1962-11-05

Right Hon. J. G. Diefenbaker (Prime Minister):: I feel sure the house will want a report on the situation in India and also on the preliminary action taken by Canada in this regard.
There has been heavy fighting on the northern frontier of India and the Chinese are occupying large areas of Indian territory. We do not, of course, know their ultimate objectives. It is clear that the military situation is serious. As hon. members know, the government of India has expressed its determination to resist aggression. Canada's hope has been that peace could be restored on this troubled frontier on the basis of an equitable and permanent solution. However, in the meantime it is essential that India should be fully supported.
I informed the house last week that the government had been examining, in response to the Indian government's request, ways in which Canada could help. The Indian government has now advised that it is most grateful for the offer which has been made and they are anxious to receive immediately six Dakota aircraft. The government took immediate steps on receipt of this request to have the Royal Canadian Air Force assemble six Dakota aircraft at their repair shop at Trenton and put them into first class condition. These aircraft will be departing from Trenton at noon tomorrow and will be ferried by the R.C.A.F. to India, where they will be turned over to the Indian government.
It is important that India's economic progress and the implementation of her five year plan should not be impaired by the need to defend her frontier, and we shall be mindful of this in considering India's request for military supplies. Other countries have also been approached by India, and we are being kept informed of the constructive steps which are being taken to provide military assistance.


Hon. L. B. Pearson (Leader of the Opposition):: As already stated, we on this side of the house will support the government in any steps that it is possible to take to assist
India, a nation with which we have built up such very close relations within the commonwealth over the years, as she now finds herself a victim of aggression-though not, presumably, aggression yet in the form of an all out, formal war-by the communist Chinese.
Perhaps the best type of assistance we could give is that mentioned by the Prime Minister, assistance in the way of supplies. India's financial position is not such, we are informed by the Minister of Finance, as to permit payment for those supplies in cash, so we all hope that the terms upon which they are being offered will be as generous as possible to our Indian friends.


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I believe we all welcome the words we have just heard from the Prime Minister with regard to direct aid from Canada to our sister nation of India, now so severely put to the test by what amounts to a wide open war with her neighbour to the north. I would assure the Prime Minister that we will give our complete support to any action the government might take toward assisting India at this time.
However, I would just come back to the point, that in standing upon our moral responsibilities at this time we are placing ourselves in the rather peculiar position of probably assisting in the destruction of our creditors as the Indian people face the threat of invasion from the communist Chinese from the north. I think that, in addition to the positive action of which we have now heard, we should be very careful to re-examine our own policies to make sure that we are giving not only practical material support, but also the moral support of knowing that our policies are based upon principles which will carry through to the ultimate moral obligation which is ours in the struggle between communism and the free world.


Mr. T. C. Douglas (Burnaby-Coquillam):: Mr. Speaker, we in this group will support any action which will assist India in defending her borders. We have that obligation to her as a member of the commonwealth, and as probably the one true hope for democracy in the far east. I was particularly impressed with what the Prime Minister said about assisting in every way to enable India to complete its five year program. If

Canadian Position on Disarmament India is to be an example of the advantages of democratic government in Asia, then she must be assisted in every way possible to raise the standard of living of her people, and I certainly think we in this country could be doing much better than we are doing in terms of the paltry contribution which we are making in foreign aid.
With reference to the suggestion that some form of economic embargo upon China might be considered, I would simply say that we in Canada should ask that this matter be considered by the United Nations. If any form of economic sanctions is to take place, it should not take place on a unilateral basis but rather as part of an international program. We in this group would point out that had China been admitted to the United Nations we might not have the problem of disciplining a country which we have consistently kept out of the world community.



UNITED NATIONS


John George Diefenbaker: Mr. Speaker, some question was raised on Friday with reference to the attitude taken by Canada in connection with nuclear testing, and in particular with the motion and the several amendments which were before the United Nations. For that reason I feel it proper that I should place before the house at this time something of the stand which the Canadian representatives have taken there in the light of the decision which was made today in the political committee.
The 36-power resolution on nuclear testing, as amended by Canada with subamendments by several other delegations, was adopted by the political committee this morning by the very large vote of 81 in favour, none against, with 25 abstentions. Immediately following the vote on that resolution a separate United States-United Kingdom resolution was also put to a vote and adopted with 50 in favour, including Canada, 12 against, with 42 abstentions. The action which the political committee took this morning on these two resolutions will, I hope, lend new impetus and direction to the negotiations in Geneva which have been marking time while this matter was under discussion in New York.
The purpose of the Canadian amendments to the original 36-power resolution was to attempt to improve it in two respects, first, to link up future discussions with the references to testing contained in the recent

correspondence between President Kennedy and Chairman Khrushchev; and second, to remedy an omission in the original text by incorporating in it a call for an immediate cessation of testing in the three environments-in the atmosphere, under water and in outer space-on which all sides are agreed that no special inspection mechanism is needed.
The subamendment submitted by Ghana had the effect of adding a third element to the Canadian amendments by calling for an interim arrangement during which underground tests would be suspended while the research for a formula for their permanent suspension would be continued. The United States and United Kingdom governments submitted further amendments to the Ghanian proposal to make clear that they wanted adequate assurances for international verification during this interim period. The United States-United Kingdom proposal was accepted, as was that of Ghana, and thereafter the resolution as a whole, incorporating the Canadian amendments thus revised, was adopted with the result that I have already indicated.
Throughout the negotiations, which were complex, Canada has kept in close consultation with all the members of the 18-nation disarmament committee and, of course, with the three other western members of that committee, namely the United States, United Kingdom and Italy. I think we can take satisfaction from the action which the committee has taken, and which will shortly go to the assembly as a whole; for it should provide a constructive basis on which the Geneva talks can move ahead, taking account of the ideas which have been advanced in New York during the current debate. The resolution will also point the way to the method of stopping all tests by January 1, 1963, an element which has hitherto been lacking.


Lester Bowles Pearson: Mr. Speaker, it has not been easy, of course, for members to keep up with the deliberations in New York in respect of this extremely important matter because of the changes that have been made to the original 36-power resolution from time to time. However, from what the Prime Minister has said it seems that the original resolution, with amendments submitted by Canada to make it more effective and more practical, along with an amendment submitted by the United Kingdom and the United States to provide for means of verification and inspection-with the inclusion of these new elements into the original resolution and the passing of that resolution by such a large majority in the political committee-is one from which,

as the Prime Minister has said, we can all take great satisfaction. This resolution deals with one of the most important matters before the United Nations and before the world, namely the ending of nuclear tests. As is clear, if we cannot make progress in this dread and practical matter of ending all tests, it is not going to be easy to make the progress which is necessary in other fields of disarmament.


Robert Norman Thompson: Mr. Speaker, I am sure that the words we have just heard from the Prime Minister bring a feeling not only of relief but of rejoicing to our hearts and those of all the Canadian people. If any good can come out of the crisis we have just had in Cuba, perhaps this is one point, in that the people of the world have been aroused to an understanding of the closeness of the danger involved in nuclear war. Hence any progress at all which is made in this question toward the ending of nuclear armament is something over which we have just reason to rejoice.
Although the Secretary of State for External Affairs is not present with us today I should just like to take this opportunity to assure him of the complete support of our group in this house in his untiring efforts which he has carried on during these past several years to bring to a successful conclusion that question about which we are now speaking. He as well as freedom loving peoples around the world can be assured that we are concerned, and that we are completely behind him in his efforts to bring about a situation in which we actually can end nuclear testing. This will be the first step toward eliminating nuclear armament and the threat of nuclear war to a world which today certainly is in no position to face up to.


Mr. David Lewis (York South):: Mr. Speaker, I rise only to underline on behalf of the New Democratic party members in this house the unanimity of this chamber in congratulating the Canadian delegation at New York for the success it has had in having a proper resolution adopted by the first committee. Like other members of the house I asked questions about this because it seemed to us, as I am sure it seems to every member and as the Leader of the Opposition emphasized, that one of the most regrettable events of recent months was the resumption of tests by the Soviet union followed by the resumption of tests by the United States of America. It is obvious, I think, that until these tests are ended any talk about general disarmament or, indeed, nuclear disarmament is rather empty.
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It is therefore with pride as Canadians that we are pleased on this occasion to join all others in this house in congratulating the government delegation at the United Nations for its work.



TRANS-CANADA AIR LINES ACT AMENDMENT TO CHANGE ENGLISH NAME OF AIR LINE

Miss Judy V. LaMarsh (Niagara Falls) moved: for leave to introduce Bill No. C-72, respecting the Trans-Canada Air Lines Act.


Some hon. Members:: Explain.


Julia Verlyn (Judy) LaMarsh: Mr. Speaker, this is a very brief bill. Its purpose is to bring into conformity with international practice the name of the state air line by changing it to Air Canada, which is now used by the air line outside the continental limits of this country, and thus have the same title in both our two national languages.


Mr. Herridge:: Is this an austerity measure?
Motion agreed to and bill read the first time.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Maclnnis: 1.	Why was the Canadian National Express headquarters in Sydney, Nova Scotia, moved to a new location?
2.	Have any representations been received from any persons or groups regarding the new location from the point of view of service to the public?


Mr. McBain:: The management of Canadian National Railways advise as follows:
1.	Canadian National Express operation at Sydney was transferred to the freight facility as part of the program of integration of express and L.C.L. freight now being progressed in the Atlantic region.
2.	No.


SYDNEY, N.S. AIRPORT TERMINAL BUILDING
Mr. Maclnnis: 1.	Does the government plan to erect a new terminal building at the Sydney airport and, (a) if so, when would construction likely begin (b) if not, was it the intention of the government to ^ erect a new terminal building prior to the decision to make certain cuts in government spending?
2.	What are the present plans of the government regarding improvements at the Sydney airport?


James Alexander McBain: 1 (a) and (b). While it is not proposed to construct a new terminal building at Sydney airport in the immediate future, within the Department of Transport's planning

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program for improvement and development of civil aviation facilities provision has been made to bring this project forward at a later stage. There has been no recent change in plans in this regard.
2.	The department plans to carry out improvements to a taxiway and seal coat a portion of runway 07-25 in 1963. Further work on improvements to the domestic water supply system, the replacement of runway approach lighting facilities to runway 07 and improvements to the drainage system in the air field area are under consideration for next year.


* GRADE CROSSINGS, MARITIME PROVINCES
Mr. Rideout: 1.	Under the grade crossing fund administered by the board of transport commissioners, how many grade crossing eliminations were approved this year in each of the maritime provinces, and at what cost?
2.	What were the amounts approved for the provinces of Ontario and Quebec, and what was expended?
3.	How many people have been fatally injured at railway crossings in the maritime provinces this year?


James Alexander McBain: The Board of Transport Commissioners for Canada advise as follows:
1.	From January 1, 1962 to date, the Board
of Transport Commissioners for Canada has approved applications for the elimination of grade crossings in the maritime provinces and has made commitments from the railway grade crossing fund for this purpose as follows:	Newfoundland-1 crossing, commitment $169,300. Nova Scotia-2 crossings, commitment $848,550.
2.	From January 1, 1962 to date, the Board of Transport Commissioners for Canada has approved applications for the elimination of 21 grade crossings in the province of Ontario and approved commitments from the railway grade crossing fund totalling $7,087,695. The elimination of three grade crossings in the province of Quebec was approved with commitments totalling $603,500. At the moment, no accounts have been received by the board and no expenditures made from the railway grade crossing fund for the above projects.
3.	Five.


*C.N.R. PURCHASE OF PRINTING PRESS
Mr. Bourque: 1.	Is it the intention of the Canadian National Railways to instal and equip its own printing press in Winnipeg and, if so, for what purpose?
2.	Has the C.N.R. requested tenders for small high speed offset presses known as multiliths and other printing machinery?
3.	Has the C.N.R. and the government received from printing industries resolutions voicing disapproval of having a crown corporation entering into competition with a long established Canadian industry?

4.	What action does the government intend to take with regard to such representations?


James Alexander McBain: The management of Canadian National Railways advise as follows:
1.	Careful studies indicate that substantial economies could be achieved in the Winnipeg office by replacing the present obsolete duplicating machines with modern duplicating equipment and by producing on that equipment certain railway tariffs, the printing of which had theretofore been contracted out to Winnipeg firms. In response to representations through the graphic arts industries association action was deferred to give the firms concerned an opportunity to submit proposals for meeting the tariff production requirements by methods or on bases which would result in comparable economies, which were not forthcoming.
2.	Yes.
3.	See answer to No. 1.
4.	This is a matter of internal management of the railway company.


ROLPHTON, ONT., NUCLEAR POWER REACTOR
Mr. Davis: With regard to the performance of Atomic Energy of Canada Limited's new nuclear power demonstration reactor at Rolphton, Ontario: (a) what is the longest period of time for which this generating plant has operated at its rated capacity of 20,000 kilowatts (b) what is the total capital cost of this unit (including land, engineering, heavy water, etc.) (c) what are its fuel and other operating costs per kilowatt hour of electrical energy sent out (d) how does the cost of power from this installation compare with, say, the Canadian average for hydro generation?


Mr. Churchill:: (a) Except for planned reductions in power by 20 per cent for three periods of about one hour each, NPD has been operating at its rated capacity of 20,000 kilowatts for 17 days as of 30th October, 1962, and is still operating. The AECB licence to operate was granted on 1st October, 1962.
(b)	Capital cost of plant $31,036,000; first fuel charge $1.8 million; total station cost $32.8 million.
(c)	Fuel and other operating costs cannot be accurately calculated at this early stage.
(d)	Answered by (c).


UNEMPLOYMENT INSURANCE COMMISSION INSTRUCTIONS TO LOCAL COMMITTEES
Mr. Orlikow: 1.	Were any instructions issued or regulations made by the unemployment insurance commission or the Minister of Labour to extend or curtail the activities of the national, regional, or local employment committees in 1961 and to date in 1962?
2.	What changes were made by the unemployment insurance commission in 1961, and to date

In 1962, with respect to disposition of resolutions forwarded by local and regional employment committees?
3.	Were any letters sent to chairmen of regional and local committees with respect to resolutions presented to or resolutions passed by these committees and, if so, has the government any objection to their tabling?


Mr. Hales:: 1. No.
2.	In order to expedite the handling of resolutions of local employment committees the commission directed that all resolutions having national implications be submitted direct to the commission instead of through the regional employment committees. It was found imperative to do so on account of the many problems raised which need immediate study and action such as the winter employment program.
3.	Letters were sent to the chairman of the national employment committee and chairmen of the regional employment committees on March 9, 1962. There would be no objection to the tabling of such letters.


UNEMPLOYMENT INSURANCE COMMISSION
Mr. Orlikow: Was there a conference held in 1961 of all local office managers of the unemployment insurance commission and, if so. (a) what was the total cost of the conference (b) where was it held (c) what was the purpose of the conference (d) what recommendations came from the conference (e) what committees made reports to the conference and (f) would the government object to the tabling of a full report of the conference?


Alfred Dryden Hales: Yes, a conference of local office managers of the unemployment insurance commission was held October 22-27, 1961.
(a)	$39,595.67.
(b)	Ste Adele en Haut, P.Q.
(c)	Review, improve, streamline administration operations and procedures; increase the efficiency of the unemployment insurance commission services; permit the staff to become better acquainted and discuss matters of interest related to the functions they perform.
(d)	and (e) Subjects of study for the conference were solicited from all local office managers on matters relating to the administration and operations of the unemployment insurance commission.
Subjects of general interest were selected and grouped under 38 broad subject topics which were studied during the conference by some 200 local office managers assisted by regional and head office officials. To study these 38 topics the local office managers were divided into 42 study groups (workshops) which permitted the study of any given topic by two or more workshops.
27507-3-814
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The conclusions of this conference have already been reviewed by the unemployment insurance commission. This has resulted in some modifications and improvements being made in the administration and operations of the commission's services.
(f) A record of the discussions and conclusions was prepared for the internal use of the unemployment insurance commission.


FITNESS AND AMATEUR SPORT
Mr. Boulanger: 1.	Since the establishment of the national advisory council on fitness and amateur sport (a) what amounts were voted for it (b) on what dates (c) how much was spent, and for what purposes?
2.	Where are the respective headquarters located of any of the organizations that received a grant as listed in the answer to question No. 36 at pages 494-5 of Hansard, Monday, October 15, 1962?


Mrs. Casselman:: 1. Expenses of meetings of the national advisory council on fitness and amateur sport are met from the $5,000,000 made available under the Fitness and Amateur Sport Act.
Expenses in the fiscal year 1961-62 were:
February 5-6-Costs of council meeting: travel and accommodation of members, transcribing and related services
at meeting	$3,282
March 16-17-Costs of subcommittee
meeting	 267
Chairman's honoraria and travel expenses 1961-62	 1,264

Expenses in the fiscal year 1962-63 were: April 15-16-Costs of council meeting	$3,880
May 12-13-Costs of subcommittee
meeting	 159
June 14-15-Costs of subcommittee
meeting	 533
Chairman's honoraria and travel expenses 1962-63	 2,471

2. Amateur Athletic Union of Canada; Major J. W. Davies, president, 3515 Minto Avenue, Montreal 25, P.Q.
Amateur Athletic Union of Canada, boxing committee; Major Paul L. Roth, chairman, P.O. Box 4165, Station D, Vancouver, B.C.
Amateur Athletic Union of Canada, fencing committee; J. Dalton, chairman, 3022 Dundas Street, W., Toronto, Ontario.
Amateur Athletic Union of Canada, gymnastics committee; Dr. H. Douglas Whittle, chairman, 1912 Acadia Road, Vancouver, B.C.

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Amateur Athletic Union of Canada, track and field committee; Ken Twigg, chairman, 980 Lawrence Avenue, E., Don Mills, Ontario.
Amateur Athletic Union of Canada, weightlifting committee; Maurice Allan, chairman, 233 St. Hubert Street, Quebec 8, P.Q.
Amateur Athletic Union of Canada, wrestling committee; Joseph Schleimer, chairman, 86 Saybrook Avenue, Toronto 18, Ontario.
Canadian Amateur Basketball Association; R. A. Mitchell, secretary, 26 Marion Crescent, Dundas, Ontario.
Canadian Amateur Ski Association; Mr. W. G. Clark, secretary, 3 Oakland Avenue, Ottawa, Ontario.
Canadian Amateur Speed Skating Association; Mrs. Elsie Barlow, secretary treasurer, 101 Condell Block, 108 St. and Jasper, Edmonton, Alberta.
Canadian Amateur Swimming Association; Dr. Paul P. Hauch, secretary, 508 Waterloo Street, London, Ontario.
Canadian Association of Amateur Oarsmen; Mr. J. L. Murray, secretary, 373 Union Street, West, Kingston, Ontario.
Canadian Badminton Association; Lt. Col. H. I. Evans, secretary treasurer, 11 Wood-field Crescent, Fredericton, N.B.
Canadian Canoe Association; Mr. W. G. Cleevely, secretary treasurer, 193 First Street, St. Lambert, P.Q.
Canadian Civilian Association of Marksmen; Mr. S. Hershenkopf, national secretary, P.O. Box 635, Station B, Montreal, P.Q.
Canadian Field Hockey Association; Mr. A. D. Boyd, secretary, 3513 West 39th Avenue, Vancouver 13, B.C.
Canadian Ladies' Golf Union; Mrs. W. F. G. Adams, chairman, administrative committee, 2149 Yonge Street, Suite 3, Toronto 7, Ontario.
Canadian Lawn Tennis Association; Mr. E. C. Condon, executive secretary, 70 College Avenue, Ottawa 2, Ontario.
Canadian Table Tennis Association; Mrs. M. Walden, secretary, 127 Summerhill Avenue, Toronto 7, Ontario.
Canadian Volleyball Association; D. L. Tweedley, secretary, 40 College Street, Toronto, Ontario.
Canadian Wheelmen's Association; Pierre Bie, secretary, 7145 Valdombre, St. Leonard-de-Port Maurice, P.Q.
Canadian Wildlife Federation; Mr. T. S. Hodgkiss, chairman, P.O. Box 580, Terrace Bay, Ontario.
Royal Canadian Golf Association; L. V. Kavanagh, secretary, Royal Canadian Golf Association, 1173 Bay Street, Toronto 5, Ontario.
[Mrs. Casselman.l
Rugby Tours Committee of Canada; Mr. Robert B. Spray, chairman, 839 West Hastings Street, Vancouver, B.C.
Canadian Ski Patrol; Mr. R. H. Grasley, executive assistant to national president, 2146 Westbourne avenue, Ottawa, Ontario.
Canadian Youth Hostels; Mr. C. A. Harris, national executive secretary, National Office, c/o 1570 Gilles Street, Ottawa 8, Ontario.
Royal Canadian Legion; Mr. D. M. Thompson, secretary, 465 Gilmour Street, Ottawa, Ontario.
The National Council of Young Men's Christian Associations of Canada; Room 410, 88 Eglinton Avenue, East, Toronto 12, Ontario.
Young Women's Christian Association of Canada; 571 Jarvis Street, Toronto 5, Ontario.


URWICK CURRIE COMPANY
Mr. Orlikow: 1.	Was the Urwick Currie Company, a private employment agency for executive and professional personnel, engaged to investigate the operations of the unemployment insurance commission and, if so, why?
2.	What was the length of time it took for this company to conduct this investigation?
3.	How many of their staff were employed on this work, and what was the total cost of the investigation?
4.	What fees are charged by this company for services to employers and for services to those for whom they find employment?
5.	Could the minister table the report of the Urwick Currie Company and advise what recommendations have been implemented?


Alfred Dryden Hales: 1. Urwick Currie Limited
management consultants were engaged for the following services:	(a) Take responsibility for the production of new time standards for measurable activities, (b) Appraise the department's program for devising staffing standards for non-measurable activities. (c) Train existing and newly acquired staff to produce work standards and carry out methods studies in the future, (d) Devise a system for the collection and analysis of workload figures for the use of management in assessing the effectiveness of the various components of the organization, (e) Advise on the role and size of the standards and methods division in the light of existing projects and on a suitable organizational framework within which to carry out this role.
2.	Six months.
3.	Number of individuals employed was six at various periods. Cost-$38,128.94.
4.	Private information not available to the unemployment insurance commission.
5.	The report of Urwick Currie Limited is for internal use only. The unemployment insurance commission has its recommendations under active study and some have already been implemented.


PACIFIC WESTERN AIRLINES SERVICE, VANCOUVER-PORT HARDY
Mr. Barnett: 1.	Has Pacific Western Airlines recently changed their service between Vancouver and Port Hardy from two flights a day to one flight a day and, if so, was this done with the approval of the air transport board?
2.	What reasons were advanced by the airline for making such a change?
3.	What effect, if any, has this change had on travel facilities between Comox and Port Hardy?


James Alexander McBain: The air transport board advises as follows: 1. Pacific Western Airlines changed their service between Vancouver and Port Hardy from two flights a day to one flight a day effective September 9. This is a class 1 scheduled service operated pursuant to a service schedule filed with the air transport board, the amendment of which does not require specific approval of the board.
2.	Carriers schedule air services according to the requirements of traffic.
3.	There is no change in the frequency of flights between Comox and Port Hardy. Flight No. 107 from Comox to Port Hardy, which was an afternoon flight, is now changed to a morning flight, and flight No. 108 from Port Hardy to Comox, which was a flight
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departing at 7 p.m., has been advanced to flight No. 102 departing at 4:30 p.m.


EXPORTS OF B.C. PRODUCTS
[Stage Direction]
Question No. 477
Mr. Laing:: 1.	In each year, since 1955, what percentage in each case of the following production from British Columbia was exported out of Canada (a) lumber (b) shingles (c) paper of all kinds (d) lead and zinc combined (e) aluminum ingots (f) fish and fish products (g) iron ore (h) apples?
2.	In each year, since 1955, what was the total value earned in Canadian dollars from these exports?


