1962-10-02

Mr. Speaker:: Order. Before formally opening this morning's sitting I would ask the house leave to mention the presence in the Speaker's gallery of a delegation of four members of the national assembly of the French Republic.
This delegation, headed by Mr. Bosson, includes Mr. Thorailler, Mr. Douzans and Mr. Collet, secretary of the delegation.
These honourable gentlemen are on a tour of Canada. They have visited industrial plants in Quebec and Ontario. They have visited some of our universities in Quebec. They are also to tour Ottawa.
In addition, being parliamentarians, they are most interested in the proceedings of our own House of Commons. Therefore, I do not think I would be indiscreet if I revealed that I think I noticed them as spectators in various parts of the galleries yesterday.
I am sure I express the general feeling of this assembly in extending to them a most sincere welcome, the more so since the weather in Ottawa is so wonderful at this time of the year. Once again, I wish them a most happy stay in Canada.
(Text):
I would crave the indulgence of the house to draw to the attention of hon. members the presence in the Speaker's gallery of a delegation of four members of the French national assembly. They are members of the foreign affairs commission and have come over on the initiative of the French government to look at Canada, to look at some of our industrial and commercial installations, in fact to look into Canada and, in particular, of course, as parliamentarians they are interested in what goes on in our House of Commons.
I am sure that I speak for all hon. members in wishing them well and extending to them a very cordial welcome.


Some hon. Members:: Hear, hear.



ANNOUNCEMENT OF LONG TERM COTTON


Hon. George C. Nowlan (Minister of Finance):: Mr. Speaker, I am happy to inform the house that the secretariat of the general agreement on trade and tariffs announced yesterday that a new long term arrangement on cotton textiles has come into force. Besides Canada, countries that have so far agreed to participate are the United States and the United Kingdom, on behalf of Hong Kong as well as itself; the six members of the European economic community; Japan, India, Pakistan, Portugal, Israel and the United Arab Republic. Several other countries are expected to agree to join in the near future.
The long term arrangement, which has five years to run, replaces the short term arrangement under GATT that expired September 30. There are two chief aims: to expand export opportunities for less developed countries that are engaged to a large extent in cotton textile production; to prevent disruptions in the domestic markets of importing countries.
Canada's position as both an important producer and importer of cotton textiles is a special one. This position is recognized in the arrangement. As a result, Canada is not committed to increase its imports of cotton textiles from low cost countries over the next five years. This does not mean that there will be no increases. In a letter to the executive secretary of GATT dated August 25, the Secretary of State for External Affairs (Mr. Green) said:
It is the intention of the government to oontinue to pursue a policy which, while avoiding disruption of the Canadian market for sensitive textile items, would permit an orderly expansion of the trade in cotton textiles on fair and reasonable terms when warranted by market conditions in Canada.



AGRICULTURE


Hon. Alvin Hamilton (Minister of Agriculture):: Mr. Speaker, I wish to announce that the agricultural stabilization board has been authorized to support the price of eggs by a deficiency payment program for the twelve month period from October 1, 1962 to September 30, 1963 at a national average

Price Support for Eggs price of 34 cents per dozen to producers for grade A large size eggs. The support price is the same as last year's and is approximately 90.7 per cent of the ten year average.
Payments on claims by any one producer during the support year will be limited to 4,000 dozen grade A extra large size, grade A large size, and grade A medium size eggs. Producers must be registered with the board and have marketed their eggs through registered grading stations, or have sold their eggs to retail outlets as producer-graders to be eligible to claim for any deficiency payment which may be made.
Final returns are not yet available for the 1961-62 support year, but it is estimated that the national weighted average market price for the full twelve months will be approximately 33 cents per dozen, or 1 cent less than the support price. I expect to be able to announce the exact amount of the deficiency payment to producers very shortly.
Mr. Speaker, I would ask new members of the house to familiarize themselves with the stabilization act so that the producers of eggs in their areas may be made aware of this support price for the coming year.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, this is another one of those routine announcements that in actual practice may not mean very much. There have been very few instances when a deficiency payment has been made on eggs, even though the price of eggs in many parts of Canada has been below the stated support price and has been most unsatisfactory.
There are two things that need to be done in order to make this policy effective. The 'wst is to declare that deficiency payments will be made on a quarterly basis so that the accounting will be done every three months. Second, they should be made on a regional basis in order that the producers across this country might have some real support, which is not provided in the announcement which has just been made.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, it is very difficult to hear clearly at this end of the house; in fact we are most uncomfortable on occasions. Nevertheless I am always interested in hearing the Minister of Agriculture make a routine announcement sound like a blessing from the government in power.
I can speak from experience when I say that poultry producers in the southeastern portion of British Columbia, the only ones with whose situation I am familiar, have been very concerned about falling prices in recent months. I hope this announcement will mean
[Mr. Hamilton 1
some improvement in their situation, but I am sure it does not meet the needs of those who are looking to the government for stronger action than this.



INTERPRETATION ACT


Hon. Donald M. Fleming (Minister of Justice) moved: for leave to introduce Bill No. C-48, to revise and consolidate the Interpretation Act and amendments thereto, and to effect certain consequential amendments to the Canada Evidence Act and the Bills of Exchange Act.


Mr. Chevrier:: Explain.


Donald Methuen Fleming: The purpose of this bill, which is lengthy, is to revise and consolidate the Interpretation Act. It will be the first general revision and consolidation of this act to be undertaken since confederation.
Motion agreed to and bill read the first time.



COMBINES INVESTIGATION ACT AND CRIMINAL CODE


Donald Methuen Fleming: for leave to introduce Bill No. C-49, to amend an act to amend the Combines Investigation Act and the Criminal Code.


Mr. Mcllraiih:: Explain.


Donald Methuen Fleming: The purpose of this short bill is to extend for another year a measure which has been introduced in previous sessions respecting fishing agreements.
Motion agreed to and bill read the first time.



JUDGES ACT


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 Judges Act to provide for salaries for two additional judges of the supreme court of Nova Scotia, including one chief justice, and for one additional judge of the court of appeal for British Columbia.


[Stage Direction]
Motion agreed to.

[Stage Direction]
-AMENDMENT TO PERMIT PAYMENTS TO JUDGE AND REGISTRAR
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 amend the Admiralty Act to permit the governor in council to authorize the payment of a salary not exceeding four hundred dollars per annum to a surrogate judge and not exceeding three hundred dollars per annum to a registrar.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, I should like to ask the Prime Minister how he can reconcile the statement made yesterday by the Minister of Justice in Toronto that "Canadians should not expect an early end of the emergency austerity measures adopted on June 24" with the earlier announcement that the austerity program was only of a very temporary character.


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I have not seen the words in question; therefore there is no reconciliation involved.


Donald Methuen Fleming: Mr. Speaker, I think I should, on a question of privilege, make reference to the question asked earlier today by the Leader of the Opposition based on a remark attributed to me in a speech in Toronto yesterday. The expressions he used in his alleged reference, Mr. Speaker, do not bear any resemblance to the language that I used in this speech yesterday. In that speech I did use this sentence-


Some hon. Members:: Order.


Mr. Speaker:: Would the minister indicate his point of privilege so that I can judge whether privilege is involved at this time.


Donald Methuen Fleming: It is because the Leader of the Opposition, Mr. Speaker, purported to base a question to the Prime Minister on a statement attributed to me in a speech in Toronto yesterday.


Mr. Martin (Essex East):: As reported in the Globe and Mail.


Donald Methuen Fleming: As reported-
Inquiries of the Ministry


Paul Joseph James Martin: In the Globe and Mail, your favourite newspaper.


Donald Methuen Fleming: The Leader of the Opposition did not specify what he was quoting from or where the report was contained. The point of privilege is that the report as he has given it to the house includes terms that I have not used. They do not bear any resemblance to what I said yesterday.


Lionel Chevrier: Another misquotation.


Donald Methuen Fleming: My speech is a matter of record-


Mr. Pickersgill:: On a point of order-


Mr. Speaker:: Order.


John Whitney Pickersgill: I am rising on a point of order-


Mr. Speaker:: Order. There is one speaker at the moment. If the minister is making a correction to words attributed to him, it is my view that he can do so succinctly and simply, and to the point-and this is purely hypothetical-for instance by pointing out that words attributed to him were not said by him. We must then accept what the minister says. Beyond that I think we should not go, because we should not get ourselves into an interminable wrangle on fine points in this regard.


John Whitney Pickersgill: Mr. Speaker, I respectfully rise on the point of order raised by Your Honour as to whether there was a question of privilege. This point should be settled before the minister is allowed to proceed.
It is a well known rule of this house that a question of privilege must be raised immediately the point arises and not after the minister has had an hour for reflection. I suggest that the same rule should be applied to the minister as I trust Your Honour intends to apply from now on to all hon. members. A question of privilege is either taken up immediately or not at all.


Mr. Speaker:: It seems to me that in the circumstances the point is well taken. The minister has indicated the general nature of his position, and I think we will leave the point at that.


Lester Bowles Pearson: Mr. Speaker, in view of what the minister has said-


Mr. Speaker:: I think I have indicated quite clearly what my ruling would be on this question. I heard the point of order raised by the hon. member for Bonavista-Twillingate. The minister had indicated that he did not agree with the words attributed to him. I do not believe it would lead to any clarification,

Inquiries of the Ministry or improve the business of this house, if we were to begin a miniature debate now on the orders of the day.


Paul Joseph James Martin: May I ask
the Minister of Finance a question? Has he seen the report of his speech in the Montreal Gazette and does he say it is an inaccurate report, especially as contained in the first paragraph?


George Clyde Nowlan: I have not seen it.


Mr. Speaker:: The question seemed to be directed to the wrong minister but I think it would be to the same end, the danger of which I have pointed out. It would merely encourage a debate on orders of the day. We are now in a full-fledged debate. If there are matters to which the hon. member wishes to advert, no doubt he will be addressing the house in the near future and I think that would be the time.


Paul Joseph James Martin: My question
should have been addressed to the Minister of Justice and I suggest, with great respect, if Your Honour would listen to me-


Mr. Speaker:: I think we will draw this matter to a conclusion.


Herbert Wilfred Herridge: Mr. Speaker, I wish to direct a question to the Prime Minister in order to clear up some confusion which exists among members as a result of some exchanges across the floor yesterday. If we want to ask questions about finance with respect to the former parliament, do we now ask the Minister of Finance the questions or the Minister of Justice?



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. Paul Hellyer (Trinity):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Has the minister authorized the articles on defence by the chief of the staff secretariat, Department of National Defence, now appearing in the Toronto Globe and Mail?


Hon. D. S. Harkness (Minister of National Defence):: Mr. Speaker, I think the articles referred to are by a Dr. Sutherland, who is actually an employee of the defence research board and was incorrectly reported as being the chief of the secretariat of the chiefs of staff committee. I believe it was something along that line.
These articles which are appearing in the Globe and Mail are summaries of a long
[Mr. Speaker.!

article written by Dr. Sutherland for, I think, the foreign affairs society's quarterly, or something along that line.


Paul Theodore Hellyer: A supplementary question. How does the minister justify the policy of having departmental employees write articles of this nature when he does not give the department authority to prepare a white paper for consideration by the people's elected representatives?


Mr. Speaker:: Order. Again I draw to the attention of the hon. member for Trinity the true nature of supplementary questions.



NUCLEAR WEAPONS


[Stage Direction]
On the orders of the day:
Mr. F. A. Brewin (Greenwood):: May I address a question to the Prime Minister. Does the answer which he gave to a question on March 5 last, that there was then no intention of entering into discussions, referred to by the United States secretary of state, for the joint control of nuclear weapons for Canadian armed forces still stand, or have there been any such discussions to date?


John George Diefenbaker: Mr. Speaker, I think at the appropriate time the whole question regarding nuclear weapons, and the discussions concerned in connection therewith can be taken up. It is impossible to answer a question such as that on orders of the day.



BOMARC BASES


[Stage Direction]
On the orders of the day:
Mr. C. M. Drury (St. Anloine-West-mount):: I wish to direct a question to the Minister of National Defence. The government has recently announced completion of the construction of the Bomarc bases north of here. Would the minister say when these bases, on which construction is now completed, will become operational?
Hon. D. S. Harkness (Minister of National
Defence): The base at La Macaza, as a matter of fact, will be taken over by the R.C.A.F. some time later this month. Some time after it has been taken over it will then be in the same state of operational readiness as the station at North Bay.


Charles Mills (Bud) Drury: I have a supplementary question. The minister stated that the base at La Macaza will be in the same state of operational readiness as that at North Bay. Does "operational readiness," the term used by the minister, mean that these bases will be in a position to fight?


Douglas Scott Harkness: I do not think this is the time to go into the various states of operational readiness.
(Translation):



ST. JEAN MILITARY COLLEGE    ENLARGEMENT OF COURSES

[Stage Direction]
On the orders of the day:
Mr. Yvon Dupuis (Si. Jean-Iberville-Napier-ville):: Mr. Speaker, I wish to put a question to the Associate Minister of National Defence. Can he tell us if, this year, the St. Jean Military College will give a full course to the cadet officers?


Mr. Speaker:: Once again, may I ask the hon. members to show some co-operation and to have such questions put on the order paper?


Yvon Dupuis: Mr. Speaker, with all due respect, I submit that my question is an urgent one in view of the fact that the course given at the St. Jean Military College is scheduled to begin this month, and if I am not informed of the situation now, it will be too late tomorrow to seek information.


Mr. Pigeon:: Why was such a course not set up when you were in office?


Hon. Pierre Sevigny (Associate Minister of National Defence):: Mr. Speaker, there have been no changes made in the course given at St. Jean Military College. However, that course is under constant revision because we wish to give the cadets the best possible education.


Yvon Dupuis: A supplementary question, Mr. Speaker. Could the minister tell the house whether such a complete course will be set before the impending fall of this government?


Mr. Balcer:: Twenty five years from now.


Mr. Speaker:: I should like to draw the hon. member's attention to the remarks I made concerning relevant supplementary questions.
(Text):



REPRESENTATIONS RESPECTING IMPORTS


[Stage Direction]
On the orders of the day:
Mr. Arthur Laing (Vancouver South):: Mr. Speaker, my question is directed to the Minister of Trade and Commerce. I want to ask him whether he and his department are rendering any assistance to the forest industry
Inquiries of the Ministry of British Columbia in its representations before the United States tariff commission in respect of the import of Canadian lumber into the United States.


Hon. George H. Hees (Minister of Trade and Commerce):: Mr. Speaker, I wish to thank the hon. member for giving me notice of his intention to ask this question. Let me assure the members of the house that my department co-operates fully at all times with all sectors of Canadian industry whose interests may be affected by hearings undertaken by the United States tariff commission.
As you will be aware, the hearings on lumber open today in Washington. Specifically they are with respect to the effect of softwood lumber imports into the United States on the United States domestic softwood lumber industry. These hearings provide an opportunity for private Canadian industry to make their views and interests known to the United States administration. We have in this connection been in close contact with and extended all the facilities of my department both in Ottawa and in Washington to assist the British Columbia forest industries in the preparation of their submission. Permit me to say, Mr. Speaker, that I am much impressed by the case of the British Columbia forest industries and the manner in which they have gone about preparing it.
Finally, I think the house will be interested to learn that this government has left the United States government in no doubt as to the importance we attach to the maintenance of Canadian softwood lumber exports to the United States, which are currently running at the rate of approximately $250 million a year.



RUSSIA-CANADA    INQUIRY AS TO RENEWAL OF TREATY

[Stage Direction]
On the orders of the day:
Mr. W. M. Benidickson (Kenora-Rainy River):: I wish to direct a question to the Minister of Trade and Commerce. Having regard to the dispatch of Mr. Robert Moon of the Regina Leader Post, who has spent three weeks in Russia, and the reports that in Russia they are considering a renewal of the Canada-Soviet trade treaty, what information can the minister give the house?


George Harris Hees: I have not seen the report to which the hon. member refers. I would like to examine it, and I shall give an answer tomorrow.

Inquiries of the Ministry



IMPORT OF CARGO FROM CUBA

[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: I wish to direct a question to the Minister of National Revenue. As today's Montreal Gazette has reported that a cargo of cement, imported from Cuba, is now tied up in the port of Montreal waiting for a clearance, could the minister advise the house whether this importation has been authorized due to a shortage of cement in this country?


Hon. H. J. Flemming (Minister of National Revenue):: Mr. Speaker, I would have to take the question as notice.



ANNOUNCEMENT OF FURTHER SALE TO POLAND

[Stage Direction]
On the orders of the day:
Francis Alvin George Hamilton: Mr. Speaker, may I have the permission of the house to revert to motions?


Mr. Speaker:: The hon. minister has asked for unanimous consent to revert to motions. Does the house agree?


Some hon. Members:: Agreed.


Francis Alvin George Hamilton: I express my thanks to the house, because this helps me out in a business way.
I am pleased to announce the conclusion of a further contract between the Canadian wheat board and the Polish foreign trade company, Rolimpex, covering the sale of 80,000 tons or 2.9 million bushels of wheat for delivery from St. Lawrence or lakehead ports before the close of navigation. This is in addition to the recent sales contract with Poland for 300,000 tons of wheat

11 million bushels-which I announced on August 30, and it forms a part of the optional arrangement made at that time for the purchase and sale of a further 200,000 tons of wheat.
The new sale was facilitated by the credit insurance facilities arranged last month by the Canadian government, providing for terms of 10 per cent cash and one third of the balance after 24, 30 and 36 months respectively.


Hazen Robert Argue: Any success which may attend the efforts of the Canadian wheat board and/or the government to increase the sale of wheat is very much in order at this time in view of the bumper crop. However, along with the announcement the minister has made this morning I would hope he intends to go forward on the lines of the statement he made some weeks ago, when he said he intended to visit Poland, Czechoslovakia and Yugoslavia with the object of
[Mr. Hees.l
increasing sales of Canadian wheat in those countries to a much greater extent, and also-over a much longer period of time. (Translation):



DOMINION-PROVINCIAL RELATIONS REQUEST FOR DEFINITION OF ONTARIO- QUEBEC BOUNDARY

[Stage Direction]
On the orders of the day:
Hon. Paul Marlineau (Minister of Mines and Technical Surveys):: I should like to give an answer to the question asked yesterday by the hon. member for Stormont.
A definition of the Ontario-Quebec boundary on lake St. Francis can be found in the statutes and, as every one knows, that demarcation comes entirely under the jurisdiction of the provinces concerned.
I understand that negotiations have been going on for some time between the two provinces concerned and that no definite agreement has been reached as yet, although both parties have expressed their wish to settle the matter as soon as possible.
My predecessor, the Hon. Paul Comtois, contacted both parties on several occasions, offering them the services of the department I am now heading to define that boundary as soon as an agreement is reached.
I can assure my hon. friend that my department continues to offer its co-operation in that respect.


Mr. Bernard Dumont (Bellechasse):: Mr. Speaker, I should like to put a question to the Minister of Mines and Technical Surveys.
At what university did the minister learn the good plain French in which he answered the questions addressed to him in English by the member for Stormont even though the latter represents a constituency where 68 per cent of the people are French-speaking?


Some hon. Members:: Order, Order.


Mr. Speaker:: Order.


Yvon Dupuis: That is the mark of a small mind.


Mr. Speaker:: I must point out to the hon. member that comments on the manner and the language in which replies are given are not allowed in this house.
(Text):



CANADIAN CENTENNIAL


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I believe my question should be directed to the Prime Minister, and it is this. Can the government at this time indicate when a Canadian centennial commission and commissioner will be established so as to provide the leadership required in the organization of our national celebration?


Mr. Speaker:: Order. I would draw to the attention of the hon. member the consideration whether the question he wishes to ask is urgent in that is it necessary to have the information immediately. There will be opportunity to get it at a later date and, as a matter of fact, I suggest that the hon. member place his question on the order paper.


Mr. Frank Howard (Skeena):: Mr. Speaker, I also have a question for the Prime Minister. It deals with the matter of our centenary activities. I wonder whether the attention of the Prime Minister has been drawn to an article in this morning's Globe and Mail reiterating statements by a Mr. Robbins L. Elliott, chairman of the program research committee of the Canadian centenary council, to the effect that it is not possible to proceed with its plans until the necessary machinery has been established by government, and making the accusation that the federal government is lagging on its plans for our celebration. If so, would the Prime Minister care to comment on that matter?


Mr. Speaker:: I suggest to the hon. member that the observation I made with regard to the previous question on this general subject would apply also to this question.


Frank Howard: That I put the question on the order paper?


An hon. Member:: That is right.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: I wish to ask a question of the Secretary of State for External Affairs. Are we to conclude that the withdrawal of the Canadian commercial counsellor in Cuba means a change at least in some aspects of our relationships with Cuba? In that event, would this situation be due to representations made by the United States to Canada and her NATO partners?


Hon. Howard C. Green (Secretary of Stale for External Affairs):: Mr. Speaker, there has been no change in the government's policy toward Cuba. In recent months there has been a great falling off in the amount of goods purchased from Canada by Cuba presumably because of the difficulty in obtaining foreign exchange. It was felt that there is no longer any necessity to have this particular official stationed in Havana.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fort William):: I wish
Inquiries of the Ministry to direct a question to the Minister of Transport. I am sorry that I did not furnish him with notice. Can the minister indicate to the house whether a start on the proposed expansion of the lakehead airport will be made this fall?


Léon Balcer: Mr. Speaker, I shall be obliged to check with the department.
(Translation):



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. L. P. Antoine Belanger (Charlevoix):: Mr. Speaker, I should like to direct a question to the Minister of Labour. Could he tell us if the government is considering improving the Unemployment Insurance Act in such a way as to increase the income which those who are entitled to the benefits may earn? (Text):


Hon. Michael Starr (Minister of Labour):: Not
at the present time, Mr. Speaker. We are awaiting the report of the Gill commission. When that report is in the hands of the government careful study will have to be given to it.


Paul Joseph James Martin: May I ask
a supplementary question. Can the Minister of Labour tell us if it is not a fact that the chairman has indicated he hopes to have a report in time to permit the government to give consideration to this matter before Christmas?


Michael Starr: I think I answered a question directed to me a few days ago about when we expect to receive a report.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. C. R. Granger (Grand Falls-White Bay-Labrador):: Mr. Speaker, I should like to direct a question to the Minister of Northern Affairs and National Resources. Has the government any plans to give the same measure of financial support to the education and welfare of the Indians and Eskimos of Newfoundland-Labrador that is given in other parts of Canada?


Hon. W. G. Dinsdale (Minister of Northern Affairs and National Resources):: In view of the fact that this question involves the Department of Citizenship and Immigration as well as my department, I think the hon. member would get a more helpful answer if he were to place the question on the order paper.

Inquiries of the Ministry BUSINESS OF THE HOUSE



INQUIRY AS TO CONSIDERATION OF REPORT OF CANADIAN NATIONAL RAILWAYS

[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: I should like to ask a question of the Minister of Transport. Is it the intention of the minister to allow the house to examine the annual report of the Canadian National Railways before the house proceeds with motion No. 8 on the order paper under government business, which introduces a resolution relating to Canadian National Railways and its financing?


Mr. Speaker:: In view of the fact that the order of business has been announced for the next eight days and this particular motion cannot come before the house before the expiry of that time, I do not think there is any urgency with regard to the information sought by the hon. member.


Douglas Mason Fisher: There are a number of organizations including pensioners of Canadian National Railways, who wish to know well ahead of time if the annual report is up for review because, like last year, they want to have witnesses at the hearing. For that reason I should like to pin down, if possible, some kind of date for the appearance of the president of Canadian National Railways in Ottawa.


Léon Balcer: Mr. Speaker, it is our intention to have a committee on the Canadian National and Trans-Canada Air Lines sit at this session. So far as the date of the sitting is concerned, it is too early for me to tell. In so far as the motion is concerned, the date upon which we will proceed with that will be announced by the house leader at the proper time. (Translation):



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Gerald Laniel (Beauharnois-Salaberry):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Could he explain his department's delay in issuing bilingual cheques to members of this house? (Text):


George Clyde Nowlan: Mr. Speaker, I will take this
question under consideration and give an answer in due course.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Stanley Haidasz (Parkdale):: I should like to ask the Minister of National Health
and Welfare whether, in view of the disappointment and confusion caused by the minister's directive to postpone the free mass immunization against poliomyelitis with oral Sabin vaccine, he has any intention of giving a directive for the continuation of the free mass immunization against poliomyelitis with Salk vaccine at the earliest possible moment?


Hon. J. W. Monleith (Minister of National Health and Welfare):: Mr. Speaker, I think it is quite misleading to suggest that the Canadian people lack the utmost protection against polio that we can provide. As I indicated when the Sabin vaccine program was temporarily deferred last month, the incidence of this disease is extremely low at the moment. My advisory committee in this field recommended that the Salk vaccine program continue, and felt that Sabin vaccine could well be used if the need arose through any local outbreaks of polio. This approach was felt by the committee to be the soundest one to follow under present circumstances.



REPORTED APPROVAL OF UNSAFE LIFE JACKETS

[Stage Direction]
On the orders of the day:
Stanley Haidasz: Mr. Speaker, I should like to address a question to the Minister of Transport. Has the minister been informed of the coroner's jury's statement of last month in Toronto, that the federal Department of Transport approves life jackets which are not safe?


Some hon. Members:: Order.


Mr. Speaker:: Order. I think the hon. member knows that his question is not of the type asked on orders of the day.



VANCOUVER


[Stage Direction]
On the orders of the day:
Mr. Jack Davis (Coast-Capilano):: Mr. Speaker, I wish to address a question to the Minister of National Health and Welfare. I apologize for not having communicated this question to him; however, I have just received this information from the west coast.
In view of the fact that a Colombo plan student has just arrived in Vancouver to attend university and is now a suspected carrier of smallpox, what measures will the department take in order to trace the other pasengers aboard the Canadian Pacific Airlines airplane in this case in order to protect the rest of the Canadian community from the spread of this dreaded disease?


Jay Waldo Monteith: Mr. Speaker, a Colombo plan student at the University of British Columbia, aged 26 years, reported to the dermatological clinic in Shaughnessy hospital, Vancouver, yesterday morning, October 1,

and was diagnosed as a suspected case of smallpox. He had come to Canada from Bangkok by way of Hong Kong and Tokyo on a Canadian Pacific Airlines flight which arrived in Vancouver on September 21, 1962. While language difficulties have presented a considerable barrier, it is understood that he has not felt ill but complained only of a few skin lesions for which he sought treatment. Specimens from the patient are now on their way to the laboratory of hygiene here in Ottawa, where it will take several days to obtain a result. The patient is presently isolated and under treatment.
Reports indicate that he possessed a valid certificate of revaccination dated in Bangkok August 26, 1962. Also there was evidence of previous primary vaccination reported to have been carried out during childhood. Modified smallpox must, however, be considered as a possibility.
Over 700 students at the University of British Columbia have already been vaccinated and efforts are being made to trace passengers who arrived on the same flight. All passengers and crew members are reported to have had valid certificates of vaccination, but a recheck will be made in all cases which can be traced. Passengers are reported to have been destined to widespread areas of Canada and the United States.


John (Jack) Davis: Mr. Speaker, a supplementary question-


Paul Joseph James Martin: Mr. Speaker,
could I ask a supplementary question?


Donald Methuen Fleming: How about letting the hon. member ask the question?


