1961-01-16

[Stage Direction]
Monday, January 16, 1961


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, it will be an occasion of sadness for members of this house to note that since the Christmas adjournment one of our members has passed away in the person of Lieutenant Colonel John Augustine Macdonald, the member for Kings, P.E.I.
Mr. Macdonald followed in the footsteps of his father in public affairs in his province. He joined the armed forces early in the war, served with great distinction in France, and was first elected to the legislature in his province in the summer of 1945, the youngest member of that body. At that time he was in hospital recovering from the effects of his war service. Subsequently he sought election to the House of Commons and became a member of this house in 1957, being re-elected in 1958. A humanitarian and one greatly interested in the welfare of all, and in particular of the veterans, he made a contribution such as is made by those who, whether in the house proper or in the committees, give of their best to the service of their country.
He served his country in the days of peace. He has passed away at a comparatively early age; indeed, one might say, at the beginning of a public career auspicious in its hope for the future. He leaves a widow and three children. We miss him sorely on this side of the house, and I think the house as a whole would wish to join me in expressing our sadness at his sudden passing and our sympathy and condolences to the widow and members of the family. Mr. Macdonald served his country well, and of no one can more be said.


Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, we on this side of the house join the Prime Minister in the sympathy he has just expressed in the passing of one of our colleagues, the hon. member for Kings, Prince Edward Island, a passing which was both sad and premature. Colonel Macdonald was a young man, as the Prime Minister pointed out, but he had served his country with distinction during his relatively short life both in time of war and in time
of peace, and new areas of service were opening to him when he was called.
We join with the Prime Minister in extending our sympathy to the members of his family. We also sympathize with the Prime Minister and the members of his party, who have lost a loyal and devoted adherent.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I was shocked to hear just a few minutes ago of the passing of Colonel Macdonald. On behalf of this group may I say we join with the Prime Minister and the Leader of the Opposition in expressing our sorrow at the loss of a highly respected colleague in this house, a gentleman who served his country well in war, in the defence of freedom, and in peace in the legislature of his province and in this house in both he worked to give effect to the principles for which he fought during time of war.
The members of the veterans affairs committee will miss him very much indeed. Suffice it to say I am certain that the impression he created on the members of that committee was one of quiet sincerity. We join with the Prime Minister and Leader of the Opposition in extending our sincere sympathy to all his family.


Hon. J. A. MacLean (Minister of Fisheries):: Mr. Speaker, I should like to associate myself with what has already been said by the Prime Minister, the Leader of the Opposition and the spokesman on this occasion for the C.C.F. party.
Perhaps more than anyone else in this house I had a long and close association with Lieutenant Colonel John A. Macdonald. Practically all his mature years have been devoted to public service both in time of peace and time of war. In addition to his service to his country in time of war, for which he was well known, Colonel Macdonald had a continuing interest in the reserve forces of his country. At the time of his death he commanded the Prince Edward Island Recce regiment. His services to veterans were especially noteworthy and his services generally to his community were of a very high order.
John A. Macdonald was a thorough gentleman. I knew him intimately for many years and never heard him utter an uncharitable word about anyone. The sympathy of all of us, I am sure, goes out to his widow and his young family in their bereavement.

Question of Privilege VACANCY


Mr. Speaker:: I have the honour to inform the house that I am in receipt of a communication informing me that a vacancy has occurred in the representation, namely of J. C. Van Horne, Esquire, member for the electoral district of Restigouche-Madawaska, by resignation.
Accordingly I have issued my warrant to the chief electoral officer for the issue of a new writ of election for the said electoral district.



PRIVILEGE


Hon. Paul Martin (Essex East):: Mr. Speaker, I wish to raise a matter which I believe involves a question of privilege affecting every hon. member of this house. It has to do with the tabling of the report of the advisory committee of the unemployment insurance commission by the Minister of Labour in the dying hours of the day when we adjourned prior to Christmas.
On December 6 I asked this question of the Minister of Labour as reported at page 527 of Hansard of that date:
Mr. Speaker, may I ask the Minister of Labour whether the advisory committee of the unemployment insurance commission has had any meetings since the prorogation of parliament and, if there has been a meeting of that committee, will the minister kindly table the report in accordance with the direction provided in the act?
The minister replied, at page 527:
Mr. Speaker, that is exactly the way it will be tabled.
Then I asked a supplementary question, as follows:
When might we expect the report to be tabled?
The minister replied, at page 528:
The act provides that it shall be tabled 30 days after it has been received by the governor in council.


Mr. Pickersgill:: Within 30 days.


Mr, Starr:: Yes, within 30 days.
On December 20 I again asked the Minister of Labour a question in this connection in the following words, which will be found at page 969 of Hansard:
May 1 ask the Minister of Labour if he is now in a position to table the report of the advisory committee of the unemployment insurance commission? The committee met in October, and about it there have already been questions this session?
The minister replied:
No. I am not prepared to table it yet, as the government is still studying this report.
I am advised by the Clerk's office, Mr. Speaker, that the day after, the minister did

hand to the Clerk a copy of this report, sessional paper No. 83, Wednesday, December 21. That was the day the spokesman for the opposition was concluding what he had to say about the budget introduced the day before by the Minister of Finance.
I submit to you, Mr. Speaker, that this is not the first time this practice has been resorted to by this particular minister or by the government. In the dying days of the session which ended on August 10 last a report was tabled in the same manner-


Some hon. Members:: Order.


Mr. Speaker:: I do not think the hon. member should introduce more than one matter of privilege at the present time. He should confine himself to the matter under discussion.


Paul Joseph James Martin: Having said that there was a self-created precedent on the part of the minister for this particular act, I will agree that there is no point in elaborating on this aspect of the matter; but, Mr. Speaker, I submit to you that it is contrary to the privileges of this house, when, the day after a member asks for the production of a particular report and the minister says that the government has not yet studied it, the minister clandestinely hands the report to the Clerk without advising the house publicly, as I believe he should. It is a violation of the rules of this house. I can well understand why it was done, because the report shows-


Some hon. Members:: Order.


Mr. Speaker:: Order. The hon. member will agree with me that he should state his question of privilege without debating the matter. There is no motion before the house, and I have to determine whether there is a prima facie breach of privilege.


Paul Joseph James Martin: I simply add that I can understand why the minister would want to do it. I do not have to give further reasons why I think he would want to show that, because of convenience, he was justified in acting as he did, but the proper practice would have been for the minister to tell the house that he was going to table a document which was so vital in the consideration of matters affecting the financial state of this nation and of the unemployment insurance fund.


Hon. Michael Starr (Minisler of Labour):: Under the circumstances in which the hon. member for Essex East has brought this matter up, I think I should say a few words. When I made the statement on December 20, in reply to the question of the hon. member for Essex East, it certainly was my intention to table the document within the time prescribed in the act. On the following day I



IB, 1961

[Stage Direction]
was advised that it would have to be tabled before the house adjourned for the Christmas holidays, and under the circumstances that was all I could do at the time.
In any event, the anxiety of the hon. member for Essex East is not wholly justified, because since he has read the report he will know that it is in almost the same tone and, as a matter of fact, is a facsimile of the report made earlier in the year by the same committee. There is nothing new in the report. The state of the fund has been well known to everybody in this country. It has been referred to in the press.
The committee does recommend that certain changes be made, and I want to bring to the attention of the hon. member for Essex East that in the speech from the throne it is set out that the government intends to bring in amendments to the Unemployment Insurance Act.
Mr. Speaker:: I take it that as the hon. member for Essex East has expressed his views and has not submitted a motion, I may let the matter rest there.



COLUMBIA RIVER


John George Diefenbaker: Mr. Speaker, at this time I wish to announce that tomorrow in Washington the treaty for the co-operative development of the Columbia river basin will be signed by the President of the United States and two others from that country and by myself, the Minister of Justice and the Canadian ambassador to the United States.
This treaty marks the successful outcome of nearly three years of intensive work on a project which we believe will bring great benefits in years to come to both Canada and the United States. Indeed, this will be an historic occasion in the relations between our two nations, showing to all the world the benefits that can accrue when nations, while having their differences, have common objectives and a desire for peace and the attainment of those things which are the attributes of peace.
After the signing of the treaty statements setting out the situation will be made both by the administration of the United States and by myself on behalf of the government of Canada. I should have liked to be able to make a full report to the house, but realizing that as soon as the signatures have been applied a statement will be forthcoming by the other signatory. I intend to make available then a summary of the terms of the treaty, the benefits that we believe will accrue to
Columbia River Treaty Canada and, in general, to summarize the effects and results of this great co-operative international effort.
The treaty will, of course, require to be ratified. It will be submitted to the house for consideration. With respect to certain elements and clauses within the treaty, there will necessarily be differences of opinion. Indeed, representations have been made to the government by certain people in areas that will be affected as a consequence of the implementation of the treaty that an opportunity should be provided for the fullest consideration of the treaty and its implications. It is the government's intention, if the house will agree, to have the treaty submitted to the house committee on external affairs so that in that committee full and complete consideration and discussion may take place relative to its terms.
I thought it well to bring this to the attention of the house at this time, to the end that it will be realized that the affixing of signatures to the treaty does not make the treaty effective. Parliament alone can do so. To the end that this house shall be enabled to secure the fullest information on the treaty, its terms, the interpretation of those terms and in general a resume of the entire field that is comprehended by the treaty, I believe that the proper course is to enable a committee of the house which is qualified to deal with the matter, namely the committee I have mentioned, to go fully into its terms.


Lester Bowles Pearson: Mr. Speaker, the satisfaction which all members of the house must feel on the conclusion of an agreement with our neighbour the United States must also, of course, be related to the terms of that agreement, and we have not yet had an opportunity to ascertain what those terms are. The negotiations on this important matter between representatives of the two countries have been going on not merely for the three-year period mentioned by the Prime Minister but for some years previously, as my hon. friend the Minister of Justice, who played such an important part in these negotiations, was careful, I believe, to point out in a recent address he delivered at Windsor, Ontario.
I know how difficult these negotiations have been. Perhaps the house will permit me to mention only one further name in connection with them. I refer to the name of General McNaughton, who has worked so hard and so long to bring about an agreement of this kind.
As the Prime Minister has stated, the treaty is to be signed tomorrow but it is not effective until it is ratified; and ratification, under our

Columbia River Treaty constitutional practice if not our constitutional law, requires approval by this house. I think the procedure recommended by the Prime Minister, namely the reference of this matter to the committee on external affairs, is an appropriate one. The treaty also must be approved by a two thirds majority of the Senate of the United States, and that is always a question mark in agreements of this kind. Perhaps we should also remind ourselves that while this treaty must be approved by the two legislatures, it cannot be made effective in its implementation without the co-operation of the province of British Columbia. That is another element which enters into the final consideration of this matter, and I do not need to stress the importance of that element, I am sure, to my hon. friends the cabinet ministers from British Columbia.
We welcome the conclusion of the treaty or the signature of the treaty, and we will make our own views on the terms of the treaty known when it is before the house for consideration.


Herbert Wilfred Herridge: Mr. Speaker, the members of this group listened with great interest to the Prime Minister with respect to the signing of this treaty tomorrow. I could not help but think of another treaty that was signed with respect to the Columbia river, namely the Oregon treaty of 1846, article 2 of which provides that British subjects shall have the right of navigation from the upper waters of the Columbia river to the sea in perpetuity. In return for that right the British government gave the United States government all the land lying between the Columbia river and the Pacific to the 49th parallel.
I trust that when we conclude this treaty we do not come off second best. The treaty of 1846 was violated by the United States through the building of the Bonneville and Grand Coulee dams without so much as a word being written to any authority in Canada. My authority for that statement is the leader of the official opposition to whom I wrote a letter when he was under secretary of state and asked him to search the correspondence in order to find whether there was a single line about this violation of the treaty by the United States government. He wrote back and told me that after a most extensive search of external affairs files his officials could not find a line written about the violation of the Oregon treaty of 1846.
I wish to say that under the circumstances we in this group cannot agree with what appears to be this unnecessary and unseemly haste in signing this treaty. I am not alone when I say that. The Prime Minister knows that what I am saying is true. I make that statement in the knowledge that I have the

wholehearted support of numerous organizations in my constituency, in British Columbia and of thousands of persons directly or indirectly affected or concerned who are members of all parties in this house.
I suggest that this is a rather hasty step. There are numerous organizations and thousands of persons opposed to or affected by the proposed building of the High Arrow dam, and their consulting engineers have not had an opportunity to present their views since the filing of that memorable document -I believe it is No. 180-on November 18 last. I was physically wounded on November 18, Mr. Speaker, but I was spiritually wounded when I read that document on November 18 last which contained the proposals for the draft treaty to which the Prime Minister has now referred.
I might say that these people and these organizations and their consulting engineers have not had an opportunity since November 18 to make representations to the government of Canada or to appear before the external affairs committee in order to give their evidence and to cross-examine some of the people who live down in the cubbyholes of the water resources branch of the Department of Northern Affairs and National Resources and who think in terms of hydro development only, not in terms of human beings and the conservation of natural resources.
My second reason for opposing this treaty and for suggesting that this is unnecessary and unseemly haste is that we shall not have during this debate, namely the debate on the budget, an opportunity properly to discuss this matter because the speakers are arranged for today, and they have their rights and will go ahead, and the treaty will be signed tomorrow.
My third reason is that Hon. W. A. C. Bennett, premier of British Columbia, announced on Thursday, December 29 that he has ordered the British Columbia energy board to make a complete investigation into the cost of the Columbia and Peace river projects, including the downstream benefits, in order, as he says, to let the sunlight into the facts; and that the first report is to be handed to him on or before March 1. That means without a doubt some months of delay.
In addition Hon. Ray Williston, minister of lands and forests has also said that he is most reluctant to predict when construction will start, as the British Columbia and federal governments have yet to agree on the terms of the agreement. Then he gave these reasons. All engineering studies must be completed, including the studies of the British Columbia energy board-


Mr. Speaker:: Order. I think the hon. member is perhaps anticipating the discussion of the treaty when it comes before parliament. The two matters presented to the house were the announcement of the signing of the treaty tomorrow and then the proposed procedure for ratification by referring the signed treaty to this house and its committee. If the hon. member has matters that go beyond that point, he could more properly defer them until the matter comes before the house for consideration.


Herbert Wilfred Herridge: I am trying like the devil, Mr. Speaker, to be in order, but at the same time I am also trying to have my say on behalf of the people whom I represent, as to why we consider this to be unnecessary and unseemly haste. Mr. Williston also says that a water licence must be issued and hearings held before any decision is made. In view of these matters there is likely to be the lapse of months before there is an agreement between the government of Canada and the government of British Columbia, and Mr. Williston says that the agreement between the government of Canada and the government of British Columbia should be attached to the treaty.
Finally, Mr. Speaker, regardless of what the chaps down in the water resources branch of the Department of Northern Affairs and National Resources say, they have not an inkling as to where the foundation for this High Arrow dam will be. I do not know how we can agree to do certain things by treaty when we do not know if suitable foundations can be found for the High Arrow dam.
I was very glad to hear the Prime Minister say that various organizations, individuals and so on will have opportunity to make representations before the external affairs committee. I am sure in making that statement he wishes to provide every opportunity to those thousands of people of all parties whom I represent who, through their consulting engineers and representatives on the water resources committee of the Arrow lakes, and the city of Revelstoke, are very anxious to come to Ottawa and present their evidence.
I trust that when the external affairs committee meets to discuss this treaty we shall hear the impregnable General McNaughton, who is the Rock of Gibraltar on Columbia development, and Mr. Bartholomew, consulting engineer of Vancouver, and possibly representatives of various other engineering firms. I hope these authorities and persons may be heard.
Report of O.E.C.D.
In conclusion, Mr. Speaker, we do think that under all the circumstances there is an unnecessary and unseemly haste in signing this treaty at this time.


John George Diefenbaker: Mr. Speaker, I do not want to enter into a controversy in any way, realizing this would be improper, but I cannot allow to go unchallenged the statement that there was unseemly haste in any way. It has been pointed out that for three years efforts have been made by this government and its representatives to bring about the attainment of an objective that has been the hope of Canadians, and particularly residents of British Columbia, for many years. The Leader of the Opposition has stated that there were discussions during the period the former government was in office, and certainly there has been available to anyone the opportunity to understand the course being followed.
The negotiating committee has been meeting and I am very confident, with that one observation, in saying to the hon. member who has just spoken that I appreciate the fact that he is willing and desirous of having this treaty submitted to the committee on external affairs.


John George Diefenbaker: Mr. Speaker, there was one matter I omitted to bring to the attention of the house, and that was to advise that a copy of the statement which I will make in Washington tomorrow morning, and also of the treaty, will be sent to all members so that each and every one will have before him or her a record of the statement and also the treaty itself.



O.E.C.D.-TABLING OF REPORT OF PREPARATORY COMMITTEE

Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, on December 15 the Prime Minister stated, as reported at page 824 of Hansard, that the convention and the report of the preparatory committee in respect of the organization for economic cooperation and development would be tabled. The following day, as reported at page 866 of Hansard, I tabled copies of the convention and of the communique that was issued at the close of the conference. I now have received and table copies in English and in French of the report of the O.E.C.D. preparatory committee.
10S0

Proposed Legislation PUBLIC ACCOUNTS



TABLING OF PUBLIC ACCOUNTS AND AUDITOR GENERAL'S REPORT

Donald Methuen Fleming: Mr. Speaker, may I acquaint the house of the fact that I have today tabled the report of the Auditor General for the fiscal year ended March 31, 1960, in English and in French, and copies in English of volumes I and II of the public accounts for the same fiscal year. The French edition of the public accounts will be available, it is expected, about February 1 and will be tabled immediately it is received.



CANADIAN NATIONAL RAILWAYS


Hon. Leon Balcer (Minister of Transport) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to provide that the C.N.R. Railway Company may construct a line of railway from a point at or near Mile 72 of the Kiask falls subdivision to Mattagami lake, in the province of Quebec, and to authorize temporary loans to the company out of the consolidated revenue fund, not exceeding $9,660,000 to enable the work of construction and completion of the railway line to proceed forthwith; and to authorize the company to issue and the governor in council to guarantee securities to finance the expenditures upon the said line up to the said figure.


[Stage Direction]
Motion agreed to.


Donald Methuen Fleming: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to amend the Tariff Board Act to increase the number of members of the board from five to seven, and to provide for the salaries of the new members; and to provide further for consequential amendments designed to facilitate the adoption by the board of a panel system.


[Stage Direction]
Motion agreed to.

Mr. Speaker:: Before calling the next order, which takes us beyond routine proceedings, I think it is my duty to call the attention of the house to the rule applicable this session which permits the government to postpone

private members' Mondays for two successive Mondays, which is the rule governing at the present time.
When the order of business for today was announced before the adjournment the house leader indicated this would be the resumption of the budget debate, making it a government day. As the preceding private members' Mondays had been used for government business this was in conflict with the rule under which this day necessarily is a private members' day, unless the house otherwise orders by unanimous consent.


John George Diefenbaker: Mr. Speaker, I notice that when the house leader referred to the business for today he stated that we would proceed with the budget. That, of course, we cannot do without unanimous consent on the part of the house. We are in the hands of the house in this regard. If the house will accept an informal suggestion-or motion, if you will, as informally put as I am now putting it-that this day be one for the discussion of the budget rather than a private members' day, we will proceed as outlined by the house leader.
If on the other hand we have not unanimous support, then naturally it will be private members' day.


John Whitney Pickersgill: Mr. Speaker, I was in the house at the time the business was announced when we adjourned, and I had understood from the hon. member on the other side who was looking after the business of the house that there was an understanding. It was in that spirit that I accepted the announcement, and I feel sure that so far as the official opposition are concerned we accept it in that spirit.


Herbert Wilfred Herridge: Mr. Speaker, on behalf of the effective opposition I wish to say that providing a day is reserved for us at another time, we agree with the suggestion made by the Prime Minister.


Mr. Speaker:: Then does the house give its unanimous consent to the use of this day as foreeast by the house leader, without of course depriving the house of a private members' Monday, which is postponed. Is that agreed?


Some hon. Members:: Agreed.



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 19-Mr. Pickersgill:
For a copy of the report submitted to the Department of Fisheries by Dr. Sinclair on the British Columbia fishing industry.
John Angus MacLean: This report is in the hands of the printers. I am afraid I was overoptimistic in my estimate of when it would be available. It is not yet ready, and in the circumstances perhaps the hon. member would be agreeable to having the motion stand.


John Whitney Pickersgill: I am quite agreeable to having it stand. I am equally agreeable to having it passed, because the minister does not have to comply with this motion tomorrow. Let the minister do whatever he wishes.


Mr. Speaker:: Does the minister insist that the motion stand? It is the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.


[Stage Direction]
Motion No. 27-Mr. Herridge:
For a copy of all telegrams, reports, correspondence and other documents exchanged between the Minister of Northern Affairs and National Resources or any officials of his department and the government of British Columbia, the officials of any corporation or other persons, regarding the development of the hydro resources of the Columbia river in Canada.

[Stage Direction]
Motion No. 28-Mr. Herridge:
For a copy of all telegrams, correspondence or other documents exchanged between the Minister of Finance or any officials of his department and any officers of any trade union with respect to pension vesting for income tax purposes.
He said: With the permission of the house I should like to withdraw these two motions, because I omitted to include the dates, and I do not want to go back to confederation. This was caused by the influx of a bevy of ladies into my office while I was dictating the motion.
Orders discharged and motions withdrawn.

[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: I should like to ask the Prime Minister whether during his visit to Washington he expects to be able to meet with the incoming president of the United States or any member of the new administration.


John George Diefenbaker: 

REASSEMBLING OF SUPERVISORY


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. Is the minister in a position to tell the house what the policy of the government of Canada is regarding the reactivation of the truce supervisory commission in the troubled situation in Laos, particularly in the light of the published views of the governments of the United Kingdom, France and the United States? When the minister is replying, could he also tell the house whether or not Canada is included among the 14 countries which Prince Sihanouk of Cambodia has suggested as potential participants in a proposed conference to deal with the matters originally discussed in 1954 in Geneva?


Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, I have a short statement here with regard to the position in Laos. The Canadian government has been very much concerned about this situation. We have been doing our best to help work out a satisfactory solution. If the hon. member who raised this question has read press reports to the effect that the countries he has mentioned have agreed on a definite position, he is quite wrong, because this whole situation is being negotiated.
Canada's direct concern in this matter arises from our membership in the international commission for supervision and control in Laos which was established by the Geneva conference of 1954. As the hon. member for Essex East knows, Canada did not participate in that conference but together with India and Poland was named to a supervisory truce commission. It will be recalled that the international supervisory commission adjourned sine die in July, 1958 following two requests by the Laotian government for its departure. I have seen the suggestion made that this commission was adjourned at Canada's insistence, but the insistence came from the Laotian government, and the adjournment was approved by Canada and India, being a majority of the nations on the truce supervisory commission.

Inquiries of the Ministry
In the second of these requests dated May 22, 1958 the prime minister of Laos stated that the task entrusted to the commission was "drawing successfully to a close", and he expressed on behalf of his government "its profound gratitude for the efficacious assistance" of the commission in re-establishing in the kingdom a "normal situation in respect )f its unity, sovereignty and independence".
The normal situation to which the prime minister of Laos referred in his letter of May, 1958 did not, unhappily, long prevail. In the fall of 1959 the security council took steps to send a committee to Laos in the hope that this would stop the trouble which had already arisen there at that time. I believe there is still a United Nations presence in Laos, but obviously that fact has not prevented the civil war which is going on there at the present time.
In recent months the situation has become increasingly critical so that at present there is not only a state of open hostilities, but also an absence of general international agreement on the identity of the legitimate government. The communist side is claiming that one man is the head of the government and the western side is claiming another man is. The conflicts within the country have engaged the sympathies and to some extent the support of interested powers outside. This is actually a question which the big powers must settle. If they do not agree to some settlement, in any event if they do not keep their hands off, it is quite impossible for other countries to bring about a settlement.
I need hardly remind the house that such a situation imperils not only the sovereignty, independence, unity and territorial integrity of Laos, which the members of the Geneva conference undertook to respect, but also the peace and stability of southeast Asia in general. In these circumstances it is natural that there should have been suggestions that a return to Laos of the international supervisory commission might help to reduce tensions and promote a peaceful solution of Laos' difficulties.
Such a reconvening of the commission presented, however, certain difficulties. In the first place, the task originally assigned to the commission was to supervise and control the application of a cease-fire agreement already reached by the great powers at the Geneva conference. There was no question of the commission itself bringing about a cease-fire. Second, it is clear that an essential condition for the effective functioning of a commission so constituted would be basic agreement among the other powers directly interested on its return and on the duties it should perform. Third, unless it had an assurance of the co-operation of the Laotian

authorities it would be unable to operate effectively, and its position would be untenable.
I might remind the house in this connection, Mr. Speaker, that at the time the commission was adjourned we made quite clear that if in any future emergency the commission were to be recalled, we would always have in mind the rights of the Laotian government and would respect the sovereignty of that country. The Canadian government, therefore, while fully in sympathy with the desire to take action quickly in a critical situation, has sought to ensure that the means adopted would be those which, given the existing circumstances, would give the best promise of success.
It was with these considerations in mind that I suggested an exploratory mission might be sent to Laos to find out by consultation with the Laotian authorities what precisely could usefully be done in the present circumstances.
In this connection my suggestion was that the three key men who went to southeast Asia in 1954 or 1955-I am not sure of the exact year-would go back as members of this exploratory mission. The Canadian member was Brigadier Sherwood Lett of Vancouver, who is now chief justice of the supreme court of British Columbia. Chief Justice Lett has offered to go out in this capacity. The Indian representative, Mr. M. Desai, unfortunately has not been well and is on sick leave. This proposal that there be an exploratory mission made up of these three key people was not generally acceptable.
Discussions are continuing with a view to establishing an agreed basis of proceeding along these general lines. We for our part are willing, if the United Kingdom and the Soviet union as co-chairmen of the Geneva conference so request, and subject to the agreement of the king of Laos-we are not asking for the agreement of the Laotian government but for the agreement of the king of Laos, who is the only generally recognized constitutional authority of that country-to appoint a Canadian representative to the commission, which would do what it could in present circumstances, by consultation and advice, to contribute to the restoration of peace and to the maintenance of the sovereignty, independence, unity and territorial integrity of Laos.
If the commission is reconvened I do not believe that all the responsibility for working out a cease-fire could fairly be placed on it, because in fact it was never set up to bring about that result, but it probably could help.
As I pointed out earlier, discussions are taking place. Some discussions are actually

going on this afternoon, and when there is anything further to report I will be very glad to bring it to the attention of the house.


Paul Joseph James Martin: I did not understand the last part of my hon. friend's statement. Did he say anything about the question whether Canada was going to participate in the conference suggested by Prince Sihanouk of Cambodia?


Howard Charles Green: I also made the statement some days ago that I thought, for a long term settlement, it would be wise to reconvene the Geneva conference. There was a good deal of opposition to that being done. In addition there has been the suggestion that there should be a broadened Geneva conference made up by adding countries in the area which are neutral, for example Burma and Thailand. Several of the Asian countries have been proposed. Whether agreement will be reached to recall the original conference or to call an expanded conference, I do not know. This is one of the questions which is already under discussion.


Hon. J. M. Macdonnell (Greenwood):: The
minister mentioned the representatives from Canada and India. Did he mention the representative from Poland?


Howard Charles Green: I did not mention the one from Poland because I cannot pronounce his name. I have not it with me at the moment. He is a very distinguished gentleman, now in the Polish foreign office.



COLUMBIA RIVER


Herbert Wilfred Herridge: ask leave to move the adjournment of the house under standing order 26 for the purpose of discussing a definite matter of public importance, namely the unnecessary and unseemly haste on the part of the government of Canada in making arrangements for the signing of a treaty between the government of Canada and the government of the United States to provide for certain developments on the Columbia river in Canada.
I ask leave to move the adjournment because there will be no opportunity during this debate to discuss this question adequately, and because there will be a delay of months, without doubt, before an agreement is signed with the government of British Columbia.


Hon. E. D. Fulton (Minister of Justice):: am sure Your Honour would feel that the question of urgency which it is necessary to establish before accepting this motion will have been disposed of by what the Prime Minister has said, namely that the treaty will
Inquiries of the Ministry be submitted to this house with the suggestion that it be submitted in turn to the external affairs committee before there is any question of ratification. There is no treaty in existence until the document has been signed. The house has the assurance that before the treaty becomes effective, before ratification is made, the house will have the opportunity for the fullest discussion and the fullest information through the medium of the committee procedure. It is therefore surely obvious that there is no urgency for debate at this time in the way in which that term is used in connection with a motion to adjourn the house to discuss a matter of urgent public importance.
It is suggested to me-I was looking at the rule at the time-that the hon. gentleman has apparently become so confused about dates generally that he has also got his motion before the house at the wrong time according to the rule which now prevails.


Mr. Speaker:: Unless the hon. member for Kootenay West has an answer to the observations of the Minister of Justice I am prepared to dispose of this request.


Herbert Wilfred Herridge: I only wish to say that I congratulate the Minister of Justice on trying to make a good case out of a bad case.


Mr. Speaker:: If the earlier statements about this treaty had not been before the house there might, perhaps, have been some doubt in my mind as to whether we should interrupt our proceedings to discuss this matter; but, as has been pointed out, the treaty, when signed, has to come before the house and until then there is nothing which can come before us. It seems to me that the necessary urgency does not exist in this case, and I regret that I must refuse the hon. member's request for leave to move this motion.


Herbert Wilfred Herridge: I appeal Your Honour's ruling.


Mr. Speaker:: I think it is well settled that the decision of the Speaker under rule 26 does not involve a point of order and cannot therefore be appealed.



BRITISH COLUMBIA


[Stage Direction]
On the orders of the day:
Mr. Erhart Regier (Burnaby-Coquillam):: I should like to ask the Prime Minister whether he is in a position to make a brief report on the heavy damage arising from the recent heavy rains in the lower mainland of British Columbia.

Inquiries of the Ministry


John George Diefenbaker: Following notice from the hon. gentleman, a report was secured from Victoria at two o'clock this afternoon. This report indicates that there has been serious flooding in three areas due to the runoff of snow and heavy rains. That flood reached a maximum late yesterday afternoon. The areas affected were the Fraser valley, the Vancouver north shore area and the Duncan-Cowichan lake area of Vancouver island. A number of dams are spilling over in one or more of these areas.
The municipal and provincial authorities have been dealing with the emergency conditions and seem able to deal with the problem locally. The army was called upon to assist at Duncan and has had a platoon of regular troops there from ten o'clock last night. The militia has assisted from time to time at certain other places. The army has provided some sandbags to supplement those supplied by the department of highways, and the information is that there are ample supplies available to meet whatever conditions may be expected. A number of people have been evacuated from the low-lying areas.
The minister of highways of Britisn Columbia has stated that there is fairly extensive damage to highways. Both the main railway lines in the Fraser valley have been cut by the flood, and the P.G.E. line has been similarly affected. The Hope-Princeton highway remains open, but there is some danger that it too may be unfit for travel shortly. It is still too early to estimate the damage.
One life has been lost, and I am sure I speak for all members of the house when I extend the sympathy of hon. members to the people in the areas affected as well as to those who suffered damage or who are bereaved.


Erhart Regier: In expressing thanks to the Prime Minister for his very detailed and adequate reply I should like to direct a related question to the Minister of Public Works. Will the government now reconsider its advice to me as given by the minister in a letter dated January 6, and immediately convene a meeting of all three levels of government for the purpose of arriving at a mutual solution to the problem caused by the rapid and repeated flooding of the Coquitlam river?


Hon. D. J. Walker (Minister of Public Works):: This problem is entirely concerned with flood relief and prevention, since navigation is not involved. Only at times when flooding is of such seriousness as to constitute a national disaster does the federal
[Mr. Regier.l
government become a party when requested to do so by the provincial government. Consequently this government cannot properly convene a meeting of the three levels of government, as suggested now by the hon. member for Burnaby-Coquitlam. Over a year ago in a letter dated August 19, 1959, the Department of Public Works has suggested a remedy to the hon. member.


Erhart Regier: Is it the contention of the government even at this date that Kanaka creek is a navigable river, while Coquitlam river is not?



COMBINES


[Stage Direction]
On the orders of the day:
Edmund Davie Fulton: Mr. Speaker, on December 21, the hon. member for Port Arthur asked whether any petitions or requests have been received for an investigation in northwestern Ontario similar to the one conducted two years ago in Quebec and eastern Ontario into prices of farm or settlement pulpwood.
I am now informed by the director of investigation and research under the Combines Investigation Act that one complaint of a preliminary nature was made to the director in the latter part of 1957, the main purpose of which was to ascertain from the director what information he would require before considering himself placed upon inquiry under the Combines Investigation Act.
This discussion referred to the pulpwood industry in the Port Arthur-Fort William area, and was not subsequently followed up with the director. Neither I nor the director have received any other petitions or requests in relation to the matter raised by the hon. member.


Mr. Hubert Badanai (Fort William):: Mr. Speaker, I wish to direct a question to the Minister of Forestry. Can the minister inform the house whether he has received a letter from the president of the united pulpwood farmers' association of the district of Thunder Bay complaining about the price of pulpwood being paid to farmers? If so, would the minis-Mr, Speaker, the hon. member for Fort


Donald Methuen Fleming: Mr. Speaker, the hon. member for Fort William was kind enough to send me notice of his question. In answer to the first part of the question, I have received such a letter from the president of the united pulpwood farmers' association of the district of Thunder Bay.

With reference to comments, I have only this to say. It seems to me that any extended comment on a matter of such importance and pertaining to so many provinces would be rather difficult to make on such short notice. I should be glad to discuss it with the hon. member privately, but I could not make any comment at the moment.


Hubert Badanai: A supplementary question, Mr. Speaker. Would the minister assure the house that he will give this question such study and make a report in due course?


Mr. Flemming (Royal):: Yes, Mr. Speaker; I have no hesitation in giving that assurance.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, I should like to direct a question to the Minister of Finance, and ask if he could now indicate to the house the areas of the country where unemployment is high to which he promised measures of assistance in his budget speech, as reported at page 1006 of Hansard. I refer to the sentence which I quote, as follows:
-I shall announce measures of assistance for new Industries in areas of the country where unemployment is high.


Donald Methuen Fleming: Mr. Speaker, I think that the house, in deference to constitutional practice, would expect that the budget proposals would be adopted at least in general before the government proceeded on that course that was proposed in the budget speech.


Lionel Chevrier: A supplementary question, Mr. Speaker. How, then, can the members of the house deal effectively with the contents of the budget speech unless they have some indication of what these areas are, as the minister indicated in his speech?


Donald Methuen Fleming: Why, Mr. Speaker, I should not have thought the hon. member would be so ready to confess a lack of ingenuity as to say what he just now says. He and others have been talking as though there were many such areas. I think the hon. gentleman had better make up his mind just where he stands on this question. This is a matter now under debate, and I do not think the hon. gentleman is suffering from any inhibitions or restrictions in debate in this regard.


Lionel Chevrier: Is it not a fact that there are distressed areas in this country? Why will the minister not tell us what they are?
Inquiries of the Ministry


Donald Methuen Fleming: I think I can point to one, Mr. Speaker, and that is the constituency of Laurier, not because of unemployment particularly but because of its representation here.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Hon. J. W. Monleilh (Minister of National Health and Welfare):: Mr. Speaker, on December 19 I answered a question in the house directed to me by the member for Rose-town-Biggar, relating to a letter circularized by Joseph A. Thain, international representative of the international union of operating engineers, concerning conditions in the construction camps of Piggott Construction Company and the Ingram Construction Company, Limited, South Saskatchewan river project. I now have a report on the present situation.
An inspector of the public health engineering division of my department visited the former camp in August of last year and forwarded his report to the prairie farm rehabilitation administration of the Department of Agriculture. This was consistent with the departmental policy of referring such technical reports to departments or agencies responsible for letting contracts in order to avoid duplication. The P.F.R.A. forwarded a copy of this report to the construction companies with instructions to carry out the recommended improvements.
After I received a copy of Mr. Thain's letter I asked my department to examine both construction camps involved. Inspection took place earlier this month, with representatives of the union and the company present. It would appear that at least some of the complaints were based on out of date information, as all conditions that could be observed showed that attention had been given to my inspector's previous report. The company's project manager stated this had been done within a few days of the P.F.R.A. instructions.
The Ingram Construction camp consists of only one trailer used as living quarters, very close to the Piggott camp and sharing its facilities. Certain matters merit attention here, and a further examination will take place in a week or two.
I might add that the union has been told that some of its complaints should be taken up directly with the company, as it is felt that they do not come within the authority of the Public Works Health Act. The union

Inquiries of the Ministry has expressed to my department its satisfaction with the manner in which it had been arranged for the general situation to be improved.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Frank McGee (York-Scarborough):: Mr. Speaker, I have a question for the Minister of Finance. Can he tell the house when the small business loans legislation will come into operation?


Donald Methuen Fleming: I am glad to inform the house that rapid progress has been made; the regulations have been distributed and, I am informed, the forms have been sent to the some 5,000 bank branches throughout Canada. It is expected that lending operations will commence on January 19.


Mr. W. M. Benidickson (Kenora-Rainy River):: May I ask a supplementary question. When the opposition so facilitated the advancement of this legislation, why is it necessary for the banks to be unaware of this affair until January 19?


Donald Methuen Fleming: Mr. Speaker, in the first place it is not a fact that the banks will be unaware of this until January 19. The banks were aware of this measure from the time it was announced in the speech from the throne nearly two months ago. Of course the banks have no access to the regulations before they are made. That is what has been in the course of distribution. So, Mr. Speaker, I am afraid that the hon. member is just barking up the wrong tree completely today.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Pori Arthur):: Mr. Speaker. I should like to ask the Minister of National Revenue whether he could obtain for us the response of the C.B.C. management to the charge contained in the current union publication called Artech and made by a Mr. Eldon Wilcox, that the C.B.C., at public expense, has sent management staff to indoctrination seminars on labour relations in the United States sponsored by the American management association, an association sometimes referred to as a union-busting organization.


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, I have no knowledge of the matter to which the hon. member refers. I will make inquiry and report in due course, without accepting responsibility therefor.



CHRISTMAS GREETINGS BY PRIME MINISTER AND LEADER OF OPPOSITION

[Stage Direction]
On the orders of the day:
Mr. L. J. Pigeon (Jolielle-L'Assomption-Monicalm):: Mr. Speaker, I wish to direct a question to the Minister of National Revenue. Would the minister inquire from the C.B.C. why it was that on the French television network eleven o'clock news broadcast on December 25 the announcer expressed the Prime Minister's Christmas greetings without the latter's photograph appearing on the screen, whereas immediately afterward the announcer presented Mr. Pearson who, for four or five minutes, appeared on the screen and presented his Christmas greetings to the people, who are disgusted with the Leader of the Opposition for preferring Khrushchev's domination to an atomic war?


George Clyde Nowlan: I will take up this matter with the C.B.C., Mr. Speaker.



BUDGET SPEECH


[Stage Direction]
On the orders of the day:
Mr. Speaker:: The question which the hon. member has just asked reminds me that on reading Hansard for our last sitting I find, as recorded on page 1032, that I misunderstood the question asked by the hon. member for Roberval. Had I understood it correctly I would probably not have interrupted him at that time, and I wish to express my regret that I did, not having understood the full import of his question at the time.



INQUIRY AS TO LIVE BROADCAST OF LIBERAL RALLY

[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: Mr. Speaker, I should like to ask the Minister of National Revenue a question about the C.B.C. based on a perhaps apocryphal report. Would the minister check into the report that the embarrassing incident of the live microphone on the Liberal rally platform during the television broadcast was an attempt by the C.B.C. to guarantee at least one "live Mike" at the Liberal rally?


George Clyde Nowlan: Mr. Speaker, I did not have the opportunity to listen to the program, so I am not in a position to comment thereon.

I understand there was a great deal of difficulty in determining who was "live Mike" and who "dead Mike", and possibly the C.B.C. may be forgiven for having made some mistake.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, the last question asked by the hon. member for Port Arthur suggests one for the Minister of Finance. May I ask the Minister of Finance whether, as a result of his rather extended tour last week, he is now convinced that there is an emergency unemployment problem in Canada?


William Moore Benidickson: He said so.


Mr. Speaker:: Order. Before the Minister of Finance responds to this question I should caution him that it does not seem to me to be a proper question to introduce on the orders of the day. There have been exceptions dealing with some specific phases of unemployment, but it seems improper to me to throw in the whole subject in that way.


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


Paul Joseph James Martin: With great respect, Mr. Speaker-


Mr. Speaker:: If the contending members cannot settle which one shall take the floor, I think I shall have to allow the Minister of Finance to raise his question of privilege.
Hon. Donald M. Fleming (Minister of Finance!: Mr. Speaker, I take strong exception to the suggestion that at any time I have suggested there was an emergency in Canada. On the contrary, I expressly disclaim it. The only emergency I know of is the one existing in the minds of members of the Liberal party.


William Moore Benidickson: Nobody is unemployed.


Mr. Marlin (Essex Easl):: Mr. Speaker,
since you allowed the question of the hon. member for Port Arthur, which I am sure most objective persons would admit was a little more frivolous than the question I put to the Minister of Finance, I am sure you will not mind my asking the Minister of Finance again whether as a result of his extended tour he is not now convinced that there is-


Some hon. Members:: Order.
Inquiries of the Ministry


Murdo William Martin: -a very serious level of unemployment in this country that calls for a recognition by the government of an emergency situation.


Some hon. Members:: Order.


Mr. Speaker:: Order. The hon. member has disregarded my caution-


An hon. Member:: It is quite habitual.


Mr. Speaker:: -if I may put it as mildly as that. He is in effect asking for an opinion on a very broad subject, and I am not satisfied that it is a proper question for the orders of the day. If I allowed the minister to deal with it I am sure it would result in an exchange which could only be interpreted as a debate.


Murdo William Martin: Mr. Speaker-


Some hon. Members:: Sit down.


Murdo William Martin: Hon. gentlemen can do what they want but they are not going to prevent us from discussing this matter of unemployment in the house.


Mr. Speaker:: Order. The hon. member for Essex East.


Murdo William Martin: I rose to discuss the point of order but you acceded, and properly so, to the right of the offended Minister of Finance to speak first. Speaking to the point of order, I suggest with great confidence to Your Honour that a question addressed to the Minister of Finance in respect of unemployment is not merely asking him for an opinion but is giving him the opportunity of declaring whether or not there is to be a revision of government policy regarding the foremost domestic problem now facing the country.


Some hon. Members:: Order.


Mr. Speaker:: Order. If the hon. member would confine his remarks to the question of order I would be glad to hear him, but when he gets into arguments relating to the question itself that is a different matter.


Murdo William Martin: I was about to say that if the question which the hon. member for Port Arthur put to the Minister of National Revenue a moment ago was a proper one, surely it is proper for me to ask the Minister of Finance whether or not his contact with the people has convinced him that there is serious unemployment in Canada.


Mr. Speaker:: The hon. member will have plenty of opportunity to do that in course of the debate which we are waiting to begin.
1068	HOUSE OF
Inquiries of the Ministry POST OFFICE DEPARTMENT



REPORTED CONVEYANCE OF RUSSIAN PROPAGANDA MATERIAL

[Stage Direction]
On the orders of the day:
Mr. Azellus Denis (St. Denis):: Mr. Speaker, I wish to direct a question to the Postmaster General. According to Ottawa city councillor Murray Heit, as reported in this morning's newspapers, a Russian review containing outrageous propaganda is on every newsstand. Has the Post Office Department an organization set up for the purpose of allowing or forbidding this kind of review to go through the mails? If not, does the minister intend to set up such an organization?