Mr. Nesbitt:: 1. The question cannot be answered properly since export entries are taken to account in the last province through which goods pass rather than in the province in which the goods were produced or manufactured.
Limited information on the amount of goods exported through British Columbia ports of exit under the headings listed do exist but to relate these figures to figures on production in British Columbia would be highly misleading.
The need for export statistics on the basis of province of origin has been recognized for some years but it has not yet been possible to compile such records.

2. There are no statistics on the dollar value of exports of British Columbia produce. The total value of the specified exports, including goods produced in all Canadian provinces, was as follows:- 	-									
Year 1955	Year 1956	Year 1957	Year 1958	Year 1959	Year 1960	Year 1961	Jan.1 to Aug. 31, 1962$	$	%	$	%	$	*	$(a) Lumber	386,297,929	328,098,874	282,690,031	293,600,203	323,716,841	346,300,131	354,866,489	271,362,550(b) Shingles	29,145,403	24,546,035	19,393,231	19,828,194	21,405,875	20,967,840	20,778,850	14,830,756(c) Paper of all kinds	694,238,977	741,291,945	751,153,346	724,698,744	762,232,215	798,702,288	804,936,615	528,461,346(d) Lead and zinc combined	107,937,548	109,278,362	94,549,990	81,635,470	80,996,505	89,811,417	86,780,167	59,167,609(e) Aluminum pigs, ingots, shot, slabs, billets, blooms and extruded wire bars	199,193,776	227,431,686	217,428,514	209,492,481	213,090,654	243,034,000	221,526,728	172,584,492if) Fish and fish products	125,287,498	129,928,322	130,334,072	152,393,165	144,214,751	134,633,696	141,070,555	97,889,440(g) Iron ore	99,814,106	144,442,550	152,281,394	107,674,258	157,814,102	155,472,478	135,834,510	142,902,722(A) Apples	6,558,549	6,635,250	6,170,088	8,111,025	6,487,533	7,997,971	8,540,701	5,146,7721268	HOUSE OF COMMONS
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SHIPBUILDING SUBSIDY PAYMENTS, B.C.
Mr. Laing: 1.	What payments have been made in respect of construction in British Columbia shipyards under the shipbuilding subsidy program since inception of the policy?
2.	What estimated sum is committed by approval but not yet paid?
3.	What value of construction is now submitted and awaiting approval?


James Alexander McBain: 1. $3,619,534.50. 2. $6,657,980, of which $1,752,275 is now due for payment. 3. $9,858,000 approximate value of applications being processed by Canadian maritime commission or by owners.


FILM PRODUCTION &quot;THE DRYLANDERS&quot;
Mr. Maiheson: 1.	When was work commenced on the feature length production "The Drylanders"?
2.	When is the expected date of release?
3.	Have any productions been cancelled or postponed as a result of austerity measures and, if so, which?


Mr. McGee:: The national film board advises as follows:
1.	The various stages of the work with respect to the film "The Drylanders" are as follows:
Research and script development was carried out during 1960 and the script was accepted in 1961.
Location and shooting took place on the prairies during the summer of 1961 and some studio scenes were shot in 1962.
The test print is expected before the end of this calendar year.
2.	No release date has yet been established.
3.	No production has actually been cancelled as a result of the foreign exchange correction measures but some preliminary projects were given new production dates. In respect of them production work will be resumed in the next fiscal year.


* FRENCH SPEAKING C.N.R. VICE PRESIDENT
Mr. Beaule: Does the government intend to appoint a French speaking Canadian as one of the vice presidents of the Canadian National Railways?
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James Alexander McBain: Staff appointments on the Canadian National Railways come strictly under the control of the management.


R.C.M.P. PROSECUTIONS AND CONVICTIONS
Mr. Kelly: 1.	What percentage of criminal cases investigated by the R.C.M.P. in the last fiscal year resulted in prosecutions?
2.	What was the percentage of convictions in the cases brought to court?


Mr. Bell (Saint John-Albert):: 1. It is
presumed that the hon. member is referring to cases investigated by the R.C.M.P. under the Criminal Code of Canada. Of the number investigated in the last fiscal year, 67.67 per cent resulted in prosecutions.
2. In cases brought to court, the percentage of convictions was 87.66.


ELIMINATION OF LEVEL CROSSINGS-FINANCIAL PROVISION
[Stage Direction]
Question No. 493
Mr. Latulippe:: Is there any amount of money included in the estimates of the Department of Transport for the elimination of railway level crossings in Canada and, if so, what is the amount?


James Alexander McBain: The Board of Transport Commissioners for Canada advise as follows: Yes; see statutory vote and vote 212 of the revised estimates for 1962-63, regarding the railway grade crossing fund which is administered by the Board of Transport Commissioners for Canada pursuant to section 265 of the Railway Act.


WINTER WORKS PROGRAM
Mr. Clermont: 1.	During 1961-62, for each province (a) how many municipalities, cities, and towns have made applications to the federal government with respect to undertakings under the winter works program (b) of these applications, how many have been accepted (c) what is the estimated total cost of the undertakings which have been accepted (d) what is the estimated amount of the federal contribution to the cost of such undertakings, by way of direct wages?
2.	What provinces are now contributing to the winter works program, and what is the contribution of each of these provinces?
Questions


Alfred Dryden Hales: 


MUNICIPAL WINTER WORKS INCENTIVE PROGRAM 1961-62
[Stage Direction]
Number of municipalities participating in program	Number of applications accepted	Estimated cost Estimated fed. of projects govt, share of during period direct payroll of program costs	
			$	$
British Columbia	
145	747	26,410,000	5,012,000
237	918	25,546,000	4,086,000Saskatchewan	
518	1,404	16,301,000	2,463,000
71	276	6,953,000	1,157,000Ontario	
356	1,507	60,449,000	8,949,000Quebec	
938	2,559	102,345,000	17,497,000New Brunswick	
84	263	3,879,000	694,000
24	68	930,000	188,000Prince Edward Island	
30	53	851,000	131,000Newfoundland	
283	391	2,490,000	516,000Yukon Territory	
3	6	23,000	4,000Northwest Territories	
12	19	54,000	22,000Indian Bands	
46	58	318,000	103,000TOTALS	
2,747	8,269	246,549,000	40,822,0002.	The following provinces have indicated that they will supplement the federal incentive payment of 50 per cent of direct payroll costs under the municipal winter works incentive program 1962-63 by an additional provincial contribution as indicated below:
Prince Edward Island, Ontario, Saskatchewan and Alberta-25 per cent of direct payroll costs.
Quebec-40 per cent of direct payroll costs.
Manitoba-(a) 25 per cent of wages of those persons employed on authorized projects who immediately before such employment were unemployed and not entitled to unemployment insurance benefits; (b) 50 per cent of wages of persons who immediately before being employed on authorized projects had been in receipt of social allowances from the province or social assistance from the municipality for a continuous period of 30 days.
British Columbia-25 per cent of direct payroll costs plus an additional 25 per cent in respect of wages of any person employed on an accepted project who had been continuously in receipt of welfare assistance from on or before June 15, 1962, to the date of such employment.

Mr. Stewart: 1.	Were tenders called by department of Veterans Affairs, or any other federal department, for the supply of coal for Camp Hill hospital, Halifax, in the current year and, if so, were these tenders advertised publicly or otherwise?
2.	How many tenders were received, what are the names and addresses of those submitting tenders, and the tender amounts in each case?


Mr. Jones:: 1. Tenders were called by the Department of Veterans Affairs for the supply of coal for Camp Hill hospital, Halifax, N.S., on May 30, 1962. The tender call was not publicly advertised but directed to a representative list of suppliers as provided for in paragraph 2(e) of the government contracts regulations.
2. Four tenders were received.
The name and address of each firm submitting a tender and the amount of each tender are as follows:
Archibald Coal & Oil Co. Ltd., 21 Bland Street, Halifax., $56,160; Mathews Coal Company, Halifax, $57,200; Urban Coal Company, 189 Agricola Street, Halifax, $57,400; Union Coal & Oil Ltd., 334 Gottingen Street, Halifax, $57,880.


SUBSIDIES FOR HOMES FOR AGED
Mr. Lalulippe: 1.	Has the Minister of National Health and Welfare considered the possibility of granting subsidies for the construction of homes for the aged and, if so, has a decision been reached, and what amount will be provided for this purpose?
2.	Have negotiations in this respect been entered into, and has any agreement been reached with the government of the province of Quebec on the matter?


Arza Clair Casselman: 1. Consideration has been given to the possibility of making grants toward the cost of construction of homes for the aged. If and when there is a change in existing policy in this regard, it will be made known in the usual manner. Assistance in the form of low interest loans is available to limited dividend companies constructing housing for the elderly. This is provided by the Central Mortgage and Housing Corporation under section 16 of the National Housing Act.
2. No.


NORTHUMBERLAND STRAIT CAUSEWAY
Mr. Crossman: Have surveys of the proposed Northumberland strait causeway compiled data relative to possible changes that might be caused by the construction of this causeway in regard to ice conditions and, if so, what is the finding of the surveys in this connection?


Mr. McCleave:: Yes. Surveys indicate that the final clearing of ice west of a causeway would be delayed, in most seasons, from 4 to 12 days while east of a causeway there would probably be little change from present conditions.


LAKEHEAD AIRPORT RENTAL
Mr. Badanai: What is the annual rental paid by T.C.A. to the Department of Transport for the use of the lakehead airport?


James Alexander McBain: Users of Department of Transport airports are not required to pay rental for the use of an airport. All users are required to pay landing fees which are levied in accordance with the air services fees regulations.
However, for the fiscal year 1961-62 T.C.A. paid $27,784 in landing fees, plus $7,700 for rental of space in the air terminal building. In addition, T.C.A. paid for electrical power, use of control lines, etc. Their total payment for all accounts came to $36,493.


AMALGAMATION OF T.C.A. AND C.P.A.
Mr. Badanai: Have negotiations taken place between Trans-Canada Air Lines and Canadian Pacific Airlines regarding possibilities of amalgamation and. if so
Questions
(a)	are these negotiations now in progress, and
(b)	are the aims of these negotiations to effect a merger or a co-operative plan?


James Alexander McBain: No.


* INVESTIGATION OF SUBVERSIVE ORGANIZATIONS BY R.C.M.P.
Mr. Matheson: 1.	To what extent does the government define the limits to which the R.C.M.P. should go in investigating groups suspected of being involved in subversive activity?
2.	Does the R.C.M.P. itself decide what organizations should be kept under observation?


Thomas Miller Bell: I have to advise the hon. gentleman that it is considered contrary to the public interest to give specific answers to his questions.


STRATHROY, ONT., POST OFFICE
Mr. Burgess: Has land been acquired as a site for the construction of a new post office in Strathroy, Ontario, and, if so, (a) have tenders been called for the construction of such post office and, if not, (b) when is it anticipated that tenders will be called for such construction?


Robert Jardine McCleave: Yes, at the comer of Frank and Centre streets in Strathroy. (a) yes, on October 31, 1962. The closing date is December 5, 1962. (b) not applicable.


COST OF WESTERN FEED GRAIN
Mr. Dumont: 1.	What price, per bushel, do western Canada farmers receive for the following feed grains (a) wheat No. 3 (b) barley No. 3 (c) oats No. 3?
2.	What is the cost of transporting these No. 3 grains from Saskatchewan to Fort William?
3.	What is the cost by the bushel of storing these grains at Fort William?


Mr. Pigeon:: 1. It is not possible to state the full price for grain delivered during crop years 1961-62 and 1962-63 because the Canadian wheat board has not yet made the final payment to the producers for grain deliveries during those crop years. For grain delivered during crop year 1960-61, western Canadian farmers received, basis in store Fort William-Port Arthur, $1.60 per 60 lb. bushel for feed wheat; 90 cents per 48 lb. bushel for No. 3 barley; and 64 cents per 34 lb. bushel for No. 3 feed oats. To arrive at the actual price received by farmers it is necessary to deduct from these prices the rail freight from his delivery point to the lakehead, and country elevator charges of 4| cents per bushel for wheat and barley and 3J cents per bushel for oats.
2. Taking Regina as a representative point in Saskatchewan, the freight rate on grain from there to the lakehead is 20 cents per cwt. On a per bushel basis this works out at 12 cents for wheat, 9.6 cents for barley, and 6.8 cents for oats.

Questions
3.	Storage charges at the lakehead are at the rate of 1/30 of a cent per bushel per day, or about 1 cent per bushel per month.


CIIAPLEAU COUNTY, QUE.  FARM LOAN APPLICATIONS
Mr. Laprise: 1.	How many applications for farm loans have been made in the county of Chapleau since January 1, 1960?
2.	How many applications have been approved, and what is the amount applied for in each case?


Louis-Joseph Pigeon: 1. Four.
2. Two-$10,000; $10,000; total, $20,000.


NEW YORK WORLD'S FAIR
Mr. Davis: Has the Canadian government made any plans for an exhibit at the forthcoming New York world's fair and, if not, has it made plans to assist the provinces in this regard?


Wallace Bickford (Wally) Nesbitt: The Canadian government has no plans for an exhibit at the forthcoming New York world's fair. Canada is a signatory to the 1928 convention of the international bureau of expositions. The bureau does not recognize the New York world's fair and Canada is, therefore, precluded from participating or assisting the provinces in this regard.


FOREIGN INVESTMENT CONTROL OF CANADIAN INDUSTRY
Mr. Matheson: What is the percentage of foreign investment control each year commencing 1956 in (a) mining and smelting (b) manufacturing industries?


Wallace Bickford (Wally) Nesbitt: (a)	Mining and (b) Manufacturing smelting	industries1956	
58	per	cent	52	per	cent1957	
61	per	cent	56	per	cent1958	
60	per	cent	57	per	cent1959	
61	per	cent	57	per	cent
(Later data are not yet available)


AMENDMENT OF CITIZENSHIP ACT
Mr. Badanai: Has the government given any consideration to the introduction of an amendment to the Canadian Citizenship Act during the present session of parliament?


Mr. Bell (Carleton):: Consideration is being given constantly by the government to the introduction of new legislation and to the improvement of existing legislation. When a decision is reached it will be announced in parliament in the usual way.


NEWCASTLE, N.B.  PERMANENT FISHERIES BUILDING
Mr. McWilliam: 1.	Is the Department of Fisheries contemplating the erection of a permanent building on the present site of the winter quarters of the Miramichi fisheries patrol services boats at Newcastle, N.B., and, if so, what is the purpose of the building, the size and type of construction?
2.	Has the Department of Fisheries, or any department of government, received a request from the town council of Newcastle requesting that the present winter storage site, now located in the centre of the town, be changed to another site in view of the town of Newcastle's waterfront improvement plans to make a park in the area which includes the present department of Fisheries winter quarters site?


Mr. MacLean (Queens):: 1. Yes; for storage of patrol boats and protection district supplies and equipment; prefabricated steel on concrete footings with slab floor 60' x 28'.
2. No.


* SOILS FROM CANADIAN SHIELD
Mr. Ryan: Have soils from the Canadian shield area been tested in other areas of Canada for agricultural purposes and, if so, with what results?


Mr. Jorgenson:: Testing of soil from the preCambrian shield area in other areas of Canada, for agricultural purposes, has been limited to the conduct of an experiment at Ottawa over a period of some ten years in which 24 tons of peat was added to sandy soil to determine if this would improve the physical and fertility conditions of the sandy soil. The addition of peat, at the rate of 24 tons per acre, had no effect on the yield of oats and resulted in very minor increases in the yields of potatoes and clover. It has been concluded the addition of 24 tons of peat per acre to improve sandy soils was relatively ineffective and that these soils can be improved more economically from a crop production standpoint by the use of commercial fertilizers, local fertilizers, and the growing of forage or sod crops.
Experience indicates it would not be feasible to transport soil from one area to another to improve conditions for growing most crops.


*TARIFF SURCHARGE DUTIES
Mr. Benidickson: Has the government asked for, or is it the intention of the government to ask, at the conference of the contracting parties to the general agreement on tariffs and trade, for a waiver of the rules in relation to Canada's tariff surcharges from 5 per cent to 15 per cent imposed by orders in council June 24 last and, if so, what approximate estimate of date has been given to the contracting parties respecting the likely date when such order in council tariff surcharge duties will likely be cancelled?


Mr. Graffley:: 1. The Canadian temporary surcharges appear on the agenda of the current session of the contracting parties to the general agreement on tariffs and trade. Instructions to delegations and proceedings at GATT sessions are, of course, confidential. It would not, therefore, be in order for the Canadian government to comment on such instructions and proceedings.
2. The Canadian government has stated on numerous occasions that the temporary import surcharges will be removed as soon as possible.


REPLACEMENT OF WORLD WAR II FRIGATES
Mr. Matheson: What plans does the government have with respect to replacing the world war XI frigates still in service?


Mr. Harkness:: Six ships of the Mackenzie class are nearing completion. One ship of this class entered service this year and the remainder will be completed by 1964. It is planned to build eight general purpose frigates in Canada following the Mackenzie class program. The purchase of three submarines is under consideration. Plans beyond this have not been determined.
action on macpherson report


Mr. Rideout: Does the government plan any action on the Mac-Pherson report on transportation during this session of parliament?


James Alexander McBain: As this relates to a matter of government policy any announcement in connection therewith will be made in the usual manner.


LABOUR FORCE SURVEY
Mr. Lewis: X. What is the basis on which the boundaries of the labour force survey was set up, when were they established, and how are they related to changing economic conditions?
2.	Have there been any changes in the areas or their boundaries, on a provincial basis, used since January 1, 1950, and, if so (a) what were the said changes (b) when was each change made, and why?
3.	(a) How many persons are now engaged in making the monthly survey in the field as enumerators (b) what are their qualifications (c) how were they appointed (d) are they engaged full-time or part-time on this work and (e) what is the basis of payment for such work?
4.	How many enumerators were engaged in the labour force survey in January 1950, and what changes, by number, have been made since that date to this month?


Wallace Bickford (Wally) Nesbitt: 1. Interviews in connection
with the labour force survey are * carried out monthly in 165 sampling areas across the country. Of these, 90 sampling areas are cities or urban centres whose population is approximately 15,000 or over. The remaining
Questions
75 sampling areas generally comprise a number of adjoining townships, parishes and the like, including any villages, towns, or cities of 15,000 or less within these boundaries. In each of these 165 sampling areas a carefully determined proportion of households are interviewed each month. In total during any particular survey, approximately 40,000 households are interviewed.
The boundaries of the 90 "city areas" normally coincide with 1951 census boundaries. The boundaries of the 75 "non-city areas" were established by grouping together townships, parishes and census enumeration areas according to industrial composition and character. Maps delineating the sampling areas in use and those not in use, at any point in time, are used to control the areas under enumeration.
The boundaries of the sampling areas were reviewed during 1953 and necessary changes were made on the basis of 1951 census information. At that time, there were 107 sampling areas as compared to 165 at the present time.
Each of the 75 "non-city areas" was selected to represent other areas in the province which were similar with respect to such factors as location, basic industry, percentage of farm households, type of farming, farm income, etc. Each of these 75 areas is therefore, somewhat different in character from the other 74. By interviewing a sample of households within each of these 75 areas, the changing economic conditions in each are effectively represented. Similarly, the sample households interviewed in each of the 90 "city areas" ensures that the changing economic conditions in each of these cities are effectively represented.
2. The boundaries of the sampling areas were reviewed and re-established during 1953, using information from the 1951 census. Sampling ratios were recalculated on the basis of 1951 census population counts. Prior to this time, there had been 107 sampling areas (32 cities of approximately 30,000 population and over, and 75 other areas).
During the period 1953 to the present, the number of sampling areas has been increased from 107 to 165 in order to improve the accuracy of information obtained from the survey. These 58 new sampling areas were generally cities with populations under 30,000 and they were introduced as follows: 5 in 1953, (Charlottetown, Oshawa, Peterborough, Sarnia, Sault Ste. Marie); 3 in 1954, (Rouyn-Noranda, Shawinigan Falls, Chicoutimi); 2 in 1957, (Cornwall, Guelph); 10 in 1958, (Moncton, Galt, Midland-Penetang, North Bay, Orillia, Owen Sound, Pembroke, Stratford, Woodstock, Moose Jaw); 28 in 1959, (Amherst,

Questions
New Glasgow, Springhill, Truro, Fredericton, Drummondville, Granby, Grand'Mere, Joliette, Sorel, St. Hyacinthe, St. Jean, Valleyfield, Magog, Belleville, Brockville, Chatham, Niagara Falls, Port Colborne, Perth-Smiths Falls, St. Thomas, Trenton, Welland, Brandon, Prince Albert, Lethbridge, Medicine Hat, Trail-Rossland); 9 in 1960, (Rimouski, St. Jerome, Thetford Mines, Victoriaville, Kirkland Lake, Elliot Lake, Alberni, Nanaimo, Kitimat); 1 in 1961, (Barrie).
Prior to setting up these places as separate sampling areas, they were included as parts of other sampling areas and interviews were, therefore, conducted only in some of them. To the extent that they are now all represented as separate entities, the accuracy of the survey results has been improved.
Of the 75 "non-city areas", which were in the sample during 1953, there have been 41 areas where all households in these areas have been interviewed in subsequent surveys. In order to avoid imposing upon the same households for additional surveys, interviewing has been transferred to other randomly selected areas with similar economic characteristics. These shifts, from one area to another similar area, are called sample rotations and the year in which they are to occur is predetermined by the population within each area. These sample rotations have occurred as follows: 2 in 1955; 4 in 1957; 7 in 1958; 11 in 1959; 6 in 1960; 4 in 1961; 7 in 1962.
These areas comprise groups of townships, parishes, villages and towns. Their boundaries can only be defined by reference to master maps maintained at the dominion bureau of statistics.
3.(a) There are now approximately 755 enumerators used each month in connection with the labour force survey. This figure varies slightly from month to month, since there are always a few enumerators who are unable to work because of illness or other personal reasons. Under these circumstances enumerator assignments are adjusted so that households are not omitted from the survey.
(b)	Enumerators engaged for this survey may be male or female. They must demonstrate aptitude for interview work and be capable of understanding and following detailed instructions. They must be personably suitable, courteous, reliable and of good character.
(c)	Enumerator candidates are interviewed by a fully qualified member of the permanent regional office staff. A written test is given to determine clerical aptitude, comprehension and ability to follow detailed instructions. They are further assessed with respect to related experience and personal suitability.

If found suitable on all counts a contract is then signed stipulating rates of pay, allowable expenses and other conditions of work. The enumerator then takes the oath of secrecy as prescribed under the Statistics Act.
(d)	All enumerators work on a part time basis. Normally an enumerator's assignment involves 4 or 5 days work during a prescribed week of each month.
(e)	At the outset enumerators are paid at the rate of $1.45 per hour. After 2 years of satisfactory work an enumerator's rate of pay may be raised upon recommendation to $1.60 per hour. A mileage allowance of 9 cents per mile is paid when travel by automobile is required. Upon occasion other expenses are paid in accordance with government travel regulations.
4.	Prior to November 1952, the labour force survey was conducted only once every 3 months in the months of March, June, August and November. During the March 1950 survey there were approximately 350 enumerators used. The number of enumerators has increased to approximately 755 at the present time. The increase can be attributed to 2 factors: (1) the population increase of approximately 35 per cent during the period 1950-1962; (2) the shortening of the monthly period of enumeration from 8 or 9 working days in 1950 to 4 or 5 working days in 1962.


PRESS RELEASES RESPECTING EMPLOYMENT
Mr. Byrne: X. Did the Department of Labour issue a press release in June 1962 which indicated that there would be full employment in Canada in that month?
2. Did the dominion bureau of statistics announce in the month of June 1962 that the greatest increase of jobs in any month in Canada's history had taken place in the month of May?


Mr. Halpenny:: 1. No.
2. No.


