1961-06-22

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90205-6-433£

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QUEEN*S PRINTER AND CONTROLLER OF STATIONERY OTTAWA, 1961
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Thursday, June 22, 1961

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Ninth report of standing committee on railways, canals and telegraph lines-Mr. Howe.


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On the orders of the day:
Hon. Paul Marlin (Essex East):: May I ask
the Prime Minister what is the policy of the government of Canada regarding the supplying of munitions to Portugal, one of our NATO allies, particularly having in mind its colonial policy? I ask this question in the light of the statement made by Mr. Lange, the foreign minister for Norway, a country which works closely with Canada in most matters.


Righi Hon. J. G. Diefenbaker (Prime Minister):: I would not think it proper to make a statement on a matter as important as this in answer to a question on the orders of the day. No notice of the question was given, and I would naturally wish to have a statement carefully prepared covering the situation.



LABOUR CONDITIONS


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On the orders of the day:
Mr. R. D. Thrasher (Essex South):: Mr. Speaker, may I ask the Prime Minister whether he has received any information in respect to a report that the United States may prevent commuters in the city of Windsor from travelling to Detroit for the purpose of working there.


John George Diefenbaker: Mr. Speaker, it was reported yesterday in the press that consideration was being given in Washington to closing the Detroit-Windsor border to Canadians who commute daily to work in the United States. It is presumed that this report has reference to surveys which are made by the United States secretary of labour in accordance with the terms of the United States immigration and nationality act. In that act provision is
made for the exclusion from admission to the United States of aliens seeking entry for the purpose of performing skilled or unskilled labour at times and places with respect to which the secretary of labour determines and certifies that there are sufficient workers in the United States able, willing and qualified to perform such labour.
I understand that in recent months action has been taken under this section of the United States statute with reference to the admission of Mexican workers to certain areas along the southern border of the United States. Assurances have, however, been received from the United States authorities that no consideration is being given at this time to any action to restrict the admission of Canadian workers along the United States-Canadian border.



AIRPORTS


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On the orders of the day:
Mr. John Drysdale (Burnaby-Richmond):: Mr. Speaker, may I ask a question of the Minister of Transport. In view of the overwhelming approval yesterday by the ratepayers of the city of Vancouver of the sale of the city owned portion of the Vancouver international airport to the federal government, can the Minister of Transport assure the house that action will be taken immediately for the plans for construction so urgently required in respect to the $15 million jet terminal buildings?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, I must admit that I expected this question from the hon. member, knowing his tremendous interest in the matter of aviation generally in British Columbia. I am very pleased to be able to tell him that instructions are being issued at once to proceed with the planning of that new terminal.



CANADIAN NATIONAL RAILWAYS


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On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I direct a question to the Minister of Transport, and ask him whether the

Inquiries of the Ministry government has yet reached the stage of appointing the new directors of the Canadian National Railways.


Léon Balcer: Mr. Speaker, when these appointments are made they will be announced in the proper fashion.


Hon. J. W. Pickersgill (Bonavisia-Twil-lingate):: Mr. Speaker, I should like to ask a supplementary question. Does the minister not think in view of the-


Mr. Graffiey:: Order. This is a statement.


John Whitney Pickersgill: Does the minister not think that in view of the assurances previously given it would be a courtesy to the house to make these appointments before the committee ceases to sit?


Some hon. Members:: Order.


John Whitney Pickersgill: Is the minister not going to answer that question?


William Heward Grafftey: That was a statement; why should he?



THE BUDGET


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On the orders of the day:
Hon. Paul Hellyer (Trinity):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Would the minister say whether we are correct in assuming that in his budget speech of Tuesday evening he estimated revenues for the fiscal year 1961-62 on the basis of a 3 per cent rise in the gross national product?


Hon. Donald M. Fleming (Minister of Finance):: No, Mr. Speaker. If the hon. member will examine carefully the statement I made he will find that I indicated that apart from the budget measures themselves we might expect, according to present indications, a 3 per cent rise this year in the gross national product. My estimate as to the anticipated revenues, expenditures and deficit is, of course, based upon the view that was taken as to the effect this year on revenues of the helpful measures to stimulate the economy which are proposed in the budget itself.


Paul Theodore Hellyer: Mr. Speaker, I should like to ask a supplementary question. Would the minister indicate what percentage he did estimate-


Mr. Speaker:: Order. I think the hon. member's questions would be more appropriately raised during the debate which is to follow. They relate to the subject matter of the debate and do not seem to me to qualify as having that special urgency required in order to be asked at this particular period.


Paul Theodore Hellyer: Mr. Speaker, on a question of privilege, the budget debate is a formal debate, so how is it possible for us to discuss the budget intelligently unless we know the rate of growth which the minister anticipates will result from the proposals he has indicated in his budget? I think, sir, it is imperative that the minister give us this information now, before we proceed with the debate.


Donald Methuen Fleming: Mr. Speaker, if the hon. member in this bland admission of his this morning, speaking for himself and I do not know how many others, indicates that he cannot discuss the budget intelligently, I hope I will not be held responsible for that.


Paul Theodore Hellyer: Is the minister not going to give the house a reply to this question, which we deserve? It has always been customary to state the anticipated percentage of growth. Surely we are entitled to this information before we discuss the budget.


Mr. Speaker:: If the words, which I could not hear, suited the actions I am sure they were more appropriate for the debate.


John Whitney Pickersgill: I wonder whether I may put a question to the Minister of Finance. In view of the character of the present government does the minister really believe that additional protection is needed for gutless chicken?


Mr. Speaker:: Order. I do not think I should permit the supplementary from the hon. member for Bonavista-Twillingate when I have refused supplementaries to the Minister of Finance on the subject of his budget address.


Paul Joseph James Martin: Mr. Speaker, may I suggest that this question was altogether different from the preceding one. The hon. member for Bonavista-Twillingate was asking a question regarding a specific proposal in the budget that had to do with "versivated" chicken. In case hon. gentlemen do not know the meaning of the word, it is a synonym for eviscerated. I would suggest to Your Honour that the question put forward by the hon. member for Bonavista-Twillingate is different, and the Minister of Finance should have no difficulty now that this long pause has taken place in giving an adequate reply.


Mr. Speaker:: If the hon. member considers the matter one of urgency of course I would not set my judgment up against his.


Donald Methuen Fleming: Mr. Speaker, I did not hear your last comment.


Mr. Speaker:: I said I did not want to set my judgment up against that of the hon. member for Essex East so as to prevent the minister from replying.


Donald Methuen Fleming: Mr. Speaker, hon. members opposite apparently do not understand something that the farmers of this country understand well. In view of the total inability of the opposition to understand an agricultural problem, or to interpret the views of the farmers on any agricultural problem, may I say that this is a budget proposal which has been received with warm appreciation by the farmers of this country.
When the hon. member for Bonavista-Twillingate associates his question on this subject with the character of the government, may I say that the government is prepared to meet this matter precisely on that plane, recognizing that we do try in our approach to public problems to have regard for the importance of the basic interests of agriculture in this country.
My final observation is that if the hon. member is concerned about protection for, as he called it, gutless chicken or as the resolution calls it, eviscerated chicken, not the corrupt version of the word employed by the hon. member for Essex East, who is above the rules of the house and now apparently above the rules of English composition as well, I might say to the hon. member for Bonavista-Twillingate that on this subject there are times when I think he needs some protection.


Some hon. Members:: Oh, oh.


Some hon. Members:: Hear, hear.


John Whitney Pickersgill: Mr. Speaker, in view of this entirely unwarranted personal attack-


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: -I feel I should be allowed to say a word in my own defence. I think, sir, that what the minister needs most is some protection for home grown Canadian humour.


Mr. Speaker:: Order. If the debate continues I am afraid that hon. members should put themselves down as having made one speech already in the budget debate.
[Later: ]


Paul Joseph James Martin: Mr. Speaker, may I ask the Minister of Finance if he is in a position to say whether his budget as presented the day before yesterday is in any way responsible for the rumours that Premier Frost is to retire from public life?


Donald Methuen Fleming: Mr. Speaker-
Inquiries of the Ministry


Mr. Speaker:: Order. I am sure the minister would like to answer, but actually the retirement of Premier Frost from public life is not a responsibility of the minister.


William Heward Grafftey: It will be a good answer; let us hear it.


Donald Methuen Fleming: With respect, Mr. Speaker, there was a point about the budget in the question, and I think I should be permitted to say that while these rumours may have no connection whatever with the budget, I believe there is a basis in fact for the rumours that are being circulated to the effect that this budget is likely to result in the retirement of the hon. member for Essex East.


Paul Joseph James Martin: Mr. Speaker, I should like to direct a question to the Minister of Finance based on a report in yesterday's Windsor Star which reads in part as follows:
W. M. Benidickson (Liberal, Kenora-Rainy River), briefly replying to the Fleming budget speech, referred to the decision to abolish the 71 per cent excise tax on cars as the "Essex East resolution"-


Mr. Speaker:: Order. The hon. member appears to be reading from a newspaper article what was said by the hon. member for Kenora-Rainy River in the debate which is now to be resumed, if I am correct in what I heard.


Paul Joseph James Martin: Mr. Speaker, 1 was asking a question based on a report of a statement made by the hon. member for Kenora-Rainy River. I was seeking to ask the minister if he would care to comment, but if he finds it difficult to acknowledge-


Mr. Speaker:: Order. The hon. member is out of order.



REQUEST FOR TABLING OF ECONOMIC FORECASTS

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On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, I should like to ask the Minister of Trade and Commerce, if I can have his attention, whether he will table for the information of the house the secret economic forecasts made earlier this year on which the budget is based?


Hon. George H. Hees (Minister of Trade and Commerce):: Mr. Speaker, any documents to which the house is entitled are always tabled on time by this government.


John Whitney Pickersgill: On a question of privilege, Mr. Speaker, affecting all hon. members of the house, there is a most distinguished precedent for the tabling of these documents
6860	HOUSE OF
Inquiries of the Ministry in the house to which I would draw Your Honour's attention, a precedent established on January 20, 1958.


Mr. Speaker:: Order. The tabling of documents is not obtained on orders of the day either by questions or by raising matters of privilege.



ONTARIO WHEAT


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On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, may I ask the Minister of Finance, because he comes from Ontario and because he is the Minister of Finance, when we may expect an announcement from the government with regard to the price of Ontario grown wheat?


Donald Methuen Fleming: Mr. Speaker, if the hon. member knew anything about the practices of this house or about agriculture he would know in the first place that the question should be directed to the Minister of Agriculture.


Paul Joseph James Martin: You don't know the answer.



INQUIRY AS TO REDUCED PRICE UNDER SECOND CHINESE AGREEMENT

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On the orders of the day:
Mr. G. J. Mcllraiih (Ottawa West):: Mr. Speaker, I should like to direct a question to the Minister of Finance in the absence of the Minister of Agriculture. Is it a fact that the change in wheat board prices and the price of sterling yesterday means in effect that the price in Canadian dollars being received by the wheat board under the second agreement for the sale of wheat to red China varies approximately 5 cents per bushel from what we anticipated at the time the agreement was signed?


Donald Methuen Fleming: Mr. Speaker, that is obviously not a question for the orders of the day. I suggest that the hon. member put his question on the order paper in the ordinary course.



HOUSING


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On the orders of the day:
Mr. J. R. Garland (Nipissing):: Mr. Speaker,
I should like to direct a question to the Minister of Public Works. As found on page 6849 of Hansard for yesterday I asked the minister for the number and dollar value of the mortgages sold by C.M.H.C. during 1960. I, as


did other members around me, heard him answer that none had been sold in 1960 although it now appears in Hansard as "some". Would the minister clarify that point?
Hon. D. J. Walker (Minister of Public
Works): The hon. member is quite right. I should like to thank him for making that correction, and say that my answer was none for 1960.


John Richard Garland: Is the answer "none" or "some"?


Mr. Walker:: The answer is "none", as I said yesterday.



INQUIRY AS TO PROGRESS OF CURRENT PROGRAM

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On the orders of the day:
Mr. Frank McGee (York-Scarborough):: Mr. Speaker, I have a question for the Minister of Public Works. In view of the 400 per cent increase in building recently in the township of Scarborough, I wonder whether the minister could indicate whether the national figures are following that general trend.
Hon. D. J. Walker (Minister of Public
Works): Mr. Speaker, I dislike taking the time of the opposition to talk about something that is not as fascinating as eviscerated chickens. The reply is that the revised figures for starts in urban centres as at May, 1961 indicate-


Mr. Bourgel:: Order paper.


David James Walker: Mr. Speaker, for a year and a half I have been bombarded by the opposition with similar questions.


Mr. Speaker:: If the hon. member wishes to raise a point of order he should rise to do so.


Maurice Bourget: Mr. Speaker, on a point of order, I think the question asked by the hon. member for York-Scarborough is asking for statistics. The ordinary practice has been that questions of that kind are placed on the order paper. I do not think that is a proper question for orders of the day.


William Heward Grafftey: The hon. member should tell that to his colleagues.


Frank Charles McGee: Speaking to the point of order, Mr. Speaker, the question which I sought to put after many fruitless attempts was one designed to elicit vitally important up to date information relating to a significant field of our economy.


John Richard Garland: On the point of order, Mr. Speaker, may I say that when in similar circumstances on earlier occasions I have attempted to put questions of that nature, I have been ruled out of order.


David James Walker: Mr. Speaker, speaking to the point of order, may I say that at no time did

Your Honour ever rule the hon. member for Nipissing out of order on questions dealing with housing starts and the housing program.
We have a special housing program. Parliament was called in November to inaugurate it. The hon. member for York-Scarborough has taken a keen interest in this program. I suggest the hon. member has a right to ask questions and to receive an answer.


John Whitney Pickersgill: On the point of order, I would point out to Your Honour that at six o'clock last evening the committee of supply was considering housing when discussing the estimates of the Minister of Public Works, and if the hon. member for York-Scarborough had been in his place he would have had an opportunity at that time to put this question. We have supply forecast again for Saturday and there cannot be, in the circumstances, any degree of that kind of urgency which Your Honour always insists upon in questions on the orders of the day.


David James Walker: On the point of order, Mr. Speaker, we devoted 15 minutes to a discussion of eviscerated chickens. Surely the welfare of the Canadian people in relation to housing is of equal importance.


John Whitney Pickersgill: The publicity of the government is of importance to hon. members opposite.


Mr. Speaker:: Would the hon. member mind repeating his question?


Frank Charles McGee: I should like the Minister of Public Works to give the house the latest available information relating to housing starts, which I understand has only now become available to the minister.


Mr. Speaker:: I think that question is more appropriate for the estimates, and suggest that it be dealt with there.



COMMONWEALTH RELATIONS


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On the orders of the day:
Frank Charles McGee: Mr. Speaker, I hate to interrupt the hon. member for Bonavista-Twillingate, but I wonder whether the Prime Minister would care to comment on reports that the Canadian government is to give military aid to the Ghanaian government?


John George Diefenbaker: Mr. Speaker, the Canadian government has received a request to provide military training assistance to Ghana, and the matter is under consideration.
22, 1961
The Budget-Mr. Benidickson THE BUDGET



ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE

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The house resumed, from Tuesday, June 20, 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, I am pleased to rise to continue my remarks in connection with the budget. It is obvious that the house is in a receptive and bantering mood. Of course I appreciate the little advance billing that was thus given to the hon. member for Kenora-Rainy River by the hon. member for Essex East.
I am, on the opposition side, the first to reply to the Minister of Finance in connection with the budget which he introduced on Tuesday last. The minister always plays his part on budget night with passion, but I suggest also usually with whiskers. I think he played that part even more obviously on this occasion. I wish, however, to pay a compliment that I read, as I read it, to the Minister of Finance. It was contained in a recent, well distributed article in the London Economist which analysed Canadian finances. In this issue of May 27-


Mr. Churchill:: Mr. Speaker, would the hon. member permit a question. Is this the article written by Mr. Michael Barkway?


William Moore Benidickson: There is no indication on it of authorship of the article. The article says this, and perhaps this disturbs the minister who rose. I am paying a compliment to the Minister of Finance; I think it is the Minister of Veterans Affairs on behalf of his colleagues who is getting excited. The article says:
Of all the ministers Mr. Fleming has emerged as the most hard working and the most adept in his department (the competition is not too impressive but the compliment is not intended to be backhanded).


William Heward Grafftey: That is London's opinion of the government. Very interesting.


Paul Theodore Hellyer: They are being very generous, too.


William Heward Grafftey: Government by Whitehall.


William Moore Benidickson: I was referring of course to that place which has always been known as the home of the Tory party and from which one normally expects compliments for a Conservative administration. Mr. Speaker, according to our rules it is not, as I know, usual to quote editorials or newspaper comment in connection with events in the house, although I know that we never raised any
90205-6-434

The Budget-Mr. Benidickson objection, when we were sitting on the government side of the chamber, when the opposition financial critic of those days invariably endeavoured to give to the house in his first speech some of the editorial comment that appeared in Canadian newspapers after presentation of a budget.
Of course on those occasions there was usually a sufficient lapse of time between budget night and the speech of the first opposition critic so that he was able to quote quite a number of editorials. As I say, we never objected to newspaper comments then. Many comments were quoted from the newspapers from coast to coast. Because of the one day interval of time which has elapsed between the presentation of the budget and today, it is not possible for me to do that nationally. I want to say at once, however, that the leader of the house was good enough, in view of the fact that we are coming to the end of our session and this budget presentation was very late, to ask me if I was prepared to go on this morning, and I agreed.
However, I am not going to follow to any extent the practice that used to be invariable in connection with criticism of the budget at this stage when the members of the present government were sitting on this side of the chamber. I am simply suggesting to all hon. members that it would be interesting to examine the lead article in today's Montreal Financial Times. I am not going to quote from it; I am only going to refer to six words in the headline.
"The budget was not worth delay."
I said, Mr. Speaker, I would not refer to the contents of this article because of the rules, but I do want hon. members on their own initiative to read the last two paragraphs of this comment in connection with the budget.


An hon. Member:: How about some of your own ideas?


William Moore Benidickson: I am prepared to give them in due course.


An hon. Member:: Let us have them.


William Moore Benidickson: Out of politeness, courtesy and the rules of the house I will not read the last two paragraphs of this article. My comment, instead of reading these last two paragraphs, which will be of interest to hon. members when they receive this publication, as I believe all hon. members do in their mail boxes, is to say in my own words that I felt there was much in the budget the other night that was unnecessary verbiage and could be described pretty generally as rhetorical ballyhoo.


The Minister of Finance rather regularly has been misleadingly optimistic to this house. He certainly was so in his budget presentation last year, when he estimated a $12 million surplus and to his disappointment, and to the disappointment of the country, we ended up with a very substantial deficit. Now, again we have an addition to this mountain of debt, and the government are always prepared to explain this by saying that it had been properly planned from the beginning. Indeed, again in the budget speech the other night the Minister of Finance, following this style, said:
In the circumstances confronting Canada today, it is "appropriate"-
That is a word the minister invariably uses. He used it in the national television press conference program last night to answer a great many questions, even in the negative. It was suggested by the press that certain things he was doing today were inconsistent with what he said he could not do a year ago. The minister said they were inappropriate then but were obviously appropriate now; but no proof or evidence was given as to what happened in the 12 intervening months. The minister said in his budget speech:
-it is appropriate, indeed desirable, that the federal government should, by incurring a sizeable deficit, help to stimulate the economy. This we propose to do. Accordingly, I shall not be introducing any increase in our general level of taxation.
He took great pride in that. Then he said:
Indeed, I shall be proposing some significant-
That is another word that the Minister of Finance uses very regularly, but which I think was scarcely fitting to the context of his speech of two hours and 20 minutes the other night:
Indeed, I shall be proposing some significant tax reductions to accomplish certain specific economic objectives.
The house heard previously his inclusion of the word "today". Presumably these economic objectives were the best estimates he could provide to this country as of today. I continue to quote one of the minister's initial statements:
This contribution in the field of fiscal policy taken together with the financial and other policy measures which have already been introduced or which I shall be announcing tonight, will bring about higher levels of production-
Hon. members know how his voice can roll when he says such words as:
-higher levels of production and employment, and a more satisfactory rate of growth.
Mr. Speaker, our contention is that this budget again was not planned. The administration attempts to say it was planned, but I say the plans had been concluded months and months ago and were largely based on

political priorities, not on economic priorities. I want to go on and establish my point. I say that this deficit is the joint result of an expenditure program put forward and completed by the ministers of the crown last autumn. It has nothing to do with June 20 of the current year. It is the joint result of that program plus the lack of growth in crown revenues resulting directly from a lack of stimulus to the economy and a lack of foresight a year ago, both of which, to say the least, increased a recession which we have been experiencing for a considerable time.
There has been for four years an undue complacency with respect to forecasting and to the country's economic interest as opposed to political interest on the part of this government. I think one of the outstanding pieces of evidence in support of this contention is provided by a statement made by the Minister of Finance when, after his budget had been introduced on March 31, 1960, and a surplus forecast, the minister went to a foreign land to meet the outstanding financial experts of the world. He was attending a conference of the international monetary fund, and when interviewed there as late as October, 1960 his view of Canada's economic prospects was that we were simply in, to use his words, a "rolling readjustment". That phrase was not original to the minister. It had been used earlier by the director of the international monetary fund, Mr. Jacobsson.


Donald Methuen Fleming: I do not wish to interrupt the hon. gentleman, who was good enough to give me a very patient hearing Tuesday night, but I think in fairness, as this has been mentioned before, he should agree that that was not all I said about the economic situation in Canada at that time. What he has referred to was one of, I think, four descriptions I employed at that time to describe the economic situation in this country.


William Moore Benidickson: Still, it is something like the statement the minister made when he visited the United Kingdom. His words then were "Canada is sound as a bell". In other words, there has been this advertising of satisfaction and complacency which, I think, has been a contributing factor to the absence, in times of stress, of the concern, the worry and the co-operation of all sectors of this great land of ours, especially, perhaps, in the government service itself, which one might look for. There was an absence of any sense of urgency directed by the minister.
I could, perhaps, quickly retell the attitude taken by the government toward economic matters in each of the four years they have held office. We have conflicting stories 90205-6-434J
The Budget-Mr. Benidickson about what the position was when the present administration took office four years ago, in June, 1957. During the election campaign of 1958 the theme of the Prime Minister was that he and his colleagues had inherited a mess, that there had been hidden information, and that this was why they had been unable to cope with a recession.
The unemployment situation was very serious in March, 1958 during the election campaign. The government faced unemployment in January 1958, but had decided it was more important for them to go to the hustings than to cope with the economic situation which was so obviously in need of attention. But the Minister of Finance has not been in that camp. The Minister of Finance is never wrong, and in two budget speeches since then he has referred approvingly to his first presentation of an economic pattern for the people of Canada, which he made not in a budget but in a financial statement or a financial amendment on the night of December 6 or 7, 1957.
I remember it very well. The minister has said repeatedly-I could quote him if I were to take the time-that this was just the right thing having regard to the economic conditions which were ahead and that this was a proper revision, a very wise revision. His action at that time has been praised by both the Minister of Labour and the Minister of Fisheries.
Well, we remember the election campaign. We remember that in that campaign the Prime Minister said that while unemployment had reached peaks beyond those which had been experienced since the pre-war depression, if he was elected no person in Canada would suffer because of unemployment. He said that in Halifax a day or so before the end of the campaign on March 31, 1958. We still do not have a very healthy economy, but most ministers, after their election in the summer of 1958, went abroad and there, of course, they painted a glowing picture of the economic situation in Canada.
We come to 1959. There was a little upturn and still a fair amount of unemployment. There was not much investigation, in a scientific way, as to its causes. In any event the government thought the time had come to break what they thought was to be a continuing boom in this country, and there was in the 1959 budget to confine it the imposition of an additional tax load of some $350 million annually.
I wish to proceed rapidly and come to the last major budget with which we are familiar, namely the budget which normally comes in March and which, on this occasion, did come in that month. In March of 1960 we still had
6864	HOUSE OF
The Budget-Mr. Benidickson impressive unemployment rolls but the minister said the unemployment would not be a burden or a worry once the snow departed. I know that hindsight is easy, and that it is a proper criticism to those who say "You should have known better" to tell them it is easy to be right by hindsight. But I said in December and the other night, and I am prepared to establish, that at that time, on March 31, 1960, there was again undue complacency and an inadequate appreciation of economic facts.
I gave one illustration Tuesday night. I showed that it was obvious to the Canadian Press, that three weeks before the presentation of the budget it reported there was a radical difference of opinion between the official opposition and the government as to whether adequate steps were being taken to cope with some clouds which were threatening on the horizon. The minister asserts to be always right in these matters, but I do say it was only 12 days later that there were quoted to him from this side forecasts which have proven reliable in the past and which have since proven as reliable as any I have seen. The minister was not prepared to do anything except assail the opposition for presenting these forecasts, including one from a very distinguished economic adviser to the government, Dr. Firestone, in one of the senior departments of the government. The minister pooh-poohed this and said he was not prepared to listen to gloom and doom.
This attitude continued. My challenge is not only that the minister may have ignored some of the facts which were obvious to others, but that he continued to ignore them and continued to neglect to impose policies which might have reduced the impact of a recession. Indeed, as I said the other night it was the Minister of Finance apparently- and this charge comes from a cabinet colleague, not from me-who turned off the tap with respect to housing. Housing is one of the economic factors so directly and quickly related to the provision of employment.
However, to take another source, I am quite confident that most hon. members of this house receive in their morning reading material here in the city of Ottawa the Montreal Gazette. It is well known that a very distinguished writer's articles, those of Mr. John Meyer, appear on the financial page of that newspaper. Three days after the budget was introduced last year Mr. Meyer stated that the budget, as a stand-pat budget, was an inadequate budget, saying this should have been obvious to the government. However, the government went blindly on with it. I recall that the Minister of Finance went to Winnipeg in the middle of May and stated there that things were wonderful and that


he had no time nor patience for people of doom and gloom. He shut his ears to all warnings.
Perhaps the next senior minister of the government whose activities might be related to the business and employment situation is the then minister of trade and commerce, the present Minister of Veterans Affairs (Mr. Churchill). He went to Winnipeg as late as the first week in July 1960, and there could not have been much ministerial consultation in regard to the economic field because the phrase he used at that time, which was a striking one. It was that the economy of Canada was going up like a rocket. This blindness, stubbornness and persistence on the part of the government continued.
The Prime Minister, during a very important speech made in October, 1960 said that we had been experiencing the three best years in Canada's history, which I suggest indicates that he was no more concerned than the other two economic ministers about those individuals in very great numbers who were not enjoying three best years in Canada's history.
Shortly after that the government decided to have the session commence earlier than most sessions do. It was called for the middle of November. At that time a program was presented, part of which was included in the speech from the throne, involving legislation of various departments. In addition it was intimated that we perhaps would have an amending budget.
It is the Minister of Finance I am concerned about. How worried has he been about the growth of the Canadian economy during 1960 which we are now reviewing in this budget debate? We met in November. The opposition complied very readily, with much alacrity, to anything that appeared to have an employment content, and several bills were passed before Christmas. I was shocked since to find that although we passed the legislation in December before adjourning for Christmas, in many cases where the cabinet, in view of the emergency, asked us to grant to it quickly executive powers it did not even have the orders in council ready until well after the new year.
I can cite one illustration in this regard, the small businesses loans bill, to which the Minister of Finance referred the other night with some satisfaction. There was here a familiar pattern which can be easily followed because there was a similar law in respect to the Farm Improvement Loans Act. If this administration had been sharp and anxious to see an upturn in the economy of this country, the $65 million of likely loans, about which they spoke in that debate, should have been put to work immediately.

I suggest the government should have arranged, in a preliminary form at least, the orders in council in respect to this legislation even before it was passed by this house. However, the order in council in that regard was not ready until January 19, 1961, a month later.
This measure was supposed to be an important factor in creating winter employment. However, this is the kind of nonchalant attitude the government has in respect to economic matters, which I feel justifies the criticism this administration has received particularly during the past year at a time when unemployment has been heavier than in any year since the thirties.
I can cite other illustrations. In connection with small business loans I charge the government that there was the usual administrative inefficiency in getting the orders out and the paper work done. In connection with the small businesses loans measure, the minister said that a substantial number of dollars had now been loaned. This has been done after the period during which people were looking for winter work. We were informed that this $65 million would become available very quickly, presumably in the winter. However, the last time he made a return to this house, at the end of April I believe, only about $4 million had been loaned under this program.
I am now looking at the Minister of Trade and Commerce. I give him good marks for some of his activities. He has been endeavouring to be the cheerleader promoting exports in connection with export trade. I think he is to be commended for the publicity and attention that he has aroused. But publicity is not enough. I recall that the Minister of Trade and Commerce really blew his top in regard to publicity last November with this unemployment crisis approaching. At that time he announced that there was a billion dollar proposition coming up soon to finance export trade.


George Harris Hees: Could I ask the hon. member to produce that statement from which he is quoting, in which I am supposed to have made that remark; because I do not recall it.


William Moore Benidickson: I have not got it with me.


Some hon. Members:: Oh, oh.


William Moore Benidickson: I have read that statement, and I have asked a question about it in this house. I asked the minister why, after all these months, this legislation was not available.


George Harris Hees: What legislation are you referring to?


William Moore Benidickson: I am referring to the Export Credits Insurance Act amendments. I
The Budget[DOT]-Mr. Benidickson also asked the minister a question in connection with the counterpart, the private company arranged by the banks, and why that seemed to be at a standstill.


George Harris Hees: I should like to say to the member that he is hopelessly confused because nothing has been at a standstill. The whole thing has been going ahead very satisfactorily, as the businessmen of this country will tell the hon. member.


Some hon. Members:: Order.


William Moore Benidickson: Mr. Speaker, I think two days ago the minister himself said during the debate on the resolution, which he only introduced last week, that the China wheat deal which has received a great deal of prominence might have been financed through the utilization of this legislation. Of course it was not because the act, without the amendments, did not have adequate financial backing to take care of a deal of that magnitude.


George Harris Hees: Mr. Speaker, on a question of privilege, the hon. member continues to quote me incorrectly. I said this thing could have been done but was not done for the reason that-


Some hon. Members:: Order.


John Whitney Pickersgill: Take your turn in the debate.


Mr. Speaker:: Order. If the minister feels he is not being properly quoted he will have the opportunity later to make an explanation. However, if the hon. member who has the floor yields the floor, that would be in order.


Lionel Chevrier: That is his way of making a contribution to this debate.


William Moore Benidickson: Mr. Speaker, I should like to bring hon. members up to date as to the thinking of the Minister of Finance. Despite the fact that some of this unemployment legislation was before us this session it did not move very fast last winter during the serious unemployment situation. I refer the Minister of Finance to the annual budget, which I describe as his pre-budget or advance budget, which he gives to friends annually in Toronto in January at the forum of the Toronto board of trade.


Donald Methuen Fleming: The board of trade?


William Moore Benidickson: The Canadian club.


George Harris Hees: Get a few of these things right.


Donald Methuen Fleming: I have not spoken to the board of trade.


George Harris Hees: Get the odd thing right. We do not ask you to get everything right; we know you cannot.

The Budget-Mr. Benidickson


William Moore Benidickson: The Canadian club; I stand corrected. Invariably, in the first two weeks of January, the minister makes a statement of this kind. He calls it his review of the economic situation. It usually contains a review and a forecast; his Toronto friends sometimes get it before anything so complete comes to the House of Commons. However, on this occasion the Minister of Finance said that we started this session early. He said though it was not an emergency session and there was nothing of very great emergency in the country at that time. This has been the attitude of the Minister of Finance all along in these serious times.
I could continue to quote the minister and the trade ministers. They were divided in this instance. My friend the Minister of Trade and Commerce, of course, joined the Minister of Finance in such attitude. At the end of the year 1960 he went on a national hookup and said that everything was wonderful. The Minister of Labour did the same thing. This does not impress the Canadian people when all should be working together to consider the dips and troughs in our Canadian economy that were so obvious at the time those rosy pre-budget statements were being made.
Of course the Minister of Trade and Commerce changed his mind. He is very versatile. A month had not elapsed before he went out and made another speech, in which he rather contradicted the Minister of Finance. He said, "Things will be worse before they get better". This was not the kind of optimism that was expressed at the finance minister's banquet in Toronto earlier in January 1961.


George Harris Hees: Would the hon. member mind quoting that reference. I would appreciate it if he would, Mr. Speaker.


William Moore Benidickson: Does the minister deny it?


George Harris Hees: I cannot remember making that statement. I would appreciate it if the hon. member would quote the reference.


William Moore Benidickson: Does the minister say he did not say it?


George Harris Hees: I am asking the hon. member to quote what I said, because he said I said it. I ask him either to quote it or take it back.


William Moore Benidickson: You said it, all right.


Paul Joseph James Martin: On a point of order-


George Harris Hees: I do not remember it, and I should like the hon. member to quote it.