Hon. W. M. Hamilton (Postmaster General):: Mr. Speaker, it is not the function, responsibility or, as far as I am concerned, the desire of the department to engage in the censorship of material that passes through the mails, and we take a very firm stand in this regard. If the courts wish to declare something to be improper mailable material, we will respect the views of the courts, but I am not going to accept the hon. member's suggestion that the department or myself should make censors out of ourselves.


Paul Joseph James Martin: That is not the
view of the Minister of Justice.


Azellus Denis: Can the minister tell the house whether in some other department there is an official who has any control over this Russian magazine going through the mails?


William McLean Hamilton: To
the best of my knowledge, no, sir.


Azellus Denis: Mr. Speaker, I have a supplementary question to the one I put to the Postmaster General. I should like to know what facilities the government has for examining, scrutinizing and detecting magazines such as this review, if there is nobody in the Post Office Department who does this.


Mr. Speaker:: Order. I think the hon. member is posing a question which might be better brought up on the estimates of the department. It is not of such great urgency, and as the practice has been going on for some years it seems to me it is a proper subject for comment on the estimates.



CHRISTMAS OVERTIME WORK


[Stage Direction]
On the orders of the day:
Azellus Denis: I wish to direct a question to the Postmaster General.
I am informed that additional work performed by postal employees in the Christmas and


New Year period will be paid for by means of holidays instead of cash, whereas in the past employees had the choice of being paid either by means of holidays or by cash. Will the minister tell the house the government's views on that subject?


William McLean Hamilton: Mr. Speaker, I am delighted to tell the house first that there has been a great deal less overtime on the part of our permanent staff this Christmas than ever before, owing largely to increased efficiency in operation and certain changes which have been made. That overtime which has occurred on the part of our permanent staff has previously been either liquidated or paid in cash, largely at the option of the local postmasters. This year we have encouraged them in every possible case to liquidate it by means of time off during the month of January rather than making payments, in the interests of efficiency and economy.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Hubert Badanai: Mr. Speaker, I wish to direct a question to the Minister of Agriculture. It has been brought to the attention of the Fort William chamber of commerce that the inspection service of the plant products division of the federal government may be transferred from the lakehead to Winnipeg. Can the minister inform the house whether such a move is being contemplated by his department?


Hon. Alvin Hamilion (Minister of Agriculture):: Mr. Speaker, I received notice of this question, for which I wish to thank the hon. member. I can assure the hon. member that no such move is being contemplated.



RED CHINA


[Stage Direction]
On the orders of the day:
William Moore Benidickson: Mr. Speaker, I should like to address a question to the Minister of Agriculture or the Minister of Trade and Commerce. After the long Christmas adjournment can the ministers indicate to the house what progress may have been made in discussions with trade representatives from China with respect to the sale of western wheat?


Francis Alvin George Hamilton: Mr. Speaker, all I can say at this time is that discussions are in progress.



THE BUDGET


[Stage Direction]
The house resumed, from Wednesday, december 21, 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.
Mr. Speaker:: Before recognizing the hon. member for Burnaby-Coquitlam (Mr. Regier)
I should like to ask the house to consider the amendment which was moved by the hon. member for Kenora-Rainy River (Mr. Benidickson) when this debate was before the house at its last sitting. The amendment was not placed before the house at the time because of the reservation which I had in my own mind as to the form of amendment which, as hon. members will note if they refer to the proceedings of our last sitting at page 1046 of Hansard, contains a substantial preamble which quotes the words of various members of this house on both sides.
I have spent a considerable amount of time in reviewing the amendments which have been made on supply and ways and means motions in the past, and have a fairly good idea of what the practice of the house has been over the last 90 years or more-it has changed somewhat from time to time-and I have come to a tentative conclusion, which perhaps I might express as a tentative conclusion and then hear hon. members who may wish to assist in the settlement of this rather interesting and, in my opinion, important procedural question; or I shall be glad to hear them first.


Mr. Bell (Carlelon):: Mr. Speaker-


Mr. Speaker:: Perhaps the better course will be to hear the members who wish to speak. I think I might give the choice to the hon. member who moved the motion or to someone from that side of the house to support it, and then hear the reply in the second place.


John Whitney Pickersgill: Personally, Mr. Speaker, I would have preferred to hear your tentative conclusion on the subject in order to abbreviate the argument as much as possible. However, in the circumstances I intend to deal with the argument put forward by the hon. member for Carleton (Mr. Bell), which was brief and which seemed to me to be wholly wrong.
The hon. member for Carleton rested his case mainly on two points. One was that the amendment was vague. That is something which I do not admit for a minute. But even
The Budget-Mr. Pickersgill if it is vague I submit that in the light of Beauchesne's citation 202 in the fourth edition, paragraph 4, that circumstance does not in the least invalidate the amendment. That citation reads as follows:
(4) An amendment cannot be ruled out because of its vagueness. Speaker Cockburn, having to give a ruling on an amendment to the address, on March 30, 1870, said: "the amendment is certainly very vague, but I cannot say the house cannot express a vague opinion".
But, Mr. Speaker, of course there is nothing vague about the amendment, with the possible exception of citations from members of the treasury benches opposite which are part of the preamble. If the hon. member for Carleton chooses to regard those statements as vague, of course that is his privilege. However, we put them in this amendment precisely because we thought they were far from vague. We thought they were precise and precisely wrong.
I now come to the other objection that was made by the hon. member for Carleton, namely that the amendment is long. May I say that the amendment is not as long as are some of the amendments that have been made in the fairly recent past, as no doubt Your Honour's researches have shown; and I am not going back beyond the year 1930 in this regard. Moreover, Your Honour indicated that you had some doubts about the recitation of argument and other matters which are properly the subject of debate. Perhaps at the same time I could deal with the question of the length of the amendment and the question of the recitation of argument in presenting these points.
At the time the point first came up for consideration I drew Your Honour's attention to the amendment moved by Mr. Heenan, the then member for Kenora-Rainy River, in the year 1932, which is reported in the Journals at page 76 for that year, and which cites in considerable number not precise statements made by ministers of the crown but press reports of statements made by ministers of the crown in order to substantiate the substantive part of the resolution. While I should like very much to read the citations, because they are exceedingly relevant to the situation in Canada, the reading of them would perhaps not be relevant to the point of order. Moreover, I have no doubt that Your Honour has already read them. The effect of them is, of course, to substantiate the substantive motion.
In addition, in the second session of 1930, which was the first session held after the election of that year, on September 18, as reported at page 29 of the Journals, an amendment was moved by Mr. Mackenzie King to a motion to go into committee of ways and
1070	HOUSE OF
The Budget-Mr. Pickersgill means and a subamendment was moved by Mr. Garland, the then member for Bow River and seconded by Mr. Woodsworth, and it was very much in the form of this amendment, although not so long. It had only three clauses beginning with "whereas" while our amendment has six clauses; but I submit that there is no sanctity in having only three clauses rather than six. Indeed, some of the other citations I will give will be rather longer than that one.
In 1932, at page 247 of the Journals, a situation similar to the one to which I have just referred arose. Mr. Ralston had moved an amendment. Mr. Gardiner, the member for Acadia-I think that was his constituency- seconded by Mr. Woodsworth, moved an amendment of an argumentative sort very similar to this one. This time there were five clauses beginning "whereas". Therefore there does not seem to be anything unusual about the present case.
Then in the session of 1932-33, as reported at page 377 of the Journals, an amendment was moved also by Mr. Ralston, and a subamendment was moved on that occasion by Mr. Lucas. I think he was the member for Camrose; I believe that is what his constituency was called. That was seconded by Mr. Woodsworth. It also contains a series -four of them, indeed-of clauses giving an argument for the proposition.
As I have said, the most precise parallel so far as quotation is concerned is the one I drew to Your Honour's attention the other day. That is the one moved by Mr. Heenan and seconded by Mr. Mackenzie of Vancouver Centre, a very distinguished parliamentarian indeed.
There is one other consideration which I shall advance with respect to amendments to the motion to go into committee of ways and means. As Your Honour knows, the motion to go into committee of ways and means is one which gives the Minister of Finance the opportunity of reviewing the whole ambit of the economic and financial policies of the government.
I have had a careful search made of the records going back to the year 1930, and I find that until the present government came into office there were only, at any time, two points of order raised on amendments to the motion to go into committee of ways and means, and in neither case by the government. Mr. Bennett raised a point when he was leader of the opposition in 1937, and the Speaker, in July of 1942, initiated a discussion on the regularity of an amendment moved by Mr. Blackmore. But on no occasion in all that long period when Mr. Bennett was prime minister, when Mr. Mackenzie King 

was prime minister or when Mr. St. Laurent was prime minister, from 1930 on, has the government ever raised a question about these amendments to go into committee of ways and means.
I suggest it is for the very good reason that this is an opportunity, and has always been regarded as an opportunity, for the fullest and freest debate on the whole scope of the economic and financial policies of the government. It is surely a simple rule that any subject which may be discussed in a debate may also be the subject of a motion seeking to get the opinion of the house. What we are seeking to do in our amendment is not merely to get an affirmation from the house on the substantive part of the amendment,, which Your Honour indicated you had already found in order, but also on the preamble on which that conclusion is based.
It seems to me it would be unduly restrictive of the rights of private members as against the government-I do not exclude the government members, I mean private members in all parts of the house-it seems to me it would be unduly restrictive of the historic rights of the representatives of the people as opposed to the advisers of the crown to restrict the opportunities of the House of Commons to express itself upon the whole ambit of the economic and financial policies of the government.
Finally, sir, I would draw Your Honour's attention to the amendment itself and to-the citations which seem to be the only part of it to which Your Honour took much exception, or suggested there might be any exception taken. The citations are in paragraph 2. There are eight of them. They all deal expressly and explicitly with matters which were the subject of the address by the Minister of Finance in presenting his budget on December 20. They deal precisely with subjects which he dealt with upon that occasion. It is true that they express views previously expressed by the minister himself and by some of his colleagues on those subjects, but surely it is not going to be argued that the previous expressions of ministers are not a proper subject for debate and, indeed, for decision by the house.


Mr. Bell (Carleton):: For debate.


John Whitney Pickersgill: And, indeed, for decision by the house. It is precisely because we wish to point out how wrong the government has been, and to get the house to agree with us about this proposition, that we have listed these citations. Of course we do not deny the right of any hon. member to disagree with us, but we do claim the right to have our proposition voted upon by the house and not

extinguished at the initiative of the government. It seems to me that is precisely the point that is at issue.


Richard Albert Bell: Mr. Speaker, may I add to the submissions which I made to Your Honour on December 21, particularly by drawing Your Honour's attention to paragraph 2 of citation 198 of Beau-chesne's Parliamentary Rules and Forms, which reads as follows:
A motion should not be argumentative and in the style of a speech, nor should it contain unnecessary provisions or objectionable words.
What applies to a motion of course applies equally to an amendment. My submission to Your Honour is that the amendment proposed by the hon. member for Kenora-Rainy River offends directly against this citation. The purpose of an amendment or of a motion is to state principles and to propose action or remedies; it is not to engage in argumentation or documentation which is appropriate to the proposing speech or to the subsequent supporting speeches. If citation 198 were not followed, I submit it would be impossible to draw the line anywhere and a whole speech might be incorporated into an amendment.
The hon. member for Bonavista-Twillingate has cited the amendment which was moved on February 23, 1932 by Hon. Peter Heenan, and he says that is the parallel. Quite obviously it is the parallel and the model for this particular amendment. But I would point out to Your Honour that the point now raised was never argued before Mr. Speaker Black and the precedent the hon. member quotes, therefore, has all the authority that a default judgment would have if it were cited in a court of law.
I have read two of the other amendments which were cited by the hon. gentleman. I have not read the third. In the two I have read the point at issue was not raised. So I respectfully submit they in no sense constitute a precedent. What the hon. gentleman's argument really amounts to is this. It is a suggestion that somehow, by some means or other, on ways and means it is possible to breach the rules of the house; that the ordinary rules of the house do not apply in respect of a motion to go into committee of ways and means.
Of course the rules relating to amendments, the rule relating to argumentation, to relevancy, and all the rules relating to motions and amendments apply to a motion on going into supply or a motion on going into committee of ways and means equally well. If this lengthy and argumentative preamble is, as I submit, objectionable, may I ask Your Honour to consider whether the whole amendment itself is not completely out of order.
The Budget-Mr. R. A. Bell On December 21 Your Honour indicated a tentative belief that the final paragraph might constitute a substantive amendment which might be severed from the objectionable parts.
My submission to Your Honour is that it is not so severable. It is clear, I think, that Your Honour has the right, before putting a motion or amendment to the house, to make technical corrections so that the motion or amendment shall conform to the usages of the house. That is citation 199.
That right does not exist, in my respectful submission, where the objectionable features of an amendment or motion are of a substantive nature, which is the case before the house. I submit it is only on the basis of this distinction that one may reconcile the first and fourth paragraphs of citation 199, or reconcile the decisions of Mr. Speaker Lemieux and Mr. Speaker Macdonald and that of Your Honour on the budget amendment of last year. Where the objectionable parts are substantive the principle which applies is that cited in the second subparagraph of paragraph 4 of citation 199, which reads in part as follows:
Any irregularity of any portion, of a motion shall render the whole motion irregular.
The authority for this is Smith's Digest, seventh edition, at page 233. I endeavoured to follow that further, but I found that neither in the library nor elsewhere could Smith's Digest be obtained. I hope that lack may be rectified.
This was the position which was taken by Mr. Speaker Macdonald on November 23, 1949 when Mr. Stanley Knowles proposed an amendment on second reading of an act to amend the Combines Investigation Act. Mr. Speaker Macdonald ruled that part of the amendment was admissible but another part was objectionable on the ground that it called into question an issue already decided by the house. In the Journals at page 280 of the second session of 1949 Mr. Speaker Macdonald is quoted as follows:
Since the proposed amendment is defective in part I must rule the amendment as a whole out of order.
That decision was appealed and upheld by the house. Any seeming conflict there may be between that decision based on citation 199 and the decision of Mr. Speaker Lemieux of April 28, 1924, with which Your Honour is familiar, and Your Honour's own decision of April 4, 1960, must be reconciled, I submit, by reference to the last sentence of citation 193, which reads as follows:
If the irregularities are trivial or without bearing on the main purpose of the motion the house may agree to rectify them, but the mover himself cannot amend his own motion.
1072	HOUSE OF
The Budget-Mr. Regier
My submission is that citation 199, paragraph 1, and the first sentence in paragraph 4 of the same citation must be read as applying to irregularities which are trivial or without bearing on the main purpose of the motion. With respect, I submit it is only on such a basis that citation 199 is consistent within itself and that the various rulings from the Chair may be reconciled. Where the objectionable features are not trivial I submit there is no power either in the Chair, either before or after the amendment is put, or in the house, without unanimous consent, to sever the objectionable from the unobjectionable portions of an amendment or motion.
Consequently, in summary, it is my submission that the preamble to the amendment is out of order for the reasons I put forward at the last sitting of the house and for the several reasons I have advanced today. It being out of order, the whole amendment is irregular and cannot be rectified without the unanimous consent of the house, and neither the mover nor Your Honour has any authority to make any correction even before the amendment has been put to the house.


Erhart Regier: have a number of observations to make on arguments which have been put forward on this matter. I cannot agree at all with the claim made by the hon. member for Carleton (Mr. Bell) on December 21 that the amendment was irregular or that the hon. member who moved it was guilty of too much vagueness. Hon. members will recall that the amendment concluded by saying:
Therefore be it resolved that the financial policies of the government do not deserve the confidence of this country.
That, I submit, is very clear and explicit. However, I have to agree with the new submissions which have been made by the hon. member for Carleton, because it is my belief that in a want of confidence motion, though we may have an argument and a proposal, or an argument or a proposal, these must be brief and must, to use the words of the hon. member for Bonavista-Twillingate, contain the subject matter of the proposal or of the argument and not all the substantiating evidence which might be called in aid. If the argument of the hon. member for Bonavista-Twillingate were adopted there would be nothing to prevent my asking that the whole of my last year's budget speech be incorporated in an amendment that I might wish to move. If only the argument of relevancy were used, there would be nothing to prevent a textbook which some economist had written on national finances from being included in the amendment, and being allowed.


Let us observe for a moment what happens in a court of law. If the prosecution is able to win a conviction it is only a conviction in: respect of the offence as alleged; it is not an endorsation by the presiding officers of each and every detail of the allegations which the lawyer for the prosecution has presented. I feel that relevancy alone is not the guiding consideration, and that in a want of confidence motion there should be only the bare statement of the argument and/or proposal given in its most concise form.
The people of Canada are watching procedure in this House of Commons more closely than ever before, and I should like to remind you, Mr. Speaker, that you have the right to make your decisions independently of decisions which have been made in the past. If errors have been made by speakers in the past I appeal to you, Mr. Speaker, to make every effort to correct those errors and establish public confidence in our manner of doing business.
I fear I must take exception to the attitude of the hon. member for Carleton during the last part of his remarks, however, because I do believe that an opposition party ought to have rights in this house. Had you made a decision on the amendment, Mr. Speaker, there might be some merit in the proposal now put forward that you ought not to accept any part of the hon. member's amendment. However, because of the fact that you delayed your decision, and because the hon. member for Kenora-Rainy River was thereby debarred from moving any other amendment in the course of his address I do not believe the people of Canada would take very kindly to the proposal advanced by the parliamentary secretary, as I understand it, that the hon. member for Kenora-Rainy River ought now to be barred from making his amendment in such a manner as would be acceptable to the Chair.


John Whitney Pickersgill: Just before you make your decision, Mr. Speaker, may I point out that the hon. member for Carleton did introduce some new arguments in his remarks, and I should like to deal with them briefly. It seems to me that the only argument of consequence made by the hon. member was that the preamble was irrelevant and unnecessary. Then he suggested to Your Honour that, because it was a matter of substance, if it were ruled out the whole amendment would fall.
It seems to me that the parliamentary secretary cannot have it both ways. If the preamble is a matter of substance, as I contend it is, then it should be left as part of the amendment. If, on the other hand, it is a mere matter of verbiage, then it is within the competence of Your Honour, as you did last

year, to direct that the necessary corrections be made so as to conform with Your Honour's view of the rules.
Moreover, I had also intended to make the argument which was made very aptly by the hon. member for Burnaby-Coquitlam (Mr. Regier), namely that Your Honour had in fact ruled upon the substance of this amendment and that we had accepted the ruling in good faith on December 21. I did not direct any argument to this question because I understood that the question had been settled and that the only question which was open to us to argue at the present time was the one on which Your Honour expressed these words:
I have my doubts about the recitation of argument and other matters which are properly the subject of debate.
Those words are to be found at page 1048 of Hansard of December 21. As the hon. member for Burnaby-Coquitlam has said, it seems to me that in view of the opinion given by Your Honour at that time it would not be competent to re-open that subject at this stage.