John (Jack) Davis: A supplementary question, Mr. Speaker. I am informed, perhaps wrongly, that it is possible to purchase vaccination certificates for as little as $1.50 from air line crews and United States troops in the Orient. Is this true?


Mr. Speaker:: That is hardly a supplementary question. If the hon. member for Essex East has a supplementary question I will give him the floor.


Paul Joseph James Martin: Mr. Speaker, may I ask the Secretary of State for External Affairs a somewhat supplementary question?


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: What steps is the minister's department taking to protect Canadian women who have been sent to Ceylon under the Colombo plan?


Some hon. Members:: Oh, oh.
Inquiries of the Ministry


Howard Charles Green: Mr. Speaker, naturally I was very disturbed to read these reports. Our high commissioner in Ceylon will do everything he can to help these young ladies.



ROYAL COMMISSION


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, may I ask the Prime Minister when the government expects to receive the report of the commission on medical health services appointed about two years ago.


John George Diefenbaker: Mr. Speaker, 1 have not had a recent report on that matter. I will secure the information for the hon. gentleman.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mr. Lucien Lamoureux (Stormont):: I
should like to direct a question to the Minister of Finance. In view of the fact that the cyclical pay reviews for civil servants approved earlier this year by the then minister of finance provided for consideration on October 1, 1962, of the customs, immigration and postal classes, will the minister inform the house whether the proposed review will now be undertaken in spite of the austerity program?


George Clyde Nowlan: Yes, Mr. Speaker.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I wish to direct a question to the Minister of Finance. It is supplementary to the question asked by the hon. member for Stormont-


Mr. Byrne:: And the member for Kootenay East.


Stanley Howard Knowles: -and I hope the hon. member for Kootenay East will not spoil my chances of getting an answer. Will there be an early statement by the government on its conversations or correspondence with the civil service organizations regarding the whole question of the pay increases that were deferred in June?


George Clyde Nowlan: As the hon. member knows, there have been some conversations carried on between representatives of the various civil service organizations and a committee of my colleagues chaired by myself. I had further discussions with the civil service representatives the other morning but some

Inquiries of the Ministry of them had to depart because of annual meetings they had to attend. We shall be conducting further talks when they return.
(Translation):



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Robert Beaule (Quebec East):: Mr. Speaker, I wish to direct a question to the Minister of Transport. Can the minister tell us if negotiations have been entered upon in regard to the elimination of railway crossings in Quebec city, particularly those of the C.P.R.?


Mr. Speaker:: I regret to intervene again, but I hope the hon. member did understand the remarks I addressed to him the other day in regard to questions of this nature. His question is certainly one that should be put on the order paper.
(Text):



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: desire to ask a question of the Minister of Justice. In view of press reports that 1,200 Sons of Freedom are again on the move in British Columbia and are now within 35 miles of the Agassiz prison, are any special federal actions being taken for the maintenance of law and order and the protection of law abiding citizens against the dangers of arson and dynamiting by this irresponsible group?


Donald Methuen Fleming: The maintenance of law and order in this situation is the responsibility of the provincial authorities. I have no reason to think that they will not carry out their duty in this regard.



NOVA SCOTIA


[Stage Direction]
On the orders of the day:
Mr. A. J. MacEachen (Inverness-Richmond):: I wish to direct a question to the Minister

of Mines and Technical Surveys, and at the same time may I wish him success in a portfolio which is so important to the coal miners in Nova Scotia. Will the minister advise the house whether he intends at an early date to make a statement of general policy relating to the Nova Scotia coal industry, a statement which his immediate predecessor promised before the dissolution of parliament last April?


Paul Raymond Martineau: I thank the hon. member for his good wishes, and wish to inform him that a statement of policy will be made in due course, in conformity with the usual practice in this house.



HIGHWAYS


[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Hat):: I wish to direct a question to the Minister of Public Works. Does the government intend to designate some present highways as alternates to the trans-Canada highway?


Mr. Speaker:: The hon. member should know that this is not the type of question we ask on orders of the day.



PUBLICATIONS


[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: I would like to ask the Minister of Justice whether any government action is under consideration to determine if the very recent purchase by the Thomson newspaper organization of the Fort William Times Journal is contrary to the provisions of the Combines Investigation Act?


Donald Methuen Fleming: The director of research investigation under the act informs me that he is aware of this matter and is looking into it.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: I wish to direct a question to the Minister of Transport. Has the minister seen the report from Antwerp to the effect that one possible cause of the tragic ditching of the United States air liner

in mid-Atlantic last week might have been faulty gasoline? If so, is an investigation under way to determine whether or not any part of the trouble is attributable to fuel supplied in Canada?


Léon Balcer: The accident in question is at present being investigated by the civil aeronautics board of the United States of America, with the full co-operation of the Department of Transport regional staff at Moncton and Gander. Fuel samples have been taken for analysis as a part of the current investigation, but no results of the analysis are yet known. So far as the report from Antwerp is concerned, it has not been seen by myself or anybody in my department.
(Translation):



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Guy Rouleau (Dollard):: Mr. Speaker, I should like to put a question to the Minister of Defence Production.
In view of the seriousness and urgency of the situation caused by mass lay-offs at Canadair, would the minister consider taking the necessary steps without delay so that Canadair production of CL-44s or of any other aircraft required by the air force may be stepped up.


Hon. Raymond O'Hurley (Minister of Defence Production):: I am very much interested in increasing the CL-44 production and I can assure you that it will be done as soon as we find a market for this aircraft.


Guy Rouleau: Mr. Speaker, I should like to direct a supplementary question to the Minister of Transport.
For the same reasons I gave the Minister of Defence Production, could the Minister of Transport get in touch with the management of Trans-Canada Air Lines in order that this company, which is spending our money, may buy its aircraft not from the United States or from England but in Canada, and more particularly from Canadair?


Léon Balcer: Mr. Speaker, I am constantly in touch with the management of Trans-Canada Air Lines. You may rest assured that the government's representations to Trans-Canada Air Lines are to the effect that this company should proceed to the most thorough and detailed study of the situation in order to buy in Canada all aircraft parts or products it can find here.
Inquiries of the Ministry
As for the final decision as to the technical possibilities of one aircraft compared with another, such a decision must be taken by technicians. The reason why Trans-Canada Air Lines has purchased aircraft in the United States or in England was based entirely on technical requirements. That decision was taken by technicians, but the government has always urged Trans-Canada Air Lines to consider the possibility of purchasing Canadian products before making any decision.



QUEBEC ARSENALS


[Stage Direction]
On the orders of the day:
Mr. Jean-Charles Cantin (Quebec South):: Mr. Speaker, would the Minister of Defence Production inform the house of the reasons for dismissing many employees of the Quebec arsenal in the last few weeks, and tell us how long this policy of dismissal-


Mr. Speaker:: Order. I trust that the hon. member will recognize that his question is entirely out of order, and should instead be placed on the order paper.


Lionel Chevrier: Mr. Speaker, on a point of order. The question put by the hon. member for Quebec South is identical in every respect to the one put to the Minister of Defence Production, because it concerns people who were dismissed just a few weeks ago. Under the circumstances it seems to me that the question is quite in order, and I would ask you to allow it, Mr. Speaker.


Mr. Speaker:: Maybe I gave myself too much leeway in interpreting the first question. However I think it appropriate to put an end to such questions and I hope there will be no more needless delay and that those questions, from now on, will be put on the order paper.
(Text):



AGRICULTURE


[Stage Direction]
On the orders of the day:
Hubert Badanai: Mr. Speaker, I wish to direct a question to the Minister of Agriculture. Will the minister be good enough to inform the house whether the government is continuing subsidizing farmers in the production of butter.


Mr. Speaker:: This question is definitely out of order at this time.

Inquiries of the Ministry COMBINES



INQUIRY AS TO REPORT

[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, I wonder whether I might direct a question to the Minister of Justice and ask him when we might have before us a report of the restrictive trade practices commission regarding the activities of certain pharmaceutical houses.


Donald Methuen Fleming: Mr. Speaker, if the hon. member will amplify to me the reference he has made, I will be glad to deal further with his inquiry.


Frank Howard: Mr. Speaker, may I ask-


Lester Bowles Pearson: Mr. Speaker, may I ask the Prime Minister when the government expects to receive-


Mr. Speaker:: Order. Is the hon. member's question a true supplementary?


Frank Howard: Yes, indeed; not a bootlegged one. In fact, Mr. Speaker, it is a reply to the question posed to me by the Minister of Justice, to identify the report. It is the report of the restrictive trade practices commission into the pricing policies-and I use their words-of certain pharmaceutical houses with respect to, notably antibiotics and tranquilizers.


Donald Methuen Fleming: Mr. Speaker, I am informed that the restrictive trade practices commission has made considerable progress toward completion of its complicated task in this case, but I have as yet received no indication as to when the report will be made. The hon. member will realize, of course, that this work has necessarily been pursued concurrently with that in other inquiries, including for example those with respect to which four reports were tabled at the beginning of this session.



PENITENTIARIES


[Stage Direction]
On the orders of the day:
Donald Methuen Fleming: have not indicated any inmate unrest of a serious nature. A very recent report from the warden confirms that the general situation at Dorchester penitentiary is satisfactory. That statement, of course, must be interpreted having regard to a general condition of overcrowding that obtains in all the maximum security institutions.
Concerning the need for additional security officers, I may say that four new appointments to the staff were authorized on September 28, bringing the total custodial establishment to 110.



TRANSPORT


[Stage Direction]
On the orders of the day:
Léon Balcer: On Friday last the hon. member for Burin-Burgeo asked a question concerning train service in Newfoundland. In reply to his inquiry, I have checked my files and find that up to now no representations have been received in my office in this connection from chambers of commerce or other groups.
In the meantime I have been in touch with the management of the Canadian National Railways and am advised that the reduction during the winter months is simply an adjustment designed to bring the service provided in line with the demand for it during that period, and is similar to action being taken in various parts of the country.



NATURAL RESOURCES


[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: I should like to ask the Minister of Agriculture if he would care to comment on a story by Walter Gray in today's Globe and Mail that much to his chagrin the government's legislative program did not include a national land and water use program.


Mr. Speaker:: The hon. member is surely aware that the orders of the day are not a period during which members may demonstrate that they are up on their daily newspapers. In addition, I doubt whether this actually comes within the ministerial responsibility of the Minister of Agriculture.


Douglas Mason Fisher: When a minister has expressed himself to a newspaper reporter-the words are "much to the chagrin of agriculture minister Alvin Hamilton"-I should like to put a proposition to you in terms of relevancy, Mr. Speaker. If a minister has, within the last few days, expressed to a reporter chagrin at the government's legislative program, what are we to do but ask him a question about it?


Francis Alvin George Hamilton: I rise on a question of privilege. I have never expressed chagrin to any person, now or in the past, on this subject.



SPEECH FROM THE THRONE


[Stage Direction]
The house resumed, from Monday, October 1, consideration of the motion of Mr. Gordon Chaplin for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the amendment thereto of Mr. Pearson.
John George Diefenbaker: Last evening at the time of the adjournment I was dealing with the question of minority governments on which the Leader of the Opposition placed so much emphasis. So that the record might be a true one I thought it proper that I place on Hansard the various occasions when in Canada, under a Liberal government, there was a minority vote of the people of Canada. In 1921, as I said, the Liberal party had 41.5 per cent; in 1925, 40.1 per cent; in 1935, 43.9 per cent; in 1945, 41.4 per cent. In 1957 we had a minority vote of 39 per cent and in the same year the Liberal party had 42.3 per cent.
In 1958 the Liberal party fell to 33.7 per cent, the lowest percentage in all its history over a period of 90 years. When the hon. gentleman talks about the resurgence of Liberalism in Canada, may I point out that in this election the Liberal party went above that level by approximately 3.6 per cent, and outside of 1958 had the lowest percentage in the history of the Liberal party since 1887. That to me is an answer to the resurgence of which he speaks; the record has also to speak.
I was very much interested in what he had to say regarding the making of appointments on the part of a minority government. I point out that in 1957 there was no complaint in that connection. He referred to what the late
The Address-Mr. Diefenbaker prime minister of Canada, Mr. King, did in 1925. It is well to recollect that in 1925 the Liberal party was a minority of minorities. It was in this position; it fell in membership from 118 to 101, the Conservatives more than doubled their membership from 50 to 116, and 24 Progressives were elected. According to my understanding of history-that is, until it was revised by one who at the moment is going to remain unidentified-Mr. King went to Lord Byng and said that he wanted to stay in office until parliament met, even though he had a minority, with 15 seats less than the Conservatives. Lord Byng said he would allow him to stay provided that he made no appointments. That was the difference in the situation then and now, and in no way does that occasion and what took place then assist the official opposition in the argument that they have advanced.
I am not going into the incidents of 1925.


John Whitney Pickersgill: For obvious reasons.


John George Diefenbaker: Mr. Speaker, Mr. Eugene Forsey did that. Also, if the hon. gentleman wants to look at the record, I would suggest that he read the letters of the late Senator Murphy, a former member of Mr. King's administration, in which he dealt with that period and the circumstances connected with Mr. King's dissertation to his government.
Mr. Speaker, I started off last evening without performing a function that is part and parcel of the application of the amenities of parliament. It is one thing about which I am able to agree with the Leader of the Opposition, and that is the expression of congratulations to the hon. member for Waterloo South and the hon. member for Nicolet-Yamaska. I doubt whether there is a more trying, but at the same time more thrilling, experience than to be either the mover or the seconder of the address in reply to the speech from the throne. It has always been the same through the years. Everyone making his maiden speech in parliament goes through an experience that is almost beyond description.
Both these hon. members, however, spoke in a manner befitting the honour that was directed to them and their constituencies. The mover, as the Leader of the Opposition said so well, has a great tradition of service before him. In the succession from father to son, we have the example of a highly respected businessman accepting responsibility and sacrifice for service in public affairs. Yet another example of that is in an appointment to the cabinet; one of the leading businessmen in this country who, in order to serve, has had to make tremendous sacrifices. These things represent the epitome of good citizenship. I congratulate the mover.

The Address-Mr. Diefenbaker
As far as the seconder is concerned, I need only say to him that he spoke with power and capacity and with an unusual ability in both languages. I heard both these hon. gentlemen speaking during the recent elections, and I can say to them that as the result of their presentations and the ability they displayed, they were honoured in this way.
I want also to say to many of the new members-things did not turn out just exactly as I had hoped; apparently the Leader of the Opposition and I are in agreement there- that the greatness of parliament depends on bringing into this institution men and women of capacity and ability. While we have been here for only a couple of days, I must say that those new members in all parts of the house who have come here have shown a capacity and ability that I know will provide a great sense of dignity and capacity in carrying out the responsibilities that will rest upon this parliament.
In lighter vein, may I say that while the Leader of the Opposition moved a vote of non-confidence, his near seatmate, the hon. member for Essex East (Mr. Martin), displayed this morning his views as to the outcome when he said that the Gill report will be available to this government for implementation shortly before Christmas.


Paul Joseph James Martin: I am a very bad prophet.


John George Diefenbaker: That, Mr. Speaker, is the finest admission he has ever made. He has been a bad prophet all the way along. This time, however, he speaks from the heart.
Now, sir, I was tremendously interested too in the appeal to the members of third parties in the house and in the fine solicitude which was displayed by the Leader of the Opposition. I would point out, as I pointed out last evening, the references made to the hon. member for Villeneuve (Mr. Caouette) by the Leader of the Opposition a few weeks ago. I would also refer to a speech that the Leader of the Opposition made at Sorel, Quebec, when he showed that he intends not only to run his own party but that he wants to direct and run other opposition parties. This is what he said. I am reading from a translation, at page 4, of his speech at Sorel. It is an extremely interesting statement which he made:
An opposition member, therefore, cannot vote confidence in the present government without being a traitor to the mandate.
That was one of the statements he made. I simply point out that contempt of parliament has had few equals to that statement. He then goes on to say many things to which I will refer. Then he states what happens to the third parties for which he has such great solicitude if he succeeds in a vote of non-confidence. This is found at page 5.


Lester Bowles Pearson: Mr. Speaker, may I ask the Prime Minister what he is reading from?


John George Diefenbaker: I am reading from a document issued by the cabinet du chef de l'oppo-sition. In that document he states.
What will this new election be like?


Lester Bowles Pearson: I was asking the Prime Minister what he was reading from when he said he was reading from a French translation.


John George Diefenbaker: I am reading from the French translation, yes; I have the French here and I am able to translate it with a great deal more effectiveness and correctness than is the hon. gentleman.


Lester Bowles Pearson: Mr. Speaker, I rise on a point of order. The Prime Minister has just said he was reading from a French translation made in my office. That is not true. He is reading from his own translation.


John George Diefenbaker: Mr. Speaker, the hon. gentleman has been carrying on a very interesting campaign-and I am happy that he has done so-in this cooling off period, as he has made more statements that have been beneficial to the government than any member of the government has been able to make. To continue the quotation:
What will this new election be like? It will be as those others which have preceded it, a fight especially between the Liberal party and the Conservative party.
For the New Democratic party he has these welcome words:
In the last election the N.D.P. was definitely chased out of Saskatchewan and has only temporarily supplanted Social Credit in British Columbia. As for the Social Credit upswing, this did not spread beyond the frontiers of Quebec.
Then he goes on to say this:
In this decisive battle between the Liberal party and the Conservative party, we do not fear the verdict.
Then he goes on to say it will be a battle between the Liberal and Conservative parties. I simply point out that the powers of prophecy are not restricted to the hon. member for Essex East.
During the election campaign the Leader of the Opposition made many statements. I do not intend to go into those statements. I do not intend to refight the election. However, I am going to point out that the expenditures he promised would amount to over $1 billion per annum additional to those already provided for-


Lester Bowles Pearson: Rubbish.


John George Diefenbaker: -$1,300 million in other odds and ends-


Lester Bowles Pearson: Nonsense.


John George Diefenbaker: -without considering that the latter would have increased income taxes in Canada by 40 per cent to 50 per cent.


Lester Bowles Pearson: That is another untrue statement.


John George Diefenbaker: Yesterday he came along and added a further group of promised expenditures. The promises he made last evening would add to the annual expenditure of Canada by well on to a billion dollars. Then he speaks about the financial difficulties of Canada and what would be done by the Liberal party to meet them. Included in those undertakings he entered into last evening was the bringing in of health insurance at a cost of approximately $400 million per annum.
These things indicate that there is no sense of responsibility on the part of the official opposition. In addition to the health scheme he says he intends to provide the municipalities with all they want, in effect, aside from the fact that the municipalities are within the jurisdiction of the provinces. To comply with the requests of the municipalities would add to the expenditure one half billion dollars per year. I ask this question. Is it responsible or is it what one would expect from the Leader of the Opposition for him to be endeavouring to bring about expenditures at this time, to cramp the economy instead of doing everything possible to put that economy in higher and higher gear?
He objects to parliament having been called on September 27. Let me say this. One of the statements he made during the election campaign was this, and I have his exact words:
I want to tell you that if we are successful at the polls there will be an autumn session of parliament.
We have accommodated him in that connection.


Lester Bowles Pearson: You were successful; that is the difference.


John George Diefenbaker: I sat and listened with amusement yesterday. If the hon. member has any observations to make, let him put them in the form of questions. Before parliament opened he announced that he was going to vote against us no matter what our program would be. Is that the attitude of a responsible opposition? It is interesting to note that five or six of the ideas advanced by the Liberal party and discussed by the Liberal party during the years are in the speech from the throne. We do not mind. They give us ideas. That is parliament. However, when we bring them out, when we bring them into being, then those who brought them before parliament-and that is the purpose of parliament
The Address-Mr. Diefenbaker -are going to vote against us. Here is their program announced in London, Ontario, on
May 20:
Domestic production of many goods now imported to reduce adverse trade balances.
In the speech from the throne there is action on that matter.
Elimination of inefficient production in Canadian industry . . . through possibly tax incentive.
We have provided for that as we did in the previous budget but the legislation was not passed.
Canadian industry should be offered tax incentives for increasing export sales.
We did that in the budget last spring. This enunciation of what the Liberal party stood for, I should point out, was made after these various matters were brought out in the budget.
Reduction of and eventual elimination of budgetary deficits.
We have made our declaration in that connection. We have taken a forward step in reducing controllable expenditure. Now, when we do this, they are going to vote against us. In addition to that, they are going to have a larger budgetary deficit in the event they are able to carry into effect the policies which were enunciated yesterday.
Finally there is the revision of the tax system. We set up a royal commission in that connection, which has been requested for years, to investigate the whole situation, the ramifications of taxation, in order to ascertain to what degree there can be amelioration and, where anomalies exist, to attempt to remove them. They speak of royal commissions. I think the person who should secure the highest degree of appreciation for his conviction in this regard is the hon. member for Essex East. He spoke of the number of royal commissions.


Paul Joseph James Martin: Government by royal commission.


John George Diefenbaker: I am glad he sa.id that because the government of which he was a member from 1951 to 1957 appointed one more royal commission than we have.


Paul Joseph James Martin: The point struck home; that is apparent.


John George Diefenbaker: I am simply pointing out these facts in order to deal with the whole problem that is before us, and also ip order to deal with some of the statements that have been made by the Leader of the Opposition in the last few months. I am going to say to him at once that I am not going to put these statements on Hansard, these personal

The Address-Mr. Diefenbaker attacks. I could answer them, but I am not going to get down in the gutter with the Leader of the Opposition.


Lester Bowles Pearson: That is where you have been for years.


John George Diefenbaker: I say to the Leader of the Opposition that it has been a concerted effort on the part of the Liberal party and was declared to be such by one of them. It was stated that everything would be done in order to personally attack me.


Some hon. Members:: Oh, oh.


John George Diefenbaker: They know it is a fact.


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


John George Diefenbaker: I will give the hon. gentleman the information. I think he is the one, himself.


Paul Joseph James Martin: Does the right hon. gentleman know of anyone-


Some hon. Members:: Order.


Paul Joseph James Martin: Does the right hon. gentleman know of anyone who was more personally abused-


Mr. Deputy Speaker:: Order.


Paul Joseph James Martin: -than the way the minister of finance abused the Leader of the Opposition?


Mr. Deputy Speaker:: Order. I do not think the hon. member for Essex East should proceed with a question unless the Prime Minister yields the floor. He knows this is the rule of the house, and I did not see the Prime Minister yield the floor.


John George Diefenbaker: I wish to state this, that criticism is essential in the democratic process, but the organized deluge of defamation and adjectival abuse that has been heaped upon the government of this country and myself as leader has never been equalled in the history of Canada. I am going to place the record here. Yesterday, as I listened to the Leader of the Opposition, I had to compliment him for his restraint in not saying inside the house, when he is face to face, what he said outside when all that he faced was Liberal supporters. I want to compliment him on that. Never before has there been the equal in vehemence and virulence displayed in public affairs in this country. I realize that in the heat of debate we often say things about one another we wish we had not said. But, sir, when speeches are prepared in advance and handed out by the Leader of the Opposition in Toronto and also in Sorel, I say to him-


Lester Bowles Pearson: Put them on the record.


John George Diefenbaker: I am not going to spoil the record with that.


Lester Bowles Pearson: What a phony attitude. Repeat them; put them on the record.


John George Diefenbaker: Mr. Speaker, it is very obvious that I have touched a tender spot. They show a disregard for the accepted amenities of political controversy. I point out also, and I am just doing it so there will be no misunderstanding, that in 1921 when Right Hon. Arthur Meighen was abroad at a conference equivalent to the prime ministers' conference, Mr. King disagreed with the stand that was being taken. However, he had that appreciation of the amenities that he said nothing until Mr. Meighen returned. Mr. Meighen followed the same course during an occasion when Mr. King was abroad; for after all the prime minister represents the people of Canada. If there is disagreement with that policy one expects criticism, but one does not expect a continuation of the kind of policy that the Leader of the Opposition and those associated with him have followed, of personally attacking.
As a matter of fact I should thank him, because I have had lots of correspondence from people who have said, "I cannot understand Mr. Pearson; I never knew he would engage in the kind of thing in which he has engaged since the last election."


Lester Bowles Pearson: On a point of order-


Mr. Deputy Speaker:: The Leader of the Opposition on a point of order.


Lester Bowles Pearson: The point of order is that the Prime Minister has accused me of making a personal statement of criticism and vilification; and using other adjectives, in connection with these statements made outside the house. I ask the Prime Minister to substantiate that allegation by putting this statement on the record inside the house.


John George Diefenbaker: Mr. Speaker, I am too old for that. When defamation takes place, do you repeat the defamation against yourself?


Lester Bowles Pearson: Put up or shut up.


Douglas Scott Harkness: That is in character.


John George Diefenbaker: I am suggesting the Leader of the Opposition apparently secured his idea of free speech from the hon. member for Bonavista-Twillingate and indirectly from the premier of Newfoundland.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: Mr. Speaker, I rise on a question of privilege, since the Prime Minister has chosen to draw me into this matter. My

question of privilege is that I take no exception at all to the personal attack the Prime Minister has just made on me and my reputation.


Mr. Bell (St. John-Albert):: What reputation?


Donald Methuen Fleming: If you only knew how funny you are.


John Whitney Pickersgill: Well, it was a personal attack.


Lester Bowles Pearson: Mr. Speaker, I rise on a question of privilege and I do it now because, in accordance with our rules, I must raise it at the earliest possible time after the event in question. That is why I am doing it now because now I have the documents in my hand, and I could not raise it before that.
The Prime Minister, a few moments ago, said that in a speech at Sorel I made the statement that anyone in the other parties who voted against a no confidence motion would be a traitor.


John George Diefenbaker: I did not.


Lester Bowles Pearson: These are the words the Prime Minister used.


John George Diefenbaker: Traitor to the mandate; that is what I said.


Lionel Chevrier: You stopped at the word "traitor".


Mr. Fulton:: He said "traitor to the mandate".


Mr. Deputy Speaker:: I think we should hear the Leader of the Opposition out on the point of privilege.


Lester Bowles Pearson: The Prime Minister used this word "traitor" and he stopped there.


John George Diefenbaker: I said "traitor to the mandate".


Lester Bowles Pearson: No.


Mr. Deputy Speaker:: I will hear the Prime Minister's comment on the point of privilege, if he wishes.


Lester Bowles Pearson: I am making my point of privilege at this time since I had not got the text before. I have now got it in French and English. The Prime Minister used the word "traitor" without anything after it. I noted it and now I have the right to the floor; and especially in view of what the Prime Minister is saying about being careful and fair and accurate, I should now put on the record the text in French and English, in our translation, to show exactly what I said at that time. That is my question of privilege and I have the right to do that. Here is what I said, to remove 27507-3-7
The Address-Mr. Diefenbaker the charge that I said that any members of other parties who voted against our no confidence motion were traitors.


Some hon. Members:: Order.


Mr. Deputy Speaker:: I did not know whether the Leader of the Opposition was yielding the floor or not, but I noted at the time that I saw the Prime Minister rising and I presumed he was rising to comment on the point of privilege.


John George Diefenbaker: Exactly, Mr. Speaker.


Lester Bowles Pearson: I can only say-


Mr. Deputy Speaker:: Order. I can only hear one speaker at a time. If the Prime Minister is speaking to the point of privilege before the comments or corrections are put on the record by the Leader of the Opposition, 1 shall hear him.


Lionel Chevrier: The Leader of the Opposition has not completed his point.