William Moore Benidickson: The minister makes so many speeches he cannot remember what he said.


Mr. Deputy Speaker:: Order.


Paul Joseph James Martin: The hon. member for Kenora-Rainy River is speaking on behalf of the opposition following the budget speech. The last half hour, Mr. Speaker, while you were not in the chair, sir, we have had persistent, ill-mannered, unbecoming interruptions by the Minister of Trade and Commerce. I think you should caution the Minister of Trade and Commerce that this is conduct not becoming a minister of the crown.


William Moore Benidickson: May I say that I have already excused the minister.


George Harris Hees: The hon. member for Essex East resents anyone usurping his role as the interrupter in chief of the House of Commons. All I was saying to the hon. member for Kenora-Rainy River is that he has said that I said certain things, and I ask him to give the quotation.


Mr. Deputy Speaker:: Order.


Lionel Chevrier: The minister has no right to do this.


Mr. Deputy Speaker:: Mr. Speaker has indicated before that hon. members should not interrupt the member who has the floor unless he yields. I think at times the hon. member for Kenora-Rainy River has yielded the floor. If he feels that he should not be interrupted, then he is perfectly entitled to continue-


Paul Joseph James Martin: There was no justification at all for the remarks of the Minister of Trade and Commerce-


William Moore Benidickson: Mr. Speaker, I indicated-


Mr. Deputy Speaker:: If the hon. member insists on keeping the floor he is entitled to it. I would ask hon. members to allow the hon. member who has the floor to continue his speech.


William Moore Benidickson: Mr. Speaker, I say that this is background to the presentation of the 1960-61 budget. It is indicative of the complacency about which I complain. We thought if the 1961-62 budget was not brought forward-and it is a very important guide to businessmen across this land, particularly in times of stress-if we had a very unusual delay, the content would be helpful to the economy and impressive. I say the contrary is the case. The impressive part is the fact that we are to have a cash deficit of about $1 billion. This is the fifth deficit presented by the Minister of Finance.
There was a very interesting and short but important proviso in the minister's budget statement last Tuesday night when he referred to the fact that at long last a decision had been made at the governmental level to take the

initiative in connection with our foreign exchange situation. There is one short sentence in the budget which I paraphrase as saying "This, of course, is not in current budget expense". However, when you think of the billion dollar cash deficit, and when you think in terms of what some experts, including the minister, have said as to the financial obligations involved in interfering with the market situation in this field, I think one must come to the conclusion that this was an undesirable minimizing of the problem in the speech of great length which the minister made the other night. I think it was altogether too inadequate a reference to something which could involve a great amount of dollars and, of course, in all its aspects could mean big involvement in the money market of this country.
I refer the minister to the latest issue of the Financial Post. This is a national financial paper which came into our hands only this morning. The assistant general manager of the Royal bank, on page 35 in looking at the prospects and the situation with respect to the foreign exchange control situation, estimated that every point of control related to the Canadian dollar vis-a-vis the United States dollar could conceivably require backing by the crown of $200 million. This gentleman is much better informed in this field than I am. He happens to be a vice president whose department is economics.
I heard reference to this question last night on the national television program when the minister appeared on "Press Conference". I observed that he did not give his interrogators very much room, as usual, but I think Mr. Barkway said he thought the liability would be just about half the figure mentioned by the assistant general manager of the Royal bank. He said that perhaps $100 million would be the figure rather than the $200 million which I have quoted. The minister on television did not answer; his rapid tongue just kept going.


An hon. Member:: Wagging on.


William Moore Benidickson: Wagging on; and the
question was ignored.
During this budget debate we shall have opportunities which were not available in the half hour allotted to "Press Conference" to get answers to some of these questions of tremendous significance. As I say, I received the Financial Post this morning. I put this to the minister. These questions are of such significance that the minister cannot possibly refrain from commenting upon the financial liabilities in connection with them.
In fact he did so in parliament as recently as February of this year. I realize 1 am not
The Budget-Mr. Benidickson entitled to quote him in the same session. In February he gave us five reasons why this was something that we should not look at. Last year in his budget speech on March 31 he explained about the financial obligations involved. He warned against interfering with normal supply and demand. He did the same in January 1960 in the annual budget speech which he makes to the people of Toronto, at meetings of the chamber of commerce.
I want to refer the minister to his speeches in this respect on these several occasions and ask that he give the house an explanation, and go further than merely saying that our obligations herein-I am paraphrasing his words-do not come into the current accounts. Certainly this does not enter into the deficit figures found at the end of his address on Tuesday night.
We are to have a known cash deficit of a billion dollars. I suggest that we will require at least a billion and a quarter dollars not only to undertake what he has told us about specifically but also to assume the responsibilities that he has announced in connection with Foreign Exchange Control Act operation. How does he propose to finance this? We must know before the debate concludes. Is the minister going to do it by monetizing the lion's share through the banking system rather than with important public purchase?
He will have noted that the day after his presentation of this budget those people who usually have the most acute awareness so far as inflation indicators are concerned, acted rather promptly. There was an unusual rise of five points on the Toronto stock exchange yesterday. Most people that I have met say that this would be a well known hedge taken against inflation. I think the minister should perhaps have regard to some of these reactions. Apparently the investors in the financial markets think there might be inflation and that they should hedge against it in the market. Certainly they were grabbing for stock equities yesterday.
Last year the minister told us proudly that all was well. He said the treasury would be in a surplus position and, as I have suggested, he remained blind to any other indicators for quite a long time. Immediately after the presentation of last year's budget a very interesting publication was issued by Saunders Cameron Limited of Toronto, to its clients and others. This is a bond house whose publications are often quoted. They had this to say four or five days after the minister had presented the budget on March 31, 1960. I quote:
One of our friends feels it has gone too far-

The Budget-Mr. Benidickson
Seemingly the government and the minister had gone too far in extravagant statements such as are usually in the budget.
-commenting, "if the budget's assumptions are correct, the bond market is too high. If the market is correct, then the budget is wrong, and we will have such poor business that we will have a good sized revenue deficit."
That was at the time the minister was telling us that in the economic interests of the country we should budget for a surplus and disregard such factors as unemloyment and so on. So if again in 1961 the market is going against the minister it is a matter of many minds of people, I suggest, who feel, contrary to the minister's view expressed to us budget night that the threat of inflation is "minimal". I think that was his word. He parried the question pretty well last night on television. That these people should hedge at once against inflation because as sophisticated people they seem to think that inflation is involved in the mountain of debt which is to be added to as a result of the announcement Tuesday night, should give the minister pause for thought.
I think we in the house should perhaps look at something else that is a warning. On the very day that the minister introduced his budget his counterpart in the United States, the secretary of the treasury, made a major speech in Washington in which he indicated that in his negotiations with the United States congress he was most concerned whether or not congress would widen the deficit that would result if congress did not accept the President's proposals which on the revenue side included somewhat more stringent measures with respect to tax deduction opportunities.
The point that I thought was of great significance when I read the story yesterday was that it was obvious from Mr. Dillon's speech that although he said some compromise might be possible, he was fighting against the possibility of a deficit beyond $3.2 billion. So far as the equivalent here is concerned, one can take almost any index, population, gross national product, or individual personal earnings. Let us assume that everything is ten times bigger. If Mr. Dillon was concerned about a deficit beyond $3.2 billion in that country on the day the minister was bringing in his $1 billion budget, according to my thinking ours could be related to a $32 billion cash deficit in the United States. Mr. Dillon said that the President would veto any reduction in prospective revenue that would increase the deficit in that country beyond $3.2 billion. We are talking here in terms of $1 billion, but if you want to relate it to our population, our gross national


product or anything else, use a multiple of ten and then regard the minister's deficit in that way.
We were surprised that for the first time, I believe, there was evasiveness displayed by the minister with regard to the usual gross national product forecast. He did refer specifically at one point to a possible 3 per cent G.N.P. increase, but hon. members will recall all the escape hatches, and not the historic ones, that were related to it. The minister abandoned the historic ones last year, as I indicated the other night. I do think this is an indication for businessmen who make plans and who, having paid their taxes, think they should get from the head of the treasury, based on all the excellent talent available in the government departments, an economic forecast in such a vital matter as the gross national product.
Such a forecast, of course, is being made three months later than usual, but it still would be of some use to businessmen in their calculations and operations for the balance of the year. We want to know how the minister is going to finance this cash requirement of $1 billion. There is an unknown factor, of course, in connection with the Foreign Exchange Control Act, but let us take the announced $1 billion cash deficit. How is the minister going to finance that? Is it his proposal that the Bank of Canada accommodate this $1 billion? If it is not to be financed through the general public, will it be monetized through the banking system?
We have seen nothing in the budget to justify the very unusual delay in its presentation. I am wondering if it took the minister three months beyond the usual date for the presentation of the budget to convince his cabinet colleagues, some of whom may be spenders and some of whom may have an eye on the forthcoming election, that he must draw the line in connection with this expansionist program. Except for the decision in connection with the exchange fund, any big decision that involved dollars and cents in the budget had been made months ago. As I have said, such calculated amended decisions in respect of the current fiscal year in the budget involve only $65 million. However, for the last three months people have been paying excise taxes on automobiles which the minister says, for the economic health of this country, should be removed. Why were they not removed three months ago for economic advantage?


Paul Joseph James Martin: They should have been removed two years ago.


Paul Theodore Hellyer: You mean the government should have been removed.


Mr. Jones:: I wonder, Mr. Speaker, il you could protect the member who has the floor from the interruptions of his own members?


William Moore Benidickson: My point is that, beyond the unknown obligation undertaken in respect of foreign exchange control, this budget has nothing in it to warrant the delay. So far as the deficit is concerned, that was determined many, many months ago. Those who are familiar with government procedures know that in the autumn the colleagues of the Minister of Finance prepare for him the estimates of their departments. This perhaps occurs initially in September. These estimates are reviewed, I know, by the officials of the treasury board and then they go to the minister. The ministry then make a decision with regard to those matters of expenditure before Christmas.
I am sure this course was followed this year. It takes a considerable amount of time to have the printing of the estimates book done so the members of the house can receive the book of estimates. This book of estimates for the next year is usually presented to us in January. The minister told us on Tuesday night that quite irrespective of the lapsings and the increases in expenditures that might occur, this budget on balances involves an increase of about $450 million during the present 1961-62 fiscal year as compared with the past year.
I say the ministers of the crown had already told the Minister of Finance what they wanted and months ago he had made decisions in respect of those expenditures. In spite of this, when the minister came before us on Tuesday night he said that, in the circumstances confronting Canada "today", it is "appropriate" to do such and such. The minister's colleagues had known for months that they could not make additional expenditures without wrecking the monetary system, but it would seem that for three months he had difficulty in persuading them that these were the hard facts of life. What we really got then, on June 20, although it was wrapped up in these grand words "an economic budget", was a change of only $65 million. The minister, in standard style, used these lavish words and referred to "my program to stimulate growth, enlarge production, increase trade and extend employment". There was only $65 million worth of financial change involved as disclosed.
During the last 12 months we have had two budgets. In view of the fact that the minister was hamstrung by decisions made seven months ago when he, the Minister of Trade and Commerce, the Minister of Labour, the Prime Minister and others were saying that there was no emergency, there was
The Budget-Mr. Benidickson nothing too much to worry about, they thought, I predict that we may have a third budget within a period of 12 months.
This is easily established by looking at the accounts the minister gave us the other night. He said that to the extent our expansion is accelerated there will be an increase in revenues. Here again I say that this is not a frank statement. The budget is supposed to be a presentation by our treasurer to the citizens of Canada, and in my opinion this language involves ambiguity as I suggest it would to most people who read it. I ask the minister, does that mean there is going to be additional revenue or is he prepared to stand by the prediction that there will be acceleration during the current year that is provided for in an increase in revenues during the current year as outlined on page 6666 of Hansard?
When we get to the harsh end of the figures the minister says that the tax revenue for the current 1961-62 fiscal year is to be $5,150 million compared with $5,016 million last year, a difference of about $134 millon. Is this the minister's best guess as to what our revenues are likely to be? The minister invariably brags, and did on Tuesday, about the growth in the number of people employed. The rise in employment has not been up to ordinary standards and the numbers of unemployed have been greater than the standard. Is the minister predicting that there will be acceleration that will alter these figures before the end of the fiscal year, or is he coming to us frankly and saying that this will be the only increase in revenues compared with last year, based on a budget which, including old age security, non-tax revenues and supplementaries, will I predict eventually come to $7 billion? Is he saying that this is all that results during the current fiscal year in so far as expansion is concerned? There is not very much expansion here. This is very obvious to most people, except for the type of language that is invariably used by the minister.
The minister said that with the stimulus imparted by his budget proposals to the levels of economic activity he would expect a general rise in our tax revenues between now and next March to offset the particular tax reductions he proposed. I think he is still talking-I want to confirm it-about merely $134 million of revenue increase this year compared with last year. Of course, in so far as expenditures are concerned he said he had been big-hearted in stimulating the economy on an expansionist basis. After the fine words have been said and the figures have been placed on the Clerk's table, after the oratory is over, we wake up in the morning and read the figures and find that there

The Budget-Mr. Benidickson was only $65 million involved this fiscal year in so far normal accounts were concerned in a budget which had all this advance publicity as an expansionist budget. This means that on budget night any dynamic or expansionist programs could not be announced because the real truth is that everything that was financially binding upon the minister, and perhaps scaring to the minister, had been settled last autumn when the minister, as chairman of treasury board, approved the spending programs of his colleagues. As I have suggested, these are not at all, as the minister said in his introductory remarks, related to the appropriate needs on budget night of June 20, 1961.
The result is the treasury convinced everybody that it was bare and broke. The treasury was conscripted long ago by the ministers for political expediency rather than economic requirements. Therefore, at a time when we were led to believe we would receive some real economic guidance, something dynamic -which I believe is a favourite word of the Minister of Finance-the finance minister was helpless.
The press did not give that impression. They get advance copies of the minister's budget words. They have a closed conference on budget day and they have to read a long speech. The word goes out, "Canada has a cash deficit of $1 billion" and the impression given is that in the main it involves new decisions for dynamic leadership decided upon by the minister just prior to budget night. This is not the fact. There are other obligations, which the minister has not disclosed. These involve taking at long last some leadership in the exchange control field.
We even had an investigation in parliament recently. We had a most useful one undertaken by the Senate manpower and employment committee. There is a large Liberal majority in the Senate itself, but in the committee there was a majority of supporters of the Conservative government. However, that was of no consequence; the report was unanimous. This committee did a great job over two sessions. It was one of the most useful committees I have known and I compliment those who took this matter so seriously. It was a marvellous thing that so many worthy people and organizations from across the country appeared before that committee to give their counsel in this most serious matter. I refer, of course, to the problem of the great number of unemployed in this country today.
The result is that notwithstanding this most recent parliamentary report, and despite the minister's budget oratory-I say we have had there only the dynamism of the wind"-mill, when one reads the 50 or more pages


of his speech which result in very little financially or socially-there was nothing dynamic in the minister's announcements budget night. We might have expected something dynamic in regard to education. I am sure the minister has seen and is familiar with the report of the Senate committee on this question, but I think the house and the country should be made familiar with what the Senate committee thought was of prime importance after its extensive deliberations.
I refer to the section of the Senate committee report dealing with education and the fact that without retraining and education those still in school, and those who have left school, are in their judgment likely to find it very difficult, even in good times, to earn enough money to maintain the standard of living this country wants to see them maintain. I quote from page 8 of the Senate report:
This leads to a consideration of the whole question of education and training in Canada. Nothing-
I emphasize these words.
Nothing has impressed the committee more than the very heavy incidence of unemployment among young people, the unskilled, and the inadequately educated. This has been brought out repeatedly, both by the committee's own research staff and by other witnesses. Every study that has been made reveals that in the economy of today the emphasis is increasingly on skill and training, and every forecast that has been prepared indicates clearly that this trend will continue in the years ahead. The opportunities for unskilled and semi-skilled workers are becoming more and more limited as time passes.
This situation must be viewed with a sense of urgency. Without any question we must devote a much larger proportion of our resources to education and training of all kinds-
If the minister was anxious to follow that recommendation it seems he was unfortunately without resources. It had been decided months ago what was to be done. The Senate manpower committee report says we must devote more resources to education and training.
The Senate committee conclude this portion of the report by saying we must begin now.
The minister may say we had such a program this session in connection with vocational training. The Senate manpower committee were well aware of that, but in their view it was quite inadequate to meet the very important problem with which they were dealing. What is this government doing for the young person? These young people are the ones who in large measure cannot enter the labour market in an initial way and find a job when times are as tough as they have been and continue to be.
All the government is offering our young people in this budget is this. "You will assume,

in addition to the debt of perhaps $14 billion net that we older people left you, another $700 million approximately as of today. We do not know when we will pay it. That will be a burden upon you as you grow older".
Despite the promises of this administration prior to coming into power, nothing has been done for the municipalities. I could quote, but I will not do so, the lavish inducements that were given to representatives of municipal governments and their taxpayers in regard to assistance they might be given if the Prime Minister assumed his present post.
In so far as employment is concerned, I am satisfied that much more can be done at the municipal level, and much more quickly, to reduce unemployment in the municipalities, if the municipalities have the proper resources, beyond that which can be done by some fancy federal public works building that usually requires a great deal of long range planning and so on. I think this budget contains $10 million of tax forsaking for the encouragement of more efficient business. I look across to my hon. friend the Minister of Trade and Commerce. Rumour has it that he meant what he said across the country, that he wanted exports to increase and he would do his best in cabinet discussions to see that exporters in this country were not non-competitive; he would do his best in connection with tax situations that put industries in an unfair position in respect to their competitors.
We have a section in this budget dealing with depreciation allowances. As I say, the cost to the treasury is $10 million for 1961-62. That is not very much when compared with the ambitions of the Minister of Trade and Commerce for our export trade. I believe almost everybody thought the minister would be successful in encouraging those in the export field by providing some spur from this government in the form of tax incentives. However, there is nothing in this budget in that connection. There are many who believe we could not lose anything by giving a tax abatement for the first two or three years of production to new industry which has never provided tax in the past. We do that for the resource industries. If the government has not been getting any taxes at all and an industry is likely to encourage the production of taxes in the near future, would this not be an incentive that would mean something? The Minister of Trade and Commerce looks rather sad. I think perhaps he got the facts of life from the Minister of Finance.


George Harris Hees: That is not why I am looking sad.
The Budget-Mr. Benidickson


William Moore Benidickson: But while we need this at this time, and though we needed it a year ago, nothing has been done. Perhaps now it cannot be done because, as I say, the treasury is bare and broke.
There are other suggestions of this kind with which the minister is familiar. I was impressed, as I am sure a great number of other members were impressed, as to what this restraint means because of past commitments and decisions. The most worth-while thing we should be thinking about are ways and means of reducing to a minimum the canker of unemployment. I read with grave concern the report of the Senate committee in this respect. They said they hope we shall get at this time bold actions. The Senate said that large amounts of money would be required but that mass unemployment in itself entails the expenditure of large amounts of money.
The Senate committee estimates that unemployment benefits and unemployment relief cost Canada roughly $600 million last year. In addition there is a production loss- and this is a factor which should always be in our thinking-which may be put close to $3 billion. On top of this is the social and psychological damage caused when hundreds of thousands of men are unable to find work. This cannot be afforded. It simply means that we have to be in a position to deal with this in a financial way, and I think the Minister of Finance, when we are engaged upon a discussion of Canada's finances, must be prepared to do that.
As I see it, those are the bare bones of the dollars that are involved and are upsetting ways and means. After two hours and 30 minutes the facts come out, but of course they come out only when we see the text when we read Hansard because they are contained in a table which goes to the Clerk. But the grand words of the minister go out to the press beforehand. We have a deficit of a thousand million dollars-


Donald Methuen Fleming: That is the cash deficit.


William Moore Benidickson: That is the cash deficit. The minister, of course, having been found wanting in his prognostications in a specific way got a little timid this time and took the attitude well, it will likely be $650 million but I want a little insurance this time so that I shall not be criticized for being a bit out. Of course he was out this last year to the tune of some $350 million; the difference between a $12 million surplus and a $345 million deficit is actually more than $350 million. However, the minister has done the unusual thing here, and he has a spread of $100 million. Besides this, he has not been

The Budget-Mr. Benidickson frank and forthright with us, as I think he should have been, in giving us even a key. He has couched references to the gross national product in the most vague terms and this, I suggest, is unprecedented.
However, we have in this budget one element which, perhaps, is of some consequence and to which attention should more deservedly be paid. I refer to the minister's statement with respect to capital savings, balance of payments and exchange rates. I quote from the hon. gentleman's budget speech.
When the economy was fully employed and expanding rapidly and when inflationary reserves were active, such capital inflows-
The minister had been talking about capital inflows.
-and the matching import surpluses of goods and services were appropriate and beneficial.


Lionel Chevrier: That was in Liberal times.


William Moore Benidickson: I was going to refer to that.
Under today's conditions they are not only unnecessary but in some forms they can be even harmful.
Even in the current session, and certainly in every other session of the present parliament during the past three years, the minister and all those associated with him have said the very opposite. They have spoken with great horror about the previously high imbalance of payments in 1956, and, of course, used it very noisily during the last election campaign. Nevertheless here we find these astonishing words "when the economy was fully employed and expanding rapidly". Does anybody doubt that the economy was at its peak in 1956? But when that was the situation-and the minister has always asserted that there were unnecessary inflationary pressures at that time-the hon. gentleman finally says to us, after four years of political activity on an opposite course, that these were appropriate and beneficial under those conditions.
Then the minister goes on to say, in this section of his speech:
The public reactions to these warnings and measures-
He is speaking of the budget of March, 1960.
-have clearly been in the right direction. The capital inflow has been reduced, the exchange rate on our dollar has been reduced, the surplus import of goods and services has been reduced; but they have not been reduced enough.
But to return to the minister's performance last Tuesday night on television, I must say I was astonished that when he was challenged as to why he had been so slow in taking action in the control of foreign exchange, if that was to be so tremendously


beneficial, he should have said that while it was not appropriate then, because of what he had done a year ago it still was now appropriate. The interesting thing is that one has to go outside the budget speech to another speech which the minister made in the country in order to find a key to why he thought his budget of March 1960 was helpful in the matter of reducing the premium on the Canadian dollar.
I find that the minister has held this view for all the 15 months since he presented that budget. The interesting thing is that apparently it was the fact that he was only going to the market for $210 million that made this helpful. Indeed, as late as January of this year, in his 1961 budget presentation to his friends in Toronto, the minister made the statement that his budget in 1960 had been helpful in the Canadian dollar situation because he went to the market only for $210 million, and it had a direct relation to the premium on the Canadian dollar. Now what is the situation going to be when in one portion of the budget the minister says he is going actively into the market to assure that the Canadian dollar goes down and there will be, using his words, "a significant discount"? We, of course, want to know what "significant" means before we can conclude this debate.


John Whitney Pickersgill: We will not find out.


William Moore Benidickson: We will put forth our best efforts to find out. There is great inconsistency. The Minister of Finance in Toronto as recently as January was defending the uncontrolled exchange rate on the Canadian dollar. I think he will recall that we in the opposition expressed concern a year ago that the premium on the Canadian dollar had a very damaging effect upon our over-all economic situation, and particularly upon our vital export trade and tourist trade. As I say, the minister was a great defender of the uncontrolled premium as recently as a year ago.
It is very disturbing to some readers of the minister's budget to compare his former statements with the minister's statement on Tuesday night in which he said, in connection with balancing payments, that it would be the government's aim to reduce the trade deficit and the balance of payments substantially, and to ultimately achieve a position of balance. In the next paragraph he said the government's purpose was to put Canadian producers in a position where as a result of these policies they would soon-he was talking about exports-be selling at home and abroad many hundreds of millions of dollars worth of Canadian goods and services which would yield a substantial effect, directly and indirectly, in the form of "more jobs, more

production, more business opportunities for our industries." Here again is the usual very extravagant language of the minister regarding what is going to be done about our exports.


George Harris Hees: That is very true.


William Moore Benidickson: The Minister of Finance apparently has confirmation from his colleague the Minister of Trade and Commerce that this is the forecast. I hope they are both better prophets now than the minister was in connection with the over-all forecast regarding a surplus a year ago.
I should like to say in this connection that when emphasis is placed in this budget on the value of the government intervening in connection with exchange control, there is inconsistency; and 1 refer to the minister's statement on this subject in Toronto on January 11, 1960. He said that anyone seeking to buy Canadian dollars with United States dollars or other foreign exchange would create a demand for Canadian dollars, and this demand for Canadian dollars arises from our merchandise exports, from foreign tourist expenditures in Canada, from foreign purchases of Canadian securities and from a whole host of other transfers of funds from foreign countries to Canada. He also said the effect of Canada's very large deficit in its commodity trade and other current account transactions tends to raise the value of United States dollars in relation to Canadian dollars. Indeed, the larger the trade deficit the stronger is the upward pressure on the United States dollar as compared with the Canadian dollar. Those were the statements he made as late as January, 1960.
We are now told that the big thing in this budget is the likelihood that the government will assure that the Canadian dollar will remain at par or, indeed, at a significant discount. In the same speech we are told that we are going to eventually eliminate this imbalance of payments, and that this means, in the words of the Minister of Finance, hundreds of millions of dollars of exports. I think we are entitled to a little further explanation about this ambiguity.
I ask how expensive this is going to be if the minister is going to control the exchange as between the Canadian and the United States dollar. I am not complaining about his objective in this regard because we have urged the same objective but he is not telling us about the financial obligations which will result. I suggest they might be very severe, having regard to what he said last year. I am taking his word of last year, when he said that this would be exceedingly expensive. Then he said in his budget that exports were going to increase by hundreds of millions of
The Budget-Mr. Benidickson dollars and that this would help to increase the value of the United States dollar vis-a-vis our own. I suggest we have heard much too little from the Minister of Finance in this respect.
The minister also said in that same speech of January, 1960 made to the Canadian club in Toronto in respect to the premium-and he was referring to United States and foreign investors-that if outsiders wished to invest in Canada it was because they have confidence in our country and its financial soundness. I suggest that the minister has announced a tremendous cash and huge ordinary deficit as shown by the budget papers we have before us.
As somebody asked last night during the press conference program, is it possible that the minister is really thinking that this control on foreign exchange is in fact not going to be very expensive to him because in the ordinary course and due to some of the matters to which I have just referred, as the Canadian dollar will perhaps fall anyway in relation to the value of the United States dollar.
Mr. Speaker, I see it is almost one o'clock, but before we adjourn I should like to refer to a press clipping which I now have through the courtesy of my friend behind me. It is from the Ottawa Citizen of February 2, 1961 and contains a spanking, a whipping up, or cheering on by the Minister of Trade and Commerce. The heading is "Hees Blames Canadians for Slowup". The minister is reported in this article as follows:
"We are facing a difficult time and things are going to get worse before getting better".
This statement was made after the glowing report made to the citizens of Toronto in the annual statement of the Minister of Finance early in January, 1961, at which time he suggested there was no emergency and indicated just too much complacency.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
William Moore Benidickson: Mr. Speaker, when the house took recess at one o'clock I was dealing with what I thought was one of the major items of interest in the budget-and there were not too many of them-that might have justified the delay in its presentation. I was dealing with the proposal of the Minister of Finance for a new policy with respect to foreign exchange control, which he argued against last year.

The Budget-Mr. Benidickson
In the course of my discussion I indicated that the minister had appeared at a press conference on television last night. One of the members of the press asked him whether it was a fact that from December, 1960 to May, 1961 the records of the Bank of Canada indicated that only a reduction of half a point in the Canadian dollar premium had been achieved vis-a-vis the United States dollar, and that according to the records it appeared to involve, as I heard it come over the air last night, $100 million for a half point difference in premium. During the noon hour I ascertained that the figure used by Mr. Barkway last night was $120 million.
I referred to the fact that just before the house opened this morning I had received this week's issue of the Financial Post, and that it contained an article by Dr. D. B. Marsh, assistant general manager of the Royal bank. The heading of the article reads:
Keeping the dollar at fixed "parity" could be costly.
I had been told that this article would assert, as it does, that it was likely this operation would require $200 million per point just to keep the Canadian dollar at this predetermined so-called parity. The minister has not indicated to us that parity is his objective. He has used vague terms. In view of what is involved we should hear more from him. He indicated that a significant discount was his objective.
I have spoken at greater length than I usually choose to do. I had hoped that I could have some time to discuss the important matter of interest and debt management. I know that my good colleague from Welland will be heard from later in the debate with his shrewd observations in this field. I would have liked to say something about the industrial development bank. I may say to the minister I regard his announcement in this respect as significant also, and he is to be commended on his decision here. However, I think the suggestion in the budget speech that we are to have legislation during this session to amend this act indicates not too much foresight in the preparation of the work of the session. I do not think this was part of the program announced to us in the speech from the throne. I indicated earlier that prior to Christmas the opposition had given extreme co-operation and had disposed with rapidity and expedition of any items that the ministry had prepared and ready for the session that were directed toward creating jobs, not only during wintertime but jobs per se.
I raised this question last year in a similar debate. I said if the minister took the position that he never said that tight money and

actual monetary policy belonged to the Bank of Canada, the decision to amend the industrial development bank legislation in this particular field could be taken by the government. It could have been done during the last session if the minister had the feeling with respect to high interest rates about which he now expresses some concern. It was not done during last session. There was no indication that the planning of the government in November had advanced to the point where they were prepared to do what was announced last Tuesday night. I said last year in the debate that at a time when the banks had been nudged by the minister to reduce the prime lending rate on commercial loans, it seemed unfortunate that the industrial development bank had not followed suit.
Prior to the budget speech the minister suggested to us during this session that he was in some way responsible and should get some credit for the fact that the prime lending rate of the commercial banks was recently reduced one quarter of a point. If it is so that the minister had a finger in that development, I say to him that at the time I raised the question why a similar development did not take place with respect to the industrial development bank. I think this, as well as the Central Mortgage and Housing Corporation interest rate, which is a matter of government decision, should be very much to the fore so far as the minister is concerned when he says he is doing all he can, I assume through all possible avenues, to reduce the general level of interest rates across the country.


Donald Methuen Fleming: I take it that the hon. member is aware of the fact that the interest rate charged by the industrial development bank was reduced not long ago by half of 1 per cent.


William Moore Benidickson: What is the current rate?


Donald Methuen Fleming: Six and a half per cent.


William Moore Benidickson: The minister says "not long ago". The newspaper clipping I have with respect to the matter is dated September 13, 1960. That is some time ago. According to my information that was the last cut in the interest rate. The level was reduced to 6J per cent not recently but as long ago as September of 1960, certainly long before the minister claimed credit, as he did on two occasions during this session, for nudging the commercial banks to reduce their prime lending rate.
I had hoped that time would have permitted me to say something about the desirability of going beyond the productivity council and setting up the type of body that

has been discussed here from time to time and which has been developed in the United States under the Kennedy administration, namely a price-wage board. I also feel that the productivity council is not the entire answer to some of our needs at the present time with respect to imaginative programs to get the economy on its feet. I think we should have an economic research agency that would carry out greater co-ordination among the departments of government which in my opinion are inadequately co-ordinated today.
The minister will be more familiar than I am, of course, with certain new developments in connection with an international monetary organization going beyond what we have today. When the minister speaks again, as he usually does, I should like to hear something about Canada's attitude toward the plans for an Atlantic monetary organization. At least three plans have been presented to most countries in the western world, the last one by Professor Tiffin. I should like to know whether Canada has been approached with regard to this new idea, and to what extent it might be an advance while still not interfering with or superseding the international monetary fund.
I should have liked to deal with several other subjects, but in view of the fact that the exchange fund problem had in my opinion been inadequately explained I thought I would devote as much time to that subject as I have devoted today. We have a cash deficit of $1 billion which we know about, but heaven knows what more is involved. When one reads the fine print in the minister's statement with relation to foreign exchange control and when one reads that the minister himself last year had great apprehensions about this matter and referred to the possibility of gigantic gambles with the taxpayers' money, I think it is very surprising that in his long speech, in which he generated a great amount of wind on so many matters that did not seem to have too much significance, the minister could only spare one little breath with respect to possible financial liability in connection with the foreign exchange control problem and the gamble with the taxpayers' money that might be involved.
Trade is a matter to which I should like to refer, but I will not take the time to do so now. I know that others on this side of the house will deal with it. All I want to say on that subject at this time is that a week ago, prior to the budget, the minister promised an expansionist budget, but when one reads the details and the fine print one finds that in the field of trade the budget is restrictionist and not expansionist.
The Budget-Mr. Regier
Finally I should like to move, seconded by the hon. member for Bonavista-Twillingate:
That all the words after the word "that" be deleted and the following substituted therefor:
"this house is of the opinion that the financial proposals of the government, as set forth in the budget presented to this house by the Minister of Finance and contrary to the advance publicity, are restrictive of trade and thoroughly inadequate to expand the production and jobs needed to ensure the growth of the economy, despite the burdens imposed by a fifth consecutive deficit of a record size;
And the house believes that for this reason, and because of the general mismanagement of the country's financial affairs, the government is not entitled to the confidence of the elected representatives of the people."