Mr. Speaker:: I appreciate the very helpful contributions made by hon. members. It is a pity to take time on procedural matters but there is a point of importance here which I feel warrants disposition in a methodical way. I ask the indulgence of the house for a minute.
There are two questions. One is the validity of the amendment itself, whether it is defective or not in accordance with our rules. The other is what we can do about it if it is defective in part which was the question raised by the parliamentary secretary.
On the amendment itself may I say that the fact that this amendment is in almost the precise form of the one in 1932 to which I have been referred requires very good reasons if it is not to be accepted because precedents are the basis of our parliamentary procedure. I have searched out what seemed to me to be the best statements of principle and I have reviewed the precedents. I should like to give what appears to me are the most reasonable statements of principle starting with one from Redlich's "The Procedure of the House of Commons", volume 3, page 187 which clearly differentiates the stages of procedure in the house. The author says:
The third of Bentham's fundamental principles concerns the forms of parliamentary procedure themselves; he points to the necessity for a precise separation, both in form and in substance, between the different stages in the formation of the will of a political assembly, and for a strict observance of the definite logical order of these stages. Proposition, debate as a means of expressing the views of members, and voting are to be kept from intermixture. They must follow strictly in order, and must be governed by a further rule, namely, that of the unity of each parliamentary action.
The Budget-Mr. Regier
That general view is supported by Bourinot. It was applied to our practice by both Bourinot and Beauchesne. Perhaps I might quote Beau-chesne's fourth edition, citation 191, section 1. This is a part which has not yet been quoted:
A motion is a proposal made by one member, in accordance with certain well established rules, that the house do something or order something to be done, or express an opinion with regard to some matter or thing.
May, to the same effect, at page 418 of his 16th edition, states:
-an amendment is a subsidiary motion moved in the course of debate upon another motion, which interposes a new cycle of debate and decision between the proposal and decision of the main motion and question.
What I have been trying to differentiate is the proposal put forward in the amendment, the debate which will follow, and the decision which the house will take on that proposal. What troubled me was the confusion in this motion of proposal and debate. I think it is clear to all hon. members that when the statements of members of the house which are quoted extensively as they are here, that is something that very properly could be done in the course of debate to support the verbiage which precedes those statements. That was the problem which seemed to me to be raised by this amendment.
That brings me to the question of whether a preamble before any motion is proper in our practice. It is clear in practice that there have been many. Bourinot says about preambles at page 317 of his fourth edition:
Instances may be found In the Common's journals where questions are prefaced by a preamble, but that form is obviously inconvenient, and not in conformity with the correct usage of either the Canadian or the English parliament.
He is correct about the English parliament because there preambles are not allowed but he is certainly not fully correct when he says it is not in conformity with Canadian usage as has been demonstrated by the citations from our practice to which reference has already been made by the hon. member for Bonavista-Twillingate (Mr. Pickersgill).
Beauchesne's citation on the same subject has already been given by the hon. member for Carleton (Mr. Bell) but for charity I shall repeat it. This is citation 198 of Beauchesne's fourth edition:
A motion should not be argumentative and in the style of a speech, nor should it contain unnecessary provisions or objectionable words.
So much for a general statement of the law with respect to preambles to motions as applied in Britain and as viewed by Bourinot and to some extent by Beauchesne. It is notable, although perhaps not persuasive in this house, to cite the rule of the other place
1074	HOUSE OF
The Budget-Mr. Regier on this very subject which expressly states that no motion shall be presented with a preamble. That is rule 27 of the other place but we have no such rule.
I have, then, to deal with the practice in this house. It is clear from our practice that the preamble has been used a great many times as a preface to a motion of amendments to the motion to go into committee of ways and means. The same applies to motions to go into supply. An extensive review shows that for many years there were no instances of such an amendment with a preamble and then they would come back into style again and be used. I have collected almost all the instances which are numerous but I do not propose to trouble the house with them. Suffice it to say that it is amply established that a preamble is in accordance with our practice. Whether or not it should be is something for the rules committee to determine.
I think it might very well be considered by the rules committee because if you have a preamble then the question of what may go info the preamble raises difficulties for the Chair. The use of the preamble can lead to absurd lengths. By way of example I have only to cite one instance which I found in 1899 of a motion the preamble of which covers 21 pages of the journals. It is, I might say, a procedural monstrosity, but there it is as a precedent. It contains exactly what this amendment contains, that is quotations from political speeches made in and out of the house, quotations from letters and there are even quotations from some confidential documents included in that preamble. That, and the instance of 1932, to which the hon. member for Bonavista-Twillingate refers., are the only two instances of actual quotations being part of the preamble. I have come to the conclusion that this amendment is not defective because it is preceded by whereas clauses, reasoning clauses or argumentative clauses in the form of a preamble, our practice to the contrary is too well established to be upset.
On the other hand, I am not satisfied that I should follow the precedent of allowing a preamble to include a lot of matter which would properly be part of the debate which would follow the motion. Therefore, without trying to split hairs at all, because I think there is a principle involved, even if the principle is only that the Speaker must do his best to draw the line somewhere between what may and what may not go in the preamble. I have come to the conclusion that the whereas clauses in this amendment are not objectionable in accordance with our practice, but that the inclusion of the eight quotations in one recital and of the two quotations in another recital are bad and should not


be permitted to restore a practice which has not been followed since 1932 and only twice in our whole parliamentary history, as far as I can discover.
Therefore, my view is that if the amendment stopped after the figures "1960" in the second paragraph, so as to eliminate "as illustrated by the following ministerial statements" and the eight numbered paragraphs of statements then set out, and stopped again after the third recital after the words "Leader of the Opposition" so as to eliminate clauses one and two which quote further, the rest of the amendment would be admissible, according to our practice.
This brings me to the point that seems to trouble the hon. member for Carleton, as to what can be done about the motion at this time. This amendment has not been placed before the house. It was moved by the hon. member for Kenora-Rainy River (Mr. Benidickson) and seconded by the hon. member for Bonavista-Twillingate. Instead of placing it before the house by reading it I indicated my doubts about it and reserved the motion for further consideration by the mover, the seconder and the house. I agree that, if the motion had been placed before the house neither I nor anyone else could alter it without the consent of the house.
I accept the argument of the parliamentary secretary to the Minister of Finance that if an amendment is bad in part it is bad in toto and, therefore, must be rejected; but I do not accept his proposition that the motion is not subject to revision with the consent of the mover, or rather at the instance of the mover if it is bad and he wishes to remove the error, provided that it has not been put in the possession of the house.
Briefly, this is the conclusion I have come to. If the hon. member for Kenora-Rainy River wishes on his own initiative to ask that what I have described as faulty parts be removed from the motion I would be sympathetic and would feel that I had the authority to accept his proposal and then to put the motion in the possession of the house for the first time after the formal and procedural objections had been disposed of.


John Whitney Pickersgill: The hon. member for
Kenora-Rainy River was called from the house; he expected to be back but he is not here. I was the seconder of this motion and, as he pointed out to me before he left that he would leave the discretion to me,
I wonder whether the house would consent in the circumstances to my accepting Your Honour's suggestions on his behalf?


Mr. Speaker:: Is it agreed to?


Some hon. Members:: Agreed.


Mr. Speaker:: Then, I take it, by leave of the house, the hon. member for Bonavista-Twillingate is asking that the amendment proposed by the hon. member for Kenora-Rainy River be resubmitted in a revised form as suggested and put before the house in that form. Then, I think I should now put the motion before the house, if it is agreeable. The motion of Mr. Benidickson, seconded by Mr. Pickersgill, is as follows:
That all the words after the word "that" be deleted and the following be substituted therefor:
Whereas the budget speech of the Minister of Finance rests on the assumption that deficits and unemployment are inevitable features of Canadian life under Conservative government;
Whereas members of the government have failed to assess correctly economic developments in Canada in 1960;
Whereas the government persisted stubbornly and blindly in this mistaken assessment of the economic situation notwithstanding warnings issued in this house, notably by the Leader of the Opposition;
Whereas the necessity of calling parliament this fall to deal with emergency legislation and a supplementary budget confirms the position taken by the opposition and reveals clearly lack of foresight and leadership on the part of the government;
Whereas the supplementary budget converts a proposed surplus of $12 million into a forecast deficit of $286 million, which will be the fourth consecutive deficit of this government and exceeded In the post-war period in amount by only the last two deficits of this Conservative government;
Whereas the new deficit was unplanned, unexpected, and is a result of a wrong assessment of the economic situation;
And whereas the proposals in the budget do not deal with the deeper causes and manifestations of economic difficulties, and in particular with massive, persistent and growing unemployment;
Therefore be it resolved that the financial policies of the government do not deserve the confidence of this house.


Erhart Regier: Mr. Speaker, before the Christinas recess I had expressed in this house the disappointment, as I understood it, of the Canadian people with the contents of the baby budget. I deplored the fact that Liberal spokesmen had done a lot of weeping and wailing and offered no constructive proposal as to alternative policies. I refer briefly to the amendment and indicate that if that is all the Liberal party has to offer, then it has no constructive proposals to place before the house and the country.
We were meeting at a time when there was great unemployment in Canada. In the fall we were meeting at a time when our markets were not growing adequately to meet the needs of the Canadian people, Canadian industry, Canadian agriculture and Canadian workers. We were meeting at a time when actually there was a decline in the level of investments in Canada, when investment money for intensive production, for adequate
The Budget-Mr. Regier establishment of markets to meet our social needs and to meet the ever-growing effects of automation was not forthcoming. Such money was not being made available in adequate amounts. We were meeting also at a time when there was yet a further decline in the net income of Canadian agriculture.
We had been called to an early resumption of the sessions of this parliament. We were here as early as November 17. We heard a lengthy speech from the throne containing a number of detailed proposals. We had been informed that we could expect a baby budget before the Christmas recess. We had received many oral assurances such as the assurance "You ain't seen nothing yet".
We had spent three years clearing out the underbrush and now the government was going to go after the tall timber. The expectations of the Canadian people were at a very high level indeed. There was hope that at long last after much procrastination the government was finally intending to tackle the needs of the Canadian people with imagination and with some vigour. Now, even as late as this afternoon, we hear with utter dismay the announcement by the Minister of Finance (Mr. Fleming) that there is no emergency. If there is no emergency I might well ask why the beating of the drums and the great effort to assure the Canadian people in the dying months of last year that the government recognized that conditions were very serious indeed and was about to undertake action that would begin to fell the tall timber.
Instead, in the baby budget we received only a denial in effect of most of the campaign pledges of the Conservative party. Instead of the implementation of campaign pledges we had a return on the part of Canadian Tories to the old, traditional and discredited Tory policies of the late R. B. Bennett's regime, policies of higher tariffs, curtailment of production in the industrial and the agricultural world, higher interest rates for the Canadian people, and any blessings that were handed out in the baby budget were, in typical Conservative fashion, handed out only to big business and to the investment houses of Canada.
Some people have the idea that when the masses of the people are hungry all you have to do is to add a little more to the tables of the overly wealthy and somehow a little more will roll off the tables and therefore the needs of the masses will be met. The remedies that have been proposed by the government will in our opinion not help us with regard to unemployment. They will not help to find markets for our products. They
1076	HOUSE OF
The Budget-Mr. Regier will not supply us with the needed investment capital. They will not help the needs of Canadian agriculture.
I welcome the effort of the government to reduce the percentage of equity that Americans hold in Canadian industry. However, at the same time the minister also imposed a severe additional hardship on our lower levels of government in that in effect he imposed a penalty on the municipalities and the provincial governments when they go to money markets abroad in order to meet their capital needs. The government by its proposal contained in the budget is in effect raising the interest rates that will have to be paid by hospital boards, school boards and municipal and provincial governments because it is obvious that when they want to borrow money in New York henceforth they will have to pay a higher rate than they otherwise would have had to pay.
I regret also that while the government is discouraging United States investment in Canadian equities and Canadian corporations the government is not making any proposal that would help to increase Canadian investment in Canadian enterprise. No action is proposed that will replace United States capital with our own Canadian capital, and we do need capital if we are going to meet the problems that a growing labour force calls for, that automation calls for and that intensification of our agricultural and industrial production and the lowering of our cost of production call for. We need this investment capital. The government made one welcome move but as it made that one welcome move it completely failed to encourage Canadian investment in Canadian enterprise and imposed an added hardship and burden on the backs of local levels of government.
The government has done nothing to entice the investment in Canadian enterprise of funds at present idle in Canada and much more will have to be done in this regard than is being done. Canadian investors do not invest their hard earned savings in visions. They will invest only in potentialities that are realistic, and when they see in office a government that can give them no assurance of expanding markets Canadian investors will continue to be unwilling to listen to the slogan: Let us buy Canada back for the Canadian people. Definite and specific plans and policies are needed rather than a patchwork policy and, as is so often the case with this government, a locking of the stable door after the horse has been stolen. We should be able to analyse what our credit needs are.
I see no evidence that the government is even attempting to analyse what national


credit needs are at all levels. We should also be able to analyse how we can best meet these needs.
This brings me directly to the possible role of our nationally owned Bank of Canada. The minister cannot for much longer deny responsibility for the actions of the Bank of Canada. The minister is the major shareholder according to the terms of the Bank of Canada Act. The Bank of Canada was established to serve the needs of the Canadian nation and the executive authority of our nation cannot begin to absolve itself of responsibility for action or lack of action or lack of adequate legislation that prevails with regard to the Bank of Canada.
The Bank of Canada is very much involved in levels of interest rates and the time has long since passed when the Bank of Canada should have been given the added responsibility of being responsible for credit needs and operations within Canada in addition to ruling over the issuing of our currency.
In all these fields markets are indeed necessary. They are the key. They are the key to unemployment, to agriculture, to business, to industry, to our investment problems and, incidentally but of great importance, to the revenues of our governments. We must enhance the tempo of our Canadian economy. The people will forgive a government that makes mistakes but the people will not forgive a government that sits idly by, formulates no policies and comes forward with no proposals for major action at this time.
The minister for the first time in the house admitted the responsibility of the government for the economic welfare of the Canadian nation. Now we ask, where are the policies which acknowledge that he in fact admits his responsibilities? Where are the markets? They can be obtained mainly at home by enlarging the public sector of our economy, by paying adequate pensions to retired civil servants, by paying a fair share of the national income to agriculture, by an adequate national program of minimum wages in co-operation with the provinces, by altering income tax rates so as to encourage consumption levels, by a comprehensive social security plan and, above all, by a policy of full employment.
Half a million unemployed in one year's time account for the loss of $1.5 billion to our national economy. When you ask us, where are you going to get the money to give this added purchasing power to the Canadian people, we point to the heavy cost so far as our wealth is concerned of half a million unemployed. We point to what in our opinion are the needlessly heavy expenditures of the Department of National Defence every year

amounting to over $1.5 billion. There are markets abroad that are available. We ought to recognize that trading blocs exist and that they are growing in number and effectiveness. We ought to affiliate ourselves as much as possible with this new movement and we should also recognize that there are markets available through an adequate program of international aid.
I know that our proposals may be radical. The Canadian people do not want radical election promises. They want election promises, yes, but along with them they want a political party to tell them what policies must be implemented in order that those election promises can be met. I am convinced that we cannot afford a Tory government much longer in Canada. If this government wants to remain in office, if it wants to retain the good will of the Canadian people, I believe it can only adequately do so by appealing to the people and by the holding of a national election immediately. I therefore move, seconded by the hon. member for Timmins (Mr. Martin) :
That the amendment be amended by adding thereto the following:
"In that the government has failed to adopt financial policies that would provide for:
(1)	lower interest rates,
(2)	an expansion of the money supply commensurate with a full employment program, and
(3)	assistance to export and domestic industries by taking those steps necessary to reduce the premium on the Canadian dollar."


Mr. Speaker:: Unless some hon. member wishes to raise any point on the subamendment I shall put it to the house.


Richard Albert Bell: Mr. Speaker, four weeks less one day have elapsed since the Minister of Finance (Mr. Fleming) presented so admirably the supplementary budget. During that period of time its proposals have been submitted to searching analysis and to exhaustive scrutiny both at home and abroad. Already it can be said that the budget has stood the acid test, that it has made major advances to the achievement of its basic objectives. Indeed, Mr. Speaker, seldom has a budget met such a universality of approval from objective critics.


Some hon. Members:: Oh, oh.


Thomas Miller Bell: Indeed, in all the double talk and phony enthusiasm of a certain political rally last week there was no substantial criticism of its proposals, even from the trinity of back room big shots, the triumvirate of big business moguls, Gordon, Sharpe and Drury, who have now taken over the Liberal party.
The Budget-Mr. R. A. Bell
But in his speech on December 21 the official although apparently now displaced financial critic of the opposition, my good friend the hon. member for Kenora-Rainy River (Mr. Benidickson), adopted a scattergun approach. Filled with statistical inaccuracies-I have a whole volume of them under my hand-his speech was an odd assortment; a curious, confused conglomeration of unrelated strictures; a hodgepodge of ill-digested criticisms.
In 30 minutes I cannot hope to deal with all his random jibes, but this I say: Nowhere were his criticisms founded upon principles. Nowhere did they reveal any consistent policy of the opposition except its total inconsistency, an inconsistency which last week became more pronounced, more vivid and more notorious as the heir presumptive, Walter Gordon, led hon. gentlemen opposite to embrace policies they have constantly spurned, to profess that which they have always eschewed.
But what was worse, Mr. Speaker, was this. The speech of the hon. member for Kenora-Rainy River was an odd assortment of pessimism, of economic despondency, of fiscal melancholy. Characteristic it has become of hon. gentlemen opposite to indulge in preachments of gloom, in woebegone and lachrymose descriptions of our economy and Canada's future.
They do themselves and this vibrant nation much less than justice when they indulge in such tactics. Canadians today have no reason for dejection and no reason to be downcast. A temporary levelling out in our high rate of economic expansion and progress ought not to be magnified out of all proportion. It should rather be assessed for what it is, namely a period of adjustment and readjustment, a period to mark the onward and upward progress of our development. This I assert, and it will be my confident theme: no government has ever taken in such a short period of time so many productive, constructive, potent actions to provide stimulus to the economy, impetus to development, incentive to expanded employment, increased social justice payments, expanded assistance to provinces and municipalities, and inspiration to Canadian unity. These are the real facts, and this is what I propose to demonstrate to the house. But first may I say a word about the amendments.
The subamendment just moved by my friend the hon. member for Burnaby-Co-quitlam (Mr. Regier), the fiscal spokesman for socialist thought, as well as his confused and disordered arguments, in my opinion succeeds in demonstrating that the only thing new about the new party is its name, that
1078	HOUSE OF
The Budget-Mr. R. A. Bell the so-called new party is nothing more than the old party with a new but equally repulsive socialist mask.
The amendment of the official opposition, now mangled and mauled as it has been, remains negative and destructive, illustrating only the barrenness of Liberal policy. What will interest the house now will be the tactics or the strategy of the official opposition. Now that their rally is over, will they pursue the stratagems which they adopted earlier in this session and which I can sum up in four words, fire and fall back. Yes, Mr. Speaker, their stratagems have been to fire and fall back; to criticize and criticize, to calumniate and calumniate; to scatter volleys of smears, sneers and innuendos. But when the chips are down, what a different story it is. Then, meekly, row upon row, up they stand to be counted in favour of that which they denounced, in favour of the very legislation for which they reserve their most violent strictures How will they ultimately vote on this budget? Will they vote as they talk or will they continue, Janus-like, to face front and look back?
Last week, with the new found bravado, with what I thought was uncharacteristic bluster, the Leader of the Opposition (Mr. Pearson) expressed an urgent desire to commit political hara-kiri. That time, whenever it comes, I predict will be too soon to suit him, despite his roll of political drums, despite all his sounding brass and tinkling cymbals. Some of us have a rather vivid recollection of what happened after the last bold challenge hurled by the Leader of the Opposition. But before he commits political suicide on the electoral front, let him concern himself with this House of Commons. Specifically, I invite the Leader of the Opposition, when he speaks on this budget, to state where he stands on fiscal issues, to rationalize the approach that he and his colleagues have taken this session. It will be interesting to see what strategy the opposition will pursue in the future, the La-montagne strategy or the Walter Gordon strategy or just the old-fashioned strategy of Joey Smallwood's favourite disciple.
I want to discuss some features of the speech of the official critic of the opposition, the hon. member for Kenora-Rainy River. It seemed to me that he took a sort of gleeful satisfaction, sometimes a gloating self-satisfaction out of alleged variations or divergences between certain forecasts and actuality. Certainly his words were waspish and sarcastic.
Let me remind the hon. gentleman of three things. First, that the so-called divergencies between forecast and actuality,


whether in gross national product, in revenues, in expenditures or in deficit are much less than has frequently been the case, as indeed was the case during much of the time when he was parliamentary assistant to the minister of finance. What we had then was budgeting by accident. Second, when one is dealing with very large figures, percentage calculations of course tend to wide margins of error in lump sum figures. A 1 per cent error in a calculation of $100 is $1, but a 1 per cent divergence in a calculation of $6 billion is $60 million.
Finally, I believe the hon. gentleman should be fair enough to concede that forecasts were made in a very different atmosphere than today and that equivalent or greater margins have occurred during the same period in similar calculations in the United States and other western countries.
My hon. friend will recollect that in the United States and here, the year 1960, the new decade, commenced with what now appears to have been an exaggerated, or at least temporarily exaggerated optimism. In the writings of economists such phrases as "the soaring sixties" and "the sizzling sixties" were commonplace. Let my hon. friend read the business and economic periodicals at various periods in early 1960. I have a wide variety of extracts under my hand as I speak, and only wish that I had the time to place them on the record.
What they do establish beyond peradven-ture is that if the Minister of Finance has had a margin of error, he was in the very best company, governmental, professorial and editorial, in the United States, Canada and elsewhere. A most realistic comment is that made by the federal reserve bank of New York in November, 1960, at page 190 of its publication in reviewing developments for the year:
Through most of the year, the economy has been dominated by a process of business and consumer adjustments to the abatement of inflationary pressures and the dissipation of inflationary psychology. These developments have been associated with all-round ample capacity, ready availabilities of all kinds of finished goods and materials, and generally stable prices. This rather unspectacular period of adaptation has continued through September and into October and may yet have some distance to go.
With reasonable accuracy that describes as well the Canadian scene. But in this period of adaptation and despite these adjustments let us not forget that our production has risen, our G.N.P. is at an all-time high, personal incomes are at an all-time high, employment is higher-though regrettably accompanied by unemployment-retail sales have increased, exports are at an all-time peak. Now, in this budget, the government seeks to assist all

