1959-04-13

Mr. Speaker:: On Monday, March 9 last, as recorded at page 1724 of Hansard, the hon. member for Port Arthur (Mr. Fisher) raised a question concerning the loss of private members' days through a motion for the adjournment of the house under standing order No. 26. He suggested that as the day had not been used for the appointed business it should not be counted as one of the six private members' days. If the point were well taken this would be a private members' day today. I thought, as the hon. member is in his place, I might say I have examined carefully into the precedents, in so far as there are precedents, with a view to seeing whether the rules would permit the solution which he suggested.
I find the answer is simply that the rules do not provide the machinery for compensatory time in such cases. I could go into the matter at some length, but I think the question appears to be reasonably free of doubt and unless hon. members wish a further explanation I shall leave it at that.



PRIVILEGE


Hon. L. B. Pearson (Leader of ihe Opposition):: Mr. Speaker, I wish to raise a question of privilege which I believe affects every hon. member of the house, inasmuch as it concerns particularly the accuracy of the records of the house. This matter deals with financial assistance to Newfoundland under the terms of union; not, I hasten to add, to the question of the form and substance of the obligation of the government of Canada under those terms of union. That matter I have already discussed. It has to do with a statement made and reports inserted in the records of this house which concern the legislative basis for any such assistance.
I should add also, Mr. Speaker, that this matter, the breach I refer to, was made on budget night, Thursday night, and normally I should have brought it to the attention of
the house on Friday; but as Hansard was not available to members until Friday afternoon, this is the first opportunity I have had, after having read Hansard, to bring it to the attention of the house.
On Thursday evening at page 2410 of Hansard, the Minister of Finance asked leave of the house to place on Hansard certain budget papers and tables and, of course, he was given that permission. Those tables and the explanatory notes attached to them are now part of the record of this house. One of those statements, Mr. Speaker, is in my view false and misleading, especially in relation to the explanation which is appended to the table, and as such I think is a breach of parliamentary privilege.
I am referring to table No. 11 on page 55 of the budget papers. In that table there is a figure of $13,600,000 under the heading, "Additional grants to Newfoundland". In the paragraph explaining it we have the following words, Mr. Speaker.


Mr. Fleming (Eglinion):: What is the page number?


Lester Bowles Pearson: Page 55 of the budget papers appended to Hansard of April 9, table No. 11. The explanatory paragraph attached to the table reads:
Under the Newfoundland additional grants act, pursuant to the report of the royal commission on Newfoundland finances appointed under clause 29 of the terms of union, Newfoundland is to receive additional grants for the fiscal years 1957-58 to 1961-62 inclusive. The additional grants for the first two fiscal years, which are payable in 1958-59, amounted to $13! million.
As we know, Mr. Speaker, although the Prime Minister has indicated that such a Newfoundland bill covering this matter is to be introduced in the House of Commons, no such resolution and no such bill have been introduced. The Minister of Finance in this statement not only assumes that such a bill has been introduced but assumes that parliament has passed this bill. He is acting accordingly, by including in this table the figure which has not yet been before parliament, let alone been passed by parliament.
I hold, Mr. Speaker, that this is a contempt of parliament and therefore an important breach of our parliamentary privileges. Unless instructions are issued by this house that these statements be corrected, they will remain as a permanent part
2606	HOUSE OF
Reference to Statement in Budget Papers of revised Hansard and the Journals of this house. Surely such a development would be objectionable in connection with the privileges of the House of Commons, referring in our records to an act which has not yet even been introduced in the House of Commons as justification for the insertion of certain figures into our records. Therefore, Mr. Speaker, I move, seconded by the hon. member for Bonavista-Twillingate (Mr. Pickers-gill):
That this house instruct the officials of the house to delete line 4 of table 11 and the first paragraph appearing below table 11 on page 55 of the budget papers and to replace the same in the revised Hansard and the Journals by a statement reflecting the true facts of the situation.


Mr. Speaker:: I should like to be sure that I understand the privilege of the house which is involved before I hear the minister, who I presume will wish to speak to this matter before the motion is dealt with. If the Leader of the Opposition could tell me explicitly what privilege of the house is involved in the statement I would appreciate it.


Lester Bowles Pearson: Mr. Speaker, the privilege in short is the appearance in the records of the house, in a table which was introduced into those records at the request of the minister and with the approval of the house, of a reference to an act of parliament as something which has been passed and which justifies certain statistical material, when that act of parliament has not even been submitted to the house, let alone passed by the house.


Mr. Martin (Essex East):: Hear, hear. Parliament still has some rights.


Donald Methuen Fleming: Mr. Speaker, the house has just listened to a most extraordinary statement from the Leader of the Opposition. He began first of all by saying that in the course of the budget speech certain tables were placed on Hansard by leave of the house, but what he refers to is not something that was put on Hansard by leave of the house on Thursday evening during the course of the budget speech at all. He is referring now to something that was in the white paper tabled on Wednesday afternoon before the budget ever came down. That is the first of a number of errors in the hon. gentleman's statement.


Lester Bowles Pearson: That is wrong.


Donald Methuen Fleming: Then when you come to see what he takes issue with, it is to be found on page 55 of the white paper which by decision of the house, indeed on motion of the house unanimously passed on Wednesday, became part of the records of the house. On page 55 of the white paper, as now


appended to Hansard of Thursday last, he draws attention to the item, additional grants to Newfoundland-this is the fourth line of which he speaks-which for the fiscal year ended March 31, 1959 amount to $13.6 million.
He takes up the time of the house to make this appear as a great mystery, when there is nothing mysterious about it at all and it is completely in accord with what the Prime Minister announced in the house the day before the house rose for the Easter recess. It was made very plain then that it is the purpose of the government to submit to the house legislation-it will be first of all a resolution and then a bill to follow the resolution -to provide for the payment to Newfoundland in accordance with the recommendation of the royal commission on the terms of union with Newfoundland of the payments for the first two years of the five year period in question, and it was made perfectly clear in the Prime Minister's statement that the payments for the fiscal years 1957-58 and 1958-59 would be charged to the federal government's accounts for the year 1958-59. That is perfectly plain for everyone to see, and that is precisely what is proposed.
As to the amount, the Prime Minister made it clear that this is the amount that is provided for in the recommendations of the royal commission on the terms of union with Newfoundland. It amounts to the annual payments that are recommended less the transitional payments which are now in decreasing amounts as they run out, and the sum of $13.6 million represents two years' net payments after deducting the transitional grants in accordance with the provisions of article 29 of the terms of union with Newfoundland. Nothing could be plainer than that.
It has not taken legislative effect yet and cannot, of course, until parliament passes the legislation. It is the intention of the government, as the Prime Minister then indicated, to introduce the necessary legislation. First of all there will be a resolution, and if the house approves the resolution the bill will then follow. The amount that has been named in the report of the commissioners for these many months now is the amount that was indicated by the Prime Minister; and this statement indicates, Mr. Speaker, that it is the intention of the government that these payments for the two fiscal years-


Mr. Chevrier:: It does not. It does no such thing.


Donald Methuen Fleming: -1957-58 and
1958-59 should be charged to the federal government's accounts for the year 1958-59. What could be plainer, what could be fairer,

Reference to Statement in Budget Papers what could be more proper than that, instead Mr. Fleming (Eglinlon): No, no.
of all this smokescreen and nonsense that has been raised today?


Mr. Speaker:: I am not sure how relevant it is, but could the minister say whether the reference to the Newfoundland additional grants act is a reference to an act which has been passed or which is proposed to be passed?


Donald Methuen Fleming: No, Mr. Speaker. In the table, as you will notice, the first line refers to payments under the Federal-Provincial Tax-Sharing Arrangements Act, as amended. Then it goes on to deal with the statutory subsidies, then the transitional grants to Newfoundland, and then the additional grants to Newfoundland. There is as yet no statutory authority for the payment of the additional grants to Newfoundland, and that will be the purpose of legislation to be introduced.


Mr. Speaker:: I understand the point of privilege which the Leader of the Opposition raises is that by referring to an act in the white paper as though it had been passed the minister is, in effect, offering an affront to parliament, which has not yet passed the act. If the act has not yet been passed but is only contemplated or in the bill stage, perhaps the minister would agree to the insertion of the word "proposed" before "Newfoundland additional grants act"?


Donald Methuen Fleming: I would be more than happy and ready to agree to that if it would make my hon. friends happy. Certainly it has no legislative effect, and if my hon. friends opposite object to the proposed legislation, perhaps it cannot be passed.


Lester Bowles Pearson: The minister has made some statements that would call for some words from me. In the first place he said if we object to the passing of this legislation, why do we not say so? At the beginning of my remarks I said that the questions of the extent and nature of the government's obligations under the terms of union were not at issue. We have made our position clear on that.
Then the minister, who was in the past always so sensitive, even so spectacular about his devotion to the rights of parliament, said that this particular addition to Hansard really did not have any validity because it was something that had been introduced into the record before the budget speech and did not require the permission of the house that evening for such introduction. If the minister will look at page 2410 of Hansard for April 9, 1959, he will see that he asked permission of the house to introduce these budget statements as part of the records of the house.


Lester Bowles Pearson: Now, just a minute.


Donald Methuen Fleming: The Leader of the Opposition is quite wrong.


Lester Bowles Pearson: I shall read from Hansard, page 2410:
There will be a number of tables that by leave of the house I will propose to place on the record of Hansard tonight, if the house were prepared to give its consent to that now I might save interrupting later.
So, Mr. Speaker, on page 55 of the budget papers we have one such table.


Donald Methuen Fleming: No, no.


Lester Bowles Pearson: The explanation of that table reads, "Under the Newfoundland additional grants act", not an act which is the proposed and which if the house passes it will be the basis for these additional grants, but under an act which assumes that parliament has already taken action. In support of that interpretation, Mr. Speaker, I cite the last sentence of this paragraph, which reads:
The additional grants for the first two fiscal years, which are payable in 1958-59-
Not, "would amount" to $13.5 million, but the words used are "amounted to $13.5 million", as if they had already been covered by an act which has not even been introduced in this house in the resolution stage.
This is the point of privilege. If the minister will admit that he is wrong, and if this correction is made and it is admitted that it is a mistake his department made, perhaps on the assumption that the Prime Minister said he would introduce a bill and have it passed; if he will get up and admit that they made this mistake and if he will make the necessary corrections, we need not proceed with this motion.


Donald Methuen Fleming: There is one correction that needs to be made at once in the hon. gentleman's understanding of the situation concerning these tables. The white paper is not one of the tables for which permission to incorporate in Hansard was sought and obtained during the course of the budget speech on Thursday night. The white paper appears in the records of the house by reason of a motion passed on Wednesday, April 8, at page 2343 of Hansard, and which reads as follows:
That the budget papers be published as an appendix to today's Votes and Proceedings and also as an appendix to tomorrow's Hansard.
That was the authority given by the house for inscribing the white paper in the records of the house. When at page 2410 of Hansard, in the course of the budget speech of Thursday evening, April 9, I asked for leave
2608	HOUSE OF
Reference to Statement in Budget Papers of the house to place on the record without reading them certain tables, those are tables appearing in the budget speech of Thursday evening and they do not include the white paper at all. I wish to point out to the hon. gentleman that he is quite wrong in his approach to that matter.
As to the content of this statement in the white paper, I tried to make it quite clear that the legislation that was contemplated when this white paper was written, and is still contemplated, has not yet been passed and has not yet been introduced under pressure of business of the house. You have suggested, Mr. Speaker, that the word "proposed" be inserted, and I indicated that I should be entirely happy to accede to that suggestion in order to clarify the matter.
The house has not been misled. There is no suggestion that anything has been done or will be done that has not the approval of the house. The accounts for the year 195859 have not been closed. So far as the provision made or proposed to be made for the payment to Newfoundland of sums recommended for the fiscal years 1957-58 and 1958-59, they will be so recorded in the accounts of the government for the year 1958-59 when parliament has so authorized and certainly not before.


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I should like to say a word because I want the record to be clear. The Leader of the Opposition, with what appeared to be synthetic annoyance engendered beyond the importance of the matter, made the statement that the reason that he did not raise this question-


Mr. Mcllrailh:: Who is exhibiting synthetic annoyance now?


John George Diefenbaker: Would the hon. gentleman who is now interrupting, and whom the former administration put and kept in a position of subservience, kindly be quiet?


Mr. Robichaud:: We hear that from the Prime Minister.


Mr. Pickersgill:: The usual courtesy.


Mr. Speaker:: Order. I must ask the house to give the Prime Minister the opportunity to discuss the question of privilege.


John George Diefenbaker: The hon. gentleman made the statement that the reason he did not raise this matter on Friday was that he had not before him Hansard, which did not come out until three o'clock in the afternoon, as I remember it. The hon. gentleman apparently did not realize that it appeared attached to Votes and Proceedings of Wednesday, April 9. Therefore the care with
[Mr. Fleming (Eglinton).)

which he explained the fact that he could not raise this alleged question of privilege until today falls down. It indicates that the examination he made over Sunday was not made when it could have been made of Votes and Proceedings. I just mention that matter because the hon. gentleman was explaining why he had failed to raise this matter earlier. It is apparent that those who read for him had not seen this in Votes and Proceedings.


Lester Bowles Pearson: Mr. Speaker, once again I have been brought into the argument. The Minister of Finance has raised a smokescreen of argument, I admit, but the Prime Minister has raised a smokescreen of political claptrap. If I was not able to digest all the details of these budget papers in the 48 hours from Wednesday to Friday, it is obvious that the members of the government were not able to go over these papers in the two or three weeks during which they were considering the budget. Otherwise they would never have allowed this table to appear.
The Minister of Finance has called attention to the fact that it appeared on Wednesday, and in that I think he is quite correct. But it and the other papers were introduced on Thursday in Hansard, with the consent and approval of the house. Furthermore, Mr. Speaker, as reported at page 2410 of Hansard the minister-and I am sure he will agree with this-asked for the inclusion in Hansard of a table which appears on that page as table 1. It is headed "Federal contributions to the provinces" and there is no argument, I am sure, between us as to when he asked permission to include this table in Hansard and when it was included.
In this table-and this is a supplementary criticism which I make of the government on this occasion-the minister included a figure of $13.6 million as the federal contribution to the province. If the Minister of Finance, irrespective of what the Prime Minister has said, will just carry out the promise he has given us to correct this paragraph by putting the word "proposed" before the word "Newfoundland", and change the word "amounted" in the fifth line to "would amount", the record will be corrected and the house can go on with its business.


Mr. Speaker:: In so far as there may be an affront to the house in the description of the act in the white paper, the minister who is responsible for it has agreed to add the word "proposed" before "Newfoundland additional grants act". Does the minister accept the other suggestion made by the Leader of the Opposition, the substitution of the words "would amount to" for the words "amounted to"?


Donald Methuen Fleming: No, the other suggestion is unnecessary, because the figures in this table are estimates. These are the estimated payments proposed and, similarly, with regard to table 1 which was placed on record in Hansard by leave of the house on Thursday evening, those are estimated payments also. When we are making up the tables for the payments estimated to be made for the year 1959-60 we include the provision which we expect will be made by way of payments to Newfoundland of $7.3 million, just as under the heading 1958-59 we show the preliminary figure to include the proposed payment of $13.6 million. It is perfectly clear, and perfectly in accordance with the practice of the house in former years.


Mr. Speaker:: It has been suggested that the words "amounted to" be changed to the present tense and be made to read "amount to". If the minister would agree to make this change, and the house would accept it, it seems to me it would dispose of the matter and make it unnecessary for me to rule on this motion. Is it acceptable to the minister that a change be made so the last line shall read "The additional grants for the first two fiscal years, which are payable in 1958-59, amount to $13J million," instead of "amounted to $13J million".


Donald Methuen Fleming: Are you reading from page 55?


Mr. Speaker:: Yes, from page 55. We might change the wording to make it read "amount to" rather than "amounted to", putting it in the present tense. Does the house agree to these corrections being made?


Some hon. Members:: Agreed.



MISCELLANEOUS PRIVATE BILLS

[Stage Direction]
Sixth and seventh reports of standing committee on miscellaneous private bills-Mr. McCleave.


Mr. J. F. Browne (Vancouver-Kingsway) moved: for leave to introduce Bill No. C-39, to amend the Transport Act.


Some hon. Members:: Explain.


John Ferguson Browne: The
purpose of this amendment is to provide that representatives of the trucking industry shall have the right to make application to the Minister of Transport when they feel that an agreed charge unjustly discriminates against a motor vehicle operator.
Proposed Legislation
Motion agreed to and bill read the first time.



RAILWAY ACT


John Ferguson Browne: for leave to introduce Bill No. C-40 to amend the Railway Act.


Lionel Chevrier: Explain this.


John Ferguson Browne: The
purpose of this amendment is to provide that representatives of the trucking industry shall have the right to make application to the board of transport commissioners for the disallowance of a competitive rate when they consider that such a rate has subjected motor vehicle operators to an undue or unreasonable prejudice or disadvantage.


Lionel Chevrier: May I ask the hon. member what section of the Railway Act he seeks to amend?


John Ferguson Browne: Section 334.
Motion agreed to and bill read the first time.



NORTHERN AFFAIRS AND NATIONAL RESOURCES


[Stage Direction]
On the order:	Government notices of
motion:
The Minister of Public Works-The following proposed motion:-That items numbered 261 to 293, inclusive, and items numbered 476 and 477, as listed in the main estimates of 1959-1960, relating to the Department of Northern Affairs and National Resources, be withdrawn from the committee of supply and be referred to the standing committee on mines, forests and waters, saving always the powers of the committee of supply in relation to the voting of public moneys.
Lionel Chevrier: Would the minister allow this to stand over until tomorrow?


Mr. Speaker:: Pursuant to section 2 of standing order 21 this government notice of motion stands transferred to and ordered for consideration under government orders at the next sitting of the house.



RAILWAYS, AIR LINES AND SHIPPING ESTABLISHMENT OF COMMITTEE ON RAILWAYS, AIR LINES AND SHIPPING OWNED AND CONTROLLED BY THE GOVERNMENT

[Stage Direction]
On the order:	Government notices of
motion:
The Minister of Transport-The following proposed motion:-That a sessional committee on
[Stage Direction]
Motions for Papers
railways, air lines and shipping owned and controlled by the government, be appointed to consider the accounts, estimates and bills relating to the Canadian National Railways, the Canadian National (West Indies) Steamships and Trans-Canada Airlines, saving always the powers of the committee of supply in relation to the voting of public moneys; and that the said committee be empowered to send for persons, papers and records, and to report from time to time, and that notwithstanding standing order 67 in relation to the limitation of the number of members, the said committee shall consist of 26 members.
Mr. Speaker:: Pursuant to section 2 of standing order 21 this government notice of motion stands transferred to and ordered for consideration under government orders at the next sitting of the house.



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 85-Mr. Pickersgill:
For a copy of all communications received by the Minister without Portfolio from Newfoundland since March 25, 1959, protesting the announcement of the government regarding term 29 of the terms of union of Newfoundland with Canada, together with the replies thereto.
Mr. Speaker:: Shall this motion stand?


John Whitney Pickersgill: On a point of order, I was proposing to move this motion.


Mr. Speaker:: I understood that the hon. member was willing to have it stand.


John Whitney Pickersgill: If the government wish to have it stand, and if the government make a request to that effect, I would be glad to consider it.


Mr. Speaker:: Is the hon. member willing to have the motion stand?


John Whitney Pickersgill: As I said, if the Prime Minister wishes to have this motion stand for some good reason, I would be very glad to comply with his request.


John George Diefenbaker: Stand.
Motion stands.



R.C.M.P. REINFORCEMENTS, NFLD.   PROTESTS AGAINST FEDERAL ACTION

[Stage Direction]
Motion No. 86-Mr. Pickersgill:
For a copy of all communications received by the Minister without Portfolio from Newfoundland since March 10, 1959, protesting the refusal of the government to reinforce the Royal Canadian Mounted Police in Newfoundland, together with the replies thereto.
John George Diefenbaker: Stand.


John Whitney Pickersgill: I see no reason why this motion should stand. It is in exactly the same terms as a motion asking for similar correspondence

addressed to the Minister of Justice and to the Prime Minister, which was passed by the house. I wish to proceed with this motion.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


Some hon. Members:: No.
The house divided on the motion (Mr. Pickersgill) which was negatived on the following division;
++YEAS
Messrs:
Argue	Leduc
Badanai	Mcllraith
Batten	McMillan
Benidickson	McWilliam
Bourget	Martin (Essex East)
Caron	Martin (Timmins)
Carter	Nixon
Chevrier	Pearson
Crestohl	Pickersgill
Dumas	Racine
Fisher	Regier
Forgie	Richard (Ottawa East)
Garland	Roberge
Habel	Robichaud
Hardie	Rouleau
Herridge	Tucker
Howard	Winch-34.
NAYS	
Messrs:	
Aitken, Miss	Grafftey
Allard	Green
Allmark	Grenier
Anderson	Gundlock
Asselin	Hales
Balcer	Hamilton (Notre Dame
Baldwin	de Grace)
Baskin	Hamilton (Qu'Appelle)
Beech	Hanbidge
Bell (Carleton)	Harkness
Bell1 (Saint John-Albert)	Hees
Bourbonnais	Henderson
Brassard (Chicoutimi)	Hodgson
Broome	Horner (Acadia)
Browne (iSt. John's West)	Horner (Jasper-Edson)
Browne (Vancouver-	Homer (TheBattlefords)
Kingsway)	Howe
Brunsden	Jones
Cadieu	Jorgenson
Campbell (Stormont)	Jung
Cardiff	Keays
Casselman, Mrs.	Kennedy
Cathers	Kindt
Charlton	Knowles
Clancy	Korchinski
Coates	Kucherepa
Courtemanche	Lambert
Creaghan	Legere
Crouse	Lennard
Deschambault	Macdonald (Kings)
Diefenbaker	Macdonnell
Dinsdale	MacEwan
Doucett	Maclnnis
Drysdale	MacLean (Queens)
Dubois	MacLean (Winnipeg
Fairfield	North Centre)
Fane	MacLellan
Fleming (Eglinton)	Macquarrie
Fleming (Okanagan-	MacRae
Revelstoke)	McBain

McCleave	Pigeon
McDonald	Pugh
(Hamilton South)	Rapp
McFarlane	Rea
McGrath	Regnier
McGregor	Ricard
McIntosh	Richard (Kamouraska)
McLennan	Robinson
MePhillips	Rogers
McQuillan	Rowe
Mandziuk	Simpson
Martini	Skoreyko
Matthews	Slogan
Milligan	Smith (Calgary South)
Montgomery	Smith (Lincoln)
More	Smith (Winnipeg North)
Morissette	Southam
Muir (Cape Breton	Speakman
North and Victoria)	Spencer
Muir (Lisgar)	Starr
Nasserden	Stefanson
Nesbitt	Stewart
Nielsen	Stinson
Nowlan	Taylor
O'Hurley	Thrasher
O'Leary	Villeneuve
Parizeau	Walker
Pascoe	Weichel
Pearkes	White
Phillips	Winkler-134.



