, without creating any geographic inequality.
2802	HOUSE OF
The Budget-Mr. Rouleau
Furthermore, the revenue accruing from indirect taxation does not depend so much on the industrial picture as do corporate taxes and succession duties.
The revenue from indirect taxation is more stable and, finally, the cost of its levying is lower than that of direct taxation.
At the federal-provincial conference on reconstruction, in 1945-1946, the federal government proposed to the provinces to open to them the field of indirect taxation.
At the 1950 conference, the provinces made the same suggestion, except, of course, the province of Quebec, who was opposed to it.
After the 1950 conference, the federal government circulated to the various provincial governments a proposed amendment to the constitution, which would have allowed the provinces to levy indirect taxes. However, in the face of Quebec's continued objection, the proposals were dropped. The time has come, it seems to me, for the federal government to call a federal-provincial conference, in order to find out if the province of Quebec's attitude has changed since then in that respect. However, I can see that, in the light of past experience, the federal government may well wonder whether the province of Quebec is really willing to make suggestions.
Mr. Speaker, when the member for Sherbrooke spoke in this house last Monday, he closed his remarks on education by expressing the wish that the province of Quebec take the trouble to offer definite, appropriate and constructive suggestions and proposals to the federal government. I would have liked him to enlarge upon his conclusions and to add that he wished the government of the province of Quebec would make definite and constructive suggestions and proposals to the central government in the matter of taxation.
After reading the proceedings of the federal-provincial conferences which have taken place in Ottawa, it is difficult, I know, to expect that the premier of Quebec will offer anything else but beautiful sentences. He will probably never submit definite proposals.
Mr. Duplessis' speech to the December 1950 conference, may be summarized by the paragraph appearing on page 27 of the proceedings. I quote:
(Text):
Co-operation is not centralization; co-operation is not assimilation; co-operation is not bureaucracy;
[Mr. Eouleau-1

co-operation is the friendly and mutual collaboration of two fellow Canadians working loyally hand in hand respecting fully the rights of each other, so as to safeguard and stabilize the future of Canada by rendering full justice to each and every one.
(Translation) :
Such is the purport of the speeches made by the premier of the province of Quebec.


Mr. Maurice Johnson (Chambly-Rouville):: Mr. Speaker, may I ask the hon, member a question?


Guy Rouleau: The hon. member had better wait till I am through with my remarks. I will answer him later.


Paul Léo Maurice Johnson: Mr. Speaker, since the hon. member gives us such a good imitation of the premier of the province of Quebec, may I ask him to also do a take-off on the then prime minister of Canada.


Guy Rouleau: I'll do that later.
Then, if we refer to the 1955 and 1957 conferences, and take the trouble of reading the speeches that were made on both occasions by the premier of the province of Quebec, we see that in 1957, he repeated exactly word for word, the speech he had made in 1955.


Paul Léo Maurice Johnson: It proves that he does not change his mind.


Guy Rouleau: A study of these two speeches does not show, Mr. Speaker, any positive proposal submitted to the federal government towards a solution to the problem of the centralization of tax fields.
Mr. Speaker, if the hon. member for Chambly-Rouville would like to hear a sample of the speech made by his provincial leader-


Paul Léo Maurice Johnson: No. But he has always said the same thing.


Guy Rouleau: -I will give him a few examples where he will recognize the premier of the province of Quebec. When Mr. Duplessis came to Ottawa in 1955 and 1957, he referred to an illustrious fellow Canadian, Sir Wilfrid Laurier; he talked about the highlights of history and its ancestral traditions and about fundamental truths. He also dealt with inalienable and unalienated rights and talked about good judgment and good sense-incidentally the Minister of Finance should have been there to listen to what the premier of the province of Quebec said- and he also talked about moderation in the matter of taxation.

But, Mr. Speaker, the Quebec premier made no concrete proposal to the government. And when he goes back to the province of Quebec after attending conferences here in Ottawa, the premier travels throughout the province to make tub-thumping speeches raising a hue and cry against the Ottawa government. But that did not prevent the premier from always accepting federal grants in substantial amounts. The Quebec premier wants the direct taxation field to himself. The province of Quebec has the same rights it always had. It never lost anything.


Mr. Deputy Speaker:: I am sorry to interrupt the hon. member, but I must tell him that his time has expired.


Louis-Joseph Pigeon: Mr. Speaker, does the hon. member for Dollard (Mr. Rouleau) allow me to ask him a question?
May I ask him if Mr. Maurice Lamontagne prepared his speech?


Guy Rouleau: Mr. Speaker, rumours are
going around here in the lobbies to the effect that the "chatterbox" from Joliette-l'Assomp-tion-Montcalm has 27 or 28 speeches already prepared. I do not know who prepared them for him but as far as I am concerned, ever since I came to parliament and I entered politics, I have always managed to prepare my own speeches.


Louis-Joseph Pigeon: I myself am at work when I am supposed to sleep.


Léonard-David Sweezey Tremblay: You will tell Mr. Lamontagne that his style is very poor anyway.


Mr. Deputy Speaker:: Order! I would ask the hon. members sitting on this side of the house to be a little bit less demonstrative.
(Text):


Mr. Eric Siefanson (Selkirk):: Mr. Speaker, on rising to take part in this debate, I see it is now almost one o'clock. May I call it one o'clock?
(Translation):


Guy Rouleau: Mr. Speaker, I was not
through with my remarks. When you rose, I understood that it was one o'clock and I resumed my seat. I would like to continue my remarks at two thirty.


Mr. Deputy Speaker:: I must point out to the
hon. member for Dollard that the reason I got up was that he had already spoken for forty minutes, indeed, 42 minutes.
The Budget-Mr. Stefanson
(Text):
Is it the pleasure of the house that I call it one o'clock?


Some hon. Members:: Agreed.
It being one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
Eric Stefanson: Mr. Speaker, in rising at this time to make my contribution to the budget debate I should like first of all to congratulate the Minister of Finance (Mr. Fleming) for the excellent manner in which he presented the budget to the House of Commons. The manner in which it was presented shows that he devoted much study and hard work to it and no doubt he consulted and sought the advice of experts in every phase of the economy before arriving at his final decision.
The opposition have been taking the same approach as last year, clouding and casting smoke screens over all the issues. They take delight in citing past statements of the Minister of Finance and other hon. members of the government. I should like to remind hon. members of the opposition that some of the statements made by them last year in the budget debate make funny reading today.
I do not profess to be an expert on matters of finance but I believe I have the average good sense and show the same responsibility of duty as the average Canadian. The average Canadian has accepted this budget. Last year the Minister of Finance predicted an increase of 2 per cent in our national production. Opposition members made fun of this and said that he was being highly optimistic. They also tried to make fun of the large deficit forecast a year ago. After listening to them for many days one got the impression they were secretly hoping conditions would get worse and not better. I honestly think they were disappointed when the white paper was presented to the house on April 8 showing that our total national production has increased by 2J per cent and that the deficit was considerably less than forecast. Even though this did not please the opposition I am sure it pleased the people of Canada.
In my opinion the Minister of Finance and the government deserve much credit for checking the two evils they inherited from the former government, unemployment and inflation. The opposition have now embarked on the same line of criticism they adopted

The Budget-Mr. Stefanson last year and one again gets the impression that they hope things will worsen and not improve. The people of Canada have every reason to have confidence in the predictions of the Minister of Finance for the coming year. All they have to do is take as a guide the predictions of a year ago in which he forecast conditions so accurately.
This year the minister has forecast an increase of 7 per cent in our national production and a budget deficit of $393 million. I am confident that at the end of the year both these figures will be bettered; that is to say, the gross national product will be more than 7 per cent higher and the deficit will be less than estimated. In some press reports this has been termed a recovery budget. I believe the words of the minister as reported at page 2425 of Hansard of April 9, are worthy of repetition. During the course of his budget speech the minister said:
Just as last year's budget was designed to meet 1958 economic conditions and needs, so this year's budget is designed to meet the changed conditions and needs of 1959. In a period when economic conditions are undergoing rapid change, our approach to our fiscal problems must be flexible and adaptable.
This budget has been designed to foster and promote recovery. Our aim is to maintain a sustainable rate of growth in terms of employment, development of resources and a sound dollar, so that Canadians everywhere may find full expression for their enterprise, industry and aspirations as free men and women.
Canada has no reason for fear. Blessed as she has been by a benign Providence above all other lands, she can face her shining future with utmost confidence.
Mr. Speaker, I can assure you that I am not happy about increases in taxes and I am sure that none of our people are. In this we no doubt agree wholeheartedly. However, my hon. friends to my right are not altogether correct or fair in their criticism when they say that the Prime Minister (Mr. Diefenbaker) and other members of the government had promised tax cuts and increased social services. Members of the government did promise tax cuts in the campaign prior to the June 10 election and they did fulfil those promises when they introduced the baby budget of 1957 which lowered taxes and increased social services. They definitely kept faith with the people of Canada. However, when they assumed office they did not fully realize how bad the situation was, nor did they have all the facts. When they took office they became aware of conditions in the country brought about by the policies of the former government and became aware of the extent to which unemployment and inflation prevailed. The last budget brought in by the former government helped to aggravate both these conditions.

Last year's deficit budget represented a remedial step to help check both the evils mentioned and the actions of this government have helped to bring about a steady recovery.
My friend the hon. member for Iles-de-la-Madeleine (Mr. Keays) in his remarks quoted a statement made by Mr. A. C. Ashford, president of the Canadian chamber of commerce, which appeared in the Winnipeg Free Press, and I wish now to make reference to a statement by Mr. Ashford reported in the Winnipeg Tribune of April 10. I am a member of a small chamber of commerce and through my association with the Canadian chamber of commerce I have found them to be sound in their judgment on most matters. The article reads as follows:
A. C. Ashford, president of the Canadian Chamber of Commerce, told the Tribune today a more balanced budget means general business improvement but that high taxation can be harmful on a long term basis for a young developing country like Canada. He said, "I believe a balanced budget, or close to one, would improve the bond market and general business. I personally was not surprised at the increase in income taxes to meet the current situation. However. I do feel that income taxes are too high on a long term basis for a young developing country like Canada.
We cannot expect the government to lower taxes if we, the public, are constantly asking them to do more and more for us. Every penny the government spends has to come out of the pocket of the taxpayers. There is no other source. I am pleased to see the Minister of Finance is optimistic about the volume of this year's business."
Mr. Ashford, incidentally, is also president of the Toronto-Dominion Bank. The Ottawa Citizen on April 13, under the heading, "Budget Hikes Necessary, Realtor Says", carried another interesting article which reads as follows:
Donald H. Koyl of Saskatoon, president of the Canadian association of real estate boards, says recent tax increases announced in the federal budget were necessary.
Mr. Koyl, here to attend the B.C. association of real estate boards convention, said the budget was not inflationary. It was foolish for a government to do heavy deficit financing when it could be avoided and an increase in taxes was not inflationary.
Mr. Koyl then went on to say that the real estate business in Canada is in a very sound condition.
This budget was designed to bring about a further recovery. No matter how much we dislike higher taxes they are necessary to meet higher national bills and to keep our dollar sound. Over half the increase in taxes goes toward the old age security fund to put it on a sound basis for the first time. Since the fund was set up and a formula adopted it has always operated in the red. I am sure that every Canadian is glad to