Mr. Erharl Regier (Burnaby-Coquiilam):: Mr. Speaker, in the baby budget brought down last December we at long last had an admission on the part of the government of its failure to meet the national needs. In December the minister told us of his error in forecasting and informed us that he was going to have a whopping deficit. In the baby budget we also noticed a recognition on the part of the government that action was indeed needed. The economy had not received the big push forward that we had looked for and that was so badly needed. However, in the baby budget the government at least did give a little nudge to economic activity in our nation.
Now it is admitted that the failure of the government to take the radical measures that were necessary has cost us half a year of needless stagnation in our national economy. In addition it has imposed needless hardship on the millions of Canadians who are at exceptionally low levels of income, and especially it has caused needless hardship to the over 700,000 Canadians who were unemployed for so much of the past year, and many of whom are still unemployed. Then, too, Canadians had been led to believe that the government was at long last in favour of expansion; that it was even going to take measures to loosen up the money supply and drastically reduce interest rates. We also expected some large scale measures in the budget specifically designed to stimulate and enhance economic activity.
What did we get instead? There is not much in the budget, Mr. Speaker, about which I can complain. There is not much that is particularly bad. There is one thing that is bad about it, and that is what is not in the budget itself. The budget is lacking in any major measures designed to remove our economic ills. As a result of what is not in this budget, I can only come to the conclusion that the government admits it is unwilling or unable to take the measures that are necessary, and that the basic flaw is deeply imbedded in our economic system, our

The Budget-Mr. Regier system of economic anarchy which parades under the false front of free enterprise.
This advice that the minister gave to Canadians to work hard and pratice self-discipline is not going to be taken very kindly by the half million Canadians who would be very happy indeed if there were employment available and they were able to work hard. They are going to consider this as a bit of ill timed advice. The minister blames Europe for his great error last year when he predicted a 6 per cent increase in gross national production. It is amazing, Mr. Speaker, but every time there is something haywire in the minister's calculations or in his estimates he always manages to find somebody else to blame. I can recall a number of occasions when he put the blame for what was happening on the United States. Now he has turned to Europe, which is supposed to be responsible; or perhaps it is the governor of the Bank of Canada, who is now pictured as such a vicious ogre, a man who has plotted and schemed against the intentions of this government.
I do not think he can get off the hook as easily as that, by blaming the United States or Europe or the governor of the Bank of Canada. We cannot forget that the minister is the owner, on behalf of the people of Canada, of the Bank of Canada. The Canadian people are not going to take kindly to the government blaming one of the employees of the bank, even though he may be the governor, for the lack of action on the part of the government, even though this attempt is hidden under the smokescreen of a charge that the governor participated in increasing his retirement allowance.
On January 16 last our group moved an amendment to the baby budget. We made a number of recommendations in our amendment, but there were three specific recommendations having to do with monetary policy. I should like to put them on the record. Recommendation No. 1 was to lower interest rates; No. 2 was an expansion of the money supply commensurate with a full employment program; No. 3, assistance to export and domestic industries by taking those steps necessary to reduce the premium on the Canadian dollar.
At that time, and on other occasions, the minister heaped a lot of ridicule on our proposals in the field of monetary policy. He made many speeches both inside and outside of the house in which he told the Canadian people it was impossible to implement those recommendations. Now, at long last and rather belatedly, the minister has officially endorsed each of those three proposals. I should like to commend him for that. I only hope his endorsation of these proposals will

result in very early action, because the nation needs the action that is contemplated in these particular proposals. At the end of my remarks today our group hope to offer additional proposals that we feel should be implemented. I hope this time the minister will not be as long in adopting the new proposals that we are going to make in our amendment.
I listened for some time to the usual complaints of the Liberal party. I regard their attitude as most irresponsible. We are here to attack, that is true, but we are here also to offer useful counterproposals to those of the government. I find very little in the whole of the Liberal complaint about the budget that could be classified as useful counterproposals. Even their amendment seems, in effect, only to call upon the government to resign in order, I assume, to make way for the resumption of the Liberal party in office. The Canadian people are not going to forget so easily the many long years of mismanagement by the Liberal party which led us into the economic mess in which we have been ever since. I believe that the utter failure of both the Liberal and Conservative parties to come forward with concrete measures designed to enhance economic activity in Canada indicates the bankruptcy of their basic political philosophy.
The minister predicted a deficit, on operations I take it, of some $650 million. If this were a deficit that was designed to do something to move the rate of economic activity to a higher level; if the deficit were designed to attain national objectives, we would heartily endorse the deficit. We have never been opposed to deficits that are deliberately planned to accomplish certain economic aims. However, this deficit with which we are now faced is only the result of poor housekeeping. It is a deficit on the normal operating account of the government.
I believe it is a horrible indictment of the ability of the government to adequately manage national affairs. If the government were to ask for a deficit designed to rid the country of unemployment, to give all people a minimum basic standard of living worthy of our nation's resources, then I would say that the people of Canada would heartily endorse the deficit. But the people of Canada are going to take a very dim view of a government that admits its inability to handle financial affairs.
This is a passive deficit, and I see no indication in the budget of the expansion that we had been led to believe would be forthcoming, especially in the light of the attack on the governor of the Bank of Canada. It is our contention that our economy is not going to improve all by itself; that

government action is necessary. It is also our conviction that our ills will not be remedied until the government subscribes to and implements the basic philosophy of a planned economy.
I should like to say that I regret very much the admission of the minister that for his lifetime in office he has avoided consultation with the governor of the Bank of Canada in the preparation of the budgets he has presented to this house.


Donald Methuen Fleming: I did not say that.


Erhart Regier: I believe this is a serious oversight on the part of the government and may in large measure be responsible for the mess in which they now find themselves.


Donald Methuen Fleming: I never said what you are attributing to me.


Paul Joseph James Martin: Yes, you did.


Erhart Regier: The failure of the government to decide these matters in consultation with the governor of the Bank of Canada and to seek the advice of the man who ostensibly operates the Bank of Canada in the interests of the people of Canada is a serious matter. The minister complained that because of the intransigency of the governor he was unable to consult with him in the preparation of the budget.


Donald Methuen Fleming: I did not say that.


Mr. Marlin (Essex Easl):: Certainly the minister said that.


Erhart Regier: I heard the minister say that the day before yesterday, and I believe the record of Hansard will show that very clearly indeed.


Peter Francis Martin: Hear, hear.


Erhart Regier: The minister now predicts an increase in the gross national product-we can only assume he is doing so-of roughly 3 per cent. This is completely inadequate to meet the needs of our country. When you consider that the minister is going to depress the value of the Canadian dollar; when you consider the increase in our national population per annum, the minister is actually predicting a per capita decrease in the production of goods and services. This admission that things are not expected to improve indicates that the government seems quite content to live for another year with a level of business stagnation, as we now know it, of almost one million unemployed next winter; and there is an indication that the government intends to attempt to ride out the storm hoping that by some miracle conditions will right themselves.
I may say it is interesting to note, in regard to the increase in our gross national product,
The Budget-Mr. Regier that there has not been enough growth ever since 1956 to match increases in our labour force and take care of those displaced in industry and agriculture because of technological changes. In constant dollars our gross national product has risen. In 1957 it rose by .1 per cent; in 1958 by 1.1 per cent; in 1959 by 3.2 per cent; in 1960 by only 2.1 per cent. That stands in sharp contrast with what happened in the years preceding 1957. In 1950 the rate of real growth was 6.9 per cent; in 1951 it was 6.2 per cent; in 1952 it was 8 per cent; in 1955 it was 8.6 per cent; in 1956 it was again 8.6 per cent. The per capita value of goods and services is today 5 per cent less than it was in 1956, and the minister is predicting that this very sad situation is going to continue at least until the end of the next fiscal year, namely March 31, 1962.
We have one of the highest rates of labour growth in the entire world. I believe only Japan has a labour growth rate in excess of ours. In the eight years 1950 to 1958-and these figures are taken from the United Nations world economic survey, 1959-we had an annual labour force growth of 2.2 per cent, whereas in the Netherlands it was only 1.2 per cent and in the United Kingdom it was only .9 per cent. When we have this rapid labour force growth action is essential on the part of the government to ensure that employment opportunities advance at a rate that is at least equal to the rate of growth of our labour force.
We had anticipated there would be some massive plans presented to the Canadian people at this time. Pump priming, as it has been commonly known, at this particular time in the field of production would be of little value. We need to take action to stimulate effective demand in Canada in order to assure ourselves of adequate opportunities of employment. The government is not undertaking measures that are designed in that direction.
I should like to ask the minister, since he now subscribes ostensibly to a policy of lower interest rates, how he plans to effectively reduce interest rates when he himself admits that we will have to find over $1 billion of additional money on the money market or by using the Bank of Canada. I believe the minister is contradicting himself when he blames the governor of the Bank of Canada for excessively high rates of interest when he, by his own activities, is going to be responsible for this terrific amount of new borrowing on the Canadian money market.
The whole role of the Bank of Canada, I am very happy to note, is likely to be reviewed by a royal commission, I believe the government has announced. I notice this

The Budget-Mr. Regier also had the hearty endorsation of the governor of the Bank of Canada, as I believe is also indicated by the report of the Senate committee on manpower. I should like to read what Mr. Coyne had to say about this matter. I read from Mr. Coyne's release to the press of June 15:
I also entirely agree with the committee's-
He is referring to the Senate committee:
-view that there is need for "a comprehensive study and re-examination of our machinery for monetary control and of its place in the formulation and the carrying out of economic policies". Such a study, whether by a royal commission or other suitable body, would of course have to include the entire banking system, and indeed all the public and private financial machinery in Canada, within the scope of its review and recommendations.
I believe the day is long overdue when the whole role of the Bank of Canada should be thoroughly reviewed and alterations made so that the Bank of Canada is not limited to one narrow aspect of the monetary field. It cannot effectively deal with our monetary needs if we have many investment houses and insurance companies which have far more power, far more authority or far more effectiveness than even the regular chartered banking system of our nation.
This situation did not obtain when the Bank of Canada was initially established. However, it is a situation that we must face up to today, and I believe we will come to the conclusion that whoever is responsible for the operations of the Bank of Canada will have to be given authority much wider and much more extensive in the field of monetary policy than has been the case hitherto.
The government is recommending exemptions for explorations under the Income Tax Act for certain industries in Canada. I find this a little difficult to appreciate when we have in existence unused known resources, unused capital goods, machinery operating at half capacity and in many cases less than that. I feel that when existing known resources are not being fully utilized it is a poor time for the government to be making these extraordinary concessions to encourage additional exploration. There have been warnings issued in the past about this reckless capital expansion, this reckless expansion in our productive capacity. Such men as the heads of the pulp and paper industries of Canada have openly admitted that they have been guilty of overexpansion in the immediate post-war years and that today they are having to operate under a handicap in consequence because they are very badly overcapitalized. I believe the oil industry is another perfect example. We now have to pay capitalization costs on oil wells which are not likely to be used in my lifetime; they will be used, maybe, by my sons or grandsons.
[Mr. Regier.l
However, the present economic system has to bear the cost of maintaining this reckless expansion which has taken place in years not long gone by at a period when our nation lacked the resources necessary to expand in the essential fields of education, hospitalization, roads, highways and the like.
We agree that the government needs an adequate level of income. We have never argued that our proposals can be implemented without our having to pay for them. We do believe that the government can enhance its income most easily by pursuing a policy of full employment. This would make it easier for all levels of government to meet their responsibilities. We believe this is the easiest way by which government revenues could be enhanced to the point where there would, at least, no longer be any need to ask parliament to approve a deficit budget in order that ordinary housekeeping expenditures might be met. We would recommend some reductions in taxation, but also some new taxes and some increases in the field of taxation with the net result that, assisted by a full employment policy, all levels of government would be able to discharge their responsibilities.
I should like at this time to call on the government to take action to protect the consumers of Canada. I believe the consumer is becoming increasingly aware of his identity as a consumer, and that he is becoming more and more restless because of the unwillingness of the government to take action to protect his interests. I make particular reference to the utter failure of the Combines Investigation Act to fulfil its assigned responsibility. It has been ineffective in preventing ruthless exploitation of the Canadian consumer. With the permission of the house I should like to put into the record a table submitted by the Minister of Justice on February 8, 1960 in reply to a question asked by the hon. member for Skeena, because I do believe that the readers of Hansard would be most interested in noting how great a variety of consumer goods has been dealt with by the officers of the combines investigation branch, including some of the most essential articles in our daily life such as bread, matches, roofing, wire and cable. I believe it would be in the public interest for the public to see that what the Prime Minister recommended when he was in opposition is most urgent at this time, namely that we put some teeth into our Combines Investigation Act. Merely to levy nominal fines on offending companies is obviously not having the desired effect. Despite all the hard and conscientious work of the civil servants who have the responsibility for

making the act as effective as they can, it is obvious that much stronger measures will be necessary.
I should like to cite just one example. A number of years ago the oil companies in the lower mainland of British Columbia were found guilty of price fixing. Nominal fines were imposed. I believe the companies may even have had the decision reversed later on in a higher court. However, by deliberate design they now have invented a new kind of agreement with the dealers, the retail agents of gasoline and oil, which completely flouts the intent of the Combines Investigation Act. I had discussions with one of the oil companies, and the officials were prepared to admit that they were circumventing the intent of law even though, perhaps, they were remaining within the letter of the law.
I have with me certain details in connection with this matter. I have invoices which indicate that a dealer who signs an agreement on the dotted line and agrees to be their slave or serf is allowed a margin of 7 cents a gallon on the gasoline he sells. However, if he insists on his independence he is allowed a margin of only 3.6 cents a gallon. This was a few weeks ago, and I understand the figure has since been reduced to 2.6 cents a gallon. I do not blame the operators of the retail outlets. They are doing their best under very difficult circumstances. They have to survive on very narrow margins. We had the University of British Columbia make a survey of all the service stations in the municipality of Burnaby, and this commission found that the net earnings of all the operators of all the service stations in Burnaby in one year amounted to less than 80 cents an hour. It is a disgrace when so-called independent businessmen earn a net income of no more than 80 cents an hour.
I understand that one company, and I have a record of it here, is engaged in a dispute. It is not before the courts yet so I can speak of it, but it may come before the courts. This company is attempting to cancel its mortgage agreement with the oil company. It is offering to pay every nickel it owes, but the oil company is not accepting the offered payment. I believe we ought to take legislative action so that if a man owes some money and is prepared to repay what he owes, he may have the right by law to get off the hook and get out from under his obligations.
This particular retail company has been warned that if it cancels the agreement, either legally or otherwise, the oil company may undertake a claim for damages against it and might be prepared to sue for loss of business amounting to as much as 10 cents a gallon for each of the next five years, running
The Budget-Mr. Regier in this case to some $60,000. I would dare a Canadian oil company which allows a margin of only 2.6 cents a gallon to publicly sue any operator for a loss of business at the rate of 10 cents a gallon. I think if they did that the people of Canada would once and for all be able to see that it is not the retail operators but the monopoly cartel of our oil companies who are responsible for the racketeering and the needless exploitation that goes on.
Let no one say there is no monoply. Imperial Oil, either alone or through its subsidiary companies, owns oil wells in Alberta, pipe lines that take the oil to Edmonton, the gathering system, the Trans-Mountain Oil Pipe Lines, and their own oil refinery outside Vancouver. They deliver in their own trucks and own their own retail outlets. Then, as I have indicated, the man actually doing the work in rain and sleet earns less than 80 cents an hour. If this is allowed to continue it will not be long before the big companies dictate whom he is to marry, when he may marry and so on. I call on the government either to amend the Combines Investigation Act or to bring in other legislation to ensure that the consumer of Canada is not going to be a forgotten man, and that the hard working businessman who wants to be independent is not exploited as he is at the present time.
I indicated earlier that at the end of my remarks I intended to move an amendment in which would be contained some specific recommendation. These recommendations may appear very expensive to the public treasury; however, I should like to point out that in our opinion these recommendations will enhance effective demand for consumer goods in Canada and will thereby be responsible for getting the wheels of industries going again in order to supply the need for consumer goods. The government, incidentally, will find its revenues enhanced as a result.
I should also like to point out that many of these payments we propose return by way of taxes, and in other ways. All levels of government added together take about one third of what the average Canadian earns. Therefore to increase the average Canadian income is not necessarily a net expense on the part of the different levels of government.
I should like to move, Mr. Speaker, seconded by the hon. member for Peterborough:
That the amendment be further amended by deleting therefrom all the words after the word "size" and adding thereto the following paragraph:
And this house regrets that adequate consideration has not been given and the government has failed to undertake social and economic planning necessary to stimulate the economy, provide full employment, and give an adequate level of social security by such specific measures as:
1.	Haising basic exemptions under the Income Tax Act.

The Budget-Mr. Regier
2.	Increasing old age security and assistance payments.
3.	Increasing family allowances to restore the value of their original purchasing power.
4.	Establishing a national security plan, by arrangement with the provinces which will include a portable pension plan available to all residents in Canada.
Perhaps I might interject here to point out that what the minister has proposed in his budget in regard to portable pension plans does not represent the kind of portable pension plan that we have been advocating, because what he proposes will still leave without any pension plans at all, many millions of Canadians who are now without adequate pension plans.
The amendment to the amendment continues:
5.	Increasing the investment in the public sector in order to increase and sustain a high rate of economic growth by providing highly essential public goods and services such as health services, including hospitals and other medical and dental facilities necessary for a comprehensive health program, low cost housing, assistance to municipalities for urban development and renewal, highways and conservation.


Mr. Speaker:: Does any hon. member desire to comment on the regularity of proposing this amendment before it is put before the house?


Mr. Richard A. Bell (Parliamentary Secretary to the Minister of Finance):: Mr. Speaker, I submit that there may be some doubt as to the regularity of the amendment, and suggest that Your Honour might like to take it under consideration before putting it to the house. I should think if the amendment simply read "This house regrets that adequate consideration has not been given to-" and then went on to enumerate the various items, it would probably be in order. The fact that it goes on to say "-and the government has failed to undertake social and economic planning necessary to stimulate the economy-" would appear to give a direction to the government in relation to the items enumerated, and if it does such it would, in my respectful submission, be out of order.
I have only had a very brief opportunity, as Your Honour realizes, to examine this proposed amendment to the amendment, and I suggest Your Honour perhaps should reserve the issue in order to have the opportunity of examining it before it is put to the house.


Erhart Regier: Mr. Speaker, perhaps I could be allowed to say a word or two in respect to the point of order raised by the parliamentary secretary to the Minister of Finance. I should like to call Your Honour's attention to the fact that the motion reads:

This house regrets that adequate consideration has not been given and the government has failed-
I do not believe that can be interpreted as a directive to the government, but is an expression of the opinion that this house feels the government has not taken this action.


Paul Joseph James Martin: Mr. Speaker, I should just like to speak briefly to the point of order. There would, of course, be no objection to Your Honour reserving your decision without prejudice. However, I do not agree with the view taken by the parliamentary secretary. I am not now commenting on the merits of the resolution one way or another but one must support the suggestion that we should give full consideration-although I have no hesitation in saying that the increases in old age security benefits-


Donald Methuen Fleming: Order.


Paul Joseph James Martin: -and family allowances are not being opposed by anything I say. Likewise, with regard to the question of portable pensions, we are in full support of the merits of those increases. What we are discussing is the-


Donald Methuen Fleming: Order.


Mr. Speaker:: Order. The hon. member should not debate the matter. He can easily reserve his comments in respect of any of these points in discussing the point of order.


Paul Joseph James Martin: Mr. Speaker, the Minister of Finance is overly sensitive these days and I will overlook his interruption on that account, and because he is overly pre-ocupied.


Donald Methuen Fleming: And you are overly sly.


Paul Joseph James Martin: This motion simply asks the house to note with regret that consideration has not been given to these matters, the mere mention of which arouses the hon. gentleman. The motion goes on to say not that action should be taken but simply that the house regrets that the government has failed to increase old age pensions, family allowances and the like.
On the point of order, there would not seem to be much reason for the objection taken by the parliamentary secretary. If Your Honour feels that you wish to reserve your ruling, I do not think there will be any objection.


Mr. Speaker:: I should like to take advantage of the opportunity of considering the amendment as the debate proceeds and to deal with it a little later. It is a comprehensive document including a great variety of specific items. I can say initially that I do not think the parliamentary secretary has

persuaded me that the passage of this amendment would in any way commit the government, because it is only an expression of regret and a condemnation for failure rather than an instruction which would be binding. However, as I said, I should like to reserve judgment and allow the debate to proceed.


Erhart Regier: Mr. Speaker, we in this group are happy with your decision to reserve your ruling, but I should hope that in conjunction with your reservation our right of consultation with Mr. Speaker, in order to possibly make some minor amendments, will be maintained.


Mr. Speaker:: I would not like to give that assurance. If I find anything to complain about in the amendment I will give the hon. member an opportunity to be heard further on the point of order.


Richard Albert Bell: Mr. Speaker, in their speeches today the two official financial critics opposite have run true to form. Caustic personal comment and tart personal jibes have been substituted for objective argument and constructive consistent reasoned discussion of fiscal and monetary policies. I would say to the house that seldom has it been treated to so much confused and disordered economic reasoning. In the 30 minutes to which I am confined I cannot hope to follow the hon. member for Kenora-Rainy River down all the blind alleys, down all the tortuous by-paths of reasoning which he traversed today; but as I go along I will deal with his principal strictures, his special pleadings and, if I may say, his hair-splitting inconsistencies.
With respect to the hon. gentleman, I must say that several times in his speech his reasoning reminded me of a man who had painted himself into a corner. I say to him as well that I have never heard such a vague, hollow, lame, disjointed criticism of any budget, and that its vagueness was equalled only by its emptiness. What to me, sir, was the most extraordinary, the most incredibly fascinating fact of his whole speech was his total failure even once to mention the name "Coyne", at least that word spelled with a "y"; and further his total failure to mention really the role of monetary policy. After the uproar created in this chamber and in a certain committee of this house by an attempt of the Liberal party to get into bed with Mr. Coyne, well, the extraordinary divorce professed today passeth completely any understanding. I say to you, what a revelation of the utter bankruptcy of Liberal policy and tactics, the utter bankruptcy of the tactics which they have pursued in this chamber over the past 10 days.
The Budget-Mr. R. A. Bell
How was it possible, sir, how was it conceivable, that the dissociation with Mr. Coyne could be so quickly achieved? Well, in fact it has not been or never could any party be deflated so rapidly. I wonder what Mr. Coyne will think of his erstwhile allies?
Let me say just a word on the Liberal amendment. Perhaps I should deal with the earlier parts of it. They are a collection of meaningless words and I would say a sophistical sham. Who in the house would have any question about the author of it. The house will know that the voice was the voice of Kenora-Rainy River's Jacob but the hand certainly was the hand of Bonavista's Esau.


William Moore Benidickson: The hon. member is just as wrong now as he was before.


Richard Albert Bell: What an amendment. Let me read the end of it:
The government is not entitled to the confidence of the elected representatives of the people.
Well, sir, we on this side of the house will take up that challenge at any time. We are prepared to divide now or at any time. We are prepared to demonstrate now the full and unlimited confidence of those of us who sit on this side of the house in the policies of the right hon. Prime Minister and in the budget which was presented by the Minister of Finance on Tuesday night. I go further, sir, and I say that in due course the people of this country will uphold the policies which are enunciated in that budget.
Hon. gentlemen opposite suddenly in the last short while have changed their tactics. Hon. gentlemen were quiet on the first day of June in this house. Why? Because of what happened on May 31: 3 to 1 was the score in the by-elections. Yes, sir, and the score will be equivalent when the time comes in due course, whether it be in the year 1961, the year 1962 or 1963 to submit the record of this government to the people, a record of which all of us on this side of the house are especially proud.


William Moore Benidickson: You are not ready?


Richard Albert Bell: In view of the fact that the C.C.F. amendment, which deals with everything except the kitchen sink, has been reserved I shall offer no comment in respect of it at the present time.
The Minister of Finance described this budget as not an ordinary one, but in more than usual measure an economic budget, and such, sir, it is. Its central design is the reestablishment of an effective partnership among fiscal, monetary and commercial policies. Only on that firm footing, on that partnership, can there be built what the Minister of Finance described as a comprehensive, sound and responsible economic

The Budget-Mr. R. A. Bell program designed to raise the levels of employment and production in Canada.
The hon. gentleman from Kenora-Rainy River endeavoured this morning and last Tuesday night with, I thought, very little success to cast scorn on the statement that the government's policies are expansionist. Well, sir, if this budget with its proposals in respect of exchange rates, interest rates, debt management, tax changes and economic and fiscal policy generally, is not expansionist, then, sir, I do not know the meaning of the word "expansion".


Paul Joseph James Martin: That is right.


Richard Albert Bell: At the outset of my remarks I should like to deal first with the general economic philosophy of the budget and with the basic principles and economic reasoning upon which it is based. I should like to point out to the house that at no time during his very lengthy speech did the hon. member for Kenora-Rainy River meet the theme of the budget head on. There were times when I thought he was about to do so. Each time that I thought he was about to meet those issues and state where he stood himself with regard to them what did he do? He deflected; he went down another of his blind alleys.


William Moore Benidickson: Not to mention the unprecedented deficit.


Richard Albert Bell: Oh, I will come to the deficit and I will say something about what my hon. friend and some of his colleagues have to say about deficit financing.
At the outset, sir, I want to repudiate utterly the suggestion of the hon. member for Kenora-Rainy River that this budget in some way constitutes a reversal in policy; that it represents in a sense some change of heart on the part of the government; that it is in some unexplained and inexplicable way inconsistent with policies heretofore followed.
The other night the hon. member for Kenora-Rainy River used the expression "flip-flop" and he appeared to savour it. I notice he did not repeat it today. Well, sir, his speech was certainly flipped and it left the house under no illusions as to where the flop was.
What this budget does represent is a fulfilment of policies consistently upheld and promoted by this government. Especially is it in full consonance with and a logical progression from the budget of March 31, 1960 and the supplementary budget of December 20, 1960. The only theme-


William Moore Benidickson: On exchanges rates?


Richard Albert Bell: I will come to what my hon. friend had to say on that. The only theme that I could detect in the speeches of

the two hon. gentlemen opposite appeared to be just this. If these proposals are good now, why were they not advanced in their present form a year ago, or two years ago? I suppose a criticism of that sort, if such it be, could be applied to any budget, could be applied to any legislation which might at any time be introduced in the house. I submit that in this instance the answer is very simple and straightforward. In a system of flexible budgeting, the timing of proposals is vitally important. What may be an appropriate budget proposal at one period in our economic cycle may well be inappropriate, even dangerous, at another. For example, what today may be an appropriate and highly desirable influence upon our exchange rate might well have had deleterious effects a year ago, or even six months ago.
We must adjust quickly to changed and changing circumstances maintaining, however, the same basic policies. What seemed to be the most appropriate influence upon the exchange rate in December was the increase in the withholding tax and the imposition of the tax on branches. At that time I heard economists of some distinction suggest that this action might well result in the Canadian dollar nosediving. But the moderate and the worth-while effect which it had is now well known to the house and to the country. The withdrawal of the special incentives to capital inflow has already proved its efficacy. But had the withholding tax then been coupled with an announcement of an intention to use the exchange fund to help place the Canadian dollar at a discount, the result might well have been a run on the dollar with detrimental effects upon our productive capacity and in the then existing circumstances perhaps an inflationary impact.
In today's economic climate the use of the exchange fund, I submit to the house, is quite different. It is a logical and orderly progression from the principles of the December supplementary budget which themselves have met the validating test of time and experience.


Paul Joseph James Martin: Except for double depreciation.


Richard Albert Bell: Oh, my hon. friend will see what double depreciation is and if I have time I will deal specifically with that and with the other depreciation measures. When I finish dealing with it he will not be as voluble as he sometimes is in the house. In view of all the effort the hon. member has put forward in the last ten days and the failure of the hon. member for Kenora-Rainy River even to mention my hon. friend's friend,

Mr. Coyne, the hon. member for Essex East certainly is doubly depreciated today.


Paul Joseph James Martin: The debate is just beginning.


William Moore Benidickson: Six days to go.


Mr. Bell (Carlelon):: What the budget seeks to do through the incurring of a substantial deficit, through direct and indirect influence on interest rates, through the achievement of a closer balance of international payments, through the reduction of our exchange rate thereby increasing exports and reducing imports, is to provide very genuine economic incentives of a powerful and, indeed, of a massive character. It is designed to increase our productive capacity, to increase opportunities for employment and to raise the levels of Canadian savings and investment.
As a genuinely Canadian budget, this budget is wholly consistent with and, as I have said, a logical and orderly progression from earlier budgets. I want to emphasize that in pursuing the objectives of Canadian expansion the government, in the field of commercial policy, has never lost sight of our dependence upon our external trade and its policies have been moderate and responsible.
The extension of the activities of the industrial development bank is a most important feature of the budget. One must couple these proposals with the Small Businesses Loans Act enacted earlier this session and with the expansion of the Farm Improvement Loans Act and other measures which have been taken by the government. Hereafter, all business enterprises in Canada will be eligible for industrial development bank loans. My hope and expectation are that this will lead to greater employment, to a broadening of the base of our secondary industry and to the achievement of a more flexible economy generally.
While assuredly not wishing to see the industrial development bank intrude into the field of other lending institutions, my hope would be that under the new legislation, the new president of the bank and its directors and officers would pursue, in the medium and long term fields, more expansive policies than have been pursued in the past. From many hon. members on both sides of the house I have received complaints about the attitude of the bank under its president, Mr. Coyne, and its alleged rigidity and inflexibility. I say simply that the policy of the industrial development bank in my view ought to be service with courtesy. I shall personally be very greatly disappointed if under the new legislation and with a new president this goal is not achieved.
The Budget-Mr. R. A. Bell
Vital as these matters which I have mentioned dealing with the industrial development bank may be, they do not in my view equal in significance the proposals of the budget with respect to interest rates. I see no particular point in engaging in exchanges, such as the hon. member for Kenora-Rainy River suggested about such matters as tight money, or any recriminations in relation to the past. But there is no doubt that in 1956 and 1957 a relative scarcity of credit had as its consequence very high interest rates. The restrictive policies of the Bank of Canada under Mr. Coyne's leadership, and to the intense annoyance of the then minister of finance, Mr. Harris, and the equally intense annoyance of the hon. member for Kenora-Rainy River, his parliamentary assistant, forced interest rates higher.
The advent of this government resulted in an easing of credit and until the late summer of 1959 interest rates were at a reasonable level in this country. In that summer an almost unparalleled demand for credit, one in which demand well outran supply, put tremendous pressure on the interest structure. So great was the pressure that at one stage the Minister of Finance (Mr. Fleming) had to reject tenders for treasury bills. Let no one believe that was an easy decision. It was a crucial decision fraught with grave risks, but it was the right one and proved to be the turning point.
Already the Minister of Finance has achieved some success in his discussions with the financial community. The reduction of one quarter of 1 per cent in the prime chartered bank rate is evidence of that fact. With the changed atmosphere because of the impending departure of Mr. Coyne, I am satisfied that the further consultations announced in the budget will lead ultimately to a readjustment in our interest structure, thereby giving a tremendous and immediate incentive to business expansion and employment as well as placing a drag upon capital inflow for non-productive purposes. In his last report the governor of the Bank of Canada in effect rejected out of hand any responsibility of the Bank of Canada for interest rates. That view, sir, I repudiate. The Bank of Canada has a vital role to play, in my submission, in easing or restricting credit and the price of credit. In my view unwise policies of a restrictive nature pursued by the present governor have had a deleterious effect on expansion and thereby on employment in Canada.
All of this emphasizes to me the vital necessity, the absolute essentiality of the integration and co-ordination of fiscal, financial, monetary and commercial policies. The achievement of the objectives of this budget

The Budget-Mr. R. A. Bell could be possible only with that co-ordination. In clear and explicit terms at the end of his budget speech, the Minister of Finance showed how impossible such co-ordination had become with the Bank of Canada under Mr. Coyne's leadership. In recent months Mr. Coyne's theme song has been that monetary policy, for which he was responsible, was powerless but that fiscal and commercial policy, for which the Minister of Finance and the government were responsible, were allpowerful. Extreme succeeded extreme until in lonely majesty in his counting house on the south side of Wellington street the governor divorced himself from the government, from all major financial institutions in Canada which both publicly and privately were denouncing his policies, and, indeed, from his own directors, and, tragically also, from many of his own advisers.
Under a new and responsible governor there may now be a co-ordination of activity in all related fields and the resumption of interrupted progress. When parliament tells this unwise governor, "Begone", I have no doubt that our economy will respond to his removal from authority.
Now, sir, I want to deal with what the hon. member for Kenora-Rainy River had to say in connection with forecasting and the deficit, for it has become a favourite topic of the hon. member to dilate, with his rather considerable gift for sarcasm, upon alleged divergences between forecasts and performances.
I want to say first that if there is a divergence between forecast and actuality in the gross national product, then he seems to take a gloating satisfaction out of the slowdown in our economy. What the hon. gentleman does not realize or certainly does not state is that such a margin of error, if it may be described as such, is less considerable in Canada than has been true in most western countries, and equally true is much less considerable than during the time the hon. gentleman was parliamentary assistant to the minister of finance. What amuses me, sir, is that the hon. gentleman from Kenora-Rainy River reserved some of his most violent and unwarranted criticism for the amount of the deficit and for the consequent increase in the total net debt. This is the official criticism of a party which, down through the years purported to believe in what they described as cyclical budgeting. O, consistency, thou art a jewel.
Suppose parliament had adopted the tax cuts which were so strenuously advocated by the Leader of the Opposition (Mr. Pearson) during the election campaign in 1958 in his something for everyone, but now forgotten, Pearson plan; policies be it


noted which have never been resurrected in this chamber. What then would have been the deficit?