John George Diefenbaker: There is no question whatever about what I said. The opposition members will have-


Paul Joseph James Martin: On a point of order, Mr. Speaker-


Some hon. Members:: Sit down.


Paul Joseph James Martin: I rise on a point of order.


Some hon. Members:: Sit down.


Mr. Deputy Speaker:: Order.


Paul Joseph James Martin: Mr. Speaker-


Mr. Deputy Speaker:: Order. I have been unable to hear sufficiently what the Prime Minister is about to say in order to give the floor to the hon. member for Essex East on a point of order. Now, if he will permit me to hear the Prime Minister, just to a point where I can make a decision as to whether or not the floor should be allowed to him, I shall be happy to do so. I presume the Prime Minister is speaking to the point of privilege, and I think I should hear him sufficiently to come to a satisfactory and fair judgment.


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


John George Diefenbaker: I have the floor.


Paul Joseph James Martin: I was simply going to point out-


Some hon. Members:: Order.


Paul Joseph James Martin: -that the opposition-


Mr. Deputy Speaker:: Order. I am going to hear the Prime Minister. As I pointed out to the hon. member for Essex East, I shall
94	HOUSE OF
The Address-Mr. Diefenbaker be very happy to give him the floor if he rises on a point of order as the Prime Minister proceeds.


John George Diefenbaker: Mr. Speaker, the words I used are these; these are the words and the translation:
Opposition members therefore cannot vote confidence in the present government without being traitors-


Lester Bowles Pearson: Traitors.


John George Diefenbaker: -"to the mandate".


Paul Joseph James Martin: Not at all. You stopped there.


Some hon. Members:: Shame.


William Moore Benidickson: Absolute deceit. They want to change Hansard.


Mr. Deputy Speaker:: The point at issue, I think, will be determined when the blue sheet of Hansard come to the members.


Donald Methuen Fleming: I heard it clearly.


Mr. Deputy Speaker:: If I may finish my sentence-when they come before the house and later, of course, in the publication that is issued tomorrow. In the meantime is the Leader of the Opposition rising on a point of order?


Lester Bowles Pearson: I am quite willing to let this matter be determined by the blue sheets of Hansard.


Donald Methuen Fleming: And I heard him use the words, plainly heard him.


Mr. Deputy Speaker:: Order. I want to give the floor now, if I may, to the Prime Minister so that he can resume his address.


John George Diefenbaker: I repeat that I said "a traitor to the mandate," and the record will speak. If hon. gentlemen did not hear it-


William Moore Benidickson: We will trust Hansard.


John George Diefenbaker: I intended during the course of my remarks to nail down and throw back in the face of the Leader of the Opposition his unprincipled suggestion that I withheld facts regarding Canada's problems. When I said that Canada was in an economic upsurge I take it that his stand is that a foreign exchange emergency cannot arise in the midst of an economic upsurge. I also intend to prove that I not only did not conceal facts from the Canadian people but I placed before them the facts as they were.


An hon. Member:: After the election.


Paul Joseph James Martin: You did, too.


Donald Methuen Fleming: What is that?


Paul Joseph James Martin: You concealed the facts from the people of Canada.


Donald Methuen Fleming: That is a false statement, utterly false.


John George Diefenbaker: Mr. Speaker, I must be irritating some parts of the anatomy of the opposition. I want to say that all of this is part of a deliberate policy, to use the Leader of the Opposition's own words in one speech-


John Whitney Pickersgill: What speech?


John George Diefenbaker: I shall produce the speech; there are so many of them-that we need no longer discredit him. I do not mind criticism but, sir, all through the campaign there was ridicule poured on the fact that I have not an Anglo Saxon name. Their advertising used the first two syllables of my name in ridicule, and I finally found where they got my dog, Happy, into it. That was about the last touch.


Paul Joseph James Martin: Surely you are not
in the class of Mr. Roosevelt.


Douglas Scott Harkness: Try and restrain yourself.


Paul Joseph James Martin: And Roosevelt was a great president.


John George Diefenbaker: I wish to tell the hon. gentleman opposite that I am not going to classify him because he would be awfully mad if I did.
Now then, I shall first therefore deal in part with the economic situation as it was and as it has developed since the election. Then I am going to refer to the experience of Canada in 1947, when we had an exchange crisis, and the explanation that was given at that time. Then I shall place before the house in general the economic plan that we have for the next five years. Some of it has been set out in the speech from the throne. Parts of it cannot be dealt with or referred to until a budget has been brought in.
In passing, may I say that this policy of ridiculing Canada or the leadership in Canada did not prevent the Leader of the Opposition yesterday from casting scorn upon the Secretary of State for External Affairs regarding Canada's position internationally. I do not know why he would do that. Wherever I go there is no jealousy. The Secretary of State for External Affairs is regarded as one who has given leadership all over the world on behalf of that one thing we are all striving for, without regard to party considerations, namely disarmament and an ending of this arms race that can only lead to catastrophe unless it is stopped.
The Leader of the Opposition did not speak at any length in regard to external affairs. I am just going to outline generally our views and particularly answer those allegations that were made respecting any action on my part to delude the Canadian people. I welcome the opportunity of meeting those allegations.

I also intend to cover one or two other matters and I will leave it to my colleagues to deal particularly with subjects other than those to which I refer during the course of this debate.
In the last two or three years all of us have had the experience of the attitude of the opposition ridiculing Canada's economy and downgrading Canada; in preaching ruin. So often I have pointed out that if continued long enough that type of criticism can only result in loss of national confidence with a corresponding loss to the national economy.
I am now going to refer to some of the changes that have taken place. When I hear the Leader of the Opposition speaking of how terrible conditions are in Canada and how economically we have fallen behind, I pick up a few recent issues of newspapers and magazines. Mr. D. L. Morrell of the chamber of commerce says in his annual report that business in Canada has "moved out of the mild recession of 1960-61 and now is well along in the subsequent period of recovery."
I see an article in the Toronto Star which says:
The small guy's bank keeps growing.
That is dealing with the expansion of the industrial development bank. In the September 29 issue of the Montreal Gazette, in connection with employment:
Employment should improve during the fourth quarter, according to the results of the 20th quarterly survey of Manpower Services Ltd.
Of 630 firms polled, 15 per cent said they would be adding staff. Of 500 firms polled last September only four per cent said they would be adding staff.
The employment prospect appeared to be brightest in Vancouver, one of the ten cities in which the survey was conducted.
So it goes on. Then we have Maclean's magazine. It is not regarded as one of our major friends, particularly since the editorial of June 27, 1957 which pointed out that the St. Laurent government had been returned. This is what Maclean's magazine says:
Forecast: Fine for Canada.
Pulp and paper contributes more to the economy than any other industry. .. Prosperity and the standard of living in Canada largely depend on the well-being of this one industry.
Then there is the Toronto Globe and Mail of September 27, 1962, where Fraser Robertson writes:
Thaw taking place in the winter of discontent. It is just one man's opinion, but it does seem to me that the winter of discontent is beginning to lift from the Canadian industrial scene. And again it is only one man's opinion, but it also seems to me that if Canadian industrialists today are indeed beginning to pay more attention to opportunities than to difficulties, much of the credit should go to trade minister George Hees.
27507-3-7i
The Address-Mr. Diefenbaker
Then he says:
These remarks are based upon a growing number of speeches delivered at meetings of businessmen, and observation of a growing number of examples of Canadian success in penetrating foreign markets. A capsule example may be seen in the recent speeches of the president of the Canadian Manufacturers' Association, Carl A. Pollock . . .
As president of the C.M.A., Mr. Pollock is duty bound to enunciate its basic policies in his public speeches and this involves, to be sure, advocacy of a degree of protection as well as relief from high taxation-
We have equitable taxation under this government.
The Windsor daily Star of September 8, 1962 says:
Canada car output up.
While the Leader of the Opposition speaks of measures to assist the car industry, I find that shipments increased by 32.1 per cent. This article says:
Factory shipments of Canadian made motor vehicles jumped 32.1 per cent in the January-July period this year-
And so on. The Ottawa Citizen of September 13, 1962-which newspaper has never been noted as one of our friends-refers to "A brighter unemployment picture". The Montreal Star and Herald of September 10, 1962, had this to say:
Wholesale sales favourable.
Wholesale trade in Canada this year has given a very encouraging performance. In June (latest figures reported) there was an increase of $55 million in dollar volume of sales of Canadian wholesalers to $880 million from $825 million in the like month of last year, a rise of 6.6 per cent.
Then the Montreal Gazette of September 17, 1962 says:
Canadian firms' dividends at record for nine months.
Dividend payments by Canadian companies are at an all-time high.
The Toronto Globe and Mail of September 14, 1962, in an article written by Leslie Wilson, says:
The statistics show good performance in trade and industrial production. Some of the figures are open to conflicting interpretations, but a number of economists argue that they show the Canadian economy is rolling along, and that our net performance is better than that of the United States and will continue to be so.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
Lester Bowles Pearson: Mr. Speaker, I rise on a question of personal privilege. This morning in his statement the Prime Minister quoted from what he claimed to be an English

The Address-Mr. Diefenbaker translation issued from my office of a speech which I made in French in Sorel. Quoting from that translation he used certain words; the exact words will appear in Hansard. The word "traitor" appeared, whether followed by other words or not. But the Prime Minister said he was quoting from a translation issued by my office. Mr. Speaker, there was no translation issued from my office of this speech which I made in French, and to make this matter clear I put on record what I said on this question in the French speech which was the only text issued of the speech 1 made.
(Translation):
So a member of the opposition could not give a vote of confidence to the present government without being a traitor to the mandate he has just received from the people.
(Text):
The Prime Minister also said this morning that out of jealousy I made a personal attack on the Secretary of State for External Affairs last evening. My only reference to the Secretary of State for External Affairs-and I am quoting from Hansard-was:
-the Secretary of State for External Affairs keeps working away at disarmament, going up to New York and to Geneva and then back again. We wish him well and applaud his efforts and his sincerity.
This is presumably the idea of a personal attack held by the Prime Minister.


John George Diefenbaker: Of course, those were not questions of privilege at all. As far as the latter quotation is concerned, it does not cover the statement which was made regarding Canada's position, and in so far as the earlier question is concerned, the blues reveal that the words used included the word "mandate".


Paul Joseph James Martin: They did not.


John George Diefenbaker: That is not what the blues say.


Paul Joseph James Martin: It is not what you said.


George Harris Hees: Yes, that is what he said.


John George Diefenbaker: There is nobody in the gallery of the House of Commons, but if there were, in the press gallery, there would be members of the press gallery who had the exact words, including "mandate" after I spoke.


Donald Methuen Fleming: And I heard the words plainly.


John George Diefenbaker: This is the first time I have ever heard the blues challenged when they included a word. Sometimes there is a word excluded because it is not heard, but this time hon. gentlemen opposite are really sore put, and I can fully understand their

feelings in this regard. They have my deepest sympathy.
I was dealing at the time of the adjournment with the argument being advanced so generally that Canada is dying politically and economically, that we ought to get the economy rolling. I was referring to some articles which have appeared in the last few days. I referred to an article which appeared in the Toronto daily Star on September 17. The heading is "Its Opponents Sniping but 'Small Guys' Bank Keeps Growing". This is what it says:
The industrial development bank, long one of the least noticed of government agencies, is heading for another record year-and a lot of attention.
The I.D.B. had an 84 per cent increase in loans last year. This year there probably will be another increase of about 50 per cent jumping the total from 740 loans in 1960 to 2,000 in 1962.
The article goes on to say that there has been a "snowball effect". The I.D.B. has expanded its offices and, by act of parliament, has had its area of operations expanded enormously.
Then, when they are speaking about how bad things are in Canada, hon. gentlemen opposite might do well to bear in mind an article written by Aaron Einfrank under a United Nations dateline. This is dated September 17, and appeared in the Toronto Telegram.
The international monetary fund has given Canada a clean, glowing bill of economic health in the fund's annual report on the state of the world's economy.
But as the IMF annual meeting opened in Washington today, managing director Per Jacobsson cautioned that additional permanent measures will be needed for Canadian economic stability in the future.
"I hope Canada's emergency program is not too successful" Jacobsson smilingly told Canadians after a press conference, "or they will think a long term program is not needed."
Then on September 14 the following appeared in the Globe and Mail. The heading reads "Bank's Review Notes Upsurge in Production".
Upward forces in the Canadian economy have moderated, the Bank of Nova Scotia says in its monthly review. There are also uncertainties in major export markets, it says.
However-
During the past 18 months business activity in Canada improved markedly following the 1960-61 recession. Figures so far available suggest that the total volume of production at mid-1962 was running about 9 per cent above the low of the recession and about 6 per cent above the previous peak reached in 1960.
Then the Vancouver Province said:
Economy is booming in B.C., says Bonner. Prosperity pointers up. B.C. has all the makings of a boom year, trade minister Bonner said Friday. If we can maintain the trend in the face of a national tendency the other way, then our economy has come of age.

Then it is of interest that Business Week, which has no political connections whatsoever, comes to this conclusion:
Canada flouts the diagnosis. This has been a year of indignity for the Canadian economy.
I will not make any observation as to who placed the position of indignity on the economy.
American, European and even Canadian pundits have unrolled even the most dolorous phrases . ..
In the first half of the year industrial production rose almost 41 per cent, a gain that matches that in the U.S. And because the 1960-61 recession was even less severe in Canada than in the U.S., Canada's economic performance over the past 2\ years has been slightly better than the U.S.
It goes on to say:
At the start of the year Canadian economists were predicting that this country's gross national product would rise 7 per cent in 1962. The current generally accepted forecast is for a GNP of $39.2 billion, up 6 per cent from last year. It therefore looks as though Canada's economic performance will come much closer to matching early year expectations than will that of the U.S.
And I could go on. I do not want to clutter the record, but I think I should mention, in support of a suggestion made earlier today, that the attitude taken by the opposition, more particularly accentuated during the election, was not beneficial to Canadian confidence. In that connection I would read from the Northern Miner of July 26, 1962. It says:
The late political campaign produced a fine crop of destructively untrue and unjustified allegations designed to swing votes against the government.
I need not indicate the area of the house from which those statements emerged.
As a matter of fact, it looks as though this smear campaign startled U.S. and European investors in Canada to the point of pulling a lot of money out of this country, creating the sudden exchange crisis. Politically it was effective. There is no doubt that the scare, as interpreted by the general public, has cost the Diefenbaker government a lot of votes and probably a number of seats.
I am not going to go into a lengthy summary of an economic review, but on other occasions it has been stated that when I spoke I had not given any general indication of the economic situation. I am going to leave this to one of my ministers, but I would like to make some general observations in connection therewith.
The Canadian economy has continued to expand throughout 1962, with the advance taking place on a broad front. The Minister of Justice, formerly the minister of finance, dealt with this at some length yesterday and will be dealing with it again. However, I would point out to the house that the six indicators of recovery which were used by President Kennedy in his T.V.-radio address of August 13 are of interest. In connection therewith he compared current levels with those of some one year earlier, and I take
The Address-Mr. Diefenbaker those six indicators and place before the house the comparison with Canada. I mentioned the gross national product. It says in Canada the gross national product in the second quarter of 1962 is running at a record level. In real terms it is also in the same position. The seasonally-adjusted index of industrial production reached a record level of 186.8, based on comparison with 1949, with 100 as the basis. In July, 1962 it was 7.7 per cent above the level of one year earlier.
Now in connection with production, steel ingots 10.8 per cent above the level of the first eight months of 1961. Pig iron production up 14.4 per cent over January-August 1961. Lumber was at an all-time high record; the output was 10.8 per cent above the comparable January-July 1961 level.


Edmund Davie Fulton: That was helped by devaluation.


John George Diefenbaker: Yes, that is true. I will come to that. I am glad to have that observation, and I will mention devaluation in a moment. A number of important minerals in the first half of the year compared with one year earlier. Iron ore was up 84.8 per cent, nickel 10 per cent, and zinc production up 13.9 per cent; crude petroleum output up 16.2 per cent. With regard to motor vehicles, the number of units produced in the first eight months of 1962 surpassed the total for 1961 by 29.8 per cent. Personal disposable income has risen to a new all-time high this year. Wages and salaries, including military pay and allowances, were running at a record rate, 6.9 per cent over one year ago. Corporation profits before taxes and before dividends paid to non-residents reached a seasonally adjusted annual rate of $3,868 million in the second quarter of the year. This is the highest level ever attained, and exceeded the total for the second quarter of 1961 by 15 per cent.
Let us compare those figures with the United States, because after all we are always told how far behind economically we are, that we should get Canada going, and there is all the doom and gloom. Comparing the gross national product with that of the United States, the seasonally adjusted annual rate was 0.7 percentage points higher. Industrial production was slightly below that of the United States. Canadian unemployment rates showed a drop of 62 per cent between January 1961 and August 1962, almost double the 31.2 per cent decline in the United States. Personal disposable income was 11.1 per cent higher in the second quarter of 1962 than in the first quarter of 1961. The United States increase was 7.8 per cent. With salaries and wages we were slightly behind the United

The Address-Mr. Diefenbaker States. With regard to corporate profits, Canadian corporation profits before taxes and after dividends to non-residents were very considerably higher, some 16.5 percentage points higher, than in the United States.
Therefore, sir, I summarize by saying that, measured by the six indicators of recovery, Canada has made greater economic progress since early 1961 than has the United States.
I could go on and read further details in that connection. I should mention the question of trade. I think what has been done by the Minister of Trade and Commerce in that regard has been phenomenal. So far as exports and imports are concerned, total Canadian commodity trade for the first six months of this year was the largest in any year in Canada's history and exceeds the comparable 1961 figure by 13 per cent. Today the export figures are available with regard to July. To bring the matter right up to date:
Exports again show an encouraging rise to $547 million in July this year against $518 million in 1961. Most significantly perhaps the sharpest increases are occurring in our shipments to the United States which are being maintained at a level of 20 per cent above last year.
A moment ago mention was made of devaluation. In the light of experience since that policy came into effect, I am sure everyone must agree that the course taken by this government in connection with devaluation has been a tremendous boom to our exporters and at the same time has provided basic help to Canadian industry within Canada to produce those things which are needed in Canada and which otherwise would not be produced.
I now come to a subject which was not dealt with by the Leader of the Opposition. I refer to the subject of agriculture. The mid-September forecast of the 1962 production of Canada's principal field crops is highly encouraging. Prices have increased to such an extent that in every part of Canada farmers are receiving more for their production than they could have hoped for a matter of a few years ago. There are some who would say, "Oh, carry me back to 1957". I know what the answer of the farmers would be to that suggestion, as farm cash income from farm operations reached an all time high, namely $2,958J million, 6.4 per cent above the level of I960 and $385 million above that of 1957, an increase of 15 per cent.


Mr. Teillel:: Would the Prime Minister permit a question?


An hon. Member:: Sit down.


John George Diefenbaker: 
Roger-Joseph Teillet: Will the Prime Minister now answer a question?


John George Diefenbaker: When I finish my sentence the hon. member may ask a question. This is the picture. This is the reason that with studied disregard to one of the major elements in Canada's economy for many hundreds of thousands of people, last evening and yesterday in that marathon effort not one word was said about this subject by the Leader of the Opposition.


Roger-Joseph Teillet: Will the Prime Minister define fully for the house what he means by cash income?


Some hon. Members:: Oh, oh.


John George Diefenbaker: All I can say is that I think it defines itself for most hon. members.
I now come to another matter in connection with agriculture. As the house knows, for several years I have advocated a food bank. When I brought this matter before the NATO heads of state in December 1957-I refer to the matter of setting up a NATO food bank-because over the years it has been impossible to secure an international one, I remember that I did not receive much support although a section was incorporated in the communique. Now, largely as a result of Canadian initiative, the matter has come before the general assembly of the United Nations, which has unanimously endorsed the plan. This constitutes an attempt to ease human hunger, and is tangible evidence of the necessary advance that must be made among all nations. Those of us who have must endeavour to raise standards among those who have not, for everywhere in the world communism marches on empty stomachs.
I am glad to see that this action has taken place. In many international forums we advocated this step. On September 5 in New York about 30 other nations joined Canada in pledging 86 per cent of the necessary objective for the experimental period. Canada will provide one third of her pledge to the program in cash. These pledges were made in cash, commodities and transport services.
When I think of the tremendous volume of wheat that was on hand when we came into office and the equally tremendous competition among producing nations to dispose of their wheat, I believe that everywhere across

this country people are deeply indebted to the Minister of Agriculture for the effort he has made. It has been an effort in which the government as a whole has co-operated. It has been built on aggressive trade-seeking principles, coupled with the necessary credit being given to prospective debtors who in the past have shown a higher regard for their liabilities.
I still think of the volume of ridicule that was heaped on the government at the time of the announcement of the transaction with mainland China. Opponents said there was nothing to it, that it was ephemeral or nebulous. Well, in consequence of that deal Canada has secured not only a market for a large amount of wheat but a great increase in employment in our port and transportation facilities.
Now, I am not going to deal with the subject of trade in general except to say, as I have already pointed out, that action taken by the Department of Trade and Commerce has been as unique as it has been effective. It has been assisted by the Export Credits Insurance Corporation, which is a vital part of Canada's trade promotion program. The corporation operates in two fields, that of export credits insurance and that of long term export financing. The facility of export credits insurance, offered by the corporation, protects Canadian exporters against non-payment by foreign buyers. This insurance is provided on a break-even basis at no cost to the Canadian taxpayer. It would not be available through private enterprise.
During the past 12 months the corporation has insured more than $110 million on a wide range of Canadian produced goods which have been shipped to more than 90 foreign countries. Commitments have been given to Canadian exporters covering a further $100 million. It is hoped that a substantial portion of this business will be finalized during the next few months.
In addition to its insurance business, the corporation administers the government's long term export financing program which was authorized a little more than a year ago under section 21A of the Export Credits Insurance Act. Although the actual financing program has been operating for such a short time, a number of transactions involving heavy capital equipment produced in Canada have been satisfactorily concluded. These orders totalled more than $50 million. Commitments have been given as well to Canadian exporters for substantial additional financing to cover heavy capital equipment exports totalling $75 million. There is a very good possibility that the bulk of this business will come to Canada.
The Address-Mr. Diefenbaker
I point this out because in the speech from the throne there are still further measures, which I do not intend to particularize now to expand trade. It is of interest to note that the problem of securing trade and markets is not quite as simple as some of the opposition members would have us believe. I took it upon myself to look back and see what happened during those golden days that are looked back upon without respect. I find that in 1954 Mitchell Sharp, who was a Liberal candidate in Toronto and at that time was associate deputy minister of trade and commerce, spoke on the puzzles of policy when he addressed the Canadian Chamber of Commerce at its annual meeting in Halifax in that year. What did he say? We have been able to get into these markets; we have been able to expand, and we have been able to bring people to Ottawa. We have done these things in order to encourage the expansion of trade. We have not sat down and done nothing. What did he say at that time?
"Canada is far from getting a fair chance to compete in world markets, and particularly in the United States," he said. "In many respects the cards are stacked against us and we must exert every effort to get a better break, not only for our raw materials and food producers but also for our manufacturers, many of whom could, I am convinced, compete effectively if they were not restricted by foreign tariffs to production for the Canadian market alone.
"I am frank to admit that I do not know of any sure and certain method for bringing about this much to be desired improvement in commercial relations. If you have an answer which does not involve reductions in markets for our efficient export industries, I shall be glad to hear it and carry it back to Ottawa."
Well, at that time he was a deputy minister. In the cabinet of that day there were some outstanding men, and I look upon the faces of two or three of them now. They did not have the answer then. As a result of the efforts of this government we are able to come before you-I know the Minister of Trade and Commerce will do so in detail- and set forth what we have done. We are asking for a vote of confidence on the measures mentioned in the speech from the throne alone which, if implemented, will bring about a still further expansion in trade.
Now, sir, having merely touched the rim of the subject, leaving it to the minister to particularize, I now come to a matter that received a great deal of attention yesterday from the Leader of the Opposition and which also received quite a bit of attention during the intervening weeks when pronuncia-mentos were issued from time to time in regard to this problem of our foreign exchange situation. I noticed that he referred to what had been done by us in June as austerity. I have never called it that, but he and those associated with him have referred to it in

The Address-Mr. Diefenbaker that term. It is interesting to note that the Victoria daily Times gives the answer to the Leader of the Opposition in this connection. I understand that the head of this paper is a great Liberal protagonist. He says this of austerity:
Whoever Introduced the word "austerity" to Canada did a good service for the crackpots-


Donald Methuen Fleming: Hear, hear.