see this fund put on a sound basis. I am sure that no one would want to see the old age pension decreased.
I personally believe that many of our senior citizens are having difficulties in getting by on the present pension. I do feel that we should give serious consideration to increasing the pension for needy pensioners as well as to lowering the age limit. In my home town of Gimli, Manitoba we have the Betel old folks' home, one of the finest establishments of this nature in Canada. Any community contemplating building a senior citizen's home, no doubt could get valuable information from the board of directors of this institution.
No doubt what annoys the members of the opposition is that the public have accepted this budget and have accepted the tax increases as necessary. They realize that they are getting far greater social service benefits than ever before and that these things have to be paid for. No one wants smaller old age pensions, smaller family allowances, smaller pensions for the blind, smaller veterans' pensions and so on. Mr. Speaker, if the public were asked to vote on these services I am sure it would vote overwhelmingly in favour of maintaining them. Furthermore, the hospital plan has come into operation since this government took office and this creates a large expenditure of money. This is another matter that the people approve of.
Another large item of expense is for national defence, and I have not heard the opposition suggest that this is not necessary. With present world conditions and the cold war, this expenditure appears absolutely necessary. It is also spread throughout the country and does help the economy of the country. In Gimli we have an R.C.A.F. station, and its location there has given considerable employment to people living in the vicinity. I am sure that the people in that area want to see that air force station remain there in operation indefinitely.
Last year in my maiden speech I gave a brief outline of the boundaries of my constituency and also a brief description of the people and their occupations. When you look at the map of Canada you can see that Manitoba is the centre of Canada and is known as the keystone province. The centre of Manitoba is the interlake area which comprises the constituency of Selkirk. The boundaries of the Selkirk constituency follow the east shore of lake Winnipeg and the west shore of lake Manitoba and includes all the land between those lakes, and includes both lake Winnipeg and lake Manitoba.
Most of the people of my constituency are primary producers. They are engaged either in farming or fishing. Generally, people who
The Budget-Mr. Stefanson are primary producers are proud and independent. This is true of all the people in my constituency. They greatly value their freedom and the opportunities of earning a livelihood through their own efforts. They are not the type that expect handouts from the government. These people have worked hard, and it is throughout all this area that we have the real, genuine family farms. The interlake area is sometimes referred to as the breadbasket of Manitoba. There have been times when these people have met with hardships through drought and flooding. When people are faced with such conditions through no fault of their own the government should assist.
This government since coming into office has introduced legislation and has an agricultural program tailored to meet the needs of the farmers. Since taking office this government has introduced the stabilization act, paid cash advances on grain, made acreage payments and amended the Prairie Farm Assistance Act to the point where it is now much more practical and much more acceptable to the farmers.
This year in the throne speech the government indicated that it will be bringing in legislation dealing with crop insurance and farm credit. Legislation regarding farm credit will be of real benefit to the farmers. I think all of this legislation has been asked for by farm organizations, and all of it is aimed at improving the conditions of those engaged in agriculture. I feel confident that this government will continue to study the problems of agriculture and when necessary bring in legislation accordingly.
The fishermen in my constituency have also had good years and bad years. Some years the fish just do not seem to be there. Nobody knows the reason why. Recently in my province the fishermen formed the Manitoba federation of fishermen, and they have already met with the government of that province to discuss the industry. There is real need for some form of credit system for fishermen. At present the only credit available is from the fish companies, and I am sure they would be glad to get out of this financing. There is need for more research and also a need for better advertising, and an education program on the cooking and the preparation of fish. There is no problem in selling certain fish and it brings a high price on the export market. Pickerel, white fish, sauger, perch and goldeye are among these. It is for what we call the rough fish that such a publicity and educational campaign is required.
I have mentioned briefly some of the problems of the farmer and the fisherman. I also wish to point out that the increase in

The Budget-Mr. Stefanson income tax and corporation tax affects very few people in my constituency.
I pointed out, Mr. Speaker, that Manitoba is the centre of the nation and the Selkirk constituency is the centre of Manitoba. It is like the core of the nation. Take the core of an apple; when the core is healthy the rest of the apple is also generally healthy. Manitoba is the core of the nation and that core is in excellent condition; therefore the rest of the nation is also healthy.
Manitoba is blessed with having an excellent government. Mr. Roblin and his colleagues are giving the province real progressive legislation, and I am sure the people of Manitoba will show their appreciation of this at the polls on May 14.
Recently, a report released by the retail merchants' association in Manitoba showed a large increase in retail sales. This shows conditions in the country to be the direct opposite of what opposition members are preaching.
The government of the province of Manitoba tackles the problems before them and does something about them. The education bill is an example, and I could give the house many more. The attitude of the previous government was, "we will wait and see".
I am pleased to see that the grants to the provinces are higher than at any time before and almost double those of three years ago. With the grants to the provinces larger, they in turn can make larger grants to the municipalities, which have a very limited income through the real estate tax. The services that municipalities are being called on today to supply cannot be financed through the real estate tax, and their only other source of income is government grants.
This morning the hon. member for Queens (Mr. MacLean) outlined very well that the budgets of all forms of government, municipal, provincial, et cetera have greatly increased during the past years, and the services being rendered have increased many times over what they were 50 years ago.
The hon. member for Humber-St. George's (Mr. Batten), as reported at page 2773 of Hansard, last night referred to the meeting that the Prime Minister held in Selkirk. He said:
The Prime Minister went on to speak in Selkirk, Manitoba, on March 7,-
That is an error; it should be March 17.
-1958, as reported in the Toronto Telegram of March 18. After claiming that the government had eased the tight money situation, he went on to say:
"This has been done by releasing $300 million for new housing, launching a vast public works program and by reducing taxes."
Incidentally, I wonder where that public works program went to.


Of course, he must admit that the housing program has been a huge success and that we built more houses last year than at any time before. When I went home at Easter I was amazed to see the number of new houses being put up in the town of Selkirk during the past winter and being constructed at the present time.
As far as the public works program is concerned, I am also aware of some of that work being done, as this government has been participating in the cost of roads being built along the west shore of lake Winnipeg on a 50-50 basis with the provinces. They have also just recently given out contracts for three extensions to wharves in my constituency. I can assure you that this public works program is going on, and I can refer also to several public buildings for which contracts have been awarded or which tenders for construction are being called for.
Before I conclude my remarks there are a few things that I want to mention briefly that are of real importance to the people of my constituency. One thing that is badly needed is improved television. I am continually getting complaints, petitions and so forth from the people of the interlake area requesting television facilities. If the C.B.C. is not prepared to give these facilities, then serious consideration should be given to granting a licence to a private station that would be willing to render this service.
Another thing that is of importance to my riding is northern development. Roads and communication are of real importance to such development. The development of our natural resources is very important, and to accomplish this one has to build railroads, highways and communication systems into these areas. In the Arthur D. Little report on the economy of Manitoba it is proposed that a railroad be constructed from Gypsumville to Grand Rapids and to Wekusko on the Hudson Bay railway. This would shorten the distance from southern Manitoba to Churchill by quite a bit. This report also points out that Grand Rapids is a logical point for a power development project on the Saskatchewan river, and if power were developed a pulp and paper mill would be built. These are sound projects and serious consideration should be given to carrying them out.
I was extremely interested in the report of the lakes Winnipeg and Manitoba board which was presented to this government last June. The board was established jointly by the federal and provincial governments. Following this report the province had the benefit of a cost analysis made of the proposed lake Manitoba regulation. The findings of this study are contained in a report entitled

"Benefit-Cost Analysis, Lake Manitoba Regulations, September, 1958". This report shows that regulation of lake Manitoba is economically feasible. I appreciate the action taken by the provincial government, and this is a project worthy of support by this government. Controlling the level of this lake will not only benefit those engaged in agriculture, but it will, I am sure, have a beneficial effect on fishing and hunting. It will also provide much better beaches.
Before I resume my seat I did want to make a further mention of northern development program. Last fall I was very much interested in hearing a lecture given in Winnipeg by the Arctic explorer Vilhjalmur Stefansson. I cannot claim to be related in any way to him. However, he was born at Arnes, which is in the Selkirk constituency. He spent many years in the Arctic. In fact, he wrote a book back in 1922, "The Northward Course of Empire." I am just paraphrasing some of the things he said in this lecture. I think it was his third Arctic expedition which was financed by the United States government. They gave him $50,000. Then, he found himself running out of money. He knew the head of some university in Ontario as well as the president of some bank, and between them they got him an appointment with the prime minister of the day, who at that time was Borden. Stefansson talked with Mr. Borden and suggested that he would like to get $25,000 from the Canadian government because any land he might discover would be north of Canada. The next day he met with Mr. Borden who had met with his cabinet and Borden told him that he was sorry but they had turned down the offer. However, Mr. Borden said, "I will tell you what we will do; we will take over the expedition." They paid back the $50,000 to the United States and Canada took over the expedition.
During the course of this expedition he discovered five large islands in the Arctic. He named all those islands after Conservative cabinet ministers. There is Brock, Lockheed, Borden and I forget some of the others. Then, he said the Liberals came into power and they referred to this as a Conservative archipelago. Then, he referred to what he thought was a sort of mean trick. Several years later when they flew over this largest island which he had named Borden it was found that what he had thought was a large bay was actually a strait, so there were two islands. Now, the Liberals were in power and they named the larger island Mackenzie King island. You can check this on the map. It was very interesting for me to hear this. He said,
The Budget-Mr. Carter referring to the book "The Northward Course of Empire", that it had finally caught on when Diefenbaker was elected; they had seen the vision of development in the north, and I am sure this development will continue steadily.
In concluding, I should like to point out that Canada is well on the road to recovery and can look forward to a steady expansion in economic activity, employment and income. The policies being pursued by the present government assure the people of Canada a bright future.


Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, since this debate occurs at a time so close to the tenth anniversary of confederation with Newfoundland one would normally use this occasion to say something about the impact which confederation has had on the tenth province. However, recent events have rendered that inadvisable, so I shall restrict my remarks to registering the keen disappointment and the utter disillusionment of the people of my province at the treatment which they have received from this government. I shall reserve further remarks until the appropriate legislation comes before this house.
Yesterday the hon. member for Port Arthur (Mr. Fisher) dwelt at considerable length on the subject of democracy and particularly democracy as it is practised by corporations and by labour unions. Today I should like to add a few words of my own on this subject. Despite the successes which the Russians have had in perverting the meaning of words there is still only one kind of democracy, and that democracy is founded on the bedrock of the importance of the individual and the nature of the individual as a created being. The human personality has worth within himself as a human being and because of that he has certain God-given rights which should not be violated by the state, by any organization or by any other person.
Democracy also recognizes that among these fundamental rights there are priorities and the highest priority goes to the right to live. As Shylock said in "The Merchant of Venice", you take away my life when you take away from me the means to support that life. Democracy also distinguishes between God-given fundamental human rights of a human personality and the legal rights of an impersonal organization which are conferred upon it by man.
The hon. member for Port Arthur yesterday pointed his finger at corporations and observed that they were not very democratic in their actions. Then he went on to use that argument to justify the same kind of

The Budget-Mr. Carter action on the part of unions; in other words, two wrongs make a right. Naturally this raised some questions in my mind, and to balance the arguments put on Hansard yesterday by the member for Port Arthur I should like to read excerpts from two articles which appeared recently in the Newfoundland press. The first article is taken from the Evening Telegram of St. John's, Newfoundland, for February 27, 1959. It is a press report from Grand Falls by Ian Macdonald. I quote:
The Canadian Labour Congress took away the charter of the Grand Falls-Gander district labour council early today for their stand against the striking international woodworkers of America (C.L.C.). It was the first punitive action taken by the C.L.C. against any labour body as a result of the bitter and violence-spattered strike of 1,200 I.W.A. loggers against the Anglo-Newfoundland Development Company.
I skip a portion because I do not want to take up too much of Hansard with this article and I come to another excerpt from the same article which gives the meat of the problem:
Eight of the twelve unions represented at the special labour council meeting left en masse after Mr. Rhodes called on them to back the I.W.A. strike. The meeting was called to discuss the reinstatement of Sterling Thomas as council president. He was suspended as president of the 3,000-member council and as vice-president of the Newfoundland federation of labour by the Canadian Labour Congress for his opposition to I.W.A. "tactics" during the two-month strike of 1,200 loggers.
A statement issued by Mr. Grimes on behalf of the eight dissenting unions said:
"At a meeting tonight of the council with C.L.C. representatives C. W. Strong and Henry Rhodes the suspension of Sterling Thomas was discussed. After about one hour it was pointed out that the council had no alternative except to come out and file full support to the I.W.A. and notify the premier to this effect. On this statement, eight unions rose as a body and walked out of the labour council."
The second article is much shorter and comes from the St. John's Daily News of February 23, 1959. It contains a statement made by Mr. Thomas himself describing what led up to the action referred to in the article I have just read, and it reads as follows:
Sterling Thomas, ousted president of the Grand Falls and Gander district trades and labour council, has accused the Canadian Labour Congress and the Newfoundland federation of labour of taking discriminatory action against him. . . . Mr. Thomas told the Daily News he can come to no other conclusion than that he has been discriminated against in view of the fact that other affiliates of the two bodies have expressed just as strong support for Premier Smallwood's stand and no action has been taken against them. He said, "They too are governed by the regulations of the federation and C.L.C.". Mr. Thomas said he was particularly surprised at Mr. Jodoin's action in the light of the work that he, (Mr. Thomas) has done in re-organizing and helping to firmly establish the Grand Falls-Gander council. He pointed out

that over the past two years a lot of work had been done to get the council on its feet and to make it a strong member of the C.L.C. and the federation. His reward, he said, is to be thrown out without a hearing. He said, even more disturbing is the fact that even though there was a C.L.C. representative in Grand Falls he was never once approached about his stand. He was not given the opportunity to defend or explain his actions.
For the benefit of hon. members I should point out that Mr. Sterling Thomas is an officer of an international union of long standing and that he bears the highest repute in his community. The hon. member for Port Arthur is not in his seat at the moment but if he were I would naturally like to ask him if this was the kind of democracy to which he was referring yesterday.
I should like to take a few minutes now, Mr. Speaker, to deal with the budget. The purpose of any budget is to give a clear, concise picture of the state of the national health, describing what maladies may be present and what remedies are prescribed to cure them. The real test, therefore, of a budget is the clarity and accuracy with which it presents that picture. Since the budget concerns everyone it should be presented in such terms that the ordinary man in the street can understand its salient points.
The present budget follows that traditional pattern which has been established over the years and which is getting far too complicated to be understood by the man in the street. The pertinent facts are buried under masses of words, figures and graphs, buried so deeply that you have to use a pickaxe to dig them out. The present budget is perhaps a little wordier and more complicated than that of last year. The astronomical figures are beyond the ordinary man's comprehension and the very form of the budget tends to conceal important facts rather than expose them.
We can understand, of course, the human tendency to present unpleasant facts in as favourable a light as possible, particularly in a light favourable to the party in power. That is a human failing but it is one that carries with it certain disadvantages because the time has come when we must treat the Canadian taxpayer as a mature individual, one who is able to face unpleasant facts and one who has a great part to play in whatever remedies may be prescribed.
The most important fact of any budget is that there is only one pie. During elections we hear a great deal about pie in the sky. During the last two elections I think we had more pie of that kind than ever before in our history. We were told about savings of $500 million of waste and extravagance, of more spending, greater pensions, less taxes and of

course a balanced budget. The hon. member for Selkirk (Mr. Stefanson) who has just taken his seat said, "Of course, everyone understands that these things have to be paid for". I challenge him or anybody to get on the floor and give one instance where anyone in the last two elections told the taxpayers they could have all these additional things but they had to be paid for.


