1961-06-27

RESEARCH

[Stage Direction]
Fourth report of special committee on research-Mr. Murphy.

Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I should like to table and, if the house agrees, have printed as an
appendix to Hansard the joint communique of the Prime Minister of Japan and myself issued following our discussions yesterday.


Mr. Speaker:: Is it agreed that the joint communique referred to by the Prime Minister be printed as an appendix to Hansard today?


Some hon. Members:: Agreed.
[Editor's note: For text of communique above referred to, see appendix.]



AGRICULTURE


Hon. L. B. Pearson (Leader of the Opposition):: Before the orders of the day are called, Mr. Speaker, I ask leave to move the adjournment of the house under standing order 26 for the purpose of discussing a definite matter of urgent public importance, namely the drought conditions prevailing in western Canada which threaten an imminent collapse of cattle prices and farm income.


Mr. Speaker:: I think it is unnecessary to hear any argument on this question. It seems to me that it is a matter which could very readily be debated in the budget debate which continues today. The requirement of urgency of debate therefore is hardly satisfied. I accept the proposition that this is an urgent and important public matter to which the Leader of the Opposition draws attention. It is a definite matter of public importance. However, that is not the criterion in determining whether standing order 26 should be applied. The criterion is whether there is an opportunity to debate this matter in an effective way.


Lester Bowles Pearson: Before you make your decision, Mr. Speaker, perhaps I may be permitted to explain that, as you have stated, this is a matter of urgency; it is not only a matter of urgency of debate but a matter of urgency of action on the part of the government to deal with a situation which is so serious and is becoming worse every day and which, across the border in the United States, has resulted in five states being declared disaster areas.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: The urgency of debate-


Mr. Speaker:: If the hon. member wishes to say anything about urgency of debate I will hear him, but not on the issue, because that matter can be debated.


Lester Bowles Pearson: Urgency of debate I should think would be required, Mr. Speaker, so we can ask the government at once to tell us what action they propose to take in regard to the collapse of cattle prices because of lack of fodder, and in regard to the necessity of doing something about this matter and the decline of farm income generally in the face of this situation. It is quite true that in the budget debate we can deal with these matters, but a special debate would give to the government the opportunity of telling us at once what plans the government have to deal with this situation which is now so very serious.


John George Diefenbaker: In view of the statements made by the hon. member, Mr. Speaker, I think I should point out first that the opportunity is available to discuss this matter today. There is no necessity for any adjournment of the house because the government has acted already, has given consideration to that matter, has already received representations from the province of Manitoba and will receive representations from the province of Saskatchewan if they have not come to hand this morning. Every assistance is going to be provided in connection with the provision of fodder and also the transfer of cattle from non-fodder areas to fodder areas.
In so far as the reference to the United States is concerned may I say this. We have been in touch with the government of the United States, our purpose being to secure from the United States permission to have those areas that have been put in grazing or in hay under the soil bank available to us in

Inquiries of the Ministry Canada for the cutting of the hay. The United States, in view of the circumstances in which it finds itself in the northern states, is giving consideration to that request but I do not look hopefully in that direction. Action has been taken already.


Mr. Speaker:: I think the matter might be pursued by a question on the orders of the day if hon. members so desire, but I am not satisfied that there is not ample opportunity to put before the house and the government all the considerations that apply to this important matter in the debate which will follow immediately after the calling of the orders of the day. Therefore with regret I cannot accede to the request of the Leader of the Opposition.



LIVESTOCK


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, may I ask the
Prime Minister what steps the government have taken to prevent the imminent collapse of cattle prices in the prairies. Have the government given consideration to putting at least a temporary special floor under cattle prices?


An hon. Member:: There is a floor price under cattle.


John George Diefenbaker: Mr. Speaker, the hon. gentleman knows that there is a floor price under cattle, or possibly I should say he does not know, because he would not have asked the question had he known.


Lester Bowles Pearson: Well, Mr. Speaker, may I ask the Prime Minister-I do not pretend to be infallible, as the Prime Minister does-


John George Diefenbaker: No.


Lester Bowles Pearson: -but may I ask the Prime Minister again what action he is taking to prevent the collapse of prices in the prairies, and what steps he has taken, if any, for freight assistance to transfer cattle from the prairie provinces to the east, where feed is available. Perhaps he will try to answer that one.


John George Diefenbaker: That is a matter for information, and I will give it. I was giving the information; the hon. gentleman did not have it. The committee of the privy council have given consideration to this matter and an order in council has been passed which in


effect is as follows. Due to drought conditions the provinces of Manitoba, Saskatchewan and Alberta face a very serious shortage of fodder for livestock and there has already been considerable distress in various areas of the west. To avoid a heavy liquidation of livestock, extraordinary measures will be necessary to provide fodder to drought areas and to move cattle from those areas to other areas for summer grazing.
The provinces of Manitoba and Saskatchewan are now formulating policies to bear part of the freight costs of bringing fodder to and moving cattle from drought areas, and have requested that the federal government share equally with the provinces the cost of such assistance. I think a similar request will also come from the province of Alberta.
As the house knows, similar assistance was provided to the provinces of Saskatchewan and Manitoba in 1958 due to drought conditions, and to all three prairie provinces in 1959 due to the loss of fodder from early snows. Therefore authorization has been given for the payment to the provinces of Manitoba, Saskatchewan and Alberta of one half of the amounts paid by these provinces for their transportation costs on shipments of fodder, for the movement of cattle to feed, and for the transportation of haying equipment from June 26 this year to March 31, 1962, subject of course to such terms and provisions as may be prescribed by the Minister of Agriculture.


Mr. Martin (Essex East):: Could the Prime Minister give us the date of the order in council?


John George Diefenbaker: The date is today.


Mr. Chevrier:: You did not move very fast.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I should like to ask the Prime Minister a supplementary question, but I would first congratulate him for getting under the wire.


Paul Joseph James Martin: Hear, hear.


Herbert Wilfred Herridge: Will the Prime Minister keep the house informed of the agreements made with various provinces and the progress with respect to this assistance?


John George Diefenbaker: Mr. Speaker, I would say yes, we shall. As a matter of fact I might add that I will be meeting with representatives of western Canada this afternoon to ascertain at first hand something of the situation in the provinces of Saskatchewan and Manitoba to the end that, as always, immediate action is taken as soon as action becomes necessary.


Paul Joseph James Martin: Reverting to the order in council, can the Prime Minister give the house an assurance that the order has in fact been passed, and will he kindly table it?


John George Diefenbaker: Yes, I will get the order in council and have it tabled.


Paul Joseph James Martin: Thank you.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I
direct a question to the Prime Minister and ask him if it is a fact that the government is seeking to replace the under secretary of state. If the answer is in the affirmative, will he tell the house for what reason?


John George Diefenbaker: Apparently the information which the hon. gentleman has obtained is not in accordance with the facts.


Lionel Chevrier: We shall see.
(Translation):



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. Lucien Cardin (Richelieu-Vercheres):: Mr. Speaker, I should like to put a question to the Secretary of State. Has the minister received representations from local 89 of the letter carrier association, in Sorel, requesting that the 1st of July be observed as a statutory holiday? If so, what decision was taken by the government?


Hon. Noel Dorion (Secretary of Stale):: Mr. Speaker, I believe the question should be directed to the Postmaster General. Moreover I think he is in a position to give an answer.
(Text):


Hon. W. M. Hamilton (Poslmasler General):: Inquiries of the Ministry will have an unusually heavy load on Monday. In many cases where it is necessary because of that load they will be asked to report to the post offices earlier on Monday morning, and will be credited with overtime in respect of that time.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to direct a question to the Minister of Labour. In view of the fact that the particular period during which the winter works program is instituted is always that period of the year when municipalities are short of funds, and in view of the fact that payments for labour costs are only made in arrears after the work has actually been done, would the minister consider a system of advances on labour costs, where necessary, thus permitting municipalities to increase their participation in the winter works program?


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, I wish to inform the hon. member that during the past winter we introduced a new system of interim payments to provinces in respect to this program.



MOOSONEE, ONT.-REPORTED USE OF INDIANS AS STRIKEBREAKERS

[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to ask the Minister of Defence Production whether he has checked complaints that Carter Construction Limited are using treaty Indians at Moosonee as strikebreakers on a Defence Construction Limited project and paying them less than the rate in the fair wage section of the contractor-government contract.


Hon. Raymond O'Hurley (Minister of Defence Production):: I understand from the Minister of Citizenship and Immigration that the answer is no, but I wish the hon. member to know that before the strike was declared against Carter Construction Company there were 14 Indians working on the project. I do not know whether they were working as carpenters or otherwise, but they were on the job at the time the strike was declared. I am having a check made to see if the number of Indian workers has been increased. We certainly cannot prevent Indians from working at this site. I have not changed my attitude that this is a provincial matter and that it is for the provincial government to take action with respect to the


labour dispute. We hope that the dispute will be settled as soon as possible in the interests of the continuance of this project.



AIRPORTS


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, I should like to address a question to the Minister of Justice based on a press release of the Department of Transport of today's date. The press release, which concerns the minister, reads in part as follows:
Ottawa-Sporting a 10-gallon hat, justice minister E. Davie Fulton is to officially open a new- Department of Transport airport at Williams Lake, B.C., July 5-
Mr. Fulton will use a short handled, double bladed axe rather than a pair of scissors to cut the ribbon held by Williams Lake stampede queens Paddy Twan and Vivian Chelsea.
My question to the minister is this. Is the double-bladed axe, like the syringe used recently by the Minister of Agriculture, gold plated and, in that event, does the minister not think that in view of the continuing deficits of this government some economy in the use of these instruments ought to be exercised?
Hon E. D. Fulion (Minister of Justice): Mr. Speaker, I thank the hon. member for his great interest in my activities, and I am glad to be able to assure him in the first place that the opening ceremonies, as I understand it, are being arranged and generously paid for by the contractors who built the airport. I do not understand that the double bladed axe is gold plated, but like the Minister of Agriculture, my thoughts will be directed in certain directions as 1 swing that axe to cut the ribbon.


Mr. G. J. Mcllraith (Ottawa West):: Mr. Speaker, I should like to ask the Minister of Justice whether this press release was issued at the taxpayers' expense.


Mr. Fulton:: Mr. Speaker, I think that question will have to be directed to the Minister of Transport, but I should have thought the hon. member who has been, as a matter of fact, on the treasury benches as parliamentary assistant, on reflection would realize that he is just taking up the time of the house by asking that question, because the answer is within his own knowledge.


George James McIlraith: Mr. Speaker, I have no apology for taking up the time of the house in the interests of the taxpayers.

Inquiries of the Ministry


Edmund Davie Fulton: Mr. Speaker, my implication was not that the hon. gentleman should apologize for taking up the time of the house, but should apologize for taking it up uselessly.


George James McIlraith: The taxpayers' interest is not useless.



SHIPPING


[Stage Direction]
On the orders of the day:
(Translation):
Mr. Y. R. Tasse (Parliamentary Secretary to the Minister of Public Works):: Mr. Speaker, would the Minister of Transport have any comments to make in connection with the article which appeared in this morning's Gazette and which contained the following sentence:
(Text):
The government will continue to discourage foreign shipping from using the St. Lawrence in winter.
(Translation):


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, I have read the article in question, and I must say that it is obviously in error.
Yesterday afternoon I had a most interesting meeting with a delegation from Halifax and St. John. I had occasion to discuss the problem of navigation on the St. Lawrence river, on the gulf of St. Lawrence and winter navigation generally. I then recalled the decision we took on November 24 last with regard to winter navigation.
For the information of the house, I think I should again read the instructions we issued at the time:
The services of icebreakers in operation in the Quebec area will be as follows during the winter season, i.e. in addition to priority work assigned to each icebreaker, they will assist maritime traffic in the area. They will provide all possible assistance first to ships reinforced against ice, then under the authority of the departmental regional officer, will provide an escort when needed to coastal ships between Quebec and Cap aux Oies and to ships entering or leaving Quebec harbour.
Now I repeated to that delegation what I stated last winter, that ships not reinforced against ice, ocean-going ships not reinforced against ice and proceeding down the St. Lawrence as far as Quebec do so at their own risk.


Lionel Chevrier: A supplementary question. Notwithstanding what the minister said to the delegation, does he intend to encourage navigation on the St. Lawrence during the winter?


Léon Balcer: For the next season we will apply the exact policy I have just described.
90205-6-449
(Text):



COASTAL TRADE


[Stage Direction]
On the orders of the day:
Lionel Chevrier: I should like to direct a question to the Minister of Transport. Has the minister taken cognizance of a question which was asked in the United Kingdom parliament of the joint parliamentary secretary to the transport ministry, Mr. Hughes-Hallett, in connection with Canadian proposals to reserve domestic Canadian trade in the great lakes area of Canada for Canadian ships, in reply to which he said that the British government had no previous consultation whatever with the Canadian government with respect to this matter? Has the minister seen this report, and in view of the question asked and the statement made in the British House of Commons has he any comment to make?


Léon Balcer: I have not seen that article, but I have read similar articles in another newspaper. All I can say is that prior to the announcement of policy we had some discussions respecting the matter of coastal trade with the high commissioner's office here. However, since the new policy was announced in the house we have received no official representations from the high commissioner's office. We are actually sending notices along the lines of the announcement I made to all countries of the commonwealth which have signed the commonwealth shipping agreement.


Lionel Chevrier: This is the object of the question I asked the minister, because the reply given was that the British government had no previous consultation whatever before the Canadian government announced its proposal in the House of Commons. That was the answer given by Mr. Hughes-Hallett.


Léon Balcer: Prior to the announcement of the policy we had approached the United Kingdom government a few times to ask them to take some action about the fact that use was being made of ships flying the flags of British colonies to the disadvantage of Canada in our inland waters. The British government informed us that they could not do anything about the matter, and it was folllowing these representations and this answer that we took the decision we did.
(Translation) :



PUBLIC SERVICE


Mr. Alexis Caron (Hull):: Mr. Speaker, is the Postmaster General in a position to reply to

Inquiries of the Ministry the question I asked him on June 26 last with regard to a promotion competition for the post of director of district No. 2?


William McLean Hamilton: Mr. Speaker, I hope to be able to reply tomorrow.
(Text):	.



DEFENCE PRODUCTION


[Stage Direction]
On the orders of the day:
Mr. E. J. Broome (Vancouver South):: Mr. Speaker, I have a question for the Minister of Defence Production. Is the minister aware that a Vancouver contractor, Beaver Construction Company, who are carrying out a contract with the department to build aprons and ramps for the R.C.A.F. at Vancouver airport, are using aggregate imported by scows from the state of Washington and thus are violating the general conditions of the contract which call for the use of Canadian materials and labour where possible?


Donat Raymond: Mr. Speaker, I am aware of this contract which is being carried out by Beaver Construction Company. I am having inquiries made to ensure that they are using Canadian materials. I am not aware that they are getting gravel from the United States, but an inquiry is being made and I will report just as soon as I have the information.


Ernest James Broome: I have a supplementary question for the parliamentary secretary to the Minister of National Revenue. Will he investigate the importations of aggregate by Deeks McBride, a company headed by a former Liberal cabinet minister, from both Stillicum and Friday Harbor in the state of Washington, with special reference to whether dumping laws are being broken through special pricing arrangements or other means such as options to purchase?


Mr. M. J. A. Lamberi (Parliamentary Secretary to the Minister of National Revenue):: We will look into the matter, Mr. Speaker.


Ernest James Broome: A further supplementary question-


Mr. Speaker:: The hon. member for Port Arthur.


Ernest James Broome: This is a supplementary.


Mr. Speaker:: I understood the hon. member.


Ernest James Broome: Mr. Speaker, I have a question for the Minister of Labour. Will the minister have his officials in Vancouver check

into impending lay-offs at crushing plants in the Vancouver area because of the importation of crushed aggregate from the state of Washington?


Michael Starr: Yes, Mr. Speaker.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I should like to ask the Minister of National Defence whether the report that Canadian troops in Germany have asked for a pay raise is accurate, this request resulting, as the report indicates, from the fast rising cost of living in Germany and the drop in value of the Canadian dollar.


Hon. D. S. Harkness (Minister of National Defence):: I have had no information to that effect, Mr. Speaker.


Paul Joseph James Martin: The papers are full of it.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, yesterday the hon. member for Essex East asked me whether Canada has any treaty commitments with Kuwait. The answer is that there are no bilateral agreements concluded directly between Canada and Kuwait. Both countries, however, are parties to a number of multilateral conventions such as those constituting the ICAO, UNESCO, the international telecommunications union, the universal postal union and so on. Incidentally, I would point out that in the heading of the question asked yesterday, as found at page 7035 of Hansard, there is a mistake. It now reads "Iraq-Reported Claim to Shakedown of Kuwait". The word "shakedown" should be "sheikdom".


Lester Bowles Pearson: May I ask the minister a supplementary question. Has Canada any political commitments with regard to this sheikdom arising out of prior treaty arrangements between it and the United Kingdom which might cover this country?


Howard Charles Green: This is a very complicated question which the department is investigating, but I am advised that there is certainly no obligation as far as defence measures are concerned.


Mr. Harold E. Winch (Vancouver East):: should like to ask a supplementary question. In view of the threatened invasion of or aggression against Kuwait, has the minister any information from the United Nations on this subject?


Howard Charles Green: No, Mr. Speaker.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, the observation made by the Minister of Finance a few moments ago prompts me to see that he is not ignored this morning, and I should like to ask him a question. In view of the fact that we are approaching the end of the session, and in view of the fact the unemployment insurance fund has reached a low and most perilous state, somewhere between $64 million and $70 million, will the minister say what policy the government proposes to announce with regard to replenishing the fund and ensuring that the contractual rights of individuals in this country are not denied under the Unemployment Insurance Act?


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, I direct the attention of the hon. member to my observations on this subject in the budget speech.


Paul Joseph James Martin: A supplementary question, Mr. Speaker. Will the minister not agree that the only observation he made in his long budget speech was with regard to-


Some hon. Members:: Order.


Mr. Bell (Carleton):: Mr. Speaker is on his feet.


Mr. Speaker:: Order. I think the hon. member for Essex East is anticipating what he would like to say in the budget debate.


Paul Joseph James Martin: With great respect, Mr. Speaker, I am asking an extremely important question.


Mr. Speaker:: The hon. member's question to my mind is not one seeking information, so far as I have heard it. The hon. member proposes to contest what the Minister of Finance said in the budget speech, and that surely is not something to be taken up at this time.


Paul Joseph James Martin: With great respect, Mr. Speaker, perhaps I did not put my question in such a way as to make it fully understood by Your Honour, and with your permission I will rephrase my question. We are going to conclude our session shortly. The unemployment insurance fund has 90205-6-449J
The Budget-Mr. Dorian reached the perilous state to which I referred. I am now asking the minister what the government proposes to do to replenish that fund.


Donald Methuen Fleming: Mr. Speaker, I again invite the attention of the hon. member to what I proposed in the budget speech in relation to the financial side of this question.


Paul Joseph James Martin: The minister said nothing in his budget address.


Donald Methuen Fleming: I do not have entire responsibility in relation to the Unemployment Insurance Act, but on the financial side there are measures proposed in the budget that will be of great benefit but which apparently are not yet known to the hon. member for Essex East.


Lester Bowles Pearson: The answer is "nothing".



THE BUDGET


[Stage Direction]
The house resumed, from Friday, June 23, 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. (Translation):
Noël Dorion: Mr. Speaker, I was particularly impressed by the speech made last Tuesday by the Minister of Finance (Mr. Fleming). The duty he was faced with then was most tricky, difficult and consequential.
Any budgetary measure has repercussions on the economy of a country, on its trade, its industry and its relations with other countries. One can imagine the tact, the knowhow and the knowledge required to perform such a task. The Minister of Finance proved once again last Tuesday that he possesses all those qualities to a great degree, and all members of the house should be unanimous in commending him in spite of the differences of opinion they might have.
I should also like to emphasize the courtesy he showed us, his French-speaking fellow citizens. Ever since his first budget speech, he has made it a point to express himself in our language to summarize some fundamental proposals. Since then, he has always been true to that line of conduct. I wish to congratulate him and to thank him. That means that he recognizes the important role his compatriots of French language and culture are

The Budget-Mr. Dorian called upon to play with their fellow citizens of English language and culture, in the economic life of our country. A reminder of this basic truth can only bring the two great people who founded this confederation of ours to work more closely and more efficiently together.
I have read with mixed feelings the speeches which were made concerning that most important document which was laid down by the Minister of Finance. A few of them were meaty and contained specific suggestions but, unfortunately, many of them seemed to go astray into the doubtful avenues of demagogy. However, if there is a debate that ought to be kept far and above all partisan or petty considerations, it is surely this one, because what is at stake in this instance is all the more serious as it involves our nation's economic progress and well-being. Faced with such a problem, it seems to me that we should proceed by the straightforward and enlightened ways of good sense, logic and objectivity in seeking the solutions called for by circumstances.
In order to fully understand the nature and the full weight of this budget, we should judge it on its substance and in the light of the facts and events of which it is but a result. It matters little whether the December estimates have met with adverse winds and have thus been in part invalidated by conditions for which surely the Minister of Finance cannot be held responsible. Under our system of government, where planned economy cannot be the rule and where economic activities are generally left to private enterprise, we have no cause to be shocked at this juncture. The government's role is limited to seeking and submitting measures which, in the present circumstances, seem most appropriate for stimulating this nation's economy and giving it such impulse that will carry it forward toward new achievements. There you have considered in its true perspective, the problem related to the budget and facing us as well as the Canadian people as a whole.
The measures introduced by the Minister of Finance have not been brought about in a haphazard way. Quite the contrary, they are part and parcel of a policy laid down previously, a policy which dominates those measures and a prerequisite of which is the economic independence of the nation.
They go back to the actions first taken by this government since coming into power and they are in line with the task assumed by the Conservative party, which is to throw off the yoke of foreign domination, under which we were gradually sinking.
As early as December 1960, the Minister of Finance had laid the necessary and logical
[Mr. Dorion.l

basis in his little budget which was a sort of prelude to the one which is now submitted to us. Both are based on the same spirit and have the same purposes. A brief summary will confirm this.
Most of the measures advocated by the Minister of Finance last December fall into three main groups-an increase and a channelling of national savings invested in Canada, an increase of income tax on revenues transferred abroad; and, finally, a review of the customs tariff.
The purpose of the first group of measures is to bring investment companies and pension funds to invest most of their money in Canada. In accordance with this, new industries in depressed areas that undertake to use local raw materials which have so far been exported and manufacturers of products which until now have been imported from abroad are entitled to double depreciation for one year.
In his budget speech, the minister stressed the interest with which this action was received by some industries. It looks as though we might expect good results in the field of employment and industrial development.


Lionel Chevrier: Will the minister permit a question?


Noël Dorion: Certainly.


Lionel Chevrier: Could the minister tell us, at this stage, how many industries have been set up in the depressed areas of this country, under that legislation proposed by the Minister of Finance?


Noël Dorion: Mr. Speaker, I believe the Minister of Finance himself replied to that question in his budget speech, when he said he had received over a hundred requests, I think, from companies wishing to take advantage of that legislation.


Lionel Chevrier: Mr. Speaker, I would not like to interrupt the Secretary of State, but I wonder whether he could tell us how many industries have been set up in the depressed areas of this country?


Noël Dorion: Mr. Speaker, surely I am not in a position to give more information than the Minister of Finance himself.
The second category of measures provided for an increase from 5 to 15 per cent of the

tax now levied by the government on income earned in Canada and transferred abroad. There is no question, under that legislation, of simply ballyragging foreign interests, but rather of ensuring that those interests contribute more to public expenses, and that the entry of foreign capital be limited to proportions more in line with the requirements of our economic independence.
On the other hand, and in order to encourage our own investments, the surtax of 4 per cent on the dividends of Canadian investments was abolished.
The third category of measures provided for the revision of some items of the customs tariff, and for the redefinition of products of a type made in Canada.
That redefinition, as wrote Mr. Jacques Parizeau, Montreal economist and professor at the Ecole des Hautes Etudes, in Montreal:
-is probably the most important aspect in the budget.
That was also the opinion of some particularly experienced businessmen. That measure could facilitate the working of anti-dumping legislation and at the same time protect our own manufactured products against certain imports which, by evading the intent of the law while observing its letter, can take advantage of the lower tariffs.
Other measures were also proposed such as the establishment of an export financing bank to help our industry to increase its sales abroad, in order to stimulate production and employment in this country.
Again, according to Mr. Jacques Parizeau, that December budget.
-is probably an outstanding event in the history of Canadian economic policy.
Another economist, Mr. Roland Parenteau, also professor at the Ecole des Hautes Etudes in Montreal, then expressed his views as follows:
Inasmuch as we are faced with a structural crisis, the nature of those various measures may turn the tide in the right direction. Already, the exchange rate has moved in a direction favourable to our trade balance. That alone might do more towards a permanent eradication of unemployment than all conceivable public works.
In his annual report to the shareholders of the Montreal city and district savings bank, Mr. Guy Vanier, chairman of the institution, also commended the Minister of Finance for setting the country in the right direction. Here is what he had to say:
Processing firms, provided they can count on a steady domestic market and on proper foreign trade possibilities, could, more than anything else, reduce unemployment in a progressive and permanent way.
The Budget-Mr. Dorion
Those are eloquent marks of appreciation resulting from an objective and unbiased study and which are certainly just as good as any criticism heard in this house. Being of immediate and long term significance, this budget encourages the growth of Canadian enterprise while reducing at the same time the benefits of foreign investors in Canada. Well, it is with that logical system that this budget was prepared as it is with that logical system that the various policies of this government have been pursued since the people of Canada gave us the responsibilities of power.
Like last December's budget, one of the main purposes of this one is to check foreign capital inflow into Canada while promoting Canadian investment in our own business.
Have we often stopped to think that since 1950, U.S. investments alone in Canadian business have reached over $3 billion, half of which have been invested in the oil industry? Should this government not be concerned and not increase the steps it had already taken to ensure Canadian economic independence?
As a second aim, we want to balance orn foreign trade as much as possible. International trade is a two-way road, but if the incoming road is wide and spacious while the outgoing one is narrow and difficult, it creates an unbalance which eventually bears heavily on the Canadian economy. The result for us is a weakening congestion of our manufacturing industry and a consequent increase in unemployment.
The government's present policy is in fact reversing the trend. In 1960, our exports rose by $225 million, or 5 per cent over the previous year, reaching a total of $5,395,300,000; our imports, with a drop of 2.1 per cent in relation to the previous year, totalled $5,495,800,000, leaving a total deficit of $100,500,000, as compared to a deficit of $368 million in 1959.
Some have been shocked at our budget deficit. However, should our international deficit not be our first concern? Should we not give top priority to a better balance in our external trade, and to the balance of payments, and try to maintain our main industries and to increase their production and manpower?
On this last point, I should like to point out the tariff amendments which are provided to ensure greater protection to some sections of the textile industry. I have been reading the complaints of the hon. member for Drum-mond-Arthabaska (Mr. Boulanger) in that regard, and his bitter words to the government and to Quebec members on the government side.
7114	HOUSE OF
The Budget-Mr. Dorion
Apparently the hon. member is totally unaware of the origin and nature of the problem, because otherwise, he would have kept cautiously silent or would have directed his complaints to his friends in the opposition.
Instead of reproaching others for their silence, he should have made a serious study of the problem and come up with specific proposals to solve it, proposals which his friends in the opposition would have been prepared to support.
First of all, I will remind him that it was the Bennett government which, through the 1932 Ottawa agreements, first afforded adequate protection for the textile industry. The measures then adopted in that field produced such results that according to economists that industry was one of those which suffered the least from the depression which affected most areas of the Canadian economy, a depression that did not originate with the Bennett administration, as some are wont to say, but with the financial crash of 1929, which occurred when the Liberal party was still in office. Following the return to power of the Liberals in 1935, the textile industry started on a downgrade. Since 1939, under their rule, specific duties protecting it have only been reduced. That is how the friends of the hon. member for Drummond-Artha-baska cared about an industry which in the province of Quebec, apart from the city of Montreal, involves at least one seventh of the labour force.
In that field as in many others, we had to endeavour to right the wrong that had been done, while complying with the international agreements binding our country. Therefore, as soon as he was sworn in, the Minister of Finance (Mr. Fleming) invited the tariff board to undertake a complete review of all GATT items regarding textiles, clothing and their manufacture. He gave them very definite instructions that in their recommendations they seriously take into account the economic situation of our own textile industries. In June 1958, the first findings were released and later on the minister hastened to order an increase in the tariffs on woollens subject to the British preferential rates.
What was the reaction of the leader and the friends of the hon. member for Drum-mond-Arthabaska? I would ask him to read again the speeches made in this house on August 13, 1958, particularly the one delivered by the Leader of the Opposition (Mr. Pearson) and the one, even more peremptory, delivered

by the hon. member for Bonavista-Twillingate (Mr. Pickersgill). If I had time, I would quote extensive extracts from that speech. But I will be content with reading the two paragraphs which in my opinion are the most characteristic:
(Text):
It is rather difficult to think of any industry that is much less indigenous. The raw material comes from abroad; the machinery in the plants comes from abroad, and the skills originally came from abroad. It is certainly not by any stretch of the imagination an indigenous industry.
What is being proposed, if it is seriously intended and if the government gets away with it this time, is to provide really high protection and really to make us self-sufficient in woollens at the expense of other Canadians. If that is so I would say we are embarking upon a most dangerous course. We should know now whether we are embarking on that course. It does not matter whether you look at this from the point of view of the generality of Canadian consumers or from the point of view of those particular industries that depend upon markets abroad-the United Kingdom, Italy and Japan are the three principal exporters to us at the present time of woollen goods-it seems to me that this policy is folly. It is contrary to our interests.
(Translation):
There you have the off-hand way in which the hon. member dealt with that industry set up in Sherbrooke in 1844, which numbers more than 800 plants throughout the country and which provides employment for about 70,000 people in the province of Quebec alone. In other words, that meant that if that industry could not subsist without protection, there was only one thing to do, and that was to drop it. Previously, he had made the following remarks:
(Text):
I consider that to increase the tariff on wool against the British is a very bad thing in itself. I will say something more about that, though I cannot add much to what was said so admirably by the Leader of the Opposition on that point. But I say this is just part of the policy; this is just the prelude to an increase in the most favoured nation rate against a country which is an essential market for our primary producers. The only excuse the tariff board could find was that this industry had social significance.
(Translation):
What does this mean? Would that reason not be sufficient? Are social consequences really such a poor excuse to the introduction of legislation? Since when does the concern for social classes or some of them not form part of the considerations that should command the attention of legislators?
Most fortunately, this government considers its obligations in a very different light. In view of the difficulties facing the textile industry, the government started negotiations

with countries enjoying the most favoured nation tariff. On April 10, 1959, an agreement was reached under which the tariff on woollens with those countries was increased proportionally to the increase in the preferential tariff. On May 31, 1960, the tariff board submitted further recommendations of which the most important, on that occasion, referred to coloured cotton goods. Through further agreements involving on our part concessions in other fields than the textile industry, and without the industry in general being adversely affected, tariff rates were increased.
A lot could also be said about the negotiations which the Canadian government has successfully conducted with Japan. Suffice it to recall that on May 5, 1960, the association of Canadian clothing and textile manufacturers commended the government for having, and I quote:
-tried to restore order and logic in our market which was upset by Japanese exportations.
And the president of the association, Mr. Peters, added:
Had it not been for the determination shown by the Canadian government in its discussions with the Japanese authorities these last months, the dangerous inflow would have been devastating.
Just a few weeks ago, the house was told by the Minister of Finance that Japan had consented to new voluntary quotas for the year 1961.
The present proposals of the Minister of Finance concerning textiles are pursuant to the logic of this policy. It is not surprising therefore that these last days, Mr. G. B. Gordon, president of Dominion Textile, stated that he was hopeful because of the firm intention of the Minister of Finance to avoid resorting to the most rigid forms of GATT during tariff renegotiations.
True to the imperatives which inspired the budget he brought down in December, which was aimed at reducing the flow of foreign capital to Canada and at encouraging Canadians to invest in their own country, the minister has also proposed a certain number of monetary policies which have already had an effect on business. The reduction of the interest rates will stop Canadian borrowing on foreign money markets and will stem the tide of imported capital. His task will be all the easier since the federal government will strive to put as little pressure as possible on the bond market.
The Budget-Mr. Dorion
To achieve that end, the government will finance its operations through short term credit and leave the whole long term bond market to municipalities, provinces and private enterprise. In that same frame of mind, the bonds which constitute the reserve of the unemployment insurance fund and are negotiable at any time will be replaced by nonnegotiable bonds. Moreover, to free the market, a government bond redemption fund will be created with a capital of $100 million, which will enable the buying of government bonds on the open market. Finally, the funds of the industrial development bank will be increased from $160 million to $400 million. Financing means available to our business firms will be increased accordingly.
It is with a feeling of relief that all those measures and others of a similar nature have been received throughout Canada. Among a great number of views expressed by both labour and business there is one which seems to summarize them all and which I would like to quote. It was expressed by Mr. F. D. Mathers, president of the Canadian Manufacturers' Association:
Of particular significance are the measures aimed at the devaluation of the Canadian dollar, as well as those reducing interest rates. The abolition of the excise tax on new automobiles and the tariff changes announced should help the industries concerned. Those items in the budget as well as the broadening of the industrial development bank's field of operations, the increased allowances for capital depreciation and for expenditures relating to scientific research, represent so many encouraging factors which, within the budget, should have a beneficial effect on employment opportunities.
In the establishment of the economic policy, the government's contribution must first of all be of a supplementary nature. It consists in promoting the co-ordination of efforts and in providing the community with general and specific means likely to make private enterprise more productive. To meet this requirement the present budget includes both fiscal and monetary measures. In the government's pursuit of policies leading to economic recovery, both types of measures are as related to one another as a pendulum to a clock. That is why obstacles had to be removed. I am confident that thanks to the hope which the minister's budget has given to the Canadian people, to the combined efforts of labour, business and finance, to that spirit of industry, co-operation and mutual help which prevails within the Canadian community, he will achieve the happy results we expect and will largely contribute to restore the economic independence of our country.