John George Diefenbaker: -a bad disservice for the nation.
In the first place, the word is quite inaccurate as applied to the policies of the Diefenbaker government. No such thing as "austerity'' has been imposed on the Canadian people-yet.
More important, by calling the government's policies ''austerity" the crackpots can make them sound evil, cruel and unnatural.
Bruce Hutchison has spoken well on many occasions.
Even the great majority of Canadians who are highly prosperous can be made to suspect that they are suffering serious hardships if they are told so often enough.
Those are the first two paragraphs and I recommend them to the edification of the gloomsters sitting opposite. Such words were used yesterday as "catastrophic," and indeed the book of antonyms and synonyms was combed in search of adjectival exaggeration.
I now intend to deal with the question of our exchange position, a position which followed some ten years of development within our country. Deficits in international trade and in other elements have amounted to over $9 billion in that period of time. When I hear the opposition talking about how terrible the conduct of the government was in this connection, and that nothing like it had ever taken place previously in Canada, I wonder whether they expect that the minds of those who sat in this house in 1947 have eradicated the memory of that year.
I recall the speech delivered, I believe from London, by the then prime minister of Canada in which he stated "all is well; multilateral trade has been achieved." He had hardly left the airwaves when Mr. Abbott, the then minister of finance, in effect said "Not yet," and imposed by order in council, for which there was no legal authority, the most drastic measures that had ever been used in connection with the economy of the country. It was the only time a law was ever made in this country by radio. It was in the month of November that these measures were imposed, and the collections continued until March, 1948 before parliament passed the retroactive legislation to legalize them.
They speak to me about respect for parliament. Is it something new? I am sure that nobody who has listened to Mr. Barkway will say that he is completely impressed by this

government. On June 30, in the Ottawa Citizen he wrote an article headed Financial Crisis, a Familiar Story:
Canada is facing one of those financial crises which are only too familiar to the rest of the world, including all the sterling area countries.
Britain has been through them several times since the war. Once it was driven into a drastic devaluation, and once it averted devaluation only by the most dramatic increase in bank rate that any of us have seen. Australia has been through them. Indeed, the majority of one which Mr. Menzies now commands in the House of Representatives resulted-in common belief-from his government's determination before the election to maintain external stability by restricting domestic expansion.
Then he goes on to deal with the problem, and he points out that it has happened over and over again. Much has been said in that connection, and I think I ought to place on record a list of the countries which have had to adopt remedial measures to deal with balance of payment problems in recent years. It includes the United Kingdom, to which I have already referred, Japan, Australia, New Zealand, France, Mexico, the Netherlands, Israel, Union of South Africa, Peru, Pakistan, Spain, Turkey, United Arab Republic, Yugoslavia, and in 1947, Canada.
I shall not fill the record by what was done by these various countries, but simply point out that this action is not abnormal. The action that we took was within the statutory right of the government to take, and we were not in the position of the government in 1947 when it imposed those drastic measures without any authorization by parliament, or any power to do so.
What about 1947? Have the opposition forgotten the severe depletion of Canada's foreign exchange reserves that made it necessary for the Canadian government to adopt special measures to bolster up foreign exchange and provide for the replacement of official reserves? Since the reserves fell so drastically in both cases, at present and in 1947, it is well to go back and see what happened in 1947 and ascertain from that the position today.
The early post-war period was characterized both by abnormalities in the international background and by the size and strength of Canadian import demands during a period of unprecedented prosperity. In saying that I am accepting at the moment the view of the official opposition in that they always speak of a period of unprecedented prosperity. The international background weakened the Canadian balance of payments position, and we found ourselves getting more and more into the red in our foreign exchange.
A feature of Canada's balance of payments position was a steady decrease in imports from the United States due to a high level of activity in Canada. During the whole period

from. 1946 to 1948 Canada ran a surplus with the world as a whole, both on merchandise trade and current account. However, the growing trade surplus with the United Kingdom and other overseas countries was mostly financed by loans and did not result in current income in convertible currency which could be used to strengthen the country's trade and reduce the deficit with the United States.
Let us look at the figures at that time. In 1947, according to Mr. King, matters suddenly became serious, when the merchandise trade deficit with the United States rose from $430 million to $890 million in 1947, and the current account deficit from $607 million to $1,134 million. The result was that Canada's reserves of foreign exchange were severely depleted. Have the members of the opposition forgotten about that? Those were the days that they speak of prosperity. Today they would have you believe that when a country is prosperous it cannot have a detrimental balance of payments situation, yet that was not so in 1947. Just remember how suddenly this came about.
On December 31, 1946 our official reserves totalled $1,245 million but by November, 1947, they had fallen to $480 million. In 1962 they fell to $1,100 million but in 1947 they had fallen, as I say, to $480 million. Then, following the introduction of the exchange conservation program, the reserves climbed to $502 million at the end of 1947 and to $998 million by the end of 1948.
They would have the people of Canada believe that I placed before the people of Canada what was not true. They say, "How can it be that a country that you say is prosperous-having employment difficulties, however-and expanding, could at the same time have an international exchange situation arise such as arose in 1962?" The same situation prevailed in 1947 in that regard. In announcing the program the minister of finance, Mr. Abbott, emphasized-and I want to re-emphasize this-that Canada's position was essentially very strong. The immediate need was only to conserve the use of U.S. dollars by limiting spending on U.S. goods, services and pleasure travel until such time as overseas trading partners became strong enough to earn convertible currencies to pay for Canadian exports, the proceeds of which we could use in settlement with the United States.
What was the nature of the program in 1947? It was restrictions on imports. They were of a non-discriminatory nature. They prohibited imports of a variety of consumer goods such as radios, washing machines, furniture; goods already being produced in Canada. They reduced the volume of imports of a variety of other commodities, including 27507-3-8
The Address-Mr. DiefenbaJcer some foodstuffs which were placed under quota. The quota system had the effect of reducing imports from the group of countries not known to be short of United States dollars while permitting increases in imports of the same commodities under quota from the dollar scarce countries. Another measure was the application of a special 25 per cent excise tax on a wide range of consumer goods in Canada.
Mr. Speaker, this was in 1947. They would have us believe, as they have gone across this country and said since the election, that this government deceived by saying conditions were good, the domestic situation was improving, the economy was on the upsurge. They said it could not have been so, otherwise this foreign exchange position would not have arisen. I give them, as the answer, what took place in 1947. Restrictions upon pleasure travel in United States dollar countries were reimposed. I see how shocked they are because we did in 1962, legally, what they did illegally in 1947. At the same time they provided assistance for Canadian gold producers. Oh, Mr. Speaker, how shocked they are that we had to get loans. This is terrible; this has never happened before. As I listened to the Leader of the Opposition during one of his bedtime story broadcasts, I wondered where he was in 1947.
Arrangements were concluded with the export-import bank in Washington for a line of credit to be available in 1948 in the amount of $300 million U.S., of which in the first half of 1948 Canada utilized $140 million. As a result of the exchange conservation program, imports from the United States declined in 1948 by $154 million from the 1947 total, while exports to the United States increased by $447 million. That is what happened then.
As a result of the action taken, the pressure on Canadian foreign exchange reserves abated; official holdings rose by $496 million between the end of 1947 and 1948 and it was possible in 1948 to begin to relax the import restrictions. That process was continued in 1949. Now when they tell you that is so unusual, I want to point out this fact, that in a period of 12 months from 1947 there was a loss of almost a billion dollars in Canada's reserves of United States currency and gold. A crisis took place. Did they know the crisis was coming? Well, they did not tell us. Mr. King said we were prepared to meet it for a period of several months, but nobody was told anything about it.
What did the 1947 Liberal program mean to business? I remember those days so well, Mr. Speaker. It gave to ministers of the crown and their officials extensive control over most industry of importance in Canada. It gave the government of Canada a life

The Address-Mr. Diefenbaker and death power over industry. Businessmen, if there are any who think that the present situation is difficult, should think back to those days; for then the businessman had to show the government that a project was, according to the government's view, in the interests of the national economy, otherwise import permits could not be issued.
What did Mr. Howe say? He said:
Since our supply of U.S. dollars is limited, it must in effect be rationed.
The situation before the 1947 program was that official holdings of gold and United States dollars was going down, he said, at an alarming rate. We can look at the legislation that was enacted. Certain imports were prohibited, 171 separate tariff items. Schedule II quotas were established for fruits, vegetables, textiles, leather products, soap, cutlery, watches and even coffee, 146 separate items. Then a permit system under the minister of trade and commerce was instituted which provided for capital goods such as machinery, heavy building materials, machine parts and the like, totalling 89 items.
There is the situation in 1947. Yet we are told how unusual is what has taken place recently. Mr. Speaker, as I listen to the Leader of the Opposition spinning his tales of woe I wonder sometimes whether these are gloomy comparisons of a disturbed imagination. Why not face up to the situation? Why endeavour to lead the people of Canada to believe that because we stated during the election campaign that the economy was on the up and up-and it is, and it has continued since the election-these things therefore could not take place? Was it mismanagement-


Paul Joseph James Martin: Yes.


Lester Bowles Pearson: You bet.


John George Diefenbaker: -in 1947?


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: In 1962 it was mismanagement.


John George Diefenbaker: Who created the mess in 1947?


George Harris Hees: The Liberals.


John George Diefenbaker: Let your conscience be your guide, I say to the hon. member for Essex East.


Lester Bowles Pearson: Full employment.


Paul Joseph James Martin: Mr. Speaker, since the hon. gentleman asked me a question I will be glad to give him an answer.


Some hon. Members:: Sit down.


Paul Joseph James Martin: You asked me a question. You do not want an answer.


Mr. Churchill:: You could not give one.


John George Diefenbaker: We are affected by what happens outside our country. We are affected by the international situation. We are affected by economic conditions in other countries. We brought into effect the pegging of the dollar.
I intend to deal with that for a moment. We fixed the dollar at 92.5 cents U.S.. What we did in that connection has been of substantial help to Canadian exporters and to Canadian producers competing for the home market, as well as to the Canadian tourist industry. I do not intend to quote from anybody's book today, but I am sure the hon. member concerned will know whose book I am thinking of when I point out that he described similar action in this regard and said it would be helpful. The pegging of the dollar brought added stability to the international exchange situation, and the decision to fix it was warmly welcomed by the international monetary fund whose membership comprises representatives of the free world.
Our action in pegging the dollar-oh, how it was ridiculed during the campaign as a means whereby they could describe the kind of dollar-meant that the highest records could be set in exports. That is what we said. That is what turned out to be the case. We said that at the time Canadian exports had reached all time peaks.
I mentioned tourism a moment ago. Let me give the house the figures which resulted from the pegging of the dollar. Hon. members opposite ridiculed it, of course. They said prices would rise.


Paul Joseph James Martin: They did rise.


John George Diefenbaker: I will give figures showing how they did rise, not just Essex East statistics.
Here is what Alan Field, the director of the Canadian travel bureau, said in a speech in Montreal:
I believe that with all the factors presently at work . . . that this year ... for the first time since 1951, Americans will have spent more in Canada than Canadians have been spending on travel to the United States, and that this Canadian travel industry which last year earned for the Canadian economy more than any other export except newsprint and wheat, will show the surplus on the international balance of payments.
This is what hon. members opposite ridiculed. This is what they said would destroy Canada. They went around and threw out those myriads of documents which they did not dare stand behind; they did not dare place the name on them as having been printed by the Liberal association. They distributed them all over Canada showing how prices were going to rise. I simply point out these facts so that the record may become reasonably clear.

Do I have to say anything more as to the benefits which came as a result of our action in this respect? I could quote various newspapers across Canada. Of course, the farmers benefited-


Lester Bowles Pearson: Before the Prime Minister leaves this interesting part of his speech, will he answer a question?


Some hon. Members:: Sit down.


Lester Bowles Pearson: Will the Prime Minister
answer the question?


John George Diefenbaker: I have the floor.


Mr. Speaker:: Order. If the hon. member has a point of order or a question of privilege to raise he may do so, or he may seek to ask a question, but I think the Leader of the Opposition will agree with me that it is not permitted for him to gratuitously take the floor. I am sorry I did not hear his first words. If he seeks to ask a question it is up to the speaker who has the floor to decide whether he will answer at the time or not and it is not subject to comment whether the answer is given then or subsequently.


Lester Bowles Pearson: On a point of order, Mr. Speaker-


John George Diefenbaker: I have the floor.


Lester Bowles Pearson: On a point of order, how can I ask for permission to ask a question without taking the floor?


Mr. Speaker:: I agree with the Leader of the Opposition, that he may rise and seek permission to ask a question.


Lester Bowles Pearson: That is what I did.


Mr. Speaker:: That is not all that the Leader of the Opposition was saying. I think if he wishes to ask a question and the Prime Minister wishes to answer him, that is perfectly in order.


Lester Bowles Pearson: On a point of order, the only words I used were "May I ask the Prime Minister a question before he leaves this part of his speech". That was all I said. Surely I am entitled to get on my feet and ask that.


Mr. Speaker:: I fully agree with the Leader of the Opposition, but there was quite a bit of side comment.


Lester Bowles Pearson: There certainly was. It was over there.


Mr. Speaker:: I do not know that one should point to only one side of the floor. It comes from both sides. Again, I would ask the indulgence of the house in giving the floor to those speakers who have the floor. Everybody will have a chance. This is a long 27507-3-84
The Address-Mr. Diefenbaker debate, and I think we could get along a lot better if we kept the extraneous comments for other occasions.


Lester Bowles Pearson: May I now ask a question of the Prime Minister arising out of what he has just been saying?


John George Diefenbaker: No. I shall be back on that subject and the hon. gentleman will have another occasion. When I have finished dealing with this the hon. gentleman will be asking himself some questions.
I mentioned the benefits which came from our action, and I refrain from quoting anybody because I do not want to make anyone feel unduly embarrassed. I was about to refer to what the farmers thought of this- they, the forgotten people in the speech of the Leader of the Opposition. When we brought this in Mr. Gleave, the president of the Saskatchewan farmers' union, and Mr. T. G. Bobier of the Saskatchewan wheat pool said they were "particularly pleased with the method employed and with the further widening of the spread in the exchange rate between the Canadian and American dollar. A report in the Saskatoon Star-Phoenix continued:
In addition, the further discount of 23 cents on the Canadian dollar would place the exporter of wheat and other drains, livestock and dairy products in a more advantageous position to compete in outside markets. The wheat farmer particularly would receive a price increase from the further 22 cents discount or about five cents per bushel.
The two farm leaders said the wheat farmer was sure to get a price increase on exports because the prices under the international wheat agreement were set in United States funds.
And all across this country various industries dependent on export markets, including the forest industry, the clothing industry and the industrial chemical industry felt the benefit of the action which we had taken- an action which was reviled throughout the campaign.
Now I want to bring this up to date. The Globe and Mail of October 2 has this to say in an article by John A. Gibson. Last evening the Leader of the Opposition spoke of something being done to bring about the making of automobile parts in Canada-a solicitude which the hon. gentleman and his party did not evince during the days they were in office when they imposed such a high excise tax on automobiles. Where was the hon. member for Essex East (Mr. Martin) then? He was a member of the cabinet during those days. What does he say about this sudden solicitude for the automobile dealer? Let me read from the Globe and Mail of this morning this article by John A. Gibson.

The Address-Mr. Diefenbaker He says:
Canadian truck makers are scrambling to build more of their products in Canada. They are responding to the cost pressure brought on by dollar devaluation and surcharge on imports. Domestic competition has priced some imports almost off the market. Ford Motor Co. of Canada Ltd. will build in Oakville its 850 and 950 heavy-duty tandem series of trucks, as well as heavy conventional trucks using V-6 Cummins diesel engines.
"This is a direct reflection of the surcharge situation", a spokesman said yesterday. "Ford Motor Co. added the vehicles to its line, and rather than import, we decided to build here".
Ford of Canada has also added a long-wheelbase 66-passenger school bus to the variety of venicles it produces.
General Motors of Canada Limited will build heavy-duty diesel truck models in Canada for the first time, starting with the 1963 model year. These units were previously Imported.
They put these things into a speech. We bring them to reality.


Paul Joseph James Martin: There is more unemployment now than at any time.


Donald Methuen Fleming: Are you crazy? Thou art beside thyself; much learning doth make thee mad. Poor old Paul.


John George Diefenbaker: Mr. Speaker, I should have thought that the hon. member knew something about automobiles and trucks, but apparently he has not kept up to date either. Let me read on.
The company said its decision to build here was made last winter and stemmed from market studies. Devaluation of the dollar and the surcharge on imports reinforced the decision, a spokesman said.
GM of Canada says 10 new series incorporating 35 different types in the highway tractor and truck category will be made in Canada for the first time-


Donald Methuen Fleming: Better get a doctor, Paul.


John George Diefenbaker: The article continues:
The company, which assembled 32,000 1962 trucks expects to make as many or more in the 1963 year ...
Howard Dewsbury, general manager of Mack Trucks of Canada Ltd., said: "There is no doubt that Mack will be manufacturing in Canada by early 1963. We intend to build engines, transmissions and rear axles here."


Paul Joseph James Martin: Go and ask the
workers in the automobile plants what they think of this government.


John George Diefenbaker: As I listen to my hon. friend, I think of those words in the scriptures:
Paul, thou art beside thyself; much learning doth make thee mad.
The article continues:
Mr. Dewsbury said dollar devaluation and import surcharges were factors in the decision, as well as the desire by the company to make in Canada a great deal of the product It sells here.
He said production of heavy-duty models should start within six months. About four sites are being considered. White Motor Co. of Canada Ltd. should

drive the first units of Its 1500 and 4000 series away from its Brantford production facilities in December-
And I could go on. These are the things which have been brought about as a result of action by this government.
I ask, why are we criticized in this way? Because I read from a book called "Troubled Canada". It says:
The high exchange rate for the Canadian dollar made it easier for imported goods to compete successfully with goods produced in Canada; they could be sold at lower prices in Canadian dollars than would have been possible if the Canadian dollar had been at par or at a discount. It meant also that Canadian exporters received lower prices for their sales in other countries when converted into Canadian dollars than they would otherwise have done. Thus the premium on the Canadian dollar worked to the disadvantage of both our export industires and our domestic manufacturers...
There is, of course, one tangible disadvantage that accrues from the reduction in the exchange rate which should clearly be stated. A substantial reduction in the exchange rate for the Canadian dollar would be bound to have some effect-[DOT]
This is the considered view of one who wrote a book-
-although not necessarily any great effect on the cost of living.
Then there is this concluding paragraph:
It is probably true to say, however, that the increased costs or losses of this nature would be far outweighed by the economic and psychological gains to be derived from increased activity in Canadian industry and a reduction in the number of people unemployed.


Lester Bowles Pearson: They had to wait for an election campaign to do that.


John George Diefenbaker: My hon. friend says "wait till the election campaign". I am bringing forward the answers to the kind of false propaganda which has been spread. Some of them criticized and spoke of this dollar and used my name in that way. What did Mitchell Sharp say on December 26, 1961? He said:
The recent change in the exchange rate was all to the good and the results are already being reflected in the statistics-a slowing down in the rate of increase in imports and a further increase in exports. both of which encourage employment within Canada. Full advantage of the long delayed shift cannot be expected, however, until there is a greater degree of confidence that something like the present rate will be maintained. An investor in new manufacturing facilities has to take a long view of competitive factors at home and abroad. The government could help him by deciding and setting the exchange rate they intend to maintain.
Now, that is exactly what we did, and the authorities in the Liberal party, the economists, said that was the proper course to follow. Then when we followed it they said it was not to the benefit of Canada.


An hon. Member:: Shame.


John George Diefenbaker: I should like now to point out something. It has been said on a number of occasions that if Canada was as prosperous as we said it was, that if the upsurge of prosperity was increasing-I will put it that way-then how could this arise? I will go back to 1947 and read what Mr. Abbott said in his broadcast of that day. He said:
Let us keep our difficulties in their right perspectives. In comparison with most of the rest of the world, we are a very fortunate people. Our trouble arises from the misfortunes of other countries, not from any basic weakness in our own economy. Our basic position is sound.
Then he states:
Our level of employment is at a maximum.


John Whitney Pickersgill: So it was.


Donald Methuen Fleming: And you had an
exchange crisis.


John George Diefenbaker: I continue with the quotation:
We are producing at a high level and at a relatively low cost. This country of ours has had a notable record of achievement during and after the war-a record which has given us self-confidence and raised Canada's stature in the eyes of the world. Let us keep up that record in surmounting the present emergency, conscious of our responsibilities and confident of our great future.
That is what he said in that year. It has been said that I deluded the people of Canada by saying that the economy was on the upsurge and then immediately after the election announced that there was a crisis in international exchange.


Paul Joseph James Martin: Something which the Prime Minister had denied during the election.


John George Diefenbaker: Yes, and I will deal with that matter in a moment and with great detail and it will be more than the hon. member wishes to hear. I would remind you also, Mr. Speaker, of this fact. I have not before me at the moment the quotation from Mr. Mackenzie King dealing with this matter when he said that there was no relationship between prosperity and such a matter arising suddenly. He went on to point out that it was something that had taken place in other parts of the world and that action had to be taken without delay because of the rapid depletion of the exchange reserves. With that background and also with the quotation from Mr. King I shall deal with the matter. In what Mr. King said there is no talk of mismanagement or wasted years or about getting the economy moving or about bold and imaginative this or that. This is what Mr. King said:
Matters have come up in connection with the depletion of our reserve of United States dollars. This is a very urgent matter and is to be taken up at this stage of the session as well. ..
The Address-Mr. Diefenbaker
No country in the world is as much dependent as Canada is upon foreign markets, and the development of this nation, as my hon. friend knows very well, lies in our having the largest possible measure of opportunity to trade with other countries of the world. The Geneva agreement is something that has not been equalled at any time in negotiations between nations ... It is a great triumph; and it is right that the people of Canada, when they are discussing these emergency measures which are unpleasant, which are the last thing in the world that this government would wish to bring down at this time, should fully realize that they are temporary measures.
Then we And these words. They pin the appearance of falsehood on those who said I endeavoured to mislead Canada by saying the economy was on the upsurge. What did Mr. King say? He said this:
It is out of the prosperity that we have had in this country that this situation has arisen. If our people had not been making and spending the money they have they would not have been purchasing to the extent they have in the United States, particularly great quantities of luxuries. I will not go into that question tonight, but the government wants the people of Canada to understand that these emergency measures are temporary in character. The people must not be blind to the larger opportunities that are going to come out of the Geneva agreements as a consequence of the agreement that was reached there.
Then he says this:
As my hon. friend well knows, we had to put the emergency measures into force at the moment we did and not wait any longer because of the fact that otherwise as, in the case of the budget resolutions, all kinds of advantage would have been taken by those who wished to profiteer and those who wished to benefit from changes that were to come about. This is not an emergency session. We carefully considered that very point. The government might have had an emergency session to deal with these questions only, but we felt that the people of Canada and hon. members themselves would much prefer to begin the regular session now... This is the regular session of parliament for the balance of the present year...
Then what did Mr. Abbott say about it? He spoke of the existing prosperity and he said that there was no unemployment. This was two years after the war, when Japan and Germany had been crushed and when there was a tremendous demand in other parts of the world for our Canadian needs and requirements. There was no difficulty whatsoever to secure markets. He said this:
I have repeatedly said that I regret the necessity of placing this highly protectionist measure upon the statute books; but I think it would be folly to fail to recognize that this is an emergency. It is not a situation which has been created by Canada.
I hope once and for all that will answer the argument that you do not have foreign exchange difficulties at a time of increasing economic strength.
The Leader of the Opposition wished to ask a question at that stage.


Gordon Minto Churchill: He has forgotten it.

The Address-Mr. Diefenbaker


Lester Bowles Pearson: Mr. Speaker, the point I was raising has long since been passed by the Prime Minister, but perhaps he will allow me to ask it now although he refused to do so previously. He was telling us about the advantages of our foreign trade from the steps which had been taken under pressure during the election campaign. Will he explain the figures with regard to our international balance of payments for the first six months of this year?


John George Diefenbaker: I am glad the Leader of the Opposition asked that question. I expected he would do so as he had those figures before him when he met Governor Rasminsky.


Lester Bowles Pearson: Mr. Speaker, I rise on a point of order. The Prime Minister obviously did not understand my question. I asked him what are the figures for our international balance of payments for the first six months of this year.


John George Diefenbaker: I am going to give them. I am going to give the applicable ones. I say that the Leader of the Opposition, having this information, did not interpret it except in an unfair manner. That is what I say.


Some hon. Members:: Oh, oh.


An hon. Member:: Answer the question.


Lester Bowles Pearson: May I repeat my question to the Prime Minister. Obviously he did not catch it.


An hon. Member:: Sit down.


Mr. Speaker:: Order. While the hon. gentleman may address a question to an hon. member who has the floor and who may accept it, the matter of the nature of the answer to the question is still with the hon. member who has the floor.


Paul Joseph James Martin: He asked for it.


Mr. Speaker:: If it does not meet the wishes of the questioner, that does not raise a point of order nor does it call for a repeated question. It may call for subsequent comment.


Lester Bowles Pearson: The Prime Minister refuses to answer.


John George Diefenbaker: I intend to answer the question in more detail than the hon. gentleman will wish to hear. This is one part I intend to follow somewhat carefully in my manuscript.


Some hon. Members:: Oh, oh.


An hon. Member:: Are you scared?


John George Diefenbaker: Mr. Speaker, I should not think hon. members would laugh about anybody following a manuscript after the exhibition we had yesterday in that respect.


Donald Methuen Fleming: Three hours of it.


John George Diefenbaker: In 1949-and I start there -the question was frequently asked in the house whether or not the Canadian dollar was going to be depreciated in value and the answer was consistently that such was not necessary and indeed would be dangerous. Finally, in 1950, it became clear that the then par value of the Canadian dollar which was equal to 90 and 10/11 cents could not be maintained because of the large inflow of United States capital. It was decided not to establish a new par value but to permit market forces to determine the rate from day to day. There was to be no intervention by the use of the exchange fund other than what was necessary to maintain orderly market conditions from day to day. The decision was taken at the time, with the acquiescence of the international monetary fund, which was a body established for this purpose by the Bretton Woods agreement to which Canada adhered in 1946. This action by the fund was taken in recognition of Canada's unique circumstances. It was anticipated at the time that Canada would eventually return to a fixed exchange rate when the circumstances were right. In fact, this flexible exchange system lasted for almost 12 years, and for most of the period the Canadian dollar was at a premium over the U.S. dollar owing to the large inflow of foreign capital into Canada.
During the early 1950's there was an exceptional demand in the world for Canadian basic materials, and there was heavy investment in Canada's resource industries giving rise to inflationary pressure. The large inflows of capital and the matching import of goods and services from abroad were a reflection of these demands and helped to keep inflationary pressures within reasonable bounds.
In subsequent years, Mr. Speaker, the world economic environment changed; western Europe and Japan were reconstructed and shortages disappeared. World demand for Canadian resources exports grew less rapidly; the rate of capital investment in these industries declined and unemployment, both of men and capital equipment increased. Under these circumstances one would normally have expected the exchange rate to have declined and Canada's deficit on current international transactions, that is on the export and import of goods and services, to have shrunk, thereby encouraging a fuller utilization of Canadian production capacity. In fact, there were countervailing pressures due to the continuing large flow of capital into Canada which tended to maintain the premium on the Canadian dollar.