An hon. Member:: I accept the challenge.


Chesley William Carter: Well, not very many have. There was certainly nothing said about paying the bill, according to the speeches of the Conservative party spokesmen during the last two elections. I have read most of the reports both during the elections and afterwards, but I do not recall very much stress being laid on the fact that you can have more pie but you have to pay for it.
That particular kind of pie is proving very indigestible at this moment. Every new speech made by the Prime Minister (Mr. Diefenbaker) described a brand new millennium that was coming to pass, and a greater and greater vision was going to be revealed according to every speaker. But nothing was ever said about the cost. Certainly as far as the Prime Minister or the Minister of Finance (Mr. Fleming) is concerned, I remember nothing being said about costs. But I can remember many occasions when the Prime Minister pointed his finger at the Liberals and said, "They said it could not be done, but give us a chance and we will show you." In the last election he said, "We did it."


An hon. Member:: What did your leader do?


Chesley William Carter: We never said it could not be done. What we said was it could not be done and balance the budget. This budget, of course, confirms exactly what we said. There is an old saying, "You can be sure your sins will find you out", and this budget really confirms this saying. At least, the budget admits that the piper has played, the people have danced to his tune, and now the piper has to be paid. Of course, I realize that the Minister of National Revenue (Mr. Nowlan) implied the other day that these promises were not meant to be taken too seriously, but I do not think he advised anybody to that effect during the election. The fact is that people did take them seriously, and while one may think that the reason the people were hoodwinked was because they wanted to be hoodwinked, nevertheless they have now been forced to learn some very painful facts. The Canadian people have been told there is no pie in the sky after all. You cannot get something for nothing. Everything must be paid for soon or later; in this
The Budget-Mr. Carter case it is going to be later. No matter how you carve it up there is still only one pie and only one taxpayer.
The man in the street is concerned, I think, first and foremost about that pie. What he wants particularly to know from the budget is how big is this pie? Is it getting bigger or smaller, and what is happening to his particular share? Well, the budget is not too helpful in that respect. The budget gives the size of the pie in figures which do not mean what they say, and can be very deceiving.
I	noticed that the hon. member for Selkirk was very deceived when he made reference to it, as also was the Minister of Fisheries (Mr. MacLean) this morning. If you really want to find out what is happening to the pie-


An hon. Member:: Whose figures are these?


Chesley William Carter: These figures can be verified by the dominion bureau of statistics any time you wish. If we want to find out if the gross national product is getting bigger we have to convert it into terms of constant dollars. The dollars which my hon. friend from Selkirk referred to this afternoon, and the Minister of Fisheries this morning, were 1958 dollars. That is a very different kind of animal from the 1949 dollar. Also, the increase is made up of two parts, and only one part is due to the increase in volume, which is the important thing. The other part is the increase in prices, which is a very serious thing. If you convert it to 1949 dollars you get the true picture with regard to the increase in volume. In 1954 our gross national product in ordinary dollars was $24,871 billion; it was down 0.6 per cent. But when it was converted to 1949 dollars, the volume was down 3 per cent. That is, the volume of production went down and the reason the over-all change was only 0.6 per cent was that 2.6 per cent of that was made up by increased prices; in other words, by inflation.


An hon. Member:: Are these your figures?


Chesley William Carter: These figures were received from the bureau of statistics and can be obtained from the library. In 1955 the gross national product was $27.07 billion, up 9 per cent; but in constant dollars it was only $21,961 billion, up 8 per cent. That was the year when we did have stable prices and very little inflation. The increase in volume was 8 per cent out of a total of 9 per cent, showing only 1 per cent inflation. In 1956 it was $30,098 billion, up
II	per cent; in constant dollars it was $23,547 billion, up only 7 per cent; in other words, 4 per cent inflation. In 1957, and this is important, the figure was $31,406 billion, up 4 per cent apparently; but in

The Budget-Mr. Carter constant dollars the figure was only $23.51 billion; in actual volume it was down 1 per cent. In 1958 it was $32,189 billion, apparently up 2J per cent; in constant dollars, $23,704 billion, up only 0.8 per cent.
These figures which I have just quoted show in terms of constant dollars that there was very little change in gross national product in the years 1956, 1957 and 1958. In fact, there was hardly any change at all. If the population had remained unchanged the size of the individual share of the pie would have been unchanged too, but during those years our population increased. In 1954 it was 15.28 million; in 1955 it was 15.69 million, up 3 per cent; in 1956 it was 16.081 million, up 2 per cent; in 1957 it was 16.589 million, up 3 per cent; in 1958 it was 17.048 million, up 2 per cent. Thus, in the three years when our gross national product was stationary, the population was steadily increasing as an average rate of 2.5 per cent per year and the size of the individual piece of pie was becoming smaller.
If we think in terms of the labour force, we see that the labour force in 1954 was 5.493 millions; in 1955 it was 5.610 millions; In 1956, 5.782 millions; in 1957, 6.003 millions; and in 1958, 6.127 millions. The increase in the labour force is a little out of line with the change in population due, of course, to immigration, but if we look at the increase which took place in the labour force and take into consideration the fact that total production was practically unchanged, it is clear that each worker during the last three years has been producing considerably less than did an individual worker in 1955.
I have these figures in the form of two tables and it might be more convenient for the house if I were given consent to place them on record in Hansard in tabular form.


Mr. Speaker:: Were the tables prepared by the hon. member or by the dominion bureau of statistics?


Chesley William Carter: They are excerpts from the d.b.s. figures.


Mr. Speaker:: Has the hon. member leave to have these two tables inserted in his speech at this point?


Some hon. Members:: Agreed.


Chesley William Carter: Thank you, Mr. Speaker. They
are as	follows:	average	Pop.	%	labour force	%Year	millions	increase	millions	increase1954 .	.. 15.287	5.493	1955 .	.. 15.698	3%	5.610	2%1956 .	.. 16.081	2%	5.782	3%1957 .	.. 16.589	3%	6.003	4%1958 .	. . 17.048	2%	6.127	2%


	G.N.P.		billions		
billions	%	$ constant	; % vol.	Infla-Year $ ordinary	change	(49)	change	tion1954	24.871	- .6%	20.186	-3 %	2.6%1955	27.070	+ 9 %	21.961	+8 %	1 %1956	30.098	+ 11 %	23.547	+ 7 %	4 %1957	31.406	+ 4 %	23.510	-1 %	5 %1958	32.189	+ 2.5%	23.704	+ .8%	1.7%


An hon. Member:: How have the Liberals been increasing in the last few years?


Chesley William Carter: You cannot digest the ones you have at this moment. You had good Liberal pie for 22 years but you did not appreciate it.


An hon. Member:: It went rotten.


Chesley William Carter: Well, the people now have a chance to taste the difference.
Next to the gross national product, the problems which most interest the man in the street concern the twin subjects of unemployment and inflation. The effect of inflation is illustrated by the figures which I mentioned a few moments ago. The gross national product last year amounted to $32,189 billions, but this had the value of only $23,704 billion when the value of the dollar is kept at a constant figure. In other words, it takes roughly $32 now to buy what could be bought in 1949 for $23.50. The Canadian dollar has lost one-third of its value in the past ten years.


An hon. Member:: Did you say "few years"?


Mr. Pickersgill:: That is where the inflation was, in the last two years.


Chesley William Carter: Those who are in a position to do so can keep abreast of this dollar depreciation by demanding more dollars, but if they do so they make the situation even worse for those who are not in that position. Currency debasement is just as great a threat to national security as missiles are, and it is far more insidious. Obviously something needs to be done about this. Perhaps we should make a thorough inquiry into our whole monetary system, including the question of interest rates.
As far as unemployment is concerned, jobs depend mainly on two things, foreign trade and the provision of capital investment. New jobs depend on capital investment. I do not know what the actual figure is with respect to each job provided, but it is somewhere between $10,000 and $25,000. But capital investment in 1957 amounted to only $8.7 billion; in 1958 it was $8.4 billion; and in 1959, only $8.3 billion. In other words, capital investment this year is $400 million less than it was in 1957, and in 1957 our total production was 1 per cent less in volume than in 1956. How, in the face of this situation,

can the minister expect a 7 per cent increase in the gross national product next year?


An hon. Member:: You will find out.


Chesley William Carter: Where is it coming from? I can tell the hon. member, whoever he was, that an article by Mr. E. J. DeSeau in the Financial Times dated April 11 inferred that if it takes place it must be due to inflation. If there is a better explanation we are ready to hear it, but nobody has explained it yet. The figures just do not add up to 7 per cent, or even to 4 per cent.


An hon. Member:: They do not add up to a billion dollar deficit, anyway.


Chesley William Carter: Well, they do add up to an $800 million deficit.


Mr. Speaker:: Some of the members in this part of the house are feeling excluded.


Mr. O'Hurley:: Look at the Speaker.


Chesley William Carter: I am sorry, Mr. Speaker. I was getting so much attention from that part of the house-but I certainly did not mean any disrespect to the Chair.
If we are to cure our unemployment problem it must be done by using the industrial capacity we have idle at the moment and by creating new jobs through capital investment. The figures which the minister has tabled do not indicate that nearly enough is being done in this direction, even without taking into account the natural increase in the labour force. In addition, also, we must take into consideration the effects of automation. We must remember that in the United States the pre-recession level of production was reached a short while ago but the number of workers employed was one million less than were employed prior to the recession, the difference being due to automation. We must realise that these forces are at work in Canada, and the only logical conclusion we can reach is that unemployment will continue to be a problem for some years yet.
The other point, of course, is trade. Twenty per cent of our jobs depend upon trade, and the international picture is not nearly as encouraging as the budget would seem to indicate. This is pointed out in an article in the Gazette of March 31. Referring to what it calls special items, this article says:
The maintenance of exports would have been more encouraging were it not for the influence of "special items" in which uranium shipments were foremost.
These were worth $277 million last year, compared to $128 million in 1957 and $46 million in 1956. The export of aircraft and parts, and cattle and meat, at $109 million and $153 million respectively, were double the 1957 figure.
When these "special items" are subtracted from the export total, a more realistic assessment of
The Budget-Mr. Carter
the impact of recession on the export trade is available. At $3,758 million, exports of mineral products, wood and paper products, other agriculture and fish products, and manufactured goods are $380 million less than in 1957.
This is an extract from an article written by John Meyer, financial editor of the Gazette which appeared in the March 31, issue.
The commonwealth trade and commerce conference about which we heard so much also has not turned out to be the success we were lead to believe it was, at least not in the eyes of the Tory counterparts in the United Kingdom parliament. I wish to read now from a statement made by Sir Albert Braithwaite as reported at page 1112 of the British Hansard of December 2, 1958:
First of all, I should like to pay tribute to the chancellor of the Exchequer and the president of the board of trade for the brilliance which they displayed in leading our own delegation to the Montreal Conference. Reading between the lines, it seems to me that what they did there literally saved the conference from being almost a stalemate. They infused some life into it. At the same time I am not satisfied that the conference report is by any means a document upon which to rebuild and revitalize the British commonwealth of nations. Its implications are narrow. It is phlegmatic. It is not precise enough in its conclusions, and it gives no real, positive direction on how even those conclusions will be carried out.
I wanted something much more vital to lead our commonwealth affairs than a lot of pious platitudes. Many people have said a great many things about how we should develop the commonwealth, but there has been a remarkable absence of action since the Montreal conference took place. The Canadian Prime Minister came over here and made great speeches on what should be done, but I have seen no real reflection in deeds implementing the words which he uttered.
Those words were not spoken by a Liberal or Socialist member of the British parliament but by a Conservative.
In the few moments left at my disposal I should like to deal briefly with the bond conversion. Last year the Minister of Finance came before us and told us about the problem of refinancing. He had, he said, $6.4 billion falling due in eight years which meant an average of $8 million worth of bonds falling due each year. That situation, he indicated, was likely to cause instability in the bond market during that period of time. His solution was to convert to long term bonds and spread the repayment over a longer period. That, of course, appeared to be a very sound idea. But what has actually happened? Less than half-45 per cent to be exact-of those original bonds were converted to long term bonds. Suppose we say half. The sum of $3.2 billion of original debt is still coming due within the seven year period. We must then add to that the $3.3 billion of new borrowing which has been made by this government since it came to power. I should like to emphasize that all
2812	HOUSE OF
The Budget-Mr. Kennedy of this borrowing is short term borrowing of less than three years. If we add half of the original amount, $3.2 billion, to the new borrowing of $3.3 billion-and I hope my hon. friend is checking on the mathematics at this point-we still have $6.5 billion falling due in the next eight years and so we still have the original problem with which we were faced.
If we have gained anything by that transaction I should like to have the Minister of Finance explain to us just what it is. On the other hand, we have paid a very high price for that experiment. We have to pay $340 million in extra interest on bonds maturing between 1960 and 1966. We have to add to that $31 million in premiums, bonuses, for advertising, etc. While we still have the original problem that existed before the conversion took place we also have increased our indebtedness by $345 million. I have much more to say but I think this perhaps would be a convenient time to stop.