The Budget-Mr. Robichaud


Mr. Boulanger:: Mr. Speaker, could I direct a question to the Secretary of State? Following the changes which were made in the Customs Tariff, could the Secretary of State tell us first, how much the textile industry has benefited from the measures mentioned, and second, whether it is true that the domestic production of Canadian industries has fallen from 52 per cent in 1956 to 47 per cent in 1960?


Noël Dorion: Mr. Speaker, I am not in a position to ascertain the figures the hon. member is quoting. But I believe it is beyond all question that evidence given by Mr. Gordon bears out that the present budget of the Minister of Finance can help the textile industry in Canada.


Lionel Chevrier: Would the minister permit a question? Is he aware of the evidence given in the other place by Mr. Berry, chairman of The Primary Textile Institute, to the effect that in the last 3J or four years, the number of textile workers has dropped by 25,000?


Noël Dorion: I am not aware of those figures, but I am aware of the evidence that was given and I admit that the figures given by my hon. colleague may be correct. Yet, what I said remains true. It is the result of a policy of the former administration, which had taken no account of the textile industry and had resulted from the principles laid down by the hon. member for Bonavista-Twillingate (Mr. Pickersgill), as shown by the quotations I read a few moments ago.
(Text):


Mr. H. J. Robichaud (Gloucester):: For the
last 30 minutes we have listened to the Secretary of State trying to prove to this house that on March 30 of last year the Minister of Finance introduced a budget forecasting a surplus of $12 million and that on December 20 this forecast resulted in a further baby budget forecasting a deficit of $286 million, which has resulted on March 31 of this year in a net deficit of $353 million.
I feel it has taken a long time for the hon. gentleman to extend all his congratulations to the Minister of Finance. However, it now appears obvious that the members of the mutual admiration society have settled their strike after having been instructed by the dictatorial head of the government to keep


mum during the last two days of discussion of this budget. They have finally realized that such an attitude is not good for the proper conduct of parliamentary debate and not in the interests of the country. Probably this morning someone has brought to their attention an article which appeared in today's Globe and Mail entitled "Parliament's Business". I wish to put on record one paragraph of this article, which reads as follows:
It would be a mistake, for example, to attempt to cut short the current debate on the budget. Finance Minister Donald Fleming's proposals are among the most important business to come before this parliament and neither the government nor the opposition parties should attempt to stifle reasonable expression of opinion from the back benches.
As I have said, it now appears that this article has had some effect on the government side, because it now seems obvious that they intend to participate in the debate on this budget.
In introducing his budget on March 31, 1960 the Minister of Finance stated, as reported on page 2670 of Hansard:
Last year we emerged from a recession which has been caused by a number of factors.
Here we are on June 27, 1961, 14 months later, and according to the minister's present budget which is now under discussion we are still emerging from the recession. The Minister of Finance was not the only member of the cabinet who expressed similar views. Two months previously, as reported on page 517 of Hansard on January 29, 1960, the Minister of Labour (Mr. Starr) said this in the house:
What about the recession? Everybody knows the recession is over. Everybody, that is, except hon. members opposite, particularly the hon. member for Essex East and his group.
Only one month later, on February 17, as reported at page 1164 of Hansard, the Minister of Public Works had this to say:
Although heavy government expenditure and government deficits are appropriate in times of recession I think we will all agree that in normal circumstances government expenditures should be limited to our income.
Now, every member of this house recalls the presentation of the budget on March 31, 1960. Every member of this house recalls the applause and desk thumping by supporters of the Minister of Finance when he announced that with revenue estimated at $5,892 million and expenditures at $5,880 million, he expected a surplus of $12 million for the coming year. It was on that occasion that the Minister of Finance said he was confident that employment would increase as the coming of spring opened up new job opportunities and as the economy, to use his words, continued its upward trend. As we on this side of the house said at the time, the only cure in the mind

of the Minister of Finance was to hope that unemployment would disappear with the melting of the snow. As the snow disappeared unemployment decreased to some extent, but within two or three months it had increased again to a record high and has remained at that level since. In fact the last report made public by the dominion bureau of statistics indicates that at the end of May of this year unemployment in Canada was 30,000 higher than it was at the same date last year.
I suggest we have here a government of confusion which has refused for two or three years to admit that there was a recession; a government which refused to admit that there was unusual and abnormal unemployment in this country. This is the government which refused to recognize the recession but which told us two years later that the recession was over and that we were then emerging from it.
Let us see what the Minister of Finance had to say about the government's tax policy at the time he introduced his budget on March 31, 1960. As reported at page 2681 of Hansard for that date the Minister of Finance is recorded as follows:
The fiscal policies we followed during our first year in office had a major influence in reducing both the depth and the duration of the recession, and by the third quarter of 1958 the low point of the recession had been passed and the forces of expansion began to gather momentum. By the spring of 1959 recovery was well on the way, and in my budget speech a year ago I recommended to this house policies which were designed to bring us back to a position of budgetary balance as soon as the economy had recovered the losses of the recession and was moving firmly forward and upward to new record achievements in production, employment and investment.
The minister then carried on to say:
The position we have now reached, with its sound prospect of a fully balanced budget,-
He insisted upon having a fully balanced budget. Then to continue his statement:
-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. It began with the great conversion loan of the summer of 1958 which made possible a policy of sound debt management which in turn restored public confidence in government credit and in our determination to control the powerful forces of inflation. It was continued in the expenditure controls and the tax changes of 1959, and is reinforced in this year's program of reduced controllable expenditures balanced by the continued promotion of constructive national development.
I ask what have been the results and what have been the fruits of these supposedly carefully designed policies carried forward by the present government over the past 18 months. The policies of the present government were so carefully designed and put forward that within nine months the Minister 90205-6-450
The Budget-Mr. Robichaud of Finance had to introduce in this house the baby budget of December 20, 1960. As a result of the supposedly carefully designed policies of the government the $12 million surplus of March 31 had been dissipated and in the minister's misconception there was born a new baby, a forecast deficit of $286 million. Furthermore we learn now, five months later, that this second forecast of the Minister of Finance has been wrong again, and from these carefully designed policies of the government the deficit is now increased to $353 million. In other words the December 20 baby has grown by another $77 million in a period of less than six months.
That was the result of the carefully designed policies of the present government; policies under which the debt of this country has increased by over $1,500 million in the last four years; policies under which unemployment in this country has reached a record high comparable only to that period of the hungry thirties when again there was a period of Conservative government. I ask, has this country ever before in its history seen more confusion, lack of policy or lack of leadership than it has from this government?
This is the government which, in 1957, told the people of this country that every Canadian man, woman and child was having his or her pocket picked by $30, and that every Canadian family was overtaxed by $120. This is the government which told the people of this country that it was time to take the unrepentant tax masters off the backs of the Canadian people. Those words were repeated throughout the campaign again and again by the Prime Minister.
Mr. Speaker, I ask what has been the fiscal record of this government since it took office in June, 1957. The record is as follows. In 1958 there was a deficit of $38 million; in 1959, a deficit of $609 million; in 1960, a deficit of $413 million; in 1961, a deficit of $300 million; an estimated deficit for the current fiscal year of $650 million, and there are clear indications now that it will likely be much higher than that. There has been deficit after deficit.
Notwithstanding these deficits the present government by its carefully designed policy has, in the last four years, dissipated a fund of $900 million which was reserved for unemployment insurance to protect the labour class of this country. In other words the record of this government-a blue government, always in the red-is that in the last four years it has added some $750 to every Canadian taxpayer's load. That is the government which, after its first year in office, blamed the situation on an administration which had left it with a $500 million surplus and a fund for unemployment insurance of
7118	HOUSE OF
The Budget-Mr. Robichaud over $900 million, with an average 3 per cent to 3 J per cent unemployment average in this country. This is the government which, as I said earlier, through statements made in this house by its Minister ol Labour and its Minister of Public Works, made it clear over 18 months ago that the recession in this country was over. These statements were confirmed in no uncertain terms, as I have shown, by the Minister of Finance in the presentation of his budget of March 31, 1960.
In introducing the present budget last week the Minister of Finance said, as reported at page 6642 of Hansard of June 20, 1961:
When there Is a substantial degree of slackness in the economy, in the form of excess productive capacity and idle manpower, budget deficits can provide an important stimulus.
We have had deficit after deficit since this government took office, and we are still waiting for the important stimulus to which the Minister of Finance referred. The minister then went on to stater
By means of such a deficit the government, through its expenditures, places in the hands of the public substantially more purchasing power than it withdraws through taxation. If appropriately planned and timed, a substantial deficit can encourage higher levels of output, employment income and savings, without incurring risks of inflation.
I repeat, this is what this government has been doing since it took office in 1957, and it has failed to create that stimulus which should have benefited the economy of this country. In view of the highest series of deficits in Canadian history, such as the $609 million in 1959 and the $413 million in 1960, has this government succeeded in obtaining the results which it claims it now can achieve with the present forecast deficit of $650 million? If it could accomplish nothing but unemployment in the last three or four years, how can we expect a deficit of $650 million this year to revive the Canadian economy?
I want to repeat what I have said before in the house; that the present government, with its Minister of Finance, is shirking its responsibility. In the first two years of the present government the previous administration was blamed for the state of affairs in the country. When at last they found that their "what would you do" questions were not being taken seriously any more by the general public, they had to put the blame on someone else. We had such statements as we have heard on many occasions from the Minister of Finance and other ministers of the government to the effect that the rate of economic expansion in Europe had shown some hesitation and was having an effect on our country; that conditions in the United States were responsible for the slow-down in Canada.


Donald Methuen Fleming: Don't kid yourself.


Hédard-J. Robichaud: Let us see what the Minister of Finance had to say about this very same problem just a little over a year ago, on March 31, 1960. I quote the minister's own words as recorded on page 2673 of Hansard:
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 rate for a decade.
An attempt by the government artificially to lower the external price of the Canadian dollar would involve borrowing or raising by taxes very large sums of money with which to buy up foreign exchange. It might well be that the government could not reduce the inflow of funds sufficiently without imposing direct controls on capital movements and then on the movement of goods. Apart from the economic objections to such policies it would be a very difficult matter to work out effective technical means of control. Even then the controls would not be effective unless the objective were one which commanded the broad public support which is necessary for general compliance. In other words we would be embarking upon a gigantic financial speculation with no assurance of success.
It would be interesting to know the reasons for such a transformation in the minister's attitude toward devaluation of the dollar. It seems to be generally agreed that had the premium been forced down and kept down some years ago it would have helped Canada keep down the rising costs which now menace our economy. We ask the question, are high living costs going to result from the new policy of the government? We already have indications which lead us to believe this will be the case. With such high costs part of our general way of life, we ask ourselves how effective this action to reduce the dollar premium will be. If the government, even with $1.5 billion in successive deficits, has failed to provide an incentive to promote business and stimulate expansion, how does it expect to succeed by the implementation of these policies? Where is this relief from high costs, this relief from high taxes about which the minister was talking when sitting on the opposition side of the house? The Minister of

The Budget-Mr. Sevigny Finance must admit he has failed to introduce a program which will lift the economy out of the doldrums. He is offering too little too late.
The incentive needed for a move forward is not found anywhere in this budget. The 1961 budget may be described as a deluge of words which will dry out with time, without producing any satisfactory results. This budget is a confession of failure when viewed in the light of the promises of a balanced budget, fiscal responsibility and a free exchange rate. Doubts, and very serious doubts, are being expressed throughout the country on the uncertainty of the measures introduced for the purpose of stimulating the economy. What is needed is a program which will result in peak employment and promote a boom in the economy. Such a program is not included in the present budget.


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


Hon. Pierre Sevigny (Associate Minister of National Defence):: Mr. Speaker, it is most interesting to note the comments from all parts of the country on the budget introduced in the house by the Minister of Finance, on June 20 last.
This anxiously awaited budget seems to have caused a pleasant surprise to those who are interested in the development of the Canadian nation and who were wondering what action would be taken by the government as regards present problems.
Mr. Speaker, before coming to the heart of the matter and expressing my views about some of the measures contained in the budget, I should like once more to emphasize the harm done to our domestic and external economy by that policy of doom and gloom advocated for too long by both parties of the opposition. By incessantly harping on unemployment, by predicting large, tragic disasters, by repeating on the hustings, over the radio and on television that the Canadian economy was going to pieces, the Liberals succeeded in bringing about such unfortunate results that the effects are still felt both in Canada and abroad.


Mr. Habel:: That was the present government's doing.


Joseph Pierre Albert Sévigny: The misgivings thus sown in the hearts of Canadians have succeeded in checking development projects in many industries and the building projects of several contractors. A large number of Canadians
IMr. Roblchaud.]
were prevented from putting their money in circulation by buying a car, furniture or a house.
We succeeded, in spite of our opponents' efforts to the contrary, in putting our economy back on the high road to new records, but the government is convinced that the expansion could have started earlier and would have achieved more progress if our friends opposite had not spread fear and even dread in the minds of Canadians with such utterances of gloom and doom so often made by the leaders of both opposition parties.
Even more unfortunate is the fact that foreign newspapermen got hold of the speeches made by our hon. friends and have made no bones about saying everywhere that Canada is no longer the country with a future for everyone, but a land of depression with nothing but unemployment, gloom and misery.
And I urge the members of the opposition to read the articles of certain English papers like The People, The Observer, News of the World and others. They will find that far from praising Canada, foreign reporters, inspired by speeches that had been made right here in Canada, almost advise English and European people to stay away from Canada and to keep their investments away from this country.
The consequences of that attitude are already being felt as far as both investments and business are concerned and I, for one, feel sure that Canadians will have to work hard to give Canada back its reputation, which the opposition has unfortunately and perhaps unwillingly succeeded in tarnishing.
It is one thing to yearn after political power, but it is another to try to get it by any means.
I sincerely hope that the day is not too far off when our opponents will finally learn what it is to indulge in petty politics, to place the interests of a party above the better interest of the nation.


Joseph-Alphonse-Anaclet Habel: You have learned it in the past three years.
(Text):


Joseph Pierre Albert Sévigny: If the budget has been so well received in financial, business, banking and commercial circles, it is because the experts recognize that in many ways the budget is an attempt to use fiscal and commercial policies for national purposes. A definite effort is being made to arrange the various taxes in a fashion which will be helpful and stimulating to many segments of the economy.

The government has never claimed that it could, by itself, correct all the ills and worries which have afflicted the businessmen of this nation during the last few years. However, the government does accept the view that business climate-making is one of its basic roles. It has become obvious that because of the measures adopted in last year's budget and also in the so-called baby budget of last November, the bottom of the recent slump has been passed and that our nation can look forward to a long period of definite prosperity. The present budget will permit the business indicators in the forthcoming months to mark progress, and there is no doubt that the people of this country will give credit where it is due. That is to the Conservative government, which has given to Canada a budget which will contribute to the expansion of the nation. Even our severest critics will admit that the budget contains a large number of items which will be beneficial to Canada. In answer to the hon. member for Kenora-Rainy River who seems to be so engrossed in his newspaper, I will now name only a few.


Mr. Benidickson:: I am listening.


Joseph Pierre Albert Sévigny: I cite the encouragement of research in Canada, the extension of the functions and powers of the industrial development bank-


William Moore Benidickson: It was the financial experts I wanted the hon. member to talk about.


Joseph Pierre Albert Sévigny: -which will certainly slow down the sell-out of Canadian businesses. The measures affecting the bond markets make sense, and the announced plan for a thorough examination of our financial institutions is timely and a positive necessity.
The positive improvements and the original thinking which is at the basis of this budget indicate the amount of work that went into its preparation. Some will ask how it is that these measures were not adopted previously. The answer lies in simply stating that there is still a great deal to be done, that caution must at all times be exercised in view of the inflexibility of the present situation, and that great thought must be exercised before stepping forward in any manner or form.
There are, we know, some serious problems which confront the Canadian leaders. The question of chronic unemployment is one. The slow moving upsurge of our secondary manufacturing industries, the serious problem of the continuous increase in foreign ownership, and the imbalance in our foreign payments are all problems of deep concern to those interested in the financial and monetary future of Canada. These basic problems exist and are recognized by the government. It will also be recognized by the people that
The Budget-Mr. Sevigny the measures contained in the budget are steps in the right direction and are intended to correct these ills which unfortunately affect this nation.
There has been a great deal of talk concerning the effects of large imports into our country. There is no doubt in my mind that many industries are seriously affected by the determined efforts of our competitors in foreign lands to rival our Canadian products in our own domestic fields and also in other countries where we offer our merchandise. The problems of these affected industries are of deep concern to us, and we are at all times studying all questions which may permit us to help the situation of these affected industries.
However, it is rather obvious that we cannot tolerate the threatened destruction of certain industries by an exaggerated flow of imports. It also must be realized that if we expect to sell our goods in foreign lands, we must also expect to trade with other countries and to give to foreign businessmen a chance to offer their products to the Canadian public. If we build a thick tariff wall around our nation we shall quickly discourage foreign merchants from considering Canada a nation with which they can trade, and we shall isolate ourselves completely from world markets. This, of course, is most undesirable and cannot be contemplated seriously by those who study the economic picture.
The answer to our problem lies instead in an ever increasing flow of exports which will mean increased production by our manufacturers with the resultant additional employment of labour and the inevitable expansion of premises and manufacturing capacity. In order to increase our exports to foreign lands a high pressure and very effective campaign has already been started by the Minister of Trade and Commerce in order to sell Canada, to sell Canadian products, and especially to sell abroad Canadian know-how. This campaign has been started, is progressing and is bringing immediate results.
In order for this campaign to gain steam it was necessary to take a long, hard look at the present price structure of our products in comparison with the prices of similar goods produced in competitive nations. The study made us realize that in many sectors our Canadian products were possibly not overpriced if we looked at the price structure according to domestic patterns, but were certainly offered at prices which were unattractive to foreign buyers. It is just plain common sense to accept the fact that if a buyer considers two products of similar quality he will almost inevitably purchase the article offered at a lower figure; and it is futile to hope that results can be achieved

The Budget-Mr. Sevigny by those who maintain a rigid price structure and remain inflexible in their bargaining tactics.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
Joseph Pierre Albert Sévigny: Mr. Speaker, at one o'clock I was in the process of explaining the nature of the very strong export drive which had started in Canada, promoted by this government, in order to interest more and more foreign buyers in the quality and the worth of products manufactured in our land. I was mentioning the necessity of being competitive in the pricing of our products, and that it was impossible for Canadian manufacturers to hope to secure orders unless they could offer products of equal quality at prices which were close to those of our competition. I was explaining that the only way we could expect a heavier flow of business was by getting more and more orders from people interested in what we could produce and making these people aware of the fact that our prices were competitive.
It is of course extremely important to bring our prices in line with those offered by our foreign competitors. In this particular field government can help, and the government in fact has done just this in the recent moves which will produce the devaluation of our dollar, which is already quite evident, on world markets. In order to give help to those interested in the export field it is logical to reduce the value of our Canadian dollar. It must be remembered that one of the reasons for Canada's enormous expansion in the immediate post-war years was the fact that our dollar was then below the value of the allpowerful United States currency. There is no doubt that a devalued Canadian dollar will give our merchants an additional incentive which they need to offer Canadian products at competitive prices.
This will mean more sales, more revenue for our manufacturers; and there is no doubt that this additional revenue will be used to expand industries and production facilities. There is also no doubt that since research will be tax free, according to the measures introduced in this budget, a vast program will be undertaken by both our larger and our average industries to improve existing facilities and also in order to find new products which can be produced in Canada and sold in our domestic and foreign markets. This will mean more production and more jobs for our people.


The government is doing its share in this respect, but it must be realized by all Canadian people that government cannot do it all alone. If business is to increase, prosperity will ensue mostly through the combined efforts of all those interested in Canadian trade and Canadian industry. It must be realized that it is a fallacy to expect that this can all be done by the government alone. Charity well ordained begins at home, and those interested in their own welfare must themselves make the individual effort necessary for the prosperity of their business.
There are two things that should be done by private enterprise people in order to increase the amount of business that can be done here in Canada. First of all industry must take a close and very hard look at its price structure and accept the fact that although higher prices may in some cases mean higher revenues, they will also mean a smaller flow of trade. Industry today must try to make its profit more through a large volume of business than through high profits on the individual items.
Industry must also accept the necessity to co-operate with the labour force of Canada. It may be that additional people could be employed if more people worked fewer hours in various factories. Industry must continually be ready to discuss its problems with the labour leaders in a spirit of friendship and co-operation. On the other hand, labour must realize that incessant demands for higher wages or increased benefits can quite easily paralyse the well-ordained plans of industry. Labour must realize that threats which too often result in disastrous strikes are not the answer to the welfare of the individual worker or to the expansion of individual industries. Labour must try to adjust its requests to the capabilities of the employers and only thus, through co-operation between labour and industry, will we achieve the results we seek.
The budget indicates that the resources of the industrial development bank will be increased from the present $160 million to about $400 million. This is a step in the right direction, since it means that a large number of Canadian firms will be permitted to avail themselves of the facilities offered by the industrial development bank. There is no doubt that this is preferable for those who wish to expand to borrow from Canadian sources and pay interest in Canada rather than go to the United States and elsewhere to secure the capital sums required for expansion. The main aim of this extension of the services of the industrial development bank is to help Canadians retain ownership of their companies instead of having to look abroad for new

capital and new investments. This will certainly help all firms which have problems arising from financial consolidations and changes in ownership.
There is no doubt that this question of financing or refinancing private enterprise has presented a very serious problem to the industrialists and manufacturers of this nation. Too many of our people have had to go south of the border or to European countries to try to secure the necessary funds to finance the expansion of their existing business or to build and open up new businesses. Yet there is, here in Canada, a vast source of money, and by affording to our people the chance to borrow this money from the industrial development bank and pay the interest which is normal on such loans we shall make it possible for this money to remain in Canada and work for the better interests of Canadians, thus in the long run enriching the citizens of this country.
There is too little time at my disposal to emphasize the definite gains which will be derived from the new budget by those interested in the automobile industry, the textile industry, the electronics industry and so many other fields of Canadian endeavour. But a study of the budget will permit the realization that this budget has been prepared by men who understand that the expansion of Canada is closely related to the prosperity of our Canadian businessmen. All will benefit from the dynamic measures contained in this expansionist budget, and within a very short time the useful effects of the minister's strategy will be felt in all sectors of our economy. They will be of benefit to Canadian industry, to Canadian business and, in particular, to the labour force and Canadian farm industries.
(Translation):
Before I conclude my remarks, Mr. Speaker, I should like to say a few words in particular to the people of the province of Quebec who take an interest in the economic life of the country. The Minister of Finance's budget presents some most interesting aspects this year. The concern for economic expansion which is apparent in each and every one of the measures which were announced, should please all French Canadians who have, for a long while, been trying to find means of enabling our fellow citizens of the province of Quebec to participate more and more in the economic life of the country.
Mr. Speaker, the people of Quebec have made giant strides in the past 15 years; everywhere in the province, one can see flourishing industries managed by our people and projects which will certainly lead our businessmen to unprecedented achievements.
The Budget-Mr. Sevigny But as I said earlier, this economic development that keeps growing from day to day does not come about of itself. The government alone is unable to ensure the economic welfare of the nation, neither is it possible for businessmen, tradesmen and industrialists of Quebec to expect reaching the required level of prosperity if the federal government does not give them help, if possible. Fortunately, we note that confidence now prevails among businessmen, on the one hand, and government authorities on the other hand, and I am convinced that the businessmen of my province, the financiers, the industrialists, in a word, all those interested in the steady development of our economy, will welcome the Fleming budget as a progressive measure likely to enable the province to forge ahead toward further achievements.
Mr. Speaker, there is no denying that the province of Quebec has undergone tremendous development in the past 15 years, and whatever my hon. friends in the opposition may say, I think a large part of the economic success of our province was due to the man who ran the province during that period. I therefore pay tribute to a great Canadian and a great Quebecker, the Hon. Maurice Du-plessis, who did more than his share to enable the French Canadians to develop the potential that existed in the province and to take advantage of all the wealth that was to be found.
Today, steps are being taken to promote economic development in the province. Everywhere we see chambers of commerce and civic action groups at work, trying to improve the conditions of industry and trade in our community and to find means of developing the tremendous natural resources, of which we have barely scratched the surface, in our land.
I am sure the Fleming budget has been hailed with respect by Quebec business people, because they realize it contains provisions that are likely to help the future economic development of the province. It is indeed unfortunate that our opponents, instead of realizing that this budget represents an economic effort that will enable the whole country to go forward, again only repeat the same old songs of depression, poverty, despair, and the same prophecies of gloom and doom for the future. If at least they could occasionally come forward with constructive suggestions that could perhaps enable us to further improve present conditions, we would gladly accept their criticism, but as long as

The Budget-Mr. Winch their remarks remain destructive rather than constructive, I feel that we and every right thinking citizen of Canada should support and thank the Minister of Finance for so ably introducing a truly constructive budget.
(Text):


Harold Edward Winch: Mr. Speaker, it is not my intention at this stage of the budget debate to be repetitive in any way in respect to the remarks I made when we were discussing the subamendment. However, because of the limitation of time it was not possible for me at that time to comment in respect to one or two aspects of the presentation made by the Minister of Finance in relation to which I desire to speak this afternoon. I personally feel it rather imperative to answer some of the statements which have been made by the cabinet ministers and backbenchers of the Tory party who have spoken in regard to this matter.
In particular I should like to make some comment regarding the speech we have just heard delivered by the Associate Minister of National Defence. I noted that in the last words of his English presentation he made comments in respect to what he called the Fleming strategy. I suggest it would have been far more appropriate for him to refer to it as the Fleming tragedy. If we try to assimilate the speeches of the Minister of Finance, the Minister of Public Works and the Associate Minister of National Defence, we can only arrive at one conclusion; it is conclusively apparent that the Tory government since it took office some four years ago has been slipping and drifting along with no more knowledge of its destination than a blind man on a raft floating somewhere between the coast of British Columbia and the coast of Hawaii.
It is not very often that I become incensed in this house, but the Associate Minister of National Defence made one remark which, if he had said nothing else, should certainly have brought me to my feet. I refer to that despicable statement he made almost at the beginning of his presentation to the effect that both parties in opposition were doing a disservice to Canada and bringing disgrace upon it because they had the temerity and the daring at this session of parliament to rise not once but many times regarding the serious problem of unemployment. I say that is a despicable statement. He may expect Mr. Coyne to shut up and say nothing, but he need not expect those individuals who realize their responsibilities as members of parliament to do the same.
[Mr. Sevigny.l