As a result, in 1960 and 1961 an important part of the government's expansionary economic program was to reduce the large deficit in current international transactions by a series of steps designed to facilitate an orderly movement of the exchange rate to a level more appropriate to the basic economic situation. These steps included measures to ensure a larger supply of Canadian capital and reasonable rates of interest to Canadian borrowers. As this was achieved, the economic decisions of private individuals and businesses based upon the market would bring about an increase in Canadian production and employment.
These measures to facilitate an orderly movement of the exchange rate hinged on efforts to improve the availability of Canadian capital at reasonable interest rates and to reduce the incentive for Canadians to seek capital abroad. None of these measures interfered with the free movement of capital over which no controls were exercised.
In the budget of June 1961 it was pointed out that since these measures might take some time to have their full effect, the resources of the exchange fund would be used if necessary to offset unwarranted upward pressures on the exchange rate. As it turned out, such use of the exchange fund was not necessary and the operations of the fund continued to be directed towards moderating market movements in the rate, not towards producing such movements.
The achievement of a better exchange rate was only part of the government's policy of economic expansion and recovery in 1960 and
1961.	It was our view then, as it is now, that the key to Canadian success in the world economy must lie in improving the productivity and competitiveness of the Canadian economy. We undertook programs to increase productivity, to encourage research, to expand and improve technical training, to encourage investment and to stimulate exports. We continue to pursue these programs and purposes.
Our efforts to achieve a more satisfactory rate of exchange were successful and during 1961 substantial progress was made in reducing our deficit on current international payments. That year it declined to $982 million, the first time for six years that it was below a billion, and we achieved our first surplus of commodity exports over commodity imports for nine years. I should like to emphasize that. This surplus amounted to $173 million.
It is against this background that the exchange markets must be viewed. From June 1961 at the time of the budget until April
1962,	the market was engaged in a process of testing the exchange rate. This was a new situation for those carrying on exchange
The Address-Mr. Diefenbaker transactions, either directly or in connection with trade or investments. For the first time in almost ten years the foreign exchange value of the Canadian dollar was below that of the United States dollar, and for a considerable period the market was trying to make judgments as to where the rate was likely to settle.
The day after the June 1961 budget, the Canadian dollar opened in some European markets at a 4 or 5 per cent discount on the United States dollar. Almost immediately it moved to about a 3 per cent discount, where it remained until October. Throughout those three months the level of exchange reserves also remained relatively stable, somewhere around $1,900 million which was about half way between the levels of $1,800 million and $2,000 million which had prevailed over most of the preceding decade.
In October the market appeared to take the view that the exchange rate for the Canadian dollar would likely settle about equal to the U.S. dollar, perhaps on the old but mistaken notion that two currencies with the same name ought to have the same price. This market view was backed up by those engaged in international trade, who delayed the payment of bills or opened up the cashing of receipts in accordance with this expectation. As a result the exchange fund accumulated $186 million, U.S., and at the end of October the total holdings amounted to $2,111 million which was above the top end of the range over which the reserve had moved during the preceding decade. During November and December 1961 and the early months of 1962, the exchange rate of the Canadian dollar moved downward and it reached a 5 per cent discount on the U.S. dollar in February. During this period the authorities continued to maintain orderly markets and exchange reserves declined moderately by $32 million in November, by $23 million in December and then, increasingly, by $134 million in January and $175 million in February as the market lags and leads in the timing of trade settlements undertaken in the preceding October were reversed. In other words, those who had anticipated a par rate in October and bought or sold their exchange to offset future trade transactions on the basis of this expectation, had now to recognize that the market view was that the Canadian dollar would remain below par and they readjusted their positions in a manner that reduced our reserves.
At the end of February our exchange holdings totalled $1,747 million, not significantly below the range of amounts that had been in the exchange reserves over the preceding decade. During the month of March

The Address-Mr. Diefenbaker the exchange market was steady. The rate remained at about a 5 per cent discount on the U.S. dollar and the operations of the exchange fund resulted in only a small decline in the reserves.
This account I have given you indicates that the government's objective of helping to bring about an orderly downward movement in the exchange rate had largely been achieved by March and that the rate itself was responding to market forces. We were, in other words, getting close to a realistic rate.
In April, and this was about the time the election campaign started, some uncertainty developed in the exchange market, and the attacks of the opposition had effected this. There was evidence of speculation and some doubts about where the exchange rate was likely to settle down. This caused the government to consider, at the end of April, whether or not a return to a par value would be desirable. It had been pointed out in the budget on April 10, and I quote:
It Is extremely difficult to devise and pursue an exchange rate policy that can be regarded as completely satisfactory from every point of view.
It must be recognized, Mr. Speaker, that Canada's international economic transactions are more complicated and extensive than those of almost any other country in the world in proportion to its size. The nature and extent of our foreign trade and of the movements of capital to and from Canada, and Canada's proximity to New York, the world's largest capital market, creates special problems in maintaining a suitable exchange rate.
The 1950 decision to let the rate be determined by market forces had been a departure from the standard practice of other countries. We knew that a return to a fixed rate would be warmly welcomed by many people in Canada, and by other countries and other financial markets. In these circumstances, and to clear up uncertainties which had developed during April, the government decided at the beginning of May that the time had come to establish a legal par value for the Canadian dollar and give Canadians engaged in international trade the security of a fixed rate of exchange. The decision, taken and announced on May 2, was concurred in under the Bretton Woods agreement by the international monetary fund which welcomed it as a realistic rate.
Now, I have referred at that point to the effects of undermining faith and confidence by criticism, in particular criticism that was not justified.
I also point out that during the months of January, February, March, April and May

stock values fell by more than $100 billion on the United States exchanges, and there was also a very serious fall in the middle of June. At that time, according to what I learned from those who are acquainted with these things, many people were in a position of having to dispose of their Canadian assets in order to meet the situation that came to them in consequence of that tremendous fall in the value of security stocks in New York. A great change took place again with renewed force in the month of June.


James Allen (Jim) Byrne: Mr. Speaker, would the Prime Minister permit a question?


Lester Bowles Pearson: Of course not.


John George Diefenbaker: Just wait until I sit down.


James Allen (Jim) Byrne: The question is, Mr. Speaker-


Douglas Scott Harkness: He said no question.


Lester Bowles Pearson: Let him read his brief.


John George Diefenbaker: I quote now an extract from Canadian Business Service Limited which is recognized as a publication that is careful in its contents. It deals with the exchange position in its issue of June 29, and states:
The action taken will, in our opinion, correct the run on the Canadian dollar. It has always been a strong currency and the critical situation which developed so suddenly was precipitated by the violence of the pre-election debate about the economic, fiscal and monetary policy of Canada. While the present and preceding regimes have done many things of which most of us disapprove, many constructive steps have also been taken and nothing has been done that has impaired the strength of Canada. Latest reports show our gross national product to be running 8.6 per cent ahead of last year-certainly not an indication of impending doom-with an over-all increase of 7 per cent indicated for 1962.
Criticism of the Conservative regime was justified but much of this went far beyond the bounds of reason and helped to add fuel to the flames. A run on a country's currency is much like a run on a bank. It feeds on rumours and if unchecked even the soundest currency-or bank-can be seriously embarrassed.
We would expect that exchange reserve figures will show a considerable improvement fairly quickly. This, however, is something that is a matter of conjecture. Once foreign investors are satisfied with the future policy of the Canadian government we may see an upward push on the Canadian dollar that will be quite as embarrassing as the recent downward pressure. This, however, is a matter of pure conjecture-except that we continue of the opinion that the Canadian dollar is a strong currency.


Paul Joseph James Martin: Who wrote that?


John George Diefenbaker: I mention that simply because it is from an objective source, and it is in keeping with what we so often said during the course of the campaign-criticize fairly but for goodness sake do not base your criticism in such a way that you ruin the

credit of Canada. The attitude of the opposition is that "we shall rule or, if we do not succeed, we care not for the consequences."
The establishment of the new par value resulted in a noticeable firming on the exchange market during most of May, at a time when, on every platform across the country, Canada was being downgraded, faith was being undermined and confidence lessened.
The then minister of finance, now Minister of Justice, made an announcement on June 1 which showed the extent of the situation.
He said that in the late days of May there was a period of uncertainty in world financial markets. That was at a time when stock prices fell sharply on the New York exchange, and this had repercussions in the financial markets all over the world. Fortunately these disturbances were not prolonged but the effect on Canada was to cause uncertainty and instability in our financial markets, including the exchange market, and as a result we encountered an unsettled exchange market which was having to be supported by sales from our reserves.
I shall now give a summary of some figures in that connection. This is not to be a precedent in any way, but in view of the nature of the attack on the integrity of the government, and the need of placing the position in general before the Canadian people, I intend to go into some detail. During the first week of June the weakness in the exchange market continued. I consulted the then minister of finance on the matter and on June 10 he issued an official statement making it very clear that the government could and would maintain the Canadian dollar at the 92J cents exchange rate. The situation was carefully watched during the next few days, and up to the middle of the week preceding the election the minister of finance expected, and I expected, that once the campaign was over, with all its controversy about the state of the Canadian economy, the exchange situation would settle down.
What are the facts in regard to this matter? I made a statement to the Canadian people on June 24, which I started off this way:
There has been developing an increasing degree of uncertainty and instability in the financial markets which has intenstified in the last few days to a point requiring immediate emergent action.
I underline those words. I continue:
Dealings in the exchange markets have been exceptionally large.
These developments have been such that a comprehensive program has become necessary to relieve the pressure on the Canadian dollar in the exchange field, to bring about greater stability in our international transactions and to strengthen our exchange reserves.
What was the situation in this regard? It has been said that we concealed the facts,
The Address-Mr. Diefenbaker but I answer those who say that by pointing out that the total amount of exchange-again I emphasize this is not going to be a precedent or a procedure-that the total amount of exchange delivered to the market from the sales of foreign exchange, from June 1 to June 14, was $128 million.
At that time the attacks became more overwhelming in their nature and more irresponsible in their denunciation. I can recall one of the big industrialists of Canada, the Hon. Mr. Winters, when he spoke at Truro on June 8 saying "Canada is at the brink of bankruptcy." That was the kind of statements which were coming from one not directly in politics.


Edmund Davie Fulton: Who is the traitor now?


John George Diefenbaker: The position he took had a terrible effect. People began to say, "I wonder whether what is being said is well founded". Fear begets fear; confidence is undermined.
It is only a few days ago that I met with Sir Winston Churchill. The one message that he had as we talked together was, "The greatest thing we have to fear is fear".


Paul Joseph James Martin: It was Mr. Roosevelt who said that.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: You are 20 years out.


John George Diefenbaker: The ribald laughter indicates that they desire to create fear. It was within a few days of the election that things started to worsen. I mentioned what the figures were between June 1 and 14. The election was on the 18th. The 15th was a Friday. Then there was an acceleration. The amount of such deliveries which reduced our exchange reserves from the 15th to the 22nd was $270 million. When I told the people of Canada that it had worsened in the last few days, that statement was true. Between the 25th and the 29th there was a further amount of $115 million including deliveries on contract made before the 25th.


Paul Joseph James Martin: What about the broadcast of June 14?


Lester Bowles Pearson: Not a word then.


John George Diefenbaker: I want to point out this fact, that with my knowledge the governor of the Bank of Canada discussed this matter fully-I have a memorandum of what took place-


Lester Bowles Pearson: So have I.


John George Diefenbaker: -with the Leader of the Opposition, who had the facts in consequence of that interview.


Lester Bowles Pearson: After the election.

The Address-Mr. Diefenbaker


John George Diefenbaker: Since that date we brought about this change. As I said in these words in my television speech, "It has intensified in the last few days". The intensification started in earnest on the 15th. The 16th was a Saturday; the 17th a Sunday. These figures tell their story and answer once and for all the allegation that we had anything to conceal during the month of June that we did not place before the Canadian people.


Lester Bowles Pearson: Mr. Speaker, would the Prime Minister permit a question?


Gordon Minto Churchill: The Liberal party is disgraced.


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: If the situation was as described by the Prime Minister, why did he not mention any aspect of it in his broadcast to the Canadian people on June 14?


John George Diefenbaker: Because, as I have pointed out, the situation was not serious then.


Some hon. Members:: Oh, oh.


John George Diefenbaker: Hon. members opposite say oh, oh, and I throw back to the Leader of the Opposition this, that as a result of the attitude of the opposition during the days of an election, an opposition which did not care what the consequences were in undermining Canada, these things were accelerated.


Lester Bowles Pearson: Oh, how cheap can you get. You cannot get lower than that.


John George Diefenbaker: What did the hon. gentleman say?


An hon. Member:: Why don't you tell us the truth?


Donald Methuen Fleming: He said, "You cannot get lower than that".


John George Diefenbaker: I am not going to enter into any argument with regard to altitude with the hon. gentleman.


Lester Bowles Pearson: I wouldn't.


An hon. Member:: Pearson said that.


John George Diefenbaker: Oh, 1 am glad to hear where it came from, because that is indicative of the kind of thing he has been indulging in all through the summer-


Some hon. Members:: Shame.


John George Diefenbaker: -vilifying and ridiculing. I thank him again, because people across Canada are beginning to wonder, "Where is that man we used to know?" What has happened since? There were other transactions during these periods which affected the fund. I cite these figures to illustrate the magnitude of the sales that were made in the market to

sustain our exchange rate. During July the reserves increased by $306 million, $60 million of which resulted from the advance payment by the government of France on post-war credits extended by Canada to that country. During August the increase in our reserves amounted to $216 million.
Mr. Speaker, I think I have covered the situation in particular, and I summarize it briefly as follows. The action taken has now been placed before the house and the country. Those figures, as I say, would under ordinary circumstances not be revealed; they are revealed in the totals at the end of the month. But under the circumstances, so the Canadian people can understand fully who was telling the truth, those figures have been placed before the House of Commons and the people as a whole.
I have mentioned that progress has been satisfactory and encouraging since the program was announced. Our primary task now is to restore confidence. This is being achieved. Reserves have improved steadily since the measures were taken. As another mark of returning confidence, the Minister of Finance was able to announce on September 13 that negotiations had been completed for the sale of a $250 million long term, government of Canada bond issue in the United States to private investors at 5 per cent. The proceeds of this issue, which will come in over the next several months, will be used to reinforce Canada's official exchange reserves. It is our view that with Canada's growing volume of trade, the very large volume of investment and the fixed exchange rate, it is essential to increase our holdings of foreign exchange reserves at levels higher than the last decade. The placing of this government bond issue in New York makes clear to Canadians and foreign investors alike that Canada welcomes the participation of outside capital in our economic development. We intend to continue to make Canada hospitable to investment even though we intend to press forward to encourage Canadians to invest more and more in the ownership of their own industries and resources. The success in obtaining this long term loan from private investors is a solid demonstration of Canada's ability to attract capital, and clear evidence of our high credit standing abroad.
In view of the long term loan, the Minister of Finance has announced that $250 million out of $400 million stand-by credit obtained in June from the export-import bank of Washington had been terminated at the request of the Canadian government. Since June there have been improvements in our balance of payments, production and employment.
I place before the house the general financial picture, which has improved since June.


Edmund Davie Fulton: Longer than that.


An hon. Member:: Since 1919.


John George Diefenbaker: We believe we should wait until the economic situation permits us to go further forward and in any event until a report is received from the royal commission on this subject so as to avoid1 the pitfalls which the members of the opposition found in the application of a hastily constructed health plan within my own province.

The Address-Mr. Diefenbaker
We believe the expansion of social security can only come out of production. We believe our duty now is to increase production, raise more and more our export aims, aspirations and achievements and build for a Canada stronger economically than ever before.
The official opposition intends to vote against us, they say. Well, we say we are going to bring in an economic board. They have asked for that. Now, when we bring it in, they announce they are going to vote against it. Again, the proposed Atlantic development board will advise on production and promote the development of the Atlantic region where the geographical situation requires measures which are not needed elsewhere. The board will deal with such matters as capital construction, including a survey of the tidal power of the eastern end of the bay of Fundy. The opposition has advocated this kind of thing for the maritimes. The position, now, is that they are going to vote against it. These are the things of which politics is made.
I cannot now go into detail about what we have done in northern development. I could deal with the tremendous expansion of the north today, with the discoveries of mineral ores, including 20 million tons of iron ore, the greatest mine in the world, or with the opening up of northern areas which previously were never expected to be accessible to development. I could speak of the assistance which has been given across this country in projects such as the Red River scheme, the Saskatchewan dam, and, yes, the Chig-necto causeway-


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: It is the Canso causeway and the Chignecto canal.


John George Diefenbaker: It does not take very much to cause frivolity. I was speaking of the Prince Edward Island causeway and inadvertently mentioned another, but they can still jeer if they want to. We brought about an oil policy that has expanded the oil exports of Canada as never before. We are now providing for the export of power as a policy, which in the days ahead will do much to bring about a fair and reasonable equalization in our international payments situation. All of these things we have done. We face great economic problems and Canada always will. I say to the members of this house, why does the opposition now say that they are going to vote no confidence? Are we going to stop the progress that is taking place, the expansion and the development, by having an election now? I do not mind elections.


Paul Joseph James Martin: Well, let us have one right now.


John George Diefenbaker: Mr. Speaker, I am so glad reference was made to that, because if I had not had a helper or an interlocutor I would have forgotten it. I think there has been a big change in four years. Let us recall how at the end of January 1958 they came in and said: "Now we want an election". Then they produced that supernatural amendment setting out all our shortcomings, which ended up by saying: "Please give us back our jobs". There has been a big change in four years. Whenever the election comes we will be dealing with it. In the meantime, I suggest that this house has a responsibility. We were elected to make progress. Let us unite together in faith and in determination to place Canada above the rank of petty politics. Let the national interest be the guide of the conscience of those who vote on this question. I have tried to place the picture before you as I see it. We intend to place our measures as rapidly as it is possible to do so before the house. We intend to delay in no way in meeting the exigencies of the occasion. We intend to pursue the course that we pursued in 1957, bringing before the house those things which we believe are right, and asking for the support of the house.
Now, sir, I do not mind those who want to put on their election paint, but I think our responsibility at the moment is to do our part to have the legislative program passed. Let us have an opportunity of bringing in a budget. Let us keep Canada moving as it is moving, and as all the documents say it is. That is my message to this house today.


Mr. Robert N. Thompson (Red Deer):: Mr. Speaker, first of all I would like to extend my congratulations to you on your election to the high office which you now hold in our midst. I know full well that, as you have already started, you will continue to carry on the traditions of the office of Speaker in our house. I wish also to extend my congratulations to the mover of the throne speech, the hon. member for Waterloo South (Mr. Chaplin), and to the seconder, the hon member for Nicolet-Yamaska (Mr. Vincent). In giving their maiden speeches in the house they spoke well, and I sincerely commend them for their efforts. It is my impression that I heard considerably more common sense from these gentlemen than I have heard in the speeches since then. The people of Canada are getting tired of the continual "yak-yak" of politicians who are more concerned with perpetuating an outworn political machine than they are in caring for the affairs of this nation and its people in a businesslike and efficient manner.
As a new member, I do want to express my appreciation for the friendly attitude shown and reception that has been given by

different members old and new from all corners of the house. This does not apply to the members themselves alone; it also applies to their wives and the parliamentary staff. Certainly they have made us all feel at home in our capital city and on capital hill. Again, I am much more impressed by the friendliness and the hospitalities of the members than I am by some of their political tactics and jargons, as we have watched them for the last several days. It has reminded me of a neighbour farmer of mine who one day last year, when the fields were very parched, stood with me and looked out across these parched fields, and then up at the stormy clouds above, and said: "Lots of thunder and wind, no rain". There has been a deluge of words but a desert of ideas.
Most people are interested in debates and fights in their proper place, but surely the people of this country will resent to know that any portion of the tremendous sum of money which is required to maintain parliament is being used as a personal tilting ground for a couple of their fellow citizens. Personally, speaking for some colleagues and myself, we are here to do business, to come to grips with the internal problems of Canada so that she can be a strong voice in a troubled world. We are not here to waste time on trivialities. So much of what has been said in the last two days smacks of the beating of party drums and all the while the world crumbles around our feet. Mr. Speaker, we have had before us a spectacle of a couple of household watchdogs fighting about who is going to protect the house, when all the while the house is in flames. Action is what is needed.
Before I move an amendment to the amendment of the leader of the official opposition (Mr. Pearson), may I congratulate the government on the speech from the throne, for its literary content, for its vagueness and for its generality. In fact, it was a masterful piece of window dressing designed to cover over its inadequacies and omissions. It is an admission of failure. Much of it is merely a rehash of the 1957 and 1958 election platforms, plus every speech from the throne since. If the government had carried out its previous election promises plus the promises and assurances contained in speeches from the throne since 1957, 80 per cent of this speech from the throne could have been left out. It would have been redundant. It is an admission by the government that it expects to be eliminated before it gets an opportunity to formulate another speech from the throne.
Yes, it is all too obvious also that the leader of the official opposition is determined to cut the life of this parliament as short as possible. He has stated that it is his first duty
The Address-Mr. Thompson to this parliament to oppose the government. I disagree with the hon. member. I was elected and I believe it is my duty to represent the citizens of my constituency and at the same time, as a Canadian, to preserve the best interests of my country. However, I must congratulate the leader of the official opposition and the Prime Minister as well for a most eloquent delivery. In fact, I do not think I have ever heard either of them in better oratorical form. However, I must say that I am unimpressed with what has been said. It is, in fact, depressing.
I am glad that the people of Canada did not have the opportunity to listen to this debate on the speech from the throne by television. If they had, they might have thought they had tuned in Havana by mistake where they are accustomed to listening to tirades of three hours and four hours in length. It might be a good idea for the Minister of National Revenue (Mr. Flemming) to explore the possibility of getting a sponsor for the television production of the proceedings in parliament. This is a great show. It is a frightful charge that this should be so in this democratic institution whose purpose is supposed to be to grapple with the problems that could spell life or death for this country. If I really could have confidence in the words of the leader of the official opposition, it might be easier to sympathize with him. To the public he shouts "We must have an election now". To his own party members he says something else. At least he is quoted in La Femme Liberate, Vol. XVI, No. 3, September, 1962 as follows, and I quote a transliteration from the French:
When we meet in Quebec city-
That is for the national congress.
-parliament will then be in session for one month. What will then be the situation? We will probably have a more enlightening perspective of the future.
It is no wonder that the people of Canada are confused. That is why I am convinced that, if we were to turn the two old line parties loose in another election at this time, it would only add chaos to confusion. Given a few more months for the people of this nation to listen to more of what we have heard yesterday and so far today, perhaps it would not take too long for the Canadian public to understand that they have no hope whatsoever in either of the old line parties. I think it might be a good thing if they added the word "Columbus" to their names. At least this honourable gentleman of centuries past would give some dignity to the names they now carry. He is defined as the man who started out without knowing where he

The Address-Mr. Thompson was going and who, when he got there, did not know where he had arrived; and he did it all on borrowed money.
According to the press of last Friday the leader of the official opposition, when referring to my own remarks in regard to a vote on non-confidence in the government, is reported to have said this, "I find it very hard to keep up with Social Credit". He found it very difficult to keep up in Quebec in the last election; and in another election he is going to find it even harder to keep up with Social Credit not only in Quebec but across the whole of the country.
I am reminded of an incident that happened a number of years ago when I was keeping a speaking engagement down in the southern states. Having flown to one of the larger cities, I was obliged to get a car in order to go on to the smaller town in which I had my speaking engagement. The hour was getting late and as I was driving along the road I was not sure just where I was. I therefore stopped and spoke with a little coloured fellow. Most of the people down in that state are coloured folk. Not thinking too much I said to him, "Sonny, can you tell me where I am?". The little fellow looked at me quizzically and finally he put a little black finger up at me and he said, "There you is, mister". I was chagrined at my display of ignorance in the form of the question. I went on further and this time I met a coloured man. Carefully I asked him how I could get from where I was to where I was going. He said, "That is easy. All you have got to do is go down the road about a mile, then you turn to the right. Oh, that road is closed. You can't go there. Then you got to go back a mile and turn to the left." Then he stopped and said, "You can't go by that road either". Then he looked at me with that same quizzical look the little fellow had a few moments previously and he said, "I don't think you can get to where you is going from where you is".
I think that is exactly the position that faces our dear old political parties. Canada desperately needs leadership and not the kind of cock and bull stuff that we have had in this sacred chamber yesterday and today. Let us get down to facing the facts. Let us remember that democracy means not only representative government but also responsible government. If there was ever a time in the history of our nation when this house needed to show responsibility, it is now. Our party is determined to face up to the needs of Canada and Canadians above political opportunism.
Canada potentially stands in a unique and enviable position. Her material resources are

vast and diversified, and their development is still in the stages of infancy. Few, if any, other nations have a material development potential equal to ours. If what we have heard today about the wonderful state of our economy is true, then I guess all is well. This is not what the people of Canada understand today. This is what they did not understand when they came to vote on June 18. Otherwise the election results would have been different from what they were. I should like to say that surely there is no question about the quality and character of our human resources. This is true both at home and abroad. Through my many years of experience overseas I have come to see first hand the fact that Canadians have set an example of friendly confidence all over the world. Our Canadian people have established an enviable reputation for their enterprise, integrity and friendliness. With the rich heritage and cultures we have from our two mother nations across the sea, plus the addition of the many other nations and peoples down through the years that we have had in the new Canadians, we have set a record of confident and efficient achievement which speaks for itself. There are few parallels in this turbulent world of ours. This combination of material and human resources can make possible a higher standard of living and a greater degree of economic stability and progress than we have ever had previously.
This is the challenge which we face today. Let us face up to it and come to grips with these things which are important. This is the challenge before our generation, namely to prove that democracy can meet the needs and solve the problems of people collectively and individually. This is important not only at home but as an example abroad. I refer to a way of life which will provide for all the opportunity to meet the challenge and help to build for mankind a peaceful way of life that will give some assurance of its continuation in an age when it is possible to destroy everything, including ourselves.
It is the record of progress and also a fact of history that a majority has not always been right, and that if it had not been for the determination and the conviction of minority groups struggling for the survival of those things they believed were right, we would never have made the progress we have today.
I would also remind you, Mr. Speaker, that all such progress has been made in the face of determined opposition and even bitter prejudice as tradition has tried to hang on to the things of the past. That is not to say that all in the past is wrong, but that too often we support outworn ideas and institutions even when they fail to meet the need which

justified their coming into existence originally. I would also remind you that if the two old parties were satisfactorily meeting our needs today, there would be no need for the minority parties which are in this house now. The fact that in the last election more than one quarter of the Canadian electorate expressed their dissatisfaction with the old line political approach is ample evidence of this. Politically Canada, since confederation, has been governed alternatively by one or other of the two old line parties. They must, therefore, accept full responsibility for the problems that we do face today and which, I am convinced, are still with us, otherwise we could get rid of this word "austerity" and have prosperity. These social, economic and financial problems could and should have been prevented by effective action on the part of the parties responsible for the government of the country.
In the grim days of the great depression of the late twenties, the Canadian people elected a Conservative government after the Liberals had proven themselves unable to cope with the issues of the day. The Conservatives, and I remember this very well as a youngster, maintained that they had the answers to the problem of poverty in the midst of plenty. Within five years that Conservative government failed miserably and, as a result, in 1935 they were swept out of office and a Liberal government was given the opportunity to prove that it could succeed where the Conservatives had failed.
I was a young school teacher at this time and vitally interested in what was taking place, not only because my own welfare was involved but because many of my buddies, who had not had the opportunity of getting the little education I had, stood in the soup kitchens and in the bread lines or rode the freight cars across the country seeking an opportunity to work and earn an honest living. It soon became evident to us, however, that while the party in power had changed, everything else continued as before. The administration of the late prime minister Mackenzie King was no better than the administration of the late prime minister R. B. Bennett when it came to facing the need for providing the necessary reforms which would correct the obvious defects and strengthen the economy which gave us the bitter depression that we were experiencing in the midst of potential abundance.
Then came world war II. Domestic issues were forced aside. I never cease to marvel at the fact that we could meet our needs and provide the positive administration necessary in times of war which we could not do to meet our needs in times of peace. Nothing
The Address-Mr. Thompson was too good for us young men who were needed to fight the battle against the forces of dictatorship which threatened to engulf the world. It was a different story from the one we knew when we had cried for the opportunity to fight against the enemies of unemployment, hunger and privation.
Following the war the Canadian economy experienced a period of great buoyancy and advancement due to, on the one hand, a large amount of accumulated wartime savings which had not been matched with available consumer goods and, on the other hand, to the large scale industrial capital expansion which had been of necessity, neglected during the war years. By the middle of the fifties the lag in industrial output had been caught up with and had become greater than the consumer buying power. Thus, the post-war boom began to wear out. Once again the cycle of industrial retrenchment and tight money came into effect and with them the old problems of the thirties. Inventories built up and the wheels of industry slowed down, in spite of excessive credit buying by the Canadian public which became the order of the day. It became apparent to the Canadian people that the Liberals had no effective program to prevent another cycle of recession.
Meanwhile, the Conservatives, now from the benches of the opposition, many of the same gentlemen who are here today, loudly proclaimed their criticisms of the government in their failure to deal effectively with the nation's economic ills. They acclaimed from the house tops that they had the answers and, if given the opportunity to form a government, could without any shadow of a doubt solve these problems. Thus, in 1957 the people of Canada decided to give them another chance, first as a minority government; then in 1958 they were given the greatest majority any party ever had in Canada's history.
What has happened in the five intervening years since 1958 constitutes one of the most dismal failures of a public administration in Canadian history in connection with its obligations and responsibilities for solving the major economic and social problems that Canada faced in 1957. Is it not strange that while on the benches of the opposition the Conservatives had all the answers to the problem of unemployment? It will be recalled that before their election they claimed to have all the answers to the deficits of international trade. In matters of external dealings alone in these five years our deficits have gone up approximately $7 billion, while the total increase in debt of government at all levels, including consumer debt and mortgage debt, has increased by nearly $19 billion. The total supply of all the

The Address-Mr. Thompson money in the country is $4 billion short of being able to match the increase in our debt in the last five years at all levels.
This total debt of Canadians stands at approximately $34 billion, on which we pay more than $2.5 million of interest every day of our lives. Even more alarming is the rapidly increasing cost of government at all levels, which tells us that under present policies this debt load will continue to increase, regardless of which of the two old-line parties governs the country. In fact, it will increase faster if we go back to a Liberal government because of the promises we heard about, the implementation of which would add up, as we have been told, to more than a billion dollars in extra spending.
What causes the concern today, gentlemen, is this: If you add up all the money Canadians earn and add up all the money that governments in Canada spend, approximately 45 cents out of every dollar is paid by the people who earn those dollars back to the governments which render them their governmental services. The record of history and economics tells us that no empire or nation in the past has survived as a free society when more than half of the income of its people is required to meet the cost of its government. Facts and common sense tell us we cannot continue as we are going if we are to maintain the free way of life. It is impossible and futile to believe that the perpetuation of the policies which created and promoted the growth of this malignancy will cure the condition. It was the Greek philosopher Demosthenes who asked: "Are you so unintelligent, men of Athens, as to hope that the same policy that has brought our state from success to failure will raise us from failure to success?"
This debt system is today destroying the very basis of our democratic institution and the initiative and enterprise of our people. Most definitely it has weakened the confidence of Canadians in their own economy to the extent that we are today content to invest our savings in the debt of our deficit financing rather than in the development of the resources which we have in our country. More than half of all the money in Canada is tied up in such "dead" investments as savings accounts in our banks or trust companies and debt investments in Canada.
If we had the confidence that we should have as Canadians in our own Canadian economy, then our savings would be put to work developing our country and its resources in order that we might have a higher standard of living. Money is the only medium to which our production can be distributed, that is money including currency and credit.