* SPEECH BY TRADE MINISTER IN STORMONT CONSTITUENCY
Mr. Laing: Was the Minister of Trade and Commerce speaking for the government when he stated in a public speech in Stormont constituency on July 4, 1962, that the dollar crisis was caused by Premier Bennett of British Columbia?


Wallace Bickford (Wally) Nesbitt: Speaking as a member of cabinet, in reply to a question from the press, the minister said that one of the factors that started withdrawal of capital from Canada was the action of the British Columbia government with regard to B. C. electric.

Questions


POWELL RIVER AREA, B.C.-TELEVISION RECEPTION
Mr. Davis: Are there any plans being made to extend in the near future the television reception area of channel 8-Vancouver, B.C., to include the 15,000 residents of the Powell River area and, if not, is the delay caused by a lack of equipment, personnel, or funds?


James Alexander McBain: The community antenna television system at Powell River, which formerly brought in the C.B.C. Vancouver station prior to the licensing of the C.B.C. transmitter at Courtenay, has made application to receive and distribute channel 8 programs.
A difficult policy problem has arisen over recent months as a result of the rapid expansion of T.V. broadcasting stations in Canada as well as the growth of CATV systems. CATV systems are not subject to the same licencing requirements as television broadcasting stations, yet are capable of providing television programs in a community in addition to those received in that community from local television stations; and in this sense raise problems of dual coverage and economic relationships.
The situation, therefore, has substantial implications for T.V. broadcasting. In the hope that it can be dealt with in terms of general policy considerations at an early date, the department has been trying to avoid making ad hoc decisions in the meantime. If however there is a major delay in development of a general policy the situation will be reviewed again on the basis of present individual requests.


IMPORTS FROM U.K. AND U.S.
Mr. Maiheson: What were the semi-annual imports commencing June 30, 1957, from (a) Britain (b) U.S.A.?


Wallace Bickford (Wally) Nesbitt: Semi-annual imports from Britain and the United States from July, 1957, to June, 1962, were as follows:-
United
Britain	States
(Millions of	Dollars)
1957, July-December ....	253.8	1,795.11958, January-June 	263.3	1,772.5July-December ....	255.2	1,687.71959, January-June . . . .	280.3	1,912.3July-December ...	.308.3	1,796.71960, January-June 	310.5	1,934.5July-December ....	278.4	1,752.11961, January-June 	.313.7	1,879.9July-December . .. .	304.5	1,984.01962, January-June 	.289.9*	2,213.2*
'preliminary estimates


SPECIAL TREATMENT INSTITUTIONS
Mr. Matheson: Pursuant to the recommendations of the Fauteux commission, what specialized types of institutions, to provide specialized treatment, have been established since April 30, 1956, to provide for (a) alcoholics (b) drug addicts (c) sex offenders (d) psychopaths?


Thomas Miller Bell: (a) None, (b) One planned to be completed in 1964. (c) None, (d) None.


MARKETING OF ESKIMO CARVINGS
Mrs. Hardie: Does the government take steps to ensure that the Eskimo carver obtains the maximum return for his work and, if so, in what manner is the Eskimo assisted in the marketing of his carvings?


Mr. Dinsdale:: While there are no direct government controls on the marketing of Eskimo carvings, a marketing system has been established which ensures a fair return to the Eskimo carvers. The Hudson's Bay Company purchases about 80 per cent of the carvings sold in the southern market; Eskimo owned co-operatives purchase the other 20 per cent. A large number are sold through the Canadian Handicraft Guild.
The Department of Northern Affairs and National Resources purchases some carvings for sale through northern rehabilitation centres for Eskimos. It has also given assistance in marketing through the establishment of a special trade mark and through a promotion program of exhibits and publicity in Canada and abroad. It has also taken steps to discourage the sale of imitations that could damage the market.


POINTE-AU-PERE, QUE.  UNLOADING DOCK
Mr. Legare: 1.	What has been, since 1960, the total amount spent by the government on the wharf at Pointe-au-Pere for the construction and equipment of unloading docks for cars and trucks?
2.	When does the Department of Public Works intend to build a permanent unloading dock at this wharf?
3.	What will be the cost of such an installation?


Robert Jardine McCleave: 1. The amount of $10,532 for temporary unloading ramps.
2.	The provision of a permanent unloading ramp together with new berth improvements and protection works at Pointe-au-Pere is being reviewed and no decision has yet been made.
3.	Approximately $1,000,000.


LAKE ST. JOHN COUNTY, QUE.  FARM LOANS
Mr. Lessard (Lake St.: John):
1.	What has been, each year, the total number of farm loans made in the county of Lake St. John since such loans were initiated?

Questions
2.	How many applications have been made since the beginning of the current year?
3.	What has been so far the total amount loaned this year, and what is the amount of each loan?


Louis-Joseph Pigeon: 1. The Farm Credit Corporation advises that the number of farm loans approved in the municipal counties of Lake St. John East and West is as follows: 1959, 14; 1960, 9; 1961, 3; to October 15, 1962, 12.
2.	72 applications have been received since April 1, 1962, of which 46 were received since September 1, 1962.
3.	12 loans have been approved in the amounts of $8,100; $11,000; $8,500; $16,400; $27,500; $10,500; $18,400; $22,500; $17,200; $16,200; $6,300 and $15,700 for a total of $178,300 and approximately 58 applications are under consideration at the present time.


TROIS PISTOLES, QUE.  WHARF IMPROVEMENTS
Mr. Legare: 1.	What does the Department of Public Works intend to do during 1962-63 with respect to improvements to the wharf at Trois Pistoles?
2.	What will be the cost of the proposed improvements?


Robert Jardine McCleave: 1. No further improvements are planned during the 1962-63 fiscal year. Repairs to the wharf at Trois Pistoles have just been completed at a cost of approximately $25,000 and dredging to the value of $5,200 has also been carried out this year.
2. Not applicable.


REDUCTION IN HOG PREMIUM
Mr. Clunis: 1.	What is the anticipated saving to the treasury resulting from the reduction of the payment to farmers of the premium on grade A hogs?
2.	Does Canada export hog carcasses and, if so, to what country does most of the Canadian production go?
3.	What is the government's purpose in reducing the subsidy?
4.	What is the anticipated saving to the treasury resulting from the reduction of the subsidy on western feed grain coming into Ontario?


Warner Herbert Jorgenson: 1. Estimated saving *Sep-tember 4, 1962 to March 31, 1963-$1,065,200.
^Premium change effective September 4, 1962.
2.	Exports of pork and pork products are mainly to the United States, and generally as fresh, cured or processed cuts.
3.	The reduction in the premium was related to the necessity of reducing expenditures. In deciding to change the premium on grade A hogs to $2, per carcass, consideration was given to the fact that the price support level for hogs had been increased by $1 per hundredweight for the current year and also that during the preceding months hog prices had averaged up to 5 cents more per pound, than prices for the previous year.

4.	There has been no reduction in the amount of transportation assistance applicable to western feed grains moving into Ontario. The most recent change was in September 1961 when there was an upward revision of the assistance on feed grain moving into the northern part of the province.


HOMER BRIDGE, ST. CATHARINES, ONT.
Mr. McNuliy: Has the Department of Transport, or the St. Lawrence seaway authority, made any decision in regard to (a) the closing (b) the repairing (c) the maintenance, of the Homer bridge spanning the Welland canal in St. Catharines: and, if so, what are the reasons for making the decision in each case?


James Alexander McBain: The St. Lawrence seaway
authority advises as follows:
With reference to (a) (b) and (c), no decisions have been made.


C.B.C. CONTRACT WITH A. C. NIELSEN CO.
Mr. Hellyer: Does the Canadian Broadcasting Corporation have a contract with the A. C. Nielsen Company for broadcast audience services and, if so, when does the contract expire and what is the annual cost?


George Ernest Halpenny: The Canadian Broadcasting Corporation informs me as follows:
Yes, but it is not considered to be in the public interest to divulge information as to details of costs of contractual arrangements between the corporation and such audience measurement firms, as it would affect the corporation in the competitive business in which it is engaged.


VALUE OF BONDS SOLD BY BANKS TO BANK OF CANADA
Mr. Leboe: Do chartered banks purchase currency from the Bank of Canada with government bonds, and, if so, are the bonds accepted at market value or maturity value?
(Translation):


William Heward Grafftey: No. The chartered banks have deposits with the Bank of Canada and the money withdrawn is entered to the debit of those deposits.
(Text):


DISTRIBUTION OF QUESTIONNAIRE TO RETURNING CANADIANS
Mr. Dube: 1.	How many forms of "Questionnaire to residents of Canada returning from trips to the United States" have been distributed since June 1, 1962, by the dominion bureau of statistics at Canadian points of entry?
2.	What was the printing and distribution cost of such questionnaires?
3.	How many such questionnaires have been duly completed and returned to the bureau?


Wallace Bickford (Wally) Nesbitt: Some 40,000 forms entitled "Questionnaire to residents of Canada returning from trips to the United States" have been distributed since June 1, 1962.

2.	Printing costs lor these questionnaires amounted to $198.36. Distribution was carried out by customs officers in the course of their normal duties and involved no expense.
3.	To date, approximately 6,500 have been completed and returned to the dominion bureau of statistics.


RESTIGOUCHE AND MADAWASKA COUNTIES, N.B.   INCOME OF FARMERS
Mr. Dube: What Is the approximate number of farmers in the counties of Restigouche and Madawaska, New Brunswick, and what was their average income for the years 1957, 1958, 1959, 1960 and 1961?


Wallace Bickford (Wally) Nesbitt: The number of farms counted in the 1961 census of agriculture in Restigouche county (New Brunswick) was 508 and in Madawaska county 858. It is not known how many of these farms are operated by full time farmers. It is possible that some of them are operated by persons whose main occupations are other than agriculture. The 1961 census also indicates that, of the 508 farms in Restigouche county, 200 were commercial farms-that is, farms from which the sales of agricultural products, including forest products from farms in a 12-month period, were $1,200 or more. Similarly, in Madawaska county, 388 farms were commercial farms as defined by the census in 1961.
Income from farming operations published quarterly by the dominion bureau of statistics is only available for the province as a whole. The census of agriculture for 1961 will have estimates of gross sales of agricultural products, by county, but these tables will not be ready for publication until mid-1963.


RESTIGOUCHE AND MADAWASKA COUNTIES, N.B.   INCOME OF LUMBERMEN
Mr. Dube: What is the approximate number of lumbermen in the counties of Restigouche and Madawaska, New Brunswick, and what was their average income for the years 1957, 1958, 1959, 1960 and 1961?


Wallace Bickford (Wally) Nesbitt: Statistics on the detailed occupational distribution of Canada's population are compiled following each decennial census for provinces and the larger urban centres. For the counties of Canada they are compiled only for main occupation divisions, for example, in this case, "logging occupations". At the June 1, 1951 census, the number of persons in logging occupations for the counties of Restigouche and Madawaska was as follows:
Restigouche	 1,488
Madawaska	 1,549
Lumbermen comprise the majority of persons in logging occupations, and in 1951
Questions
amounted to 14,021 of the total of 14,629 in logging occupations for New Brunswick.
Similar information from the June 1, 1961 census is expected to be available early in 1963. Average wage and salary earnings of lumbermen will be available also for provinces, but not on the basis of occupation divisions (such as logging occupations) within counties.


*EMIGRATION OF CANADIAN UNIVERSITY GRADUATES
Mr. Dube: 1.	Since 1957, what has been, by provinces, the number of graduates from Canadian universities who have emigrated to other countries?
2.	What number has emigrated to the United States?
3.	What number has emigrated to other countries?


George Ernest Halpenny: Mr. Speaker, this information is not available from the records of any federal department or agency.


CANADIANS ACCOMPANYING U THANT TO CUBA
Mr. Addison: Did any Canadians accompany the acting secretary general of the United Nations, U Thant, on his recent trip to Cuba and, if so, what are their names and positions?


John George Diefenbaker: No.


* REPRESENTATIONS FOR CANCELLATION OF IMPORT SURCHARGES
Mr. Benidickson: 1.	After the imposition of import surcharges by order in council dated June 24, 1962, what countries have made representation to the Minister of Finance for cancellation or alteration of the agreements under which such countries promised voluntary export controls?
2.	What has resulted to date from each of such representations, if made?


William Heward Grafftey: 1. None.
2. Answered by 1.


*GROS-CACOUNA, QUE. WHARF
Mr. Gagnon: 1.	Have all boring and inspection operations, related to the construction of the Gros-Cacouna wharf, been completed and, if so, what was the cost of such operations?
2.	Has the government decided to proceed, in the near future, with the construction of this ocean harbour?


Robert Jardine McCleave: 1. All of these operations considered necessary at the present time have been completed. The cost was $89,600.
2. Not at the present time.


INFORMATION TO &quot;EXIMBANK&quot; ON CANADIAN ECONOMY
Mr. Lewis: 1. What information, if any, has "Eximbank" requested and what information, if any, was provided to it by the government in relation to

Orders for Returns
Canada's present and prospective baiance of payments position and any related aspects of the economy of Canada, pursuant to article VIII of the agreement between Canada and "Eximbank", dated the 12th day of September, 1962?
2. What information in respect of the economy of Canada, if any, was requested by and/or provided to "Eximbank" by the government between April 9 and September 12, 1962?


Mr. Graff  ley:@: 1. There have been no drawings on the line of credit with "Eximbank". Accordingly there have been no reports required under the terms of article VIII of the agreement between Canada and the "Eximbank".
2. None.


CANADIAN COMMITMENT ON TARIFF SURCHARGE REMOVAL
Mr. Addison: Has the Canadian government committed itself to a schedule for the removal of surcharge tariffs to the United States government, and, if so, when?


William Heward Grafftey: No, Mr. Speaker.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Teillei: 1.	Was a piece of property belonging to the late William Beech at Churchill, Manitoba, expropriated at the time the railway was extended to that port and, if so, what price was paid for the said property, and what was its extent?
2.	What use is being made of the said property at the present time?
3.	Is this property suitable for an extension of the town site and, if so, is any consideration being given to its use for that purpose?


TRANSPORT DEPARTMENT FLIGHTS
Miss LaMarsh: 1.	How many aircraft, and of what type, are
available from the Department of Transport for so-called VIP flights?	.
2.	When, and under what authority, were they
purchased?	,	,
3.	Are these aircraft used by the department for any other purpose and, if so, what?
4.	What VIP flights were made in 1962 by these aircraft, by whom, and what was their destination?
5.	How many VIP pilots and co-pilots are
employed by the	department,	and	(a)	what	isthe annual salary	and	qualifications	of	each	(b)
how many of such pilots and/or co-pilots were employed in 1957, 1958, 1959, 1960, 1961 and 1962 (c) aside from piloting such flights, what are their other duties?
6.	Does the department own a Lockheed "Jet Star" and, if so (a) when was it purchased (b) at what cost (c) for what purpose (d) what sum or sums have been expended to modify it (e) when (f) how many hours has it flown (g) what has been the purpose of these flights (h) how many passengers does it carry (i) what is the cost to the department for one hour's flying time of this aircraft (j) has it ever been used for high-level calibration?


CANADIAN COASTGUARD
Mr. Howard: What ships of the Canadian government comprise the Canadian coast guard?


James Alexander McBain: Return tabled.


PENSION ENTITLEMENT, ARMED FORCES
Mr. Maclnnis: 1.	What is the pension entitlement of a man who has served 20 years or more with the armed forces?
2.	Are there any cases on record where a man has served for 20 years or more and has not received a pension and, if so, what are the details of the cases involved, and what were the regulations in each case that prevented the payment of a pension?
3.	Are there provisions in the act or in the regulations governing service pensions which allow a pension to be paid to a person who has been discharged for inefficiency or misconduct, providing he has served 10 years or more and, if so, what are these provisions?
4.	Has the government received any representations on, or is it giving consideration to, amendments to the Defence Services Pension Continuation Act or the regulations involved which would enable a service man to retire from the armed services at his own request after 20 years or more service and entitle him to a pension and, if so, will such amendments be retroactive?


* HYDROELECTRIC SERVICE TO INDIAN RESERVES
Mr. Fisher: 1.	Do the two Indian reserves at Longlac, Ontario, have hydroelectric service and (a) if not, have any requests been received from the band councils for assistance or total financial support in the wiring and service of the homes on these reserves (b) if so, when, and what disposal was made of the request?
2.	How many homes built by the Indian affairs branch are on each reserve?
3.	Has the branch provided wiring and taken the lead in developing hydroelectric service on many other reserves in Canada?
4.	Has the branch an estimate of what it would cost to provide such wiring and service to each of these reserves?


SPORTS FACILITIES BUILT UNDER WINTER WORKS PROGRAM
Mr. Roxburgh: 1.	How many facilities for sport alone have been built by the government winter works program during the years of 1961-62, and how much money has been spent on such facilities.
2.	How many such facilities are to be built during 1963 by the government winter works program, and what amount of money, if any, has been allocated for them?



TORONTO


Mr. Macdonald (Rosedale): Has Central Mortgage and Housing Corporation carried on negotiations from time to time with any person or persons with respect to the advancing, by way of loan, of funds for the construction of buildings, including rental housing projects, within that area in the city of Toronto bounded on the north by Howard street, on the west by Ontario street, on the south by Wellesley street east, and

on the east by Parliament street and, if so, (a) with whom were such negotiations carried on (b) what persons were applying as borrowers, specifying in the case of individuals, their names and addresses, and in the case of a corporation or corporations, its or their corporate name, the address of its or each of their principal place of business, the jurisdiction under which incorporated, and the names and addresses of all directors and officers (c) what was the outcome of such negotiations and if any loan agreement was entered into when will (i) clearing of the land, and (ii) construction of the buildings commence, and upon what events will the principal of the loan be advanced and (d) if any loan agreement was entered into but is no longer in force, why was it terminated?



SECOND NARROWS BRIDGE, VANCOUVER-COST

Mr. Davis: 1.	What was the total capital cost of the second narrows bridge in Vancouver, British Columbia, and what proportion of this cost was met by the federal treasury?
2.	What formula was used in order to determine the federal share of this expenditure?



BROADCASTING


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: May I
direct a question to the Secretary of State in his capacity as minister reporting to the house on behalf of the Canadian Broadcasting Corporation and the board of broadcast governors. Could the minister report to the house whether the B.B.G. has taken any action on the complaint of the premier of the province of Quebec to the B.B.G. concerning L'Institut Opino de Recherches et d'Opinions Inc., and if so what action has been taken.


George Ernest Halpenny: The answer is rather long and I think it would be advisable to have it printed in Hansard, if that is agreeable.


Lionel Chevrier: I think, in view of the circumstances, that it should be read.


George Ernest Halpenny: Very well. The answer is yes, Mr. Speaker. The board of broadcast governors received a telegram from the premier of Quebec on November 2 in which it was alleged that the programs sponsored by L'lnstitut Opino de Recherches et d'Opinions Inc. carried by radio stations in the province of Quebec contravened the provisions of the Broadcasting Act.
I am informed that in its reply to the premier the board reported that following a complaint that had been filed with it alleging contraventions of section 17(2) of the act, all radio stations in Quebec had been advised on October 29 to discontinue the
Inquiries of the Ministry broadcasting of these programs until further notice. After reviewing tapes of the programs and having received legal advice, the board on November 1 notified the stations that in its opinion the programs were not in contravention of section 17(2) of the act and could be broadcast. This action was taken before the board was informed that the attorney general of the province of Quebec had instituted proceedings in the courts.
The board in its reply to the premier also requested that it be supplied with evidence of alleged infractions of section 17(1) of the act, subsection (a) of which prohibits the broadcasting in a dramatized form of any program, advertisement, or announcement of a partisan political character. The board pointed out that it could not undertake any action without the opportunity to study such evidence as was available. I am told that information is now being provided to the board.
In the meantime the board has learned that the publicity agency which placed the programs of L'lnstitut on the radio stations has withdrawn them on its own initiative pending results of the proceedings undertaken in the courts by the attorney general of Quebec.


Lionel Chevrier: A supplementary question. 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?


Mr. Speaker:: Order. I think the nature of the reply indicated that an answer to a question such as this could hardly be expected on orders of the day. Here we have a further inquiry as to a legal opinion, and concerning details of this matter. If the minister wishes to take it as notice and make a reply tomorrow, or at some subsequent time, he may do so, but I think it is unfair to expect the ministry to answer complicated questions of this nature without notice.


Lionel Chevrier: Will the minister take this as notice, then, and answer the question later?


George Ernest Halpenny: I shall be happy to do so.



COLUMBIA RIVER


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: I wish to address a question to the Minister of Northern Affairs and National Resources.
In view of the fact that as the result of further investigations the estimated cost of the High Arrow dam has almost doubled since the Columbia river treaty was signed; and in view

Inquiries of the Ministry of the fact that prominent engineers estimate that these costs will continue to mount as the result of further investigations, would the minister inform the house whether he continues to have confidence in the advice being given to him by officials of his department on Columbia river development capital costs.


Mr. Speaker:: Order. The hon. member is, perhaps unconsciously, engaging the minister in controversy with opinions expressed by individuals outside this house, and I respectfully submit to him that his question is out of order in its present form.


Herbert Wilfred Herridge: I apologize. I was quite innocent.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Hon. Paul Martin (Essex East):: May I ask
the Prime Minister if he is now in a position to answer my question of last Monday, which he took as notice. The question had to do with whether Canada is represented on the special committee on allied policy in Berlin which has been meeting for some weeks now in Washington.


John George Diefenbaker: I had been ready to answer that question-it is a rather difficult matter-but in the absence of the hon. gentleman I did not do so. However, I will get the complete answer and have it ready for him. I will say no more at this time than that Canada is not represented on that committee and is in no way a member of it, or consulted in connection therewith. Any representations made by Canada would naturally, however, be made within the NATO council.


Paul Joseph James Martin: Is Canada consulted in any way by the members of that committee, in view of the fact that we have a definite interest in these matters as a result of our declaration in London in 1946?
I do not think the Prime Minister has heard me.


John George Diefenbaker: I not only heard the hon. gentleman's question but I inwardly marked it.


Paul Joseph James Martin: No consultation. Canada is being ignored in all these things. (Translation):


CANADIAN MEMBERSHIP INTO ORGANIZATION OF AMERICAN STATES
[Stage Direction]
On the orders of the day:
Mr. Gerard Chapdelaine (Sherbrooke):: In
view of the Cuban crisis, does Canada intend to become a member of the Organization of American States in the near future?


(Text):


John George Diefenbaker: Mr. Speaker, as has often been said on past occasions, this matter has been under continuing review over a period of years, and whenever a decision is made the house will be made aware thereof.


TRANSPORT
[Stage Direction]
On the orders of the day:
Mr. Thomas R. Berger (Vancouver-Bur-rard):: May I direct a question to the Minister of Transport. Can the minister tell the house whether the Canadian maritime commission is falling behind in making progress payments to shipbuilders under the ship construction assistance regulations?


Mr. Speaker:: Order. The hon. member, by the very nature of his question, is asking for information of a type which he cannot expect a minister to have available, and I suggest that he should put it on the order paper.


Thomas Rodney Berger: With great respect, may I submit to Your Honour that a question asking whether the $10 million which was allocated-


Mr. Speaker:: Order. The hon. member for-


Lionel Chevrier: Mr. Speaker, I rise on a point of order, and the point is this. Before the hon. member completed his point you interrupted him and called on another member.


Mr. Speaker:: Order.


Lionel Chevrier: I have not finished. I say to you, sir, that having regard to what you said when you were appointed Speaker, namely that you were the servant of the house, you should not be its master, and you should at least wait-


Some hon. Members:: Order.


Lionel Chevrier: -you should at least wait-


Mr. Speaker:: Order. I commend to the hon. member consideration of the fact that while the Speaker is the servant of the house, he is not the servant of the views of individual members who might feel that their questions are important. It is up to the Chair to determine whether they fall within the ambit of questions to be asked at this time of the day. I do not intend to indulge in a controversy on interpretation with the hon. member, but I feel the hon. member's question was not one which should be called at this time.