William Moore Benidickson: President Kennedy had just this in mind.


Richard Albert Bell: Does the hon. gentleman say that President Kennedy had this in mind? That is perhaps the most outrageous statement my voluble friend has ever made in the house. Suppose we had taken over a policy of tax cuts and increased expenditures which were forced down the throats of responsible Liberals by the triumvirate of Gordon, Sharpe and Drury at the so called Liberal rally here in Ottawa in January? What then would have been the deficit? Let hon. gentlemen tally that up. I say to them if you had put in full those measures-


Paul Joseph James Martin: Are you asking us?


Richard Albert Bell: The hon. gentleman will have ample opportunity to make a speech.


Paul Joseph James Martin: If you are asking us, then I shall deal with it.


Richard Albert Bell: The hon. gentleman is on his feet so often in this chamber, and I only want to say to the hon. gentleman-


Paul Joseph James Martin: You asked me a question and then you do not want me to answer.


Richard Albert Bell: -every time he rises with the pomposity of a mid-Victorian duchess he proves that his volubility is equalled only by his unwisdom.


Paul Joseph James Martin: Why did the hon.
gentleman ask a question?


Richard Albert Bell: The hon. gentleman will have his opportunity to make a 30 minute speech on another occasion.
I say that the situation would have been that the deficit would have been at least $2 billion. My hon. friend from Kenora-Rainy River who, in my opinion at least exceeds this tiresome trio in genuine knowledge of public finance, although they seek now to replace him as the heir presumptive, endeavours to exploit for political purposes the amount of the deficit. Now, he cannot have it both ways. He cannot blow hot and cold in this particular way. He cannot become indignant and sarcastic about the existing deficit and at the same time join with his colleagues in the advocacy of policies that would triple or quadruple the deficit.
Certainly, we have had a deficit. It is the result of two things. First, it is the result of the greatest increase in services to our people of any equivalent period in Canadian history.

Let the Leader of the Opposition when he speaks in this debate tell this house which of these services he would reject or discard. That is not what he will advocate; he will say he seeks to further expand them with predictable results in deficit financing.
Second, sir, the deficit is the result of flexible budgeting designed to meet existing economic circumstances. In times of economic slowdown the federal government, by incurring a sizeable deficit, can help to stimulate the economy. I had thought that hon. gentlemen opposite gave at least lip service to this theory. However, one would not know it this morning by listening to the hon. gentleman from Kenora-Rainy River.
One of his party's brain trusts has stated it very explicitly. I refer to a speech made by Mr. Tom Kent, former editor of that great organ of outdated Liberalism, the Winnipeg Free Press, as reported in the Globe and Mail of April 22, 1961. What did Mr. Kent say? I quote:
-if our economy isn't growing properly, budget deficits are sound economics.
Contrast that statement from the Liberal braintrust with what the hon. gentleman from Kenora-Rainy River said today. Then Mr. Kent went on to say this:
They are a necessary stimulus. We should not be afraid of extra public debt. In a free economy, you can't have economic growth without extra debt.
Now, sir, for myself I would adopt the first sentence without qualification, although I might put some qualifications upon the second. Mr. Kent went on:
That's the simple fact which is always ignored by the illogical people-
I do not know whether or not he was referring to my hon. friend from Kenora-Rainy River when he said, "by illogical people".
-who claim to be the champions of our free enterprise system, who talk about the virtues of saving and yet who are so terribly nervous about debt.
In my view, what is important is not the deficit or its size. What is important is whether the policies of the budget will lead to a balanced budget and ultimately to a policy of orderly debt retirement when we re-enter the period of high employment of our labour and resources and a renewed period of progressive and rapid growth. This is what I believe the budget gives expectation and confidence of achieving.
There are two further factors, sir. If you relate the amount of the deficit for the last fiscal year or the amount of the prospective deficit to our revenues or our expenditures, you will see that there have been many times in our history under both Liberal and Conservative governments when the then deficit 90205-6-435
The Budget-Mr. R. A. Bell represented a much higher percentage. On previous occasions in this chamber I have put on the record the statistics of the Fielding and Dunning budgets. I shall not repeat them, but I would refer hon. gentlemen to Hansard of this year at page 1079.
The second factor is that of our ability to pay our net debt. In certain by-election campaigns last month, by-election campaigns which certainly did not proceed to the satisfaction of hon. gentlemen opposite, obviously an advertisement regarding the increase in our debt must have boomeranged upon hon. gentlemen on the other side. Their excessive cleverness did not take into account the sober common sense of our people who realize that our ability to pay has risen very markedly. Our net per capita debt, sir, and that surely is the only realistic test, as of March 31 was about $150 below that of 1950 and about in balance with that of 1956.
As I have already pointed out, this has occurred during a period of unprecedented expansion of the public services provided to the people of this country. This is the record of this government. Let hon. gentlemen opposite try to deny it. Even my genial and very good friend from Welland who dilates so often on this subject, should now give credit for the high quality of debt management which has existed under this government.
Perhaps less attention than is warranted has been directed to the significant debt management proposals in this budget. The establishment of a purchase fund initially of $100 million will have an immediate and salutary effect upon our financial market, and an ultimate significant approach to orderly debt retirement. The removal of the overhang of medium and long term bonds in the unemployment insurance portfolio will end that threat to the stability of the long term market. The decision to confine new federal issues, for the next several months at least, to the short end of the market will be of direct and immediate benefit to the provinces, to the municipalities and to the corporate borrowers.
Taken together, sir, these decisions must assert a vigorous pressure upon the level of interest rates and upon the exchange rate. This was their basic purpose. It has now become popular for hon. gentlemen opposite to attribute many of the ills of our economy to the conversion loan. I have no doubt that when he arises, my hon. friend for Welland will again devote most of this speech to a distortion of this subject.
Sir, I want to repudiate those allegations completely. When the economic history of the last decade is recorded, I believe it will be established that the gigantic conversion

The Budget-Mr. R. A. Bell loan of 1958 was one of the most farsighted acts of financial statesmanship ever undertaken.
There are many policies in this budget with which I could deal. I have described only some of the essential features. There is the proposal with respect to special depreciation until March 31, 1963. There are proposals with respect to increased incentives for research; proposals with respect to portable pensions. Yes, these are some of the things that in the long run will have a most significant impact upon our whole economy.
There was the decision to go ahead with the proposals which were introduced last year for tax deferment in respect of profit sharing schemes; the repeal of the tax on automobiles. Oh, Mr. Speaker, I have been amused, really, by my hon. friend from Essex East, the hon. gentleman who has attempted to pose as the putative father of the removal of the excise tax on automobiles.


Paul Joseph James Martin: If it had not been for our persistent interrogation we would still have that tax.


Richard Albert Bell: The honourable and train catching member for Essex East was a member of the previous government for a period of about 15 years. He was strangely silent during the whole of that period while Mr. Ilsley, Mr. Abbott and Mr. Harris maintained this tax.


Paul Joseph James Martin: We cut it from 25 per cent to 15 per cent.


Richard Albert Bell: The hon. gentleman did not question the tax when he was a member of the government. It was the hon. gentleman's transfer to your left, Mr. Speaker, which converted him to his advocacy of tax reduction, and I say that his attempt to take credit now is both ridiculous and laughable.
Mr. Speaker, I see that my 30 minutes have expired. I only say to the house, this is a good budget; it is a sound budget; it is a realistic budget. It deserves the support of the house and the country and we on this side of the house are ready at any time to meet the challenge of the opposition amendment.


Paul Joseph James Martin: A most incredible speech. A great public career destroyed.


Paul Theodore Hellyer: Mr. Speaker, we have just listened to a very loud but not very enlightening speech from the parliamentary secretary to the Minister of Finance.


Mr. Ricard:: You have heard nothing yet.


Paul Theodore Hellyer: The parliamentary secretary has criticized in rambunctious terms the excellent contribution which has been made by

speakers on this side of the house. If he would examine the budget more closely and with less partisanship he would learn that it is a budget of rationalization of failure.


Donald Methuen Fleming: This is non-partisan, is it?


Paul Theodore Hellyer: The parliamentary secretary complained that we were not accurate when we said it involved a reversal in policy. He said it was not a flip-flop budget. We stand corrected, because the government had no policy then; it has no policy now. The hon. member for Carleton is quite right; when no policy exists, a reversal is impossible. As he said, "consistency, thou art a jewel". The trouble started way back in 1957 when the hon. gentlemen opposite-


An hon. Member:: It certainly did.


Paul Theodore Hellyer: -even before the election of 1957 were speculating with figures which they were not able to comprehend. They went about this country saying there was a surplus for 1957-58 of $500 million. One of these hon. members, the Minister of Public Works (Mr. Walker), in a television broadcast in Toronto increased the sum to $600 million. Well, if they had listened to Mr. Harris' budget that year they would have known that after his budget proposals had been carried into effect the budgetary surplus in the coming year was half that amount; that an increase which was due the civil servants of this country and the armed forces of this country had yet to be paid out of that budgetary surplus, and that the national health insurance program which had just been enacted had yet to be paid for.


An hon. Member:: Don't forget the $6 old
age pension.


Paul Theodore Hellyer: It was this grandiose ignorance of economic facts which got the government off to an improper start even before the election of 1957. Before the election, too, the government had been talking about the effect of high interest rates, the effect of the government's policy of that day, and saying that the time had come to expand, to relax, to let up; and yet what did the new government do after it came into office in June of that year?
The very first act of the government was to cancel many of the projects which were already on the books for that summer. They cancelled the CF-100 Mark VI which was to have been built to replace the rapidly obsolescent CF-100 Mark V. They cancelled runway extensions, hangars and other projects scheduled for that summer. At that time they immediately put into effect a restriction-ist policy. This was in the summer of 1957, notwithstanding the fact that the same hon. gentlemen, when they were on this side of

the house, had said the time had come to start opening up. Then months later, in the spring of 1958, they were feigning surprise at a report which said that in the opinion of a department of government the time had come to ease up.
Mr. Speaker, it was not a convincing performance. It is true that late that year, in November, they did reinstate some of the projects which had been cancelled in the summertime; but by then it was too late, the snowball had started. Since then most decisions of this government have been decisions of financial crisis.
My hon. friend mentioned the reconversion loan. This was the biggest financial crisis decision of them all. The Minister of Finance touted it as the biggest and most successful financial operation in the history of Canada. I have said publicly many times, and I say again today, it was the biggest and most successful financial swindle in the history of this country. It will cost the taxpayers of this country hundreds of millions of dollars directly and indirectly over the balance of their lives.


Paul Joseph James Martin: One hundred million dollars a year.


Paul Theodore Hellyer: The government has criticized the Bank of Canada for failing to facilitate its policies. If anything, I had the impression in 1958 that by facilitating the reconversion loan and by increasing the money supply more than 10 per cent in one single year, when the physical output of this country was not increasing, the Bank of Canada prostituted its responsibility in respect to its obligation to the Canadian people.


William Moore Benidickson: To accommodate the minister.


Paul Theodore Hellyer: This government has been in trouble ever since. There have been more and more crisis decisions based on financial mismanagement. One that is recalled to mind is the cancellation of the Avro Arrow. This was not a military decision. It was obvious from what the Prime Minister (Mr. Diefen-baker) said in this house last week, when announcing that the government had ordered some United States airplanes to fulfil the function for which the Avro Arrow was designed, that it was a financial crisis decision.
Even then the government could not see past its nose. In its desperation to cut back its expenditures in the short run it contributed to a contractionist policy again. The cancellation of the Avro Arrow in February, 1959 put more Canadians out of work than will be put back to work by this budget. And that 90205-6-435J
The Budget-Mr. Hellyer is not to mention the smashing of a great industrial design team which had been buill up over a decade.


Mr. Pugh:: What did C. D. Howe think?


Paul Theodore Hellyer: The present budget is a result of four years unprecedented financial mismanagement. This government has never sought to take the responsibility for its actions. In its early budgets it blamed the Liberals, its predecessors, for the legacy they left. It was the legacy, Mr. Speaker, of a surplus and full employment. Then the government sought to blame the United States and external factors far out of proportion to the influence they exert on the Canadian economy. More recently the government has blamed the economic recovery of Europe. Now, finally, as the last stroke, they have sought to blame the governor of the Bank of Canada for their troubles.
This government has never been willing to accept its responsibility for financial matters, with one possible exception. When interest rates came down for a brief period in the summer of 1958, then it was the government which brought the interest rates down; then it was the government which was responsible. But after that, when the interest rates started going up again due to the reconversion loan and the big government deficit of that year, it was no longer the government's responsibility but the responsibility of the Bank of Canada. The government, they said, had no control over the Bank of Canada, which is responsible only to parliament. What a sham, Mr. Speaker. What a farce. This government has the integrity of an alley cat. After its whinings and howlings it refuses to take responsibility for its financial misdemeanours.
Now, Mr. Speaker, the government says we must have a skilled society. I quote from the minister's statement:
Our technological developments, the enterprise of our business community and the skills and training of our people, great as they are, have not kept pace with the needs of a rapidly changing world.
Everyone knows that. This is not something new. I made a speech in this house in the spring of 1959 urging the government to take immediate and drastic action to rehabilitate unemployed workers and to provide them with the skills which they would otherwise not be able to acquire. I urged the government to do this on a scale comparable to the rehabilitation of world war II veterans. Did the government listen? Not then, Mr. Speaker.
If they had acted then, the program would have been well under way by now. It is true the government did take some small steps in the right direction last November, but the

The Budget-Mr. Hellyer action taken was completely inadequate to meet the situation which we face. It was another example of too little and too late. But if the government took itself seriously it would realize that these skills must start at the top. We must have a skilled government. We must have a skilled minister of finance if the country is going to grow and develop. If these skills, which are now nonexistent, had been available at the top we would not have suffered this so-called rolling readjustment; it would never have taken place.
The minister has said that this is not an ordinary budget. That is a mouthful even for the minister. He called it an economic budget. In truth it will turn out to be an economic bungle. The keynote of the budget, as we were told by the parliamentary secretary this afternoon, is the deficit and what it is going to do for the Canadian economy. But as was so ably pointed out by my hon. friend from Kenora-Rainy River (Mr. Beni-dickson) this budget is not planned; this deficit is not planned; this is not part of the great new blueprint for Canadian recovery. This is just an acknowledgment of a fact of life which exists in this country at the present time. This, again, is the minister trying to make a virtue out of a necessity. We have had examples on previous occasions of the minister saying that something was planned. Last year, when the minister introduced his budget, he said:
The position we have now reached with its sound prospect of a fully balanced budget represents the fruits of carefully designed policy carried forward over the past 18 months. This is not something which has just happened. This is the result of considered means and efforts. It began with the great conversion loan in the summer of 1958 which made possible a policy of sound debt management which in turn restored public confidence and government credit and our determination to control the powerful forces of inflation. It was continued in the expenditure controls and the tax changes of 1959 and has been reinforced in this year's program of reduced controllable expenditures balanced by the continued promotion of constructive national development.
To listen to the minister speak one would think that many months before, and as part of a plan, he was going to bring in a really balanced budget. But what is the fact? The fact is that the minister's proposed $12 million surplus has turned into a $345 million deficit. Members opposite used to paraphrase and malign the Right Hon. C. D. Howe and attribute to him the question: "What is a million?" Now we have the Minister of Finance asking, in effect, with a shrug: "What's a million dollars a day?" It is a sad commentary that the planned economy which this government endorses is planning from hindsight rather than from foresight.

What the minister said last year is borne out, of course, by a Conservative document called "Conservative Action". They were pleased to boast at that time and I quote:
In 1960-61 the Conservative government introduced financial proposals which had as their objective the balancing of the budget without raising taxes and, indeed, at a level of taxation in relation to the growth of the gross national product lower than in any year between 1950 and 1958.
Well, if that was the objective, the government certainly fell short of reaching it.


Mr. Palletl:: Taxes are still lower.


Paul Theodore Hellyer: Taxes were not still lower. The hon. member might check that. We thought we had an undertaking in this respect. The people of Canada, at the time they gave the Prime Minister the mandate, thought they had an undertaking. In Saskatoon, on May 27, 1957, at a press conference, the Prime Minister gave a pledge that taxes would be reduced. I quote from a news dispatch:
John Diefenbaker said today the Progressive Conservative government could carry out its declared policy, reduce unnecessary taxes "and still do it on a balanced budget".
That, Mr. Speaker, is one more unrealized dream, one more broken promise. Now we have this year the fourth annual deficit of the Progressive Conservative government, and instead of apologizing, the Minister of Finance has the temerity to pretend to this house that it was planned, that it is all part of a fiscal scheme to rescue the country from the mess in which it finds itself. It would be nice if that were so but, of course, it is not so. The minister in his budget speech said:
If appropriately planned and timed, a substantial deficit can encourage higher levels of output, employment, income and savings without incurring risk of inflation.
He went on to say that the risk of inflation was minimal but he skirted very cautiously around the whole subject. He did not tell us how he was going to achieve the goals he has in mind without inflation; he did not tell us the extent to which the Bank of Canada should be used to finance the deficit and to finance the proposed manipulations in the exchange fund. We have a right to know this, Mr. Speaker, because it is important for the future of Canadians that they should know whether or not the minister intends to start the printing presses rolling now as the only recourse in order to get the government out of their present unfortunate situation.
The minister was faced with high expenditures-expenditures which, he would say, were largely uncontrollable. There were three alternatives. He could have increased taxes,

but that would be very unpopular politically. He could have borrowed the money in competition with other borrowers, but this would have driven interest rates to unprecedented high levels beside being equally unpopular politically. As the third alternative he could start the printing presses rolling and print more money and put it into circulation. In this way he might avoid the consequences of any action which was politically unpopular.
We wonder, Mr. Speaker, whether this blushing bride, the Minister of Finance, is not like the blushing bride who puts woollen stockings into the washing tub of boiling water and finds on removing them that they have shrunk to a considerably smaller size. We wonder to what extent the Canadian dollar will be shrunk as a result of the monetary expansion which the Minister of Finance may have to prescribe in the existing circumstances.
The Minister of Finance had quite a bit to say about inflation in earlier days and some of the quotations from his speeches in the years 1956 and 1957 make very interesting reading. At that time he was not in favour of embarking upon such an escapade. However, today when he is responsible, it is quite a different matter.
The minister in his budget speech went on to say that we should not expect deficits to occur in the indefinite future. He stated that when the economy and income have reached satisfactory high levels and the rate of economic growth is strong a sound budget and tax structure should generate sufficient revenues not only to cover actual expenditures but also to provide funds for the orderly retirement of debts. This is an interesting prospect and an interesting hypothesis; it must be so because the minister says it is so. If he is correct in his assumption then there have been only four years of Tory government in the history of this country when there has been a satisfactory level of employment and income. In every other of the approximately 40 years of Conservative government in this country there have been unsatisfactory levels of employment and income, at least according to the minister's tests.
We now find the minister seeking to find a scapegoat in order to get himself out of his financial difficulties. He has told us that he is going to require the resignation of the governor of the Bank of Canada. There are only two possibilities to explain why the governor of the Bank of Canada should be retired six months before his term of office has expired. The first is, of course, that the government must start the printing presses,
The Budget-Mr. Hellyer and must indulge to some extent in the inflation of the Canadian dollar, a course which no governor could possibly permit in all conscientiousness.
The other reason is, of course, that the government is trying to find a scapegoat on which to unload the political unpopularities in which it finds itself at the present time, anticipating a deficit of $650 million, in round figures, as well as requiring perhaps several hundred millions of dollars to finance the manipulation of the exchange fund. That is a course which the minister said, only a few months ago, might not be successful.
There is a great deal of capital also required in respect to the industrial development bank, and I should like to ask where the government is going to find that capital, as well as the $100 million for the sinking fund to buy long term government securities. Where are these great amounts of capital going to come from? Are they going to come from the market or are they going to come from the printing presses, and to what extent? We have the right to know whether our savings are going to be jeopardized by an irresponsible government.
This Minister of Finance has deceived the House of Commons.


Some hon. Members:: Oh, oh.


Paul Theodore Hellyer: By changing the structure of his budget he created the impression in regard to his revenue forecast that he only expected a growth of 3 per cent. In answer to a question today he admitted that was not the figure he used. He has refused until now to give this house the figure. He must do so because it is the right of the peoples' representatives to know on what basis the minister has made his forecast.


William Moore Benidickson: It was an unprecedented performance.


Paul Theodore Hellyer: By subterfuge and by changing the structure the minister has misled this house deliberately, or otherwise, and he will have to say which.


Some hon. Members:: Order.


Paul Theodore Hellyer: The minister should also tell us at the same time what percentage of growth he expects to take place, and on what his-


Mr. Deputy Speaker:: Order.


Paul Theodore Hellyer: -forecast is based.


Mr. Deputy Speaker:: Order. I thought I heard the hon. member say that the Minister of Finance had deceived the House of Commons deliberately. I am sure the hon. member did not intend to say that and will wish to correct it.

The Budget-Mr. Hellyer


Paul Theodore Hellyer: Mr. Speaker, 1 said "deliberately", or accidentally, and the minister himself would have to tell us which. If he says it was accidental I will take his word for it, but he should tell this house which it is. He should also tell us what is the expected rate of growth on which he has based his economic forecast. Let him stand in his place and tell us the truth.


Mr. Deputy Speaker:: Order. That may be another way of putting the suggestion, but I think in one way or the other the hon. member should not use the word "deliberately" because it is not accepted parliamentary practice to do so.


Some hon. Members:: Withdraw.


Paul Theodore Hellyer: Does the minister wish to say that-


Some hon. Members:: Withdraw.


Paul Theodore Hellyer: Is the Minister of Finance asking that I-


An hon. Member:: The minister did not say a word.


Mr. Lambert:: Put up or shut up.


Paul Theodore Hellyer: Mr. Speaker, I suggest we have to leave it to the minister to tell us whether this was an inadvertency or otherwise.


Mr. Deputy Speaker:: Order. The hon. member is not putting a question but making a speech, and he was not putting a question on the first occasion he used the words, which I indicated are unparliamentary. I think he will agree with the suggestion that he withdraw his remarks.


Paul Theodore Hellyer: Mr. Speaker, I do not wish to accuse the minister of anything of which he is not guilty.


An hon. Member:: Then withdraw.


Paul Theodore Hellyer: If the minister will rise in his place and say that this was done accidentally or inadvertently-


Some hon. Members:: Order.


Mr. Deputy Speaker:: Order.


An hon. Member:: Don't be so cheap.


Mr. Deputy Speaker:: The hon. member will realize that the problem is not one of fact but of form. He cannot discuss the fact, and it is the form that the Chair is now objecting to and that is why I am asking the hon. member to withdraw the word "deliberately".


Paul Theodore Hellyer: Mr. Speaker, I withdraw and say that the minister misled the house accidentally; whether for a purpose or not, only he can say.


Some hon. Members:: Oh, oh.


Mr. Deputy Speaker:: Order. It seems to me that the hon. gentleman is having difficulty withdrawing. He should understand that the rules and practice of the House of Commons are very clear in this respect, and should withdraw his remarks without reservation.


Paul Theodore Hellyer: Mr. Speaker, I withdraw the accusation of deliberate deception. However, I think the deception remains and that this house is entitled to an explanation from the minister.


An hon. Member:: Don't spoil your withdrawal, be a gentleman.


Paul Theodore Hellyer: Mr. Speaker, in referring to the future the minister said he would not wish hon. members to expect that expansion can be accomplished by some simple or quick formula. It would be folly, for example, to attempt drastically and artificially to force interest rates down by irresponsible increases in the money supply. How else can this be achieved other than by currency issue or in the alternative a reduction in government borrowing? We have the right to know from the minister the mechanics by which this is going to be achieved. He has not told us. He is vague.
The minister has carefully skirted this question. While we may regret that we have not been given clear statements by the minister in this regard I am going to assume for the purpose of a few comments that there is in the mind of the Bank of Canada and in the mind of the minister a fear-
In respect of this matter, Mr. Speaker. I continue:
I do not believe for one minute that the Bank of Canada would act in a vacuum. We all have respect for the governor of the Bank of Canada, Mr. J. E. Coyne: he is a very serious man who takes a conscientious and grave view of his responsibilities.
I am sure no one would disagree with that; I hope they do not because these are the words of the Minister of Finance, as recorded in Hansard of August 11, 1956, at page 7460. Many of the statements the minister made then are in quite definite contradiction to his actions in office. At one point he said, as reported at page 2557 of Hansard of March 21, 1957:
The governor of the Bank of Canada has appealed for the curtailment of expenditure but his recommendation has gone unheeded by the government. I am not saying, of course, that some large government expenditures are not necessary; we have been dealing with some of them here today in what we have approved in recognizing the need of the pensioners to some additional increase because inflation has destroyed, in part, the value of their pensions. But there is a great deal of government expenditure that could be, under careful examination reduced.
And so I say in conclusion on this subject: Let the government first cast out the beam from its

own eye and then it will see clearly to pull out the mote from the eye of the individual Canadian.
And I may add this-that the Minister of Finance, as far as we are concerned, is not going to hide behind the policy of the Bank of Canada. He is going to bear his own responsibility.


John Whitney Pickersgill: Who said that?


Paul Theodore Hellyer: That was said by an hon. gentleman who sits on the treasury benches today. At the present time he occupies the portfolio of finance. He said it in this House of Commons on March 21, 1957, as reported at page 2557 of Hansard.


John Whitney Pickersgill: Another contradiction.


Mr. Speaker:: Order. I am sorry to interrupt the hon. member but his time has expired.
If I may intervene here for a moment, perhaps we could complete the discussion of the proposed subamendment. I have some general conclusions. Unless anybody is disposed to argue seriously that the subamendment is out of order I think the benefit of the doubt should lie in the direction of accepting it. In the last decade or two the tendency has been to admit subamendments and amendments in the budget debate rather more easily than in other instances. The normal rule is to be found in citation 203, subsection 1, of Beauchesne's Parliamentary Rules and Forms, fourth edition, where he says:
It is an imperative rule that every amendment must be relevant to the question on which the amendment is proposed. Every amendment proposed to be made either to a question or to a proposed amendment should be so framed that if agreed to by the house the question or amendment as amended would be intelligible and consistent with itself.
The reason I feel that this subamendment might be accepted is that the amendment itself is very broad, bringing into question the whole of the budget. Therefore I have looked at the subamendment to see whether any of the numerous subjects mentioned in it are necessarily outside of fiscal and economic policies such as might be appropriate for action in the course of the consideration of budget measures. On that test, perhaps giving the benefit of the doubt to the mover, the subamendment can be accepted.


Erhart Regier: On a question of privilege, if I may, I had asked-


Mr. Speaker:: If anyone wishes to propose any contrary view I would hear him at this time.


Erhart Regier: During the course of my remarks I asked leave of the house to table a rather lengthy table which appeared in Hansard of February 8, 1960. I did not give you, Mr. Speaker, time to ask for permission.


Mr. Speaker:: Has the hon. member leave to ask at this time that the table be printed in Hansard?
The Budget-Mr. Allard


Richard Albert Bell: Would the hon. gentleman indicate the length of the document and in view of the fact that it already appears in Hansard, why he wishes to have it reappear?


Erhart Regier: It does not appear in Hansard of this year; it appears in Hansard of February 8, 1960. It contains a list of corporations and individuals who have been convicted by the courts for violating the Combines Investigation Act since 1950.


Donald Methuen Fleming: Mr. Speaker, I do not think it is the practice of the house to have a document reprinted in Hansard of a later session. It is available to hon. members in Hansard of 1960, I understand. I therefore see no occasion to reproduce it in Hansard of this session. It is available to all hon. members because of the reference the hon. member was kind enough to give.


Mr. Speaker:: Without unanimous consent it would not be in order to incorporate anything in Hansard which had not been spoken.
(Translation):


Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, may I congratulate the Minister of Finance (Mr. Fleming) for his wise budget.
Under the present circumstances, this budget is such as to promote employment, production and exports. It is certainly advisable to increase the purchasing power of Canadians, of taxpayers, by reducing interest rates and the rate of exchange of our dollar.
One item which pleased me particularly was the one providing for further tariff changes to give greater protection to our textile industry. Since the Progressive Conservative government assumed power, it has taken action with regard to the protection of that important industry on 14 different occasions. I see that the government means to pursue its commendable efforts in this field, and I want to thank its members on behalf of the many thousands of workers, men and women, in the textile industry of Sherbrooke and elsewhere in the country.
The budget speech gives members an opportunity of commenting on the various financial, economic and fiscal aspects of our national administration. That is why I wish today to make a few remarks on the sharing of revenues between the federal government and the provinces, and on the important issue of education.
In the matter of tax sharing between the federal government and the provinces, there were in the past two great causes of trouble between Ottawa and the provinces. First of all, the various governments encroached on fields which the British North America Act of

The Budget-Mr. Allard 1867 did not place under their jurisdiction. Second, Ottawa, under Liberal rule, centralized various powers and taxation fields so as to levy almost everything while entrusting the provinces with the spending of large amounts of that money. In the latter case, which we will discuss later, it meant sapping the fundamental principles of responsible government.
On the basis of our constitution and of judicial decisions, the provinces are entitled to exclusive jurisdiction over direct taxes collected within the province for provincial purposes. The federal government can levy taxes either directly or indirectly.
Several years ago, due to certain circumstances, the federal government invaded the direct taxation fields of the provinces, such as income tax, corporation tax and succession duties. The provinces in turn invaded some indirect tax fields which were ruled to be direct tax fields by the courts in view of certain tricky aspects.
I refer in the latter case to indirect taxes on retail sales, to taxes on the transfer of securities, on meals, theater tickets and gasoline or petroleum. Such indirect taxes levied by the provinces were ruled direct taxes by the privy council, because they were levied directly from the ultimate consumer, without being included in the initial price.
Now we have just seen that the federal government and the provinces skilfully invaded taxation fields which had not been explicitly granted to them under the British North America Act of 1867. While such actions on both sides may have helped improve temporary situations, they have created confusion and raised permanent difficulties in the way of fiscal relations betwen the federal government and the provinces. It is always difficult to withdraw from a field of activity after getting deeply involved in it, because once a precedent is established under our constitutional law, it leaves an almost indelible trace.
When, for the first time, the federal government levied a direct tax on personal incomes, the then minister of finance indicated that this was just a temporary measure. On that occasion, Sir Thomas White recognized that direct taxation was particularly appropriate for the provinces, and I quote:
(Text):
The income tax is peculiarly within the jurisdiction of the province and is a suitable tax for the purpose of the province and the municipalities.