As our economy grows, there is need for a corresponding increase in the amount of money. However, the tight money policies of this present austerity program, along with the unreasonably high interest rates which we are paying on everything on which we have to pay interest, will only perpetuate an ever-worsening situation. The pre-requisite of a balanced economy is the supply of purchasing power sufficient to distribute production. This we do not have. As a result, our economy is depressed and progress prohibited.
I realize that this house has many hon. members with long years of political experience. There are likewise those with great academic achievements in the field of economics. I make no claim to either of these qualifications. However, perhaps as a continuing student in the graduate college of practical economics and sound business, I am able to give some practical advice. One of the first lessons I myself learned in the hard cold facts of this school I am talking about can be summed up in this way-if your outgo is more than your income then your upkeep will be your downfall. How can you ever eliminate debt through the incurrence of more debt?
I commend the government for saying the budget must be balanced. It was the chief criticism of the speech from the throne by the aspiring member to the vacant chair across the house, who criticized the government for aiming towards a balanced budget. If prosperity depends upon plunging this country into further debt, if a continued load of debt is our only destiny, then it would be better to throw in the towel now to the proponents of statesmen and let each individual become a bondservant of the government, rather than prolong the agony of a slow death. However, I am convinced that this need not and shall not be our destiny.
There is a way of progress and we must adopt it ere it is too late a way which will let every man have security without debt and still have the guarantee of his personal liberty and freedom. This way is social credit. When we talk about a balanced budget I wonder what right the government has to state this as its objective when, during the last five years, it has created greater deficits than were created in any similar period in the history of our country. The debt increase in Canada from the period January 1, 1957 to June 30, 1962 totals $18,990 million. Our overseas debt is $6,988 million. Federal government direct and guaranteed securities add up to $3,060 million. Provincial direct and indirect debt amounts to $2,402 million. Municipal direct and indirect debt stands at $2,348 million. Consumer debt, and this includes

personal loans by banks and credit unions, is $2,702 million. That makes a total of almost $19 billion in just five years.
It is useless to pretend that the Liberal party has any better record than the Conservatives when it comes to incurring debt. Under a succession of Liberal administrations Canada's national debt increased between January 1, 1939 and December 31, 1956, a total of no less than $10,898 million.


An hon. Member:: There was the war.


Robert Norman Thompson: You say it was the war. That is true; but most of that debt was incurred during those years. You say it is permissible to go into debt during a war, but some say that after the war the debt was reduced. I deny that statement.
At the commencement of the last war members of this party protested most vehemently against the adoption of a method of war finance which would plunge the country into debt. They pointed out that a government which had power to issue a bond also had power to issue dollar bills and credit. Had it not been for the inflation that this method of war finance entailed, it would not have been possible for the Liberal administrations to carry on as well as they did in the years after the war.
As it is, we must place fairly and squarely upon the Liberal administration the responsibility for the greater part, although by no means the whole, of the crushing burden of this country's national debt. As an example we can look at the Liberal administration in Quebec. In two years it has increased the debt of the province of Quebec by more than it was increased during the previous 93 years history of that province.
How can private enterprise be established and strengthened by robbing incentive and initiative, by tight money, high interest rates and by reinforcing the hand of vested interests and monopolies? The Prime Minister has said that the issue prior to the last election was private enterprise versus socialism, but this is not the issue if private enterprise is expected to live under present trends when those who claim to be the champions of private enterprise become the apologists for socialism.
An outstanding example is the equalization of taxation on private and public utilities which, at the present moment, is an issue in the province of Quebec under a Liberal administration. If users of electricity, who buy their electricity from private companies, can be expected to pay the increased cost of their electricity, and those who buy their electricity from public companies do not have to pay the tax placed on private companies,
The Address-Mr. Thompson how can you expect free enterprise to survive? Why should the users of private electricity be subject to the payment of a tax which the users of public electricity do not have to pay? Not only is tax equality urgently required but it would also create a great incentive towards more development.
We now have a royal commission on taxation, but we in this party maintain that we cannot wait for tax reform upon the findings of a royal commission, which may not be produced for two years or more.
I am pleased to note that it has finally been decided to go ahead with the development of the Columbia river project. The recommendations which the government of British Columbia has been pressing are nothing more than a practical business approach. To refuse to export power which is a continuing energy resource, as long as the rains fall and the rivers run, is completely incompatible with the policy which permits the export of expendable resources such as oil and gas. However, it is interesting to note that the export of power in this case concerns power which is not even generated in Canada. Rather, it is extra power generated in the United States at the Libby dam and returned to Canada on a share basis.
It is hoped that the government will also see fit to play its part in immediately going ahead with a two river project. This is vitally needed by Canada if our industries are to expand and if there is to be any hope of increasing employment. I would also remind the government at this time that any hope for a useful national energy grid will depend largely upon the immediate development of both the Peace and the Columbia rivers.
I was pleased to note that the Prime Minister has given the house an assurance that legislation will be introduced in accordance with the practical recommendations of the O'Leary report as it relates to the magazine publishing industry in Canada.
The speech from the throne states that Canada's prosperity and growth must ultimately rest in large measure upon its exports. May I ask how we can increase our exports while at the same time we build up higher tariff walls? The only true basis of international trade must be the exchange of goods. Canada's prosperity and development depend on our ability to grow and on the ability of the Canadian people to use that which they are able to produce. We must expand if we are going to live. Social Credit regards continuing progress as being dependent upon new development and growth, and it is a basic law of divine creation that our trade and economic functions must be directed to this end.
Therefore we say that the prosperity and development of Canada depends on a trade

The Address-Mr. Thompson balance, on Canadian consumers with money purchasing that which they are able to produce. Second, it depends upon a general decrease in the cost of living, which will mean cessation of the present inflationary trends. This means lower taxation as well.
Amendments to the Export Credits Insurance Act will be welcome, but it is necessary that we follow up on our settlement problem as well.
It might be well to note here that the financial proposals for the commonwealth, made by the United Kingdom's Chancellor Maudling recently, are worthy of consideration. In the same way that we were in difficulty in the thirties internally with the gold standard so we are in trouble externally with the gold standard today.
The freest possible exchange of goods and services is an essential ingredient of a buoyant economy. Likewise the old pattern of high tariffs and economic isolation must be replaced with new and freer trade patterns. The commonwealth weakens about us and its influence diminishes simply because we do not have the courage or vision to launch out into the obvious. Prime Minister Diefenbaker missed a great opportunity for leadership at the recent London conference simply because he could not free himself from the old rationalizing indecision which has been characteristic of his administration. Today's freer trade requirements are not limited to the commonwealth; they must also apply to the United States, to the American hemisphere and to other friendly nations. But they must begin some place.
We must understand not only the truth of this, but the urgency of it. What better place could we find to begin such a policy than our next door neighbour? Talk of a world conference to this end sounds all too hollow in light of the increased tariff walls we build, even though we give them such high sounding names as "surcharges".
I must commend the Prime Minister for his first mention, as given in the throne speech, of the political implications of the European economic community as it relates to the treaty of Rome. It is well that the leader of the official opposition should remember that the strength of our nation and our way of life does not merely depend upon economic laws. There Eire laws, yes; immutable laws which extend far higher than this. One of the great heritages that we have in the commonwealth of nations is the parliamentary system of government which puts the democratic authority and responsibility back to the people rather than being vested in the constitution.
May I say here that the treaty of Rome, while good in its economic aspects, and while

its benefits have been and will continue to be of much benefit to the continent of Europe itself, is outweighed by the political implications it contains. I would suggest that every hon. member of this house study this document before making any final decision as to whether or not he thinks Britain should be joining this political, economic setup at this time.
If only we could understand that Britain's need is not merely preferential treatment for commonwealth countries, not merely industrial competition from Europe, but simply that of raw materials and markets which can be far better obtained within the commonwealth itself, then we would immediately demand a commonwealth trade conference with full preparation and study. Thus we come to many of the problems that we have been hearing about today and yesterday.
At this particular time I think we should remind ourselves very carefully, each one of us as members of this house, that we have a responsibility to Canada, to our electors, to each other and to parliament. Therefore we maintain that we must face up to the legislative needs of Canada at this time. Canada desperately needs legislation; she desperately needs to have the confidence of her people restored in the processes of democracy and in those who have the authority for government.
Therefore at this time-I will at a later time finish the remarks I have to make-I would move, seconded by the hon. member for Villeneuve (Mr. Caouette), that the amendment which was proposed last evening by the leader of the official opposition be amended by inserting after the word "advisers" and before the word "do" the following:
-having failed to pursue economic and financial policies based on Social Credit principles-


Some hon. Members:: Oh, oh.


An hon. Member:: Printing money.


Robert Norman Thompson: Nobody said anything about printing money. I noticed that some of the proposals of the leader of the official opposition had been copied right out of our last election platform. Hon. members should stop laughing, before they go too far. To continue;
-having failed to pursue economic and financial policies based on Social Credit principles, designed to establish a balanced economy and relieve the burden of public debt and public debt charges, thus assuring Canadians a standard of life compatible with this nation's capacity to produce-
The amendment as amended would then read:
We respectfully affirm to Your Excellency that Your Excellency's advisers, having failed to pursue economic and financial policies based on Social Credit principles, designed to establish a balanced economy and relieve the burden of public debt

and public debt charges, thus assuring Canadians a standard of life compatible with this nation's capacity to produce, do not possess the confidence of this house.
Now, Mr. Speaker, I would continue with my remarks. I think I still have a few moments left. The objectives for a world trade conference are commendable and good, but may I remind the government that you must start some place, and what better place to start than the commonwealth itself?
It is interesting to note that the Prime Minister has endeavoured to build confidence in Canada for foreign capital. Why is not something done about building confidence in Canada for Canadian capital? How can we expect Canadian owners of Canadian capital to invest their money in the development of their own country when they can receive more profit with less risk by investing in the debt of a deficit financing policy?


Mr. Speaker:: Order. I regret to advise the hon. member that his time has expired.


Some hon. Members:: Continue.


Mr. Speaker:: However, if the house grants unanimous approval, the hon. member may continue.


Some hon. Members:: Agreed.


Robert Norman Thompson: Thank you, Mr. Speaker. At this point it is well for us to understand, in general terms at least, the different capitals with which we have to work. Adam Smith understood this when he realized that labour and land were not sufficient; that in a mechanized world capital is necessary. Today, as automation takes over, how much more necessary is it for us to understand the basic purpose of capital if we are to survive at all as a free way of life.
We have tax capital. Tax capital is the money which the tax collector takes from your pockets, my pockets and the pockets of all Canadians to pay for the services which government renders. Governments have no source of capital except as they take it from us, the taxpayers, or as they use our credit to borrow money to make up deficits. I think the sooner we understand, the better. I suggest to hon. members of the house on this side that the sooner we remember that the only money governments have to spend is tax money, the better off it is going to be for our economy. You cannot get something for nothing when it comes to paying the cost of services of government.
Second, there is commercial capital, which has better been called production capital. This is the capital which comes from our savings and which is rightfully used for the development of our resources and the carrying on of our commerce. This is the kind of capital that
The Address-Mr. Thompson earns a profit. There is nothing wrong with profit. Some of our hon. friends would make "profit" a dirty word. Profit is nothing more or less than the earnings of the invested capital as it produces our needs.
The trouble in our country today is that our production capital lies idle when it should be at work developing our country. If 25 per cent of this type capital today that lies idle were put to work, there would be no shortage of capital and we would not have to be crying for capital from outside the country.
I should here like to mention a third type of capital which is most important to us right now. This is public capital. Public capital is capital which is used to construct and make possible our public projects which do not earn a profit. I am thinking of schools, hospitals, highways, bridges and canals. This is the type of capital we must have to finance the capital development of our public or social needs.
We in this corner of the house maintain that this capital should not come from the commercial market. It should come from a municipal development bank as an integral part of the Bank of Canada. May we remember here that such capital does not earn a profit. Do we earn a profit on schools, highways, hospitals or canals? No. Instead, it facilitates a service. Public capital under the present system is drawn off the commercial market at high rates of interest. As a result, the cost to the taxpayer of all public developments in this country is more than double the cost of the actual construction itself. As an example, board sidewalks costing $100,000 in 1912 cost the Vancouver taxpayer $345,000 by the time the final payment was made in 1962. The paradox of this is that those sidewalks never earned a cent of profit and they rotted away more than 30 years ago.
The real purpose of a municipal development bank and not that of a municipal fund, which just takes more money to redistribute to the others, is to supply the credit which is necessary for the construction of our public capital works and this is one of the most urgent needs at this moment in our economy because unless this type of expansion can go forward this winter we shall be facing one of the grimmest winters we have experienced for many a year. While I do not claim to be a prophet nor a son of a prophet, I am sure that by next spring we shall have 20 per cent of our work force unemployed, together with a cost of living higher than it has ever been. This is something we shall have to face in this house in this parliamentary week. Canada stands at a crossroads in her history and the crisis

The Address-Mr. Thompson centres right here in this house. It is essential that we should face up to it and meet the responsibility which is before us. What does this involve? On the part of the government-and I think this is very important-it must be remembered that this is a house of minorities. They must acknowledge that they do not have the trust and confidence of the Canadian people generally; they form a government only because they have the largest minority group. The government and its supporters must recognize that the policies and program which they have followed in the last five years are responsible for the loss of public support and therefore they must be willing to give heed to some of the recommendations from the other parties whose combined public support represents nearly two thirds of the electorate.
The Liberals, as the official opposition, must recognize that the situation in Canada today is not a normal set of circumstances but a national emergency. Statesmanship requires that they should forego their traditional political procedures and give precedence to a position dictated by the national interest.
We in this corner are not responsible for the government's decisions. We will use this opportunity to give leadership and a practical demonstration of statesmanship as against the jockeying for partisan advantages which the prevailing situation invites and which is so characteristic of both the larger parties.
What is our practical approach? To be practical it is essential that we look at the facts. The confused situation facing parliament obviates clear thinking and brings into focus two specific issues. First, with regard to external affairs, a realistic program is needed to solve the balance of payments problem. Obviously, temporary emergency measures cannot solve anything. We cannot expect to return to normal conditions and progress if we maintain these emergency measures. It is essential that external credits be granted, using the Bank of Canada to increase exports for the good of all the people. To increase exports is a more logical approach than the curtailing of imports except when domestic production will not increase consumer costs.
Internally, there is an urgent need to create circumstances which will assure a buoyant and confident internal economy. We need: adequate capital for industrial expansion; adequate consumer purchasing power, and adequate social measures for large-scale municipal growth and improvements.
Thus, I think we must rise above those things which divide us politically, to the level of the statesmanship which the nation needs at this time. Let us have a few months at


least free from partisan considerations. Let us keep Canada first. Our party recognizes and acknowledges the facts with respect to its own position in parliament. No one has the confidence of a majority. Collectively, we all represent the public will. In this regard there is a particular responsibility resting on the government party, since they form the government. Social Credit is determined to follow the role of statesmanship. This is the only approach. I appeal to each party, to each individual member of this house, to consider their responsibility. If this responsibility is rejected, the only outcome would be a national crisis.
In five short years we shall be celebrating the hundredth anniversary of our nationhood. Before this historic milestone is reached, the people of this land will have to reach a decision. They will have to decide whether they will continue to blunder along the path of confusion and indecision. This decision may well be as vital as was the decision which first united the foundling provinces of this great nation. Shall we continue down the road we have been travelling to the inevitable economic and financial crisis to which our debt system has been taking us? Shall we continue to believe in a system which says we never had it so good and then, the next week, have to tell the people that the country is going broke? Shall we have confidence in a system which told us in 1957 and again in 1962 that we were in the midst of a period of economic expansion only to wake up to find tight money and high interest rates holding us back?
Would it be better to turn to the left and sacrifice the remaining vestige of freedom and dependence, first to the false hope of socialism and later to communism which is the socialist's ultimate destiny? True, it would be an alternative to the old way admitted even by those who profess free enterprise but who, in their expediency, have become the apologists of the very philosophies which they preach.
Or shall we turn to what is right and set our feet on a new path which will lead this nation into an era of prosperity and freedom with opportunity for all? This is the problem to which hon. members must find an answer as we face our joint responsibilities in parliament toward the needs of our nation at this time.


Herbert Wilfred Herridge: Mr. Speaker, may I take advantage of this first opportunity to congratulate the mover (Mr. Chaplin) and seconder (Mr. Vincent) of the motion. Their thoughtful presentations bore testimony to their concern about the problems which face Canadians at this time.

No doubt hon. members have noticed with interest that there is an unoccupied seat to my left. I must explain to them that there are many people in the constituency of Burnaby-Coquitlam and all across Canada who are doing all they can to see that Mr. T. C. Douglas graces that seat after October 22.
Mr. Speaker, the leader of the aggregation opposite us mentioned the word "statesmanship" on half a dozen occasions and then ended up by placing his group in the same position as the Prime Minister (Mr. Diefen-baker) attempted to place the Leader of the Opposition (Mr. Pearson).


Paul Theodore Hellyer: Explain.


Herbert Wilfred Herridge: I think my hon. friend opposite understands what I mean. I do not like using the word the Prime Minister used. The limited time at my disposal does not permit me the luxury of gnawing on the bone of partisan trivialities. Therefore, I intend to take the time at my disposal to present a synopsis of our program to the house. Other members of this group will deal in more detail with particular aspects of the throne speech and our program, will give a thoughtful analysis of the economic situation as we see it and of our proposals, and make certain criticisms, comments and observations on the speeches of the Prime Minister (Mr. Diefenbaker), the Leader of the Opposition (Mr. Pearson), and my hon. friend opposite.
However, before proceeding I must say this. I think a good many members will agree with me that a considerable portion of this very important debate has been considerably below par. I think we have a definite responsibility to the institution of parliament and to the Canadian people. So far as this group is concerned, it accepts its responsibility. It will continue to do all it can to maintain the dignity of parliament, promote respect for parliament, and make it function more efficiently for all Canadians.
Mr. Speaker, the members of this party have tried their best to receive the speech from the throne with a broad mind and in as charitable a fashion as possible. It has been very hard. We have listened carefully for any hint or suggestion of protective measures to deal with the many serious problems which face Canadians today. I must admit, however, that looking for positive measures in this throne speech requires a degree of optimism equal to that of the man who looks for eggs in a cuckoo clock. Government promises in the throne speech remind me of the huckleberry crop in British Columbia this year. In April the huckleberry bushes were
The Address-Mr. Herridge replete with blossom; blossom was on the huckleberries everywhere in profusion. Then we had a few chilly days in May, and we have not had any huckleberries in September. I think that illustrates very well the government's promises and the indications of what the government intend to do so far as this speech is concerned. I think it is quite safe to say that the majority of Canadians generally now realize that the government's performance has fallen far short of its promises since 1957. Anyone who has read the record throughout the years will fairly agree with that, I think. Government ineptitude, lack of purpose and lack of direction have been repeatedly demonstrated. My time does not permit me to go into numerous illustrations, but seeing that the subject has been mentioned this evening, I want to bring one illustration to the house which I think shows this perfectly. Time will permit me only to give this one illustration of the government's lack of purpose, policy and program, namely, the tragic desertion of principle and capitulation to the premier of British Columbia in the matter of the Columbia river treaty. I wish to point that out. It is a most unusual circumstance. Never before in Canadian history have we had cabinet ministers telling the public a few months before that such a course of action would betray the interests of the Canadian people, who then turned around later and did just that.
Now, two paragraphs in the speech from the throne concern us. They are that:
It is hoped that arrangements will soon be completed that will make it possible to submit for your approval the Columbia river treaty and the legislation required in parliament to implement it.
The second paragraph is:
My ministers have come to the conclusion that large scale, long term contracts for the export of power surplus to Canada's needs, present and potential, should now be encouraged in order to expedite the development of major power projects in Canada which are too large to be supported by the domestic market. Such exports can also strengthen our balance of payments.
There is a reason for this about-face. This government is hungry for dollars, and is willing to sell this country out to get some quick dollars through the signing of the treaty, and surrender to Premier Bennett. This is a different course of action to the former course and it has been taken by members of this government from the Prime Minister down.
I would like to quote the Prime Minister on February 11, 1957, as reported on page 1158 of Hansard. He said:
Also in connection with power development which is so necessary we believe that Canada's right to the potential hydroelectric power latent in international rivers in Canada should not be parted

The Address-Mr. Herridge with under any circumstances, and that the benefits of such hydroelectric power should be preserved for the ultimate use of the people of Canada.
Can we square that statement with the government's present policy? I will not go into the details of this-there will be opportunity later-but I do want to emphasize and to demonstrate this complete reversal of policy, which indicates the instability of the policy of this government. On September 16, 1961 there was an address by the Hon. W. A. C. Bennett, premier of British Columbia, to the associated boards of trade of central British Columbia, at Prince George. During this address Mr. Bennett spoke in critical vein of the treaty, repeatedly quoting Mr. Stewart L. Udall, secretary of the interior of the United States, to indicate what a good treaty this was for the United States. At one point Mr. Bennett said:
This is the deal which the zealous-and in my opinion, extremely naive-chief Canadian negotiator, the Honourable E. Davie Fulton, wants British Columbia to buy.
Then later the "Hon. Davie Fulton" went to Prince George to reply to Mr. Bennett, and I have a copy of his manuscript in my office. The minister spoke on November 28, 1961. Mind you, this is the Minister of Public Works (Mr. Fulton) in this administration speaking. He said:
The Americans haven't been offered such a windfall since the purchase of Manhattan Island, unless, of course, it was the Bennett-Kaiser deal the federal government stopped in 1954. Now the pattern is repeating itself and the sellout will have to be prevented again.
Then again, here is another quotation from the same speech:
Of course American government and other officials are hoping that Ottawa will adopt this policy. Of course Mr. Bennett is using this as a squeeze play, but Canadian government policy is still made in Ottawa not in Washington and Victoria as Mr. Bennett would like to see it. Canadian government policy will continue to serve Canada's best interests, not those of the United States.
Then Mr. Fulton went on to say:
Why did the Bennett government and the federal government set the treaty up on the basis that we should get back 50 per cent of the power generated in the United States?
Because we knew that this was the cheapest power British Columbia will ever get anywhere.
Because we knew that this meant better chances of British Columbia competing in Canadian and world markets.
Because we knew that this improved our chances of getting new industries-creating more permanent jobs-not temporary construction jobs, but permanent industrial jobs-
The Bennett plan makes sure that the transmission lines go just one way-south-
Canada is opposed to the sellout of the power we are entitled to under the treaty. Canada is opposed to long term contracts tying up Columbia downstream benefits. This would confer an enormous benefit on the Americans, but we are not prepared

to permit that at the expense of British Columbia. The Bennett-United States squeeze play won't work. The power sellout has to be resisted-[DOT]
To exchange it-
That is, the present Columbia treaty.
-for a penny-wise and pound-foolish agreement under which this country would dispose of a great resource in its entirety would be sheer madness.
It would be an act of such reckless and improvident philanthropy that would make this country the laughing stock of the world.
The Minister of Public Works made these statements when he was minister of justice and when he was chairman of the negotiating committee. This will take some explaining to the people of British Columbia, and I can tell you already that there are telegrams from trade unions and other groups in British Columbia coming to our office. This is going to be an issue in British Columbia. Let me say this: the debate on this treaty, when it comes before the house, will rival the pipeline debate. There is going to be a really good debate on this great issue. I note that the government's final promise in the speech from the throne reads as follows. I say "promise" because I am always a little bit leery.
You will be asked to abolish closure and to reestablish the special committee on procedure of the house.


John Whitney Pickersgill: Will the hon. member permit me to ask him a question at this time?


Herbert Wilfred Herridge: Certainly.


John Whitney Pickersgill: Has the hon. gentleman noticed that this is not the third session but the third parliament to which that promise has been made?