I have the honour to represent, as I have represented for a great many years, a constituency in Vancouver which is strictly a working class residential area. After representing it as an M.L.A. and M.P. for 28 years I feel I know my responsibilities to the residents, and one of those responsibilities has regard to employment. If they are unemployed I maintain it is my duty to seek an answer to the situation. According to the Associate Minister of National Defence, to do so is to do a disservice as a member of this house to the people of this country.
I should like to draw to his attention and to the attention of all hon. members of this house the situation which exists in my home city. According to the records I find that from March 1, 1960 until March 31, 1961, a period of 12 months, the unemployment insurance office in the city of Vancouver paid out more than $25 million in unemployment insurance benefits. Why has that office had to do that? I suggest the answer lies in the fact that during that 12-month period there were 134,000 applications for unemployment insurance benefits. Let us not forget that although there may have been 134,000 applications and $25 million paid out in unemployment insurance benefits during that 12-month period, that is not the grand total of unemployment, because many thousands of individuals were not entitled during that period to unemployment insurance benefits.
What do the figures show in relation to the Vancouver unemployment insurance office during that time? Those figures show that in January of this year there were 40,651 individuals drawing unemployment insurance benefits from that one office in Vancouver at a cost of over $3J million. Because this government always likes to refer to the lesser figure, let us consider the best month of that 12-month period, which was July. In July, 20,945 individuals were drawing unemployment insurance benefits from that one Vancouver office at a cost of over $1 million. Taking that 12-month period from March 31, 1960 to March 31, 1961 we find that the average number of unemployed individuals was 5,000 more than during the same period a year before.
The Associate Minister of National Defence has the unmitigated gall to say that because we are representing the people in our constituencies in respect to this matter of unemployment in an attempt to do whatever is possible, we are doing a disservice to this country. Let me suggest that it is not a disgrace to be a responsible member of parliament and to question the government's policy in regard to this situation, but that it is a disgrace on the part of the government,

because it has done nothing about it and has not found a solution to the problem.
I suggest the Associate Minister of National Defence should study basic economics before rising in this house, if he has a desire to intelligently discuss a finance budget. What did he say in this regard? He said, and I quote his words: "Canadians will have to work harder to overcome our disgraceful name overseas."
I think Canadians are prepared to work harder, Mr. Speaker, but we have between 30,000 and 40,000 in the Vancouver area who would love to have the opportunity to work at all, let alone work harder. Produce your policies to produce the jobs. The Associate Minister of National Defence said that really hard work went into the budget. I suppose that is true, but it is too bad that the hard work has not produced more than what we have seen so far.
But even with all that the associate minister said in favour of the budget, what did he also say? I wrote it down as he said it. He said that one of the biggest problems still facing the government is the problem of chronic unemployment. Yes, the minister said that chronic unemployment is still with us, in the same way that R. B. Bennett used to talk about prosperity being just around the corner. The budget does not solve the problem.
The minister also said that we had to be careful about tariffs because tariff walls will isolate us from foreign markets. I agree with him. But what I cannot understand is that a so-called responsible minister should get up, put forward a bunch of rotten window dressing and tell us that increased tariffs will be dangerous and will isolate us, while at the same time completely ignoring the fact that a devalued dollar is the same thing as a tariff increase. A devaluated dollar is a tariff increase because we have to pay for imports in Canadian dollars. Other countries have to export to Canada in order to obtain Canadian dollars, and if we have to pay for those goods with devaluated dollars then for every 1 per cent our dollar goes down in value it is the same as a tariff rise by a similar amount. So why should we have this type of foolishness from one who is supposed to be a responsible minister of the crown?
Why does the government completely ignore the basic facts of economics? I can still hear the eloquence and vehemence of the associate minister when he said that a flow of exports is our goal. We will all agree that a flow of exports should be our goal. We will all agree that everything has to be done to increase our exports. But there the minister stops. We are not going to export for nothing. We have to
The Budget-Mr. Winch be paid for our exports in Canadian dollars, and how do these countries get Canadian dollars unless we import?
The Minister of Finance, the Minister of Public Works, the Associate Minister of National Defence, every backbencher completely ignores that side of the balance sheet. Before we are finished with this budget I think it is going to be very interesting so far as the other side of the balance sheet is concerned if we can get an explanation of Conservative economics that will give some indication that the budget is not simply window dressing, not just wishful thinking; that the government, as I said, is not just drifting like a blind man on a raft between British Columbia and Hawaii, that they have thought things through.
There, of course, is where I challenge them. They have not thought things through. They do not know how to think things through. They are just hoping that something will turn up to rescue them from the fiasco brought about by their own complete and absolute ineptitude. If they carry on as they have for the last four years there is only one rescue, war; and God forbid that that should happen, because it would be suicide for the world. I say, sir, that I just want to take some of the statements made by the cabinet ministers who have already spoken.
However, I do not want only to be critical. Let me offer something they have not thought of that may help a bit. The Minister of Finance has brought in a deficit budget. Without doubt there are times when a deficit budget is in the interests of the country to deal with an immediately serious situation. But I think the Minister of Finance in his presentation has been absolutely unfair in bringing forward a deficit budget without national planning. Let it be remembered that the deficit budget of $650 million-and I do not agree with that figure because with the borrowing they are going to have to do it will be over $1 billion-is tied in with the three previous deficit budgets, and the presentation of a further deficit budget is only an immediate solution to get the government off the hook. What they are doing about national planning is saying to our children and our children's children, "You will pay for the incompetence of this government". The deficit has to be repaid, and it has to be repaid with interest. If we know this government, the deficit is not only going to have to be repaid with interest but the interest is going to have to be paid by further borrowings involving more interest. In other words, it is our children and our children's children who are being asked to pay to get this incompetent government off the hook on which it finds
7126	HOUSE OF
The Budget-Mr. Winch itself through not being able to solve the problems to which they told us they knew all the answers.
I say, sir, this is not fair. I imagine our children will have enough problems without us passing on our problems to them. That is what will happen unless, of course, we have a change to a good government.
As I have said, I recognize that the immediate occasion may call for a deficit budget, but at the same time I believe there should be planning along with it. The associate minister said that a lot of work had gone into the budget, but I say that the work was only half done. I suggest that along with a $650 million deficit budget there should have been a policy statement involving government control of investment capital so the government could at least have some direction as to the type of productive work that would be initiated by that investment. I say there should have been a policy of control of excess depreciation reserves. Let us not fool ourselves. Corporation after corporation in Canada is cheating its stockholders, cheating the corporation and cheating the income tax department because of the way it manipulates its depreciation reserves. There should have been some provision in that regard as an offset to the deficit.
This afternoon the Associate Minister of National Defence said so piously that charity begins at home. That being so, why was there not some policy statement and planning with regard to government control of excess profits so as to do what the minister said we should do, and see that the profit-hungry corporations of this country have a decent sense of responsibility? Members may not want to admit it, but these corporations do not have a decent sense of responsibility so far as profits are concerned. They want more and more and more, and the only time they will ever behave is when they are brought under control. It was necessary to control excess profits in time of war, and I say it is still necessary in the critical period through which Canada is passing at the present time.
Yes, the Associate Minister of National Defence really made quite a remark when he said that industry must limit its profits. I am afraid industry will not do so of its own accord, and that is one reason we must have a national government policy. I have mentioned excess profits and I also mention capital gains. When I think of the many speeches about Texas buccaneers made by hon. members opposite when they sat on this side of the house, I also recall that they have been in office four years and as yet they have not done anything about these buccaneers. What is one of the big reasons why money comes into Canada? It is because the


United States has a 25 per cent capital gains tax. Canada, of all the countries in the world, is the happy hunting ground of the financial, monopoly buccaneers of the world. The minister referred to charity beginning at home, and I think it is time that Canada looked at this question of industry limiting its profits.
I could have found a deficit budget far more acceptable if the government had followed through on national planning. I have just given a few indications of what I mean by national planning. Let us go further. I am following along the lines suggested by the Associate Minister of National Defence. During the latter part of his remarks he said that our prices must be competitive. Of course our prices must be competitive if we are going to succeed in the export market. Why then, when the Minister of Finance announced the establishment of a policy to devaluate the Canadian dollar, did he not introduce policies to enable us to remain competitive in the production field?
Of course in my own province the pulp and paper and lumber industries are going to gain some advantage in export markets as a result of the devalued dollar. However, Mr. Speaker, their production costs are going to go up. Why is this? This result will be produced because none of the major machinery required in the pulp and paper and lumber industries is manufactured in Canada. It has to be imported into Canada from the United States. This imported machinery which they must have to maintain production has to be purchased with the devaluated dollar.
Government policy, therefore, is increasing the costs of production of these industries, in spite of the fact that the minister who spoke before me said we have to maintain a competitive level. If the government had thought things through, at the same time they devalued the dollar to aid our exports they would have changed the tariff level on those things which must be imported to maintain our productive capacity. If this had been done we could maintain our present cost of production and not increase it. Both sides of the question have to be considered. This has never been done by the government. They are not facing up to the issues, the practical issues, the financial issues or the economic issues. They are not wearing gold-hued glasses, they are wearing a blindfold. This is dynamite for Canada, to have a government wearing a blindfold.
What I have said with regard to cost of production is also true with regard to the cost of living. The government must have known, if they gave any thought to it at all-surely they have economic advisers who could tell them-that if you devalue the dollar you have

to pay more for your imports. I want to speak now about one thing, and that is the imports into Canada that we do not and cannot produce.
I have spoken about this in relation to manufacturing, but how about the consumers, the forgotten men and women in this budget? Is there anything in this budget to protect them from the devalued dollar as it affects the necessities of life? Has anything been done about coffee, tea, spices, or about the many other things we have to import because it is impossible to grow them or manufacture them here? A government that was thinking across the board, a government that understood economics, a government that had any interest at all in the consumer, when devaluing the dollar would have given some thought to the regulation of the economy so that as the dollar went down in exchange value the tariff would go down correspondingly on those necessities that must be imported so that the standard of living would be maintained. No, sir, we have nothing of that type. Not only does the government not take care of those things that we have to import, but they have not even protected us in relation to those things we grow and manufacture ourselves. Some of these things are already increasing in price.
What I said about the tea, spices, coffee and cocoa is also true of the imported fruits and vegetables which come on the market prior to our own. An announcement has already been made that prices on the Vancouver market for fruits and vegetables are going up this week. My hon. friend laughs. The increase may be half a cent, one cent or two cents, but this means a lot to old age pensioners, blind pensioners, veteran pensioners, in fact to everybody. When it comes to basic economics all these things have been completely ignored.
Why has something not been done directly to encourage Canadian industry? Sometimes I think they do not want to encourage Canadian industry. Let me give one example. I know of a firm that started manufacturing in Vancouver and which now has a manufacturing plant in Ontario, one which is going to mean a great deal in the future. Approximately two thirds of this manufacturer's product is produced in Vancouver or in Clinton, Ontario. About one third has to be imported from the United States. Although this manufacturer has travelled from Vancouver to Halifax he cannot find a plant that can or will produce what is absolutely essential to his product. He has to bring this element in from the United States. He is faced with excise and customs taxes on those items he is forced to import of 27$ per cent plus 10 per cent. Here is a man who is trying to develop a business in Canada and get things
The Budget-Mr. G. Campbell going, yet he is faced with customs and excise taxes of 27$ per cent plus 10 per cent on those elements he cannot obtain in Canada.
I say, sir, it is quite obvious that this budget has not been thought through, that this budget is related to only one side of the question and not to both sides of the question. It is a deficit budget, but its implications have not been considered. I do not think that is right. We hope, Mr. Speaker, that part of it which is good will really work, but we are rather afraid, because the whole budget has not been thought through, the repercussions can be serious. The rosy picture painted by the Minister of Finance and others may not be realized because they refuse to see both sides of the picture.
I want to conclude by saying, and all the supporting speeches made on the budget thus far only indicate, that it has been half thought out and that it is half baked. However, there is still time this session to rectify the omissions, and that is the most important thing. I appeal to the government and to the Minister of Finance. The well-being and the welfare of the people of Canada demand that before this parliament closes, prorogues or is dissolved, the government and the Minister of Finance in particular get busy and overcome their four years of irresponsibility and indecision and give some indication at least that they know something about government planning and administration.


Mr. Grant Campbell (Stormont):: Mr. Speaker, last week on the public works estimates the hon. member for Laurier neglected the affairs of Laurier and took up the time of this house by making another incursion into Stormont. He is either an incurable busybody or he suffers from an unquiet conscience.


Paul Joseph James Martin: Will the hon. member permit a question?


Grant Campbell: No. The hon.
member can ask questions afterwards.


Paul Joseph James Martin: It is a very reasonable one.


Grant Campbell: I shall be glad to answer questions afterwards. The hon. member for Laurier put up a smokescreen around all the damage he had done to his home constituency of Stormont by locating the seaway locks on the United States side and then abandoning this constituency like a sinking ship. Now that the present member and the government of which he is a supporter are attempting to rectify some of this damage by erecting a harbour, he is attempting to jump on the band wagon and claim credit for it. The people of Cornwall and the people of

The Budget-Mr. G. Campbell the St. Lawrence valley know that the time to have built a Canadian seaway was when the seaway was being constructed. No 27-foot channel ending in an 80-foot wall is a substitute for a Canadian seaway. The disastrous decline in tonnage on the Cornwall canal is due not to the competition of air lines, buses or trucks, as the hon. member for Laurier alleged, but is due to the fact that the Cornwall canal is now a stagnant backwater which also ends in a blank wall. The traffic now passes through the United States seaway locks.
If the new industrial complex adjacent to the seaway locks was the result of cheap power in New York state, as the hon. member contends, rather than the United States seaway locks, then why on earth did not the hon. member, who did all the seaway dealings for his government, and his provincial Liberal colleague in Ontario not endeavour to protect the interests of this area? Obviously the time to have extracted concessions from Ontario hydro was when the joint project was being constructed, at this time when the Ontario hydro were looking out for all of Ontario by putting the power from this area on the Ontario grid in the same way the power from Niagara Falls serves the whole of the province of Ontario.
I should also like to ask the hon. member for Laurier how much of the $800 million spent on the seaway that he boasts so much about went to Cornwall people, as he alleged, and how much went to Montreal and Toronto contractors. My precedessor also said that the former municipal administration in Cornwall spent $140,000 to expropriate land at Gray's creek at Cornwall for harbour purposes on the recommendation of the C.N.R. economic survey, which he no doubt ordered himself. The overburdened taxpayers of Cornwall will be very much interested indeed in knowing who is responsible for this large and so far useless expenditure, with all the interest that has accrued thereon.
Last year I informed this House of Commons of the assassination of a city by its favourite son and of its betrayal by the former minister of transport.


Paul Joseph James Martin: No one ever did as much for Cornwall as the hon. member for Laurier.


Grant Campbell: This hon. member tried to justify himself again last week on the estimates. He can twist and squirm till the cows come home, but he will not get off the hook. When I was a boy down on the farm, if a trusted dog killed a chicken we tied it around his neck until it rotted. The


hon. member for Laurier today has a chicken tied around his neck called Cornwall seaway city.


Paul Joseph James Martin: Is it eviscerated?


Grant Campbell: It is eviscerated. The people of Stormont and the people of Laurier see it every time they look at him. He is a desolate man. By night he is haunted by the ghosts of two stillborn infants called the Canadian seaway locks. By day he is pursued by two illegitimate children born of a United States mother and1 called the Eisenhower and Snell locks. There are persistent rumours in northern New York state that the people of Massena, the village across the river from Cornwall, are going to erect a suitable monument to the father of the Snell and Eisenhower locks. They say that that mausoleum in Cornwall, that consolation prize for Cornwall-I refer to the St. Lawrence seaway headquarters building which he erected as a monument to himself-is not appreciated there. It is located in the wrong country.
I did not intend to go into the matter of the budget, but I cannot allow this opportunity to go by without saying a few words on unemployment insurance and the budget. I firmly believe that this latest budget will do very much to hasten the economic recovery which is evident not only in Canada but in the United States. However, it is quite possible that with the increased automation we have throughout North America and indeed throughout the world we shall still have a large measure of structural unemployment even during periods of economic booms and expansion. If so, I should like to make a few suggestions regarding unemployment insurance and such matters for the consideration of the government.
My first suggestion is this. I believe it is desirable that the age of retirement be lowered to 60 years and that we spend more money on contributory old age pensions and less on unemployment insurance. It is desirable that older men enjoy the evening of their years in comfort and leisure so that men in the prime of life can have the jobs that will provide for their families and enable them to retain their self-respect.
I now proceed to my second suggestion. British Columbia fishermen have been known on occasion to make as much as $8,000 to $10,000 in several months if they get an exceptionally good catch. Loggers sometimes make the same amount during a cutting season of five to six months. Women who happen to be married to prosperous businessmen or professional men often quit work after a few months owing to pregnancies or for other reasons. In each of these three

cases, and no doubt in other similar instances, these people draw unemployment insurance for the remainder of the year. When the breadwinner of a family has a total annual income exceeding a certain ceiling-and that ceiling, of course, can vary with the number of children or other dependents-I believe that he or his spouse should not be eligible for unemployment insurance for the remainder of that year. If the regulations were changed in this respect it would not only reduce government expenditures but would be conducive to thrift, self-reliance and independence in our people.
My third and final suggestion with regard to unemployment is more far-reaching. I believe there should be a fluctuating scale of unemployment insurance payments varying with the degree of unemployment in the country. When unemployment is high the payments could be almost as high as the average person's income over the past three to five years. These high unemployment insurance payments would maintain consumer purchasing power at a high level, thus encouraging production in the country and increasing the number of jobs. When prosperity returns; when unemployment drops and jobs are plentiful, then the unemployment insurance payments could be reduced to a mere subsistence level. When unemployment is high, if some loafers do not want jobs it does not matter very much anyway because there are no jobs available; but when jobs are plentiful the low payments would induce them to go out and find one.
I realize that these suggestions will require very careful study and I think they would be difficult and complicated to administer. But if we can invent atomic bombs, it should not be beyond the wit of man to devise practical means of providing economic security in such a rich country as Canada. These suggestions with regard to unemployment insurance have the great merit, in my opinion, of fitting into our present economic system with a minimum of dislocation and without resorting to a socialistic planned economy.
I cannot resist a few comments on the budget and on the crisis in the Bank of Canada. First let me commend the Minister of Finance (Mr. Fleming) for resisting the urgent demand of the governor of the bank that he raise income taxes. Let me commend the minister on the aid his budget has given to the hard pressed textile and automobile industries. Let me further commend the minister on increasing the scope and resources of the industrial development bank. More than one motel in Stormont that I know of will be saved from bankruptcy if they take advantage of these provisions.
The Budget-Mr. G. Campbell
Let me especially commend the minister on reducing the exchange value of our dollar, which is the equivalent of a 5 per cent general increase in tariffs, to protect secondary industry at home and a 5 per cent general reduction in costs to assist our primary industries to sell abroad. Nothing could possibly do more at this time to stimulate our economy than this measure. Mr. Coyne's proposal, for a 10 per cent surcharge on tariffs, may be desirable but, like most of his suggestions, it is academic and entirely impractical because of our international treaty obligations, many of which were incurred by our predecessors.
Let me further commend the minister on his responsibility and restraint under extreme provocation in trying to work out some peaceable basis of co-existence with Mr. Coyne until his term of office expires at the end of this year. The minister did all that was humanly possible to avoid bringing the Bank of Canada into disrepute, but the governor's exhibitionist antics in calling an unprecedented press conference, in releasing his own budget statements and in exposing numerous confidential letters caused this whole unseemly explosion. Let me finally comment the minister on his refusal to bring this matter before a committee of the House of Commons, which would produce the kind of circus that would cause a crisis in confidence in the economy of this country throughout the world.
May I say also to the minister that if I were minister of finance Mr. Coyne would long ago have been fired as he deserved, and he would have been exposed to the ridicule of a parliamentary committee as he requests. That is probably one of the reasons why I am not minister of finance. May I say, further, that he would probably be in jail for misappropriation approaching larceny in using the facilities of the Bank of Canada to promote his private purposes; or if not on that indictment, for a breach of confidence approaching perjury in broadcasting the internal affairs of the bank in defiance of his oath of office.
In this whole unsavoury matter we must not lose sight of the fundamental issue involved. This fundamental issue is very, very simple indeed. It is this: who is running the country? Is it parliament and the people, or the bankers and the bureaucrats? The last time any parliament set up under the British system was challenged to this extent by any one man who was not representing the people was in 1611-and King Charles lost his head. If the Liberals had any conception at all of how our constitution works they would not be defending Mr. Coyne; they would be impeaching him, for he has usurped the functions of the Leader of the Opposition (Mr. HOUSE OF COMMONS
The Budget-Mr. G. Campbell Pearson) whose prime duty it is to criticize the government. There Js an old proverb, Mr. Speaker: Whom the gods would destroy they first make mad.
I have here a fantastic letter, a letter such as never before in this country has passed between a public servant and a people's government. It is the latest scandal sheet put out by Mr. Coyne. The instigator of this scurrilous letter could only be the same pathological man whose conduct we witnessed in the House of Commons last night. May I ask the hon. member for Bonavista-Twillingate (Mr. Pickersgill)-I see he is not here, but I shall ask him at the earliest opportunity; no doubt my words will be conveyed to him and I would like an answer-whether he also supports Mr. Coyne in his bid to take over the leadership of the Liberal party; or does the hon. member prefer Mr. Charles Templeton, the apostate evangelist and C.B.C. actor? Which is his choice?
It is a pitiful sight, Mr. Speaker, to see gentlemen who were once honourable behaving like carrion, snapping at the dry bones of the leadership of a once great party. Even the younger and the more virile elements in this party, or what is left of it, have such a death wish that they hope to submerge themselves in the arms of the socialists. I need not waste much time on the antics of Mr. Coyne, which are known to all hon. members only too well. He went up and down this country preaching austerity and yet he voted himself, in the most clandestine manner, a pension for life of $25,000 annually after only six years of service.
Let me say further that that very great gentleman for whom I have always had the utmost respect, Rt. Hon. Louis St. Laurent, after 17 years of outstanding service in this house, during each of which he contributed toward his pension, now receives $3,000 per year less about $660 for old age pension. This is a standard of comparison. Mr. Coyne went about preaching; he pleaded with us; he pleaded with the government, with the country and with the ordinary housewife to reduce our imports, and yet he ordered custom-made cars from Kalamazoo, Michigan, for himself and his staff to ride around in. Then he criticized this government in a most political and partisan way, but when he was called before a Senate committee largely made up of his own political sympathizers, what had he to say? He had no cure; he had no panacea; he had not even a constructive suggestion to offer about the economy-


Paul Joseph James Martin: He was muzzled by the Minister of Finance, that is why.


Donald Methuen Fleming: That is a false statement.


Grant Campbell: May I say, Mr. Speaker, that there has been more confusion and more controversy among this government and its predecessor and the Bank of Canada in the last six years than there was in the previous 20 years under Mr. Graham Towers, who incidentally was appointed by Mr. R. B. Bennett. Mr. Graham Towers served his country in this position with distinction and competence. There is another basis of comparison.
Leading professors of economics in our Canadian universities, Mr. McLaughlin of the Royal Bank and most of our leading bankers, our union leaders and most responsible people in this country insist and indeed demand that this governor must go. Even the societe generale de Belgique and other leading foreign financial houses in their bulletins distributed to their customers and clients throughout the world insist that confidence in the Canadian economy will be restored only with his passing. Yet we see in this house the members of the official opposition being his most valiant supporters.
May I say in closing that the Minister of Finance has the best possible precedent for his present action. Christ chased the money lenders from the temple when they became too arrogant. The Minister of Finance is, as it were, chasing them from the government in asking for the resignation of Mr. Coyne, who threatens the existence of the government by his arrogance.
(Translation):


Mr. Adrien Meunier (Papineau):: Mr. Speaker, last Tuesday night, June 20, the whole country which had been waiting for a long time for its health report, heard the Minister of Finance (Mr. Fleming) put forward in a very long and rather confused speech what he intended to do for the 1961-62 fiscal year.
The main theme of his speech, that night, was that he was introducing a budget of economic expansion and that, to this end, he intended to give Canada fiscal, financial and trade policies calculated to create more jobs, stimulate production, in a word, to improve the general state of our national economy.
Since this administration took over the Minister of Finance introduced four budgets and in every one of them, he gave indications of optimism and hope about Canada's economic situation.
In 1958, with a deficit, the Minister of Finance said he had inherited from the Liberals a bad economic and commercial situa-

tion, and especially unemployment, and that it was imperative to make adjustments in the then forthcoming year.
In 1959, with a deficit of $609 million, the minister admitted that there had been a recession, adding that our economy was recovering, and he predicted results and a marked reduction of the number of unemployed.
In 1960, after forecasting a surplus of $12 million and offering optimistic indications about the country's economy and the revenues that would accrue to the government, the minister expressed the idea that it was time we came back to a policy of balanced budgets. Of course the minister's aim was poor, since the forecast of a $12 million surplus was changed in fact to a deficit of $345 million.
With regard to his desire to have a balanced budget, this is what the Minister of Finance said last year, as reported on page 2681 of Hansard:
-and in my budget speech a year ago 1 recommended to this house policies which were designed to bring us back to a position of budgetary balance as soon as the economy had recovered the losses of the recession and was moving firmly forward and upward to new record achievements in production, employment and investment.
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.
As can be seen, Mr. Speaker, the minister was quite sure of himself, but "the result of considered aims and efforts" was not very good since the whole thing turned into a deficit.
Each time he presents a budget, the Minister of Finance announces that the economy is recovering and that the situation is again flourishing but, when he tables his next budget, he never admits that he was mistaken; he merely says that things are seen under a different light.
In the present budget, the minister tells us that the steps he advocates, such as the free devaluation of the dollar and the reduction of the interest rates, will not create inflation.
However, he does not give any reason to justify that statement. The devaluation of the dollar will mean more money for the tradesman, the businessman and the industrialist, but what about the small wage-earner and the labourer?
When I studied political science, I learned that the devaluation of a country's currency means a premium on exports. There can be no mistake but that our exports will increase, that tradesmen, businessmen will make more
The Budget-Mr. Meunier money, but will those surpluses result in a lower salary for workers and labourers? We do not know. But on the other hand, it is obvious that the price of our imports will climb and without listing them all, I have in mind certain essential commodities such as tea, coffee, sugar, cocoa and other products of which our families are in constant need. Who is going to pay, when the price of those commodities goes up? It will be the low-income people, the wage earners, the labourers, and if those people's incomes do not increase they will be faced with a rise in the cost of living which they will not be able to bear.
On that point, I should like to quote the statement of Mr. Donald MacDonald, secretary-treasurer of the Labour Congress, as reported in La Presse, last June 22.
The federal budget contains no improvement in the field of social security, no true relief for the small taxpayer, nothing which is likely to increase substantially the consumer's purchasing power.
I regret that the minister did not give us his views on that point, and although I could ask him several questions on that matter, I will merely ask him one.
If the government must borrow money to finance its budget deficit, what will happen to the loans that municipalities, provinces or big business will have to raise abroad?
What will be the loss resulting from the exchange rate for the provinces and the municipalities which have already borrowed money abroad?
Has the government provided anything to allow public bodies to borrow more easily to finance their debt or undertake large scale projects in order to reduce unemployment?
The minister told us that his expansionist budget would create more jobs, would stimulate industry and increase production. Those words are delightful to hear, but I would have liked to know from the minister to what extent that expansion will go and how many jobs that new policy will create.
The minister is asking the provinces and the municipalities to raise a large part of their loans in Canada. I do not question the minister's good intention because it is a very desirable objective. But, if the government drains the market to finance its loans, what will be left to the provinces and the municipalities? They will be forced to go on foreign markets and to repay their matured loans with devaluated dollars. It means that they will find themselves paying millions of dollars that they did not expect to pay.
How will all that balance? We know nothing about that, because the minister provided no