(Translation):
During the second world war, another minister of finance, Mr. Ilsley, again invited the provinces to lease out their taxation powers to the federal government for the duration of the war only.
But what happened after is a matter of record: what was supposed to be temporary became permanent under the Liberals.
Precedent superseded principles and the spirit of the constitution.
Another important cause of conflicts in the fiscal relations between the federal government and the provinces is the systematic dislocation of responsible government which was fostered by the Liberals to the prejudice of the provinces. That is what they did when they were in power: they centralized in Ottawa more than 77 per cent of taxes, part of which they returned to the provinces. What they wanted was to levy taxes while letting another government spend the tax revenues, in short, to control the greater part of the revenues and the economy of the provinces and let the provinces take the responsibility for their respective expenditures and development.
That flippant attitude of the Liberals toward the constitution was found to undermine the principles of responsible government. Under the Canadian constitution and according to the very nature of Canadian federalism, the provinces, like the federal government, are independent governments and each of those governments is sovereign and responsible in its own sphere. Well, everyone knows that a responsible government must have essential taxation powers and should not be placed under trusteeship which would paralyse its activities.
The system established by the Liberals consisted in grabbing the province's revenues and distributing to the provinces subsidies and varying payments. Such policy was unconstitutional, erroneous and a source of dissatisfaction both at provincial and national levels.
Under a federative system, it is unthinkable that a government should levy taxes and that another should spend those moneys.
The Liberals of today and of 1945 would be much better off if they would forsake their last leaders and stick to the views of a great Canadian, Sir Wilfrid Laurier who stated in 1887:
It Is altogether a false principle that a government should levy taxes and that another should spend them.
In 1930, some 15 years before he gave in to the centralizing ideas of Mr. Howe et al, the Right Hon. Mackenzie King stated in the House of Commons:

(Text):
When on a previous occasion we were discussing this matter of grants from one treasury to another, I said I thought it was an unsound principle; in fact, I think I used the expression that it was a vicious principle to have one body raise the taxes and another body spend the people's money thus raised.
(Translation):
In 1952, a Liberal senator, the late Jacob Nicol, whom I had the privilege to know and admire, stated in the Senate that the Liberals were stealing from the provinces by refusing to return to them their taxation rights.
In 1955, another great Canadian, the Hon. Maurice Duplessis, the premier of his province during the most crucial years, was not afraid to demand the return of what the Liberals unjustly refused to surrender.
In fact, on October 3, 1955, at a federal-provincial conference held in Ottawa, he stated:
What advantage would be gained in having the tax-dollar collected for provincial purposes make a wide detour via Ottawa before being returned to us? Would it be any bigger when it reached us after such a journey. Obviously not. It is certain that responsible government can never exist if fiscal powers which are indispensable to the exercise of the constitutional rights and the performance of the constitutional obligations are not wedded to legislative and administrative prerogatives.
Mr. Speaker, two axioms illustrate well that governments hold administrative authority through taxation; the right to tax is the right to govern. In other words, he who holds the purse strings always has the last say.
It is in the light of the foregoing principles that in this house, on April 13, 1959, I asked the present government to gradually return to the provinces their responsibilities and their taxation powers.
In this field, as in many others, the present federal government is seriously seeking to rectify the anomalies and the confusion spread by the Liberals in our national economy and in our federal-provincial relations during their 22 years in office.
We should not be expected to set everything straight overnight. But the trend set by the formula announced by the Prime Minister at the last federal-provincial conference is a marked return to the spirit of the confederation pact of 1867; to acknowledge the sovereignty of the provinces and to give them back gradually their taxation powers. Since they came into power in 1957, the Conservatives handed over to the provinces, by way of deduction, 10 per cent of the personal income taxes.
Mr. Gerard Filion, managing director of Le Devoir, was fully justified in saying in an editorial dated February 25, 1961:
90205-6-436
The Budget-Mr. Allard
From the purely constitutional point of view, the Diefenbaker proposals mark a definite progress. The provinces, at least those which insist on their freedom, should find them satisfactory.
A little further down in the same article, Mr. Filion said:
If the provinces wish to get back some of the ground they lost, they must not be content to ask more money from Ottawa but must state their willingness to shoulder heavier responsibilities.
This is what Father Ares, a Jesuit who is an authority on constitutional matters, has to say about the provinces' role in the field of taxation. I am referring to Father Ares' article which appeared in the December 1960 issue of Relations, and more particularly to page 320. I quote:
The provinces must not forget this: if they refuse to make full use of their rights in the taxation field, they forgo the possibility of their becoming modern and independent governments, capable of handling their own destinies and of deciding on their own what policy they should follow; if they refuse to assume the responsibilities freedom entails, they are doomed to mediocrity, they accept their downfall and join the ranks of governments whose subsistence is ensured by a paternalistic and self-seeking metropolitan government. There is but one road open to the provinces if they wish to remain true to their dignity and keep their freedom; they must, right from the start, fully assume their responsibilities in the field of taxation.
I find it difficult, Mr. Speaker, to understand the negative criticism of the Quebec premier, the Hon. Jean Lesage, with respect to the recent proposals made by the hon. Prime Minister (Mr. Diefenbaker), and which take into account the sovereignty and the increasing autonomy of the provinces. Or rather, I can see in what embarrassing position the new premier of Quebec finds himself. At the time he was a member of the federal Liberal government was he not one of those who did the most to hinder provincial autonomy?
May I read here from the speech made by the Hon. Mr. Lesage in this house on April 14, 1954. As seen on page 4078 of Hansard, he said the following:
We cannot, however, accept the unjustified claim that the provinces have priority over the Canadian government in so far as direct taxation is concerned.
And a little further on, he added:
In neither case Mr. Speaker, is there anything but the recognition of a parallel and concurrent right.
So, Mr. Speaker, that was the interpretation that the Hon. Jean Lesage put on the letter and spirit of the confederation pact with a leaning toward centralization and contrary to the interests of the provinces.
But we know that under section 91 of the Canadian constitution, the government of Canada, in the interest of peace, public order

The Budget-Mr. Allard and good administration is entitled to legislate in any matter not included in the classes of subjects assigned exclusively to the provincial legislatures.
Now, in paragraph 2, section 92, of the same constitution, it is provided that the provinces shall have an exclusive right in the matter of direct taxation for provincial purposes. Direct taxation includes personal income tax, succession duties and corporation income tax.
Therefore, the provisions are clear and specific. When provincial purposes are involved, such as education, property and civil rights, the provinces have an exclusive right to direct taxation.
It is not a case, then, as between the federal government and the provinces, of a parallel and joint right to direct taxation for provincial purposes.
Mr. Jean Lesage made in this regard erroneous statements; it is fortunate that our country is now headed by a Progressive Conservative federal government, which is more anxious than he is to preserve those rights and prerogatives our valiant forefathers wrought into the Canadian constitution.
Under the new fiscal formula of the right hon. Prime Minister, the provinces regain possession of their tax fields, enjoy a greater degree of taxation freedom and more of their proper responsibilities.
Before I resume my seat, I would like to suggest to the Minister of Finance (Mr. Fleming) a means or method of settlement concerning the important field of education.
Section 93 of the British North America Act says quite clearly that education is the exclusive responsibility of the provinces, except when minority rights are violated in a province.
Also, the courts have decided that the word "education" used in section 93 must have the broadest meaning. A decision of the Supreme Court of Canada reported under "Adoption Act, 1938," page 398 of the report of the supreme court, bears witness to that.
We must therefore progressively eliminate any federal interference in the field of education as experienced in the last century.
I sincerely believe that an integral observance of the constitution is essential for proper political efficiency of the Canadian confederation.
To this effect, I make four suggestions:
1.	That the present government publish its intention to consider as an exclusive provincial responsibility all claims for an in-

crease in the payments made at present by the Canadian government, either to provincial governments, or to educational institutions, as subsidies or any other form of assistance to education, at any level;
2.	That the government adhere to the principle of handing over in due course to the provinces the control and distribution of the various forms of assistance with regard to education, which are now operated by the federal government;
3.	That the solution of this problem be sought by including the present federal payments for education in the equalization payments guaranteed to the provinces under the fiscal agreements, so that both be integrated and considered at the same time when a renewal of the fiscal agreements is discussed;
4.	That this solution be immediately accepted with regard to university grants, it being agreed if necessary that the federal government is willing, until otherwise decided by the fiscal conference, to increase equalization payments each year by the sum representing the intended increase of grants to universities, i.e., by $1.50 per capita of the increased Canadian population.
Mr. Speaker, the federal government would then abstain from paying any additional grants.
A study of the present grant system should be made in order to determine the machinery by which they might be eliminated through their integration with equalization payments.
The amounts voted each year for the Canadian conference of universities would be immediately added to equalization payments and directly handed over to the provinces. It would then be the responsibility of the provinces to make arrangements with the universities to determine the method of distribution, whether through the present Canadian conference of universities, or any other means. It would be the responsibility of the universities themselves to discuss the formula with the provincial governments.
Under such an agreement, no province could claim to be financially wronged by the cancellation of direct grants to the universities. They would receive the same amount, except that they would be free to use it as they pleased. The problem of equalizing the funds available for educational purposes would then be a responsibility of the federal-provincial conference and could be appropriately settled by the parties concerned.
(Text):


Mr. Walter Pitman (Peterborough):: The Budget-Mr. Pitman that government can really be effective. The minister's remarks regarding "bureaucratic delays", and so on, show his idealistic view of so-called laissez-faire, free enterprise school which believes that no government is good government.
The purpose of the budget as expressed by the Minister of Finance is worthy; to solve unemployment, to create a balanced growth in every sector, to improve technical efficiency of industry, to raise the level of savings and investment by Canadians. All of these objectives are very worthy, though we fail to see how this budget is going to accomplish any of these things. We do not believe that government needs to adopt stifling controls; we do believe that a government should provide leadership and planning, something which is completely lacking in this particular government.
What does the minister appeal for throughout the entire budget? He said, as reported at page 6642 of Hansard:
In our free enterprise system we shall need selfdiscipline and the full co-operation of business, labour and all levels of government-
Later in his speech the minister called for "co-operation of labour and management" in regard to prices and wages. In other words, what he expects is foresight and initiative to come from the bottom, when it is completely lacking at the top.


John Whitney Pickersgill: Hear, hear.


Walter George Pitman: We do not believe the country is on the brink of disaster, as has been claimed. However, we do believe that when a nation has the highest unemployment rate of any developed nation in the world, when it has one of the lowest gross national products of any developed country in the world, when its capital expenditure on plant and factories has gone down to an unbelievably low level, when a small businessman in an area, whether he runs a restaurant, a furniture store or a car lot, finds his profits going down somewhere between 3 to 27 per cent, something seriously needs to be done.
We feel that the tragedy is not so much what is but what could be, in a nation with all the unused plant capacity and unused human resources which the minister spoke about last Tuesday evening. We want to see an expanding economy, and once again we do not see anything in this budget which will give us this.
The minister has said, "We do not intend to let events take an unguided course in the hope that these problems will solve themselves". But that is exactly what happened this last winter. This government would not even admit there was unemployment until some time in December and January. Then

they waited for these problems to solve themselves. This government has no faith in planning. This government cannot plan, because it has no faith in the initiative which would take place if it did.
This budget is concerned entirely with incentive, in the hope that if we spread enough money around at the top, some small part of it will finally find its way and filter down to the bottom. It is completely beyond the comprehension of this government to give money at the bottom and hope that some of it might go to the top.
One of the things this budget is certainly built upon is the hope that the premium on the Canadian dollar will disappear. We want to know by what method. The minister is not suggesting that the foreign exchange board of the second world war is going to be reconstituted and will fix a rate, something that can be depended upon. He suggests, rather, that we are going to set up a foreign exchange fund to buy United States dollars. With an annual average inflow of well over $1 billion, how can one tenth of this create a long term devaluation of the Canadian dollar?


An hon. Member:: Go back to school and find out.


Walter George Pitman: How can the minister be sure that this will not create a considerable fluctuation which will have a very serious effect upon the money market? What of other currencies? I understand that yesterday the relationship of the German mark to the Canadian dollar was exactly the same. In other words someone could have converted Canadian currency to German marks and exchanged German marks into United States currency to escape the premium on the direct conversion. I think this is certainly a problem with which the minister should be concerned.
The minister suggests also that he will lower interest rates. How? I share the concern of the hon. member for Trinity (Mr. Hellyer) as to how these rates are going to go down. The minister says he is not going to force the interest rates down.
As he stated-and this appears at page 6645 of Hansard-we attach high importance to a climate of confidence and understanding in our financing matters. Well, all of us have a great deal of confidence in the businessmen of this nation but to expect leadership from them is, I suspect, a matter of misguided hope. Will not the government's needs, with a deficit of $1 billion not raise interest rates, or will the printing presses begin to turn as the hon. member for Trinity suggested? I am all in favour of creating understanding,

but I think this is an area where the government has to take some action and show some initiative.
Certainly, one of the areas where the government is advocating a shrugging off of responsibility is the area of dominion provincial relations. In this respect, the government seems determined to go back to the 1930's. In 1940 this nation had the benefit of having one of the greatest examinations of our federal system which was ever initiated. I will be the first to admit that it was under the Liberal regime. The recommendations of the Rowell-Sirois report are, I think, as valid today as they were back in 1940.


John Whitney Pickersgill: All being torpedoed now.


Walter George Pitman: That commission thought the solution to our problems would require greater centralization. They thought this was a world wide movement and not simply a matter for Canada to deal with. They believed it was in the interest of all Canadians for the government of Canada to take over certain functions and to take over certain fields of taxation. They believed these policies should be centralized. Equalization, they thought, should be based on a national adjustment grant which would be based on need decided according to expert study. Now, not only is this government determined to excuse its failings by commenting on the confidence of the businessman but it wants to shrug off its responsibilities placing them with the provinces.
The No. 1 weapon by which this government can do anything about unemployment is the monetary and fiscal weapon and now the Prime Minister (Mr. Diefenbaker) is thinking of placing in the hands of the provinces the opportunity to negate whatever the central government is trying to do. A perfect example of this comes right with this budget. Here, this government is going to reduce this tax on automobiles-7A per cent. But what is the premier of the government of Ontario doing? He is putting up the tax by 3 per cent. If the premier of Ontario had pondered for a year to find a way by which he could negate the influence of this government he could not have come up with a better suggestion than a 3 per cent sales tax, the most regressive tax possible. This is an example of what is going to happen. One can see this jungle taking shape in every place in Canada as province after province puts on one tax after another to negate the effect of taxes taken off by the federal government. I think this will be a matter of intense concern to people right across this nation.
Furthermore, once again this equalization is back on a political pandering basis. Forty per cent is given here, $8 million there. The
The Budget-Mr. Pitman government refuses the opportunity to provide leadership and refuses to realize that provincial freedom may involve federal slavery for the Canadian people as a whole.
Perhaps I might give a perfect example of the lack of leadership and direction which has been noticeable in the last six months by drawing attention to one particular problem with which this government tried to deal in the last budget placed before this house. I should like to read from Hansard at page 1007 where the speech is reported in which the Minister of Finance brought forward one of the ways by which the unemployment problem was to be solved. I quote:
The most important of our immediate objectives, as I have already said, is to deal effectively with the problem of unemployment.
I take it, of course, that the minister meant unemployment during this year and not unemployment some years hence. Further on in the same paragraph the hon. gentleman said:
I am anxious to do everything in our means to encourage initiative and enterprise. As a powerful incentive to these ends I am pleased to announce measures to fulfil three major purposes: first, to assist new industries in areas where there is a substantial degree of continuing unemployment over the years-
That was the first proposal. Did this government designate the areas which were to be qualified as surplus manpower areas? No. We heard nothing more about it. When more information did come down, not without considerable prying on the part of the opposition, it came down on March 2. Yet the minister had the audacity to suggest in this budget, and here I read from Hansard at page 6658:
As usual with such matters, interested persons took some time to consider the possibilities in relation to their own affairs and their own plans. Following a time lag which was not unexpected-
The minister went on to say that interest was increasing. The time lag Mr. Speaker was the result of delay by this government. It took until March 2 before any indication was given as to what the criterion might be for those areas which had a surplus manpower. Equivocation of this kind is difficult to stomach. It certainly was not the result of business hesitation. It was because the municipalities did not know whether they were eligible and could not even find out from the government whether they were eligible.
Finally, on March 2, we found out what the criterion was. Was it some glorious, complicated criterion which might have taken months and months of this government's activities to find out? No. It could have been looked up the day after the minister had rushed out his budget speech. It could have been looked up in a chart to be found among
6898	HOUSE OF
The Budget-Mr. Pitman the documents of the Senate committee on manpower and resources. That criterion could have been announced then. Instead, this government took three months while the unemployment rate was the highest in the history of this nation for the last quarter of a century. This was an inexcusable lack of responsibility. This criterion, again, was combined with another stipulation that the industrial force must be going down. That is when the Department of Labour or the Department of Finance, through its officials, should have been in these constituencies finding out whether or not the employment force had gone down. I am not, of course, suggesting that what was being offered to these areas of surplus manpower would be any use whatsoever-double depreciation for one year is practically useless. In fact, I would ask this question: how many industries are, six months later, receiving the benefit of this allowance? I would be very interested to know, because this is one of the most fantastic negations of government responsibility that I have ever seen.


John Whitney Pickersgill: None.


Walter George Pitman: It took four months from the bringing down of the last budget before one area had been designated, namely, Cornwall. It took from March 21 to May 4 for the government to figure out that Windsor should be designated as such an area. Then-this is the greatest joke of all-a few days ago they had to change the rules so that they could bring in the one area which they were trying to get in, namely, Elliot Lake. The government had refused to tell the areas which had an opportunity to come under this scheme whether they were eligible or not. But I have worked out-and I can assure hon. members it did not take me long-a list of the major industrial areas of 10,000 people and more who have the required 75 per cent of unemployment and, as of June 2, Shawinigan Falls, which had 90.5 per cent, had not applied; Grand Val d'Or had not applied; Cornwall had applied and been accepted; Lac St. Jean with 32.6 per cent had not applied; Trois Rivieres with 90.5 per cent had not applied, Brantford, with 90.5 per cent had not applied -had not even been told that they were in a category where they could apply. So what do we have? As of June 2 there was 39 places which had applied and most of them, well over 50 per cent of them, are way below what has been set out in this particular criterion. They have no chance of gaining any help whatsoever from the scheme which has been designated by this government.
I know of one case where the municipal council of a city tramped all the way down here to Ottawa and spent the day down here, the taxpayers' money having been spent on


sending them down here, to spend a couple of hours with a minister of the crown to find out where they belonged in this category. They could have been told that they belonged in that category by means of a phone call in two minutes. It took me 15 minutes to find out what the percentage was by simply looking through the copies of the Labour Gazette which are to be found in the library of this particular house. That is an instance of the lack of responsibility, the lack of leadership, the lack of initiative with which this government has conducted its affairs over the past six months. We are presented with a huge deficit and told by the Minister of Finance that this will not cause any real inflation. He then adds that modest price advances in regard to some of the goods we obtain from abroad as well as in regard to some of our export commodities will occur. What consideration does he give to the consumer or those individuals who are on pensions and whose incomes are stabilized, those individuals who are so dependent on welfare benefits? I suggest there is not a bit of concern given to those people. It's a budget of bits and pieces.
I should like to read from page 5 of the report from the Senate special committee on manpower and employment as follows:
The maintenance of an adequate rate of economic growth requires a continuing high level of capital investment, both private and public. Private capital investment must be supplemented and stimulated by an adequate rate of government investment in social capital.
This is an area which the present budget has missed completely. The report then continues as follows:
Our stock of social capital is both inadequate and in many respects obsolescent, especially in our rapidly expanding urban areas.
Has this government dealt with anything in that area? I suggest it has not. That certainly indicates poverty of imagination and a complete lack of a recognition of the major problem of this nation.
This huge deficit is being used as an answer to the problem in a manner similar to spreading out a mass of green and white bottles on the floor and then turning a firehose on the bottles with the expectation that some water will go into the green bottles but none into the white bottles.
There is no indication in this budget as to the determining of whether this huge deficit and the money resulting from it will be directed into those areas where it will provide employment. I suggest it sets forth a firehose approach which I am convinced will have very little effect upon the problems of this nature.

The minister is determined that he is going to increase the investment in Canada by Canadians. Here again there is no plan for creating some kind of Canadian development fund to provide incentive and encouragement to Canadians to invest their money in areas where it is socially desirable, none whatsoever. Once again the incentive is provided at the top with the hope that some of it will drop to the bottom. Again, is this not a time for lower taxes in certain areas so as to provide greater employment?
We note with satisfaction that the minister is now determined to do something about the individuals with high expense accounts; expense account living, he called it. His answer to this problem is simply that the Department of National Revenue will scrutinize this type of thing. I suggest this is not enough.
In conclusion I should like to state that this is the last time that the C.C.F. party as such will have the opportunity of discussing a budget on the floor of this house. For that reason, and in view of the budget which has been brought down, I feel that a few facts placed on the record might be of value.
Family allowance payments this year will be $523 million. Old age assistance payments, blind persons and disabled persons' allowances and unemployment assistance will be in the amount of $96,856,000. Hospital insurance and general health grants will amount to $317 million. Old age security payments -expenditures from the old age security fund -will amount to $606,570,000.


An hon. Member:: All increased by this government.


Walter George Pitman: The government's contribution to the unemployment insurance fund will amount to $57 million. Total welfare payments amount to $1,600 million. All of this must come out of a total budget of $6,100 minion. That means the total welfare payments represent 26.2 per cent of the total budget, which amounts to $90 per year for every man, woman and child in this country.
Let us remember that family allowances were advocated by J. S. Woodsworth in 1926 and were adopted in 1944 and 1945. Old age pensions were extracted by J. S. Woodsworth and A. A. Heaps from the Liberal government in 1926. Hospital insurance was advocated by J. S. Woodsworth in 1926 and adopted in 1959. Old age pension were extracted from the Liberal government in 1926, and we have a letter signed by the late Mr. Mackenzie King indicating the extent of that extraction. Unemployment insurance was advocated by Mr. J. S. Woodsworth in 1926 and adopted in 1940 by the Liberal government.
The Budget-Mr. Speakman
In concluding my remarks 1 should like to say that I have no concern whatever about history dealing very kindly with this party.


Mr. Nasserden:: Mr. Speaker, would the hon. gentleman permit a question?


Walter George Pitman: Most certainly, Mr. Speaker.


Edward Nasserden: Did I understand the hon. member to say that the provincial sales tax, such as was brought into effect in the province of Saskatchewan by the Liberal government, and later increased by the C.C.F. government by 50 per cent, was regressive?


Walter George Pitman: I should say that under certain circumstances it could be regressive, yes.


An hon. Member:: That is an example of the C.C.F. government in Saskatchewan.


Mr. J. S. Speakman (Wetaskiwin):: Mr. Speaker, this is my first opportunity to participate in a budget debate, and I must compliment the minister and the government for this budget which, in my opinion, and I think in the opinion of many other Canadians, is a good budget.
I was very interested on Tuesday evening last to hear the remarks of Dr. Hannam, the president of the Canadian Federation of Agriculture, who said that in his opinion this budget would do much of benefit to agriculture in Canada.
I wish to deal with three matters which I feel are of urgent importance. The first is of regional concern, but, in my opinion, of national importance. Since 1950 in Canada and particularly in western Canada we have built up a beef industry with the largest market being the United States. Over the past years farmers' incomes have been increased in part as a result of the shipment of dressed and live beef to the United States. In western Canada this year the farmers are facing a drought situation.
I should just like to refer to the latest issue of the Manitoba Co-Operator dated June 15. In that issue under the heading "Drought and Livestock" there appears the statement that Manitoba's pasture and hay picture this season to date has not been as grim since the 1930's. This same situation applies to all three western provinces where there will be no early hay cut this year. Normally the first cut of hay should have already been taken, but this year farmers will be fortunate to take one crop in July or early August.
Since this government came into office in 1957 it has recognized Canada's agricultural industry as it has never been recognized by any previous government. This government has placed legislation on the statute books of great benefit to Canada's agricultural industry
6900	HOUSE OF COMMONS
The Budget-Mr. Speakman across the nation, and has increased the level of income and standard of living of those individuals participating in this industry; although not to the degree desired, this is a step in the right direction.
Among the pieces of legislation which this government has enacted is the measure providing the acreage payments made in 1958 and again in 1960 on the basis of emergency. I should like to state that in my opinion the present situation in western Canada constitutes another similar emergency. One of our major sources of United States dollars exists through the export of beef to the United States. I suggest that if the beef farmers are not assisted in the provision of funds to purchase fodder for their beef herds these herds will have to be drastically reduced with a resultant loss in economy, both regional and national, for some considerable time. I suggest the situation has never been as bad since the 1930's as far as drought is concerned as it is now, when we are just nicely recovering from the losses suffered from the outbreak of hoof and mouth disease in 1950. We have our herds back; we have a good market and I would hope that the government would seriously consider paying the $1 an acre again this year.
The second matter that I should like to deal with is one that I consider to be in the national interest. It is in the interest of all of Canada from the point of view of employment, and from the point of view of a balance of payments with the United States, and it is in the interest of Canadian development and national advancement. I want to speak for a few moments on the Canadian case for the Montreal pipe line.
In the area east of the Ottawa valley we have the largest concentration of users of the products of our oil industry being supplied at the present time almost wholly by foreign imports. In effect this situation is creating employment outside of Canada when we need so much an increase in employment in Canada.
Recently a booklet was put out by Home Oil Company Limited of Canada, and I should like to refer, if I may, to one or two sections of it. The booklet is called "The Canadian Case for the Montreal Pipe Line". They begin by saying:
The Montreal pipe line project, must succeed or fail on whether it serves the national interest of Canada.
In my opinion it has failed to do so. I continue:
The proposal to construct a $430 million large diameter pipe line to Montreal falls four-square within the national interest as so defined.

Our productive capacity of crude oil, sir, is 1,100,000 barrels of oil a day. At the time this booklet was printed we were producing 525,000 barrels a day and importing more than 410,000 barrels of crude oil products a day from outside the country. I continue:
The building of a Montreal pipe line, and the consequent utilization of western Canadian crude oil, can reduce Canada's merchandise trade deficit by more than $200 million in 1963, increasing to more than $400 million per year by 1972.
Surely, Mr. Speaker, this is a worth-while objective for Canadians. The booklet goes on:
The building of a large diameter crude oil pipe line from Alberta to Montreal will provide direct employment for 6,000 Canadians and indirect employment for more than an additional 25,000 during the two-year construction period.
The pipe line will require approximately 700,000 tons of steel, all of which can be produced from Canadian iron ore and fabricated in Canada into 2,100 miles of Canadian pipe.
There again we would create additional employment. I am sure, Mr. Speaker, that Canadians would gladly pay perhaps a little more for their oil products which they require and use, in the interest of providing employment for other Canadians, rather than providing employment for people in outside countries.
In addition, the building of this pipe line would give a great impetus to national development, to the expansion which the minister and the government so desire. Our known potential of crude oil is more than 30 years' supply for Canadians and our expected potential is probably something like 300 years' supply. Therefore, I believe we would be better off as Canadians to use our own product and develop our own oil rather than give this employment, as I said before, to people outside of Canada.
The third subject that I should like to deal with I like to think is global. As all hon. members know, I had the honour and the privilege in April and May of this year to attend as Canada's delegate the meeting of parliamentarians from the nations and dependencies of the commonwealth, which was held at the houses of parliament in London, England, and at Stormont, the parliament of Northern Ireland. It was a great privilege for me to attend this conference, sir. Before I go any further I should like to urge the government to consider very seriously increasing by a very large amount its contribution to the Canada branch of the commonwealth parliamentary association so that more members of the Canadian House of Commons and of the other place might be able to visit the countries of the commonwealth.
It was very interesting indeed to find, when we were assembled in the houses of parliament in London, that of the 32 delegates

three were white. I think this provides a very interesting commentary on the position of the white people in the world today. In fact their position is perhaps not quite as ascendant as it was. There were 12 delegates from the various nations in Africa; four from commonwealth countries in the Orient; three from India; seven were of Arabian nationality and three from the West Indies. I was delighted indeed to find that all of these people from all of these countries held Canada and Canada's Prime Minister in the highest respect. In fact, the remark made by many of them was that they consider the Prime Minister of Canada to be the foremost figure on the political scene in the world today.
During the passage of another piece of legislation in the house this week, Mr. Speaker, I made mention of the needs of some of these member nations of the commonwealth in respect of the things which we in Canada can provide. I was amazed to read in a report of one of the committees of the house that one of my colleagues had suggested the government should reduce its aid to African nations. In my opinion, sir, we should vastly increase aid to Africa particularly. There is a need for advancement in agriculture. They are farming under very primitive conditions. They have no other source of national income, really. In most African countries their young men and women have to leave home to make a living. Canada could make a tremendous contribution, sir, to the advancement of those nations and by making this contribution it could certainly help to weld this commonwealth into what it could be.
I should like to see my colleagues in all parts of the house support such a move to extend this assistance to those African nations; in fact, to all of the commonwealth nations. I would hope that it would be done soon. It is my opinion that the commonwealth, rather than any other organization in the world today, provides us with our greatest hope for world peace and security. With the commonwealth we can weld together and keep together a team whose members are multiracial and speak many languages but with a common devotion to the crown and the common bond that most of the people in these countries can speak the English language. I would hope that we in Canada would adopt an attitude as a nation and as a people not of what can we get but what can we give in today's world.


Mr. C. R. Granger (Grand Falls-White Bay-Labrador):: Mr. Speaker, the budget brought down two nights ago aroused a great deal of interest. There was perhaps more interest this year than at any time in the recent past. There was much anticipation and much
The Budget-Mr. Granger speculation because the Minister of Finance (Mr. Fleming) had indicated that he was going to produce an expansionist budget.


Thomas Miller Bell: He did.


Charles Ronald McKay Granger: The word "expansionist" had a magical effect. Canada, still in a period of recession, still plagued with unemployment, was really in difficulties. There was no official admission that the nation was in trouble but there was a sort of unofficial acknowledgement that all was not well and among the public there was concern that this condition of recession might not cure itself.
The announcement of an expansionist budget was welcomed generally and excitement ran high. Certainly there is reason to call the budget the great expectations budget. Tuesday night came and the great expectations budget was brought down. The preamble was heroic and heroically delivered. The minister's words were optimistic. He said, as found on page 6641 of Hansard:
The normal growth of real demand can be expected to overtake capacity in the not too distant future.
A great part of the budget speech was an attempt to explain the new policies which were about to be produced, policies which it was indicated would make Canada a land flowing with milk and honey and bursting with prosperity. The minister admitted as he proceeded with his speech that all was not well. This was a new departure, one of several in what was in fact an unusual budget. He had this to say in his speech:
There is more unemployment and unused capacity in our industries than we can possibly accept. Recent rates of economic growth have been lower than we need to absorb our rapidly growing labour force and the output of our expanding industrial capacity.
This was a very neat way of formally acknowledging that there has been an unemployment problem. A little later he used another neat phrase when he said, as found on page 6642 of Hansard:
We do not intend to let events take an unguided course-
One must note, however, that he did not announce a planned economy. One statement he made was soon proven to be correct, namely:
The budget which I bring down this evening is not an ordinary budget.
It certainly was not an ordinary budget. It was not set in the usual ideological background either. This was to be an expansionist budget, not one of the ordinary run of the mill, pay as you go budgets. The passing of the years and the persistence of economic troubles had induced a change of thinking if not a change of heart.

The Budget-Mr. Granger
Deficits are not new to this government There were deficits in 1958, 1959, 1960 and 1961 and a huge deficit is expected and planned for in 1962. I might also go so far as to say that deficits are a way of life with the present administration. However, to embrace deficit financing as a way to prosperity and to hail it as a noble means to a glorious end is a new philosophy for this administration.
I hasten to add that deficit financing is not necessarily bad or perhaps I should say that deficit financing can be justified. I am not criticizing the decision to resort to deficit financing. I am merely wondering at the complete change in economic philosophy which accompanied its announcement. In a time of economic stress and strain there is positive justification for resorting to deficit financing provided that the deficit financing is to create something new. However, it appears to me that all the present deficit does is to cause us to go deeper into debt in order to pay off old debts. The present deficit financing seems to have been forced on the government rather than having been sought out to create a better and healthier economic state.
Then there is the matter of delay in introducing the budget, for there was an inordinate delay in introducing the budget this year. The budget is, I suppose, about three months late. The delay has caused great anxiety, concern and uncertainty in the Canadian business community. The only possible justification for such a delay would have been the presentation of a far-reaching budget introducing major changes, but there are really no major changes in the budget. To my way of thinking, it is not a document which would justify such a delay and the resultant consequences of the delay that have occurred upon Canadian business. The conclusion which the Canadian public must reach with regard to the delay is that it represents both the arrogance and the poor administration of the government.
The only substantial measure introduced by the government is the use of the exchange fund to attempt to influence the external value of the Canadian dollar. This fund has existed for at least 20 years. It now stands, I believe, at nearly $2 billion. The government could have employed this fund at any time to influence the exchange rate. It did not require a budget to enable the government to use this fund. The fact that the Minister of Finance has seen fit to emphasize the use of the exchange fund and calls this a major measure shows the lack of dynamic ideas in the budget. The use of the exchange fund is rather like finding an old toy in the closet, bringing it out and polishing it up and becoming excited over it. Too little and too late

may well apply to this budget of great expectations. It is questionable if the budget contains the power, the real power to bring about the upward change and the rise in industrial development which it forecast. There is wind without the windmill. There are great promises which require real geared energy in order to fulfil them. The substance is not there. Of course, time will prove the value of all the prophecies which have been made.
However, I cannot help but think back to some of the great national projects which were initiated under the previous Liberal administration.



THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
Government House Ottawa, June 22, 1961
Sir:
I have the honour to inform you that the Hon. Patrick Kerwin, Chief Justice of Canada, acting as Deputy of His Excellency the Governor General, will proceed to the senate chamber today, the 22nd June, at 5.45 p.m., for the purpose of giving the royal assent to certain bills.
I have the honour to be, sir,
Your obedient servant,
E. Joly De Lotbiniere Assistant Secretary to the Governor General
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
An act respecting the construction of a bridge over the St. Lawrence river near the city of Trois-Rivieres.
An act to amend the Army Benevolent Fund Act.
An act to provide for the rehabilitation of agricultural lands and the development of rural areas in Canada.
An act to amend the Government Property Traffic Act.	'
An act to amend the Canada Shipping Act.
An act to amend the Food and Drugs Act.
An act to provide for the control of narcotic drugs.
An act to amend the Judges Act and the Exchequer Court Act.
An act to amend the Farm Credit Act.
An act to amend the War Veterans Allowance Act, 1952.
An act to amend the Export Credits Insurance Act.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 7.30 p.m.


[Stage Direction]
The house resumed consideration of the motion of Hon. Donald M. Fleming (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Benidickson, and the amendment to the amendment of Mr. Regier.
Charles Ronald McKay Granger: Mr. Speaker, when the house rose I was recalling some of the great national projects which had been initiated under previous Liberal administrations. I would mention among others the Trans-Canada Air Lines, the trans-Canada highway, the trans-Canada pipe line and the St. Lawrence seaway. I cannot help but deplore the fact that there does not seem to be provision made in this budget for the development of further great national projects in the near future. I might add that such national projects serve a twofold purpose; they give a boost to the national economy and they develop the cohesion and maturity of Canada as a nation.
It is a matter of regret that there are no great new national projects forecast at the present time because such national projects would more than justify a deficit. The only expansion on the horizon in an expansion of debt without the compensation of expanded productivity.
I should like to make some reference to parts of the budget speech of the Minister of Finance which were devoted to international trade and commercial policies. The minister seemed to reject most of the views of people who have been thinking about Canada's trading problems. I think he referred to them as "counsels of fear and even despair".
The point which I wish to emphasize is that all the discussion regarding the need for fundamental rethinking in Canada's trading position, and the many arguments that have been presented, notably those by the Leader of the Opposition (Mr. Pearson) regarding the need for Canada to recognize and assess the impact of European trade developments, have apparently been rejected as well as the proposal put forward regarding new horizons for Canada's trade. The minister said:
I do not believe that the economic problems which confront Canada today require a drastic redirection of our trading relationships; or that these problems cannot be overcome by a vigorous pursuit of our present trading policies judiciously adjusted to meet changing world conditions.
The Budget-Mr. Allmark
The minister made some reference to the prospect of Britain entering the European common market and it seemed to me that he did not think Britain should join that group. On the other hand, it seemed to me that the tenor of his remarks held implications that Britain would be doing Canada a disservice if she joined that common market. If I am right in my assumption that the Canadian government is opposed to Britain entering the European market, I should like to ask what alternative policy or proposal the Canadian government has to offer the British government.
If Britain considers that it is essential to her economy to join the European common market, we should act constructively so that Britain and Canada can strengthen their economies and expand their trade. I suggest the time has come for Canada to show a greater long term understanding of the position of the British government and to attempt to make arrangements whereby she can share the increased prosperity which this move could bring to Britain, to the common market and to the commonwealth.
I believe there is no more important area in which new thinking is required in Canada than in respect to our trading relationship with Britain and the European trade bloc. The Minister of Finance seemed to be neglecting the opportunity which exists to expand our future trading prospects in these areas of the world, and I should like to suggest that he spend some time studying the arguments put forward in this house time and time again by the Leader of the Opposition and others regarding the Atlantic economic community.
The budget of great expectations is already petering out in uneasiness and disappointment. I think it would be unfair to blame all this on the Minister of Finance who, after all, is in the rather unenviable position of operating a cash register in which there is no cash. It was the Prime Minister who, in 1958, sowed the wind and it is now the people of Canada who are reaping the whirlwind. The long delay in the so-called expansionist budget has become, in the words of the Leader of the Opposition, an expansion of wind, word and debt.


Mr. B. G. Allmark (Kingston):: Mr. Speaker, I should like to add my congratulations, to those already expressed, to the Minister of Finance (Mr. Fleming) for his very able presentation of the budget. May I say that in this presentation the minister has again shown that quality of good judgment he has always exhibited since first occupying this portfolio.

The Budget-Mr. Allmark
The budget debate provides an excellent opportunity tor members who are backbenchers to pass along to parliament the advice and opinions of those whom they represent in their ridings. I would like to commend the ministers on their readiness to turn a sympathetic ear to the problems of the private members and since this receptive attitude exists on their part I should like to take this opportunity to pass along to hon. members on the front benches the comments, praise and criticism of those who live in both the urban and the rural sections of my historic riding.
One of the most frequent complaints concerns the unemployment insurance fund. I know that all Canadians are anxious to help those who are in need but I do think there are areas where we could do more than we are doing at the present time. May I say that many of my constituents are not at all satisfied with the hand-out of insurance funds to those who are not in need. I am sure that the public is not opposed to married women drawing unemployment insurance if it is necessary for them to supplement the income going into their homes, but there are, I find, many who are definitely opposed to married women drawing unemployment insurance when their husbands are taking home $4,000 or $5,000 a year. We know there are thousands in Canada who are doing this and we do not have to look very far for examples of such misuse of the insurance fund.
Possibly because I come from a port on the great lakes I have always supported the Canadian sailor. I have stated on a good number of occasions that as pilots and ship handlers Canadian sailors have no equal. They work hard in the job which has its disadvantages and discomforts. They deserve good pay. But 1 see no justification for sailors who are making between $5,000 and $10,000 a year receiving unemployment insurance during the winter months. I have friends who are in the top salary bracket and who enjoy the luxury of having their unemployment insurance cheques mailed to them in the winter months. These men are good Canadians; I am sure they do not believe that this is the purpose of the fund. But one cannot expect them to refuse what is lawfully and cheerfully provided.
I have the opportunity which all hon. members do to help many elderly people in my riding. There are many Canadians who do not have an opportunity fully to realize the tremendous blessing which the old age pension is to elderly people. There is, however, an area to which further consideration should be given. There are cases where the survivor of a couple who have made ends meet on both


old age pensions finds great difficulty in managing on a single pension. Sometimes extreme hardship has to be faced. It has been my privilege in many cases to assist such people to obtain supplementary assistance from the province and from the municipality. However, in such cases an investigation is made as to means and this adds to the upset state which bereavement has already brought to these people. I would strongly recommend that some method be found to increase the income of such persons without making it necessary for them to appeal to charitable organizations.
The residents of my constituency are extremely grateful for the assistance given by this government to the shipbuilding industry. We are aware that in the shipbuilding trade in recent years and particularly since the opening of the seaway competition from foreign countries has been very keen. Had this provision for assistance not been made we were faced with the loss of those skills which are peculiar to this trade and which would be almost impossible to replace. Thus we were faced with the loss of an important Canadian industry. May I remind the government that there will no doubt be considerable work to be done in the conversion of the best of the old canal ships to a larger and more economic size for use in the new canal and I would ask that consideration be given to the application of this subsidy to the conversion of existing Canadian ships.
No one who has followed the shipbuilding industry has failed to notice the number of times foreign engines are used in ships belonging to the Canadian government. Too frequently we find that these ships are designed so that Canadian marine engines cannot be adapted for use in them, or that they can be adapted only at considerable additional cost. I believe that when it is decided that the Canadian government needs new ships there should be a consultation at the; design stage with a committee of government to ensure that the ship was not so designed as to exclude the use of Canadian machinery and equipment. We have in Canada two marine engine manufacturers. One of them is a Kingston plant. The marine engines produced by these Canadian companies are at least equal to those produced by any country and it is shocking to find that on occasions we appear to give preference to engines and equipment produced by other countries. If we believe the "Buy Canadian" slogan, let us make sure that our government ship designers do not prevent us from practising this policy.
Until recent years in my historic riding we were very proud of our transportation

system both by water and and by rail. Kingston is on the main line of the Toronto-Mont-real route of the railway. Our passenger and freight service by rail was equal to the best in Canada. Our passenger and freight service by water was also equal to the best in Canada because we were one of the important ports on the St. Lawrence-great lakes system. Ninety per cent of all the ships which passed from river to lake or down from lake to river passed the port of Kingston. But the shipping channel, either through stupidity or design was diverted, under the previous government, to the United States side, missing the port of Kingston. In addition, under former governments, when the necessity for air service became apparent, only a few feeble attempts were made to provide my constituency with this modern system of travel. It is said that the wheels of government turn slowly. But may I say that it is only a little more than three years since the people of Canada elected a government of Sir John A's party and in this short period of time a contract has been awarded which in its first step will provide a connection with the seaway channel to the east. This will permit 90 per cent of the present seaway vessels to use the Canadian side and to pass the port of Kingston. Also in this short period of time the government has studied and realized the need for air service and has granted a licence under which Kingston will have a daily air service to Toronto and Montreal, commencing at the end of this month. I should like very sincerely to thank the Minister of Public Works (Mr. Walker) and the Minister of Transport (Mr. Balcer) for their interest, their sound judgment and their progressiveness in bringing those services to my riding. At this time I should like to say how much I appreciate the assistance of our local council and the businessmen of my riding who took the time to come to Ottawa and efficiently present briefs supporting those necessary services.
At the junction of the St. Lawrence and lake Ontario, where the city of Kingston is situated, there are a number of very beautiful islands. Two of those are large and have a large population of year round residents in addition to those hundreds of people who have their summer homes there. The great problem for those who make their homes on the islands is transportation to the mainland, particularly at the time of freeze-up and at the spring break-up. To cross over the ice in the spring and fall is very hazardous and through the years there has been a tragic loss of life.
There is only one proper solution to this problem, Mr. Speaker, and that is the building of a bridge to span the distance from
The Budget-Mr. Allmark the mainland to Howe island, thence to Wolfe island and from there to the United States mainland. Unfortunately, the bankers who finance such projects as international bridges assess only the financial returns and attach no importance to the great benefit to those who must make this hazardous crossing in the spring and fall, nor does the loss of life enter into their calculations.
This project has been studied by committees on both the United States and Canadian sides of the river, and, while all agree on the great benefits a bridge would bring to the area, there is also agreement that such a project is impossible without government assistance. May I suggest to the Minister of Public Works that his very capable economic study group under the leadership of Dr. Weeks might well look at this proposal with a view to assessing the benefits which would accrue not only to those who live on the islands but also to the entire area through increased tourist traffic. It does seem to me that here is an excellent opportunity for the government to be of service to Canadians which would result in a tremendous benefit in the development of the area and, what of course is more important, it would save human life.
In the rural area surrounding the city of Kingston the chief occupation of those who are engaged in farming is the dairy industry. We realize that this government has been particularly interested in the welfare of the farmers, and particularly aware that the dairy industry is one which has not received a fair return for its production. While the farmers in my area appreciate the legislation which has been passed by the Conservative government to stabilize farm prices, I should like to impress upon the Minister of Agriculture (Mr. Hamilton) the fact that the dairy industry is likely to continue to have a problem and it is our responsibility to continue to study and improve the conditions in this industry which is so vital to our country.
We in the riding of Kingston are grateful to the Minister of National Defence (Mr. Harkness) for the granting of an additional $100,000 toward the cost of Kingston's sewage disposal program. We also commend the Postmaster General (Mr. Hamilton) for the extension of mail carrier service to the residential areas which lie outside our city.
We are grateful to the Minister of Public Works for his co-operation with Canada Steamship Lines and James Richardson Company in dredging Little Cataraqui bay so as to provide a deep water port for the city of Kingston.
As I mentioned earlier, we are extremely grateful for our air service and the connecting

The Budget-Mr, Allmark channel to the seaway. May I, however, remind the Minister of Public Works, who I know has some very close ties with my riding, that he may expect me back in his office shortly urging further port improvements so that the port of Kingston may share in the development of this promising area.
Before coming to the House of Commons I was an employee of a Canadian industry with an excellent pension scheme. However, Canadian workers are aware that even the best of our Canadian pensions have one great weakness; they are not portable. Industrial employees in my riding have discussed this matter of the portability of pensions with me on numerous occasions and I should like to say to the Minister of Finance (Mr. Fleming) that his statement during the presentation of the budget that steps will be taken to deal with this matter will be indeed welcome news to Canadian workers.
In closing I should like to mention a subject which is important to my own riding and the surrounding ridings. While I have admiration for the qualities of the man whose empire I propose to bring to the attention of this parliament, I think it proper that I should level criticism because of the great concern expressed to me by residents of my constituency. I refer to the control of the news media over a wide area of eastern Ontario which is held by one man. Not only does he control the news media in my riding but also in adjoining ridings. Let me be specific. There is one daily newspaper in Kingston and one in Peterborough. This man owns both. There is one T.V. station in each of those ridings. He controls both. There are four radio stations in the two ridings, and of those he controls two. Licences for both the T.V. and the radio stations were granted to this Liberal Senator by the previous Liberal government. This man, whose newspapers pose as being politically independent, had this to say in a speech to the commonwealth press union, reported in the Ottawa Journal of June 15 of last year. I quote:
The new government has appointed a hoard of broadcast governors which has proved to be very autocratic. This board tells stations what to do and what not to do. How much time to devote to each item. How much profit must be devoted to the development of local talent. Some of us are worried that this might eventually affect the freedom of newspapers.
Here is a man who has gained control of the news media over a large area who is obviously concerned only that this government should not disturb his empire. I believe it is utterly impossible to have freedom of the press, or to have an informed public, when almost 100 per cent of the control of the news media over a large area is held by one man. It is in my opinion impossible for


any person to have such a monopoly of the news, such a power to influence people's minds, without using it for his own personal advantage. Frankly, I see little difference between the government controlled press such as exists in some countries and a news monopoly held by one person such as we have in this instance. I believe, Mr. Speaker, that it is the responsibility of the board of broadcast governors and the C.B.C. to take such steps as are necessary to break up these monopolies wherever they may exist across Canada.
(Translation):


Mr. J. P. Deschatelets (Maisonneuve-Rose-mont):: Mr. Speaker, Tuesday night's budget was introduced under very unusual circumstances. Never had a rendering of accounts to the country been delayed so long. The most surprising thing is that the Minister of Finance (Mr. Fleming) did not attempt to give an explanation or a reason to justify such a delay.
Therefore, the government is responsible for the confusion and uncertainty in which business and industry in general have found themselves since the end of last March, the time when a diligent government usually gives an account of its administration.
The four previous budgets submitted by the present government showed substantial deficits. At times the economy was at a standstill, according to the government, at other times we had come out of a momentary recession, but never in those four years had the Canadian citizen the clear impression that their government was aware of the actual problems and shortcomings of our economy and took appropriate action to correct them.
Last year, for instance, on the basis of a 6 per cent rise in gross national income, the Minister of Finance forecast a surplus of approximately $13 million; yet, last December, we heard that that surplus was to become a deficit of about $350 million because gross national income had not met the minister's hopes.
The Minister of Finance who has already been nicknamed "Donald deficit" by some people, has become our national "Wrong way Corrigan" with his record-breaking deficit of $1 billion forecast for the current year.
That means, that after five and a half years of Conservative administration, this country is $2.5 billion deeper in the red. I am not against deficits as such, because they are sometimes necessary.
I think Canadians, in general, were expecting an expansionist and therefore adverse budget. However, like most of my fellow-citizens, I am deceived because, if it is true

that we will have a deficit at the end of the next fiscal year, we are far from being sure that the program introduced by the Minister of Finance will bring us the expansion he promised.
The Conservative party still bears the mark of Toryism, and in this situation into which we were thrown by this administration I submit that the Liberal expansionist program would have been a hundred times better.


An hon. Member:: What program?


Jean-Paul Deschatelets: I must reply to my hon. friend who just interrupted me, that we have submitted a program under which a national tax reduction would have brought immediate dividends to every class of citizens.
The Minister of Finance (Mr. Fleming) and my hon. friends should be reminded here that the working class like others, the humble class, the class of small wage-earners should have been directly considered and protected under this so-called expansionist program, which in fact is mostly based on artificial measures.
This budget is not a budget for the majority of our people who shall still have to be content with a few crumbs that may fall from the table of the wealthy.
The disastrous results achieved so far by the Minister of Finance force us to accept his predictions under beneficium inventorii and I feel that an editorial of the Ottawa Citizen of June 21 expressed quite accurately my views in that regard.
(Text):
Mr. Fleming's past performances as a prognosticator being what they are, it is difficult to feel anything but the most profound uneasiness as he offers his new prescription for an ailing economy. The Minister of Finance sounds his usual ringing note of confidence, but the fact remains that he is embarking on a gigantic gamble. It carries the danger if not the outright guarantee of inflation. In this budget, Mr. Fleming frankly goes out to achieve a deficit of some $650 million. This assumes an increase in revenues between now and next March 31 as a result of the stimuli being applied to Canadian business. In any event, the accumulated deficits of the present government promise to top the $2 billion mark before it has been five years in office, which is quite a feat.
Part of the minister's objective is to bring down interest rates. How he expects to do this in the face of such monumental deficit financing, with its consequent effect on the money market, is difficult to see.
(Translation):
And the article concludes as follows: (Text):
Yet while these features of the budget appear satisfactory as far as they go, the document as a whole is a disturbing one. It is overshadowed by yet another deficit, and while a case may be made out for deficits for pump-priming purposes, Mr. Fleming has become addicted to them as to a drug. It remains to be seen how the business and financial community reacts to the latest in the series. Any
The Budget-Mr. Deschatelets outcome of the experiment in manipulation of the exchange fund is unpredictable. Pushing buttons without knowing just what will happen is a risky game.
Canadians will hope that the minister's gamble will turn out all right. It will be unfortunate for the country as well as for the government if it does not.
(Translation):
Everyone is aware of the well-known unbiased and objective attitude of the Ottawa Citizen.
Mr. Speaker, following even a superficial examination of the budget, you cannot but reach the conclusion that the Conservative government has been faithful to its past and its Tory spirit.
While radical measures are imperative, we only get words and wind; while a measure of tax reduction is offered, there is nothing for the small wage-earner, nothing for the working classes, nothing for the unemployed, except perhaps renewed concern about the presits tory spirit.
The small wage-earner will be the first to bear the brunt of the budget. It is he, in fact, who will have to shoulder the burden of that budget.
As I said earlier, the economy is not like a car. A car can be shifted into gear, its speed can be increased by pressing on the gas, and it can be stopped by applying the brakes.
You cannot do that with a country's economy.
You will also recall the government's lack of judgment in trying to divert to the United Kingdom 15 per cent of our trade with the United States. You will also recall the difficulties that followed that irresponsible statement.
Mr. Speaker, I now come to that new policy announced by the Minister of Finance Tuesday, concerning the exchange rate control. That is one of the main points in the budget.
With that policy, the government hopes to control the exchange rate, even to reduce it, through the exchange fund.
But a report published in La Presse of June 21, sets forth a very interesting opinion in that connection:
The minister proposes to reduce the exchange rate.
And the minister goes on:
More than any other policy that could be adopted, a lower exchange rate will be of signal assistance to all of our producers, both in primary and in secondary industries, to those who export as well as to those who sell at home.
There had also been a rather interesting article concerning the budget brought down on March 31, 1960. The Minister of Finance had then made a statement on the same subject in utter opposition to this one.

The Budget-Mr. Deschatelets
I quote:
I have seen some references to a demand that the government should deliberately "devalue" the dollar. This kind of talk might have been appropriate when Canada was on the gold standard, or even when it maintained a fixed exchange rate. We have not been on the gold standard for half a century and we have not had a fixed exchange for a decade. An attempt by the government, added Mr. Fleming, artificially to lower the external price of the Canadian dollar would involve sums of money with which to buy up foreign exchange.
The minister added:
It would be a very difficult matter to work out technical controls.
In other words, we would be embarking upon a gigantic financial speculation with no assurance of success.
I have just shown that this new policy is a complete reversal of the minister's former position concerning the exchange rate.
And yet that was what the minister said on March 30 last.
I cannot understand why the minister is saying exactly the opposite of what he was stating last year. I wonder when he is speaking the truth. Was it last year, when he said that the artificial reduction of the exchange rate was bad policy. Or is it this year, when he says that it is sound policy. I must tell the minister that there are a thousand ways of controlling the exchange rate, but there is a way that could prove very bad because of unforeseen consequences, and that way is precisely this artificial method adopted by the government Tuesday night.
Canada is an exporting nation. We must therefore take that into account and adjust our economy in such a way as to achieve commercial expansion and competitive prices on world markets. One must not forget however that we are equally dependent on. a great many imported products for our very subsistence. I will mention the most essential ones, those which may be found on every Canadian table: tea, coffee, sugar, etc.
As a result of this change in the rate, our Canadian families should necessarily expect to pay more for imported products. I should like to ask the minister what provisions there are in his budget against such an occurrence? What will happen to the lower and middle classes if there is a sharp rise in the cost of living?
I know of experts who have expressed the opinion that the cost of living index could go up by as much as five points. Regarding this matter I should like to read a most interesting article which appeared in this morning's Gazette, that is the June 22 issue, under the signature of Mr. John Meyer. It is entitled:


(Text):
The full cost of budget has still to be figured.
Mr. Fleming will have to borrow an average of $100 million a month for the balance of the fiscal year to meet his estimated cash deficit. No provision was made for the $100 million needed for the debt management fund. There will probably be other non-budgetary expenditures which haven't yet been accounted for. The heaviest cost is likely to arise from keeping the dollar at a discount. A total borrowing half again larger than that indicated remains a distinct possibility. Meeting this requirement and, at the same time, reducing interest rates will be a remarkable accomplishment to bring about without inflating the money supply.
(Translation):
Now, I ask the minister: how much will the government have to borrow monthly in order to meet the requirements of its deficits? What will happen to the interest rates which the government is anxious to maintain at a reasonable level? What are the means provided in this budget to maintain those interest rates at a reasonable level? What will happen to the loans of our provincial governments, of our municipalities, past loans as well as future loans?
Shall we be in a position to meet their needs if they are unable to obtain funds on foreign markets, as far as financing is concerned? I am thinking in particular of the Montreal subway project, about which it was reported that financial arrangements were almost completed with the French government, because at that time, Canadian businessmen had been extremely surprised and taken aback when they heard that the Canadian government was unable to supply funds to our own municipalities, which were forced to borrow on foreign markets.
Well, today, with the adoption of those measures, I submit that such financing will place the provinces and municipalities in a very difficult situation, and I ask the minister what provision was made to enable those provinces and municipalities to get the money they need for their projects.
Mr. Speaker, I will not conclude my remarks without saying a word or two about a question which is very close to my heart, because I represent, as you know, a constituency with a majority of workers. I should like at this point to talk about the unemployed, a question which the government tried to keep under the carpet, a question which the government tried to prevent us from discussing because it has neglected for the past two or three years to convene the committee on industrial relations, and I say that it is a shame that this very committee should be the only one to remain inactive when the main problem in Canada, the most important

domestic problem is precisely that of unemployment. We have never been told why the committee on industrial relations was not sitting. Since the Prime Minister takes so much pride in the fact that a great number of committees are sitting, I ask him to explain to the house why the committee which perhaps could have made the most important contribution is precisely the one the government did not want to sit?
Mr. Speaker, under this government, the unemployed have been ignored, forgotten, abandoned. Every month, when the Minister of Labour (Mr. Starr) reports on the unemployment situation in Canada, he uses the D.B.S. figures. He does not use the actual figures that he gets from the unemployment insurance commission. He does not give us either a figure that nobody can question: the number of persons now receiving unemployment insurance benefits. The identity of an unemployed and the number of the unemployed people could give rise to all sorts of arguments, but one fact remains undeniable: on April 30 last, 714,894 Canadian citizens were receiving unemployment insurance benefits.
Mr. Speaker, I suggest that those people are unemployed in a statutory sense, and their number does not include other citizens who have waived their unemployment insurance benefits and whose names do not appear on these lists.
Mr. Speaker, I would like to deal with another matter, and submit that it is a field which comes under the leader of this house. As a matter of fact, it is not the first year that the situation has arisen, I mean that discussion of the labour department estimates is delayed until the last days of the session, probably for the purpose of preventing hon. members from asking the Minister of Labour too many questions. We have the same situation this year. Consequently, I say that the government did, by every means and every possible action, prevent an honest discussion of the unemployment problem in Canada, and I believe that such lack of responsibility with regard to the unemployment situation is the greatest criticism that can be levelled against this government.
Mr. Speaker, I recently asked the minister why the Department of Labour did not call a meeting of Canadian municipalities to give them some information on the winter works program. It is not in the fall that we will be able to interest municipalities in such an undertaking. If the minister told me that the government had greater success this year than last year, I should answer him that he
The Budget-Mr. Drouin is right, but I would add that, if the winter works program had been made known earlier to the municipalities, we might have employed many more men on those projects last winter.
The Minister of Labour has no excuse for delaying information to the municipalities about the program which he intends to submit to the house for next winter, and I hope that the scope of those projects will be broader. I also hope that the government will pay more than 50 per cent of labour costs under that program so that the lot of the jobless can be improved to some degree.
Mr. Speaker, those are the comments I wanted to make in connection with this budget, and in my opinion its impact has been weakened by the fact that it was submitted by the Minister of Finance at a time when the government has obviously lost the confidence of the Canadian people.
The total popular vote in the last four by-elections, gave the Liberal party a majority. The latest Gallup polls also show a majority in favour of the Liberal party.
It therefore seems high time that the Canadian people are due for a change of administration. It is obvious that such a change is eagerly sought at this time and I do hope that the government will soon give us this opportunity which the Canadian people are so anxious to have.


Mr. Noel Drouin (Dorchester):: Mr. Speaker, it gives me pleasure to have this opportunity to give to the house my impressions on the recent budget brought down by the Minister of Finance (Mr. Fleming). He and the government are to be highly commended for their tremendous, magnificent, intelligent, enlightened and detailed work in relation to Canada's economic orientation in the present year.
You will agree, Mr. Speaker, that in a few minutes time, it is impossible to deal fairly with the various aspects and technicalities of the present budget; however, I note that it will benefit every segment of the population and that every economic sector, whatever its level, will enjoy a most satisfactory development brought about by measures which are not artificial but natural and solidly based. Thus the Canadian nation will be assured that its investments have not been left to chance and will not be subjected to the risks of a short and artificial show.
6910	HOUSE OF
The Budget-Mr. Drouin
In relation to expenses, the figures that make up the various items of the departmental estimates assure us of a brilliant future on the basis of the past year and of spectacular events we have witnessed and which are known throughout the world.
The present government of this great country, through its genius and skill, has managed to breathe new life into the Canadian people and gain the friendship and respect of the world. It would be grossly unfair to take issue with the expenses in the field of external affairs, because this government has been able, through a mixture of intelligence, diplomacy and occasional severity, to gain for Canada the respect and confidence of every nation.
Mr. Speaker, is this not a fact that deserves to be stressed in this house, when nearly half of the world is sitting on a volcano, when most countries are meeting with competition on the markets, when hunger is a permanent feature of certain countries, when whole populations are without shelter, when others roam the deserts and the deepest jungles in search of a shirt or a pair of shoes, when nations are torn by racial strife, when all those countries are faced with such troubles and have to spend much of their national income on armaments and armies, is it not a fact that we in Canada are fortunate to live under the banner of a provident and enlightened government, considering the size and geographic position of the country. This is a country inhabited by two equally great and proud races who live in harmony; we have managed to gain the respect and affection of our powerful neighbours to the north and to the south. While those neighbours talk to each other over our heads, while our friends to the south say certain things about our friends the Cubans and the Peking government, at the same time Canada's external and trade relations are at the highest possible level, and never have Canada's name and goods been so well known.
I would be remiss, Mr. Speaker, in failing to mention in this house a "comparative" situation in which we have been living and are still living at the present time. I submit that the least mistake on the part of the Prime Minister or his Secretary of State for External Affairs (Mr. Green) would immediately plunge Canada into very difficult circumstances in view of its geographic and highly strategic location. There was nothing that could compare at the time of the Suez incident, because Suez is just a very small spot on the map.


All this goes to show, Mr. Speaker, that Canadians can be mighty proud of the government in power. Statistics have proved time and again that no other people in the whole world have more bread, meat and material for clothes and leather for shoes than the Canadian people.
In this country, we hold the world's record in the matter of housing, with every citizen having more cubic feet of living accommodation at his disposal than people anywhere else in the world. We also use more gasoline for touring than do our neighbours to the south.
There, Mr. Speaker, we have a comparative which the opposition has never had the frankness or the courage to admit in this house.
The Leader of the Opposition (Mr. Pearson) has on several occasions attempted to disparage our country. In referring to Hansard for April 18, I find he claims to be the one who enjoys world confidence, and that it is the Liberal opposition whose statements are believed in other countries. It was Voltaire who said:
Lie, lie; something will always come out of it.
For once Voltaire was mistaken. Of all the opposition's sarcasms, little remains if we consider the enviable position which this country occupies, as a result of this government's energy and vitality.
When opposition members speak in this house they remind me of the devil attempting to preach a sermon. Mr. Speaker, never before has a government shown so much insight and fairness in the distribution of public funds. Citizens at all levels have a share in them.
Never before have so many public works been undertaken; never before have municipalities received so much help and consideration for the promotion of their development; never before, either, have our veterans received better treatment and, there again, never before has a government done so much for the development of a merchant marine and the promotion of shipbuilding in this country. Never before has a government done so much to promote family housing, farm credit, and loans for the recovery of industry in general. And then there is the action taken to encourage the sale of motor cars and the technical training of the unemployed.
A hundred million dollars have been set aside for a survey of the problem of water pollution, a vital problem which so far had been sadly neglected.
We can claim credit for organizing 75 per cent of vocational and technical training. The

Conservative government has shown very special regard for export trade, providing funds for it in amounts never equalled in the past. We have built railroads that have opened new access roads to the development of our national wealth.
I think, Mr. Speaker, that those few remarks will refresh the memory of the opposition. I would like to remind the house that there is an area in the province of Quebec that the government at the time had forgotten. I refer to the constituency of Dorchester which I have the honour of representing in the House of Commons. My constituents are always amazed at the amount of attention they have been getting from a federal government since 1958. Because of its geographical situation the constituency of Dorchester cannot take advantage of certain legislation due to the fact that, like nine out of 10 constituencies in the province of Quebec, it has no adjacent navigable waterways; yet it has benefited from the millions of dollars that have gone to municipalities in the form of public works, subsidies and public buildings. There, Mr. Speaker, is a summary of the activities of a vigorous government, a government that has a sense of responsibility.
I am sure that the people of Canada are quite happy with the new provisions included in this budget, one fully in accord with the political program that the Prime Minister submitted to the people in 1958, and which was endorsed by this nation.
Mr. Speaker, the budget that has been presented to the people of Canada, with a fair balance of fiscal, financial and trade policies, is designed to give fresh impetus to Canada's economy, to develop unused capacity for production, to increase trade and, in this way, to multiply jobs. The result will be increased development of our resources, so that every citizen may get his share of our national economy. That is what this budget holds for the people of Canada. Such is its purpose, a purpose which meets the fondest wishes of the people of Canada.


Mr. Samuel Boulanger (Drummond-Arihabaska):: Mr. Speaker, it is not part of my duties to act as opposition critic of the government on financial and monetary matters. However, I have general remarks to make following the budget speech delivered last Tuesday by the Minister of Finance (Mr. Fleming).
The most striking feature is no doubt the announcement of a deficit of approximately $650 million for the fiscal year 1961-62.
The Budget-Mr. Boulanger
While the new measures resulting from this budget will bring about a tax reduction about $100 million, we are wondering, as do the taxpayers, to what extent the economic activity will be increased if we rely on the experience of past years when we had enormous deficits.
The fact is that our deficit in 1958 was $38.5 million; in 1959, $609.5 million; in 1960, $413 million; in 1961, $345 million; while that for the current year will reach $650 million.
If the figures for the 1962 deficit prove correct, and if we add to them a decrease of about $900 million in the unemployment insurance fund and about $160 million in the national defence fund, we get a total deficit of $3,121 million for the four years of Tory administration.
Can we rely on the figures supplied by the Minister of Finance as to the expected deficit for 1962?


Mr. Marlineau:: Would the hon. member allow me only one question?


