OFFICIAL REPORT


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EDMOND CLOUTIER, C.M.G., B.A.. L.Ph., PRINTER TO THE KING'S MOST EXCELLENT MAJESTY CONTROLLER OF STATIONERY 1948
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House of Commons debates
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Tuesday, May 13, 1947


Hon. DOUGLAS ABBOTT (Minister of Finance):: Mr. Speaker, I rise to a question of privilege. My attention has just been called to the issue of the Brantford Daily Expositor, of Wednesday, April 30, 1947, which contains a statement as to the budget proposals, and on the front page is a reproduction of the photograph of a very handsome gentleman with a black moustache. Printed beneath the picture there appear the words "The Hon. Douglas Abbott, Dominion Finance Minister". Unfortunately the photograph is that of the Hon. Maurice Duplessis, premier of Quebec, and in view of the wide circulation which I know this publication enjoys in western Ontario, I felt, in justice both to Mr. Duplessis and to myself, that I should make this explanation.



CIVIL SERVICE


Mr. D. G. ROSS (St. Paul's):: Mr. Speaker, may I take this opportunity, on a question of privilege, to make a correction at page 2990 of Hansard. On line twenty-one, in the second column, I inadvertently said "seven people". It should be seventy people.



DELIVERIES BETWEEN MAY 15 AND JUNE 30- SPECIAL INCOME TAX ARRANGEMENT

Hon. J. A. MacKINNON (Minister of Trade and Commerce):: Mr. Speaker, a year ago the dominion government announced a special income tax arrangement available in respect to wheat marketed between April 1, 1946, and June 30, 1946. This arrangement was made because wheat was urgently needed *or overseas shipment. Under this plan a 83166-193
considerable quantity of wheat was made available by producers a year ago and this wheat was promptly moved forward to needy countries. The plan provided an arrangement whereby producers could deliver their wheat during a limited period with the actual cash settlement taken at the producers' option in
1946,	1947 or 1948. Producers taking advantage o fthis plan received what was known as an emergency wheat receipt. The plan was entirely optional and producers delivering wheat during the period of time set forth could take advantage of the special arrangement or deliver their wheat in the usual manner.
The need for wheat overseas is just as urgent this year. With a greatly improved transportation position, wheat delivered now can be moved overseas in a very short period of time. The government and the Canadian wheat board have received many requests for a similar plan for a limited period in 1947.
The government has decided to make substantially the same plan available in connection with wheat delivered by producers in western Canada between May 15 and June 30. Under the plan which the government is proposing for this year, producers will be able to take cash settlement at their option in
1947,	1948 or 1949.
The dominion government feels that an arrangement of this kind is worth while if it will make more wheat available for overseas shipment during the balance of the present crop year. Full details of the plan will be announced at an early date by the Canadian wheat board.



REDISTRIBUTION


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Mr. JEAN-FRANCOIS POULIOT (Temis-couata): With the consent of the house I move, seconded by the hon. member for Quebec-Montmorency (Mr. LaCroix):
That the petition of 144 electors of the parish of Squatteck who are opposed to the separation of the said parish from the federal electoral district of Temiseouata, together with a letter on
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Inquiries oj the Ministry
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the same subject from J. A. Laforest, mayor of Squatteek, Temiscouata county, be referred to the standing committee on standing orders.
I would read the accompanying letter from His Worship the Mayor, but it is such a fine one that I should be embarrassed if I did so.
Motion agreed to.


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Hon. II. F. G. BRIDGES (Minister of Fisheries) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a measure to amend the Fisheries Research Board Act to provide for the election of a vice-chairman, the appointment of an executive director who shall be the secretary of the board, and for the employment of such scientific, technical and other officers and employees as may be necessary for the proper performance of the boards work; and for the emoluments, salary or remuneration, as the case may be, of such officers and employees, also for the application to them of the Civil Service Superannuation Act as well as of the benefits enjoyed by civil servants.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.

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On the orders of the day:
Mr. JOHN BRACKEN (Leader of the Opposition):: I wish to direct a question to the Minister of Finance. It has to do with the subject of dominion-provincial relations. In view of the press reports with regard to Nova Scotia's attitude to the dominion's proposal with respect to dominion-provincial relations, will the minister say whether there has been any recent offer or any implied change in the offer made to the Nova Scotia government which has not been made to the other provinces? Will the minister table the recent correspondence with the province of Nova Scotia, more particularly a reported letter from the minister dated April 21?


Douglas Charles Abbott: The answer to the first part of my hon. friend's question is, no. As to the second part, I think it is the intention of the Prime Minister (Mr. Mackenzie King) to table the
iftir Fouliot.]
correspondence between the dominion and the provincial premiers since the last correspondence was tabled.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: With the permission of the house, I should like to table the correspondence in English since January 30, 1947, on matters of substance regarding tax agreements with the provinces.


John Bracken: Will the government give consideration to the printing of this correspondence separately, or to having it appear in Hansard? I think the other correspondence was printed.


William Lyon Mackenzie King: I think the other correspondence was printed in the Votes and Proceedings. If that is correct, I would ask that this correspondence be printed in the Votes and Proceedings of today.



AVAILABILITY TO VETERANS FOR CONSTRUCTION OF HOUSES

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On the orders of the day:
Mr. G. K. FRASER (Peterborough West):: I should like to direct a question to the Minister of Reconstruction. On Friday he told the house that he would make a statement about the fifty per cent priority to veterans building their own houses. He said on Friday that priority was eliminated. Can he make a statement now?


Right Hon. C. D. HOWE (Minister of Reconstruction and Supply):: I asked that a proper statement be prepared, but I am sorry to say that it has not yet been delivered to me. I will promise to make a statement not later than tomorrow.


Gordon Knapman Fraser: The reason I asked the question today is that the building supply men had no word of this until Saturday.


Some hon. MEMBERS:: Order.



VETERANS AFFAIRS


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On the orders of the day:
Mr. RALPH MAYBANK (Winnipeg South Centre):: I desire to ask a question of the Minister of Veterans Affairs or his parliamentary assistant. Is he aware of the signal honour which has been paid by another government to a distinguished Canadian veteran? I am referring to Mr. F. J. A. Orchard of Winnipeg, former president of the International War Veterans Alliance.


Mr. W. A. TUCKER (Parliamentary Assistant to the Minister of Veterans Affairs):: I am glad that the hon. member brought this

Inquiries of the Ministry
to my attention. I had intended referring to it in the house. The United States government has awarded the Medal of Freedom to Mr. Orchard for exceptionally meritorious service. As this is a most unusual distinction, I should like to inform hon. members of the reason for this recognition of a Canadian citizen. The International War Veterans Alliance, of which Mr. Orchard was president, is composed of members of the American Legion, the Canadian Legion, the Army, Navy and Air Force Veterans and the War Amputations of Canada. It was founded with the purpose of promoting international good will and understanding among ex-service men and women on both sides of the international boundary. As a gesture of friendship, the Canadian members of this organization during the war set up in Winnipeg an information centre for members of the United States forces passing through Winnipeg. During the three years this booth was in operation, under Mr. Orchard's direction, service was rendered to 55,000 United States troops. I am told that Mr. Orchard personally was responsible for a great deal of the success of the work which was done. It is felt that the recognition he has been given is well merited.



PUBLIC HOLIDAYS


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On the orders of the day :
Douglas Gooderham Ross: I wish to direct a question to the Prime Minister. I notice in the Ottawa Journal this morning reference to a suggestion in the Kingston Whig-Standard that our fixed annual and national holidays be observed on Mondays to give the general public the benefit of a few long week-ends, especially in summer. Victoria day falls this year on Saturday, which is a half holiday for most people. Dominion day comes on a Tuesday. Will the government consider having these holidays observed on Monday instead of Saturday?


William Lyon Mackenzie King: I am only one member of the government, but I shall be pleased to have my colleagues join with me in considering this matter.



INQUIRY REGARDING FLOOR PRICE

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On the orders of the day:
Mr. R. E. DROPE (Northumberland, Ont.):: 
Gordon Knapman Fraser: Come on, answer. That is the first time the minister has been stumped.


An hon. MEMBER:: That is the $64 question.


Robert Earle Drope: May I ask if I will get an answer to my question?


Mr. SPEAKER:: I am sorry to interrupt the hon. gentleman, but I do not see any urgency in the question.



UNEMPLOYMENT INSURANCE


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On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake. Centre):: I should like to direct a question to the Minister of Labour, arising out of a telegram I have just received from the Saskatoon city council with reference to the intended removal of the compensation claims branch of the unemployment insurance office from Saskatoon to Winnipeg, Manitoba, on the ground that the number concerned in Saskatchewan are so small. Will the minister state whetheT or not reconsideration will be given the decision to remove this office, by reason of the numbers who will be affected and who are subject to unemployment insurance in Saskatchewan?


Hon. HUMPHREY MITCHELL (Minister of Labour):: In the first place, Mr. Speaker, since many hon. friends in the opposition have discussed at length the size of the civil service and why the government has not moved with greater expedition in that regard, I want to thank the hon. member for Lake Centre (Mr. Diefenbaker) for raising this question. This office comes under the jurisdiction of the unemployment insurance commission. Since the war ended we have set in motion a policy to reduce the numerical strength of what was then known as selective service. The unemployment insurance commission decided that on the ground of efficiency, or they so inform me, this function of their work should be centralized in the city of Winnipeg. I a.m afraid that decision will have to stand; and might I say that to some extent this question does show the inconsistency of the opposition in these matters.


John George Diefenbaker: Mr. Speaker-


Some hon. MEMBERS:: Order.


John George Diefenbaker: I asked a question; I made no suggestions-


Some hon. MEMBERS:: Order.


James Horace King: Order. In spite of the
rules I permitted the hon. member to put
Inquiries of the Ministry

quite a lengthy question and the minister to make quite a lengthy answer. I think that should be satisfactory to both parties. Orders of the day.


John George Diefenbaker: Mr. Speaker-


An hon. MEMBER:: Ah-h-h.


John George Diefenbaker: That interruption
was the most intelligent statement the hon. gentleman has ever made. I rise on a question of privilege.


Some hon. MEMBERS:: Order.


John George Diefenbaker: I am not a bit
disturbed. I have the same rights as any minister.


Some hon. MEMBERS:: Order.


John George Diefenbaker: I asked the minister a question and in reply he made a political speech. I have a right to point out that there was no justification-


Some hon. MEMBERS:: Order.


James Horace King: Order. I would ask the
hon. gentleman to be kind enough to abide by the rules. He has put his question and he should be satisfied with the answer.


John George Diefenbaker: Mr. Speaker-


Some hon. MEMBERS:: Order.


John George Diefenbaker: Again on a question of privilege, sir, the rule you applied should be applied equally to the government benches in this house.


Some hon. MEMBERS:: Order.


James Horace King: Order. I would ask the
hon. member to be kind enough to retract what he has just said.


John George Diefenbaker: I have nothing
to withdraw, Mr. Speaker.


Some hon. MEMBERS:: Reflection on the Chair.


James Horace King: Order. I would ask hon. members to be kind enough to cooperate with the Speaker, one of whose principal duties is to protect freedom of speech in this house. I would ask hon. members to allow the hon. member for Lake Centre to give the explanation he wishes to give; but before the hon. member rises I would ask him again to be kind enough to withdraw what he just said about the Speaker.


John George Diefenbaker: Mr. Speaker, I
made no suggestion about you. My hon. friends over there


Some hon. MEMBERS:: Order.


John George Diefenbaker: I am explaining.
My hon. friends over there have a way of

trying to prevent us over here from saying anything, by trying to howl us down. What I said, sir, was that we have the same rights on this side of the house as have any members on the government side. There was no suggestion about Your Honour.


Some hon. MEMBERS:: Withdraw.


Mr. MUTCH:: On a question of privilege, Mr. Speaker, the hon. gentleman who just resumed his seat made a statement which is not in accordance with the facts and impugned every hon. member of this house.


Some hon. MEMBERS:: Order.


Leslie Alexander Mutch: Just a minute, now. That is what he did when he said that we on this side of the house have attempted to howl down any member of the opposition. Some of us may have tried to insist that the same rule which applies to the rest of the house shall apply to the distinguished member and others in the opposition.


Mr. HOMUTH:: Are you talking for a ministerial seat?


Leslie Alexander Mutch: Over here there is a chance; over there, none.


James Horace King: Order. I consider the incident closed; but I want it to be thoroughly understood that the hon. member for Lake Centre has said that he did not impute any improper motives to the Speaker.

Hon. DOUGLAS ABBOTT (Minister of Finance) moved that the house go into committee of supply.
Motion agreed to and the house went into committee of supply, Mr. Macdonald (Brantford City) in the chair.



INTERIM SUPPLY BILL

Douglas Charles Abbott: That a sum not exceeding $95,069,200.11, being one-twelfth of each of the several items to be voted as set forth in the estimates for the fiscal year ending March 31, 1948, laid before the House of Commons at the present session of parliament, plus an additional sum not exceeding $5,853,666.66, being eight-twelfths of the amount of item 485 and nine-twelfths of item 610 of the said estimates, a total of $101,822,866.77, be granted to His Majesty, on account, for the fiscal year ending 31st March, 1948.
He said: The cdmmittee will recall that the house has already granted interim supply covering one-sixth of all the items in the main and supplementary estimates for the current fiscal year, and an additional one-twelfth of certain other services of a seasonal

Interim Supply
or sessional nature, as detailed in the schedule attached to the act. That supply will ordinarily run out about the end of this month, but I understand that there is to be royal assent tomorrow and that the other place proposes to adjourn for two weeks. Therefore I spoke to the leader of the opposition (Mr. Bracken) and the leaders of the other groups opposite and suggested they might be willing to pass additional interim supply today, an additional one-twelfth for most of the items, but in addition the full amount of two special items in the agriculture estimates. The first is item 485, amounting to $2,030,500, which covers subsidies on milk for butter, cheese and concentration purposes. Payment of that subsidy is continuing now, but the subsidy terminated the end of April, and those payments should be made within the next few days. In addition there is $6 million, included in the special supplementary estimates, to cover the subsidy on feed grain.
The passing of the bill will not prejudice the rights and privileges of hon. members to criticize and discuss any item in the estimates, including these two special items, which will come up for discussion from time to time throughout the session; and the usual undertaking is given that those rights and privileges will not be restricted in any way as a result of the passing of this measure.


John Bracken: The official opposition does not oppose the measure brought forward by the Minister of Finance. We are pleased to have his assurance that any of the items dealt with by this measure will be subject to discussion later, if it is the desire of any hon. member to do so.


Douglas Charles Abbott: I give that assurance, Mr. Chairman.


Mr. COLDWELL:: I was wondering about the two items in agriculture; I presume there will be a place in the estimates where these matters may be discussed.


Douglas Charles Abbott: Yes.


Major James William Coldwell: In any event, probably the minister would allow us to discuss these items on his item for administration.


Mr. GARDINER:: I have discussed this matter with the Minister of Finance and I have given the undertaking to permit such discussion. If it is desired to have an item named now, I shall name the marketing item, No. 23.


Mr. CHURCH:: Mr. Chairman, by adopting the policy embodied in this resolution we are embarking upon a dangerous practice. The
sum of S101 million is a lot of money; it is the money of the taxpayers. Here we are voting large sums of money for main and supplementary estimates down to March 31, 1947, and we did the same thing before Easter and sanctioned it all for a song. The total now is $101 million. I thought the government proposed a new policy last session, and I should think it would not have been introduced now, two years after the war. We are at the sixty-seventh day of the session; we have not discussed the estimates at all, and yet eight-twelfths of the money has been spent. This goes on from month to month.
At the end of last March we rushed through a supplementary before Easter, but we cannot strike a dollar off, and there is no use in holding a post mortem when the money is voted and spent. The people are complaining that huge sums are being spent like water. Surely parliament should regain some control over these expenditures. The sum mentioned here is nearly four times what was spent in 1896, for the whole year, to run the country. But today we pass a vote for over $101 million- unforeseen overdrafts-and we do it in the twinkling of an eye. Is that the way parliament is going to do its business?
Do not forget that this procedure of permitting expenditure of money by the executive, without the consent of the high court of parliament, is that same principle of taxation without representation, the principle for which the people in the American colonies were fighting when they tossed the tea into Boston harbour and afterwards left the mother country. Well, if that is responsible government under the Liberal party, a party which is going to hold a convention where they will talk for hours about responsible government, then we might as well say there is no responsible government left in this country.
Resolution reported, read the second time and concurred in.



WAYS AND MEANS


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Hon. DOUGLAS ABBOTT (Minister of Finance) moved that the house go into committee of ways and means.
Motion agreed to and the house went into committee, Mr. Macdonald (Brantford City) in the chair.
Douglas Charles Abbott: Resolved, that towards making good the supply granted to His Majesty on account of certain expenses of the public service for the fiscal year
The Budget-Mr. MacNicol

ending March 31, 1948, the sum of $101,822,866.77 be granted out of the consolidated revenue fund of Canada.


[Stage Direction]
Motion agreed to.
Resolution reported, read the second time and concurred in. Mr. Abbott thereupon moved for leave to introduce Bill No. 204, for granting to His Majesty certain sums of money for the public service for the financial year ending March 31, 1948.
Motion agreed to, bill read the first and second times and the house went into committee thereon, Mr. Macdonald (Brantford City) in the chair.
Sections 1 and 2 agreed to.
On section 3-$5,853,666.66 granted for 1947-48.
Mr. FLEMING:: Are copies of the bill available?


The CHAIRMAN:: This is an interim supply bill; I do not think it is customary to have copies.


Douglas Charles Abbott: The bill is the same as bills passed in other years. Usually bills are not printed for distribution until after first reading. Since by unanimous consent this bill is being put through all stages this afternoon, it is not available for distribution. However, for those who are interested, it will be available later this afternoon.


Mr. CASE:: I suggest that the chairman should read the sections. We are just sitting here like a bunch of dumb-bells.


Douglas Charles Abbott: That is right; no misrepresentation.


William Ross Macdonald: Perhaps it would be sufficient if I were to read the short title. It states:
This act may be cited as the Appropriation Act, No. 3, 1947.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
The house resumed from Monday, May 12, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Mac-donnell (Muskoka-Ontario), and the amendment to the amendment of Mr. Coldwell.
Mr. J. R. MacNICOL (Davenport):: Mr. Speaker, on several previous occasions when speaking to the budget resolutions I have made reference to the western provinces; on this occasion I am going to devote my remarks to that forgotten part of Canada, the maritime provinces. I listened with interest to the speeches already made by various maritime members, and like most other hon. members outside the maritimes I have been amazed to hear of the continued recession in that part of Canada and the mounting unemployment. On this occasion I am going to try to present some recommendations which if carried out I believe will reverse the downward trend of the maritimes economy and the increasing maritimes unemployment.
I make no apology for speaking about the maritime provinces. I was in business a long time and I have a clear recollection that during that time we shipped many trainloads of material made in Toronto to the maritime provinces. Last evening I figured the approximate number of carloads shipped from the plant with which I was so long connected to the maritime provinces. If I average that number at only 40 cars per year it means that in the 65 years of that plant's existence -I was with the company for 20 years-more than 2.000 carloads of boilers and radiators and heating equipment were shipped to the maritime provinces.
I feel I have an interest in anything that will improve conditions in the maritime provinces because that means more employment for the workers in my riding and for the workers in other ridings in central Canada. I never can bring myself to that position where I talk only about my own riding. My riding depends upon the extent to which Canada expands, and an improvement in the maritime provinces benefits not only my own riding but the other ridings in central Canada.
The recommendations which I am going to offer were compiled by myself during half a dozen exhaustive survey trips through the maritime provinces in as many years. The last trip was made in September of last year when from the time I left home to the time I arrived back I drove my car 2,964 miles. Over half of that mileage was spent in the Squatteck area mentioned previously by the hon. member for Temiseouata (Mr. Pouliot) when he was presenting a petition, and in connection with watershed problems in that area and throughout the maritime provinces.