The Budget-Mr. Meunier explanation. It would have been interesting to have his views on that point, in which case he would have not only enlightened the people on the matter but also made the borrowers aware of the effects of this measure.
I mentioned a few minutes ago that the Minister of Finance had stated that all those policies he was advocating would create jobs, but that he did not give us any idea of the number of jobs which would result for the Canadian people.
There constantly exist in Canada, Mr. Speaker, certain vague conditions which cannot escape being noticed by everyone, a chronic and gnawing disease to which the government does not seem to pay too much attention: unemployment.
I appreciate that since the beginning of the present session, the government has enacted legislation conceived to relieve unemployment. I am aware of such things as the productivity council, assistance to technical and vocational schools, financial assistance to small enterprise, double depreciation and amendments to the National Housing Act. It is true, Mr. Speaker, that all those measures are going to help create jobs and reduce unemployment.
But I do not agree that housing is going to remedy unemployment, because it has been found that Montreal, the metropolis of Canada, is also the city with the most houses to let. When the government got elected in 1957, it invested heavily in building. On the other hand, I recall that in 1957, the Hon.
C.	D. Howe, addressing the lumber dealers association, said that house building had to keep a steady pace because activity in the building trade is a sign of prosperity.
What happened is that we invested heavily in building and as a result, the price of the building lots went up. Houses are nowadays selling at prohibitive prices. And with the land selling at prohibitive prices, some builders have gone out of business.
I heard on television that in the city of Montreal, building had increased 4.6 per cent last year. That is no stimulus and no way of creating many jobs.
It is in the field of one-family units that the situation is most disastrous. A house is sold to a buyer who is asked a ridiculously low down payment. Enthused, he wants to have his own home. He goes visiting housing developments. He is told that he will have to pay only so much a month. But what happens is that when the municipality starts putting in sewers, waterworks and other services, the assessments increase and the

amount the buyer expected to pay annually is changed. In addition, those who buy one-family houses in suburban Montreal have to buy a car for transportation, and after two or three years, which is not so surprising, the buyer cannot fulfil his obligations any more and has only one alternative, to give the house back to C.M.H.C.
I do not think that housing creates so many jobs and that it is the solution to the unemployment problem. Proof of that is in the still sizeable number of our unemployed.
I have here an article of La Presse of June 24 last, written following an interview with Mr. Charles Renaud, director of the department of social welfare of the city of Montreal. I quote:
2,740 needy unemployed in Montreal.
And the article goes on:
In the month of May, 5.8 per cent of the 46,500 unemployed in Montreal were ini dire need.
The 2,740 unemployed in question were no longer entitled to unemployment insurance benefits. Their unemployment insurance benefits were exhausted, and they had to rely on the social welfare service of the municipality for their subsistence. Naturally, they came under unemployment assistance and had to satisfy themselves with what they were given for their subsistence. Those people have no jobs at all. When are they going to work? God knows.
Before concluding my remarks, Mr. Speaker, I should like to reply to certain statements made by the Associate Minister of National Defence (Mr. Sevigny). After having praised the Minister of Finance (Mr. Fleming), he told us that his budget would be beneficial to Canadians. He made a digression to say that the people of Quebec who are interested in Canada's economic life will find something beneficial in this budget. I do not agree with the Associate Minister of National Defence on that point and I suggest to him that, quite to the contrary, all Quebeckers are interested in Canada's economic life, as are all other Canadians.
He told us of the climate of confidence that prevails in the relations between the government and the businessmen in our community. Of course since June 22, 1960, there is a climate of confidence in the province of Quebec between the government and the Quebec businessmen.
But the Associate Minister of National Defence wanted to go back 15 years and

promote again the idea of erecting a monument to Mr. Duplessis, a matter of which we do not hear any more in Quebec. He wanted to tell us that Mr. Duplessis always sought, during the 15 years of his administration in the province of Quebec, to draw all the advantages he could out of his relations with Ottawa, to the benefit of the people of Quebec.
Well, I must tell the Associate Minister of National Defence that he is badly mistaken. For 15 years, Mr. Duplessis, for political expediency purposes, always criticized the Ottawa government, always tried to debase the authority of the government in Ottawa and to have the population of Quebec believe that Ottawa was not our country's capital, out that of a foreign country.
Now, if Mr. Duplessis has always taken advantage of federal legislation, as the Associate Minister of National Defence claims, I will say for his information that, because of Mr. Duplessis' stubbornness the province of Quebec lost in 15 years close to $1 billion, and here is how. In never wanting to participate in joint plans for forest protection; in never wanting to participate in joint plans for the construction of the trans-Canada highway; in refusing to co-operate in fiscal matters from 1944 to 1956; in refusing to accept grants for vocational schools.
Mr. Duplessis, logical in his autonomy, refused at that time to accept the federal government's money for vocational schools. During all the time Mr. Duplessis was at the head of the province of Quebec, I repeat for the Associate Minister of National Defence, the province lost $1 billion. If Quebec had that money today, perhaps there would not be so much unemployment in the province, and Quebeckers might be happier.
The Associate Minister of National Defence said, on two different occasions, that the opposition was singing dirges of gloom and doom and was voicing nothing but destructive criticism. I would say to the Associate Minister of National Defence that if he was unable to be in the house, he should at least have read the official report of debates to be better informed.
Last year, the house discussed the estimates of the Minister of Labour (Mr. Starr) for 12 days. At that time the hon. member for Essex East (Mr. Martin) and the hon. member for Laurier (Mr. Chevrier) submitted to the Minister of Labour their proposals for an over-all plan to reduce unemployment.
The Budget-Mr. Meunier The hon. member for Laurier mentioned then that in 1945, when this country was in a transition period from war to peace, and our soldiers were coming back from overseas, an economic emergency had to be faced, and added that the Hon. C. D. Howe, then the minister of reconstruction, had tabled a white book in which he planned for the reconstruction of the country by means of an eight point over-all program to help our economy, which was to be carried out over a period of 15 years.
Now, again last year, as I was saying a few moments ago, hon. members for Laurier and Essex East submitted some constructive suggestions, and the government did not follow up any of those suggestions which formed an over-all plan to help remedy unemployment; nothing was done. Therefore, it ill becomes the Associate Minister of National Defence to say today that the opposition not only is singing dirges of doom and gloom, but fails to make any constructive criticism.
Mr. Speaker, the budget submitted by the Minister of Finance is a mess of high-sounding words. The Associate Minister of National Defence asked us to put our trust in this budget. He sees in it the corner stone of a remarkable development and maintains that thanks to the measures that are provided in it we will at least have a climate favourable to employment. Mr. Speaker, I want to stress that we must always take the budget of the Minister of Finance with a grain of salt. It is the fourth one which he has submitted, and, each year, he describes the situation as encouraging, saying that it is far from alarming, and the following year, as conditions have not improved, he still finds comforting words for describing it. But nothing happens.
Now, Mr. Speaker, I submit that we are right in not trusting the Minister of Finance, because this fourth budget submitted to us proves worse than the previous ones.


Mr. Pigeon:: Mr. Speaker, may I ask a
question of the hon. member?


Adrien Meunier: Certainly.


Louis-Joseph Pigeon: Does the hon. member prefer Mr. Coyne to the Minister of Finance?


Adrien Meunier: Listen, I do not know whether Mr. Coyne worked on the other budgets, I do not know whether he worked on this one. It is quite probable that Mr. Coyne had nothing to do with drafting this budget,

The Budget-Mr. Clancy but the Minister of Finance has never indicated that Mr. Coyne had helped him in any way with the preparation of previous budgets. I therefore cannot answer the hon. member's question, because it is baseless.
(Text):


Mr. G. D. Clancy (Yorkton):: Mr. Speaker, I should like to join with other members of the house in congratulating the Minister of Finance (Mr. Fleming) on his budget which will be welcomed by Canada, a budget designed to increase employment and expand the economy. The pleasing aspect of the budget is the fact that there is no increase in taxes, a fact that points up the faith, and justified faith, that the government has in the Canadian people and the Canadian economy.
The retention of the tariff on turkeys and the new five to ten cents per pound tariff on dressed chickens will be of great aid to our farmers. Tariff adjustments will be welcomed by the textile industry, although apparently the minister did not go far enough for the hon. member for Drummond-Artha-baska (Mr. Boulanger). He advocates the imposition of dumping duties on textiles. The hon. member for Essex East (Mr. Martin) would like to impose higher tariffs on automobiles and parts entering Canada. Hon. members of the Liberal party have been advocating the adoption of the proposals of the governor of the Bank of Canada, increased taxes, increased tariffs and trade restrictions. How do they reconcile their present attitude with previous public statements? The views on tariffs of the member for Essex East, the spokesman for the party, seem to vary daily. People are rapidly reaching the conclusion that this is due to a complete lack of Liberal policy, cynical application of the divide and rule theory and political expediency of the moment.
The position of the third party was expressed by the hon. member for Burnaby-Coquitlam (Mr. Regier). I assume he was speaking for his party when he stated in the house that he did not believe in tariffs. He preferred quotas and currency restrictions, the most vicious form of protectionism ever designed. The present government, in contrast with the opposition groups, is fully aware that Canadian prosperity depends on world trade, that high tariffs and restrictions have no place in our economy. The government policy is one of moderation designed to ensure a fair balance between all segments of the economy. The reduction of the sales tax on various items is welcome. The automobile industry will benefit and the consumer will benefit.

The municipalities have been requesting direct aid from the federal government. I do not know whether this is possible under our system of government, but the addition of further items to the long list of sales tax exempt materials required by municipalities, payment of 50 per cent of the labour costs on municipal projects under the winter works program, credit for the inception and extension of which must be given to this government, increased hospital construction grants and the new grants for equipping and building technical schools have been of great assistance to the municipalities and the taxpayers.
All branches of the pharmaceutical profession have recently been receiving a great deal of publicity with respect to the high cost of pharmaceuticals and pharmaceutical preparations. The critics were not well enough nor fully enough informed to justify their sweeping generalizations. It is for this reason that the profession welcomes the public inquiry to be conducted under the Combines Investigation Act. If the investigation should show that any segment of the profession is conspiring to maintain prices at an unwarranted level, I am sure the profession itself will take steps to remedy the situation.
The cost of medicine to the sick could be reduced by the removal of the sales tax on those ingredients used in medicinal preparations. I confess to extreme disappointment that this step was not taken in the present budget. I urge the Minister of Finance to give this suggestion careful consideration. If it would not be practical to remove the sales tax on the whole range of medicinal products, consideration might be given to removing the tax on those drugs and preparations contained in the schedules of the Food and Drugs Act and the provincial pharmacy acts, that is, for drugs and preparations that can be supplied to a customer only on the signed authorization of a doctor.
The pharmaceutical profession in all its phases is vitally concerned with the physical welfare of Canadians. There was deep disappointment throughout the profession when it was not given representation on the royal commission on health. It is felt by this group so closely associated with the health problems of Canadians that the inclusion of one of their members on the royal commission would have made a substantial contribution to the findings of the commission. I would ask the government to consider including a member of the pharmaceutical profession on the commission.
I listened with great interest to the hon. member for Niagara Falls (Miss LaMarsh). Perhaps my interest was due to the personal charm of the member and the ease of

delivery. Certainly I could not maintain my interest in the hon. member's speech when reading Hansard. The whole speech was particularly sterile. The hon. member intoned with pathos: We have drought in the west which is deepening; we have insects in the west, and so on. These were words that would lead her listeners to think that she really believed that drought, grasshoppers and cutworms were the visitation of a higher power to punish the prairie people for daring to vote anything but Liberal. Bathos!
The members from the prairie provinces know that there is drought in certain areas; grasshoppers, cutworms and a late June frost hit others. The obvious relish with which the Liberal speakers catalogue these disasters leaves a sour taste in our mouths. We are too familiar with the hardship and frustration suffered by our farmers in affected areas. The members of this government are more concerned with devising ways to relieve the hardships caused by the ravages of nature. The Prime Minister (Mr. Diefenbaker) announced this morning that emergency measures are now in effect to meet the situation. The Liberal leader could only suggest that the house go into committee of supply to debate crop conditions. That is all they have ever done for the western farmer-talk.
The hon. member for Niagara Falls went on to say: "Many members of this house were children as I was", referring to the 1930-39 period. In discussing the events of the period, the hon. member apparently suffered a lapse of memory. Since I am slightly more mature, my recollection of the period will not be so childish. I believe, if my memory is correct, that a Liberal government came into power in 1935. That year was not a profitable year on the prairies; we had drought, grasshoppers, Russian thistle and extremely low prices. The following year, 1936, saw a continuation of these conditions. The year 1937 saw what was, probably, the most complete crop failure in the history of the prairies. The years 1938 and 1939 showed little, if any, improvement. I would not insinuate that the prime minister of that day was responsible for the vicissitudes of nature, but what were the members of that Liberal government doing, other than sitting on the benches wringing their hands with the attitude, the Almighty will look after us and we will collect taxes where we can? I repeat, what were the Liberal government doing in the face of business stagnation, rampant poverty and unemployment? They did nothing, yes, absolutely nothing, to their everlasting discredit and shame.
The year 1939 marked the outbreak of the war. Checking back on the statistics for that year provides interesting reading. In spite of
The Budget-Mr. Clancy the large number of Canadians who hastened to enlist, unemployment was very high, business was unsettled. The war years, ah yes, that was the period. Controls were slapped on the economy. It was a wonderful world for those forming the government. There were no decisions to make because world events had taken that need out of their hands. There was nothing to do but administer. Those superbureaucrats proceeded to foster and promote the growth of the biggest bureaucracy in the history of the nation.
Canadian farm income, in spite of worldwide shortages, showed only moderate gains in the post-war years. Obviously, there had been no effort to put the economy on a peacetime footing. The Korean war gave a boost to the economy. Farm income rose rapidly until 1951, and levelled off in 1952. The nations of the world were stockpiling for an emergency. From 1952 to 1954, farm income fell rapidly to the 1946 level; a slight increase in 1955 and 1956 was followed by a sharp decline until June 1957. After eleven years, two wars and the death of half a million Canadians, the country was back where it started. Farm income was reduced to nearly the 1946 level, with a rising cost of living, unsettled business conditions and rising unemployment. Indeed, this is a remarkable record.
When the present government took over, steps were taken to strengthen and improve the economic position of our farmers. The improvement has been steady, but perhaps not as rapid as hoped because we were too optimistic in expecting to clean up, in 22 months, the mess left on our doorstep by 22 years of mismanagement and incompetence of a Liberal government.
This government has replaced indifference with positive legislation and action. In the first three years under this government, Canadian agriculture producers have received $499 million from the federal government, an increase of 111 per cent, compared with the last three year period under the previous administration. The 1959-60 payment of $190.9 million was 112 per cent more than the largest payment made in any year by a Liberal administration.
This government paid 50 per cent of the unharvested grain assistance; 50 per cent of the cost of moving equipment and fodder into, and livestock out of, drought areas; instituted cash advances on grain; introduced and put into effect the Farm Credit Act, increasing the maximum amount and repayment period of loans; widened the scope of farm credit and pegged the interest rate for these loans at 5 per cent; introduced Canada's first Crop Insurance Act, under which the government will pay 50 per cent of the
7136	HOUSE OF
The Budget

Mr. Clancy administration, 20 per cent of the premium and will loan provinces 75 per cent of the amounts required to meet indemnity requirements; paid out $82.6 million in acreage payments; increased the compensation for cattle slaughtered in the control of tuberculosis and brucellosis; undertook to pay 75 per cent of the cost of the South Saskatchewan dam.
The water level of the Saskatchewan and Qu'Appelle valleys will be controlled so that use may be made of waters which were for many years wasted. This government also raised the maximum amount of farm improvement loans from $5,000 to $7,500 and eliminated the double security clause on loans over $2,000; 15 per cent more farmers now benefit under the Prairie Farm Assistance Act as a result of the Conservative government's amendments. The Agricultural Rehabilitation and Development Act has been passed. The Conservative government's program under this act will operate in three ways to rehabilitate and develop Canadian agriculture. It will provide for the development of alternative uses for marginal agricultural land; assist local groups in developing new income opportunities; provide projects for soil and water conservation. So that western grain producers will not have to pay storage charges on wheat stocks in excess of the normal carryover, the Conservative government paid storage charges amounting to $39.8 million in 1958, $43.6 million in 1959 and $51.7 million in 1960. Wheat exports have risen substantially due to an aggressive selling campaign and Canada's increased contributions of wheat and flour to the Colombo plan.
These are a few and by no means all the steps taken to help Canadian agriculture. The Agricultural Stabilization Act is a new approach to the problem of stabilizing farm prices. The act is basically sound. Minor adjustments have been necessary. Snags were bound to develop that only experience in the application of the act could reveal. There are adjustments that are still necessary. I speak now of the operation of the act with respect to hogs and eggs. Under the present regulations the prairie farmers are not receiving full benefit of the act with respect to hogs and eggs. I am not satisfied that the present regulations are fair to the farmers in my area. The farmers are not satisfied.
Let us look at the hog situation. The prescribed price is $23.65 per hundredweight Toronto, on a quota of 100 hogs per producer. A deficiency payment is made when the national weighted average price is below $23.65. The present transportation differential


between Regina and Toronto cannot be justified and the differential should be narrowed.
It is possible to have a situation develop where there is no deficiency payment by using the national weighted average, and yet, the prairie producer will have received a price for his hogs below the prescribed price.
The situation with respect to eggs is more extreme. The prescribed price is 33 cents per dozen Toronto-Montreal for Grade A-XL and Grade A-L with a quota of 1,000 dozen per producer per quarter. The transportation differential between Regina and Toronto is not warranted. The use of the national weighted average price is not fair to the producers in Alberta, Saskatchewan and Manitoba. Let us take an example. The cumulative national weighted average price to producers for Grade A-XL and A-L was 31 cents per dozen on June 10 this year. If there were to be a deficiency payment for this period, it would be two cents per dozen. The weighted average price per dozen during this period for the three prairie provinces is 23.9 cents; British Columbia, 33.2 cents; central Canada,
33.05	cents; the maritimes, 33.4 cents, and Newfoundland, 47.9 cents. The prairie producer would receive 25.9 cents as a final payment, the other areas would receive from
35.05	to 49.9 cents per dozen. The inequality between the prairie region and the other areas in Canada is obvious.
I urge the Minister of Agriculture (Mr. Hamilton) to give serious and immediate consideration to equalizing with the rest of Canada the returns received by producers in the prairie provinces. I would suggest that deficiency payments on eggs be made quarterly. The producer can receive a deficiency payment only on a maximum of 1,000 dozen per quarter. In other words, if he markets 800 dozen in the first quarter, 700 dozen in the second quarter, 3,000 dozen in the third quarter and 3,000 dozen in the fourth quarter, he can receive a deficiency payment on only 3,500 dozen, although he exceeded the 4,000 dozen maximum for the year.
I suggest that the calculation for deficiency payments should be based on a regional weighted average price for British Columbia, the three prairie provinces, central Canada, the maritimes and Newfoundland. This method would be fair to producers across Canada and would place the prairie farmer on a more nearly equal footing. The stabilization board and the advisory committee recommend that the present system be continued for the balance of the year. I do not agree. Mr. Speaker, I repeat that I believe this is a matter of urgency which should receive immediate and careful consideration by the Minister of Agriculture and the government.

(Translation):


Mr. Rodolphe Leduc (Gatineau):: Mr. Speaker, on June 20 last, the Minister of Finance (Mr. Fleming) introduced his budget for the fiscal year 1961-62. The people have proved that they had been anxiously awaiting the budget speech, because on that occasion, the galleries of the house were filled to capacity, and most hon. members were in their places.
I also noted a striking difference between the situation prevailing in this house in 1957, and the situation on June 20 last. In 1957, the present Minister of Finance brought down his first budget, and on that occasion, every hon. member on the government side including the Minister of Finance had a nice smile and wore a blue tinted white carnation in his lapel. This year, no one wore a blue tinted white carnation, no one had a flower in his lapel, and at the end of the minister's speech, you could see on the faces of Conservative members an expression of disappointment and discontent. Needless to say, cabinet members did not display the broad smile they had in 1957.
The budget speech of last week was the longest in all the history of Canada, but that is not its main feature. The Minister of Finance has forecast the highest deficit ever recorded by a peacetime government. But this deficit budget does not surprise the Canadian people, because ever since the Conservative government took office, we have only had deficit budgets. In 1958, Canada had a deficit of $38,500,000; the deficit reached $609,500,000, in 1959, $413 million in 1960, and $300 million in 1961. For the year 1962, the minister tells us that the deficit will range from $650 to $700 million, which makes up a total deficit of more than $2 billion for the four years in office of the present government.
Mr. Speaker, there is in my province and in the country a common saying to the effect that when the Conservatives are in office, we have deficits, tax increases, unemployment, tight money, high interest rates, numerous bankruptcies, a higher cost of living, in short, drudgery and hardship for a great many Canadian citizens.


Donald Methuen Fleming: That is a misrepresentation.


Rodolphe Leduc: I beg your pardon?


Donald Methuen Fleming: I say that it is a misrepresentation.
The Budget-Mr. Leduc


Rodolphe Leduc: You say it is wrong?


Donald Methuen Fleming: Yes.


Rodolphe Leduc: It is a realistic interpretation. If you can deny it, do so. If you are realistic, you will agree with me.


An hon. Member:: The industrialists of this country do not say the same thing in their comments.


Rodolphe Leduc: Mr. Speaker, it is often said that history repeats itself. We are witnessing today a recurrence of history in this country. Many of us lived through the years 1930 to 1935 under a Conservative administration. And what is the difference between the situation which existed in this country between 1930 and 1935 and that existing today?


An hon. Member:: It is even worse.


Rodolphe Leduc: I agree that there is a difference, and it is because from 1935 to 1957 the country was run by a Liberal administration which prepared everything and provided for a Conservative administration.
When the Liberals were in power, they took action to remedy unemployment. In 1941, they put in the statute books the Unemployment Insurance Act and, from 1941 to 1957, the unemployment insurance fund reached over $900 million. Since the Conservatives took over, in 1957, the fund has dropped from $900 million to less than $100 million.
Not only did the Liberal party give the country the Unemployment Insurance Act, but they adopted a series of social security measures. There was the Family Allowances Act, a piece of legislation which was not quite welcomed by certain Conservatives when it was introduced in this house. Among all the electoral promises of the Conservative party, I have never seen any to the effect that the Conservative government would increase family allowances.
The Liberal party also provided for pensions for the aged, the disabled and the blind persons.
Mr. Speaker, if the people of Canada did not have today all those social security measures, I am sure that the situation, on account of the high cost of living, would be worse than between 1930 and 1935.
True enough, the budget announces certain tax reductions, of which the most important is the abolition of the excise tax on passenger cars. I am satisfied with that decrease, but I should like or rather I would have liked it better had the minister thought also of our

The Budget-Mr. Leduc farmers, settlers, workers who have to buy a small half-ton truck and forgo the passenger car. It seems to me that the minister should also have abolished the excise tax on half-ton trucks.
The major announcement in the budget speech is the devaluation of the Canadian dollar. I am not an economist nor a financier, but I am convinced that the devaluation of the Canadian dollar will increase the cost of living in our country. A great number of foodstuffs that we have to buy daily such as fruits, vegetables, tea, coffee, sugar, etc., are imported, and I am convinced that we shall have to pay more for those products. In addition we have to import a great deal of manufactured products. As another member so rightly stated earlier, some industries have to import from the United States the machinery they require to develop and to replace their equipment.
I am also convinced that the towns, provinces, municipalities, corporations and individuals who borrowed money on the American market and elsewhere will have to pay more for principal and interest, which will mean a supplementary tax for the consumer.


Donald Methuen Fleming: You prefer unemployment.


Rodolphe Leduc: In his budget speech, the minister stated that he expected a substantial increase in our exports. Well, I hope that prediction will come true, but I am doubtful. Many Canadians are doubtful also, because this is not the first time that the minister makes predictions and his forecasts, in my opinion, are seldom correct.
(Text):
Mr. Speaker, the debate on the budget gives an opportunity to hon. members of this house to speak on a variety of subjects, which in the course of ordinary debate we cannot do. I have been listening for the last four years to many speeches from both sides of this chamber and a number of special words have been used more often than others.
I have no intention of referring to the word "we", which is the most popular word in Hansard, but to more specific words used by the Minister of Finance (Mr. Fleming) in his budget speech. In his budget speech the Minister of Finance used the word "vision". When he talked about his expansion policy he said that was a vision which would create greater exportation and bring about more work and more revenue to this country. I hope


that this vision will be better than other visions which were expressed during the campaign of 1957 and 1958 by the Prime Minister (Mr. Diefenbaker) and other members of the government.
I know, Mr. Speaker, that there are men of vision. We in the Liberal party are very proud of some of those men of vision we had in the past. Just to name a few I would refer to the Right Hon. William Lyon Mackenzie King. He was a man of vision. The Right Hon. Louis St. Laurent was another. Then there was a great one in the Right Hon. C.
D.	Howe. I was reading just a few weeks ago a speech made by our ex-prime minister, Louis St. Laurent, in which he expressed the view that what is lacking in this government is a man of vision like C. D. Howe.
Another word that was used and which is very familiar to the Minister of Finance is "taxation". In the electoral record of 1957 and 1958 there are many pages of promises to reduce taxation, and today we find that the government is collecting more money than ever in taxation from the Canadian people. So "reduction of taxation" is only a phrase not a fulfilled promise. Then there is "inflation". Well, the minister has always been opposed to inflation and I am opposed to it too. I hope this new devaluation of the Canadian dollar will not bring about inflation.
There is another word, "conversion". We all know what happened with the conversion loan. I believe that the conversion loan is responsible for some of the financial difficulties that the government is in today, because this conversion loan has increased the interest and the government has got to tax the people in order to pay that interest, or mortgage the Canadian people.
"Double depreciation"'-that is a new phrase in Hansard; I have never seen it before this year. It has not brought much result as yet. Let us hope that it will bring results. "Diversion"-this is a word that was very popular in the campaign of 1957 and 1958 when hon. gentlemen opposite were talking about trade. The Conservative members and candidates were then talking about diversion. They were not talking about expansion of trade in those days; no, it was diversion. Well, we know what kind of a result diversion has had in this country.
Then there is the word "expansion". This is a very popular word now. It is the main word in this budget. We will have to wait until the next budget to see whether the meaning the Minister of Finance gives to that word proves to be correct. Then there is the word "confusion". This is a very popular word too, and we know there is confusion. The minister,

in his expose yesterday, said there was confusion between himself and the governor of the Bank of Canada.
Then we have the word "devaluation". This is a new word too. "Devaluation" is another word used in the monetary field, so we will know by next year what this means to this country. "Prediction" is another word. I have talked about predictions. We know all the predictions of the minister and I hope all his predictions, especially one, will come true. I hope his prediction comes true that in two years from now we will have a balanced budget and in three years we will have money with which to start repaying the loans we are obtaining today.
Another very popular word is "consultation". In this debate and previous debates the minister said he had had many consultations with the governor of the Bank of Canada. I had to consult the dictionary to find out what the word "consultation" really means, and according to Webster's dictionary it means conferring for mutual counsel. I am sure the minister has used fully the consultation process with the governor of the Bank of Canada, because when the consultation process breaks down we have another word that comes to my lips and it is "decapitation". Those are some of the words which the Minister of Finance used often in this house.
But there are other words used by other ministers and by members of the government which are also very interesting. There is one I think of readily-"misquotation". I recall a few months ago that the hon. member for St. Denis (Mr. Denis) said to a good many members: why don't you join the club of the misquoted? He said that because almost every day there was a member rising on a question of privilege and saying he had been misquoted.
Another word is "commission". We all know that when the government is in trouble over a problem it appoints a royal commission to settle or delay the problem. Another word is "consideration". It is a very vague word but it is a very useful word for the government. The Prime Minister used it today. Whenever the government is embarrassed by a question asked by the opposition the minister concerned has only to stand up and say: we have this question under serious consideration. Rehabilitation. That is a good word-rehabilitation. When hon. members opposite are speaking of the unemployed people they speak about rehabilitation. There is a good example of rehabilitation in my riding and many of the municipalities have protested. They are going to rehabilitate prisoners from St. Vincent de Paul, Montreal. They will take them to the Gatineau park, about 25 miles from
The Budget-Mr. Best
Ottawa and put them to work. Fortunately they are bringing them into the riding of my hon. friend from Hull (Mr. Caron). They are bringing about 100 criminals there to rehabilitate them but they are depriving local citizens of that work. They have no work for honest workers who have families. There is no need to bring prisoners and place them within 30 miles of Ottawa. I am not against rehabilitating some of these prisoners but why not take them into the Northwest Territories where the government is going to build a railroad? That is where these men would be of use.
"Illusion". Well, there are many illusions and I am sure the government is full of illusions about this budget, but I would not be surprised if the illusion of today proved to be the disillusion of tomorrow. Another word we hear about is "elections". That is an important word. This is the word, this is the subject, and this is the thing that hon. gentlemen opposite believe will get the government and the country out of this mess.


Mr. Alexander Best (Halton):: We have heard a number of interesting observations today. Before I make some comments on this budget I should like to congratulate the minister on this lengthy yet meaty item which contained many points of particular interest to my riding as well as points of general interest to many people across Canada. More of that in a moment or so.
The hon. member for Gatineau (Mr. Le-duc) who has just resumed his seat has made a very clever play on words here today. But words are a two-edged sword, I suggest, and I would like to evaluate a few of the words he has mentioned in application to our budget, and his party. The hon. member talks about depreciation and devaluation. I wonder whether we should not apply this in evaluating the Liberal party and its appreciation of our budget here today. The hon. member talked about rehabilitation and I can think of no better use of the term than to apply it to the Liberal party. I think the members of the opposition sitting across the aisle are at this time probably undergoing some form of rehabilitation and perhaps after another two decades or so their rehabilitation will be consummated.
The term confusion has been used and confusion, I suggest, is rampant on that side of the house. It is rampant also, Mr. Speaker, among the group who sit on your immediate left. I would perhaps stretch that further and say even hysteria. I notice a trace of hysteria on that side of the house. Hysteria, I am

The Budget-Mr. Best
told, may amount in a medical sense to illusions of grandeur; in the case of hon. gentlemen opposite, illusions of being elected, or of power. We could go on and on.
The term consultation, a most useful word, has been applied just recently to consultations between the Liberal party and the New Party and, possibly, after the motion by the Ontario young Liberal group, to consultation about the amalgamation of those two parties. This consultation represents temptation, as the hon. member for Gatineau would say- temptation to achieve power by any means whatsoever. This is the way one could apply words of many meaning to different people and to different situations.
Devaluation, a change in the value of the Canadian dollar, is having an important effect on many companies in my riding. In the last few days people in the county of Halton have expressed to me a feeling of certainty that many new export markets will be opened up as a result of this measure. They are very happy about this. They believe that the increased sales they may be able to make as a result of this proposal could lead to further employment and much greater prosperity for the companies and for the region concerned.
I wish, now, to say a few words about the industrial development bank. We have heard of the increased lending figures which have played a part in the story of this bank in the last year or two. The volume of the increase has certainly been proved by the amount of money lent by it to the various companies and businesses throughout Canada. Nevertheless, this recent change, increasing its capital from $160 million to $400 million is a most important move, as is the enlargement of its field of operation to cover virtually all businesses in Canada. The reservation is that organizations such as the farm credit corporation must take precedence before the industrial development bank, particularly with respect to certain specialized types of businesses, such as farming. This increase in the money, the facilities and the scope of the industrial development bank represents a most important move, one of which has been greatly welcomed by people in business all across Canada.
The automobile industry has an effect upon us all. In my riding of Halton we have at Oakville the assembly plant of the Ford Motor Company of Canada. Many thousands of automobile workers live in that area and adjacent ridings. We are hopeful that the dropping of the 7J per cent excise tax on cars will have a marked effect on car sales, with resultant employment in our area. This is a proposal of great importance and one which is welcomed, indeed, by the buying public all across Canada.