Mr. C. F. Kennedy (Colchesler-Hanis):: Mr. Speaker, since becoming a member of this honourable house it has not been my lot to swell the records with many words and I assure you that on this occasion I intend to continue my brevity. When I was very young I was advised that no man learns wisdom while talking and since I have been a member of this house-and I have been here some time now-I have often wondered if the same thing does not apply to listening.
I take this opportunity to congratulate the Minister of Finance (Mr. Fleming) for the splendid budget he has presented. I do not propose to comment at length upon it, but I suggest it is one which should appeal to Canadians generally as a compromise to our economy and an incentive to all to participate in the great future which this country offers.
And now, since it is my privilege to represent the finest constituency in Canada, I should like to transgress a little on the time of the house to say a few things about my part of the country and the excellent people who live there. Geographically, the counties of Colchester and Hants are located in the centre of Nova Scotia, hinging on the town of Truro which is known as the hub of Nova Scotia. Our lands envelop the headwaters of the famous Cobequid bay and run north to a short frontage on the strait of Northumberland. It is unique that I am nearly surrounded by and border on the constituencies of seven of the other eleven members who represent Nova Scotia in this house. I assure you that it is very comforting to have such wonderful neighbours.
The good judgment of my people is well known provincially because at present we


are represented in the legislature by four members on the government side. Of these, one is deputy speaker, another is our excellent minister of highways and a third is none less than the distinguished premier of Nova Scotia.
This constituency is steeped in history and the area bordering the Cobequid bay and the north shore still bear evidence of Acadian settlement as far back as the 17th century. Because we are blessed by fertile lands bordering our shores and in our many river valleys our economy is based chiefly on agriculture which is, in most cases, coupled closely with the harvest of wood products from our forests.
The world-renowned tides of the Cobequid bay at some points and in some cases rise to heights of over 60 feet above low water, and the action of these turbulent waters entering and receding from the rivers have over the years built up large areas of fertile marsh lands. It was part of these lands that the early settlers reclaimed and tilled to support themselves and their livestock. Today, thanks to the assistance rendered by the Maritime Marshland Reclamation Act, thousands of acres of marsh lands are being turned into crop and grazing areas. The people who own those lands are very grateful for this assistance, and I hope that this program will continue to the benefit of all areas.
Owing to the steepness of the watersheds on our rivers, occasional flooding is a menace to those who live in the lower valley areas. Erosion of valuable farmland is also much in evidence. This situation has been aggravated somewhat by the removal of timber from the slopes. Owing to the intensity of this erosion and the increased cost of labour and materials, the farmers are finding it most difficult to provide necessary protection. I fully realize that this is a widespread problem, and I am happy that a study is being made to ascertain whether some assistance is warranted. There are several inland areas inundated by shallow water at the present time which could be brought under cultivation by drainage. Perhaps the provisions of the Maritime Marshland Rehabilitation Act could be extended to include projects of upland erosion and drainage.
I have already mentioned that the cutting of timber has upset water control, and although it is generally recognized that natural rehabilitation of forests is as fast here as anywhere else in Canada, recent surveys show that growth is not keeping pace with cutting. We have learned to assist nature in our field production and I believe it is high time that we applied more common sense to forest management. Even if

we give a tree a good chance we must realize that it takes nearly a generation to produce.
Because our economy is so closely tied to the forest products industry, it is both desirable and necessary to continue limited production. Financial returns are continually diminishing and the recent increase in freight rates has dealt a very serious blow to our home markets. Mr. Speaker, I urge this administration to expedite, and quickly, a complete review of the freight rate structure, with the objective of equalization of advantage to all Canadians in all industries.
Our principal manufacturing is in the textile field located in the towns of Truro and Windsor. Good management and skilled craftsmen have combined here to produce, and even now we are expanding in the production of excellent quality goods which are famous from coast to coast. The quarrying and export of gypsum and barytes adds to the economy of a large area, as does the manufacture and export of pulp products in the western area.
Owing to our short coastline fishing is done only on a limited and seasonal scale. Because we are centrally situated transportation plays an important part in our general activity. Both railways and highway transport converge on Truro from all directions. Many hon. members of this house who were among the thousands of troops who proceeded overseas during the last war will recall Truro as the last train stop before reaching the point of embarkation. To those of you who can find time for a holiday I commend to you the excellent scenery of Cobequid, the valleys, streams and hills, and the beautiful and excellent bathing beaches of the north shore where the water temperature is most inviting. For the outdoor sportsman there are many inland waters and forests which will reward exploration during the midseasons.
I am proud to report that the general economy of my constituency has held fairly firm, and many indications point to a steady improvement. This speaks well for the people who are resourceful and believe in steady progress. Those people believe in keeping one foot on the ground and consolidating each step rather than getting up in the air and expecting someone else to come to their rescue.
Problems, Mr. Speaker! Certainly, we have problems. No one should ever expect to get through this world without adversity and each one is provided with a brain to apply, and not to think that we are in a Utopia where all our wants will be supplied on demand.
During 1957 and early 1958, most of the federal services located in my constituency
The Budget-Mr. Kennedy were moved elsewhere. This has brought great hardship upon a certain segment of the population and I would urge the departments concerned to co-operate in filling the gaps.
Most of camp Debert, including excellent air terminal facilities, have been vacated. This vacant camp area is well underlaid with miles of water mains and sewer mains, which could be utilized by other industry. There are also plenty of sources of water supply, railway siding facilities, air landing facilities, hangars and other buildings in the area. It is located very close to Truro on the main Canadian National Railways line, and I would urge this government to locate some type of crown corporation there or, if they have no intention of using this vacant area, to consider turning it over to other interests which might utilize it for industrial uses. I personally believe, and I suggest, that it should be turned over to the crown corporation of Nova Scotia known as Industrial Estates Limited, which is at this time doing such a wonderful job in promoting some industries in the province of Nova Scotia. The establishment of light industry not only in Debert but in other parts of the constituency would serve as well to absorb those displaced because of these changes and current slumps such as the depressed forest products industry.
There is another matter which requires immediate attention. The town of Windsor is located on the shores of the Avon river. At the present time part of this town is endangered by erosion. This river is subject to terrific tides and erosion has been taking place progressively in the town. Actually now the highest tides flow into some sections of the town. There are and there have been over the years some public works established on the river at that point. I suggest that they have made some contribution to the erosion here. I strongly urge that the government take some responsibility in providing some protection of this shore, otherwise, part of this town is going to suffer because it is impossible for the townspeople to assume the whole cost of such an undertaking.
Better transportation is one of the great needs of the maritimes. I am very proud that our local department of highways is making considerable improvements throughout the province of Nova Scotia. At the present time they are paying particular attention to the main highway linking Truro and Halifax. This highway is one of the most widely travelled in the province of Nova Scotia, and I would suggest that the whole highway will require the same treatment which sections of it are getting now. I would strongly urge that the provisions of the Trans-Canada Highway Act

Division
be extended to include this highway in order to help with the cost of construction of a highway which is so badly needed to handle the projected increase in the volume of traffic during the months and years to come.
In closing, Mr. Speaker, I should like to leave with you an observation. The sudden increase in the birth rate after the beginning of world war II has had a considerable impact upon our educational facilities. The burden of providing these facilities has fallen upon the present adult population. The impact of this terrific force will hit the labour force over the next few years. We, the present adult population, have moulded this force; they are our investment. Their opportunity is the greatest on this earth. I say, then, to the pressure groups of this country and the members of this house, let us not mislead them but rather let us encourage them to stand on their own feet. What these young people are inheriting was not built on dependence upon others but upon the initiative and courage of the individual. Training and leadership are essential so that our youth may face their careers with confidence. However, morale is not born of over dependence on others. I respectfully suggest, Mr. Speaker, that without morale no battle can be won.


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


Mr. Samuel Boulanger (Drummond-Arlhabaska):: Mr. Speaker, since the budget speech was delivered by the Minister of Finance (Mr. Fleming), I have had the opportunity to meet many citizens from a few communities in the province of Quebec, and more particularly in my own riding. The majority of those people with whom I spoke were of Liberal allegiance, probably, because it is hardly possible by

now to find any supporters of the Conservative government. Indeed right thinking people in general are waking up from the great illusion that had been held out to them two years ago and they do not hesitate to express their dissatisfaction and disapproval of the Minister of Finance's budget.
There are ridings which, today, are happy not to have trusted the Conservative party. Those are the ridings where Liberal representatives were elected. It is true that we are not many, but we may boast to have freedom of speech, and sincerity of mind.


Paul Léo Maurice Johnson: Thanks to the Conservatives.


Samuel Boulanger: If the Conservatives in the province of Quebec had the qualities I just quoted, they would not be afraid to say to the Canadian people, and more particularly the people in the province of Quebec, what they really think of the budget, as well as of the grants which have been doubled since the Conservative government is in power. I mean the grants to the provinces.
Some time ago an increase of $100 million was voted for the construction of highways in the province of Quebec. If Conservative members had been sincere, they would not have withdrawn behind the curtains but would have expressed their opinion here in this house. Their gesture was perhaps due to the attitude of the hon. member for Rober-val (Mr. Tremblay) who seems to have become the head of the Conservative members from the province of Quebec.


Léonard-David Sweezey Tremblay: I am very much honoured!