Lionel Chevrier: You did not wait to hear him.


Mr. Speaker:: The Speaker has the floor. The question which was asked was complete, and

it was only when the hon. member was questioning the decision oi the Chair that I indicated, as I still believe, that the question was not one for the orders of the day.


Lionel Chevrier: Mr. Speaker, the hon. member had raised a point of order, and my respectful suggestion to you is this, that Your Honour should have heard the point of order and made a decision on it before seeing the other hon. member.


Mr. Speaker:: I will not argue with the hon. member, but I will say this. When a point of order was raised which argued the judgment or decision taken by the Chair, it was felt by the Chair that the hon. member who caught the eye of the Chair had now got the right to ask his question.
(Translation):


PUBLIC SERVICE
[Stage Direction]
On the orders of the day:
Mr. Guy Marcoux (Quebec-Montmorency):: Following a news release issued by the Civil Service Federation of Canada, does the Minister of Finance (Mr. Nowlan) intend to reconsider his decision with regard to salary increases for civil servants in groups B and C?
(Text):


Hon. George C. Nowlan (Minister of Finance):: Mr. Speaker, that matter is under review and consideration for the time being.
[Later:)


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I ask the Minister of Finance a question supplementary to that asked by the hon. member for Quebec-Montmorency. How soon will the minister be making a statement regarding the unfreezing of civil service pay increases?


George Clyde Nowlan: Mr. Speaker, the word "soon" is a very relevant one at this time, but I would not be prepared to spell it out at the moment.


George Clyde Nowlan: that the house go into committee of supply.


TARIFF SURCHARGES AND TIGHT MONEY
Lester Bowles Pearson: Mr. Speaker, on this occasion I hope to take the customary advantage of our parliamentary privilege which has come down through the ages, and which I believe we still have, of not voting supply without bringing
Tariff Surcharges and Tight Money up questions to the government for redress, reform and change. For that purpose, Mr. Speaker, in due course I hope to move an amendment to the motion. The debate which this motion has made possible is one which will result in a decision, not like the ten-day debate which we have been privileged to have recently on budgetary conditions without a budget and the financial and economic situation facing this country, without any opportunity being given to move a motion dealing with the matter.
The government position in regard to the financial and economic problems with which we are confronted-a position which goes back to the days of the election campaign- is that we are in the midst of a great upsurge in this country; that we have never had it so good; that everything is fine; and even if there were an exchange emergency that also is being removed by the improvement in our present position, an improvement brought about by such things, for instance, as the sale of a Canadian oil company to foreign purchasers who thereby replenish our supply of United States dollars.
But, Mr. Speaker, while the government take that position now, they admitted, of course, that there was an emergency not so very long ago, and they produced a program, a short run emergency program, to deal with the immediate crisis which confronted this country at that time. That short run program was an emergency austerity program. The Minister of Finance (Mr. Nowlan) does not like to use that word, but we have referred to it as such throughout the country since it was introduced last June. Well, Mr. Speaker, if everything is so fine in this country at the present time, and if we are going ahead at a rate unprecedented in our history, why continue this austerity emergency program?
There are two aspects of this program with which I wish to deal: the tariff surcharges, and tight money. This emergency program-


Gordon Minto Churchill: Would the Leader of the Opposition permit a question? Is his amendment to be on this subject?


Mr. Pickersgill:: Wait and see.


Lester Bowles Pearson: I will move my amendment in due course-


Gordon Minto Churchill: Answer the question.


Lester Bowles Pearson: -and my amendment will deal with the subject about which I am talking, the austerity program of the government, and more particularly the tariff surcharges and the tight money aspects of the program. I think what I have said now at the beginning

Tariff Surcharges and Tight Money of my remarks is clear enough to indicate to the Minister of Finance that he will be more particularly involved in this discussion.


George Clyde Nowlan: You amaze me.


Lester Bowles Pearson: Mr. Speaker, the reason for this so-called austerity emergency program which was introduced on June 24, just after the election, was the financial and exchange crisis which we were facing at that time and, indeed, had been facing for weeks before that time. We got into that crisis because the government had let the situation get out of hand over the weeks and the months preceding the acceleration of the crisis, which took place in the third week in June. We do not have before us all the statistical information which we have requested dealing with the developing dollar crisis.
We have not yet received the return showing the forward transactions of the Bank of Canada. Even, Mr. Speaker, if and when we get that information, the statistical information itself will not be able to tell the whole story.
However, we now have enough. The figures we have received are such as to confirm absolutely the fact that pressure on the Canadian dollar was very serious from the time of the last budget of April 10. Indeed, prior to that time, from January 1 to the budget of April 10, there had been a drop in our exchange reserves during that period of $385 million. That drop should have been a cause for anxiety. Hence the trouble had begun even before the budget was introduced into this house. It was a trouble which owed its origin to the policies preceding that budget and indeed going back for many months.
The trouble began to increase right at the beginning of the year. However, in April, after the introduction of the budget, it built up to a crisis. From April 10 to May 4, on the basis of the figures which have been given to the house, our exchange reserves dropped in that period of about three weeks-it was less than a month-by $200 million. In one day, from April 30 to May 1, they dropped by $39 million. That drop brought about the forced devaluation-it was not planned but was forced-of our dollar in the midst of an election campaign.
The government, of course, tried to pretend that this devaluation was a great master stroke of policy that had been carefully planned. Ministers talked as though the decline in our dollar reserve-at least they talked that way during the election campaign -did not matter very much, and as if it was just exchanging one kind of dollar for another. As we have been so often reminded in this house, the Minister of Agriculture even suggested that, in so far as he and some of his


colleagues were concerned, the only trouble with devaluation was that the dose had not been big enough.
It is true, Mr. Speaker, that after May 2 and devaluation our reserves increased and the position strengthened somewhat. I think they increased in a few days by $14 million. We recall the explanation for that increase at that time given by the then minister of finance. The explanation was that there had been-what shall I call it-a windfall of 62 millions of dollars and I quote his own words, "from special transactions not associated with the open market".
However that improvement may have been brought about, Mr. Speaker, it was only temporary. Devaluation gave only a breathing spell, a temporary relief. Pressure on the dollar built up again after devaluation, and any chance of restoring confidence at that time was certainly destroyed by the Minister of Agriculture who gave the impression, "Well, the dollar is going down again shortly because the cabinet is divided on this matter". The run on the dollar then built up again and pressure became great again. Yet on May 28 the Minister of Finance said, and I quote, that the Canadian dollar was a "good, sound, stable currency; one of the strongest in the world."
That was on May 28. What happened, Mr. Speaker? Let us consider the five days from June 11 until June 15. On June 12 we lost $35 million. On June 13 we lost $20 million. In two days therefore, Mr. Speaker, we lost $55 million. That was in two days before the Prime Minister's broadcast of June 14 which gave a very rosy picture indeed of the situation of the country and which stated that nothing in regard to the situation was concealed from the Canadian people.
There has been a controversy over these statistics, over the figures and their meaning. One way in which this controversy can be settled is by referring this matter to the standing committee on banking and commerce and allowing that committee, with the evidence before it and witnesses to be summoned, to go into this whole question. We will then find who was right and who was wrong.
It is, of course, true that after June 18, with the accelerated run on our dollar, the government had no alternative but to replenish its foreign exchange reserves which it had treated so lightly and had guarded so carelessly; and it replenished them, I admit, in the only way possible at that time, namely by borrowing from foreign banks and by arranging stand-by credits. No responsible person denied at the time the necessity of

that procedure and I do not think any responsible person would deny it now, faced with the desperate situation into which the government had got itself and the country.
However, what else was needed? Long range action was needed, Mr. Speaker, to get at the causes of our trouble as the only way to permanently restore confidence in the Canadian dollar. The Prime Minister and members of the government more than once since that time have emphasized that this was just a temporary emergency program, and that long range policies would be brought in and long range steps would be taken to permanently restore confidence in our dollar and to strengthen the economy generally. We have been in session now in this house for a good many weeks and we had eight days or nine days of debate on the economic state of the nation. However, none of those long range programs have been brought in.


Paul Joseph James Martin: They are not even ready.


Lester Bowles Pearson: Moreover, there is no indication that they are ready to be brought in. Of course the basic cause of our difficulty leading up to this crisis from the beginning of the year has been the slowdown of our economic growth, causing unemployment, and massive chronic budget deficits leading the government into financial irresponsibility, producing unproductive expedients, with changes of mind and weak action along with strong words; instead of a constructive policy to bring forth more production and more jobs in this country. However, we did not get from the government these constructive long range policies. We got words, expedients and half measures. The program that was brought in, the temporary emergency program which is still with us, is a program of restriction. Today I am dealing only with two of its main features, namely tariff surcharges and tight money.
The tariff surcharges represent an increase in taxation of about $200 million a year. Those are the figures which we have received. That amount is now being collected-an amount of approximately $200 million a year-from the people of Canada and the only authority for the imposition and the collection of that taxation has been an order in council passed by the government under legislative authority which can be and has been challenged. Whatever may be the facts about that situation, there is no doubt there is no argument over the fact that we in this House of Commons are not to be permitted to pass judgment on this taxation of $200 million which was levied by the government by order in council.
Tariff Surcharges and Tight Money
It is an extraordinary thing that this taxation was levied by the government, in accordance with the method I have just mentioned, very shortly indeed after government spokesmen had boasted in the election campaign that they had lowered taxes. They had not in fact done so. In total the people were paying more taxes before this emergency taxation than when this government came into office, but government spokesmen used some carefully selected figures to boast about reducing some taxes. Yet a week after the election they raised taxes by some $200 million, did so by order in council under legislative authority the legality of which is at least arguable, and then refused to let parliament decide whether or not this extra taxation was justified.
When that was complained about the Minister of Justice (Mr. Fleming) pointed out that once you give the government a vote of confidence on the address in reply to the speech from the throne, by doing that you confirm everything the government has done before that time. That is an extraordinary constitutional position to take, and I commend to my friends in the group to my left this position, that by giving the government a vote of confidence on the speech from the throne they were supporting, confirming and approving everything that had been done in respect of this emergency program since June 24.
Not only did the government raise taxes in this way by these surcharges, but they raised the kind of tax which can be the most unfair of all the taxes that we pay. They raised taxes by tariff increases. That kind of taxation hits the ordinary person more than any other kind. That is the kind of taxation that hits every housewife when she goes into a store, taxation that hurts most those who can least afford the extra burden. Yet the government have done this and are keeping these extra taxes in force at a time when they say everything is fine with the economy, we are in the midst of a great upsurge, there is nothing to worry about, yet at a time when the prices that Canadians have to pay to live are at a record high.
What a contrast between talk and action once again. What a contrast also with the new kind of talk that the government has recently started, and I welcome its beginning, about trade conferences, about joining with the United States, the common market and other NATO countries in order to lower tariffs and remove as far as possible all obstacles and obstructions to trade.
Higher tariffs and surcharges only intensify one of the basic causes of our economic troubles. But under this government Canada had been standing aside from the main stream

Tariff Surcharges and Tight Money of economic co-operation among the free nations. Indeed, until very recently we have been on the sidelines growling while Europe, the United Kingdom and the United States are launching new, imaginative and farsighted trade policies. They are looking to more trade, to lower barriers, while this government is raising obstructions to trade through surcharges which, even though justified in an emergency by the government's own reasoning, surely cannot be kept on when, as they say, the emergency is now over and everything is fine.
Of course I know the minister is going to tell me, when he gets up to take part in this debate, that these surcharges are only temporary. That has been continually stated by the Prime Minister and other members of the cabinet. They are only temporary; they are going to be removed at the first possible opportunity. But if the revised budget estimates which the Minister of Finance brought in two weeks ago mean anything, the government's intention must be to continue this extra taxation at least until March 31, 1963, because he included it in his revenue estimates.
What is he going to do after March 31 next? What about the manufacturers who want to know now whether they must base their plans for the future on the existence of these higher tariffs, these surcharges? How are they supposed to know what to do? How can you expect the economy of this country to run smoothly when it is exposed to the uncertainty that the government itself creates? What is the government's policy in this matter? The country certainly has a right to know. Businessmen have a right to know. Workers have a right to know. Housewives have a right to know. Is it to be lower tariffs, or is it to be higher tariffs indefinitely by means of these surcharges? Are these surcharges to be temporary only, or are they to be permanently temporary like some of the wartime buildings in Ottawa that are still called temporary buildings and in which so many people still work today? I say, Mr. Speaker, that these surcharges should be dropped now. If the government is not going to do that it has a duty to say what it will do, how long it plans to maintain this extra taxation, and then ask parliament to decide in regard to that policy.
There is another aspect of the emergency program, and only one other, to which I wish to refer, and that is tight money, high cost money, expensive money, high interest rates, money which it is difficult for people to get who need the money to expand their business activities. The Minister of Finance in his jovial way said the other night that we did not have such tight money but he was not quite sure what it is. Perhaps he will tell us

this afternoon what he means by tight money, and explain to us what he means when he says we have not got it. We have the same story with regard to tight money that we have with regard to surcharges, with regard to government words as contrasted to government action. In the election campaign the government boasted that it had ended tight money. It ended, said the Secretary of State for External Affairs (Mr. Green) on May 17, and said the Prime Minister on May 26, "when we ended Mr. Coyne". Apparently that was what was supposed to be involved in the shameful Coyne affair. That was their excuse. They were putting an end to tight money and they had to get rid of Mr. Coyne in order to get rid of tight money at the same time.
Yet within a week after the election they raised interest rates. They told the Bank of Canada to do exactly what they said in the election campaign they had stopped the bank from doing. When the election campaign began the bank interest rate was 3J per cent. After the election it was raised to 6 per cent, almost twice as high, Even now after some gratifying reductions it is 5 per cent. What we have had since June is the highest cost money that this country has ever known, with all the restrictive results that are bound to come from that situation in terms of business expansion. Never since we have had a central bank has its interest rate been as high as during this period.
What does tight money as I have defined it do in a situation of excess unemployment, inadequate growth and idle productive capacity? Its one merit, and I do not deny this merit, in the situation in which we found ourselves at the end of June is that it temporarily lessens exchange problems largely by encouraging the inflow of money. Of course, a great deal of the inflow in these circumstances is bound to be and has been hot money. But that in itself involves a long term liability as payment for a short term advantage. It exposes us to more exchange trouble when the hot money decides to cool off and go elsewhere. Second, tight money hurts small businesses which particularly depend on bank credit. It discourages industrial growth. It is a very blunt instrument indeed, particularly handicapping those areas most in need of special development. Three, it especially hurts the construction industry, which also needs a lot of bank financing of a comparatively risky kind, and which is so very important in the provision of jobs. Four, it encourages businesses of all kinds to put off investments and new developments in the hope that credit will become cheaper and more plentiful later. Five, in all these ways

tight money means fewer jobs and more unemployment. Six, tight money particularly handicaps Canadian companies in competition with United States controlled companies which can go to their parents across the line for financial help which they find difficult in obtaining in this country. In that effect, tight money policies of the kind I have indicated are not only discriminatory in respect of regions in this country, which are usually most prosperous, but this policy discriminates in favour of satellite companies or subsidiaries of United States companies against Canadian owned companies.
Seven, tight money raises the financing costs of municipalities and other public authorities, even the federal authority. When the Minister of Finance was giving his revised budget he had to add no less than $40 million to his predecessor's estimates for this year's service of the public debt. Tight money, therefore, means higher costs and higher taxes at all levels of government. Finally, in order to escape this as far as they can, the bigger municipalities and other public bodies are driven to do part of their borrowing abroad. This means more interest payments and capital repayments to foreigners in the future. In other words we are mortgaging our future. This intensifies rather than lessens our long term problem of the balance of payments.
The balance of payments problem has been serious, I know, over many years, years before this government came into office. In the early weeks of this year we were told it was gradually being eliminated, that everything was improving. We know now, on the basis of the figures for the first seven months of this year, that the balance of payments problem is going to be as serious as it ever has been, including an unfavourable balance in our trade commodities.
These, then are some consequences of tight money. Yet the Minister of Finance gaily pretends he does not really know what tight money means, but he is sure we have not got it. Well, Mr. Speaker, tight money is what we have got today, high cost money, high interest rate money that is hard to get for the person by whom money is required for expansion, production and jobs. The consequences of this kind of tight money are exactly the opposite of what this country needs today.
Oh, there have been lots of occasions in the history of our country in the last 10 or 15 years when a tight money policy could be justified. I refer to times of booming expansion when it was absolutely essential to prevent runaway inflation, we did not have idle capacity, we did not have massive unemployment. But we are not in that situation
Tariff Surcharges and Tight Money today, so we must relate a tight money policy to the economic situation in which we find ourselves.
Today we need expansion, not restriction. We need to encourage industrial growth, not make it more difficult. We need more construction work for municipalities at lower costs in local taxes, not less construction and higher costs. We need to encourage Canadian ownership of our own industry. But, as I have said, tight money makes it easier than ever for foreign companies to buy out Canadian companies. We need a plan for a reduction of our balance of payments deficits on a steady, long term basis, instead of adopting expedients which worsen our problems in the future.
The policies we need, Mr. Speaker, are quite contrary to tight money policies and to higher tariff surcharge policies. They are policies of more capital for industry, more capital for municipalities. They are policies to encourage the growth of industry to create more jobs, to restore confidence in our economic progress, to raise production and income and so bring back stability to the nation's finances. Those are the measures we need, the measures that my colleague and I have put forward and will continue to put forward in this house on behalf of the Liberal party. Those are the policies which the next government of this country will act upon.
So, Mr. Speaker, I believe, and I know a great many members of this house believe, that tight money and tariff surcharges are the very opposite of a cure for the problems which we have in Canada today. The government does not want to talk about it, but the amendment which I am about to put forward now will give every member of this house a chance to express his views in favour of tight money and tariff surcharges, on the policy of the government, for or against tight money and tariff surcharges. The division will show where we stand on this matter. There could hardly be, Mr. Speaker, very much doubt about where the members of the Liberal party stand on this matter. I suppose there could not be very much doubt about where the members of the Social Credit party should stand on this matter.
I recall that immediately after the austerity emergency program was put into effect the Canadian Press were consulting the leaders, deputy leaders and co-leaders of the various parties as to their attitude toward these policies. According to the Canadian Press the hon. member for Villeneuve (Mr. Caouette) said in Rouyn that Mr. Diefenbaker was proposing two absolutely contradictory solutions to Canada's financial problems. He said,

Tariff Surcharges and Tight Money referring to the emergency austerity program, that Mr. Diefenbaker ought to resign rather than make proposals like this. Well, Mr. Speaker, our amendment this afternoon condemns those proposals, and we are going to give all members of this house an opportunity to support us in this condemnation.
I move, therefore, seconded by the hon. member for Laurier (Mr. Chevrier):
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.


Robert Norman Thompson: Mr. Speaker, it would seem to me as I have been listening to the prelude to this amendment which has just been placed before the house, that in my opinion it is a question of the pot calling the kettle black.


Mr. Fleming (Eglinion):: A pretty big pot.


Robert Norman Thompson: As I have said before, in so far as finding an alternative to the present economic situation is concerned, all the Liberals have proposed is more of what we have had before. The leader of the official opposition sings one song today. When he was a member of the Liberal government in 1956 he sang another song, and he was in exactly the same position then as this government finds itself in today-


Some hon. Members:: Oh, come.


Robert Norman Thompson: -in a question of tight money and higher interest rates. It is rather interesting to note that in a series of four or five newspaper clippings which I have here, we find him today completely reversing the stand he took a few years ago. For example, on February 12, 1956, in the Ottawa Citizen we find an article written by Douglas Leiterman of the Southam news services talking about the tight money policy of the Liberal government being the cause of the national housing program sagging. We jump across to the Vancouver Province of November 10 of that year and find the Liberal government being condemned severely for a tight money program that has put agriculture in a very difficult situation, and we find the Liberal government were supporting and were directly responsible for that tight money program. Here again a great Liberal newspaper, the Toronto Star of October 27, the same year, devotes a major editorial to the tight money problems that arose under the Liberals. We could go on to a number of other editorials and newspaper comments, but it would take too long to deal with them now.


Some hon. Members:: Go ahead.


Robert Norman Thompson: It seems to me that the hon. members in the Liberal section of the house are more determined to upset and wreck the economy of this country at this particular time, and so place themselves in what they think will be a position of political advantage, than they are concerned with doing what is good for the country. Members of that party have in the last few weeks travelled around the country and accused myself and the members of our party of being guilty of supporting the Conservative government. To tell the truth, all we have been trying to do is save the country from the wreckage the Liberal party would try to bring about. I say again-* in this respect I agree with the leader of the official opposition-that if what the government says is true, we do not need an election; and if what they say is true, we cannot afford to have one at this time. This is the obvious motive behind the amendment with which we are faced today. It is not a question of trying to ease the tight money program or better the position we are in at this time.
I was very interested to note, in turning back to Hansard, that the leader of official opposition on October 19 not only assured hon. members of this house but also the Canadian people at large that if the subamendment that was proposed in the speech from the throne was defeated, they would give their support to this parliament in trying to bring forward some constructive legislation for the good of the country. In fact, when I-


An hon. Member:: There is none.


Robert Norman Thompson: There isn't any simply because hon. members on this side of the house have talked so much and at such length on the very legislation they have said they agreed with, and there has not been time to bring in legislation.


Mr. Argue:: The record does not prove that.


Robert Norman Thompson: This is what the hon. member had to say:
When I spoke in the debate on the address on October 1 X indicated that if the house should reject the motion of want of confidence being put forward at that time, as well as subsequent similar motions moved during that debate, this would mean that the government would have a mandate at least to introduce its legislative and other proposals. I also indicated at that time, and I repeat it now, that each of those proposals would be considered on its merits by the official opposition in exactly the same way as if the government had a clear majority in this house. That did not mean then, and it does not mean now, that we were, or are, giving approval in advance to any measure or action taken by the government. It did mean we would give each measure objective consideration in the light of the public interest.
I suppose, then, that the-


Mr. Deputy Speaker:: Order. I am sorry to interrupt the hon. member, but I must caution him against using quotations from debates

that have already been disposed of. I was not quite certain, when he made that quotation, just what debate it came from. I just mention that as a caution.


Mr. Monteith:: It was this session.


Robert Norman Thompson: Thank you, Mr. Speaker. However, it is in Hansard for all to read.


Hazen Robert Argue: He just got under the wire.


Robert Norman Thompson: In this particular situation, however, what is the motive behind this amendment? I would ask the leader of the official opposition to think this through a little bit. Do you want to add chaos to the confusion which we agree the country is in at the present time? Do you want to project us into a situation where we face an election simply because you want to further your own political ends? This is something we must consider. Where would we have been in the last week, in the face of the crisis we have been through, if we had been in the midst of an election campaign? I can well imagine that the hon. members who are determined to bring this thing to a crisis, obviously, through the amendment that has been made, would enjoy an election campaign over the Christmas holiday. I am sure it would season up the festivities of the celebration which is so near at this time.
I think the real issue here at the present time is simply this. Are we, sitting in this house of minorities as we are, going to give the government an opportunity to meet their present obligations and go ahead and bring in some legislation that we need, or are we going to plunge ourselves into an election campaign? As far as we over here are concerned-and we say this for the good of the country and not for any political expediency-


Some hon. Members:: Oh, oh.


An hon. Member:: You are afraid of one.


Robert Norman Thompson: -an election at this time would be wrong for Canada.


John Whitney Pickersgill: Why?


Robert Norman Thompson: I think it might even-


Mr. Carter:: It will be wrong for Social Credit.