In respect to new plant facilities, we were happy, indeed, to note the 50 per cent increase in the rate of capital cost allowance allowed from now on in relation to new assets acquired by businesses, provided it is additional spending over the normal volume in the immediate past. I am sure this will indeed help to speed up reconversion, modernization and expansion of various businesses in our country, and in this regard the government should be congratulated.
It has been my interest while a member of this house, at the meetings of the special committee on research to examine a number of scientific problems which exist in our country, particularly in regard to crown corporations and in the whole field of scientific research in Canada. I think that the provisions in this budget represent an important step toward assisting industries, which are becoming more research conscious, to apply this consciousness and appreciation for increased expenditures in this field in a practical way. Their ability to write off capital expenditures in research not over three years but over a period of one year, is an important advance. I hope this provision will increase research expenditure by various companies.
This type of measure has received the enthusiastic approval of the heads of various corporations including the president of the Ford Motor Company of Canada and others, who have pointed out that they come at a time when industry, government, and the public generally across Canada are becoming much more research conscious.
The lifting of the 5 per cent ceiling on deductible income in respect to research expenditures may enable many firms to spend more in this regard. It has been puzzling to me to decide whether some of these research expenditures have actually been listed under development, expansion or some other heading, but in any case these industries will now be able to give a more accurate fisting of research spending under that heading, now that the ceiling has been lifted.
It is very important also to note that donations to non-profit research foundations will now be deducted from income. This is a matter which has received legal attention recently, and has been given realistic and practical consideration. For instance, in Canada, we have new research foundations such as the Canadian uranium research foundation, sponsored by the various uranium mining companies in this country. This foundation may well conduct research in regard to the methods of processing and alternative uses of the metal uranium, and through its funds it may well let contracts for specific projects to universities or other research organizations. I presume that this projected legislation will

enable such foundations to increase their work, and would enable various trade and industrial groups to set up further foundations to carry out much needed research and development work in Canada. If such a tax provision will enable these groups to carry on this research to a much greater extent, it will prove a most valuable change indeed.
I now come to the specific subject of volunteer firemen. The subject of volunteer firemen has been a very touchy one in my riding. I suggest the problems in connection with this subject commenced in my riding in the town of Oakville and spread to Hamilton and various other sections of southern Ontario. As the Minister of National Revenue (Mr. Nowlan) and his parliamentary secretary will appreciate-


William Moore Benidickson: The hon. member for Welland (Mr. McMillan) had something to say about that subject.


Charles Alexander (Sandy) Best: -this has been a thorny problem indeed. I hear echoes and the wagging of tongues across the way in the distance, Mr. Speaker, but I can't make out the words.
We are very happy to witness the government taking action on this problem and in this regard I should like to congratulate the Minister of Finance and the Minister of National Revenue for their consideration of my case.
Up to $300 may be deducted retroactive to 1958 as expense money paid to various firemen. It has been a very difficult problem for small municipalities, which must provide fire protection services to do so, and the residents of those small municipalities have had to depend upon the loyalty, integrity and ability of the hardworking numerous volunteer firemen. In my riding I would suggest hundreds of individuals are involved. It seems to me a fair and excellent decision to allow money paid to them by way of expenses not to be included as income from now on. This measure is to be retroactive to 1958.


William Moore Benidickson: Thanks to the hon. member for Welland.


Charles Alexander (Sandy) Best: Mr. Speaker, I again heard something from the hon. member but it was so indistinct that I shall let it pass.


Mr. Deputy Speaker:: It being five o'clock the house will now proceed to the consideration of private and public bills, the former having precedence, pursuant to section 3 of standing order 15.



PRIVATE BILLS

Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, before private bills are called, I should like to state that the hon. member 90205-6-451
Private Bills
for Davenport (Mr. Morton) who is absent because of the death of his father should under normal circumstances have asked at this time for the unanimous consent of the house to proceed with non-contentious bills somewhat out of order. I am not sure that unanimous consent will be forthcoming but I should like to ask that we commence our consideration with item No. 4 on the order paper under private bills, an act respecting the Canadian council of the girl guides association, followed by items Nos. 5, 6, 7, 8, 9 and 10 in that order. Those items would then be followed by items Nos. 3, 1 and 2.


Mr. Arthur Smith (Calgary South):: Mr. Speaker, I should like to ask whether the bill, which is item No. 1 on the order paper, is still considered to be contentious? I ask that question seriously in view of recent developments which have taken place. As hon. members appreciate, a provincial body has given considerable consideration to the various pipe line companies which appear before us, and has seen fit to grant a licence to the particular company mentioned in this bill. I should like to ask if it would be possible now for us to proceed with this bill.


William Moore Benidickson: Mr. Speaker, I have great respect for the hon. member for Parry Sound-Muskoka (Mr. Aiken) who indicated he felt there was no controversy with respect to certain private bills which he enumerated. He will understand that I was not a member of the committee that discussed these measures. I know the hon. member would not mislead the house in any way and in expressing his views with the certainty that he did I am sure he felt that those in the opposition would have no objection to his motion. On that basis I am prepared to go along with the suggestion of the hon. member for Parry Sound-Muskoka without reservation. I am sure he speaks for the government and for my part may I say on behalf of the opposition that I have heard of no objection to the suggestion put forward by the hon. member for Parry Sound-Muskoka.


Harold Edward Winch: Mr. Speaker, I do not quite know what the situation is now.


Mr. Speaker:: The hon. member for Calgary South was endeavouring to ascertain whether any member wished to indicate that he was still opposed to item No. 1. I think that was the preliminary matter before we deal with the proposal of the hon. member for Parry Sound-Muskoka.


Arthur Smith: My point has to do with delaying this bill.

Private Bills


William Moore Benidickson: I had that exception in mind.


Arthur Smith: I understood that perhaps there was clarification of the picture with respect to this bill. Any delay does have an effect on a particular portion of the province that I represent and I hope that hon. members will let us proceed with the bill.


Harold Edward Winch: Speaking on behalf of this group, may I say that we are prepared to accept the suggestion of the hon. member for Parry Sound-Muskoka. However, the hon. member for Calgary South has raised a question regarding one bill which is certainly contentious now, if it has not been contentious in the past, for the reason that a decision has been made by the Alberta conservation board to grant a licence to a company which has not yet received incorporation under federal law.


George James McIlraith: No.


Arthur Smith: That is not correct.


William Moore Benidickson: May I say that I withdraw my unanimous consent so far as item No. 1 is concerned. I would want the hon. member for Calgary South to have his full rights with respect to item No. 1.


Mr. Speaker:: The proposal before the house, which I take it will not now receive unanimous consent, was that we begin with item No. 4 on the order paper under private bills and follow through to item No. 10 inclusive and then revert to items Nos. 3, 1 and 2 in that order. Is the house agreed?


Some hon. Members:: Agreed.
(Translation):


Samuel Boulanger: I take it, Mr. Speaker, that item No. 4 is the bill introduced by the hon. member for Beauce (Mr. Racine). The member for Parry Sound-Muskoka (Mr. Aiken) said that it was Bill No. 4; under public bills. Am I right in my understanding that it is Bill C-41?
(Text):


Mr. Speaker:: Item No. 4 is Bill No. S-20, an act respecting the Canadian council of the girl guides association.



THE CANADIAN COUNCIL OF THE GIRL GUIDES ASSOCIATION

[Stage Direction]
On the order:
House in committee on Bill S-20, an act respecting the Canadian council of the Girl Guides association. (Without amendment).-Mr. Morton.
Mr. O. H. Phillips (Prince):: Mr. Speaker, I would ask leave of the house to move this

item for the hon. member for Davenport who is absent because of the death of his father.


Mr. Speaker:: Has the hon. member for Prince leave to move on behalf of the hon. member for Davenport who is absent?


Some hon. Members:: Agreed.


Orville H. Phillips: that the house go into committee to consider Bill No. S-20', respecting the Canadian council of the girl guides association.
Motion agreed to and the house went into committee, Mr. Flynn in the chair.
Clauses 1 and 2 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the said bill be read the third time? Now, by leave?


Some hon. Members:: Agreed.


Orville H. Phillips: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



UKRAINIAN EVANGELICAL BAPTIST CONVENTION OF CANADA

[Stage Direction]
The house in committee on Bill No. S-18, to incorporate Ukrainian Evangelical Baptist Convention of Canada-Mr. Smith (Winnipeg North)-Mr. Flynn in the chair.
On clause 1-Incorporation.
Harold Edward Winch: Mr. Chairman, I was not a member of the committee and I would ask the sponsor if he would mind explaining what this is about.


Mr. Smith (Winnipeg North):: Does the hon. member wish an explanation of clause 1 or of the bill?


Harold Edward Winch: The principle of the bill. I have not had time to study the bill.


William Murray Smith: The statement I made on second reading of the bill explains the principle. The purpose is to incorporate the Ukrainian Evangelical Baptist Convention of Canada which is now in operation with headquarters in western Canada at Saskatoon and in eastern Canada at Toronto. The convention represents more than 7,000 Baptists of Ukrainian origin and there are more than 500 pupils attending Sunday schools conducted by the convention. There are 21 organized churches with an adult membership of more than 800 and in addition there are some 25 mission stations where services are

held periodically. The convention has ten resident ministers and ten missionaries.


[Stage Direction]
Clause agreed to.
Clauses 2 to 12 inclusive agreed to.
On clause 13-Power to acquire and hold property.
George James McIlraith: I should like to ask the
sponsor of this bill why the usual limitation on the right to hold property in bills of this kind is not included.


William Murray Smith: As to why
the usual limitation-?


George James McIlraith: On the right to hold property, yes.


William Murray Smith: What does the hon. member mean by "the usual limitation"?


George James McIlraith: It is frequently the case in bills of this kind that there is a limitation as to the amount of property the organization may hold. Was the omission of that clause in this bill intentional or an oversight?


William Murray Smith: This clause, Mr. Chairman, is identical to section 9 of the Evangelical Mennonite Act which was passed by parliament in 1959. This clause was copied verbatim from that act.


George James McIlraith: This does not answer my question. The limitation was omitted from that act after consideration; it was a deliberate decision. I am wondering if the applicants wished the unlimited power or if the omission of the limitation was inadvertent? I have no objection to them having the power.


William Murray Smith: It was copied specifically from the Evangelical Mennonite Act.


George James McIlraith: This does not deal with the point I am raising. It is usual, in this type of bill, to have a limitation on the right to hold property. The act to which the hon. member has referred did not contain that limitation because the incorporators dealt with the point and wished the limitation to be omitted. I am wondering whether that is what these incorporators wish or what is the reason for the omission?


William Murray Smith: That is my answer, Mr. Chairman; this organization wished the limitation to be omitted and therefore they copied the exact section from the Evangelical Mennonite Act which deals with this matter.


[Stage Direction]
Clause agreed to.
Clauses 14 to 21 inclusive agreed to.
90205-6-451i
Private Bills
Preamble agreed to.
Title agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
Bill No. S-26, respecting the Congregation of the Sisters of the Holy Family of Bordeaux in Canada-Mr. Morissette.

[Stage Direction]
On the order:
House in committee on Bill No. S-16, an act to incorporate National Mortgage Corporation of Canada. (Without amendment but recommending that the title of the bill be altered to read "An act to incorporate General Mortgage Service Corporation of Canada")-Mr. Morton.
Orville H. Phillips: I ask leave to to move this bill on behalf of the hon. member for Davenport (Mr. Morton), seconded by the hon. member for Parry Sound-Muskoka (Mr. Aiken).


Mr. Speaker:: Is it agreed that the hon. member has leave to move this bill on behalf of its sponsor?


Some hon. Members:: Agreed.


Orville H. Phillips: that the house go into committee to consider Bill No. S-16, to incorporate National Mortgage Corporation of Canada.
Motion agreed to and the house went into committee, Mr. Flynn in the chair.
On clause 1-Incorporation.


Orville H. Phillips: In accordance with the report of the standing committee on banking and commerce, I would move that:
All the words after "of" in line 15 be deleted and that the "General Mortgage Service Corporation of Canada" be substituted therefor.


George James McIlraith: I think if the sponsor will look at the form of his motion, he will find he wants the words "hereinafter called the corporation" left in the clause. He has deleted all the words after the word "of" in line 15 and then just substituted the name of the corporation. If he will look at the form of his motion again, I think he will find it does not do what he intends it to do.


Jacques Flynn: I think the purpose of the amendment would be fulfilled if the words "National Mortgage Corporation of Canada" in lines 15 and 16 were replaced by "General Mortgage Service Corporation of Canada".


Orville H. Phillips: Agreed.


Jacques Flynn: Shall the amendment carry?


[Stage Direction]
Amendment agreed to.
[Stage Direction]
Private Bills
William Moore Benidickson: This is not now a contentious matter, but I think the amendment is significant. This bill was introduced in the Senate and a very hot, contentious and earnest fight was conducted there and lost in connection with the name of a company that intends to operate as this company does.
I wish to say that the banking and commerce committee took up this matter. It is not my intention to enlarge upon the evidence that is available by looking at the record of the sittings of the banking and commerce committee with respect to the National Mortgage Corporation of Canada. Complaint was raised earlier, when the bill was introduced in the Senate, with regard to the right of private people to use names such as "national", "Canada" and so on. I indicated that I wished to be brief. I shall therefore simply refer all hon. members of this committee and the people in the country to the record of our proceedings in the banking and commerce committee when we examined this problem.
May I say that I think this was an example of the usefulness of a parliamentary committee. Politics did not enter into the matter at all. If such had been the case, it would not have been possible to change the name of this corporation after protests from Central Mortgage and Housing Corporation which felt that there was some conflict or confusion or some element of difficulty for the public in connection with the name. That crown corporation made the same representations to the Senate. They failed there in getting an amendment.
I simply wish to pay tribute to the general attitude of those who are elected across the country as members of the House of Commons and to refer to the fact that it was felt that no corporation entering into this important field of second mortgages, which is a unique field, was checked to the extent that, as a private enterprise organization, it must use a title that would indicate that it was a private enterprise organization and not a government sponsored organization. This was not a political partisan affair. The suggestion came from members of all parties who attended the meeting of the banking and commerce committee. It was their feeling that corporations, no matter how important their national service might be, must be careful not to use names or appellations that might give rise to confusion in the mind of the public or possibly indicate that they were government sponsored.


Jacques Flynn: Shall clause 1 carry?


Mr. Peters:: I also should like to say a few words on this bill, and to add my condolences to those of the mover of the bill today on
[The Chairman.]
the death of the father of the previous sponsor. We all offer our condolences.
In this bill, as the hon. member for Kenora-Rainy River has mentioned, we have seen some of the best operations of this house and of the work of the committee of this house. A great deal of contention was raised in my mind immediately by two events which occurred fairly close together. One was the announcement by the Minister of Public Works that offerings would be made in the secondary mortgage field in relationship with Central Housing and Mortgage Corporation. The second was the advent of this company which had the appearance, because of the name of the company, of being in the mortgage field in competition or of being in the field in such a manner that, because of the name, some difference of opinion would arise whether it was in effect in a field in which we would prefer to see established a crown corporation rather than a private company. The fact that this company has agreed to and the committee has endorsed the idea of changing the name to one more appropriate to a private company and reserving for the crown a name that would of necessity be more acceptable to a crown corporation certainly has been of advantage with regard to the passing of this bill.
In other respects there are many unique factors. One is that we now have a uniform secondary mortgage company that has by law established certain rules and regulations as to its capitalization and to the method of its capitalization. All members of the house, no matter what their political affiliation, I am sure were pleased to note that this company asked that 75 per cent of their directors be Canadian citizens ordinarily resident in Canada. I am sure they were also pleased to note that this company asked for and made part of their bill the requirement that for a period of 15 days at least 60 per cent of any stock offering up to $10 million, with a proposed increase of $5 million to a total of $15 million, would be allowed for sale in Canada to Canadian citizens.


William Moore Benidickson: In essence, what does that mean? It means nothing.


William Arnold Peters: The Minister of Citizenship and Immigration is with us. She would be in a much better position than am I to define what is a Canadian citizen ordinarily resident in Canada. But whatever it is, it sounds fairly good to me. It is a great deal better than we have had in the past.
We have the fact that this company has been established and that there are to be two types of mortgages. The first type is one that can be bought by companies and will be held under trust by this corporation, with a

small payment being made for the management of their bonds. The second type of mortgage will be that in which a number of people can participate, those who wish to do so and who are willing to put their money into second mortgages but who normally would not have enough capital to handle one secondary mortgage. Through its proposals this company has set up the machinery which will allow those people with less than the normal amount of money required for a second mortgage to participate and to take advantage of the opportunity in this field. I think that this bill is an exceptionally good one. I believe it will offer something to the Canadian people, provided that the interest rates are reasonable; and I presume and hope that will be the case as the company have been reasonable in other respects. I believe that this bill will do two things. It will allow the accumulation of the money necessary at the present time for second mortgages, something which will tend to eliminate the very high premium that is now paid on second mortgages, including in many cases an unreasonable bonus. It will also allow people having a limited amount of savings with which to engage in the secondary mortgage field to participate on this basis, with a company that has set up the machinery that will protect the investment they care to make under this legislation.


Mr. Regier:: Mr. Chairman, I believe the bill now before the committee is rather unique and I should like to say a few words about it. In the first place, I heartily endorse the amendment that has been proposed. I do believe that we must be-and we have not always been-very cautious before we authorize the use by Canadian companies of such words as "national", "royal" or "dominion" in their name. Equally so, I believe that a company incorporated in the province of Ontario carrying in its name the word "Ontario" operates at unfair advantage over other companies. A company incorporated in British Columbia ought not to be permitted to use in the name of the company the words "British Columbia". I say this because to the average, innocent Canadian there is the implication that this particular company might have the backing of either the province or the nation. Therefore I want to compliment the committee for proposing the amendment that is now before us, that the word "national" be eliminated and another word be substituted for it.
We have long asked for action on the part of the government to eliminate the racketeering that exists in the sale of mortgage paper in Canada. Several months ago the government announced its intention of moving in this direction in that C.M.H.C. was going to
Private Bills
place on the market blocks of half a million dollars each of real estate paper. As I understand it, this company is specifically designed in order to take advantage of these potential offerings of the government. I would like to heartily congratulate the company for many aspects of its articles of incorporation as they now appear before the committee. In the first place I notice that the shares are going to be offered in denominations of $10 each. I would advise any Canadian with idle investment capital, no matter how small, to participate in an effort of this kind. I believe this is a bona fide-


George James McIlraith: Is this what you are recommending?


Erhart Regier: Yes, the money will be invested in insured mortgages.


George James McIlraith: You are recommending investment in fixed securities rather than in equities, in a period of inflation. Did you not hear the budget?


Erhart Regier: I am not going to discuss inflation at the moment. I believe this is a bona fide Canadian corporation and they realize the possibilities that exist in this field of buying and selling mortgages on real estate. I would also like to endorse the commendations made by the hon. member for Timiska-ming. I notice that this company insists that not less than 75 per cent of its directors shall at all times be Canadian citizens ordinarily resident in Canada.
I also like another aspect of this matter, whereby before there will be any offerings of the stock of the company on the world market Canadians will be given at least a 15-day leeway in which to participate. I realize at once that this is only one of many hundreds of Canadian companies and corporations which will be eligible to submit bids on offerings of mortgage paper by C.M.H.C. and to deal in other types of mortgage paper. However, I believe this is the first time this parliament has been asked to incorporate a company that is basically a Canadian company in concept and also in its intentions as to manner of operation.


William Moore Benidickson: Nonsense. Anybody can buy stock in this company.


Some hon. Members:: Carried.


William Moore Benidickson: Mr. Chairman, having heard the remarks of the hon. member for Burnaby-Coquitlam I feel obliged to say a few words on this matter. I am not opposing the incorporation of this company, because countless companies based on principles similar to those enunciated in this bill have been incorporated by this parliament. However, when federal incorporation is required, as a

Private Bills
member of parliament I think I should warn my colleagues that it is just wishful thinking to believe that some of the clauses in this bill are different than those in bills incorporating other mortgage corporations.
The hon. member for Burnaby-Coquitlam referred to the fact that 75 per cent of the directors must be Canadian. To me that means nothing. It is a question of whether or not the directors are truly owners of the stock in the company, or whether they are simply nominees of foreign holders of stock in the company.
To me several clauses in this bill are simply window dressing, eyewash and nonsense in so far as any drive on our part is concerned for effective, proper legislative control to reduce foreign ownership. I said at the beginning of my remarks that I am not opposing the bill, but I do not like the eyewash and the suggestion that this is a good measure because 15 days are given as an opportunity for subscription for stock. In my opinion that means nothing, in connection with the National Mortgage Corporation of Canada.
In my opinion dummy residents in Canada could subscribe for stock within that 15-day limit, and realistically it has nothing whatever to do with the terms of this bill. I am not opposing the bill, because we have approved bills of this kind for a long time; but I do want to indicate that we are not being misled in any way that this is more of a "Canadianization" bill than any other bill of this kind which has been presented to parliament for federal legislation.


Mr. Marlin (Timmins):: It is more Canadian than is Aurora.


William Moore Benidickson: I think perhaps similar faults prevail in both cases. I am saying that the technical devices, the legal devices applied to invoke the principles that might be in the minds of all hon. members of this parliament when we think of Canadianization are really, if we look at this bill, completely defeated by reason of the fact that 15 days after the opportunity for Canadians to buy, a United States or foreign investor could buy through a dummy Canadian citizen. I simply want to warn other applicants for incorporation that we in parliament are not so stupid about our wishes with regard to incorporation and Canadian ownership that we think if they put some of the meaningless clauses into a private bill such window dressing enhances its likehood of passing through the House of Commons.
I say I intend to vote for the bill because we have not voted against similar bills in the past, but I am not for a moment misled about the appointment of directors or the

offering of stock for 15 days to Canadians. I am not misled for a moment into thinking this necessarily means the Canadian ownership and operation of this company in the future.


Mr. Howard:: This question is obviously of great interest to the hon. member for Kenora-Rainy River. I think I do not have the same appreciation of Canadians he has. I cannot apply the word dummy to them, not to all of them, at any rate. Of course, when one looks across to the other side of the chamber the word may come to mind.
I think that perhaps in essence what the hon. member says is true, namely, that the intent set out here could be subverted. That is correct, but that is no reason for not adhering to the principle and the hope, barring any international barriers placed around the country which prevent the movement back and forth of people and money. Barring these things I do not think we shall ever be able to develop any legislation, which will be completely effective along these lines.


William Moore Benidickson: I am not opposing this bill but I do not want parliament to be kidded by this clause.


Charles Benjamin Howard: I appreciate that. I think I have the same appreciation as the hon. member does of the effect of this. I realize the intent and the purpose of this could be destroyed very easily by the company itself, as far as that goes, and also by others who have an interest in it and who want to act on behalf of individuals who have money outside the country. I think this would be true in all instances. But it is no reason for us to sit back and do nothing about it. I think we should consciously attempt to promote Canadian ownership of corporations just as we should consciously attempt to promote Canadian control of another company whose affairs may come up 'for discussion following this.


Erhart Regier: I cannot lightly pass by the warning issued by the hon. member for Kenora-Rainy River. The hon. member called this particular aspect of the bill nonsense and mere window dressing. However, if I understand this matter rightly, if I own some equity in a Canadian corporation and if I attend the annual meeting I am able to cast votes according to the equity I hold. If I have
5,000	shares I am able to cast 5,000 votes while another man, who may have only 11 shares, can cast only 11 votes. However, this does not apply once you have been elected to the board of directors. I have never yet heard of a board of directors where the vote of one director counts for more than the vote of another director and if this bill says that not

less than 75 per cent of the directors must be bona fide Canadians I cannot understand why the hon. member should call that nonsense and window dressing.


William Moore Benidickson: A director could be a dummy if he was appointed to the board because somebody else in the United1 States could own 75 per cent of the stock.


Erhart Regier: I appreciate that. Yet there is in the hearts of Canadians, I hope, such a thing as loyalty to their nation. I can well imagine that the recent rumpus we had over the unloading of grain that we sold to China or the rumpus we had some years ago over the issue raised by the hon. member for Vancouver East when the sale of rubber belts or conveyor belts to China was blocked would never have happened if 75 per cent of those who had the right to cast a vote had been Canadians basically.


William Moore Benidickson: In 1958 in connection with Ford products they got their orders from Detroit.


Erhart Regier: I know there may be Canadians who will subvert the national interest for their own selfish interest. I know nothing at all about the men who are responsible basically for the organization of this company. However, I have reason to believe they are bona fide Canadians and I would much prefer to support the incorporation of a company of this kind than to support, as we are often asked to do in this house, a company being organized by a legal firm which we know is acting on behalf of outside financial interests. I am sure even the hon. member for Kenora-Rainy River is happy to know that the men responsible for the sponsoring of this bill are not merely a smokescreen for the Household Finance Corporation, for instance, which is a United States interest.


William Moore Benidickson: I hope not.


Erhart Regier: There may be some merit in what the hon. member has said. He has attempted to warn the house that we ought not to be misled, that our intentions can be frustrated despite the terms of this bill. However, I believe the expressions contained in this bill will have a beneficial result on our national interest because I think that in the years to come we shall see more and more incorporations including clauses along these lines, and despite any dirty work that may go on behind the scenes at times I think the long range intention is good and that it will have a good effect.


William Moore Benidickson: Having heard the hon. member for Burnaby-Coquitlam I shall say very tersely that I agree in large part. I will only repeat that the clauses of the bill in
Private Bills
my opinion are windage, not legally binding, containing such words as "maybe" and "perhaps". They indicate a course on which we would both agree though we would hope they would have some legal application in so far as directors are concerned and the holding of stock. I have indicated twice that I do not propose to vote against the bill but I felt that this was just window dressing to the extent that it talks about Canadianization and I thought all of us in the House of Commons should beware of bills of this kind.
Clause as amended agreed to.
Clauses 2 to 13 inclusive agreed to.


[Stage Direction]
Preamble agreed to.
On the title.
William Moore Benidickson: Mr. Chairman, in connection with the title I should like to repeat that the banking and commerce committee of the House of Commons performed a very important function. I am not sure whether that committee has re-established a principle in doing so in so far as names relating to companies which apply to the Secretary of State for incorporation as limited companies, or apply to parliament for incorporation, are concerned, but I think this is a very important development in this connection. I hope that parliament will regard this as such when it adopts this practice of restricting the use of the words "national" and "Canada" and so on. That is all I intend to say in this regard. I suggest amendments such as this are very significant, although they can be reversed by our successors.


Orville H. Phillips: Mr. Chairman, I understand that the title has been amended.


George James McIlraith: It has not been amended yet.


Jacques Flynn: A report has been received recommending the amendment but it has not yet been adopted.


Orville H. Phillips: Mr. Chairman, I should like to move:
That the title of Bill No. S-16 be amended by replacing the words "National Mortgage Corporation of Canada" by the words "General Mortgage Service Corporation of Canada".


[Stage Direction]
Amendment agreed to.
Title as amended agreed to.
Bill reported, read the third time and passed.
Mr. W. G. Beech (York South):: Mr. Speaker, the passage of these bills took longer than we had anticipated. I wonder whether I could have unanimous consent of the house to deal with Bill No. S-23, an act respecting the Canadian Legion, at this time?

Private Bills


Gordon Harvey Aiken: I have no objection.	considered in committee-third reading


Mr. Speaker:: Is the house agreeable to that proposal?


An hon. Member:: No.


Mr. Speaker:: I hear some objection. Is the house agreeable to considering the next three bills in the committee of the whole at the same time? I understand it is perhaps possible they will be disposed of without objection.


Some hon. Members:: Agreed.



ACADIA LIFE INSURANCE COMPANY

[Stage Direction]
The house in committee on Bill No. S-22, to incorporate the Acadia Life Insurance Company-Mr. Aiken (for Mr. Morton)-Mr. Flynn in the chair.
On clause 1-Incorporation.
George James McIlraith: Mr. Chairman, I desire to say a word or two in respect to this clause, and I hope to be brief.
It will be noted in this clause the petitioners are seeking to incorporate this company under the name The Acadia Life Insurance Company, and in French, L'Acadia Compagnie d'Assurance-Vie herein after called "the company".
The point I wish to make is that this follows the desirable practice which has been adopted by the house of granting alternative names to companies incorporated by special act. Under our Companies Act, companies seeking incorporation by letters patent do not have the same right and can only take a name in one or other language. This fact presents a great deal of difficulty to national companies which do business in all sections of Canada who have to use a name in a language which may not be used in a particular section of the country. I have reason to suspect that there are many companies, and some I know for certain, which would prefer to have alternative names for use in different parts of the country. I can see no objection at all to the same practice being used under the Companies Act as is used in these special acts of incorporation provided the translation of the name is carefully done. I should like to draw this situation to the attention of the government and request the minister to give consideration to appropriately amending the Companies Act at some future date.


[Stage Direction]
Clause agreed to.
Clauses 2 to 7 inclusive agreed to.
Preamble agreed to.
Title agreed to.
Bill reported, read the third time and passed.

Bill No. S-27, to incorporate the Guaranty Trust Company of Canada-Mr. Aiken (for Mr. Morton).

[Stage Direction]
The house in committee on Bill No. S-25, to incorporate the Canada Permanent Trust Company-Mr. Aiken (for Mr. Morton)-Mr. Flynn in the chair.
Clauses 1 to 6 inclusive agreed to.
On clause 7.
William Arnold Peters: Mr. Chairman, in respect to clause 7 I should like to ask the sponsor whether the banking and commerce committee made any recommendation or reference relating to the fact that the interest is to be compounded?