Samuel Boulanger: Mr. Speaker, there is a matter I want to deal with more particularly on this occasion, namely the building of a bridge over the St. Lawrence at Three Rivers.
The idea is not new. A road crossing the river at that spot was already considered to be necessary in 1950 and there was some discussion whether a tunnel or a bridge would be preferable.
A few years later, in 1953, a group of sympathetic and able businessmen set up an organization with the aim of investigating the possibility of carrying out that project.
After a survey was made in Halifax, where a bridge had just been built crossing the river to the city of Dartmouth, it was revealed that an undertaking of that type in Three Rivers would be possible and would be self-liquidating.
A research fund of $30,000 was subscribed by the people concerned so that the project could be studied thoroughly.
The services of the consulting engineer for the Halifax bridge were retained, and Mr. P. L. Pratley, of Montreal, was instructed to make an extensive study of the project. In 66968-9-179
The Budget-Mr. Boulanger September 1954, he stated that the building of a bridge at Three Rivers was decidedly possible, that it would be self-liquidating and, furthermore, that there was great need of it.
The most elementary study of the immediate traffic and subsequent possibilities, he added, points to the urgent need of a better means of communication than ferryboats, not dependent upon weather conditions, seasons, winter ice, mechanical stallings and hazards of navigation.
After reading the Pratley report, the bridge committee felt reassured and hopeful. It decided to retain the services of a firm of consulting engineers from New York, Cover-dale and Colpitts, founded by a Canadian, Mr. W.H. Coverdale, to make a more elaborate study of the possibilities of the traffic anticipated.
That second report, published in November 1955, filled the bridge committee with optimism and enthusiasm.
The report stated that, during its first year of operation-it was believed then it would be in 1960-the traffic between the two shores would increase by 45 per cent; in the second year, by 10 per cent; and then, that it would continue to increase at an average rate of 5 per cent a year. At the toll rate established at the time of the investigation, they said, the bridge would be self-liquidating.
The cost of such a project had been estimated, at the time the plans were being prepared, at $12| million, which would have been financed through a 4J per cent interest loan, repayable in 13 or 14 years.
But at the time the first plans were accepted by the federal and provincial authorities, the seaway project necessitated a change in plans, which resulted in an increase of the estimates to $20 million, which would have then to be financed at a 6 and 6J per cent interest rate, in addition to higher cost of material, steel and labour.
Other studies were made on the self-paying possibilities of the project; it is still considered quite practicable. However, amortization would have to be on a period of 40 years, instead of 14, as was the case at the beginning.
Mr. Speaker, it has been established, beyond any doubt, by engineers and financiers, that the building of a bridge over the St. Lawrence at Three Rivers is a practicable and self-liquidating project in addition to being urgently required.
All the population of the Mauricie area and the eastern townships, all the manufacturers and farmers and everybody have been urging the construction of this bridge for many years.
2816	HOUSE OF
The Budget-Mr. Boulanger
I need hardly quote figures to prove this desire of almost half the population of the province of Quebec. The bridge would be located in the centre of the province and nobody, even those who would not benefit directly by it, would object to its construction since its cost would be financed not by taxes but by a private corporation.
In the course of certain debates of years past, here in this house and in political meetings, we have heard members who today are ministers make sensational statements in favour of the construction of that bridge.
The Solicitor General of Canada (Mr. Balcer) himself, at the beginning of the 1953-54 session, made a speech from which I quote at page 65 of Hansard: Here is what the then member for Three Rivers (Mr. Balcer) who today is the Solicitor General said:
At present, we are experiencing a lot of trouble with the ferry between Three Rivers and Ste. Angele. The system is so inadequate that one has to wait from three to four hours before being able to make the trip. And for this reason the national harbours board should improve the wharf at Three Rivers so that this city may become a modern port such as its geographical location would call for.
We have to face a large number of problems, but the number one problem undoubtedly is the joining of the north and south shores, by means of a bridge between Three Rivers and Ste. Angele in the county of Nicolet. This would help not only the city of Three Rivers, but all the cities in the district which are hampered by the lack of communications between the two shores. As a matter of fact, the whole central part of the province suffers from this state of affairs. It finds itself, because of that fact, in a state of economic inferiority.
And later he added:
That is why I ask the federal government to do its share, for it is a large-scale national undertaking.
The federal government collects a large proportion of the taxes. At the present time, it collects 77 per cent of the taxes so that there remains very little for the provinces and municipalities. The latter are in a precarious position, for real estate in the small towns cannot be taxed any more than it is now. Consequently cities and municipalities hesitate before embarking upon large-scale projects.
It was that same minister who, in a speech he made at the Ste. Cecile school in Three Rivers-that was of course, during the 1957 election campaign-made the following statement, as reported in Le Nouvelliste of Three Rivers on May 31, 1957. I quote:
The candidate added: "The matter of the bridge was raised during Mr. St. Laurent's visit. Mr. St. Laurent made the same reply as had been made


in 1908 by Mr. Laurier when the matter of building of a canal across the isthmus of Chignecto was being considered". According to Mr. Balcer, Mr. St. Laurent has only to utter the words "national necessity", and this means a first class burial for the bridge across the St. Lawrence.
Moreover, the federal government has insisted on two central spans for this bridge, which raises the cost by $7,000,000. Today, the promoters of the bridge have no way of raising this extra money. The federal government should pay the difference. At the same time, the people of all Canada will contribute to the St. Lawrence seaway, which will divert many ships from the port of Three Rivers. "The bridge will be a monument to the good sense of the people of Three Rivers", said Mr. Balcer. "No one should be allowed to play politics with such a matter".
True enough, Mr. Speaker, no one should play politics with this matter which is of interest to the people of between 15 and 20 constituencies, and it is time to prove it.
If the Solicitor General is true to his word, he will introduce a bill as soon as possible, thus giving effect to his high-sounding promises.
Think of the number of years the Solicitor General has been criticizing the Liberals, claiming they were opposed to the construction of this bridge.
Today, he is in a position of authority, in addition to having been pardoned for his disowning his leader at the 1956 convention.
Just what is it that is standing in the way of building the Three Rivers bridge?
Apparently, it is not Ottawa that is balking, because three federal cabinet ministers reportedly promised Ottawa's financial support to pay for the difference between the initial cost and the present cost, according to an item in Le Nouvelliste of March 4 last.
This report went on to say:
However, such promises are unofficial. It has been recognized that provincial government approval is an essential requirement. That, at least, was the main outcrop of the last general meeting of the chamber of commerce, held last week.
That organization thought it appropriate to pursue the matter by having the chairman of its bridge committee call on the premier of Quebec last February to sound him out. Mr. Duplessis expressed approval of the bridge in principle, but added that present economic conditions did not justify construction of the bridge at the present time.
The chamber of commerce and the people concerned do not agree with that view, however; they have expressed the opinion that it is never time to spend millions, but that faith in the future is often justification for bold undertakings.
The studies and surveys made by the people concerned show that there is still an obstacle which stands in the way of the building of the Three Rivers bridge and only the premier of the province of Quebec can overcome it by

a simple approval, which would be of no serious consequence, and by guaranteeing the first year's operational deficit, as was done in the case of the Halifax bridge. It is the responsibility of federal and provincial members to act jointly and to put pressure on the provincial authorities so that they give their approval. A suggestion was made in the Three Rivers chamber of commerce to the effect that provincial members of the legislative assembly from the 15 counties in the central area of Quebec would be asked to stake their seat on the proposed bridge that would span the river at Three Rivers.
This shows the determination of the promoters, of the chamber of commerce, of the Three Rivers city council and of the citizens who subscribed $30,000 for the use of the research committee.
When workers are desperately looking for jobs, this undertaking could not be more timely.
Unlike the premier of the province of Quebec, we submit the implementation of such a project I just told you about will improve the economic situation.


Paul Léo Maurice Johnson: Are you talking federal or provincial politics?


Mr. Dupuis:: Don't answer, it is not worth it.


Samuel Boulanger: Besides supplying jobs to thousands of workers, the construction of such a bridge would promote the industrial development of communities on either shore.
It cannot be said that our industries in that area are not thriving, but our industry in general does not expand at the same rate as in centers better served by highway development.
I repeat with conviction and sincerity, along with the radio stations on both sides of the St. Lawrence: We need that bridge, we shall have it.


Mr. Roger Parizeau (Lake St, John):: Mr. Speaker, before tackling my main theme, 1 would like to tell of the impression I have of this house after listening for a whole year to hon. members of the loyal opposition.
To my mind, the reason for which the people of Canada got rid of the Liberals, was that it realized, after several years, that it was made up only of practical jokers. We may wonder, Mr. Speaker, who is the greater clown, the hon. member for Bonavista-66968-9-179J
The Budget-Mr. Parizeau Twillingate (Mr. Pickersgill) or the latest arrival in this house, the hon. member for St. Jean-Iberville-Napierville (Mr. Dupuis).
This reminds me somewhat of some happenings during the last world war. You will surely recall them, Mr. Speaker. When there was intensive training in England, the famous Lord Haw! Haw! used to say: "The Mac-Naughton circus is on the run again". Well.. I am saying: "The Pearson circus in on the run again. Yes, the Pearson circus is on the run again and it will be on the run for quite a while."
Mr. Speaker, I want to congratulate the government through the distinguished Minister of Finance, for well-balanced budget he has just presented to the Canadian people. In times as difficult and complicated as these, legislation brought in by our government will help reduce unemployment and check inflation.
The people of Lake St. John asked me to thank the government for everything that has been done since it took over in this country, and more particularly for all that has been done in the building field. As a matter of fact, the sound action taken under the National Housing Act has helped a great number of workers in my riding, as anywhere else in Canada, to become homeowners.
I am speaking in full knowledge of the case because in 1956, only about 60 homes had been built at Alma, our county town, whereas that figure has gone up to 85 in 1957 and to a record high of 126 last year. The people of Lake St. John owe those magnificent results to the government, Mr. Speaker, as the necessary legislation was passed to facilitate loans to help our workers.
However, Mr. Speaker, economists and experts agree that while there has been considerable improvement in the National Housing Act, following legislation introduced by this government, more should be done radically to solve the housing crisis which, it must be said, is still critical throughout the country, but to a varying degree.
The problem of home ownership, is, as we have all learned, the crux of the social problem, as it constitutes the basis of this nation's prosperity. For the last few years, we have to face all sorts of concepts and theories, aimed at destroying and sapping the principles we have been taught. Those nefarious ideas have greater impact on people who are not attached by owners' rights, and that is why we must tackle the problem boldly and find adequate solutions. Among those which we feel are the most practicable and possible, there is one which should

The Budget-Mr. Parizeau particularly draw the attention of our government, and that is that each citizen should be provided with a house of his own.
If we take a look at history, Mr. Speaker, we realize at once that revolutions in the old countries were organized and directed by people who did not enjoy the benefits of property rights. It was then a struggle between tenants or slaves against owners or lords. We have not yet reached that point, and I am far from believing that we could ever reach it. However, it is on account of a lack of foresight on the part of government leaders that peoples could rise and follow the lead of revolutionaries.
Mr. Speaker, our government has already shown great vision in adopting adequate social measures to stem the wave of unemployment which was spreading all over the country. Its housing policy has been of great help to our people, thus checking unemployment, but especially in the fight against subversive ideas, by providing easy means of obtaining money to those who wanted to become owners.
Property is the basic element in the development of the individual; it is basic to the existence and welfare of the family, and contributes to social peace. There will not be better defenders of our country than our own people, once they are owners. Our country should be a land of predilection, where the old saying would be truer than anywhere else: "To each his home, to each his little tract of land, and the country will be safe."
Those who thrive on overtly spreading liberal or socialist doctrines seek above all to attack private property. It is up to us therefore to defend it, if we want our ideas and principles to be listened to and followed by the people.
I am sure that we will succeed, if we keep on helping construction by voting still larger sums of money for house building in Canada.
Mr. Speaker, I should like to remind you of an idea I put forward last year at the time of the debate on the speech from the throne, for the further improvement of that housing loan act. In fact, as recorded on page 649 of Hansard of May 29, 1958, I said that the interest rates should be lowered, in order to help Canadian workers, since they are unable to pay $75 or $80 a month for capital and interest charges.
I repeat the same suggestion this year, Mr. Speaker, asking again a lowering of the in-


terest rates in favour of the borrower who is building a house through the C.M.H.C. The 6 per cent interest now being paid by the borrower is much too high, because its cost, over a period of 25 years, almost doubles the initial amount of the loan, which is hardly the purpose of the act.
Allow me to digress briefly at this point to say that the citizens of the Saguenay-Lake St. Jean area are seriously affected by the lay-off of employees of the Aluminum Company of Canada, a lay-off which has been brought on by the lack of markets and the cut-throat competition of iron curtain countries. The company intends to rehire these people as soon as possible. Meanwhile, however, they are unable to meet their obligations. I therefore urge the government to take whatever steps are needed to enable these people to renew their contract with Central Mortgage and Housing Corporation and to have the privilege of paying an extra $5 or $10 when they resume their work, instead of having to catch up on their rent payments in a single shot. I was therefore saying that a means must be found to reduce the interest rate, and this without altering the national budget, so as to enable more people with low incomes to become home owners, a privilege to which they are entitled just as anyone else.
If you look at the statistics, you will find that 163,000 houses were built in Canada last year. Had the interest rate been 3 per cent, for instance, rather than 6 per cent, it would have meant a saving of close to $5 million for the taxpayers who became property owners in the last year. At that rate, it adds up to the fabulous figure of $125 million over a period of 25 years, a saving that would enable many Canadians to become home owners.
I have no thought of dictating to the government, but as a suggestion, may I be allowed to outline a plan that might result in considerable improvement of the construction situation? I would suggest, as I indicated last year, reducing the interest rate by 3 per cent, and this without interfering with the national budget.
To this end, I would first suggest amending the Criminal Code to allow for setting up a national lottery such as exists in other countries. However, the entire proceeds from this national lottery, under government control, would be made available to the Central