Robert Norman Thompson: -be wrong for the civil servants who, through the very nature of this supply motion, might have some chance of getting their pay by Christmas, which otherwise we are trying to deny them. However, leaving that as it may be, Mr. Speaker, I think the situation we find ourselves in requires from us some positive thinking and some positive action. I would hope that in this House of Commons we will get through 27507-3-82
Tariff Surcharges and Tight Money this particular supply motion which is necessary for the government to have passed, in order that we can have the opportunity of judging them according to the legislation which they must later bring down.
In that regard I have a few constructive suggestions to make. I would suggest to the government that it is necessary immediately to take steps which will correct the situation we are in at the present time. We heard the other day that in their economy measures the government have cut out a great deal of the money that was previously allocated to the Colombo plan. The reduction in the amount of Canada's current contribution to the Colombo plan as a means of further reducing the budget deficit is, surely, a gesture of gross national selfishness or callousness, particularly when applied to a fellow nation of the commonwealth such as India at a time when she finds herself in such a difficult position. I hope the government will see fit immediately not only to restore the aid which has been passed on to India for many years but also to increase it in respect of her basic food requirements, if not in any other way. We were glad to note today, however, that some constructive action is being taken to help India in other ways as well.
In approaching this over-all problem as other problems, I do not think our primary motive should be one of debating. I am not interested in debating at this time. The taxpayers of Canada have been paying for providing a debating society in our parliament for too long, and what we heard today as a preliminary to the amendment being moved is the same as we heard a few weeks ago and a few weeks before that. It is time we got down to business and settle some of the grave questions facing us, rather than trying to display to the public and to the press our ability to outwit each other verbally.
We have come to a crossroads in the affairs of this nation. We have to decide now, not next year or the year after that, whether we are going to remain Canadians or whether we intend to throw in the towel and become the fifty first state of the U.S.A. In this regard, never before has our economy been so invaded, backed by the power of the press, radio, television and finance, as it is at this time. Given this picture, it is necessary for the government to take action to release the pressure on the tight money program we have now.


John Whitney Pickersgill: So you vote for it.


Robert Norman Thompson: I find it is very interesting; we get applauded from both sides of the house. Yes, but not according to the procedure

Tariff Surcharges and Tight Money and not according to the devious means which the movers of this amendment are following at the present time.


John Whitney Pickersgill: Let the people decide.


Robert Norman Thompson: The most important thing at the present time is for us to understand that legislating in piecemeal fashion to correct some small anomaly in the economy here, or some case of injustice there, will never meet our needs. The side effects of this type of legislation can be appalling. Our need is to decide on the fundamental direction of our economy and to adapt all economic policy to it. In this way we avoid-in Stephen Leacock's phrase-rushing madly off in all directions.
The principle that the government should take action to improve the working of the economic system is well established, and it is one with which all parties agree. How this should be done is a matter of dispute. Let us take as a concrete example the raising of capital, whether it be capital for industry, capital to finance the government's deficits or capital for essential public works. We live in a free enterprise economy. We should, therefore, expect to find that capital for commercial purposes would be raised on the open market. Instead, what do we find? We find a fantastic increase over the past four years in the activities of the industrial development bank which now has more than four times as many branches and three times the number of customers as it did only four years ago. In addition, it makes loans at more than twice the rate it did four years ago. We were told when the industrial development bank came into being that it was a bank of last resort intended to provide capital for risk projects when private investment was not ready to provide it. Instead, it has widened its scope. Where does the money come from for this lending? By far the greater amount of it comes off the printing presses of the Bank of Canada. Originally, the I.D.B. was designed to fill gaps in the lending structure of the nation-to make credit available where none was available before commercially. Now it makes loans in direct competition with existing commercial sources. Because it has Bank of Canada money available to it at government borrowing rates it can without exception undercut any competition there may be in that field from normal sources. The end result of this must be a completely state controlled pattern of investment-a negation of our private enterprise system.
But in other fields, the reverse is true. Suppose a government, federal, provincial or

municipal, wishes to carry out non-commercial improvement for the good of the community, one would naturally expect it to go to the Bank of Canada or to its agent, the industrial development bank, and by exchanging its promise to pay for the promissory notes of the bank, receive money to pay for the improvement more or less at cost. Is this what happens? Oh, no. Governments borrow on the commercial market, thus automatically doubling the cost of every long term project they undertake; they have to pay as much for the financing as they do for the project itself. Moreover, the very fact that they do this is precisely the reason that commercial risk capital is so scarce and hard to come by, the situation which tends to make necessary institutions such as the industrial development bank.
Let us settle one matter of principle at this point. In a private enterprise economy, commercial risk capital should come from private investors. Equally, government social capital should come as low cost credit from the Bank of Canada, provided inflation would not be increased to an excessive extent by doing so.
We have no scarcity of raw materials in this country. Heaven knows, we also have no scarcity of unemployed. Suppose we did set up a municipal development bank. The industrial development bank would be able to return to its role of supplying special commercial credit as needed, while the municipal development bank would provide the capital which our social needs require. Employment would receive the stimulation which is required at this time and we would see our economy begin to move forward. What, in fact, would we be likely to see? One hundred million dollars could go to the Atlantic region for projects such as the Chignecto canal and the Montreal turnpike, for the improvement of harbours and fishing facilities. Spend this every year for some years and think of the transformation that would take place in this region, the facilities it would have, the commercial development that would take place. And remember, the resources that this money would put to work are there already, idle.


Mr. Wahn:: On a point of order, Mr. Speaker. It would appear that the hon. member is reading his speech. I would refer you to Beauchesne at page 124 where it is stated as a rule of both houses of parliament-
-that a member must address the house orally, and not read from a written, previously prepared speech for the reason that "if the practice of reading speeches should prevail members might read speeches which were written by other people, and the time of the house be taken up in considering the arguments of persons who were not deserving of their attention.


Robert Norman Thompson: Might I answer the hon. member. I am not reading my speech; I merely have some copious notes, because I want to make sure that the record is correct. If the hon. member is right in this regard, he should have brought this point up a good many times in the last couple of weeks. He might also have referred to his leader, who read much of his speech which he delivered to us a little while ago.


Mr. Deputy Speaker:: It is a rule of the house, and again a rule in committee, that speeches should not be read from a prepared text. A good deal of leeway has been allowed, both in the house and in committee, in this regard, because it was understood that many hon. members were making their maiden addresses, which in the earlier stages was also true of the leader of the Social Credit party. I am grateful to the hon. member for St. Paul's (Mr. Wahn) for bringing this point up because it is worthy of consideration. I am not speaking solely to the hon. member for Red Deer (Mr. Thompson) but to all hon. members of the house when I say that in future participation in debates it would raise the level of debate considerably if they would use just notes or reference texts, as opposed to reading a prepared text word for word. I hope hon. members will give their co-operation in this respect. I am sure this rule is not applicable so much to leaders of parties, who in many cases are developing or declaring policy, which must be done with a great deal of care.


Robert Norman Thompson: Thank you, Mr. Speaker. I am sure that if you were to look at my desk you would realize that I am not reading from a prepared text. As I said, I have merely some notes.
However, continuing with my remarks, not only would this happen in the Atlantic provinces, but the same thing would happen in the western provinces as well. Supposing $100 million a year were available for the development of social capital needs in western Canada. I am thinking of the paving of the Alaska highway which would serve any necessary emergencies in times of national disaster, such as a war. Certainly it would do a tremendous amount toward opening up the northwest part of our continent. I am thinking of my own constituency and the constituency of Acadia, which runs to the east of it, and of what a Red Deer river irrigation scheme would do for the whole area of central Alberta and even part of central Saskatchewan. We are already thinking of the Red river diversion scheme which has been started around the city of Winnipeg.
27507-3-82-}
Tariff Surcharges and Tight Money If we came into the central provinces, into Ontario and Quebec, where we could talk of many similar projects as well.
Mr. Speaker, one of the greatest needs we have in our country today is for the freeing of our credit restrictions through making municipal or public capital available according to our ability to expand and produce. It would solve many of our unemployment problems and it would put that necessary stimulus into our economy which, if it could be accompanied with the necessary tax reform which we need today, would put us on the road to recovery. Thus I believe that in our long range program these are things about which we should be talking.
Along with this we are very concerned about the high interest rates which are developing at the present time, and I believe they relate directly to the problem we have of restrictive taxation. I think the iniquitous and destructive tax system which we in Canada have cannot wait for, say, the two years which are usually necessary for a royal commission to bring out their findings. If we can combine our public needs for capital in the ways I have suggested and free the restrictions which limit our own investment capital, which we have in abundance-we lack only the confidence to use it-and then combine them with a realistic tax reform program, now, we could move forward in this country to a great era of prosperity. These are not just my words or the thinking of a few of us here in this comer of the house, because I do not believe that there is any hon. member in this house or any collective group of members who themselves know all the answers to the problems which we face today. In this regard I am convinced that in this house of minorities, at least for a while, during this emergency we ought to be working together to deal with some of these problems in such a way that the country as a whole will benefit.
In regard to my suggestion for tax reform, let me quote from the Financial Post in its latest editions, where it has written about this very problem. In an editorial which is headed: "Let's get moving on tax incentives", in the edition of August 18, I find this:
A tax system that discourages effort, which penalizes risk-taking and which makes it more profitable for a lot of people not to be enterprising and not to create new jobs, surely makes poor sense in today's Canada.
A little later it says:
Who will make the jobs necessary for renewed progress? Plainly, it won't be Canada's weak and discouraged manufacturing industry-unless there are new tax incentives designed to speed industrial growth.

Tariff Surcharges and Tight Money
In the same paper on October 27 I find an editorial headed "Real tax reform can't wait", and here I quote words spoken by A. J. Little, a partner in the accounting firm of Clarkson, Gordon and the immediate past chairman of the Canadian tax foundation, when speaking to the Canadian club in Toronto. He said:
"With intelligent and forthright action Canada should be out of the woods in three years. I suggest we need more tax incentives applied now, the promise of a corporate tax rate reduction in one year's time, an indication of a further corporate tax rate reduction and a personal tax rate reduction in two years' time, and removal of the tax incentives in three years' time."
Then he went on to say:
"Surely it would be good common sense to take every step possible to encourage the development and growth of small and medium private business and encourage retention in Canada, and yet with our tax structure we do just the opposite."
The hard truth is that lassitude, indifference and ignorance of the basic tax changes so urgently needed apparently persist in the exalted places where policy is made-
I am sure I do not know what place he is referring to there.
-and the result is the perpetuation of an outdated tax system that discourages initiative, destroys capital and militates vigorously against growth in production and employment.
For instance: Canada, as a country where the health and development of secondary industry is so urgent, stands in desperate need of more investment capital. Yet our estate tax laws, which produce only a dribble of national revenue, make it almost impossible for family or closely held corporations to survive, let alone expand over the generations.
Between punitive estate taxes and vicious rules concerning "designated surplus" Canadian companies are terribly handicapped.
This editorial clearly outlines, and states in a practical way, some of the changes which should be brought about now in our tax reform system. Therefore, it is our opinion on this side of the house that instead of trying to force the crisis this time upon parliament and upon the Canadian people, we should permit this supply motion to pass and that we should demand from the government that they bring in the necessary financial and economic reform now. It could be done, as I have mentioned, very simply in making more public or social capital available. It could be done through tax reform, which would encourage the capital that we already have to be put to work, and then we could have some hope at least that of coming out of this winter and there would be less danger of crisis than there is at the present time.
Mr. Speaker, we should like to move a subamendment to the amendment already moved in light of the remarks I have made. Therefore I should like, seconded by the hon. member for Quebec-Montmorency (Mr. Mar-coux), to move the following subamendment:
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".
Mr. Speaker, there are just a few remarks I should like to make in addition to those I have already made in referring to the subamendment in its latter wording. In this question of bringing our economy back to the position in which it should be, in which we can get going forward at a rate of expansion of at least 5 per cent or 8 per cent of our gross national product per year, it is absolutely essential that we consider the matter of world trade. In this regard it is not good enough that we talk about a world trade conference in a year or a year and a half. It is necessary at this time that we take the leadership and do something about solving our trade problems now facing us. I have mentioned this matter previously and I again suggest to the Minister of Trade and Commerce that it would be an ideal time to take steps toward the bringing about of a commonwealth trade conference.
If Britain is so tied up with her intentions to join the European common market at this time, I think that Canada should take the lead and try to bring this about. We already have a commonwealth economic committee, one which could be very easily charged with the responsibility of doing the preparatory work that such a trade conference requires. I am convinced that the other commonwealth countries, in view of the problems they themselves face in the same regard, would be only too willing to co-operate. If we did this, along with the working out of freer trade patterns within the commonwealth, we could also be talking about the need of some kind of new arrangement for commonwealth settlements. One of the problems facing us today is this question of settlements as far as international trade is concerned. I have in my hand a copy of a speech made by the chancellor of the exchequer of the United Kingdom, namely Right Hon. Reginald Maudling, member of parliament and member of the cabinet in Great Britain, who makes some very interesting remarks in this regard. He states:
I believe it is universally accepted that a growing volume of world trade calls in the long run for a growing volume of liquidity, even if not necessarily in arithmetic proportion ...
There are those who argue for a return to the classical gold standard. 1 find it difficult to accept this proposition. Either it means that the volume of world trade must be tied to the amount of gold that can be mined and acquired by monetary authorities, which seems to me a proposition that is not intellectually sustainable, or the volume of gold available must be brought in line with world reserve requirements by variations in the price of gold, and the difficulties of this course are only too clear to all of us ...
At present gold is supplemented by the two reserve currencies-the dollar and the pound

sterling. But there is a fundamental difficulty about this system, namely that the reserve currencies are short term liabilities of the United States and the United Kingdom-one nation's reserves is another nation's debt.
Mr. Maudling goes on to state as follows:
The gold exchange system has already undergone extensive development in the last 17 years, particularly in the much wider use of the dollar. But despite the many advantages of the system as we know it today, I cannot believe that its evolution can stop here, or that we already have the final answer to the longer term problems. We shall have to be prepared to supplement present international payments arrangements if we are to make certain that they do not act as a brake upon the possible expansion of world trade and production.
Then he goes on to say this:
Some people have seen in the obligations created under the borrowing scheme the germ of a truly international paper which might in due time become acceptable and transferable between the monetary authorities and so become a familiar holding among reserve assets. It would certainly be worth while to explore this possibility. I am myself, moreover, attracted by the thought that we might develop a system of co-operation between the leading trading countries in the form of a mutual currency account in the fund.
Herein I see a real suggestion that could take its germ beginning in the commonwealth and which could be later expanded to meet the needs of all the nations of the west as we look towards free trade patterns on the world scene. In this regard here in Canada I believe that it is our opportunity to take a lead in this. I believe that we should take steps to initiate a commonwealth trade conference. I should also like to see a commonwealth ministers of finance conference where the various ministers of finance would get together in order to work out these very problems. I think it is a positive suggestion in this regard to see that we set up-and we have had need of it for a long time-an export-import bank that would permit us to take the beginning steps relating to this need of expanding world trade. I would remind hon. members of this house-and I am sure we all appreciate it in some sense at least-that the greatest threat today to the world's peace is the threat of hunger. We find that many of our scientists and our international economists are speaking about this very thing. To quote one of the great United States scientists today, "The world's greatest need is hunger". Then on the other hand I pick up a copy of the Western Producer dated October 25, 1962, and there I find an editorial under this heading, "Food is our most potent weapon". Through trade facilities such as those I can see here, I believe it will be possible for us to turn our production loose in this country, particularly agricultural production and through proper trading channels and proper trading facilities, make these goods available
Tariff Surcharges and Tight Money to the peoples of the world who need them at this time. This is the pattern of constructive thinking that I think we ought to be taking. Therefore, we on this side of the house, or shall I say in this corner of the house, as certainly I do not believe the thinking follows through with the members on my right, move this subamendment. We move this subamendment to the amendment with the thought that herein lies the essential basic policy that can correct the situations which today weigh upon us and hinder us from going forward economically and taking our part as we should as a progressive nation reaching forward into a new era of development, which could be so if only our financial and economic policies would permit us to do so.


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I say that you will have no difficulty with regard to correcting me about reading from a prepared text since I have no prepared text and it is probably just as well that I have not any. My position might be as the old man said about the new minister, "You read it and did not read it very well, and it was not worth reading". It is therefore probably just as well that I have not a prepared speech to deal with what I think is one of the most important questions to come before this parliament.
In moving this subamendment to the motion to go into supply the leader of the Social Credit group said something about motives. I for one am not in a position to discuss the motives of the Leader of the Opposition.


An hon. Member:: You would be out of order if you did so.


Thomas Clement (Tommy) Douglas: I can speak only about my own motives in dealing with this matter. Prior to parliament being convened 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, see what legislation it proposed to place before the house and make our decision in the light of what would be in the best interests of the people of Canada.
When we come to the question of the austerity emergency program we are not dealing with it on a partisan or political basis. We are not opposed to this program merely because it gives us the opportunity to vote no confidence in the government. We deal with this program on the basis that it vitally affects the lives of the Canadian people and because it will vitally affect the life of our economy in the months and years ahead.

Tariff Surcharges and Tight Money
Ever since the government announced the austerity emergency program on June 24 I and the group with which I am associated have taken the position that irrespective of what may have been the motives in bringing forth this program it could not have been better calculated to do the opposite of what was needed if someone had been deliberately drafting it for that purpose. Here is a program that consists mainly of three parts, tariff surcharges, reduced government expenditures and tight money and high interest rates. I submit that all three of these measures, by the simplest laws of economics, are bound to increase unemployment rather than cure it; are bound to result in contraction of the economy rather than expansion of the economy; that tariff surcharges are bound to raise the cost of living particularly on those items which are brought into Canada; that this takes part of the purchasing power which people would use for other goods to pay for the increased cost of living; that the result of reducing government expenditures, whether in capital programs or in social capital, means particularly the destruction of job opportunities which might have materialized. Finally, a tight money program can have no other effect than to reduce the capacity of municipalities and provincial governments, small businessmen and corporations, to carry out the programs which they had intended to initiate had they been able to borrow money at low and reasonable rates of interest.
In a situation such as we had in 1961, when the growth in our gross national product was less than our population growth and when our unemployment figure was some 7 per cent of our labour force, we contend that this was not the time to reduce government expenditures. This was the time to increase them. This was not a time to introduce a policy of tight money but a period to introduce a policy of easy money and low interest rates so as to stimulate the economy and provide full employment.
I want to be just as fair as I possibly can and I say at once that certainly the situation in Canada has improved since 1961. In the first nine months of this year there has been an upswing and this should be readily acknowledged. Certainly I speak for our group when I say that we hope it will continue. But this upswing, it should be remembered, is in comparison with the trough of 1961, the low point in the business cycle. This upswing was due to two factors which I suggest are not likely to continue for very long. The first factor was the effect of the devaluation of the dollar which made it possible for us to increase our exports to foreign countries. I suggest that the beneficial effects of that devaluation are not likely to continue

very much longer as exporters increase their prices. The second reason for the stimulus in the early part of this year was the large government expenditures which were up some 4 per cent, but they are now being cut back so that we cannot expect to get any benefit from that.
Therefore I suggest that the government's emergency austerity program should be completely reversed. I was impressed with the fact that the Leader of the Opposition in moving his amendment simply suggested that the emergency austerity program of tariff surcharges and tight money should be stopped at once. I would have appreciated it, as I am sure other hon. members would, if the Leader of the Opposition had told us what they would put in its place, what constructive measures the official opposition would propose when we stop this emergency austerity program. If the official opposition expects to be the government, I submit to them most respectfully that the people of Canada have a right to know what they intend to put In place of the austerity emergency program which they are asking to be discontinued.
In the limited time I have I want to deal with only one aspect of the kind of program which we in this corner of the house would like to see introduced in place of the austerity program. We are convinced that too little recognition has been given to the fact that the real problem in Canada today is not a lack of production or a lack of capital investment. I am constantly amazed at the references made from time to time to the fact that we must have more capital when as a matter of fact it can be shown that during the past four years very substantial quantities of reserve capital have been built up by corporations in this country, and have not been reinvested. Figures for the first nine months of this year show that, although profits were up 3 per cent, expenditures for capital equipment by corporations increased almost not at all. In other words, these corporations do not lack capital. They do not need additional capital at this time. They are not even using to the full the productive capacity they have. The real reason for the lack of demand for capital is the lack of effective consumer demand. We in this corner of the house are suggesting that the emphasis of a fiscal and monetary policy at this time should be directed toward increasing effective consumer demand on the part of the Canadian people.
We suggest that this can be done in three ways. First of all, it can be done by increased government expenditures in those fields or those segments of our economy which are underdeveloped. It can be done, first of all, by

increased expenditures by the federal government itself. I need not enumerate the scores of things which need to be done, for example, such as a second trans-Canada highway; national power grid; improvements of harbour and shipping facilities, increased research in a score of fields; national parks. The federal government itself could put money into the pockets of consumers of this country by engaging in large scale public works and, above all, by a tremendously accelerated housing program for low income groups.
Some gentlemen suggest that there has been quite a housing program, and there has been a good housing program in the main for people of middle and upper income groups. This country has not even begun to tackle in a serious manner the problem of housing for low income groups, for old age pensioners and people of that type. In almost every country in the western world today, subsidized housing has become an accepted fact for people in low income groups. We could also make money available to the municipalities in the form of social capital for schools, for hospitals, for streets, for sewers, for water facilities, recreation facilities and libraries.
I am always interested in noticing how quickly people reverse their position. From 1945 until 1961, I attended every federal-provincial conference and appealed to both Liberal prime ministers and Conservative prime ministers to activate the Municipal Improvements Assistance Act under which money can be lent to municipalities at a 2 per cent interest rate to enable them to carry on their necessary programs. I always got support from the Conservatives when they were in opposition. Now, I have no doubt I could get support from the Liberals since they are in opposition. I want to tell the house, Mr. Speaker, that of the scores of municipal councils I have met in the last three or four months, every one of them has told me the same story. They were not in a position to carry on the kind of programs that they envisaged this fall and winter unless they were able to get social capital at low rates of interest from some other source than the open market to which they must go at the present time. The same thing is true of the provincial governments.
The provincial governments would undertake large scale programs for senior citizens' housing, for the improvement of provincial parks, for increased road building, if they could borrow money at low rates of interest. I am suggesting that this provision of social capital would put people to work, would put money into circulation, would stimulate effective demand, would do more than any single thing to help get our economy moving.
Tariff Surcharges arid Tight Money
I want to suggest that the second front from which we should tackle this problem of increasing consumer demand is to take immediate steps to lower the tax burden on middle and lower income groups. Most economists agree that there is a close relationship between the level of income and the propensity to consume. Almost all of us know that people in the upper income bracket save a larger percentage of any increase in their disposable income than do the people in the lower income group, who naturally have to spend almost every increase in their disposable income because of the demands of their families and because they are always living close to the border line. It would be possible to put into the pockets of hundreds of thousands of low income and middle groups in Canada increased purchasing power by making the necessary adjustments in the Income Tax Act when the budget is brought down.
There has been a good deal of talk in recent years by economists as to what this affluent society of ours means in Canada and the United States. Hon. members will recall that J. K. Galbraith did a study of this in the United States. The figures for Canada are not available beyond 1959, but they are rather interesting. We find that in that year Canada had a labour force of 6,228,000 people, of whom 1,985,510 or almost two million, some 30 per cent, did not even earn enough to be charged for income tax purposes. This means that almost two million income earners did not earn $1,000 a year if they were single or $2,000 a year if they were married and without any children.
These income tax figures show that the top 5 per cent of our taxpayers received 17 per cent of the total income before taxes and the lower 5 per cent received 1.5 per cent of the total income before taxes. Let us see how taxes have redistributed the national income. After taxes, the top 5 per cent received 15 per cent of the total income and the lower 5 per cent after taxes received slightly better than 1.5 per cent of the total income. In other words, the top 5 per cent received ten times as much as the bottom 5 per cent. The top 25 per cent of the taxpayers earned over 43 per cent of the total income after taxes and the bottom 25 per cent received less than 12 per cent the total income after taxes. About 15.5 per cent of the taxpayers earned less than $2,000 and 36.5 per cent earned less than $3,000. Only 1 per cent earned over $15,000 and they represented 6 per cent of the total income after they had paid their taxes.
I suggest, therefore, that we are deluding ourselves if we do not recognize that there is