HOUSING RENTALS, ARMED FORCES, SUMMERSIDE, P.E.I.

[Stage Direction]
Motion No. 87-Mr. Pickersgill:
For a copy of all communications received by Hillcrest Housing Company of Summerside, Prince Edward Island or any solicitor or agent on behalf of that company on the one hand, and the Minister of National Defence or any official of his department or any other department of government since June 21, 1957, respecting the rental of housing units for personnel of the armed forces.
Hon. G. R. Pearkes (Minister of National Defence):: Mr. Speaker, for sound and
adequate reasons I ask that this motion stand.


John Whitney Pickersgill: I shall be glad to comply with the minister's request.


Mr. Speaker:: Motion stands.



PROTESTS AGAINST TERM 29, TERMS OF UNION, NEWFOUNDLAND

[Stage Direction]
Motion No. 88-Mr. Pickersgill:
For a copy of all communications received by the Prime Minister since March 25, 1959, protesting the announcement of the government regarding term 29 of the terms of union of Newfoundland with Canada, together with the replies thereto.
Right. Hon. J. G. Diefenbaker (Prime Minister): Mr. Speaker, subject to the limitation respecting personal or confidential letters or communications.
Mr. Speaker:: Is it the pleasure of the house to adopt the motion, subject to the reservations expressed by the Prime Minister?


[Stage Direction]
Motion agreed to.
Inquiries of the Ministry BUSINESS OF THE HOUSE

[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, on March 25, just before the Easter recess, the Prime Minister was good enough to state in reply to a question by me that he would "endeavour forthwith after the Easter recess to place before the house in as complete outline as is then possible the legislative program". I wonder whether the Prime Minister is in a position to do that now, or within a few days?


John George Diefenbaker: I think it would be better if I had a few days in order to look into the matter so the statement will be as complete as possible.


Lester Bowles Pearson: Thank you.



REQUEST FOR ANSWER TO QUESTION ON ORDER PAPER

[Stage Direction]
On the orders of the day:
George James McIlraith: I should like to direct a question to the Minister of Agriculture. It has to do with question No. 147 on the order paper, which has been standing unanswered since February 18. I wonder when I might receive an answer.


Hon. D. S. Harkness (Minister of Agriculture):: I am surprised that the hon. member has not had the answer either Saturday or today, because it passed over my desk on Thursday afternoon, I think, and went forward.


George James McIlraith: Would you check up on it?


Douglas Scott Harkness: I will be glad to check up on it again. The only reason I can suggest why he has not received it is some delay in the mail. I am sure the hon. member will get it tomorrow.


John Whitney Pickersgill: Ask the Postmaster General.



FINANCE


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, I should like to ask the Minister of Finance whether it would be a fair conclusion that the reason he included in his budget the figure of $1,212 million, representing all payments by the federal government to the provinces, was that he wanted

Inquiries of the Ministry to indicate that he had no intention of acceding to Premier Frost's request for an additional $100 million?


Mr. Speaker:: I think the hon. member for Essex East might better take advantage of the debate which will follow this to deal with matters of that kind.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to draw the attention of the Secretary of State to the fact that on March 9 last the house passed a resolution that I moved asking for the production of certain correspondence more directly related to the Department of Citizenship and Immigration. Will he kindly make inquiries as to why this rather lengthy lapse of time has passed since the motion was passed and no results have been forthcoming?


Hon. Henri Couriemanche (Secretary of State):: Mr. Speaker, I shall be glad to do that.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to direct a question to the Minister of Transport. It relates to the minister's coming trip south of the border to talk with United States officials on problems relating to the Canada Shipping Act. Will the minister consider talks with the proper United States officials on the effects of their policy of subsidizing United States maritime shipping into the great lakes, or at least find out why and how they support their shipping with such subsidies?


Hon. George H. Hees (Minister of Transport):: I shall be glad to give consideration to the hon. member's request.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. Alexis Caron (Hull):: Mr. Speaker, in the absence of the Minister of Citizenship and Immigration I should like to direct a question to the Prime Minister. In this morning's Gazette it is reported that London may ask Canada to accept the atom spy, Klaus Fuchs. Has any consideration been given to this question?


John George Diefenbaker: Mr. Speaker, I have had various departments communicated with in order to ascertain what foundation, if any, there is for the press dispatch referred to by the hon. gentleman, and I have been unable to find anything to substantiate the substance of the report.



HIGHWAYS


[Stage Direction]
On the orders of the day:
George Harris Hees: Mr. Speaker, on Thursday last the hon. member for Laurier asked me a question arising from an article in La Presse to the effect that the main highway running along the waterfront in Montreal adjacent to the border and within the jurisdiction of the Montreal harbour commission is to be closed. In answer I am glad to report to him that it is not the intention to close the waterfront road to which my hon. friend referred. This road is located inside the harbour limits, and by reason of the fact that a considerable number of persons having no business in the harbour have been utilizing it, congestion and serious inconvenience to port traffic and railway operations have been created. To alleviate this condition, which is detrimental to the welfare and efficiency of the port, the imposition of restrictions upon unwarranted traffic is now proposed.
I might add that the article in La Presse says, among other things:
A few days away from the opening of the seaway, the decision of the national harbours board appears fully justified.
Also, on Thursday last the Gazette commented in an editorial, "The move is a logical one."



THE BUDGET


[Stage Direction]
The house resumed, from Thursday, April 9, 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.
Mr. W. M. Benidickson (Kenora-Rainy River):: Mr. Speaker, the fairly lengthy budget speech which we heard the other night buried a number of important facts, I think, within the superlatives in the address. One's immediate reaction was that some of the rhetoric and semantics fairly shouted for further investigation, and one is indeed quite grateful

for the interval of two or three days before dealing with some of the important matters referred to then.
There have been rather substantial increases in the public relations and personal staff of the Minister of Finance, and after the event they endeavoured to see that summaries were provided to the C.B.C. and the press that would give the impression that the budget had substantially avoided the little man in its tax bite; but I was amused to find in this city of Ottawa on the following day something that is rather extraordinary. The two Ottawa papers do not always agree, but we find that they had almost exactly the same headline. The Ottawa Journal said "Every Pocket Hit", and the Ottawa Citizen varied it very little and said "Budget Hits Every Pocket". After a bit of digestion I think that is what is understood to be the result of the budget.
Certainly the increase in sales tax hits everyone, and a substantial portion of the new taxes to be levied comes from that source. I was somewhat surprised that this would be the tendency of the Minister of Finance, because he certainly was a very severe critic of the merit, so far as the little man is concerned, of placing special emphasis on tax raising from this source. Indeed the Minister of Finance, on the occasion of his last opportunity to discuss fiscal and monetary matters when on this side of the house, complained on March 21, 1957 that the minister of finance of that time had done nothing to reduce the sales tax on clothing, boots and shoes, etc. He went on to say, as found on page 2555 of Hansard:
If inflation expresses itself in high prices then surely the government ought to have reduced the sales tax on those necessities of life-
Yet this is the source of tax revenue that seems to be chiefly relied upon in this budget.


Donald Methuen Fleming: Chiefly?


William Moore Benidickson: In dollar volume. My hon. friend anticipates increased annual revenue of $352 million, and I think he will find that a very exceptional portion is from the sales tax.


Donald Methuen Fleming: About one-quarter.


William Moore Benidickson: I am referring to the
over-all tax on purchases for old age pensions as well as excise taxes.


Donald Methuen Fleming: About one-quarter.


William Moore Benidickson: I think he will also agree that the tax on corporations is generally regarded as being passed on fairly quickly to the consumers, and I propose to have something to say about that, too. The Minister of Finance, in comments since Thursday night,
13, 1959
The Budget-Mr. Benidickson has been called an Indian giver. Well, Mr. Speaker, I think the Indians in the part of northern Ontario from which I come could learn quite a bit from the present Minister of Finance, because the arithmetic is pretty simple. Actually he has taken back $2 for every $1 he gave in tax reduction in the preelection budget or the baby budget of 1957.
But that is not the entire story. I think a great number of people who have had economic reverses during the period that my hon. friend has been in charge of the treasury will agree with the secretary of the trades and labour council, who said:
Most of the minor tax reliefs granted before the election of 1958 were eliminated in Thursday's budget without restoring the level of economic prosperity that existed at that time.
We have had a very quick reaction as to the inflationary squeeze that can develop from further imposts on consumer expenditures such as were so prominent in the budget. Even the press was wrong. The following morning the headlines said "Fags Up 2 Cents." That, of course, seemed to be the nearest figure to the actual amount of the tax increase, but we all know that within a matter of hours the giant in the field said "Oh, well, we have increased operating expenses, and as a manufacturer our increase must be 3 cents." We quickly got a very similar reaction from other manufacturers. Canadian General Electric said their costs were rising. Westinghouse reacted in the same way and said that as a result of the new tax set-up they would have to reprice their goods. No one will deny that as a result of the repricing the consumer will end up paying out of the gross national product about which the minister speaks a great deal more than the actual dollar value of the taxes referred to in the budget.
I am sure there were a great many who were surprised that the minister had actually increased the purchase tax with respect to automobiles. I am sure the ministers from the Ontario constituency, the hon. Minister of Labour, as well as the hon. members from Essex constituencies would be very surprised; because we recall the great enthusiasm with which hon. members opposite greeted the announcement of a 2.5 per cent decrease in the purchase taxes on automobiles announced by the Minister of Finance in December, 1957. Statements were made that this amounted to a 25 per cent reduction of the excise tax formerly at 10 per cent. Well, put on that arithmetical basis the minister has taken back 40 per cent of the value of any reduction he made at that time.
It has been said that perhaps early today we will hear from the treasury benches, and that perhaps the spokesman will be the

The Budget-Mr. Benidickson Minister of National Revenue (Mr. Nowlan). I recall that he participated very early in the budget debate last year, and I recall that one of the many statistics he used to buttress his arguments related to automobile production. Fortunately there has been some slight increase in the sales of automobiles in Canada as compared with last year. The statistics to the end of March indicated that the increase in the sales of automobiles and trucks combined amounted to 12 per cent. However, other members will have read, as I have, that the increase in the same period of 1959 in the United States amounted to 70 per cent. This extra purchase tax, therefore, is going to be felt very importantly in these constituencies where I think unemployment of late has been of unusual prominence.
There are a few items in the budget press releases that I feel are not properly understood by the people of this country. I suggest that one such item is the actual increase in the tax take which results from this budget. Prominence was given, of course, only to the estimated value of the extra tax revenue that would come from the new rates, but what was overlooked was the fact that because of the extra expenditures and the extra revenues, the total tax take predicted by the minister for the coming year is not up $245 million but is to be up $640 million. The minister felt justified in telling the house and the country he expected an increase in the gross national product, and he expected that might amount to $2.2 billion. But I am sure any reasonable person today, with recovery not bouncing, would be wondering whether or not a proposal to take $640 million by federal taxes alone out of this expected increase in the gross national product is likely to aid or abort recovery.
I said the other night that you get figures in a debate like this that have a bright side, and if they are unduly exaggerated or overemphasized there is a duty to present as well some of those that are distressing and not quite so cheerful. I want to point out, with respect to the gross national product, that the minister has qualified his estimate in exactly the same words that he qualified his estimate last year. He said, and his assumptions are very important, that assuming normal crops, stable prices and no untoward external events, he predicted this year a 7 per cent rise. We recall the figures with respect to the minister's prediction of last year. He predicted an increase of two per cent, and it turns out that in dollar values the increase was 2.5 per cent. However, his white paper on financial results points out that 80 per cent of that increase came from inflated prices, so this is something to which we have to


give consideration when he estimates an increase in the gross national product.


Mr. Bell (Carleton):: Did the hon. gentleman not suggest last year that 2 per cent was optimistic?


Lester Bowles Pearson: And so it was.


William Moore Benidickson: I want to point out that based on his assumptions the minister proved to be wrong. Actually, the white paper establishes that Canada's living standards underwent a slight decline in 1958. Living costs outpaced small gains in wages, reducing real earnings for the first time in recent years. My hon. friend can calculate that from the white paper itself, I think on page 5, where it states that 80 per cent of the 2.5 per cent increase was due to inflationary prices.
I said the other night, and I think it is worth emphasizing, that in looking at this all-important figure of the gross national product it is very difficult to be as optimistic as one would want to be because of two particular elements that are essential to a steady rise in the gross national product. One of these elements is exports; the other is capital investment. Since the budget speech we have received the most recent issue of the Financial Post, a very reliable newpaper indeed. The Financial Post of April 11, 1959, has this to say about these elements:
Exports are giving more indications of receding from last year's high levels. In February, for example, Canadian goods sold abroad were off 11 per cent, after taking into consideration seasonal influences. It is unlikely that the full year will be down this much, but it is still hard for many producers to see any sudden upsurge in foreign demand for most Canadian source-related products.
This year's statistics, available only for the first two months, actually show that the trade deficit of this country is three times that reported last year. With respect to capital spending, another all-important element in the gross national product, the same issue of the Financial Post has this to say:
There is still no sign of a turnaround in capital spending by business. Year-to-year decrease for Canada for 1959 will be about 5.5 per cent. In the United States, by contrast, business plans call for 1959 outlays over 4 per cent higher than last year's.
I suggest to the minister that there is certainly no significant "oomph" in figures of this kind. In addition to that, in the private sector, according to the latest report I have from the A. E. Ames brokerage firm, reporting on corporation borrowings to March 23, it is stated that corporation borrowings in Canada, indicating capital investment intentions, are down 76 per cent, or are $48 million this year instead of $207 million last year.

Now, at this stage I am not going to belabour the question of what is the real deficit, either in the accounts of 1958-59 or 1959-60. However, I am going to point out again that as a result of some rather slick bookkeeping, the minister is still successful in planting this figure of a deficit of $617 million rather than the real figure of $835 million. I say to the minister that if it was his intention to keep these expenditures from the defence account out of the current budget he required to do more than simply make a speech about it as he did on budget night in June last. Actually I think he will find that he saw to it that not only were those proposed defence expenditures in full put in the blue book of estimates, but that they were included in appropriation bill No. 5 as part of the budget at the gross amount, $1,630 million.
But I am afraid that some of this type of arithmetic is not over with. We all noted that again this year there appears prominently a figure of this kind. When the minister estimates the deficit for the forthcoming year at $393 million surely it is obvious that, contrary to practice for quite a number of years, he has no intention of including in the expenditures for this year a fairly closely calculable item of $42 million, namely the expected deficit in the old age pension fund. He did not say positively that this would be recovered even within the following year; he said it might take two or three years to recover that amount. But the point is that that is to be a borrowed item. In accordance with the practice of past years one would have expected that it would have been included in the budget in the normal way.
I said the other night that one of the obvious indicators of decreasing financial confidence in the competence, understanding and real intention and determination of this government to cope with what I agree were fairly massive, wide dimensional problems, was the steadily declining prices offered for federal bonds. The minister spoke again on Thursday to the body politic; but while the patient realizes that he cannot change his physician for a couple of years yet, he did not seem to be any more convinced that he was getting the right treatment. Because actually, following the minister's statement with respect to mammoth increases in expenditures, borrowings, debt and taxes, federal securities weakened again the day after the budget. The latest budget, no more than other financial statements, I submit to the minister, therefore has not succeeded in convincing the country that they know what are the intentions of the minister and the administration in these all-important matters.
13, 1959
The Budget-Mr. Benidickson
That indeed is the charge we have made against this administration, but I did not expect it to come from the chief journalistic supporter in Toronto of the Conservative administration. However on Saturday, after examination of the budget, the Toronto Globe and Mail had this to say:
The present government at Ottawa has not yet arrived at a fiscal policy. It is simply struggling to raise money for a 12-month period-the money needed to meet its cumulative commitments, and the predetermined expenditures of its various departments.
We have said before that the budget deficit of last year was not planned but merely happened. We say again that the new taxes and the important deficit for this year are again the result of a long series of unco-ordinated decisions. I know the minister would like us to believe otherwise. He would like us to think these were part of an over-all financial plan. However, I think the record is against him. For too long, in matters of this kind, the ministry has not been planning ahead. Its decisions have been on a hit or miss basis, and the minister has had no choice but simply to pick up the chips for the bungling and bumbling that has involved only hindsight and not foresight. The big thing is that the ministry continues to keep the country in the dark as to its real intentions. As a result we have continued confusion and uncertainty. That is why the country lacks confidence financially in the administration.
As we know, from the very beginning we have had conflicts among important people in the ministry as to what is the real plan and intention of this government in matters of fiscal policy. During the election campaign of 1957 the Minister of Finance was just as vigorous and almost as vocal as was the Prime Minister when he told the people, and convinced them, that it was possible to increase old age pensions, make larger payments to the provinces and municipalities, cut income taxes, cut automobile taxes and do all these things on a balanced budget. That is obvious from a great number of quotations that are available to us. In Vancouver in 1957 the Prime Minister said:
The Liberals say they cannot increase pensions and reduce taxes. Give us a chance and we will show you.
Of course we all know with what indignation and withering scorn he was able to make assertions of that kind, but the point I want to make is this. Even after six or seven months of the responsibility of office was there any indication on the part of the Prime Minister that as a result of being on the other side of the house he had found out some of the facts of life with respect to financial policy, or that he was more knowledgeable or realistic in matters of that kind?

The Budget-Mr. Benidickson On the contrary, Mr. Speaker, we find this. Six or seven months later, after statements of this kind that might be excused to some extent in an election campaign, the financial critic the hon. Mr. Sinclair on this side of the house asked the Prime Minister about his much vaunted assertion he had made so frequently, namely that a $500 million reduction could be made in taxes with $120 for each man, woman and child in the country, and so on, and why were the financial proposals of the Minister of Finance in December so meagre in comparison.
We find this. On January 20, 1958, as reported at page 3523 of Hansard, the Prime Minister was asserting that he had done a great deal, and this is the dialogue:
We have reduced taxes-


Mr. Sinclair:: How much?


John George Diefenbaker: They say how much, Mr. Speaker.


James Sinclair: You promised $500 million.


John George Diefenbaker: When we have the authority we shall do so.
We know that in a short time the Prime Minister was given authority. He has a commanding majority here. We sometimes wonder whether it is not a commanded majority. Nevertheless, this was the assertion; even after seven or eight months of holding office he still maintained that this assertion was justifiable. We know what happened. The public was persuaded that, with the vision, the government could spent more, tax less and do all this without any inflation; and, of course, could do this with a balanced budget.
Over the week end I have heard some comments. Many people who are not partisan with respect to politics say they do not see much change in the budget propositions that have been put forward, or many changes, except one important one. Practically all of them realize that the new administration has certainly left the till empty.
Right after the election we found that the Minister of Finance had lost no confidence in his ability to operate on the theories I have just quoted. I remember the great satisfaction that was portrayed on the faces of the new members on the treasury benches when we assembled in the fall. They were quite satisfied that they could accomplish these things, and they did not seem to be much concerned about the recession.
The Minister of Finance (Mr. Fleming) in his speech the other night would lead us to believe that in his first financial effort in this chamber in December 1957 he did seem to have given some recognition to the economic conditions which eventually proved to be depressive. But I just want to give hon. members some indication this is not so and that if this were so the minister was certainly

not talking to the House of Commons or to the rest of Canada in this way, because on the very day before he made that financial statement to this house on December 5, 1957 this was his view as expressed to the young people at the University of Toronto when he was addressing the Hart House debaters. He said: "Canada has no crisis or emergency in unemployment". A day or two before this he was addressing another group, and he had similar comments to make. Speaking before the dominion commercial travellers association he said that unemployment on the present scale naturally gives us all concern, but that there is no justification for calling it an emergency as some are doing.
The Minister of Labour (Mr. Starr) had occupied his office for some months, and this experience did not seem to convince him that there was too much to worry or complain about, because in December, in Montreal, he said this:
There is hardly an economist who does not feel that the unemployment situation is merely temporary, and that given a brief breathing pause the natural buoyancy of the economy would assert itself.
We know what happened in the election campaign. There was no attempt on the part of the administration to indicate that they had many serious worries about the future in this respect. The Prime Minister (Mr. Diefenbaker) in February and March was saying that the situation was licked, and we know that all summer after the election there were optimistic noises being made despite warnings from all sectors of the country. In the middle of June when the Minister of Finance was obliged to disclose the financial situation in his budget the picture really began to shock the country.
We have since seen the financial results. The true position was indicated, not only by a deficit where the minister had predicted a surplus but also by the terrific deficit which he forecast for the year 1958-59, and the intimation that deficits of this order were likely to be with us for some time. I am sure that this, as much as anything else, has set off the inflation psychosis to which the governor of the Bank of Canada referred in the report which was recently issued.
I maintain that this lack of frankness, over two years, is still one of the most serious matters of misconduct of which this government can be accused. There are many matters at this very moment which call for candid statements to this house. I am thinking of such subjects as tight money and inflation and I intend to say something about the conversion loan. I want, also to say that we on this side abhor the debating tactics of several hon. members on the other side of the house

when an attempt is made to discuss these all-important questions. We are not going to be deterred at all from discussing them and bringing them into the light of parliamentary debate by the threadbare argument that this would be giving some comfort to the Russians, or that it was almost unpatriotic-practically traitorous-to talk about some of these matters. I hope that before this debate closes we shall get from the Minister of Finance, both in attitude and in frankness, something very different from what we have witnessed recently when matters of this kind have been before us.
I have observed that it has been the minister's custom to sit in his seat and shout across the floor such terms as "rabbish", "nonsense", "improper", "irresponsible" and so on. Then before the debate closes we hear nothing further from the hon. gentleman. I hope he will speak with greater candour in the course of this debate with regard to these all important matters. This shyness on the part of the Minister of Finance is something new. He never used to be shy in discussing matters of this kind, and I can easily give an illustration or two in support of what I am saying. For example, on March 27, 1956, as reported in Hansard on page 2648, this is what he had to say:
Every time the bank rate was raised, it had the effect of subtracting millions of dollars from the value of the bonds held by Canadians, including dominion government bonds.
We found no shyness or lack of statements from the government when interest rates appeared to be going in another direction. I recall that on January 27, 1958, as reported on page 3852 of Hansard, the finance minister did not think it was improper to say something about government policy in a matter of this kind. These are his words: "The tight money policy has now been eased in line with the policies of this government." He was referring to municipalities, and so on. The Prime Minister had earlier met the premiers of the provinces-on November 25, 1957-and again, at this conference, he had no timidity about discussing a matter of this sort. He said: "Here in Canada, quietly and gradually over the last three months, the tight money situation has been eased." And he added:
Those whose business it is to follow the bond market will have noticed it, and that includes many of you here, but it has not attracted such attention as one would think it has merited.
I could give innumerable quotations of this kind. The Minister of Finance during the election campaign was listing the elements of the Conservative inheritance which had been left them by the Liberals, and one of them, he said, was that interests rates were
13, 1959
The Budget-Mr. Benidickson at the highest point in the generation. Credit was stifled, he said, by a tight money policy. Then he went on to say:
Money is now more plentiful. Credit and interest rates have been reduced very substantially.
I draw to the attention of the minister that the rate for treasury bills one day after the budget was 4.42 per cent. A week before it was 4.33 per cent, and the week before that it was again 4.22 per cent. The all-time high, previously, was 4.08 per cent -the rate about which he had been complaining-and I suggest we are entitled to have some further authoritative statement from the ministry with respect to the government's intentions in matters of this kind, because when interest rates were going down, hon. gentlemen on the other side did not hesitate to say it was a result of government policy. The governor of the Bank of Canada, at page 3 of his recent report, said this:
I believe that these fears of inflation will prove to have been exaggerated, particularly if appropriate steps may be expected to be taken to overcome government deficits.
The minister told us in his budget speech that he is not unduly apprehensive, or rather that he has no expectation of substantial increases in the cost of living in the course of the next year or two. If the minister and the governor do take this view I think the Minister of Finance should be able to tell us just why there is such a tight money rein at the moment. We know it is stifling capital investment and that the resort to the United States market is unduly high, particularly on the part of junior governments. And I am sure that the Minister of Finance did not miss the complaint of the chairman of the metropolitan area in Toronto, Mr. Gardiner, who is no normal critic of the present government but who felt obliged to complain and squeal with respect to the federal government's policies in this sphere of interest rates.