Housing and Mortgage Corporation Fund as a means of reducing the interest rate. Such a measure would be of considerable benefit, because the government would have no outlay to face as a means of reducing the interest rate. It would only have to keep making regular annual payments as a help to construction.
It would be an innovation, Mr. Speaker, and may be a revolution in our way of life, but we must follow the march of progress. According to surveys made by responsible agencies, 95 per cent of the population would be in favour of a national lottery and those who would oppose all games of chance would only mildly object.
Should we not keep in Canada the millions of dollars that are going out of the country each year on lotteries? Mr. Speaker, I would be interested to know how many hon. members have, at times, bought a lottery ticket; it was the simple psychological effect of the man who takes a chance, without any ulterior motive. But is not life itself a continuous game of chance, Mr. Speaker? The insurance we buy on our life, on the life of our family, on our house, our car, are all chances that we take, are they not? We take chances every day and I do say that there are many people here who take chances with much more consequences than if they would buy a simple lottery ticket.
I would like to go into more details about the effects of a national lottery as an aid to housing. Considering that we could build as many as 400,000 houses a year to meet the immediate needs of the population, this could mean about $120 million in interest, a sum that we could return to the new owners with a reduction of 3 per cent in the rate of interest on average loans of $10,000.
That return of interest of $120 million would be entirely covered, I am sure, by the revenues of a national lottery which, I believe, for the sake of argument, could easily reach $150 million. Thus, the national budget would not be affected by this reduction of interest and it would be of considerable help to the new owners.
Mr. Speaker, it would be the best way to resist these subversive movements which try to infiltrate our country. It is proclaimed everywhere that that property thrives on exaggeration, that it must be overthrown and destroyed. Pope Leo XIII gave us the answer
The Budget-Mr. Parizeau to these ideas in his encyclical letter Rerum Novarum, when he said:
Socialists condemn the poor to jealous hatred of those who possess; they claim that all ownership must be abolished, that each man's possessions should be common property and that their administration must be vested in the municipality or the state.
So, that is what we have to fight, Mr. Speaker, by all possible means, even by a national lottery, if necessary. This reminds me of the story of the good communist who, trying to explain the communist doctrine to one of his friends, told him: "It is simple; I am going to explain it to you. Suppose that you have ten cows, you give me five; that is the communist doctrine. Suppose that you have twenty sheep, you give me ten; that is the communist doctrine. Suppose that you have fifty chickens, and you give me twenty-five." "Oh! No", replies the friend. "I have no cows nor sheep, but I have chickens, so I'm going to keep them."
This is the answer we are looking for, Mr. Speaker. The man who owns something has no intention of sharing; he is master in his home, he is conscious of his strength and proud to be a good citizen, a true Canadian.
In closing my remarks and as an example, I am pleased to mention my own city of Alma, in my constituency of Lake St. John, where the number of home owners increased from 35 per cent in 1953 to 51 per cent in 1958. Here is a city that benefited of the advantages offered by the government in the field of home building, but it is also a city where every citizen has the ambition to own his home in order to be a better Canadian. People of that kind, we would need hundreds of thousands more of them every year, and it is the duty of the government to take necessary action in this regard.
Mr. Speaker, we belong to a party that is still young but has noble and high ambitions. We all want to make Canada a prosperous country. Home building is a way to bring about this result, while reducing employment at the same time.
I am sincere, Mr. Speaker, when I state that we must do even more in order that everyone may own his property, that everyone may be proud to own a small part of our country. I ask therefore that the government take note of my suggestion and consider it on its merits, because it represents the thought of thousands and thousands of Canadians.

The Budget-Mr. Brassard


Mr. Augustin Brassaid (Lapointe):: Mr. Speaker, my friend the hon. member for Lake St. John (Mr. Parizeau) has put forward at least one idea I can support, with respect to national lotteries. I fail to see why there is so much hypocrisy on this matter. Many people who are anxious to take on a holier-than-thou attitude object to the idea of a national lottery in this country, but how many, on the other hand, at home or between the four walls of an office, make no bones about buying lottery tickets, thus helping to send overseas millions of dollars from which hospitals and educational institutions of other countries derive a great benefit. I submit a national lottery could help the housing industry, as was said by my friend the hon. member for Lake St. John, and could also have a beneficial effect in the field of education in the province of Quebec.
I have listened to a good number of Conservative members who took part in the budget debate and all of them of course congratulated the Minister of Finance (Mr. Fleming) for introducing a courageous budget on April 9 last.
Not so long ago a Conservative member said in this house that the Canadian people had welcomed the budget introduced by the Minister of Finance. Such a statement sounds queer when you take cognizance of the recent newspaper reports on this matter. For instance the Ottawa Citizen on April 16, 1959, carried a story entitled:
(Text):
Survey of the Press Shows Budget Critically Received
The Toronto Star, of course, was critical. (Translation):
I would just like to refer to two or three comments made by newspapers in order to prove perhaps our colleagues have no monopoly on truth.
For instance in the Toronto Star, we can read the following:
(Text):
It said that one thing was sure about the budget, namely, "it has dissolved the last vestige of the financial mythology created by Mr. Diefenbaker before the 1957 election. He promised to raise welfare payments, cut taxes and balance the budget. The payments were raised, taxes cut. and the result of these things plus the recession was the biggest deficit in our peacetime history. Now Mr. Fleming finds it necessary to raise taxes by an amount which exceeds his previous tax relief by nearly $150 million a year. So much for financial magic."
In neighbouring Hamilton, the Spectator said that "although Mr. Fleming told the commons
(Mr. Parizeau.]
that his budget was designed 'to foster and promote recovery,' its fiscal details suggest no such positive purpose."
And along in Windsor, the Star took a roundhouse swing in Mr. Fleming's direction. "The blunt fact", said the Star, "is that the Conservative government has been spending far in excess of any Canadian government, even in wartime, and much further in excess of its revenues than any government in peacetime. Where does it think such a policy will lead? If a private individual were to follow the same practice he would be headed for speedy bankruptcy."
Out on Canada's west coast the Vancouver Sun was outspokenly critical. "Canadians now know what value to put on a Tory election promise. They were promised lower taxes and they have got higher taxes... when a patient is recovering the wise physician coddles the body. Mr. Fleming compels his patient, the Canadian economy, to don a hair shirt."
The Victoria Times had this ironic comment: "It is a courageous budget, since it admits that the government completely miscalculated the nation's finances and misled the public with impossible promises in two elections... The government is showing a new sense of responsibility. It is late but welcome."
Like the Star-Phoenix's line that the "Diefenbaker vision must be taking on the dimensions of a nightmare," the Winnipeg Free Press trumpeted, not surprisingly in an editorial called "Cost Of The Vision," that the Canadian people had been handed "the second instalment of the bill for the vision. And a shocker it was."
(Translation):
Among the Conservative members who took part in the debate and praised the budget introduced by the Minister of Finance, I want to refer particularly to the Secretary of State (Mr. Courtemanche) who made a brilliant speech.
I was a bit surprised when I heard him commend the government the way he did, and I wondered if he had not already spoken in this house about the problems that confront us to-day. Therefore, I leafed through Hansard from the previous years and I found out that on March 6, 1950, as we can see on page 520, the Secretary of State who was then sitting in the opposition had risen about the question of unemployment; however in 1950, unemployment was far, very far from reaching its present day proportions and still here are the words, quite-I shall not say courageous-but critical, he used concerning the administration then in power. Thus, I quote from Hansard of March 6, 1950, on page 520. These are the words of the present Secretary of State:
Mr. Chairman, let us not forget that unemployment is the breeding ground of disorder, poverty, unrest and communism. Unemployment leads to communism. It must therefore be averted. We have tried to fight it with words but that was a wasted, futile, useless effort. People do not yet understand why there was so much employment and money in wartime and why there is so little now, in peacetime. If money is found for destructive ends, it should also be available for constructive purposes. Should the fact that consumers are too few in number justify starvation in the homes of the jobless?

And a little further on, the hon. member said:
I therefore ask the government to attend to these alarming wounds, to heal them. That is within its powers as well as within its duties. There is no reason why any one of our citizens should not be able to live in a country 3,700,000 square miles in area.
In my own name, in that of my constituency, of my province-
The hon. member used high-sounding words at the time.
- (in the name) of my own race, in the name of the whole country which is threatened with the same crisis, the same miseries, I beseech those in power to put an end to this sad state of affairs.
Let us find jobs for our people. That is the only way to earn a salary. Whatever work is found, let it be, not just any work, but useful work, constructive work which will benefit our country. Let us not fight communism with words, but with action, honestly, by ensuring to the people what is rightfully theirs-order, justice, prosperity and national security in this fine, powerful and great country of ours.


Mr. Habel:: He made a nice speech on that occasion.


Augustin Brassard: Mr. Speaker,
that very statement was made in this house on March 6, 1950 by the hon. Secretary of State, then sitting on this side of the house.
Mr. Speaker, following such feats of oratory, the only thing one can add is this: a man can often turn a new leaf in his lifetime.
The hon. Secretary of State now sits on the government side; he is even a minister of the crown in the Conservative cabinet. If he was sincere-and I don't doubt his sincerity-when he made that declaration in 1950, how could he talk the way he did this week, in this house, on the budget of the minister of Finance?
There is an example, among many others anyway, of the kind of contradiction of which the Conservative party as well as a great number of its members are guilty, not only during electoral campaigns and while they were in the opposition, but also since they have been sitting on government benches.
Mr. Speaker, I would like to call the attention of the government to the unfortunate unemployment situation in the Lake St. John area. My colleague, the hon. member for Lake St. John made reference to it, but I would like to give particulars.
It never occurred to me that one day I would see groups of young unemployed, or similar associations, get together to settle the problem of unemployment and complain
Private Bills
of a situation such as that which exists today in my riding and the whole area known as the Kingdom of Saguenay. At Jonquiere, Kenogami, Arvida, and even the three other ridings of this area, we can see those associations of young men of 18 to 30 years of age who are making their complaints heard not only by this house, but by all the public bodies of our area, begging them to try and find a way to put a stop to this unemployment which causes thousands to suffer, not only in my area, but also in the areas of Lake St. John and Saguenay.
Mr. Speaker, may I call it five o'clock?
(Text):



PRIVATE BILLS

Mr. Speaker:: There are three private bills standing for consideration in committee of the whole. Is it agreed that in accordance with section 1, Standing Order 54, that they be referred to committee of the whole in one motion?


Some hon. Members:: Agreed.



CONSIDERED IN COMMITTEE


[Stage Direction]
Bill No. S-15, respecting Co-operative Fire and Casualty Company-Mr. Jones.
Bill No. S-12, to incorporate Paramount Life Insurance Company. (As amended, and recommending that the title be changed to "An act to incorporate British Pacific Life Insurance Company")-Mr. Taylor.
Bill No. S-14, to incorporate the Congregation of the Sisters of the Holy Family of Bordeaux. (As amended, and recommending that the title be changed to "An act to incorporate the Congregation of the Sisters of the Holy Family of Bordeaux in Canada")-Mr. Flynn.


Hazen Robert Argue: the second reading of Bill No. C-5, to amend the Small Loans Act.
He said: Mr. Speaker, we all seem to be good-natured this afternoon and there seems to be an unusual amount of co-operation on procedural matters which I think is all to the good. However, when the division bells ring that co-operation ceases to exist.
I have moved second reading of this bill, Mr. Speaker, because I feel that the interest rates now being charged by small loans companies in this country are unnecessarily high. The small loans business is very extensive.

Small Loans Act
Hundreds of thousands of Canadians avail themselves of such loans, and I submit to the house that a maximum rate of interest of 1 per cent per month should be ample at the present time. Following the amendments adopted in 1956 the maximum rate for loans up to $300 has been 2 per cent per month. The amendment provided by this bill would place a ceiling of 1 per cent per month on all interest rates charged by small loans companies.
I have had similar bills on the order paper every year since 1955, and although experience under this new administration would seem to suggest that private members' bills and resolutions are becoming of less and less value, nevertheless the experience I have had with regard to this particular bill has indicated to me that it has been very worth while and that parliament has listened. In 1956 the government acted. I did not think the legislation at that time went nearly far enough. The original proposal I made prior to action being taken by the government in 1956 was along these same lines. Before 1956 the rates on loans up to $500 were controlled by the Small Loans Act by providing a maximum ceiling of 2 per cent month.
This particular measure has never received, either by way of vote or speech, strong support from any member of either the Liberal or Conservative parties, but in 1956, because public opinion demanded that action be taken and because the minister of finance at that time, the Hon. Walter Harris, was in this instance paying some attention to public opinion, action was taken. As a result of that action many millions of dollars have been saved the consumers of this country.
When the government's bill, going part way along the road I had suggested, was before the banking and commerce committee in 1956 numerous representatives attended from the small loans companies. There were spokesmen for the small loans companies association and spokesmen for individual companies. They represented to the committee at that time that the legislation being proposed by the government would cripple them financially and that they would be put out of the small loans field. Crocodile tears were shed by members of the Conservative and Liberal parties and initially not all members of the Liberal party were in favour of the government's legislation. They were worrying about the widows and poor people who would have to have loans but would no longer be able to get them because conditions were going to be so difficult for this gang of loan sharks incorporated with the blessing of the government.
What has the result been? They have not suffered. They have prospered and grown.
tMr. Argue.]
They have extended their business. They have made an increasing amount of profit. They have done very well. Perhaps this was the kind of legislation which was necessary to suggest to them that they should increase their volume of business. By increasing their volume of business at somewhat lower rates of interest they have been able to effect an even higher net profit than theretofore. I know that if this bill were placed before the banking and commerce committee at this time the small loans companies would come before the committee once again in droves and would plead that they would be crippled if this legislation were passed. But I suggest that if it is passed, as it should be, those companies would prosper under what I consider to be a very ample rate, yes, a very high rate, of 1 per cent per month.
We had the men in the grey flannel suits before the committee; I think 50 of them came in 1956. There was a tremendous lobby and not without some effect, because it took the greatest possible amount of persuasion by the minister of finance. I think the hon. member for Kenora-Rainy River (Mr. Beni-dickson) will remember the occasion very well. The minister of finance was determined, and finally some of the members of the Liberal party who were reluctant to go along with the minister voted the right way and the Conservatives took to their heels and quit the opposition which they had initially started in that committee.
With the government we now have, I see no indication that there is so much as a single member on the government side of the house who is prepared to stand up and say that he supports action by the government to lower the interest rates on small loans companies.