Samuel Boulanger: I shall give permission to my hon. friend only when I have concluded my remarks, because I do not think I will be able to say everything I have in mind in the short time at my disposal.
I maintain that we cannot rely on the figures provided by the Minister of Finance since he has never been very good at crystalgazing. Last year, when he introduced his budget, he forecast a $12 million surplus; it all turned out into a $345 million deficit, or a difference of $333 million, that is, a third of a billion dollars.
We are therefore inclined to feel that if the minister makes the same mistake, it is not a $650 million deficit that we will have but a $1 billion deficit, which means a charge of $750 per family.
We had hoped that, after increasing the already enormous debt load which bears down on each Canadian family, the government would have shown itself fatherly and given us the gift it promised us during the 1957 and 1958 electoral campaigns. In fact, here is the promise the Prime Minister made in Toronto and which was reported in the April 29, 1957 edition of Quebec city's he Soleil:
The high taxes party has been in power too long, added Mr. Diefenbaker. The present tax structure practically amounts to confiscation and, if it is allowed to go on like this, it will spell the end

The Budget-Mr. Boulanger of tree enterprise. The leader of the Conservative party does not wish to encourage attempts at tax evasion, but had harsh words for government employees who act as spies and tyrants and who, by their action, infringe upon the rights of Canadians.
Not only has the tax burden not been lightened but it has been made heavier.


Mr. Pigeon:: What do you think of the excise tax on automobiles?


Samuel Boulanger: What provisions are there in the present budget to help average families?
As the hon. member for Joliette-L'Assomp-tion-Montcalm (Mr. Pigeon) just stated, the tax on automobiles has been repealed; it was to be repealed four years ago. Besides, it is not so much the average taxpayer who will benefit from that provision, because the workers cannot afford the luxury of changing their cars every spring. When they can buy a car, they keep it for seven or eight years.
The government has made possible the manufacture of a slightly heavier cigarette.
But what has been done to enable farmers to benefit from their share of the national income of which we heard so much about during the 1957 and 1958 electoral campaigns?


Louis-Joseph Pigeon: Remember butter at 64 cents a pound.


Samuel Boulanger: Mr. Speaker, I intend to keep on with my speech. If the hon. member for Joliette-L'Assomption-Montcalm has questions to ask, I would ask him to wait until I have concluded my remarks.
The government has changed the excise tax on poultry imported from the United States and reduced the rates on secondary products. That is all.
But there is nothing in the budget to make the average working man enthusiastic.
We now have in power a Tory government which takes after the Bennett government of 1930-35.
During the four years and a half of the latter regime, we had the worst depression in our history. It was truly at the time the rule of poverty and of hunger, of which the soup-ticket was so symbolic.
Today the Tory government is resorting to camouflage and fleeting visions. In years to come it will be nicknamed "The Unemployment Party" or "The no one will suffer Party."


Louis-Joseph Pigeon: Recent by-elections are proof of the contrary.


Samuel Boulanger: I would like to say a few
words about textiles. Here is one industry which felt the ill effects of a revolting policy of inaction.

Here again promises galore were made by the Prime Minister, the Minister of Finance (Mr. Fleming) and also by many candidates in the 1957 and 1958 elections. They were going to put the industry back on its feet.
What a forceful electoral campaign was undertaken in the areas which depend on that industry.
I remember listening to talks on television by Conservative candidates who today are members for Sherbrooke (Mr. Allard), for St. Hyacinthe-Bagot (Mr. Ricard) and for Richmond (Mr. Dubois).
Their enthusiastic line of talk, backed by the dictatorial Union Nationale, gave them victory at the polls. But since then have we heard anything from them about that industry?
I especially remember a vision of the member for Sherbrooke, in a speech, in 1958, full of recommendations to his government.
Since then, the member for Sherbrooke has kept rather silent in this house on that matter of textiles.


Louis-Joseph Pigeon: There has not been a year he did not talk about it.


Samuel Boulanger: He makes himself heard through press releases.
Mr. Speaker, I intend to submit a few specimens of those releases. I will give only the titles.
In 1958 as reported in La Tribune, the member for Sherbrooke said this:
Ottawa introduces two changes to solve the textile problem.
Of courses, they were nice changes.
September 10, 1958, he said:
Aid from municipalities sought to save the textile industry-
At a time when the member for Sherbrooke was asking municipalities to cut down taxes and grant special rates on electric power, on November 14,	1958, he wrote an article
entitled:
Mr. Allard is preparing a study on textiles.
On November 24, 1958, another spectacular heading:
Seek answer to textile problem.
Nothing yet had been saved.
On December 16, 1959, the press reported:
M.P. asks parliament to inquire into the textile industry. One of the main points, imports.
A few weeks later, that is on January 13, 1960, the Prime Minister (Mr. Diefenbaker) stated:
Higher Japanese exports welcomed.

On March 20, 1960, another item is entitled:
Mr. Allard endorses any measure that could save the textile industry-
Here is what was stated in June 1960 in a report which appeared in La Presse under the title:
Textile situation calls for moderate optimism.
Naturally, the situation was deteriorating instead of improving. The hon. member for Sherbrooke did recognize it.
Last year, in July 1960, again according to an article reproduced in La Presse, the hon. member for Sherbrooke said:
Ottawa shall have to take action to protect the textile industry.
The situation was not as good as in 1958.
This spring, in March 1961, at the Conservative convention, there was adopted a resolution introduced by Mr. Allard, federal member for Sherbrooke, and seconded by Mr. Andre Langlais, urging the federal government, among other things:
To impose quotas on foreign textiles in the most vulnerable sectors of the Canadian economy.
That is about all the work done by the hon. member for Sherbrooke. After having recognized that the textile industry had been saved, we now hear him say, in 1960 and in 1961, that we must not be overly optimistic about textiles.
Another member, representing St. Hya-cinthe-Bagot, referred on some occasions to textile products.
A few weeks ago, he told us, among other things, that 11 new industries had been set up in St. Hyacinthe since the coming to power of the Conservative government.
To whom must we credit that? To him personally or to the municipal council?
His reasoning seems confused. Would he be afraid if he spoke his mind to have a bad reputation as was the case in 1959? We will recall that at that time the hon. member for St. Hyacinthe-Bagot (Mr. Ricard) had said things that had not given satisfaction to a certain textile workers union in the city of St. Hyacinthe. In an open letter to La Presse, dated July 8, 1959, the union had this to say to the hon. member:
Trade unionists respectfully suggest that you consult them if only as a courtesy before you talk on their behalf. Besides, the position you took is openly at odds with a resolution adopted at the 1958 convention of the Canadian and catholic confederation of labour.


J.-H.-Théogène Ricard: Mr. Speaker, on a question of privilege. Could the hon. member for Drum-
The Budget-Mr. Boulanger mond-Arthabaska also read the letter I addressed to that union and in which I explained my position? Would he tell me also whether there was any mention at that time of the increase in unemployment benefits the government had voted for the unemployed, and whether the hon. member was opposed to it.


An hon. Member:: There is no question of privilege.


Mr. Dupuis:: It is an abuse of privilege.


Mr. Speaker:: The hon. member for Drum-mond-Arthabaska has the floor.


Samuel Boulanger: From that letter of the union leaders in the St. Hyacinthe area, we had to come to the conclusion that at that time the hon. member for St. Hyacinthe was not their spokesman in this house. When he announces that 11 new industries will be established in the city of St. Hyacinthe, I am not sure that he is the spokesman for those industries. He may have more-


J.-H.-Théogène Ricard: Mr. Speaker, on a question of privilege.


Mr. Habel:: There is no question of privilege.


Some hon. Members:: Order.


Mr. Speaker:: Order. Before allowing the hon. member to state his question of privilege, I must point out to him that if he objects because he disagrees with the remarks of the hon. member for Drummond-Arthabaska, that does not constitute a question of privilege. When the hon. member has concluded his speech, if the hon. member for St. Hyacinthe-Bagot thinks that his remarks have been misinterpreted and feels he must correct the hon. member for Drummond-Arthabaska, I shall give him the floor.


J.-H.-Théogène Ricard: No, Mr. Speaker, there is no question whatever of a misinterpretation, only-


John Whitney Pickersgill: What is the question of privilege?


J.-H.-Théogène Ricard: -if the hon. member for Bon-avista-Twillingate will give me the chance, I shall state my question of privilege which is as follows: he credits me with words that I have not said; he tells the house-


John Whitney Pickersgill: This is not a question of privilege at all.


J.-H.-Théogène Ricard: -he quotes remarks I did not make-


Some hon. Members:: Order.
6914	HOUSE OF
The Budget-Mr. Boulanger


J.-H.-Théogène Ricard: -and which are not true.


Some hon. Members:: Order.


An hon. Member:: The question has been ruled upon.


Mr. Speaker:: This is just what I thought. There is no question of privilege in this. Order. The hon. member for Drummond-Arthabaska-


Samuel Boulanger: Besides, the hon. member for St. Hyacinthe-Bagot never did mention the names of those industries. Since he is such a good industrial propagandist, I ask him to tell the house why the number of applications for jobs filed with the unemployment insurance office in his city has gradually increased.


J.-H.-Théogène Ricard: Do you want me to give you the reason?


Samuel Boulanger: And I will quote figures 1 have taken from the official Labour Gazette. On January 30, 1957, there were 2,566 workers looking for jobs. In 1958, on the same date, there were 3,187. In 1959, there were 3,337. In 1960, there were 3,500. On March 30, 1960, there were 3,995-


Louis-Joseph Pigeon: Have you any figures going back to when the Liberals were in power?


An hon. Member:: Would you please keep quiet.


Samuel Boulanger: Mr. Speaker, I would have liked very much to comment on the attitude taken by the hon. member for Richmond-Wolfe (Mr. Dubois), in whose constituency there are several textile industries, but as far as I know, he never said a word about the textile problem in this house nor through the newspapers. His only merit is to be at his desk when a vote is taken. I am quite willing, in a few words-


Louis-Joseph Pigeon: You are cheap.


J.-H.-Théogène Ricard: Pretty cheap in fact.


Samuel Boulanger: -to consider the present situation in the field of textiles. I shall do so fairly quickly.
First of all, if we compare the number of people employed in the textile industry between the years 1956 and 1960, we find a decrease of 9,000. In 1956, the production was 393 million yards; it went down to 340 million in 1960, a decrease of 53 million.


Paul Raymond Martineau: Mr. Speaker, on a point of order. Could the hon. member give us his source?


John Whitney Pickersgill: Why?


J.-H.-Théogène Ricard: Why? Because he has piled up
a great many inaccuracies.


Samuel Boulanger: The figures are from the cotton institute of Canada, 1960.


An hon. Member:: Are you satisfied now?


Samuel Boulanger: Imports rose from 315 million yards in 1956 to 356 million in 1960. So that today the Canadian production is down from 52 to 48 per cent.
I could have quoted many paragraphs from the brief prepared recently by Mr. G. H. Dobbie, president of the Canadian textile association. I will merely quote a few of his remarks. He said:
Canada is the biggest importer of textiles. If the present rate of production in Canada is maintained, we will have 7,000 more people employed in the textile industry in 1970.
He goes on:
If the market continues its downward trend at the same rate as in the past, there will be 14,000
jobs less in 1970.
According to Mr. Dobbie, the Canadian textile industry could employ 110,000 persons in 1970, if steps are taken to control imports.
I have here an article published in Le Progres du Saguenay, on October 14, 1960. I quote:
Sales of Japanese textiles and clothing in Canada reached such a volume last year that they represented an expenditure of $2.38 per man, woman and child in the country.
That makes up an astonishing amount, considering that sales of those Japanese products in the United States only represent $1.50 per head, and 30 cents per head in Europe.
If textile imports from Japan do a lot of harm to our Canadian industry, U. S. imports do no less.
I see that I have to summarize my remarks. An article published in the June 1960 issue of the magazine Affaires says this:
Total Canadian consumption in 1959 was 555 million yards, but the increase only benefited imports. Last year, the United States sold 240 million yards in this country, whereas Canadian textile mills only sold 229 million yards.
Mr. Speaker, this increase in our textile imports from over the southern border is the result of subsidized exports by the United States government. Moreover, it was announced that those subsidies would be increased to a large extent as from August 1, 1961.
The six cents a pound subsidy for raw cotton will be raised to 8J cents; the 6.84 cents subsidy for cotton yard goods to 9.69; the 7.08 cents grant for finished fabrics will be increased to 10.03 cents and the present subsidy for manufactured cotton goods will be raised to 11.47 cents.

According to the comments of the Canadian cotton institute, this country will never be able to compete with United States imports, which are subsidized to such a large extent.
The position of our textile industry today, is the Conservative government's doing. What can this government do to remedy that situation?
In fact it strikes me as strange that the remedies advocated during the 1957 and 1958 elections cannot be applied today.
Has the government lost heart? Yet, it has available a good way, all set and prepared, which lies in the full enforcement of the anti-dumping legislation, which authorizes the Minister of National Revenue to determine the value for excise tax purposes of goods entering this country.
Mr. Speaker, I would have liked to deal with our secondary industries, like the footwear and electronics industries which are in a precarious position. In fact, we have witnessed last year as we shall witness again this year many bankruptcies in the secondary industry and in conclusion I would like to read a paragraph from a speech made by a great economist, Mr. Coyne himself, the governor of the Bank of Canada who stated-


Louis-Joseph Pigeon: Your friend.


Samuel Boulanger: Here is what he said:
If we produced in Canada all the goods we need and that can be economically produced here, 250,000 additional jobs would be provided for Canadians and we would be using to full capacity the facilities of some of our plants now idle.
Mr. Speaker, I share that opinion. There is nothing in the budget proposals of the Minister of Finance indicating that the governments intends to take steps to stimulate our secondary industries and more particularly the textile industry, the footwear industry and the electric appliances industry.
Several industries have already disappeared; others will move to other countries, as happened recently in the case of the textile industry.


Louis-Joseph Pigeon: Mr. Speaker, may I direct a question to the hon. member for Drummond-Arthabaska?


Mr. Deputy Speaker:: The house would have to give unanimous consent because the time of the hon. member for Drummond-Artha-baska has expired.
The Budget-Mr. Pickersgill


Louis-Joseph Pigeon: Would the hon. member for Drummond-Arthabaska be in favour of a customs tariff increase to protect the textile industry?


Samuel Boulanger: Mr. Speaker, I already put forward my suggestions for improving the situation in the textile industry, and that is the application of the anti-dumping act.


John Whitney Pickersgill: Promised by the Prime Minister.
(Text):


Mr. Deputy Speaker:: Is the house ready for the question? The question is on the subamendment-


John Whitney Pickersgill: No, Mr. Speaker. I thought someone on the other side would have been able to find something to say in favour of the budget but in fact I am not in the least surprised that they are not able to do so.


Some hon. Members:: Oh, oh.


Richard Albert Bell: There has been no attack upon it.


John Whitney Pickersgill: Apparently they do not want to hear a reflection of what the public is saying about it either because I am being howled down at the present time.


Richard Devere Thrasher: Quit crying and get on with your speech.


John Whitney Pickersgill: If the hon. member for Essex-


Richard Devere Thrasher: South.


John Whitney Pickersgill: -would be quiet and let me I would be very glad to do so. I do not suppose that in the whole of the peacetime history of Canada, and I exclude those days of war when we had a competent minister of finance, there has ever been a budget about which there were such great expectations, as the hon. member for Grand Falls-White Bay-Labrador (Mr. Granger) said earlier today, as there were about this budget, particularly after we had the Grosart advertisement a week ago about this phony expansion that was so different from the alleged restrictionism of the governor of the Bank of Canada. The difference, of course, between the two was that the governor of the Bank of Canada, whether it was the right or the wrong one, had a program for full employment and this government has a program for the maintenance and perpetuation of unemployment which they refuse to regard as existing in the country and which they say is a figment of the imagination of the opposition.


Richard Albert Bell: Does the hon. gentleman adopt the governor's program?
6916	HOUSE OF
The Budget-Mr. Pickersgill


John Whitney Pickersgill: No, I do not adopt the governor's program, I am putting forward my own views. I am supporting the program of the Liberal party and, unlike hon. gentlemen opposite, we have a program.


Norman Platt Lambert: Tell us about it.


John Whitney Pickersgill: No, I am going to tell you about your budget. I am going to tell you what the country thinks about yours, but you do not want to hear it. This is, I hope, still a free parliament and I will be allowed to speak about it.
After this great Grosart advertisement of last week, which the Minister of Finance could not conceivably have made up because it was succinct and catchy whereas we know the Minister of Finance and his cold porridge, I knew that this budget was going to be the greatest anticlimax we had ever had in our budgetary history. Whenever you put out this misleading, inflated advertising and then produce the kind of empty package that we got on Tuesday night, you find that the public is let down. This is what happened once again with the present government.
There is another very striking feature about this budget. As I was following the minister in the reading of the budget speech the other night, when he reached page 10 which was about one sixth of the way through that dull, tedious document, I noted the minister had adopted about one third of Mr. Coyne's proposals and I wrote on the margin of my paper, Coyne and water, more water than Coyne. I was surprised to find that I was not the only one who had that reaction. A distinguished member of the press gallery, a particular favourite of the minister's, used exactly the same phrase in his broadcast that same evening, so I am told. I defy any fair-minded person, and when I say that I exclude the Minister of Finance, to go through the budget proposals of the Minister of Finance and find a single item, with one exception, that is not a pale reflection of Mr. Coyne's memorandum. Everything the minister has proposed, not as clearly nor in nearly as good English and certainly not as succinctly or as comprehensively-of course he did not propose a lot of the things in Mr. Coyne's memorandum-is in Mr. Coyne's memorandum.
The one exception is something the minister described only a year ago as a great gamble with the taxpayers' money. The minister said this was dangerous financial speculation. This is the one thing that the minister has produced that Mr. Coyne did not, in some fashion, recommend, and the only thing in this so-called expansion budget. Expansion is undoubtedly the right word, but there is a synonym for that word "expansion",


and the synonym that is generally used in these matters is the word "inflation". We had an inflation of the publicity, and then the air just petered out of the balloon that night as the 58 pages of the budget were slowly, tiresomely and boringly read to this house. The minister steadily lost his audience and several of his colleagues actually slept through it, which perhaps was the best treatment it could have been given. Never before has there been such an anticlimax in our budgetary history. Never before, sir, in any respectable country has a minister of finance erected the fouling of one's own nest into a principle.
It is true that after a war and in other very critical times a few countries have had to depreciate their currencies because they were in dire straits and this was the last possible remedy available. But here we have this pious, sanctimonious, hypocritical Minister of Finance coming into this house-


Some hon. Members:: Order, order.


John Whitney Pickersgill: -and erecting the fouling of one's own nest into a principle.


Some hon. Members:: Order, order.


William Heward Grafftey: You ought to be ashamed of yourself; you know better than that.


Mr. Depuiy Speaker:: I am quite sure the hon. member for Bonavista-Twillingate would wish to correct one of the epithets he used to describe the Minister of Finance. It is not parliamentary, as he knows.


John Whitney Pickersgill: As a matter of fact, I am not quite sure which of the epithets I applied to the Minister of Finance Your Honour would like me to withdraw. In order to save time, I will withdraw any of them if you ask me to do so.


Mr. Deputy Speaker:: In order to save time, I might suggest that the hon. member withdraw them all.


John Whitney Pickersgill: I would be glad to, sir, with a mental reservation. I will comply with the rules of the house, but as I said the other day when the minister made an attack upon my motives, I could not care less what he thought of me and I was not going to ask him to withdraw.
The minister pretended during his budget presentation that this fouling of our own nest, this use of the exchange fund to get the dollar below par, was something new. Then he let the cat out of the bag during his press conference. Last night in his press conference the Minister of Finance was asked this question by Mr. Michael Barkway, and it is found at page 5 of the transcript I have in my hand:
Between December and the end of May-

That is this year.
-according to the official figures you spent $120 million to move the dollar by 50 cents and it was still at a discount of li points. Now you want to bring it down by a significant amount you say-let's say five cents-[DOT]
The minister said that he had said a significant discount. The minister did not deny that allegation by Mr. Barkway.


Donald Methuen Fleming: I did not confirm it.


John Whitney Pickersgill: We know the minister well enough to know that if Mr. Barkway had not been telling the truth, the minister would have leapt up in that synthetic indignation for which he is so famous in this house. The plain fact is that the Minister of Finance has apparently been using the exchange fund since last December to foul our nest without telling parliament. He has been spending this money; he has been spending $120 million, for which he gave us no accounting whatsoever, for this purpose ever since last December, according to Mr. Barkway's evidence.


Donald Methuen Fleming: Evidence?


John Whitney Pickersgill: Now he is going to go on-


Donald Methuen Fleming: Do you call that evidence?


John Whitney Pickersgill: Mr. Barkway said that was from the official figures. Does the minister deny that the fund went down by $120 million? If the minister wants to deny it, let him deny it.


Donald Methuen Fleming: It is silly to talk about that as spending, and you know it.


John Whitney Pickersgill: The minister says it is silly to talk about spending. The other day I got a friend of mine to go through Hansard and make a count of the number of times the minister said "nonsense", "silly" and "rubbish", and when he reached 5,000 he said, "I cannot take it any more". That is a statistic about as reliable as most of the statistics we get from the government, I might say. The minister has told us, in addition to this great claim that he is going to foul our nest, as I call this scheme to depreciate our dollar. The minister's words were very amusing when he talked about Mr. Coyne suggesting something that was contrary to our international financial and trading obligations. The minister knows perfectly well that Mr. Jacobsson has already warned him that tampering in this way with the exchange rate is contrary to the rules of the international monetary fund.


Donald Methuen Fleming: That is a false statement.
90205-6-437
The Budget-Mr. Pickersgill


John Whitney Pickersgill: That is not a false statement because it appeared in the press everywhere-


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: -and if it had been false the minister would have been the first to deny it.


Donald Methuen Fleming: Mr. Speaker, I am the first to deny it and I say that is a false statement.


John Whitney Pickersgill: The minister has his own ideas about what are false statements and I will come to a few more of them before long.


An hon. Member:: The hon. member does not care what he says anyway.


Richard Albert Bell: Neither does anybody else.


John Whitney Pickersgill: Mr. Speaker, whoever interrupted me was quite right. I really do not care what the Minister of Finance says, and neither does the country, because the country has ceased to have any kind of confidence in the Minister of Finance or his statements.


An hon. Member:: What abuul the by-elections?


John Whitney Pickersgill: This is the minister who in 1957, in his first press release as Minister of Finance, said he was going to tackle the tight money situation and end it. Then a year later, when it was embarrassing, he washed his hands like Pontius Pilate and said he had no control over monetary policy. When interest rates started to fall again he said, "I did it with my little hands", and then when the interest rate went up again there was the Pontius Pilate act, "It was the Bank of Canada".


Donald Methuen Fleming: When are you going to start telling the truth, tonight?


John Whitney Pickersgill: The minister talks about someone else telling the truth. When one considers what the minister told this house regarding when he learned about Mr. Coyne's pension fund, which he knew about from 1959, and then he talks about someone else telling the truth-


Some hon. Members:: Hear, hear.


Donald Methuen Fleming: Mr. Speaker, this is a matter that was raised the other day and you will recall-


John Whitney Pickersgill: I have the floor.


Donald Methuen Fleming: On a question of privilege, Mr. Speaker-


John Whitney Pickersgill: Mr. Speaker-

The Budget-Mr. Pickersgill


J.-H.-Théogène Ricard: Sit down. A question of privilege has been raised.


John Whitney Pickersgill: The minister does not like it-


Mr. Deputy Speaker:: Order. The minister has risen on a question of privilege. I have to decide whether there is a question of privilege.


Donald Methuen Fleming: There is a point of order here, Mr. Speaker.


An hon. Member:: Order?


Donald Methuen Fleming: Mr. Speaker, you will recall that the other day we had the same situation. I made a statement in the house on Wednesday of last week that the first time I heard about the voting of this pension to Mr. Coyne was in the spring of this year. A question was raised; there was an attempt made by the Leader of the Opposition (Mr. Pearson) to throw doubt on that statement and that question was required to be withdrawn.


John Whitney Pickersgill: It was not withdrawn.


Donald Methuen Fleming: The record will show that what I have said is correct. It was required to be withdrawn because it was a reflection on an hon. member of the house. Now the hon. member for Bonavista-Twillin-gate (Mr. Pickersgill) is violating the same rule. He is saying something in relation to a statement made by a member of this house. I say I first learned of the voting of this pension, a vote that was made by the board of directors of the bank on February 15, 1960, in the spring of 1961. The hon. member says I knew about it from 1959. It was voted by the board of directors on February 15, 1960. I suggest, Mr. Speaker, that the hon. member observe the rule that when a statement is made by an hon. member concerning a matter within his knowledge, that statement must be accepted.


John Whitney Pickersgill: I will comply with the rules and accept the minister's statement with a mental reservation-


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: -because I do not believe the minister is that incompetent and I do not believe the minister is that inattentive to his duties, if indeed he had any duty in this matter, which is very doubtful indeed. He seems to have arrogated to himself, not for the first time, a duty that was never given to him by parliament in this matter and has interfered in a matter that parliament never intended a minister of the crown to interfere in. But it is what you would expect from the kind of minister who brought

in the "class or kind" legislation excluding citizens from the courts. It is all of a piece with this dictatorial attitude and this "to hell with parliament" attitude that the minister has taken.


Some hon. Members:: Oh, oh. Shame.


Mr. Kucherepa:: Mackenzie King would not
like that statement.


John Whitney Pickersgill: Surely, Mr. Speaker-


Some hon. Members:: Order.


Mr. Deputy Speaker:: Order.


Some hon. Members:: Sit down.


John Whitney Pickersgill: -no one is so squeamish-


Mr. Deputy Speaker:: Order. I hear hon. members calling order. I appreciate that the hon. member may be using words which are not too proper, but they are not unparliamentary. However, I would say that they do not add to the dignity of debate.


John Whitney Pickersgill: Nor, sir, do I think the minister's attitude to parliament adds very much to the dignity of parliament. He has consistently treated this parliament with the utmost contempt.


Donald Methuen Fleming: No, just you.


John Whitney Pickersgill: Nothing, sir, bothers me less than the minister's attitude to me; but I notice that my attitude to the minister does seem to get under his skin almost all the time.


Donald Methuen Fleming: Don't flatter yourself, old boy.


Mr. Horner (Jasper-Edson):: Something is under your skin.


Donald Methuen Fleming: The hon. member for Bonavista-Twillingate should not talk about things under the skin.


John Whitney Pickersgill: The plain fact of the matter is that we know the minister is not at all a free agent any more. No other member of this government is a free agent. What we have

and we had a beautiful display of it last night-is a one-man government in this country with a lot of little boys running errands, and none of them has been running more unpleasant errands than the Minister of Finance has had to run in the last few weeks. But we know the source of all this-


Thomas Miller Bell: This is just plain hysteria.


John Whitney Pickersgill: I beg your pardon?


Thomas Miller Bell: This is just plain hysteria.


Mr. Nesbitt:: The man in a white coat is coming soon.


John Whitney Pickersgill: As a matter of fact, the hon. member for Carleton (Mr. Bell) speaks more truly than he knows, because I was just about to read from the Prime Minister's broadcast of last night and I do not think a more apt description could have been found by me.


Donald Methuen Fleming: He was talking about you and1 the way you are carrying on; you must understand that.


John Whitney Pickersgill: Perhaps the hon. member for Carleton can speak for himself without help from his little boss. For the benefit of those-


Donald Methuen Fleming: The big man talks.


John Whitney Pickersgill: -who did not hear it or see it last night, it began:
My fellow Canadians.
Well, I couldn't do justice in imitating it, you know:
Four years ago today following your mandate____
Of course, he did not get a majority:
-I was called upon to be Prime Minister of Canada and naturally-
Naturally, all right:


An hon. Member:: Naturally you won't forget it.


John Whitney Pickersgill: The Prime Minister said:
-I look back on the intervening years with feelings of satisfaction and humility this evening.
That was 99.44 per cent satisfaction and the rest of the fraction humility, sir. Then, sir, the Prime Minister told us how he carries on the government of this country.


William Heward Grafftey: Now give us Uncle Louie.


John Whitney Pickersgill: This is the Prime Minister's conception of a duty of a prime minister.


John Cameron Pallett: Picky-picky.


John Whitney Pickersgill: The Prime Minister said:
Above all else I am thankful for the opportunity given me to serve my fellow citizens to the best of letters thousands of letters I have received, every-And throughout the period of time, while there have been ups and downs I have been sustained by the encouragement of so many of you in your letters thousands of letters I have received, every one of which I have read.


Some hon. Members:: Hear, hear.


John Whitney Pickersgill: Now, sir, I served for 16 years in the Prime Minister's office and I know how many letters come to the Prime Minister's office and I know that any prime minister who spends his time reading all the letters that come to his office is not earning his salary and is not administering the affairs of the country. That is precisely what has been happening in these last four years.
90205-6-437i
The Budget-Mr. Pickersgill


An hon. Member:: Don't you wish you got them?


John Whitney Pickersgill: You don't like it, do you? No prime minister who is responsible-


An hon. Member:: Crystal ball.


Mr. Deputy Speaker:: Order. May I recall to hon. members that it is not permitted to interrupt the hon. member who has the floor.


John Whitney Pickersgill: I was saying that no prime minister who has the responsibility for the welfare of 18 million people has any right to spend hours every day reading letters from the few hundreds out of those 18 millions who write those letters. If he has any sense of duty and any sense of responsibility and any appreciation of the many burdens and the urgent problems of that office he would not be wasting his time reading thousands of letters which an efficient secretariat could deal with as they have been dealt with in the past in a perfectly competent way. Of course, I do not believe for one moment that the Prime Minister meant that statement to be taken literally. He merely meant that each individual should think that he read his particular letter. No prime minister could possibly read all those letters.


John Cameron Pallett: Would the hon. member permit a question? Does the hon. member for Bonavista-Twillingate read the letters he receives?


John Whitney Pickersgill: No. I do not read all the letters I receive, and-


Some hon. Members:: Oh, oh. Shame.


John Whitney Pickersgill: -neither does the hon. member for Peel, nor any other member of this house. I suggest that a very high proportion of the letters which come to our desk go where they ought to go-right into the wastepaper basket.


Some hon. Members:: Oh, oh. Shame.


Mr. Deputy Speaker:: Order.


John Whitney Pickersgill: We are supplied with secretaries for the purpose of winnowing all this stuff which is sheer propaganda from the real letters. I use mine, and they should be used by every other conscientious person who has a sense of responsibility as a member of parliament to all the people of Canada or to all his constituents.
Now we come to the next statement in the Prime Minister's document to which I wish to refer. The Prime Minister said:
Some of the current headlines concerning views on fiscal and monetary policy have pointed to an aspect of blocks-
I do not feel I have to apologize for the English or for the syntax.

The Budget-Mr. Pickersgill -an aspect of blocks in the path of progress that can defy even the most patient and persistent efforts.
You can imagine the most patient and persistent effort on the part of the Prime Minister-between letters.
The case of the governor of the Bank of Canada is now out in the open where it can be thoroughly discussed and assessed in the light of all the facts.
That was said last night. Yesterday morning the Prime Minister voted against two motions to provide us with the facts out in the open and he used his majority to keep those facts away from parliament.


Some hon. Members:: Order.


Mr. Deputy Speaker:: May I just caution the hon. member that it is not in accordance with the rules to question or discuss votes taken in this house.


John Whitney Pickersgill: I was neither questioning nor discussing the vote. I was pointing to the fact that a vote had been taken.


Donald Methuen Fleming: You were reflecting on it.


John Whitney Pickersgill: I was certainly reflecting on the Prime Minister. I was reflecting on the kind of leadership the Prime Minister gave. In the morning he denied the facts to parliament and in the evening he went on television and said we had the facts. Do you believe him in the morning or do you believe him at night?
The Minister of Finance refused to answer straightforward questions put by my hon. friend from Welland (Mr. McMillan), straightforward questions about which the minister himself had made his own statement in parliament before those questions were put on the record. He refused to answer because he knew the answers to those questions were very embarrassing to the government.


Donald Methuen Fleming: Not a bit.


John Whitney Pickersgill: The answers to those questions would have revealed conclusively that the statements made by the minister were not in accordance with the facts.


Donald Methuen Fleming: That is a false statement.


John Whitney Pickersgill: That is why the minister would not do it. But the minister did answer one question. He threw a little light on the subject in answering one question. He disclosed one of the facts, and let me show the house how he gave that fact. The minister was asked this question. He was asked by the hon. member for Hull (Mr. Caron): Did the Minister of Finance at any time receive from Mr. John Bassett, publisher of the Toronto


Telegram, a suggestion that the government should seek the resignation of the governor of the Bank of Canada?
And here is the way in which this simple, straightforward question, which called for the answer yes or no, was answered.


An hon. Member:: You say so.


John Whitney Pickersgill: Well, I will read the minister's answer. I am always fair to the minister. Here is the answer:
Not in any formal sense.
The minister knows perfectly well that in the presence of a good many witnesses Mr. Bassett assailed him because he did not have the courage to fire the governor of the Bank of Canada. And knowing what we do about the courage of the minister-


Donald Methuen Fleming: That is a false statement.


John Whitney Pickersgill: It is not a falsehood and the minister knows it.


Donald Methuen Fleming: I said it was a false statement.