Mr. Stinson:: Mr. Speaker, before the hon. member leaves this subject, would he permit a question?


William Moore Benidickson: Surely.


Frederick Coles Stinson: Would the hon. member not agree that the conversion loan was a good thing for Canada?


William Moore Benidickson: Mr. Speaker, the hon.
member has simply drawn me to the next subject with which I propose to deal. We did not have an opportunity to deal with any authoritative information on the matter of the conversion loan when the house adjourned last session. The Minister of Finance at that time was not prepared or was not able perhaps to give us very much information with

The Budget-Mr. Benidickson respect to the costs of the operation and we only this session gained some information of that kind.
As the hon. gentleman who interrupts knows, the Minister of Finance is certainly one who has maintained with great fervour that this scheme was an unqualified success. Indeed, he says it so frequently that I suspect there are many Canadians who wonder if it is not a case of the minister protesting too much.


An hon. Member:: Mr. Coyne says so.


William Moore Benidickson: I am going to indicate some questions that I feel should be very carefully considered by all hon. members of this house particularly when we are being asked to raise taxation for a one-year period to the extent of some $350 million. I have indicated that the sentiment of investors visa-vis this government has not improved and in fact seems to be on the decline, despite protestations that this conversion loan was an unqualified success. I believe it is a well known fact that since this government came into office-we will take the period from the end of June 1957 to the end of March 1959- it has increased the amount of our debt by $1,664 million and at the same time the money supply is about $1,720 million greater than it was at that time. I do not think anybody can deny that the deficit announced last June has been the cause of the conversion as well as the cause of this unprecedented expansion of the money supply. The government's need to borrow money is the explanation of both of these operations.
I think the following is rather significant. I noted that one of our most respected officials who has retired from the Department of Finance is reported in an article at page 394 of the November-December journal of the Canadian tax foundation. I think this statement is typical of the down to earth remark one would expect from Dr. A. K. Eaton. Describing the role of civil servants in the finance area he said:
You cannot pretend to be fighting inflation at a time when you have lined up your powers behind the government in a drive to sell bonds to meet deficit financing.
There are a number of facts we have obtained this session with regard to the conversion loan. I ask hon. members who have asked me questions about this particular operation to reflect on the matter and tell us what they think about some of these startling results. The Minister of Finance in returns to those on this side who have asked these questions has indicated that we can now take the immediate cost of the operation to be $42,400,000 for premiums, $19,478,000 for commissions, $7,300,000 for issuing fees, $1,495,000


for advertising and $1,265,000 for administrative costs. Those immediate costs alone total $71 million plus, to get the project launched. Even more important, I think, is the cost that is involved in the years ahead.
I continue to draw the attention of hon. members to the relationship to the need for increased taxation. The Minister of Finance has indicated that the annual interest on the new bonds will be $58 million more than what was paid on the bonds that were converted; there is an amortization charge on an annual basis of $6 million; that totals $64 million.
The important thing I want to ask hon. members who have interrupted is this. Can they give me any good reason-and we have heard nothing about it from the administration-why the conversion committed itself to maturities well in the future. I refer to the 6th, 7th, 8th and 9th victory loans. Permit me to state what the result of that cost has been. The extra interest that will have to be paid for the 6th victory loan, which would not have matured until June 1, 1960, is over $13 million. Calling in advance the 7th victory loan results in an expense of $44 million; for the 8th victory loan, not due until October of 1963, $91 million, and for the 9th victory loan, not due until 1966, $165 million in extra interest. The total of interest with respect to these particular maturities is the staggering amount of $314 million.
But that is not the whole story. In addition to that, premiums had to be paid for the conversion of these loans. That involves another $30 million, giving a total of $345 million. I point out that this is very close to the increase in taxes we are discussing here. As an hon. gentleman on this side suggests, this could perhaps be referred to as a howling success.
Another question I would direct to hon. gentlemen opposite is this. Have they received a satisfactory and convincing answer to the question posed by the fact that in the case of the 17-year 4\ per cent new bonds and in the case of the 25-year 4J per cent new bonds there was no elementary prudence taken in putting in, a few years in advance of maturity, a provision that would give a right on the part of the government to call them. This has been more or less standard practice in the past. In other words if interest rates go down within the 17 and 25 year periods the government has no right to call in those bonds.
Surely hon. members supporting the government have heard from many constituents, as I have, another criticism to the effect that from sorry hindsight they rather think they were diddled by this operation. They are

recalling with considerable distaste the television and radio eloquence of the Prime Minister, the sledge hammer arguments of the Minister of Finance, the high advertising campaign and its very considerable expense and perhaps in particular they remember advertisements such as those which encouraged females to take advantage of the premiums and buy new hats. They remember all these things but what they are perhaps most conscious of is the fact that they have suffered promptly very substantial capital losses.
I have been disappointed to find in the explanation we have received from the ministry that there is an indication that they seem to be proud that they put something over and that this saved the crown some money. If in August the government knew what was likely to happen to bond prices and still went ahead with the conversion scheme, the complaints we are getting from the public are justified. If the government did not know what was going to happen then I feel it should have been better informed. If the government did not know, how much reliance can we place on the predictions and comments we might get along a similar line at this time? In any case, I think it is extremely poor taste on the part of the administration to brag about the success of this conversion operation which has resulted in a great number of their fellow citizens being victimized by sustaining very injurious losses.
A great number of matters are referred to in the minister's speech with which one would like to deal, but the debate will be going on for some days and there will be many others more competent than myself to deal with them. In addition, it is an unusual debate in that it provides several stages for further discussion, namely the resolutions, the bills and so on. As I said the other night, one of the most impressive things, because of the relative silence, in the budget speech, was the reference to unemployment. We are all very concerned about the fact that if the recession is disappearing it is doing so much faster than unemployment.
Probably many of us read recently the report in the Financial Post of a very wide canvass of businessmen as to the economic prospects. Quite a number of them indicated that in their opinions there could be an expectation of an increase in profits, in output and that those were inching upwards in probably a majority of instances; but 70 per cent of those consulted said that they foresaw no increase in the labour force even in consequence of an advance in those other sectors. These are the things that we have heard little about from the administration and I hope that those who follow me in the debate
The Budget-Mr. Regier will say more about government intentions in this all-important field.
I move, Mr. Speaker, seconded by the hon. member for Welland (Mr. McMillan):
That all the words after the word "that" be deleted and the following be substituted therefor:
"this house regrets the bad faith of the government, which sought and secured support from the Canadian people on a program of lower taxes, reduced expenditures and a balanced budget, and which has now produced, in flagrant disregard of pre-election promises, a budget calling for higher taxes, record expenditures and a large deficit.


Mr. Erhari Regier (Burnaby-Coquiilam):: Mr. Speaker, the country has waited a long time for the bringing down of the budget. We have all recognized in this as well as in other commonwealth countries that the contents of the budget must not be revealed to anyone before the budget is actually presented to the house and to the country. I do not for a moment assume that there was a leak of the contents of the budget this time. I know that a member of the fourth estate is, however, a senior adviser and it is likely that when some months ago he was asked by the Minister of Finance (Mr. Fleming) what his opinion was as to the contents that the budget should contain he supplied a little advice to the Minister of Finance and he assured him that that advice would be accepted. I have reference to an article in the Montreal Gazette, dated March 12, 1959, under the title, "Ottawa Day By Day", by Arthur Blakely, in which he says among other things:
Rightly or wrongly, the general expectation is that Mr. Fleming will not postpone a decision any longer but will move, in the new budget, towards a restoration of the rough state of balance between budgetary revenues and budgetary expenditures.
It is also assumed that he will not attempt to restore this state of balance in a single budget, but will take some remedial action now and defer later measures (which might be made unnecessary by a new buoyancy in the economy) until later.
Then, a little farther on at the end of the article he says:
It would not surprise many observers if Mr. Fleming made the fund-
And he is referring to the old age security fund.
-again self-supporting by the imposition of a 3.3.3 formula, taking one additional per cent from personal income tax, corporation tax and sales tax.
I for one would like to congratulate this member of the fourth estate for having a keen insight into the operations of the mind of our Minister of Finance.
When we look at the budget which has been revealed we realize what a disappointment it is indeed because for the masses of the
2620	HOUSE OF
The Budget-Mr. Regier people of Canada there is nothing in it except higher taxes, higher interest rates and a rise in the debt of the federal government. There is nothing in the contents of the budget which will supply any hope to our unemployed, to our farmers, to our basic enterprises and to our secondary enterprises. There is in the budget no hope for those responsible for raising the necessary financing for the operation of either the provincial or municipal governments.
I realize that the minister is most able to present the budget of Canada for the government of Canada in as excellent light as it is possible to present a budget of the kind that he has brought before us. I will not attempt to assist him in that most able performance of what is a message of very little comfort indeed for the Canadian people.
I notice that the minister has made many admissions of failure in the budget. I grant that those admissions were very ably presented so that to find those admissions one really has to look very hard indeed. The minister has been able to persuade most Canadian newspapers and magazines-and he was able to accomplish this even before the presentation of the budget-that things are on the upgrade in Canada. There has been indeed a lot of whistling in the dark to keep our spirits up. The minister was very adept indeed on Thursday last at pouring on a lot of soothing syrup. There were plenty of words, exceptional language, there was excellent oratory, indeed, as only he is able to present oratory. However, as I listened to the minister, Mr. Speaker, it reminded me of a very conscientious clergyman who typed out his sermons and left rather wide margins. His sermons were also like the minister's speeches, on the lengthy side. On one particular margin of one particular page he had inserted the note, "Argument weak here; shout like hell". After listening to the minister, after considering the effect of the budget on the economy of Canada, we realize why the excellent oratory was indeed necessary.
The minister has a remarkable ability to use argument to prove prosperity when in the argument itself there is an admission of failure. I refer to an old term used in senior government civil service ranks which dates back-the minister did not use this one; however it is a play that can be put on words- I remember a Liberal minister of labour who used to talk about the decrease in the rate of increase when he gave us figures on unemployment. The other day the minister used the sentence, "Our net borrowings should be less than one-half", definitely conveying to the average layman, not spending too much time on the budget, the impression that we


were about to reduce our debt. Actually I must admit that the minister said no such thing. However, his statement, "Our net borrowings should be less than one-half" invited the reaction and led many people to believe that we were about to reduce our debt.
It is our contention, Mr. Speaker, that the economy of Canada has reached the stage of being in very deep trouble indeed. I see that even the minister admits this, although inadvertently, because on page 2425 toward the end of his remarks, he said:
Canada has no reason for fear.
I hope the minister can explain why he felt it necessary to insert in his budget speech the sentence, "Canada has no reason for fear." We maintain that there is a good deal of fear. The minister only has to look at interest rates to realize that there is a good deal of fear. I feel that he admitted that. However, he is attempting to wish it out of existence with the sentence, "Canada has no reason for fear."
It is our contention that the Tory party and the government, not only at election time but since, have been misleading the people of Canada as to what the true situation is, especially in the fields of unemployment and economic recovery and particularly so in the field of public finance. I have here a clipping from the Globe and Mail of March 6 last and under the heading, "Questions and Answers for Investors" there is an article published by Wood, Gundy and Company Limited containing a graph comparing yields on bonds and yields on stocks. It shows that the exceptionally high and excessive yields from investment in Canadian equities, which we in this group have advocated should be made more moderate by the imposition of heavier taxation, have forced a rise in interest rates on government borrowings until today, without considering the dividend income tax provisions, the returns from bonds are higher than the returns from investment in Canadian equities. That is something that has not happened during the whole period covered by the graph which begins with 1949 and goes up to 1959.
On many occasions we have called for the establishment of a national investment board and I note the odd place where our approach to this problem is being met. I have here a report in the Globe and Mail of March 31 from Madrid which reads as follows:
The Spanish government announced here details of a new anti-inflationary law aimed at controlling public and private investment and steering it into areas useful to the nation.
In this modern day and age we feel that that concept will eventually have to be accepted as being one of the responsibilities

of government, the management of the direction and flow of available investment capital so that the social needs of the nation may be met along with our industrial needs.
I notice that the confusion in the money market has caused some concern south of the border. Our Canadian government tells us that everything is all right but in another article published in the Gazette of March 11 I find this sentence:
The 1958 fiasco was the worst debacle in the history of United States public finance. Thousands of investors lost money. The government bond market became demoralized and has not yet regained public confidence.
Official investigations are under way south of the border as to what can be done to restore public confidence in the issuance of government securities. Here we have in office a government that does not recognize the seriousness of the situation and tells us that we must accept the old law of supply and demand of the market place with regard to our social capital needs.
The government also has not fully informed the Canadian parliament or the people of the implications of the capital investment forecast for 1959. When we consider the implications of the statistics we see that capital investment is three per cent off compared with the 1958 level. I should like to refer to an article by John Meyer, financial editor of the Gazette, published on March 9 last in which he says:
The $8,321 million in capital investment which the Department of Trade and Commerce anticipate this year, on the strength of the estimate given it at the beginning of the year, is 1.1 per cent less than last year's figure. Prices have increased 2 per cent over the last 12 months. In terms of 1958 values, then, capital investment intentions are a little more than 3 per cent off the 1958 level.
This article ignores the continuing growth in the Canadian population and if we consider the factor of the growing population we will see that the real situation in terms of continuing investment and expansion of the Canadian economy is even worse than indicated in the article.
With regard to markets, we are again assured that everything is rosy and that we do not have too much to worry about. The minister always likes to talk about what is happening south of the border and how that influences us here. I should like to refer him to an article in the Globe and Mail of March 12, 1959 by Richard E. Mooney from the New York Times service. Mr. Mooney says in part:
In broad terms, the conclusion here-
The reference is to Washington.
-is that the world is back on its feet. Europe has regained its prewar competitiveness, and underdeveloped nations are coming up. Both of
The Budget-Mr. Regier these developments have long been objectives of U.S. foreign policy, objectives for which billions of dollars have been spent. The result, according to thinking here, is that U.S. producers can no longer dominate world trade so easily as they did in the earlier postwar years.
I believe that the government found that out when it found that its decision to transfer 15 per cent of our imports from the United States to the British commonwealth was not as easy to implement as to pledge at election time. We have a recession in our local market. Mention was made some time ago of retail sales. I have figures here to show what is happening in the field of retail sales. According to a dominion bureau of statistics report in February last, retail sales in 1957 amounted to $1,235,500,000 and in 1958 to $1,271 million, indicating a 2.9 per cent increase. When we relate this to the 2.6 per cent increase in the price index over the same period and also relate it to the increase in Canada's population of 2.3 per cent, we can see that net retail sales on a per capita basis in 1958 were away below those of 1957. We are not only losing markets abroad but we are losing markets at home, even though some statistics may be produced to show otherwise. If the change in the purchasing power of money is taken into account, as well as the growth in Canada's population, then we find we are not moving out of the economic recession, we are very much in it today. We find no action proposed by the government to remedy the situation.
Then, in so far as unemployment is concerned, this government plies us with statistics from the unemployment insurance commission, attempting to show that unemployment is on the wane. It reminds one a little bit of the phrase "argument weak here, shout like hell". This was the course followed during the election when we were assured, in these loud, booming voices, that so far as unemployment was concerned we were past the peak. Has anyone in the government ranks ever made an estimate of all those people who are ineligible for unemployment insurance benefits and who have not been near an office of the unemployment insurance commission for many long months? During the last winter in the Vancouver area we had 10,000 such people. All of these people whose unemployment insurance benefits have expired are no longer in the statistics that are supplied to this house by the government of Canada. Almost all the people above the age of 35, and especially those above the age of 40, who are told that they are too old for employment, have long since been taken off the list in the unemployment insurance commission offices.

The Budget-Mr. Regier
We are told that last year there was a growth in Canada's labour force of only 1.16 per cent. The government always likes to brag about the growing number of people who are working in Canada. As I indicated before, last year our population rose by 2.2 per cent and yet at the same time our working force showed a rise of only 1.16 per cent. In my opinion this is rather clear evidence that unemployment actually is climbing in Canada instead of receding as the government would have the people of Canada believe. I should like to cite only one little example. If we were really climbing out of the economic recession, if we were really on the way to economic recovery, why would a report indicate that at this time some 25 per cent of the population of one of our ten provinces is on social welfare or relief? Surely, that does not indicate a return to prosperity.
Then, we have claims made, by a reference to industrial enterprise, that we have this economic recovery. Once again, when you consider the growth in population, when you consider the change in prices and think of the volume of goods, you will note that we are lagging rather than growing out of the recession. I have figures here showing industrial output for the month of December, 1958 as compared with December, 1956, and the base period for this index is taken as 1956. The index for December, 1956 stood at 154, while in December, 1958 it was only 148.2. One could take mining, for instance, as another good example. In December, 1957, the index for mining was 217.6; in December, 1958, the index for mining was 214.6. These indices are based on volume rather than the annual sales value in monetary terms.
I fail to see how the minister can, like the men of magic, pull a rabbit out of a hat and base a budget on a growth in gross national product for 1959 by seven per cent, because that is only two per cent less than the greatest industrial growth that Canada has ever experienced since the end of the war. In one year it was nine per cent. Last year, on a volume basis, there was less than one per cent growth, and on a per capita basis there was actually a decline in our gross national product. In spite of this, the minister says he expects a growth of seven per cent, and his predictions are very important, Mr. Speaker, because the whole welfare of the federal budget depends on the accuracy with which the minister is able to make his predictions.
In so far as national defence is concerned, the whole country is in a quandary. We do not know what the policy of the government is, nor is enough information supplied to indicate what the policy of the opposition is


on this matter. We have no information about government policy in the field of transportation, and yet we are asked to subsidize railway transportation at least. The minister has not tackled the problem of the finances of the other levels of government. Instead of calling a dominion-provincial conference he is having a meeting with the provincial finance ministers. In the field of public financing, I feel the minister made a serious error the other day when he indicated his public borrowings would be $850 million. He failed to point out he will have to borrow this year some $1,350 million to refinance government bonds that are falling due in 1959. Adding this amount to the $850 million, we find that federal government bonds or other sureties that will have to be handled this year will amount to $2,200 million as opposed to last year's figure of $2,250 million, that is excluding the bond conversion deal. When we exclude the bond conversion deal, we find the minister will offer on the market this year practically the same amount of government bonds and treasury bills as he did last year.
I know the minister is accurate in the actual wording and the grammar of what he said but, in effect, the country was misled into believing that government borrowings this year would be only half of what they were last year. The facts show that the minister will be borrowing $2,200 million this year as opposed to $2,250 million last year. If he says that much of this is retiring debt, and the debt is	only going to grow	by	$850million,	I know he is right. At	the	sametime it	has	the effect of placing	all	these
bonds as a new issue on the money market.
We feel that the Tories have been misleading the public in the matter of public financing and its relations with other governments. We feel that they have supplied inadequate information on national defence and on transportation. We feel that they have been misleading	the	public with as to	what is
happening with regard to economic recovery, unemployment, the market, our capital investment forecast and present incomes of Canadians which are down, as can be found at page 8 of the Canadian Statistical Review, the February issue.
We feel that the results of no action on the part of this government will be serious indeed. The world today is moving at a rapid pace. Canada's economy is especially vulnerable. Unemployment breeds unemployment. Industrial progress must be made in order to meet our ever-growing commitments and the requirements of our population. Agriculture is facing industrialization unless action is taken to meet the problem posed by the cost-price squeeze. Short term policies with regard

to other basic enterprises lead to serious lack of conservation, especially in lumbering, forestry and mining. Higher interest and higher taxes bring more unemployment because they affect the purchasing power of the people. Our troubles begin to compound themselves.
After all, Mr. Speaker, the Tories recognized the ills that we had and the larger ills that we were heading for. At the time of the several elections the Prime Minister (Mr. Diefenbaker) and his party assured the country that they had the answer. We now find that instead they are following a policy of advising the people of Canada to play the sitting ducks game and to take the consequences of an open season. We feel that this procedure is hardly in keeping with the solemn pledge that was given to the Canadian people. I should therefore like to move, seconded by the hon. member for Kootenay West (Mr. Herridge):
That the amendment be amended by adding thereto the following words:
"and this house further regrets that the government has failed to present to parliament a planned financial and economic program designed to develop the economic health of the nation by, among other things, (a) reversing the trend of rising interest rates (b) establishing a capital gains tax".


