1962-11-06

Mr. L. P. A. Belanger (Charlevoix) moved: for leave to introduce Bill No. C-73, to amend the Representation Act.


Some hon. Members:: Please explain.


Louis-Philippe-Antoine Bélanger: My Charlevoix riding contains Charlevoix and Montmorency provincial counties, three quarters of the last one being part of Charlevoix constituency. So this bill is intended to officially designate my riding by the double name Charlevoix-Montmorency, as it is the case for the constituency next to mine, Quebec-Montmorency.
Motion agreed to and bill read the first time.
(Text):



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I direct a question to the Minister of National Revenue, which is as follows. Did the government recently make an appointment to the vice chairmanship of the income tax appeal board and, if so, who was appointed?


Hon. H. J. Flemming (Minister of National Revenue):: Mr. Speaker, the answer is yes, and the gentleman concerned was Mr. Fordham.


Lionel Chevrier: May I ask a supplementary question. Was consideration given to the appointment of a French speaking Canadian, to preserve the principle of alternation, as had been the practice and the custom in the past?


Hugh John Flemming: Mr. Speaker, I understand the appointment was made on the basis of seniority.



PREVAILING RATES EMPLOYEES


[Stage Direction]
On the orders of the day:
Mr. Sianley Knowles (Winnipeg North Cenire):: Mr. Speaker, I wish to direct a question to the Minister of Finance. Has the government taken action within the past few days to freeze the wage rates of prevailing rate employees? If so, in view of the hardship created will this decision be reconsidered?


Hon. George C. Nowlan (Minister of Finance):: Mr. Speaker, the situation is as announced. There will be no increase with respect to those employees at the moment, until the whole situation is reviewed.



INQUIRY AS TO FINAL PAYMENT ON 1961 CROP

[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Minister of Agriculture. I wonder if the Minister of Agriculture would give the producers of western Canada and the house some information as to when the final payment on last year's wheat crop will be made, and can he say whether the payment will be in the neighbourhood of 40 cents or 42 cents a bushel?


An hon. Member:: Peanuts.


Mr. Speaker:: Order. That is already in Votes and Proceedings as a starred question.


Hazen Robert Argue: Mr. Speaker, with regard to the statement you have made may I say this. I suggest that this kind of question is of sufficient urgency that it should be asked on the orders of the day. The western wheat producers believe the payment should be made now. In the last crop year it was made three months ahead of time because of the election.



INQUIRY AS TO GRANT TO TRAIL


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Prime Minister. My question is based on

Inquiries of the Ministry speeches made by the Prime Minister and the present Minister of Public Works during their historic visit to Trail during June. In view of the high hopes aroused as a result of those speeches, that the Trail Smoke Eaters would receive a grant from the physical fitness council, would the Prime Minister inform the house whether they are still justified in maintaining those hopes?


Mr. Speaker:: Order. With all due respect to the hon. member may I say this. I know the fame of the Trail Smoke Eaters and the interest of all hockey fans in the country, but I suspect that hon. members from all parts of the country might ask whether some favourite hockey team of theirs which also had some claim to fame might obtain a grant from this particular fund. I think the hon. member has made his representations.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Thomas R. Berger (Vancouver-Burrard):: I wish to direct a question to the Minister of Transport. Has the minister received protests from shipbuilders that the Canadian maritime commission is failing to make progress payments on schedule under agreements made pursuant to the ship construction assistance regulations?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, I have received a couple of letters to that effect. These payments will be made as soon as the main estimates and the supplementary estimates are passed by this house.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. J. R. Nicholson (Vancouver Centre):: Mr. Speaker, I should like to direct a question to the Secretary of State. On October 10 the hon. member for Lapointe (Mr. Gregoire) asked if the minister intended to intervene in the dispute between the C.B.C. and the council of Canadian authors and artists. The minister said he would look into the matter and get an answer. That was on October 10. My question is this. Can we expect an answer at an early date?


Hon. G. E. Halpenny (Secreiary of State):: Mr. Speaker, I will make further inquiries about that matter.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fort William):: Mr. Speaker, I wish to direct to the Minister of Citizenship and Immigration a question notice of which has been sent to him. Does the deportation order for Weldon Chan still stand, or has it been withdrawn?


Hon. Richard A. Bell (Minister of Citizenship and Immigration):: Mr. Speaker, there has been no change in the situation.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. M. W. Martin (Timmins):: I should like to direct a question to the Minister of Transport. Can the minister inform the house if the latest changes in the C.N.R. trans-Canada schedules have succeeded in the objective of driving the last of the passengers off the C.N.R.?



NATIONAL CAPITAL COMMISSION


[Stage Direction]
On the orders of the day:
Miss Judy V. LaMarsh (Niagara Falls):: should like to direct a question to the Prime Minister. Would the Prime Minister disclose to the house the details of the great scheme, including the relocation of the national war memorial and redesigning of Confederation square, which his great and good friend the lady mayor of Ottawa last night announced was so big that it was known only to herself and the right hon. gentleman?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I do not know that I accept the entire summary given by the hon. lady. However, I have been informed that last evening at council meeting statements were made the details of which are as changeable as is the recollection of the listeners who were present on that occasion. All I can say is that there is a continuing planning process in connection with development of Ottawa.
I know how interested the mayor has been in assuring that Ottawa should be one of the most beautiful capitals of the world. This planning is carried on by the national capital commission through the instrumentality of a design committee and certain architects, Parkin Associates of Toronto and others, who are engaged in making a general summary of the economic and traffic considerations that must receive the fullest investigation.

In so far as the capital plan for the central part of the city is concerned, I do not believe there is any hope for progress being made in developing some 22 acres in the central part of the city until such time as the railway station and other buildings have been removed. I think a report will be received shortly-at the end of this year, we hope-as to what is the view of the architects and the consulting economist with regard to the whole situation, and when that is received further consideration will be given to the matter.



BROADCASTING


[Stage Direction]
On the orders of the day:
George Ernest Halpenny: Mr. Speaker, yesterday the hon. member for Laurier asked a supplementary question in these words:
Can the minister say whether the board of broadcast governors had secured a legal opinion before this program was suspended and, if so, why was it reinstated?
I am advised that on October 28 the chairman of the board of broadcast governors re-cieved representations from Maurice Sauve, M.P., on behalf of the Liberal party of Quebec alleging that the programs of L'lnstitut Opino de Recherches et d'Opinions Inc. did not state that they were on behalf of a political party and, therefore, were in contravention of section 17 (2) of the Broadcasting Act.
Having this formal complaint before it, the board considered that it should obtain a legal opinion on the interpretation of the act and advice on action to be taken. Counsel advised that until further investigation was undertaken stations should be advised to suspend the broadcasting of the programs, subject to further notice. The board acted on this advice on October 29.
Upon receipt of further advice by counsel on November 1, the board was satisfied that the programs were not in contravention of section 17(2) of the act and so advised the Quebec stations on the same day.


Lionel Chevrier: May I ask
a supplementary question. Was the opinion to which my hon. friend referred given by the person who was appointed yesterday as a director of the C.B.C.?


George Ernest Halpenny: Of that I am not sure, but I do know that Mr. Seguin, who was appointed to the C.B.C. yesterday, has acted as counsel for the B.B.G. on several occasions.
27507-3-841
Inquiries of the Ministry HEALTH AND WELFARE



USE OF COMPOUND TO ELIMINATE STRONTIUM 90 FROM MILK

[Stage Direction]
On the orders of the day:
Hubert Badanai: I
should like to direct a question to the Minister of National Health and Welfare. It has been reported that the atomic energy commission, the public health service and the Department of Agriculture, in a combined effort, have discovered a resin compound which if used would eliminate strontium 90 poison from milk supplies. Is the government giving consideration to compelling dairies to use this new found formula which would reduce strontium 90 in milk?


Hon. J. W. Monleilh (Minister of National Health and Welfare):: Mr. Speaker, research into possible methods of removal of strontium 90 from milk and other foods has been proceeding for some time, and the compound the hon. member mentions is not a discovery of very recent date. I would mention also, of course, that in the last report I brought out, as of the end of September, no degree of urgency whatever was indicated with reference to strontium 90.


Hon. Paul Martin (Essex East):: May I ask
the minister if his department in any way collaborated in the statement made by the Canadian spokesman, the parliamentary secretary to the Secretary of State for External Affairs, on this very matter in the United Nations last Thursday or Friday?


Jay Waldo Monteith: I am not aware of any particular conversations having taken place, but I presume they would have.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to bring up a point of privilege in connection with some remarks made in the house yesterday by the hon. member for Lapointe (Mr. Gregoire). They will be found on the first page of the translation at the back of the English section of Hansard. He is reported as saying:
To give a concrete example, planning is more or less like the hon. member for which riding I do not know exactly, Mr. Fisher, a tall and hefty man, who goes to the parliamentary cafeteria and puts away a big bowl of soup, a full course of meat and vegetables followed by a heavy dessert and a glass of milk.
My point is, Mr. Speaker, this is not a concrete example. I think the hon. member means a hypothetical example. In these days

Inquiries of the Ministry when stout men tend to be the villains, 1 Federal Republic of Germany, have special think there should be an adjustment made, responsibilities for the problems of Berlin and I would appreciate it, Mr. Speaker, if through Germany.
you I could ask the hon. member to indicate The discussions in this working group are that this was hypothetical rather than ci0Sely linked with those in the North Atlan-something concrete.	tic council in Paris which is, of course, the


Mr. Speaker:: I trust the hon. member was principal forum for allied consultations on not referring to the nature of the food he Berlin and Germany. Canada, as the hon. might be consuming. I think we all took it gentleman knows, is permanently represented on the basis of an illustration, perhaps by in the NATO council and participates fully way of exaggeration.	in its deliberations on these matters.
(Translation):



MR. DUMONT  NEWSPAPER REPORTS RESPECTING ABSENCE FROM CHAMBER

Mr. Bernard Dumont (Bellechasse):: Mr. Speaker, I rise on a question of privilege.
In a report published in the newspapers La Presse and Le Soleil last Friday, it is stated that I mysteriously left this chamber just a few moments before I was going to be referred to.
Mr. Speaker, if the newspapermen had checked the facts, they would have found that I had gone to meet a delegation from my riding just as I was being mentioned in this house. Moreover, I am not in the habit of hiding to answer charges thrown at me.
I think those newspapermen should rather be helping their colleague, Mr. Raymond Rodgers, to be accepted in the press gallery.


Mr. Speaker:: Order. I think the hon. member has given the required explanation.
(Text):



EXTERNAL AFFAIRS


John George Diefenbaker: Mr. Speaker, yesterday I undertook to give the hon. member for Essex East a more detailed reply to his question as to whether Canada was represented on what he described some days earlier as the special committee on allied policy on Berlin, which has been meeting recently in Washington. I take it that the hon. member was referring to what is generally known as the four power ambassadorial working group which has met from time to time in Washington during the recurring crises over Berlin in recent years.
I indicated yesterday that Canada is not a member of this body and does not participate in its deliberations. The membership of this essentially informal working group is limited to the three former occupying powers, the United States of America, the United Kingdom and France which, together with the


The house resumed, from Monday, November 5, consideration of the motion of Mr. Nowlan for committee of supply, and the amendment thereto of Mr. Pearson, and the amendment to the amendment of Mr. Thompson.


TARIFF SURCHARGES AND TIGHT MONEY
Mr. W. H. McMillan (Welland):: Mr. Speaker, at ten o'clock last night I was referring to interest rates in Canada. I think it is fair to infer from the minister's statement yesterday that interest rates are being reduced, but I have said that these reductions are not being passed on to the taxpayers. In fact the very opposite is happening, because at the present time the minister is engaged in selling Canadian savings bonds with the highest interest rate at which they have ever been sold in Canada, and is consequently committing the taxpayers of Canada to progressively increasing interest payments over the next few years.
We have to get back to the fundamental, basic issues. It is not possible for us to go behind for an indefinite period in the amount of $2 million per day on current account and not go completely broke. Also we cannot continue to sell off our assets to foreign investors because after a while we will not have any assets to sell.
The measures that have been presented to the house to cure our troubles are only temporary measures and do not go to the heart of the situation. The other night I heard an hon. member indicate that we should engage in massive spending in the public sector of the economy in order to stimulate our economy, but I believe we have had lots of experience regarding the fallacy of that idea during the last five years. This overspending is akin to something I heard from a resident of Ontario who, after seeing the high annual liquor bill in this province, suggested that we could drink ourselves out of debt here.
The emphasis should be on productive spending. We should try to stimulate the productive side of our economy in order to put people to work. I agree that from the public

sector we should help our provinces and municipalities, and in the public sector of the economy we should spend money and give priority to those things that might give us a return from our expenditures and might also help us in our balance of payments problem.
Above all, I think it is necessary to have interest rates reduced in our country. We must live within our means soon. If we do not do so now we shall have to do so later, and it will be harder later than it would be now. It is bound to come. We have to do something about balancing our books. Somebody said we should continue to spend. I maintain that if we had raised taxes in the last five years to meet our expenditures on current account we should have needed to raise $6 billion a year, and I think it would have resulted in a lower standard of living in our country, if we had spread those taxes over the people.
This government have slipped into a crisis. They slipped into a crisis unknowingly, because they had said everything was fine. They were rescued from this crisis by borrowing abroad, by increasing interest rates to attract money from abroad, and by the surcharges.


Mr. Speaker:: Order. I regret to inform the hon. member that his time has expired. (Translation):


Mr. Heward Graffley (Brome-Missisquoi):: Mr. Speaker, this being the first time I have the honour to address the house since the opening of parliament, I should like to congratulate you most sincerely on your recent appointment.
I offer my best congratulations also to the hon. member for Winnipeg South (Mr. Chown) and to the hon. member for Berthier-Maskinonge-Delanadiere (Mr. Paul) who have been respectively appointed chairman and deputy chairman of committees.
Mr. Speaker, I am sure you will fill your office with great distinction and impartiality and, once again, I offer you my best wishes.
As this is my first speech here since the election, I take this opportunity to thank the people of Brome-Missisquoi for having chosen me once again to represent their constituency in the house.
I should also like to express my appreciation to my political opponents, the two gentlemen who have put up a good and honest fight in my riding, during the last election.
(Text):
I was very interested to hear the speaker who preceded me mention the fact that we must as a nation live within our means, that we must balance our books. Well, this is one of the things the program upon which we entered last June is designed to do. I noticed that when the Leader of the Opposition
Tariff Surcharges and Tight Money launched this debate yesterday afternoon he attacked, attacked and attacked again. I suggest to hon. members that while it is the duty of an opposition to attack, it is also the task of a responsible opposition to offer alternatives.
I well remember that during the last session of parliament before the election the hon. member for Bonavista-Twillingate lectured us at one point on what a government should do. He said a government was responsible for governing. This I agree with. At the same time, although an opposition should criticize, it should criticize constructively. I suggest that what happened yesterday and what is happening today is the keynote of the whole position taken by the opposition. They attack, they criticize, but nowhere in the fabric of their performance can one find constructive alternative suggestions. While I understand, along with the hon. member for Bonavista-Twillingate, that government must govern, I also understand that an opposition, whether in general or in this particular debate, must present this house and the Canadian people with logical, constructive alternatives. This they have not done, certainly in this debate, and it is the hallmark of the attitude taken by members opposite toward the problems which face this country today.
I was also interested to hear the leader of the New Democratic party (Mr. Douglas) and his supporters talk about planning. Somehow or other the Liberal-N.D.P. alliance in this house today keeps bringing in the word "planning", and they surround it with a tremendous aura of mysticism. Let us put the record straight. While the socialists to our immediate right turned their backs on nationalization and the Regina manifesto, they have now created a new notion of mysticism. I do not know whether it goes back to their Fabian roots or not, but there it is, nevertheless, a new aura of mysticism surrounding the word "planning". Now, ladies and gentlemen-


Some hon. Members:: Oh, oh.


William Heward Grafftey: I am sorry; the days of the election campaign are not too far behind.


Paul Joseph James Martin: And perhaps not too far away.