The Budget-Mr. MacNicol
Oftentimes I had to drive into remote and unsettled areas. I wanted to see the maritime resources and how close the different localities were to transportation. I wanted to gain some idea of the potential electrical development. Speaking for the moment about transportation-I shall have more to say about this later on- I found that there were many vicious bottlenecks through which trade within the provinces themselves had to pass.
I found also that there were other vicious bottlenecks through which trade between the maritime provinces and the New England states had to pass, and through which trade from the maritime provinces and central Canada had to pass.
I had with me the reports of the reconstruction and rehabilitation committee so that I could select the parts of the provinces from Which I could learn the most about resources and other matters I wanted to look into. The recommendations of that committee can be boiled down to three headings. The first is the extension of electrical production and rural electrification throughout the maritime provinces; second, the elimination of trade bottlenecks in the maritime provinces, to which I referred briefly a moment ago and, third, the expansion of maritime primary and secondary industries to process the four indigenous products of the provinces, that is, minerals, agriculture, lumbering and fishing.
I am going to deal first with electrical production, a matter in which I have always been much interested. I start with that because one of the ministers from the maritime provinces, in reply to a question-I am not sure that it was not asked by myself-as to whether or not electrical energy would be available if someone applied to the province of New Brunswick for a large block of power stated that New Brunswick was not very well equipped to supply large blocks of electrical energy but that if the water resources behind Grand Falls were conserved they would be able to supply a great deal more power.
I determined to ascertain if it were possible to increase the production of electricity at Grand Falls in New Brunswick. There are two principal factors associated with the production of electricity. The first is the head of water and the reservoir at the head of the penstocks. In this respect Grand Falls is not too badly off for the depth of water in the penstocks is about 125 feet and it is capable of being increased to 130 feet at high water. That is a fairly substantial head of water from which to produce electricity.
The next factor is the firm flow of water, and this is not so great at Grand Falls. At the present time under the best conditions there is a flow of about 2.400 cubic feet per second. They obtain this flow from a dam at the head of the falls behind which there is sufficient reservoir capacity to hold about 500 million cubic feet of water. Then they raised a dam at the outlet of lake Temiscouata, from which flows the Madawaska river and into which flows the Touladi river, and there they conserve another 4,500 million cubic feet. This gives them a total reservoir capacity of about
5.000	million cubic feet of water and from this they are able to obtain a firm flow of 2,400 cubic feet per second. From this flow they are able to produce at Grand Falls a total of
40.000	horse-power. This is not many horsepower when compared with Ontario hydro or Quebec hydro production, but it can be increased. Any increase in production will be of advantage to the province of New Brunswick and to the whole of the maritimes economy.
When I arrived at lake Temiscouata, I believe it was at the village of Cabano, I turned my car up into the highlands of the watershed of the Touladi river in the county of Temiscouata and continued for quite a long distance. I made a survey of the Squatteck lakes, having with me, of course, the reports of the engineers, and all I had to do was to ascertain where the reservoir sites were and go and see them, because I like to go and see these things for myself; I am not good at simply reading and repeating what somebody else has said. I saw these sites where another 20 billion cubic feet of water could be conserved. They also stated-and I examined the site to see if it could be done- that if the dam at the outlet of Temiscouata lake were raised two feet, another billion and a half of cubic feet of water could be conserved. If all the water in the watershed of the Madawaska river, which is the principal Canadian tributary of the Saint John river in Canada and supplies most of the water to the Saint John, was conserved, it would mean approximately 26 billion and a half cubic feet of water altogether above Grand Falls. That would mean that at Grand Falls they could have a firm flow of forty-two hundred cubic feet per second, which would produce another
25.000	horse-power. That would be a total of 65,000 horse-tpower, which would be a mighty smart block of horse-power in the centre of New Brunswick either for rural electrification or to promote primary or secondary industries.
To purchase these reservoir sites would require joint action by the provinces of
The Budget-Mr. MacNicol

Quebec and New Brunswick and the dominion government, to supply the necessary money to buy the sites, which belong to pioneers, and these pioneers should receive fair compensation for giving up their land. Maritime economy can be greatly enhanced by the production of 65,000 horse-power at Grand Palls, instead of the present 40,000 horse-power.
About one-half of the flow of the river comes in from the state of Maine, so I drove to the remotest parts of the state of Maine- where I believe no wheels had been in years, for I could find no tracks and I could go no farther-to see the reservoir sites in Maine. But after an exhaustive survey which I made in that state I realized that we might just as well not waste time trying to get any more water from the state of Maine. I did find something that amazed me. Although the Allagash river, the principal tributary of the Saint John in the state of Maine, arises in Chamberlain lake in the international watershed and therefore should be under the control of the international joint commission and is controlled by the Ashburton treaty of 1842, I found the outlet of lake Chamberlain dammed so that no water can go through it, and the canal at the other end of the lake takes the water into Penobscot river. It is not much use worrying our heads trying to recover that water because on the Penobscot river are many big factories which would fight against any stoppage of the water. That water is now diverted out of the international watershed. I am not going to waste time on that. I return to where I left off a moment ago. If we wish to improve power production at Grand Falls it can be done. It will necessitate buying land from the pioneers and others to conserve the water in the Squatteck area, because we cannot produce power without water and without firm water. To produce
65.000	horse-power at Grand Falls-and it can be done-would require the conservation of all the run-off water in the Madawaska watershed., which flows into the Saint John at Edmundston.
From observation I would say that from
5.000	to 10.000 horse-power can be produced if reservoirs were properly built and controlled on the Tobique river, just.before it enters the Saint John river. It has high banks, and a substantial flow, and it is an excellent place to build a dam which would have a substantial reservoir behind it. Why that water has been allowed to run as long as it has without being dammed is more than I can understand. If that water were conserved-and it can be conserved- 10.000 more or less horse-power could be produced there. It would mean a very great boost to maritime economy. To
f [Mr. MacNicol.l
boost maritime economy they must have cheap power and lots of it. The more they have, the stronger their economy becomes, and the better it is for all Canada; therefore I feel that in helping them I am helping the working men in the plants in Toronto.
I am going to run rapidly on and- touch on a number of other matters. I may have to omit- some but I will cover all I can.
I come to the Chignecto canal. I have been over that site many times from end to end, and last September I had the great pleasure of going along the route of the canal from the bay of Fundy to Baie Verte across the isthmus, with my good friend the hon. member for Cumberland (Mr. Black). We walked over part of it and at various places stopped and observed. I am for a canal across the Chignecto isthmus. I will go further and say that the building of that canal has been fifty years delayed, at a great loss to this country. I go further and say, from some little experience, that the canal can be easily built. I go further and say that it is an outrage against the maritime provinces that that canal was not built fifty or seventy-five years ago. I say further that the building of that canal would revolutionize upwards the whole economy of the three maritime provinces.
The canal, if it were built, would shorten the distance from Charlottetown to Saint John by as much as 430 miles. It would shorten the distance from Charlottetown to the New England states as much as 325 miles, and would shorten the distance from the bay of Fundy to central Canada by as much as 375 miles-all for the good of trade. What this country wants more than anything else is interchange of trade; we can get that only by cutting down transportation rates, and the rates can be cut down only by shortening the distance and using boat traffic as much as we can. The whole coast of New Brunswick on the gulf of St. Lawrence is a vast treasure house of timber. The Chignecto canal would cut in two the price of delivering that timber '"mm New Brunswick to the New England states. If it costs S10 per thousand feet freight now. a Chignecto canal would cut it down to S5.
Not far from my hon. friend's riding there is a great resource of gypsum at Hillsborough.
I mention that now only because of the canal. They produce at present about one-half the gypsum produced in Canada. They have inexhaustible supplies of it. I can picture the Hillsborough gypsum mills being two or three or four times their present size if they could load the boats right at Hillsborough, as they could if the canal were built, and take the boats through the canal up the gulf and the St. Lawrence to Montreal, Toronto and other

The Budget-Mr. MacNicol
big cities in central Canada which use so much gypsum. That too would expand maritime economy and provide much more employment and much more business. It would provide steadier work for the maritimes; all of which would be equally good for us in central Canada. The more they expand the more we would expand.
Coming back to the canal, it would be about nineteen miles long. Two main plans have been submitted down through the years. One called for locks 300 feet in length by 48 feet in width, with a draft of 18 feet; the other calling for locks 500 feet in length, sixty feet in width, and a draft of 25 feet. The smaller canal would cost, according to the best reports I have been able to obtain, approximately $23 million, perhaps less. The larger canal would cost up to $38 million or less. In my opinion the larger canal would be the economical one, because larger boats would then be able to go through, travelling from the maritime provinces to upper Canada and from the maritimes down the east coast of the United States, thus building up a vast volume of trade.
When I think that a short distance of nineteen miles is allowed to block traffic, as we find in the Chignecto, I am amazed that members from the maritime provinces have stood it as they have done for the last seventy-five years. They have spoken repeatedly about it in the House of Commons but they have not got anywhere. They should organize a brigade of delegates from those three provinces and come here and present a programme for the building of that canal. I am going to ask the Minister of Reconstruction and Supply to do what the Minister of Agriculture has done on previous occasions when I have been willing and happy to assist him in his programmes for western rehabilitation. I am going to ask the Minister of Reconstruction and Supply to carry out the same type of programme for the maritime provinces, spread over a period of twenty years, at $5 million a year. This would represent a total of S100 million for maritime rehabilitation and construction, one part of which, I suggest, should be the Chignecto canal.
I wish to refer now to the writings of Mr. Ian Sclanders, which I have read carefully. Mr. Sclanders is one of the editorial writers of the Saint John Telegraph-Journal. I have never met him but he must be an able man, for his articles are written in an able and convincing style and contain a great' deal of information. I suggest to the government that they publish all his articles that have appeared in the Saint John Telegraph-Journal about the Chignecto canal. I believe they were pub-83106-194
lished in the spring of 1945, in the months of March and April and perhaps May. If the government would publish those articles and circulate them across Canada to the boards of trade, I venture to say that every board of trade in central Canada would be behind the building of the canal.
What would it mean from the standpoint of expansion of trade not only in the maritime provinces themselves but in central Canada as well? A great advance. In one of the articles to which I have referred, Mr. Sclanders tells about the chairman of the Nova Scotia power commission appearing before one of the inquiries held in connection with the canal and telling that board of inquiry that the building of the Chignecto canal would create a reservoir between the two bodies of water, and, owing to the fact that the tides on the bay of Fundy side rise so high, and would rise twice every day for ever, they would provide a never-failing source of water for the reservoir, that would enable the production of 40,000 horsepower of electrical energy. That would pay for the canal, and one result would be that the beautiful town represented by the hon. member for Cumberland (Mr. Black)-I mean Amherst-would double in size in a short time; Sackville and all that surrounding territory would also benefit by it, and they could send a cable carrying electricity across the short channel over to Prince Edward Island, which also needs electrical power.
Now there is a programme that would build up maritime economy and provide employment for many thousands of men and women in those three provinces. I do not know of any other way by which the people in those provinces will be saved from sinking down and down, unless the rest of Canada comes to their assistance and helps them to build these projects. One of the easiest ways of helping them is to provide a large volume of cheap power, and there are two or three sites that I have mentioned.
Another vicious bottleneck, one of the most vicious I have ever seen, is at the strait of Canso, which was mentioned by someone yesterday. I have spent quite a little time on the strait of Canso on several occasions but last September I was fortunate enough to be there when the car ferries were moving in and out. I examined the strait and I said to myself, "This is nothing short of scandalous". It is only 288 miles from Sydney to Halifax, the capital of the province, a very fine city indeed, and that unbridged strait is a menace to trade. It now takes from 15 to 19 hours to travel that 288 miles, provided there is no ice in the strait and the tides are not very high nor the wind strong enough

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to stop the ear ferry. Imagine taking from 15 to 19 hours to go from Sydney to Halifax. That is an outrage in this day and age-just a common outrage. It is a waste of time. If that strait were bridged it would take from 7 to 9 or a maximum of 10 hours to go between the two cities. It can and it must be bridged. I am not in favour of a causeway.
When I returned to Toronto I called on some of the best engineers I could get in contact with to consult them about bridging that strait. The tide runs at about five knots, the water is about 200 feet deep, and the distance across the strait is a little less than
5,000	feet. None of these factors should obstruct the building of a bridge, though they are all important. I met an eminent engineer who is building six bridges across the Mississippi at St. Louis and I asked him whether I could see in Ontario a bridge of the type that he would recommend for the strait of Canso. He drove me to a site near St. Catharines, in the constituency represented by the hon. member for Lincoln, -where they have been building a bridge over what is known as Twelve-Mile creek. They put the footings right down in the creek, but it was a rough creek owing to the fact that all the discharge from the DeCew power plant, where they develop 250,000 horse-power, floods against the abutments. It is built after the manner of certain Canadian National bridges -and I am thinking of one in northern Quebec Dver the Kenojevis river, which is 200 feet deep. It is what is known as a prepakt concrete bridge type.
I telephoned to Toronto this morning and got in touch with an engineer and asked what it would cost to bridge the strait of Canso, and he said a minimum of $15 million and a maximum of $20 million. Yet we have been told in committees here that a bridge could not be built for less than $50 million. I suggest, Mr. Speaker, that we shall have to consult the same type of engineers that the Canadian National railways and the city of St. Louis use. We must consult engineers who are experienced in building bridges of the type that would span the strait of Canso.
There is also, of course, the question of straightening out the tracks. I have examined it carefully. In part it is zig-zag and in many other places it goes up and down. If we straightened the track and levelled the humps and double tracked the line between Sydney and Moncton it would cut down the time consumed in taking a trainload of coal from Sydney to Toronto. I have no doubt it would reduce the time by two days and cut down the cost of freight proportionately- und w-e want to use Nova Scotia coal.
[Mr. M&cNieoi.j
How can the people of the maritime provinces advance unless they can get their products out to the market at a reasonable cost? Bridge the strait of Canso, straighten and double track the railway, take out the curves and the bends and let us have fast traffic, because in these times fast traffic will do more than anything else to cut down costs and increase the economic efficiency of the country.
I must hasten along because my time is going and I want to get over to that beautiful gem of the gulf, Prince Edward Island. We have heard a good deal in this house about bottlenecks in connection with Prince Edward Island, and the bottlenecks there are just as vicious against traffic to and from the island as they could be. The people in central Canada have done little to carry out the terms of confederation to give that island a chance to expand as it should. It is a perfect garden. I went by car to Cariboo and to my amazement I had to back down on to a little boat. I rebelled against this at first, but I decided to back down on to a little boat and go across the channel over to the island. There again there is a monstrosity of a dock. The docks on each side, the one at Cariboo and the one at Wood Island are nothing short of shocking. This country ought to do the right thing for Prince Edward Island and give it proper transportation so that it too can grow, so that its farmers may have a chance, so that its merchants may have a chance. This province used to have a population of about 125.000. I believe it is now down to around 90.000, but with a chance it will expand again and there will be more business there.
As soon as you land on the Prince Edward Island side, what do you pass by? A whole string of shacks. They should be removed. I suppose they were left there by contractors. Give the island a chance. Make its entrance look beautiful. Then after you get to Charlottetown and go from there to Borden you have to go away around-I just cannot describe how you have to go, but it is twenty miles longer than it should be. At Charlottetown there should be a bridge right across the York river, a short one, only 2,275 feet long. It can be built by modern methods for $1,250,000. It would shorten the route from Charlottetown to Borden by twenty miles and speed up traffic. That would be for the good of Prince Edward Island. You cannot increase the tourist traffic and you cannot cut down the cost of freight by increasing the length of a route. You can increase the tourist traffic and cut down the cost of freight by shortening the length of that route by building a bridge across the York river for around $1,250,000.

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That would be a small part of the five million dollars I am going to ask the minister of reconstruction for, for this year.
When you arrive at Borden, what do you find? There is a bottleneck there, the worst I have seen in America. To get on the ferry boat at Borden is a job, and to get off it at Tormentine is another job.
I cannot picture a group of women from the United States arriving at either of these places in Prince Edward Island, without dismay. In the one instance you have to back down on the boat, and in the other you have to go up a high ramp. I can picture them turning around and saying, "I will not do either; I will go back to my own country." In order to increase traffic you have to make it easy for people to approach the places they want to visit. There is not much ease in getting to and from Prince Edward Island on the present ferries.
I know we are having a new car ferry. I inspected it at Sorel. It is a fine ship. It will carry nineteen freight cars at a time. I believe last year some 19,000 loaded freight cars were ferried across the straits. It will carry about sixty motor cars at a time, and I believe last year some 33.000 motor cars and trucks were taken across the straits. On the day I went from Prince Edward Island back to Tormentine one of the officials on the ship with whom I discussed this problem told me that when he left Tormentine on the previous trip there were seventy-two cars left on the dock. People will not willingly wait for the ferry to make a return trip before they can get across to Prince Edward Island. A lot of them do; I did it myself, but I rebelled every minute I waited. When you come to the dock you want to get on the ship without undue delay. This new ferry will be all right for winter and summer, but it will not handle all the traffic in summer. I advocate another vessel, not a big one, but the regular type of ferry boat for trucks and motor cars-one on which and off which you can drive your car, instead of being obliged to drive up a high ramp, turn around the deck and scratch your car from one end to the other making the turn. That kind of transportation does not invite increased tourist travel. There again we have a chance to do something for that beautiful island and for maritime economy.
I think I shall finish with bottlenecks before I deal with resources. There is another bottleneck at the north side of New Brunswick. When you come to a place called Campbell-ton, if you want to take your car across the river you either go on a little dump of a ferry or you go up the river twelve miles, 83166-194J
cross a bridge and come back down again. If there was a proper bridge at Campbellton, across to Mission Point, so that tourists when they come to Campbellton could drive right across the bridge, it would be much better. Nine out of ten would go up that gorgeous route, the like of which you cannot see everywhere, into what is called Gaspe peninsula. If such a. bridge were built it would open up the whole of the Gaspe peninsula to tourist traffic.
The last bottleneck I want to talk about is the automobile route between Saint John and central Canada. Today you have to go down to the United States or up the beautiful Saint John valley. The trip through the Saint John valley is worth anyone's trouble; the scenery is magnificent; but if you are in a hurry you like to get to your destination. I would build a concrete highway from Saint John straight through to Sherbrooke and Montreal and' thus cut off many scores of miles between the maritimes and central Canada so that trucks and motor cars could drive through rapidly. If Canada is to advance, as I think it will some day, it must do for the maritime provinces what we are now planning to do for western Canada, and I am for doing both. I will support the minister of agriculture and the minister of reconstruction in a twenty year programme at $10,000,000 a year to carry it on in western Canada. Now I want them to put through a 20-year programme, starting with at least $5,000,000 a year, to get on with the maritime rehabilitation and maritime reconstruction. Otherwise the maritime economy may go down and down and her population will not increase as it should. It is high time that the maritimes once again held the position in Canada which they held years ago. In this house their members, by their numbers, held a big place. But today, through no fault of the members but through the fault of Canada, they are down now to four for Prince Edward Island, twelve for Nova Scotia and ten for New Brunswick. That does not build up a country. I want to see Toronto grow. I want to see Montreal grow. From years of business experience I know of trainloads of goods that were shipped east. I said earlier in my talk that 60 trainloads of goods from one plant, of 35 cars per train, were shipped to the maritime provinces. Instead of shipping 2.000 cars of freight you can double it by doubling the capacity of the maritime provinces, and you would double employment in Ontario just the same as you would double employment in the maritime provinces. That is what we have to do. There is a programme which will do something not only for the
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maritime provinces but for all Canada; for if they grow, we will grow, just as if the west grows, we will grow.
The maritimes are full of resources. I did mention gypsum. I have on my desk a sample of slate from Hillsborough. It is as good slate as you will find anywhere. Why are we not shipping this slate all over Ontario and Quebec instead of bringing it in trainloads from Indiana and elsewhere in the United States? Give us water traffic. Give us cheap traffic and cheap freight. Load it up at Hillsborough and send it up through the Chignecto canal to central Canada. In that way you will get big business down there.
Here is another resource. It is oil shale. I do not know how many millions of tons of this there may be. I examined into it very carefully. During the last two or three years this country has spent $60,000 working these oil shale mines which are near Hillsborough. I saw along the track a pile of several hundred bags of this material. They had been lying there two or three years, and I took this piece out of one of them. I was not thieving;
I had with me a man who told me I could have it. This has a value. Why is it not being developed? It should be developed If the maritimes had half a chance they would go forward as the rest of Canada is going forward; but they are away down there in the forgotten part of Canada. Well, I am going to try to rip off the blinds and open all the doors there so that the rest of Canada can see what a wonderful place it is. Instead of having perhaps a little over a million people they should have two or three million, or more.
Then I went to a little place called Shediac, where I met a splendid man who was engaged in the processing of fish. I have forgotten his name, but I believe at one time some of his people were senators here. In 1943 that area shipped 27,000,000 pounds of fish from Shediac to the New England states, but on every pound they shipped they had to pay twice the freight they should have paid. If they could load it on a boat at Shediac, as they can, and take it through the Chignecto canal, the fishermen would get a great deal more for what they take from the sea. Those seas are full of fish, but these people are obstructed. They should have a chance to expand, but how can they with all these bottlenecks?
That is the situation all over the three provinces. There are vast resources of timber, fish, minerals and agriculture. I might say just one word further about the island. I investigated the situation there very carefully, and what I have said about New Brunswick
riVIr. MacNicol. 1
and Nova Scotia applies there also. In the harbour of Charlottetown there is a splendid place for the construction of an elevator. I spoke to several hog producers there. They told me they were now raising about 70,000 hogs a year, a mere bagatelle for an island like that, but to do that they had brought from the west, I suppose under the assisted freight rates programme, something like 10,000,000 bushels of western grain to feed their cattle and hogs. Give them a line of boats from Charlottetown to Churchill; let them bring down not 10,000,000 bushels a year but 30,000,000 bushels of grain from the west. In that way you would promote interprovincial trade; you would do something to keep down the deficit on the Hudson Bay railway, and you would help the people of that island. If they could raise 70,000 hogs last year there is no reason why they could not raise a million hogs within a short time.