Tariff Surcharges and Tight Money still wide inequality in the distribution ol income. If we merely give everybody $100 a month or $100 a week, whatever it may be, that will not get to the people who need it. If we are going to put purchasing power into the pockets of the people who need it, we must do it through the income tax mechanism by setting a minimum standard that people require in order to live, and making that exempt for income tax purposes.
The third front on which we need to tackle this problem of increasing consumer purchasing power is by stepping up our whole program of security payments, old age pensions, veterans pensions, family allowances, all forms of health insurance, and so on. All these payments represent a means by which we redistribute income. There are hundreds of thousands of people in Canada who live on very little more than the pensions which they get. This does not enable them to buy very much in the way of consumer goods. By increasing social security payments we would tremendously increase the demand for consumer goods on the part of this very substantial sector of our economy. Today men like Galbraith in the United States and Professor Titmus in England have pretty well established to the satisfaction of most economists that an expanding economy is almost completely dependent upon an adequate system of social security. The old days are gone, when people can condemn the welfare state. Today we recognize that the welfare state in some form is not only demanded by virtue of social justice but is also essential to provide the necessary purchasing power for an expanding and growing economy.
I recognize, Mr. Speaker, that if we had the three things which I have suggested would increase purchasing power-namely increased government expenditures in the field of social capital, an adjustment of income tax so as to lessen the burden on those in lower and middle income brackets, and substantially increased social security payments-this will inevitably mean we will have a deficit budget. I want to say that we in this group are completely opposed to those who think there is some virtue in a balanced budget by itself. We certainly take strong opposition to those who hold that view, including, may I say to my Liberal friends, Liberal newspapers such as the Winnipeg Free Press, who seem to be convinced that an expanding economy will somehow be brought about if only we balance the budget. Thirty years ago the myth of the balanced budget was destroyed once and for all by John Maynard Keynes, who pointed out to the economists of his day what has since been accepted by most economists throughout the world, namely that there is nothing sacred about 12 months, any more 

than 20 months or 60 months, for balancing a budget. Keynes said that what we ought to be thinking about is balancing the budget on the business cycle, and whether or not we balance a budget or whether we have a surplus or a deficit should depend on what stage we are at in the business cycle; and that if we are in, as we are now in Canada, a period when the economy is sluggish, when there is a lack of economic growth-as there has been for five years-when there is unemployment, this is the time to spend money; this is the time to increase the money supply.
What have we been doing? In the months of July and August we decreased the money supply by over $500 million. This is the time to increase government expenditure. As Keynes pointed out, governments do not lose by increasing their expenditure; they put people to work; they increase production; this increases their tax revenue and the next year they can spend more money. Then he said that when the time comes, as it will, when you have full production and full employment and there is a danger of inflation, the government reverses its technique and takes out of circulation, by way of taxes and other means, more money than it spends. So the government may balance a budget over a period of years in conformity with the business cycle, but not just because 12 months is the time to balance the books.
As has been pointed out again and again in this corner, almost every country in the western world today is following the policies and principles of Keynes in carrying out cyclical budgeting techniques. Britain has not balanced a budget in the last 12 years; France has not balanced a budget for ten years; Sweden has balanced her budget only once in the last ten years; Germany has not balanced her budget for the last seven years. These countries are not going broke; they are growing and expanding at rates of 4, 5, 6 and 7 per cent. These countries have unemployment rates of less than 2| per cent, because they have recognized that there is nothing sacrosanct about balancing a budget every 12 months.
I submit to the government that they were not elected to balance the budget. They were elected to get our economy going, to promote economic growth and to provide jobs for every able bodied person in Canada. That is the kind of job I think the people of Canada expect them to carry out. Some will say, if this is so, why has the government tried to balance the budget? They did not balance the budget in the past. It was not deliberate deficit balancing in the last few years; it was deficit financing by mistake; it was deficit financing that

came as a result of over estimating the economic growth and thinking it was going to be 7 per cent, and it turned out to be less than 2 per cent. Why are they now suddenly deciding that they must balance the budget? I submit that the reason the government has adopted this policy is this; they have been compelled to do so as a consequence of pegging the Canadian dollar at 92| cents in relation to the United States dollar.
We in this group have taken strong exception to pegging the dollar. We have argued that had the government taken expansionary monetary policies, increased growth and production, this would have been more effective than pegging the dollar. We maintain that by pegging the dollar the government is now having to use resources to bolster its international reserves which ought to be going to promoting economic growth and providing jobs. We think this is a mistake. We believe that a floating exchange rate would permit this country to pursue full employment policies at home without aggravating our balance of payments problem abroad. Indeed, the balance of payments problem might be alleviated, because full employment causes unit costs of production in Canada to fall.
These, Mr. Speaker, are the things we would suggest as an immediate program for promoting economic growth and providing full employment. We recognize that these are immediate steps. The long term answer, of course, is much more fundamental. The long term answer, we believe, lies in planning the economy of this country, in mobilizing our financial, material and human resources, so as to put idle men to work on idle resources, so as to make use of all the idle funds we have in Canada to increase our wealth production, to provide jobs for all our people who are able to work. There was a time when talking about democratic economic planning was immediately put down as being just a cranky idea of socialist doctrinaires. The fact is that today democratic economic planning has been accepted by almost every country in the western world, starting in Sweden 31 years ago under the leadership of Gunnar Myrdal and now covers almost every country in Europe and many in the rest of the world. The country which has made most progress in this field is France. Last year I had the privilege of reading the verbatim report of the conference between the French economic planners and the British civil servants who were being groomed to set up a planning agency in Great Britain. That agency has since been set up; it is known as the economic planning council. It is interesting to see what France, 27507-3-83
Tariff Surcharges and Tight Money West Germany, Holland and Italy have done by planning their economies.
The fact is, we have always had some planning and we are going to have more planning. The only thing which it is important for us to decide is: who is going to do the planning and for whom? As corporations grow larger, as economic power becomes concentrated in fewer and fewer hands, planning is either going to be done by small groups of directors responsible to nobody but themselves or it is going to be done by the government of this country responsible to parliament and to the people of Canada. I submit to you, Mr. Speaker, that the day is past when the man in the street any longer believes that what is good for General Motors is necessarily good for Canada. There is a growing recognition, as Professor Keirstead was reported as saying the other day in one of the Toronto newspapers, that planning by gigantic corporations is planning for their profit. The time has come when we must have planning in the public interest.
We in this group will not be satisfied to see only what the amendment suggests-that the austerity program should be stopped at once. We should like to see in its place a program designed to increase effective consumer demand, to put idle people to work, to begin generating capital resources to get this economy moving. I believe this government never had a greater opportunity and that no government in the history of Canada ever had a greater opportunity. The people of Canada are prepared to follow leadership, if that leadership shows it has a sense of purpose and a sense of direction. If this government were prepared even at this late hour to set up social and economic goals and then mobilize the resources of this country toward the attainment of those goals they would get the support of the people of this country. Certainly, they would get the support of the members of this group. So far we have not seen any indication that the government has any such intention. We have seen nothing which would convince us that the government intends to reverse its program and, instead of constricting the economy with tight money, a high cost of living, and reduced national expenditures, launch upon a program of expansion and development.
I want to say a word to my Liberal friends, and tell them I am disappointed. While I agree with their criticism of the auterity program, I had hoped we would get from their spokesmen-we may do so before the day is over-a constructive alternative program to the austerity program. It is significant, for instance, that they have suggested that two features of the austerity

Tariff Surcharges and Tight Money program be stopped-surcharge tariffs and tight money. But they say nothing about government expenditures. Does this mean that the Liberal party also is worshipping at the throne of a balanced budget? I think we have the right to know. Let me say, in closing, as far as the Liberal party is concerned, that neither their conduct during the 22 years they were in office nor the program which they have presented so far would give me any reason to feel they would be likely to do any better if the people of Canada were to put them on the treasury benches.
I hope the government will make use of this debate to tell the house what they propose to do. I hope they will not simply regale us with statistics of the improvement we have made during the last six or eight months. I suggest this is not the answer. I suggest the momentum we have had from the devaluation of the dollar will not carry us far through 1963 and that the curtailment of government expenditure is going to have an adverse effect during the next six months. I urge the government to reverse its program while there is still time and to give this country the kind of national leadership it needs, the kind it deserves, and the kind to which I am convinced it would gallantly respond.


George Clyde Nowlan: Mr. Speaker, I am grateful for the applause. I must confess I had hoped it would continue for a little longer in order to give me a greater opportunity to review the notes I have in front of me as well as to shorten the time in which I have to speak before six o'clock.
However, I shall be speaking now until six o'clock, and before dealing directly with the subject before us I should like to express my personal satisfaction at being able to follow the hon. member for Burnaby-Coquit-lam, the leader of the New Democratic party. I think I came to this house, some years ago now, after the hon. member had left it, possibly for greener fields. We are very happy to have him here today. If it is necessary to have representatives of the New Democratic party-and apparently it is thought so in some places-we are fortunate that it should be the hon. member for Burnaby-Coquitlam, and I am glad, as I say, to have the opportunity of speaking after him. If I do not attempt to answer all the questions he has raised it is not because I do not consider them worthy of attention but because there will be other speakers in this debate who will undoubtedly deal with some of them.
Perhaps I could also take this opportunity to comment on the statement that our old friend the hon. member for Kootenay West
[Mr. Douglas.)
is retiring from the position of house leader of the New Democratic party. Some of us have sat in this house with the hon. member for Kootenay West for many years. We have not always agreed with everything he has said, but usually he took such a broadminded view that it was possible to agree with him in part, at least. He is a member of this house whom we are all proud to call our friend, and since he has been relieved of some of the responsibility he has been carrying I presume he will look younger while his associates will look older. I wish him the very best of everything.
Now to refer to the amendment which has been brought before the house today. There are many matters which can be raised in connection with it, but not having the opportunity of knowing, nor should I know, what the amendment would be about, I am not in a position to deal with it concretely, as perhaps one would be if one were bringing in an amendment oneself. However, there are some comments I should like to make about it. The Leader of the Opposition (Mr. Pearson) said it was based on the fact that it would have been better for the economy of this country to dispense immediately with what he called the austerity measures, and he pointed specifically to the surcharges and to what he called tight money. I will refer to tight money again in a moment or two, because I am not clear yet what the Leader of the Opposition has in mind when he talks of tight money. At one moment I thought he was talking about interest rates, then at another moment about the quantity.


An hon. Member:: Both.


George Clyde Nowlan: He says he is talking about both.


Lester Bowles Pearson: I did not say anything, but that is right.


George Clyde Nowlan: However, I would point this out. Of course, before my hon. friend got down to the wording of his resolution he sort of waffled around over the picture as to who was responsible for what, who had done the developing, and all the rest of it; but he did admit, as I think everybody admits, that there was an economic crisis in June following the run on the exchange fund. He also admitted that some drastic steps were necessary. I think he went so far as to say that under the circumstances the government probably took the best steps they could. As a matter of fact, it has been said in some very responsible economic journals, Mr. Speaker, that the government took a series of prompt and courageous steps which controlled the run on the dollar and largely corrected the situation.

Mr. Speaker, I say this: I am informed, as we all know from reading that this is not the first country which has had a run on its exchange funds. We also know that this is not the first country which has an economic problem at this time. We know that many countries have gone through these problems, and it may be the fact that there are still other countries, either the same ones or others, which will have to go through the same experience. In every case the country going through that problem or crisis was compelled to take certain emergency measures, measures which were to rectify the situation, and over a period of years or months, or whatever it may have been, went a long way toward that rectification. But I am told, Mr. Speaker, and from what I have read I believe, that no country, in such a short time as from June to November-from the time the economic crisis developed and the exchange crisis developed in this country until today-has been able, or was asked, or was expected, to take away the steps which have been taken to deal with their economic problems. I say to you, Mr. Speaker, with firmness and with respect to my hon. friend, that I think it is an attitude of absolute political irresponsibility to suggest, as the hon. member for Burnaby-Coquitlam (Mr. Douglas) pointed out a moment ago, without any suggestion of an alternative, that tonight, with an axe, like chopping off a rooster's head, we do away with the economic steps which have been taken by the government and which have gone so far to rectify the situation with which we are faced.
The other part of the resolution deals with the surcharges, and the fact that they should be immediately repealed. As has been stated in reply to a question on orders of the day, I think today, and as the hon. member knows, these matters are now being considered again by representatives of all the countries sitting round a table and discussing this problem of surcharges, and the changes which the government proposes to make and the action it proposes to take. Again I say that a speech such as we heard from the Leader of the Opposition when dealing with the surcharges, at the very moment when these matters are being discussed at an international gathering in Geneva, is an act far removed from political responsibility and does no good service to Canada but rather hurts the government and the country in dealing with the situation. Again I say it is an act of political irresponsibility.
Mr. Speaker, why is this resolution brought forward at this time? Because this question is of such importance, such dominating influence on the public thinking of this nation, that the opposition party has to raise it 27507-3-83J
Tariff Surcharges and Tight Money today? I have here, simply by a strange coincidence, Mr. Speaker, the daily Gleaner, a paper published in Fredericton, the edition of November 3, which is Saturday last.


Mr, Carter:: It is a good Tory paper.


George Clyde Nowlan: I am not so sure about that.


Paul Joseph James Martin: It supports the Tory party blindly.


George Clyde Nowlan: Then it follows the blindness of the Liberal party, because it started to publish the Gallup polls. It started to publish them in its first edition. It was put in red, and thereafter they have published it twice weekly. The first question of the poll concerns the austerity plan. I am not sure what this mysterious word "austerity" includes, but I am sure that some of the factors that the Leader of the Opposition mentioned are included in the word "austerity". The first question asked was: "Have you heard or read anything about what has been called the government's austerity program?" Mr. Speaker, do you know that over the national scene on a national survey 56 per cent of the people had heard about it and 44 per cent had not heard about it at all? Yet, when it comes to the problem of the drug thalidomide, which concerned the house a little while ago, some 96 per cent of the people in Canada had heard of that. So I doubt that this austerity program was of such pressing importance that it needed to be brought up at this moment, and this emergency action that the Leader of the Opposition has suggested taken.
The second question in this Gallup poll was: "In general, do you approve or disapprove of the program?" Over the national scene, 52 per cent of the people said that they approved of it, 27 per cent said they disapproved, and 21 per cent said that they had no opinion because they had not heard of it. So that is the survey as far as the national scene is concerned dealing with this austerity program at the moment.
Then we are also told, and this is repeated and repeated and repeated, that something must be done about these measures because they will add to the cost of living; that this devaluation is going to add tremendously to the cost of living. We have devalued our dollar for a period of a great many months. It started in at a premium and has gradually come down and come down, until now it is down to $0.92J. I have here the most recent figures for the cost of living index in the United States, where they have had no devaluation, and therefore have not been faced with this awful spectre of increasing prices such as my hon. friends shiver about.

Tariff Surcharges and Tight Money In the United States the cost of living has gone up 2.2 per cent, whereas in Canada, according to recent figures, it has gone up 1.8 per cent. So it is 1.8 per cent as compared to 2.2 per cent. Therefore, I think I can deny emphatically that devaluation, these surcharges, or any other of the steps taken by this government, have materially affected in any way the price index in Canada. Of course there is no question that certain prices will go up; that is obvious. If you import oranges, or grapefruit, or a Cadillac car, or other products, some luxuries, some necessities, the cost will go up; but as I have pointed out, the increase has been relatively minor according to these figures.


David Lewis: Mr. Speaker, would the minister permit a question? Would he tell the house what period is covered by these figures for the cost of living increase in the United States and Canada? 1 mean the 2.2 per cent and the 1.8 per cent.


George Clyde Nowlan: That was from the beginning *of last year. I gave other figures the other day when speaking on the first motion dealing with the cost of living increase over a period of 15 months. However, this index is computed on a slightly different basis. We hear a great deal about the fact that something must be done about the lagging economy which is threatened by these austerity steps which we have taken. In the speech here the other night in opening the debate on the fiscal and financial problems of the country I stated that the increase in the gross national product would this year be 7 per cent, one of the highest in all of our history. I still stand by that prophecy or that statement. I do not think it will be refuted by events as they develop, barring some unforeseen catastrophe. Again I say there is no authenticity for these dire prophecies.
I am always intrigued by people who say, "Oh, you are doing very well now, we have to admit that; but think how low you were last year and you are only coming up out of the trough. In a few months you are going to be down in the trough again and then you are going to be worse off than ever". There have never been so many dire prophecies of doom by people facing these facts and these figures. Their only explanation is, "You were down in the trough; you are going up, it is true and as far as we are concerned-they say this under their breath-we hope you do not go up forever, but you may; but next year you are going to come down." Perhaps we shall come down. It is fair to make an assumption, Mr. Speaker. I am willing to admit that we have had a very rapid growth during this year or this period. However, I also say


that the policy which we have inaugurated-I refer to the policy which my predecessor started and which I am trying to carry on, namely the policy of economic expansion- will I believe continue to develop the economic growth of this country and we shall not be facing the dire disaster which is so often prophesied for us.
A moment ago I think my friend said that he thought the effect of the devaluation would soon be lost to us and that we would soon have rising costs. He referred to rising costs and all the problems of exports and imports and costs of production which would result in our loss of the advantage of devaluation. That is a prophecy. I am not prepared to deal with prophecies, Mr. Speaker. All I know is this, that I have met a great many Canadian businessmen and industrialists of repute and certainly not all of them by any manner of means were supporters of this party. I refer to the party of which I am a member. A great majority of them have said that we have not yet begun to feel the full effect of devaluation in a positive sense and that in another six months the economy of this country will be developing and growing much more rapidly than it has developed and grown in the last six months. May I say, Mr. Speaker, that I am prepared to accept those prophecies rather than the prophecies we hear from time to time with regard to the dire disaster that faces us.


An hon. Member:: That is because they expect the Liberals to be in power in six months.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: That is the last word in doom and gloom.


Douglas Scott Harkness: That would certainly end the progress.


George Clyde Nowlan: I come back to the first line of the resolution which is before us with regard to tight money. As I said, I am intrigued to know exactly what is meant by tight money. I understood the Leader of the Opposition to interject a moment ago that he meant both interest rates and supply of money. You can have tight money, Mr. Speaker. I think there have been quite a few of us in this building or in this chamber who sometimes experienced tight money when perhaps interest rates were not too high and when perhaps it was in fairly good supply. I wonder how many members here in this house and who have been here for any length of time have not had a score of constituents come to them and tell them that money is awfully tight, that they could not borrow from the bank and that if that member would only endorse a note for $50 they could go to

the bank and get $50. The fact that they endorsed a note does not increase the supply of money in whatever bank it might be presented. However, it might have increased the possible creditworthiness of the constituent, if the member was unfortunately caught to such an extent that he was obliged to endorse a note. Some of them developed the practice of endorsing the note and then telephoning the bank manager before the constituent could get back and telling him to be sure to turn the note down anyway. However, there were all sorts of situations such as that.
Individuals, of course, through hardship, through misfortune, sometimes through their own fault and sometimes without it whatsoever, through circumstances absolutely beyond their control, have found it difficult to get money or to get credit. One can appreciate that situation and sympathize with it. One can also, sitting on the government benches, appreciate the fact that it is a very good amendment for the opposition to move. It is always nice to be able to say, "You know, you should have more money", the inference being that "If we were only there, there would be more money for you and it would be much easier to get". You can appeal to a large number of individuals perhaps politically on an argument such as that. However, I suggest that it is not a very politically responsible one at this time, and in the circumstances in which we find ourselves.
There is no question that there was an emergency. There is no question that we have come out of it very well. There is no question either that we still need to continue and to maintain certain protective steps in order to guarantee our situation.
A moment or two ago my hon. friend-and the first thing I know I shall be debating with him rather than with the Leader of the Opposition-came out, as I recall it, in favour of a floating rate and said it was a terrible mistake to peg the dollar.


An hon. Member:: Hear, hear.


George Clyde Nowlan: I hear "hear, hear" from over there on the opposition side. I am not going to debate the merits of pegging the dollar or of a floating rate. Not long ago I happened to be in a position-it was a couple of weeks ago-of meeting a group of businessmen, including two of Canada's leading bankers. One of them got me off in a room and told me that it was the act of an imbecile to peg the rate. An hour later another banker of equal prominence got hold of me and said, "Did so and so talk to you about that?" He said, "It is an act of imbecility if you did not peg the rate". Hence when you get leading bankers debating
Tariff Surcharges and Tight Money the matter in that way, I am not going to debate the merits of it at this time.


Paul Joseph James Martin: May I ask the hon.
gentleman a question?


George Clyde Nowlan: I would point this out to the hon. gentleman. From what he said I gathered first that if we did not have a pegged rate it would not be necessary to use any of our dollars whatsoever in the exchange fund and that we could sit with it floating up and down like a cork in the rapids. I might suggest to him that whatever the merits of the one system or the other, you would still need to have dollars in the exchange fund and you might need a substantial number of dollars in it, whether the rate was a floating one or a pegged one.


Paul Joseph James Martin: May I ask the hon. gentleman a question?


George Clyde Nowlan: Yes.


Paul Joseph James Martin: The minister says he is not going to deal with the question whether we should have a pegged dollar.


An hon. Member:: At this time.


Paul Joseph James Martin: Yes, at this time. My hon. friend, for whom we have the greatest admiration, is nevertheless the Minister of Finance. Does he not think that at this time he ought to take the opportunity to tell the house and the country what his view on this question is, as Minister of Finance, at this time?


George Clyde Nowlan: I have no hesitation in telling my hon. friend what my view is and what the view of this government is on this matter, and surely my hon. friend knows it. I knew he was going to ask this question and I thought it was a good opportunity to take a thirty second breather. I was hoping he would take two and a half minutes to ask the question, as he usually does, instead of one minute. The intention of the Minister of Finance and of this government is to maintain the Canadian dollar at the pegged rate where it is now. That is its policy and it is going to be continued. Without indulging in a debate but for a moment adverting to the remarks made by the hon. member for Burnaby-Coquitlam -and I said I was not going to go into the merits of what he said-I just point that out to him, and I think everybody in the house knows it. Certainly that is our policy on that matter, and there can be no question whatever.
What about this matter of the level of money or the supply of money and the interest rate? As I said, I am not sure whether the Leader of the Opposition wishes to make his position more clear on that matter when he

Tariff Surcharges and Tight Money comes to deal with the tight money policy, whether he was referring to the bank rate or whether he was referring to the money supply, or whether he was referring to both. I think at one stage he said it was the highest rate since Canada had a central bank.


Lester Bowles Pearson: I would ask the minister to tell us what he means by tight money.


George Clyde Nowlan: I am asking the hon. gentleman. The hon. gentleman moved an amendment here in this house, this afternoon, and submitted it to this parliament, deploring the austerity measures. He referred particularly and specifically to tight money but as far as I know he did not enlarge on that in any way, shape or form. He simply used the term "tight money" which, as I said, makes a great appeal to everyone who has been refused a loan by a bank. It could get votes from a certain number but I think it will also lose the votes of a lot of responsible people who would like to see it more clearly defined and who would regret this approach being made at this time, when we are facing the situation that we are facing.
I have tables here, Mr. Speaker, which have been sent to me, dealing with the quantity of money or the money that is available, and I think it is only right that I should put some of these figures on the record. I have them going back over a period of years and I am going to put a few of them on the record at this point before six o'clock. Tight money, of course, must be tied in with bank loans. If bank loans are decreasing then there would naturally be some evidence of tight money, but if bank loans are increasing substantially there would be some suggestion that money was not so tight. I want to tell the house that from June, 1961, to June, 1962 general bank loans increased on an average of $88 million a month.