William Heward Grafftey: Let us admit that where you have government you must have planning, but unlike the Liberal-N.D.P.-Levesque axis we do not want government just for government's sake or planning just for planning's sake. What these socialist minded hon. members really wish to do is to impose on this great young nation of ours a system of regimentation which the people of Canada will never tolerate.

Tariff Surcharges and Tight Money
I agree with some hon. members opposite that the everlasting quoting ol statistics does become tedious on occasion. I admit that speeches containing statistics can become boring. But if, at times, members of this government and hon. members supporting this government quote statistics to show the basic economic health of this nation, and it becomes at times tedious, it is because in the face of all the gloom and doom continually put before this country by opposition speakers it is the responsibility and the duty of this administration to create confidence where we know confidence does and should lie.
I would not suggest for a minute that the tariff surcharges which were imposed last June and which, to a great extent, are in effect today do not involve some short term sacrifices on the part of the Canadian people. Of course they do. But as I have listened to this debate I have gathered the impression that the Leader of the Opposition and his supporters underestimate the backbone of the Canadian people. I firmly believe that the Canadian people are only too willing at times to make short term sacrifices for the long term benefit, economic and otherwise, of this great young nation of ours. In this debate it is my firm impression that ofttimes hon. members opposite have undersold the basic strength and patriotism of the Canadian people.
Mr. Speaker, what does this amendment actually say? It says:
This house is of the opinion that the emergency austerity program of tariff surcharges and tight money, introduced on June 24 this year, should be stopped at once.
Mr. Speaker, I have nerve enough here and now-


An hon. Member:: You certainly have.


William Heward Grafftey: -to ask hon. members opposite, do you really mean it? These measures have been before the Canadian people for less than four months. I am suggesting to hon. members opposite that when the former prime minister and Mr. Abbott led their administration and made their announcement by radio in 1947, they announced a program which lasted for nearly three years.


Paul Joseph James Martin: A program approved by parliament.


William Heward Grafftey: He announced the program on the radio and it lasted for nearly three years.


An hon. Member:: We were trusted by the people.


Mr. Speaker:: Order. As I said yesterday, in order to let hon. members make their own
[Mr. Grafftey.)
contributions perhaps we could have fewer contributions from their seats by other hon. members.


William Heward Grafftey: Mr. Speaker, as I have said, our program has been under way less than four months; and although they have shown a high spirit of impatience, which I am sure hon. members on this side of the house and even opposite recognize is the basis of the Liberal approach these days-they are impatient for everything-I suggest that in this instance they are being recklessly impatient. In June our government exercised powers conferred upon it by parliament. Yesterday we heard the speech of the Leader of the Opposition, who did not even take into account the fact that since June many of these surcharges have been reduced and modified. He has said that these surcharges constitute a $250 million tax levy on the Canadian people. I simply refute that, because it is not so.
Mr. Speaker, this whole question-and this is strictly a personal feeling-must be discussed within the context of realizing that today in relation to manufactured goods Canada has the highest annual per capita dollar imports in the world. I feel, sir, that this whole debate must be discussed and thought of in that context.
If in fact hon. members opposite mean what they say, that these surcharges should be immediately taken off, do they in point of fact mean that our present reserves are high enough? That is what they must mean.


Mr.   Marlin@Essex East: Not at all.


William Heward Grafftey: If they agree that these surcharges should be taken off now, they also agree that our reserves are high enough; I do not see how they can get off that hook. If they say that in fact our reserves are high enough, we saw last June, as they saw in 1947, exactly what could happen. Today there are large volumes of international funds flowing back and forth. Mr. Speaker, I might also suggest that with a fixed exchange rate we might also consider the desirability of a higher level of reserves. We have every indication that the government's programs are really taking hold and taking effect. But while we see a capital inflow into Canada now, I suggest we need more experience under present conditions to see how permanent this movement is, and in my view it is only prudent that we keep up our guard as much as possible before removing our defences. Hon. members opposite yesterday heard my minister say, as the Prime Minister has stated time and time again, that these surcharges are measures of a temporary nature only. We

have already seen many modifications and reductions. The Prime Minister, my minister and the government have stated time and time again that as soon as possible and as soon as desirable reductions and modifications will be enforced.
What has happened in relation to what hon. members opposite call tight money since these measures were invoked? I say that if hon. members opposite have been purposely vague up to now, and I suggest they have, it is because they have not defined what tight money is. The minister yesterday gave them alternative choices, but as yet they have not exercised their option on these choices. We have all read that on two occasions in the last few weeks the Bank of Canada has eased interest rates, and we have seen the relaxation of interest rates on the market itself.
I was also extremely interested to hear the hon. member for Welland. Mr. Speaker, here was inconsistency at its height, and I think it is in debates like this where we see just how sincere and consistent are the hon. members opposite. The hon. member said that we must balance our books, that we must stop our spending. He criticized this government for its spending record, and went into detail about how this government has recently overspent, as well as overspent generally in past years. But what did hon. members opposite do and say when, in relation to current spending estimates, we cut $230 million from the budget? They howled, absolutely howled.
I suggest that if the program that hon. members opposite are presenting to this country ever came into vogue, the spending rate would go up another billion dollars annually. Where is consistency there? I believe that this is an extremely important debate which is before the house, but I also feel that the least we can ask from hon. members opposite is more than a modicum of consistency in their approach to an extremely serious subject which has serious implications for our nation at large and for every Canadian citizen.
What this government did back in June and what it has done subsequently is something that every major western power has done during the post-war years, and done to their benefit. Hon. members opposite refer to this program as an austerity program. I would like to state simply this, that any program which is designed to strengthen the economic base of our country should be called a prosperity program. We have seen the volume of our exports go up. We have seen Canadian tourism encouraged.
I would also draw this to the attention of hon. members opposite. I think everybody in this chamber is agreed on the desirability of
Tariff Surcharges and Tight Money economic expansion both for Canadian goods abroad and for our nation at home.
However, I do not think you can talk about economic expansion without a sound dollar. Last night the minister time and again reiterated that while economic expansion was always desirable, it could never be fully debated and discussed outside the context of a sound Canadian dollar. The courageous actions of this government have been actions to protect both at home and abroad the soundness and the integrity of the Canadian dollar.
Can members opposite be sincere? In view of what they did back in 1947; in view of the fact that this attack on the government is being led mainly by people who had experience in 1947; can they really be sincere as true Canadians? Can they really be sincere in the amendment they are putting before this House of Commons today? I hate to be cynical, Mr. Speaker, but I think this is reckless irresponsibility of the first order. While the program entered into by this government some months ago has had great effect, the minister has said there is a need for continued action. In view of all these things; in view of the facts that I have placed before the house today-and they are irrefutable facts-about the desirability of continuing to strengthen our reserves, how can hon. members opposite-unless they are trying to fool the people and I do not think you can do that in this day and age; the people are much smarter than hon. members opposite think they are-possibly put this amendment before the house with any degree of sincerity?
I made a promise, Mr. Speaker, not to quote statistics. However, if I could be permitted to break my promise by just about that much, I may say there are a few that I think should be placed before the house. They are indicators in which I have always put great faith. Since 1957 industrial production in Canada has gone up 21 per cent; in the United States 19 per cent and in the United Kingdom 17J per cent. All the time this was going on did opposition members in the United States and in the United Kingdom downgrade their country and tell the nation that everything was black and going to the dogs? That never happened. I suggest to hon. members that never in the history of the western world to my knowledge has a young country like Canada been faced with such a recklessly irresponsible opposition as we have had in the last three years.


Some hon. Members:: Oh, oh.


Mr. Byrne:: You are quite young yet.


William Heward Grafftey: May I put this on the record. The other night I was browsing through some

Tariff Surcharges and Tight Money material relating to Thomas Jefferson. Between the writing of the articles of confederation and the writing of the constitution in the United States of America he had this to say:
In every free and deliberating society ... there must from the nature of man be opposite parties and violent dissentions and discords, and one of these for the most part must prevail over the other for a longer or a shorter time. Perhaps this party division is necessary to induce each to watch and relate to the people the proceedings of the other. But, if on the temporary superiority of one party, the other is to resort to a scission of the union, no federal government can ever exist.
I think hon. members opposite, putting country before party for a change, should read these words most seriously. As a young Canadian I am not crying over spilt milk. I am not saying that an opposition does not have its function. However, I am saying this. I have watched the party opposite putting their party before country for the last three years, and not only does this party suffer but the country suffers also.
Just this last week end I was at a Legion meeting in my constituency when a lady came up to me and said, "You know, Mr. Grafiftey, I am not very much on politics. I voted every which way over the last ten years. However, it seems to me that somebody should tell the Leader of the Opposition to stop whining and screaming and to get down to the nation's business".


An hon. Member:: It must have been a Tory.


William Heward Grafftey: I am simply saying this to every member who puts country before party. He or she realizes that the program announced by the then minister of finance just four short months ago, while it entails sacrifices for the Canadian people, involves a program which is for the good of Canada. As I mentioned a few minutes ago in this chamber, I believe all Canadians are willing to make these short term sacrifices for the long term benefit, economic and otherwise, of our country. I believe that every member who votes tonight with this consideration in view can do nothing more than uphold the motion of the minister and vote down the amendment and the subamendment so irresponsibly placed before this House of Commons yesterday.


Mr. David Lewis (York South):: Mr. Speaker, in rising at this time to participate in the debate I suppose I ought to bow in all cringing modesty before the last speaker, who corralled to himself and to his party the idea of serving the country rather than his party. Through you, Mr. Speaker, let me say to him that in our view the Conservative party and the Conservative government are selling this country to a series of outworn ideas of sound dollars and balanced budgets

which died with Queen Victoria for anyone who is modern in his thinking. I say that this self-righteous accusation against all members of this House of Commons except of his own party by the parliamentary secretary is entirely without foundation and, if I might say so, even without good taste.
It is not my intention to make a lengthy statement at this stage. However, I am glad to satisfy some hon. members of this house by this promise. I wish to deal first with some of the statistics given by the Minister of Finance and then to deal briefly with the amendment and the subamendment before this house. I wish to say, Mr. Speaker, that if I were writing a book on the Minister of Finance I think I would entitle it, as all melodramas ought to be entitled, by three titles. I would call it first "The Wizard of Nova Scotia", I would then, L think, go on to say "Or Pollyanna Revisited", or, as the third subtitle, "The Slumbers of an Ostrich".


Mr. McCleave:: Cheap and sickening.


David Lewis: Because throughout his use of statistics in an attempt to show this house and the country that the country is going up and up and up he has, in my respectful submission, made improper use of what is before the country in actual facts about the economy. Our leader said the other day, as I myself said in another debate, that no one denied that there was an improvement in the Canadian economy during the first half of this year. No one denies that there was an increase in production and an increase in other desirable economic indicators. It was pointed out that we are on an upswing in the economic cycle and there was bound to be an improvement over what we had the year before. Indeed, if we had not had some improvement during the first six months of this year we would now be in one of the most serious depressions this country has known, perhaps not less severe than the one some of us remember before the last war. So this upswing of the curve was bound to come, and we have asked the government and ask them now to look at the figures realistically to see what we can do to avoid another drop such as we had last year and the year before that.
In order to show how rosy the picture is, the Minister of Finance spoke about the increase in bank loans, and he said that denoted an increase in the money supply and evidence that there was not tight money but loose money, which I suppose is the opposite of tight money. With great respect, I suggest to him that is obviously wrong. You can have in an economy an increase in bank loans without any increase in the money

supply at all. Indeed, during a tight money period the banks almost invariably sell securities and use the proceeds of those securities in order to make loans, and that is merely transferring one sort of loan to another sort of loan. It is not increasing the total liquidity of the country at all.
I suggest to the Minister of Finance with respect that that is precisely what has happened; because if you look at the proper indicator for money supply, if you look to see what the total money supply in this country is, that is to say the total bank deposits and the total currency and you add those together, you find that in the three months from July to September inclusive, in other words the three months immediately following the austerity program, there was a decrease of $600 million in the total money supply in this country. No playing around with the amount of the bank loans that the banks have extended can possibly obscure the simple statistical fact that there was a decrease of $600 million in the total money supply of Canada in the three months from July to September inclusive.


George Clyde Nowlan: One hundred per cent wrong.


David Lewis: In the same way the minister, in order to make the money supply look even better, talked about private bank deposits and showed how private bank deposits had increased; but by doing that he excluded from his calculation, of course, government deposits. In an economy where the federal budget alone represents 15 per cent or more of the gross national product and some 20 per cent or more of the national income, the Minister of Finance thinks he is dealing with legitimate statistics when he deals only with private bank deposits. Clearly he is wrong. Furthermore, one must remember that if one adds to federal expenditures the expenditures of provincial and municipal governments as well, you have in our country government expenditures forming an immense proportion of the total expenditures in the country and the government use of money forming an immense proportion of the total supply of money in the country. I suggest with great respect that when the wizard of Nova Scotia did that he was guilty of statistical vandalism and became a vandal; that the ostrich, if I may say so with the greatest respect to him, became a fox. You cannot deal with statistics in that way.
He argued finally that the per capita money supply in this country had increased by over $100, if I remember correctly, between June, 1957 and September, 1962. Without even attempting any statistical calculation I respectfully submit that is an irrelevant criterion. The criterion for the money supply is not the 27507-3-85
Tariff Surcharges and Tight Money number of heads in the country; it is the level of production and the money supply that production requires. It is the level of employment and the money supply required to achieve full employment instead of unemployment. Those are the criteria by which to measure the money supply in the country, and not some statistical fairy tale such as the per capita money supply.
I respectfully submit that it would do the government good, as it would this parliament, to look at the improvement in Canada's economy in the first six months of this year with pleasure, and if the government wishes to take credit for it I do not care. They can look at it with pride and take credit for it as much as they like, because I am not concerned with who has a little bit more credit in this house or in the country. But we are concerned that we not permit the inevitable, necessary, expected improvement in the first six months of this year to blind us to the fact that the full effect of the austerity program is not yet felt, and I respectfully suggest that when it is fully felt the unemployment situation will be worse rather than better.


Mr. Starr:: Nonsense. You don't know anything about it.


David Lewis: The Minister of Labour says that I don't know anything about it.


Michael Starr: You don't.


David Lewis: I say, Mr. Speaker-


An hon. Member:: You have hurt him.


David Lewis: -that I do not claim to know everything about it-


Michael Starr: You don't know anything.