James Garfield Gardiner: I have been advocating that for twenty years, but I could not get anyone to back me up.


John Ritchie MacNicol: I will back you up. I notice that you and I see eye to eye on a good many things.


Mr. KNOWLES:: You are both socialists.


John Ritchie MacNicol: Socialists nothing. There is no socialist about me and the minister is not a socialist either. I will back him up in any programme to bring to the maritime provinces through Churchill, twenty or thirty million bushels of grain a year and thus cut down the deficits on the railways of this country. Then we will be doing something for the country instead of taking other people's money as -we are doing now.
What would that mean? It would mean that thousands of young men and women who now have to leave the maritime provinces-and what I have said would apply also to Nova Scotia and New Brunswick-for jobs in the New England states processing raw materials from Canada, would remain in this country and take jobs here. That would give our maritime provinces a chance to grow, it would let their economy expand and give them more employment. As far as I know that is the only way it can be done. If we as Canadians pull together and work together I believe the whole country will expand. One part cannot expand while the remainder stays still. I remember that the firm with which I was associated twenty or twenty-five years ago did ship thousands of carloads of material to the maritimes. Let the maritimes expand; then that firm will ship over the years perhaps

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five thousand carloads of boilers and radiators to those provinces, which would mean thousands of jobs in Montreal, Toronto and other places. We also brought back carloads of stuff from the McAvity people in Saint John, who make fine valves and brass goods, and from firms in Halifax.
Now, Mr. Speaker, you have been very kind to me and I am going to sit down. I have done my best to show how the economy of the maritimes can be expanded in the interests of the whole of Canada.


Mr. J. A. BRADETTE (Cochrane):: Mr. Speaker, I want to express my appreciation of the speech just delivered by the hon. member for Davenport (Mr. MacNicoI). His very first statement struck me forcibly; that his riding would expand to the extent that the rest of Canada expanded. I believe that is a fine motto, and I may use it later on when I speak about dominion-provincial relations.
I should like to preface my remarks with a well deserved eulogy of the present Minister of Finance (Mr. Abbott). Since the first day he came into this house I have watched this magnetic young man, and I was not astonished at the celerity with which he advanced in the public life of this country. When he was appointed parliamentary assistant he practically did the work of a minister. Later, when he was made a member of the cabinet, he came up to and surpassed all expectations. The way he was able to accomplish so much work was a revelation. In making that statement, I have more particularly in mind what happened last year, when he was the cabinet minister responsible for the army and air force. Then, on account of the condition of health of the Minister of Finance of that day, of whom I want to say a few words in a moment, the present minister had to assume the heavy responsibility of piloting last year's budget through the committee of ways and means. Again he was a revelation to the house and the whole country. Perhaps it will sound a little musical to his ears to hear some praise for a change, not only from this side but from the House of Commons as a whole, though he may have been compensated to a large extent by the fine commentaries which have appeared not only in the Liberal and independent newspapers but also in the Conservative press. I do not want to predict what may be his future, but there may be something even bigger ahead for the present Minister of Finance.
I should like to say a few words also about the present Minister of Justice (Mr. Ilsley). We were fortunate indeed to have a man of
his ability, his courage and his sincerity of purpose as Minister of Finance during the war years. He carried the confidence and respect of every citizen of Canada, regardless of party affiliations. I can apply the same words to the high office he occupies at the present time. He is giving the Department of Justice all his talents and all his sincerity, as he did when he was carrying the heavy responsibility of conducting the finances of this country in time of war.
Before I proceed with my remarks, I should like to read two or three excerpts from the Ottawa Journal, a newspaper which calls itself independent, but which is usually a good Conservative newspaper, of Thursday, May 1, 1947:
A Second Look at the Budget
Solomon in all his wisdom could not fashion a budget that would please everybody. When a finance minister comes, as Mr. Abbott came on Tuesday, with a 'budget giving nine out of -ten taxpayers a 29 per cent reduction in income tax-a great number get much more than that -and lopping $410,000,000 off collective income tax payments, he is bound to please many.
And Mr. Abbott has given tax relief where tax relief was most needed-to people on wages or medium salaries. The Journal has argued often that our middle class population, people on fixed salaries, benefited less from war conditions and suffered more from war taxes than any other class. Mr. Abbott, acknowledging this, and remedying it substantially, says . . .
And later on:
Our own view, for what it is worth, is that Mr. Abbott has levelled off taxes (apart from excess profits) to where we may expect to find them for some years to come. We are now budgetting at the rate of about 2,000 million dollars a year; a great deal of our expenditure is uncontrollable; we have embarked on many heavy commitments, and may have to embark on more. In the light of that, plus things happening in the world (a good way to study the budget is in conjunction with this week's report of the foreign exchange control board), it might be as well if we braced ourselves for continuation of existing taxes, for some years at any rate, guarded against vain delusions, and felt thankful for our lot.
I believe that is very fair, and reflects what is in the minds of the people of Canada at the present time.
When the opposition mentions economy, we are in complete agreement. We favour curtailment of expenses, and retrenchment. But a few minutes ago I listened to my good friend, the hon. member for Davenport, and what he propounded to the house respecting requirements of the maritime provinces. No doubt those suggestions were all very fine, and perhaps they should be implemented. But I just leave this question to hon. members, as to how much it would cost the federal treasury if we were to give effect to the recommendations made-and I believe they
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were made sincerely-by the hon. member this afternoon. These things are worth remembering when we are discussing the budget and national financing.
Then, I have one word to say about taxation. During the last by-election in Pontiac, the candidate for l'Union des Electeurs approached the electors of that riding. He talked to the workers, the settlers, the professional men, and asked them, "Do you like taxation?" Naturally those people said, no; just the same as if he had asked them if they liked smallpox or typhoid fever. No one likes taxation. I do not like it. If anyone were to ask any member of parliament, that member would say, no; the same as the electors in Pontiac did last fall.
But when in the next breath the same speaker said to those people, "If you elect my party to power at Ottawa, taxation will disappear", then I call that demagoguery, pure and simple. It is not a proper appeal to the intelligence of the people of the country; on the contrary, it is an attempt to appeal to their passions. And one of the greatest dangers to democracy is these demagogic statements, wherein people make appeals to the passions of others, and attempt to take from democracy those things which make it a strong and living function.
These are points I am bound to make, because no matter what government holds office in Ottawa, no matter what its political stripe may be, we are bound to have taxation in this country, the same as in any other country of the world. They have taxes in Russia; they have taxes in France; they have taxes in socialist Britain, regardless of what some theorists may say. I say this with a bit of heat, because I do not quarrel with the ideology of any party. I have made a thorough study of the philosophical background and the monetary system of the Social Credit party. But when some of their supporters get on a public platform and say that they will abolish taxation, if they are returned to power, then I begin to doubt the sincerity of such utterances, and doubt the sincerity of the statements they make on the hustings during election times.
Why is our taxation high today? I will answer that, just as any one of my people in my constituency would answer it. When I hear hon. members of the Progressive Conservative party say that taxation is too high, I am tempted to ask them what happened in Canada during the last thirty or thirty-five years. I would tell them that in that time this country has taken part in two world wars. We were not the last to enter world

war number one, nor were we the last to do it when world war number two began. We entered those wars spontaneously.
But what happened during those years of war? What happened, when the Conservative opposition brought upon the House of Commons crisis after crisis during the last war? Those were the days when the government sitting on the treasury benches told the opposition that Canada was making a magnificent effort in her every war department, and that all her population, whether they were in the armed forces, or in civilian occupations, were playing a full part. But the opposition brought on these crises time after time and, on many occasions, the work of the House of Commons was vitiated by the unfair political situations thrust upon it by the opposition.
What did they want? They wanted a million more men in uniform. They were telling the House of Commons that this country was not going far enough in its war effort; that we were not giving enough in lend-lease to our allies. They were saying that we were lacking in our effort; and all this at a time when the Minister of Finance of that day, the Prime Minister (Mr. Mackenzie King) and the cabinet as a whole were telling parliament and the whole of Canada that this country was making a magnificent, yes, a 100 per cent effort, that was the admiration of the whole world.
What would have happened if we had listened to the opposition? What would have happened if we had had a national government, if we had listened to the dictation of the committee of two hundred. Taxation would have been trebled; it would be three times what it is today. We cannot get away from those facts.
We must be realists, and I say it ill behooves any member in the opposition to say that taxes are high. True, the}- are high, but one of the greatest causes of our present high taxation is that we participated loyally and generously in two great wars for democracy and Christianity, when Canada, the empire and civilization generally were in jeopardy. And we are proud of having done our part, but there has been a price to pay for such magnificent participation.
It is easy to say that the war has been over for two years and that something more should have been done for lower taxation. But surely if I lose my house by fire today, it cannot be expected that it will be rebuilt, by itself, on the next day, when the embers are still burning. Surely we must be prac-

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tical. Some of the statements made by members of the opposition would not seem to equal the logic of a school boy or a school girl under eighteen years of age.
We must be realists. No doubt taxation is heavy today. Perhaps it is not always equally divided over the different sections of our population, and is subject to changes and amendments, but at the same time it will never be as it was before the second world war. It was never as low after the first world war as it was before it. These are the things we must remember.
We must be realistic. Again I express the hope that God may never permit another world war to take place. But, Mr. Speaker, if such should happen again, and if at that time my party were in opposition I would beg of it to work hand in glove with the government in power at that time. Because a government in time of war has the full responsibility for all our activities, and its obligations are terrific. And if at some times the plans for this country were vitiated, it was due to the fact that the criticism was unfair; certainly the situation in Canada would have been deplorable if we had listened t,o the opposition at that time. I point out these facts because I believe it my duty to do so. I do not do it as a supporter of the government, but simply as a Canadian.
One word about booms and depressions. One after the other we hear similar whisperings to those of 1931 and 1932; here and there creep in whispers of death. They may be whisperings, but they are there, just the same. I was greatly surprised when my hon. friend the leader of the C.C.F. party (Mr. Coldwell), before the war was over, and only last year again made the prophecy that we would have one or two million unemployed. It is not fitting for the hon. member, because I do not think he believes that. We do not want a depression, just as we do not want a great boom. Neither of them is good. But I want my hon. friends of the C.C.F. to study the situation in Great Britain today, so that they may be at least logical.
I admit that my hon. friends of the C.C.F. believe sincerely and honestly in the theory of socialism. That theory is being tried out in England. During the last general election over there the Labour party told the fine people of Great Britain that, if that party were returned to power, the people would never have to face a situation such as they would have to face under a Tory administration. But what happened? The minute the Labour party attained power they found, of necessity, that they must, forget most of their theories. And why? They must forget them
for the simple reason that they have responsibilities in connection with governing the people, and every section of the people. I note how closely the British government watched Dumbarton Oaks, and how closely they are watching the tariff deliberations taking place at this time in Geneva.
We note, too, how closely they watch the financial situation in the United States, and the reasons for any change in that country. They do so because they are afraid that a big inflation in the United States may lead to a depression. Great Britain and the government of that country are honest enough to understand that a depression will spread, and one which envelops the United States is bound to creep into Great Britain.
I am not worrying about the government of Great Britain on account of its political shade, because I realize it is composed of Britishers. I was proud indeed when I noted that Russia was sadly disappointed because they did not make headway with their principles in that country; that the people of Britain were not communists, and that they remained British, and practical to the core. At the same time, if a depression came along, regardless of the fact that they have a socialist government in Great Britain, regardless of the fact that they have a socialist government at the present time in France and in Norway and in Sweden, it will affect the populations of those countries. The same depression will occur in Russia, and when it will hit that nation the only difference between that country and between Great Britain will be that the Russian people will not be permitted to express their own opinions. They will be compelled to take what the government gives them, while in Great Britain the people will be absolutely free to express what they think.


Mr. JOHNSTON:: Are they going to have a depression in Great Britain?


Joseph-Arthur Bradette: We should have learned by now that there is only one way to avoid a depression. After world war I we had an increase in intensive nationalistic economic feeling. We should remember what happened then in order to avoid a depression now. Our United States friends-and I say "friends" deliberately-attempted to penalize the best customer they ever had by putting on the Hawley-Smoot tariff so as apparently to hurt their best customer. The result was a depression. Surely we have learned something from these errors. An appeal was made indirectly by the Minister of Finance to the great nation to the south of us. *
I do not fear the United States; I love that nation; I do not fear that great giant with
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all its idealism, the freedom and the liberty that they love so much, with their Christianity; their dynamic culture; I do not fear them. Surely it can be found possible for her to deal commercially with the rest of the world. How illogical it was for their statesmen after world war I to expect Great Britain to pay billions in war debt when they would not buy millions of dollars worth of her goods. The thing -was economically impossible. These are the things the world must learn if we want to avoid the economic wreck that occurred after world war I. If every country erects a Chinese wall of tariffs almost sky-high, only one thing will result.
We Canadians are in a happy position. We want no aggrandizement of our territories; we do not want to enlarge our frontiers; we do not want the last pound of flesh. Therefore our voice should be clear in this thing. We should say to the world, not only through British preference, not only through multilateral trade agreements, but by every means possible that there should be more and more free trade in every section of the world. Before the war, when I heard that Germany wanted to fight because she could not get raw materials I did not want to believe that because it sounded so foolish. Surely it should have been possible for a nation like Germany to get the necessary raw materials. Surely after this war it should be possible for nations like Germany or Italy or all the other nations to have access to the raw materials of the world. Again I repeat that if we go into the same kind of foolish nationalistic and selfish economy that we had after world war I we shall fall again into the same situation that we had to face in the past.
1 have hope, because the nations have learned, and through pressure from the people the governments must of necessity act. In the United States at the present time there is a great school of thought among workers, manufacturers and financiers, which realizes the viciousness that exists in high tariffs.
I come now to the matter of economy. There is no doubt that no hon. member on this side of the house wants extravagance, wants the people's money to be wasted, squandered. After all, we are just as responsible as are hon. members of the opposition. Let us be fair with ourselves. When I was Deputy Speaker, I think it was in 1944, for two weeks I tabulated the cost of the requests made by the opposition and I quit when I reach $2,000 million. The same opposition were also asking for curtailment of expenditures. Those who were most vociferous were the Progressive Conservative party. I should like to quote a few short sentences from the

Financial Post, which is not an enemy of the Conservative party. They criticized that party's attitude in parliament as being the biggest political riddle heard in Ottawa in a long time and they referred to the leader of the opposition's statements that:
1.	Old age pensions could be raised.
2.	Radio licence fees eliminated.
3.	Agricultural floor prices increased.
4.	Veterans treated more generously.
5.	Income taxes reduced one-third and exemptions raised.
If all those things were done it would have meant an increase of $650 million in the budget. A short time ago the hon. member for Lethbridge (Mr. Blackmore) was pleading for the beet sugar industry. I should like to see the government do all it possibly can for that industry. Then I hear other hon. members talk about maritime rights and freight rates. I should like to see all those things implemented. But again you must cut your sails according to the cloth you have. If the government had had a deficit of $200 million or $300 million we would have heard, and how vociferously, from the opposition. We must be absolutely realistic when we are dealing with financial matters, and the opposition should at least be consistent on this question.
I should like to say a few words about the gold mining industry, which is an important industry in my section of the country. However, I am a realist, and when a gold producer comes to me and says that he cannot produce gold for less than $38 or $40 an ounce, I tell him to forget about it. I am not in favour of subsidizing the gold mining industry, but at the same time I feel that that industry was not treated fairly when the Canadian dollar was brought back to parity last year. This was one industry that was singled out, and the then minister of finance knew that because he mentioned it specifically. When we deal with this question let us be practical.
We allowed some marginal gold mines to function for three and a half to four years with a premium of $3.50 an ounce due to the exchange difference between Canadian and United States dollars. Those people did not know how long that situation would exist. You cannot blame them for being optimistic. They thought it would exist for a period of years, that possibly ten or perhaps fifteen years -would pass before the Canadian dollar would be at par with the United States dollar. Those people were allowed to go ahead producing.
The gold mining industry has always responded to any requests made of it by the federal government. Early in the war the then Minister of Finance made an appeal to the gold mines to produce as much as they