Gordon Harvey Aiken: Mr. Chairman, on behalf of the sponsor of the bill I should like to say that I am not clear what the question is. I believe it had reference to compound interest. To which clause did the hon. member refer?


William Arnold Peters: I referred to clause 7.


Gordon Harvey Aiken: I cannot answer the question. That clause does not seem to refer to interest at all. I do not understand the significance of the question.
Clause 7 agreed to.


[Stage Direction]
Preamble agreed to.
Title agreed to.
Bill reported, read the third time and passed.
Harold Edward Winch: That is co-operation for you, mister house leader, three at once.


Mr. Churchill:: That is very good.


Mr. Speaker:: The hon. member for York South appears to be anxious to proceed. Does the house give the hon. member leave to proceed?


William George Beech: Mr. Speaker, I wonder whether I could crave the indulgence of the house to deal with item No. 3, Bill No. S-23 respecting the Canadian Legion?


Some hon. Members:: Six o'clock.


Mr. Speaker:: I am sorry. I hear objection to the procedure suggested by the hon. member.
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.
Charles Alexander (Sandy) Best: Before dinner, Mr. Speaker, I was discussing some of the measures introduced by our recent budget and the particular effect they have on the various groups of people in my riding. These measures, such as the one with respect to our dollar, writeoffs in respect of capital expenditures in various fields, new provisions for new plant facilities and research expenditures, are measures which I am sure will please and affect many areas of our country.
I was drawing attention to the fact that two particular measures play an important part in my riding and before their implementation I had discussed these at some length with the ministers of the departments involved. The provision in respect of payments to volunteer firemen is one such measure, and the matter of a duty or tariff on chicken imports from the United States is another. This latter matter is one which will affect many specialized farmers, broiler growers, those who produce eggs and, indeed, the whole chicken industry. There are many hundreds of these specialized farmers in my riding and in adjacent ridings. They have for a long time wanted some equality of duty or tariff on fowl coming into Canada with our own exports to the United States. This measure introduced by the government has been warmly greeted by people in the riding of Halton who are concerned with this business. This duty of five cents per pound on eviscerated chicken, will apply to cut up and cooked chicken as well, and will thus be important to our broiler growers and all people associated with the poultry industry.
There are other budget measures which we could discuss this evening if time permitted, such as the complex financial matters which will have a profound effect over the weeks and months on various sections of Canada. The opposition, as voiced by some members of the Liberal party and the C.C.F. party, has been particularly weak in the days succeeding the introduction of the budget. The opposition has been lengthy but rather empty of content, I would suggest, as is the Liberal 90205-6-152
The Budget-Mr. Best
amendment itself, which mentions trade restrictions and so forth. I feel that the measures introduced may not really be restrictive of trade at all. Indeed, they may stimulate a great increase in our export trade. I believe the total effect of these measures upon our country will be beneficial, particularly to our export trade.
In considering the various opposition speakers, most of whom are not here tonight, I would say it has been noted in recent days that the hon. member for Bonavista-Twillin-gate (Mr. Pickersgill) has demonstrated a mounting, increasing hysteria as evidenced by the volume and loudness of his attacks on the government. We all realize that the session has been long and perhaps the hon. member for his own sake could stand a good rest and a bit of refreshment before he continues mounting these attacks in this house. We were very much interested in his comments just a few days ago and the fact that he does not read a high proportion of the letters he receives. I think that few of us could say that we read absolutely everything. Most of us try to read all of our correspondence. An admission of this sort by a former Liberal cabinet minister but now a private member, is a most interesting one indeed.
Perhaps I can continue in relation to the tariff measure on chickens that I was discussing previously and note his off-hand reference to gutless chickens, as he put it. If this indicates the importance attached to this matter by the hon. member and indeed by the Liberal party, it is something of which I feel the farmers of Canada ought to take note in a very serious degree. We cannot blame them too much on the opposition side, however, since the position of farm or agricultural critic seems to be constantly shifting around among a variety of members on that side of the house.
The hon. member for Bonavista-Twillin-gate in a previous debate in this budget set of speeches mentioned something about "off with the heads" of senior civil servants in this country. I do not think the people of our country have any thought whatsoever that any action which the government is now taking in reference to the Bank of Canada means this sort of thing at all. As a matter of fact, in my own opinion and in that of most of the constituents from whom I have heard, we have really leaned over backwards to be fair, honest and, if at all possible, accommodating with respect to the governor of the Bank of Canada. The same thing may be said with respect to other senior people in public life. I think we have been extremely fair in this matter. I would suggest to the

The Budget-Mr. Best
Liberal members that they look into their own background in this field before casting such aspersions at others.
I mentioned agricultural matters. It was rather interesting to see in recent days the trespassing by various other members of the Liberal party in this field which I had come to think belonged to the hon. member for Essex East (Mr. Martin). The hon. member for Ottawa West (Mr. Mcllraith), for instance, got into the grain trade business in recent days. The hon. member for Niagara Falls (Miss LaMarsh) commented rather plaintively on matters of drought and grasshoppers in the west. Indeed, today the Leader of the Opposition (Mr. Pearson) got into the cattle market, perhaps to his subsequent sorrow. This business of an agriculture shadow cabinet minister has really been travelling the circuit in the Liberal party opposite. I am sorry the hon. member for Kenora-Rainy River (Mr. Benidickson) is not here this evening as he was so much in evidence this afternoon. Perhaps we should congratulate him in that he seems to have maintained his shadow or shadowy position of opposition financial critic.
The hon. member for Trinity (Mr. Hellyer) in this budget debate a few days ago commented on various topics. He suggested that we have cut down on various important works in this country. When this procedure was necessary and when it seemed wise, we have indeed done so. But, Mr. Speaker, I would call to your attention and to that of the people of this country the tremendous increase of funds, and the building and construction in general which has taken place in the last three or four years. I could name hospitals, roads, dams, house construction, public building construction, airports and so on, a whole long string of projects, which this government has fostered to an increasing extent and which really negate and deny any such argument on the part of the hon. member for Trinity.
But this hon. gentleman a few days ago, as found at page 6888 of Hansard, mentioned that if the government took itself seriously it would realize that these skills must start at the top, and that we must have a skilled government. By inference I presume he meant that a skilled government could arise from the members sitting opposite us. This is a rather ludicrous thought. We may have seen, of course, in recent weeks prior to the byelections at least, I suppose fully half of the members of the Liberal opposition counting on various cabinet positions for themselves. We can see this subtle build-up and we can see the much more sudden deflation following the by-elections which they won in the proportion of one out of four. Hence if a

skilled government is necessary, Mr. Speaker, I submit that we have it now; and I submit that the alternatives on the other side of this house are simply not in existence at the present time.
The hon. member for Niagara Falls, in discussing the budget, talked about various problems out west, as I said before and I think really typified, along with others, the sort of mounting hysteria which we have noticed in the opposition party. The obvious divisions within this party about which we hear in private and which are frequently exemplified in public, are ones which will have to be worked out in the period of years that follow.
I observe my friend the hon. member for Peterborough (Mr. Pitman) sitting down at the far end of the chamber. We were interested in his comments on the budget as well. With regard to some of the very interesting remarks he made, I think we could agree with him. I note the comments which the hon. member for Peterborough made, as found at page 6895 of Hansard where he states:
Indeed, there are few extreme positions; life is nothing but finding compromises.
I suggest that this is not the spirit of a New party member. While it may be a wise personal decision on the part of the hon. member for Peterborough, I am sure he must be suffering acute indigestion in the group in which he finds himself at the moment. I would rather agree with his position, but it is not the philosophical position of the incipient party to which he belongs.
Then we go on to the hon. gentleman's other comments about this country perhaps becoming a banana republic and so on. I believe there is instance after instance in which this government has asserted in a true and independent spirit our differences with the country to the south of us, our great friendship with it but our distinct differences. It has taken a government such as that which we have had in the last four years to assert these differences, to stand up from a position of honesty and strength in various difficult and individual positions which have fallen upon us. In short, Mr. Speaker, I cannot accept the long and frequently windy but completely vacant and empty opposition which has come to the present budget. We do not pretend to say that it has solved all our problems but it has made major steps in many directions.
I cannot sit down without one final comment on these various remarks from the two opposition parties. We have talked about various types of fowl, farm problems and a number of miscellaneous items. One which came to my attention just a few days ago

involved a mouse and a tiger. This mouse and tiger combination is one which I think may ring down the succeeding months and years with loud reverberations. When the president of the Liberal association of Ontario describes the approach of his party to the incipient New Party as a mouse coming to a tiger, I think perhaps half of that description at least is correct. I would not say that about the whole of it. But I welcome with an open heart the honesty of this man in voicing his opinion and his true feelings, and we are glad indeed that it has come to the public's notice in recent days.


Mr. Romuald Bourque (Ouiremonl-St. Jean):: Mr. Speaker, the reason members of the government in power did not speak on the budget before today is no doubt due to the fact that the Minister of Finance (Mr. Fleming) put them to sleep when he made his marathon speech on budget night. They woke up suddenly today. We had nearly three hours of words, words, words-30,000 of them-when the whole thing could have been said in one hour at the most. I have never heard the Minister of Finance make a speech so uninteresting, so devoid of interest as was the budget speech. Of course a budget that offered so little had to be couched in many words. I have great respect for the Minister of Finance, but he certainly disappointed me on budget night. The Canadian public soon realized that this was again a deficit budget, in which the Minister of Finance specializes, and soon lost interest. It made me think of the old saying: You may fool all the people some of the time; you can even fool some of the people all the time; but you cannot fool all of the people all the time.
Mr. Speaker, may I quote from a Montreal financial weekly under the date June 22, 1961. E. J. DeSeau, the financial editor had this to say. It is a long article and I will not read it all:
The budget was not worth delay. Not even size of cash deficit offered any new surprise.
The article continues:
The platitudinous preambles to the budget were undoubtedly spoken in Donald Fleming's voice but the words were those of the Prime Minister.
This is clearly a government by fall guys.
We would say that nobody really knows who is next in line for some sort of misery. But what matters at this moment is this budget.
Was it worth being delayed from April till June? It was not.
Is it an expansionist budget?


Mr. Bell (Carlelon):: Hear, hear.


Romuald Bourque: Due to this budget provinces, corporations and municipalities which have borrowed in the United States will find the
90205-6-452J
The Budget-Mr. Bourque cost of their reimbursements greatly increased. The finance commissioner of metropolitan Toronto said each drop of one cent in the value of the Canadian dollar would add $200,000 a year to Toronto's costs on its United States indebtedness.
May I, Mr. Speaker, read from the annual address of Mr. W. Earle McLaughlin, president of the Royal Bank of Canada.
It is time we stopped talking dangerous nonsense about using fiscal and monetary policy, not for their legitimate purposes, but as an allegedly "easy" way of bringing down the exchange rate or the interest rate, or both. We are blaming the steam gauge for the lack of pressure in the boiler. There is no easy way to bring down our long term interest rates or to achieve an excess of exports over imports or cut down on foreign borrowing, if we think any or all of these thing'? desirable; and the sooner we recognize the facts of life as they relate to economic policy, the sooner we will achieve the goals we seek... increased employment and balanced economic growth without inflation. They cannot be attained- indeed our problem can only be made worse-by concentrating on and trying, through monetary policy, to manipulate the exchange rate, or long term interest rate differentials between Canada and the United States.
I should now like to quote from a Montreal newspaper of Monday, November 14, 1960:
U.S. investment brings more good than harm.
"Problems have arisen," Edward R. Ernst of the Bank of Montreal told a Canadian-American seminar, "but I am certain that in the absence of foreign capital we would have a much bigger problem on our hands".
The article continues:
"It was United States capital that opened the iron fields of Labrador and Steep Rock, the nickel deposits in Manitoba and to a large extent the petroleum and natural gas resources of the west."
From 1931 to 1935 inclusively, under a Conservative regime Canada had a yearly deficit. This deficit, for the five years under a Conservative regime as I stated previously, totalled $668,346,999. From 1947 to 1956 inclusively, under a Liberal regime Canada had a total surplus, not a deficit, of $2,120,537,800.


Thomas Miller Bell: Why did the hon. gentleman jump 12 years?


Romuald Bourque: We had a war in between. You can make your speech later. In 1957-I know hon. members opposite are not going to like these figures, but they are the truth- for the period before the accession to power of the present government, the Liberal government had a surplus of $257,505,582. From 1958 to 1959 inclusively, under this Conservative government, a period of two years, Canada had a deficit of $647,939,576. Add to this, based on the estimated figures of the Minister of Finance, a deficit of $345 million for 1960 and a further deficit of $650 million for 1961 and the estimated total deficit for

The Budget-Mr. Bourque the years 1958, 1959, 1960 and 1961-a period of tour years-adds up to a total deficit of $1,642,939,576.


Murdo William Martin: We will probably beat that this year.


Romuald Bourque: Tory years are always depression years. "Deficit Don" has done it again. The minister will depend on, and no doubt will hope, for a lowering of the interest rates in Canada. How this is to be done was not clearly explained in the budget speech. The effect will be to make investments in Canada less attractive to foreign lenders. It has been said that this government will have to borrow an average of $100 million a month for the balance of the fiscal year to meet the estimated cash deficit of $650 million. It is anticipated that the expenditures for 1961 will be $6,415,000,000, and the anticipated revenue is $5,961,000,000. The Minister of Finance and this Tory government have added $2,056,000,000 to Canada's public debt in four years.
Mr. Speaker, may I read from Labor, a weekly publication, issue of Saturday, March 25, 1961:
Business failures jump in Canada.
Business failures increased 21 per cent between 1959 and 1960, according to the dominion bureau of statistics. Defaulted liabilities under the provisions of the bankruptcy and winding up acts reached $148,253,000. The increase in business failures were substantial in general merchandising, auto products, building materials as well as in iron and steel and wood products manufacturing industries.
The high taxation with which industry is saddled is stinting our competitive ability. The government should realize how badly off industry is in comparison with most of our foreign competitors. Gross corporate earnings are taxed at a flat 50 per cent rate. No distinction is made between what is distributed and what is ploughed back into the company to provide for expansion, thereby enabling it to manufacture a cheaper, better and more competitive product.
Canadian industry is allowed less favourable depreciation rates than most of its foreign competitors. Under our tax laws, not much more than 20 per cent of the cost of a piece of equipment having a 15-year life can be written off in the first year. Britain and Japan permit a first year write-off of about 50 per cent; Sweden, 40 per cent and Italy more than 30 per cent.
The United Kingdom provides many other exemptions such as 20 per cent on new machinery and plant in the year of acquisition deductible from taxable income. This is in addition to the regular depreciation on machinery which would amount to approximately 15 per cent plus an extra initial


allowance of 10 per cent in the first year. This government should take a leaf out of the Britishers' book in this matter of investment allowance. Semi and fully manufactured products account for more than one third of all the export dollars we earn in any given year. The last final figures available are those of 1959. They show that such goods brought us in $1,860 million, or 37 per cent of the total income from the export of Canadian products in that year. Our 1959 purchases abroad of fully manufactured goods, were equal to $244 for every man, woman and child in Canada.
The amount spent by Canadians for competitive imports is little short of fantastic. Individual Canadians bought 4.7 times as much fully manufactured goods as did the Britishers in 1959, nearly 4.9 times as much as the west Germans, 6.4 times as much as the Americans and 27 times as much as the Japanese. We have a favourable trade balance with European nations and a heavy adverse balance with the U.S.A. How long will European nations continue to pay for our luxurious imports from the U.S.A.?
One thing is sure to result from this budget. The cost of living will rise as our dollar declines. We have a serious unemployment problem but it is as nothing compared with what this problem will be unless we take immediate measures to check the uncontrolled flow of printed matter from foreign countries and principally from the United States. Our small population in Canada is called upon to support the greatest volume of imported printing of any country in the world. Sixty per cent of United States printing exports are absorbed by Canada. Only 5 per cent of our printing exports are absorbed by the United States. The population of the United States is approximately 180 million. Canada's population is about one-tenth of that. For every rabbit we sell to the United States we have to purchase 12 elephants. This applies to the printing industry only. Possibly similar comparisons can be made in other industries.
Printed imports to Canada from the United States and all other countries for the year 1953 amounted to $130,679,553, as compared with $183,716,509 for 1959, which represents an increase of $53,036,956. Printed exports shipped from Canada to the United States and all other countries for the year 1953 amounted to $5,451,234 as compared with $8,927,732 for 1959, which is an increase of $2,994,038. Let us compare the difference. In 1959, Canada imported from the United States and all other countries printed matter to the value of $183,716,509 and in the same year the total Canadian exports were

The Budget-Mr. Bourque
$8,927,732, representing an imbalance between exports and imports of $174,788,777.
I understand that a group of officials was sent to Europe recently where they visited Her Majesty's stationer in England and some of the leading European industrialists. Though I cannot vouch for this, my information is that in England they were looking into the possibility of Her Majesty's printer doing some printing for the government of Canada, and that they were also looking for information about British government printing operations in order to justify our own printing bureau to the Glassco commission. I also believe that this delegation visited the Olivetti company in Italy. What was the reason for this delegation? Is the government thinking of importing more printed matter from Great Britain and other European countries, thereby increasing unemployment in the graphic industries in Canada?
We are now experiencing the influx into the labour force of many tens of thousands of young Canadians, those born after the end of the second world war. Industry will have to absorb a large proportion of these if we are not to be faced with chronic unemployment. The planning to put an end to unemployment must be undertaken right now. Too long has this government been dilly-dallying with this problem. It will be too late and worse than useless to be throwing up our hands in consternation five years from now. The government should confer immediately with industry, labour, educators and parents in order to prepare the way to put to work every single one of these young Canadians. They must be trained, however, so that they will possess the knowledge, intelligence and skills that industry needs and must have in these difficult times.


Donald Methuen Fleming: Would the hon. member permit a question? Before he leaves that matter of the importation of printed material I wonder whether he would indicate to the house specifically what he would propose. He has indicated some degree of alarm at the volume of the inflow into Canada of printed material. What is it, precisely, he is proposing as a solution to the problem he described?
(Translation):


Romuald Bourque: Mr. Speaker, I had a speech to make. I did not come here to supply information to the minister. The minister should know his business and know what to do. He can inquire later. If he wants my co-operation, he can telephone me, and I shall be pleased to go to his office and tell him what I think he should do.


Donald Methuen Fleming: The hon. member has succeeded in evading the question.
(Text):


Romuald Bourque: In a period of serious unemployment there are many thousands of jobs going begging in Canada today for no other reason than that there are too few people with the necessary education and technical qualifications to fill them.
Long enough has this government dodged its responsibilities. It should invest in the training of such people rather than continue indefinitely to help them in uneducated idleness draining the unemployment insurance fund dry, or subsisting on government relief.
I have gleaned much of my information from the address given by the president of the Canadian Manufacturers' Association at its ninth annual general meeting. The unemployment insurance fund sank to $110,051,922 at May 31, the lowest point since its building era. A year ago the fund was at $299,293,000, and at April 30 this year it stood at $143,651,000. The $33 million dip in May was one of the sharpest May declines in the fund's 20 year history.
Municipalities could play an important part in restoring and maintaining full employment. For this purpose large sums of capital would be required at interest rates which the local communities could afford. Most Canadian municipalities have reached the limit of their borrowing power. They are forced to compete in the financial market with the more attractive securities of the dominion and the provinces making municipal borrowings practically impossible.
If the federal government created a national development fund to assist municipalities in financing improvements in public services and utilities at a reasonably low interest rate, this would create jobs for thousands of unemployed throughout Canada. Unless immediate measures are taken to get the unemployed back in jobs Canada faces the unenviable prospect of continued unemployment and a grim future of poverty and dire misery.
Since 1956 approximately 41,000 employees have been dropped by the Canadian National Railways and the Canadian Pacific Railway. These figures relate to one type of industry only. We are told the railways are losing money, their losses are increasing every year. If their earnings do not increase we can expect to have further curtailment of railroad services. Chances of any increase in the passenger or freight traffic do not look very bright. Let us put back to work the 625,000 unemployed persons in Canada and soon the goods manufactured by these people will keep traffic moving at a rapid pace. We must set to work right now, resolved to find a solution to our problems.


Donald Methuen Fleming: Mr. Spencer, the hon. member has offered none.

The Budget-Mr. Bourque Mr. Bourque: The Canadian market is saturated with Japanese goods. Most of these goods should and could be manufactured right here in Canada which would give employment to thousands upon thousands of our unemployed. The textile industry has been greatly affected by our purchases of Japanese goods. Japanese shipments of clothing, textile products and fabrics to this country totalled $40,200,000 in 1960 and $41,500,000 in 1959 as compared with $5 million in 1954. The textile workers union of America recently wired the Minister of Finance pointing out that 35,000 Canadian textile workers had lost their jobs. They demanded immediate government action to curb the flood of imports. In 1951 the textile industry employed
102,000	Canadians and produced 75 per cent of the textiles sold in Canada. They now produce 48 per cent to 52 per cent of the market and employ about 70,000. In the first seven months of 1960 Japan exported to Canada a total of 3,220,000 square yards of man made fabrics against 3,411,000 square yards for the whole of 1959 and 1,049,000 square yards for all of 1958. Based on the above figures, Canada will have absorbed more of these goods in 1960 than in the two previous years.
I should now like to quote from an article by John Meyer which appeared in the Montreal Gazette of April 14, 1961:
The Japanese argument for continued access to the Canadian market on their terms is, heaven knows, familiar enough. The Japanese buy more from us than they sell; they insist that the only fair trade is a balanced trade. They buy a million dollars worth of our goods; we buy a million dollars worth of their goods. The economics of such a contention, if fully applied, would bankrupt Canada in short order. The products we sell to Japan create jobs; the products we buy from Japan destroy jobs.
I have touched only on the textile industry but, apply the same thing to all our industries and you will soon realize what the principal cause of our unemployment problem is.
"Japan Today" written by Christopher M. Young, Southam news correspondent supplies the following information:
Ninety three million people occupy a land area slightly smaller than the province of Newfoundland where fewer than half a million people live. The busy millions of Japan provide a ravenous domestic market for the products of industry. Despite its huge domestic market, Japan depends for its prosperity on its sales abroad. Its own national resources are limited.
To manufacture in quantity and to feed its people, Japan must buy heavily abroad. To pay for these imports, it must sell heavily abroad.
Japan's markets today are North America, southeast Asia, Africa and Europe in that order. Ninety three million people in a land the size of a small Canadian province simply cannot survive without trade.
We do not want the Japanese to starve but if we import more of their goods Canadians will be threatened not only with 
increased unemployment but also with starvation. The government must take proper measures to increase available jobs for Canadians and thereby decrease unemployment.


Donald Methuen Fleming: Mr. Speaker, would the hon. member permit a question?


Romuald Bourque: I am nearly finished. You can ask your question after.


Donald Methuen Fleming: Thank you.


Romuald Bourque: There is an urgent need for the establishment of some positive form of Canadian control. There is no question about the desirability of trade with Japan. The question is, to what extent can Canada afford to allow any one Japanese product a predominant position on the Canadian market, particularly when at the expense of Canadian producers and Canadian workers.
Canada, as a nation which prizes human values, must enable all to share its material wealth and lead useful lives. It must find a suitable formula to assure to its citizens full employment, and retrain, relocate and otherwise fit displaced workers for new job requirements and take measures to prevent future vocational maladjustment of young people.


Donald Methuen Fleming: Mr. Speaker, the hon. member was kind enough to indicate that he would be prepared to answer a question. He has indicated his concern regarding the volume of imports of Japanese goods. Would he be good enough now to indicate what measures he would propose to abate, reduce or prevent that inflow of Japanese imports?


Romuald Bourque: I will tell the hon. gentleman what I told him a few moments ago in French. You are the elected and responsible government and therefore if there are any measures to be taken it is up to you to take them. If you assume power thinking that you are going to settle all problems, it is not up to us, but if the minister will telephone me I will be glad to come and discuss the matter with him at any time and give him the benefit of my experience.


Donald Methuen Fleming: I thank the hon. member for his answer. It is quite clear he has no solution.


Romuald Bourque: May I say to the minister that I have a lot of solutions that I will be glad to give him if, as and when he calls me.


Donald Methuen Fleming: The hon. member will not give his solutions to the House of Commons.

(Translation):


Mr. Theogene Ricard (SI. Hyacinihe-Bagol):: Mr. Speaker, I had no intention of taking part in the budget debate but considering the lack of sincerity displayed by the Liberals and the complaints they made, I have decided to show the other side of the picture.
Since the beginning of the budget debate, we have heard members of the opposition complaining that the Conservative government never presents anything but deficits. Yet, during the campaign which preceded the last by-elections, we heard none other than the Leader of the Opposition (Mr. Pearson) urgently call for deficit budgeting. That is an example of the inconsistency and lack of sincerity of the Liberals. The only thing they are interested in is power, and ever since they have been removed from power, they have not stopped whining. It has become an obsession with them to be in the opposition.
Well, Mr. Speaker, I think they should get used to it because as far as the people of Canada are concerned, they are going to stay there for a long while.
Another very convincing proof of their lack of sincerity is that in the same breath they proclaim themselves leaders in the field of social justice and think of themselves as champions because they have introduced the Unemployment Insurance Act, while at the same time they deplore that Canadian workers are deprived of unemployment insurance benefits.
That is a sure sign of their lack of sincerity. It goes to prove that when they introduced unemployment insurance, they did it merely with a view to extorting money from the workers, because they had no intention whatsoever that the workers should benefit from that legislation. They complain now that workers are taking advantage of the Unemployment Insurance Act that we, Conservatives, have improved and will keep on improving. Let our good friends opposite shed tears and whine. I can understand that after spending 21 years in power they can hardly get used to being in the opposition.
Mr. Speaker, I will only take a few moments to show the other side of the picture. The two Liberal members who spoke before me contended that bankruptcies were increasing under the Conservatives. Well, let us see what the real situation is. I have here Le Devoir of Tuesday June 27, 1961. Here is what I read on page 10:
In the first quarter of 1961, commercial bankruptcies under the Bankruptcy Act and liquidations
The Budget-Mr. Ricard
numbered 729, which means 3.8 per cent less than the 758 a year earlier, whereas liabilities dropped considerably from $78,495,000 to $26,999,000. Average liabilities per bankruptcy were $37,000, compared to $103,600 a year earlier.
However, that will not stop the lamentations of the opposition-they contend that bankruptcies are on the increase in Canada, while the contrary is rather the case.
My Liberal friends seem used to speaking the opposite of the truth and they seem to thrive on it. Opposition members like to spread confusion throughout the country, hoping that it will be to their advantage.
There you have the true face of the Liberal opposition. We should not bear too big a grudge against them-their education is at fault.
I want to report here what the newspaper La Presse said last Thursday, June 22. The article was signed by Mr. Eric Kierans, president of the Montreal and Canadian stock exchanges and dealt with the budget submitted by the Minister of Finance (Mr. Fleming). I quote a few excerpts:
Because of existing conditions, the proposed deficit should mean expansion and not inflation.
And then it goes on:
From the point of view of the manufacturing industries, the advocated legislation is, on the whole, rather satisfactory. Last week, Mr. Fleming had given to understand that he would bring down a budget to promote economic expansion, and he did.
Further on it says:
This budget generally, like all the others, will somewhat disappoint those who were expecting special concessions, like a lowering of personal income tax. On the whole it should pave the way to a significant business recovery.
I can understand why the economic upswing should throw the Liberals into confusion: it does not answer their hopes.
Never in this house has there been greater joy in the Liberal ranks than when workers were hit by unemployment. In such cases they lost no occasion to stress the fact that 10, 20 or 50 workers had been laid off. However, they kept silent about the action taken by the government to provide employment.
Again I say unemployment is the best weapon of the Liberals. They like nothing better than to see it grow, and see workers without jobs. It helps their propaganda.


Mr. Rouleau:: It is something we deplore.

The Budget-Mr. Ricard


J.-H.-Théogène Ricard: Something you deplore? It is rather something you enjoy, because every time a lay-off is announced, you rise in this house and ask questions and try to spread fear. That is your way of working on the unemployment problem.


Mr. Denis:: That is all nonsense.


J.-H.-Théogène Ricard: Before going on to another part of my speech, I should like to place on the record a statement made by Mr. G. B. Gordon, president of Dominion Textile, who knows more about economics than the coffin expert from Drummond-Arthabaska (Mr. Boulanger). In his remarks, Mr. Gordon has this to say:
The budget will be of some help. He saw some encouragement in the proposals aimed at eliminating the premium on the Canadian dollar and even discounting it in relation to American money. Part of the increased production to be expected from this measure, Mr. Gordon stated, will be directed to the export markets. However, a substantial proportion of the additional goods will be sold on the domestic market.
And he goes on to say:
Moreover, the Minister of Finance did not conceal his determination to bring about the highest possible degree of flexibility in the necessary tariff adjustments, especially those concerning the textile industry and other industries affected by competition from abroad. He stated that he was hopeful on account of the minister's firm intention to avoid the more rigid GATT formulas during tariff re-negotiations, and because of the remarks concerning the recommendations of the tariff board.
Our Liberal friends like to say: "Tory times are hard times".
Mr. Speaker, I have here a newspaper clipping dating back to 1937. The Liberals were then in office. This is how the article reads:
People in the professions were affected like the others. When they went really hungry, they went on relief.
A list of the professions follows. This was happening under our beloved friends, the Liberals, who are striving so hard to improve the lot of the nation. What a joke.
The following statistics are for Montreal and apply to 1937:
Lawyers, 2; notaries, 3; doctors, 2; dentists, 4;


An hon. Member:: Name them.