sections of the community to adapt to the new environment to meet the challenge of the 1960's of new demands, new products, new markets in Canada and abroad.
Already a most significant feature is apparent. By orderly decline the Canadian dollar has reached the position where it is trading close to parity with the United States dollar. Virtually all Canadians will welcome this development, from which the economy will derive substantial and immediate benefits in terms of production and employment.
When my hon. friend the member for Kenora-Rainy River was speaking of deficits I had the impression that he was scoring debating points rather than getting to the heart of the issue. Nowhere did he whisper what he, or his old mentor, Professor Lamon-tagne, or his new mentor, the heir presumptive, Walter Gordon, would have done to avoid a deficit. Would he have raised taxes; and if so, which ones? Or would he have reduced expenditures; and, if so, which ones? He cannot have it both ways. He cannot face both directions at the same time.
Yet that is precisely what the Liberal rally in its plethora of platitudes last week sought to do. Reduced taxes and greatly increased expenditures; that was the theme, that the battle cry. How gullible do they think Canadians are? Under the proposals made by that rally the deficit this year would certainly exceed $1 billion.
I suggest to my hon. friends that it is time for a return by them to responsible thinking. Apparently what is needed is not only a royal commission-with or without psychiatrists-to examine the defence policy of the Leader of the Opposition, but a royal commission to examine the fiscal thinking of the trio of tyros who have replaced the four horsemen opposite.
Then the Leader of the Opposition states that these proposals are only a guide; by which expression I assume he attaches to them the same importance as Mackenzie King did to the 1919 resolutions when he described them as a chart and compass. The most significant of the "chart and compass" resolutions took 38 years to implement. Doubtless we may anticipate equivalent expedition with this guide.
What I say to my hon. friend the member for Kenora-Rainy River is this: It does not lie in his mouth to wax indignant about a deficit at one moment, to exercise all his considerable powers of flip, glib sarcasm about Conservative governments in one breath, and then at the next moment in the next breath to advocate policies the inevitable result of which would be larger and larger deficits. Yet that is precisely the
The Budget-Mr. R. A. Bell dilemma upon the horns of which he has gored himself; and so gored, what a pretty sight he is.
One of my friends summed up this dilemma of the Liberal rally rather well, I think. He said, "I've read everything they said, and they succeeded, on most issues, in getting themselves in the undignified posture of straddling the fence, with an ear to the ground, grinding an axe." What an apt description of a rally which, with all its vaunted efficiency, succeeded in dealing with only 12 out of 21 resolutions, and only that number after a revolt of the young grass against the big business brass.
But what of this deficit? Naturally the Minister of Finance is not pleased by it; but should it cause any concern? What it represents is 5.6 per cent of our total expenditure this year. There have been many times in our history, both under Liberal and Conservative governments, when a deficit represented a very much higher percentage of expenditure. On an earlier occasion in the house I gave the house detailed figures and indicated that the great Liberal finance minister of all time, Mr. Fielding, in his second last budget expressed no concern over a deficit which represented 35 per cent of the total expenditure of that day. The famous Dunning budget showed a deficit of 19 per cent of expenditure. The less noted Dunning budget, his first after 1935, showed a deficit of 14.6 per cent of expenditure.
One might relate the deficit to the gross national product or place it on a per capita basis. On either basis, there have been many, many occasions when the deficit has been very much larger than now projected.
But the real test is, what is our per capita debt? The hon. member for Kenora-Rainy River delights in dialectical exercises about the alleged rise in our net debt. He is strangely silent about our ability to pay. The realistic test is our per capita debt. In 1950 it was $849; in 1956 it was $701; in 1960 it was $679. With this forecasted deficit, as of March 31, 1961, it will be of the order of $684. Despite the greatest increase in services to our people of any equivalent period in our history, our per capita debt is $17 less than in 1956. That is the realistic way to look at the issue. What a record in which to take pride.
Let me turn now to the budget purposes and the tax changes. The objectives of this budget may be summed up and stated in five propositions: to provide immediate stimulus to employment; to intensify the impetus to balanced economic development; to encourage more effective use of Canadian savings in the development of our resources and industry; to assist in the improvement of our
1080	HOUSE OF
The Budget-Mr. R. A. Bell balance of payments situation and to keep a tight rein on inflationary pressures.
Let us test the proposals of the Minister of Finance in the light of these objectives, these targets. First, what of employment? The budget must be examined, of course, in the totality of government policy. It is an integrated, cohesive part of a positive, dynamic program of action to meet the problem of unemployment, seasonal, technological and chronic.
The increase in the bracket for the low rate of 21 per cent on corporations from $25,000 to $35,000 will provide an immediate spur, a further incentive to expanded economic activity. Since this government came to power in 1957 the low bracket has been enlarged from $20,000 to $35,000, and now 55,000 of the 62,000 corporate taxpayers in Canada pay only the low rate. What more positive evidence of the concern of this government for small business could be cited? What a triumphant fulfilment of the Prime Minister's election commitments to the smaller businesses of this nation, the very great bulk of which are wholly Canadian owned.
When one couples this with the enactment earlier this session of the small business loans legislation, providing government guarantees of bank loans to small business, the enactment last session of the amendments to the Combines Investigation Act, so bitterly fought by the opposition, but which restored to small merchants adequate safeguards against unfair competition, and with the establishment of the small business branch of the Department of Trade and Commerce, the pattern of government policy is crystal clear. This government is the friend, the ally, of the progressive small businessman of Canada. It seeks to have him grow and prosper, providing secure employment and a stable community.
Then the new proposals for double depreciation are of high significance, first in areas of high unemployment and, second, generally across Canada in the development of new products and new processes. The objects are to broaden the base of our industrial output; to assist in the balancing of our productive capacity; to strengthen our secondary industry now in need of a spur to renewed activity, and to assist in what is a major, indeed, the most fundamental, goal of this government-the achievement of a higher degree of processing of our own raw materials here in Canada both for our own market and for export. The government has provided the incentive; the challenge is passed on to industry itself. Here is the opportunity. Here the chance for new ventures, for a pioneering spirit in industrial production.


These tax and fiscal measures must be examined as part of the program already placed before the house-new assistance to housing, including urban renewal and slum clearance, loans for university residences, loans and write-off for municipal sewerage installations, new aid for vocational training, establishment of a productivity council, a greatly expanded winter works incentive program. These and other measures still to be presented, coupled with the proposals in this budget, constitute the most massive program to combat unemployment ever proposed by a Canadian government and, indeed, by any other government, for most of these proposals are original, one might say indigenous to Canada.
I am not so optimistic as to believe that magic wands have been discovered in this program which when waved will cause the problem to disappear immediately. What I do say is that this government's actions are a sincere, honourable and intelligent grappling with a dislocation, part of which is seasonal, more of which is technological, all of which will respond only to a variety of treatments.
But, if we are to have a balanced development, we must increase the volume of Canadian savings available for Canadian development. To that problem the Minister of Finance has addressed himself in a realistic manner. The great pools of capital today are with the pension funds, the investment companies, the mutuals and the insurance companies. When mated with the legislation forecast in the speech from the throne regarding the investment policies of insurance companies, the proposals in this budget will provide the incentive to these institutional investors to place the bulk of their investment in Canadian enterprises. And so they ought. The trend to diversification of portfolios in foreign markets has not been a healthy one for our economy, and if these companies, which the Minister of Finance aptly styled conduits for individual investment, wish to enjoy the advantages of low tax rates, then they should participate in the fullest measure in channeling Canadian savings to Canadian development. This is not nationalism, it is just plain common sense.
A basic encouragement to individual savings is the proposal to repeal the 4 per cent surtax on investment income from Canadian sources. Canadians can avoid this surtax by investing in the future of Canada. If they want to invest in the future of some other country, let them pay the tax. Canadians must generate more capital within Canada. We need more savings by Canadians, the marshalling of those savings into capital and the wise investment thereof in Canada. Part of

this program of self-reliance is dependent upon our practice of increased efficiency, productivity and thrift. For, as I hope to have the time to mention later, one of our major concerns must be to avoid a price and cost level which will bar us from export markets as well as make foreign goods more competitive in our domestic markets.
This budget, having first sought to provide additional stimulus to Canadian savings, then advances proposals to remove the incentives which attract foreign capital. Personally I was pleased that the Minister of Finance dealt so lucidly and vigorously with those who seem to assert that Canada can get along without foreign investment. At this stage of our development it just is not so, and any attempt to bar the door to foreign investment in Canada would launch us into grave economic difficulties.
In some of the comments, by some queer twist which I do not understand, this budget and, in particular, the proposals relating to withholding taxes and taxes on branches, has been represented as anti-American. How ridiculous can prejudiced assertions become? This budget, like the government, is proCanadian. It is not anti-anything. There is nothing, I emphasize, nothing hostile or discriminatory in these proposals. They are moderate. They are rational. They are tailored to today's needs.
Until Canadian savings are sufficient to provide all capital needed for development of our natural resources and of our processing and secondary industries-and that day has not yet arrived-we shall need foreign investment in Canada. Policies antagonistic to foreign capital would be not only shortsighted, they would intensify an unbalanced economy. So long as we manage our financial affairs in a manner commanding confidence abroad we can expect capital from abroad to seek opportunities for profitable investment in Canada. As the Minister of Finance mentioned, it cannot be turned on and off like a tap. Progressively we can strengthen our own capital position and lessen our dependence abroad, and that is one of the objectives of this budget. It is both a long range and a short term measure. Some of the impact has been immediate, as we have seen in our exchange position.
At the outset of these comments on the tax changes, I mentioned that one of the budget objectives was to keep a tight rein on inflationary pressures. It has been a central feature of this government's policy from the outset to contain inflation-and it has been a hard fight. It is not over. Vigilance and sound, flexible budgetary and monetary policies are needed to keep the battle won.
Associated with inflation is the danger of rising costs. As the fifth trading country in
The Budget-Mr. R. A. Bell the world, with 20 per cent of our production disposed of in external markets, Canada cannot insulate her economy from the rest of the world. By efficiency, by productivity, by every means possible, Canadian producers must keep costs down or pricing ourselves out of world markets will be inevitable. And if that happens we may find we have also priced ourselves out of the domestic market. Every Canadian has a direct and immediate interest in preventing the loss of markets through high costs of production.
These, then, are the objectives, the purposes of this budget. I repeat what I said earlier: the legislative proposals forecast in the speech from the throne-the proposals made in this budget-are a cohesive, integrated program of action and, taken together, constitute the most massive attack upon unemployment, the most massive stimulus to a balanced economy ever launched by a Canadian government.
Now a word about the tariff proposals. Over the last few months a consistent attempt has been made by hon. gentlemen opposite and, in an exaggerated way, by their newspaper supporters in western Canada to misinterpret and malign the trading policy of this government. The universal policy of Liberalism on trade and tariffs has been to play both ends against the middle-and I mean that both literally and figuratively.
What this budget seeks to do is to restore and strengthen the historic position of the "class or kind made in Canada" items, gradually chiselled away in recent years. I hope my hon. friends opposite will not repudiate Sir Wilfrid Laurier and Mr. Fielding under whose aegis the "class or kind made in Canada" principle was first developed. But they have encouraged the Sifton press in western Canada to paint this as high protectionist action. I have some of their ridiculous, prejudiced editorials here. My hon. friends encourage the Sifton press to paint this as a high protectionist action, and this despite the fact that the founder of the Sifton fortunes, Sir Clifford himself, was a member of the Laurier government which introduced the "class or kind made in Canada" concept which is now being restored to its original intention.
Nor do I doubt that my learned historian friend from Bonavista-Twillingate will, at some stage of this debate, seek to repudiate the history of the period 1936-39 when under the guidance of Charles A. Dunning, a onetime professed Saskatchewan free-trader, and of J. Lorimer Ilsley, a Nova Scotia disciple of Fielding, the largest number of "class or kind" items was introduced. It was the later satellites of these earlier and genuine Liberals
1082	HOUSE OF
The Budget-Mr. Racine who chipped away the benefits that their more statemanlike predecessors had sought to confer.
There is no antagonism to anyone in these proposals, but there is enlightened self-interest; an enlightened self-interest this country pursued for many years. I am not content to have Canadian secondary industry sold down the river by administrative chipping away of the clear intent of parliament expressed under a succession of Liberal and Conservative governments from 1904 to 1950. Well, that is precisely what we have had. Under a halo of self-righteousness my hon. friends opposite will no doubt describe this as high protectionism and repudiate all the great Liberals of yesteryear.
One further word. In accordance with the practice initiated, I think, by the hon. member for Greenwood (Mr. Macdonnell), my friend the hon. member for Kenora-Rainy River proceeded to try to find a name or description allegedly characterizing the budget. How obviously the hon. gentleman strained, how obviously hard put he was, is evident from the unreality of his characterizations "Executive suite budget," he exclaimed. How ridiculous. This hardly merits a reply for all hon. members know that the tax changes are designed to put men to work now and in the future, to build and develop Canada for Canadians.
This is no executive suite budget. It is a payroll budget. That is what the hon. member should have styled it. It is a national development budget, a jobs for Canadians in Canada budget. It is a genuine Progressive Conservative budget.
With the right hon. gentleman from Prince Albert as Her Majesty's first minister our country has developed and expanded to the highest peak in its history. This budget so brilliantly presented by the Minister of Finance is a further step in the march of progress, ever onward, ever upward, ever more self-reliant.


Mr. McMillan:: Mr. Speaker, will the hon. member permit a question?


Mr. Speaker:: I am sorry to say that the hon. parliamentary secretary's time has expired.


Richard Albert Bell: I would have been glad to accept one.
(Translation):


Mr. Jean-Paul Racine (Beauce):: Mr. Speaker, my hon. friend the parliamentary secretary to the Minister of Finance (Mr. Bell) who just spoke before me, reminded me of a lawyer pleading a hopeless case. To 

good arguments he substituted eloquence, and it is on that score alone that I congratulate him.
I also thank him for thus affording good publicity to last week's Liberal rally. We had been pleased at the good coverage given to it by the press throughout the country, in addition to the points covered by the press we now have those presented by the hon. parliamentary secretary.
My first words, Mr. Speaker, will be to indicate that I wholeheartedly support the amendment moved by my colleague from Kenora-Rainy River (Mr. Benidickson). It seems that, under the present government, the problems of unemployment and deficits are inevitable in Canadian life. This is so true that apparently the government failed to give adequate attention to the estimates and prospects of the economic development in Canada during 1960, since the estimated $12 million surplus forecast by the Minister of Finance will become, according to the new estimates of the minister, a deficit of approximately $300 million.
In his budget speech of March 31, 1960, the minister stated his belief that the unemployment problem would soon improve. He will have to admit that, again on that point, he was quite wrong.
As for the C.C.F. party, the hon. member for Burnaby-Coquitlam claims that it is wrong for us, Liberals, to draw the attention of the people to the errors of the Minister of Finance in his estimates for 1960. He even goes so far as to agree that the Minister of Finance might have been mistaken or ill-advised. The same hon. member states that the statements made by the Liberals amounted to mere weeping and wailing and yet we find that in the speech he made in this house on December 21, he said that the budget speech of the Minister of Finance is meant for businessmen and offers concessions to corporations and capitalists, but not to widows and orphans.
He also states that people in Canada and in other parts of the world no longer consider the government able to deal with national affairs.
He also says that the average citizen is even more disgusted with the government's failure to act. According to him, there is no reference in the budget speech to the development of domestic and foreign markets for Canadian products.
Further on, he says that he is very concerned over the future of GATT, if present ideas are going to prevail and if the government does not do anything about interest rates.

The Budget-Mr. Racine
C.C.F. members weep and wail, but it seems to me they claim to have a monopoly on ability. This I do not concede; I would rather support the Liberal amendment, an amendment introduced by people who, at least, know about the responsibility of administering the country. The previous Liberal government has already done something positive about the major current problem in this country. After the last war, the government was faced with a similar situation, but there was no unemployment, because under the direction of able administrators, more concerned about the welfare of the people than about politics, solutions were presented in advance of the problems.
The government of the time had to find jobs for an increasing number of Canadians, since the population was growing rapidly and wartime production had come to an end.
That wise and experienced government created thousands of jobs each year and provided work for the ever-increasing number of workers, that is to say for those who were working in war plants, as well as for our soldiers discharged from the armed forces.
That solution was brought about by the creation of new industries, and by giving them the means of necessary expansion in order to provide more jobs for our people, by means of an outstandingly wise external economic policy which allowed us to export our surplus production.
Today, unemployment is our number one problem. Never since the great depression of the thirties has it been so serious. That should not be the case but, since 1957, the matter of full employment has not received the attention it deserved.
This government has proved unable to solve the problem, and its actions are not in keeping with the requirements of that emergency. And yet, unemployment is a reality.
Between October 1959 and October 1960 the number of unemployed in Canada has increased by 117,000. It seems to me these figures are thought-provoking; even if the number of those employed has increased by 92,000, there is still a shortage of 25,000 jobs.
What makes this situation even more complicated is the fact that the unemployment insurance fund has dwindled alarmingly. While unemployment is higher, the unemployment insurance fund is fast dwindling; obviously, those two factors are inter-related, the first one necessarily affecting the second.
It is even said that if things keep going as they are now, by May 31 next, the unemployment insurance fund will go down to an alltime low of $85 million.
The situation is most serious and requires drastic remedies.
The extent of the evil now prevailing can easily be grasped if we recall, for instance, that on May 31, 1957, the fund amounted to $878 million.
The present situation is naturally related to the constant increase in the number of unemployed, which will reach unprecedented levels this winter.
This whole unfortunate situation may be explained by a slow down of the national economy. Consequently it is imperative that steps be taken to produce immediate results, since the report submitted by the committee and tabled in the house, on the day of the adjournment, also considers that after March, when the present fiscal year comes to an end, expenses will exceed revenues, on account of the numerous insurance benefits that will be paid in April and May; that is why it is estimated that by May 31, 1961, only $85 million will remain in -the fund.
Faced with the government's inaction, we, on this side of the house, had foreseen the situation which was outlined in the report submitted to the house at the time parliament adjourned for the Christmas holidays, but no more discussion was then possible.
The Minister of Labour (Mr. Starr), has played exactly the same trick on parliament when he tabled a report almost as alarming, from the same committee, on the last day of the session, last August.
Does the government wish to avoid a debate on unemployment in the house and, at the same time, prevent that report from being circulated among the public so that people may not fully realize the seriousness of the situation?
If this were the case, it would show that the government is not shouldering its responsibilities, and is afraid to show the situation as it is, after failing to consider it for the last two years.
The government has no right to play this game, while there are now more than half a million suffering unemployed, in spite of the statement made by the Prime Minister (Mr. Diefenbaker), to the effect that no Canadian would suffer from unemployment as long as he would be Prime Minister.
It is true, however, that in the speech from the throne of this session, which was written by this government, the existence of unemployment, has at last been recognized but it was late in the day, and the government must bear the responsibility for unemployment, as it waited too long before considering it a serious issue. As a matter of fact, the legislation passed in the first part of this

The Budget-Mr. Racine session will in no way immediately remedy the anxiety and suffering which affect more than half a million of our fellow citizens.
The creation of a productivity council, which was moved by the Minister of Trade and Commerce (Mr. Hees), is an excellent thing; it is even a necessity under the present circumstances. But there is no reason to believe that an increase in productivity will automatically eliminate unemployment. On the contrary, because, in itself, increased productivity might entail an immediate increase in the number of unemployed, for greater productivity means greater production without additional effort, or even greater production, with less work or equal production with fewer working hours.
Now, an increase in production is, in itself, beneficial. Thanks to such increase we may experience a higher standard of living, ever-increasing comfort, better health, better education, more culture and more leisure but, only on condition that we organize our economic and social life so that productivity serve the general interest, instead of throwing workers into unemployment and subsequent misery.
We must increase national productivity so as to be more able to compete on the world market, and we have to admit the progress of automation, but in the immediate context, this legislation will only bear fruit over several years.
The government chose to bring up another solution to the unemployment problem, which, to my mind, will not have any immediate impact on the employment situation in this country.
The changes to the National Housing Act are excellent and they will promote construction of additional housing, while stimulating Canadian economy to some extent, without, however, solving the problems of unemployment or of economic recession.
There is no doubt that by raising the loan percentage from 90 to 95 per cent of the estimated loan value, a greater number of people will be able to own their own homes, as a lesser down payment is needed to buy or build a house.
The extension of the reimbursement period is another improvement as it will distribute payments over a greater number of years.
However, when reading some items in the press we must admit that there is no cause for exaggerated optimism with regard to building activities in 1961. Can we, indeed ask an unemployed man, who is the head of a family, to build a home at a time when his life is so lacking in security?

Even with this belated legislation, there is nothing which would justify the hope of a business revival before the summer of 1961, and unfortunately there again we cannot foresee any improvement over 1960.
The number of jobless who are now placed on equal footing with the seasonal unemployed will therefore not substantially decrease, and unemployment will remain the principal problem to be solved in this country, despite those belated pieces of legislation which will not have any immediate effect.
I read in a newspaper that, as a result, it is feared that the government may take drastic steps to replenish the unemployment insurance fund. Up to now, the government has taken no such step to replenish the fund, but I must admit, as do many workers, that the government did take drastic steps to maintain it.
On September 27, 1960, the commission published a circular letter entitled:	"Insurance circular"-"Insurability". It was circular number 13, Mr. Speaker, an unlucky number for the workers, and one that will be irrevocably fatal to the government when it will have the courage to call an election.
This circular letter contains a new definition of the service contract, and will have disastrous results:
1.	It will eliminate almost all cases of insurability in casual and seasonal jobs.
2.	In the past, unemployment insurance offices decided on the insurability of a job, while today they have to decide whether there is a service contract or not.
3.	Employers do not like this procedure, as regards the supervision to be exercised on certain projects, like the construction of private houses, woodcutting, etc.
4.	Also displeased are the employees, particularly the hourly paid labourers in private housing construction. This is an encroachment upon their rights and they are placed at a disadvantage as compared to those who work for contractors. As a result they will refuse to work for an individual because he will not be able to give them unemployment insurance protection.
5. This new decision will be a serious handicap to the winter work campaigns, because workers will not be interested in taking uninsurable jobs with individuals for the construction and repair of private houses.
6. Certain employees are being refused unemployment insurance benefits even if they have paid the required contributions.

7.	Workers who expected to receive benefits after paying contributions have their stamps cancelled by the unemployment insurance offices; they have to go back home empty-handed and tell their wife and children this sad news which places them in a hopeless situation. This is another doing of the Conservatives who cannot find any remedy to unemployment but who devised this backward method of saving the unemployment insurance fund.
By means of that circular, the unemployment insurance offices are seeking to ascertain whether or not there is a service contract, and to this end, they ask such silly questions as this, for instance:
Who has set the worker's salary? It is well known that when a worker is hired, the salary is set by agreement between both parties.
Here is another question. Why did you hire him? Have you ever heard of someone being hired when he is not needed?
The employer is also asked: What knowledge did you have of the type of work he performed for you? What a question. Do you have to be a carpenter to hire a carpenter?
The following is also asked: Did you remain on the premises while the work was being done? This means that from now on, an individual who is having some repair work done on his home, if he works in an office, for instance, will have to stay away from his job and remain on the premises to meet one of the requirements of the service contract.
Then there is this question: Are you employed yourself? This question is as silly as the previous ones.
One is left with the clear impression that unemployment insurance officials are instructed to supply as little information as possible, to keep benefit payments at a minimum.
In the new definition of a service contract, it is mentioned, among other things, that it is essential that the employer be on the premises when the work is done.
It is also mentioned that no service contract can be involved if the employer is less qualified than the worker himself.
Now, according to this new circular from the commission, in order to have a service contract, a garage owner has to be a mechanic himself if he hires a mechanic. How ridiculous can you get.
This matter should be reviewed without delay and important construction, repair and 90205-6-69i
The Budget-Mr. Racine alteration jobs should be covered as they were on September 27 when this circular was issued.
Apparently, it was not enough to have those new instructions take effect on the date of the circular; they went a step farther and made them retroactive. That is why so many workers are being deprived of contributions paid before September 27, with the result that they are not eligible for benefits. A shabby performance indeed, particularly on the part of a government which has been indirectly responsible for the unemployment situation, through its refusal to recognize it and to take appropriate action to correct such an inexcusable state of affairs.
In order to fight our unemployment situation, the government should have increased the money supply and lowered the interest rate.
The personal income tax should have been lowered in order to leave the taxpayers greater purchasing power.
Considering the number of unemployed, the necessary measures should have been taken by the government to reduce the deficit in our trade balance.
We in Canada are like a young man with great expectations who one day would inherit from his parent several properties. He would then think himself a rich man and go about spending more than he collects in rents. And so, at the end of the year, in order to balance his budget, he would have to sell several properties. At that rate, the father's fortune would obviously not last very long.
Mr. Speaker, may I call it six o'clock? (Text):
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

At 8 p.m. the house resumed.
(Translation):
Jean-Paul Racine: Mr. Chairman, I should like to go on dealing very briefly with the problems I was discussing before six o'clock.
As we all know, foreign investments in this country have been rising steadily over the last few years, and this has provided us with the dollars needed to foot the bill. We are somewhat in the position of an heir.
Of course, I am not referring here to investments in the development of our natural resources, but to the process of downright and systematic control over our industries and businesses which has been going on, in fact, for two or three generations.