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could, and they responded immediately. A year and a half or two years later, when curtailment was necessary in the gold mining industry because of man-power and material shortages, they again responded immediately. This is an industry which has always stood on its feet, never asking for any special privileges. We sometimes hear it referred to as a sheltered industry, but it is not a sheltered industry. It does not want to be. It has never required shelter. All it wants is to receive fair treatment, and the comprehension of their problems.
No matter what may be said about it, our government has done something for this industry. Before the budget was announced, the Department of National Defence announced that assistance to the gold mines was provided by the government in three relief measures, the first of which raised the depletion allowances from 33J to 40 per cent on profits earned after January 1, 1947, in the :ase of mines the value of whose output is derived to the extent of 70 per cent or more from gold. Second, in the case of low grade mines with profit margins under $10 an ounce, the minimum depletion allowance was to be $4 an ounce, instead of S2, the change to apply in fiscal periods ending after June 30, 1946. The third measure applied to new mines that have come into production since the first of last year and relieved them of the obligation of taking into their books the appropriate write-off for depreciation and pre-production expenses during the first three years of operation. These steps were intended to encourage prospecting and to stimulate operations, gold production having declined nearly fifty per cent in the past five years.
The door of the Department of Finance is still open to members of all parties to bring reasonable and logical pressure on the government to implement the necessary requests made, so that the gold-mining industry will play the full role it is intended to play in our national economy.
I repeat that w'hen you hear it said in the House: of Commons that all Canadian gold should not be sold in the United States market but on the open market, I say, no, for the simple reason that ninety per cent of the gold producers do not want the latter market. They do not want to black market, to bootleg against the United States treasury, and they do not want the responsibility of collections. In places like Egypt, India, North Africa and South America the producers may get as much as $50 an ounce for gold, but where will the responsibility lie for collection? Will they absorb all our gold production? Certainly not. There is only one natural market for gold and that is the United States treasury.
I listened attentively the other day to the statement made by the hon. member for Muskoka-Ontario (Mr. Macdonnell), that perhaps a solution of the difficulties of the goldi mining industry would1 be an increase in the price of gold per ounce by the United States treasury, but he said that would be pure inflation. I do not agree, because I have it on good authority that gold producers in the United States at the present time, with the price $35 an ounce in the United States, are in the red just as some Canadian producers are. The day is not far distant when the price of gold will be increased by the United States treasury. That will be a great help to Canada as well as to the United States. It could not be inflationary, for the very simple reason that you cannot oversaturate that market. Gold is not an ordinary commodity but one used only by governments for exchange purposes. Some say that the gold is just put in a hole in the ground and left there, and nominally that is true. But great big nations find their gold reserves today sadly depleted, and these gold reserves served a most useful purpose in bringing us victory in the last war. I shall gladly cooperate with any member in any logical way in promoting the interests of the gold mining industry. There is no necessity for politics in discussing the gold mining industry. The mine operators would be the first to resent that, because they are practical and logical men. But if ever the day comes when the price of gold is increased by six or seven dollars an ounce it will mean 200.000 more people employed in northern Ontario, northern Quebec and northern Canada as a whole, and will prove beneficial to the whole of Canada.
I want to say a few words about a very contentious subject, namely dominion-provincial relations. I know I am going to have with me in this the present leader of the Progressive Conservative party (Mr. Bracken), because his attitude was most logical and statesmanlike when he appeared before the Rowell-Sirois commission, and later on the dominion-provincial conference held for the discussion and adoption of that report. He made a wonderful impression there, not as a provin-cialist but as a true Canadian. He realized that the whole was greater than any of its parts, and his situation today must be unhappy because behind him there are men who are not playing the game on dominion-provincial relations, as he did as a real and true Canadian.
The doors have always been open so far as the federal government is concerned. I am not going to hold any brief for the premiers of Ontario and Quebec. They happen to be
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premiers of our two greatest provinces. But it is only by accident that Quebec has a larger territory than Ontario and that Ontario has more natural resources than some of the other provinces. I repeat the words which my dear friend the hon. member for Davenport used at the outset of his remarks: My riding expands as the rest of Canada expands and my province of Ontario expands when the rest of Canada expands. There is no getting away from that. There should be no poor sister in the confederation. When it comes to a meeting of the provinces with the federal government to provide health insurance, old age pensions, mothers' allowance and other social legislation we should all be one, no matter from which province we come. I am sure that no two men have a monopoly of all the grey matter in Canada.
Only yesterday it was announced that the premier of Nova Scotia has accepted an agreement with the federal government. The premier of New Brunswick and the people of that province have just as much intelligence as we in Ontario or the people of any other province. That fine little province of Prince Edward Island, which is smaller in area than my own riding, has its share of grey matter, as is so well shown by its sons scattered all over Canada. The province of Manitoba has good men at the head of its government. Then there is the province of Saskatchewan, and I want to speak a special word of eulogy of the premier of that province. I have read that he was most constructive in the deliberations of the dominion-provincial conference and that he did a good job. If there was anything bad or vicious in signing an agreement with the federal government I am sure that Mr. Douglas, who is an experienced parliamentarian and a true Canadian, would never have signed. The same applies to Alberta and British Columbia. Surely there should be a way of coming to agreement by honest compromise. There is nothing sinister in that. They tell me that when you get married you must be willing to meet your wife half way, and this applies to practically every action in our lives.


Mr. MARTIN:: How do you know?


Joseph-Arthur Bradette: I have heard that several times. Why is the air around dominion-provincial relations so vitiated at the present time? I say deliberately that it is done purely and simply for political purposes.
I have in my hand a report of a meeting which was addressed by Mr. Duplessis, premier of the province of Quebec, my native province, at the official opening of International Plywoods Limited at Gatineau, Quebec.
I wish to read an excerpt from an editorial in Le Droit, an Ottawa newspaper, of November 18, 1946. I am going to give, first of all, my own translation of this paragraph, and then I shall read it in French so that there can be no comeback on my interpretation of it. Speaking of dominion-provincial relations and the speech of Mr. Duplessis on that occasion, this article, which, I believe, was using the words of Mr. Duplessis, says:
In the first as in the last federal propositions, Mr. Duplessis sees again an assimilation attempt against Quebec, a menace to its right to develop according to her Catholic and French traditions, in taking away from her its financial means of action, in limiting its legislative jurisdiction of social order. Of this legislative centralization, of this assimilation by small portion, but positive on the long run, of this placing under tutorship, of this diminution of the facilities of Quebec, to organize and to develop its life in accordance with its Catholic and French mentality, of this Mr. Duplessis does not want any.
Now I shall read the paragraph from the editorial as it appeared in Le Droit:
Dans les dernieres comme dans les premieres propositions federales, M. Duplessis voit encore une tentative d'assimilation du Quebec, une menace pour son droit a se developper selon ses traditions eatholiques et franqaises, en lui enlevant ses moyens financiers d'action et en limitant sa juridiction legislative d'ordre social. De cette centralisation legislative, de cette assimilation a petite dose, mais sure a la longue, de cette mise en tutelle. de cette diminution des facilites du Quebec a organiser et a developper sa vie selon sa mentalite catholique et franqaise, M. Duplessis ne veut point.
(Translation):


Mr. GAGNON:: That is so.


Joseph-Arthur Bradette: No, that is not so; the statement is partly right and partly wrong.
(Text):
I have been a member of parliament for a long time in this fine assembly, and you will not be surprised, Mr. Speaker, and members who are listening to me will not be surprised when I say that I never saw or heard a single member of parliament who would like to see anything happen to provincial autonomy. The reason is very simple. I come here from the province of Ontario. My home town is the little town of Cochrane, a fine little spot in northern Ontario. I like my own town and will fight for it even against the big city of Toronto. I am an Ontarian now and love the province of Ontario and will fight for the province of Ontario because I am an Ontarian. But over and above all that there is a great big loyalty which we all honour and cherish, and that is of being a Canadian; it is Canada. And here in the federal house any legislative assembly has

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all the protection of provincial rights that it could wish to have. I never heard from the lips of any member of this house a single expression that would lead me to believe he would tolerate for a single moment any infringement of provincial rights.
Having said that, I am going to speak now as a man who was born in the province of Quebec and tell Mr. Duplessis this.
If ever the French Canadians in this country lose their faith or their language it will be due to themselves and themselves alone, but I know that that will never come. I make that statement deliberately, because there is no reason why religion or language should be mixed up with a question of this kind. It would be just as logical for Mr. Drew to say, in Toronto or in Kingston or even in Ottawa, that in signing dominion-provincial contracts the Protestant faith and the English language would be destroyed. I have lived forty years in northern Ontario, among English-speaking people of the Protestant faith, as well as among French Canadians, and I think you will believe me when I say that it has never occurred to any Englishspeaking person to do anything to prevent me from being a Roman Catholic. I say that deliberately and sincerely. If I have seen people who have not received that amount of respect which they thought they deserved it was because they were not true enough to their own faith or the French language.
On the question of language, it is true that the Canadian minority in Ontario had to fight for their rights and to the members of parliament I say, you should have seen the moving spectacle of French-Canadian mothers surrounding elementary, separate bilingual schools because there was legislation passed in Ontario-rule 17-which attempted to stop the teaching of the French language in the primary stages in the elementary schools. But by organization, through the vigilant guidance given by L'Association de 1'Education de l'Ontario, by the rising of our men and women as one person, using all the weapons of democracy and just plain good judgment and intelligence, and speaking as one as Canadians of French descent, we brought our case before the provincial authorities for consideration, the privy council, the Ontario legislature and public opinion.
I want you to remember that the man who had put that unjust law on the statutes of Ontario, the Hon. Howard Ferguson, after years of practical and necessary agitation, was sufficiently courageous-because it needed courage-to repeal that act. The French Canadians are logical. They had logic on
their side in this important question for them, therefore we thought that we could rely on the fairness and sense of justice of the Englishspeaking majority in the province and we succeeded.
Is there any single member, whether from the province of Quebec or from any other part of Canada; is there any single federal member who is prepared to tell us now that if the province of Quebec should sign an agreement with Ottawa it would mean parting with the rights of that province, either constitutional or natural, either faith or language? No one could make that statement because it would be absolutely untrue. That is why I deplore any statements that are not Canadian, statements that are not constructive. To my compatriots I will say this: If we respect ourselves in the province of Quebec and outside the province of Quebec; if we are true to our faith and to our mother tongue; if we are vigilant about our rights we shall be respected by the rest of the Canadian people.
One word about the premier of Ontario. I live in northern Ontario, and sometimes we make jokes about what is called Queen's Park, because it is so far away from us. The premier of Ontario seems to be afraid of centralization resulting from a dominion-provincial conference. He blows hot and cold, however; hot one day and cold the very next. At the conference, Mr. Duplessis walked out and Mr. Drew followed saying, "We shall have nothing more to do with it". A few weeks later, Mr. Drew said that we must have another conference, and then, later on, he declared that he would have nothing to do with a government in which he had no confidence. I would ask hon. members from Ontario whether that is the word of a statesman and whether it shows cohesion and consistency.
I respect Mr. Drew just as I respect all the premiers that have been, in office in Ontario. I was honoured with the personal friendship of Mr. Ferguson, Mr. Finlayson and Mr. Hearst during the first years I lived in the northern part of the province. But there are certain things that the Canadian people must know about his lack of confidence in the federal government.
The Prime Minister, the leader of the present government, has not been at the head of this country by accident. The Canadian people, through the ballot box, soon find out the weight and ability of a man whom they put at the head of a country, a man who is to govern the country for years. If he is found wanting he does not remain long in office. How long has the Prime Minister been at the head of affairs in Canada? Mr. Drew should remember these things. I have mentioned
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previously the name of two members of the cabinet, the Minister of Finance and the present Minister of Justice. I mention now the Secretary of State for External Affairs (Mr. St. Laurent) and the Minister of Agriculture (Mr. Gardiner). I mention also the Minister of Reconstruction and Supply (Mr. Howe), and I wish to pay him this tribute. We were fortunate indeed to have him at the head of so important a department during the war. He has done a job which was the admiration of the whole world, and I take second place to no one in honesty or sincerity, when I make this statement. I could mention every member of the cabinet without exception for their excellent services.
If I thought for a moment that the signing of an agreement with the dominion would, be prejudicial to my own province I would be the first to oppose it. Why should anybody question the loyalty' of members of parliament on any' side of the house? Statements of the kind that I have just referred to are nothing but a reflection on the government and on every member of this parliament.
We have grievances in northern Ontario. I have heard an hon. member speaking of hy'dro electric power in New Brunswick, and it is all very well for members of parliament from southern Ontario to talk about the wonderful achievements of Ontario Hydro; but we have not yet Ontario hydro power in northern Ontario. WTe have developed all our mines and natural resources with private capital, and when we went to Toronto and appeared before the hydro electric, they said, "No. The field is not proven and we cannot go there at the present time". But individuals found it possible to go there. Through Ontario Hydro, we in northern Ontario have paid tens of millions in taxation to help bonus the southern part of the province. We did not begrudge that, because what is good for one section will eventually be good for every other part of the province. In my section there are farmers who have been farming for the last forty years, and in the summer months when there is rain they cannot get out because the mud is right up to their knees. We do not criticize that, because we know the territory' is terrific and is too expansive to develop all at once. I repeat, we are logical, and I want the premier of Ontario to use the same logic in dealing with dominion-provincial relations as we use in northern Ontario in relation to Queen's Park and the provincial government, and with our real grievances we do not damn or condemn the administration.
I suggest, Mr. Speaker, that if we have the necessary cooperation there is no reason why 
we cannot succeed, why we cannot arrive at constructive understanding. There need be no talk of hard bargaining. The hon. member for Muskoka-Ontario seemed to be scandalized because there was bargaining; but, after all, there must alway's be some give and take. There was bargaining at the time of confederation.


The ACTING SPEAKER (Mr. Golding):: Order. The hon. member's time has expired.


Some hon. MEMBERS:: Go on.


Joseph-Arthur Bradette: I do not want to abuse the privileges of the house.


An hon. MEMBER :: Go ahead and finish.


Joseph-Arthur Bradette: I thank you most sin-'cerely. The premiers of Ontario and Quebec will be in good company if and when they sign agreements with the seven other premiers, because those other gentlemen are all true Canadians, as much Canadians as any of us in this house, and it is a reflection upon them to think otherwise. Why should we try to create the impression that the other premiers came here as beggars? They came here not as beggars but as Canadians negotiating with other Canadians in an endeavour to find a solution to a common problem. We do not want any duplication of taxation, but we do want to have the social legislation that we stand in need of implemented, and it ill behooves the two richest provinces to take the attitude, "Well, if they haven't got the money it is too bad for them".
I repeat the statement of the hon. member for Davenport. The expansion of Toronto and the expansion of Montreal is due to the expansion of the rest of Canada. The expansion of northern Ontario has helped southern Ontario. I may say that two years ago when I spoke in this house I then complimented the premier of Ontario, Mr. Drew. I said that he did well at the conference two years ago,, but I cannot say the same thing at the present time. Let him forget politics for a while and work for the whole of Canada and, as far as my' section of the country is concerned, we shall be 100 per cent behind Mr. Drew. We believe in Ontario, but we believe still more in our wonderful country and welfare, which is Canada.


Mr. SKEY:: Will the hon. member permit a question?


Joseph-Arthur Bradette: Certainly.


Lawrence Wilton Skey: May I ask if he thinks that his province of Ontario should be guaranteed individual exclusive fields of taxation undler this dominion-provincial agreement?

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Joseph-Arthur Bradette: That is an elaborate question and it would take quite some time to answer it. However I will say this: If you read the British North America Act, the federal government can have all the fields of taxation it desires-it is there in plain black and white-but it does not want that. It wants to work in cooperation with the nine provinces in the Canadian federation for the welfare and benefit of the whole nation.


Charles Edward Johnston: I should like to take this opportunity, as others have done who have spoken in this debate, to congratulate the Minister of Finance (Mr. Abbott) on the splendid manner in which he presented the budget. It is a great honour indeed for so young a minister to have such a tremendous responsibility as the one he carries, namely, being the Minister of Finance for the Dominion of Canada. While I do congratulate him on presenting his budget and while I think he did it in a splendid manner, I cannot agree with the statements outlined in the budget. I am sure that a great many Canadians feel, as I do, greatly disappointed in the budget of 1947. After all, Mr. Speaker, the people were looking forward at this time with great hopes and expectations to a considerable relief from the terrible tax burden which they have carried for so many years. The minister in his statement presented to the house is estimating his revenue this year at $2,200 million. That is a huge amount. It is true, too, that the total revenues have greatly increased; but, in my opinion, the living standards of the people have not risen according to the production, and therefore the people of Canada have every right to look for greater relief from taxation.
As was pointed out by the hon. member for Peace River (Mr. Low) $2,200 million will have to be collected from in the neighbourhood of 3,000.000 families, making a total tax levy of over $700 on the average family. The average Canadian family can ill afford that tremendous amount. Not only did the Liberal party themselves do a great deal of boasting about the splendid budget that was brought down, but they were assisted in their efforts by the press across Canada generally. I do not contend for a moment that the press across Canada reflects the opinion of the people of Canada; but for some mysterious reason the press carried in great flashing headlines remarks such as these concerning the budget, "Finance Minister announces $352 million surplus." On the face of it, that sounds very good and it seems as though the government is doing a tremendously good job of financing. Then again, in one of the Ottawa papers there was the
headline "Income tax slashes well received." I cannot for the life of me imagine where they got that opinion from, unless it was merely from the editorial writers.
That brings me to the point, Mr. Speaker, where I want to refer briefly to the Progressive Conservatives in this house. I was very much interested in the official criticism made by the Progressive Conservative party, and I refer to it in that capacity. I was amazed that there was really no effective criticism, and I am not so much surprised at that, because the Minister of Agriculture (Mr. Gardiner) I think, gave the answer quite clearly yesterday when he was speaking to the house. He went to great lengths to point out that the policy of the Conservative party, ever since Canada was started, was one of raising tariffs and the policy of the Liberal party was always one of lowering tariffs. But the point is this: the Conservatives have been in power, and the Liberals have been in power much longer, but the tariffs have always climbed up.


Some hon. MEMBERS:: Oh, oh.


Charles Edward Johnston: That is a matter of history. I am not saying something that is not a fact.


James Garfield Gardiner: You had better check the record.


Charles Edward Johnston: The Liberals have been in power all the time I have been in the house. During a portion of the time there was a war on. but for the last two years there has not been any great reduction in tariff rates that I know of, except in one or two instances.


Stanley Howard Knowles: Where it did not make any difference.


Charles Edward Johnston: And before that the Conservatives were in power. So I say to the Minister of Agriculture and to the Conservatives that it does not make much difference to the country which of the parties is in power. The people always get the dirty end of it anyway.
I want to refer to the criticism made by the Progressive Conservatives and when I say that I do it in a kindly way and just to show that their criticism was ineffective. I wish to refer to the Progressive Conservative amendment to the budget made on May 6, 1947. as reported at page 2805 of Hansard, and to read parts of it. I read over very carefully the speech of the financial critic of the opposition in the hope that I might find some place where there was some constructive
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criticism. The amendment starts out in this way and I read only that portion to which I intend to refer:
This house regrets that the proposals of the Minister of Finance (a) offer no relief from the oppressive burden of indirect and hidden taxes on staple necessities that compose the family budget, all of which taxes directly increase the cost of living;
(b) offer no encouragement to those engaged in the development of our natural resoures, especially mining and agriculture.
As I looked through Hansard, the only place where I could think that the Conservatives were making reference to the high cost of living and the treatment which they would give, was at page 2802. This is what the official critic of the Progressive Conservative party had to say:
I want to say a word about inflation, just a word dealing wholly with the question of money supply. The minister did not deal with that, and in a way I was sorry that he did not because I think it is important. I think it is important for us to remember that the means of payment in the hands of the public, that is to say, the money or its equivalent which people have in their hands, is two and a half times what it was in 1939. It was then $2,400 million and now it is $7 billion. I would urge strongly that that huge amount should be reduced, and incidentally I am glad to see the minister the other day began a measure of reduction by partly paying off a maturing loan out of the government's own resources.
I would interpret that to mean that the Conservative opposition are concerned about the tremendous rise in prices; they apparently blame that on the fact that the people have so much purchasing power in their possession and therefore would reduce that purchasing power. The only way in which I could see that they would effectively reduce the purchasing power -would be by raising the taxes. I am sure the people of Canada would not at all appreciate having their taxes increased beyond their present levels If that is the solution the Progressive Conservative party would apply if they were in power, I think that would be even a worse day than we are witnessing at the present time. Then the amendment goes on:
(b) offer no encouragement to those engaged in the development of our natural resources, especially mining and agriculture.
The only reference I can find to this, in an offhand way, is on page 2803, where the financial critic had this to say:
Fifty years ago the man who retired with a modest competency could get five or six per cent on it and he could reckon on living the rest of his life upon the proceeds. What happens today when he receives three per cent? And he is lucky if he gets that.

There the financial critic is very much concerned because the government has endeavoured to lower interest, rates. I would take strong exception to that. I think interest rates are much too high. I need not make further reference to that at this point, because I intend to deal with it later on. However, those were the only two points I could find in the criticism of the budget, so again I say the people of Canada would have a difficult time if those were the only solutions the Progressive Conservative party had to offer.
Let me now deal more specifically with the budget and the manner in which I think the people of Canada are taking it. Those of us in this house recall quite clearly that, before this budget was brought dowm, the tax exemptions w7ere S750 for single persons and $1,500 for married persons. As social crediters we have always maintained that the tax exemptions should not be less than $1,200 for single persons and $2,000 for married persons.


Mr. MICHAUD:: They ask a lot more than that in Quebec.