J.-H.-Théogène Ricard: You were one of the briefless lawyers mentioned here; you could not earn a living.
Opticians, 4; nurses, 35; teachers, 51:	civil
engineers, 6; chemists, 11; accountants, 73; architects, 13; painters, 10; musicians, 51; photographers, 12; journalists, 8.
Mr. Speaker, that is the Liberal balance-sheet. And they are the ones who cry:

(Text):
If you want to follow me, Mr. Speaker, I shall, during the next few minutes, make a comparison between what was going on during the time those Santa Clauses of prosperity, the Grits, were in office and what we are giving to this country. In 1956 the gross national product was $30,584 million, whereas in 1960 it was $35,959 million. Gross earnings in 1956, Mr. Speaker, amounted to $14,890 million, whereas in 1960 under Conservative government they totalled $18,514 million. Gross personal income under those Grits, those manufacturers of prosperity, amounted to $21,884 million, whereas under the present Conservative government it amounted to $27,442 million. Personal savings under the Grits amounted to $13,020 million, whereas under the present Conservative government they amounted to $16,075 million. Can we honestly say that Tory times are hard times when we have more money, when we are saving more, when we are earning more than ever before in the history of Canada? It takes the hypocrisy of those Grits to stand up in this house and pretend these things. I challenge any one of them to contradict what I am saying now.
They say we have done nothing for the people. Let us look at the record again. In August, 1956, there were 5,892,000 Canadians at work, whereas in 1960 during the same month, August, under a Conservative government we had 6,271,000 Canadians at work. The average weekly earnings-


Samuel Boulanger: From what are you quoting?


J.-H.-Théogène Ricard: Oh, I will come to you in a minute.
The average weekly earnings in different sectors of our economy, sir, were as follows: In 1956, the textile industry had average weekly earnings of $55.96, whereas in November, 1960, textile earnings were $63.51. In the manufacturing industry in 1956, average weekly earnings amounted to $68.72, and in 1960,	$79.16; construction industry, 1956,
$70.78; 1960, $81.46.
Now, let us see what the taxes were under those Grits who love the workers so dearly. Here is what the Grits were taking from the pocket of a single man earning $60 per week; they were collecting in taxes $7.30, whereas we are collecting from him only $6.05. A married man earning $60 per week had $3.60 deducted from his pay under the Grits, whereas we are collecting only $2.75. A married man with two children earning the same salary paid $2.60 in taxes under the Grits, whereas we are collecting only $1.47 from him. A married man with four dependents had $1.60 deducted from his pay, whereas we are

collecting only five cents from him. In the face of the ignorance of the hon. member for Drummond-Arthabaska (Mr. Boulanger), may I say that those figures were taken from the dominion bureau of statistics.
I should like now, sir, to deal with another item which interests me greatly. I refer to the textile industry, and may I revert to French at this point because I want the hon. member for Drummond-Arthabaska to understand me.
(Translation):
The other day, the hon. member for Drummond-Arthabaska read a letter into the official record. It is not my intention to brag about this, but I should like also to put on record a letter that reads as follows:
Dear sir,
On behalf of the federation-
Of course, Mr. Speaker, this letter is addressed to me.


Mr. Dupuis:: What is the date?


J.-H.-Théogène Ricard: July 15, 1959. The letter reads as follows:
Mr. Theogene Ricard, M.P.
Parliament buildings Ottawa. Ont.


Samuel Boulanger: Mr. Speaker, on a point of order.


J.-H.-Théogène Ricard: On behalf of the federation-


Mr. Deputy Speaker:: Order. The hon.
member for Drummond-Arthabaska is raising a point of order.


Samuel Boulanger: Mr. Speaker, before reading that letter, I think the hon. member should tell the house who signed it.


J.-H.-Théogène Ricard: Mr. Speaker, I will give that name in a short while; I would ask the hon. member to wait-he is too anxious.
The letter reads as follows:
Dear Sir:
On behalf of the building workers' federation of Canada, it gives me great pleasure to thank you most sincerely for having honoured us with your presence during the deliberations which marked the thirty fifth anniversary of our organization, for having attended the banquet which was offered on that occasion, and for the good words you had for us in your speech, indicating your interest ini the promotion of labour.


Yvon Dupuis: Very badly read.


J.-H.-Théogène Ricard: It is signed:
Yours very truly,
The Building Workers' Federation of Canada, Per: Jos. Arcand, Secretary General.
The Budget-Mr. Ricard


Samuel Boulanger: Is that the fascist?


Mr. Martel:: Not the same Arcand.


J.-H.-Théogène Ricard: In a speech interrupted by sighs, the hon. member for Drummond-Arthabaska cast some doubts on a statement I made last May 3 to the effect that 11 industries have been established in St. Hyacinthe since the Conservative government came to power.
I have here a pamphlet entitled: Statistics concerning the industries established in the city of St. Hyacinthe-


Yvon Dupuis: Who signed it?


J.-H.-Théogène Ricard: -which gives a list of the industries established in St. Hyacinthe. I see the following names: Alan Corporation Reg'd., established, 1957; Lucien Carrier, established, 1959-


Azellus Denis: What do those people do?


Yvon Dupuis: Do they sell hot dogs?


J.-H.-Théogène Ricard: Delly Dress Shop Co., established, 1957; Exquisite Form Brassiere (Can.) Ltd., established, 1959; Jace Tapes Incorporated, established, 1960; Kimberley-Clark of Canada Ltd., established, 1958; Megantic Knitting Co. Ltd., established 1959; Mercury Wire and Nail Co. Ltd., established, 1957; Modern Plastics Co. Ltd., established, 1957; Produits Laitiers Mont Saint-Hilaire, established, 1959; Regent Chocolate Co., established, 1959.
At present, these new industries employ 413 people-


Azellus Denis: Name the others.


J.-H.-Théogène Ricard: I named them earlier.


Samuel Boulanger: Name the industries that closed down.


J.-H.-Théogène Ricard: Mr. Speaker, I should now like to read into the record some extracts from a publication entitled Quebec Industriel, May 1957 issue. On page 18, this is what I find:
That is why from 1950 to 1954, almost 70 establishments had to close down, and as a result 21,000 workers were laid off.
It should be noted that this happened at the time of the Liberals, the easy-going, the Santa Clauses-


Azellus Denis: Just Santa Clauses.


J.-H.-Théogène Ricard: Mr. Speaker, these things cannot be repeated too often. The kindly Grits forced 70 firms out of business.

The Budget-Mr. Ricard
On page 16 of the same magazine, I find this:
The Canadian primary textile industry is left untouched by the wave of prosperity which is now sweeping the country, notwithstanding the fact that this industry is 84 per cent, under Canadian control, a fact which should earn it our best encouragement. While in 1955, the profits of Canadian corporations were on the whole slightly higher than in 1950, those of the textile industries were reduced to almost one third.
Mr. Speaker, various articles in this magazine have convinced me that it has always been under a Liberal government that tariff rates have been the lowest. As a matter of fact, page 24 reads as follows:
For 20 years now-
Under the Liberals.
- (except for the depression in the 30's) customs duties on imported textiles have been going down steadily.
And those gentlemen would have the population believe that they were the protectors of our textile industry. In fact, Mr. Speaker, they are the ones who betrayed the industry and, today, because the government has to pay the piper and make good their mistakes, they try to take advantage of the situation. They refer to the 30's, but they forget to say that when they were in power, in 1937, for example, the number of unemployed under a Liberal government-


Yvon Dupuis: Following the Bennett government.


J.-H.-Théogène Ricard: -was 400,000; it was up to
522,000	in 1938 and in 1939, after four years of Liberal administration there were 529,000 unemployed and 423,000 in 1940 for a population of 12 to 13 million.
Those people today shed crocodile tears while we have to rebuild all they have neglected. When the Bennett administration came to office in 1930, the worst crisis in Canadian history had just been prepared by the previous Liberal administrations. Mr. Bennett and his team restored Canada to her feet. And when the 1935 elections came around, the Liberals launched a huge campaign about unemployment. They claimed, as they did in Quebec last year, that they would remedy unemployment overnight.
The figures I just quoted, Mr. Speaker, show their lack of sincerity and their incompetence. I am not the only one who knows that-the whole population of Canada knows it too.

The Canadian people know what good administrators they are in periods of prosperity brought about by war.
They were saved by the 1939-45 war and again by the Korean war. But in 1957, the situation was too difficult and the people of Canada put them where they belong. And today, under a Conservative government our workers earn more than ever before, save more than ever before and more Canadian workers than ever before have jobs. However, this does not deter our Liberal friends from trying to confuse the population, from spreading fear, dread and discord, and this for one purpose only, that of playing petty politics.
Mr. Speaker, as you know, a while ago when the minister asked the hon. member for Outremont-St. Jean (Mr. Bourque) a question, the latter remained silent at first, and then suggested an appointment by telephone. Those people, as their past arrogance has shown, have never been able to come down to the grass. They admit it now-they had lost contact-
(Text):
They lost contact between the brass and the grass and they have lost it for a long time, for the good of the Canadian people.
(Translation):


Guy Rouleau: I should like to direct a question to the hon. member for St. Hyacinthe-Bagot (Mr. Ricard). Could he tell me what the political speech he delivered tonight has to do with the budget introduced by the Minister of Finance?


J.-H.-Théogène Ricard: Mr. Speaker, if the hon. member for Dollard (Mr. Rouleau) finds himself lacking in intellectual capacity, it is too bad, but I would not like to waste any more of my time.


Samuel Boulanger: Mr. Speaker, I should like to direct a question to the hon. member.


Mr. Deputy Speaker:: The hon. member's time has expired.


Azellus Denis: Saved by the bell.


Yvon Dupuis: As for Mr. Fleming, he fled before the bell-he had had enough.
(Text):


Murdo William Martin: Mr. Speaker, throughout the first two days of this debate I wondered what had happened to the hon. members on the government side. I finally came to the conclusion that they were stunned by this budget.


Some hon. Members:: Oh, oh.


Murdo William Martin: 
An hon. Member:: You never can tell.


Murdo William Martin: I believe I heard an hon. member say, "You never can tell", and perhaps he is right. I should like to read from another article in the Globe and Mail of June 22. This is a summary taken from various newspapers across the country giving their opinions of the budget. I am not going to read them all. However there are two that I think are worthy of note if for no other reason than that they list themselves as independent newspapers. The first one is taken from the Victoria Colonist, and from what I hear of the Victoria Colonist it is just about as independent politically as is the Minister of Public Works (Mr. Walker). It says:
In letting Canada go further into the red by $1 billion-$650 million in a budgetary deficit and $330 million for other cash requirements of a statutory nature-Mr. Fleming apparently feels that the upturn in the economy is already well under way, and needing only minor pump priming. It would be safest perhaps to say at this stage that it is a mildly protectionist budget, but one that shows Canada is in no way anxious to erect new tariff walls-
And so on.
If this analysis is correct and this is a mildly protectionist budget, what is all this talk about expansionism that we have been hearing?


Gordon Minto Churchill: On a point of order, Mr. Speaker, I dislike interrupting the hon. gentleman, who normally makes a very effective contribution to debate in the house, but I think he is now infringing the rule. The hon. member is quoting from newspapers which are reflecting upon proceedings within the house, and he is doing this for the purpose of attempting to influence decision in the course of debate here in the House of Commons.
In Beauchesne's fourth edition, on page 133, there are two citations which I think are worth considering. In citation 157, subsection 5, Beauehesne says:
It is not in order to read articles in newspapers, letters or communications emanating from persons outside the house and referring to, or commenting on, or denying anything said by a member or expressing any opinion reflecting on proceedings within the house.
Subsection 6 reads:
On the 17th March, 1933, a member quoting a newspaper in debate was ruled out of order by the Deputy Speaker who said: "The rule is quite clear, that the quoting of a newspaper, an author or a book which reflects upon debate before the house, either directly or indirectly is entirely out of order, because members are here to give their own opinion and not to quote the opinion of

The Budget-Mr. M. Martin others... Members may quote an article or a book stating facts, but a commentary on any proceeding or any discussion in the house, with the object of swinging an opinion to one side or the other, is out of order".
I think the hon. member who has been addressing the house has been using these quotations from newspapers in order to attempt to affect opinion here in the course of debate. I suggest to you, sir, that according to the rules the hon. member is out of order.


Erhart Regier: Wait till the Prime Minister does that.


Murdo William Martin: Mr. Speaker, I have no wish or desire to transgress the rules of this house. I only hope that the minister is as quick to check the Prime Minister the next time he starts quoting from newspapers.


Mr. Speaker:: There has been a good deal of quotation in the course of the budget debate. As long as it is in general terms relating to the budget as a public issue I think it might be acceptable to a limited extent. However, when it does get to the point of direct reference to proceedings in the house, what the minister says in undoubtedly true. Therefore I trust that the hon. member will limit his quotations to those which do not reflect on the proceedings in the house.


Murdo William Martin: Well, Mr. Speaker, rather than tread on the tender nerves of the hon. minister-


An hon. Member:: How about following the rules?


Murdo William Martin: I think possibly I had better paraphrase some of these statements.


Gordon Minto Churchill: Use your own ideas and not somebody else's.


Murdo William Martin: May I say, Mr. Speaker, that the quotations I have been reading are a reflection of my own ideas, and although I may have found them in a newspaper they none the less correspond completely with my own thoughts, particularly what one prominent newspaper had to say. It went something like this, that we are still in an era of improvisation and groping. There was another article which I believed described the situation very well and the headline, as I recall it, was to the effect: "Too little, because too late". It suggested, as we have suggested so often in this house, that by the time this government gets around to applying a measure to solve some situation, unfortunately the situation that it is trying to solve is some 20 years old and a whole new list of problems has grown up in the meantime.


The Globe and Mail, that good old friend of the Conservative party, after offering some mild criticism, went on to agree completely with the government. I hope the minister does not take any objection to that. It pointed out that the minister had emphasized the need to maintain at all costs the good old private enterprise system and added that the minister had listed a number of worth-while measures which the government intended to take. For example, they were going to increase the depreciation allowance for business; there were three or four different measures they were going to adopt in order to bolster industry and business, and the reason for this was because it had been requested for a long time. But there are also many other things which have been requested for a long time; I do not see them in this budget and I do not think anybody else can see them either. For example, for a long time people have been recommending a decrease in income tax or, possibly, an increase in exemptions under the Income Tax Act. I fail to find anything of that nature in the budget. The same thing applies as far as the sales tax is concerned, a tax which affects each and every individual regardless of his circumstances. The unemployed have been looking for jobs for a long time, now. But there is nothing in this budget to indicate that they are not going to continue to look in vain.
Nevertheless, there is one thing we can find in this budget. We have noticed it already. The old age pensioners have something to look forward to in this budget, and it is not an increase in their pension. It is an increase in their cost of living brought about by the measures taken by this government.
What are these Tory measures? What are these measures which the minister advocates and which receive so much praise in the Tory newspapers? Well, it follows the good old Tory policy that the only solution they can find is to try to help business, to let the "haves" get away with more and more. As a result, we shall have to soak the "have nots" to make up for it. What amazes me is that both the minister and this government and the Tory newspapers go blindly along this road completely ignoring the fact that they have been trying these measures for 94 years and that is what has gotten us in the mess we are in today. I do not know how many times they will have to be shown this before it will ever sink into their heads.
I wish, Mr. Speaker, that I had the time and the facilities to tally up the measures passed by this government in the last four years and see how many of those measures were designed to prop up business and how many were in the interest of the individual taxpayer. I think it would be an impressive

score. It seems strange to me that this government cannot understand that there are only two ways in which we can run a country. One is to raise enough money to do it and the other is to borrow enough money to do it. Apparently this government has decided that the only way they can accomplish it is by the second way. They refuse to do it the first way but they adopt the second solely for the reason that by doing so they can fool the public for a little while longer.
There is one bright side to our economy today, and only one that I can see. That is housing, the bright spot in the building industry. It is interesting to find out just why. We find that in an article by Farrell Crook in the Globe and Mail of today. We find that activity in the over-all construction industry is up some 16 per cent compared with the same period in 1960. Why is it up 16 per cent? We find that the Central Mortgage and Housing Corporation reports that in the first five months of this year starts were made on 29,337 dwelling units in centres of more than
5,000	population, a jump of 40.7 per cent compared with last year. So it took a 40.7 per cent jump under this socialistic measure to give us a 16 per cent increase in our over-all picture. If we look through further we find out again why-it was because the free enterprise part of our construction industry, according to contract awards, is down 30 per cent as compared with last year. It makes me wonder just how long this self-illusion on the part of this government can be maintained; how long they can hang on to the idea which is propounded by the Prime Minister in his clarion call that the next election should be fought on the issue of free enterprise versus socialism.
Bad as the situation has been, I wonder whether the government has stopped for one moment to think what the situation would have been like over the last three years if it had not been for our old age pensions, our old age security payments, our blind and disabled pensions, our veterans pensions, family allowances and unemployment insurance, building and construction under the Central Mortgage and Housing Corporation, our industrial development bank, our much lauded winter works program, our home improvement loans and public works department construction? Had it not been for all these measures-measures which I do not think anyone by any stretch of the imagination could call free enterprise measures-we should be back exactly where we were in the early thirties. Our country would be in chaos.
I think it is interesting to note what the Economist of London has to say about the over-all situation in Canada. I should like to quote from an editorial which appeared in
The Budget

Mr. M. Martin the Toronto Daily Star of June 3, 1961 entitled "Plan for Growth" which reads as follows:
One of the western world's most authoritative and respected publications, the Economist of London, says Canada faces a bleak decade unless it reexamines its ineffective economic policy and begins to plan for something better.


Marcel Joseph Aimé Lambert: Gloss upon gloss.


Murdo William Martin: This editorial then quotes from the Economist, as follows:
"Entirely new planning arrangements bringing together the public and private sectors, are urgently necessary.
A new purposive sense is needed in the federal government's economic thinking."
The editorial then continues as follows:
The fact is that Canada is one of the few industrial nations to scorn national planning.
It is needless to add that it is also one of the few industrial nations with an unemployment problem today.
The editorial continues:
The closest we have come to it is with the new national productivity council, which seeks to find ways in which our resources in manpower and machines can be used more effectively, but it must rely primarily on exhortation to industry and labour.
How many times have we heard the ministers of this government stamp up and down the country exhorting labour and industry to try and do better in the future but apparently each exhortation falls on deaf ears because we have not seen very much improvement. The editorial then continues:
The contrast between this limited function and those employed elsewhere is startling. Whether in Europe's "common market" or in the Red bloc, planning is a vital fact of economic life. And even south of the border, in that bulwark of free enterprise, U.S. presidents have had the help of a council of economic advisers.
The editorial continues, as follows:
If we as a nation are to grow and prosper; if we are to adjust our efforts to the conditions in the new and thoroughly planned world, we ourselves better begin planning.-For, as the Economist suggests, the alternative is continued decay.
Mr. Speaker, I have one more article here which I think is apropos of this debate. I should like to read a portion of an article appearing in the Globe and Mail of June 27, 1961 writen by Ronald Anderson entitled "Economy at Midyear", which reads as follows:
In the first quarter, the economy made no improvement. National accounts figures, to be released later this week by the dominion bureau of statistics, are expected to show a sideways drift, possibly a slight decline, up to the end of March.
When I read that statement it reminded me of the words of Samuel Taylor Coleridge


Marcel Joseph Aimé Lambert: Mr. Speaker, in the early stages of this debate it was rather difficult to assess the true position of the official opposition as regards this budget. Certainly during the first day we were not given any true inkling. We have, however, had more time to find out what hon. members in the official opposition thought after the second day of the debate and their almost exclusive participation in it.
The member who just resumed his seat wondered why hon. members on this side of the house did not participate beyond a certain stage in this debate. Frankly, as far as I am concerned, it was because I felt that I should participate in a debate, and up until that time nothing had been said which could be debated.


Murdo William Martin: The minister spoke for three hours.


Marcel Joseph Aimé Lambert: The minister has spoken but I do not have to re-echo his words to participate in the debate. When I wish to participate in a debate I shall exchange thoughts and criticize the thoughts of others, but when there is an absence of thinking on the other side we just stay out of it until we see what they have to say. Hon. members opposite were given full scope and while they have filled many pages we are not much wiser even now. Frankly, Mr. Speaker, the reason is that the Liberal party is at sixes and sevens in its attitude toward the budget. Fury and storm have been promised, a real side-raking, slashing attack, but apart from the exhibition put on by the hon. member for Bonavista-Twillingate (Mr. Pickersgill) there has been none of that fury and storm.
We did see a frenzied and, I would add, rather frantic performance by the hon. member for Bonavista-Twillingate exceeded only

in slight degree by that incredible speech of last night in another debate. Had he not been suffering from a bad case of foot-in-mouth disease, and we have heard the reference to gutless chickens and his confessions about letters from constituents and elsewhere, we would have thought that he was putting on a display of histrionics in competition with the dramatic festival of much greater note and worth at Stratford at this time.
However, the prerogative of putting on that great dramatic show is reserved for his running mate, the hon. member for Essex East (Mr. Martin), as he thunders away, as he postulates and postures, as he plays to the gallery, always in mock indignation oblivious of all but the self-intoxicating volume of his own exuberance.
But other than these minor blows there has been none of that fighting attitude that had been announced with such fanfare and such ballyhoo and, as we know now, such false bravado last January. That bravado has been displayed from time to time since then but, Mr. Speaker, there is a curious parallel between 1961 and 1958. In 1958 there was a conclave in January. To the sound of trumpets and a great to-do the Liberals came up posturing for a fight. There was a great thumping of chests, cries of bring on the lions, and after a violent travail those of us who were here in January, 1958 saw the Liberals give birth to a puny runt of a mouse. How the people of Canada reacted to that mouse was well recorded some two months later.
Again in 1961 we have had the sound and fury, the January conclave, the trumpets and the ballyhoo, the threatening growls and, quite in keeping, the puny runt of a mouse. That mouse is the amendment put forward by the genial member for Kenora-Rainy River (Mr. Benidickson) as financial critic for the official opposition. Not for a moment do I believe that the hon. member is the author of that amendment. He certainly was not the author of that other notorious and unlamented-by the Liberals-amendment of January, 1958. We rather know who was the author or at least the inspiration for that one. I would say the same for the present amendment. That busy, busy man of the Liberal party I think was not too far away when the present amendment was concocted.
I had some other remarks about his inspirational authorship last night, and if one credits the number of stories about the hon. member's activities prior to his entry into the house, then he is keeping quite in character. Truly sir, this amendment really says nothing. Let us look at it.
This house is of the opinion that the financial proposals of the government, as set forth in the
The Budget

Mr. Lambert budget presented to this house by the Minister of Finance and contrary to the advance publicity-
I ask, Mr. Speaker, whose advance publicity? That of prognosticators in the press? After all, they have a right to speculate, but that was not advance publicity from the government.
-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.
We will talk about deficits a little later, Mr. Speaker, and about the attitude of the Liberal party toward deficits, their attitude since 1958 and what their program since that time has meant in potential expenditure.
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.
These last few words are very reminiscent of 1958 and for that reason they mean just as much as they did then. My only thought is that obviously this amendment is intended to gain the support of the hon. members of that group which is casting about for a name and for a leader but can quite easily answer to the name of the third party. Not only do the Liberals in this house seek to garner unto themselves the elected representatives of that new party but it would appear that the order may have gone out to do the same at the lower echelon; at least, so the young Liberals would appear to have thought in Toronto last week.
I think the hon. member for Kenora-Rainy River deserves a better fate than to fight the cause of such an amendment. His was a curious speech but because my colleague, the hon. member for Carleton (Mr. Bell), has dealt at some length with last Thursday's opener by the opposition financial critic I shall make but one or two short comments. First of all, there was an unseemingly long dredging into the past for items of speeches, for statements, some reported accurately and some otherwise, statements taken out of context, glosses put on statements, excerpts from the red bible. I wonder whether they have the red dean too. How that book has been in evidence. On all of the glosses, the excerpted statements, the hon. member built up a number of men of straw. Oh, he worked hard and tortuously to get these creatures to stand up so as to be identifiable at least, but just as hard he worked to knock them down. To what purpose? To consume the major portion of his speech.
I would say that he neglected most of the really important items in the budget. What of the tariff changes? We had heard the hon.

The Budget-Mr. Lambert member on previous occasions speak at great length about tariffs and yet this time I do not recollect having heard him so speak. As financial critic, surely he would have had a good deal to say about the provisions for dominion-provincial fiscal arrangements. These were concretely stated and were not something intangible like the possible effects of the devaluation of the dollar which has so many indefinables. But then I suppose such a course of action as he took was more in keeping with the Cassandra-like mood of the hon. member the other day.
Surely if he were really interested in the economic welfare of the country he would have dwelled much more on the changes concerning the industrial development bank, for instance. These are two-pronged and are most important, and I intend to discuss them in more detail later.
However, Mr. Speaker, the official financial critic was subsequently followed by the hon. member for Bonavista-Twillingate who gave the first of two speeches in the last four or five days which indicate that the hon. member is finding the session long. I am not going to refer to yesterday's effort, but last Thursday evening's effort was quite a contrast with the reasoned though laboured effort of the opposition's opening critic. There was no intelligent development of argument. It was a resort to invective, to personal vilification of the Minister of Finance and of the Prime Minister. One would say there was smear by innuendo and of course there were exaggerated gestures and language. I do not think the indignation he showed was as synthetic, and certainly was not of the order of that which we often get from his running mate, the hon. member for Essex East.
However, there was one thing he said with which I agree. At one stage the hon. member for Bonavista-Twillingate gloated that he was not thin-skinned. Well, Mr. Speaker, I will agree that at times he has the hide of a rhinoceros. The other night, however, I believe he displayed other characteristics of that animal, certainly in so far as the intelligence of his speech was concerned. Thursday was a bad day for the hon. member as was indicated earlier by the hon. member for Halton (Mr. Best). "Gutless chicken" will be as long remembered as "Canadian babies".
I thoroughly enjoyed the spectacle of the hon. member for Trinity (Mr. Hellyer), that coiner of pat phrases. I have had experience of him in last year's committee on defence expenditures. He has not changed a bit. On all and sundry occasions we hear flat assertions from him, relying for their validity on the fact that they are statements by the hon. member. He had a great deal to say

about planning and tried to chide the government for a lack of planning. His remarks were general, I point out, and applied to no particular sector.
This love of planning exhibited by the hon. member for Trinity is touching. He was one of the co-chairmen of that famous January conclave. He was one of the backroom boys, sir, who steered the meetings, the conclusions and resolutions. We know just what the result was. If there was any vestige of planning in what came out of that January meeting of the Liberals then the hon. member for Trinity stands alone in the Liberal party in his great love of planning. Of course, we all remember the Pearson plan of 1958. We recall it rather dimly, mind you, because it lived for two short months and has been buried for the past three years.
The hon. member for Trinity tried to make much about the reduction of taxes. He dug into the past, into 1956 and early 1957 for excerpts of speeches by the Prime Minister. Then, the red book came out. He forgot, though, about the reduction in taxes in late 1957 which were worth about $178 million. There were reductions in the rates of personal income taxes, increases in the exemptions of children. Of course, one can forgive the hon. member for Trinity for forgetting that because he was not here then. Undoubtedly, he has forgotten these minor items as well as the upward revision from $25,000 to $35,000 of corporate profits to which the lower 21 per cent rate applies. If this is not lowering taxes, then I do not know what is.
A great deal was said by the hon. member for Trinity about deficits. This was echoed by other members of the opposition, the hon. member for St. Jean-Iberville-Napierville (Mr. Dupuis) and others. However, they conveniently forgot what their leader said about deficits in 1958. He cheerfully promised tax cuts up to $400 million in addition to the $178 million that the Conservatives had put into force in 1957. What has become of the promise to aid young married couples about which we heard so much? We know that the other day they supported increases in family allowances. What about the plan to bring spring wheat, oats and barley under definite price supports? Wheat was supposed to be $1.50 per bushel in 1957 and 1958. This program would take a lot of money, but the Leader of the Opposition was quite candid about it. He cheerfully accepted the fact that he would have to engage in heavy deficit financing.
I would ask hon. members of the opposition, why all this lately discovered concern about deficit financing by their group? Let us ask

them the cost of that great platform of January, 1961. I have heard the estimate put as low as an additional $1,000 million and as high as $1,600 million. Certainly, though, no Liberal who participated in the production of that famous platform has ever publicly admitted that fact, and certainly not the leaders of the Liberal party. They have not admitted the cost of these programs. Unless they are prepared to increase taxes to meet the cost of these items, they are going to have to engage in deficit financing. If they are not so prepared, then the whole program is a sham to deceive the Canadian people. When one considers the added cost today of the $270 million annually for hospital insurance which the Liberals did not have to face prior to 1957, the Liberal program of last January makes absolute nonsense of the opposition's lamentations about deficits, and even greater nonsense of the plea of hon. members such as the hon. member for Maisonneuve-Rosemont (Mr. Deschatelets) for tax cuts across the board. I said earlier that the Liberal party was at sixes and sevens in its reaction to the budget. We have had more than ample proof of this fact, Mr. Speaker.
I should like now to turn briefly to the speech of the leading C.C.F. member, the hon. member for Burnaby-Coquitlam (Mr. Regier). All I can say is that the part of it in which he made direct reference to the budget beggars all description as to its logic. The hon. member complained about exploratory exemptions, and so forth, which he said led to the reckless expansion of our resource industries in the last few years. I should like to see him come out to Alberta and say that. I challenge him to come out there and say that. I defy him to go to any part of the country in which development programs such as we saw in connection with oil and gas, resulted in economic growth in many sectors of the country and tell that part of the country that we have had reckless expansion.
His lack of logic was illustrated in his next remark when he lauded the higher level of the gross national product in those years. How can he reconcile his two arguments? We have these developments of our resource industries which have contributed, in the main, to the development of the gross national products and will continue to do so. He approves of this increase in the gross national product, but he spent a good deal of his time chiding the government because there had been a decrease in the rate of increase in the gross national product. His logic was completely lacking in this argument.
I did say, sir, that I would refer to the industrial development bank. We have seen a great need in this country for medium and
The Budget-Mr. Lambert long range financing in all types of business enterprise. The banks do a good deal of financing. The Canadian chartered banks have a record for which they have no cause to be ashamed. They certainly have participated to the full in the economic growth of this country. However, by reason of their structure and the limitations of the Bank Act, they cannot engage in this medium and long range financing. There has grown over the years, therefore, some use of the industrial development bank in a limited sector. We will now see that use expand in so far as these facilities are available to industry in this country.
If I might make a gentle suggestion to the Minister of Finance, it would be that the true spirit of the amendments to the Industrial Development Bank Act be carried out in the regulations and that we do not hamper or inhibit the use of the credit facilities under the Industrial Development Bank Act. That is one side of the amendment to the Industrial Development Bank Act. However, there is another side and this is a point on which I am glad to see that the Minister of Finance has acceded to the representations which were made not only by myself but by other hon. members and by various organizations throughout the country.
I refer to the fact that in this country, as the minister indicated as found at page 6647 of Hansard in the second column, on ac-casion problems arise where the principal owners of a firm, be it a family owner or otherwise, are facing or anticipating difficulties in connection with estate taxes. We know of instances in which national firms may be developed through' the enterprise, genius and drive of two or three men; those men provided the key to the success of that firm. They may be all able to insure one another so that if, for some reason, one of them should disappear, they are able to buy in his interest and to maintain it within the firm. They are not obliged to sacrifice in order to deal with estate taxes or to settle with the deceased partner's estate and so on.
But there are instances-and I know of some very difficult ones-in which one of the persons involved is not able to get the insurance. There is no means whereby provision can be made for those funds required to clear up the estate taxes or to purchase the interest of the estate. It is suggested that under the Industrial Development Bank Act the bank may be able to participate in the purchase of the shares and in that way to assist the remaining members of the company to keep it together, so that it will not have to be sold at fire sale prices. Again, there is the case of an individual who anticipates that he is not long for this world and that he is going to have quite a sizeable estate.