The Budget-Mr. Racine
Canada's trade deficit runs to a billion dollars a year, and this cannot go on forever.
If the government were willing to grant tax concessions to any Canadians who, over a certain period of time, would undertake to set up an industry or factory to produce goods that are not now made in Canada and which have to be imported, I feel we would see new industries being established and thus achieve a dual object, namely reduce the trade imbalance and provide jobs for the unemployed. But we would have to go much further than is provided for in this budget.
In 1959, Canadian imports amounted to $244 per capita; this means that we import six times more per capita than the Americans. This points up the need to set up new industries in Canada.
We learned two things in the last two days before the Christmas recess: both the federal treasury and the unemployment insurance fund are depleted.
I should not want to conclude my remarks without saying a few words on a matter which has been and is still making headlines. I wish to speak objectively on question No. 10 on the census forms.
It will be recalled that this mention was introduced in the census questionnaire by an order in council dated February 8, 1960 and that we were informed of it on the 11th of February, that is three days later.
Notwithstanding the statement made by the Secretary of State (Mr. Dorion) to the effect that instructions will be given to the enumerators that will tend to lessen the importance of this item, this opinion is not shared by the associations which submitted a memorandum to the minister of trade (Mr. Hees) on December 19, last. On January 5, officials of the dominion bureau of statistics stated before the special committee on associations that only the cabinet could settle this problem. So, it is the cabinet that will be held fully responsible if this question goes unsolved.
According to the associations which made representations, the mention "Canadian" concerning the origin is bound to talsify the census and I agree entirely with them.
During the last national census, in 1951, enumerators were allowed to accept "the Canadian origin", but the words themselves did not appear in the list.
However, for the 1961 census, greater importance is given this origin by the fact that it is placed at the top of the list. This is possibly a cause of confusion.

On the 7th of January, the newspaper he Soleil published statements from some Conservative members to the effect that the matter would have to be settled. Certainly a correction is called for.
I feel that in this case a dispute has been brought about by the government and it causes a problem. For the sake of a census question, the government does not hesitate to endanger the relations between Canadians of different cultures.
It is important that each ethnic group know where citizens belonging to the group are located.
In October, a Canadian trade delegation visited the countries of the European community. If we look at the official list of the 11 members of that delegation, we find that only one of them is French Canadian. This is not the first time French Canadians have been treated in such a way by the Department of Trade and Commerce, even though that department is one which would need most to be aware of the origin of Canadian citizens, in order that such delegations be truly representative.
As reported in the newspaper Le Soleil of January 7, 1961, the hon. member for Chicoutimi (Mr. Brassard) said he was under the impression that the Minister of Trade and Commerce was refusing to consider changing the question on racial origin for the simple reason that he himself had been unfairly treated by some associations.
I hope the solution of this matter will not depend on the minister's outbursts of temper, but that justice will be rendered to all. (Text):
On behalf of the official opposition, Mr. Speaker, I wish before closing to say a word about our attitude to the C.C.F. subamendment which is now before us.
The C.C.F. subamendment contains as illustrations of the Liberal amendment three specific recommendations from the policy statement on unemployment of the national Liberal rally almost in the precise language of that policy statement. It has been said that imitation is the sincerest form of flattery and we in the Liberal party are naturally pleased-


Mr. Winch:: We drafted that subamendment five weeks ago.


Jean-Paul Racine: -to support our own policies even when they are put forward in a C.C.F. subamendment.


Mr. J. F. Browne (Vancouver-Kingsway):: I am pleased, Mr. Speaker, to have the opportunity this evening to say a few words in support of the supplementary budget which has been brought down by the Minister of

Finance (Mr. Fleming). It, of course, ties in closely with the comprehensive and continuing program that the government has been pursuing in order to deal with the problems of this country. In my opinion it will do a great deal to stimulate economic activity in this country, to encourage Canadians to invest in Canada and to bring as much ownership and control as possible of Canadian industry into the hands of Canadians. It will also do a great deal to increase our export trade and to create greater opportunities for employment in this country.
The parliamentary secretary to the Minister of Finance (Mr. Bell) this afternoon went into great detail in outlining the direct benefits from the budget and it is not my intention to repeat them at this time but rather to deal with the individual items in the light of the criticism that the opposition has made of the budget. First of all, we have had the usual kind of attack that we have come to know so well in the house, a policy which apparently started some time ago when it was first brought out by that bright young Liberal Mr. Templeton who told us on television that he hoped the forecasts of some economists were correct that there would be a recession in Canada because that eventuality offered the best hope of returning the Liberal party to power. Since that time the Liberal opposition in this house have pursued a policy of trying to strike fear into the hearts of Canadians, preaching their doom, gloom and destruction.
The hon. member for Kenora-Rainy River (Mr. Benidickson) when he started his criticism of the budget, said this kind of talk did not amount to much, it did not have any effect on the country at all. Then he went on to disprove that statement, because very shortly after he had said that it had no effect whatsoever on the country he went on to quote from the Financial Post, which had this comment to make at page 1037 of Hansard:
In a sharp break with all previous Canadian experience in the post-war years, consumers pulled back their spending during the first quarter"-
That is, the first quarter of 1960. Mr. Speaker, I do not know whether that is entirely accurate. Actually consumer spending was up very slightly in the first quarter of 1960, but it was curtailed when we compare it with the income that labour had. During this period labour income was at an all-time high. More Canadians were working than had ever worked in this country before, and certainly there was no reason why consumer spending should have been curtailed.
I would like to suggest to the house that it is the kind of fear that is being spread by the Liberal party in this country that has brought that about. I am sure the hon.
The Budget-Mr. J. F. Browne member for Essex East (Mr. Martin) will appreciate what I am speaking about when I say that a Canadian who is earning more than he ever earned before and who is working just as hard as he has ever worked before will say, "Well, the Liberal party is telling us that things are not quite as good and I am to be out of a job; I will not buy a new car this year". That kind of thing will not help this country very much. I am very glad to see that it is now being taken up throughout the country and is being recognized for what it is, because once it is recognized for what it is, this preaching of doom and gloom, we will have nothing further to fear from it.
I would now like to read what the Canadian Manufacturers' Association has had to say on this very subject in their publication Industry for January, 1961. After pointing out, as I have already said, that the year was a good and prosperous one for all Canadians and individual earnings and savings were never higher, this publication goes on to say this:
The cause of those without jobs is not helped, for example, when an impression of an economy collapsing into blue ruin is created both at home and abroad. Such far-fetched distortions would be ludicrous if their effects were not so damaging. As it is, the painting of an exaggerated and sombre-hued picture plays a major role in the undermining of public confidence so far as the immediate future is concerned.
I suggest that is exactly the policy the Liberal opposition in this house has been pursuing. They direct a barrage of criticism at every measure that is brought forward. They say it does not meet this requirement, or it does not meet that requirement, regardless of whether the measure was designed to meet that specific requirement or not.
To go on with some of the more specific criticisms that have been made, the hon. member for Kenora-Rainy River indicated that in his view it was our highly valued dollar that makes our exports non-competitive across the world. Here, again, was a negative attitude. There is no doubt that we have to be concerned with our production costs, and of course the government has been concerned with that matter and has set up a national productivity council. At the same time I think it must be remembered, when discussing exports in this country, that they too are at an all-time high. In 1960 they were 6.4 per cent higher than the previous year. Our trade deficit on commodity trade was considerably lower than it has been for several years, $116 million in 1960 compared with $412 million in 1959, with a record deficit of $731 million in 1956, the last year that we had a Liberal government.

The Budget-Mr. J. F. Browne
It also shows that he was completely unable to analyse the probable effects of the budget on the economy and on the country, because there is little doubt that although the government does not set the external price of the dollar, budgets do have a good deal of effect on it. After the budget of last March the premium on the Canadian dollar declined from five cents to a little over two cents. The supplementary budget has been followed by a further reduction in the dollar so that it is trading almost on a par with the United States dollar at the present time.
Therefore when we consider the trade position of this country as I have outlined it, that it was at an all-time high, and when we relate that to the fact that we have now taken action which has resulted in the reduction of the premium on the Canadian dollar, which will undoubtedly make it easier for our exporters in world markets; when we consider that the government has set up the national productivity council to make sure we are as efficient as possible in our production; when we consider that the government has taken action to make better financing arrangements for export credits, which were not available before, certainly any criticism of our policy in that regard could be nothing but misguided criticism and not in the best interests of this country.
The hon. member for Kenora-Rainy River went on to indicate that he was not too favourable to the deficit that we had. However, he did not make any criticism of the particular things that were outlined by the Minister of Finance that had brought it about. Nor did he suggest any cutting of expenditures. In fact, his colleagues in the Liberal party, or the liberally-minded persons, or whoever they were who were meeting in Ottawa, went on to suggest that we spend a further billion dollars, not only without raising revenues, but by cutting them. They were going to reduce taxes as well as spend another $1 billion. Therefore any criticism about the deficit would certainly have to have better substantiation than the action or policy they were advocating.
The well-known Winnipeg Free Press- and I do not think there is a more staunch supporter of the Liberal party in this country than that publication-did not seem very impressed by this great policy-making body of the Liberal party. However, it went on to say:
The fundamental problem facing Canada today so transcends all others as to make any talk of further social reforms and higher governmental expenditures at the present time not only impractical but utterly dishonest.
[Mr. Browne (Vancouver-Kingsway) .3

I would not go so far as to say the party was utterly dishonest, but certainly they have been advocating higher expenditures and they have been advocating lower taxes, and at the same time criticizing the financial position we are in at the present time.
I think one of the most surprising criticisms that the hon. member for Kenora-Rainy River made was bleating about the little man. He said, "People are paying more taxes than they used to pay". It is surprising to me that he found it necessary to go through such a complicated procedure to try and convince the average person in this country that he was paying higher taxes and that he was suffering under this government, because I believe that the hon. member for Kenora-Rainy River represents a riding very similar to my own. It may be described as a labour riding. I would think most of the people in that riding are working people who are working for wages. When they go to discover what taxes they are paying-and I have pointed this out to the house before-they usually look at the income tax form, which has the rates of tax and a table of taxes. They look there to determine what they are going to pay. They do not have to take the gross national product of the country, and they do not have to take the number of inhabitants and go into some complicated financial dealings to try and determine what they are going to pay.
In order that this can be cleared up once and for all, may I say that 85 per cent of Canadians are paying lower taxes today than they were when the Liberal party was in office, notwithstanding the fact that a great deal more money is being paid to the provinces than was the case in their regime. Also, this is notwithstanding the fact that social benefit welfare payments have increased by over 50 per cent and that we have extended the basic income tax exemptions.


Paul Joseph James Martin: Where did you get
that figure of 50 per cent?


John Ferguson Browne: We
have also reduced the sales tax on a wide range of municipal purchases. We have reduced the automobile excise tax.


Paul Joseph James Martin: When?


John Ferguson Browne: I could go on and indicate other tax concessions that have been made, but I should like to ask the permission of the house to have the 1956 and 1959 tax tables and rates of tax printed in Hansard. I ask permission for this to be done in order that the public will be able to make a proper comparison and determine for themselves that taxes are lower now for the average Canadian than they were when the Liberal party was in office.


The Deputy Speaker:: Is the house agreed that the hon. member should have leave to have these tables printed in Hansard?


Some hon. Members:: Agreed.


Paul Joseph James Martin: We shall have to examine them carefully first.


John Ferguson Browne: The
public will be able to examine them. They will not have to go by the kind of nonsense the Liberal party has been spouting around here. They will not be the kind of statistics they are used to getting from the hon. member for Essex East. They will be authentic for a change.
[Editor's note: Tables referred to appear on pages 1090 and 1091.]


John Ferguson Browne: I
should also like to point out some of the increases which have been made in the payments to the provinces. In 1957-58, the total of unconditional payments to the provinces amounted to $382.6 million. For the current fiscal year this amount has increased to $543.3 million. Three years ago the federal government increased the provincial share of the yield from the personal income tax from 10 to 13 per cent. This 3 per cent increase has been maintained this year and given statutory enactment for the remaining period of the present tax-sharing agreements which ends March 31, 1962. The effect of this increase amounted to payments to the provinces of $56 million in 1958-59, $67 milion in 1959-60 and an estimated $68.3 million in the current fiscal year.
At the same time the federal government has substantially enlarged its conditional payments to the provinces in connection with shared cost programs. These have risen from a total of $144.8 million in 1957-58 to an estimated $388.9 million in the current fiscal year.
I notice that the Leader of the Opposition (Mr. Pearson) has been making a few statements during the recess and at the Liberal rally which was held so recently. He has had something to say about anti-Americanism. I suppose that any kind of action which would tend to take ownership and control of Canadian industry out of United States hands and bring it into the hands of Canadians might possibly be construed as anti-Americanism though I think it would take a considerable stretch of the imagination to place that interpretation on it. I think it would be more logical to say that the policies advocated by the Leader of the Opposition were pro-American or, perhaps, anti-Canadian, looking on it in that light.
Of course, the record of the Liberal party in this regard is clear. The Leader of the
The Budget-Mr. McMillan Opposition is quoted in the Vancouver Sun of Tuesday, January 10 as making the following statement-surely the most incredible statement ever made by a leader of a political party, because it is a damning indictment of his own party during the 22 years it was in office:
He (Mr. Pearson) also said that if Canadians have allowed American domination of their development and culture it was because they didn't care enough to do anything effective about it, or even because they wanted it that way.
Perhaps the Liberal party wanted it that way during the two years they were in office, but I am pleased to see the present government taking the kindi of action it is taking at this time to encourage Canadian control of Canadian industry because I think this is one of the main reasons why the Liberal party was thrown out of office and one of the things which was so heartily endorsed when this government was elected.
It is most encouraging to see this action being taken at the present time. I do not know whether these are the kind of policies to which the Liberal party wishes to return or whether they are the kind of policies the Leader of the Opposition had in mind when he suggested they would like to have an early election. We can, of course, recall an occasion when he asked for an early election once before and he found the public of this country were not very favourable toward the kind of policies he was advocating at that time. However, the hon. gentleman seems to have changed his views somewhat, because the Liberal party when in office stood idly by and watched control of our natural resources and industry slip into the hands of other countries while doing little or nothing about it.
Now, apparently the Leader of the Opposition seems to think that if we are to continue to let things go in that way we should have some payment for it. He now suggests we should shirk our responsibility in the defence of this continent and charge the United States with that responsibility. I suppose he feels that under Liberal policy they would have control of the entire country so they might as well defend it. I can only say, that I do not think these are very wise policies on which to fight an election and, speaking for myself, any time the hon. gentleman wishes to go to the country on those policies I will be happy to be there to contest them with him.


William Hector McMillan: On December 20, the Minister of Finance (Mr. Fleming) when presenting his baby budget said:
In previous budget speeches and on other occasions I have recognized the need for flexibility in our economic policies... Not only must policies

The Budget-Mr. McMillan



TABLE AND RATES OF TAX

[Stage Direction]
Your OLD AGE SECURITY TAX is 2% of taxable income, maximum $60. Ip Taxable Income is $3,000 or less you may use the Tax Table.
1956 TAX TABLE-Including Old Age Security Tax
Taxable	Total	Taxable	Total	Taxable	Total	Taxable	Total	Taxable	Income	Tax	Income	Tax	Income	Tax	Income	Tax	Income	TaxNot	Not	Not	Not	Not	Over Over	$	Over	Over	t	Over Over	s	Over Over	$	Over Over	s0- 10	1	600-	610	91	1200- 1210	185	1800 - 1810	287	2400 - 2410	39710- 20	2	610-	620	92	1210-1220	187	1810 - 1820	289	2410 - 2420	39920- 30	i	620-	630	94	1220 - 1230	188	1820 - 1830	290	2420 - 2430	40130 - 40	5	630 -	640	95	1230 - 1240	190	1830 - 1840	292	2430 - 2440	40340- 50	7	640 -	650	97	1240 - 1250	192	1840 - 1850	294	2440 - 2450	40550- 60	8	650 -	660	98	1250 - 1260	193	1850 - 1860	295	2450 - 2460	40660- 70	10	660 -	670	100	1260 - 1270	195	1860 - 1870	297	2460 - 2470	40870- 80	11	670 -	680	101	1270 - 1280	197	1870 - 1880	299	2470 - 2480	41080- 90	13	680-	690	103	1280 - 1290	198	1880 - 1890	300	2480 - 2490	41290 - 100	n	690-	700	104	1290 - 1300	200	1890 - 1900	302	2490 - 2500	m100 - 110	16	700 -	710	106	1300 - 1310	202	1900 - 1910	304	2500 - 2510	416110- 120	17	710-	720	107	1310 - 1320	204	1910 - 1920	306	2510 - 2520	418120 - 130	19	720-	730	109	1320 - 1330	205	1920 - 1930	307	2520 - 2530	420130 - 140	20	730 -	740	110	1330 - 1340	207	1930 - 1940	309	2530 - 2540	422140 - 150	22	740 -	750	112	1340 - 1350	209	1940 - 1950	311	2540 - 2550	m150 - 160	23	750-	760	113	1350 - 1360	210	1950 - 1960	312	2550 - 2560	425160 - 170	25	760-	770	115	1360 - 1370	212	1960 - 1970	314	2560 - 2570	427170-180	26	770-	780	116	1370 - 1380	214	1970 - 1980	316	2570 - 2580	429180 - 190	28	780 -	790	118	1380 - 1390	215	1980 - 1990	317	2580 - 2590	431190 - 200	29	790 -	800	119	1390 - 1400	217	1990 - 2000	319	2590 - 2600	433200 - 210	31	800 -	810	121	1400 - 1410	219	2000 - 2010	321	2600 - 2610	435210 - 220	32	810-	820	122	1410 - 1420	221	2010 - 2020	323	2610 - 2620	437220 - 230	si	820 -	830	124	1420 - 1430	222	2020 - 2030	325	2620 - 2630	439230 - 240	35	830 -	840	125	1430 - 1440	224	2030 - 2040	327	2630 - 2640	441240 - 250	37	840 -	850	127	1440 - 1450	226	2040 - 2050	329	2640 - 2650	448250 - 260	38	850 -	860	128	1450 - 1460	227	2050 - 2060	330	2650 - 2660	444260 - 270	i0	860 -	870	ISO	1460 - 1470	229	2060 - 2070	332	2660 - 2670	448270 - 280	H	870 -	880	131	1470 - 1480	231	2070 - 2080	334	2670 - 2680	448280 - 290	4S	880 -	890	133	1480 - 1490	232	2080 - 2090	336	2680 - 2690	450290 - 300	44	890-	900	134	1490 - 1500	234	2090 - 2100	338	2690 - 2700	452300 - 310	46	900-	910	136	1500 - 1510	236	2100-2110	340	2700 - 2710	454310-320	47	910 -	920	137	1510 - 1520	238	2110-2120	342	2710 - 2720	456320 - 330	49	920 -	930	139	1520 - 1530	239	2120-2130	su	2720 - 2730	458330 - 340	50	930 -	940	140	1530 - 1540	241	2130-2140	346	2730 - 2740	460340 - 350	52	940-	950	142	1540 - 1550	24S	2140-2150	348	2740 - 2750	462350 - 360	53	950 -	960	143	1550 - 1560	W	2150 - 2160	349	2750 - 2760	463360 - 370	55	960 -	970	145	1560- 1570	246	2160-2170	351	2760 - 2770	465370 - 380	66	970 -	980	146	1570 - 1580	248	2170-2180	353	2770 - 2780	467380 - 390	58	980-	990	148	1580 - 1590	249	2180-2190	355	2780 - 2790	469390 - 400	59	990-	1000	149	1590 - 1600	251	2190 - 2200	357	2790 - 2800	m400 - 410	61	1000-	1010	151	1600 - 1610	253	2200 - 2210	359	2800 - 2810	473410 - 420	62	1010-	1020	153	1610-1620	255	2210 - 2220	361	2810 - 2820	475420 - 430	64	1020 -	1030	154	1620 - 1630	256	2220 - 2230	363	2820 - 2830	477430 - 440	65	1030 -	1040	156	1630 - 1640	258	2230 - 2240	365	2830 - 2840	479440 - 450	67	1040 -	1050	158	1640 - 1650	260	2240 - 2250	367	2840 - 2850	481450 - 460	68	1050 -	1060	159	1650 - 1660	261	2250 - 2260	368	2850 - 2860	482460 - 470	70	1060 -	1070	161	1660 - 1670	263	2260 - 2270	370	2860 - 2870	484470 - 480	71	1070-	1080	163	1670 - 1680	265	2270 - 2280	372	2870 - 2880	486480 - 490	73	1080-	1090	164	1680 - 1690	266	2280 - 2290	374	2880 - 2890	488490 - 500	74	1090 -	1100	166	1690 - 1700	268	2290 - 2300	376	2890 - 2900	490500 - 510	76	1100 -	1110	168	1700 - 1710	270	2300 - 2310	378	2900 - 2910	492510 - 520	77	1110-	1120	170	1710 - 1720	272	2310 - 2320	380	2910 - 2920	m520 - 530	79	1120-	1130	171	1720 - 1730	273	2320 - 2330	382	2920 - 2930	496530 - 540	80	1130-	1140	173	1730 - 1740	275	2330 - 2340	384	2930 - 2940	498540 - 550	82	1140-	1150	175	1740 - 1750	277	2340 - 2350	386	2940 - 2950	500550 - 560	83	1150-	1160	176	1750 - 1760	278	2350 - 2360	387	2950 - 2960	501560 - 570	85	1160-	1170	178	1760 - 1770	280	2360 - 2370	389	2960 - 2970	503570 - 580	86	1170-	1180	180	1770 - 1780	282	2370 - 2380	391	2970 - 2980	605580 - 590	88	1180-	1190	181	1780 - 1790	283	2380 - 2390	393	2980 - 2990	507590 - 600	89	1190-	1200	183	1790 - 1800	285	2390 - 2400	395	2990 - 3000	609
if taxable income exceeds $3,000 you must use the rates of tax
1956 RATES OF TAX-Including Old Age Security Tax
Taxable
Income	Tax
$1,000 or less			15%			
1,000	$150	+	17%	on	ext	$1,0002,000	320	+	18%	on	next	1,0003,000f	510	+	17%	on	next	1,0004,000	680	+	20%	on	next	2,0006,000	1,080	+	24%	on	next	2,0008,000	1,560	+	28%	on	next	2,00010,000	2,120	+	33%	on	next	2,00012,000	2,780	+	38%	on	next	3,000
Taxable
Income	Tax
$15,000	$3,920	+	43%	on	next	$10,00025,000	8,220	+	48%	on	next	15,00040,000	15,420	+	53%	on	next	20,00060,000	26,020	+	58%	on	next	30,00090,000	43,420	+	63%	on	next	35,000125,000	65,470	+	68%	on	next	100,000225,000	133,470	+	73%	on	next	175,000400,000	261,220	+	78%	on	remainder	
t The maximum Old Age Security Tax of $60 is reached at this point.