Charles Edward Johnston: I said "not less." If the hon. geDtleman will just listen, I think he will find that my statements are quite accurate. That is the unfortunate thing about the hon. member who spoke yesterday, and I intend to refer to that later on. He does the same thing; he sits here but he does not listen carefully, and he gets the wrong impression. Let me repeat; wTe believe the exemptions should be not less than $1,200 for single persons and $2,000 for married persons, and in a few moments I hope to be able to convince the hon. member that this is not asking too much. As a matter of fact, it is not sufficient, and really should be higher. It is true that some relief was given by a reduction in the rates, but when that is interpreted in terms of dollars and cents the relief is very little indeed. Let me refer for just a moment to the table put on Hansard by the minister; then I do not think we shall be so optimistic about this thing. If we refer to page 2556 of Hansard, a married taxpayer with no children and having an income of $1,800 would pay $68 for this year at the present rates. For the year 1947, w'ith six months at the present rates and six months at the new rates, he will pay $52, or a saving of only $16. No one will seriously contend, not even members on the government side or the Minister of Finance himself, that $16 is very much relief to a taxpayer. Then a married taxpayer receiving $2,000 would pay $118 at present rates and will pay $94 during the full year, a reduction of $24, or $2 a month.

The Budget-Mr. Johnston


Mr. LESAGE:: What about 1946?


Charles Edward Johnston: I quoted the figure for 1947, which would be the tax payable under last year's budget, and I am quoting the figure the minister gave for the full year 1947, payable next year.


Joseph Arthur Lesage: But you do not have there the reduction made in 1946.


Charles Edward Johnston: As I say, the saving in this case is $24 a year, or S2 a month. Surely we cannot boast very much about that. A married taxpayer receiving $2,250 would pay $180 under the present rates and will pay S15C during the coming year, or a saving of S30.


Joseph Arthur Lesage: For six months.


Charles Edward Johnston: No; that will be his tota' tax.


Joseph Arthur Lesage: In 1947.


Charles Edward Johnston: No; for 1947, six months at the present rate and six months under the new rate. That will be his tax next year, so that he is saving only $30. That is nothing to boast about. I believe the people of Canada have every right to expect a better deal than that. Now let me just quote from a clipping I cut out of a newspaper the other day in regard to the cost of living, and we shall see just how far that $2 a month will go toward compensating people for the tremendous increase in the cost of living. This is an article from the Western Producer of May 1, 1947, headed "Housewives right on living costs." It states:
In Ottawa last Friday-
You see this is quite authentic.

the 'bureau of statistics confirmed with figures what housewives have been declaring for a long time, that the cost of food, clothing and household requirements is considerably more than the official cost of living index indicates.
Between August, 1939. and the end of 1946, the official index showed an increase of 26-1 per cent. By last month it had risen an additional 2-8 per cent.
While these figures represented the official average advance, they did not give much indication of some of the price advances houeswives, particularly city housewives, have worried about. Egg prices are 70 per cent higher than they averaged in the period 1935-39. In the same class are cheese, round steak, rolled rib roast, stewing beef, veal, bacon, lard, rice, beans, corn syrup and lemons.
The bureau computes its index by averaging the weighted representative price figure for each of six main essential item groups: fuel, rent, foods, clothing, home furnishings and services and miscellaneous.
The food group-
And this is interesting to note.
-advanced 47-4 per cent; clothing 31-1 and home furnishings and services 28-2 per cent.
Fuel moved ahead 10-3 per cent,' rent-before the recent increase in domestic rentals-9-2 and miscellaneous, 12-6.
That is the increase in the cost of living; and compare that increase in the official cost of living with the measly $2 a month that the man I referred to is going to save.


Joseph Arthur Lesage: What about the increases in salaries since the beginning of the war?


Charles Edward Johnston: We will talk of that in just a minute; I am glad the hon. member mentioned it. Apparently he is satisfied that the people of Canada are receiving sufficient to maintain a decent standard of living, so for his benefit and the benefit of all hon. members in the house I want to quote what was stated by the Toronto welfare council in regard to a budget for a minimum standard of living and self-respect. They state that to maintain a bare relief subsistence for a family would require, as of May 1, 1947, over $2,300 a year before taxes.


Joseph Arthur Lesage: How many children?


Charles Edward Johnston: It would not make any difference whether there were one, two or three children.


Joseph Arthur Lesage: Oh, yes, it does.


Charles Edward Johnston: At present prices you show me the family in this country that can have a decent standard of living on less than $2,000, and for every one you show me I will show you five hundred who cannot. However, Mr. Speaker, I want to refer to the hon. gentleman a little later, so I am not going to give him too much attention just now. I do not want to flatter him.


Joseph Arthur Lesage: You had better not.


Charles Edward Johnston: I am coming back to you in a moment.
I now want to direct attention for a moment to page 2554 of Hansard, where the Ministei of Finance was speaking. I am not going to quote at great length, because others have done a very good job of that, but there the minister had this to say:
In reducing the rates of income tax I have, of course, endeavoured to graduate them as fairly as possible, giving the greatest proportionate relief to those in the lowest brackets, but granting some relief to all.


Joseph Arthur Lesage: That is good.


Charles Edward Johnston: I am not going to say that is not right. But the thing I want to point out is that he said he is giving the greatest possible relief to those in the lowest brackets. I disagree emphatically with that statement. I do not think the minister did give the greatest possible relief to those in
The Budget-Mr. Johnston

the lowest Income brackets. Surely no one would contend that a reduction of $6 in taxes for a year is any appreciable amount of relief, or $16 or $18 for one in the next bracket. Would that be considered relief by any sane person? Would that be considered as a great amount, or the greatest possible amount of relief? Surely not.
Then he said that he was granting some relief to all. I do not know whether he meant there some relief to all people in Canada, or just some relief to those in the income tax brackets. If he meant some relief to those in the income tax brackets, then I think he would be right; but if he meant relief to all the people of Canada he is most definitely wrong.
I want to speak for a moment about those persons who are not in income tax brackets. They are the ones who are being more harshly treated than any other people in Canada. And when one considers that those persons to whom I refer form about fifty per cent of the families and people generally in Canada, one realizes that a tremendous number of people are receiving no relief whatsoever. In fact, their living standards are being greatly lowered by the continual increase in prices, and the rising cost of living, as I have already indicated.
At page 2554 of Hansard, the minister said:
The exemption levels established last year are high enough to exempt completely from tax more than half the people earning incomes in Canada.
That is an astounding statement, when the minister has the audacity to stand in the House of Commons-even though it was his first budget, and he may be inexperienced- and say that over half the people of Canada are receiving no benefit whatsoever, and then in the same breath say that fifty per cent of the people of Canada, if they are single, are living on less than $750 a year.
The government of Canada should be thoroughly ashamed of itself to make that admission to other countries, and to the people generally. It should be ashamed to admit in the same breath that over fifty per cent of the people of Canada, if they are married, are receiving less than $1,500 a year, and should be ashamed to say that it expects that a family could be maintained on that amount. That is an outrageous disgrace.


Joseph Arthur Lesage: It is not true, if they have children.


Charles Edward Johnston: I am taking the minister's own word; if you want to contradict him, you can go to it.


Joseph Arthur Lesage: I do not have to contradict him; but what you said is not true.


Charles Edward Johnston: I want to speak further about these people. Eor instance, for a moment let us consider the old age pensioner. I believe the average pension runs between $23 and $30, across Canada. And when I give those figures as the monthly payments, I am putting them terrifically high. Would anyone contend for a moment that Canada, such a rich country, cannot produce sufficient to give our elderly citizens a better standard of living than that? I think that is one of the most disgraceful things that ever occurred, to expect our elderly people-


Paul Joseph James Martin: Has the hon. gentleman ever thought of having the government of Alberta increase the amount?


Charles Edward Johnston: I am glad the minister mentioned that, because Alberta was the first province to do that very thing. And I say to the minister that even Alberta would have gone farther at that time, and would go farther now, too, if the federal government would not turn around' and take it away from the old age pensioners.


Paul Joseph James Martin: Would the hon. gentleman be good enough to answer the question?


Charles Edward Johnston: I do not think I got the significance of the question. Would the minister mind repeating it?


Paul Joseph James Martin: I suggest to my hon. friend that perhaps he might ask the government of Alberta to do the very thing he is asking this parliament to do.


Charles Edward Johnston: I answered the minister, because I said that Alberta was the first province in Canada to do that very thing. They increased it to a point where, at the present time, the pension in Alberta is $30 a month.


Mr. LOW:: And without asking the federal government to share in it.


Charles Edward Johnston: And the point was this, that if the provincial government had given more than that there would have been difficulty, because there is a federal regulation whereby, if more than $425 is received by the pensioner, the federal government's contribution would be cut down. So that it was unwise for the provincial government to give the pensioners more, with one hand, only to have the federal government take it away from them with the other.


Paul Joseph James Martin: The hon. member knows that is not so.


Charles Edward Johnston: You explain it, then.

The Budget-Mr. Johnston


Paul Joseph James Martin: He knows, furthermore, that the government of Canada pays seventy-five per cent of the contribution.


Solon Earl Low: But not of the additional $5.


Charles Edward Johnston: I was not arguing that; I did not say that the federal government did not pay seventy-five per cent of the amount; but they do not pay one five-cent piece of the $5.


Paul Joseph James Martin: My bon. friend is trying to give the impression that this parliament alone is responsible in connection with that matter. If he gives the full story he will realize that the government which is paying seventy-five per cent surely has the right to suggest that the other jurisdiction, which is paying only twenty-five per cent, might well increase its share, if an increase should be made.


Solon Earl Low: We did, to the extent of $5 a month.


Charles Edward Johnston: I did not say that the federal government was not paying seventy-five per cent. I readily accept that; it does. But just because the federal government contributes seventy-five per cent, why should it have in force regulations which prohibit provincial governments from raising old age pensions as high as they like?


Paul Joseph James Martin: I will point that out when the legislation is brought down, and my hon. friend will have his answer.


Charles Edward Johnston: I am pleased to hear that. I think the minister will agree with me that it is long overdue. These elderly oitizens have received too little for many years, and have had to live in a state of poverty.


Stanley Howard Knowles: And they will still be poor.


Charles Edward Johnston: I am hopeful that when the federal government does bring down its old age pensions legislation the amount provided will be considerably' in excess of $30 a month. And I sincerely trust that the means test will be eliminated, because it is a federal baby, and not one from the provinces. If that is done, then I think the minister's criticism would be justified.


Paul Joseph James Martin: One further question. In view of the question I put a while ago, is the hon. member aware that his neighbouring province of British Columbia pays more than the province of Alberta?


Charles Edward Johnston: Yes, but just at the last session of the legislature of Alberta provision was made for grarting medical services, which will greatly outrun what is done by British Columbia.


Paul Joseph James Martin: Oh, no.


Charles Edward Johnston: Alberta is always ahead in that regard. I am pleased to see the other provinces coming along, and I think Alberta has done much in prodding this government to bring down old age pension legislation which, we hope, will be worth while.


Stanley Howard Knowles: This is the parliament of Canada. Let us deal with the things with which we are supposed to deal here.


Charles Edward Johnston: And when we are dealing with old age pensions, let me say the amount should be much greater than S30 a month. It should not be less than $50 a month, without a means test. Some may laugh at that, and may say it is crazy to suggest that we should give an old age pension of $50. But is it crazy? Is it crazy to expect our old people to live on less than $50 a month, in view of the fact that prices have so greatly increased? Why, certainly it is not. We cannot expect these elderly citizens, who are not receiving enough to keep body and soul together, to continue living in that way.
In passing, I should like to refer to pensions for the blind, and to suggest that again in this instance the amount allowed is inadequate.
Time is passing rapidly, much more rapidly than I had thought, so I shall turn now to another subject, I want to refer particularly to the speech of the hon. member for Mont-magny-LTslet (Mr. Lesage). I should like to refer for a moment to that portion of our agriculturists who do not come within the budget, who are receiving no consideration by way of relief in taxation. The hon. member for Battle River (Mr. Fair) asked for the number of farmers who pay income tax, and the return tabled showed that only 3-6 per cent paid income tax in 1945-46. This means that 96-4 per cent of the farmers of Canada are earning less than $750, if single, and $1,500, if married. In Quebec only one-tenth of one per cent of the farmers are receiving sufficient income to pay an income tax. These are the people to whom the hon. member for Pontiac (Mr. Caouette) was referring when he asked the government to provide them with a decent standard of living. The hon. member for Montmagny-L'Islet is reported on page 3006 of Hansard as follows:
Mr. Speaker, since I still have a few minutes at my disposal. I should like to quote a few excepts from a book written by M. Henry de Jouvenel and entitled "Huit Cents Ans de Revolution Francaise":
The financial genius that was Law or Lass conceived every form of modern credit. He
The Budget-Mr. Johnston

showered them on a distressed country with the cheerful faith of an inventor who ascribes universal powers to his discovery.
That applies to our social credit system, does it not?
He asked a question and I want to answer it. I think that statement shows the colossal ignorance of some individuals. Whether it is intentional or not, I cannot say. If it is done in pure ignorance. I sympathize with him; if it is done intelligently, then there is no sympathy warranted. Any hon. member who has been in this house for one, two, ten or twelve years should know that social credit is a system of distribution of surpluses. When the hon. member refers to a distressed country he could not possibly be referring to social credit. Canada is certainly not a distressed country; Canada is one of the most productive countries in the world. The other day the minister pointed out that our production had reached the high point of 811-1 billion, and it was possible that our production would exceed $12 billion this coming year.
Why should there be any family in the province of Quebec living a substandard existence? If we did not have the stuff in Canada it would be a different proposition, but according to the minister's own words Canada is one of the richest countries in the world. No family or no individual should have to live on an income of less than $1,500 or $750 respectively. The hon. member for Mont-magny-L'Islet should take a lesson from the hon. member for Pontiac and do a little studying and find out what is the matter with this system.


An hon. MEMBER:: We are doing it.


Charles Edward Johnston: You did not show it in that speech. I want to speak for a moment about the national debt. In this connection the minister said, and I quote from page 2551 of Hansard:
The estimated gross liabilities of the dominion at the end of the fiscal year amounted to approximately $17,660 million, against which active assets of approximately $4,590 million were held, leaving an estimated net debt of $13,069 million as of March 31. This, of course, is $352 million less than a year ago, as a result of the surplus on the year's operations.
Although the minister did it later on, it would have been nice if he had stated right there, that that surplus was due almost entirely to the sale of war assets, which amounted to $372 million. Do not forget that those war assets were built up by the people of Canada through the toil and labour and materials which they supplied and that they were then sold for a few cents on the dollar to realize B372 million.
In connection with our debt I should like to point out that our funded debt, as at the end of the last fiscal year was $16,524,161,000 and that on that debt we pay $437,000,000 in interest every year. At least three-quarters of that debt was built up during the war. The debt was caused largely by the government financing the war effort by borrowings from the chartered banks and individuals. According to the Canada Year Book-I am speaking from memory, but I think the reference is page 946 or 964-before the war twenty-five per cent of our taxes went to pay interest on our national debt, but since the war, because of the increase in the revenues of the country, about twenty per cent of the taxes now collected are used to pay interest on the national debt.
I suggest to the government that had they financed the war effort through nationally created credit, by the use of the Bank of Canada-the hon. member when speaking the other night did not seem to know anything about the Bank of Canada and I suggest that he do a little studying about it-they would not have created billions and billions of dollars of debt and we could have saved practically all of that $437 million. We could have used that to raise the tax exemptions to the amounts I have suggested without impairing the national credit whatever. We could have done away with the excise duties, which amounted to $75 million, and the sales tax, which amounted to $162 million. I suggest that that is one way in which we could have used the Bank of Canada and thus been able to raise our tax exemptions this year to a decent level. At the same time we could have lowered the cost of living without jeopardizing our financial status, so that the people of Canada would have received some benefit during the years to come.
The hon. member who preceded me said that we should not always be looking forward to a depression because, if we do that, a depression is likely to come. That may be so, but I am not so gullible as to think that mere wishful hoping will keep us out of a depression if it is coming. As was suggested by the hon. member, I want to look at the thing logically. When speaking the other day the minister referred to a possible depression, or I think he said recession. But there is not much difference between a recession and a depression. It all depends which end of the line you are on. One has already been predicted in the United States because of the lack of consumer purchasing power which exists there as well as in Canada. The U.S. Journal oj Commerce reports:

The Budget-Mr. Johnston
The recession is here ... a decline in production is taking place this month.
That was on April 24, 1947. Moody's Stock Survey of April 26, 1947, refers to "a business contraction of disturbing proportions".
Business Week of April 26, 1947, states that:
. . . though incomes have been rising right along for most people they long since were left behind by prices.
The U.S. Journal oj Commerce also reports that wage rates are about twenty-one per cent "out of line" with prices.
These are warnings that we cannot well disregard. People may say that preaching a depression is apt to bring one on. Nevertheless the facts are there, and no less a person than the Minister of Finance himself has cautioned us against one. Therefore it is high time that we began to revise our financial system, and the people of Canada would do well to review the economic history of the Liberal party and of the Progressive Conservative party. If they do so they will find that the facts of history are these, that no matter which party was in power it has always led us into a depression. If we are to travel the same road again it does not take any great intelligence to foresee that we are going to come out at the same place. We have had all these warnings and the people of Canada would do well to take the advice I am giving. I also suggest that if the hon. member for Montmagny-L'Islet wants to come back to this house he had better mend his ways and learn a little about social credit.


Mr. GAUTHIER (Portneuf):: You think you are the best judge of that.


Charles Edward Johnston: Well, he seems greatly worried about it and I am simply giving him a little fatherly advice. I shall not have time, Mr. Speaker, to enter upon another subject in which I am particularly interested.


William Ross Macdonald: By unanimous consent the hon. member may proceed.


Charles Edward Johnston: Then, with the permission of the house I shall make a brief reference to the agreement of sale which is being presented to returned men and civilians who are taking advantage of the government's wartime housing programme. I have the agreement of sale in my hand. I made some reference to it the other day, but I did not have a copy then and have received this since from the Central Mortgage and Housing Corporation.
First, let me say that proper consideration should be given to these men who offered
their lives in the defence of this country, some of whom have come back crippled. Due consideration should also be given to those civilians who are building homes under this programme. The returned men offered their lives for us unconditionally and for not very much pay. I am not comparing their pay with the pay that was given by other countries, but generally speaking I say that they did not receive very much pay for what they were called upon to do.
Under this agreement of sale which I have received from the Central Mortgage and Housing Corporation, the returned man or the civilian is forced to pay 41 per cent interest compounded half-yearly. In my view that is too high a rate for these men to pay. It should be not more than-I emphasize that, not more than-three per cent simple interest. When we sold victory bonds to the people of Canada we did not give them 4J per cent interest compounded half-yearly. That rate should be changed to three per cent simple interest.
But that is not the major fault I find with this contract. The veteran who is building a home under this contract must sign this agreement. It is the only one presented to him. The government may say that it is just the standard agreement of sale. I agree that it may be the standard agreement of sale, but surely we should have some consideration for these men who offered their lives for us in the last war and have come home and are endeavouring to start up anew by buying a home for themselves. I shall read two clauses, so that hon. members may judge them for themselves. This one is taken from page 5 of the contract:
And also that he will give up possession-
That is referring to the purchaser.
-of the said lands on breach made in all or any of the covenants herein set forth without any notice to quit and without the vendor bringing, any action for ejectment. And that, on such breach, these presents (at the option of the said vendor) shall be . void without any recourse whatsoever by the purchaser either at law or in equity against the said party of the first part for or in respect of any matter or thing in those presents contained for the recovery of any moneys paid by the purchaser under or in pursuance of this agreement which payments, in the event of any breach by the purchaser of any of the covenants aforesaid hereby declared, shall be retained by the vendor as and for liquidated damages and not as a penalty.
Under this clause of the agreement, if a veteran should slip up on any one of his payments-he may have paid them all except the last one-if for any reason, perhaps by losing his job, he could not make that last payment he would have no equity in the house and no recourse to law. He has to give up
Private Bills

every cent of equity he has in the house. That is a very severe contract for these men who fought for us in the last war. The next clause reads:
And upon any such breach the purchaser shall forthwith become a mere trespasser upon every part of said lands and may be forcibly ejected therefrom by the vendor or by his employees or agents without any of them being in any way responsible for damages or otherwise therefor. And the vendor shall be at liberty to retain possession of said lands and at his pleasure to re-sell same without notice, upon such terms as he may deem proper and in any event absolutely freed and discharged from all and every claim whatsoever thereto on the part of the purchaser. Time being declared to be the very essence of these presents.
In other words, the vendor, in this case the Central Mortgage and Housing Corporation, a subsidiary of the government, when the veteran has paid everything except perhaps his last payment which, for some reason or another he may not be able to make, can kick him out and re-sell his property to anybody, without calling for tenders or asking for bids, just sell it for anything they like and say to the veteran, "You have not got one cent of equity in this property; get off; you are a trespasser." If the veteran says, "I will take it to court," they can answer, "You signed an agreement that under these circumstances you have no equity in the property at all and you have no recourse to the law." In my view, Mr. Speaker, this agreement of sale is an absolute disgrace to Canada, and the federal government should see to it that there is no delay in changing the terms of this agreement of sale as it applies to veterans coming in under wartime housing.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. PRIVATE BILLS



QUEBEC NORTH SHORE AND LABRADOR RAILWAY COMPANY

[Stage Direction]
Mr. EDOUARD RINFRET (Outremont) moved the third reading of Bill No. 106, to incorporate Quebec North Shore and Labrador Railway Company.
Motion agreed to and bill read the third time and passed.