Mr. Drysdale:: Would the hon. member permit a question?


Hazen Robert Argue: All right.


John Andrew W. Drysdale: Mr. Speaker, the hon. member has introduced this bill I think two or three times, and the difficulty I have is that although I would be extremely glad to support him unfortunately I have somewhat of a selling problem, because the only authority I have is the hon. member. The hon. member says repeatedly, "I feel that interest rates are unnecessarily high". The difficulty is in explaining to some people that the hon. member is an agriculturist, I believe, by avocation, and it is a very difficult problem to sell them this legislation. Perhaps he could give some statistical information as to why the 1 per cent rate should be used.


Hazen Robert Argue: That is a very learned question which took the hon. gentleman a long time to ask.


John Andrew W. Drysdale: I regret the time.


Hazen Robert Argue: Let me remind him of the statement the Minister of Transport (Mr. Hees) made the other day in the discussion on freight rates. He said, "This is a complicated field. I am a novice and know little or nothing about the intricacies of freight rates. But if you allow it to go before a standing committee of this house, we will bring in the experts and then everything will be made clear." I suggest that we allow this bill to go before the banking and commerce committee and then call in the experts, the superintendent of insurance and officials from the credit unions of this country and the men in the grey flannel suits. I think that we can turn them into the very best witnesses possible to bring evidence which will support this kind of measure. I am not an expert on banking matters. I do not profess to be an expert in any given field.


Some hon. Members:: Oh, oh.


Hazen Robert Argue: I do not have to get up and blow my horn, as the hon. member for Brome-Missisquoi (Mr. Grafftey) did last night in his campaign speech to get into the cabinet. He went down to the United Nations, as an observer, and it was not good enough to tell us once; he reminded us in every other paragraph that he had been on an important trip to the United Nations which apparently made him an expert in that field. However, I am prepared to put my judgment in this matter before the committee and confront any witness who may be brought before that committee. If the hon. gentleman and his colleagues wish to have evidence on this bill I suggest it be sent to the committee.


John Andrew W. Drysdale: Would the hon. member permit a further question? Would the hon. member not think that before it went to a committee he should establish a prima facie case? All he has established so far is what he personally feels. That may be authoritative in his group, but perhaps other people in the country question such authority.


Hazen Robert Argue: I do not expect to convince a Tory member of anything, Mr. Speaker. It would take something of a sledge hammer to get some very elementary economics through to them.


John Andrew W. Drysdale: Well, I am listening.


Hazen Robert Argue: I can tell the hon. member that there are many people in the country who would like to see this legislation passed. There are organizations who are in favour
66968-9-180
Small Loans Act
of control of interest rates and who think it is a shame, a crime and an insult that Canadians should be forced to pay up to 2 per cent per month on small loans; and of course in other fields the sky is the limit.


John Andrew W. Drysdale: Would my hon. friend permit another question?


Hazen Robert Argue: I have been very generous with my hon. friend and I think, if he will permit me, I will give him some information which may be helpful. Then he can speak a little later on and can take his place as part of the group whose main purpose is to talk out these bills.
Mr. Speaker, I have in my hand a table of the loans and profits of small loans companies and moneylenders. They are the latest figures up to the end of December, 1958, which is the first year following the former government's legislation and the number of accounts of small loans companies and moneylenders was just over 1,075,000. The number of accounts of small loans companies and moneylenders lending amounts covered by government legislation, that is up to a maximum of $1,500, numbered 1,107,000. The amount of loans in 1957 totalled over $368 million and that figure had increased in 1958 to $477 million. So that with a reduction in interest rates the small loans companies in 1958 were able to increase their number of accounts and the volume of business by some $109 million; namely, from $368 million to $477 million.
I am convinced that if this legislation were passed the small loans companies would be able to function and still carry out their high pressure advertising, and would increase their volume of business. The main thing which would take place would be a reduction in the maximum rates of interest that they would be allowed to charge. These companies have not gone out of business as was threatened. As a matter of fact, there are more in the business today than there were at that time. There are today 82 small loans companies and moneylenders, which is approximately five above the number in 1956. The number is increasing and their volume of business is increasing.
It was stated before the committee in 1956 that if legislation were passed to limit the rate of interest on loans from $1,000 to $1,500 to one-half of one per cent per month the chances were that companies would not make substantial loans in this area. That has proven to be correct. According to the statistics which have been made public by the superintendent of insurance in the report for the year ended December 31, 1957 the small loans companies had relatively few accounts in the category between $1,000 and

Small, Loans Act
$1,500 and fewer accounts still in the category from $1,100 to $1,500. It has been said that this is one means of placing an effective ceiling on the total amount of money that small loans companies are prepared to lend. I am not certain that I go along with that theory, but it has been suggested that this is a way of making certain that small loans companies remain in the small loans field. I would have no objection, myself, to these companies being given a standard rate for making their loans provided the standard rate was not exorbitant and provided it came within the limit mentioned in the bill I have proposed.
I would ask that the members of this house allow this question to come to a vote. I do not think it is a service to parliament for hon. members to talk out every single private members bill that comes before this house. If this were a new bill, if this were the first time this measure were before parliament and if hon. members were not acquainted with its terms, I could see some reason for talking it out and, by that means, killing it by this back-door method until it were dealt with at some future session. But since this is not a new bill; since it has been before parliament in the same form on previous occasions, I would suggest that the house should proceed to take a vote on this question.
I do not like to see the members of the government party which has such a huge majority becoming so subservient to the party whip. I should like to see some independent thought; I should like to see some indication that the capacity for independent thought still exists. How often, on past occasions, the Hon. George Drew, when he was leader of the opposition, turned on a very large Liberal party across the way- it was still, of course, much smaller than the number of supporters of the Conservative party here-and told them that they were trained seals because they did very little but applaud at the right time when the prime minister or one of the cabinet ministers made what appeared to be an appropriate debating point. Now the applause comes from the Conservatives, and the very same thing the Liberals once did is being done by them. And when we had the trained seals rather than the present large volume of apparently untrained seals -when we had these trained seals, unanimous as they were in giving their applause when the then prime minister or members of the cabinet made good debating points- they did, nevertheless, have within their ranks a number of members who from time to time were prepared to take an independent stand; members who were prepared to stand 
up and speak on a private members bill and take a view different from that taken by the government or by a member of the cabinet.
There is no evidence in this colossus that is now the government, of any independent thought. Not only is there an absence of independent thought but a stand has been taken by hon. members opposite which prevents all members including members of the opposition from voting on the matters which come before this house. I believe that by their attitude in talking out every single measure such as this and every single resolution they are undermining the prestige of parliament, undermining the position of the Conservative party in this country and, moreover, proving that statements made in years gone by about the rights of parliament were merely empty words without meaning in fact.
I think the country is becoming tired of seeing members of parliament spend a couple of hours a week debating subjects which I and, no doubt, many others, consider to be of great importance while, at the same time, performing something of a farce because the government has said: there will be no vote; we will talk it out; although we have the biggest majority that any government has ever had in the history of this country, we must admit we are the government which is the most timid, so afraid that we will not deal with any matter which is placed before the house by the opposition. I have no doubt that if an hon. member on the government side had presented a bill the government would be just as timid with regard to his bill as they are with regard to opposition proposals.


Mr. Aiken:: On a point of order, Mr. Speaker, I believe the hon. member for As-siniboia is not referring to the bill at all at this point, and is himself succeeding in talking it out.


Frank Howard: On that point of order, may I say that it is strange how delicate the feelings of certain members of the government can become on some occasions.


Mr. Speaker:: It does occur to me that the hon. member for Assiniboia has been generalizing on what he alleges has happened on other occasions rather than on what may happen on this occasion and that, strictly, is not in order.


Hazen Robert Argue: I appreciate Your Honour's optimistic point of view, but if I may make a prediction I venture to forecast that when six o'clock comes we will see a repetition of what has happened on those other occasions; Conservative members will occupy the time between now and six o'clock and this

bill will go to the bottom of the list of bills under public orders and will, for all practical purposes, have been killed for this session.
This measure runs counter to the trend of interest rates in the country today. The trend of interest rates in Canada today is upward, and this is so because this government has allowed interest rates to rise to the highest point in Canadian history. Instead of being a government interested in securing lower interest rates, as they said they would be, they have become a government of higher and higher interest rates. Although 12 per cent is still a high figure, if the government allows the central rate to go much higher then even a bill with a ceiling as high as this might make it difficult for the companies concerned to operate. I can foresee great harm coming to the country, because if this trend is not arrested some of the legislation which has been placed before the House of Commons and which is already in our statute books to provide loans for certain segments of the Canadian community at reasonable rates of interest will be jeopardized.
If maximum rates under these statutes are maintained, as I trust they will be, it will mean that many of the institutions that are making loans today necessary to the welfare of farmers, fishermen and people buying houses, will either find it impossible to make loans or great losses will be sustained by them. I know that hon. members opposite are anxious to deal with this measure. I hope they will deal with it in the only way in which parliament should deal with legislation and that is by way of a vote and a decision.


Mr. Pallell:: After full discussion.


Hazen Robert Argue: My hon. friend says, "After full discussion". What a hypocritical interjection. Full discussion to his mind means killing every good idea that comes before the house by way of a private member's bill or resolution. It used to be different and ideas were not given this kind of cavalier treatment. When an hon. member presented a bill on any subject in which the public took a great deal of interest the government in the past adopted a position and a cabinet minister or a parliamentary assistant would stand up and present the government's attitude, and then private members would rise and give their opinions and then a vote would be taken.
We now have a cabinet which is not interested in members' bills and resolutions even to the extent of stating the government's position. If we know anything about party discipline we can presume that word has been sent around by the Conservative whips that there shall be no vote and no decision.
66968-9-1804
Small Loans Act
If parliament itself carries on this kind of mockery this institution will be held up to public scorn. If this attitude is to continue then the time is here for us to consider appropriate amendments to the rules of this house which would not permit closure, a procedure followed by a former administration, but which would provide the opportunity in any given session to thoroughly discuss and reach a decision on each measure that is advanced by a private hon. member. Unless we do that we shall be undermining the parliamentary institution which all of us say we support so fervently.


Mr. Murray Smith (Winnipeg North):: Mr. Speaker, we have just witnessed a performance from that eight-ring circus to my right which covered everything from soup to nuts.


Hazen Robert Argue: After the soup I got back to you.