The Budget-Mr. McMillan

[Stage Direction]
INCLUDING OLD AGE SECURITY TAX-2.5% OF TAXABLE INCOME, MAXIMUM $75 If Taxable Income is $3,000 or less you may use the Tax Table
1959 TAX TABLE-Including Old Age Security Tax
Taxable	Taxable	Taxable	Taxable	Income	Income	Income	Income	Tax	Tax	Tax	Tax	TaxNot	Not	Not	Not	Not	Over Over	;	Over Over	$	Over Over	$	Over Over	$	Over Over	$0- 10	1	600 - 610	82	1200 - 1210	169	1800 - 1810	268	2400 - 2410	87910- 20	2	610- 620	83	1210 -1220	170	1810 - 1820	269	2410 - 2420	38120- 30	8	620 - 630	84	1220 - 1230	172	1820 - 1830	271	2420 - 2430	38330- 40	5	630 - 640	86	1230 - 1240	174	1830 - 1840	273	2430 - 2440	38540- 50	6	640 - 650	87	1240 - 1250	175	1840 - 1850	274	2440 - 2450	38750- 60	7	650 - 660	88	1250 - 1260	177	1850 - 1860	276	2450 - 2460	38960- 70	9	660 - 670	90	1260 - 1270	179	1860 - 1870	278	2460 - 2470	39170- 80	10	670 - 680	91	1270 - 1280	180	1870 - 1880	279	2470 - 2480	39380- 90	11	680 - 690	92	1280 - 1290	182	1880 - 1890	281	2480 - 2490	39590 - 100	18	690 - 700	94	1290 - 1300	184	1890 - 1900	283	2490 - 2500	397100-110	u	700- 710	95	1300 - 1310	185	1900 - 1910	284	2500 - 2510	398110- 120	16	710- 720	97	1310 - 1320	187	1910 - 1920	286	2510 - 2520	400120 - 130	17	720 - 730	98	1320 - 1330	189	1920 - 1930	288	2520 - 2530	402130 - 140	18	730 - 740	99	1330 - 1340	190	1930 - 1940	289	2530 - 2540	404140 - 150	20	740 - 750	101	1340 - 1350	192	1940 - 1950	291	2540 - 2550	406150 - 160	21	750 - 760	102	1350 - 1360	194	1950 - 1960	293	2550 - 2560	408160 - 170	22	760 - 770	103	1360 - 1370	195	1960 - 1970	294	2560 - 2570	410m7f* mon	ISO - 190	25	780 - 790	106	1380 - 1390	199	1980 - 1990	298	2580 - 2590	414190 - 200	26	790 - 800	107	1390 - 1400	200	1990 - 2000	299	2590 - 2600	416200 - 210	28	800- 810	109	1400 - 1410	202	2000 - 2010	SOI	2600 - 2610	418210 - 220	29	810- 820	110	1410 - 1420	203	2010 - 2020	SOS	2610 - 2620	420220 - 230	80	820- 830	111	1420 - 1430	205	2020 - 2030	305	2620 - 2630	422230 - 240	32	830 - 840	US	1430 - 1440	207	2030 - 2040	807	2630 - 2640	424240 - 250	S3	840 - 850	114	1440 - 1450	208	2040 - 2050	809	2640 - 2650	426250 - 260	84	850 - 860	115	1450 - 1460	210	2050 - 2060	311	2650 - 2660	428260 - 270	36	860- 870	117	1460 - 1470	212	2060 - 2070	318	2660 - 2670	430270 - 280	87	870- 880	118	1470 - 1480	213	2070 - 2080	315	2670 - 2680	482280 - 290	38	880 - 890	119	1480 - 1490	215	2080 - 2090	317	2680 - 2690	4S4290 - 300	40	890- 900	121	1490 - 1500	217	2090 - 2100	319	2690 - 2700	436300 - 310	41	900- 910	122	1500 - 1510	218	2100-2110	320	2700 - 2710	487310 - 320	43	910- 920	124	1510-1520	220	2110-2120	822	2710 - 2720	439320 - 330	44	920 - 930	125	1520 - 1530	222	2120 - 2130	824	2720 - 2730	441330 - 340	45	930 - 940	126	1530 - 1540	223	2130 - 2140	326	2730 - 2740	443340 - 350	47	940 - 950	128	1540 - 1550	225	2140-2150	828	2740 - 2750	445350 - 360	48	950- 960	129	1550 - 1560	227	2150 - 2160	330	2750 - 2760	441360 - 370	49	960 - 970	ISO	1560 - 1570	228	2160 - 2170	332	2760 - 2770	449370 - 380	51	970 - 980	132	1570 - 1580	230	2170-2180	334	2770 - 2780	451380 - 390	52	980 - 990	183	1580 - 1590	282	2180 - 2190	336	2780 - 2790	453390 - 400	58	990 - 1000	184	1590 - 1600	238	2190 - 2200	338	2790 - 2800	455400 - 410	55	1000 - 1010	136	1600 - 1610	235	2200 - 2210	840	2800 - 2810	457410 - 420	56	1010 - 1020	137	1610-1620	236	2210 - 2220	842	2810 - 2820	459420 - 430	67	1020 - 1030	139	1620 - 1630	238	2220 - 2230	344	2820 - 2830	461430 - 440	59	1030 - 1040	141	1630 - 1640	240	2230 - 2240	346	2830 - 2840	463440 - 450	60	1040 - 1050	142	1640 - 1650	241	2240 - 2250	848	2840 - 2850	466450 - 460	61	1050 - 1060	144	1650 - 1660	248	2250 - 2260	350	2850 - 2860	467460 - 470	63	1060 - 1070	146	1660 - 1670	245	2260 - 2270	352	2860 - 2870	469470 - 480	64	1070 - 1080	147	1670 - 1680	246	2270 - 2280	854	2870 - 2880	411480 - 490	65	1080 - 1090	149	1680 - 1690	248	2280 - 2290	356	2880 - 2890	478490 - 500	67	1090 - 1100	151	1690 - 1700	250	2290 - 2300	358	2890 - 2900	475500 - 510	68	1100 - 1110	152	1700 - 1710	251	2300 - 2310	859	2900 - 2910	476510 - 520	70	1110-1120	154	1710 - 1720	253	2310 - 2320	361	2910 - 2920	478520 - 530	71	1120-1130	156	1720 - 1730	255	2320 - 2330	368	2920 - 2930	480530 - 540	72	1130 - 1140	157	1730 - 1740	256	2330 - 2340	365	2930 - 2940	482540 - 550	74	1140-1150	159	1740 - 1750	258	2340 - 2350	367	2940 - 2950	484550 - 560	75	1150-1160	161	1750 - 1760	260	2350 - 2360	369	2950 - 2960	486560 - 570	76	1160-1170	162	1760 - 1770	261	2360 - 2370	371	2960 - 2970	488570 - 580	78	1170 - 1180	164	1770 - 1780	263	2370 - 2380	373	2970 - 2980	490580 - 590	79	1180- 1190	166	1780 - 1790	265	2380 - 2390	375	2980 - 2990	492590 - 600	80	1190- 1200	167	1790- 1800	266	2390 - 2400	377	2990 - 3000	494
If Taxable Income exceeds $3,000 you must use the rates of tax and must not use the Tax Table to calculate any part of your Tax.
1959 RATES OF TAX-Including Old Age Security Tax
Taxable	Taxable
Income	Tax	Income	Tax$1,000 or less	13.5%	$15,000	$4,025	+	44%	on	next	$10,0001,000	$135	+	16.5%	on	next	$1,000	25,000	8,425	+	49%	on	next	15,0002,000	300	+	19.5%	on	next	1,000	40,000	15,775	+	54%	on	next	20,0003,000t	495	+	18.0%	on	next	1,000	60,000	26,575	+	59%	on	next	30,0004,000	675	+	21.0%	on	next	2,000	90,000	44,275	+	64%	on	next	35,0006,000	1,095	+	25.0%	on	next	2,000	125,000	66,675	+	on	next	100,0008,000	1,595	+	29.0%	on	next	2,000	225,000	135,675	+	74%	on	next	175,00010,000	2,175	+	34.0%	on	next	2,000	400,000	265,175	+	79%	on	remainder	12,000	2,855	+	39.0%	on	next	3,000	
t The maximum Old Age Security Tax of $75 is reached at this point.
1092
[Stage Direction]
The Budget-Mr. McMillan
be flexible from year to year, but there are occasions when it becomes appropriate to reassess the economic outlook and to adjust fiscal policies between the main budget dates. This is such a time.
This is the second occasion on which the Minister of Finance has thought it appropriate to reassess the economic outlook between budget dates. This is the second time he has felt it appropriate to step in, as it were, in midstream. This is the second time he has given a supplementary financial statement. The first time was in December, 1957. He thought then, as he thinks now, that such a time had come.
It might be well to compare these two supplementary statements. It might be well to compare the minister's reassessments on those two different occasions and to observe the results produced or are likely to be produced. In 1957, under the Harris budget, the country was going along and paying its way with a $400,000 surplus each day. As the result of the baby budget in 1957 an era was inaugurated, and when that budget was implemented the depletion of government accounts and the overspending on current account has amounted to $2 million every day since. In other words, the minister substituted a $2 million deficit day for a $400,000 surplus day. Day in and day out the taxpayers of Canada are worse off by $2 million because of the minister's reassessment in December, 1957. Just as sure as day dawns, the people of Canada are worse off by $2 million before the day is spent, and surely for the taxpayers of Canada every day is a dismal Diefenbaker day.
This afternoon the hon. member for Carle-ton (Mr. Bell) referred to the inconsistency of the Liberal party. I certainly cannot accuse the government of being inconsistent about this $2 million deficit day. This $2 million a day, day after day, becomes monotonous. It becomes monotonous for the Minister of Finance. This has already far exceeded the cost of world war I while it was being fought when we had 500,000 men overseas in the three services.
The minister has had to borrow this money from the people. He has borrowed money to pay interest on this money and, what is worse, he has borrowed money to pay the interest on the interest on this money, and this has been going on over three years.
On account of the need of flexibility in the minister's mind, in 1957 the increased interest has already amounted to $200 million a year. This has gone up by over 50 per cent or by over $500,000 a day. This extra interest plus bonuses and commissions over the last three years will approximate $600 million. That is a staggering amount. It is enough to build four
[Stage Direction]

Welland canals based on the cost at the time the Welland canal was built. It is enough to complete our share of the St. Lawrence seaway and have a lot of money left over. It is enough to build 40 Hamilton two mile skyways across the Hamilton harbour. This is just extra interest, it is not the interest.
Worse still, a lot of this high interest is built into our financial structure and in such a way that we will have to pay extra high interest on it for a generation or more. This would not be so bad if this extra spending went to pay additional money to our senior citizens or to put men back to work.
The former government raised the old age pension by $6 a month and this government by $9 a month, a total increase of 37£ per cent, but the contributions toward that were raised by 50 per cent. This government changed the old 2-2-2 formula to a 3-3-3 formula, an increase of 50 per cent, more than enough to meet the increase in the old age pension payments.
It is true that this government put men to work in housing but the money spent in housing is capitalized and does not come out of this over-spending. That money is capitalized as is the money used for the completion of the St. Lawrence seaway and as is money used for building the South Saskatchewan dam. It is also true that men were put to work under these schemes but that money is capitalized and goes to add to our gross debt. Our gross debt as of last year was up by $2.5 billion, since this government came into power. It will be up at least by $2.8 billion by the end of this year because the minister has a deficit close to $300 million. When you add to this amount the depletion in two government accounts, the unemployment insurance account and the defence equipment account, we arrive at a figure of between $3.4 billion and $3.5 billion, more than double the cost of world war I between the dates of declaration of war in 1914 and demobilization in 1919.
All this extra spending is a far cry from the promises that we heard to the effect that there would be an increase in social services, there would be tax cuts and the budget would be balanced. As I said, the increase in social services has been more than balanced by the increases in special taxes. We know that this government has collected more taxes than any other government before in our history. It has also spent more and its accounts are more out of balance than at any time in our peace time history. This record of the government's performance and the statement that "no one will suffer by reason of unemployment so long as I am Prime Minister" certainly take the cake to my mind.
John Whitney Pickersgill: You ain't seen nothin' yet.


William Hector McMillan: Indeed, perhaps we "ain't seen nothin' yet". On August 10, when speaking on the estimates of the Department of Finance, I pointed out in the house how difficult it is for hon. members of the opposition to make much sense out of the estimates. I know that there were always some lapses in spending over the money voted in the different departments. I think this year they are out $30 million or $40 million and I can understand that but the minister himself under-estimated his financial requirements to service the public debt by nearly a quarter of a billion dollars in two years. I know that the minister excused himself by saying in effect that he would be revealing his mind to the financial community and it might affect the market on new bonds if he were to make known how much interest he expected to have to pay in any particular year but the difference between the estimates and the reality in terms of the cost of servicing the public debt seems colossal alongside the close estimates of former years. The minister is presently out by $243 million in his estimating in two years.
I do not expect that the announcement made by the minister to the effect that he would have a deficit of $286 million this coming year is necessarily right. I say this because when introducing the first baby budget on December 6, 1957, as reported at page 2002 of Hansard, the minister said:
Mr. Chairman, I have been asked several times in the house to give a financial statement. I welcome this opportunity of doing so and not least of all because of some of the things that are currently being said outside of this house.
On that occasion the minister went on to criticize the former minister of finance, Mr. Walter Harris, who two days previously in London had predicted that the government would wind up with a deficit the following March unless it cut down its high spending. The minister also criticized the then hon. member for Winnipeg North Centre who, according to the Toronto Telegram, the previous day accused the Minister of Finance of hiding the books from parliament until after the next election. The minister doubted that anyone would be so gullible as to believe these remarks. He could not understand why such irresponsible statements- were made, he said. The minister went on to state that he accepted the former minister's figure on revenue but was changing his figures for expenditures. He said that there had been increases in expenditures arising in part out of the changing economic developments and in part from new policies of this government.
90205-6-701
The Budget-Mr. McMillan
In discussing the change in expenditures he first of all indicated that he was saving $164 million in relation to Mr. Harris' expenditures. I have smiled about that ever since. The minister said he would then have a surplus of $106 million but ended up with a deficit of $38.6 million in three months. The minister was out by the sum of $145 million in the three months to which the baby budget was to apply. It is therefore difficult for me to accept that the minister may be correct in his figure of $286 million. He is probably out in this estimate and in all likelihood the situation will be worse. I have described what may be characterized as the prologue to all the weird financing we have seen on the part of this government.
I have read much in the current press concerning the recent baby budget. The premier of British Columbia said he would resign if he could not make better predictions than the Minister of Finance. Premier Frost of Ontario said that the Ontario public works program will have to be cut back as a result of United States capital being taxed coming into Canada, unless money becomes more freely available in Canada.
I welcome any provision by which Canadians can develop their own country. The slowing down of foreign capital coming into Canada will depreciate the Canadian dollar. This is all to the good as far as our exporters are concerned although it will tend to increase the cost of living as we will have to pay more Canadian dollars for our imports.
A better way to help our economy in my opinion would be to keep interest rates down. Certainly everything that this government has done has tended to increase interest rates. I admit that this is not the only reason for the stagnation in our economy but it is the main basic reason. Because we protest the high interest rates, because we protest their results, we are accused of being prophets of doom and gloom. We will be accused of preaching doom and gloom because we say that this budget has nothing for the little man, because we say it does not come to grips with the all important problem of unemployment. I certainly think something could have been done to stimulate our economy and help overcome unemployment. I am not surprised that the minister has not done something along those lines to help overcome this -problem, particularly when we hear him say that there is no emergency in unemployment. I was going to quote something that I have heard so often. The minister has not denied it and I am sure he said it, that is that there is no emergency in unemployment.

The Budget-Mr. McMillan
Whenever we predict the truth about interest rates, and they can see the results of those rates, they still say we are preaching doom and gloom. I will give the house two or three examples. At the time of the conversion loan-and we all remember that- the Prime Minister (Mr. Diefenbaker) and the Minister of Finance went on the air and said that everybody would get money cheaper; that the bond market would be stabilized; and that the provinces and the municipalities would borrow money to better advantage. We said just the opposite; we said that everybody would be paying more for money, and because of this unemployment would increase.
A little later the Prime Minister said, "It will mean bigger and better jobs; it will mean a higher standard of living for everybody". To disagree with the statements is to preach doom and gloom; to state the truth is to advocate doom and gloom. On many occasions when the bonds were plunging down from par to about 20 per cent below their face value the Minister of Finance said that the bond market had been stabilized; only to see the bonds go down again a few days later. We on this side of the house said that something had to be done to stop the drop in the bonds and therefore the high interest rates, and the minister at that time accused us of preaching doom and gloom.
Haying in mind the fact that only on two occasions has any Conservative government had a surplus of as much as $1 million since confederation, and having in mind the inept way that this government was running its fiscal policy, I predicted in June, 1958, as recorded in Hansard at page 1587, that this government would never have a surplus. I see no reason to change my mind, although I will admit that the minister predicted a $12 million surplus this year. I have no reason to alter my prediction. It may be doom and gloom, but it is doom and gloom for the taxpayers.
As far back as April, 1959 I made another prediction. I declared that the fiscal policy was going from bad to worse. The Prime Minister and the Minister of Finance became very expansive in the way they were going to help the provinces. The provinces came here. I predicted on that day, as reported in Hansard of April 14, 1959, at page 2676, that there was no use the provinces coming here for help because this government could not even help itself. What happened? The provinces came here and the Prime Minister in effect told them to go home and collect their own taxes. Nothing was said about the $100 million for Mr. Frost. On different occasions Mr. Frost has said that he wanted more than $100 million.

During the election campaign Mr. Frost was in close liaison with the Conservatives in this house. After that occasion Premier Frost gave the Prime Minister a dinner in Toronto and there was much patting of one another on the back. Mr. Frost never got his $100 million. He was critical of this government because of the fact they were putting this extra tax on foreign capital; but this is doom and gloom for Mr. Frost, who else?
On various occasions I have referred to the fact that the minister gave gimmicks to the wealthy people in order to get them to take bonds or to sell bonds. These gimmicks were given to the wealthy people at the expense of the taxpayers. On August 10 last I referred to the $125 million 3 per cent bonds sold at $94.65, to mature in 19 months. This bond was so conceived as to pay individuals and corporations paying 50 per cent income tax a 5 per cent net after income tax or 10 per cent before income tax. In other words, their net earnings from this bond would be the same as if they had a bond at par paying 10 per cent or over. In his baby budget the minister says that this is an important but technical matter. These are his words:
But unfortunately increasing use is deliberately being made by others of a device to pay bondholders the equivalent of interest in a form that is tax free.
The hon. member for Kenora-Rainy River (Mr- Benidickson) and I have repeatedly called this to the attention of the Minister of Finance and have told him that this was a device to give the wealthy people an advantage over the ordinary taxpayers, or those who could buy only a very small number of bonds. Now because he catches the provinces doing the same thing that he has been doing he says, "I will stop you". The minister is saying in effect, if you do what I do I will stop you; I agree it should be stopped; it should never have been started. The minister says, "Obviously such issues are very attractive to individual lenders in the high income brackets". The minister is penalizing those who use this practice when buying provincial and municipal bonds. He is penalizing them not because he thinks the practice is wrong but because he wants to collect more money. This amounts to a lot of money. I always thought that a minister who would deliberately load the bond sales so much in favour of the wealthy to the detriment of the ordinary taxpayer is not a fit and proper person to be finance minister of Canada.


Donald Methuen Fleming: Mr. Speaker, on a question of privilege, the hon. member can say what he likes within the rules of parliament-nobody will worry very much about

that-but when he says the Minister of Finance deliberately loaded the sales to favour the wealthy and thereby give the wealthy a privilege, then I submit that offends all the basic rules of parliament. I ask that it be withdrawn because it is completely untrue in every particular.