[Stage Direction]
The house in committee on Bill No. 172, respecting Guaranty Trust Company of Canada-Mr. Brown-Mr. Macdonald (Brantford City) in the chair.
Section 1 agreed to.

On section 2-capital stock.
Mr. JAENICKE:: I should like to say a
few words about this section. When this bill was in committee we questioned a director of the company who was there to give evidence, and while it appears perhaps that for the convenience of the company it is advisable to change the head office, I am not so sure that it is advisable in the public interest. This company had its birth in the city of Windsor, Ontario, and it has established branch offices in other cities of Ontario. It established such an office in Toronto in 1934 and, according to the evidence given to us, the business in the Toronto office is now larger in volume than that in any other city. I think we should give this bill some thought before we approve this section, because of the danger of centralization. Some of my hon. friends talk about the danger of centralization of political power.


Mr. TIMMINS:: What is the difference
between Toronto and Windsor?


Frank Eric Jaenicke: I will tell you in a minute. I think there is much greater danger of centralization of industrial,' economic and especially financial power in the cities of Toronto and Montreal. This was pointed out a few days ago by the hon. member for Cape Breton South and I do not need to repeat what he said. We find that our banks have their head offices in either Montreal or Toronto, and when we look at our trust companies incorporated under dominion law we find that most of them are now situated in Toronto or Montreal. Hon. members should think twice before assenting to more centralization of financial power in these two cities.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.
workmen's CIRCLE OF CANADA
Mr. DAVID CROLL (Spadina) moved the second reading of Bill No. 180, to incorporate Workmen's Circle of Canada.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Macdonald (Brantford City) in the chair.
On section 1-Incorporation.
Thomas Langton Church: This seems to me to be an extraordinary bill for any hon. member to introduce into this parliament, inasmuch as it deals largely with property and civil rights within the province. In our province we have a workmen's compensation act and we have had labour legislation on the statute books

Private Bills
since shortly after confederation. This bill grants very wide powers as set out on several of its pages; powers to maintain a general fund, make provision for deficiency in the general fund, dispose of surplus of benefit fund, acquire real estate, and so on. It covers matters that are largely provincial. In view of the fact that we have already such excellent labour legislation and labour unions, I am surprised that it should be considered necessary to establish an organization such as this at the present time, because, as I say,, it undoubtedly deals with a large number of local matters that are covered by various statutes under the federal Department of Labour and under the province as well. Section 15 of this bill provides that the society may acquire the whole or any part of the rights, assets and property of any kind whatsoever of the Workmen's Circle incorporated under the laws of the state of New York.
What have we to do with an organization in New York? Have we not trouble enough of our own without bothering about what goes on in the United States? Why do we want to bother with any workmen's circle there? It seems to me that we are going around in a circle here. I have a great deal of respect and admiration for the hon. member who is sponsoring this bill and I know he has always been a friend of the working man, but I must say to him that I cannot see any necessity for a bill of this kind. I certainly do not see why there should be such an organization.
I have never mentioned race or religion in this country-I am not that kind of man-but I am afraid that if we are to have various organizations of this kind; if we are to have different circles set up, we shall have a. tremendous amount of work in parliament from various other circles coming up for charters, some of which are m-ore ornamental than useful. I do not know much about this circle, but in the other place it passed to the sound of a trumpet. There are secret circles in the other end of the building, and they are here today and gone tomorrow. I do not see why we shoultf pass this bill. There was one bill for which second reading was asked there some time ago and it had not even been printed. I should like to get some explanation from the mover because he is a man who generally gives an illuminating address. He might be able to convert me and others too, but I say in all sincerity that we are going very far afield when we propose to incorporate societies that will be linked up with organizations in New York or elsewhere across the border. What we want today is a national policy not
only for capital but for labour. I do say that about all United States organizations, even though they have been started for many years past and been in Canada. I say that the time has come when some reason will have to be given for coming to Canada to do fraternal business in the interests of peace and prosperity and the working classes in this country.


William Ross Macdonald: Shall section 1 carry?


Mr. SMITH (Calgary West):: No. I want to ask the sponsor of the bill to give us an explanation of it. I have no opinion one way or another, but it does seem to suggest some extraordinary powers. It may be quite all right. I think we should have a full explanation of the intention of the bill.


Mr. CROLL:: This is the ordinary incorporation of a fraternal society for the purpose of insurance benefits. The Workmen's Circle is a United States organization having branches in Canada. They have decided to embark on their own in Canada and have therefore requested this parliament to incorporate them. The reference made by the hon. member for Broadview to the Americans was merely for the purpose of taking over what assets they had in this country and accepting their liabilities. The bill has been gone over by the insurance department and they find it satisfactory. I thought the bill would be referred to the appropriate committee; but as the house is dealing with it, I may say that it is the ordinary bill of this sort. The Workmen's Circle have been in Canada for nearly twenty-five years. They are merely asking for the ordinary incorporation that a friendly and fraternal organization requires.


Arthur Leroy Smith: Does section 5 carry out what you say?


William Ross Macdonald: Does section 1 carry?


Mr. HACKETT:: I was going to ask if there is any reason for dealing with this bill in this way. This is the type of bill that generally goes to a committee such as the banking and commerce committee where it is dealt with in a businesslike way. The officials of the different departments affected can go there and give their views and enable the members of the committee to express an enlightened opinion. I do not know to what extent the hon. gentleman who is sponsoring this bill feels that he can vouch for those who are incorporating this society or feels competent to express an opinion concerning the various phases of the activities in which this body would like to engage. Is there any objection to referring this bill at this time to
Private Bills

the committee on banking and commerce, which is the procedure that seems logical and proper to me?


David Arnold Croll: As a matter of fact, I was taken quite by surprise. I thought this bill would go to a committee and I think it ought to go to a committee. I am quite prepared to vouch for the people who are incorporating this body; I know of them and they are excellent citizens. However I am not fully acquainted with the bill and in committee we shall be able to explain it.


John Thomas Hackett: I think the hon. gentleman has been quite fair; the procedure suggested will enable the gentlemen- who are interested in the bill to go before the committee and tell their story. The matter could then be dealt with in the usual businesslike way.


David Arnold Croll: I will move that the bill be referred to the banking and commerce committee.


William Ross Macdonald: With the unanimous consent of the committee.
Progress reported.


David Arnold Croll: That Bill No. -180, to incorporate Workmen's Circle of -Canada, be referred to the standing committee on banking and commerce.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Mr. DAVID CROLL (Spadina-for Mr. Sinclair, Ontario) moved the second reading of Bill No. 178, respecting certain patents owned by Toronto-Type Foundry Company Limited.
He said: At the request of the hon. member for Ontario, I think it is fair that I should make a few explanatory remarks about this bill. The Toronto Type Foundry Company Limited are the owners of certain patent rights relating to printing machinery, such as feeders, folders and stitchers. Some eight patents are involved. Two of the patents have expired and six have two or three years to run. The purpose of the -bill is to revive the two patents which have expired and to extend for an additional period of six years, the life of those patents which have not yet expired. The reason they ask for this is that during the war the owners were unable to use the patents because of lack of material and lack of manpower. As I have already stated, the period that they ask for is approximately the six-year period. Under British law application may be made to the courts for the purpose of 
extending the life of a patent. With respect to these patents that are applicable to Britain, that application has been made and has been granted. There is no such recourse to the courts in this country and so it is necessary to come to parliament. The company points out that it needs this legislation in order to operate successfully. In 1927, 1928 and- 1930 similar legislation was passed by this house, though I have not with me and cannot seem to put my hands on the circumstances under which it was passed, but I have the references.
Mr. JACKMAN:: Not in connection with the same company?


David Arnold Croll: No, not the same company. My suggestion is that because this bill is somewhat unusual it be sent to a committee where evidence may be heard and perhaps differences reconciled. I think the house should know that this corporation the Toronto Type Foundry Company, is neither a cartel nor a trust, but a family corporation of many years' standing in the city of Toronto. The public interest will not be injured if the bill is passed. There is similar machinery available in the country. Under the circumstances, and because it is an involved matter, I believe these people are entitled to their day in court. So I ask the house to give consideration to sending this bill to committee, where these people may have an opportunity to present all the pertinent facts before we deal with it here. There is a committee that has already dealt with the matter of patents, and it might very well be referred to that committee for such consideration and opinion as it may wish to give.


John George Diefenbaker: A moment ago the hon. member mentioned that in the United Kingdom there was provision for making application to the courts in order to maintain these patents which were lost under the circumstances referred to by him. Would he tell the house the nature of the proceedings taken over there and where they can be ascertained or whether he has a record of them?


David Arnold Croll: Yes I have; I shall refer to my memorandum. In answer to the hon. member's question the British patent act contains a provision which permits the courts to extend the life of patents. This was done in the case of two British patents No. 281599 and No. 290509 which correspond to Canadian patents No. 283101 and No. 323334 which are among those covered by the bill. Extensions in Britain were granted on the ground that the patentees had suffered loss or damage due to war, which is the same basis on which this

Private Bills
bill is being presented. There is provision in Britain for applying to what they refer to as the high court which has jurisdiction to deal with this matter.


Frank Eric Jaenicke: I am rising to oppose second reading of this bill, and I do not think it should be referred to a committee. We are asked to extend the life of eight patents, two of which have already expired, as has been pointed out by my hon. friend. These are patents owned by the applicant, the Toronto Type Foundry Company Limited, who hold these patents as assignees of the original inventors. I searched these patents, and it might be well to put on record who were the original inventors and also when the patents would ordinarily expire, as well as the date of expiry of the two patents mentioned. No. 266582 expired on December 7, 1944; the inventor was one R. Hitchcock of Cleveland, Ohio. No. 283101 expired in September, 1946, and the inventor was again this Mr. Hitchcock. No. 323334 will expire in June, 1950, and R. Hitchcock again was the original inventor. No. 343638 will expire in July, 1961, and again R. Hitchcock was the original inventor. No. 376688 will expire in September, 1956; the inventor was William H. Draper of England. No. 328639 will expire in December, 1950; the inventor was James Cook, also of England. No. 332292 will expire in May, 1951; the inventor was Harold Mason, also of England. The last one, No. 292206, will expire in August, 1947; the inventor was Fred L. Manny, of Burton Harbor, Michigan.
I strongly and vigorously oppose the passing of this bill, for several reasons. In the first place, I contend that it would set up a dangerous precedent. Our Canadian law makes no provision for the extension of the life of a patent. There is a reason for that; and that is why the owners are seeking to extend their patent rights by this special act of parliament. I have tried to look up some previous applications of this kind. I find there have been several, and I refer in particular to one made to this house in 1925, which concerned the extension of a patent right with respect to radio tubes. The bill then before the house was the same as the present bill, and after a short debate the house refused the motion for second reading. Mr. J. L. Brown, at that time the member for Lisgar, in opposing the bill on that occasion had this to say, as reported at page 1232 of Hansard for 1925:
In the judgment of many that time is too long;-
He meant the period of seventeen years.
[DOT]-certainly it is long enough. If the term is to be changed at all, I think we would favour reducing rather than lengthening it. Many reasons might be advanced why this patent should not be continued. The hon. member who has introduced the bill has indicated certain reasons why in his judgment it should be continued. I suppose the same reasons could be advanced by almost every patentee for similar indulgence.
I wish to endorse the sentiments expressed by Mr. Brown, especially his view as to the length of life of the patent and also as to the creation of a precedent. An interesting application of this kind was before this house in 1900, where a special act of parliament was sought to make provision empowering the commissioner to extend the life of certain patents. Sir Wilfrid Laurier, then Prime Minister, took part in that debate, and this is what he said as reported in Hansard for 1900, columns 2671 and 2672:
Now it seems to me that in public interest such requests should not be granted. The granting of a patent is an abridgment of the right of the community generally ... I think as a general rule all such applications ought to be refused unless a very strong case is made out . . . For my part I do not think it would be wise to facilitate such extensions in any manner.
According to the explanatory note in the bill itself, and as stated by the hon. member who introduced the bill, the reason for this legislation is stated to be that conditions created by the war and business depression have prevented the petitioner from enjoying the patent rights to a fair extent. I would think that almost any patentee holding a patent right will have suffered to some extent by the same conditions stated by the petitioner, and if we grant this bill, what is to prevent this parliament's being swamped, perhaps not at this session, but at the next session of parliament, with similar bills? If we grant this we would have no moral right or justification to refuse other similar applications.
It may be argued, and it was argued, that in Great Britain and the United States there are powers which extend the life of a patent, and I shall discuss that later. I also understand that some of these particular patents have been extended in Great Britain, as the hon. member for Spadina (Mr. Croll) just told us they have. But Britain would not be faced with the same danger of precedent as we are in Canada, because the British law is a bit different from ours.
In Britain, for instance, most patents do not last for the life which was granted under the patent originally. In Great Britain, after the third or fourth year, the patentee has to pay an annual fee to keep his patent alive. If that
Private Bills

fee is not paid, then the patent expires. The result is that in the sixteenth year only six per cent of the patents in Great Britain are in force; that is, of the patents granted sixteen years previously; while in Canada, under our law 100 per cent of the patents are still in force seventeen years after they were first granted. Therefore any precedent that might be set in Britain is not half as dangerous, because only a small number of the patents are in force. And an application in Britain must be made at a certain time. I shall also mention later some of the conditions which attach to an application for extension of time in Britain.
I say we cannot possibly afford to pass this bill for the reason I have stated, of creating a dangerous precedent alone. I say, further, that there is no legal right whatsoever to grant any such extension. Our act is silent as to the extension of patents. We have already dealt with war conditions, and with the delay which has been caused by war. Bill No. 16, which was finally passed by the house last Friday, makes provision for that. I would argue that for us to pass this bill would be in direct contradiction of section 28 (a) of the bill which was passed by this house last Friday, and which, by the way, was fully debated, fully discussed, and gone into in committee.
As I say, we have made provision for some extensions necessitated by war conditions. It may be argued that in Britain, and also in the United States, there is power to extend the life of a patent. This is true, and I have already pointed out the situation in that respect in Great Britain, where there is less danger of precedent because of the expiry of eighty-four per cent of the patents before their term is at an end. According to the British law, the courts have power to extend the time under certain strict and prescribed conditions. In Terrell on Patents (7th edition), on pages 266 and 267 under the heading "Extension of Term of a Patent", the learned author says this:
The merit (to he shown by petitioner) required is that of great practical utility rather than that of exceptional ingenuity and it is to be judged by the benefit which the invention has conferred or is likely to confer upon the public.
In Trantom's Patent, 34 R.P.C. 28, at page 37, Sargant, J. said:
There is no doubt whatever that before the court can exercise its jurisdiction in favour of a petitioner, it must be satisfied that there has been some merit considerably greater than is sufficient to support the grant of the patent itself and having regard to the nature and merits of the invention in relation to the public,
I think the court has to find, as a condition precedent to exercising its jurisdiction in favour of

the patentee, that there has been some considerable benefit given to the public by the inventor in respect of that invention.
It will be noticed that it is a condition precedent to exercising its jurisdiction that the court must find that there has been some considerable benefit given to the public by the inventor. That is a most important point, and nothing has been shown here, for instance, of anything of that kind.
In the United States there seems to be power vested in the commissioner of patents to extend the time under certain conditions again, but it appears from Walker on Patents, second edition, that the extension of time is restricted in favour of the original inventor. The author states on page 1177:
It w'as against the policy of the law, if not against its ietter, to extend any patent in the extension of which, if granted, the inventor would have no property right. The right to an extension was given by the law chiefly with a view to the advantage of the inventor, and not of his assignee or grantee.
It will be seen that under United States law this company would certainly not be successful in getting an extension of time, because the original inventors are not applying for this extension, but only the assignee. In the case before us all the original inventors of all these patents are apparently private persons, and the company which applies for this act of parliament is simply the assignee. There seems to be good sense and logic in this. When the original inventor assigned his patent to the company he undoubtedly received consideration, and this consideration was based in part upon the fact that the patent would last for a certain time. Now, if the assignee is to receive further time, I would argue that for this further time no consideration is given to the original inventor, because he is not a party to this extension, and he seems to be absolutely ignored. Consequently there is no legal right whatsoever.
And now what about any moral or equitable right in this connection? I claim there is no such right, either moral or equitable, in any patent. I believe that a patent is a contract between the inventor and the public, and if it is such,, there can be no alteration of any contract under the contract law, unless it could be shown that the parties to the contract were not of one mind, or similar circumstances which are not applicable here. I find my contention to be supported by Frost on Patents, where the learned author says on page 159:
A patent is to be considered as a bargain with the public, and ought to be construed on the same principles of good faith as that which regulates all other contracts.

Private Bills
And then on pages 300 and 301, the learned author says; and I find this interesting:
It cannot, however, be contended that an inventor has any natural, or even a moral right in his invention, for he does not create in the same sense as an author does. The distinction between the production of a great literary composition and the discovery of a great invention is made apparent by a contrast of a play of Shakespeare (Hamlet, for instance) with a world revolutionizing invention such as the steam engine of Watt. Had Shakespeare never written Hamlet, it is practically certain that the play would never have existed, and the literature of the world would undoubtedly have been the loser; but had Watt never lived, it can scarcely be doubted that the vast superiority of the plan of condensing the steam in a steam engine in a separate vessel instead of in the cylinder would have been perceived and communicated to the world by some other inventor. It is evident that an inventor merely produces a new art. The law does not recognize any natural or moral right in the inventor to the exclusive use of the invention, and will not, except on certain conditions, attempt to guarantee him a monopoly in the profitable exercise of it.
I have already pointed out the absence in the picture of the original inventors, and I would even go farther and say that it is neither moral nor ethical to grant an exten- -sion to this company without protecting the rights of the original inventors.
Moreover, the company is out of court altogether, because I think it has abused its patent rights, as I shall explain in a few moments. There being no legal right as I have pointed out the applicants come to this house as if it were a court of equity. It is an old recognized principle in equity that one who comes to equity must come with clean hands.
I may say that this company offends against this principle because on the information which I have received none of the articles patented are now, nor have they ever been manufactured in Canada. Section 65 of the Patent Act provides in sub-paragraph 2 as follows:
The exclusive rights under a patent shall be deemed to have been abused in any of the following circumstances:
(a) if the patented invention, being one capable of being worked in Canada, is not 'being worked within Canada on a commercial scale, and no satisfactory reason can foe given for such non-working.


Arthur Leroy Smith: I may say to the hon. member that so far I am with him, but I am wondering if he has the dates of assignment in order to bring it in line with his argument?


Frank Eric Jaenicke: I am sorry; I have not the dates.


Arthur Leroy Smith: You do not know whether these people have had an opportunity of working the patents?


Frank Eric Jaenicke: My information is that they have had these patents since the original applications were made; in every case they were assigned at the time the patent was issued.


Arthur Leroy Smith: They have had them for a long time?