David Lewis: -but I would be pretty ignorant indeed if I did not know at least as much as the Minister of Labour. I say that when the austerity program; when the tight money policy, which is there despite all attempts to hide it; when the full effect of the surcharges; when the full effect of freezing the wages of civil servants, an act of unkindness and meanness as well as being uneconomic; when the full effect of the freezing of additional increases to prevailing rate employees; when the full effect of the reduction in public expenditures-when the full effect of all these restrictionist steps is felt in the economy, the minister will not be as happy as he tried to be yesterday; because the economy will not be as well off as it was in the first six months of the year. That is why we have argued and urged that the policy which the government is pursuing is precisely the opposite of the policy which ought to be pursued.
May I indicate, Mr. Speaker, that there was a very interesting and revealing statement made by the Minister of Finance the other

Tariff Surcharges and Tight Money day with regard to the surcharges. He has kept on saying all the time that the surcharges are a temporary matter and that the austerity program is a temporary expedient which will be got rid of as soon as possible; but at the same time he said, as found on page 1303 of Hansard for yesterday, in dealing with our chronic balance of payments problem in our export-import trade:
It is necessary to achieve savings in foreign exchange in so far as possible by reducing our imports and increasing our own production. As hon. members know, every year we are running into a deficit of over $1 billion. Except in so far as our exports and imports of goods are concerned, the deficit is increasing. This means that every year we overcome that deficit we are providing more employment for Canadians and bettering our economic position. This is one of the reasons why these surcharges were imposed, to restrict imports for the time being in order to conserve foreign exchange, not only because of an exchange problem at the moment but because of this fundamental problem with which we have to deal.
The only meaning I can give to those words is that the government in 1962 is proposing to Canada that the way to deal with the exchange problem, the way to deal with the balance of trade problem, is to add to the tariff structure of this country; and that is a totally outworn idea, an idea which is self-defeating and which will bring Canada to literal catastrophe if this parliament permits it.
Let me put it this way. It is inconsistent as well as disastrous, because it comes from a government which talks about expanding foreign trade, which says it is proud of the part Canada is playing in certain suggestions for a world conference with regard to foreign trade, and then produces the theory, as I have just shown, which is the exact opposite of that. Now I respectfully suggest to you, Mr. Speaker, that it is not those of us who criticize government policy who are underselling the Canadian people, but those who are pursuing a policy so devoid of modern ideas and modern direction. They are responsible for underselling the Canadian people and the Canadian nation.
This brings me, Mr. Speaker, to the Social Credit amendment. I start by saying, sir, that the members of this party had a meeting this morning, as may have already been announced to the press outside. We decided unanimously and without any difficulty, so there may be no idea of any division in anyone's mind, that we could not possibly support the subamendment without being false to ourselves and our determination to vote for the words which are before us, without trying to read into those words things which are not here in order to satisfy some political objective. The words before us, which were moved by the leader of the Social Credit

party, are to the effect that the austerity program of the government be removed and be replaced by a policy of debt free money and a constructive proposal to foster a balanced domestic economy and balanced international trade.
The first point with which I have to deal is this point of debt free money. I say in all modesty, Mr. Speaker, that for a good many years I have read a good deal of Social Credit literature, and have attempted to understand what is meant by this phrase, "debt free money". I find it very difficult to understand, and even more difficult after listening to the leader of the Social Credit party and especially after listening to the hon. member for Lapointe (Mr. Gregoire). This morning I looked at the report of the royal commission on monetary, banking and credit systems, 1956, in New Zealand, in which there is a very detailed analysis of some Social Credit propositions. I have very good company in the members of the New Zealand commission, because they too found it impossible to follow the tortuous paths of the theories and propositions concerning this alleged debt free money.
Now, if hon. members opposite mean by debt free money loans at low interest rates to municipalities or for the purpose of building low cost housing or for some other purpose like that, then we of the New Democratic party and the party which preceded it have been proposing this to the Canadian people for years. We are in total agreement with the idea that loans to municipalities and for the purpose of building houses for low income or middle income people ought to be made at an interest rate sufficient only to cover the cost of services. If that is what the hon. member for Lapointe meant, that is fine.


Mr. Gregoire:: That is just part of it.


David Lewis: Let hon. members wait a minute; that is not debt free money. It is loans at low interest rates. Let us talk a language that everybody can understand, and let us not use double talk.
If, in addition, hon. members also meant that the central bank of Canada should be used more than it has been used hitherto whenever it is necessary to expand the total money supply in a period of recession and underemployment, then there too, except to the extent that they would want to use it as I would not want to use it, there is not any difference in principle. Every modern economist will agree that it is not always necessary to expand your money supply by going to the private banks or other private lenders. It is possible to expand it by direct use of the central money agencies which the government has under control.

If hon. members opposite mean that, then there is no quarrel. However, that is not what they mean. They mean much more than that. They talk about the gap between national income and gross national product. Every time they see that gap, which does not exist -let me not be taken, Mr. Speaker, as meaning it exists-they want to create money to fill it. In this way, every year you would create new money to fill this gap of $7 billion, $8 billion or $9 billion between what they say is the national income and the gross national product, and money would just be thrown on the market.


Gilles Grégoire: You are wrong.


David Lewis: It cannot mean anything else. If I am wrong I will be very glad to have hon. members put me right.


Mr. Ouellel:: You know it, but you do not want to say it.


Gilles Grégoire: Will the hon. member permit a question?


David Lewis: Yes.


Gilles Grégoire: You say there is no gap. Let us assume that there is a gap, and we create money to fill that gap.


David Lewis: If my hon. friend intends to make a speech-


Gilles Grégoire: I was asking a question, and this is my question. Are you ready to accept the principle that if there is a gap between production and purchasing power, we should create that purchasing power through the use of the central bank?


David Lewis: I am prepared to accept the principle, because I believe-


Gilles Grégoire: Right.


David Lewis: Just a second; let me state it in my words and not your words. I am not agreeing to any principle stated in the language of the hon. member. I am stating it myself. I am prepared to agree with the principle that whenever the total money supply is inadequate to meet the needs of full employment and production, that money supply should be expanded, and it could be expanded in various ways depending on the situation. It could be expanded either through the chartered banks or through the central bank, always-


Gilles Grégoire: Are you a friend of the hon. member for Laurier (Mr. Chevrier)?


David Lewis: -remembering that every time you expand the money supply through the central bank you release a much stronger inflationary pressure on the economy than when 27507-3-85i
Tariff Surcharges and Tight Money you expand it some other way. But subject to that, I certainly agree that there are situations when the central bank ought to be used for expanding the money supply in the country. I say with the greatest earnestness to all hon. members opposite that their propositions play havoc with the little man whom I am sure, in their hearts, they want to serve. Of what value is it to put more bills in the hands of the ordinary Canadian if these bills lose all value, if they can use them to paper the walls of their houses as the Germans did when the German mark went down?
If, on the other hand, the proposition is to create indefinite amounts of money without regard as to where it lands, then I suggest to hon. members opposite that even the big corporations would be able to get capital free, something I am sure they would not want to give them.
One of the basic problems of the proposition put forward by hon. members opposite is that if there was consistency in that theory you would think they would want to do something about the private banks, which they chastise all the time. Perhaps they might even remove from members the possibility of bank directorships, thus removing the temptation to hon. members of this house to whom they often make reference. However, hon. members opposite do not intend anything of the sort. The hon. member for Lapointe said, as reported at page 1311 of Hansard-I am translating freely instead of turning to the translation-that he does not want to take anything from anybody. He said:
(Translation):
Mr. Speaker, it should be remembered that when big industry is too heavily taxed, and especially when it is taxed at the present rate, its development, expansion and improvement are impaired, and, on that account, it cannot hire new employees. When the owner of an industrial enterprise is too heavily taxed, he cannot expand and thus provide new jobs.
(Text):
That may or may not be true, but the next sentence, the final sentence in the paragraph, is the significant one.
(Translation):
Let us see to it that there is something for everybody, big or small, without taking anything away from the big to give it to the small.
(Text):
What he was saying, with a most generous gesture-and although I was not here I can imagine the gesture-is that there should be something for everybody, big or small, without taking anything from the big to give it to the small. If that is what he means, then every time you increase family allowances you create more money; every time you increase pensions you create more money;

Tariff Surcharges and Tight Money every time you build a house you create more money.


Gilles Grégoire: No; stop at houses.


David Lewis: Every time you increase social security payments you create more money.


Gilles Grégoire: Right.


David Lewis: When the provinces increase social security payments they create more money.


Gilles Grégoire: No, it is not the provinces.


David Lewis: And every time you create more money the money you create is worth less than it was yesterday, and thus it becomes a complete hoax on the Canadian people. For that reason alone we cannot possibly vote tor the subamendment without being false to our ideas and our logic.
The same is true, without going into detail, about this proposal for a balanced domestic economy. What is a balanced domestic economy?


Mr. Hellyer:: It is a planned economy.


David Lewis: Is it 10 per cent more at one end and 10 per cent off at the other? What we require now is an expanded domestic economy and not a balanced domestic economy. Then there is the phrase "balanced international trade." I do not know what that means, nor does any member of my party.
For those reasons, and because we believe the proposals are meaningless, we shall vote against the subamendment; and to the extent that the amendment proposed by the leader of the official opposition does mean something -it means that the austerity program is harmful to the economy-we shall vote for it. That amendment proposes criticisms of the government which in our view are justified and accurate.
The amendment calls for an end to the austerity program. Throughout the session we have emphasized our opposition to the tight money policy, to the policy of reduction in public expenditure, and to all the other policies involved in the austerity program; and we could not have taken the position we have taken here without being consistent and voting for an amendment which says exactly that.
However, we regret very much, as our leader said yesterday, that the leader of the official opposition found it desirable-I hope he will forgive me for saying this, but I am certain it is true-for purely political reasons to limit his amendment to purely negative proposals. He must have thought that by framing it in a negative way there was more chance that the members of all opposition groups would vote for it, since the members of all parties in opposition have expressed themselves as being opposed to the government's austerity program.

That may be cute politically but in our submission it is undesirable from the point of view of pointing out the way to the proper policy, which is an alternative duty of the official opposition. If our leader had had a chance yesterday, if a subamendment had not already been moved by the leader of the Social Credit party and if the house rules did not limit proceedings to one amendment and one subamendment, then our leader would have proposed to add to the negative amendment of the leader of the official opposition a positive program in the following terms, which I desire to place on the record: that the amendment be amended by adding at the end thereof the following words "and replaced by a program to stimulate consumer demand by (1) reducing the burden of income tax on lower incomes, (2) expanding public expenditures on the production of necessary social capital, and (3) increasing family allowance and other social security payments."
In our belief this would be a desirable, positive program to replace the undesirable, negative program which the government has imposed on the people of Canada. We in this corner of the house, without arrogating to ourselves any self-righteousness, consider, as the minister and the parliamentary secretary said, that this is a time when it would be desirable for parliament to act in a united way, if that were possible, to solve the serious problems facing the country.
Unfortunately the policy of the government makes that impossible. It is impossible for those who try to understand Canada's economy in modern terms, it is impossible for those who try to understand the consequences of a restrictionist policy such as the government has proposed, to do other than oppose the government; because we are convinced-and every word said in the house today, every figure we have looked at today, and every fact we have been shown today have given strength to our view-that the policy pursued by the government is bound to have a deleterious effect on the future of the country. In the long run it is bound to increase unemployment. It is also bound to restrict the expansion of our economy and is bound to create more and more problems for the people of Canada, problems which could be avoided by the application of modern thought and imagination.


Paul Joseph James Martin: May I ask the hon. gentleman a question? In view of his last statement, which I think was an accurate and adequate statement for the occasion, does he not think he ought to take immediate steps to help in getting a new government that will put the country on the right road?


David Lewis: Mr. Speaker, even though we have not had a chance to discuss this subject in precisely those words I am sure I speak for all members of the New Democratic party caucus in saying we are prepared to take all appropriate steps, all honest steps, to get rid of the government. But if the hon. member means by his question that we should vote for the Social Credit amendment because he intends to vote for it, then that is neither an appropriate nor an honest step to take; and that kind of behaviour by the hon. member and his associates, if that is their intention, merely underlines their insatiable hunger to get across the aisle to the treasury benches, and that they will be prepared to make themselves ridiculous in the eyes of the people of Canada by voting for debt free money in which they do not believe. We do not intend to join them in doing that.


Mr. Walter Gordon (Davenport):: Mr. Speaker, I should like to begin by remarking on the debating skill of the hon. member for York South (Mr. Lewis). He is very fast on his feet, but I sometimes find him a little less convincing than I think he sets out to be. Through you, Mr. Speaker, I say to him that despite all his protestations he does give the impression sometimes that he wishes to designate himself the repository of all political morality in this house.
We all listened to his tortuous defence of the reason his party is going to vote to keep the Conservatives in power. It was not bad, considering the task he had been set up to perform, but I think the people of this country will realize that when it is not the Social Credit party that is keeping the Tories in power it will be the New Democratic party, and I can assure my hon. friends we shall remind the people of that fact.
I intended to be rather non-controversial today, and in my remarks this afternoon I shall first of all explain-


An hon. Member:: Social Credit.


Walter Lockhart Gordon: I do not know who said I would try to explain Social Credit, but I should just like to say this-that I found the explanation of Social Credit which was given a few moments ago by the hon. member for York South just as incomprehensible as I have found the explanations which have come from hon. members to my left in this chamber. I suggest that when it is necessary for some of the gentlemen from the N.D.P. to explain Social Credit to us they should leave the task to their leader who knows a great deal more about it than the hon. member for York South.
Perhaps I can get back to my non-controversial remarks. I was about to explain why we on this side support the amendment
Tariff Surcharges and Tight Money which is before the house. In doing so, I shall have some things to say about the revealing speech which was made by the Minister of Finance yesterday and, if I have time, I hope to make a few brief comments on some of the things that have been said by the leader-I do not include the co-leaders or the subleaders or the associate leaders-of the two minor parties.


Mr. Churchill:: Is it the subamendment you are supporting?


Walter Lockhart Gordon: I said, the amendment.


Mr. Marlineau:: Would the hon. member permit a question? I wonder if he would be good enough to explain his party's conception of debt free money.


Walter Lockhart Gordon: You will be informed.


An hon. Member:: No answer.


Walter Lockhart Gordon: When the austerity program was announced on June 24, I expect the immediate reaction of the majority of the newly elected members of this house was that its effects would fall most heavily on those least able to afford it. I said then, and I say now, that this austerity program of restriction is a negative way of dealing with our country's basic problems. Instead of the expansionist and positive approach which is so clearly called for, this is an austerity, tight money policy or program which will result in increased unemployment this winter.
I seem to remember that during the summer the leaders of the Social Credit party and the New Democratic party were vociferous in their criticism of this austerity program and loud in their statements of what they intended to do about it when they got into parliament. When the time comes to vote on this amendment it will be interesting to see whether they have changed their minds. When the time comes to vote on the subamendment that may be interesting, too.
The tight money policy which was introduced as part of the austerity program, and by this I mean restrictive credit and high interest rates, was bound to slow down business activity. High interest rates were bound to make it difficult for municipalities to proceed with badly needed works and services. This, in turn, could not fail to slow down construction and this is bound to mean fewer jobs this winter. But instead of worrying about a program which would lead to the employment of more people in this coming winter, the government seemed much more anxious to placate those who had moved their money out of Canada and to beg them, in the form of high interest rates on their investments, to bring it back. The effects of the government's tight money policy are bound

Tariff Surcharges and Tight Money to fall most heavily on small businessmen and on those parts of the country such as the maritimes and the Minister of Finance's own province of Nova Scotia where capital is especially hard to come by. Why we should go on punishing our own people in this way is beyond my comprehension. But that is what we are doing under this emergency tight money policy.
Yesterday, the Minister of Finance gave us a sprinkling of statistics which seemed designed to show that all was on the up and up. His figures seemed designed to prove that we have not got tight money. In doing this, the hon. gentleman used certain figures. I think his comparisons were between June, 1957, which he said was a significant date- I think a lot of people in this country will agree with him-and the present time. But I should like to point out that in the last four to four and a half months the money supply in Canada has been reduced by, in round figures, half a billion dollars. This means that individuals, businesses, and especially small businesses, have not been able to get the bank credit for legitimate business enterprises which they need. This, to me, means tight money and it also means fewer opportunities for employment.
The only other thing I should like to mention about the minister's choice of statistics is this: he said, as reported on page 1298 of Hansard, that the cost of living in Canada in the past 12 months had gone up by 1.8 per cent. I think he might have added that 221 Per cent of that total increase occurred between September and October of this year according to the dominion bureau of statistics monthly bulletin released this morning. In other words, I suggest that if this most recent rate of increase is part of the up and up process, that fact also might have been disclosed.
The other important feature of the emergency austerity program is the tariff surcharges. At one fell swoop extra tariffs of between 5 and 15 per cent were imposed. The subsequent reductions which the minister talked about were minor, as he himself admitted when he was presenting us with his revenue estimates. These tariff surcharges are bound to increase costs, and this means increases in the prices of the goods we have to buy. It means further increases in the cost of living.
The government has refused to put these tariff increases before parliament in the proper way as part of the budget for the current year. I should like to say-and I wish the Minister of Finance were here to hear me, but I hope someone will tell him what I am going to say because I say it

seriously-that to me this is "absolute political irresponsibility", to use the minister's own words last night.
There is also the question of how these increases can be justified under GATT. The Minister of Finance said that we should not talk about this at a time when Canadian officials are in Geneva trying to justify what this government has done. The Conservatives have used this line before. We were told that we should not be critical of the Prime Minister when he was in London being critical of the British. But in this case of justifying these tariff increases I wonder whether the Minister of Finance really expects us to keep quiet in order to help him continue taxes which we think are bad for the people of this country.
The minister made it clear yesterday, or I thought he made it clear, that the government intends to continue the emergency austerity program. I think he also made it clear that the government has no other program for dealing with our long term economic problems. This government has offered us a dish of hard money and high tariffs. That is what this program means. It is a typical old fashioned Tory recipe, and will inevitably result in high prices and a low rate of economic growth and greater unemployment.
The minister has chosen to let the cat out of the bag with regard to what many people believed were only temporary tariff surcharges. He should go further and say whether the government proposes to keep these taxes on indefinitely. If it does, then perhaps some Canadian producers will decide to establish domestic sources of supply for at least some of the things we are importing, despite these tariff surcharges. Very wisely these producers have hesitated to do this up to now. Let me make my meaning clear. As far as I have been able to ascertain, neither the Liberal party, the Social Credit party, nor the New Democratic party is in favour of these austerity measures. We all believe they should be stopped. There are variations in what we think should be done; but all of us seem to agree that the restrictive approach to the resolution of Canada's basic economic problems which is being pursued by this government is bad.
Now let me say a word about the subamendment put forward by the Social Credit party. I think it must be clear by this time to all hon. members of this house, and to the general public, that this parliament would not approve, would not condone, would not permit these austerity and tight money policies to be continued if it were not for the unnatural alliance, perhaps I should say the

unholy alliance, that has been contrived between the Conservatives and the Social Credit party.