William Hector McMillan: I will withdraw, Mr. Speaker, but if the minister did not do it deliberately, he did not know what he was doing. He must have known what he was doing because now he says the provinces are doing it deliberately.


Donald Methuen Fleming: If I may deal with that point, I would say that the point is the hon. member has said the Minister of Finance deliberately rigged the rules in order to favour the rich. This is an offence against the rules of this house. He says this was done deliberately.


An hon. Member:: He did withdraw.


Lionel Chevrier: There is no point of order.


Mr. Deputy Speaker:: The rule, of course, is that a member may not impute motives to another. I may say that in my opinion the words used by the hon. member did not directly impute a motive to the minister. If an hon. member says somebody did something deliberately which in itself may not be wrong, I do not think that infringes the rules of the house.


William Hector McMillan: I should like to make a short reference to the 15 per cent tax which will be placed on dividends accruing from bonds owned by non-residents. During the last three years this government has taken all the loose money available. This was done to meet the cash requirements, to meet deficits and for other obligations. Premier Frost of Ontario has said that the provinces and certain municipalities have had to go to New York to borrow money. This has been done in spite of the warning of the Minister of Finance who said it was dangerous to do so. I agree with the Minister of Finance that it would be dangerous for them to do so because they might have to pay back these obligations at some time in the future when the exchange rate was against them. However, if the municipalities had not done this we would have had more unemployment than we have.
If United States money is lent on provincial, municipal or other bonds at 6 per cent, it will only return to the lender 5.1 per cent; at an interest rate of 5.5 per cent it would only return 4.67 per cent. In order to get 6 per cent net a bond would need to yield over 7 per cent. Unless the minister
The Budget-Mr. Keays withdraws from the money markets to a greater extent than he has in the past there will be only two courses open to the provinces. The first alternative will be to cut down on their capital expenditures, delay them until some future time. The second alternative would be to pay an interest rate sufficiently high to pay for this tax in whole or in part. This would mean that the minister would be taxing the provinces and the municipalities on their capital expenditures, and I do not believe this is right.
In so far as this tax will make less money available, it will tend to increase interest rates. I would predict now that if the minister goes to the money market, as he has in the past, the interest rate on our federal bonds will go up to 6 per cent or beyond and the rate on provincial and municipal bonds will go correspondingly higher.
Lately our ministers have been going out from Ottawa on a kind of crusade to find fault with members of both opposition parties. I feel their time could have been better spent in Ottawa rather than making political speeches. If the cabinet gave us good government, then politics would look after itself. I do not believe the ministers should embark upon such a crusade as they have done within the last week or two. They might have been better employed in Ottawa carrying on the business of government. I feel that they have been talking to more or less hand picked audiences. I should like to invite them to come to my part of the country to Windsor, Hamilton or Toronto and try to make the statement stick that there is no emergency in unemployment, particularly if the unemployed are allowed in the door. I think these ministers would be better employed in Ottawa trying to find jobs for men rather than trying to tell the people there is no emergency in unemployment.
Finally, Mr. Speaker, I believe also that the different members of the cabinet should be helping the Minister of Finance in a department in which we have a continuing and chronic emergency.


Mr. J. R. Keays (Iles-de-la-Madeleine):: Mr. Speaker, a debate such as we are having here tonight allows each member of this house free and independent expression of ideas and I am, therefore, pleased to take part in this debate. I should like to speak on topics of interest to this house, namely the economic, monetary and fiscal policies of this government. The budget which was presented last December has been qualified by many adjectives, a few of which have been less than commendable but most of which should have' been gratifying to the Minister of Finance-(Mr. Fleming). The adjective which struck me as being most applicable was the word

The Budget-Mr. Keays "courageous". The minister has displayed a courage which is synonymous with the Progressive-Conservative party and with Conservative policy ever since confederation, especially since 1957.
Whenever a Conservative government has followed a Liberal government it has been necessary to introduce legislation to protect the financial structure of our country and the well-being of Canadians. Why has this been so? It has been so because the official opposition, when they were occupying the government benches, were giving to this country a careless and lackadaisical administration. Fortunately they were taken off the hook occasionally by forces from outside our economy. Whenever the economy needed legislation to combat weaknesses this has been introduced when the Liberals were out of power.
I do not intend to rehash the statements that have been made concerning the condition of our economy in 1957. I should say, however, that it was a godsend that the population of this country decided to put in power a government with such dynamic leadership and with a minister of finance who was dedicated to the task of putting Canada back in the state of expansion, full employment and a full economy.
There are those who will say that the present conditions do not justify this statement. Truer words were never spoken than those of the Prime Minister (Mr. Diefenbaker) when he said that the underbrush must be cleaned up and that action must be taken. Mr. Speaker, now is the time of action. Now is the time when this government is moving forward to fulfil the wish of all Canadians for full employment.
Let us look at the throne speech. Never before was a more comprehensive plan given to the Canadian people. It was an attack upon those germs which have crept into our financial composition, not since 1957 but since the early days of the fifties when the handwriting was on the wall and no action was taken. Was it not evident then that automation, shortage of money and a changing economy would have warranted some action? The causes were evident and the effect was driven home. However, lackadaisical and careless administration reigned and stagnation set in. As I have mentioned previously, a few bright spots appeared but they were non-recurrent and hence the slip to a slow pace in our economic expansion.
As to loans to small business, it is true that the Liberals said they thought of that matter. Prior to this government coming to power they were thinking of so much legislation that they did not have time to introduce it. The effect of this legislation will be tremendous.

During the recent recess I had the opportunity of speaking to business people who were extremely enthusiastic about plans to modernize, improve and extend the services to the public. It remains to be seen how the chartered banks will play their part and how they will contribute to the welfare of that segment of our business people who have no accesss to revenues from the sale of bonds and debentures or who cannot qualify for loans from the industrial development bank.
The chartered banks have contributed to the existence of small business and I would not say, as is indicated in an expression commonly heard, that the banks lend you money only when you can prove to them that you do not need it. They made a contribution but on the assurance from the financial statement or the assets of the borrower that he was able to repay it on a short term basis. Under present economic conditions and in a changing economy where patterns of business administration are different, the banks must live. They must make loans to those who need them; and with the legislation which has been passed they should lend more money to those in the small business sector. That they have a responsibility with respect to the productive capacity of this nation is beyond doubt and I am sure that they will answer to the call. This being done, investment by small business will put many hundreds of millions of dollars to work in our economy in every sector of the country. Secondary industry, which is the key to full employment, will develop and will walk hand in hand with steady national growth.
The opposition always seem to say that nothing has been done to alleviate the problems of today. What about the productivity council, this bold and imaginative bit of legislation? Getting the brains of primary and secondary industries together with the purpose of finding a solution for those problems of our productive industries, will be of great benefit to this country. I will not delve into the sound effect of a productivity council. However, I would refer hon. members of this house to the speech made in December last on third reading of this bill by the hon. member for Halton (Mr. Best) who spoke about our productivity council. In it there was information which was extremely valuable.


John Whitney Pickersgill: Mr. Speaker, I feel that I must rise on a point of order. I do not think that anyone would take the slightest exception to the hon. gentleman's referring to legislation that had already been passed by the house in the present session. However, when it comes to quoting what other members have

said in debates that have already been concluded in this session, it seems to me that he is going beyond the rules.


James Russell Keays: I do not believe that I have quoted any one word mentioned by the hon. member for Halton.
Action by the productivity council will solve the problem of cost of production, quality of production and improvements to production, allowing the people to transact more business at home and abroad, making products more attractive and competitive. The economy is changing. Our government realizes this fact and is geared to respond to this challenge. Hence our actions to attack our economic ills.
What about our sales problem abroad? The record speaks for itself. In 1960 we sold abroad 20 per cent more than we sold in the year 1959. The figure is an all-time high. The novel idea of the Minister of Trade and Commerce (Mr. Hees) of gathering here in convention supersaiesmen the world over has had a tremendous effect on many of our Canadian producers who had toyed with the idea but had never studied it seriously. As a result of the revelations at this convention they have gone back home disposed to concentrate on a bigger and better export trade. Is this not more action to attack economic ills?
May I suggest going further in this drive for expansion or for exports and home consumption and patterning a group similar to the productivity council itself in a study directed towards bringing in new industries or expanding present ones. This council within the Department of Trade and Commerce should be made up of people who are experts or professionals in their own trade in countries other than Canada. We are a young nation. We have much to learn from those whose history dates back many centuries.
As to the products made in those countries and which could easily be manufactured here, I am thinking now of products of the nature of those contained in the recent order obtained by the Montreal Locomotive Works Limited for the building of railway cars for the Toronto transit commission. The ingenuity of this company in going south of the border to get engineers to make plans, to study their costs and to tender intelligently on this order are things that we must think of and which are progressive in this country.
I do not believe that the orders given by the Toronto transit commission are the exclusive rights of Americans, Germans or French. The Montreal Locomotive Works has proven that they can also build at a competitive price and give quality equal to any. These people taken from the primary and secondary industries of other countries would be a complement to the productivity council
The Budget-Mr. Keays and to those in the business of trade anc commerce who are preoccupied with sales to other nations.
Irksome and painful as it may be, we must consider that the forestry industry of Canada is one of our large wage-earners and we must realize that so much saw mill and. pulp mill machinery comes from other countries. I trust that this suggestion of a complementary body will find acceptance in this chamber and that we will not export our brains but keep them at home and bring in others who can be of benefit to us.
The hon. member for Kenora-Rainy River (Mr. Benidiickson) has accused the government of not bringing in any legislation which would cure the exchange rate. I am sure he is very sorry for having ever mentioned this. The steps taken by this government have been indirect and the only way of implementing a change in the exchange rate. I do not say that the budget was aimed at this alone, because many consequences of a satisfactory nature will result from this courageous budget.
Let me also assure you-and I doubt whether there are any who do not believe this-that this budget was not offensive to our neighbours to the south. It was a Canadian budget to meet Canadian aspirations, and was not anti-American. We have problems to solve and we should solve them at home, not in an anti-American way but as a neighbour of that country and in the interests of Canadians. Our relations with the United States of America are good, and we should assure them of our desire for co-operation inasmuch as it does not affect Canadian interests.
By raising the ceiling of profit for small business, which is extended to $35,000 before they fall into the heavy taxation bracket, we have rendered tremendous comfort to those people who needed it most. By this relief a large segment of Canadian firms will put the additional reserve profits to work, expand more and provide more employment.
Could we not think of the small firms employing from five to 25 people mushrooming throughout this country, in the west as well as in the east, manufacturing those items which heretofore came into Canada by way of importation. I am thinking of this well-conceived plan of this government intended to affect all these segments of our economy. The incentives for the establishment of businesses in new areas where labour is available, the elimination of the surtax of 4 per cent, the imposition of a 15 per cent charge on dividends paid to non-residents, as I have said before, were planned and

The Budget-Mr. Keays prepared for an all-out attack on our economic ills. They were brought into affect by a progressive and systematic removal of the many obstacles which have been referred to as the underbrush. Now the way is clear for an advance towards the goal of a full economy.
What do you see south of the border? You see small towns spread out throughout the country which employ 5, 10, 15, 20 or 30 people, residents of those areas, giving them employment and supplying larger plants of the country. Everyone there has a hand in production, and there is no reason why Canadians should be denied this right.
The attitude of this government toward small business, the investment potential of Canadians, Canadian income restrictions on funds available, trust funds, mutual funds and pension funds, are all part of a well-defined plan. Canadians should produce for Canadians and in order that prices in Canada should be competitive with those of any other nation.
I said earlier that steps taken by the budget were not immediate but that the indirect effect of these steps has caused the lowering of the exchange rate. This, along with the redefinition of goods made in Canada will protect those engaged in manufacturing, thus widening the field of employment.
Think of those classes of goods which are called custom made. How many arguments will be saved at the ports of entry into Canada where purchasers argue by the hour to give their own definition of goods made in Canada. Think of those who are importing heavy equipment into Canada at the rate of $300 million, $400 million or $500 million a year and who are getting these goods across the border by a definition of goods not made in Canada because of the control system of the equipment whereby some additional light, battery or connection is attached thereto.
Those items entering Canada are competing with items being manufactured here, and I am sure that the redefinition of these words will mean more production and more manufacturing in Canada, not solely by Canadian firms but also by subsidiaries of United States firms. Savings will find their way into capital investment or into risk capital, because this government has given to the Canadian people that security which they needed for investment.
It is interesting to know that the total volume of life insurance in force in Canada, related to the national income, is 163 per cent, whereas in the United States it is 135 per cent.
I am led to believe that one reason why some of our Canadians have not invested in Canadian corporations-why they have not fMr. Keays.]

put a share of their money into risk capital- is because they did not feel secure about the financial policies of past governments. I am sure that as a result of the direction which is being given us by the present government and as a result of its monetary and fiscal policies Canadians will be increasingly encouraged to invest their money in Canadian companies.
There must be a warning. These pieces of legislation cannot of themselves accomplish the attainment of these ideals. Labour must be aggressive and venturesome. The unions must be understanding and tolerant. Management must be co-operative and patient, recognizing ability and leadership in the ranks. Bankers must give direction regarding our economy, and the government leadership in monetary policies. In its handling of our financial resources the government has shown courage, because it is being realistic and facing up to the demands from industry and labour, and these policies will show their effect much sooner than the opposition hopes. In view of this situation I cannot understand the amendment which is being proposed and I intend to vote freely, independently and justly in favour of the budget as prepared.
A few days ago a rally was held in Ottawa by a party called the Liberal party. It reminds me of a group of people who have assembled in a crater and who have got their heads together there to come up with solutions to the problems of the day. They have squeezed themselves together; they have put their heads together so closely that they have squeezed themselves into a cell, and I believe they have squeezed themselves off the platform of the political parties of Canada.
I see that they mention in their program unemployment benefits and greatly extended trading facilities. They speak about accelerated depreciation, easier credit and control of the Bank of Canada, improving the value of the Canadian dollar and increasing the market for Canadian goods. What kind of a binge has that party been on since this session came into operation? They do not realize that every one of those measures is a measure which has been brought in by this government. They just seem to be going a little further. They speak about the federal contribution to municipalities-here again, I think that is going back to centralization- and there is a reference to an incentive to industries to locate in certain specified areas. This sounds as if I have heard it before. It was proposed by this government.
The program talks about extended winter works and federal contributions to welfare in depressed areas. In the province of Quebec 90 per cent is now being paid, and I think

the public at large must absorb at least 10 per cent of the responsibility. In addition to all these benefits there are to be cuts in personal taxation, but there is no mention of where the money is to come from to pay for all this. As I have said before, the opposition is inept, careless and lackadaisical and they are operating today as they did in the days when they formed the government of this country.


Harold Edward Winch: Having looked at the time, Mr. Speaker, I get the impression I shall have to defer most of my remarks until we come to a later stage. Listening to the oratory of the hon. member for Carleton (Mr. Bell) this afternoon and to the oratory of the hon. member for Vancouver-Kingsway (Mr. Browne) this evening I think that at this time, when we are facing many weeks, and perhaps months, of work in this House of Commons, it might be advisable to remind the government of words which should be reiterated whenever a government begins to become imbued, as this government is, with arrogance. I say this because of the remarks of the hon. member for Carleton and the hon. member for Vancouver-Kingsway criticizing the opposition for criticizing the government.
I think, Mr. Speaker, we should all remember on occasions and keep in mind at all times that opposition in parliament is not a luxury to be indulged in occasionally but that it is a necessity. It is the one incontestable advantage which a free government offers independent and responsible people. It is the responsibility of the opposition to give warning, not in order to frighten but in order to instruct. The duty of the opposition is to oppose, is to criticize, is to warn, and no plea of state interest such as that made by the hon. member for Carleton this afternoon can relieve the opposition of its responsibility and obligations. I think the government and its supporters should remember those words. They are not mine. They are very famous words which have been used in the past on similar occasions.
Why is it necessary to warn? It is necessary because of conditions, existing or threatening, which are or may be serious. Listening to the hon. member for Vancouver-Kingsway, a supporter of the government, one would take it that there were no problems in British Columbia, that everything is rosy there. Yet there are items and factors of which notice must be taken. I note that according to the dominion bureau of statistics, in British Columbia in the first seven months of last year-and these are the latest figures I had available immediately after hearing the speeches today-7.7 per cent of the working
The Budget-Mr. Winch force was out of work. I notice also that consumer spending in British Columbia was down by $30 million as compared with the similar period of the previous year. Motor vehicle sales in the province were down by 8.4 per cent and sales of building material were down by 25.5 percent. I find that in Vancouver the number of employable unemployed on the welfare roll was double that of a year ago. Those are some of the things which have been brought to our attention only through the medium of the D.B.S. figures, and although the figures I have mentioned are not completely up to date they are an indication of the situation.
Anyone who has read the Vancouver newspapers during the last month will know that the jobless total in Burnaby is up 260 per cent over the same period last year, city construction in Vancouver is at an eight-year low, the housing industry has declined in 1960 which was characterized as a black year and on January 1 there were many newly completed homes still unsold and unoccupied.
The government cannot close its eyes to these things. It is our responsibility to point them out, warn the government about them and ask what the government is doing to meet the situation by way of planning, policies and legislation. The government appears to adopt a lackadaisical attitude. It glosses over the unemployment situation as though it did not exist or would take care of itself if it were ignored. Apparently that is the attitude of the Minister of Finance. The minister, speaking in Moncton recently, as reported in the Winnipeg Tribune of January 11 said:
-unemployment that does exist is due to automation in industry, an increase in the labour force and seasonal conditions.
Is that not a marvellous conclusion? The government has known about automation for years. It must have been warned about this trend by its own departmental officials. It has been warned about automation on the floor of this house year after year. Over the years we have asked how this problem would be approached, faced and met. We are told that one of the reasons is automation. The minister says the problem is seasonal unemployment. There has always been seasonal unemployment in Canada but this does not mean it will always be with us nor that we should ignore it today.
The minister referred to the advantages of the winter works program. I am not going to deny that much good can come of the program although it appears to be the only immediate policy the government has to meet the present unemployment situation.

The Budget-Mr. Winch
The city of Vancouver is the third largest in Canada. In the eleven adjoining municipalities comprising what is known as greater Vancouver there is a population of approximately one million. According to figures released by the chairman of the metropolitan committee in charge of this program it will have provided employment to 2,300 people as of January 3. Any measure that provides employment is welcome but that amount of employment in relation to a population of that size is an indication of the inadequacy of the program. I give the government all credit for its attempts at long range planning as mentioned in the baby budget. I believe these measures will be of benefit but it is the immediate situation which must be of vital concern to us. The problem will not be solved as long as the government maintains the attitude that the unemployed are statistics. As a Toronto newspaper editorial pointed out, the unemployed are not statistics but people.
When we have criticized the government for its lack of policies, planning and legislation we are often confronted with the question: O.K., what would you do? The government is supposed to have the answers but nevertheless I admit this is a logical question. There are a couple of things I wish to mention and perhaps in the time at my disposal I shall have an opportunity of developing only one thought. This is a measure that could be speedily undertaken to assist in meeting the present critical situation.
My first suggestion appears to be a natural one. The government should create confidence in the minds of Canadian people and businessmen and give encouragement to businessmen and industry by following through with its declared policy of buying Canadian goods. When the government buys goods it should buy Canadian goods if the specifications are those required and if the price is relatively competitive. I think it is axiomatic that that is what is supposed to be done but I am certain it is not done to the degree it could be with the result that there is a lack of confidence on the part of Canadians and little encouragement to Canadian businessmen and industries. Of course, if you purchase from outside when you could purchase in Canada there is additional unemployment in our country. As a first step the government should rectify that situation where it exists.
It is only a year ago that I asked the then minister of veterans affairs why it was that in our major veterans hospitals the laundry was sent out and not done on the premises as is the case with most large nonveterans hospitals. I was told that it was


customary to follow the procedure of sending out the laundry. It is apparently no longer customary because the government has introduced a policy in large veterans hospitals of permitting them to purchase their own laundry equipment. I am pleased to note that.
During the Christmas recess I learned that Shaughnessy military hospital in Vancouver is purchasing laundry equipment. I then received a phone call advising me that although there was a Canadian tender on supplies and equipment which they guaranteed would be produced in Ontario factories to the extent of 80 per cent the contract had been let to a United States firm under which 100 per cent of the equipment will be produced in that country. It is hypocritical of the government and its supporters to talk about the responsibility of industry and labour in this area when the government would allow a contract of this type to go to the United States. That is all I will say about the matter. The government is being unfair to the Canadian people, to industry and labour in allowing this practice to continue.
I hope that whoever is the watchdog for this phase of government administration will see to it that the government purchases Canadian goods if they meet the required specifications and are available at a relatively competitive price. The work would then be given to Canadians.
There is another matter on which I wish to lay stress which I feel could give great impetus to employment in British Columbia if we were to remove some of the unnecessary red tape and regulations applying to exports from that province.
This is something which will help us and our great timber industry. Since I require some 10 to 15 minutes to go into the matter, and since under standing orders you have to put the motion within 30 seconds, I hope that I may be able to complete this phase of my remarks at the next opportunity.


Mr. Speaker:: Order. It being 9.45 o'clock it is my duty, pursuant to section 4 of standing order 58, as provisionally amended, to interrupt these proceedings and put forthwith the question on the subamendment now before the house.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I ask what the business will be for the rest of the week?


George Clyde Nowlan: I do not know that I can answer it for the rest of the week but tomorrow we will carry on with the debate which we have been carrying on today. I understand there have been discussions which will indicate that on the following day we will take up the appointment of committees. If that business is not completed on Wednesday we will carry on with it on Thursday and follow with legislation.


Lionel Chevrier: May I call the attention of the acting house leader to the fact that Thursday is private members' day.


George Clyde Nowlan: We shall have to conclude the motion on Wednesday and then go into private members' day.


[Stage Direction]
It being seven minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Questions