John Whitney Pickersgill: The witnesses can judge that. That happened and the minister knows it happened.


An hon. Member:: How do you know?


John Whitney Pickersgill: The minister also knows that Mr. John Bassett, a favourite of this government, the owner of a powerful newspaper, apparently has more influence with the present government than parliament has in matters of this kind.
Of course, this is all part of a pattern. With this government there is one principle of government-a head every three months. Heads must roll. The head of the government has to have heads, one after the other. Off with their heads. Off with his head. I have not time to go into the list of them. We recall, of course, the time when the Minister of Justice (Mr. Fulton) was humiliated over the R.C.M.P. and we lost the head of the commissioner. Now we see what is happening here, and I suggest sir, that the next head that will roll will be the head of the Minister of Finance.


Mr. Deputy Speaker:: I am sorry to interrupt the hon. member but his time has expired.


John Whitney Pickersgill: I trust, Mr. Speaker, I was given allowance in respect of all the interruptions that were made.


Some hon. Members:: No.


Mr. Deputy Speaker:: It would have been very difficult to calculate, as the hon. member realizes. I do not think the circumstances permit that being taken into consideration. Is the house ready for the question?


Paul Theodore Hellyer: Mr. Speaker, perhaps the house would give the member for Bonavista-Twil-lingate unanimous consent to continue.


Some hon. Members:: No.


Miss Judy V. LaMarsh (Niagara Falls):: Mr. Speaker, this is the first opportunity I have had to speak in this house after hearing a full budget speech. That occasion was, Mr. Speaker, one of the most disappointing which I have experienced in what is already too long a life time. We had expected, those of us in the country-


An hon. Member:: Oh, you are not that old, Judy.


Julia Verlyn (Judy) LaMarsh: -after waiting and waiting for months, and after having been informed since last fall that the country had not seen anything yet, and after waiting since that stillborn of the twentieth of December last- the baby budget-that by the time the minister presented his full budget, that baby of his this spring, the government would finally after four years have arrived at the point where it had in fact a policy. Alas, the people of the country are left as a woman is left in the lurch waiting at the church.


Some hon. Members:: Oh, oh.


Julia Verlyn (Judy) LaMarsh: We are as confused and angry now as all hon. members will realize an unfortunate person would be in that position. This results from the same sort of false persuasion, the same sort of faith and trust, but in this case in a nation of more than 18 million people, this results from four years of pumping them full of advertising, pumping them full of expectation and hope.
Last year this parliament was told in March, when the minister brought down his budget, that what he was reporting on that evening was the result of 18 months serious study and planning. At that time he said, as reported in Hansard of March 31, 1960, at page 2681:
The position we have now reached, with its sound prospect of a fully balanced budget, represents the fruits of carefully designed policies carried forward over the past 18 months. This is not something that has just happened. It is the result of considered aims and efforts.
I should like to underline the words "considered aims and efforts" which brought three quarters of a million Canadians to unemployment in the years since then.
This government has demonstrated that it received a mandate on the hopes of the people that this government would have the vision to carry Canadians forward to the greatest prosperity in their history. Instead, what have we? We have a return of the dirty thirties.


Some hon. Members:: Oh, oh.
The Budget-Miss LaMarsh


Julia Verlyn (Judy) LaMarsh: We have drought in the west which is deepening; we have insects in the west, far more than we have here.


An hon. Member:: Yes, we have a few here.


Julia Verlyn (Judy) LaMarsh: In the west-


An hon. Member:: I resent that remark.


Julia Verlyn (Judy) LaMarsh: In the west there are grasshoppers and drought, yet in this parliament this Minister of Finance (Mr. Fleming) and the Minister of Trade and Commerce (Mr. Hees) have been trying, without the use of the phrase, but with the use of the same old Tory policy, to blast their way into the markets of the world.


An hon. Member:: Have one for me.


Julia Verlyn (Judy) LaMarsh: Many of the members of this house were children, as I was, during the last depression and they know what Tory policy brought to Canada then.


Donald Methuen Fleming: Nonsense.


Julia Verlyn (Judy) LaMarsh: It is current in the country now that Tory times are hard times. This government has more power than any government has ever had in Canada's history. This government cannot escape any of the responsibility for what has occurred in the last four years.


Donald Methuen Fleming: That is utter nonsense.


Some hon. Members:: Hear, hear.


Julia Verlyn (Judy) LaMarsh: There are in this house 200-odd supporters of the government. I admit that their main contribution is represented by the kind of aside I have been listening to for eight months in this house, and that is a shame to the institution of parliament.


Some hon. Members:: Oh, oh.


Julia Verlyn (Judy) LaMarsh: Those individuals who come to represent their ridings, come into this house to make a contribution through debate, and not-


An hon. Member:: We at least read our mail.


Julia Verlyn (Judy) LaMarsh: -to make the sort of asides and irresponsible interjections that many members are now making.


Mr. Skoreyko:: You came here to fight the election.


Julia Verlyn (Judy) LaMarsh: This is a parliament; this is supposed to be a forum for debate, not a political arena.
In the time since this government took power it has had but one purpose, and that is to seek and retain power again and again.

The Budget-Miss LaMarsh


William Heward Grafftey: Oh, no, we have no Mackenzie Kings in this parliament.


John Whitney Pickersgill: You certainly have not.


Julia Verlyn (Judy) LaMarsh: This government has inveigled the people during "buy" elections, and with respect, Mr. Speaker, for the purpose of assisting the Hansard reporter I should like to spell that first word: "b-u-y" elections. In every instance, at least in 1960 and 1961, the policy which this government put to the people in the by-election was one of attempting to purchase the votes. In three recent instances this did work, but in one other instance it did not. In those by-elections just concluded the Minister of Finance did not participate. Nor in one sense did the Prime Minister (Mr. Diefenbaker)-


William Skoreyko: They did not have to.


Julia Verlyn (Judy) LaMarsh: -although his image appeared on television immediately before, and assistance was given by someone close to him. Other ministers of the crown went out in the by-elections and offered to buy the voters.


An hon. Member:: Order.


Julia Verlyn (Judy) LaMarsh: There was the Minister of Agriculture (Mr. Hamilton) and the Minister of Veterans Affairs (Mr. Churchill), and there was that master of sweetness and light, the Minister of Public Works (Mr. Walker).


John Andrew W. Drysdale: What were the predictions before the by-elections?


Julia Verlyn (Judy) LaMarsh: They went from one riding to another. Ministers went into the province of New Brunswick and in the first instance they offered them a cabinet seat, and told the people there that if they did not elect the Conservative candidate they would not have anyone in the cabinet. They came into my riding and offered defence contracts; they went into the riding of Peterborough and they offered contracts there; and they went into the riding of Leeds and offered public works projects. Nowhere in Canada, Mr. Speaker, have they offered decent responsible government.
This government has been toying with the people as a cat toys with a mouse. When this government goes to the people in a general election it will find what the people think of it and its policy.


William Skoreyko: Mr. Speaker, may I ask the hon. member a question?


An hon. Member:: Sit down. Give the lady a chance.


Julia Verlyn (Judy) LaMarsh: Mr. Speaker, we have in this country a feeling of unrest, and since I have been a member of this house I have heard the responsibility for that charged to a

number of people, and in particular by those who sit opposite the treasury benches. The Prime Minister and the Minister of Finance, and others on the treasury benches, have gone on television and radio and out in the hustings and have told the people of the country that we in the official opposition were the ones that cast doom and gloom and caused the uncertainty and unrest. That was until recently; but now it is claimed1 that the Bank of Canada and its governor caused all this unrest.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: They always have an
excuse.


Julia Verlyn (Judy) LaMarsh: Recently it has been suggested that it was the president of the Canadian National Railways who has caused all this uncertainty. I am told that previously it was the chairman of the film board. There have been other persons accused; someone else was always responsible.
Then, if you read the minister's speeches on budgets-which I had occasion to do last night-since he took over his office you will see that he blames the rest of the world. We in Canada are having the greatest government we have ever had. The rest of the world does not seem to appreciate that. In my lifetime, Mr. Speaker, I have been proud of Canada, proud of its reputation around the world for stability and for good government. I am no longer proud.


William Heward Grafftey: Shame!


Julia Verlyn (Judy) LaMarsh: In the past four years this government has succeeded where no one in the world would have believed it possible. Yes, it has succeeded in alienating our two greatest friends, the United Kingdom and the United States of America.


William Heward Grafftey: Of course, that is not party politics.


Julia Verlyn (Judy) LaMarsh: This country gave a mandate to this government second to none that had ever been given to any government, and the government then went to the United Kingdom and shook its finger under the nose of the prime minister of that country and said, "Oh, no, you will not join any economic union in Europe and we in Canada will not". Indeed, we will not join any economic union; we will sink alone.


An hon. Member:: What rot.


Julia Verlyn (Judy) LaMarsh: We wonder why the Canadian people are restless and afraid. Why do they have no confidence? Why will they not invest their money in Canada?


An hon. Member:: Three out of four byelections.


Julia Verlyn (Judy) LaMarsh: Why is it that the other countries of the world are afraid of Canada? Why is it that when this Minister of Finance makes a speech the Canadian dollar plunges? Why is there chaos in the financial world? Why is it that the private and public corporations of this country are in a state of confusion and anxiety? Why is it that the municipalities of this country are unable to prepare their budgets? Why is it that hon. members of this house are unable to go back to their constituents and say that this is a solid, responsible program? It is because, first, this government delays the budget and then beats the drums so that the people believe there will be real assistance to the economy and then they drop the people.
The municipalities, hydro, the provinces, had to borrow money in the last couple of years outside this country and the Minister of Finance knew it very well. They had to because all of the money in the market in Canada had been sucked up by this government. Now they are left with nothing but a devalued dollar with which to pay this off, and again it is the taxpayers who pay. This Minister of Finance said last year-and it can be seen in black and white-that the dollar would not be devalued. It is a most incredible somersault to find that he can come back to this parliament in a little over a year after saying what he did in the flattest most unequivocal language, which he used in March, 1960. It was obvious then that it could never be contemplated that the Canadian dollar would be devalued by government manipulation. But this minister has come back and unblushingly done it. He has done it to a point where no one knows where it will end. He has not indicated whether it will be 2 cents or 20 cents or just what it is he wants. The people of this country do not know what this government will do because .t has followed, if anything, a policy of lurching from crisis to crisis. It has not in the four years since it has been in office had any plan, any policy. Oh, yes, I remember the Prime Minister said in a speech to Conservatives last fall, which was widely reported, that up until that time the ministers of the crown had been learning their jobs. It might have been better for the country if after three years in which they could not learn their jobs the Prime Minister had tried out some of those other gentlemen to my left.


William Skoreyko: Does the hon. lady not realize that the people of Canada, after 22 years of Liberal reign, have learned to dis-
The Budget-Miss LaMarsh trust federal governments and they are just now able to recognize a good government after 22 years?


Julia Verlyn (Judy) LaMarsh: I do not think this is a matter of privilege; however, it depends on Your Honour's ruling. I may say that what the hon. member says may have an element of truth in it. You see, up until 1957 the people of Canada thought it was an easy thing to govern federally because before that time they had a good government. It looked easy. But they have found that easy or not, it is too difficult for those across the way.
There is one thing, Mr. Speaker, which has caused this feeling of lack of confidence in this country, and I charge to the government as a deliberate planned proposal, the only one they have had. I refer to a plan originally conceived to keep the opposition in a state of alarm, but with the highly unhappy consequent circumstance of keeping the country in a state of alarm. They have cried "wolf"; they have cried "election". This has happened in respect of every proposal they have brought in, every time there has been a suggestion that it was not a perfect proposal. Every time anything has been put before them the Prime Minister has stood up and wagged his chin, and the Prime Minister's seat mate has stood up and wagged his finger, and they have threatened to take us back to the country. I can only say, Mr. Speaker, "Take us to the country". How gentlemen opposite will then find out what the feeling of the country is-


An hon. Member:: You found out at the
beginning of June.


Julia Verlyn (Judy) LaMarsh: -with respect to the trifling proposals which were placed before us on Tuesday night.


Henry Frank Jones: Is the hon. member speaking for her party when she makes that remark?


Julia Verlyn (Judy) LaMarsh: I am a member of my party. I know they are people of courage, that they have been responsible for a great government and will be again shortly.
Here we are, Mr. Speaker, in a situation where the people do not know where to turn. We are now in June. Last August we had the worst unemployment figures in Canada's history. I prophesy, not as a matter of doom and gloom, that they will be greater still in the coming August and this is a frightening prospect for a country which reaches a condition approaching really full employment-and by that I mean a condition in which no one who wishes to work is out of work-only during the full summer months. We are not able to do anything about our

The Budget-Mr. Dupuis climate. This government has abandoned its right; it has abandoned all the tools which it has to use.
You will recall, Mr. Speaker, that we had the baby budget, this deformed child, last December, and that following it there was the provision introduced by the Minister of Labour, I believe, to assist areas which were called areas of surplus manpower. That provision was very nearly laughed off the statute books by the people of this country. It was said at that time to be a tremendous assistance for new industry; so tremendous that now in the new budget we have had another proposal of much more major importance to apply all across the country.
Well, perhaps I should not too harshly judge those on the other side. There was a member of the treasury benches

now unhappily no longer a member of this house but of the other place-a former secretary of state, who said in 1959, perhaps in justification for this government's past and future actions, as reported at page 2961 of Hansard: We did all that could be done. Of course, our methods can be questioned .. .
If I understand the rules, Mr. Speaker, it is not proper in this house to question the bona fides, the good intent of hon. members opposite. I cannot question motives but I would expect that every person who has been honoured with a seat in this venerable house, no matter for how short a time, would be a man or woman who had the greatest benefit for Canada at heart. But there are more things necessary than good intentions, Mr. Speaker, and I am told there is a road to a certain place, not the other place, which is paved with them. It is not sufficient to take office and to have good intentions. If this government has given up, if it cannot or if it will not introduce proposals in this house to be of assistance to the country and if it will not do so soon, then I ask that the government and its supporters go back to the country to receive the judgment which they so richly deserve.
(Translation):


Yvon Dupuis: Mr. Speaker, first of all I wish to remind the house that a year ago today the province of Quebec escaped from bondage and freed itself from the Duplessis dictatorship. I am glad to point out to the house that the people in Quebec tonight and since last June 23 are finally enjoying freedom under a democratic administration.
Mr. Speaker, we have just heard speeches delivered by opposition members. I have the

privilege of being the third speaker in a row from this side of the house and I am pleased to note that the government side seems to be lacking in fighters. Of course, if I had to come to the defence of the Conservative party and of the budget introduced by the Minister of Finance, I should also be most reluctant to rise in this house. But fortunately, Mr. Speaker, I am speaking on behalf of a riding whose constituents had foreseen, as early as 1958, that it would be a pity to vote for the Conservatives and tonight we note once again, during the discussion on the budget submitted by the Diefenbaker government, through its Minister of Finance, a fourth deplorable deficit in four years of administration.
If the deficit could be explained by important accomplishments on the part of the government, like all other members of this house, I could admit the existence of a deficit. But four deficits without solving any of the present problems, nor any of the problems resulting from a bad Conservative administration since 1957, that is too much.
Mr. Speaker, in order to find years comparable to those we are now going through, we must go back to the years of Borden, Bennett and Diefenbaker-the three BBD years of Canada, Bennett, Borden, Diefenbaker-years of darkness, of carelessness and of decline for this country.
Well, Mr. Speaker, the greatest confusion was reigning in the house a while ago; indeed, order has not yet been restored. Not only are the Conservatives unable to stand up in defence of their budget but they constantly interrupt members of the opposition who do their duty in this house. By the way, I would say that they could at least have the decency of listening attentively to a representative of the fair sex. When we, on this side of the house, have the opportunity of hearing a woman from the other side, we listen carefully and respectfully as should always be done towards a woman.
Well, Mr. Speaker, the member for Niagara Falls (Miss LaMarsh) fortunately succeeded in expressing the views of her constituency and she did her duty when she said that the people of Canada are most deceived with the present administration.
I was speaking of years of confusion. Naturally, that is not the Conservatives' fault. When things go badly, the previous governments are always to blame. When things go wrong, the member for Joliette-L'Assomption-Montcalm (Mr. Pigeon) holds the C.B.C.

people, the C.N.R. people or the Bell Telephone people responsible for all the government's wrongdoings. The government is looking for victims right and left; it is Mr. Coyne who is to blame, or Miss Judith Jasmin of the C.B.C., or Mr. Rene Levesque, or Mr. Alphonse Ouimet, or Mr. Donald Gordon. All those heads have to be cut off to prove to the Canadian people that someone is to blame. Well, Mr. Speaker, I say to the hon. member for Joliette-L'Assomption-Montcalm, who is a very sympathetic fellow: Stop looking for heads; if you wish the country to prosper, cut one head off, that of your present leader. Vote Liberal at the next election and all problems will be solved.


Louis-Joseph Pigeon: That would be a disaster.


Yvon Dupuis: Mr. Speaker, I am speaking of confusion. In the whole history of our country, have you ever seen a government change its mind so often. The Minister of Finance is always either retracting or contradicting himself. I said a while ago that I did not expect to speak tonight because I thought some of the hon. members opposite would show some fighting spirit. Looking over to the other side, I tried to find traces of this change of mind, this change of opinion, this whirlpool of uncertainty to which we are used and which is characteristic of the Conservatives.
The present Minister of Transport (Mr. Balcer) was tried about everywhere: solicitor general, secretary of state, minister of transport.
The minister of transport was shifted to trade and commerce while the minister of trade and commerce (Mr. Churchill) was being transferred to veterans affairs.
The minister of veterans affairs was sent to the Senate.
The same was done with the secretary of state, and for good reasons, he was such a sick man.
As for the minister of agriculture, he was given national defence.
The minister of national defence was sent somewhere else and he is now lieutenant governor in a province.
Then the minister of northern affairs and national resources was moved to agriculture while the minister of agriculture received the national defence portfolio.
There you have the only changes made. There is no mistake about it, the more it changes the more it is the same.
It shows what a wash-out this government has been for the country.
Mr. Speaker, as I was saying, to shuffle ministers and transfer them from one de-
The Budget-Mr. Dupuis partment to another is no solution to the problem facing this country. The way to settle this problem is not to transfer ministers but to invite members of the opposition to sit to the right of the Speaker and to allow clever men like the hon. members for Bona-vista-Twillingate (Mr. Pickersgill), for Essex East (Mr. Martin) and for Laurier (Mr. Chevrier) and others to play the part that is theirs, and to give to the country the Liberal prosperity which was so appreciated.
Mr. Speaker, for the last three years, even four years, we have been watching the Minister of Finance (Mr. Fleming) and hearing him explain his policy.
In 1958, for example, the Minister of Finance was saying that he had just come into the legacy left by the Liberals, that he was new to his post.
He would then explain to the house and the public that it would take time to reorganize his department according to Tory pattern and to put the country back on the road to prosperity.
In 1959, the Minister of Finance comes forward with a deficit. His explanation: it is obvious that we are having a slight recession: but next year, things will be better, finance will be reorganized, the situation balanced and we will present concrete results.
1960, 1961: deficits. But now, the blame is on Mr. Coyne, the fault lies with Judith Jasmin, Rene Levesque, Alphonse Ouimet, Donald Gordon. Even the Bell Telephone is to be blamed, it is a bad company.
If our economy lacks stability, those people are certainly not to blame, but the fault lies with the present Prime Minister who asked the people's trust in the general election campaign of 1958.
He never said that, if elected, he would not be able, because of the persons I just mentioned, to solve the problems in four years. He said: Trust me. I will take the job.
He said: As long as I am Prime Minister, no one will suffer, deficit or no deficit.
Mr. Speaker, tonight we must remind him of his promises. We must tell our friends opposite that people are suffering from unemployment at this very moment.
We have to remind the Prime Minister that he did not fulfil any of his promises.
We are forced to remind the Minister of Finance that he should have organized what is now called his economic expansion pro-
90205-6-438
6926	HOUSE OF
The Budget-Mr. Dupuis gram, four years ago, in order that we could at last feel its beneficial results, if there are any to expect from his budget proposals.
But no, Mr. Speaker. In 1958, the hon. member for Essex East (Mr. Martin) rose in this house to ask the government to kindly consider the problem of the automobile industry in Canada.
In 1958, 1959, 1960 and 1961, the hon. member for Essex East recalled that in his native city of Windsor, as well as in the major cities where cars are being made, there was some slackening in business and unemployment, because the government admitted foreign cars into Canada, and did not protect the Canadian car market.
This government has been aware of that situation for four years-four years during which we have seen the automobile industry going into a slump; four years during which we have seen our car plants laying off thousands of employees, who swelled the numbers of unemployed in Canada.
At that time, the Minister of Finance could find no solution to the problem.
But, feeling that elections are now in the offing, he suddenly finds, after four years of administration, that it might perhaps be wise to listen to and put into practice the suggestions made by the hon. member for Essex East.
Yes, Mr. Speaker, the 7.5 per cent tax should be abolished, but unfortunately, it is a bit late to do so.
Now that the automobile industry has laid off a considerable number of workers; that the European car market has been organized on a solid basis throughout the country, it may be a little too late; it would surely have been easier and wiser to put those proposals in effect as soon as they were announced.
What about the pitiful situation of the textile industry in this country?
Not only Liberal members, but even Conservative have, for the last four years, urged the government to adopt economic measures to protect that industry.
What has the Conservative government done? They turned a deaf ear.
There was no known solution, no possible means. We were facing competition against which we could do nothing.
Then, all of a sudden, after four years, the Minister of Finance says he has found means to assist the textile industry, at the very moment it is dying.
I could also, Mr. Speaker, talk about the dollar problems.


While the Minister of Finance said two or three years ago that it was absolutely impossible to devaluate the Canadian dollar, because it would have created a terrible economic chaos, the same Minister of Finance after rejecting that suggestion during four years of administration comes out this year with a broad smile and tells us that it is wise to devaluate the Canadian dollar.
No wonder we are disappointed and that the people of Canada are also disappointed, profoundly disappointed with the budget.
We do not believe the Minister of Finance has the confidence of the people, after making, as he has, year in year out for four years, promises that he has not kept at any time or in any way.
Mr. Speaker, we are now faced with an intolerable situation. Our economic situation is far from being enviable. On the contrary, it deteriorates from day to day.
Therefore, I urge the Minister of Finance to cease claiming he has found the solution to this problem, when he fails to take the necessary steps to do so.
He has brought forward nothing that could help the Canadian economy.
All across the country, people were expecting a general federal election as early as next September.
Mr. Speaker, I am not one of those who entertain this view.
This government is a Tory government, an historically and fundamentally Conservative government.
The Hon. Mr. Borden clung to power as long as he could before being defeated. The Hon. Mr. Bennett extended his years of office as long as he could before being defeated.
This government will do just the same and will extend its administration until March or April 1963, when the people of Canada, after five years of suffering and enduring, will finally free the country from this lame administration that we now have had for four years.
What have you done, my Conservative friends, of those famous public works projects that you announced in all corners of the country? One billion dollars of public works. That was the promise the Prime Minister made everywhere in Canada.
What have you done, hon. gentlemen of the government? Absolutely nothing.
The government say that they want to solve the unemployment problem, but they do nothing to this end.
We, in the opposition, have submitted several suggestions to the government for several years now. Had the government been

serious, they would have listened to us and now, instead of being in an unemployment period, in a period of uncertainty, and instead of experiencing an unhealthy economy, we would have restored the financial situation of this country and we would be living in happier years.
Mr. Speaker, we are still waiting for the Conservatives to keep the promises which were made, not only in my constituency, but in Chambly-Rouville and other ridings in that area, to the effect that if they were carried back to power the Richelieu seaway would perhaps be considered.
Now, Mr. Speaker, four years have gone by and the Richelieu is still flowing past our shores. This government has done absolutely nothing in his respect.
Mr. Speaker, as I said and shall repeat every time I rise in this house, the unemployment problem in Canada will never be settled only by long term projects of national scope. The one means for remedying the present unemployment situation, and revitalizing and strengthening our economy, is to solve the problems of each district in the most beneficial way.
To my mind, the Richelieu seaway should have been considered as from 1958; the planning should have been submitted by engineers in 1959 and, in 1960, we should have been able to tell our people: We cannot proceed with the Richelieu seaway, for such and such a reason. On the other hand, if the project had been considered practical, we should have gone ahead and explained to the population why it could be carried out. But no, there again, we have seen the same utter sloth on the part of the government.
The Minister of Transport is still here tonight. I am trying to catch his eye to tell him how much the people of Quebec have been disappointed not only because of the Richelieu seaway, but in almost every field connected with his department. There has been no progress in the field of transport in the province of Quebec, since the present minister took over that department. He did less than nothing. There is a vacuum. The result is naught.
Well, Mr. Speaker, instead of coming to us with statements and promises for our part of the country, the minister should give us what we want, that is serious consideration of the Richelieu seaway. It is his responsibility to do so. And when he comes to the Queen Elizabeth hotel, in Montreal, to tell us that
The Budget-Mr. Dupuis the project will not pay, I shall ask him once again, to prove it in this house and to our people.
Obviously, the minister smiles. It is very funny indeed. He does nothing and smiles. Well, let him smile while there is time, because, after the next general election, our friends will shed crocodile tears when they sit on this side of the house.


An hon. Members:: Oh, Oh.


Yvon Dupuis: Mr. Speaker, has the hon. member for Joliette-L'Assomption-Montcalm (Mr. Pigeon) anything to say?


Mr. Johnson:: The lad is nervous.


Yvon Dupuis: Mr. Speaker, the hon. member for Chambly-Rouville (Mr. Johnson) is again interjecting. It is the only thing he can do properly. I should very much like to hear him discuss seriously and objectively the Richelieu waterway. In any event, I think he will have to discuss it with his constituents some day, and I am sure that when he does, four years too late, he will be given an extended leave of absence from the House of Commons.
Mr. Speaker, I again ask the government to make a study of the Richelieu waterway project. Further, I repeat to the Minister of Finance that deepening the Richelieu is the only way to revitalize our area.
I also urge the Associate Minister of National Defence (Mr. Sevigny), who lives in our immediate area, to do his share and try to persuade the government to consider this great Richelieu scheme, a scheme which has been seriously considered by the governments of the states of New York and Vermont as well as the United States government. The scheme was also the subject of a serious study on the part of the chambers of commerce, the boards of trade and many well thinking people in our area.
Of course, Mr. Speaker, there are those who think that to revitalize the economy of a country, all you have to do is to make statements and promises. There are others who say: When things are bad, you must do as the Roman emperors: give the people bread and games. That is why some ministers of the crown take a lofty attitude with regard to this problem despite the fact that it is close at hand.
Mr. Speaker, I too wish to say to the house that the budget brought down by the Minister of Finance has been a disappointment to the entire Canadian population, because they need action which will yield immediate results.
90205-6-438i
6928	HOUSE OF
The Budget-Mr. Dupuis
Today, after four years of depression under a Conservative government, what will be the effect on the Canadian economy of the removal of the 7J per cent excise tax on cars? None whatsoever. A citizen who can afford to buy a car priced at $3,200 will certainly not change his living standard if the price of the car is reduced to $3,000. Four years ago, however, when it was time to act, European cars were allowed to invade the Canadian market, thus contributing to the lay-off of thousands of workers by the Canadian automotive industry. We are now faced with a situation that was entirely created by the Conservative government.
Mr. Speaker, having studied the budget speech of the Minister of Finance, I am trying as you are to find something this government has done for the unemployed. I find not a single thing. What does the present government suggest for the unemployed? Not a single thing.
What solution is this government planning to put forward in the matter of federal-provincial relations? None whatever. What is the Conservative government planning to do to get us out of our difficulties? It calls upon its smiling Minister of Finance to propose a fifth deficit, which will amount to something like $1 billion, and tell the people of Canada: "Let's go into the red, and get around the problem that way".
Mr. Speaker, the people of Canada have had enough of the deficits of the Minister of Finance. The people should be used to them because if we take a look at the past, we find that the last four deficits instead of helping the Canadian people have resulted in a shaky and dangerous economic situation. The next deficit will lead to a new period of inflation whose effects will start to be felt a few months hence. Conditions will then be worse than those facing us at this time and the government will say once again: "We were wrong; we thought that the recession was over and that the great Donald had found the solution".
But, again I say, this is a deficit that not only will reach the billion dollar mark, but within a year-and I shall be here to see it-the estimated billion dollar deficit will be $1J if not $2 billion.
Mr. Speaker, with those members in this house who are of good faith, I repeat that the Conservative government has been a failure, and I remain convinced that this government will not call elections in the immediate future. Why? Because public opinion has been tested recently. One test was


held last year and the hon. member for Labelle (Mr. Clermont) is here as a result. There was a further test last year. The hon. member for Niagara Falls (Miss LaMarsh) is here as a witness. And this year, since the hon. member for Joliette-L'Assomption-Montcalm asked me, I shall say that the Liberal party, in the last four by-elections, has won four great victories of which we are proud because, first, in the constituency of Leeds, we have taken a stronghold away from the Conservative party.
Second, in Kings riding in Prince Edward Island, the Conservative majority was only 165, while in 1958 they had a majority of 1,134 votes.
In the constituency of Esquimalt-Saanich, the Conservative candidate had a majority of 769 votes, while his predecessor had a majority of 14,000 votes.
In the Restigouche-Madawaska riding, all the big guns of the Union Nationale party had been brought into action, but the victory was only a flop for the Conservatives, since the temporary member for Restigouche-Madawaska only received a majority of 960 votes, while his predecessor had secured a majority of 4,000 votes. The conclusion to be drawn is that the Liberals secured 44 per cent of the popular vote, and the Conservatives, 43 per cent.
Here is another conclusion: in 1958, in the Restigouche-Madawaska riding, the Conservative party had received 60 per cent of the vote, and that percentage is now brought down to 43 per cent, while the Liberals, who had then secured only 32 per cent of the vote, have now overtaken the Conservatives.
Hon. members of the Conservative party, we shall outride you, and soon there will be only three or four of you sitting on this side of the house to the extreme left of Mr. Speaker.
Mr. Speaker, may I simply call it 10.30?



BUSINESS OF THE HOUSE

John Whitney Pickersgill: Mr. Speaker, perhaps the house leader could indicate what the business will be for the rest of this week, and of course we would appreciate it if the government has been able to make up its mind about next week.


Gordon Minto Churchill: Mr. Speaker, the government would be happy to have the fullest co-operation from the other side of the house with

regard to completing the business of the session, but no agreement has been reached with regard to that.
Tomorrow, if the house-which has shown considerable interest in the subject-would like to debate a bill, notice of which has been given in Votes and Proceedings, called an act respecting the Bank of Canada, it would be quite possible for the house to take first reading and then follow with second reading.


John Whitney Pickersgill: I can disabuse the hon. gentleman at once. We should not have the slightest intention of relaxing the rules in any respect regarding that particular matter. The very suggestion that a question as important as this should be rushed through the
Business of the House
house in this fashion is another evidence of the contempt of the government for the house.


Gordon Minto Churchill: Well, it is a very short bill and the subject is one which is not unknown to the house. Tomorrow, then, we shall continue with the debate on the budget.


John Whitney Pickersgill: And on Saturday?


Gordon Minto Churchill: At this stage of the session I think it would be wiser to announce the business from day to day.


[Stage Direction]
It being thirty three minutes past ten o'clock the house adjourned, without question put, pursuant to special order.
[Stage Direction]
Question

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

Mr. Argue: 1.	What are the salaries of the directors of income tax in the Regina and Saskatoon offices?
2.	How many employees in each of these offices are paid (a) over $6,000 (b) over $5,000?
3.	What was the total travelling expense of the employees referred to in 2 (a) and 2 (b)?
4.	What was the total number of employees in 1960 in (a) Regina income tax offices (b) Saskatoon income tax offices?
5.	What was the total salary of the employees in 1960 (a) Regina income tax offices (b) Saskatoon income tax offices?
Answer by: Hon. J. W. Monleith (Aciing Minister of National Revenue):
1.	Regina, $12,500; Saskatoon, $12,500.
2.	Regina (a), 53, (b), 70; Saskatoon, (a), 48, (b), 66.
(a)	(b)
3. Regina	 $31,859.96	$44,654.51
Saskatoon ______ 25,775.65	36,729.96
$57,635.61	$81,384.47
Permanent Seasonal Total
4. Regina .. 141	30	171Saskatoon . 120	24	1445.	Regina, $750,183.28; Saskatoon, $636,351.77.
Note: The answers furnished with respect to parts 1, 2 and 4 of this question are as of 31st March, 1961. The answers to parts 3 and 5 are for the fiscal year ended 31st March, 1961.

Friday, June 23, 1961



RAILWAYS, CANALS AND TELEGRAPH LINES

[Stage Direction]
Ninth report of standing committee on railways, canals and telegraph lines-Mr. Howe.