Herbert Wilfred Herridge: Yes. I am fully aware of that fact. That is why I qualified my statement when I said that it was the government's final promise. I look upon it only as a promise, yet. However, I am appealing to the Prime Minister's sense of sportsmanship in view of what he had to say in the pipe line debate. We all remember the Prime Minister's strong opposition to the application of closure during the pipe line debate and his promise that a Conservative government would abolish it. There are many hon. members who will recall his rousing remarks on that occasion, this champion of the Canadian Bill of Rights and of that sort in this house. We trust he will stand by his principles, his assurance and his promise by making certain that the house will have the opportunity to deal with the abolition of closure prior to the introduction of the Columbia river treaty. I think that is a very fair suggestion. I could go on for hours on this subject. My office is full of material. Let me also say this. Some of the hon. gentlemen opposite are not fully aware of this

situation. They live in eastern Canada and they do not understand what it means to thousands of people in British Columbia. However, 1 am speaking for thousands of people in British Columbia when I mention this matter with respect to the Columbia river treaty.
In the main the throne speech concerns itself with economic affairs. Once again we find the Conservative government can look at exactly the same evidence as everybody else and yet come up with an observation all their own. It is very clever of them. The rest of us look at the dominion bureau of statistics figures which show that average annual unemployment in Canada has hovered around 7 per cent of the labour force during the last four years and that last year the per capita real gross national product was less than it was in 1956, and we arrive at the conclusion that this is a very shoddy performance.
For example, a recent report by President Kennedy's committee on unemployment revealed that the United States has the highest unemployment of any non-Communist industrial country, with the exception of Canada. I noted that the leader of the official opposition mentioned that matter in his speech. Canadians are noticing it. On this matter I am getting letters cut out of papers and underlined. The facts are being impressed on a good many Canadians. The government, however, interprets exactly the same set of data to mean that the economy has moved ahead sharply. This seems very odd to me and to the other members of our party, but doubtless these are mysteries which mere mortals like myself cannot hope to comprehend.
It came as no surprise to most of us that the government is determined to continue the austerity program. What I think staggers the imagination of anyone who thinks seriously about these things is this. The government thinks it can provide a million new jobs over the next five years and keep the austerity program at the same time. Tight money and reduced government spending are bound to increase unemployment and further restrict economic growth. These are, from our point of view, exactly the wrong policies to adopt in our present economic circumstances. All across the country the cry has been taken up that the time has come for Canadians to tighten their belts. In an economy such as ours we believe this is dangerous and misleading nonsense. Belt tightening policies might be called for if we already had full employment, were producing at full capacity, and were in danger of inflation. But to tighten our belts now can only prolong and aggravate
The Address-Mr. Herridge the high unemployment and sluggish economic growth which have been this country's shame for the past six years.
I just want to deal with this aspect of the matter. Let us consider the tight money policy for example. With interest rates of 5 per cent and 6 per cent the provinces and municipalities will be unable to borrow the funds they need for essential social capital investments. Everyone knows that all across Canada there is a tremendous need for social capital of all kinds for schools, houses, hospitals, roads, bridges, public power, slum clearance, urban renewal, parks, recreation centres and the like. The Canadian Federation of Mayors and Municipalities has brought these matters before the government on more than one occasion and I have discussed this matter with officials of the federation. Not only are these projects desperately needed by our society now; they are also capable of creating thousands of jobs for unemployed Canadians and for those thousands more who will enter the labour force over the next few years. There are thousands coming into our labour force every year. Many of these projects are the responsibility of the provincial and municipal governments. On behalf of this group I wish to emphasize that in order to carry out investments of this magnitude they must borrow money. But when interest rates are as high as they are now under the tight money policy, we find this situation.
I wish my hon. friend the leader of the aggregation opposite me had been in this house when their former leader, Mr. Low, used to talk about the tight money policy. The hon. gentleman sang a very different tune from that sung by his predecessor in the years gone by. At any rate, when interest rates are as high as they are now under the tight money policy, the provincial and municipal governments will be unable to borrow and will have to abandon their plans for social capital and public works construction. When these things are abandoned, thousands upon thousands of potential jobs will be lost to the Canadian economy. There is no question about that matter. Tight money also restricts the investment plans of small businesses. Small business is noticing this throughout the country and small business is beginning to turn towards this party of social progress to come to its rescue. More and more people are beginning to realize that we are the ones who believe in the mixed economy, public ownership, co-operative ownership and legitimate free enterprise, particularly small business.


Robert Norman Thompson: It will eliminate it.


Herbert Wilfred Herridge: Moreover, it strikes the home builder and compels him to abandon his plans for building that new house until he can

The Address-Mr. Herridge borrow money on easier terms, with the result that the construction industry sags and more jobs are lost. All this adds up to one thing namely greater unemployment, both directly and indirectly, now and in the future.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Herbert Wilfred Herridge: Mr. Speaker, when I was enjoying my dinner and noticing the large number of people who were enjoying their dinner in comfort, I could not help thinking of the millions in the world who go to bed hungry every night, and of the task we have to set things right both at home and abroad, a task that will tax our humanity, integrity, intelligence and industry.
Now, Mr. Speaker, when we rose at six o'clock I was questioning the statement that the government's policy would create a million jobs in five years. I said I would like to know how. I may say that equally disastrous is the government's determination to make large cutbacks in government expenditures. From our point of view it will be particularly harmful if those cutbacks take place in public works and social capital. This is precisely the sector of our economy where a much higher level of investment is needed and which has the greatest potential for creating new employment. This is a self-liquidating investment which returns something to our society throughout the years. A cutback in expenditures here will depress employment directly.
Mind you, Mr. Speaker, it is not only this government's projects that will cause a loss of jobs. It must be remembered that each employee on these projects will be spending part of his wages and salary on the goods produced by private industry, thus expanding employment and production in that sector of the economy as well. Therefore, the members of this party say that when the government makes giant cutbacks in government expenditures it costs jobs both in public and private industry. We fail to see how we are going to get economic growth, rising employment and production as promised in the throne speech on this basis.
The austerity program is diametrically opposed to economic expansion. When the government talks about using austerity to promote prosperity, I am reminded of those governments in Canada and the United States, as well as Britain, during the thirties, that thought the way to solve the paradox of


poverty in the midst of plenty was to get rid of the plenty. Surely, Mr. Speaker, a great many members in this house can remember the policies of former president Hoover, of Britain going off the gold standard, and the consequent unemployment in Great Britain and then in Canada. We remember exactly the same austerity program under former prime minister Bennett which created great hardship when the stability of money was of more concern than the welfare of human beings.
We in the New Democratic party are convinced that you can only get full employment and economic expansion through a system of democratic planning. Now, you know, planning has become very popular. I recall some years ago the leader of the group opposite rising in this house and saying-and I am sure the hon. member for Winnipeg North Centre (Mr. Knowles) remembers the occasion, and you will find it in the record- that anybody who suggests economic planning in Canada is suggesting reducing the Canadian people to slavery. Well, we have had an impact on thinking people in Canada. Planning has become quite respectable. Even the heads of big corporations realize there has to be a measure of planning, and so does this Conservative government realize it. But our point is that this economic planning must be under the direction of this house which is responsible to the people of Canada, and not the directors of big corporations.
We note, Mr. Speaker, that the throne speech makes special mention of a national economic development board, but as usual the wording used by this government in throne speeches is very vague in relation to the jurisdiction and powers that this board will have. I must say that from past experience we are very suspicious of the exact meaning of this wording. We are waiting with interest for some elaboration of the proposal, some details of what is actually meant. Will it be a serious effort at economic planning in Canada on the part of this government, in co-operation with provincial governments and other levels of government, or will it turn out to be a second cousin to that mammoth hoax the productivity council? This is the question we are asking.
The New Democratic party has made clear its policy on economic planning. We have also made it clear what we do not regard as planning. For example, planning does not mean mere economic forecasting. It does not mean just a review of what is already happening in the economy. It does not mean a mere announcement of economic goals. It does not mean the mere lumping together of the separate programs of government departments. Finally, it does not mean simply the

exchange of information and advice between the government and a board of advisers. It goes far beyond that.
Democratic economic planning, Mr. Speaker, as understood in this party and by an increasing number of Canadians at this time consists of four things. In the first place, it is an account of the possibilities in Canada. It is an estimate of what the economy can do, of what it might do this year and next year and in all the years of the foreseeable future. The range of choice is enormous when one applies his thoughts to this question. How much education are we prepared to provide today? We in this group believe that every Canadian child, regardless of where it lives or the economic circumstances of its parents, is entitled to all the education of which it is capable of taking advantage at the expense of us all. How much northern development should there be? Now, our northern development would extend beyond that unconventional project of the government's last year in the Yukon, but which had a great d^al of news value. I am all for preserving these historical sites, but we have to set our "sights" much higher than that. I mean that in several senses.
What kind of industrial investment is required in this country? What combinations of all these things are possible? Now, Mr. Speaker, we have the mechanisms, we have the services in federal government. They have them in the provincial governments. You would be surprised at the number of persons in private industry and in local organizations who would be willing to cooperate with the government if it had a purpose, a plan which was prepared and in which they were asked to co-operate. We simply fail to take advantage of the reservoir of goodwill that exists amongst the Canadian people. I am one of those who believe that we have to provide the morale equivalent to that prevailing in wartime; we have to stir the people to believe that they are proud of this country. I am a Canadian and proud of it. We have got to get them thinking of national problems and get their co-operation in national projects and objectives.
I think all of us realize that in an unplanned economy there is a feeling of inevitability about what happens. Indeed, I meet people today who ask "What is the use"? because they realize they are capable of starting this going and getting it in motion, and that sort of thing, but this inevitability is taken as an excuse for poor economic performance by governments, and by private industry in some cases, but a planned economy shows how wide and rich the possibilities are from which we can choose. This will be democracy in action.
The Address-Mr. Herridge Here we will have people applying themselves to the maintenance of political freedom and working at the same time towards the extension of our economic freedom.
I suppose I should interject at this point that we would set up a planning board, consisting of economists, engineers and other experts whose job it would be constantly to conduct studies of the Canadian economy, draw up goals and priorities and the means for implementing them, and report regularly to the government.
In the second place a democratic economic plan is the discovery of what people actually want. It is not just making them want a lot of the tinselled, useless things peddled to them today which create standards for false values. We would find out what the people should want, and do want in the majority of cases. I represent a constituency of good solid Canadians, 50 per cent rural and 50 per cent industrial, but I find that the great majority of people do not understand what are the sound values in life, what are the things worth looking for and what are the things worth acquiring. We should find out what they want. We should give them a chance to express themselves instead of flooding them with the tinsel things on which they are asked to spend their money today.
In the New Democratic program we call for the establishment of an economic advisory council, representing business, labour, farmers and consumers. We say that a part of the function of this council would be to keep the government informed about how the people want their economy to perform and what they want it to produce. Of course the first things are the necessities of life for everybody.
Then, once the possibilities have been assessed and the choices of the people understood, the officials on the planning board-


Mr. Speaker:: I regret to advise the hon. member that his normal period has expired.


Some hon. Members:: Let him continue.


Mr. Speaker:: Has the hon. member the unanimous consent of the house to continue?


Some hon. Members:: Agreed.


Herbert Wilfred Herridge: Mr. Speaker, I want to express my sincere appreciation of this courtesy extended to me by the house. It is obvious that I am making converts wholesale.


Jay Waldo Monteith: Don't be misled.


Herbert Wilfred Herridge: Once the possibilities have been assessed and the choices of the people understood, the planners on the planning board should draw up goals for the economy based on the people's choices and within the limits described by the possibilities. This plan



L26 HOUSE OF COMMONS

[Stage Direction]
The Address-Mr. Herridge would be submitted to the cabinet and to parliament for debate in this house, and then for approval or otherwise.
Finally, democratic economic planning is the deliberate determined use of intervention and direction to attain the goals of the plan. We believe it is time that those responsible to the people determined the direction of investment, the rate of investment and the development of our natural resources. This is where our concept of planning departs significantly from planning as it is understood by the other political parties. The leader of the Liberal party, for example, bases his party's belief only in advisory planning. It was rather disappointing to hear this as I thought we had influenced him more than that during the last parliament.
Unless the government is prepared to intervene in economic affairs to ensure that the people's choices are translated into achievement, then any planning institutions the government set up would be next to useless. Democratic choice is denied in the unplanned, so-called free market economy. People do not choose unemployment and declining per capita production, but these things have happened just because of our unplanned system. The people want more social capital, more roads, more schools and hospitals, but there is no way in which they can express their demand for such goods in the private market, in the way that they can express their demand for an automobile or an electric toaster.
In the private market economy there is a wide range of choice denied to consumers. Unless planning institutions are created, and unless the government is prepared to intervene in the economy to ensure that the recommended and planned goals are achieved, then the government is not engaged in economic planning at all. Without planning, the performance of our economy will grow worse and social and economic democracy will be denied to the majority of Canadians.
Some may ask whether economic planning of the kind this party believes in has any relevance to Canada's present economic problems. We are convinced that it has. A New Democratic government would use its planning institutions to promote economic growth, full employment and a higher standard of living, and may I say that we look upon a higher standard of living as a development towards a higher social and spiritual life, because with a higher standard of living insecurity will have been removed.
This would lead us to policies which are diametrically opposed to the policies of the government as outlined in the speech from the throne. In particular it would lead us to

reject tight money and any cut-back in government expenditure on public works. We would replace high interest rates by low, long term interest rates to encourage investment by the provinces and municipalities, and by small businessmen and home builders. An easy money policy of this kind would provide new employment and give our sluggish economic growth a shot in the arm. It is the wrong policy to reduce government spending at this time.
This party is not afraid of budget deficits when these are part of a plan to promote full employment and economic growth. The reason the very large deficits of the present government have not been successful in this regard is that these deficits have arisen as the result of mistake, and not as the result of planning. They have arisen largely as a result of our sluggish economy failing to yield the expected tax revenues, but properly and deliberately planned deficit spending is necessary to promote full employment at the present time. If people do not believe this then I would refer them to the economies of countries in western Europe.
Instead of reducing government expenditures, we would launch a massive program of public spending on social capital, on roads, hospital, public housing, transportation, education, natural resource development, urban renewal, slum clearance and so on. Not only would this fill a serious gap in the range of goods and services available to the Canadian economy but it would generate new incomes and thousands upon thousands of jobs, both in the public and private sectors of the economy.
In the days to come other members of this group will deal with our proposals in greater detail. We intend to put our proposals logically before the house. They are the result of considerable discussion and co-operation with economists, engineers, research people and other authorities, and we are putting them forward realizing that they are the result of the application of intelligence to the problems that face us today.
In addition to the measures I have already mentioned, other members will explain why the New Democratic party favours abandoning the pegged exchange rate of the Canadian dollar and returning to a free-floating rate, in order to meet our balance of payments difficulties without sacrificing employment and growth in the process, which a fixed rate inevitably does. They will present other suggestions for improving Canada's long-run balance of payments, and will comment on the trade and tariff policy of the present government in some detail.

Mr. Speaker, in the few minutes at my disposal I have, in general terms, presented the alternative program to the government's program, proposed by members of this party, and I sincerely and seriously urge hon. members of the house to give it their serious consideration.
(Translation):
Joseph Pierre Albert Sévigny: Mr. Speaker, my first words are of congratulation to the mover and seconder of the address in reply. The mover is carrying on in this house a tradition established by his father, and his speech indicates that a long and fruitful parliamentary career lies before him.
As for the seconder, he spoke with eloquence, clearness and precision. He has shown himself worthy of the high reputation of distinction established in this house by his distinguished predecessor, His Excellency the lieutenant governor of the province of Quebec, the Hon. Paul Comtois, to whom I present my respects.
Allow me also, Mr. Speaker, to tell you how happy we are to see you fulfil the position entrusted to you, being convinced that you will carry out your duties with competence and distinction.
I also congratulate the Deputy Speaker of the House (Mr. Chown) as well as the deputy chairman of committees (Mr. Paul).
Mr. Speaker, during the election campaign, the speeches made by the Leader of the Opposition (Mr. Pearson) and his Liberal supporters were of course followed with great interest.
A few days before the election, the Leader of the Opposition stated in Montreal that in spite of the fact that he had no absolute confidence in Gallup polls, he was nonetheless under the impression that it would be impossible for the Conservative party to form a government on election night, June 18, and he was speaking in such a tone that he seemed sure that he and his Liberal supporters would be called upon to sit on the government side. The wonder, Mr. Speaker, is that ever since that memorable election, the Leader of the Opposition and his lieutenants keep on talking as if they were sitting on the treasury benches, without realizing that in fact Canadians across the country have denied them the vote of absolute confidence which they had asked, and without realizing that they are now-the hon. gentlemen must recognize that-
The Address-Mr. Sevigny


An hon. Member:: Were you granted it?


Joseph Pierre Albert Sévigny: -in the very same situation in which they were when the last parliament was dissolved


An hon. Member:: Oh no, I do not think so.


Joseph Pierre Albert Sévigny: Mr. Speaker, since June 18, we have heard the Leader of the Opposition and his lieutenants make all kinds of statements which could lead the people of Canada to believe that at the opening of this parliament we would hear from them sensational statements and learn of a dynamic, progressive and constructive program which would brighten the future of the Canadian nation.
That is the reason why all of us yesterday listened during four hours with religious attention-


An hon. Member:: What religion?


Joseph Pierre Albert Sévigny: -to the marathon speech of the Leader of the Opposition.


An hon. Member:: What religion?


Joseph Pierre Albert Sévigny: While minutes and hours ticked off, we all wondered where was that dynamic program? Where were those extraordinary revelations?


An hon. Member:: Not in the Conservative party.


Joseph Pierre Albert Sévigny: In fact, after four hours, we realized that all the words he had uttered ever since June 18 were hollow and that far from being enhanced, the prestige of the Liberal party had definitely crumbled under the futility of the speech we have heard.
It is a difficult thing, Mr. Speaker, to summarize in 30 minutes a speech which lasted four hours, but this is perhaps made easier for me by the tedious wordiness we heard and the paucity of arguments contained therein.
We heard, for instance, the Leader of the Opposition vigorously criticize decisions taken by the Conservative government on the morrow of the election, decisions which were necessary because of prevailing conditions in the field of fiscal relations and had been approved by the Leader of the Opposition before they were officially made known.
We realize why the Leader of the Opposition and the members of his party had to approve the government's decision. They had to approve that decision because any other decision would have countered the best interests of the Canadian people. The immediate and vigorous action of the Conservative government was not ony called for, but absolutely needed.

The Address-Mr. Sevigny
The Leader of the Opposition and his lieutenants try to criticize the Conservative government's decisions on all the nation's hustings. Therefore, we might have expected the Leader of the Opposition to offer some solution in his speech. But you will have noticed that he was completely silent on that point.
The Leader of the Opposition and the other members of his party have, indeed, since the Prime Minister of Canada (Mr. Diefenbaker) returned from the London conference, been trying to criticize and blame his stand at that vital conference for the Canadian nation. We hear on the radio, we see and hear on the television, and we see and hear in this house violent criticism of the Prime Minister's stand in London. Yet, what did the Prime Minister do in London? Can we blame this man for having gone there to defend the best interests of the Canadian nation? Can we blame him for having tried to strengthen the links which hold the commonwealth together, and which are so important for the economic security of this country and of the other nations who are partners in that magnificent enterprise? Can we blame the Prime Minister for having asked Great Britain to look after the interest of its partners of the commonwealth before embarking in a risky adventure with the common market countries, which might turn out to be harmful and detrimental to this Canadian nation?
Mr. Speaker, I ask you, and I ask all members of this house, whether it was not the Canadian Prime Minister's duty to go to London in order to defend the interests of the Canadian nation? Who, in this house, can blame him for having taken such action to safeguard the interests of our economy, and the interests of our fellow citizens?
(Text):
Over in London, the Prime Minister drew the attention of the commonwealth conference to President Kennedy's plan for the expansion of trade in the free world and to the similar, almost unanimous desire of commonwealth prime ministers. He therefore proposed that the conference should declare its intention to extend an invitation to all member nations of the commonwealth, of the EEC, the EFT A, the United States, Japan and other like-minded nations indicating a desire to meet at the earliest practicable date to consider how to deal with trading problems in a way which would be to their mutual advantage.
This proposal was greeted with enthusiasm in many private and top business circles in Britain which were looking for just such

a lead from a commonwealth statesman as offering a possible third alternative to the choice between commonwealth and common market. Some of the British press gave this proposal the acclaim it deserved, notably the Daily Telegraph which called it the conference's only show of genuine inventiveness and originality.
After all, what would the Liberals have done if they had been over there in London? What would the Leader of the Opposition have done? How can the Leader of the Opposition speak of a North Atlantic market which would be in its scope way beyond the present common market structure while refusing to realize that there is merit in the suggestion that the leading nations of the world should meet in order to discuss their trading problems and in order to build a structure which would lead to prosperity and progress?
I am proud, as are all sane-thinking Canadians, of the attitude taken by our Prime Minister during the London conference. I believe that I represent the thinking of the majority of the citizens of this nation when I say that the attacks which are continually being made on our Prime Minister are based only on a desire by the attackers to acquire political power at any price.
May I suggest to hon. members opposite that they read an editorial which appeared in the Orillia Packet last September 27. This newspaper has a reputation for being of Liberal tendencies and has certainly never shown any indication of being particularly friendly to our Conservative cause. I quote from this editorial which reads as follows:
History will show Mr. Diefenbaker to have been one of this young nation's ablest leaders. He took office at a time when the Liberals openly admitted they were pleased to get out from under at a time of apparent economic crisis. His government has introduced a host of measures which have improved the condition of most Canadians, and when the economy was again threatened he did not hesitate to adopt measures which are proving themselves completely successful.
On his record he merits the respect of Canadians of all political persuasions. The bitter and unwarranted campaign of hatred and ridicule to which he is currently being subjected does not reflect credit on many of Canada's political commentators.
This is the opinion of one newspaper and the opinion today of the majority of Canadians. The only advantage which is being gained from this unwarranted criticism is that the majority of Canadian citizens are quickly becoming disgusted at the way in which hon. members opposite and their fanatical friends are talking about the Prime Minister and the quicker this happens the better it is for Canada.

(Translation):
Mr. Speaker, I said in my opening remarks, and I repeat it now, that we were all anxious to hear the dynamic, constructive and revolutionary program which had been promised us for such a long time by the Leader of the Opposition and his chief supporters, a program which was to launch our Canadian economy on its way to new summits, an imaginative and original policy which was to open up the minds to more and more new concepts.


Some hon. Members:: Oh, oh.


Joseph Pierre Albert Sévigny: Imagine our surprise, therefore, when we heard yesterday each point of that program. The Leader of the Opposition spoke first about a new expansion of the building industry. There I asked him: "Where have you been for the past five years?" Because, certainly, if there is something we can be proud of, it is the upswing we gave to the building industry by lending billions of dollars to the builders of this country through Central Mortgage and Housing Corporation, which made it possible to build more than 500,000 homes across Canada. Compare those figures with the situation that prevailed in the days when the members of the Liberal opposition were sitting on the treasury benches. Then, only about $100 million were being loaned to the builders of the nation who were told: "If we lend you as much money, we will create an inflationary trend disastrous for the country." However, the present government has loaned 20 times more to this industry, and the financial experts of the country recognize that the buying power of the Canadian dollar in 1962 is not much different from what it was in 1957.
Mr. Speaker, it seems that the Liberal party now wants to try and offer vocational training to our young people, our older people and our unemployed. But where were our hon. friends during the last four years? Do they ignore that this policy of assistance to vocational and technical training is an accomplishment of the Conservative party? Do they ignore-and I have before me figures from the labour department to support this statement-that 435 new projects have been or are currently being carried out from April 1961 to the end of August 1962, for a total cost of $417,794,283, and that the federal contribution to these projects amounts to $267,133,355?
When our hon. friends talk of assistance to the municipalities, they apparently want to ignore the benefits accrued to the Canadian nation from our winter works program, which the members of the opposition are trying to
The Address-Mr. Sevigny ridicule. In fact, this winter works program is such a good thing that upon coming to office-where it will fortunately not remain for long-the premier of the province of Quebec hastened to adopt this dynamic and original program which has contributed to secure employment for thousands of Canadians during these last four years. The federal government has wholeheartedly and generously contributed $100 million to this program.


Mr. Deschatelets:: Two months a year.


An hon. Member:: You did not have it in your time.


Joseph Pierre Albert Sévigny: Mr. Speaker, we appreciate the tender concern of the Leader of the Opposition for his distinguished colleague, the hon. member for Essex East (Mr. Martin), when he talks of improving the lot of the automobile industry in Canada. We share the view of the Leader of the Opposition that we should assist that industry. However, we Conservatives believe that we should not only think of that particular industry but of all the industries of the country, and that is exactly why we have gone out to conquer new foreign markets so as to obtain the orders which will not only make it possible for our industry to increase its production, but also to employ a maximum number of people in its factories.
Mr. Speaker, thanks to the various manifestoes put out by the Liberal party, we now know what the program of that party is. If ever that program were implemented, the Canadian nation would have a deficit of over $1 billion each year. How fantastic, careless, and thoughtless these gentlemen are. No wonder, in view of what they desire, that in another province, where another Liberal administration has been in power for two years, thanks to the utter insignificance of its leaders, and I repeat thanks to the utter insignificance of its leaders, that administration should now be obliged, after having been in power for 27 months, to skulk behind a curtain of excuse in order to hide its bad management and the failure of its province.


Jean-Paul Deschatelets: Do you mean the Salvas commission?


Joseph Pierre Albert Sévigny: Mr. Speaker, let us compare the futility of the program outlined by the Leader of the Opposition with what has been achieved by this government in the last five years. Let us compare the vacuousness

The Address-Mr. Sevigny of that program with the dynamic, progressive and creative measures outlined in the speech from the throne.
Mr. Speaker, the speech from the throne outlines progress, advancement and hope for all Canadians. It announces the setting up of a national economic development board, which will allow Canadian experts to direct this country's business towards the achievement of new economic records.
Realizing the necessity of revising our whole taxation system, we have set up a commission to that effect. It will get to work in the very near future, and we believe that its recommendations will help strengthen the financial structure of our country.
This government is proposing measures which apply to agriculture as well as industry; it also proposes measures to help workers and farmers, and it creates for each Canadian family an increased purchasing power, in granting an additional tax rebate of $50 per child.
In the economic sphere or in any other field, the speech from the throne outlines a program which is to the advantage of the whole Canadian nation, a program which we are proud to propose to the hon. members of this house, and which we will always be proud to discuss with all Canadian citizens.
Mr. Speaker, no doubt you will have noted that we wanted, on the eve of the centennial of confederation, to create that atmosphere of unity which is so essential to the sovereignty of our magnificent country. No doubt you will have noted that instead of talking about sovereignty, of humility, our words were followed by deeds. Indeed, Mr. Speaker, we will repatriate the constitution to adjust it progressively to our present needs. Because we, Conservatives, believe in unity, we will consult the provinces and we will choose together those symbols of our national sovereignty which Canadians have been demanding for so long but which have been refused constantly by the Liberal opposition of today and the Liberal government of the past, in spite of the fact that, during every electoral campaign, they promised to the province of Quebec the fulfilment of this long-cherished dream.


Jean-Paul Deschatelets: That is untrue and you know it.


Joseph Pierre Albert Sévigny: A great Liberal for whom I have deep respect and whom the hon. members of the opposition should take as their model, said once that a national flag should be a symbol of unity not disunity.

Firmly convinced of the truth of those words of a great man, the Conservative party has decided to create unity under that symbol. It is thanks to the efforts of the Conservative government that, in the near future, Canada will proudly raise its distinctive national flag over all buildings across the land.
When we get together in 1967 to celebrate the centenary of confederation and meet in Montreal, in the heart of Canada's metropolis, at the world fair which will attract tens of millions of visitors from all countries, we shall then be able to give those millions of people, who will bring this country a financial as well as a cultural contribution, the spectacle of a nation that has forged ahead, developed and expanded tremendously in five years' time and will keep on developing in the years to come through the efforts of our Conservative group of ministers and members.
In 1967, the Conservatives will be glad to welcome visitors from all parts of the world who will find Canada on the road to renewed recovery and prosperity, thanks to the sound administration of the Conservative government, which since 1957 has been correcting the mistakes of the previous administration, an administration which over 22 long years was instrumental in bringing on the economic recession we have known.
Members of the opposition would like to see a motion of non confidence adopted by members who do not share Liberal fanaticism. They should know however that it is with the present Conservative government that Canada can go ahead. This is why this motion, like the others, will be 'Weated as it deserves.


Lionel Chevrier: Would the minister allow me me a question?


Joseph Pierre Albert Sévigny: Certainly.


Lionel Chevrier: If it is true that the leader of the opposition proposed exactly what the Conservative government has done in the last five years, why did the Prime Minister say this afternoon that it would cost more than $1 billion to carry out the program put forward by the Leader of the Opposition?


Joseph Pierre Albert Sévigny: Mr. Speaker, the measures that the hon. members of the opposition are trying to present as their own were implemented by the present government in keeping with accounting and financing rules.