Michael Starr: We will see how you vote tonight.


Paul Joseph James Martin: That is the truth.


Walter Lockhart Gordon: The hon. member for Red Deer (Mr. Thompson) has said outside this house that his party will support the Tories until the spring at least.


Michael Starr: And you will support us from then on.


Walter Lockhart Gordon: Yet he is offering us a subamendment which, if approved, will defeat the present government. The leader of the Social Credit party also talks a lot about political morality and other people's principles. At the same time he presents a subamendment which he hopes will be defeated. I find it difficult to reconcile this action with his protestations.
The hon. member for Villeneuve (Mr. Caouette), the co-leader or the deputy leader, or the associate leader, or the some kind of leader of the Social Credit party-perhaps I should say the real leader; but anyway, he is the hon. member for Villeneuve-has become a sort of public entertainer-


Lionel Chevrier: He is a ball of fire; the other fellow is too slow.


Walter Lockhart Gordon: -and perhaps for that reason we should not take his utterances too seriously.


Mr. McGee:: We do not take yours very seriously.


Walter Lockhart Gordon: That is your privilege. But nevertheless, the hon. member for Villeneuve has stated outside this house that he likes holding the balance of power in parliament; that he likes being in a position to keep the Conservatives in office. This means, of course, that he likes being in a position to ensure the continuance of policies which he claims are bad for the people that he and his colleagues represent. Perhaps he is doing this because this is what is wanted by his friend, the premier of British Columbia. On October 19, according to the Vancouver Sun, Premier Bennett said that Social Credit has the Dief-enbaker government "on the hook". According to this report the next sentence reads:
And he told national Social Credit leaders to keep the Tories there.
Mr. Speaker, if I may digress for a moment, the hon. member for Lapointe (Mr. Gregoire), and I think the hon. member for Villeneuve sometimes, and some of his colleagues seem to like reminding, and seem to take a certain amount of delight in reminding, my hon. friend and colleague, the hon. member
Tariff Surcharges and. Tight Money for Laurier (Mr. Chevrier), that he is a director of a chartered bank. Sometimes I wonder if they know that the chief financial adviser of their friend the premier of British Columbia, the chief financial adviser who is a defeated Social Credit candidate, is also a director of a chartered bank. The chartered bank of which he is a director-perhaps has the largest business of any chartered bank in Canada. I will go further. If we leave out two other banks, then this bank on whose board of directors the Social Credit party is so ably represented is bigger than all the other banks in Canada put together. Perhaps our friends in the Social Credit party will remember this the next time they are tempted to talk about my friend, the member for Laurier.
Mr. Speaker, I am not sure what the Social Credit leader really meant by his subamendment. However, unlike the hon. member for York South, I am more intrigued by, than indignant at the words he chose. To begin with, his subamendment is in addition to and is not in substitution for the original amendment. Apparently the Social Credit party agrees that the emergency austerity program of tariff surcharges and tight money should be stopped at once. So far so good. Then they go on to say that this policy should be replaced with a policy of debt free money-whatever that may mean-and "constructive proposals to foster balanced domestic economy and balanced international trade". We on this side of the chamber understand more or less the second half of this amendment, although we should like to see it worded in clearer language.


Some hon. Members:: Oh, oh.


Mr. Deputy Speaker:: Order.


Walter Lockhart Gordon: That leaves the question of what debt free money means. I do not agree with Social Credit doctrine-and I am sure no members on this side of the house agree with it-which, if ever applied in practice, would in my view bring financial panic and ruin in its wake.


Some hon. Members:: Oh, oh.


Walter Lockhart Gordon: It is a fuzzy form of economic radicalism-


An hon. Member:: Let us try it.


Walter Lockhart Gordon: -which is not supported by any recognized economist. I may say that in that phrase I do not include the respected professor of literature from a Montreal university. I do not accept the meaning of the words "debt free money" put forward by the hon. member for Lapointe last night. Money is anything which serves as a unit of account, a medium of exchange and a store of value.

Tariff Surcharges and Tight Money Money as we know it-a dollar bill for instance-represents a debt. It is a debt of the state, in our case through the Bank of Canada, which is the legal means of settling debts between us. It would be foolish to suggest that the words "debt free money" mean getting rid of dollar bills. I do not interpret the words to have that meaning. However, if "debt free money" is a colloquial expression for such things as grants to municipalities for schools, hospitals and universities, and for easier credit, then to that extent at least it sounds not unlike some parts of the Liberal party program.


Some hon. Members:: Oh, oh.


Mr, Gordon:: I should like to say a word to the hon. member for Burnaby-Coquitlam (Mr. Douglas). In his interesting speech he was highly critical of the emergency austerity tight money program. However, he complained that the Leader of the Opposition (Mr. Pearson) did not put forward the kind of alternative program the Liberal party would pursue. If the leader of the New Democratic party had not been engaging in certain successful exertions on the west coast during the last few weeks he would have heard the Leader of the Opposition put forward a program in his first speech in parliament on October 1, and he would have heard the hon. member for Davenport-


An hon. Member:: Who is he?


Walter Lockhart Gordon: -explain in some detail the same program on October 22.


Michael Starr: Oh, that was your pet program.


Walter Lockhart Gordon: I have listened to the Minister of Labour on several occasions, Mr. Speaker.


An hon. Member:: You had better listen a little bit more.


Walter Lockhart Gordon: Sometimes he helps a little bit. He helped to sell my book, as I told him the other day. Sometimes I do not think he contributes very much.


Michael Starr: He contributes something every time.


Stanley Howard Knowles: Is the hon. member now going to publish another edition of his book in which he will explain debt free money?


An hon. Member:: What about your book on socialism?


Walter Lockhart Gordon: I shall be glad to answer that question, Mr. Speaker. The answer is no. I shall not go into our program again in any detail. However, let me summarize it very briefly for the hon. member for Burnaby-Coquitlam who I am very pleased to see as a member of this house. The first

essential of this program is an easy money policy, freer credit, lower interest rates and, as I have said before, a clearer understanding by the government of its full responsibility for monetary policy. In order to increase investment in the public sector of the economy we propose an extensive program of loans and grants to municipalities. We must bring our current account balance of payments more nearly into line. I agree with the Minister of Finance that this is one of the important things that we must do. However, I do not give it quite the top priority which he gave it. This means producing more of the things we need in Canada. In my speech on October 22 I gave some examples and said that we should not hesitate to use public capital in order to get things going if this were necessary, as has been done in the past. At the same time I said we would prefer to see as much as possible done by private industry rather than by state intervention. That is the philosophy of the Liberal party.
I was criticized by the hon. member for York South for saying that. I suppose it was not to be expected that an old doctrinaire socialist like him would like this kind of approach, even though he now belongs to a group which claims to be much more benign and much less militant in these matters than was its predecessor. He said the Liberal party's method would not work because we would hesitate to step on people's toes. I agree with him in this statement. We do not wish to step on people's toes nor do we wish to step on people's necks either for that matter.


Paul Theodore Hellyer: We want to step on the accelerator.


An hon. Member:: Tell us what you would do.


Walter Lockhart Gordon: I am not sure, Mr. Speaker, who I am supposed to be speaking to at the moment. There are various crossfires here.


An hon. Member:: Walter Erb.


Walter Lockhart Gordon: I do not know him. However, I seem to remember that he was once a colleague of the hon. member for Burnaby-Coquitlam in another place.


Mr.   Marlin@Essex East: What has he done?


Walter Lockhart Gordon: He has seen the light. All I wanted to do, Mr. Speaker, was to point out to the leader of the New Democratic party that our party has a program. We do know what we would do to put this country on its feet and we think that the sooner this is done the better it will be for all of us.


Mr. E. A. Winkler (Grey-Bruce):: Mr. Speaker, it is a pleasure for me to participate in this debate. I realize that the time set aside for this discussion is set out in the rules but I should like to take advantage of this opportunity to place some thoughts I have before the house. Before I begin to do so, may I say it has usually been my practice to have something to say particularly to the hon. member for Essex East (Mr. Martin) before he leaves the house. I think I will depart from that usual pattern today and speak of other things although, having regard to the economic position of the country, I might point out that I noticed an article in one of the leading newspapers in the last few days indicating that the motor car industry is experiencing one of its most prosperous seasons and that 1963 automobiles are selling at a tremendous rate, greater than ever before.


Paul Joseph James Martin: I hope so. Are you opposed to that?


Eric Alfred Winkler: I think that is indicative of the action we have taken on behalf of industries such as the motor car industry. As I have watched the manoeuvring that has gone on in the house, particularly this afternoon, I have noted that some very interesting things have taken place. There is a slight shift of sympathy, I think, from a political point of view and the usual pattern has not been followed.


Mr.   Marlin@Essex East: May I go out now?


Eric Alfred Winkler: We have not seen any particularly derisive comments today by the Liberal party with regard to the Social Credit party. Therefore I think we can expect something different in the vote tonight. It is not with any particular fear or trepidation that I await the result of the vote but it is only a matter of interest to see which way the shift will take place. With respect to the old alliances that were built up in this house, I can only think of the title of a popular dance tune some years ago, "Won't You Change Partners And Dance With Me"? I think we will see this in evidence when the bells ring tonight, particularly after having listened to the hon. member for Davenport (Mr. Gordon) who, I regret, has left the house.


An hon. Member:: We will soon see who is the wallflower.


Mr. Denis:: How about your former girl friend, Social Credit?


Eric Alfred Winkler: Mr. Speaker, I am willing to yield the floor if one of those Liberals over there would rather have it. There is one thing that has become evident in the last few days.
Tariff Surcharges and Tight Money Although it is difficult for a supporter of the government such as myself to admit it, it has become evident that there is a sense of responsibility in the corner to my right. I was very interested to hear the leader of the New Democratic party say yesterday, as found on page 1291 of Hansard:
-I and my colleagues took the position that we were not going to support a motion of no confidence in the government just for the fun of bringing the government down, that in our opinion we ought to hear what the government had to say


An hon. Member:: Who is changing partners now?


Eric Alfred Winkler: I am merely quoting, my friend. We will see what the results are tonight. We will see where you stand, and I am not inviting you to come over here. I do think that the hon. member for Burnaby-Coquitlam (Mr. Douglas) took a responsible attitude in his speech, but later this evening we will see how responsible it is.
In the speech by the hon. member for Davenport this afternoon I noted some significant words which impressed me, not because of their content or their wisdom but because of the hidden meaning that may exist. For instance, he stated very emphatically that the government's emergency program was a negative one. He looked forward to the day when there would be an increase in unemployment as a result of it and he claimed that the program was punishing the people of Canada. These words have a strange ring in our ears as we think back to the days when we had daily dirges on unemployment and what the government was going to do about it in this house. Today I feel that maybe the hon. member for Davenport is opening up a new door with regard to the method they might try to put across to the Canadian public as the way in which they will proceed in their effort to upset the government.
He also stated very clearly that the main feature of the government program that was distasteful to him was the tariff surcharges. Today when we have a very substantial degree of prosperity in our primary and secondary manufacturing industries as a result of these activities it is a peculiar and funny thing to hear these charges levelled against the government when such prosperity is in great evidence. I would ask this question with regard to the policy that the member for Davenport was endeavouring to put forth to the country. Are the Grits trying to pay back an election debt? One would expect to hear such a speech in Washington possibly but not in the House of Commons in Ottawa, and I can only say that there must be some

Tariff Surcharges and Tight Money other meaning than the narrow terms of the words that the hon. member put before the house this afternoon.
He also spoke in the latter part of his address about the use of public money to support industrial expansion. As a member of the house I am not particularly opposed to such a policy, but it is a peculiar thing that he would support the amendment of his leader on which we will be voting this evening because the measures imposed by the government are bringing about that very thing. They are bringing about the expansion of the smaller secondary industries at the present time without the use of public money. No one can deny that, but I realize that the hon. member for Davenport will try to make the picture look as black as possible. I do not know who he thinks believes him throughout the country, particularly when we realize, as I said before, the prosperity that exists.
I do not want it said for a moment that I am opposed to what the Grits have to say just for the sake of being opposed. I hold in my hand here an editorial in the London Free Press, and although that newspaper may be somewhat sympathetic to us I still think that the opinions of the editor of that paper represent some of the best and clearest thinking in this country. In the editorial he refers to a similar opinion expressed by the Toronto Star. The editor of the Free Press had this to say in the editorial found in the issue of September 29 last:
As a matter of fact, if there was an immediate election it might well react against the party responsible.
He also refers to the Toronto Star as saying that the Leader of the Opposition is wrong in his insistence upon an early vote. Let us also look at some Liberal comment. I have here an article written by Michael Barkway which appeared in the Financial Times. It is very interesting having in mind the argument put forward against government policy today. Mr. Barkway has this to say:
If the American government, or any other, tries to persuade Mr. Nowlan and his colleagues that we should settle our balance of payments problem by handing over more and more Canadian companies into foreign ownership, rather than by continuing the import surcharges, Canada's answer should be an immediate and unqualified no.
It should be given with no apology, but with the penitent admission that we ought to have taken steps nearly ten years ago to prevent such an immoderate use of foreign capital to cover current spending.
I think that is a very sane view, a realistic view. One of the people who preceded me in this debate mentioned the fact that he did not like to quote statistics. I was not going to use them either, but they certainly go a long way towards proving that what the hon.

member for Davenport was saying this afternoon was entirely wrong. The figures on gross national product, personal income, labour income, the index of industrial production, merchandise exports-that is very important in view of the trade programs that have been sponsored by this government-construction, contract awards, are all up; everything is up. Motor vehicles, steel, iron, cement, nickel, crude petroleum, natural gas, and the employment picture, are all moving upward. I do not know how the hon. member for Davenport, coming from the province of Ontario as he does, can say that our program is so far wrong.
If you examine the unemployment figures for Ontario you will find that they are below the level which people in some quarters believe to be average at any time of the year under the circumstances which exist in Canada. There are some things, Mr. Speaker, that probably, can be taken into consideration. I noted them as I prepared to come into the house, and noted them with a certain amount of interest. For instance, I hold in front of me a program that was put forward as the ideal program for this country, a program that was mentioned some considerable time back. I should like to put it on the record for the benefit of hon. members. This program can be set out as follows:
1.	Recognize unemployment as a national problem. I think this government has always recognized that, particularly in view of the steps we have taken.
2.	Adopt an easy money policy to reduce the dollar discount.
3.	Bring our international trade into a popular balance.
4.	Produce more goods, and import less. This is very important, too.
5.	Restrict immigration to those with special skills, and close relatives.
6.	Sponsor a program of urban redevelopment.
7.	Provide tax incentives to attract industry to depressed areas.
8.	Make ample provision for those who are unemployed.
9.	Use taxation as a weapon against unemployment.
10.	Provide vocational training for unskilled people.
11.	Give workers over 40 preference in government jobs.
12.	Study solutions to seasonal unemployment problems.
Now, I think all of those points have been looked at and have been dealt with fairly by this government.


Michael Starr: Who proposed this?