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, I am sure the hon. member who has just taken his seat will not be offended if I amplify that story with which he regaled the house a short time ago and in which he spoke about the minister and the marginal notes which were included in the wide margin. Actually, 1 think the Minister of Finance (Mr. Fleming), myself and some of the rest of us who are associated with the legal profession have perhaps a better knowledge of that story because we were all told it in law school many years ago. It has three parts to it instead of the one to which he referred. The advice which was given to the students was this. If you have the law with you, you do so and so with a judge. If you have the facts with you, you do so and so with a jury. It is only when you have neither with you that you do what the hon. member suggested be done.
In the same breath the hon. member regretted the fact that all of the newspapers and all of the magazines in this country had accepted the statement of the Minister of Finance that prosperity was around the corner and that this country was moving forward every day in its recovery from the depression. I would suggest to the hon. member that the Minister of Finance obviously had the facts with him and he impressed the jury because in matters of 66968-9-167
The Budget-Mr. Nowlan this kind the jury, of course outside of the members of the House of Commons, are those journals and magazines and other agencies of public opinion in this nation.
I am rather intrigued by the atmosphere of gloom which still permeates the hon. member for Burnaby-Coquitlam (Mr. Regier) who has just taken his seat. The financial critic for the opposition was more careful in his gloomy prognostications than he was last year. As you will recall, Mr. Speaker, this house was confronted with the appalling prospect of having a deficit which was going to amount to over $1 billion and if you do not accept the words of a politician for that, then you accept the words of financial authorities across the country. This afternoon for a few moments I checked back on some of the statements which were made during the budget debate last year. We have that redoubtable master of statistics who now has the Martin bureau of statistics figures with which he regaled the house in the past. Speaking in the budget debate last year he said this as reported at page 1883 of Hansard of July 3, 1958:
Instead of these promises being fulfilled we are faced-
There was no doubt, no hesitation, no question.
-with a billion dollar deficit. This the Minister of Finance denies-
And so on and so forth.
And the Leader of the Opposition, in dealing with this matter last year, says this as reported at page 1903 of Hansard:
If you think my predictions in these matters-
And he predicted over a billion dollar deficit.
-coming from a political source are suspect. I can refer you again to the director of the Canadian tax foundation which is an accepted authority.
And he goes on and spells out a deficit of over $1 billion. I cannot put my finger on it at the moment but I am sure that my friend the financial critic of the opposition will recall that last year, in dealing with this matter, he too said that if the figures were analysed properly there would be a deficit of over $1 billion. He also quoted various tax authorities which he called to witness in order to establish the financial condition in which this country was going to find itself after one year of budgeting under the present Minister of Finance. The Minister of Finance had suggested that the deficit would be $700 million or approximately that amount, and all of the dire prophecies which the hon. member for Burnaby-Coquitlam is still repeating in this house this afternoon were stated by our friends in the official opposition last year. There were

The Budget-Mr. Nowlan charges of misleading the house and charges of an absolute breakdown of the financial structure of this country, with an inevitable deficit of $1 billion.
Yet what do we find? When the minister brought down his statement last Thursday night and the white paper the day before we found that there was a deficit of not $700 million for which he budgeted but of $618 million. I think that the Minister of Finance and this government deserves great credit for having accomplished this result in the light of the dire prophecies which were made last year. When I hear these gloomy prognostications about the way the country has been betrayed, the way in which the financial structure of the country is being jeopardized, I must say that outside the attendance in this house, where members are always assiduous in their attention and in their attendance, the attendance in the galleries would not suggest that the nation is living in fear and trembling of what is going to happen under this budget or that it wishes to express any indignation or any great apprehension because of what was proposed by the Minister of Finance.
We have had a difiicult year during which to finance. I think the Minister of Finance deserves a great deal of credit for having planned the financing of this nation, assuming additional responsibility and financial expenditures which were never contemplated in the days in which we were in opposition and having succeeded in coming out with a deficit of not that which he had expected but which was less than that for which he had budgeted. Why is it that there should be these suggestions about the "terrible Tories" having betrayed their promises and exposed the country to increased taxation. We have heard about the things which are supposed to have been done; according to the amendment which has been moved-
This house regrets the bad faith of the government which sought and secured support from the Canadian people on a program of lower taxes, reduced expenditures and a balanced budget, and which has now produced in flagrant disregard of pre-election promises a budget calling for higher taxes, record expenditures and a large deficit.
Mr. Speaker, there is no doubt that promises of any kind, whether pre-election promises or otherwise, should be honoured and respected so far as circumstances will possibly permit, but I would suggest to you, sir-and I think all hon. members on both sides of the house would accept this general principle-that promises made to this House of Commons and promises made to parliament stand in an even more favoured position in so far as sanctity and respect are concerned than promises made during an election campaign.

What has been one of the major reasons why we are facing increased taxation at this time? It is simply the necessity for putting on a sound financial basis the old age assistance and security fund which was accepted by this parliament in 1951 after a joint committee of the House of Commons and of the Senate had spent months in considering the inauguration of such a fund. I have the report of that committee here, but I do not intend to weary the house by reading excerpts from it, unless hon. members should desire me to do so. But this was the effect of the report -that there should be established provision for old age assistance and old age security in this country and that the fund should be on a self-supporting basis. As a matter of fact, reference was made to this point in the committee's report itself, that the fund was to be placed on a "pay as you go" basis. This report was adopted by the government of which the Leader of the Opposition (Mr. Pearson) was then a member. Others who sit in this chamber today were also members of the cabinet at that time; the hon. member for Essex East (Mr. Martin); the hon. member for Bonavista-Twillingate (Mr. Pickersgill)-


John Whitney Pickersgill: I do not think I was a
member at that time.


George Clyde Nowlan: No. The hon. member for
Bonavista-Twillingate was, of course, still relegated to the back room. It was some time before he escaped his enclosing confines and came to the front row of the house.
A resolution was moved to establish this fund, and it came to this house having previously been approved by the governor general because it involved the expenditure of money. It was moved by the hon. member for Essex East, who was at that time the minister of health and welfare in these terms:
That it is expedient to introduce a measure to provide for the payment of pensions, without a means test, of $40 a month to persons who have attained the age of 70 years and have appropriate resident qualifications and to establish a fund made up of special contributions levied for that purpose.
In other words, this fund was to be established to pay for the pensions. The minister of finance of that day, now one of the distinguished ornaments of the Supreme Court of Canada, and one who will be remembered by many of us here, said in dealing with this matter that the fund should be self-liquidating. As reported on page 390 of Hansard for October 25, 1951, he said:
The purpose of the provisions to which I have just referred is to ensure that the fund, at least after the first few months, will be self-sustaining and that the revenue sources are sufficient to ensure an adequate flow of income to meet the pension payments and the repayment of loans. This is the basic principle on which it is proposed to operate the fund.

After that, the debate went on for many, many weary days. Then Mr. Abbott again dealt with this matter, and said that if there should be a shortage in the fund he might have to advance a loan for a few weeks or, possibly, a few months, and he goes on to say as reported in Hansard of November 8, 1951, at page 840:
Early next spring when we are looking at general budgetary matters, we shall have to see how things get started: and as I said in my opening statement, some special action may have to be taken at that time to get the fund oft to a proper start. But while it may be necessary to advance moneys to the fund to make payment of current pensions, pending tax receipts-or if tax receipts prove inadequate, pending the time taxes are increased to make up for the deficit-from then on that is the basis upon which the fund will be operated.
Then a former hon. member who will be remembered by many of us in this house, the former hon. member for Winnipeg North Centre, Mr. Stanley Knowles, asked a question, wishing to make it clear whether pensions would be paid, whether the fund was in balance or not, and Mr. Abbott said, in reply:
I would say that additional taxes would have to be imposed, sufficient to reimburse the fund for any advances made, and to provide for future payments.
And Mr. Knowles further asked:
In other words, it could go on as a sort of debt which could pile up as simply a picture of what it has cost to provide old age security.
And this is the response given by Mr. Abbott; it is one to which I should like to draw the particular attention of this house:
That would be possible, but it would not be probable as long as this administration is in power.
What has happened, Mr. Speaker? That was in 1951, and with regard to carrying out that promise to parliament, as with regard to carrying out many other promises to parliament and to the country, the government of that day immediately chose to disregard it, and from then on, every year, this pension fund was never brought into balance. Every year there was a deficit. Last year, as hon. members know, there was a deficit, partly due to increase of pensions which this government made and partly due to the increases which were put into effect by the preceding government amounting to the tremendous sum of $186 million in the fiscal year just closing. And the year before it was $102 million.
Was that principle not right, the principle which was enunciated in 1951? Was it not a sound principle, this principle which had been agreed on not only in the House of Commons but in the other place, and agreed on unanimously, that old age security should 66968-9-167i
The Budget-Mr. Nowlan be guaranteed by means of funds to which we all have to contribute, and that those funds should be kept in balance? Were not the government and the minister of finance justified in making this pledge and saying they felt it virtually impossible to conceive of any other way of doing things?
We all know the situation in which we find ourselves today and the situation in which the Minister of Finance has found himself. We have therefore gone ahead this year to deal with the difficulty, and a very substantial part of this so-called increase in taxation-in fact, $183 million in the full year- will go toward bringing the old age assistance fund, the old age security fund, into balance. This will not be accomplished entirely next year, but over a period of a year or two the fund should be in balance. In this case, as in so many other situations which the government inherited, we shall be carrying out, and redeeming and implementing, a pledge which was made heretofore and which was ignored by our predecessors in office.
Much will be said, I am sure, with regard to sales tax. The hon. member for Kenora-Rainy River (Mr. Benidickson) referred- though not in such detail as I thought he might have done-to the fact that there is an additional sales tax of one per cent, the proceeds of which will contribute to the deficit in the old age security fund which might be prejudicial to the motor car industry. And, of course, there is the additional excise tax, too. Everyone regrets having to pay increased taxes. I may say I feel that the hon. member for Kenora-Rainy River has let me down to some extent because he did not go as far as I thought he might in condemning the increase in the sales tax. I am sure amplification of that has been left for some other speaker on that side of the house and no doubt that hon. gentleman will appreciate my bringing to his attention a statement made by the then minister of finance, Mr. Abbott, as reported at page 388 of Hansard of October 25, 1951:
The sales tax more nearly approaches the ideal levy for financing social security than any other tax in our system. Where under social security provisions the benefits are to be universal it is only right that contributions to the fund should likewise be universal. Income tax, incidentally, reaches, I believe, only about half of our working population. It seems clear that all should take at least some part, however small, in making provision against need.
I commend those words to hon. gentlemen opposite and suggest to them that what we are doing now, at least to the extent of $183 million, is meeting the pledge which was made by the then minister of finance. Some

The Budget-Mr. Nowlan hon. members will be able to recall that hon. gentleman as he sat on the treasury-benches, and will remember that pleasant voice, his smile, the way his eyeglasses were removed and waved around to make a point. They will recall his attitude that any questions coming from the oppositon were simply something to be laughed at. Many will recall his typical statements, "We are going to do so and so; we shall do thus and thus". And because he and his associates did not do what they promised, we have one of the results with which we are faced today.
Much has been said about the weight of taxation and the terrible thing this government is doing in increasing taxation as it has. What are the proposed increases in taxation? I, like the hon. member for Kenora-Rainy River, am not going to deal with all the details of taxation. As he stated, this debate is going to continue for several days and during that interval many speakers will participate and many questions will be dealt with. In brief we have a two per cent increase-or call it three per cent, if you wish, including social security-in corporate income tax. We have an increase of approximately two cents on a package of cigarettes and of 15 cents on a bottle of whiskey. These increases are introduced and hon. gentlemen opposite immediately rise and proclaim that the whole social and financial structure of this country is going to come crashing down on our heads and that the Minister of Finance, like Samson, has disturbed the pillars and now the temple will come crashing down in ruins. If that disastrous event should come about I am sure that both the Minister of Finance and the Prime Minister would be willing to start smoking cigarettes and drinking whisky to save the economy, but I think we need have no fear of such a catastrophe occurring.
I want to suggest to hon. gentlemen opposite that the financial fabric of this country is what we inherited.


John Whitney Pickersgill: Rubbish.


George Clyde Nowlan: If it is as bad as critics suggest today then I can only remind them that we inherited this condition which certainly belies and beclouds all the boasting we used to hear from hon. gentlemen opposite when they sat on this side of the house about the greatness of Canada, one of the leading nations of the world, brought to the forefront through policies they introduced, a nation strong financially, internationally and in every other way. Hon. gentlemen opposite now depict us as a nation of frightened rabbits scurrying through the bushes, weak, emaciated and timid, all because of a little tax on whisky and cigarettes, and a two per

cent increase in the corporate tax. No reasonable person believes what is said to this effect by hon. gentlemen opposite. That is why I suggest, emphasized by the great interest we see aroused in this debate on the part of the public, that there exists on the part of the Canadian people a general acceptance of this budget.
Through you, Mr. Speaker, I would ask if any hon. member has ever seen a budget in which substantial tax increases are advocated, promulgated and brought forward, which has been so readily accepted by the nation as has this budget? I use the word "accepted" advisedly. Oh, I am quite convinced there will be no paeans of praise nor any hallelujahs, but I am certain there is general acceptance. Even hon. members sitting in this chamber bear their share of the burden of the increased taxation. I am sure none of us wants to throw his hat in the air and boast about it. But, as the hon. member for Bumaby-Coquitlam (Mr. Regier) has pointed out, the press and magazines of this country have already accepted the fact that increased taxes were necessary and that the Minister of Finance has developed a system of increases which on the one hand will tend to stabilize our economy and ward off the dangers of inflation and on the other hand not interfere with the economic development of the nation or deter the course of recovery which is taking place at this moment.
Reference has been made to broken promises. I suppose there has never been a budget brought down about which some reference of this nature has not been made n terms of broken promises. There is no question but that statements were, have been and probably always will be made during the course of election campaigns, both inside and outside of this house, in connection with the financial affairs of this country and reduced taxation. Such statements were made during election campaigns held prior to 1957.
Let us examine what has transpired. Early in 1957 and probably prior to then this country was entering into a serious business recession months before we came into office, the seeds of which recession had been sown, had sprouted and were almost in full flower prior to our taking over the administration of the nation. That is a fact, Mr. Speaker-


John Whitney Pickersgill: That old myth.


George Clyde Nowlan: That is a fact. I do well to remind hon. gentlemen opposite once in a while of the fact that the indications of this recession were well known to hon. gentlemen opposite when they were in power and were concealed from this house and from the people of Canada. If we had had a proper appreciation of the financial facts which they

knew and deliberately concealed perhaps some of the statements which were made during the course of the election campaign would not have been advanced with the emphasis they were given. That is the only difference in so far as that situation is concerned.
What happened next? We have emerged out of the depression to a remarkable degree. My friend the hon. member for Burnaby-Coquitlam made reference a moment ago to retail sales. 1 wonder if any hon. gentleman in this house could name a retail merchant in any constituency in Canada who having experienced normal circumstances, and quite apart from unique or peculiar situations involving a strike or something of that sort, would not be in a position to tell him that he had enjoyed better and increased business and more sales last Christmas than ever before in his experience?
The province of Nova Scotia is not one of the wealthiest provinces in Canada and it has received substantial assistance from this government. I can tell hon. members that with the possible exception of one or two industrial areas where labour troubles had resulted in substantial unemployment locally, there was not one retail merchant in that province who did not experience more sales last Christmas than at any other Christmas in history and I am sure that the same thing applies generally across this nation. These facts are independent of figures produced by the bureau of statistics. These are facts which everyone knows, which the country accepts and for which the people of this nation are grateful to the present government.


Some hon. Members:: Oh, oh.


George Clyde Nowlan: Do not scoff. I am not attempting to take full credit for the government. It has been one of the factors contributing to this situation. Management, labour and government working together have accomplished a tremendous amount for the nation during the last 18 or 20 months and we shall continue to do more in the months that he ahead so that by the end of this year we should experience the highest degree of prosperity that has ever been known in Canada.


Some hon. Members:: Oh, oh.


George Clyde Nowlan: I still hear the scornful laughter across the aisle. I could make reference to a well known quotation but I shall refrain from doing so because it might be personal and I should not want to be guilty of that. I believe that when the budget is brought down next year it will tend to justify the prophecy I have made.
The Budget-Mr. Nowlan
There is a psychological danger of inflation and that is one of the problems with which the Minister of Finance has been confronted. I do not refer to an immediate danger of inflation such as has been spoken of by some politicians and some bankers and a few other people. There did exist in this country,, however, a genuine psychological danger of inflation. If steps had not been taken to deal with this threat, again through the co-operation of management, labour and government which assisted economic recovery, there possibly would have been a real danger of inflation that could have had some detrimental effect on money markets. Certainly when words of warning about inflation were spoken by so-called financial experts they carried some weight.
The minister dealt with that in his budget, and by increasing taxation substantially and yet not exceptionally, by reducing the budgetary deficit substantially next year, he has given to the people of Canada an assurance, implied from this government, that we are not going to stand idly by and watch the fires of inflation develop a head of steam in this country. The people can accept that, and that is why this budget has been framed in the way in which it has.
I am not sure whether it was the financial critic or the hon. member for Burnaby-Coquitlam who referred, of course, to unemployment and the dire state of employment in this country. We hear a great deal of talk about that at all times and we all realize that when one man is unemployed it is a tragedy as far as he is concerned, and the more there are unemployed the greater tragedy it is. No one certainly sitting on the treasury benches, or no one sitting on this side of the house, and certainly on the other side as well as far as that is concerned, would for one minute attempt to minimize the tragic effects of unemployment where it does exist. One of the paradoxes, of course, of the immediate situation is that you get all those indices of expanding economy, higher wages, more men employed than ever before, and all the other matters to which reference could be made, and yet we do have a fairly substantial element apparently of unemployment in this country. We have called it seasonal unemployment in the past. I sometimes wonder whether the true seasonal effects are implied. We who live north of the 49th parallel suffer more from a more severe climate than does the great country to the south of us. Undoubtedly, there is a substantial element of seasonal unemployment; possibly also unemployment due to automation possibly due to other things.

The Budget-Mr. Nowlan There is a backlog of unemployment which has been generated owing to economic conditions.
Someone has asked: What is the hope for the future? What about employment? I would like to point out something, Mr. Speaker. These figures may have been put on the record before, but they certainly deserve repetition if they have. The number of Canadians working in mid-February, and there are far more today, according to the D.B.S. figures, was 5,247,000, or 152,000 more Canadians than ever worked before at that time of the year. That is the wonderful record of employment which has been achieved in this nation. Similarly, the number of people without work, reported under the D.B.S. system, was 26,000 fewer than it was in February of the preceding year. We were employing substantially more, over 152,000 more, and unemployment was dropping, and this under economic conditions which we have been told have been made terrible by this government.
Let us speak of the deficit and additional taxes. The Minister of Finance is critized for those additional expenditures. I would like to commend to the house those figures on the contributions to the provinces, the payments which we are making to the provinces of Canada only in comparison with what was assumed three years ago. It will be found at page 2410 of Hansard. I think those figures should commend themselves to every member of the House of Commons and to every intelligent person throughout this country. My time is running out but we find that in the 1956-57 fiscal year-just two years ago-the total contribution made two years ago by the treasury of this country, by the minister of finance, by my hon. friend's predecessor, was $689 million. That was the last payment made by the immediate predecessor of my hon. friend. According to the budget which the present Minister of Finance has brought down for which he is critized for imposing higher taxes, for which he is critized because t still has a deficit, what is the situation? According to those figures, for the fiscal year which will end next March 31 the total contributions to the provinces will be $1,212,500,000, virtually twice the $689 million which was paid three years ago. Yet this government is criticized for breaking promises, for not having a dominion-provincial conference called, and so forth. This government has done more in connection with these matters than the preceding government did in the 25 years preceding this budget, and make no mistake whatsoever about that.
In the past three years we have doubled the total amount of payments which the preced-

ing government made to all of the provinces for all purposes, conditional and unconditional.


John Whitney Pickersgill: You have not been in office three years. You are including Mr. Harris' increase in 1957.


George Clyde Nowlan: I would not praise Mr. Harris' budget because I still remember something about one cup of coffee and two lumps of sugar, or two cups of coffee and one lump of sugar. It was one or the other.


John Whitney Pickersgill: If his was two, yours was three.