An hon. Member:: What about 1956?


George Clyde Nowlan: I am coming to those figures too. I have got them. It is true that after the crisis hit us at the end of June there was a levelling off in August, a decrease in general bank loans, but despite the levelling off in August the increase between the end of June and the end of September averaged approximately $90 million a month. Do hon. members opposite call that tight money?


Donald Methuen Fleming: The Liberals were not creditworthy.


John Whitney Pickersgill: The first joke in six months.


Mr. Siarr:: You are always telling jokes.


Donald Methuen Fleming: You have a standing joke over there in the member for Bonavista-Twillingate.


Mr. Speaker:: Order. It is my impression that the Minister of Finance has the floor. Hon. members may wonder when they read Hansard whether this has been a round-table conference.


Paul Joseph James Martin: Ask the Minister of Justice to be quiet.


George Clyde Nowlan: Someone a moment ago asked me about 1956. I have the figures here on a per capita basis. I hope no one will suggest that I have done this to mislead the house in any way because they are figures that were sent to me. I can change them into some other unit if the house wants that done. In June of 1956 the publicly held money supply was $685 per head for the whole population. In June of 1957, one year later, and this is rather significant in the light of history, it was $676 per head. In other words, the supply of money had decreased slightly between June, 1956 and June, 1957.
I am going to give the figure for September, 1962, and I am using September because it is the last month for which I have a record.
I was criticized the other night for having used one month in one year and another month in a second year but I used the month in the second year that was the last one for which we had figures available. That was the only reason I did so.
As I said, in 1957 when we came into office the money supply was $676 a head. In September, 1962, the month before last, it was $783 a head, an increase of over $100 a head during the period. That is rather significant, Mr. Speaker, when you apply it to the nation as a whole.
Talking about tight money again in so far as the banks are concerned, I will give the figures on a per capita basis now and the general figures later. General bank loans in Canada in June, 1956, amounted to $256 a head. In June of 1957 they had gone down $5 to $251, but in September of this year they were $355 a head or a little bit over $100 a head more across the board than at the time we came into office. In view of that very sketchy but I believe absolutely accurate record of the financial picture, if this government can be accused of tight money then I say that we do not know what is meant, and that is why I asked the Leader of the Opposition just what he meant by tight money.
We also have the lending by various government organizations. Between September 30, 1961 and September 30, 1962 industrial development bank loans increased in number from 1,364 to 2,085 and in amount from $71 million to $92 million. In the fiscal year ended September 30, 1957, at the time when this government came into power and inherited the industrial development bank with

all its widespread lending power and also the free money policy of our predecessors opposite, who now decry that we are not more generous in our lending, the industrial development bank had 401 loans outstanding totalling $30 million in all.


Douglas Scott Harkness: There was really tight money.


Donald Methuen Fleming: Don't these Liberals look sick.


Thomas Miller Bell: Paul looks like that all the time.


Lionel Chevrier: Are we going to hear from you?


George Clyde Nowlan: Let us look at farm credit. We have heard that subject discussed in the house in the last few days. Legislation has been before the house enlarging the lending power of the Farm Credit Corporation and it can be assumed that as a result of these amendments there will be a further expansion of farm credit lending. I should like to put these figures on the record. The number of farm credit loans made in the three and a half months between July 1 and October 15, 1961 was 2,239. Obviously I have taken October 15 because that is the last date for which we have figures available. During the same period in 1962 these loans increased from 2,239 to 2,808, an increase of almost 600 loans over the same period last year. The amount of these loans for this period last year was $24.9 million and for the same period this year, a tight money period, $34.7 million. I also have the figures for the entire year ended March 31, 1957, just before we came into power. This is a nice little yardstick to look at when comparing generosity with tight money such as we are accused of imposing. In the year ended March 31, 1957 there were only 2,921 loans in all of Canada under the farm loan board and the total amount of these loans was $14 million.
Let us look at export credit financing, which is another phase of credit expansion and development of our economy. The total amount of exports insured in 1961 was $66 million and in 1962 it has increased to $90 million. This gives some indication of the development of our exports, in so far as those receiving financial assistance are concerned.
We have also heard it stated by both hon. gentlemen who have spoken this afternoon that they are worried about unemployment, the fact that unemployment was bound to increase because of the policies which we have followed. I am not minimizing for one minute, Mr. Speaker, the fact that there are some people unemployed in this country. I am not suggesting for one minute that it is
Tariff Surcharges and Tight Money not a personal tragedy for anyone who is unemployed. However, this government has done more in trying to overcome the unemployment problem than has any other government. As has been said in the house time and time again during the prior debate and also in public places outside during the summer, employment in 1962 has been about 200,000 higher than in 1961. Since we have come into office over half a million more Canadians are now working than there were before. These people have been provided jobs. Unemployment is continuing to drop. In the last month there were 48,000 fewer unemployed than in the same month last year.
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.


An hon. Member:: Well, you created it.


George Clyde Nowlan: If you give us another year in here it will be all over; there will be no unemployment. We created what? The unemployment situation is improving. I must say we are just a little bit weary, a little bored, with having dire prophesies that some terrible thing is going to happen next month or next year. One would think one could get some satisfaction out of improvements. Is jealousy so great in certain places? Is this desire to obtain office so bitter, so biting, so driving in certain places that the record has to be distorted? They hope and pray- they deny that they hope or pray for these things, but let them remember that the prayers of the wicked availeth not. It is rather interesting to note, in view of the prophecies that something bad is going to happen, that they still hope they are wrong. If it is of any comfort to them, I can tell them that they will be wrong.
I should like to leave the question of tight money for a moment because I intend to put some figures on the record at eight o'clock to complete the picture over the period from May and June right down through the rest of this year. I should like to say a word about surcharges for a moment in a general way. The Prime Minister stated when the surcharges were imposed that they were necessary, but they were of a temporary nature and would be removed as soon as it was possible for this to be done. We have already taken some very major steps in that direction. A few weeks ago we removed the surcharges on a large class of goods coming into this country which were used in the production of goods in this country. The government felt
1302	HOUSE OF
Tariff Surcharges and Tight Money that to impose surcharges on those goods of a class or kind not made in Canada and used in the production of Canadian goods increased our cost of production to a very substantial degree.
We are dealing with tariff classifications and you cannot deal with every individual item in an individual way as you would like to do. I think it can safely be said, in a general way, that by lifting the surcharges on these items we went a long way toward dealing with those goods of a class or kind not made in Canada and which formed part of our cost of production. I am not going further into the matter at the moment, much as I should like to do so. I regret the fact that the question has been raised here this afternoon. As I said, these matters are under discussion, possibly at the very moment and certainly within the last day or so, and will be again at the GATT negotiations. Our government representatives are there carrying on confidential and detailed discussions with the representatives of the other nations concerning our plans with respect to these surcharges.
I am told that no country has ever before removed charges of this kind so shortly after an exchange crisis. The government is determined to remove these as soon as it is practical or possible to do so. We are not going to remove them at the moment. As I said earlier, we have made a remarkable recovery from the situation with which we were confronted in June. Our exchange reserves have been built up substantially. I noticed an article in a newspaper this morning which suggested that because our exchange reserves are almost as great as they were prior to the crisis, perhaps we would not have to build them up any further. Well, the fact that they were so great a few months ago and faced such a severe run would possibly suggest, or at least some economists would argue, that they should be maintained at an even higher level in the future to make sure, with our expanding trade and our expanding economy, that a similar problem would not arise.
At any rate, the house can rest assured of this, as soon as it is possible, practical and proper so to do, the surcharges are going to be removed. They were and are an essential part of our machinery for safeguarding the Canadian dollar, internally and externally, as we have done. Farther than that, I cannot go on that phase of the situation at the moment.
May I call it six o'clock, Mr. Speaker?
At six o'clock the house took recess.


COMMONS AFTER RECESS
[Stage Direction]
The house resumed at 8 p.m.
George Clyde Nowlan: 
Mr. Gordon:: Would the hon. gentleman permit a question? I think he said there had been a long history of reduction of interest rates.

Tariff Surcharges and Tight Money


George Clyde Nowlan: No. I said "a steady reduction".


Walter Lockhart Gordon: Would the minister care to give some of the figures which might substantiate that statement.


George Clyde Nowlan: I have some here, Mr. Speaker. We have the figures starting in June. The rates went up somewhat in July, with the crisis. In June, on treasury bills for instance, it was 5.45 per cent. In July, it was 5.47 per cent. In August it went down to 4.95 per cent, and in October, it went down to 4.16 per cent.


Paul Joseph James Martin: What was the bank rate?


George Clyde Nowlan: The bank rate came down from 6 per cent to 5 per cent during this period. There can be no question but that there has been a reduction in interest rates during this period. As restoration of the reserves made it possible, the Bank of Canada reduced the interest rate with the consent and knowledge of the government and after consulation with the government. The market yields on government of Canada securities are now back to the level at which they stood early in June and so is the spread between long term interest rates in Canada and the United States. I will deal with that matter again for a moment before I sit down. The capital market is receptive to new issues and the confidence of the investing public is demonstrated by the fact that since June 20 they have added a net amount of over $800 million to their holdings of government of Canada securities.
The hon. member for Davenport may be especially interested in this, which affects his own province: only today the province of Ontario has announced a new long term 20-year issue at terms of 5.33 per cent, slightly more favourable than it paid on a similar issue last March, when the percentage was 5.35. That, I should think, coming from the province of Ontario is an indication of the trend. Bank loans have increased substantially. Because of the monetary policy previously followed, the banks were in possession of surplus liquid assets which they were able to sell to meet an expanding loan demand. In September, total general loans of the banks were, on the average, $330 million higher than they were in June and $1,202 million or 22 per cent higher than they were a year ago.
It has been suggested there was a decline in the money supply during the summer. In fact, the impact of this fell on government balances which were high in June. The privately held money supply, which is the only relevant money when it comes to a discussion of "tight money", went on increasing.


In October, the privately held money supply was about $365 million higher than it was in June, an increase as large as one could expect in any such period despite the emergency.
There is clear evidence that the monetary situation has become easier in the last two months. I have already mentioned two examples; I refer to the loans made by the Farm Credit Corporation and others. I want to make it clear, again, that this government is determined to protect the integrity of the Canadian dollar at the present rate of exchange. We are not going to follow policies which result in a fresh devaluation of the Canadian dollar or a fresh loss of confidence in the Canadian dollar. We are convinced that the present exchange rate is a good one for the Canadian economy and that it would help us, along with other measures, to bring our international accounts into closer balances and reduce our dependence on foreign capital. We are convinced that we would be able to follow policies of economic expansion consistently with the protection of the value of the currency and we have already provided evidence that we are determined to move in this direction.
As I said at the outset, the policy of this government is to maintain the integrity of the Canadian dollar, to provide for an expanding economy and at the same time to try to overcome to as substantial an extent as possible the deficit which we are running in current accounts. While this is being done, until we can overcome this deficit-and it cannot be done today or tomorrow-we shall have to be dependent to a certain extent upon the flow of capital from outside this country, and in order to bring that capital here and hold it here there has to be a gap between interest rates here and in the United States, or otherwise there would be an outflow rather than an inflow.
These are the fundamental policies of this government; these are the measures which are attacked in the amendment we have before us. The leader of the New Democratic party asked us this afternoon to bring forth our policies with respect to these matters. Some of those policies we have brought forward. Many of them, as the hon. member knows very well, are budgetary problems which cannot be dealt with at this time. However, I can assure this house that the present government is working on these problems. I have indicated the direction we are taking, and these steps will be followed up by legislative measures and by proposals which will be included in the budget when it is brought down. I am sure the people of Canada generally will wish to co-operate with the government in working toward the solution of

this problem which is one that can be solved by co-operation, understanding and hard work. I know we are on the road to accomplishing this, but it cannot be done by negative amendments such as we have before us at this time.


Mr. E. T. Asselin (Notre Dame de Grace):: Mr. Speaker, this is the first occasion I have had since becoming a member of this house to offer you my congratulations on your appointment as Speaker. I have had occasion to marvel at your dexterity in dealing even with the most intricate and delicate of procedural problems. To you, and to your deputy, congratulations.
It was 62 years ago that my grandfather the Hon. Senator Edmund William Tobin sat for the first time in this house. The year was 1900. He came to Ottawa to represent the eastern townships' constituency of Richmond-Wolfe. He represented it with devotion and distinction for eight consecutive terms and, needless to say, Mr. Speaker, he was elected under the Liberal banner. He remained in office until June 3, 1930, when he was summoned to the other place. They say that I take after him. I hope so, for at least the next 30 years.
My riding of Notre Dame de Grace is a far cry from my grandfather's rural riding. "NDG", with its 100,000 inhabitants and 60,000 eligible voters, ranks with the country's largest constituencies and closely mirrors the total Canadian ethnic picture. Basically Anglo-Saxon, we have good representation from French-speaking Canadians as well as Canadians of all the other origins which go to make up Canada. Mr. Speaker, when we say the word "Canada" we call to mind a great sweeping panorama that encompasses rugged sea coasts, vast forests, deep flowing rivers, golden prairies, and pure snowcapped mountain peaks. This is fine for the tourist brochures; but for our purpose, for the serious business of government, Canada must be seen as people and problems, for it is its people and problems that are really important.
It is a fact, Mr. Speaker, that more than 65 per cent of all Canadians are now urban dwellers. Sixty five per cent of our countrymen now live in a type of community that the present government has chosen almost to ignore. This is extraordinary, really. What is any country but the sum total of its villages, towns and cities as well as its farms and forests? The economic and sociological health of any urban area extends for many miles beyond its boundaries. It is a major factor in setting the economic pace of the whole nation. The urban problem is not new but it is typical of the problems which Tory austerity measures have made worse. For
Tariff Surcharges and Tight Money years now Canadian towns and cities from coast to coast have been seeking assistance for their serious financial and other problems. They have never found the situation so difficult as it has been since the advent of the austerity program. That is the program which the minister denies exists but which anybody can see does exist just by referring for one moment to the submission to the royal commission on banking and finance which was made by every municipality in Canada. The word "austerity" is used there several times, and I can assure you, Mr. Speaker, used without reference to the high cost of credit to look after their problems.
The Canadian federation of mayors, in their latest brief point out that the urban centres must in large measure "rely on the national economy as a whole for a solution to the needs of urban redevelopment and growth". In all our cities and towns we find a tremendous backlog of unmet demands for social capital, slum clearance, mass transportation, roads to relieve traffic congestion, action on water and air pollution, and the renewal of obsolete and inadequate school facilities-these are among the most important ones. The solution of these problems is important not only to the cities and towns concerned, but it is also vital to the economic growth and development of the nation as a whole. Just because, constitutionally speaking, the municipalities are the creatures of the provinces, it becomes too easy for the federal government to shrug off these problems and ignore the fact that many municipal problems present an acute national issue. They are national problems, I repeat, not just because so many of our people are deeply affected, but because they eventually involve our national prosperity in many ways.
Many of these problems started in the early depression years, the early thirties, when residential and municipal construction virtually came to a halt. In the subsequent war years urban problems and needs, including housing, were still relegated to a low priority. After the war, reconstruction and the rapid development of industry, along with the pressures of the Korean war, again forced curtailment of urgent redevelopment in urban areas and strained municipal resources to the limit. In the last few years things should have been different, Mr. Speaker; a new order of national priorities has become necessary.
The need for slum clearance, recreation areas, low cost housing, schools and urban redevelopment generally, confronts us today as urgently as any other national problem. The Canadian people as a whole and their
1306	HOUSE OF
Tariff Surcharges and Tight Money economic and social welfare are deeply involved. Urban needs demand large investments of social capital of a magnitude which is beyond the limited capacity and resources of the municipal governments. Many municipal needs run parallel to those of the federal and the provincial governments. Municipal governments should not be backward in pressing their claims on the national economy because they, as urban areas, are responsible for so much of the national economy, an economy, Mr. Speaker, terribly hampered today by Tory austerity or, if you prefer, by tight money policies.
Let us see what the report of the special committee of the Senate on manpower and employment has to say on this point:
We are in a continuing danger of choking our economic growth with congestion, pollution, the development of slums, and with the effects of deficiencies in vital public services and amenities.
Mr. Speaker, that was not a politically biased statement; it was the considered opinion of a group that had carefully studied all aspects of a major national problem and has seen the relationship between urban renewal and the unemployment tragedy. We are faced with a situation today that demands great imagination and effort from federal and provincial authorities if these problems are to be solved. Although the federal government is clearly responsible for the general economic climate of the nation, it has not taken sufficient measures to deal with those particular sources of economic trouble found in urban areas.
There is a great deal of precedent for federal intervention and assistance to municipalities. Take, for example, assistance with regard to slum clearance, low rental housing, hospital construction, removal of level grade railroad crossings, bridges over navigable rivers, sewage disposal, civil defence, vocational and technical training, and the winter works program, although the scale has not been at all adequate, nor has it been planned to give maximum effect. The municipal authorities have said many times that if you strangle traffic you also strangle commerce. Yet so far as the federal government is concerned, it seems that traffic could strangle so completely in our urban centres that the municipalities themselves could wither away. Commerce and industry would disappear also or be obliged to undertake the tremendous expense of relocation and hence become less competitive. However, from the treasury benches in this parliament I have heard no speeches and I have read none from the last one which would indicate the possibility of 

any positive action on this extremely important problem. Basically, the financial resources of most municipalities are heavily committed to the provision of new facilities that expansion demands, such as new sewers, new streets and new lighting. This commitment leaves very little of their revenues available for an attack on the older existing problems. Tremendous population growth has taken place in the last few years and if urban areas had not committed themselves to the cost this growth involves, they and the nation would have ceased to grow. However, a good deal of growth has been at the expense of the commercial hearts of these same cities and towns because money was being spent on new streets and roadways and consequently could not be spent in sufficient amounts for widening old streets, on the construction of expressways or the development of a rapid transit system to handle the movement of people and goods.
Municipal governments must also anticipate continuing growth and development. The volume and nature of foreseeable urban growth and redevelopment within the next ten to 20 years will entail an outlay of social capital that will go far beyond the debt carrying capacity that municipal governments can afford to assume within the framework of their present tax and revenue structures. If the municipalities are to carry out the program required of them and if we are to get this nation's economy moving, we can no longer rely on the government's austerity program. Investment of social capital is necessary in urban areas and it is necessary now. It is necessary to strengthen our national economy.
Together with all members of the official opposition and the representatives of municipalities, large and small, everywhere in Canada, I suggest that a municipal loan bank or fund be created. The government's tight money program has meant increased costs to all Canadians and this includes municipalities. It has restricted the ability of our cities and towns to borrow money and to undertake the backlog of work which is sadly needed and to which I have already referred. A municipal loan fund should be organized in consultation with the provincial and municipal representatives. It will not conflict with existing sources of capital. It will provide loans for sound municipal improvements which, in order to protect their rights, provincial governments would approve but for which capital is unobtainable on reasonable terms from existing Canadian sources.
Loan agencies of this sort have existed in Europe since the 19th century to aid municipalities there. Similar banks or funds exist

in Denmark, Holland, Norway, Belgium, Italy, Spain, Switzerland and Turkey. The United Kingdom's public works loan board is, in many respects, a similar institution. Are we to lag behind Spain and Turkey?
Our party has been advocating a municipal loan fund since 1958. The Canadian Federation of Mayors and Municipalities, on behalf of large and small municipalities, have been requesting it since 1958. I would ask you, Mr. Speaker, to think of the force for good it could be. It could provide social capital resulting in schools and low cost housing, but best of all it could provide those things which are so badly needed and which austerity so badly neglects, namely an investment in people and institutions to help people toward a richer and more productive life.
Public requirements have been neglected owing to an outmoded system which places on the municipalities responsibilities far beyond their capacity to assume, without the help of the federal and provincial governments. It is a system which provides the federal government with the bulk of the nation's tax revenue-that is roughly two thirds of the total tax dollar collected from all Canadians-and then makes it difficult, constitutionally speaking, for the federal government to redistribute it where it can be used best. But, Mr. Speaker, just because it is difficult does not mean that we should sit back and, figuratively speaking, twiddle our thumbs as the Conservative government leadership is doing.
A municipal development bank, together with an economic advisory council to plan for a brighter, stronger, expanding economy will be a tremendous force in settling not only major local problems in most of our far flung municipalities from the Atlantic to the Pacific, but also our balance of payments problem and the export-import imbalance. Only long range planning will accomplish this result.
Of course, adequate credit at low interest rates will not solve all of the problems of all of the municipalities in Canada. In depressed areas, in addition to loans the government should make outright grants to municipalities. There are in existence many areas which could be called depressed areas, and I am thinking particularly of those where the economic base has withered away in the Atlantic provinces and in some parts of Quebec and Ontario. Here it will be necessary for the federal government to redistribute tax revenues where they can be used best, not only by means of low cost loans to the municipalities but by means of outright grants
Tariff Surcharges and Tight Money to revitalize, and to create new interest, to attract new industry, or in short to create new jobs.
There should be a national redevelopment plan for urban-


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


Edmund Tobin Asselin: If I have time at the end of
the 30 minutes allotted to me, I should be pleased to answer any questions which hon. members would care to address to me. I would remind the hon. member who has just risen of our interest in the creation of new jobs and express the hope that, after tomorrow night, he will not be looking for one.
There should be a national redevelopment plan for urban as well as rural areas. This could be an extension of the work planned under the Agricultural Rehabilitation and Development Act and the Central Mortgage and Housing Corporation. The operations of Central Mortgage and Housing Corporation should be expanded in order to put reality into the attack on the problem of urban renewal. Red tape and useless delay must be cut to a minimum. Slum clearance and redevelopment is a national problem which affects Canada from St. John's to Victoria. It is not going ahead at nearly so rapid a rate as is necessary.
Typical of the sort of problem that arises at the present time is the redevelopment of a blighted area, with which I am very familiar in Montreal, to become the centre of new facilities for the C.B.C. Montreal is prepared to proceed with the program and agreements have been signed with Central Mortgage and Housing Corporation, but despite the very low initial costs treasury board is holding everything up in the name of austerity.


Mr. Fulion:: That is not correct at all.


Edmund Tobin Asselin: The immediate costs-


Edmund Davie Fulton: That is not the case.


Edmund Tobin Asselin: Mr. Speaker, if I have erred I will be glad to change what I have said and retract it, but I do not think I have. This slum clearance program in Montreal has been standing and holding fire for practically as long as the government across the way has been in power. The immediate costs are only those for planning. The expropriation and demolition costs will not arise for a year to 18 months and the construction costs not until some time after that. Yet they are holding it up in the name of austerity- and this at a time of unemployment. The government has cut back a useful long term project in the name of tight money. I submit this is senseless.

Tariff Surcharges and Tight Money


Edmund Davie Fulton: That assertion certainly is. Tom Kent is.


Edmund Tobin Asselin: Mr. Speaker, I submit another idea. I think that expressways are completely necessary from a defence standpoint and they would also serve a useful purpose in normal times. It should be remembered that the world's first superhighway was the autobahns build in Germany before the war for military purposes, but we can go further and say that they are still serving useful civil purposes today. I think that part of our defence budget should be spent on access routes into and out of urban centres right across the country. These will serve a dual purpose. They will benefit the economy and settle some of our defence problems all at the same time.
Let us extend the Municipal Grants Act to cover all crown corporations and crown agencies without exception. Let us expand the winter works program to make the resources more widely available. It should not be restricted to municipal corporations only but should be open to other fields such as rapid transit authorities, universities, hospitals and school boards. If the purpose of the program is to create useful winter works, why not make it more widely available?
All this adds up to jobs and a surging economy, more revenue for all levels of government-products for consumption and export, facilities for a better and richer life for all. Five years of Tory reaction is long enough. Their dull, indecisive leadership adds up to austerity of ideas and when perchance a good idea is brought forward they lack the strength, the foresight, indeed, the inner fortitude, to put it into effect. I listened to the hon. member for Villeneuve (Mr. Caouette) the other day in Montreal and he made a statement that I think this house should know about. He told us that his father knew enough to be a Liberal.