Eric Alfred Winkler: I was hoping that question would come from across the floor because this is entitled, "Walter Gordon's Proposals," dated October 15, 1960, as they appeared in the Toronto daily Star. On the basis of those proposals, 1 think we should have received more votes from the other side. I think if the policies we have adopted are examined, and the measures outlined in the speech from the throne, we should at least expect the hon. member for Davenport to stand up in his place tonight and vote with the government. I gather, Mr. Speaker, from what has been said in this debate so far, as well as from other sources, that the Liberals want a cessation of the emergency measures program. The Social Credit party wants debt free money, a balanced economy and a balance in international trade. The N.D.P. certainly appears to be against devaluation of the dollar. They want a planned economy; they want peoples' activities planned and they want all our resources planned. These things sound all right, and they have been put before the country. After viewing the entire situation, one gets the impression that we are all trying to do our utmost for Canada, for the people of Canada and for Canadian industry.
I feel it is worth while once in a while, Mr. Speaker, to relate the situation in the country to one's own constituency. I do not intend to embark on another throne speech debate, but I do feel we can all take a look at the industries that exist in our constituencies and realize what the programs initiated by the government mean to those industries. I have here a paper printed in Hespeler, Ontario, the Hespeler Herald which announces that Simplicity Products Limited has completed an agreement with the McGraw-Edison Company of Chicago to manufacture its Speed Queen washing machines and driers in Canada. This United States company is one of the big sellers of automatic machines and now has its main division at Hipon, Wisconsin. The announcement was made in Hespeler by Mr. T. R. Reid, vice president of sales, for C. A. Wilson, president and general manager. It is anticipated that this will mean a $750,000 expansion program for that company in this small town in western Ontario.
Why is this being done? It does not matter to me whether it is Canadians, people from the United States or Great Britain or who it may be, these people are only going to go into a market where they can find a sale for the products they are interested in producing. The remarks I am about to make would apply equally to the exponents of free trade. I do not believe any of us are narrow enough to think that eventually we will not become part of such a situation. However, I do believe
Tariff Surcharges and Tight Money this, that in the interim period we, as the legislators of this country, must see that our industries are not sacrificed to the larger interests which could put a number of these small secondary industries out of business. I have said that before, and it is a true statement.
Let me return once more to my own constituency which is the home of the Canadian furniture business. For a number of years there has been great concern over the flood of United States products into this country. I find a great deal of concern, too, in respect of shipments of furniture to the United States. This restriction is not necessarily the result of government design but the result of the system which exists in the United States and one which we, in the past, have failed to recognize.
It is a heartening thing for me to return to my constituency on week ends and find that there is a tremendous surge in industrial activity. When one hears the factory whistles blowing on Saturday morning, something one has not heard for the last 15 years, he realizes that something very definite is taking place. This surge of industrial activity has been caused by the emergency measures adopted by this government. As I said the last time I spoke in this house, one of these people remarked to me, "Long live austerity, if that is what the Grits want to call it, because it is unprecedented prosperity so far as we are concerned." On looking around my own constituency and elsewhere, and not only in the furniture industry, looking north to Barrie, south to Kitchener, Guelph, Galt and London, I find there is a tremendous new feeling, a new sense of business that has not existed for a long, long time, and I will agree with Mr. Barkway when he says our answer should be an unqualified no.
I agree with that statement and I suggest to the Minister of Finance that he wait a long, long time before removing these measures. I say to the hon. member for Essex East that the motor car industry in his constituency will remain prosperous so long as these austerity measures are in effect. If he wants unemployment then he should adopt his policy.


Mr.   Marlin@Essex East: We have had austerity for a long time now.


Mr. Creslohl:: He disagrees with his own minister.


Eric Alfred Winkler: I should now like to deal with what the future holds for us and with the demand of the hon. member for Davenport that these measures be removed immediately. There is nothing we get in this world that is free, and that includes our livelihood, money

Tariff Surcharges and Tight Money and everything else. They will come at a price and if we are not prepared to protect those things that are ours we may well lose them. If we move in the way the Liberals would have us move, we would take a tremendous risk of losing a lot of the secondary industries which we have at present, and we cannot afford to lose them. We must take measures to protect them and to increase their number. We must also see to it that the terms worked out in regard to western European trade are spelled out clearly. No country with a population of 18 million people can adopt a different attitude.
I have before me an article which appeared in The London Free Press following the speech of Mr. Carl A. Pollock, president of the Canadian Manufacturers' Association to the American trade and industry committee of the Chicago association of commerce and industry. In his speech Mr. Pollock emphasized some plain facts about Canada's trade with the United States, and the article says:
He pointed out that American tariff levels and

what is more important-the attitude and rulings of the United States bureau of customs, are major obstacles to Canada's entry into the American market.
These are things we must consider very seriously before any move is made. The article continues:
Nearly every industry south of the border retains a lobby at Washington, which uses pressure as soon as Canadian goods begin to compete seriously with American products.
Then referring to the President of the United States and his attitude in moving towards freer trade and a reduction of tariffs, the article continues.
The first place he should start is in removing restrictions and annoying methods by which Canadian manufacturers are barred from the rich American market.
Further on the article quotes Mr. Pollock, referring to the Americans, as follows:
You are our closest neighbour and, at the same time, the one country above all others with which, year in and year out, we have a massive trade deficit, so massive in fact that it jeopardizes our whole national balance of payments position.
I think this is a very strong case to put in the right quarter. We cannot develop secondary industry in Canada and have it remain Canadian, or even remain in Canada, if we are going to allow all the profits on the goods manufactured to go to outsiders, whether they be citizens of the United States or whoever they may be.
In my own constituency we have noticed the growing volume of American products coming into the country, and industry in my constituency has done its utmost to compete with them. The furniture manufacturing industry has gone in for automation on a great


scale, so much so that it is rather disheartening to see all the old skills that had to be used now go out the window in the face of automation. Yet even with these advances in production techniques we find the flow of United States products is such that it is depressing that industry. No one can say that the people engaged in that industry have not been alert or have not been aware of what has been going on, but it is simply the case of the cost of production which is hampering it.
I recall going to a very large showroom in the city of Toronto not very long ago. It was organized by an industry with which I was associated before the war. I can recall when the large retailers of suites of furniture in southwestern Ontario carried a tremendous percentage of Canadian furniture on their floors, but when I went to this showroom about a year or a year and a half ago, out of 1,200 suites on the showroom floor there were, I believe, only nine that were made in Canada. Even though there was a surcharge of 22.5 per cent on the United States product it could still flood the market, and the reason is a very simple one of arithmetic. The producers across the border were producing for the great American market to which we do not have access.
I hope the program to which the President of the United States is committed will have the desirable effect mentioned in the article quoting Mr. Pollock. If it does we shall have access to this huge market and it will help our smaller industries, which are the backbone of many towns and indeed of many of our smaller cities. We cannot afford to lose them, and again I urge the minister to retain the measures that are in existence for as long as humanly possible.
I found something interesting also in the speech delivered by the leader of the New Democratic party. He had a partial solution in his plan for the creation of a greater flow of money into the consumer market. This was a reduction in personal income tax, and I should like to speak on the circumstances as they exist today in that field.
I well remember the Prime Minister saying, and I have had it substantiated by the Department of National Revenue, that the majority of income taxpayers pay less today than they did in 1956. The reason again is a simple matter of arithmetic. Today income tax is assessed at 11 per cent on the average, and in 1956 it was 13 per cent. Therefore, although we have not moved as fast as we would like, at least we have moved in the right direction, and inasmuch as we took $1,800 million out of the economy last year I believe this could be reduced further.

I am one of those people who believe income tax is a fair form of taxation in so far as the fact exists that in Canada we have the highest rates of tax in the higher brackets of income. It might be a good thing for us to try to eliminate income tax entirely and collect the money in some other way. Maybe it could be done through a federal sales tax or through a different type of taxation with respect to estates. But that is another question, and although I have given it considerable thought I do not wish to elaborate on it this afternoon. I do think, though, that the policies which were mentioned by the hon. member for Davenport are not very different from those he presented to us in this list of October 15, 1960. If they are, I can only draw the conclusion that he can amend his thinking whenever he chooses. Certainly, if he will analyse the 12 points listed under his name he would find that they all have been, or all are, under active consideration at the present time-and not by any influence of his.
You will have noticed, Mr. Speaker, that the leader of the New Democratic party had nothing to say in his speech about what the workers of this country feel with regard to the increased degree of industrial activity in this country. I know from the experience in my own constituency and in a good many others around me that there is no more quarrelling about unemployment.


Paul Joseph James Martin: Oh, that is a ridiculous statement. There are more unemployed in Canada than in any country in the western world.


Eric Alfred Winkler: I am glad the hon. member for Essex East said that. I had not intended to spend much time on this subject this afternoon, but I should like him to know that there are at least five fair-sized industries in my constituency and in the immediate vicinity which cannot hire extra men. The unemployment insurance commission has temporary offices set up in all the small towns to attract off season farm workers to take jobs in industry during the winter months in order to meet the tremendous surge of business.


Mr.   Marlin@Essex East: Would the hon. member permit a question?


Eric Alfred Winkler: Not today. I should like very much to take the hon. member home with me one week end and show him what this means to the unemployed.


Mr.   Marlin@Essex East: I should take the hon. member to Windsor.


Eric Alfred Winkler: Since we have got on the subject, I might say the hon. member for Davenport, when he spoke in Owen Sound in an
Tariff Surcharges and Tight Money attempt to win votes for the unsuccessful Liberal candidate, made the statement that there were a certain number of unemployed in that city-a statement which was ridiculous and untrue. The hon. member had a figure, but it was a figure for the whole area represented by the office there, including half the constituency of Grey, Bruce and all the towns and cities in the north end. This is the way hon. members opposite promote their cause. This is the way the hon. member for Davenport talks against our emergency program, though nobody knows in his heart better than he does that he is wrong.
Finally, I believe that if the government today, together with industry and management, employ, the God-given faculties which they possess, we are on the threshold of the greatest progress we shall ever see in our country's history.


Mr.   Marlin@Essex East: Would the hon. member permit me to ask him a question? Do I understand him to say that there is no serious level of unemployment in Canada at this time?


Eric Alfred Winkler: In answer to that question I will agree that it behoves us to pay attention to the national picture. But this government has worked hard and steadily to bring about a solution of that unemployment problem. Let me say that in the province of Ontario there is 3 per cent. How does the hon. member like that?


Mr.   Marlin@Essex Easl: That is too much.
(Translation):


Mr. Real Caouelle (Villeneuve):: Mr. Speaker, since yesterday we have seen and heard all kinds of things here. From all parts of the house, we hear about Social Credit, as from all parts of Canada, and especially throughout the province of Quebec.
A moment ago, I heard the hon. member for York South (Mr. Lewis) refer to debt free money or debt free credit, proposed by the leader of our group yesterday as an amendment to the Liberal amendment.
We also heard the hon. member for Davenport (Mr. Gordon) criticize Social Credit on the matter of debt free money.
And members from all parts of this house are wondering what is debt free money.
It may mean-
(Text):


An hon. Member:: Hear, hear.
(Translation) :


David Réal Caouette: Hear, hear. The hon. member for Winnipeg North Centre (Mr. Knowles) asked the same thing: what is debt free money?

Tariff Surcharges and Tight Money
If the hon. members do not yet understand what is debt free money, I must inform them that their electors are beginning to understand it fairly well in their respective constituencies.
And what should we think when we see, for instance, in a Montreal newspaper report of this morning the statement made by the hon. member for Burnaby-Coquitlam (Mr. Douglas) in British Columbia, and I quote:
That industrial and commercial companies which have declared in the first nine months of the year a 3 per cent increase in their benefits have not re-invested that money ... He added that they had not felt the need to invest their capital because a production which is already slowing down is enough for their needs.
He should have said that, during his election campaign in October, to the electors of his constituency, that their needs were satisfied. Probably he would not have achieved the same result.
If the consumers bought more, if they had an increased purchasing power, those who have capital would invest more.
It was then that the hon. member for Burnaby-Coquitlam proposed to increase government expenditures, to increase social allowances and to lower taxes.
What does it mean to increase government expenditures? It means, normally, to increase taxes, to increase taxation sources in Canada.
Now, the Canadian people cannot pay more taxes than they do at present. What counts is to lower taxes. Certainly. But here is the obvious contradiction: there is talk of lower taxes to increase the purchasing power, and then the government is asked to increase its expenditures. But where will those people take the money if they do not believe in debt free money?


An hon. Member:: They are mortgaged.


David Réal Caouette: Mortgaged like the Liberal party.


Mr. Rouleau:: Why do you never say anything about the Conservatives?


David Réal Caouette: Yes, like the Conservatives also.


Guy Rouleau: Why not say it?


David Réal Caouette: Mr. Speaker, when the
Leader of the Opposition (Mr. Pearson) submitted his amendment, yesterday, he said:
That all the words after "that" be deleted and the following substituted therefor:
This house is of the opinion that the emergency austerity program of tariff surcharges and tight money introduced on June 24 this year should be stopped at once.
We agree.


Guy Rouleau: Are you going to be able to do it?


David Réal Caouette: Probably. When the Liberals were in power in 1956, and also in 1951 and 1953 and when they imposed upon us in Canada credit restrictions and austerity programs, what were they doing to get out of it? Absolutely nothing.


An hon. Member:: Oh, oh.


David Réal Caouette: Absolutely nothing. And today they are playing politics and trying to make this country believe that they are anxious to have an election, because they really believe they will take office, and yet more than half of them here in this house will not come back.


An hon. Member:: It is true.


David Réal Caouette: Those people do not consider the present situation in this country and do not even try to find a solution. What are their solutions? What do they propose as an alternative to the austerity program? Absolutely nothing. But we are told by them: defeat the government so that we can get elected. That is what they say, and yet we know that they have been here for 22 years, wearing out the seats of their pants, to Your Honour's right.
Mr. Speaker, through our leader the hon. member for Red Deer (Mr. Thompson), we moved a subamendment which reads as follows:
That the amendment be amended by adding the following at the end thereof: "and replaced with a policy of debt free money and constructive proposals to foster balanced domestic economy and balanced international trade".
A few minutes ago, my good friend the hon. member for Mercier (Mr. Boulanger), handed me a newsletter just released by the Canadian National bank-


An hon. Member:: Not the Provincial bank?


Mr.. Caouette:: -where mention is made of "Money, that unknown". I say that it is indeed an unknown. Most members of parliament do not know where money comes from, where it goes, how it is disposed of, how it is issued. That is not known. However they venture to laugh at Social Credit. They venture to make assumptions, to make charges without rhyme or reason, without knowing what it is, and they think they are taken seriously in Canada or in the province of Quebec.
Thank God, jokers in Canada are being more and more exposed and recognized by the Canadian people.