George Clyde Nowlan: This is the government which is not giving leadership; this is the government under which there are financial problems; people are suffering because of our leadership. I have the white paper in front of me. I have not time to refer to it, but some of you have seen a summary of part of it in the Globe and Mail. I am reading from an editorial of April 10, which is a reflection of the figures which appeared in the white paper:
The personal incomes of Canadians totalled $24.6 billion in 1958, highest such figure in their history. Average annual wages were at a peak of $3,534. Farmers had the second biggest earnings on record-$2.8 billion, just 2 per cent less than in 1952. Canada's gross national product passed all previous marks at $32.2 billion.
As the Minister of Finance pointed out the other night, in the table appears schedules dealing with increased taxation. I refer to the increase in the personal tax. He detailed to the house what the increased income tax would mean to the average family of this country, a married man with two children, and three children, and the various salaries ranging from $3,000 up. Do not forget that this increased tax does not fall on the medium and middle groups. Although it is true, as the minister pointed out, we have raised income taxes this year over what they were last year, nevertheless the increase does not offset the decrease in taxes which he brought in in his preceding budget, so that those taxpayers in that great group, the intermediate and medium group, are better off today than they were before, vis-a-vis income taxes, even after the increase which we have proposed to impose by this taxation increase. In fact, social security has been improved, we have a hospital scheme and all these other things to which reference could be made if time permitted.
I note by the clock, Mr. Speaker, that I have but one or two minutes left. I do not think anything more I can say will point up the argument I have attempted to make. Scan the record, see what the government has done and how it has been accepted by the people of Canada. Despite the one or two scornful laughs I hear from the other

side-you have to expect one or two but the majority over there must be so woeful that they dare not laugh out loud-the country is accepting the fact that because of a combination of circumstances, over a substantial number of which we had no control whatsoever, increased taxation was necessary; that increased taxation to the extent to which it has been imposed is justified and that this government by controlling inflation or holding out the threat that if inflation should start it will be drastically controlled, while at the same time approaching a balanced budget and providing these additional benefits, has given the type of fiscal security and financial leadership that the nation wants and expects. The result will be that Canada will achieve a higher standard of production and prosperity than it has ever known before.


Mr. Speaker:: Before I recognize the hon. member for Hull, I should like to say a word about the subamendment which has been put from the chair without objection being taken as to its propriety. There are two features of the subamendment which appear to me to raise doubt as to the regularity of accepting it.
In the first place the subamendment "regrets that the government has failed to present to parliament a planned financial and economic program." That is very reminiscent of the subamendment moved in the debate on the address in reply to the speech from the throne which added after the word "policies" the words "caused by the absence of social and economic planning."
But there is a further point to which I think I should at least refer before the debate proceeds. Although the amendment condemns the government for increasing taxes rather than reducing them, the subamendment calls for the establishment of a capital gains tax, which is contrary to the amendment itself. To my mind a subamendment should be such that it relates to the same subject matter as the amendment, to the degree that if both the amendment and the subamendment were accepted they would make sense together.
I am not sure that in a wide-range debate such as this it will be restrictive in any sense of the privileges of the house or of the freedom of debate whether or not the subamendment is allowed to remain before the house or not but I should not like to be met in the future with this subamendment as a precedent on relevancy. Therefore I take the opportunity to enter this caveat before calling on the hon. member for Hull.
(Translation):


Alexis Pierre Caron: Mr. Speaker, I must say right in the beginning of my remarks
The Budget-Mr. Caron that the budget introduced by the Minister of Finance (Mr. Fleming) has been received in Canada with the greatest disappointment, not so much because of tax raises in themselves but mainly because of the state of mind of those hon. gentlemen who, when they were sitting on this side of the house, invariably grumbled against any tax increase that might be submitted. As a matter of fact, I remember quite a number of speeches by the Minister of Finance, when he was sitting on this side, and the vigorous language he used in lambasting the government every time taxes went up. When on the other hand, the government proceeded to cut down some taxes, the minister-when he was sitting on this side of the house-still found fault with that, complaining that the tax cut was too small. Besides, the present Prime Minister always referred to the Liberal government, as the "taxing government". Now, on December 24, 1958, the Montreal Gazette had this to say:
(Text):
"The high tax party has been in power too long," declared Mr. Diefenbaker in 1947. "The taxes have become confiscatory and can, if continued, bring about the end of our system of free enterprise."
(Translation):
This was the present Prime Minister (Mr. Diefenbaker) speaking at the time. Today he seems to have forgotten it all. And the Gazette reported further:
(Text):
The Conservatives promised to reduce taxes, and this they have done in two separate takes, to the amount of about $200 million per year. So, as things now stand, they have done what they were pledged to do.
Mr. Diefenbaker and his colleagues emphasized time and time again, taxes were so high as to "penalize success, neutralize incentive and diminish production."
(Translation) :
Such was the language of those hon. gentlemen when they were sitting on this side of the house. And each time they had a chance to speak about the budget, the present Prime Minister and several of the members of his cabinet kept asking that a royal commission investigate expenditures made in Canada. Furthermore, I find in the Gazette of February 19, 1959, the following text: (Text):
During the long years that the Conservatives decorated the opposition benches, they built up over the years a warm affection for the proposition that a royal commission should be set up to probe federal government spending and recommend possible savings. In those days, all true Conservatives stood four-square by and for the project. They made no secret of the fact that they were appalled at the rate at which the Liberal government of the period could spend money and of their related conviction that something should be done about it.

The Budget-Mr. Caron (Translation):
Those are the gentlemen who today extol the many expenditures they have made and propose new taxation without seeming in the slightest degree embarrassed. General criticism throughout Canada had foreseen that such orgy of expense on the part of the present government would necessarily lead to the present conditions. And I find again this in the Montreal Gazette, a publication which can hardly be labelled Liberal:
(Text):
Birds that come home. Spending of this kind is hound to create a deep deficit. And the deficit [DOT]will be filled only by more taxing or more borrowing. As far as taxation is concerned, Canadians have already reached a worrying level.
(Translation):
This was on February 10, 1959. Therefore, even papers supporting the government were afraid of conditions that might follow in the wake of such extravagant and exaggerated spending, which did not always aim at correcting conditions in this country.
If, at least, those expenses had considerably reduced unemployment, they would have been accepted as well as deficit budgets; but, no, the situation grew worse from year to year. Though there is some decrease in unemployment figures, if we add to them all the people who are no longer entitled to unemployment benefits, the number will be greater than those statistics indicate. Moreover, we read in the Montreal Gazette of December 26, 1958:
(Text):
The unbalanced wheel. What is to be done now? The government, by spending beyond its revenues, has incurred a budget anxiously large. But it has also, without doubt, made its contribution to national inflation.
(Translation):
And that is a tremendous truth. I was flabbergasted the other day Mr. Speaker, when I heard the minister state with a broad smile, Mr. Speaker, that the deficit this year would not be a billion, not even 700 million, but only 617 to 618 million dollars and, moreover, looking quite smug, announced a general increase in taxation which is going to affect everything walking on two feet in Canada, and tell us later in French in a poetical flight:
We have withstood the disturbing calm of recession, and the winds of prosperity again fill our sails, as the basic strength and soundness of the Canadian economy again assert themselves. With a united, determined and confident population, Canada marches on unflinchingly towards its bright destiny.
Mr. Speaker, this puts me in mind-


Some hon. Members:: Hear, hear!


Alexis Pierre Caron: You can pound your desks as much as you like! This puts me in mind of
[Mr. Caron.l
Nero who sang his poems and plucked his harp while Rome burned.
I notice that these hon. gentlemen have stopped their applause.
Mr. Speaker, the government announces an estimated deficit of some $335 or $350 million, and I am convinced that, if the government really did its duty, the deficit would be much higher. In fact, if the deficit is only $335 million, it is because the government has failed to act as it should.
For instance, we are now able to see- which has been said and stated by every economist,-that the unemployment insurance fund has declined dangerously. To my mind, Mr. Speaker, there are only two ways of settling the matter. We should pay an amount of $300 or $400 million into the fund in order to put it in a more favourable position. Now, there are only two ways to levy such an amount: either it should be taken out of the consolidated revenue fund, which would add to the estimated deficit, or the rate of contributions should be raised, which would mean an extra tax on all workers in Canada.
Either way it would be bad, and I am afraid the government might lack the courage to take drastic action as would seem warranted under the circumstances.
Mr. Speaker, there is another matter which the government failed to deal with, and seems unwilling to approach. It is the question of civil service employees.
We have in this country civil servants who are getting much lower salaries than those paid in industry, a good many of whom for instance, are getting $3,000 a year or less. There are many married employees with two, three, four, five or six children, whose take-home pay varies between $50 and $60 a week. I think their position is quite deplorable and if the federal government were to do its duty, the civil servants should get a general increase, which would again add $300 or $375 million to the estimates for the current year.
I do not know whether the claims of federal civil servants and their plight are not being recognized because of a statement made by the hon. Minister of Defence Production (Mr. O'Hurley) during the by-elections of Mont-magny-L'Islet, when he said on October 28th, 1958-and you might note that this was in a public meeting, Mr. Speaker:
"We didn't succeed In bringing the boys from the Civil Service Commission to heel, but we shall get the better of them and manage that business ourselves."
Well, Mr. Speaker, I maintain that such attitude on the part of a minister of the crown, whose statement has been refuted

neither by the Prime Minister (Mr. Diefenbaker) nor by another cabinet member, gives rise to some fear with regard to the future amongst federal civil servants in spite of many years of service. They dare not express their views, even on matters having to do with their most urgent needs, and most particularly their salary increase. Some of them dare raise their heads, but most of them are afraid-and besides, we have heard hon. members repeat the same thing-that the people sitting on the other side of the house will apply the axe to them.
Mr. Speaker, it is not taxation that we condemn, but the incompetent and unwieldy administration of this government. The present taxation affects everybody. It is all very well to claim that income tax affects only those having an income of $3,000 or more, but the fact remains that the additional tax for old age pension purposes affects everybody, as does the higher sales tax.
Mr. Speaker, the hon. Minister of National Revenue (Mr. Nowlan), speaking about the increased sales tax, said: "What will be the reaction to the 2 cents increase on a package of cigarettes?" That statement is false, Mr. Speaker; the present tax is $1 per 1,000 cigarettes, which actually represents an increase of one cent per package. However, since the new tax has been applied in the province of Quebec, cigarette manufacturers have increased the price of a package by 3 cents instead of one cent. A package of cigarettes which sold for 37 cents now sells for 40 cents; one which sold for 46 cents now sells for 50. And the same thing applies to the gasoline tax and every other tax. People take advantage of that increase in taxation to boost their own profits. This is due to the fact that the government did not foresee how to proceed with such increases; and this, of course, will substantially increase the inflationary trend.
Mr. Speaker, there are two problems...


Mr, Pigeon:: The national printing bureau!


Alexis Pierre Caron: I shall come to that later, and those who know nothing of the situation will not prevent me from doing so.


Mr. Pigeon:: Thanks for the compliment.


Alexis Pierre Caron: Mr. Speaker, there are two continuing problems-problems that the hon. member will perhaps never understand, blinded as he is by partisanship-which call for serious consideration: I mean inflation and unemployment.
Inflation is probably the greater of the two because it places Canada in a very alarming situation. We see in various newspapers, and 66968-9-168
The Budget-Mr. Caron in reports of meetings, statements by bank managers and insurance companies, in other words by people who know something of finance, to the effect that criticism is being directed against the government.
For instance, in the Citizen of December 26, 1958, we read the following:
(Text):
-Less than a year and a half after the Liberals turned over control of the nation's affairs-with the treasury in a healthy condition and the only grumblings arising because of the size of surpluses-the economy is suffering from stresses and strains. It is plagued by the twin apparitions of inflation and unemployment, neither of which the Diefenbaker magic appears capable of shooing away.
(Translation):
We read also in the December 30, 1958 issue of the same paper, the following:
(Text):
Then there is the subject of the gross national product (the sum of all goods and services produced during the year) ... 32 millions.
-This figure represents a two per cent dollar increase over 1957 which, on the face of it, seems to be a heartening growth. The fact is, however, prices have risen by approximately the same amount during the 12 months so there is, in fact, no physical increase in our national product at all.
(Translation):
And speaking about inflation, a western paper, The Herald, a paper in full sympathy with the Conservative party, writes as follows:
(Text):
In an editorial called "Crisis of Confidence", the Herald took a long look at the six billion dollar-
Said the Herald: "This newspaper, as its readers know, supported the Conservative party in its bid for power. We devoutly wish we could now assert that Canada's finances are being managed as well as they could possibly be managed. But we cannot in all honesty make such a claim."
(Translation) :
It was a Conservative paper which expressed itself as follows:
(Text):
We do not think the present government of Canada is managing our country's finances as well as they could be managed. On the contrary, we have reluctantly come to the conclusion that Canada is heading for a serious financial disturbance; that the nation's confidence in money is being undermined; that the market for government long-term bonds is likely to become progressively more sticky; and that Ottawa will increasingly have to resort to short term borrowing, which is the most inflationary of all the available methods of providing the cash which the government must have to carry on.

The Budget-Mr. Caron (Translation):
Mr. Speaker, there were a number of other quotations I intended to read, but I shall have to set them aside, because my time is running out. However, I must quote the following:
(Text):
In the decade after 1946, this volume climbed by about three per cent per year whereas the money supply rose by about five and a half per cent annually.
In the last 13 months, the volume of output of goods and service remained virtually unchanged. But the supply of money in the hands of the people increased by a startling 14 per cent.
The increase in the money supply in the last 13 months has totalled $1,500 million. It is much greater than in any similar post-war period.
(Translation) :
Mr. Speaker, there is criticism from all quarters.
Here is another case:
(Text):
Fewer Bonds Held by Public
Here are the figures which show the continuing recent decline in public investment in government bonds, not including savings bonds:
At August 28, 1957, this figure stood at $6,159 million.
At June 25, 1958, it was $6,013 million.
At September 24, 1958, it was $5,597 million.
The trend is unmistakable. It is down, down, down.
During the same period, the gross public debt has been going up, up, up.
Again, here are the gross public debt figures for the same periods:
At August 28, 1957, this stood at $14,765 million.
At June 25, 1958, it was $15,507 million.
At September 24, 1958, it was $15,815 million.
As of October 20, it was over $16 million.
The gross public debt is still going up, having reversed the downward trend last year.
(Translation):
As you can see, Mr. Speaker, those are statements from outside, but let us take one from another source. I quote:
The greatest inflationary pressure that exists today is reckless government expenditure and extravagance. And if the government is going to preach the virtues of thrift and care to the individual Canadian, I say let it begin in its own house. Before plucking the mote from the eye of the individual Canadian, I say to the government "first pluck the beam out of thine own eye". There is no more inflationary force in Canada today than the full weight of reckless government expenditure and extravagance.
Those, Mr. Speaker, are the words spoken by the present Minister of Finance on March 27, 1956, as reported on page 2648 of Hansard.
It can be seen, Mr. Speaker, that the present Minister of Finance's policy for this year is being criticized not only by people from outside, but the minister himself condemned such a policy in 1956. Yet, he comes forth with a wide grin and says: "Everything is fine, all is well; everything has burned, including the stables."

The danger of inflation does not threaten our country alone; it is much more serious than people apparently realize. In 1920, Lenin stated:
(Text):
Lenin advised his communist followers that Inflation was one of their chief weapons for the world revolution they hoped to bring about. Lenin said the best way to destroy capitalistic countries was to demolish the purchasing power of their currencies.
(Translation):
Moreover, Lord Keynes, in discussing the situation at about the same period, said to the British: "Take care not to fall into the hands of communism by supplying it with potential weapons". This, in fact, was nothing new. Karl Marx himself, in his book Das Kapital, made the following statement:
(Text):
The surest way to overturn the social order is to debauch the currency.
(Translation):
Mr. Speaker, I am not suggesting that the members of this government, including the Minister of Finance, have communist leanings. No, they are against communism, but through their careless administration, they are doing exactly what Lenin called for as a means of changing world organization and putting it under communist control. That is the kind of administration the country is getting. They are the ones who come forth with a wide grin, and who assure us that they are in the process of saving Canada and placing it in a position such as we have never known before.
Mr. Speaker, I may add that in France, it was after an inflationary period that, in 1789, the people revolted after they had had enough of destitution and hunger. They revolted, the guillotine entered the picture, and all those who did not share their views were wiped out.
It was with the help of inflation in Russia, in 1917, that the communists succeeded in their revolution and one has only to read history to be convinced.
In 1948, the Chinese revolution succeeded on account of this inflationary system which placed the people in a condition worse than mendicity.
Again it was due to inflation that Hitler managed to take over the exclusive control of his country and, later, to launch war.
In 1923, in Germany, it cost, I believe, 1 million marks to take the streetcar while those who lived in the country could pay off a mortgage with a cow or two pigs.
Well, Mr. Speaker, because of that situation, Germany went for the exaggerations of that braggart Hitler and followed him in

a revolution which brought about a world war for which we are still paying today.
Mr. Speaker, this situation cannot last. This government cannot boast of having accomplished a marvellous task for, if it were really serious, it would have followed rather the advice its supporters were giving us when they sat on this side of the house.
Mr. Speaker, since it is six o'clock, I move the adjournment.
(Text):
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m. (Translation):
Alexis Pierre Caron: Mr. Speaker, when the house adjourned, I was speaking about inflation and its great dangers, for inflation leads to a vicious circle because of increasing living costs and receding monetary value. Salaries have to be increased in order to allow the worker to follow the trend towards higher living costs. Now this generally brings about higher production costs. Because of competition on foreign markets, high production costs generally lead to the loss of those markets, and, finally, to the closing down of a number of industries. By this very fact, the vicious circle causes increasing unemployment at a time when it is our duty to check it.
Unemployment is the second point I want to stress, because it remains a serious obstacle to our economic development. Statistics reveal that in some parts of this country,-and I admit the fact-unemployment has slightly decreased, while in others, it shows a small increase. Therefore, as I said this afternoon, if we add to the number of those that are now unemployed all the people who are not registered as such, having no more stamps giving them the right to draw benefits, I maintain that the unemployment situation is as serious as last year at the same time. This entitles me to say that the government has the responsibility to see to it that unemployment is considerably reduced, because Canada cannot go on having 500,000 unemployed each year, as is the case now. In fact, even if that number were much lower than the figure of 500,000 indicated by us, the problem cannot be a permanent one. Nevertheless the issue remains a serious one and as the government seems unable to settle it, the load falls back on the municipal government.
The Budget-Mr. Caron
The people who do not get enough, as well as those who are not paid any benefits now, have to appeal to municipal governments to obtain food, clothing, housing and heating, which considerably increases the cost of municipal administration with regard to public welfare. Therefore the government should consider it its responsibility, if it is able to do so, to find the means to remedy this persistent evil, which, even if it has been reduced in some areas of this country, has considerably developed in others.
Let us, for instance, take Newfoundland, where unemployment is on the increase, Quebec where it is also growing, and Ontario where an important rise has been noted even if unemployment did recede in some areas.
The Minister of National Revenue (Mr. Nowlan) told us this afternoon that employment is on the increase, that more people now have jobs than at the same date last year. That is normal, in view of the increasing population; in fact, it would not be quite normal, if there were no increase. In any case, with over 500,000 unemployed in Canada, even if more people now have jobs, for people who do not work and have not sufficient income to look after the needs of their families, the problem remains a serious one.
When there are more than 500,000 unemployed in the country, and when, in addition, there is inflation, it is normal that the worker should ask for higher wages, in order to keep pace with events; however, salary increases, as I said a moment ago, might be a dangerous thing. On the other hand, if the government, through its laws and taxes, hits every pocket without exception, increases the cost of living, can we blame the worker for claiming higher wages? The minister said it in Toronto: "People will have to tone down their demands."
Well, the only way to tone down people's demands for higher wages is to reduce the cost of living, and that is one of the duties of the Minister of Finance. He has been advised to do so since he took over his post; he has been advised by the Liberal party, by the C.C.F., by labour leaders across the country, by industrial management, by bank managers, by directors of insurance companies, in other words, by all those who are interested in the welfare of Canada. Now, what has he done, nothing or nearly nothing. And what has the government done? Of course, we will be told that it has spent about $15 million to help municipalities in their winter work
2634	HOUSE OF
The Budget-Mr. Caron program. People had not had time to prepare in advance. We are told this helped 30,000 unemployed, but what are 30,000 people out of 550,000? On the whole, it is not a very substantial help. What we need is a much more energetic cabinet. Here are people who, at the present time, are content with saving their own skins, with saving their own political party from bankruptcy and from the disrepute into which it has fallen. That is why there are so many requests on the part of labour unions. Instead of always asking for higher wages, they should tell those who are responsible for the administration of this country: "If you do not want wages to go up, see to it that there is no increase in the cost of living." Drastic means should be found to reduce the cost of living. It is the only way for us to develop a link between capital and labour in Canada.
Mr. Speaker, our foreign market is in jeopardy. I do not blame workers for finding fault with the government, since the government brought about that danger. As a matter of fact, the problem facing us today is actually a Conservative problem. We had to face the same problem with the Bennett government which had imposed comparable legislation on markets, the same legislation on tariffs and the same increases in every segment of the economic life. It was described as the "blasting" Bennett administration. Today we have a new government which follows a policy strictly patterned on what the 1930 government has done. It will be called the 15 percent Diefenbaker government. For the people the result is the same: hardship, and the same difficulties. The cost of living is increasing and the people are unable to find what is needed for a decent living.
However, when the same gentlemen were sitting on this side of the house, they boasted they could administer everything without boosting taxes, that all they had to do was to cut down expenditures, and they promised everything in sight. To-day they keep apologizing and saying that they are compelled to take such action. They are compelled to do it because they placed themselves in a situation which forces them to take such steps. That is why, I submit this government was remiss in its duty when it tried to take office through promises it could not keep. Our friends criticized the Harris budget which, we realize it now, was a sound and wise budget, designed to work out a policy capable of checking inflation, as well as of reducing


unemployment. Now, after blaming the previous administration for some tax increases, they have no hesitation in taxing everybody. In point of fact, only four-legged animals are not taxed.
Mr. Speaker, I dealt with the necessity for the organized workers to ask for higher wages due to the lackadaisical attitude of the present government. But there is also the danger that some elements might avail themselves of the plight of the organized workers and proceed to infiltrate into the labour movement. They succeeded in some instances in introducing people like Knowles, and there was already a Forsey to prepare the ground for them.
And in that way, organized labour is being brought into the political field, something that is extremely dangerous. Instead of being helped, the workers are being enslaved. The idea is not new, because it was attempted in the United States in 1920. It is an idea against which labour should react, because when it was put forward, in the United States in 1920, such intelligent leaders as Lewis, Hutcheson and Gompers, fought tooth and nail against the encroachments of politicians into the field of organized labour.
La Patrie, in its Sunday issue of January 4, published an article written by Mr. Manuel Maitre, which reads as follows:
Canada, a young country with a brilliant future, but not immune to political adventure, unfortunately seems ready to throw itself into the wolf's jaws heedless of the experience of others. Indeed, it requires no crystal ball but merely good eyesight to say that Canada's national labour organizations and unions affiliated with American bodies-which admittedly are a vital necessity throughout the world-will tomorrow be rallying under the sole banner of the CCL (beginning with our own CCCL) and will, as a result, become an obedient and well disciplined tool in the hands of the C.C.F. which by throwing the working masses, whether passive or militant, into the great adventure of the next federal electoral battle, may become a dangerous opponent for the Conservative party, replacing the Liberal party which is greatly weakened in several provinces. As the saying goes, forwarned is forearmed. Canadians . . . should look before they leap, because it will be too late after. It will be too late if a socialist government eventually gains power in Ottawa, as this might be the first step towards communism sooner or later. Let us hope, therefore, that labour will keep "outside politics" in Canada as elsewhere, so that we may avoid the dangerous excesses to which such a course might lead.
I have here an article written by Mr. Hutcheson, an American labour leader of the 1920's who kept the unions from falling into a political movement. I quote his words:
For some time now, under the skilled leadership of certain politicians-