Frank Eric Jaenicke: Yes. I have reason to believe that my information is correct when I make the assertion that neither one of these patents is being worked in Canada but the articles or devices which the patents protect have always been imported from foreign countries. This is an abuse of patent rights under our law and it is an abuse which affects materially our whole Canadian economy. At some time or another we should really look into this matter fully. In 1946, according to the commissioner's report, patents granted in Canada amounted to 7,412, of Which only 495 were granted to Canadian residents, and of the 6,917 which were granted to foreigners, 5,845 were granted to residents of the United States. I may say that the picture in the United States is the very opposite, where the patents granted to United States residents amounted to 22,983, and only 1,655 were granted to foreigners.
When we were talking about the benefits of the public in connection with patents and patent rights, what public do we mean? Surely we refer to the Canadian public and to no other public. The public is very much concerned. May I point out that two of the patents have already expired, and consequently any rights under these are vested in the public, the Canadian public, which so far does not appear to have benefited because the devices and articles are not made in Canada.
I think it would be the most vicious precedent for us to create if we were to pass this bill.
I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the word "now" be deleted and that the words, "this day six months hence" be added at the end of the question.


Mr. EUGENE MARQUIS (Kamouraska):: Mr. Speaker, I wish to object to the present bill and to support the views of the hon. member for Kindersley (Mr. Jaenicke). Bill No. 16, to amend the Patent Act, 1935, was adopted by this house a short time ago. It was discussed at length in the standing committee on banking and commerce and general provisions were adopted in so far as the dura-

Private Bills


Mr. D. KING HAZEN (St. John-Alibert):: Mr. Speaker, it seems to me that there are two sides to this question. I hold no brief for the people who presented this bill, but I think the matter should be more carefully looked into and a decision should not be jumped at in too great haste. It seems to me that it would be advisable to submit this matter tO' the committee which considered the amendments to the Patent Act.
What are the facts in connection with this application? Here they are. This bill seeks an extension of the life of eight patents. Two of them have already expired and the others will expire at various dates between now and' 1950. The basis of the application for this extension is this, that by reason of wartime regulations which prohibited the securing of' materials and man-power to develop these patents their owners have suffered a loss. They got the patents and were prepared to

go ahead- and develop them; they made a big investment. Then the war intervened, and the government made regulations that prevented the people who were to develop and make these machines from getting the necessary materials and the labour. Consequently they were held up, although I presume they had gone to a great deal of expense.
An hon. gentleman to my left said that this should be treated as a contract. I have not the cases here, but it seems to me that you will find plenty of authorities to the effect that, when it is impossible to carry out a contract owing to the intervention of war, that puts an entirely different aspect on the agreement. In this case these people had invested their money in these patents, prepared the machines and were all ready to do the work. Then the government passed certain regulations which prohibited them from getting the materials and prevented them from employing labour, because the government said it wanted to put materials to other use and men to work somewhere else. Consequently the patent holders stand to face a big loss. Is it fair or right that, because the war intervened, they should be deprived of their right of going ahead? Is it right that the privileges secured under the act should be taken away from them?


Mr. GIBSON (Hamilton West):: What about the 180,000 other patents?


Douglas King Hazen: I do not know anything about the other 180,000 patents. I do not know if there are 180,000 or not. But I think this particular measure should be considered on its own merits and should be considered upon principle rather than upon the assumption that consent to it might lead to flooding the patent office with other applications. Is that not the right way to deal with this matter, to consider it on its own merits rather than say: Oh, well, if we pass this bill there will be a lot of other bills come into this house.
That, I know, is only one side of the question. \ ou can look at it in another way. You may say it is the wrong principle that we should do it in this way. Then it seems to me that if it cannot be done in this way, there should be an amendment to our Patent Act somewhat similar to the amendment to the English patents and designs act to enable a man who has secured a patent to go to the courts. He should be able to go there and not come to this house, when he finds himself in such a situation. Under circumstances like this, where a man has been prevented from developing a patent by reason of war intervening he can in England tell his story to the court and, if the court is satisfied, it can grant 83166-195J
The Budget-Mr. Bentley
him an extension of the time in which he can control that patent. It seems to me that there should be an amendment to our Patent Act to cover a situation of this kind1, and that is the reason I submit that it might be to the advantage of this house and of the country to have this matter sent to a committee of the house for consideration and not just brush it aside in this peremptory way without proper consideration.


James Horace King: The hour for private and public bills having expired, the house will revert to its former business.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee ol ways and means, and the amendment thereto of Mr. Macdonnell (Muskoka-Ontario), and the amendment to the amendment of Mr. Coldwell.
Mr. T. J. BENTLEY (Swift Current):: Mr. Speaker, I am sorry the Minister of Finance (Mr. Abbott) is not in his seat at the moment, because all those who have preceded me in this debate, including some notable and redoubtable members, have offered their congratulations to the minister upon the excellence of his budget presentation. I should like to add mine too, humble as they may be. I think he earned congratulations upon his presentation.	However, after reading the
budget I find that, while I can congratulate the minister upon his presentation, I cannot congratulate him upon the subject matter of the budget. Like the other speakers from this group, I am keenly disappointed over the things I see in the budget and disappointed over some of its important omissions, and those omissions will be the main part of my discussion tonight.
The budget itself is a rich man's budget, in a year when rich people are getting richer and poor people getting poorer. It is a direct negation of the government's promise to bfing in a new order of society in the interests of the great mass of the producing and working citizens of Canada. A little over a year ago the Minister of Justice (Mr. Usley), then minister of finance, informed the house that the wartime prices and trade board had permitted Canadian manufacturers of farm machinery to increase their prices by 124 per cent. He gave it as his positive opinion and that of the officials of the department, or of

The Budget-Mr. Bentley
the wartime prices and trade board, that if these companies were not allowed this increase their profits might fall so low as to prevent them from continuing that business. But now a year later we find that the Massey-Harris Company had in 1946 the highest net profits they ever had since 1929, and that is after paying taxes. Besides that, they increased their working capital from S23,869.000 in 1941 to $31,470,000 in 1946.


Mr. ILSLEY:: Are the figures the hon. member is giving the figures of their world business or their Canadian business?


Thomas John Bentley: This is the Massey-Harris statement, probably including all the business they do.


James Lorimer Ilsley: In the whole world?


Thomas John Bentley: As far as I know. It still does not alter the fact that they did not need an increase in Canada, because they still had plenty of world business. It would appear that the judgment of the minister and his officials was inaccurate, and I can only conclude that their anxiety to protect the rights of big business to earn great profits at the expense of the working people of the country was the cause of the inaccuracy of his forecast.


Douglas Charles Abbott: Pretty demagogic stuff.


Thomas John Bentley: Well, the Massey-Harris people published their own statement, and whether they sell their stuff in Timbuctoo or in Canada the profits are there. They would not have gone out of business, and I made that statement as flatly as that at the time.


James Lorimer Ilsley: I believe the figures are the consolidated balance sheet of their world business, and the profits were made mainly not on the export sales but on what they produced abroad.


Thomas John Bentley: It still gives them a profit and does not alter the essential facts. These interruptions are all right, but I have only so many minutes, whereas the ministers get a lot of time.


Douglas Charles Abbott: It reads better too when you send it out.


Thomas John Bentley: The minister ought to know, and I am prepared to have him interrupt at strategic moments so as to make my stuff read better. The minister also declares a surplus bigger, as he said, than the total of all previous surpluses, I believe he said since Canada became a dominion. In spite of all that surplus, he did not give any ear or consideration to our request for the removal of some of the nuisance and other unnecessary taxes. In the matter of soft drinks, I would

point out this; and I do not regard soft drinks as being nearly as important as the milk subsidy. It is only fair, however, to mention that the $18 million or $20 million revenue that this country gets from that tax could well have been dispensed with and the children of poor families could have been allowed that five cent luxury, buying their soft drinks at a nickel a bottle. I know there are people who will say that the manufacturers of soft drinks would probably have retained the price anyway and put the extra money in their pockets as profit, and if I were convinced that they would have done so I would have made no plea on their behalf. But I know one manufacturer of soft drinks who has given me his categorical word that he would not have done that, that he would have passed on the two cents, and I think it is only fair that I should put on Hansard a telegram he sent me just before the day the minister gave his budget address.
It shows that there are some small operators who have a public conscience. Those are the fellows I like, the little people, private enterprise and not monopolies, just the little fellows in the little communities who have a public conscience and are willing to do the public a service. This telegram was sent to me from Swift Current, Saskatchewan, dated April 28, 1947:
T. J. Bentley, M.P.,
House of Commons,
Ottawa, Ont.	. .
Removal of war excise taxes on soft drinks will mean price of five cents to the pubhc as we will pass this saving to it and will not raise our prices. As we see it we still urgently need a confection that can be purchased for five cents, more now than ever before as the publ c indicated its desire in this respect. Our quality will remain high and uniform as before. We respectfully urge removal of these taxes.
R. C. Dahl, Swift Current Bottling Works.


An hon. MEMBER:: They would purchase ice cream cones.


Thomas John Bentley: I expect there are some hon. gentlemen in this house who purchase confections and luxuries that cost a great deal more than that. It would do no harm to allow the children to have an ice cream cone as often as some folks have a bottle of Scotch.


Arthur Leroy Smith: Then they would get too much ice cream; you have to be careful.


Thomas John Bentley: There may be something in that and I will qualify my statement to that extent, but the principle remains the same.
However, the main thing I want to speak on tonight is the sins of omission in the minister's

The Budget-Mr. Bentley
budget. I refer to the fact that no mention was made of any amendment or improvement in the laws affecting cooperative institutions in this country. Last year I criticized, as well as I was able to, the government's proposal for the taxation of cooperative associations and its failure to recognize by statute the difference between cooperatives and corporations. I stated then and I state now that this country has great need for a federal cooperative act which will clearly define what is considered to be a cooperative association for purposes of taxation and for all other matters of legislation.
This may be a difficult act to devise, because there are likely to be as many different opinions as there are provinces; nevertheless a start should be made and work to that end should be going on as rapidly as possible. In the debate last year I tried to define the difference between cooperative associations and profit-making corporations, for the benefit of hon. members of this house. I was, of course, unsuccessful in convincing the government to accept the difference as I see it, so I will repeat it tonight, even though this may be a little wearisome. There are not so many in the house and perhaps those who are here can stand it.
To begin with, a cooperative association is as purely democratic as any human institution yet devised. In a cooperative institution each member has one vote only; consequently a cooperative cannot be dominated by virtue of the money investment of any single individual or group of individuals. This is the acme of democracy, if I understand the word.
1.	Cooperative shares are not traded on the open market; therefore they are not attractive to speculators.
2.	Interest on capital is limited and usually small, and in some cooperatives interest on share capital is completely non-existent by virtue of the decision of the membership.
3.	Cooperatives are non-profit business concerns, by philosophy, by declaration and by actual operation. They exist to provide a service to the members at what the members believe is less cost than their cost for similar services that are being provided by existing profit-making concerns.
Cooperatives come into existence only when enough people come to believe that a cooperative can serve them in that way. As a rule, cooperatives, by decision of the members, charge the rates prevalent in their area, or in that type of business for the goods and services they provide their members. But there are very good reasons for this. It prevents price wars, which would be bad for all concerned, and sometimes disastrous. It does
more than that. It provides a measuring stick for (a) efficiency of operation; (b) proof of the belief that savings can be made by cooperative effort; and (c) a safe figure to work on to take care of all foreseeable contingencies which might arise in the business world in the course of the year projected, and in this way prevent, in so far as possible, any deficit.
If the truth of this is established, then obviously, at the end of the fiscal period, if efficient operation has been carried out, there is bound to be a surplus which is then allocated back to the members on a patronage basis. There is no profit. I want to emphasize and underline that fact, that there is no profit.
4.	Cooperatives are completely open as to membership, being thoroughly non-political in a partisan sense, non-denominational in a religious sense, and non-discriminatory in so far as race and sex are concerned, in membership and in the matter of elected or appointed officers and employees.
5.	Cooperatives provide for education in cooperative principle and practice, with a limit set on the amount which may be spent for this purpose. All members are encouraged, are even implored, to study cooperative principles in general and their own cooperative in particular; to attend the meetings, and take part in examination of the operations, finance and in formulating policies, as well as in voting for directors.
It can be seen by this explanation that cooperatives have a special feature which makes them differ sharply from purely profitmaking corporations. That special feature is the identification of the owner with the user.
These are the five guiding stars of cooperative enterprise. No one is coerced into becoming a member, although all are asked to consider becoming members. No one can dominate the organization by economic power. All policies and practices are decided upon by open and fair discussion of the members, with responsible officers present to answer for their respective responsibilities. There is no proxy voting by blocks of stock in the hands of a few individual officers. Interest on the capital provided by the members may be paid or not paid, by decision of the members and by no one else; that is, until last year when it was made law that they must declare a three per cent profit before they could return their surpluses to themselves. Any surpluses of the year's operation cannot be withheld by the officers for expansion or other purposes, unless the owners of the surpluses-that is, the members-instruct
The Budget-Mr. Bentley

such officers to withhold them for a given purpose, in which case such surpluses become an additional loan or share capital of each member. Hence, a surplus is his property.
This should make it apparent to everyone that this type of enterprise does not attract membership of any others than those who expect to use the services provided by the cooperative. It has no speculative or profit investment value. Interest takes second place to patronage dividends in a properly constituted cooperative.
Now I should like hon. members to observe the difference between cooperative associations, which I have just described, and corporations designed primarily for the purpose of profit making. In profit-making organizations each share has one vote, so that one person or a small group of persons controlling a large number of shares may decide the whole policy of that organization. Shares of this type of enterprise are listed on the stock exchange, many of which are bought and resold fcr speculative purposes, because the value of such shares fluctuates from time to time, and sometimes considerably. True, quite a few people may buy these shares for savings or investment, nevertheless these buyers may, and probably will, be spread over a great portion of the world, far removed from the headquarters of the corporation itself, and would be quite unable to exercise any democratic control over its operations. Such shareholders are usually invited to provide for the vote of their shares by a proxy to someone who is certain to be at the annual meeting. Hence an officer of the corporation who has a large financial interest in it himself, and who quite naturally will vote the shares for policies most remunerative to himself, may represent the voting shares of those who are jvithout interest in his special policies. Thus, ;he theoretical element of democracy is nonoperative in actual practice.
In such a corporation the main purpose is to make profits on the investment, and the public are invited to buy shares for no other purpose than to earn interest or a capital dividend on such investment. This should clearly indicate the decided difference between money invested for the sole purpose of earning interest and money invested for the purpose of providing goods or services for the investor. In profit-making corporations there is no identification of the shareholder with the user.
This government claims to believe in cooperative enterprise. If it did not so claim I would not have made this speech tonight.


Arthur Leroy Smith: Will the
hon. member permit one question?


Thomas John Bentley: Yes.


Arthur Leroy Smith: I was wondering if the hon. member went so far as to object to people buying and selling the shares of a company on the market.


Thomas John Bentley: I did not object. I was describing the difference.


Arthur Leroy Smith: I did not understand.


Thomas John Bentley: I did not object. I have made no quarrel with that.


Arthur Leroy Smith: Thank you.


Thomas John Bentley: I have simply described the difference between the two.


Arthur Leroy Smith: The hon. member will appreciate that I was merely asking a question.


Thomas John Bentley: Yes. What I am trying to do-and as I go along I will show why- is to claim that the present taxation of cooperatives is unjust. The Minister of Agriculture (Mr. Gardiner) has said in this house more than once that he believes in cooperatives. In fact, he has taken credit to himself and the Liberal party for the rise of cooperatives in Saskatchewan. The hon. member for Rosthern (Mr. Tucker), the leader of the Liberal party in Saskatchewan, has also said that he believes in cooperative enterprise. This government itself, by the very act of sending delegates to the Hot Springs food conference in 1943 and its subsequent acquiescence in the findings of that conference, has at least paid that much lip service to the idea of cooperative enterprise.
I am going to quote something which has been put on the records of this House of Commons on at least three occasions during this parliament, but which will bear repeating until everybody is cognizant of the great moral lesson contained in it. This is one of the findings of the Hot Springs food conference:
That each nation examine its laws, regulations and institutions to determine if legal or constitutional obstacles to cooperative development exist, in order to make desirable adjustments.
But this government, in spite of its claim to believe in the ideal of cooperation, has deliberately made a law compelling cooperatives to be profit-making organizations, to the extent of three per cent of the capital employed; a most unwarranted action and a flagrant violation of the rights of free enterprisers-which cooperative members are-to decide whether they will invest their own money in their own business, interest-free or not. The law now says positively that they must not. It says that three per cent of the

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capital employed must be recognized as capital earnings, regardless of the opinion and decision of the owners of such capital.
It is true, of course, that some types of cooperatives may so conduct their affairs as to have no surplus at all at the end of the year, but the number in this category will be small. The greater bulk of cooperatives operate, as I pointed out earlier in this speech, on the practice of charging the prices prevalent in the area or type of business, and there is bound to be a surplus to be returned to the member patrons. The government has decreed by statute that this investing membership are not competent to decide whether they should or should not pay themselves interest on their own capital employed. This is one of the worst types of class legislation since section 98 of the criminal code. It is discriminatory law; it is very bad law, and this budget makes no provision for its removal.
Cooperative members have already adopted the principle of limited interest on capital, and they should be quite competent to decide to what extent within that limit they will or will not pay themselves interest on their own capital investment in their own business.
Another piece of bad law passed last year is the government decision to force cooperative associations to get from each member patron an individual authorization to retain any or all of the member's share of the patronage dividend. Heretofore, in my province at least, it had been the custom for the membership, in annual meeting or by local by-law, to make this decision by majority vote, after full and free discussion. This is democracy.
The government's ruling, just mentioned, means a plebiscite of the membership every time the board of directors and management desire to carry out what might be the expressed will of the vast majority of the members. As I have said, this is bad law, and I trust the government will take immediate steps to correct it, though there are no indications in the budget speech this year that the government is taking any interest whatever in cooperatives.
Let me point out another instance of the government's ineptitude in dealing with cooperative organizations. It has been decided, for purposes of income taxation, that patronage dividends actually paid out are an expense of operation. That is quite proper. The government has also decided that certain types of dividends become income in the hands of the receiver, and other types do not. Those which are not so taxable are described as consumer or cost of living goods, which are a saving to the family or the domestic budget.
The other kind are the cost of production goods. These the member purchases for use in his business, such as gasoline for his power machinery, lumber for his granary, coal for his bunkhouse, and so on. The dividends on these become income in the hands of the member patron when paid to him by the cooperative, and they are taxable. I am not going to quarrel with that decision by the government, but recently they passed order in council P.C. 528 instructing the managers of all cooperative enterprises to make returns to the Department of National Revenue, setting out the amounts paid to each individual member in patronage dividends; and they have placed the onus upon the manager of the cooperative to decide in each individual case how much of the patronage dividend is in the class of consumer or cost of living goods and therefore not income in the hands of the receiver, and which part is cost of production goods which does become income in the hands of the receiver. I should not like to suggest that the government had any ulterior motive in doing this, but I emphatically advise them that this will cause more trouble among members of cooperative associations than almost anything else I could think of. I ask y-ou, Mr. Speaker, and the government, what individual will allow the manager of any business, cooperative or otherwise, to be the judge of how he has used the goods he purchased during the year? If the government is deliberately trying to create dissension between cooperative members and their management it could hardly have chosen a better method. The government must find some way of placing the onus of responsibility on the individual receiver of the patronage dividend. Difficult as this may be, it is the only fair and sensible way of doing it.
Under the law as enacted in the budget of last year, the government did exempt new cooperative associations from income taxation for a period of three years. They are to be commended for this partial recognition of the fact that cooperatives are an important part of our national economy, but I submit that three years is not a sufficiently long period. This exemption of three years applies to new cooperatives starting on or after the first day of the year, 1947, a year when prices are high, when costs of doing business are very high, and costs of capital equipment are extremely high, so that a cooperative starting this year may find itself with a heavy capital investment and, in the course of three years, may find itself in the middle of a serious recession or repression. I am not prepared to decide which of these terms, recession or repression, is the correct one to use as compared to "depression." In any event, three years is not long enough
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for a cooperative association to ride over the vagaries of our present capitalistic system, with its booms and busts.
I should like to suggest to the government also that they alter the present legislation which provides that new cooperatives must have not less than twenty members, to permit a smaller number to be recognized. There are certain types of cooperatives, such as cooperative farms, housing cooperatives, fishing cooperatives and so on, which may require only five or ten or any number less than twenty for successful operation, and they should not be barred.
I mention these things, Mr. Speaker, because of my disappointment at the failure of the government to mention any of these matters in the budget or, as far as I have been able to see, in the budget resolutions which I believe were distributed yesterday or the day before. As I said last year, I believe the government pays too much attention to people who are opposed to the rise of cooperatives. I believe a great many governments do that. Provincial governments do it. Even though many governments claim to believe in free competition and so on, they are ready to listen to someone who wants legislation to prevent free competition. I notice that this year in the British Columbia legislature, where there is a coalition of the two old parties, there was an amendment to the cooperative associations act. The original act was passed in 1936, and under section 21 (1) of that act it is provided that an individual who freely becomes a contractual member of a cooperative is bound by the terms of the contract between himself and his association. Subsection 4 of that section provides that anyone who has knowledge of a cooperative marketing contract between a producer and an association, who solicits or persuades or aids or abets a producer to sell or deliver any produce otherwise than in accordance with the terms of the cooperative marketing contract, or accepts or receives for sale or for auction or for display for sale any produce of a producer delivered by the producer otherwise than in accordance with the terms of the cooperative marketing contract, shall be liable on summary conviction to a penalty. Now this act has been amended by striking out the word "produce" in subsection 1 and substituting therefor the words "thing caught", meaning fish or other sea product. The act is further amended by striking out subsection 4 and substituting subsections 4 and 5. The new subsection 4 practically repeats the things contained in the old one, but subsection 5 reads:
Every person who uses any property belonging to another person to catch, produce, or collect