An hon. Member:: With continued deficit.


Joseph Pierre Albert Sévigny: The difference between us and members of the opposition is that we have respect for figures, whereas the Liberal opposition is always rushing towards utter bankruptcy, whether here, at the federal level, if they ever come to power or at the provincial level, in Quebec, where they have been in power far too long.
(Text):


Mr. John R. Maiheson (Leeds):: Mr. Speaker, my first words, of course, must be to extend to you my warmest congratulations upon your having been elevated to this high office and of course to extend the compliments of myself and our group to the able mover and seconder of this address. It was not an easy assignment which they took on in this 25th parliament. They certainly did it admirably and to the credit of themselves and their party. For this we commend them, respect them and wish them well.
May I at the outset speak for a moment with regard to the subamendment to my leader's amendment which was moved by the hon. member for Red Deer (Mr. Thompson). In doing so I am authorized to speak for my party and to say that we welcome this evidence of his willingness to support the amendment of our leader. He has indicated that willingness by offering an amendment which leaves intact and unchanged the expression of lack of confidence in the government. If the hon. member would agree to delete just five words from his subamendment-


Some hon. Members:: Oh, oh.


John Ross Matheson: -we would be prepared to accept it. Those five words are the words-


Some hon. Members:: Oh, oh.


Mr. Deputy Speaker:: Order. In recent seconds it has been impossible for the Chair to hear what the hon. member has to say.


John Ross Matheson: Those five words are the words "based on Social Credit principles". Leaving them out would surely not change the objectives of the hon. member's amendment and would demonstrate the sincerity of his profession in this his maiden speech in the Commons, namely that he wishes to put statesmanship ahead of petty politics. Leaving those words there can only be regarded as a political device to ensure the defeat of a motion which, if sincerely put forward, the hon. gentleman must want the house to accept. If he will agree to the removal of these five political words, every Liberal member in this house will support it. I commend to the hon. member for Red Deer the few lines from the writings of Roy Campbell:
The Address-Mr. Matheson
I will go stark, and let my meanings show, Clear as a milk-white feather in a crow Or a black stallion on a field of snow.
May I as a lawyer-


An hon. Member:: You sound like one.


John Ross Matheson: -make a reference to a statement of the Prime Minister this afternoon which we cannot allow to pass in silence. The Prime Minister asserted that the emergency exchange program of 1947 was brought into force by order in council for which there was no statutory authority. The Prime Minister must know that the orders in question were passed under the Foreign Exchange Control Act, and that they could have no possible legal effect without statutory foundation. If I may, I should like now to touch on something that was discussed at some length today by the Prime Minister and by the Associate Minister of Defence (Mr. Sevigny). I am referring to those words in the speech from the throne which refer to the meeting of commonwealth prime ministers. Part of the speech states as follows:
The commonwealth conference discussed Britain's negotiations with the European economic community and the economic and political implications for the commonwealth and its members of possible British accession to the community.
The speech then goes on to say this:
Canada has a vital concern in these issues and the government will spare no effort to safeguard the interests of Canada while preserving the unity and strength of the commonwealth as a whole.
I should like to speak for a moment on this matter that is so important to everybody I am sure in Canada. In doing so, I think back to the time years ago when I was a small boy and had a younger neighbour who at times was irritating. Occasionally I was tempted to use my slightly greater size and administer a little bit of punishment. Whenever I got him on the ground he used to say, "Now John, remember you are British". That is the challenge we put to the Prime Minister tonight on this matter. We should like him to think of this matter in the sense that he is British. Barbara Ward, in her interesting little book written recently says this:
I suppose we are all aware of the fact that we live in the most catastrophically revolutionary age that men have ever faced.
In 1936 H.A.L. Fisher wrote from the English point of view a book entitled "A History of Europe". It was an excellent book. The preface to that book is cynical because in it he said this:
One intellectual excitement has been denied me. Men wiser and more learned than I have discerned in history a plot, a rhythm, a predetermined pattern. These harmonies are concealed from me. I can see only one emergency following upon another as wave follows upon wave.

The Address-Mr. Matheson
All he could see was the play of the contingent and the unforeseen. I think the tragedy of our time in Canada is the kind of leadership we have now. Since 1936 great things have happened and there are patterns and harmonies that can be seen by those who have eyes and wish to see. When we look at this British subject today, I think we must look at it with a bit of depth.
May I refer to some of the problems of just a few years ago in world war I which we so quickly pass over and forget. I ask this house to recall that in the battle of the Marne in August 1914, France lost approximately 300,000 men. In that great battle, which some members of this house will remember, and which is spoken of as the miracle of the Marne, France actually held the situation together in Europe. The war memorial of St. Cyr to the class of 1914 is to the class as a whole. At Verdun we had practically the massacre of the French nation in the spring of 1916. The battle of Verdun extended over seven months. Those of us who are British in our background and our traditions remember the appalling butchery at Verdun. There are many Englishmen who think of France in terms of Verdun and the heroism of Verdun. Following that you will recall there were four months of the great battle of the Somme. Germany lost 500,000 men at that battle, the British 410,000 men and the French 190,000 more men. Some people in this house have some knowledge of the events of 1917: Ypres, Passchendaele. Two of the best men in my family remain there because of those battles. Then there was Cambrai and the battles that followed.
When we look at this great British problem facing us today I ask hon. members to think of it in terms of depth of this tragic history of war. France lost one out of 28 of the population. One out of every 28 was destroyed in death in world war I. Germany lost one out of 32 and England lost one out of 57. That is one of the reasons that Wilson approached this whole situation of Europe from the standpoint of an idealist and an outsider, a man who had been a keen student of the international scene, although he was in every sense an American. He put forward 14 points which became something of a vision to the rest of the world. You remember that these 14 points included open covenants of peace; freedom of navigation, removal of economic trade barriers and a great association of nations. Wilson summed up his ideas, you will recall, at the end of world war I by saying that what we are striving for is a new international order based upon the broad and universal principles of right and justice. Historians have described Wilson as forthright and stiff. Tiger Clemenceau-they say his


belief in France was noble and sincere, but she was the only thing in which he believed. The French had suffered very grievously and they were cynics. Lloyd George was hampered by the ferocious demands of the British public. Their cry was, "Hang the Kaiser".
As we look back on that terrible time in history we can see that the spirit of the league of nations and the spirit of the treaty of Versailles were utterly incompatible. You recall, Mr. Speaker, that T. E. Lawrence, who gained his experience in the desert said that when we fought together we were thinking in terms of a new heaven and a new earth. Then he said that when we won the war and came home we found the old men came out, brought out all their old ideas and the victory escaped us. This is the situation we believe could develop today. We do not want old ideas. We do not want any old views. This is a time for new wine in new bottles. We want British vigour, British idealism and British traditions put to work in the modern world which has greater possibilities than any time in the history of mankind.
Christopher Dawson is an Oxford man who tells us that actually there has been more accomplished in the last 200 years from a standpoint of human progress, in spite of the butcheries and brutalities of recent years, than in all of recorded history before that time. Are we prepared to adjust to new situations or not?
I was mentioning, too, to this house, sir, something of the disappointment the people suffered in respect of the conclusion of world war I. Let me refer to an economist. I know some of the gentlemen on the treasury benches do not think very much of economists, but this is a man about whom we have had to think pretty seriously because he has had a great influence on events in Britain and indeed in this country, in the United States and in academic circles all over the world. I refer to J. M. Keynes. Lord Keynes was perhaps best known in early days for his book, The Economic Consequences of the Peace. You will recall that it was written at Cambridge in 1919. Let me refer this house to a few passages in this important historic book with respect to Europe, England and France.
He says that before 1870 different parts of the small continent of Europe had specialized in their own products; but, taken as a whole, it was substantially self-subsistent. He says that Europe, if she is to survive her troubles, will need so much magnanimity from America that she must herself practise it. It is useless for the allies, hot from stripping Germany and one another, to turn for help to the United States to put the states of Europe, including Germany, on to their feet again.

If the general election of December, 1918, had been fought on lines of prudent generosity instead of imbecile greed, how much better the financial prospect of Europe might now be.
Then, he goes on in this important book, which is actually one of pessimism, and he tells us that Europe consists of one of the densest aggregations of population in the history of the world. This population is accustomed to a relatively high standard of life in which, even now, some sections of it anticipate improvement rather than deterioration. He says that to succeed they must work together; they cannot possibly survive alone; that it was dangerous and destructive, for example, to take iron and steel and separate them, to put a boundary between them. He says that peace has been declared at Paris, but winter approaches. Men will have nothing to look forward to or to nourish hopes on. Who can say how much is endurable or in which direction men will seek to escape from their misfortune?
Then, he tells us that the opportunity was missed at Paris during the six months which followed the Armistice and that they will never be able to recover. He says that by a moderation of the clauses of the Versailles treaty, particularly related to coal and the exchange of iron ore there could have been a continuance of Germany's industrial life with great advantage to the production of the whole group and that a free trade union comprising the whole of central, eastern and southeastern Europe, Siberia, Turkey and the United Kingdom, Egypt and India might do a great deal for the peace and prosperity of the world.
If we read that book carefully, sir, we see actually many conclusions in it that are very similar to the conclusions that we find in Mein Kampf. The only thing is that he is looking at it from the point of view of a scholarly, broadminded Britisher, and Hitler was looking at it from the standpoint of a defeated person with a perverse psychiatric disorder. These two people looked at the same problem and actually what was predicted by Lord Keynes in 1919 came to pass. There was not the same destructive effect in Europe in world war II to armed forces but when we consider the destruction of civilians, the millions and millions of Jewish people, the many emigres of one kind and another, we must surely feel that this new thing that is happening in Europe today is something we must prayerfully consider.
I am going to ask you, perhaps, to leave that subject for a moment and look at England itself. Churchill tells us that England 27507-3-10
The Address-Mr. Matheson was at one time part of the continent. A wide plain joined England and Holland, in which the Thames and the Rhine met together and poured northward. A tremor caused the plain to sink a few hundred feet. Eventually another tremor occurred which separated the coast of Dover from Cape Gris Nez, and then tides did the rest. Actually, 55 years before our Lord the legions of Caesar were able to go to Britain and recognize very interesting similarities between people who had the same Celtic characteristics, in spite of their insular background.
What is the background, then, with respect to this British nation? I do not want to be facetious, but again going back to Churchill as an authority, he says that William, the illegitimate son of Robert, Duke of Normandy, and Arlette, a pretty tanner's daughter whom he saw washing by a stream, did not have a future in France. William's social position would not commend the respect he needed, and therefore he conquered England and established a new aristocracy. We can easily recognize that amongst the Scots there is a strong German strain, the same appeal of blood and kinship; among many British Druids and Gauls there is a very close relationship. There is an affinity between the Irish and the Spanish. In other words, the fact of the matter is that England has never been really separated from Europe.


Mr. Deputy Speaker:: Order; I am sorry to interrupt the hon. member but I hear a fairly substantial buzz of conversation in the chamber, which I think is rather unfair. I would ask for the co-operation of all to give the hon. member a reasonable hearing. Perhaps this conversation could be continued after ten o'clock.


John Ross Matheson: Sir, I have very little time left so I shall go on as rapidly as I can. We all recall the offer of the British cabinet on June 16, 1940 to France when General de Gaulle was authorized to offer Mr. Renaud an Anglo-French union. The offer was to the effect that the two governments declare that France and Great Britain no longer be two nations, but one Franco-British union; that every citizen of France will enjoy immediately citizenship of Great Britain and every British subject will become a citizen of France.
Just within the last few days I read something by Russell J. Clark, principal of the economic intelligence department of the Westminster Bank, London who said:
Britain could become the political leader of Europe by joining the common market.
This is true because Italy and the Benelux countries are not happy with the idea of France or Germany becoming dominant.

The Address-Mr. Matheson France and Germany would both like to take the lead, but each would deter to Britain rather than to the other, not because of Britain's powerful industrial resources but because Britain has been able to show something to the world about statecraft and the development of principles of constitutional authority and democratic strength.
Surely we are the heirs of that great tradition, we the oldest member, a member for some 100 years, of this great and glorious family. Surely these times present new opportunities for us.
Barbara Ward, now Lady Jackson, an editorial writer of the Economist tells us that the most important thing about Britain's entry into Europe at this time is that Europe will then have a new outlooking attitude. It must not become the rich man's club. It will be England that will eventually join up North America and Europe.
We know this is the plan that Winston Churchill had for many years. He attended a meeting at The Hague in 1948, at which Leon Blum represented France, and said that the time had come for the European nations to co-operate and each give up some portion of its sovereign rights. I say that this point of view is completely incompatible with the kind of words we heard from the Associate Minister of National Defence (Mr. Sevigny), who is taking the narrow, nationalist attitude at a time when most countries in the world could benefit by the larger approach, this international approach, and particularly by the marriage between these two nations which have been the foundation of Canada-France and Great Britain.
I am not talking only about peace, although 20 years ago all we asked was the chance to come back to Canada to live and get by without further war. That has been granted us and the mistakes of Versailles have not been made this time. In large measure this was due to the Marshall plan and I only wish I had time to develop my remarks with regard to it. However, the leadership came not from Canada, not from us who are the heirs of the British tradition, but from the United States. The Marshall plan gave the world a new start and now there are great possibilities ahead for us if Britain implements its forward looking, brave policy of joining Europe.
We should look at some of the literature coming out of Germany. Ludwig Erhard has said:
Our economic task-the employment of over 12 million more people than before the war-cannot be carried through but must founder in a cul de sac unless we create more air.
Britain needs more air too. The real situa-

tion is that Britain must survive. She must be strong and must be great. In the councils of Europe and the councils of the world mother Britain can give a leadership that she has not given in recent years. This challenge now comes to Canada but we are faced with the fact, even in the speech from the throne, that Canada is not prepared to accept the challenge.
Emerson says that genius is not knowing more than another person, not being more knowledgeable, but rather the characteristic of acclimatizing oneself to the particular challenges and opportunities of the moment, and with common sense and wisdom taking advantage of these events and moments.
"Sterile" was the word originally used by the London Times to describe the negative attitude of the Prime Minister of Canada, and of his government throughout, with respect to developments far reaching in their consequences not only to Canada but to every human being in the world. Britain's entry into Europe can provide a depolarization of the world from the perilous situation where two great powers, Russia and United States might again lead us into a world war.
We believe in the north Atlantic community. It is a challenge and we believe that it will come to pass. We must face up to the opportunities it presents, and shape our economy to meet them. The Prime Minister was trying to draw an analogy between the exchange crisis so recently experienced by his government and the so-called crisis in 1947. I would remind the house that the crisis in 1947 arose because Canada, having poured out her material resources during the long years of the second world war, was then pouring out even more for the assistance of England, and thank God she did. Now the situation is that if Canada withdraws her strength and her power from Europe, from NATO and even from Britain she will obstruct England in her fight for survival.


Mr. McIntosh:: That is nonsense. (Translation):


Mr. Real Caouetie (Villeneuve):: Mr. Speaker, my first words will certainly be to congratulate the mover and the seconder of the address in reply to the speech from the throne (Mr. Chaplin and Mr. Vincent), who performed their tasks exceptionally well and said very interesting things.
Since the opening of this parliament, I have been given the opportunity of making a few observations and also a few comparisons with the time I was sitting in this house, that is from 1946 to 1949.
One often hears it said that years come and go but are not the same. I have found, since yesterday, that years do come and go and that they are often the same. While I

was here, in 1946, 1947 and 1948, things in this house were the other way around. The Liberals were sitting on the other side and the Conservatives, on this side.
When they were in opposition, the Conservatives spoke exactly like the Leader of the Opposition did for four hours without saying anything. The Conservatives who were then in opposition are now in power and they sit on your right, Mr. Speaker, and curiously enough, they are saying at this time exactly what the Liberal leaders were telling us in 1947, 1948 and 1949.
We are presented with a speech from the throne which should bring improvements to the lot of the Canadian people. Well, in that speech from the throne we see some projects outlined but no precision. Let us maintain austerity in a country as rich as Canada.
When have you ever seen, in Canada, a worm in a big apple starve to death because the apple was too big? When have you ever heard that, in a tropical country, a monkey on a banana tree starved to death because there were too many bananas on the tree?
And yet, here in Canada, where everything is plentiful-not one member in this house can say otherwise-there are 500,000 unemployed, and it is expected that their number will increase during the coming winter. We are told of misery in the midst of plenty.
When the Social Creditors ask for legislation that, instead of attacking private industry, instead of attacking the individual, would attack the financial system that does not take into account any of our country's physical possibilities, what do we hear? Statements of the kind we heard this afternoon: "Let us print more money. Let us print more money, without giving it any thought."
The matter was discussed not long after the elections on June 18, because after June 18 the Liberals and the Conservatives in Quebec held meetings to ask themselves: What is that Social Credit upsurge in the province of Quebec? Twenty six members here; 30 in all of Canada, but 26 from Quebec.
As I was saying, consideration was given to the upsurge of Social Credit. How could one account for the election of 26 Social Crediters?
I would gladly have suggested to both the Conservatives and the Liberals that they study the Social Credit doctrine itself instead of racking their brains. They would have seen what this is all about.
At this time, I should like to thank most sincerely the hon. member for Grey-Bruce (Mr. Winkler) who has kindly relinquished 27507-3-10i
The Address-Mr. Caouette his time tonight because I must be in Montreal tomorrow. A thousand thanks to the hon. member.
Mr. Speaker, our country is undoubtedly extremely wealthy and yet, the Canadian people are constantly given the impression that it is absolutely impossible to develop our natural resources without foreign investments.
Now, there is nothing more stupid in my opinion than for our government to go around New York or Boston or elsewhere in the wide world, begging for leave to finance the development of our natural resources.
We have our wealth of natural resources, we have engineers, qualified personnel, labour force, we have men of good will, we have a Canadian society made up of all social classes, all prepared to undertake the development of our natural resources and increase our gross national product
We have all that, but because we lack financial authority to put everything into operation, we allow bankruptcies to occur increasingly in Canada, we allow thousands of unemployed to live in near squalor and we can find no solution to such a situation and when the Social Crediters submit their solutions we hear such comments as those made by a member of the opposition a moment ago: "Strike out the words Social Credit from your amendment to the amendment and we will be prepared to support it".
It is quite clear, if Social credit was taken out of the program, we would be sitting with the Liberals or the Conservatives. That is precisely why my friends and myself are sitting here, but after the next election-which will come too soon for the Leader of the Opposition

at the very first opportunity we shall sit across the aisle instead of this side.
The inconsiderate printing of money has never been part of the Social Credit platform, and hon. members in this house know it.
What we of the Social Credit party advocate is that there be as much money as products and services for consumers, that is all. To the extent that Canadians promote production, let the Bank of Canada print the necessary money to enable production to meet the needs of the people. That is common sense regardless of political allegiance.
The emphasis is on ever-increasing productivity, while we talk about greater productivity. At the same time, we notice that a

The Address-Mr. Caouette feeling of insecurity is growing everywhere in Canada. More and more, unemployment is plaguing our country. Everywhere, we hear the opposition, we hear the government, we hear our socialist friends preaching full employment: "A job for every Canadian". The more full employment is being talked about, the more automation and unemployment face us at home today.
What is the solution of the political parties, of the politicians and of the economists of Canada to the problem of automation now existing in our country and which will be called upon to play an increasingly important part in the next few years?
We are being told that it is a mathematical impossibility, a physical impossibility to create new jobs in the circumstances. Inasmuch as scientific progress replaces men in Canada, there is only one way to ensure the expansion of our industry: it is to give to the Canadian men, women and children a purchasing power which will allow them to buy the products of science, of machine, and of our industry. We shall therefore respect the human person, private property, private organizations, and private industries. At the same time we shall give to all Canadian citizens prosperity, security and freedom.
The problem of unemployment is not a problem of production or sentiment for Canadians, but a financial problem which is in the hands of consumers. When the consumers themselves will be able to finance an adequate national production, then we shall have security with greater freedom for each individual in Canada.
There is tight money in spite of unsuspected wealth; that is the result of the present system. Nobody dares attack the monetary system-yet it is that system which is defective. It is rather the individual who is attacked by debasing his personality. The human being is to be depersonalized.
There is more and more talk of economic planning. But when speaking of economic planning, many people-mostly those who are called ignorant-never have understood the country's economy. Those people believe in planning. It is my firm belief and deep conviction that it is not planning that we need in Canada, but rather money to allow us to do our own planning ourselves.
Let's take my own case. When I have money, I don't need the federal nor the provincial government to tell me what to do or

not to do. I am free to do what I please. Others are not more stupid than I am. The government is substituting itself to human personality and subjecting it to shackles and plans. It is precisely against such shackles and plans that we are fighting everywhere in Canada at present.
Not so long ago, a little boy told me after the election: "Mr. Caouette, come and see my new-born pups." So I went to that little boy's place and in a two by two box I saw seven puppies.


An hon. Member:: That's an old one.


David Réal Caouette: As old as my friend, it amounts to practically the same thing.
In the corner, are the seven puppies with their eyes closed (like my friend of the Liberal party who has just interrupted me), because puppies do not open their eyes before nine or ten days. Those puppies, through instinct alone, could find their mother in the far corner of the box even with their eyes closed. Deprived of intelligence, they could nevertheless reach the source of abundance.
We are intelligent, our eyes are open, but we are unable to see the abundance in Canada. How can such a thing happen.
Mr. Speaker, I could have set up a government for the seven puppies, with a system of shackles and plans, and told the yellow puppy: "You shall not go to your mother immediately" or told the black puppy: "You shall go at such or such a time". I could have prevented them from ever reaching their mother in the other corner of the box. I could even have starved them to death. This is exactly what the Liberals gave us for 22 years and what the Conservatives are giving now.


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


David Réal Caouette: Sure.


Sylvester Perry Ryan: Do these puppies need money?


David Réal Caouette: They use their instinct, while the hon. member has neither one nor the other.
(Translation):
And yet it was the Liberal leader, in 1935 the Right Hon. William Lyon Mackenzie King, who said, and I quote:
(Text):
Once a nation has deprived itself of the control of its currency and credit it matters not who makes the law. When in control, usury will wreck any nation.
(Translation):
However, he never acted upon this solemn affirmation or declaration made in August, 1935, and it is for all these years that Social Credit, not only in Quebec but everywhere in Canada, has been asking for the return to

parliament of this sovereignty, concerning money and credit in Canada, and insists on the issuance of orders to the Bank of Canada to the effect that what is physically feasible and desirable for Canada should be made financially possible. When we have the opportunity and the physical capacity to do something, to develop our natural resources, let the question of money be subordinated to these possibilities and money itself be put to their use, instead of seeing them nullified or left untapped owing to the lack of funds and credit.
One often hears those who oppose Social Credit say that there is no lack of money in the country. They say no, there is enough money but it is not circulating fast enough. In fact, it is somewhat like a rabbit caught in a hollow log 16 feet long. The rabbit will run from one end of the log to the other and when he sees you at one end, he will run to the other end; if he sees someone there, he runs back to the other end. Then, you ask yourself this question: At what time or at what speed must the rabbit run inside the log so that he can be seen at both ends at the same time. That is the speed of circulation of money in Canada.
It is said that there is no shortage of money in Canada, but how is it possible that 85 per cent of the Canadian people borrow from finance companies on two, three, four and even five year terms?
In the field of housing, mortgages are granted for periods up to 35 years. If these people had enough cash, they would not have to borrow from finance companies at interest rates as high as 20, 25 and even 30 per cent or to mortgage their salaries for the next three years to buy this year's production.
In two or three years, we will still have to face another more serious problem, just because the problem of money and credit will not have been solved. We are of the opinion that many reforms are needed in Canada, but none of them will be possible as long as a monetary reform has not become a fact, as long as we have not succeeded in putting the Bank of Canada at the service of the Canadian people instead of having the Canadian people at the service of a money dictatorship.
Mr. Speaker, we feel that the only way to reform the money system in Canada, at the social, economic or political level, is to think mostly of the consumer not the producer. Goods are being produced but as I say, the
The Address-Mr. Caouette problem is that the consumer does not have the money to purchase the goods and services which are offered to him.
Why not tackle that problem and solve it once and for all? Afterwards, we could embark upon the necessary reforms at the economic and political levels, if you wish, and even at the social level, but the key to the problem remains the reform of the money system.
Some say that money is unimportant. No, money is not important for members of parliament and for big industries, but it still has some importance for most people. In a sense, money plays the role of a key in a door lock. If you wish to get inside a castle, the castle assuredly is more important than the key to it; however, if you do not have the key and the door is locked, you will simply be left standing outside. But on the other hand, if you hold the key with which to unlock the door, you will have access inside, and to the beauties of the castle, since the key will have done its job. Money should play exactly the same role in a well-organized and well-balanced economy.
Mr. Speaker, we hear people telling us of budget balance and balanced budgets. What does a balanced budget mean? What lies behind that? It is that the government decides not to spend more money than it has levied in taxes upon the people it governs and not to spend more than the total amount of tax collected at all levels. The economic activity of the country is thereby restricted, and instead of increasing the purchasing power up to the level of production, an effort is made to slow down production to the level of the buying power. By whom was this decision taken? By the majority of Canadian financiers who have exerted a great deal of influence. Everyone says that 75 to 80 per cent of the Canadian economy is in the hands of Americans, and yet we claim that we are a sovereign country in the free world.
We must regain possession of our rights and means of production through the agency of the Bank of Canada, a financial institution which belongs to the Canadian people. Let the Bank of Canada create credit at the same rate as the Canadian people produce goods and services.
We have recommended increased purchasing power not only during the electoral campaign but for the past 25 years in Quebec and for 30 years in the rest of the country. We have suggested various means of achieving

Division
this end. For example, the Leader of the Opposition repeated yesterday a suggestion already put forward by Social Crediters since 1945, that is to grant family allowances to all children who continue their studies until they are 21 years old. The Liberals have at least learned from Social Credit.
Then, we request the establishment through the Bank of Canada, of a new kind of credit based on the surplus of production over our total national revenue. Creation of that new source of credit through the Bank of Canada, would permit an increase of the old age security rates and its payment to those 65 or over, without means test and to those between 60 and 65, following a means test. This would permit a substantial increase of the old age pension which would allow our senior citizens to make a decent living in such a wealthy country as ours.
We also suggest an increase of family allowances proportionate to the cost of living.
Everybody knows that the cost of living has more than doubled since 1945 and that in 1956, family allowances were increased by the fabulous amount of $1 per child by the Liberals.
Mr. Speaker, we also suggest that no income tax be levied on any income of less than $5,000 a year. We, as members of the house, enjoy an almost identical exemption and we are quite happy about it. If that tax exemption is justified for members of parliament, it should also be justified for the voters who elected them last June 18.
Mr. Speaker, before closing, I wish to say to all members that we are in this parliament not only for one year but for several sessions. I am convinced that as soon as possible the whole of Canada will elect a Social Credit government which will put money to man's service. This is the wish I express before taking my seat.
(Text):


Mr. Speaker:: I declare the amendment to the amendment lost.
I recognize the hon. member for St. John's West.


Mr. Cashin:: Mr. Speaker, may I call it
ten o'clock?


Mr. Speaker:: It now being ten o'clock this house stands adjourned until two thirty o'clock tomorrow afternoon.
It being thirteen minutes after ten o'clock, the house adjourned, without question put, pursuant to standing order.

Wednesday, October 3, 1962