Mr. Speaker, I shall have to cut this short, because my time is running out.
(Text):
No one will gainsay or deny the importance of political action on the part of wage earners in their constant struggle to right the wrongs and to secure to the workers a full and equal opportunity to life and liberty and the pursuit of happiness.
(Translation):
This is something written in 1920 by Mr. Hutcheson:
(Text):
Differences arise not on the principle of political action, but to the extent of which economic trade union determinism should be supplemented by political power and influence of the wage earners should be manifested.
That there is room for improvement in the efficient exercise of the political power of the wage earners is freely admitted. The dangers of exercising this power from a purely partisan political standpoint (emphasis ours) is convincingly portrayed in the report of the executive council . . . With the increasing tendency to place employees in public and semi-public utilities under public and governmental control there is an increasing need of more closely solidifying the forces of labour in all their varied manifestations and in such a manner as not to interfere with the workers' freedom of choice and freedom of action. To render ineffective, or to hamper in any degree, or to lessen the importance and value of trade union economic determinism merely to attain possession of political authority, to place into dominance political parliamentarianism will not have been a gain but a loss to the advancement of the workers to a fuller, a freer, a better and nobler life.
(Translation):
As you realize, Mr. Speaker, intelligent leaders, the American labour leaders who created the American unions out of nothing in 1907, fought like lions to get for the workers the right to be represented when the importance of organized labour was being discussed. Well, those men, who even risked imprisonment to fight the cause of the worker did oppose the intervention of politicians who tried to creep into their organization in order to bring them to defeat. That is why I believe that organized labour should be exceedingly careful before dealing with those matters.
Mr. Speaker, I notice that time flies and I must shorten my remarks to a certain extent.
It was said this afternoon that federal grants to the provinces, which were $689 million in 1956-1957, would reach $1,212,500,000 for the fiscal year 1959-1960. Well, Mr. Speaker,-and here I address my remarks to the members from the province of Quebec, -this was done by telegram or through the newspapers, even without calling a federal-provincial conference. These gentlemen should
13. 1959	2635
The Budget-Mr. John MacLean recall that during the last general election, they promised that the Conservative party would change that situation, that it would call a federal-provincial conference and that nothing would be done that would not be in accordance with the constitution. Well, Mr. Speaker, today, they have increased everything without even consulting the provinces and I wonder if these gentlemen could tell me where are the centralizers today, and who really abides by the constitution?
Mr. Speaker, I know that they will keep the complacent silence that they have kept from the beginning on that matter. They have not the courage to express their opinions because they are blinded, some of them by the Conservative party theory, others by their leader of the Union Nationale. Nevertheless, it is a good thing that people should know that their promises in that field, as in all other fields, have not been fulfilled.
Mr. Speaker, I still had two points that I wanted to deal with, but I feel that you look at me as if you wanted to tell me that my time has already run out.
But just the same, I want to say that, in a few years, we will be celebrating the hundredth anniversary of our constitution, of the foundation of our Canadian nation. I know that for years there have always been those problems arising between the provinces and the federal government. This situation is natural, because when the constitution was adopted in 1867, Canada was nothing but a small and sparsely populated colony of England and the problems which resulted at the time could be compared to traffic problems. At the time, horses and buggies were all that we had; today, with automobiles, aircraft and all you can think of, the situation has changed a great deal.
The present government should therefore call a meeting with the provinces to review all aspects of this situation, so as to ensure that past errors be avoided in the future, and that there be no repetition of a situation such as that brought about in Newfoundland by the present government. It would also clarify the position as between the provinces and the central government. If the government has the character and the courage to defend its beliefs, it will follow this course. Thus at least one of its promises will not have been ignored, but will have been fulfilled in the best interest of Canada.
(Text):


Mr. John MacLean (Winnipeg North Centre):: Mr. Speaker, I doubt whether I shall ever be as volatile as the hon. member for

The Budget-Mr. John MacLean Hull but I hope the house will find my comments just as interesting as his. At the outset I should like to compliment the Minister of Finance (Mr. Fleming) on the capable, competent and courteous manner in which he presented the budget to the house. In the course of this debate-it has been a short debate so far-the minister has been criticized in rather a destructive way. Of course, in such a responsible office as his he should expect criticism; for he cannot hope to please everyone all the time. But I do believe some of this criticism is unjustified.
The hon. member for Kenora-Rainy River (Mr. Benidickson) made comments at length upon the budget and I should like to deal with some of the points which he attempted to make in this house. He saw fit to suggest that the government had increased taxes at this time only so that in two years time they might decrease taxes. I suggest, Mr, Speaker, that this sort of statement is not in keeping with the hon. member's position in the house. Who likes to raise taxes? To think for one moment that we are going out of our way to raise taxes so that in two years time we can decrease taxes is absolutely fantastic. Do hon. members think that I am pleased, or any member of this government, or any member in this house, for that matter, is pleased when taxes are raised? I know that I myself, and I am sure this feeling beats eternally in the hearts of everyone across Canada when budget time comes, hope that taxes wifi be decreased. However, that is not always possible. I point out this to the hon. friends to my right. If taxes are decreased next year and the following year, or three years from now, it will only be because of the policies followed by the Minister of Finance and by this government.
There has been much talk this afternoon, and there was much talk in the latter part of Thursday evening, with regard to our decrease of taxes late in 1957. It is even being intimated that perhaps this was a pre-election scheme of some sort of the Conservative party-


John Whitney Pickersgill: Was it not?


John Douglas Campbell MacLean: see my friends are following me very closely. I think it is fairly well recognized-and it is recognized by some of the best financial people across this country-that our decrease in taxes at that time, along with our higher expenditures, the two of them combined, were probably the most important forces in stemming and halting the business decline in 1958.
Then, we have this statement by the hon. member for Kenora-Rainy River that the


Prime Minister (Mr. Diefenbaker) is breaking faith with the electorate; he is not fulfilling his promises. He even moved an amendment to this effect. He said the Prime Minister stated that there was no great difficulty to be encountered in bringing about deductions in taxes and also having increases in pensions. The Prime Minister probably did make this statement, but what the hon. member for Kenora-Rainy River forgot to mention in this house was that there was a budgetary surplus of $282 million in 1956; that there was a forecast budgetary surplus of $305 million in 1957 which-and I want to be fair about this-the former minister of finance took upon himself to apply in only his own inimitable fashion and in devious ways to cut down the surplus to $152 million. We have then the Prime Minister making those statements before the election of June, 1957, statements based on huge surpluses two years running by the former Liberal government.
Is it too far out of line to say that the Canadian people took this for granted, that when we were in office, if there was a surplus, we would take that surplus and use it for the benefit of the Canadian people? Surely it is misconstruing the facts entirely and underestimating the intelligence of the Canadian people to say that they believed this hodgepodge; that what was said at that time dealt with economic conditions during the recession or when financing needed to be done in such a huge manner as was needed last year and is needed to be done this year.
The hon. member talked about unemployment, but he is not the only one who talked about it. The hon. member for Hull (Mr. Caron) and the hon. member for Burnaby-Coquitlam (Mr. Regier) talked about unemployment. I would like to talk about unemployment. This is something I want to point out to the Liberal party. Last year and this year they have taken a keen interest in the problem of unemployment. Where their interest was in 1954 and 1955 I have failed to discover. I have searched Hansard for those years and have failed to find one comment by any member of the Liberal front benches about the importance of the disastrous unemployment in 1954 and 1955. Certainly, all unemployment is bad. Let us not forget that. Regardless of what explanation or excuse we place upon it, nobody wants unemployment. I do not want unemployment. We would all like to see everybody with employment.
During the debates on this topic we are forever talking about statistics and figures. The government brings out statistics; the hon. member for Essex East (Mr. Martin) brings out his statistics; and we have a battle royal. But those statistics and figures do not mean

anything to the man on the street who is out of work. This is a problem that was thrown upon us when we assumed office, a problem that was not of our doing, and do not think for one moment that the people across this country recognize that it is any different. And yet, we have our winter works program where we pumped millions of dollars into the program. We have a statement by the Leader of the Opposition (Mr. Pearson) on November 11, 1958 with regard to what he thought of the winter works program. He said in Toronto, Ontario, according to a Canadian Press report of November 11, 1958:
The federal government's winter work program has been made too late to be of maximum effect this winter.
The government's attack on jobs has been "unco-ordinated, unplanned-actions which have resulted in large expenditures without corresponding results in terms of employment."
During the summer there was a seasonal improvement in trade and employment. Canadians showed vigour and initiative in combatting recession and preventing it from sliding into depression, he added. This was in large part due to the social and economic policies brought into operation since 1935 by Liberal governments, policies which had kept up consumer purchasing and cushioned the impact of recession.
He says in effect that if unemployment gets worse it will be the government's fault; their policy and program have no value. Then he goes on to say there was an improvement during the summer in employment and, of course, this was due to the social and economic policies brought into operation since 1935 by the Liberal government. What he says in effect is that if things get worse it is the fault of the present Conservative party; if things get better it is only because the Liberal government was in power for 22 years. What a remarkable statement for the Leader of the Opposition to make. Possibly he has never made a more inaccurate and misleading statement since he assumed office.
On unemployment the opposition currently talks in generalities. I am, of course, concerned with the general picture, but I am more vitally concerned with the situation as it exists in the city of Winnipeg. During the debates on unemployment and during this debate here we have heard their cries about the terrible picture of unemployment and how terrible it is today. Let me point out to them that the situation in the city of Winnipeg at the present time is better than it was in 1955. Where were the cries of the member for Kenora-Kainy River (Mr. Benidickson) in 1955 about unemployment or, for that matter, the cries of any of those on the Liberal front benches? They are not fooling the people of the city of Winnipeg on this very important matter.
13, 1959
The Budget-Mr. John MacLean
Just for the record I want to put these figures on Hansard as they make very interesting reading. On December 18, 1958, there were 17,927 unemployed in the city of Winnipeg while on December 18, 1954 there were 17,447. On January 22, 1959 there were 23,568 unemployed while on January 22, 1955 there were 22,744. On March 19, 1959 there were 22,594 unemployed while at the end of March, 1955 there were 23,374. At the beginning of March, 1959 there were 23,240 unemployed and at the end of February, 1955 there were 23,554, this being the only comparable figure I could get. At this point in our economy the city of Winnipeg has fewer people unemployed than in 1955.


Lester Bowles Pearson: What about 1956 and 1957?


John Douglas Campbell MacLean: can get those figures for you too and they would not be far off.


Lester Bowles Pearson: I would be glad to have them.


John Douglas Campbell MacLean: We
are not fooled by the outbursts of concern and anxiety of the Leader of the Opposition (Mr. Pearson), the hon. member for Kenora-Rainy River and the other members to my right about unemployment. We are not fooled because nothing was said by them about unemployment in the city of Winnipeg in 1955.
The hon. member for Kenora-Rainy River also speaks about trade, but does he speak about credit restrictions under Liberal policy? Is it not apparent, and I believe it is-if it is not apparent to all members of the house it is apparent to the people across Canada-that under a Liberal policy of credit restrictions the recession from which we have now emerged would have in effect become one of the blackest depressions from which this country has ever suffered? He does not tell us of these matters. He does not speak of the greatest trade deficit in Canadian history which was built up under a Liberal government; the greatest trade deficit in the history of the country with the United States of America in the amount of $1,280 million. He does not speak of these things when he is criticizing the budget.
These are some of the things I want to point out to the hon. member for Kenora-Rainy River and his associates. I would also remind them that although the deficit for last year was large, if the Liberal party had been in power the deficit would have been greater, greater by perhaps $675 million.


Some hon. Members:: Oh, oh.


John Douglas Campbell MacLean: Oh
yes, $500 million in tax reductions and $175 million of a tax holiday. The Leader of the Opposition has never said that this is not

The Budget-Mr. John MacLean correct. He made these promises during the election campaign. Can you imagine what the deficit would be today? Can you imagine what the tax increases would have to be? The people of Canada are not being fooled by all this shillyshallying on the part of members of the Liberal party.
I point out all these facts to the members of the Liberal party and the C.C.F. party and their friends in the province of Manitoba who are attempting to use federal politics in a provincial election.


Lester Bowles Pearson: Shame.


John Douglas Campbell MacLean: point out all these facts just to put it on record in order to show that the people of Manitoba are not fooled. We are well aware of the huge budget surpluses of the former Liberal administration before the election of 1957. I am sure that the hon. member for Kenora-Rainy River underestimates the intelligence of the Canadian people when he suggests that they are misled with regard to promises made by the Prime Minister (Mr. Diefenbaker) or by any other responsible member of the cabinet. Does he underestimate their intelligence by thinking that they believed that they were going to get something for nothing? Any promises made with regard to tax decreases can only in effect deal with budgetary surpluses.
With regard to the C.C.F. subamendment I will say that it is quite typical of the thinking that goes on in that corner of the house. It calls for a planned financial and economic program. Those are words they use continually whenever they wish to move an amendment to a speech from the throne or a budget debate. Their amendment is vague in its beginnings. Just what planned financial and economic program they would put into being, heaven only knows.
Then they make two points. This planned financial and economic program would have to do with reversing the trend of interest rates. My heavens, that is exactly what we are trying to do with this budget. Do they think any government wants higher interest rates? The budget dealt with that effectively.
Second, they call for a capital gains tax. There may be some merit in that suggestion but I would think that this matter has been before the present Minister of Finance and Mr. Harris, his predecessor. I would think that the difficulty with regard to a capital gains tax is where you put it into effect and what means you use. For instance, I point this out to my friends on the far right. If you had a capital gains tax in effect, an old age pensioner selling his house and moving into an apartment would be taxed on the proceeds of that sale.


Erhart Regier: Nonsense.


John Douglas Campbell MacLean: capital gains tax would deal with bank accounts. It would deal with everything.


Mr. Winch:: Absolute nonsense.


John Douglas Campbell MacLean: The
pensioner with a bank account would be affected. You would have all kinds of difficulties to surmount. Just how this would be done I do not know. If it is possible to do it on an equitable basis, fine.


Harold Edward Winch: You might but we wouldn't.


John Douglas Campbell MacLean: There is that chatter again. We hear that chatter every so often. Having regard to the way the subamendment is worded and its ambiguity, it is impossible for me to even think of supporting it. We have heard repeated pleas with regard to reducing capital expenditure. The latest plea to that effect was made by the hon. member for Hull. This would be fine in itself. I am one of those who support such a proposal. We must reduce government expenditures in every way possible.
As a matter of fact, the government has reduced expenditures in this budget when you consider our total expenditures in the light of the increased services and the increased population. However, at this point in our economy when we are emerging from a recession I cannot see for the life of me, and I have looked over the budget quite thoroughly, how we can cut expenditures any further.
There are three main branches of expenditure. One of them has to do with national defence. Expenditure on national defence in any free country is very large. It does not appear at this time that much can be done with regard to cutting expenditure on this department. As Mr. A. G. Gardiner sets out in his "Life of Harcourt":
What a good thing for the world it would be if all nations were altogether insolvent. How much less mischief they would do.
But as he noted, "Even beggars will fight." This has been true ever since Victorian days. Beggars have learned to fight with modern weapons and to pay for a good stock of the most up-to-date killing machines, even if they can pay for little else. Perhaps this example is a little far-fetched but in reference to the world scene today a disarmament policy has not been put into effect and at the present time we cannot afford to cut our expenditures on national defence.
Then we come to social security which is another item of major government expenditure. I hope that no one here is suggesting that we cut old age pensions or family allowances. Certainly I for one believe that all Canadians realize that social security has to

be paid for by way of taxes, and I do not think there is anyone who would not expect an increase in the rate of taxation in order to balance the old age security fund. I do not think there is anyone who believes this is unfair at the present time. Let us be realistic.
I should like to say a few words about our old age pensioners. Many of our old age pensioners are barely existing on the $55 a month they receive, and I think most members will agree with me when I say that old age pensions should be increased and perhaps the age qualification should be reduced to 65 years. I am in favour of these two things as are many members of this house. The only obstacle that remains is how to accomplish them.
The government has received Dr. Clark's report which is the result of an extensive investigation into the present social security system in the United States in relation to Canada's old age pension scheme. I have read the report thoroughly, and I must say that Dr. Clark made a very complete and thorough investigation. This report is now in the hands of the government and the existing problems in connection with old age security must be met in the near future. How far such provisions should go and what form they should take are still open problems. There are two things that appear to be needed: one is stability in real terms for payments, and the second is an agreement on a stable proportion of the national income to be devoted to this purpose.
A simple system is needed, in my estimation, to tie the payments to the movements of national money income. I believe the old age pensioner across Canada realizes that this government has his interests at heart, and since this is the case we should stand prepared to alleviate any of the sufferings of our senior citizens. I have every confidence that this assistance will be forthcoming by way of legislation after a thorough study has been made of the fine report submitted by Dr. Clark.
However, I do not believe that this will be enough. I would think that after the government has studied this report in all its details, a national conference should be called to consist of the government and all interested agencies across this country as well as representatives from the various provinces. Then, this conference could re-evaluate the present situation of the old age pensioner. Something must be done and the problem must not be left to the haphazard guessing game of other days. The policy must be a long range one and must be for the benefit of old age pensioners across the country in the years to come.
13, 1959
The Budget-Mr. John MacLean
There is another item, probably the last major item of government expenditure mentioned by the hon. member for Hull, and that is the servicing of the national debt. Surely, no one could suggest that this be discontinued. After these three items, defence, social security and the servicing of the national debt, have been dealt with, there are really very few places for the government to economize. At this time, therefore, we are faced with the only alternative and that is to raise some taxes, yet not raise them too high so as to prohibit the expansion of our economy. Certainly, some budgetary deficit would be appropriate in order to ensure the continued economic recovery of this nation.
Our economy has become dependent on growth and, therefore, very substantial increases in both domestic and foreign demand will be necessary in order to keep pace with the growth of the Canadian labour force and its increased efficiency. We have two problems, therefore, to solve in our present day Canadian economy. One of these problems is unemployment and the other is inflation. It is important, and I believe all financial experts agree with me on this, that the soundness of the Canadian dollar be preserved.
In this connection it was mandatory that an attack be made on last year's deficit, as it was made by the Minister of Finance. I do not believe there is anyone who disagrees with the statement that inflation creates more unemployment than it cures. Not only does it do this, but it affects the savings and investments of a great many people and, in the end, it would lower productivity. It is important, therefore, that we attack inflation. Why do we not go all the way and raise taxes still further in an attempt to balance the budget? This would not be a proper thing to do for, as the minister has pointed out in his budget speech, we have to combat inflation and yet ease unemployment. We have to have an expanding economy, that is our industrial output must be increased. We have to be careful just how high we raise taxes to ensure that our economy does not retract but keeps on expanding. It is not possible at this stage in our economy to ensure an expanding economy other than by way of a deficit budget, although this deficit is a great deal smaller than the deficit of last year.
Our national budget is supposed to provide us with a picture of our finances which will enable us to reorganize the economic life of our country. Our national budget should give us an indication of whether or not the government is really grappling with the problems prevailing in our economic society. I believe in all sincerity, Mr. Speaker, that the budget brought down by our Minister of

The Budget-Mr. Rdbichaud Finance does fulfil these conditions. Since it does this, I believe it reflects the outstanding characteristics of the present government. Let us never forget that the manner in which we govern our country is linked with the manner in which we govern our finances. The wealth of this nation is not measured by statistics relating to fiscal policy; it can be measured only by the amount of goods and services provided to our people and by the standard of living they enjoy as well as their freedoms as evidenced during their daily life in this great country.
It is the dream of every minister of finance to build a perfect budget. Perhaps before too long the present minister may have occasion to do just that. I hope I am sitting in this house when he does. This year's budget has been described in various ways in speeches by hon. members and in the various newspapers across the land. It has been described as a belt-tightening budget, as a recovery budget and in the Winnipeg Free Press in my own home town as a castor oil budget. Some of these things, in essence, are true. I should like to name this budget and call it a sincere budget. I would call it a sincere budget because it is typical of the responsible attitude of this government toward the people of Canada.
In closing I should like to reiterate the statement the Minister of Finance made while presenting his budget last year. This represents the true position of this government. "We stake our unwavering belief in Canada's destiny, and we shall strive to meet the challenge of our responsibilities."