William Murray Smith: The soup was thin, the nuts were stale. In effect, the hon. member for Assiniboia (Mr. Argue) is asking us to rubber stamp something that he has placed on the order paper when he himself used up most of his time in talking about something other than what is before us today. In my mind he has failed to advance one good reason as to why we should support this bill. I should like to point out to the hon. gentleman that although, as he stated, he has had a bill of this nature on the order paper every session since 1956, a check in the parliamentary library such as I have made this afternoon indicates that not one reached the stage of debate in this house.
The hon. member is asking us to rubber stamp a measure which he tried to explain to us in about five minutes this afternoon. I for one will rise in my place on any occasion I feel inclined to on private members' days and put my views before this house. The hon. gentleman should also realize that there are a great many new members in this house who have valuable contributions to make on this or any other subject that may come forward and so discussion should not be curtailed.
The purpose of this legislation is to provide that interest or the cost of a loan allowable under the Small Loans Act shall not exceed the aggregate of 1 per cent per month on any part of the unpaid principal balance not exceeding $1,000 and one-half of one per cent per month on any remainder of the unpaid principal balance exceeding $1,000.
I should like briefly to discuss the history of small loans companies in this country. In the early stages of the development of Canada each family was a largely independent unit and produced its own needs. Family units were relatively independent of outside

Small Loans Act
sources. However, there was a gradual change from a crop economy to a cash economy. This was prompted by the movement of citizens from the farms to the cities and towns. Families became dependent upon a cash income and any interruption or emergency that reduced the family budget caused a serious crisis and hence a need arose for sources of small sum credit. The existing laws at that time were ineffective to deal with moneylenders because the legislation did not take into consideration the changed conditions and did not protect the public from unscrupulous lenders. Consequently rates of 400 and 500 per cent were quite common. People could not repay these short term loans-weekly or monthly loans -and in the final analysis paid many times the amount of the loan in interest over a period of a year or more and still had the principal amount to repay.
The legislation concerning interest was ineffective at that time for two reasons. First, the borrower was in a poor bargaining position and second, as I have mentioned, certain charges for such things as investigations or the preparation of documents were permitted legally because only the interest rate was controlled.
This was the situation that obtained during the mid-thirties. The Moneylenders Act which was in force at that time restricted the rate of interest on loans up to $500 to 12 per cent per annum but no restriction was placed on various other charges that could be made. In 1938 the House of Commons committee on banking and commerce made a report which formed the basis of the Small Loans Act. This plugged the gap and provided a rate to include all charges, including interest. The rate established was 2 per cent per month on loans up to $500. The rate applied each month after the monthly payments of principal and interest had been made.
In 1956 the act was again amended because most operators were now making loans up to $1,500 in value and so the present rates were established at that time. The rates that are in effect today are 2 per cent per month on that part of the unpaid principal balance up to $300, 1 per cent over $300 to $1,000, and one-half of one per cent over $1,000 up to $1,500. It is possible that at this time we should have another look at this legislation. Perhaps in this day and age these rates are somewhat high. However, I am not prepared to accept the words or opinions of the hon. member for Assiniboia because I do not feel that he has done the research into this matter that he might have done.

What he has given us this afternoon are opinions and not facts. I should like to point out to the house that another bill placed on the order paper by the hon. member for Assiniboia would provide that interest rates under the Interest Act could not exceed 12 per cent. I merely point out that the two bills conflict with one another. The combined effect is that the licensed lenders under the Small Loans Act would be allowed a lower rate of interest than the unlicensed lenders. The unlicensed lenders could charge a rate of 1 per cent per month while the licensed lenders would only be able to charge a combination of 1 per cent and one-half of one per cent per month. This would be a reversal of the principle that the smaller the loan the higher the rate needs to be. Here I should like to quote from the report of the committee on banking and commerce which was presented to the House of Commons in 1938:
Quite obviously the purchase of a block of 12-year Canadian government bonds requires little expenditure for investigation and none for supervision: investments in 50 farm mortgages for varied periods entail considerable cost both for investigation and supervision; while the investigation of 1,000 applications to effect loans to 500 people for a few months with meticulous supervision becomes expensive business when expressed as a percentage rate of $100 on a monthly basis.
I submit that the hon. member for Assiniboia, by presenting these two bills which conflict with one another, is not quite sure in his own mind as to just what the problem is, let alone what the remedy should be.
I should also like to point out to the hon. member that a great many of the people who do business with small loans companies seem to be quite satisfied with their dealings. I am informed by the president of one of the large finance companies that in 1957 the figures for his company show that over 90 per cent of the loans made were to people who had dealt with them before or who had been referred by others who had dealt with them.


William Moore Benidickson: They never get out of their clutches.


William Murray Smith: They never get out of their clutches? Well, the same company informs me that every year one-third of the outstanding loans are paid off, and if one-third are paid off every year I think they are getting out of their clutches somewhat and it certainly is not the 50 per cent figure that is so cast around wholesale by the members of the C.C.F. party when they say that half of the people who deal with finance companies never get out of their clutches.

I should like to read a letter which was placed on Hansard in the session of 1952-53. This was placed on the record by a member who I followed very carefully politically, namely Mr. Alistair Stewart, the former member for Winnipeg North. The letter appears at page 5170, volume V, of Hansard for the 1952-53 session. At that time the house was dealing with estimates and he read this letter:
Here's the answer to your debt worries-
The present high cost of living makes it often very difficult to meet the demands of all your creditors.
The result: you get phone calls and letters of demand from your creditors, garnishees on your pay, court judgments and seizures, lawyers' actions . . . problems upon problems.
Now, with one visit to the office of Consolidated Finance you can shed your problems. Simply make a list of all debts you owe for: hospitals, automobile, furniture, jewellery, groceries, doctors, lawyers, loan companies, etc.-then see us.
This is a letter which was circulated by Consolidated Finance Corporation. I should like to draw the attention of the house to the fact that this very same letter was placed on the record of Hansard, at page 950, of the current session by the hon. member for Assiniboia, exactly the same letter from exactly the same company. 1 should also like to draw attention to the fact that the company commenced business in 1952 or 1953. At the insistence of the Ontario department of insurance the name was changed to Consolidated Payment Plan because in effect they were not a loan company or a finance company. Because of their unsatisfactory performance their licence was cancelled by the Ontario department of insurance on December 1, 1954, and they ceased doing business early in 1955. We have the letter on Hansard in 1953. The company went out of existence in 1955, and in 1959 the hon. member for Assiniboia is using the letter as evidence in his argument for the case that he is trying to present to us today.


An hon. Member:: Shame.


William Murray Smith: In conclusion, Mr. Speaker, I should like to reiterate that there may be grounds for reducing interest rates, and it might be a good idea to study those interest rates at this time; but I would submit that unless the research of the hon. member for Assiniboia is better now than it has been in the past we have nothing to go on. In view of the way in which he roamed today through everything from zoology to no-ology I think we should look into this matter and hear opinions from other members of the house because this attitude of "Don't confuse me with the facts; my mind is made up" does not go over as far as I am concerned.
Small Loans Act


Mr. R. S. MacLellan (Inverness-Richmond):: Mr. Speaker, like the hon. member for Winnipeg North (Mr. Smith), I am in general agreement with the tenor of the bill and agree that certainly interest rates charged by small loans companies, as by other concerns, should be no higher than necessary. I support this bill to the extent that certainly an inquiry should be made, and that the interest chargeable by small loans companies should be limited to the extent necessary to provide funds for the availability of people who cannot borrow from other loan sources. However, it is a matter which should be examined very carefully because, as the hon. member for Assiniboia (Mr. Argue) has neglected to consider, there is a very good possibility that by limiting the interest on loans by small companies, as he suggests, it would deprive the wage earner and the man who is unable to borrow at banks or from other institutions, of funds that he needs and requires in his daily routine.
I think that one of the most important aspects of the whole problem of consumer financing and the business done by finance companies has been neglected by this bill. Certainly, it has always been an accepted principle that the interest rate charged should be in relation to the risk of the loan. And that has been the argument the finance companies have used to justify interest rates which are much higher than would be charged by banks or other institutions. But it seems to me, that at least in one instance in the consumer finance field this argument has no jurisdiction whatever. I refer to the large amount of consumer financing that is dene through acceptance corporations; that is to say, the very large finance corporations which do not make loans directly to the purchaser, but which lend him the money through the dealer or the retailer from whom he purchases an automobile, appliance or other goods.
We have been striving in this nation, as other free nations, for stability in the money that is available in the country; to try to control booms and prevent busts. We do that through the Bank of Canada which was established by the Bennett government in 1934. It has been done by the Minister of Finance (Mr. Fleming) in the budget which he introduced last week. The amount of money available in the nation at any given time will affect the expansion and the amount of production in the nation.
It seems to me that consumer finance companies in some cases make available an unhealthy type of credit in the nation, a

Small Loans Act
credit that oftentimes in periods of inflation is greatly expanded when it should not be. Many consumers are thereby invited to purchase goods and through advertising programs are encouraged to seek loans which they cannot afford. In the case of an automobile dealer who recommends a finance company to his customer, the acceptance corporation or the finance company may charge interest rates considerably higher than those that would be charged by a bank. At the same time the finance company may take much less risk than the bank takes.
The acceptance corporation has not only the security of the article which has been sold, the car, television set or any other type of appliance, but also has the security of the endorsement of the consumer and the endorsement of the retailer. These companies take little risk, yet they charge high risk interest rates. Since they assume small risk they are ready to make money available at any time, often at times when the nation cannot absorb it, and some people are encouraged to buy goods which they cannot afford. It seems to me that these acceptance corporations should be required to assume the risk themselves on the money they lend. They should be precluded from requiring the endorsement of the retailer or the dealer. If they are going to charge these interest rates, at least let them accept the risk on the loan.
I have seen many instances in which dealers needed to achieve a volume of sales-


Mr. Speaker:: I have allowed the hon.
member to stray into a field that is not covered by this bill, hoping he would relate his argument to the principle that is involved here. It seems to me that he is going too far in a direction that is not covered by this bill at all.


Robert Simpson MacLellan: I have been establishing
a basis for an argument on the interest rates charged by some small loans companies, which are certainly unjustified, which I felt was within the purview of the bill before the house.
Speaking again of consumer finance companies, which are small loan companies-


Mr. Speaker:: If the hon. member is coming to this bill, I do not want to interfere with his line of argument. But this is small loans companies bill and does not relate to other methods of financing.


Robert Simpson MacLellan: Very well, Mr. Speaker,
I will relate my remarks to that subject. I feel that the interest rates charged by finance

companies should be examined closely by a committee to see to it that those rates are in relation to the risk taken on the loan. Certainly, I am in full accord with the limits suggested by the hon. member for Assiniboia in this bill in so far as acceptance corporations are concerned which do not take full risk on the loan but rather rely on the endorsement of the dealer. The effect, so far as the country is concerned, is that at the slightest downturn easy credit which is encouraged by these loan companies in good times brings on repossessions and we have a drab picture of people being saddled with borrowings they cannot repay.
I would suggest to the house that while this matter is of the utmost importance, we should proceed with some caution. The whole matter should be examined very closely. Certainly, we should never make a decision on the basis of the small argument that was put forth this afternoon by the hon. member for Assiniboia. It is a shame that the hon. member spent so much time in discussing other matters that there was not a proper opportunity to discuss this bill, when I am sure so many members would like to put forth their views. In effect, this bill was talked out this afternoon by the hon. member for Assiniboia.


Hazen Robert Argue: That is a false statement.


Robert Simpson MacLellan: There were very few of his remarks directed to the bill.


Hazen Robert Argue: Question, question.


Robert Simpson MacLellan: I suggest that in presenting this bill the hon. member for Assiniboia is not sincere. He is not anxious to have this bill discussed. It is just a matter of continuing the C.C.F. propaganda.


Hazen Robert Argue: Read on.


Robert Simpson MacLellan: At no time this afternoon have I done anything more than refer to my notes. I did notice, Mr. Speaker, that when the hon. member for Winnipeg North was discussing the bill, the hon. member for Assiniboia showed little interest. He chatted with his seatmate and he read the newspaper. I suggest he has no interest in this bill. It is a mere matter of C.C.F. propaganda.



BUSINESS OF THE HOUSE

Mr. Chevrier:: May I ask the acting house leader the business for Monday and as many of the succeeding days of the week as he can indicate.


Mr. Brooks:: On Monday we will continue the budget debate and expect to continue with it on Tuesday and Wednesday. After Wednesday we intend to go on with estimates and intend to take up the estimates of the Department of Agriculture.


Lionel Chevrier: Does that mean on Thursday and Friday we will discuss agriculture estimates?
Business of the House


Alfred Johnson Brooks: If agriculture estimates are not through on Thursday.


Lionel Chevrier: Can the acting house leader indicate when the budget resolutions will be discussed?


Alfred Johnson Brooks: No, I cannot, Mr. Speaker.


[Stage Direction]
At 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. Boivin: 1.	Were instructions issued some time in March, 1958, by the legal branch of the Montreal regional office of the Unemployment Insurance Commission for an investigation to be carried out in Sherbrooke regarding the payment to certain textile workers of unemployment insurance benefits to which they were not entitled?
2.	Did any employees receive overpayments?
3.	If so, what was the amount overpaid in each case?
4.	Was the investigation stopped?
5.	How was the matter settled by the commission?
6.	Were these employees compelled to refund such overpayments?
Answer by: Hon. Michael Siarr (Minister of
Labour):
1.	Yes, when it was reported to the Montreal regional office that several claimants had omitted to disclose as earnings the amounts of production bonuses received from their former employer.
2.	Yes; overpayments were established in 442 cases.
3.	Full information is not available but the amounts ranged from $1.00 to $168.00 with the bulk under $50 each.
4.	No, the investigation was carried to conclusion.
5.	Claimants who were overpaid were required to make restitution. In a few cases other infractions were discovered as a result of the investigation and punitive action was taken with regard to them.
6.	See answer to No. 5.

Monday, April 20, 1959