Here is what the Canadian National bank newsletter says:
Some people suggest that banks create credit and even money as much as they please. Those people should agree on what they mean by the word create.
Banks create or they do not. There should be agreement on that word.
If banks created money, how would those people explain why some banks went bankrupt?
Mr. Speaker, if everybody who has money deposited at any of the chartered banks in Canada were to go to the wicket at his own branch and ask for his money, every bank would be bankrupt tomorrow, because they do not have the cash reserve to return the depositors' money.
It is precisely because everybody does not go to the bank at the same time that there is confidence in the banking system or that bankers themselves have confidence in their own system. But if all depositors, tomorrow morning, were to lose their confidence, the whole system would be immediately bankrupt. And it is not with the humbug monetary policy we have now in Canada that the government could save them.
The credit operations of the commercial banks have nothing in common with alchemy-
How true, but they do have something in common with inkwells.
When a bank lends money against bonds-
You will note it is not a loan against money or against ready cash.
-against bonds, it does not put new money into circulation: it is merely coining-
It does not put new money into circulation, but it does coin. What is the difference between coining and creating money? Hair splitting I call it. And to think that our good friends, the Liberals and the Conservatives, let themselves be fooled by such statements.
For instance, when it grants a manufacturer a $100,000 loan repayable in three months, an account is opened in his name where that amount is credited.
At an interest rate of 6 per cent.
The manufacturer will draw cheques on his account as he needs the money.
And mind you, Mr. Speaker, no deductions have been made from anybody's accounts. Now go to the branch office of the bank that granted a $100,000 loan to that industrialist and ask the bank manager, or the president, vice president or general manager: "Add up all your accounts before I get a loan from your bank, and once I have secured that $100,000 loan have all your accounts added up again, and you will see that $100,000 in new money has been created by the bank which agreed to loan $100,000."
Tariff Surcharges and Tight Money The industrialist will draw some cheques against his account as needed to pay for his raw materials and to meet his expenses, including the salaries of his workers and employees, until his products are sold. When his bill falls due, he will reimburse the bank.
He will pay back not only $100,000, but $100,000 plus the interest, that is $6,000 divided by four, which makes $1,500 to add to the $100,000.
Where will this industrialist get the money to reimburse the $100,000 loan, plus the interest of $1,500, when only the chartered banks have the right to operate that way, when neither the credit unions nor any other banking organization in Canada has the right to supply money to the country, except the chartered banks?
Consequently, $1,500 are taken off the circulation. In fact, they must be if that industrialist is to reimburse the $100,000 loan. It is on account of a system like that that we are in such a predicament. Our public debt, amounting to $23 billion, is costing us $800 million in interest each year.
We are accused of rehashing the same story. But, Mr. Speaker, although the Good Book has been taught to the whole world for 2,000 years, a great number of people are losing their souls every day simply because they refuse to abide by its teachings.
We are coming now to the present situation. You cannot pay back more than what has been created through credit or money in the country. It is mathematically impossible. That is the reason why when the government borrows an amount of $100 million and injects those credits into the circulation we go through a booming period, but only when that money is put into circulation. Let us suppose that we have a loan for a 20 year period bearing interest at 5 per cent; as soon as that amount of $100 million is put into circulation it creates a prosperity similar to that we have known in wartime, when the Liberals were in power.
What did we gain by that? We had an era of prosperity but 20 years have elapsed since then. The amount of accrued interest is now equal to the capital since we borrowed $100 million at 5 per cent. It follows that we owe the principal plus another $100 million. How could the government pay back $200 million when only $100 million have been created? That is a mathematical impossibility.

Tariff Surcharges and Tight Money
Why? That is how debt-money works. Any money or credit created implies, in theory, the reimbursement of the capital plus interest.
We are not against honest, logical and humane interest but we are against usury. Interest does not go against our principles. In fact, we find it quite normal that I should have to pay back $105 or $106 on a $100 loan. We are not against that but we cannot accept that the banks convert into money private, industrial and public property in Canada with the help of the government, and that they ask interest on top of that. That is what we are fighting against and we will keep on fighting.
In opposition to that banking practice in Canada, what are the Social Crediters proposing as debt free money?
I hope my friend from York South will understand this. We suggest to make use of the Bank of Canada, our financial institution, for all new production; that is to say the establishment of new credit, without interest, by the Bank of Canada, because those are our funds based on our work and our production. That is what we are asking, debt free money at the time it is created. When that money is put into circulation, it is not the government's business, it is not our business as members of this House of Commons if it bears interest, it is a matter for private enterprise, for free enterprise, depending on the interest we take in the development of our country.
Mr. Speaker, I go on with the reading of this famous Canadian National bank newsletter, which is interesting in many respects.
When this becomes due, the industrialist will repay the bank, plus $1,500 in interest, and the loan granted him for definite purposes will be written off. However, it is not said that it will be written off plus the interest which I just mentioned. And this is what the bulletin says:
The bank did not create a sum of $100,000 which has swelled the amount of money in circulation; it put momentarily at the disposal of an industrialist-
Notice the word "momentarily".
-it put momentarily at the disposal of an industrialist money that the latter exchanged for products and services. After having fulfilled its normal function to serve as a medium of trade, this money disappears, leaving the wealth which it helped create.
Certainly, Mr. Speaker, this money disappears, but it is mortgaged by interest, so that

the bank keeps control over the economic activity of the country.
That was why His Holiness Pius XI stated in his encyclical letter "Quadragesimo Anno":
Those who control money and credit are masters of our lives and nobody is even permitted to breathe without their leave.
What does that mean? Just that the banks have the financial power to make a man or break him tomorrow as soon as he stops catering to their whims, and particularly when he stops paying the interests they want him to pay.
And I continue quoting from the same bulletin, I find it most interesting and I commend it to the hon. member for St. Jean-Iberville-Napierville (Mr. Dupuis). Here is what we find under the title "Control of currency":
The Bank of Canada governs bank credit by deciding either for an increase-
This is most interesting and I do hope that the former minister of finance is listening carefully, because it is of the utmost importance.
The Bank of Canada regulates bank credit by deciding either for an increase or a decrease of the cash reserves of the chartered banks and, therefore, of that portion of their assets available for loans. By what means? By purchasing or selling Canada savings bonds.
Then, the Canada savings bonds are purchased or sold by our financial institution. And I go on:
The system is as follows: when the central bank-
In other words, the Bank of Canada.
-acquires Canada savings bonds, it increases the cash reserves of the chartered banks.
If a $100,000 bond is issued tomorrow morning by the government and then purchased by the Bank of Canada, this operation increases not only the cash reserves of the chartered banks of Canada but also enables them to multiply by 12J that amount and to ask for an interest of 6 per cent on the money newly created by the chartered banks. That is the way the banks control the finances of Canada. I do not understand such a situation.
Hon. members will see that the people who voted Social Credit in the last general election-which means nearly a million people in Canada-did not do so because they did not know what they were voting for, quite the contrary. That is what Social Crediters have been explaining for the last 25 years throughout this country. And, be sure, there is progress.

This is what happens and why. There is an increase of liquid assets in the chartered banks. Why? Because:
Whenever a bank sells, it receives a cheque which increases its deposit in the Bank of Canada by the same amount.
That gives the same result. According to official statistics, a chartered bank would have the right to multiply that amount up to 20 times if it wanted to, and this, under the Bank Act. As a matter of fact, however, the bank multiplies that amount only 12J times. And that is so much credit put into circulation.
The newsletter goes on to say:
The Bank of Canada also controls, in accordance with the government's monetary policy-
"With the government's monetary policy", that is understood. I believe there has been some legal wrangling previously on this matter, as to whether it is the government or the governor of the Bank of Canada who is duly authorized to decide the monetary policy of Canada. Mr. Coyne said that it was the government; the government said that it was Mr. Coyne. He was dismissed and replaced by someone else. But things go on as before. Nothing has changed. Not only does it rest with the government to decide for the Bank of Canada, but it must also pass legislation instructing the Bank of Canada to create new credit proportionate to new wealth produced in the country, so as to get out of this austerity program and ensure prosperity to each and every citizen of Canada, to each and every one who voted for us, and not to serve the purposes of financial interests but those of the human person in the country.
The Bank of Canada also controls. In accordance with the monetary policy of the government, the issuing of bank notes where it has a monopoly.
Bank notes, not credit.
To regulate credit and money in the best interest of the nation.
Such is the essential purpose or the very essence of the Bank of Canada's function, as shown in the explanatory notes of the act under which the bank was established.
Despite the various forms it has taken in turn, from cattle money to cheques, money still remains the common measure of goods and the medium of exchange. No matter what figure appears on a bank note, its real value is its purchasing power.
Its purchasing power. Not the purchasing power in the United States, not the purchasing power in England, not the purchasing power in China, but the true value of the bank note for a $1 purchase in Canada. As far as buying on Canada's credit is concerned, the value which counts is that of our dollar.
Tariff Surcharges and Tight Money
Now, here is what is said here:
That purchasing power depends on the relationship which exists between the money in circulation and the goods available. Many factors sometimes affect the prices of certain products, but the general price level depends on the money supply.
That is absolutely wrong. It does not depend on supply, on monetary funds, it depends on production and services existing in the country.
Mr. Speaker, we have undreamed of resources in Canada. We have plenty of goods of all kinds. There is not one Canadian, not one member of the cabinet, who doubts that.
Everyone is of the opinion that our country is enormously wealthy. And yet, 500,000 unemployed and their families are underfed in Canada, which means that 2.5 million people suffer directly from unemployment in our country at the present time. And they are forced to live under an austerity program and asked to believe that they will be lifted out of the present economic crisis only if they pay more taxes.
Mr. Speaker, that is not a solution. It is just so many more shackles put on man.
As a solution, we need new credit right across Canada.
People are being controlled right and left, industry is controlled, the family is controlled, controls are everywhere and on a national scale. Why? Those who are most in favour of controls are those who were never able to succeed in life, whether in Canada or in another country. Then, man is shackled. Plans are made. Planning, what does that mean? It means human slavery. We, of the Social Credit party, are going to fight to the death against such socialist slavery.
Mr. Speaker, I shall continue to read the newsletter:
Theory and facts.
It goes without saying that nobody can predict the future in the field of economics and even the most farsighted monetary policy always involves doubtful factors. What about the theory which claims to equate money and production and maintain a steady balance between those two terms?
One might think that official statistics would provide the necessary data. Would the annual reports published by the federal bureau of statistics be used? It is estimated that, in 1960, the gross national product reached $35,959 million and the national income, $27,375 million. Consequently, there was a difference of $8,584 million between the two. By subtracting from that amount the figure of $5,266 million covering our exports, there still remains a difference of $3,318 million. According to that theory, the Bank of Canada would therefore have to issue $3,318 million worth of bills to adjust the purchasing power of the population to the production value.
There, in the whole paragraph, you have precisely-

Tariff Surcharges and Tight Money


Mr. Prosper Boulanger (Mercier):: Mr. Speaker, I rise on a point of order. I am pleased to hear the hon. member for Ville-neuve read a document but he should read it all. Actually, he is quoting only some parts here and there. He is now reading from the third paragraph. If he wants to read a document, let him read the whole document.


David Réal Caouette: I could table the document, if the Chair would allow me. It is the confirmation of what I have just said.


An hon. Member:: You can keep it.


David Réal Caouette: Now, the man in question prints a news letter and brings up a difference of $8,584 million-
-subtracting from that sum the amount of our exports-
Let us subtract, but at the same time let us increase, by the amount of our imports- we import a little more than we export- and in fact, we have an unfavourable trade balance of $1 billion for the current year.
One billion dollars, instead of a decrease of $5,266 million, that would mean an increase of $6,266 million, not more. But if you reduce by five instead of six, you have a gross production one billion greater. With a budget deficit or an export-import deficit of $1 billion our imports and exports would balance out and, above all, our economy would be balanced, and that is what we are seeking for this country.
According to this gentleman there would be a difference of $3,318 million. But it is not so, there are in fact $9 billion missing.
According to this theory, in order to adjust the purchasing power of the people to the value of production, the Bank of Canada should issue $3,318 million.
Social Credit members never said that.


An hon. Member:: Never.


David Réal Caouette: We said to fill the gap between production and purchasing power, consistent with the present circulation speed of credit or money in this country.


An hon. Member:: Exactly.


David Réal Caouette: It is not a question of printing money but of making entries in ledgers. Family allowances do not mean that new dollar bills are being printed and circulated in Canada. In regard to these allowances, a cheque is received and deposited, then it comes back to the Bank of Canada or to the bank that cashes such cheques. There was only a cheque in circulation.


Let me give you a striking example: let us take a $10 cheque which is successively handled by five different individuals. My good friend the member for Chicoutimi (Mr. Cote) hands me a $10 cheque; I am a merchant and, so, he buys from me; I make 20 per cent profit and so, I get a $2 profit. Then I endorse the cheque and I give it to my supplier who, when he endorses it later, also makes 20 per cent profit. The cheque is handled that way five times. Finally, the last person who deposits the cheque finds that there are insufficient funds to cover the amount of the cheque. So, he comes back to the person who has drawn the cheque, in this instance my hon. friend the member for Chicoutimi, who says: "Fine, give me this cheque back and I will give you $10. We get $10 but the five people who have passed or cashed the cheque have each made $2 profit. The total profit is $10. The cheque is covered, $10. As far as money or figures are concerned there is nothing. And yet $50 worth of goods have circulated here and there among those who have endorsed and cashed the cheque. That is a credit system.
Nowadays, 95 per cent of trading in Canada is done through credit, and 5 per cent only represents currency in circulation. Five per cent currency and 95 per cent credit.
Mr. Speaker, it is in connection with this credit, or it is toward the creation of new credit by the Bank of Canada that the Social Crediters are so strenuously striving, not only here in parliament, or in this House of Commons, but all across Canada.
Mr. Speaker, let those who tend to ridicule or laugh at Social Credit learn what is involved and what is Social Credit before trying to ridicule everybody or to laugh at all Social Crediters here in parliament or outside.
Mr. Speaker, in closing, I shall quote the following from the same newsletter:
The so-called weakness of purchasing power-
There is no so-called about it. Let us ask the workers and the farmers in each of our constituencies whether or not their purchasing power is weak. You will see that the voters are aware of that weakness. It matters little whether those questioned are plant workers in St. Jean d'Iberville or in the constituencies of Pontiac or Villeneuve or in Chicoutimi. The problem covers the breadth of the province and of Canada.

-is offset threefold by the potential purchasing power which is represented by private savings accounts in chartered banks-more than $8 billion- and by deposits in other institutions-more than $1,750 million.
Mr. Speaker, all these sums are included in last year's revenues. The amounts deposited in the banks this year are already included in national revenue. Let nobody try to tell us today that these amounts are added to the national revenue o f Canada, for they are included in the total.
It would be dangerous to deceive ourselves and to imagine that an unlimited expansion of the money supply-
When have Social Crediters advocated an unlimited creation of money with an expansion of the money supply as mentioned in the newsletter of the Canadian National bank?
Mr. Speaker, if the shareholders and the directors of the bank are being given this kind of information, they are misled. But, thank heaven, Social Crediters are educating the public so that every Canadian can understand the machinery of finance and credit in this country.
(Text):


Paul Joseph James Martin: Mr. Speaker, we have listened with considerable interest during yesterday and today to a number of speeches by members in all parties in the house. Perhaps of the speeches delivered none had greater significance, apart from that of the Leader of the Opposition (Mr. Pearson), than the speech delivered last night by the Minister of Finance (Mr. Nowlan). The Minister of Finance has taken on his heavy responsibilities admittedly at a very difficult time, at a time when he can in all honesty say that personally he had not directly contributed to the situation which faces him as Minister of Finance. As a member of the government, of course, a government responsible for the present situation confronting our nation, he has to share in the collective responsibility but perhaps only to that extent.
Therefore we had a right to expect from the statement of the Minister of Finance yesterday some indication whether he would embark on policies that might relieve the pressure on the nation at this time. We might have perhaps expected him to indicate that the huge deficit position in which this country has been placed, as a result of the mismanagement of our affairs by the present Minister of Justice (Mr. Fleming) -
Tariff Surcharges and Tight Money


An hon. Member:: Nuts.


Paul Joseph James Martin: -was going to be alleviated. We might have expected that there would be a new attitude on the part of the government with regard to ultimate responsibility in monetary policy. We might have had from him some assurance whether we could anticipate a much earlier suspension of the program of surcharges and tight money. But instead of receiving from the minister a frank statement of the economic situation facing the country and then an assurance as to when the government expected to be able to lift this austerity program, we have had nothing from the Minister of Finance (Mr. Nowlan) but a confirmation of our greatest fear, namely that this government, under this new Minister of Finance has no different policy than it had under his predecessor. Notwithstanding what the Prime Minister (Mr. Diefenbaker) said in that television broadcast, a week after the election, this government has no long term policy at all designed to relieve the country of unemployment and other economic problems which confront us today.
All we can say, therefore, is that we have had from the Minister of Finance not some reason to look carefully, to take a balanced position, but rather a justification for the amendment put forward by the Leader of the Opposition (Mr. Pearson) yesterday. This government has given no indication of its capacity to win the confidence of this house or the people of Canada. If we were in doubt about that, all we have to do is to look at the speech made yesterday by the Minister of Finance when he pleaded with the house in these words, "If you give us another year in here, it will be all over; there will be no unemployment". Imagine the government of our country, through its Minister of Finance, having to come into this chamber and plead with the house to give him another year so that he can introduce the policies which the Prime Minister and other hon. gentlemen said during the last election they were going to introduce in order to maintain this country on the road to prosperity.
Now, the Minister of Finance, after five months and after the apologia of the Prime Minister over television, now comes beggingly to this house, addressing himself to the New Democratic party, the Social Credit party and the Liberal opposition, and he says, give us another year to carry on. I say, Mr. Speaker, that this country now wants leadership from a government that can provide leadership and can provide programs that will meet our problems and not a government that has to

Tariff Surcharges and Tight Money beg for another year to carry on so that it can justify assurances given immediately after the general election.
We were told by the Prime Minister that unemployment would end in August. We have heard today from the hon. member for Grey-Bruce (Mr. Winkler) the amazing statement, in the face of the situation we now know exists in the country, that there is no unemployment in Canada at all.