Hédard-J. Robichaud: Mr. Speaker, in his reply following the presentation of the budget on the evening of April 9, the opposition financial critic, the hon. member for Kenora-Rainy River (Mr. Benidickson), stated that unfortunately, as we often find in such presentations by the Minister of Finance (Mr. Fleming), there was an exceeding amount of passion in the presentation of his case but not very much consistency. In so far as the degree of passion is concerned in this year's budget, we are not surprised at all because if we care to look at page 2435 of Hansard we will find that under tariff item 95c the rates in effect prior to the rates proposed in the present budget on passiflora edulis, remain the same. Passiflora edulis, of course, is nothing else than what is commonly known as passion fruit. This fruit is to be allowed free entry under the British preferential tariff and must have been available to the minister in the preparation of his budget at no extra cost.
In so far as consistency is concerned, I can agree with the hon. member for Kenora-Rainy River that this new budget seems to be


directly opposed to the policies the minister and other members of the government have enunciated in recent years. It is my intention, in the course of my remarks this evening, to elaborate to some extent on this lack of consistency in the present policy of the government, as compared with the pre-election stand of its members, and particularly with the stand taken by those who have been sitting on the opposition side of this house in the years past.
My criticism of the present budget will be based on six different points, all the factors concerning which I intend to elaborate, which show the complete lack of consistency, even the lack of policy of the present government. This lack of policy on the part of the government was clearly indicated in an editorial which appeared in the Globe and Mail on Saturday, April 11, under the title "No Policy To Guide Him". This newspaper which is commonly known as being generally not too unfriendly to the present administration clearly states that present tax increases will also increase costs and prices in every sector of Canada's economy. They will make Canadian goods dearer and less competitive at a time when the budget speech tells us, as found at page 2408 of Hansard:
World markets are becoming increasingly competitive, and unless we can keep our costs of production in line with those in other important trading countries we shall find it increasingly difficult to sell our goods abroad and meet the competition of imports at home. Indeed this is happening now.
The minister admits that Canada's prices are too high and still, in the same breath, he introduces tax changes which will increase commodity prices by another $352 million in one full year.
If I were assigned the task of moving an amendment to the present budget I would be tempted as my first suggestion to move that the government has failed to reduce taxes which are an excessive burden on the Canadian people and place our producers under a severe disadvantage in meeting competition from abroad.
The present Minister of Finance, when speaking in the budget debate on April 28, 1954, described the Abbott budget of that year as a "poor, scrawny creature dragged into the chamber by the minister of finance". He then went on to describe the members on the government side as following their usual course of obedient cheering but nevertheless with not much "stomach" for the task that had been assigned to them. He also criticized the Minister of Finance for not offering a substantial reduction in taxes on commodities and for keeping on adding to the cost of living by collecting taxes on the basic necessities of life.

Where is the evidence of consistent policy of the present government in the fiscal field? No later than February 9 of this year when speaking on an amendment to a non-confidence motion introduced by the hon. member for Essex East (Mr. Martin), the Minister of Finance warned the opposition members not to dare to accuse the Prime Minister (Mr. Diefenbaker) of this country of not carrying out the undertakings that he had given. If you dare to do such a thing, said the Minister of Finance, you will find 207 loyal members and followers of the Prime Minister of this country rallying to his support.


An hon. Member:: Hear, hear.


Hédard-J. Robichaud: There they are. I think the trained seals are not so well trained after all because there is only one performing at this time.


An hon. Member:: Stick to your text.


Donald Methuen Fleming: I rise on a point of order Mr. Speaker. I hesitate to suggest this, but I suspect that the hon. member is reading his speech. That is a practice that has been declared to be not in accordance with the rules of the house.


Hédard-J. Robichaud: Mr. Speaker, I am following my notes. I understand it is permissible to follow one's notes.


Mr. Speaker:: I hope that the hon. member who has the floor will bear in mind the fact that it is contrary to the practice of the house to read a prepared speech verbatim.


Hédard-J. Robichaud: Mr. Speaker, on Thursday night last, those witnessing the performance of the Minister of Finance, whether sitting on the opposition side or whether sitting in the galleries, were offered a rather amusing spectacle.


Donald Methuen Fleming: He is
reading verbatim.


Hédard-J. Robichaud: Amid the usual obedient cheering of 207 followers of the Prime Minister, there were bursts of applause as the Minister of Finance proceeded with his remarks. I am wondering how much stomach those members had for their task when applauding the minister's statement to the effect that the 1958-59 deficit would be in the vicinity of $616 million.


An hon. Member:: Turn the page.


Hédard-J. Robichaud: Those same hon. members must have had in mind the warning of the Minister of Finance when again they burst into applause following the announcement of $352 million of increase in the taxation field. In 1954, under a Liberal administration, it 66968-9-168J
The Budget-Mr. Robichaud was a crime for the government of the day not to offer tax concessions or reductions in excess of $26 million with a forecast surplus of $4 million. Let us see what the present Minister of Finance had to say on that occasion. At page 4208 of Hansard we find the following remarks made by the hon. member for Eglinton:
The effects of high taxes are having ever-widening consequences. We see them reflected increasingly today in the high cost of production which is having secondary effects in this country of very serious significance. We see on every hand, every day, Mr. Speaker, the effects of these high taxes in the increasing cost of production, and they have been a major contributing factor in bringing about a situation where our export trade has been falling off to a disturbing degree.
Do you realize, Mr. Speaker, the extent to which, by reason of these high taxes and high costs we have been pricing ourselves out of some of our best markets abroad? The government seems to take no account of that fact, and no responsibility. The effects do not stop with our markets abroad, for right here at home, by reason of these high taxes and the high costs to which they have given rise, we are seeing the loss of our domestic market to goods which are being imported from countries abroad where the burden of taxation is less heavy.
The hon. member for Eglinton is occupying today the post of Minister of Finance, and he is doing just the opposite of what he was advocating in 1954, and this is with the applause and approval of his government supporters.
What did the Prime Minister have to say about high taxation when appealing to the electors of Canada for their support prior to the last election? In Edmonton on March 8, 1958, as reported in the Vancouver Sun of March 10, we find this:
Prime Minister John Diefenbaker indicated here Saturday that if re-elected he will make drastic changes in taxation treatment of oil companies.
He promised "tax adjustments to put Canadians in a more equitable position compared with Americans in exploration and development".
He said later he was referring to the depletion allowances treatment accorded firms under Canadian tax laws, and the allowances permitted against earned income to offset unsuccessful wells.
Then again in Selkirk, Manitoba, on March 17, 1958, as reported in the Winnipeg Free Press:
-Mr. Diefenbaker promised that Canadians would be given opportunities equal to foreign investors in developing the country's natural resources.
Until now, he said, Canadian investors had found themselves at a disadvantage but this would be changed by tax revisions.
What is the result of the present government's policy? What is really happening in the foreign capital investment field? Let us listen again to the Prime Minister's own

The Budget-Mr. Robichaud words. What did he have to say in a "Nation's Business" broadcast on March 9 of this year? Listen to this:
Now, as to the maintenance of Canadian sovereignty-that's a concern, and that's one of the reasons that over the years I've advocated the necessity, in the interests of Canadian defence and of Canadian sovereignty, and of preserving Canadian sovereignty, that action must be taken to assure Canada's destiny by a northern development plan. And it's worked out-in the last few weeks 75 million acres of northern Canada, the wastes of northern Canada they used to say, have been taken up for oil and mineral development. And I want to underline this-that's the way to preserve Canada's sovereignty.
In a question which was addressed to the Minister of Northern Affairs and National Resources (Mr. Hamilton) by the Leader of the Opposition (Mr. Pearson) and answered on March 11, as reported at page 1833 of Hansard, we find that a check had been made of the status of the various successful bidders. There were ten successful bidders, of whom two were United States corporations, and four were Canadian subsidiaries of such corporations. One corporation is owned by United States, Canadian and British interests and there were two Canadian firms. Later on it was found that as to these Canadian firms, only five per cent of the rights in the 75 million acres mentioned by the Prime Minister went to them.
Let us be realistic. Are those United States investors now to be branded as "Yankee pirates" or "Texas buccaneers"? Those were the terms used by hon. members now on the government side when they were in opposition. Are the tax revisions offered by the present government the revisions referred to and promised by the Prime Minister in Selkirk on March 17, 1958? Is this the government's way of protecting Canadian investors? Maybe not, but at least we must take the Prime Minister's word when he stated, and I repeat again his own words: "That is the way to preserve Canada's sovereignty."
What about tobacco? I have here an excerpt from the Toronto Star of February 18, 1958 containing a report of what the Prime Minister had to say at that time about the tobacco industry in Brantford, Ontario. It reads as follows:
Prime Minister Diefenbaker last night dropped a clear hint that the taxes on cigarettes, cigars and tobacco soon may be cut.
He told an audience of 1,400 that no industry in Canada suffers a greater degree of taxation than the tobacco industry.
Tobacco growers, he said, are the one segment of agriculture that has not received the attention it deserves, although growers long have clamoured for government aid.
The Prime Minister added: "We want to give them this assistance. We are having a study made of this industry to see what action is needed to

give tobacco growers a reasonable return and some security for their efforts.
Let us be realistic. We know what the Minister of Finance has done to the tobacco growers in his present budget now under discussion. The government has failed to reduce taxes which are placing an excessive burden on the Canadian people and putting our producers under a severe disadvantage in meeting competition from abroad. The facts are that the Minister of Finance expects to collect this year a total of $5,165 million, plus an additional $245 million in new or increased taxes, or, altogether, an additional $638 million over and above the total tax collections for 1958.


Mr. Brunsden:: On a point of order, the hon. member reads very well.


Hédard-J. Robichaud: Mr. Speaker, with your
permission, I am continuing my speech.


Mr. Speaker:: If the hon. member continues his speech he will do so on the basis that he observes the practice of the house.


Hédard-J. Robichaud: I will try to follow the practice which has been the practice of this house for years, and especially during the present session. I was just saying that the Minister of Finance expects to collect this year an additional $638 million over and above the total tax collections for 1958.
My second criticism of the present budget is that it has failed to reduce unnecessary expenditures. Hon. members of this house who were here in 1954 will remember the criticism which was made by the opposition of that day when the then minister of finance presented a budget estimating expenditures of $4,460 million. We well remember the official critic for the opposition, the hon. member for Greenwood (Mr. Macdonnell) telling us that as long as the government has the pocket of the taxpayers open to it, it does not become realistic. We also remember him saying: "We all know that taxes enter into the cost of production and we all know that nondefence expenditure should be coming down." As a member of the present cabinet, was the hon. member for Greenwood consistent in advising the government to put into practice what he was preaching in 1954? I have reasons to believe that he has been warning his colleagues in the cabinet, but that unfortunately his advice and counsel have reached deaf ears.
What did the present Minister of Finance have to say about waste, extravagance and unnecessary expenditures? Let me refer again to page 4208 of Hansard for April 28,

1954 where we find the hon. member for Eglinton saying the following words:
Mr. Speaker, there will be no effective significant reductions in taxation at Ottawa here until this government faces up, as it has never done, to the problem of its own waste and extravagance. Time after time when proposals have been made in this house for review of the operations of government with a view to introduction of efficiency and elimination of waste and extravagance, our efforts have been defeated by the government.
And again, on page 4207 we find the hon. gentleman saying:
Hidden taxes go on. There has been no attempt on the part of the minister to bring these taxes out in the open so that the consumer, the man who pays for the goods, knows what portion of the price is going for taxes.
Not only is the hon. member for Eglinton now a minister of the cabinet, but he occupies the chair of the Minister of Finance. What has he done to put into practice what he was preaching in 1954? Oh, when I was listening to the minister on Thursday last telling the house and the country that at an income level of $4,000 a year, under the new rates a taxpayer will pay a total of $208, an increase of $14 from the 1958 level, but still $44 less than before the reductions introduced in 1957, I could not help but be reminded of the minister's own words: "Hidden taxes go on." Yes, hidden taxes go on, and the consumer keeps on paying. This same taxpayer will see his $44, his "Tory gift", being gradually pulled out from his other pocket day after day until he himself will be compelled to reach into his left pocket in order to pay his share of the $352 million of additional taxes imposed on him by the present budget. In other words, as a Canadian consumer he will be asked to share and share fully in meeting the requirements of the record Tory budget of 1959 presented by a minister of finance who has lost his regard and concern for the same human beings for whom he was appealing in 1954.
As my third point, I should like to ask the question: what real and noticeable changes have taken place in the administration of government since June 1957? Where is the evidence of all this waste and extravagance which was supposed to take place in the administration of various departments of government? The only change we are able to find is an increase of approximately 9,000 civil servants together with an unknown number of patronage appointees which has added to the ranks of government employees since this government took office. Is this the government's major move to improve the efficiency of its administration?
A fourth subject which is of major interest at this time is the government's complete lack of policy with regard to offering relief to
13, 1959	2643
The Budget-Mr. Robichaud those who are unemployed. In other words, the present budget fails to recognize the plea of the unemployed. What did the hon. member for Eglinton have to say with reference to unemployment when he was speaking in the 1954 budget debate? Then, as recorded on page 4208 of Hansard for April 28, the member for Eglinton, now the Minister of Finance, made this statement:
In consequence we see today Canadian unemployment at a post-war peak. The latest government figures issued by the national employment service have shown that on March 18 the number of Canadians applying for work through that service totalled no less than 570,000. We have had no figure to compare with that in the last decade and a half.
If there were 570,000 Canadians applying for work on March 18, 1954, hon. members might like to know that the registrations at national employment services offices on February 19, 1959 reached a total of 791,210. The March figures when released may prove to exceed 800,000. In other words, the fact of
570.000	unemployed was viewed as representing a serious problem in 1954, but the fact of
800.000	unemployed or an additional 230,000, an increase of 40 per cent, does not seem to worry the minister too much in 1959. "So what?" would say the Minister without Portfolio, (Mr. Browne), the representative in the cabinet from Newfoundland. The present government chooses to ignore the pressing problem of unemployment.
We all know that the Minister of Labour (Mr. Starr) has taken pride and satisfaction in the total cost of projects undertaken by municipalities involving the expenditure of $70 million and providing employment to
30.000	people with the federal share amounting to $15 million. The minister did not state, however, that a large proportion of these
30.000	workers were employed only for the period of a few weeks and in some cases for only a few days. In effect to alleviate winter unemployment the government contributed $15 million or approximately $500 each for two or three per cent of the workers registered for employment throughout Canada.
What has happened to the huge pre-election public works program of $1,185 million that was enunciated to ensure the development of our country and to provide as well help to Canadians, work to Canadians and an opportunity for Canadians to acquire the better things of life? Where are those work projects promised by the Prime Minister (Mr. Diefenbaker) in February of last year when he said that his government would not allow the possibility of deficits in the national budget to stand in the way of providing work projects to try to take up the slack in unemployment?

The Budget-Mr. Robichaud
The words of the Prime Minister in his telecast of February 18, 1958, as reported in the Montreal Star the following day, must be repeated at this time in order to remind the Canadian public of phony election promises:
"As long as I am Prime Minister of Canada," said the Prime Minister, "everything that can be done-everything without regard to limit-will be done to the end that no one will suffer."
In Cornwall on February 24, 1958, as reported in the Winnipeg Free Press, the Prime Minister said:
We have given young Canadians the hope. We have given them the vision.
Yes, a vision it was and a vision it will remain. The Prime Minister must be reminded once again of his pledge to the Canadian electors in an address in Charlottetown on February 27, 1958, as reported in the Toronto Star, when he said:
I make this promise. We acted. My pledge is to every man and woman in this nation who is unemployed-
And there are 800,000 today.
-so long as I am Prime Minister, no one will be allowed to suffer in this nation.
There are public works projects which could be undertaken and which would provide not only temporary employment and temporary relief but that would at the same time contribute to the stabilization of the general Canadian economy. Major public works such as the Chignecto canal between New Brunswick and Nova Scotia if undertaken would help to relieve the unemployment situation in the maritimes. An over-all national program to include consideration of projects which would be of lasting and definite benefit to Canada, should be the aim of the government under existing conditions.
In my own constituency of Gloucester, the Minister of Public Works (Mr. Green) has been offered the possibility of providing employment, and I mean permanent and repeated seasonal employment, to a large number of fishermen and shore workers in different fishing communities. I have placed before the minister requests for a wharf extension at Maisonnette; for the replacement of a wharf at Lower Caraquet which was partly disintegrated in a storm last fall; for the construction of a wharf at Pigeon Hill, to accommodate the fleet of 60-odd fishing boats of the area; for improvements to the entrance of Tracadie Harbour, and Ferguson Gully. Those are the kind of public works projects which should receive priority in the preparation of public works estimates. A new post office building or a new federal building will provide employment during the construction stage, but it will not add to the economy of
[Mr. Robichaud.l

an area as much as a public wharf which can accommodate a fishing fleet and bring in new industries to the communities concerned. In delaying the construction of a public wharf, where its construction has been proven economically justified, the department is contributing to the extension of the serious unemployment situation such as exists today in my constituency, and in other fishing areas of the maritimes.
A request is before the department for the construction of a new wharf at Bathurst. There is a progressive town with a paper mill, lumber mills and other industries, but nevertheless it is deprived of proper shipping facilities. The matter has been before the department for some time and it is urgent that a decision should be reached without delay to provide Bathurst harbour with adequate docking facilities to permit shipping by water the production of its industries.
An important factor in Canada's economy is the disposal of our surplus primary products. Time will not permit me to elaborate on this fifth factor, which shows the lack of direction of the present government and its inconsistency in the application of its trade policy. This is the government which had pledged itself to switch some of Canada's trading eggs out of the United States basket. This is the government which has boasted of its accomplishments in increasing trade and beginning the shift away from an overwhelming percentage of Canadian purchases in the United States. This is the government which, on the eve of the last general election, claimed to have a real plan worked out in detail in order to give opportunities to provide markets. Nevertheless, this is the same government under whose administration the value of merchandise exports in 1958 amounted to $4,890 million, compared with $4,909 million in 1957, a decrease of $19 million, and this notwithstanding the gifts of wheat shipments made under the Colombo plan and without at the same time taking into consideration the annual increase in our population. This is the same government which has lead the country to unwarranted restrictions of quotas on the part of the United States, on imports of certain Canadian products such as oil and base metals.
I am not surprised, that on April 1, 1958, the day following the last general election, a mining company in my constituency, the Brunswick Mining and Smelting, made the announcement of its decision to cease operation at once and place its equipment and machinery in mothballs until the advent of better days to come.
A sixth factor which is clearly noticeable from the present budget is the failure of the

government to reach agreement with the provincial governments in regard to a clearly defined reallocation of taxing powers so that provincial governments and municipal councils may have adequate financial resources to carry out their rapidly increasing responsibilities. Here again, time will not permit me to discuss this subject at length this evening. May I be permitted, however, to remind the house of the words of the present Minister of Finance, then the private hon. member for Eglinton who, when speaking on the 1954 budget debate as reported at page 4212 of Hansard of April 28, 1954, said:
There is the hard fact of the situation, and there is the fact that makes this sophistry we have listened to from the Minister of Finance and others so completely unrealistic. You can talk today about concurrent rights on the part of the provinces, the Minister of Finance and others can say that the provinces have just as much right as they ever had to levy income tax on persons or corporations hut, Mr. Speaker, you must take account of the fact that the federal government is already taxing to the limit in those fields.
Further along he continued:
Nothing will change it except action on the part of the dominion and the provinces to come together to reach an agreement in this field and then action on the part of parliament and the legislatures in consequence.
It is not surprising that a government with no policy to guide it would devote so little attention to a subject of such cardinal importance. It is a surprise, however, that the Minister of Finance has forgotten so soon his own statements as well as those made by the Prime Minister during the last federal election campaign.
I know that I have only a few minute left at my disposal. I have elaborated on six different points which demonstrate the com' plete failure on the part of the government to cope with existing problems and I have illustrated its inconsistency and lack of policy in the administration of the affairs of the country. I am sure the hon. member for Greenwood (Mr. Macdonnell) will be quite familiar with the six points I have mentioned this evening. So far as the other members on the government side are concerned, I would refer them to pages 3992 and 3993 of Hansard for April 12, 1954, where they will find those six points included in the amendment of the official critic of the opposition on the 1954 budget presented by Mr. Abbott.
In view of the contents of the present budget, I cannot see how the hon. member and those on the government side who were sitting in the opposition at that time cannot vote in favour of the amendment introduced this afternoon by the hon. member for Kenora-Rainy River (Mr. Benidickson).
We were accused then of failing to reduce taxes when in reality the budget offered $36
The Budget-Mr. Robichaud million in tax reductions as compared with increases of $352 million in the present budget. We were accused of failing to reduce unnecessary expenditures when our total expenditures in the 1954 budget were estimated at $4,460 million, as compared with total expenditures of $5,660 million, or an increase of $1,220 million; yes, an increase of $1J billion in the present budget. We were accused of failing to improve the efficiency of the administration when in fewer than two years of administration the present government has increased the civil service force by over 9,000 and has failed to show evidence of waste and extravagance in any of the departments.
We were accused of ignoring the problem of unemployment when we had a temporary
570,000	registrations for jobs at the national employment service which, two months later, had practically been entirely absorbed owing to the policies of the then government, against a present force of over 800,000, which has constantly remained at a level 30 to 40 per cent higher since the present government took office.
We were accused of failing to retain and regain markets for our surplus primary products when the expanding trade and the real plan to provide markets promised in the 1958 election campaign have failed to materialize.
We were accused of failing to reach agreement with the provincial governments in regard to a clearly defined re-allocation of taxing power, so that municipal councils may have adequate financial resources to carry out their rapidly increasing responsibilities, when the present budget offers no relief whatsoever in this field and when the present government refuses to meet with the provinces and municipalities to discuss their mutual problems.
With the exception of the war years the Liberals produced an almost continuous series of surpluses which were associated with years of progress and prosperity. In a spectacular fashion, under a Conservative government, the pattern has been altered and the lower taxes promised in 1957, and partially applied in 1958, have been of short duration. In fact, the over-all picture is that Canadians were offered a thin slice of $200 million in tax reductions out of a promised $500 million reduction, and fewer than 10 months later they were being asked to pay back this same $200 million, plus an additional amount of $152 million, making a total additional burden of $352 million in a full year. This, is quite different from what most Canadians were led to expect when they listened to election promises and decided to let new political hands take over the administration