The Budget-Mr. Carter I know of one case that was referred to me some time ago by the gentleman concerned. His estate will have to pay a very heavy estate tax, and he does not object to paying it; but in order to raise the cash for that purpose, that business will have to be liquidated possibly at fire sale prices, under forced conditions, to the detriment of the estate and any continuing business interest they may have. Yet, on the other hand, today he has offers from foreign interests to buy his business as a going concern. He can take cash to protect his family and to take care of the estate tax problem. But on the other hand, the loss has been that of Canada because a flourishing business has had to be sold to foreign interests. Here again, if I may make a plea to the Minister of Finance, I would express the hope that the regulations, which will embody the spirit and principle of the Industrial Development Bank Act, will be so fashioned and interpreted that we can get the maximum use of it.
I have not referred in very great detail to the provisions of the budget, Mr. Speaker. The Minister of Finance gave a clear picture of those provisions. Hon. members have copies of all of its provisons. I commend it to them for those features which will give to the people of Canada those necessary incentives to improve the economic climate of this country. It is positive action such as that embodied in this budget which will create the right atmosphere for the people of Canada to go forward and not the carping criticism and denigration which we have heard from far too many members of the opposition. Mr. Speaker, I would commend this budget to hon. members of this house and to the people of Canada.


Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, the budget now under debate presents some very interesting contrasts with previous budgets that have been brought down by the Minister of Finance (Mr. Fleming). The increase in wordiness and the decrease in information have already been commented on by various hon. members. I do not think anything more need be said on that score. However, when we examine this budget in the light of last year's budget we can surely be pardoned if we question the accuracy of the minister's economic forecasts and the competence of this government to manage the financial affairs of our nation.
In March, 1960 the minister told us he was budgeting for a surplus of $12 million. In December, 1960 he came and told us the $12 million surplus had now somehow turned into a $286 million deficit. A few days ago he told us that on March 31 instead of a $286 million deficit we were going to have a $345 million deficit. These figures hardly inspire

confidence in the minister's judgment. I can remember the time, and it is not so many years ago, when the minister rather prided himself on the accuracy of his forecasts. He now seems to have given up completely in despair. He told us that we were moving out of a recession and that, even if there were no changes in the budget proposals, we could expect a three per cent increase in our gross national product. He refused, however, to predict how much extra increase would be brought about by his budget proposals. He has now come to the point where he will not even predict what his deficit will be. He cites a figure of about $650 million to $700 million and provides himself with a comfortable margin of $50 million even on his deficit.
With respect to the competence of this government in managing our national affairs may I say this. This government has produced a deficit every year since it took office. There have been four successive deficits and a fifth deficit of $650 million is predicted for the current year. The result of these deficits has been to add over $2 billion to our public debt and to increase our interest charges to about $800 million, making them now the third highest item of federal expenditure, second only to national defence and national health and welfare, When we consider all these things, we can hardly regard this performance as an example of good national housekeeping.
There can be no disagreement, however, with the objectives of the budget; to get our economy rolling; to create jobs; to lower interest rates; to finance a greater proportion of our industrial expansion with Canadian capital. Everyone will welcome the tax cuts on automobiles and the other measures such as research allowances, exploration and development allowances and the extension of the operations of the industrial development bank. All these will receive, I believe, general approval.
However, when these proposals are viewed in the light of our national problems, problems of unemployment, economic slow down, the problem of underdeveloped areas and our unfavourable balance of international accounts, then there is room for a great deal of doubt both as to their adequacy and their effectiveness.
Here, Mr. Speaker, I must record my personal disappointment that apart from the extension of the operations of the industrial development bank this budget contains nothing whatever to stimulate the economy of the Atlantic provinces-


Mr. Morris:: Who wrote the speech you are reading?


Chesley William Carter: I am not reading it.


Edmund Leverett Morris: You are reading a speech. Who wrote it?


Chesley William Carter: I wrote it myself; I write my notes myself. I do not have to come to you or anybody else to write my speeches.


Azellus Denis: You all do that.


William Arnold Peters: Why didn't you look around this afternoon when four or five members read their speeches? You did not say anything then.


Azellus Denis: Didn't you see the hon. member for Joliette-L'Assomption-Montcalm (Mr. Pigeon)?


Mr. Speaker:: Order. I am having great difficulty in determining who has the floor. I think it is the hon. member for Burin-Burgeo.


Chesley William Carter: Thank you, Mr. Speaker. In particular my constituents will be disappointed that apart from putting net making machinery on the free entry list, bringing it down from-


Edmund Leverett Morris: Mr. Speaker, on a point of order, the hon. gentleman is reading his speech and has been reading it up to this point. That is against the rules.


An hon. Member:: Shame.


Hédard-J. Robichaud: The Secretary of State (Mr. Dorion) did the same thing this morning.


Mr. Speaker:: What has the hon. member to say to the point of order?


Chesley William Carter: Mr. Speaker, I think it is well known that I am not in the habit of reading my speeches in this house.


Edmund Leverett Morris: On the point of order, Mr. Speaker, the hon. gentleman is holding the script from which he is now reading his speech.


Hédard-J. Robichaud: Shame.


Mr. Speaker:: The practice of the house, and the rule of the house nominally is against the reading of speeches, but in the final analysis it rests with hon. members to observe the rule. If the hon. member indicates he is not reading the speech, the house will accept his statement.


Mr.   Carier@: Thank you, Mr. Speaker.


Mr. Palleli:: The hon. member has not said he was not reading it even yet.


Mr.   Carier@: No, Mr. Speaker, I am not reading my speech. I have some notes to which I am referring, like every other hon. member.


Joseph-Alphonse-Anaclet Habel: He is not reading a newspaper, like you did the other day.
The Budget-Mr. Carter


Mr.   Carier@: I am quite willing to send them up to Your Honour, if Your Honour wishes to verify it.


Mr. Speaker:: Would the hon. member proceed?


John Cameron Pallett: Have you lost your place? It is the fourth line from the bottom.


Edmund Leverett Morris: Read on.


Mr.   Carier@: I was saying, Mr. Speaker, that my constituents will be particularly disappointed that apart from putting net making machinery on the free entry list, bringing it down from the most favoured nation tariffs, which means a reduction of only 5 per cent, there is nothing whatever in this budget to assist the fishing industry.
I wish to refer to the recommendations of the Fisheries Council of Canada. Here I am going to read quite extensively from my notes, Mr. Speaker. I am going to read the recommendations of the fisheries council from notes rather than from the letter which I have here. It is more convenient and I think I will save time by following this procedure. The recommendations of the Fisheries Council of Canada that free entry under item 682 be extended to include trawl doors, inflatable life rafts, aluminum fish boxes and pen boards, cordage with metal strands, salt fish dryers and parts, and electrical generating equipment have been completely ignored. Even their request that the 15 per cent duty on anchors weighing under 40 pounds should not apply to commercial fishermen has been refused.
It is doubtful whether the depreciation of the value of the Canadian dollar will be of very much benefit to fishermen. It is true that it will make fish exporters more competitive, but the New England fishermen are already complaining that our fish products are too competitive in their market. While it may tend to increase profits of fish exporters, there is no guarantee whatever that this increase in profits will be passed on to the fishermen in terms of higher prices. On the other hand, their cost of living will rise, and rise substantially. As other hon. members have already pointed out today, not only will their cost of living increase, but their cost of production will also increase because most of the equipment that the fisherman uses, in my province at least, has to be imported.
In view of the risks involved in using the exchange stabilization fund to depreciate the value of our Canadian dollar there is great room for doubting even the wisdom of this proposal. The most heartening thing about the present budget is that the minister has at least conceded that our Canadian economy

The Budget-Mr. Carter is sick. However in this budget, as in previous budgets, the minister seems to have overlooked two very important factors. These are that no matter how accurately he has diagnosed our economic ills, and no matter how good the remedies he has prescribed, there are still two things necessary to make them effective. These two things are the intelligent co-operation of the people and the confidence of the public, particularly of the business community.
The minister cannot expect to get the intelligent co-operation of the people if they do not understand what is required of them and why. I want to suggest to the minister that the wordiness of his budget tends to defeat these two very desirable and necessary ends. If a person comes to me and spends 20 minutes saying something that could be said in five minutes, that certainly does not inspire my confidence in him.


Donald Methuen Fleming: Would the hon. member permit a question?


Chesley William Carter: Yes, certainly.


Donald Methuen Fleming: Is this not the hon. member's second speech in the course of the budget debate?


Chesley William Carter: Yes, Mr. Speaker. The first was on the-


Donald Methuen Fleming: And did the hon.
member not spend some time on this very same theme in the first of his two speeches in the course of the debate?


George James McIlraith: That would be as repetitious as the minister's budget speech itself.


Chesley William Carter: Mr. Speaker, I am repeating it to lead up to a very important point which I do not want the minister to miss. Mr. Speaker-


Edmund Leverett Morris: Don't obscure it in verbiage.


Chesley William Carter: -I do hope the minister will give serious attention to this-


Edmund Leverett Morris: Read on.


Chesley William Carter: -because, as I say, if a person takes 20 minutes to say something-


Donald Methuen Fleming: Or makes two speeches.


Chesley William Carter: -that he could say in five minutes, that does not inspire anyone's confidence in him. If, in addition to that, he uses those 20 minutes to talk about minor details without giving the vital information that is necessary to form a balanced judgment, then I not only lose confidence in him but I also get suspicious. I want to suggest to the minister that in my opinion-


Donald Methuen Fleming: You are a suspicious man.


Chesley William Carter: -the public mind reacts in much the same way. In this connection the budget leaves unanswered some very important questions.


An hon. Member:: Didn't the Liberal budgets do that for years?


Chesley William Carter: The Liberal budgets were never like this.


William McLean Hamilton: You
are right. This is a good budget.


George James McIlraith: Good for nothing.


Chesley William Carter: I am reading from page 6642 of Hansard. The minister had this to say:
When there is a substantial degree of slackness in the economy, in the form of excess productive capacity and idle manpower, budget deficits can provide an important stimulus. By means of such a deficit the government, through its expenditures, places in the hands of the public substantially more purchasing power than it withdraws through taxation. If appropriately planned and timed, a substantial deficit can encourage higher levels of output, employment income and savings, without incurring risks of inflation.
Well, it is evident from these words that the minister has at last been converted to the merits of budgeting for a planned deficit. We have been urging that course of action on the minister for the last four years.


An hon. Member:: You have?


Chesley William Carter: Oh yes. Budgeting for a planned deficit.


Donald Methuen Fleming: Would the hon. member permit a question? Are we to understand that the hon. member is saying that he and his colleagues have been urging on me for the last four years the virtues of planned deficit financing?


Chesley William Carter: Certainly.


Donald Methuen Fleming: A moment ago you complained about deficits.


Chesley William Carter: The hon. member for Edmonton West (Mr. Lambert) a few moments ago-was not the minister listening to his own colleague? -was decrying the Liberals for all the deficits we were proposing in our resolutions.


Donald Methuen Fleming: And you were complaining about the deficits.


Chesley William Carter: I want to recall to the minister what the hon. member for Edmonton West said. He said the Liberal leader came out and asked for a deficit of $400 million. That was a terrible thing. Here we have the minister telling us that last year he had a deficit of $350 million which was not planned

at all. Not content with that, he comes before us and tells us he is going to have another deficit of $650 million or $700 million this time, and that is not planned either. I am going to prove to the minister just how little planning there is in this budget, but before I go on I just want to answer another thing that the hon. member for Edmonton West said. He went on to say that we have to find $298 million for the hospital insurance plan; the Liberals never had to face anything like that. I want to tell him that as far back as 1957 we had $89 million in the budget for this contingency. So at the time when we were in the depths of a recession the minister steadfastly rejected any suggestion that he should budget for a planned deficit but now that we are on the way out of it he suddenly espouses this cause and becomes alive to its merits. Why has the minister changed his mind? Surely the people are entitled to know. Is it because he has tried everything else and has come to this as a last resource?
I want to tell the minister that it is open to serious doubt whether he has in fact presented us with a planned deficit. The minister has said this is an expansionist budget and I think everybody would agree that if the economy is moving upwards a little more momentum would be all to the good and it would not be a good thing to try to slow it down before it really got under way. We want it to get enough momentum to keep on going. On the other hand we do not want it to get out of control. It might be good politics on the part of the minister to talk about an expansionist budget when the economy is moving upwards, because if the economy is moving up we are going to have expansion anyway. The minister has told us to expect a 3 per cent expansion apart from any effect brought about by his proposals. Will the minister take credit for all the expansion that occurs next year, or only for the expansion that occurs in excess of 3 per cent? I want to tell the minister that there is not much expansion indicated in this white paper which is entitled "Private and Public Investment in Canada Outlook for 1961". If this is really an expansionist budget, how much expansion does it represent? To be healthy, our Canadian economy needs to expand at the rate of at least 6 per cent-2 per cent to take care of the national increase in the working force, another 2 per cent to take care of the backlog of unemployment and a further 2 per cent to provide capital for reinvestment and improvement and to raise our standard of living. Do we have a deficit that is planned to accomplish this? If so, how is it to be achieved? It is certainly not clear from what the minister has told us so far.
The Budget-Mr. Carter
A planned deficit, as I understand it, has two components. One component is designed to put extra purchasing power into the hands of the people and the other is to carry out planned projects. The minister told us when he brought down his budget that his proposals would put only $100 million extra purchasing power into the hands of the people in the whole year, and that for the balance of this year they would receive only $65 million extra spending money. Well, I submit that that is not going to have very much impact on the economy. What about the rest of the budget? What about the rest of the deficit? Last year we had a deficit of $350 million and that was totally unplanned and totally unexpected. Now we are going to have $650 million-$300 million more. To what plans are that extra $300 million deficit geared? The minister has not told us. But the hon. member for Kenora-Rainy River (Mr. Benidickson) has suggested that it is geared to the spending program which was approved eight months ago. If that is so, and it seems very likely that it is, then it is not related to any expansion project at all.
Another vital question which has been left unanswered is this. What is behind the minister's sudden conversion in favour of using the exchange stabilization fund? Last year he told us it was too dangerous even to contemplate. What is the difference now? He has not told us that.


Lionel Chevrier: Gigantic speculation.


Chesley William Carter: We know that the cost of living will go up, but in addition what will be the cost to the treasury to bring our Canadian dollar down, and not only to bring it down, but to keep it down particularly in the face of the United States dollar which may tend to get stronger on the world market? Where will this money come from? Will we borrow this money or will we just print it, and how will this affect the deficit? In fact, is $650 million a realistic deficit and, if not, how will it affect our cash requirements?
If, as the minister has told us, he already will need $1 billion, if our cash requirement will be $1 billion and if in addition to that we have to borrow more money for the industrial development bank and for the exchange stabilization fund, will that not defeat the minister's efforts to keep interest rates down? Surely that will have the effect of an upward push of interest rates.
Then again what will be the effect of a devalued dollar on other sectors of government spending, for example, in regard to the armed forces? I have an article before me which appeared in the Ottawa Journal on June 24, 1961 headed "Canadian Troops



The Budget-Mr. Rouleau Ask Pay Boost" and bears the date line, "Soest, Germany". Part of this article reads as follows:
Until about a year ago here Canadians received approximately 41 marks on the dollar, give or take a tew "phennings" (100 to a mark or the German equivalent of our cent).
Since then, however, the value of the dollar has dropped 15 per cent, 7.5 per cent of this since mid-January this year, taking in the March revaluation of the Deutschmark.
On the basis of $100 you used to receive 440 marks; now you only get 384, or 57 marks less, equivalent to- a loss of about $15.
A later paragraph of the same article reads as follows:
Sometime this fall the strengthened Deutschmark is to be revalued again. And the question asked is: "If the Canadian dollar is only worth 3.75 now, what's it going to be worth then?"
We might very well ask what it will be worth after the minister has devalued it.
These are all very important questions. I should like to suggest to the minister that the success of his budget proposals will be in direct proportion to the confidence he can inspire in the business community. Businessmen are not interested in the political aspects of the budget and will not be fooled by changes made for political purposes without economic justification. Their confidence will depend on to what extent and with what forthrightness the minister provides the answers to these important questions.
(Translation):


Guy Rouleau: Mr. Speaker, I listened a few moments ago to the hon. member for St. Hyacinthe-Bagot (Mr. Ricard) who had risen to take part in the discussion of the budget. The hon. member said that he had no intention of taking part in this debate, but that, in view of the lack of sincerity, or of the "insincerity" of the Liberals, to use his own words, he had decided to do so.
Mr. Speaker, I am asking you, is it a lack of sincerity on the part of the members of the Liberal opposition to take up the case of the unemployed in this country? Is it a lack of sincerity, Mr. Speaker, to defend the businessmen who are having trouble since the Conservatives took over in this country? Is it insincere on the part of the Liberal opposition to make an appeal on behalf of businessmen in Canada? Is the Liberal opposition lacking in sincerity because it wants to defend the Canadian workers and taxpayers? Is it a lack of sincerity, Mr. Speaker, for members of Her Majesty's official opposition to try to co-operate in the restoration of full employment in Canada, in the restoration of prosperity and of the finances of the state?

Mr. Speaker, who is guilty of insincerity, if I may use the expression of the hon. member for St. Hyacinthe-Bagot? Certainly it is those who, in 1957 and 1958, made irresponsible promises. They were guilty of insincerity in failing to provide to the Canadian people what they had been used to receive during the 22 years of Liberal government.
The hon. member for St. Hyacinthe-Bagot managed to pull another neat trick tonight. In taking part in the budget debate, he managed to say not a single word on the budget itself. That shows what the member for St. Hyacinthe-Bagot really thinks of the budget speech delivered to us by the Minister of Finance. The hon. member for St. Hyacinthe-Bagot suggests that we, of the Liberal opposition, are glad to see the unemployment insurance fund depleted. Well, Mr. Speaker, nothing could be more untrue. What we complain about however, we, Liberal members, is that the unemployment insurance fund that we had succeeded in setting up during our administration, because we were able to ensure full employment, is seriously threatened by the bad administration of the Conservative government which is directly responsible for the present unemployment in our country. But before long, Mr. Speaker, it will be those who sit on this side of the house who will have the responsibility of replenishing that fund, as we did in the past, by restoring prosperity and full employment in Canada.
The hon. member for St. Hyacinthe-Bagot stated here tonight in front of his colleagues, that we, on this side of the house are glad that there is unemployment in Canada. Well. As a young Canadian, as a Liberal, as a politician, I take objection to the statement of the member for St. Hyacinthe-Bagot. As a Canadian who loves his country and his fellow-citizens, regardless of party affiliations, I cannot rejoice that there should be so much unemployment in our country. As a Liberal, as a member of Her Majesty's loyal opposition, nothing would please me more than if unemployment were on the way out and if all those who suffer at present could find the jobs to which they are entitled and which would enable them to earn their living and benefit from the natural resources with which providence has endowed our country.
Mr. Speaker, the hon. member for St. Hyacinthe-Bagot asserts that all we want on this side of the house is to get back into power.

After four years of Conservative administration, after having travelled here and there in the country and having heard Canadian citizens from all classes complaining, I should say that it is less a case of Liberals wanting to get back into power than a case of the Canadian people being anxious to get rid of a government in which they put their trust in 1957, but which they do not trust any more and which they would gladly replace by one having shown its mettle, namely a Liberal administration.
The member for St. Hyacinthe-Bagot told us that we wanted to get back into power only for the sake of being in power. The hon. member for St. Hyacinthe-Bagot would do well to read again the report of the Conservative convention held in Ottawa in 1957 when the young Progressive Conservatives were stating that in order to take hold of power in Ottawa they only had to mobilize all the discontented Liberals.
Mr. Tom Bell, then president of the young Conservatives stated:
We are going strong, united and anxious to do a job for our party, and the easiest way to do that is to turn against the Liberals.
Such was the program that the young Conservatives held before the Canadian population.
Well, on this side of the house, we have a concrete program to offer. We have concrete proposals to submit to the people, as we have done during the present session. Unfortunately, those members opposite did not want to listen to us, nor take into account the suggestions we made, so that their administration has put us in a sad plight.
Mr. Speaker, the member for St. Hyacinthe-Bagot is not usually so vocal. Perhaps it is the presence here tonight of the candidate to the leadership of the Union Nationale party, Mr. Daniel Johnson, that inspires him. That explains perhaps the severe attitude of the hon. member for St. Hyacinthe-Bagot.
Mr. Speaker, let us come back to more serious matters. Our political institutions, like our parliamentary traditions, favour a system of political parties representing various shades of opinion.
A certain group, known under the name of Conservatives, accept men and institutions as they are. It is the present Prime Minister who gave that definition of the Conservative party. In practice, that party has shown some preference for restrictive and protectionist policies and a certain leaning toward financial interests which it seeked to protect.
Another group, the extreme left group, known as the C.C.F., advocates a radical evolution in our institutions, including nationalization of production.
The Budget-Mr. Rouleau
The middle of the road party is the Liberal party, which believes that reforms are always required because it is always necessary to adapt oneself to changing conditions in these modern times.
The Liberal party wants to protect the average citizen; it does not want changes as radical as those advocated by the socialists, because it believes that free enterprise is of great service to the nation. But it wants to ensure a more equitable distribution of the wealth of the nation and the fruits of production through social security measures and reforms it has always advocated.
These three schools of thought are constantly opposed in Canada but more particularly in the House of Commons where the elected representatives of the nation meet.
If it falls to the party with the largest number of representatives to govern, to administer the nation's business, the opposition which represents a large proportion of Canadian citizens, has the duty to criticize, and criticize severely when needed, the government measures. The opposition has the duty to point out the faults and omissions of the government, to make observations and suggestions and, let us admit it frankly, to show the nation, the Canadians, the shareholders of this country, that it is more capable of running the country than the government of the day.
In their respective fields, the government, and the opposition, must never forget their responsibility, which is the welfare of the nation and the sound management of the affairs of the country, coming first, before the promotion of a political party.
The government must never make use of its majority in the house to stifle the opposition. It must listen to opposition members with attention and sometimes, let us admit it, with patience.
Opinions are certainly different as to the policy to be followed in order to bring about the general weal. This is something we must never forget in our discussions, but we must take for granted and for sacred the fact that the public weal is the sole care of every member of this house. Any member who does not entertain such an ideal would not deserve to sit in this house.
The system of government we have in Canada encourages such an ideal and I, for one, am convinced that we have now an ideal system of democratic government of which I am proud to be a member and I am grateful to the voters of the Dollard constituency for giving me the opportunity on their behalf to take part in that government.

The Budget-Mr. Rouleau
It is with this preamble as a background that I rise tonight to take part in this debate on the budget.
I wish a greater number of my colleagues of the ministry had participated in this debate, but I find that they, who are usually so loquacious, especially during the present session, when they continuously rose to talk about the most trivial matters, to praise this or that minister, to shower flattery upon the government on all occasions, have become hesitating when it comes to deal with one of the most important measures, if not the most important of all the reasons why we are here, that is the Canadian budget which will directly affect, during the next 12 months and even during years to come, the life of every family, of every Canadian citizen, and which will also affect our relations with every nation of the world.
Our hon. friends opposite, after the applause of the budget night has faded away, are somewhat stunned. They are as quiet as frightened partridges. You would think they are ready, like panic-stricken ostriches, to hide their heads in the sand.
It is no wonder that they are afraid. They have reason to fear not only the anger of their constituents, in view of the complete failure of four years of Conservative administration, but also the worst for the Canadian economy, because of the tremendous gamble the Minister of Finance is taking in his budget. No one can say where we are headed. The experience of the past four years has taught us to fear the worst.

Four years of Conservative administration have given us the following result: five deficits in four years; an increase of $2 billion in the national debt; corresponding increase in the interest on the debt; deterioration of our commercial relations throughout the world; deterioration of our relations with our American neighbours; irreparable deterioration, in some cases, of relations between the government and senior officials, as well as various government agencies.
The Minister of Finance has announced an expansionist budget; indeed the budget is expansionist, but in its deficit.
Last year, he forecast a $12 million surplus and ended up with a deficit of some $345 million. This year, he predicts a deficit ranging between $600 and $700 million. What will be the situation next year?
The policies of the Conservative government have resulted in unenviable records, record deficits, record unemployment, record increase in the interest on the debt in peacetime, and record hesitation, contradiction, incompetence and irresponsibility.
Mr. Speaker, may I call it 10.30?
(Text):



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire what the business will be for tomorrow and Thursday.


Gordon Minto Churchill: We will continue with the debate on the budget tomorrow and the business for Thursday will be announced at the adjournment hour tomorrow.


Lionel Chevrier: In due course.
At 10.30 p.m. the house adjourned, without question put, pursuant to special order.



ANSWER TO 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. Taylor: 1.	Have there been any complaints directed to the Department of Transport about the dumping of waste in the gulf of Georgia or Burrard inlet within the last six months?
2.	Has the Department of Transport issued any instructions recently to owners of vessels in the gulf of Georgia or in Burrard inlet with respect to the dumping of refuse in the waters?
3.	Are there any penalties for dumping waste?
4.	Has any action been taken by the Department of Transport to eliminate the nuisance caused by such dumping by owners of vessels?
5.	Has there been an increase in waste dumpage in recent months in Vancouver harbour?
6.	If so, has there been an increase in the staff and equipment of the national harbours board to cope with the situation?
Answer by: Hon. Leon Balcer (Minister of
Transport):
The responsibility of the Department of Transport for the prevention of dumping of
Question
waste or refuse in navigable waters is confined to oil pollution by ships. Within this area of responsibility, the answers to the questions are as follows:
1.	No complaints have been received concerning the discharge of oil in the gulf of Georgia or Burrard inlet within six months.
2.	Vessels are boarded by department inspectors in Vancouver for the purposes of examining oil record books. Public notices are also posted warning of the penalties for discharge of oil into Canadian waters and pilots bringing vessels into west coast Canadian ports are provided with cards advising the master of the ship of the penalties for discharge of oil.
3.	Section 495A of the Canada Shipping Act provides for a penalty of up to $500, and/ or six months' imprisonment.
4.	Surveillance of vessels on a continuous basis is not possible but arrangements have been made with the masters of Canadian government ships and the masters of fisheries inspection vessels to report any cases of oil pollution which come to their attention.
5.	No increase in oil pollution in Vancouver harbour has been reported.
6.	Not applicable.
90205-6-453



APPENDIX


[Stage Direction]
June 26, 1961.
The Prime Minister ol Japan, Hon. Hayato Ikeda, has concluded today a visit to Ottawa made at the invitation of the Prime Minister of Canada, Right Hon. John G. Diefenbaker. Prime Minister Ikeda was accompanied by the foreign minister of Japan, Hon. Zentaro Kosaka, and a number of officials of the government of Japan.
Prime Minister Diefenbaker and Prime Minister Ikeda, together with the Secretary of State for External Affairs, Hon. Howard C. Green, and the Japanese foreign minister, exchanged views on a number of international problems of mutual interest and concern and on questions affecting the relations between Canada and Japan.
They examined the state of east-west relations, with particular attention to recent developments in the Far East. They agreed on the need for a genuinely independent and neutral Laos and on the importance of economic co-operation with the less fully developed nations of Asia. They further exchanged views on communist China.
Prime Minister Ikeda and Prime Minister Diefenbaker welcomed the continuing cooperation of the Canadian and Japanese delegations to the United Nations. They emphasized that they looked forward to even closer co-operation in the future.
The two Prime Ministers also reviewed economic relations between Canada and Japan. Prime Minister Ikeda reaffirmed the principle of orderly marketing of Japanese exports
to Canada of products competitive with Canadian production in order to avoid injury to Canadian industries. Prime Minister Diefenbaker confirmed that the government of Canada looked forward to the continued expansion of mutually beneficial trade between the two countries.
Prime Minister Diefenbaker noted the Japanese interest in the possible establishment and development of Japanese investments in Canada and indicated that mutually satisfactory arrangements would be made for the entry to Canada of Japanese nationals required in connection with certain of the operations of these enterprises. Prime Minister Ikeda explained his government's plans for further liberalization of imports, including commodities of interest to Canada.
The two Prime Ministers agreed that in view of the increasing importance of Canadian-Japanese relations, there should be established a Canadian-Japanese ministerial committee which would not be a negotiating body but would provide a valuable means of contact between ministers of the two countries. The activities of the committee would consist primarily of visits of ministers to each other's country from time to time to exchange views on matters of common interest particularly in the economic field, and to familiarize themselves with the problems of the other country.
At the close of their discussions Prime Minister Ikeda renewed the invitation to Prime Minister Diefenbaker to visit Japan. Prime Minister Diefenbaker accepted this invitation to visit Japan at a mutually convenient time in the near future.
[Stage Direction]
Wednesday, June 28, 1961