Some hon. Members:: He never said that.


Mr.   Marlin@Essex East: My hon. friends can make their speeches after. I was here, and I heard him. He said that there was no unemployment. I rose at the end of his speech and asked him to say if it was not a fact that there was more unemployment in Canada than in any country of the western world. He gave us a review of what the government had done to bring about prosperity which he says is to be found all over this country; that was the reply he made. I say to the hon. gentleman, I say to the Prime Minister and I say to the Minister of Finance that we have unemployment in Canada. We have more unemployment in Canada now than there is in any country in the western world. While the situation has improved over what it was at this time last year, I defy any member in this house to produce government statistics to prove the statement that we do not have serious unemployment in Canada.
However, I must say that the Minister of Finance did not take the position that the Minister of Justice (Mr. Fleming) had taken in another debate in this house. He has not denied that we have an austerity program. He has admitted that this policy of surcharges, of imposing taxes amounting to some $200 million without parliamentary approval, the tight money policy of the government, does represent austerity. Lest there be any question about this let me remind the house what he did say yesterday in this connection, as reported at page 1301 of Hansard:
We have had devaluation for a year. We have had tight money for so long. We have had austerity measures. We have had surcharges, and we are told we are faced with doom and disaster.
He did not hesitate to say that we have austerity measures. This is not what the Minister of Justice has said. It is because we have these austerity measures that there is an obligation on the part of those opposed to these measures to take advantage of the only procedure open to us, that is to move a vote of no confidence in this government. This, we have done.


Robert Jardine McCleave: Will the hon. member permit a question?


Paul Joseph James Martin: My time is limited.
After listening to the gentleman who spoke for the New Democratic party, having heard arguments of the Social Credit party opposing the government's austerity program, it is difficult to understand how the New Democratic party can fail to join with the Liberal opposition in challenging this government and giving the people an opportunity to say whether they agree with the position taken by the opposition parties in this house. The leaders of the New Democratic party and the Social Credit party have said we should not have an election at this time; that we ought to wait. They almost use the words of the Prime Minister who asked for a cooling off period in stating that parliament should not meet at the earliest moment after the election. The Prime Minister said there should be a cooling off period, as though this were a boys' parliament, as though it were not the responsibility of parliament to meet at the earliest possible moment to deal with the emergency.
I say if it is right for us to criticize this government, as we jointly in all three opposition parties are doing, then it is right, indeed it is our duty, to take steps in this house tonight to condemn this government in a manner that will at least give us an opportunity once again of seeing if we cannot have returned to this house a government with sufficient strength to bring forward policies designed to meet our present economic situation. I cannot understand the leader of the New Democratic party and the leader of the Social Credit party saying we must wait for a period. Surely, this is not in keeping with our concept of responsible government. Our concept of responsible government is that when a government has lost the confidence of parliament, when it has lost the confidence of the people, regardless of the inconvenience to which the Canadian people might be subjected, the very integrity of our parliamentary system calls for the defeat of that government, whether or not that means an election.
Yes, we are against this program of austerity, not only in the Liberal opposition but in the two other opposition parties as well. I believe that throughout this country there is much evidence to indicate that we are not alone in our view. All over the country there is evidence of discontent, of the dissatisfaction which exists with regard to the wishy-washy way in which our affairs are being handled. I think that I do not overstate the case when I suggest there was something in what the hon. member for Port Arthur (Mr. Fisher) said about leadership in this country at this time. Of course it would be imprudent for me to suggest what should be done about

the leadership of another party. I am not doing that. But I am saying that as a Canadian I have a right to complain about the leadership which the government, and particularly the Prime Minister, is giving to Canada at this time.
We have had uncertainty in this regard not for five years but for three years and the latest example of this inadequate, uncertain leadership was the leadership we received from the government during the Cuban crisis.


Some hon. Members:: Oh, oh.


Mr.   Marlin@Essex East: If my hon. friends opposite question that, let them go back to their own constituencies and they will find not only Liberals, not only socialists, but members of their own party who are ashamed over the way this country is being directed and administered.


Robert Jardine McCleave: On a point of order, Mr. Speaker; the hon. member presently on his feet is not talking about debt free money or other matters set forth in these amendments. He is talking about foreign affairs, something outside the scope of either the amendment or subamendment, and I suggest he go back to debt free money.


Mr.   Marlin@Essex East: May I deal with the point of order, Mr. Speaker, and say that I think what I had been saying was relevant. I say that if we had a government equipped to deal with these problems, that had a program, that had at its head one who was capable of providing the kind of leadership we need at this time, then some of these economic problems now staring us so seriously in the face would not have developed as they did.


An hon. Member:: What would you do?


Mr.   Marlin@Essex Easl: Some hon. member has asked what would we do. The Leader of the Opposition has already given adequate answer to that, and so has the hon. member lor Davenport. Let us see some of the things we would do; and remember, Mr. Speaker, we are the only opposition party in this house that can say, with some assurance to those who listen to what we say, what we would do, because during the time when some Liberals now in the house were in office, and when there was a Liberal government in power, this country enjoyed its highest level of prosperity. Then at no time did any hon. member rise in his place in this house and question the capacity of the government of the day, and of the prime minister of the day, to lead the country.
There was not always full agreement with policies under Mr. St. Laurent and Mr. Mackenzie King, but no one ever rose in his place
Tariff Surcharges and Tight Money in this house and said that either one of these right hon. gentlemen was a man who did not provide the kind of leadership which this nation required. This we have not got today.


Mr. Fleming (Eglinlon):: They certainly did say so.


Mr.   Marlin@Essex Easl: The first essential is an easy money policy. We believe we should have freer credit and lower interest rates. Last night the Minister of Finance said that the bank rate had been lowered from 6 to 5 per cent and that there was a reduction in the rate of treasury bills. But when you compare the present highest rate with the highest bank rate under former regimes in the last decade it will be seen how inconsequential is this reduction in terms of easing what we call tight money.
We have not had from the Minister of Finance what is very essential in this whole discussion, and that is a statement on the position of the government with regard to monetary policy. We know what the position of the former minister of finance was. He abdicated from any responsibility in monetary policy. He said the Bank of Canada Act imposed that authority and that responsibility on the governor of the Bank of Canada, that it was a responsibility which belonged to an entity created by parliament and untouchable by the government of the day. We pointed out to him that the government in our country, or a government in any country with our kind of system, must ultimately accept responsibility for monetary policy. We know that as a result of the action and views in this particular matter taken by the former minister of finance there began a series of incidents that led to tremendous drains on our exchange reserves during the past year.
If the former minister of finance had been a member of a government that recognized it had a responsibility in this matter, as well as the governor of the Bank of Canada, it is quite arguable to say that this balance of payments problem would not have arisen in the way that it did arise. But what do we have from the present minister? Surely in a debate of this kind we were entitled to have him assert that the government did take the view that it was responsible for monetary policy, that it was the initial responsibility of the Bank of Canada, but that the government of the day either had to accept or reject the policy of the Bank of Canada.
No reference was made by the Minister of Finance yesterday to the statement made by the present governor of the Bank of Canada when he took up his office and when, in a carefully prepared statement, he confirmed

Tariff Surcharges and Tight Money the position in the matter of the relationship between the governor of the Bank of Canada and the government, which had been taken by former ministers of finance and the position that members in the Liberal opposition took over a period four years before and after the humiliating Coyne affair, a humiliation which now, in the light of events, is greater on the part of the former minister of finance than on the former governor of the Bank of Canada.
We have also said that, in order to increase investment in the public sector, the government should unhesitatingly embark on an extensive program of grants and loans to municipalities. We said we would bring, and we must bring our current accounts payments more closely into line, and this means producing more of the things we need in Canada.
The other day the Minister of Finance announced a policy dealing with the importation of automatic transmissions.


Donald Methuen Fleming: Six o'clock.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Paul Joseph James Martin: Before the adjournment, I had dealt with what I thought was the desirable direction which economic policies designed to improve our economic situation ought to take. I had stated we must bring our current account and balance of payments more nearly into line.
Further, I think we have a right to expect that before embarking on a program of additional protective tariffs the government might have resorted to policies such as those suggested, at least in part, by Professor Bladen. These would improve the position of secondary industry. I might add that we should not hesitate to use public capital to get projects under way if that should be necessary as, indeed, Liberal governments have done before to keep the economy buoyant. I would add that we think there is too much absentee control of Canadian industry and resources and that this situation should be corrected gradually, though steadily, through appropriate changes in our tax laws, and not merely by the appointment of royal commissions for this purpose, a well known delaying tactic of this government.
We have indicated throughout the past four years that while we do not share fully the view of the socialists or of the New Democratic party members with regard to planning,


we do advocate planning and a regional approach to economic problems. In addition, of course, as the Leader of the Opposition has indicated, we have strong views on what should be done about trade, agriculture and the necessity for labour-management-government co-operation. With regard to the latter, we have heard nothing from this government in spite of the unanimous report from the special mission to Europe of the productivity council.
In a few moments we will be voting on the subamendment and, later, on the amendment introduced by the Leader of the Opposition (Mr. Pearson). The amendment put forward by him reads:
This house is of the opinion that the emergency austerity program of tariff surcharges and tight money introduced on June 24 of this year should be stopped at once.
It is significant-and I address myself now to members of the Social Credit party-that they have not altered one word of that amendment. What they have done is to add an amendment of their own embodying the amendment which we put forward as part of a resolution which, in the first instance, contains the words which were used by the Leader of the Opposition in the amendment he offered to this house. That is significant in itself, and must clearly be an indication there can be no question but that the Social Credit party in this house will support that amendment when it is put to a vote tonight.
The New Democratic party has not put forward an amendment for the reasons properly stated this afternoon by one of its spokesmen. However, we are glad to note that the New Democratic party considers our amendment, while a little negative in character, nevertheless to be one which deserves support. Therefore, we shall count on them, because of their views as to the austerity program of this government and as to its incompetence, to vote with us in confronting this government tonight in the name of the Canadian people.
The amendment put forward by the Social Credit party reads as follows:
That the amendment be amended by adding the following at the end thereof: "and replaced with a policy of debt free money and constructive proposals to foster balanced domestic economy and balanced international trade.


Some hon. Members:: Explain.


Paul Joseph James Martin: It is significant that the hon. member for York South (Mr. Lewis) should have said this afternoon that this amendment met with his approval except for the words "debt free money".


Mr. Lamy:: That is very important.


Mr.   Marlin@Essex East: If those words meant what he thought they meant, the hon. member told us, he would have no difficulty in supporting the subamendment. I refer to that statement as being a significant one. I may say at once that the phrase "debt free money" is a phrase which is open, as the spokesman for the C.C.F. party indicated.


An hon. Member:: There is no C.C.F. party.


Mr. Speaker:: I would beg the indulgence of the house. The hon. member for Essex East has the floor.


Mr.   Marlin@Essex East: It is a phrase which is open to several interpretations. Indeed, the spokesman for the New Democratic party offered several interpretations himself. Let me say we have examined the use of this phrase in speeches in this house made by members of the Social Credit party. We do not, of course, support their definition of the phrase "debt free money". As a matter of fact, there are some fairly strong and authoritative definitions which have been given to this phrase which are not consistent with the definition given by the Social Credit party.


Donald Methuen Fleming: More Liberal shillyshallying.


Mr.   Marlin@Essex East: Lord Keynes, perhaps the most outstanding economist of the last four decades has written in his book "The General Theory of Employment, Interest, and Money" that we can draw a line between money and debt at whatever point is most convenient in the handling of a particular problem. Then, at page 32 of this persuasive and authoritative work we find the following:
The great puzzle (ol how and why effective demand could be deficient or excessive) .. .vanished from economic literature. It would only live on furtively, below the surface, in the underworlds of Karl Marx, Silvio Gesell or Major Douglas.
If the Prime Minister wants more evidence, I suggest he should look at page 371 and page 382 of the same work where he will find further variations, different interpretations, of the meaning of a phrase which, so far as the Social Credit party is concerned, has a definite meaning.
We do not support Social Credit principles. We do not support this interpretation of theirs of debt free money.


An hon. Member:: Why are you voting for them?


Mr. Speaker:: Order. I recognize the enthusiasm of hon. members, but again I must draw to their attention that the hon. member for Essex East (Mr. Martin) has the floor, and it may come to pass that certain hon. members who are now more vocal from their
Tariff Surcharges and Tight Money seats may also seek the indulgence of the Chair in protecting their rights to speak.


Paul Joseph James Martin: Mr. Speaker, I have said that we do not support this definition of debt free money. We do not support Social Credit principles. But I should like to say to you, sir, and through you to the house, that we were not elected to this parliament to oppose the Social Credit party or the New Democratic party as our main function; we were elected to oppose this government.


Some hon. Members:: Oh, oh.


Mr.   Marlin@Essex East: During this session the government has received the support of a party which believes in Social Credit principles. This does not mean, of course, that the government accepts Social Credit principles. On previous occasions, such as in the debate on the address, we voted against Social Credit principles at a time when the Social Credit party, affirming those principles, supported this government. Mr. Speaker, tonight we will vote for the subamendment.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: Shame.


Mr. Speaker:: Order. The hon. member for Essex East has the floor, and if those who are in support of him curb their enthusiasm as much as those opposed to him, we might be able to hear the hon. member.


Mr.   Marlin@Essex East: In doing so, Mr. Speaker, we are not voting for Social Credit principles, against which, I repeat, we have already voted, but we are voting against a government that must go, in the interests of this nation.
On October 17 the Prime Minister (Mr. Diefenbaker) said in a television broadcast:
-Canada is today enjoying one of the greatest periods of economic progress in peacetime history.
Mr. Speaker, that is not an accurate statement and we will vote against this government.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: Liberal honour is a thing of the past.


Mr. Harkness:: They have no honour.


Mr. Speaker:: Order. If the Chair may have the attention of the house and the left field will leave the right field alone, it being 8.15 p.m. it is my duty, pursuant to paragraph (4) (d) of standing order 56, to interrupt these proceedings and to put forthwith the question on any amendment now before the house.

Divisions


Mr. Brown:: I	was paired with the hon.
member for Simcoe East (Mr. Rynard). Had	
I voted, I would	have voted for the amendment to the amendment.