The Budget

Mr. Allard of Canada's business. It is no wonder, that we find members on the government side rebelling, as we saw in an article published in the Ottawa Citizen of this day, which has the title, "Tory Rebel tells P.M. to amend Newfoundland's Ways". Part of this article, which has reference to the hon. member for Restigouche-Madawaska (Mr. Van Horne), reads as follows:
He said the government's decision to end special payments to Newfoundland in 1961 was "contrary to everything we said or preached while in opposition.
We were, remember, the party for maritime rights. We were going to right the wrongs of previous governments. We cannot have one policy when in opposition and another when in government."
Mr. Van Horne said that in order to be on the government side of the commons, "we sold the Canadian people a bill of goods. Our purpose now must be to deliver those goods in fulfilling all our promises.
He said it was not too late for the Diefenbaker government to "regain the vision we apparently have lost. The best possible thing this government can do is to admit it was wrong, correct its mistakes and adopt a new attitude."
These were words spoken by a member about whom the Prime Minister said during the campaign, "I need him on my side in Ottawa; I want him in Ottawa." The attitude of the member for Restigouche-Madawaska exists also among some of the members on the government side and the day is not too far away when some of them will have the courage to expose the lack of policy of the present government as well as its failure to keep its promises.
(Translation):


Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, early in this session, when I came back to the House of Commons, I found my seat had been changed. You may recall that last session I was sitting beside you, to your right, facing the opposition. If by-elections between the two sessions did not modify the Progressive Conservative representation of March 31, 1958, they had, at least, the effect of establishing me in this part of the house. However, be assured that I am happy about it, because the effect was to take me further away from the opposition, and anyone getting away from the present opposition can truly have the feeling of getting nearer to the Canadian people. That is why tonight I want to speak on the problems of education, of international trade and also on another subject, if time allows.
Mr. Speaker, since I came to this house, I was astonished to note with what care, and 
also sometimes with what indifference, a good number of hon. members avoid referring to the significant problem of education. When dealing with such matters we must always go back to the confederation pact of 1867, because our parliamentary thoughts and actions must be ruled by our constitution. We may say immediately that if the Canadian constitution is a good one, it should be respected. If it is bad, it should be amended with the consent of all parties concerned. But as long as it is not changed, we should respect all that it prescribes.
As far as I am concerned, I would be in favour of amending the federal pact with regard to some matters of a physical nature, like the trans-Canada highway and hospital insurance. We know that since 1867-it is not difficult to confirm it-Canadian economy has developed considerably. Economic problems have changed and we have now eleven governments, i.e. ten provincial governments and one federal government. When these governments want to carry out their projects, they sometimes, in certain fields, feel with regard to the constitution as if they were stifled by a straight jacket.
In regard to problems of a practical nature, it would therefore be desirable to amend the Canadian constitution. At a federal-provincial conference, it would be proper to set up a national economic council, with economists from the federal government and from each province as members, who would study and report their views to the various governments, precisely in order to co-ordinate the production of each and to allow an appropriate development of our natural wealth.
However, Mr. Speaker, there is a field which, in my humble opinion, cannot be touched and that is the field of education. In 1867, the two main races and the four provinces of the time created the federal government of which we are now part. In doing so, they wished to set up in this country a federal system, that is the Canadian federal system.
But what is federalism? It is a system of association between autonomous governments; in other words, the governments adhering to and composing such a system, are not subordinated to one another, but are co-ordinated governments. Under such a system, those governments co-operate in common tasks, such as, for instance, under article 95, in immigration and agriculture. Those same

governments respect the exclusive rights of each. Under such a system, those same governments know that they cannot do indirectly what they are prohibited to do directly by the constitution.
Those principles of Canadian federalism were recognized and sanctioned several times by decisions of the privy council in London, especially in the Great West Saddlery case, 1921, in the Edwards case, in 1930, and in the aeronautics case, in 1932.
Mr. Speaker, if the province of Quebec, in 1867, adhered to the confederative pact, it was precisely to safeguard its rights, prerogatives, traditions, as well as its teaching and educational system.
Under the Canadian constitution, article 91 provides that the federal government may legislate for the peace, order and good government, in all matters not coming under the exclusive jurisdiction of the provinces. Under section 93 of the constitution, the provinces are granted exclusive rights in the field of education.
But what is meant by an exclusive right? It is a right that belongs peculiarly to the holder and cannot be shared, except with mutual consent. An exclusive right is of a higher order than an ordinary right, and even overrides a priority right, a relative right. In its own field, it is an absolute right.
But it is not enough to have rights; there must be the financial means to exercise them. So the fathers of confederation had the foresight to include subsection 2 of section 92, which grants to provinces the financial means of exercising their prerogatives. I am referring to direct taxation, within the provinces, for the purpose of raising income to meet provincial needs.
That is the basis of the position taken by some provinces, and particularly the province of Quebec, in claiming exclusive rights in the educational field. It is a matter of justice, of right and of freedom.
Mr. Speaker, whatever formulas may be invented, whatever contortions of the mind are resorted to, I think sooner or later, we shall have to come back to the spirit of the confederation pact of 1867, and hand back to the provinces that want them the taxation fields they need to discharge their exclusive prerogatives and rights.
In 1901, the following statement was made by Boucher de la Bruyere, superintendent of education in the province of Quebec:
The majority of the people in the province of Quebec insist on controlling their own schools, and in no way favour the encroachment of the federal government in the educational field outside the limits set by Canada's constitution.
The Budget-Mr. Allard
A few years ago, Mr. John P. Rowat, then chairman of the Protestant committee on education in the province of Quebec, in discussing federal government interventions into the field of education, made the following statement:
I oppose such interventions, because they go against our laws and against the traditions of the majority in Quebec.
Mr. Speaker, the only case where, under subsections 3 and 4 of section 93 of the confederation pact, the federal government may subsidize schools is where the schools of a minority group in a province are being deprived of their rights.
But under what principle do many Canadians and those of the province of Quebec in particular object to the active role of the federal government in the field of education? It is because of the principle of the responsible government which we have been enjoying in this country since 1841. Responsible government requires ministers to account to the people for their management and expenditures. Now for an administrator to be able to account for his managership, he must control the moneys he is distributing. And it is precisely this control which defeats the purpose of the confederation pact and which the province of Quebec is not prepared to accept.
An objection might be raised to the effect that the federal government can give unconditional grants. But such a procedure is fraught with danger, and the best evidence I can marshal on that score was given by the former justice minister in the Liberal government, Mr. Garson, who in March 1952 said in this house in the course of a debate:
If they were large enough to be worthwhile, the dominion treasury simply could not defend handing out these large sums of money to the provincial governments without assuming some responsibility as to the manner in which they would be spent.
It will be recalled that when the Liberals were in power they did indirectly what the constitution forbade them to do directly in this field. During the winter of 1957, they passed two pieces of legislation under which they established an arts council and granted financial assistance to universities. To justify their encroachment upon this field of education they referred to an excerpt from the judgment of Lord Atkin, of the privy council in London, in a case concerning unemployment insurance. That part of the judgment reads as follows:
That the dominion may impose taxation for the purpose of creating a fund for special purposes and may apply that fund for making contributions

The Budget-Mr. Allard In the public interest to individuals, corporations or public authorities could not as a general proposition be denied.
But while they were referring to that judgment, Mr. Speaker, the Liberals were hiding the truth and knowingly failed to communicate the other part of the same judgment of Lord Atkin, of the privy council, which rightly limits the governmental activity in the field at issue. That second part of the judgment reads as follows:
But assuming that the dominion has collected by means of taxation a fund, it by no means follows that any legislation which disposes of it is necessarily within dominion competence.
It may still be legislation affecting the classes of subjects enumerated in section 92 and, if so, would be ultra vires. In other words, dominion legislation, even though it deals with dominion property, may yet be so framed as to invade civil rights within the province: or encroach upon the classes of subjects which are reserved to provincial competence. It is not necessary that it should be a colourable device, or a pretence. If on the true view of the legislation it is found that in reality, in pith and substance, the legislation invades civil rights within the province or in respect of other classes of subjects otherwise encroaches upon the provincial field, the legislation will be invalid. To hold otherwise would afford the dominion an easy passage into the provincial domain.
Briefly, such are the law and the precedents that establish the exclusive competence of the provinces in the field of education. The province of Quebec is then perfectly right in claiming its exclusive rights in that field. But while it was offering resistance, claiming its dues and being thus deprived of money, the Quebec universities were thus less favoured by the provincial state than the other universities in the other provinces.
In fact, the Quebec universities received, in 1956, provincial subsidies for general purposes, equivalent to 20.83 per cent of their budget. In Ontario, that proportion was 32.43 per cent; and, in the west, 45.52 per cent.
To settle that problem, formulas were suggested, among which a reduction in taxes, the surrendering of the direct taxation field, the restitution of levied overtax and the deduction of taxation.
But in my humble opinion, Mr. Speaker, the main remedy for the provinces under the constitution would be the gradual return of their taxation fields to the provinces who want them back, so that they may exercise their financial prerogatives guaranteed by the federal pact.
The federal government has to face so many problems in national and international affairs, that it is ill-advised to deal with matters in which it is not concerned.


If the Liberals, when they were in power, had looked after their business, the country would not have been so badly administered and it would not have been left to us in such a state of unemployment and inflation.
As they are now in opposition, Mr. Speaker, we often hear them hold forth and make interjections, and the questions we are asked precisely arise from that die-hard centralizing policy they have embarked upon.
In that regard, I recall a statement made by the Liberal member for Megantic (Mr. Roberge) who on January 29, said in this house, as reported on page 133 of Hansard, and I quote:
Therefore, I repeat that in my opinion the fathers of confederation, in good faith, did not think in terms of universities when section 93 was enacted.
Mr. Speaker, I must reply to that statement made by the member for Megantic that I have never heard such a superficial and inadequate interpretation of the Canadian constitution.
It was rightly said: in 1867, in addition to Laval University, McGill University had already been erected on the Burnside estate by the royal institute for the advancement of science. Established in 1856 under chapter 54, Victoria 19, the higher education income and investment fund was to be distributed by the superintendent of lower Canada schools to such universities or colleges as were approved by the governor in council. This higher education income fund, as well as education, the permanent university fund and the royal institute, are mentioned in the fourth schedule to the British North America Act as part of the assets taken over by the provinces of Quebec and Ontario. How then can someone rise in this house and say that section 93 does not include education at all levels, including the university level?
Mr. Speaker, I am confident that the present government will restore things to their proper place. I know the right hon. Prime Minister shows respect for the Canadian constitution. I should like to quote from a statement he made during the last session before a delegation of the Canadian conference on education:
Education must remain under the exclusive jurisdiction of the provinces. The sections of the British North America Act which grant to the provinces the exclusive jurisdiction in the field of education must stay intact. Such constitutional rights are not apt to be amended. All Canadians must recognize the necessity of maintaining the constitution inviolate in this respect.

In turn, the hon. Minister of Finance (Mr. Fleming) September 6 of last year, while explaining his estimates to the house, stated:
Now I say, Mr. Speaker, on the matter of Canadian universities and about the attitude of the present government, that while the formula contained in the present agreement has not so far been such as to be viewed with favour in the province of Quebec, if there is any formula or modification of the present agreement which anyone cares to put forward which would permit the institutions of higher learning in the province of Quebec to participate, and which is in keeping with the national interest, we as a government are prepared to give it serious consideration.
That is why if the Quebec government cares to offer a suggestion, to make an official proposal, an appropriate and constructive one, I am positive that this government will consider it with great care and that, eventually, a decent solution will be found in this field.


Some hon. Members:: We have been waiting for it for a long time.


Lionel Chevrier: Mr. Speaker, would the hon. member allow me-


Maurice Allard: Mr. Speaker, I shall allow my hon. friend to ask questions when I am through with my speech. It will then be a distinct pleasure to answer his questions.
(Text):
Mr. Speaker, before going any farther I should like to sincerely congratulate the Minister of Finance (Mr. Fleming) who last Thursday night presented in this house a budget which was most favourable to economic recovery. He completely confused those in the opposition who seemed to prophesy a billion dollar deficit. His statement revealed our economy is presently healthy and progressive under an intelligent administration. (Translation):
Mr. Speaker, through the federal parliament we deal with national problems, we also must turn our thoughts to international issues.
I wanted to inform this house of a particular observation I made during my stay in New York as a parliamentary observer last fall, during the thirteenth regular session of the general assembly of the United Nations Organization. The house certainly remembers that the six main institutions of the United Nations are:	the general assembly, the
secretariat, the security council, the trusteeship council, the economic and social council and the international court of justice. Now, one of these bodies, i.e. the general assembly, mainly functions through a bureau and seven larger committees. Those committees are: the
The Budget-Mr. Allard committee on political and security questions, comprising control of armaments; the special policy committee, which during the thirteenth session studied the opportunity of maintaining the police force in Gaza; the committee on financial and economic questions, which considered, during the thirteenth session, technical assistance to underdeveloped countries; the committee on social, cultural and humanitarian matters; the committee on trusteeship comprising non-autonomous territories; the committee on budgetary and administrative matters and, finally, the committee on legal matters. It is therefore, in the economic and social council, one of the six bodies mentioned, and also in the third important committee, that economic problems are discussed. Some people, when speaking of the United Nations Organization, think that it has attained no concrete or practical results and they point out, amongst others, the field of politics. Indeed, if we consider some aspects like armaments, for instance, we find that since 1946 there has not been much progress yet in this respect. More than 863 meetings took place, either at the atomic energy commission, or the disarmament committee, or even at the security council. But nations have always developed new armaments. However, in the economic and social fields, commentators recognize that the United Nations have attained practical results.
One can wonder if, in the economic field, the United Nations Organization has used its influence to improve trade relations, labour conditions and production methods for or between its members.
On February 18, 1946, a resolution adopted by the economic and social council recommended the establishment of an international organization on trade and employment. An international conference was therefore held in Havana, from November 1947 to March 1948. It was intended at the time to promote the economic progress of underdeveloped countries as well as to improve their standard of living. At that conference, 53 countries, including Canada, adopted regulations known as the Havana charter. To give permanent form to the international organization on trade and employment, a provisional committee was created and Mr. L. D. Wilgress, of Canada, became the first chairman of the executive committee. But, since that event which took place in Havana and which was designed to regulate international trade and employment, there has been no practical result, except that resolution coming every year before the

The Budget-Mr. Allard economic and social council. That resolution is urging member nations to approve, through their respective domestic legislation, that principle of international organization of trade and employment.
It seems that the U.S. congress, at first reticent for several years, would support that principle. Canada, for its part, would wait until the United States and the United Kingdom take legislative action in this matter. Pending the belated setting up of such an international organization, some countries have joined together and concluded general agreements on customs tariffs and trade. These agreements are known as GATT. In 1947, at Geneva, 23 countries adhered to that multilateral trade agreement and, in 1949, at Annecy, 10 other countries took part in another series of negotiations on customs tariffs. But in spite of those international efforts to smooth international trade relations, the United Nations does not seem to sponsor any co-ordinated system in the field of production. It would be advisable if member nations agreed to determine and co-ordinate the nature of their production. For instance, here in Canada, in Ontario and Quebec, and particularly in the eastern townships, where I come from, we produce textiles; other countries like Japan, the United States and England are producing identical or similar textiles. The result is, therefore, that without wishing it perhaps, we are sustaining against each other a very keen competition, a very unhealthy one. Would it not be preferable then, that countries competing in the manufacture of a similar product should agree to diversify their production and coordinate their industrial activities? In that regard, would it not be desirable within the United Nations, through the economic and social council, or within the North Atlantic pact, to set up some sort of body, namely an economic guidance council, in order that such member countries might study the problems relating to the diversification of their production and the co-ordination of their trade and industrial activities? Indeed, such an organization might be set up within the UNO or under the North Atlantic pact. Article 2 of the North Atlantic treaty reads as follows:
The parties will contribute toward the further development of peaceful and friendly international relations by strengthening their free institutions, by bringing about a better understanding of the principles upon which these institutions are founded, and by promoting conditions of stability and well-being. They will seek to eliminate con-

flict in their international economic policies and will encourage economic collaboration between any or all of them.
Since the North Atlantic treaty was signed on April 4, 1949, economic alliances have begun to take shape, such as Benelux, the coal and steel pool, EURATOM, the six-power customs union, the European common market plan, but all these moves are outside NATO, and the leading American partners of the alliance are kept outside.
Mr. Paul-Henri Spaak, secretary general of NATO and chairman of the North Atlantic council, stated on April 8, 1959, during a brief press conference held at the St. Hubert airbase:
However, in the economic field, very little has been done: we shall have to lay particular stress on co-operation in this field. In that regard, I think the NATO countries should co-ordinate their efforts with regard to helping underdeveloped countries.
The fifteen NATO countries will have to do much more and much better in that field and NATO should be the ideal instrument for the co-ordination of endeavours intended to contribute to the economic growth of underdeveloped countries.
So, whether through UNO, NATO or the commonwealth, Canada should continue to initiate economic endeavours. I am inclined to believe that the allies will defeat communism and will restrain its effects to the extent that they will co-ordinate their efforts and their economic relations.
Mr. Speaker, may I call it 10 o'clock?


Lionel Chevrier: Would the hon. member permit a question?


Maurice Allard: Certainly.


Lionel Chevrier: About his earlier argument concerning the interference of federal authorities in the provincial field, does the honourable member not agree that his argument applies much more strongly in the case of this government with respect to the increase in the contributions to universities and to the construction of the trans-Canada highway?


Maurice Allard: Mr. Speaker, I am pleased to tell the hon. member for Laurier, who is now in the province of Quebec, that his question like many others which are asked by members of the opposition are a result of and spring from the uncompromising and centralizing policy which the Liberals implemented when they were administering this country.
(Text):


Mr. Speaker:: Order. I am sorry but I must remind hon. members that it is ten o'clock.



BUSINESS OF THE HOUSE

Lionel Chevrier: Since I did not get an answer to that question, perhaps I could ask the leader of the house what the business is for tomorrow.
Business of the House Mr. Green: The hon. member will do a little bit better on this question. Tomorrow we shall continue with this debate.


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

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

Mr. Mcllrailh: 
ENGINEERING SERVICES, ATOMIC ENERGY OF CANADA
Mr. Fisher: 1. What companies supplied engineering service to Atomic Energy of Canada Limited, during the
fiscal year ending March, 1958, and for the subsequent period to March 23, 1959?
2. What was the amount, by company, of these services?
Answer by: Hon. Gordon Churchill (Minister of Trade and Commerce):

Questions
LISTING OF COMPANIES SUPPLYING "ENGINEERING SERVICES" TO ATOMIC ENERGY OF CANADA LIMITED DURING THE TWO YEARS ENDED 23bd MARCH 1959, TOGETHER WITH AMOUNTS PAID FOR THESE SERVICES
* Those marked with an asterisk include cost of manufacturing as well. No breakdown of these accounts to determine the engineering services component is possible.
**In some cases, the figures shown include amounts paid to March 31, 1959.
Amounts Paid
Company	Description of work	Year ended 31st March 1958	Year ended 23rd March 1959	Total for 2 years* AMF Atomics (Canada) Limited	Design, develop and manufacture shut off rod control mechanism and development and fabrication of reactor fuel elements	69,365	82,345	151,710Babcock Wilcox & Goldie McCulloch Limited	Design heat exchanger for steam generation in a nuclear power plant	-	5,000	5,000* Canadair Limited	Design and fabrication of pool test reactor and of beta-ray spectrometer coils; design of vacuum chamber; fuel charge and discharge gear	135,823	3,567	139,390* Canadian Badger Company Limited	Design and fabricate a heavy water upgrading plant	-	69,984	69,984Canadian General Electric Company Limited	Design of nuclear power demonstration reactor; development program for fabrication of UO2 pellets; and design of a flask to remove defective rods	8,931	923,122	932,053Canadian Locomotive Works Company Limited	Design heat exchanger for steam generation in a nuclear power plant	-	3,808	3,808Canadian Vickers Limited...	Design heat exchanger for steam generation in a nuclear power plant	12,992	12,992Canadian Westinghouse Company Limited	Design and development work on loops for NRU reactor; design of heat exchanger; pressure relief study, etc.	164,888	174,178	339,066Catalytic Construction Limited	Design out-reactor corrosion test loop	26,776	26,776Combustion Engineering Super-heater Limited	Design heat exchanger for steam generation in a nuclear power plant	-	20,179	20,179Computing Devices of Canada	Engineering development for a 100-channel sorter	11,268	1,500	12,768Dobush & Stewart	Design of biology and health physics building, cafeteria, decontamination building, etc	13,890	62,884	76,774Electronic Associates Limited	Development of a halogen quenched Geiger Mueller tube	2,646	-	2,646'Foster Wheeler Limited	Design, fabricate and install large zeep reactor and design of a heat exchanger for steam generation in a nuclear power plant	118,491	118,491Giffels & Vallet of Canada Limited	Design of an extension to metallurgy building, garage, firehall, heavy decontamination building, etc	27,288	32,747	60,035*High Voltage Engineering Corporation	Design and fabrication of tandem van de Graaff accelerator	496,500	136,170	632,670C.D. Howe Company Limited	Design and supervision of construction of NRU reactor and loop power facilities for same	486,555	486,555""Humphreys & Glasgow (Canada) Limited	Design, supply and install main test rig..	92,444	92,444
Questions
LISTING OF COMPANIES SUPPLYING "ENGINEERING SERVICES" TO ATOMIC ENERGY OF CANADA LIMITED DURING THE TWO YEARS ENDED 23RD MARCH 1959, TOGETHER WITH AMOUNTS PAID FOR THESE SERVICES-Concluded
Company	Description of Work	Year ended 31st March 1958	Amounts Paid ** Year ended 23rd March 1959	Total for 2 yearsJohn Inglis Company Limited	Develop improvements on NRU control rods; design of fuelling equipment for a nuclear reactor; and design heat exchanger for steam generation in a nuclear power plant	34,379	34,379Montreal Locomotive Works Limited	Design a heat exchanger for steam generation in a nuclear power plant	-	6,878	6,878Ontario Research Foundation	Investigation of ceramic methods of fission product disposal	1,096	15,999	17,095Orenda Engines Limited	Design of a gas-cooled loop; design and supply compressors for same	343,363	343,363Shawinigan Engineering Company Limited	Canada-India reactor project	608,122	487,034	1,095,156John Thompson-Leonard	Design a heat exchanger for steam generation in a nuclear power plant	-	10,249	10,2492,053,148	2,637,313	4,690,461
Tuesday, April 14, 1959