An hon. Member:: He gave up.


Hazen Robert Argue: He looked at his son.


Edmund Tobin Asselin: Let us look at the ARDA program for a moment. This was a good idea.


Edmund Davie Fulton: Why do you not look at the amendment and deal with it for a moment?


Edmund Tobin Asselin: It could have been a positive force but the government approached it with timidity, inwardly shaking, and only a few pilot projects have emerged, spread over three years. This program should go into effect immediately.
We should be helping the municipalities financially instead of competing with them for the available credit. Hon. members opposite will say that they are helping. They say: Look

at the help we are giving cities to build plants for the treatment of sewage. Yes, I admit that is a good program, but it is a small step in the right direction. It is a drop in the bucket. The urban areas need help, not just with their sewage but in every aspect of municipal life. Growth of population and expansion coupled with a drying up of their sources of credit at reasonable cost has increased the burden that comes from a tremendous backlog of work to be done. We need planning, not the disorganized hodgepodge of halfhearted attempts-


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order. I trust that hon. members who have not yet made their maiden speeches will extend the courtesy of the house that should be accorded to an hon. member making his maiden speech.


Edmund Tobin Asselin: Mr. Speaker, I received my political baptism in the Montreal city council and so far these proceedings have been most polite, but I thank you for your good intentions. We need planning, not the disorganized hodgepodge of halfhearted attempts to get out from under in the name of austerity and tight money. Mr. Speaker, the nation simply cannot accept a situation in which the government fails to come to grips with these great issues.


Edmund Davie Fulton: Which ones?


Edmund Tobin Asselin: One of the great issues that this nation faces is how to get rid of the cabinet over there. These issues will not be solved by austerity, by tight money or by a go-slow policy. They will be solved only by policies that are actively and progressively aimed at promoting growth. I urge all members to support the want of confidence motion presented by the Leader of the Opposition. Last June 63 per cent of our citizens showed that they were not satisfied, indeed far from satisfied, with Tory policies and particularly Tory leadership. I would remind hon. members of the other parties sitting in opposition with us that their constituents also voted against Tory policies, and when I ask them to support our amendment I am only reminding them of the votes of their own constituents. (Translation):


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, a moment ago we heard a few words about planning, and mention was also made of it this afternoon.
As far as I am concerned, we have a living example of planning in this house, especially on the side of the New Democratic party.
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. He is accompanied by the tiny member for Burnaby-Coquitlam (Mr. Douglas), who takes a small bowl of soup, a small helping of meat and vegetables, a bit of dessert and a little coffee. They are joined at their table by a third party, in charge of planning: the government, the tax inspector, who takes, first of all, 30 per cent of what both men have, then distributes what is left between the two, in such a way that the hon. member for Burnaby-Coquitlam has much more than he needs and dies from overeating within 15 days, while Mr. Fisher, for his own part, starves to death after 15 days because he did not have enough.
Mr. Speaker, that is not unlike what I call "planning"; that is to try and reduce Mr. Fisher's stomach to the dimensions of Mr. Douglas'; to try and enlarge Mr. Douglas' stomach to the dimensions of Mr. Fisher's. You will appreciate that that is to go against nature and to try and give the same eating possibilities to two physically different men.


Mr. Caouette:: Hear, hear.


Gilles Grégoire: That is pretty near what the hon. member for Burnaby-Coquitlam talked about this afternoon.
Well, we are in favour of a social security scheme. We are in favour of a program for loans without interest to municipalities and school boards so that they can achieve their projects. But where we disagree, it is when somebody tells us, as the hon. member for Burnaby-Coquitlam did this afternoon: we are not afraid of budget deficits; let us carry out work programs and, if we cannot afford them, we shall get into debt.
But what good has that done in the past. What have been the results?
Here is what is happening today. According to page 1037 of the 1961 Canada Year Book and as recently stated in a reply by the Minister of Finance (Mr. Nowlan), in 1958, the federal debt stood at $23,204 million and today it exceeds $26 billion and costs us $800 million in interest per year.
Moreover, according to page 1076 of the Canada Year Book, the combined provincial debts amounted to $6,408 million, with interest charges of over $400 million per year, which
Tariff Surcharges and Tight Money gives us a total of $1,200 million in interest every year. Also, declared municipal debts in the amount of $5,500 million and add about another $350 million in interest. This adds up to $1,550 million we are paying every year in interest. That is the result, the consequence, the harvest of debts and budget deficits piled up in the last 50 years in this country yielding interest for chartered banks. The hon. member for Laurier (Mr. Chevrier) may rejoice, since he is a chartered bank director. One billion, 500 million dollars every year.
Now, let us take a look at what is given to our farmers in the budget this year. What is given to our farmers in the way of payments, allowances, grants, etc? Eighty eight million in 1962. And to chartered banks? One billion five hundred and fifty million because of budget deficits piled up since confederation.
Is that, Mr. Speaker, a policy providing for future generations?
We know that a politician is a man who is only thinking of the next election but that a true statesman is a man who is thinking of the next generation.
If 20 or 22 years ago, the hon. member for Laurier and the former premier of Saskatchewan had thought of the present generation, we would not have $1,500 million interest to pay but we could rather spend that amount in assistance to farmers and in the payment of family allowances because it is not the chartered banks who need money but the Canadian families.
Mr. Speaker, with the annual budget deficits, advocated this afternoon-and I have not yet recovered from the shock-by the hon. member for Burnaby-Coquitlam (Mr. Douglas), we have paid eight chartered banks a sum of $1,550 million. But in family allowances, that is to our young people, the future of our country, what did we give this year? Three times less; $523 million, for all the young people of our country, and three times more to the chartered banks of which the hon. member for Laurier (Mr. Chevrier) is a director.
Mr. Speaker, the hon. member for Laurier complained to me the other day that I always forget to mention that he is a director of the Provincial Bank of Canada. He wanted me to give him some publicity in that respect. The hon. member for Laurier should go among the people now; he would see that it is not an honour but a shame to grow rich through our taxes and to get money out of the people, as he is doing today, to help the

Tariff Surcharges and Tight Money chartered banks, including the Provincial bank ol which he is a director, grow rich.
(Text):


Lionel Chevrier: I rise on a point of order, Mr. Speaker. The hon. member has made an accusation and the accusation is that I have enriched myself at the hands of a certain bank. The hon. member has no right to make such an accusation as that because it is untrue, and I ask Your Honour to direct him to withdraw that charge.
(Translation) :


Gilles Grégoire: Mr. Speaker, on the point of order, I will reply in French to the hon. member for Laurier.
I never said that he had enriched himself. I do not know that. I know that the chartered banks, of which he is a director-


An hon. Member:: -have grown rich.


Gilles Grégoire: -have obtained the money of the country. I did not say that he had enriched himself, but I say that the people feel it is a shame to see the government leaving in the hands of eight private corporations the money of the people and the means to grow rich through that privilege.
(Text):


Lionel Chevrier: I rise on a question of privilege, and the question of privilege is this. The hon. member has now shifted his ground by saying that the banks have enriched themselves, and that is a different story from the one he gave a moment ago. He said that I, as a director of one of the banks, had enriched myself, and that is contrary to the rules of the house. I ask you to instruct the hon. member to withdraw that statement.


David Réal Caouette: Mr. Speaker, on that question of privilege, I maintain that the hon. member for Lapointe has never said that the hon. member for Laurier has enriched himself. He said very plainly that the chartered banks of our country have enriched themselves, and if the hon. member for Laurier feels the hat fits him, let him put it on his head.
(Translation):


Gilles Grégoire: Mr. Speaker-
(Text):


Mr. Deputy Speaker:: Order. I have to confess that I did not hear that allegation by the hon. member for Lapointe, and only tomorrow's record will disclose whether or not this was said. The hon. member has been endeavouring to tidy up what he said. I invite the hon. member for Laurier to raise a point of privilege tomorrow if the blue sheets reflect that this is indeed what was said. If it was said, I admonish the hon. member for

Lapointe by asking him to withdraw it now. But he alleges in what he said subsequently that he did not in fact say that.
(Translation):


Gilles Grégoire: Mr. Speaker, I am perfectly aware of what I said; I said that chartered banks were growing rich. If the hon. member for Laurier-who is one of the directors- thought this referred to him, it is not my fault.
I am not surprised that he always uses such arguments trying to divert attention, and that he was stumped ten times the other day by the hon. member for Villeneuve (Mr. Caouette) in front of the students at the Ottawa university.
Mr. Speaker, we realize that students can recognize serious arguments. This is why newspapermen mentioned the other day that at the end of the debate the hon. member for Laurier did not have a single argument left, when he should have known that in order to discuss a question one must know all the viewpoints and not only those of the chartered banks.
Mr. Speaker, in examining the figures pertaining to the budgetary deficit.-I shall stick to this aspect of the budget-one notices a particular item; that is why, when I noticed that the member for Burnaby-Coquitlam (Mr. Douglas) persisted in expressing the same idea, I looked up, among other things, the item dealing with provincial debts in the Canada Year Book, and looking at page 1110, I noticed that the hon. member for Burnaby-Coquitlam took exactly the same stand as when he was premier of Saskatchewan. The per capita debt of that province in 1960, according to those figures, was the highest for the provinces of Canada, or $396, while the neighbouring province under a Social Credit administration did not have a per capita debt of $396 but rather $18.
This is a difference one can notice today, between the achievements of different administrations in two different provinces. The first, Saskatchewan, is a province dedicated to deficit budgeting and it must take money in the pockets of the taxpayers to cover interest charges, which involves double repayment of the debt. On the other hand the next province relies on accumulated interests, surpluses or realized profits enabling it to carry out more work to cope with recurrent recessions.
Here are two kinds of administrations: one in complete stagnation, and we have seen proof of that, and the other is prosperous today.
This series of budgetary deficits results in interest arrears accumulating from year to

year over and above the previous deficits. Look where we are today. I might mention the example quoted by the member for Ville-neuve (Mr. Caouette). Wooden sidewalks were built 50 years ago in Rouyn; they were replaced by concrete ones since, but the people are still paying the interest on the wooden ones which have disappeared long ago. Such is the present system.
In fact, statistics show that we are still paying interest on the money borrowed by the Canadian government in 1812 to pay for the red coats of the soldiers who defended Canada against the American invasion. After 150 years we are still paying interest. Such are the results of perennial deficits.
This afternoon the hon. member for Bur-naby-Coquitlam talked about granting interest-free loans to municipalities to assist them in public works. It seemed to us that the hon. member was talking about Social Credit. That is all right but when it comes to planning we realize that he does not offer any solution to the social security program.
Social Crediters were the first to promote family allowances and old age pensions. If the Conservative government really want to do something for the country, if they want to develop the country, they must first think of the consumers. Family allowances must be increased, not by $1 as was done by the stingy Liberals before the 1957 election, but by doubling them to $12. That would help the consumers and in turn increase production.
Mr. Speaker, this afternoon we heard the hon. member for Burnaby-Coquitlam conclude his remarks by saying that if the government implemented that program, by the same token, the purchasing power would be increased. Now, I challenge the hon. member for Burnaby-Coquitlam and his entire group of socialists to prove that it is merely by redistributing money from one to the other, by taking it away from one to give it to the other, that the purchasing power will be increased. Such a theory is altogether false, because that is not the way to increase the purchasing power.
As I said earlier, it might be possible to adjust Mr. Fisher's stomach to that of Mr. Douglas, or Mr. Douglas' stomach to that of Mr. Fisher, but the amount of food on the two plates will remain the same. The social security program as proposed by the New Democratic party constitutes a redistribution without any increase in purchasing power.
Tariff Surcharges and Tight Money And what is important today is not so much to redistribute purchasing power as to increase it.
Let us rejoice over the fact that some people have plenty, but let us ensure that those who have nothing can have their share of the wealth of the country, for we are convinced that Canada is a country rich enough so that every Canadian citizen can live decently in his country without it being necessary for us to take something away from one person to give it to another.
Mr. Speaker, it should be remembered that when big industry is too heavily taxed, and especially when it is taxed as 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. 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.
Mr. Speaker, this afternoon the Social Credit party proposed an amendment to the Liberal amendment. We agree with the hon. member for Burnaby-Coquitlam that the Liberal party's proposal was a purely negative one. Indeed, I suggest that to put forward such an amendment at this time of year is an act of political expediency. But then, the Liberals are past masters in that art, as they have shown once again this afternoon. There is nothing definite in their arguments, nothing constructive in their amendment.
We Social Crediters have made it a point to put forth a precise amendment and not merely to state that we wished to put an end to this period of austerity.
How can we get to a period of prosperity? There is only one way and it is to organize a system whereby money would be issued debt-free, money which would not have to be reimbursed with interest, because it is impossible to put $1 into circulation, to create $1, and to ask that same $1 to come back inflated, so to speak, by interest. That is mathematically and physically impossible.
Mr. Speaker, we have to set up a debt-free monetary system. I know that this proposal is not perhaps to the taste of the hon. member for Laurier, because in a debt-money system, there comes a point where the various governments are paying $1.5 billion in interest on the debt. But, in a debt-free system, the money put into circulation would not have to be reimbursed to banks, and the government would not have to pay interest on that money.
The total accumulated debt, at present, is more or less equivalent to the dividends

Tariff Surcharges and Tight Money Canadian citizens should have received. And all the money borrowed in the past, directly created by the chartered banks, and when I say created, I mean out of nothing-and that has been proved here in the house for some time-the chartered banks have managed to accumulate it.
In years gone by, it was said that the king was sovereign and master, that he had the privilege of coining the money in his kingdom. But came a day when kings waived that privilege to bankers and usurers who captured that control system. Nowadays, who runs the country, who is the master? The bankers or the government? The bankers of course because during emergencies we saw bankers in a position to bring down a tight money situation, to plunge governments into crisis, into all kinds of problems such as those Canada is facing today: unemployment, credit limitations, etc. On the other hand, what can the government do except grovel before the chartered banks?
I maintain that in this house, we see parties only seemingly in power because of the fact that they do not control the money in the country since that control is held by allpowerful bankers and chartered banks.
Mr. Speaker, that may seem harsh, but let us consider the facts. Money comes from somewhere. Who is making money so tight, if not the chartered banks? Let us get rid of all that.
A subamendment has been proposed this afternoon, which can help the government to emerge from the present austerity period and to enter a period of true prosperity without going into the hole or having a budget which would be a burden as proposed by the member for Burnaby-Coquitlam and the Liberals, but which would result in a debt-free budget and allow the government to create and control money in our country.
That is the meaning of our amendment. That is the amendment we proposed to the Liberal amendment with regard to the budget speech this year.
We must set up in our country a system whereby the government will regain control over money and credit, not to the advantage of the chartered banks or a few individuals, but to the advantage of the population as a whole.
Mr. Speaker, let us think of that and we will see afterwards what could be accomplished


with such a program. We would not give $88 million to agriculture, but we would help all the Canadian farmers in general; we would not give only $523 million in family allowances, but we could double that amount.
It might take courage to break every tie with the past. However, I ask the Liberal party to reconsider the meaning of that amendment which could give the country a better system, without which the Liberal party itself could not do any better than the Conservatives.
The hon. member for Laurier has to be thrown out; we have to do away with the chartered banks and replace the present system. Liberals, if you have some cannonballs within your party, the time has come to do away with them, and send them away to sit elsewhere. Please consider the interests of 18 millions of Canadians instead of those of a few bankers who can walk right through your ranks and who will prevent you from ever getting the confidence of the Canadian people. Get rid of that dead wood.
Having spoken with a few of you and with members of other parties, I have come to the conclusion that many of you are sincere and would like nothing better than to improve the state of things in our country. Unfortunately, they are not too sure of what is wrong and they keep on wondering what could be the trouble.
You, Conservatives, Liberals and members of the New Democratic party cannot think straight because your minds are set astray by the so-called financial experts within your ranks who are trying to control your thoughts and to keep you under the present financial system.
Get rid of them. Try to understand that it is the people who must rim the country through their government and not a handful of financiers who want to control Canada's economic and monetary system. Only then, will you be able to see what you can do in such a rich and vast country as Canada.
It will be said that the economists do not share this view. But the economists-and I just happen to see one up there in the gallery; it is the best friend of the hon. member for Laurier, Mr. Lamontagne-and these dear friends, the economists-
(Text):


An hon. Member:: He cleared the gallery.

(Translation):


Gilles Grégoire: He has disappeared; he has vanished for a few minutes.
(Text):


Mr. Deputy Speaker:: Order. I would remind the hon. member of two things. Earlier in his address he referred to other members of the house by name. That is prohibited by the rules of the house. He should also know that there is no gallery at all, so any reference to it is to a blank which does not exist.
(Translation):


Gilles Grégoire: Mr. Speaker, from now on, I shall ask you for the names of the members-


Some hon. Members:: No, no.


Gilles Grégoire: I mean the names of the ridings of the hon. members, since we are not allowed to mention them by their own names. However, this was only an example that, to my mind, dealt with the socialists and their planning, and I could not help but name those two individuals. Besides, it was only a comparison.
Reference is often made to the economists, Mr. Speaker. But where have the economists learned their trade? We have some physicians with us in this house who will tell you that after having studied medicine for four or five years, they are sent as resident medical students to a hospital where they learn their trade from practical experience.
After making theoretical studies, a lawyer- and there are many in the house-has to article in a lawyer's office or learn procedure at the court house.
The same thing goes for forestry engineers whom one meets near the forestry engineering building in Quebec city. Every year, in May, you can see them surveying for the nth time the Entente boulevard. Why? To put their theoretical knowledge into practice.
But what have economists learned from practice? They are still studying books dating from 1892 or 1895. They are not aware of what is going on today in our country, on our farms and in our small businesses.


An hon. Member:: Are you speaking in general?


Gilles Grégoire: They are still saying generalities. Let them see what is wrong, in practice, in the country, among the people.
Is it production? Not at all. Some claim that production must be planned. But production is here, and a lot of it. Just call on car dealers and you will see how many cars there are for sale.


An hon. Member:: Yes indeed.
Tariff Surcharges and Tight Money


Gilles Grégoire: Unfortunately, the consumer has no money to buy them.
Call on producers, and you will find that they have products.
But the consumers cannot afford them, they do not have the money to buy the production.
That is the problem, Mr. Speaker. As long as we refuse to tackle this problem-the problem of the consumers who buy the production of their country-as long as we refuse to tackle this particular problem, no workable solution will ever be found. All the solutions that will be brought forward will never help to settle the problem as it should be.
But, Mr. Speaker, let a real investigation be made once and let us regain control over our money and our credit, let us set up a real "debt free money system." When this is done, when we have regained control now in the hands of the chartered banks, we shall-
(Text):


An hon. Member:: We agree.
(Translation):


Gilles Grégoire: You agree? All right. If it is so, tell it to your leaders so that they may let you free to express your ideas, let them cease to urge you to share their ideas. Therefore, if you agree, tell them what you think and see to it that means are taken to change the money system that we have now.
Then, when we can control money and credit, we shall be able to put at the consumers' disposal those things that producers can make, and, Mr. Speaker, we shall not have the debt we have now.
A debt-free money system.
That is the first key. And there, the hon. member for Burnaby-Coquitlam will not state, with all the candour he can master, that he is in favour of budgetary deficits, even if they mean paying $1,550 million a year in interest.
Do you know, Mr. Speaker, that the interest paid to the eight chartered banks practically represents all the money taken from our pockets in the form of income tax?
Do you know, Mr. Speaker-


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


Gilles Grégoire: Any question, yes.


An hon. Member:: Shoot.


Gilles Grégoire: Ask your question.

Tariff Surcharges and Tight Money


Charles Mills (Bud) Drury: Did you ever buy Canada savings bonds?


Gilles Grégoire: Yes, I bought some once.


Charles Mills (Bud) Drury: Well, what have you got to say about that?


Gilles Grégoire: Yes, that is true, Mr. Speaker. We shall be told that people have bought Canada savings bonds. But I think that the hon. member is not quite aware of what really happens. He should come and see what the worker at the Aluminum Company in Arvida, or at Price Brothers in Kenogami does with those bonds.
At the beginning of the year, he purchases a savings bond of $200 or $500, but when he has finished paying it, if he wants to buy a car or to repair the roof on his house or purchase new furniture, he will cash his bond in a chartered bank, and this is how those banks become holders of all Canada savings bonds. But the workers who buy those bonds have to sell them after a year. This is a fact, Mr. Speaker. Indeed, I purchased a small $100 bond myself and paid it off in a hurry so that I could go to a chartered bank because I was broke.
The worker purchases a savings bond and pays it through pay deductions at the rate of $5 a week. After a year, he cashes his bond to purchase a car, not to pay it entirely, but to make a mere down payment. This is how the Canada savings bonds are used, Mr. Speaker.
Finance companies also hold a great number of victory bonds. Just go and see and you will realize that this is the truth.
That is what 99.9 per cent of the Canadian people are doing. Maybe some members of this house have money enough to keep their bonds, but that is not the case for the majority of the people.
Mr. Speaker, let us set up a debt-free system as outlined in our motion, and on that day, once we have become the masters, we shall control the money in our country. The only way for us to become masters in our country is by controlling the money and the credit in our country.
We shall then see to it that the resources and the abundant and varied production of our country are used to serve our own people. The government can then see to it that enough money is put into circulation to allow the consumer to buy the production instead of remaining an idle victim of production surplusses, as is the case at the present time.


That is the first thing to do, to become the masters of our economy and of our monetary system-a debt-free monetary system.
(Text):


Mr. W. H. McMillan (Welland):: Tariff Surcharges and Tight Money or more than his predecessor did when he sold those bonds to return an average rate of 4.67 per cent.
Then this minister says: Give me another year; give me a chance. Does he wish to raise the rate on these bonds next year up to close to 6 per cent, or another one half of one per cent? There is no doubt that the minister will come out with an optimistic statement. Indeed, I think he has already done so by saying that these bonds would sell well. I think they would sell very well indeed. Why should they not sell well with such a high interest rate? I say it is just another case of mortgaging our future earnings, the wages of the working people, in favour of those people who have money.
I know that a number of people with a small amount of money buy these bonds and it is fine for them. However, many of them do not hold them for very long. I think I heard a previous speaker say-I do not think the case is quite as high-that 99 per cent of them did not hold them over a year or two. I do not know what his percentage was. Certainly the people with more money are holding them a longer time, and the people with no money are trying to pay taxes. That is a point in connection with these bonds.


George Clyde Nowlan: What do they pay taxes on if they have no money?


Robert Jardine McCleave: Would the hon. member have debt free money?


William Hector McMillan: 
Paul Joseph James Martin: We have got a taller Minister of Finance.


William Hector McMillan: All this trouble is not recent. I remember something that happened a year ago which I thought was very prophetic. On the very day a year ago when the government was celebrating the fourth anniversary of its accession to power our dollar was falling in the markets of the world and there were no bids on the dollar. On that very day Canadian banks in London, Paris and New York refused to bid on the Canadian dollar. The government has put a great deal of money into the public side of the economy, and this has meant that much less for the private side of the economy which might have invested the money to put people to work.
If hon. members will look over the budget papers of recent years, they will see a chart there. This chart shows a differential during the years before 1957, when this government came to power, of about one half of one per cent between Canadian securities and equivalent United States securities. When this government came into power we had the



BUSINESS OF THE HOUSE

Lionel Chevrier: May I ask the house leader what we will do after we dispose of this motion to go into supply, on Wednesday and Thursday?


Gordon Minto Churchill: Tomorrow, Mr. Speaker, we will continue with this debate. On Wednesday, I think it would be useful to complete Bill No. C-71, an act to amend the Farm Credit Act which is already in committee of the whole. Tomorrow night, I may add another item to that, but Wednesday is a short day and perhaps we might not do more than just the one bill.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, November 6, 1962