Mr. Speaker:: I	declare the amendment to
the amendment lost. The question is now on the amendment.	
The house divided on the amendment (Mr.	
Pearson) which was negatived on the following division:
 YEAS Messrs:	
Addison	Beer
Argue	Benson
Asselin	Berger
Badanai	Boucher
Barnett	Boulanger .
Batten	Bourque
Bechard	Brewin

Extension of Freeze on Pay Increase
Burgess	Latulippe
Byrne	Leduc
Cadieux (Terrebonne)	Legare
Cameron (High Park)	Lessard (St. Henry)
Cameron	Lewis
(Nanaimo-Cowichan-	Loiselle
The Islands)	Macdonald (Rosedale)
Cantin	MacEachen
Cardin	Maclnnis
Caron	Macnaughton
Carter	Mcllraith
Chevrier	McLean (Charlotte)
Clermont	McMillan
Clunis	McNulty
Cowan	McWilliam
Crestohl	Martin (Essex East)
Crossman	Martin (Timmins)
Davis	Mather
Denis	Matheson
Douglas	Matte
Drouin	Mitchell
Drury	Munro
Dube	Nicholson
Dupuis	Orlikow
Ethier	Otto
Eudes	Pearson
Fisher	Pennell
Forgie	Peters
Garland	Pickersgill
Godin	Pilon
Gordon	Richard
Granger	Rideout
Gray	Rinfret
Habel	Robichaud
Haidasz	Rochon
Hardie, Mrs.	Rock
Harley	Rouleau
Hellyer	Roxburgh
Herridge	Sauve
Honey	Scott
Kelly	Stewart
Knowles	Tardif
Lachance	Teillet
Laing	Tucker
LaMarsh, Miss	Turner
Lamoureux	Wahn
Lamy	Walker
Laniel	Whelan-108.
NAYS	
Messrs:	
Aiken	Doucett
Alkenbrack	English
Balcer	Enns
Baldwin	Fairclough, Mrs.
Baskin	Fairweather
Beaule	Fane
Belanger	Fleming (Eglinton)
Bell (Carleton)	Fleming (Okanagan-
Bell (Saint John-Albert)	Revelstoke)
Belzile	Flemming (Victoria-
Bigg	Carleton)
Boutin	Forbes
Bradley	Fulton
Cadieu (Meadow Lake)	Gagnon
Cardiff	Gauthier
Casselman, Mrs.	Grafftey
Chapdelalne	Green
Chaplin	Grills
Chatterton	Gundlock
Chown	Hales
Churchill	Halpenny
Clancy	Hamilton
Coates	Hanbidge
Cooper	Harkness
Crouse	Hees
Diefenbaker	Hodgson
Dinsdale	Horner (Acadia)
Horner (The Battlefords)	Nielsen
Howe	Nowlan
Jones	Nugent
Jorgenson	O'Hurley
Kennedy	Ormiston
Kindt	Ouellet
Laprise	Pascoe
Legere	Patterson
Lessard (Lake St. John)	Paul
Macdonald, Mrs.	Phillips
MacEwan	Pigeon
MacLean (Queens)	Plourde
Macquarrie	Pugh
MacRae	Rapp
McBain	Ricard
McCleave	Robinson
McDonald	Rowe
(Hamilton South)	Roy
McGee	Sams
McGrath	Sevigny
McIntosh	Simpson
McPhillips	Skoreyko
Maltais	Slogan
Mandziuk	Smallwood
Marcoux	Smith (Calgary South)
Martineau	Southam
Millar	Starr
Monteith	Stefanson
Moore	Stenson
More	Thomas
Morris	Thompson
Muir (Cape Breton	Valade
North and Victoria)	Vincent
Muir (Lisgar)	Webb
Nasserden Nesbitt	Winkler.-121.


James Elisha Brown: Mr. Speaker, I was paired with the hon. member for Simcoe East (Mr. Rynard). Had I voted, I would have voted for the amendment.


Mr. Mackasey:: Mr. Speaker, I was paired. Had I not been paired, I would have voted for the amendment.


Mr. Speaker:: I declare the amendment lost.


EXTENSION OF FREEZE ON PAY INCREASES TO PREVAILING RATE EMPLOYEES
Stanley Howard Knowles: Mr. Speaker, in the few minutes remaining before the main motion has to be put to the house there is a grievance I should like to raise and I invite in particular the attention of the Minister of Finance (Mr. Nowlan). The point about which I am concerned is the extending of the freeze on pay increases to prevailing rate employees of the government. It is well known that some of us disagree with the action of the government in freezing pay increases of classified civil servants. We hope that it will not be long until the minister makes a favourable announcement in that connection. But I feel, Mr. Speaker, that it is particularly unfair to extend the freeze on wage increases to prevailing rate employees.


Mr. Speaker:: Order. I would draw attention to the fact that the hon. member is at the far end of the chamber and the Chair is

Extension of Freeze on Pay Increase having some difficulty in hearing him over the hubbub prevailing in the house; so may we extend the usual courtesy to the hon. member who now has the floor.


Stanley Howard Knowles: Thank you, Mr. Speaker, but I can readily understand the hubbub there has been in the house in the last little while. 1 trust that the Minister of Finance at any rate has heard the subject matter that I am raising at this point and I shall keep my remarks brief in the hope that the minister may say something in reply.
I said a moment ago that I feel it is particularly unfair to extend this freeze on increases to prevailing rate employees. The Minister of Finance is quoted in one of the newspapers today, or perhaps in both of the Ottawa newspapers, as saying that it would be unfair to grant increases to prevailing rate employees at a time when increases are denied to classified civil servants. I should like to point out that prevailing rate employees already lag behind classified civil servants in those areas where comparisons can be made, and I should also like to point out that prevailing rate employees are already under the disadvantage of being in that category. They can get increases only when surveys have been made of the prevailing rates for comparable jobs in their particular area. It is the fact that during the last number of months a number of these surveys have been in process and many of those who are known as prevailing rate employees thought that the usual course would be followed, namely, when the recommendations were made those recommendations would be considered and they could anticipate their normal increases. But the announcement made by the minister today, at least the word that he gave to the press and what he said in answer to a question of mine on orders of the day, indicates that the freeze applies to prevailing rate employees.
The surveys that have been made will, I am sure, bring out the fact that in a great many instances prevailing rate employees are already behind the prevailing rates in the areas concerned, and to apply to these employees the two barriers, as I say, is quite unfair. There is a long tradition of dealing with these employees on the basis of wages that are being paid for comparable work in an area, and to break this tradition at this time is most unfair. I might add, Mr. Speaker, that to hold back a wage increase for prevailing rate employees is to hold back the economy generally; it is to encourage other employers in the area to point to what the government is doing to prevent increases. The


result will be that the supposed growth in the economy that the Minister of Finance (Mr. Nowlan) talks about is inhibited.
On the other hand, if the minister keeps making the point, as he has been in this house in the last day or so that things are going well under this government, I suggest the advantage of this should be passed on to these employees. This whole experience does point up the unsatisfactory situation that obtains when civil servants generally, as well as prevailing rate employees and all those in the public service, do not have the right of collective bargaining. We hope that some day soon that will be the case. In fact, a few moments ago when it occurred to me that this might be our last night in this parliament, I was planning to make a plea that something be done about this matter before this parliament was dissolved.
As I say, Mr. Speaker, the case has many aspects. There is the whole question of collective bargaining and the denial of rights to civil servants generally, but the particular problem that has been pin-pointed today is that prevailing rate employees are being denied their increases that would come under the normal practice. We believe that the Minister of Finance should lift this freeze, so far as prevailing rate employees are concerned, and that he should move as quickly as he can to lift the freeze for all those in the public service.


Mr. Speaker:: Does the hon. member wish to speak on the same subject?


Mr. G. J. Mcllraiih (Ottawa West):: Yes, Mr. Speaker. The grievance raised by the hon. member for Winnipeg North Centre (Mr. Knowles) is one of great urgency. Unfortunately, it appears to be part of the pattern of the present government and part of their austerity program, which the hon. member for Winnipeg North Centre has recently done his part in continuing. Notwithstanding this extraordinary conduct on his part-


Mr. Speaker:: Order; I think the hon. gentleman will recognize it is quite improper to comment upon the way any hon. member has voted on this or previous occasions.


Stanley Howard Knowles: The hon. member might
look at the record of his party on collective bargaining.


George James McIlraith: I think examination of my remarks in Hansard tomorrow will show that they are not out of order. I did not refer to a vote, nor did I comment on his vote. I commented on the extraordinary conduct of the hon. member for Winnipeg North Centre, and was going on to say that the

grievance he has raised tonight is, none the less, a very genuine grievance of the utmost importance, and one that indicates the incompetence of the government in so far as employee relations are concerned. Unfortunately, it is not an isolated incident.
It "will be noted from the press reports of the minister's remarks when he was asked about this subject, that there was the usual indecisive and confused statement from him, speaking on behalf of the government, that we had during the last year from his predecessor in office, the present Minister of Justice (Mr. Fleming). The former minister of finance made so many statements on the subject before he became Minister of Justice that each one contradicted the other. In any event, I must point out to the present Minister of Finance that his predecessor in office did something in connection with the subject. He selected the higher brackets of the professional class and granted increases to some of them, while at the same time leaving the large bulk of salaried employees without increases, notwithstanding the fact he had kept leading them to believe their increases would be dealt with.
The announcement today by the Minister of Finance respecting the pay freeze is one more step in the pattern used by this government in dealing with these public employees. Regrettably, it is producing added inefficiency in government because the administrative arm of the government must work efficiently and well if the government is to have its policies well carried out. There are two arms of government in my view, the political arm and the administrative arm and it must be acknowledged that the paid civil servants are a most important part of the administrative machinery of government.
The grievance discussed tonight indicates another measure that is doing much to demoralize the civil service. This demoralization, while not yet as universal in the civil service as it was when there was a Conservative government in office a number of years ago, is none the less spreading. If the ministers will examine carefully their own departments, they will find that in virtually every department or government branch, demoralization has already set in. It is not only because of the pay freeze; it is because of the refusal to replace key personnel as they retire or cease to function through normal causes, leaving those key positions vacant. There is also a loss of confidence spreading rather rapidly through the service in relation to the civil servant's right to rely on the civil service commission method of hiring and 27507-3-86i
Extension of Freeze on Pay Increase promoting within the service. Perhaps that is a bigger subject than I should raise here on this particular grievance.
However, I should like to warn the government that if they think for one moment they are not crippling the administrative arm of government by these measures, they are quite mistaken. Unfortunately, the action they are now taking is identical to, but a little slower in result than that taken by the Conservative government which came into office in the thirties. It is exactly the same kind of pattern although I must admit it is not being put into effect so rapidly or with such obvious viciousness as that policy was in those years.
There are civil servants still in government service who remember the policies of that government, and I would ask the government to consider this matter. I would hope that, when this has been done, we would get an announcement from the Minister of Finance, a clear announcement dealing with the subject. Let us not have just a great volume of words such as his predecessor resorted to when spreading ideas that were confusing and capable of misleading interpretation by those relying on them.
I would hope that the minister would deal with this subject when he has an opportunity, and that he will be given that opportunity very soon. As I say, I hope he will make a clear statement and not some kind of loose announcement, such as his predecessor in office was wont to do. So that he will be given an opportunity to do so, I shall resume my seat now.
(Translation):


Mr. Speaker:: The hon. member for Quebec-Montmorency has the floor inasmuch as he wants to deal with the same matter.


Mr. Guy Marcoux (Quebec-Monimorency):: I intend to deal with the same matter, that is the salary of civil servants. Mr. Speaker, I raised yesterday the question of pay increases for civil servants, and I was not surprised that the hon. member for Winnipeg North Centre (Mr. Knowles) asked a supplementary question, because I know that he has been interested in this matter for a long time.
Civil servants are lucky to still have tonight a government which will be able to consider granting them pay increases, instead of finding themselves in a period of confusion that might well have lasted more than two months. I feel it is important that the government should seriously consider looking after the various groups of civil servants. Our party proved tonight that we respect freedom of thought, freedom of speech and freedom of

Extension of Freeze on Pay Increase action. In the eyes of the Canadian people, we shall certainly be considered more seriously than those who want to bring chaos to Canada, that is the absence of a government.
As we know, the Liberals have already displayed their attitude as regards salaries of civil servants. Therefore, we cannot hope that they would do any better if they had the opportunity. Moreover, I am confident that the groups B and C of government will seriously consider assisting the civil servants. There are many in my riding who have fairly large families and who must be satisfied with starvation wages. They expect that the government will help them, since their salary increase was looked into by a special committee which made specific suggestions to the government.
Mr. Speaker, I merely wished to insist on the importance of having a government that can alleviate the situation of its employees in such a way that the whole Canadian population will be treated with equity instead of being thrown once more into darkness or in the red.


Mr. Alexis Caron (Hull):: Mr. Speaker, there is no doubt that the complaint voiced by the hon. member for Winnipeg North Centre (Mr. Knowles) is justified, because ever since the Conservative party came into power, the employees have certainly not been treated as they deserved.
For example, when the civil service commission made its first recommendation about a salary increase, the then minister of finance (Mr. Fleming) stated that it was a privileged report and could not be made public. And yet, between March and April and until the end of October, retroactive increases were granted to each group, so that those who received their increase in October only were refused an increase that had been granted to others in April, May or June.
Furthermore, an injustice was done when, recently, a salary increase was granted to 7,000 other civil servants. Finally, a way was found-as the Conservative party always has done-to postpone the increase for 55,000 civil servants, so that they have been the victims of the famous austerity program about which the government talks.
Civil servants had the right to expect better treatment from the government. That is why today they do not know where to look for help in order to obtain justice. They have been unfairly treated.
The grievance that has just been raised is quite appropriate since 7,000 civil servants

have already received a pay increase. Now, because of the present government's typical slowness and procrastination, 55,000 civil servants are being deprived of a salary increase. Being small wage-earners, they are the ones who most need a pay increase.
The government feels that the austerity program has been useful. In fact, some hon. members have stated their endorsement of the program. I suggest that they should talk to the 55,000 civil servants who have thus been treated so shamefully by the government and they will see how dissatisfied they are.
I congratulate the hon. member for Winnipeg North Centre for having raised this grievance in the house and I support him 100 per cent.
(Text):


Mr. A. J. P. Cameron (High Park):: I simply rise to add my words to those expressed by the hon. member for Winnipeg North Centre (Mr. Knowles) and other hon. members about this grievance. I see that the hon. member for Comox-Alberni (Mr. Barnett) wants to say something so I shall be very brief. I know the generous heart of the Minister of Finance. I know he has listened to what has been said, and I know that as soon as possible he will give consideration to the just claim of the civil servants. I feel they are being unfairly discriminated against in this case and I ask the minister to give it his early and favourable attention.


George Clyde Nowlan: Mr. Speaker, I know it is ten o'clock but the discussion has gone on and so I have to trespass for a moment on the patience of the house. The hon. member for Hull (Mr. Caron) was talking about 10,000, 20,000 or 30,000 civil servants some time ago. There were 3,000 people affected by the order which was issued suspending an increase for temporary employees. I happen to know the figure; it was 3,000 not 30,000; and I wish to say that these civil servants are Canadian citizens who recognize the fact that they are carrying part of the cross of austerity at the moment. I can assure the house that the government has been giving very careful consideration to their case, but I could not authorize an increase in their case without dealing with all the other civil servants.


Lionel Chevrier: You had better hurry up or you won't be there long.


George Clyde Nowlan: I will be here long enough to deal with it.


Mr. Speaker:: It being ten o'clock it is my duty, pursuant to section (4) (f) of standing order 56 to interrupt the proceedings and put

the question now before the house. The question is as follows: that Mr. Speaker do now leave the chair for the house to resolve itself into committee of supply. Is it the pleasure of the house to adopt the said motion?


Some hon. Members:: Agreed.
Motion agreed to and the house went into committee, Mr. Paul in the chair.
(Translation):
Estimates for the following departments are first called and discussed:


DEPARTMENT OP AGRICULTURE
[Stage Direction]
1.	Departmental administration, including advisory committee on agricultural services, $1,003,000.

[Stage Direction]
1.	Departmental administration, $7,305,200.

[Stage Direction]
1.	Departmental administration, including a grant of $10,000 to Frontier college and the expenses of the international labour conferences, $1,321,700.

[Stage Direction]
1.	Departmental administration, $3,560,800.
DEPARTMENT OF NATIONAL REVENUE 1. General administration, $4,931,950.
POST OFFICE DEPARTMENT 1. Departmental administration, including Canada's share of the upkeep of the international bureau at Berne and Montevideo, $2,133,000.
Business of the House
Progress reported.
(Text):

Lionel Chevrier: Mr. Speaker, now that the government has a short lease of life, may I ask the leader of the house what the business will be tomorrow and Thursday?


Gordon Minto Churchill: Tomorrow, the opposition will want to reflect on its sins. We have rather a short day. We shall deal first with Bill No. 71, an act to amend the Farm Credit Act, which is item No. 2 on today's order paper, followed by item No. 28 on the order paper which is the resolution setting up the sessional committee on railways, air lines and shipping.


Lionel Chevrier: May we have some indication of the business for Thursday?


Gordon Minto Churchill: It will likely be a continuation of the business I have announced but there will be time enough tomorrow to announce further business if necessary.


[Stage Direction]
It being five minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Wednesday, November 7, 1962