fish or other marine products shall not be bound by a cooperative marketing contract with respect to the sale, delivery, or other disposal of such fish or other marine products, and the preceding subsections shall not apply to the sale, delivery, or other disposal of such fish or other marine products.
This relieves the member of his contractual obligation with the association and removes the penalty that can be imposed upon those who aid or abet him in breaking the contract, if the producer is using any property belonging to some other person to catch, produce or collect fish or other marine product. The actual effect of this will be that on the big fishing boats, where the fishermen are paid a share of the catch, even those fishermen who are members of a cooperative association will not be bound by their contract with the association to deliver their share of the catch to the cooperative. It further means that the owner of the vessel or equipment will be able to use every method known to him to solicit, persuade, aid or abet the producer not to fulfil his contract, if he should be inclined to do so. In other words, a fisherman who wants to hold his job on a boat will be practically compelled to sell his share of the catch to whomever the owner of the boat wishes, and in the case of big companies it does not require a great stretch of the imagination to realize that very few of these fish will find their way to a cooperative association.
Whether or not the government of British Columbia had any other reason for doing this than that they felt it was a good thing to do, the fact remains that it will be discriminatory law. I can remember when the same attempt was made to prevent the farmers of the prairies from delivering their grain to the elevators of their choice. As a matter of fact, the private elevator companies were able to prevail upon the government here in Ottawa to take out of the Canada Grain Act that provision which gives the farmer the right to determine the destination of his own grain. To have that right restored took quite a long fight in parliament; it took the introduction of a private bill here by the then member for Mackenzie, Mr. M. N. Campbell; I believe it was called Bill No. 8. I believe this whole matter was discussed before the committee on agriculture, and members of both the old parties on that committee were opposed to the restoring of those rights to the farmers. It became a matter of great concern to those of us in western Canada, and became almost an election issue, to such an extent that, when the election of 1926 was over, the new government finally, after much delay, did reinstate and restore those rights to the farmers.
Under those conditions, and realizing the omissions in the budget, the government can-

The Budget-Mr. Jutras
not wonder at my feeling at times-and others feel the same way-that they are too ready to listen to those who are opposed to the interests of the people themselves.
I have given these illustrations tonight, not in an effort to create antagonism, but to try to convince the government that big business is out, not only to prevent the expansion of the cooperative movement, but actually to kill it by these devices, if it can persuade the government to do so. Both this and past governments have been a little too ready to listen to this kind of people. Their readiness to listen in respect of this and other matters is the very reason for the existence of this party, and the party sitting to my left.
Both in spirit and in fact this budget is as much against the interests and democratic rights of the vast majority of Canadian citizens as are the examples I have just placed on record. There is no indication that the government has any intention of introducing a new order of society, nor is there any apparent intention on its part of even giving legislative aid to those little people who have the courage and the initiative to try to introduce it for themselves, through cooperative action.
I should like to commend to the government and the minister serious consideration of the points I have tried to place before them this evening. To my mind, the budget was aptly illustrated by the hon. member for Battle River (Mr. Fair) who, I believe, is of Irish extraction. When he spoke yesterday he told the story of the Scotsman who gave his child a nickel to go to bed quietly, and then took the nickel away after the child had gone to bed. But there is more than that to the story, because when the Scotsman tells it about the Irishman he adds this, that the Irish father who did this made the child go without his breakfast as punishment for his carelessness in having lost the nickel.
It seems to me the budget is doing much the same thing to the people of Canada. It is trying to keep them pacified so that they may go to sleep, and then, when they are asleep, or when they are not looking and are convinced that no harm will come to them, or when they have become somewhat inattentive, they lose what they have got; and they are being punished when they awaken for not having been more attentive. I would ask the government to give consideration to the recommendations I have made tonight.
In conclusion, may I say that I have not said these things with any desire whatsoever to cause any member of the government or the opposition to feel that I am being unduly critical. I was simply trying again to bring to 83166-196
their attention the facts I brought out last year with regard to this cooperative movement, of which I think so highly. And I shall have to continue so to direct their attention, so long as I am a member of the House of Commons, or until some government gives actual effect to these recommendations, by legislative action.


Mr. R. N. JUTRAS (Provencher):: Mr. Speaker, I wish to deal more particularly this evening with the problem of dominion-provincial relations. Before doing so, however, I should like to make a few observations on the budget, as such. I am pleased to see the Minister of Justice (Mr. Ilsley) in his seat, because he did so much work in connection with the present act, and also to see the Minister of Finance (Mr. Abbott), who has made such a fine presentation of the budget. I should like to join others in congratulating him; and to see also the Minister of National Revenue (Mr. McCann), because, after all, he is the one who collects the money.
I wish to refer particularly to this statement of the Minister of Finance at page 2557 of Hansard:
We have been busy during the past year upon the re-writing of our basic income tax law in an effort to improve its arrangement, .to make it clearer and simpler, and to remove ambiguities and anomalies. Hon. members, will, I think, be particularly pleased with the extent to which it will be less dependent upon the exercise of ministerial discretions. Senior officials of the Departments of Justice, National Revenue and Finance have spent many months on a very detailed revision. I have taken a considerable personal interest in their work in this field.
I fully realize that we shall have ample opportunity at a later day to discuss this question. However, at this stage I wish to ask the Minister of Finance and the officials of his department to make a complete and thorough review or study of the income tax act as it applies to the farmers of western Canada. I am satisfied that the act framed to take care of the conditions of eastern farmers will not meet the requirements and the conditions of western farmers.
It would appear that the present act applies with a flexibility sufficient to meet most conditions in the eastern provinces; but on the other hand it is equally apparent that there is a marked rigidity in its application to conditions in western Canada and that it fails to meet conditions in that part of the country. I do not make this statement lightly but after having made a certain study of the matter. Many hon. members have seen the various sessional papers which have been published and which seem to substantiate my contention.

The Budget-Mr. Jutras

I am not going to labour the point nor am I going to quote from tables extensively. However I would point out for instance that in the year 1945-46 Manitoba contributed SI,866,590, whereas Ontario contributed SI,086,000 and Quebec, $59,000. This makes a difference between Ontario and Manitoba of about $800,000, despite the fact that the number of farmers in Manitoba is one-third the number in Ontario. I could place on record the figures for 1944-45 which, I suggest, would give about the same picture.
The very nature of western farming is entirely different from farming in other parts of Canada. In the west it is big business and entails heavy capital expenditures, because the farms are necessarily large. Consequently, before a person begins farming his costs are high. Then, the cost of operation is correspondingly high, because a man is working a larger tract of land, with the consequent larger operational costs.
There is a further factor which is most important, and particularly as it applies to income tax. I have in mind the fact that the farming enterprise in the prairie provinces is much more precarious than it is in other parts of Canada, and many conditions bring this about.
First, there is the matter of fluctuating prices. Fortunately, in the last few years, under this government, definite steps have been taken to stabilize that factor. And under the wise guidance of the Minister of Agriculture (Mr. Gardiner), who is certainly thoroughly familiar with conditions in western Canada, I am sure we shall not have to face the wide fluctuations in prices we have had in the past. I am quite sure that there will always be some fluctuations because there are hardly any local markets in western Canada. In my own province of Manitoba there are only two cities, greater Winnipeg with a population of 290,000. and Brandon with a population of 17,000. Consequently we have to go outside of the province.
Another factor which should be kept in mind is the hazards of nature in the west. I was surprised to notice the normal precipitation of rainfall in the western provinces. Many people think that in the west all is well outside the drought areas as defined by the Prairie Farm Rehabilitation Act. However, as an example, I should like to take the town of Morris, a thriving community of 1,000 population, situated about the centre of the Red river valley in my constituency. I think that district is recognized by all as being the best agricultural part of the province. It is supposed to be the most prosperous. Morris

is situated half way between Winnipeg and the United States boundary and just about, half way between the Ontario and Saskatchewan boundaries. It is in the centre of the province and of the Red river valley. The normal annual precipitation at Morris is 17-9 inches, whereas the normal precipitation at Lethbridge, which is in a drought area, is 15.01 inches. The normal precipitation at Indian Head, which is also in a drought area, is 17.4 inches, which is just 0-5 inches under that at Morris. Consequently there are many crop failures in districts outside the supposed drought area. Farming is a precarious and costly enterprise.
The trust, loan and mortgage companies failed to understand this in the thirties and they paid heavily. They had based their agreements for loans principally upon eastern conditions. During the boom period they went out and lent money to the farmers quite freely and, when the depression came, they got panicky and began to fear they would not get their money. They then dashed out to try to collect all the money they could from the farmers, and in many instances they removed the very means of producing revenue which could have been used to pay them. The result was that in many cases they failed to collect and. what was worse, they left behind feelings of distrust and even hate. They failed to realize that it was to their advantage to enable the farmers to produce rather than to drive them off their farms by their efforts to collect too much, too quickly. They ruined the picture. As we know, our friends of the C.C.F., particularly in Saskatchewan, capitalized on that point with considerable success. That experience is full of significance for all concerned.
The farmer in western Canada either takes a heavy loss or makes a large profit. The chances are that he will get one crop out of three. When he gets a good crop he makes a pretty good profit, and all in all it balances from one year to the other. I realize that the enactment last year of the three-year plan will help the situation tremendously and I must again express our gratitude to the Minister of Justice who was responsible for that measure. However we have two more years to go before the plan comes into operation. Times are good now and some temporary relief in the meantime would be more than welcome.
On account of the heavy operating costs and capital outlays the farmers of western Canada went heavily into debt during the thirties, but I am happy to point out that the trend in that respect has been most encouraging to date. I

The Budget-Mr. Jutras
should like to read from the annual report of the Dominion Mortgage and Investment Association as follows:
Mortgage and agreement for sale debts of farmers in the three prairie provinces declined 21 per cent in 1946.
This estimate is based on the experience of thirty life insurance, trust and loan companies which have a substantial investment in farm mortgages and agreements for sale in the prairie provinces.
They then show the total amount owing to the thirty life insurance, trust and loan companies on farm mortgages and agreements for sale, and those amounts for Manitoba were as follows:
1937	 $29,560,000
1943	 18,478,000
4944	 13,044,000
1945		 9,722,000
1946		 7,479,000
The statement continues:
In percentage reduction in the total amount owing Manitoba farmers were in the lead in 1946, the decline in that province being -23 per cent. Alberta was a close second with a reduction of 22 per cent and Saskatchewan was third with a reduction of 20 per cent. As already indicated, the reduction for the three prairie provinces combined was 21 per cent.
As will be seen from the table above, the decline in farm mortgage debts in 1946 was a continuance of a trend which has been evident for some years. The reduction which has occurred since the end of 1937 is remarkable. It is doubtful if any other group in Canada has been as successful in reducing their liabilities during the past nine years as have the farmers of the prairie provinces. As the above table shows, the amount owing on mortgages and agreements for sale by farmers in the prairie provinces is now less than a third of what it was at the end of 1937, the percentage reduction being 69 per cent. In Manitoba, the decrease since the end of 1937 is 75 per cent; in Saskatchewan 66 per cent; and in Alberta 73 per cent.
Then they show the total number of farm mortgages and agreements for sale in Manitoba held by these companies, as follows:
1937 			 8,364
1943 			 6,141
1944 			 4,778
1945 			 3,925
1946 			 3,184
At the end of 1946 there were 4.694 fewer farmers in debt to these 30 companies than at the end of 1945. As compared with the end of 1937. the reduction in the number of farmers in debt to these 30 companies is 32,365, or more than 59 per cent.
To my mind, it is of great importance to the consolidation of the provinces and to the dominion that these debts should be paid off as rapidly as possible. A clause in the income tax act to encourage this trend still further, and I submit it with all deference to the present Minister of Finance, would go a long way.
83166-196J
I could go on and make more specific recommendations, such as the setting up of a board of arbitration, and herds being recognized as capital assets, but I know we shall have opportunities to do that at a later date. I know the minister is fully aware of those recommendations and, on the last point, the only reason it was not brought in last year was technical difficulties.
I wish to refer to dominion-provincial relations. My purpose in doing so at this stage is twofold. First, everyone recognizes the importance of the problem because so much of the most important legislation of the federal government depends upon agreement with the provinces and we have seen so many provincial budgets pending agreement with the federal government.
Another reason I bring it up at this time is that I believe more interest in this great problem should be awakened among individual citizens. This is not the problem of the premiers of the provinces; it is not the problem of the ministers of the cabinet or of members of parliament as a whole. It is the problem of every man and woman in Canada. Every organization, all governments, municipalities, school boards, civic clubs, yes, and young people's clubs should understand the full significance of the problem. It was brought to the fore in 1940 when the Rowell-Sirois report was published. It is unfortunate indeed that it came out at the time that it did, because it did not get the publicity it should have received and it was robbed of its publicity by the rapid advance of the German army in Europe.
Furthermore, the fact that it came out just at the beginning of the war made it appear as a report to meet wartime conditions when it is really a peacetime report. It is good to remember that this report was started in 1937 and that the work was completed before the war started, although the report was not presented until 1940, in the first year of the war. This report was not just another report. Usually royal commissions are instituted to look into one phase and one phase only of a particular subject and are necessarily restricted fo that one phase. But the Rowell-Sirois commission had the widest possible powers and latitude; there were no restrictions whatever and they went into every phase of our economy, travelled thousands of miles and came back with, I suppose, thousands of pages of evidence, with the result that the twenty-nine appendices to the report constitute our greatest historical document. It contains a complete statistical picture of the evolution of this country from confederation to the second great war.
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When the commission was set up we knew there was something wrong but did not know what or where. We did not know what the problem was and where the trouble lay, but we knew there was a real problem before this country. The commission gave us the facts and figures. We now know where the wheels grind and which one should be replaced for greater efficiency. The commission also made a number of recommendations which, in their opinion, would meet the problem. The federal government took the lead in implementing those recommendations. It tried again and again to bring about some settlement with the provinces. It took such an active lead in the matter that the rumour hats gone out in certain quarters that the federal government is in desperate need of provincial sources of revenue to meet the cost of its wartime expenditure. Nothing could be farther from the truth. The tax concessions which the federal government is asking for are certainly not favours to the federal government. It is merely to consolidate the position of many of the provinces and to give them a full measure of stability. The constitution gives the federal government full access to both fields of taxation, direct and indirect, but the government realizes that nine weak provinces or seven or six or four cannot constitute a strong country. And now is the time to consolidate the position.
In spite of all the difficulties, the government has succeeded in signing fiscal agreements with six, perhaps now I should say seven provinces. The federal government should be warmly congratulated upon having made a good start but it is but a start and the federal government needs the full and unqualified support of every man and woman of this country to extend to all citizens the benefits which a complete agreement with the nine provinces could give them.
To get the full significance of the problem, we should go back briefly to the original proposals of the commission.
Let us remember also that when the commission began its work the main problem it bad to face was the financial position of many of the provinces. Some were so much in debt that they were on the verge of bankruptcy; others could not see the day when they would ever get out of debt. The heavy burden that had driven them to this desperate position was the colossal relief expenditures. Some of the provinces were in such a bad position that they did not have a twenty-five cent piece to give to the schoolteacher. It is to the credit of this devoted profession that they gave their services on credit and for a mere pittance.

Otherwise a great many children would have gone without any schooling at all. Such was the state of some of the provinces when the commission set out to find out the big question. Why?
We are in the midst of a relative prosperity now and human nature easily forgets. That was only in 1937. How can we assume that conditions will be different in the future if nothing is done about the matter? Fortunately, something has been done and a good step has been taken.
As I said, the main problem before the commission was the precarious financial position of the provinces. The solution of the commission was the following, and it was very simple, or comparatively simple in theory:
1.	The dominion assumes entire provincial debt, not municipal.
2.	To prevent the recurrence of such a debt, the dominion assumes entire responsibility for unemployment relief for employables.
3.	To be able to meet that burden, the dominion discontinues the payment of subsidies, and gets the exclusive field of income, inheritance and corporation taxes.
4.	To ensure a minimum standard of educational and social services, the federal government would pay the provinces an annual adjustment grant according to need.
It sounds very simple, but the great difficulty is that it requires a change in the constitution. The dominion saw there an obstacle that could not be surmounted. It therefore rolled up its sleeves and got down to work to try to find a way of accomplishing the same thing but within its constitutional rights and without diminishing by one iota the autonomy of the province.
The results were the federal proposals to the provinces, as we know those proposals. These are necessarily much more involved and complicated, because they are made to conform to the constitution and to respect scrupulously the autonomy of each province. In spite of all that, the federal government has since been accused of conspiring to wreck the constitution and of undermining the autonomy of the provinces. It is to prevent such accusations that the federal government took so much pains and put in so much effort to evolve the present proposals.
These proposals sounded so complicated and involved that very few people actually bothered to find out what they were and how they solved the problem of 1937-indebtedness of the provinces, threatening unemployment, and let me add here that even the big provinces in this dominion could take heed on this score, ensuring the distribution of a

The Budget-Mr. Jhtras
minimum of education and social services throughout the nine provinces. To these must be added the problem of keeping a steady and progressive development, not of one section or two of the country, but of every part of our great country.
To make the present proposals more readily understandable and to show in a practical way what has been accomplished and how the problem has been partly met by the temporary proposals now in force, I am going to show how they apply to my own province, Manitoba.
The province has withdrawn from the income and inheritance tax field and has agreed to limit its corporation tax to five per cent. In return, to stabilize the financial position of the province, the federal government pays to the province an annual per capita payment of $12.75, based on Manitoba's population in 1942. To this is added the escalator clause, which provides for an increase proportionately to the increase in population; then, no matter what happens in population, the minimum remains. The full statutory subsidies remain, as in the past, and the federal government also returns to the province fifty per cent of the amount of the province's income and corporation tax collection in the year ending April, 1941. This ensures the province of a guaranteed irreducible payment of $13,500,000 a year. This is far more than it ever got from the taxation field that it has agreed to vacate. This is how the province's revenue has been stabilized.
On the other hand, the problem of the heavy relief debt left on the shoulders of the province by the thirties was dealt with as follows. The federal government cancels half of the province's relief debt, this amount being roughly $5,500,000, and the other half of the debt is to be repaid by the province to Canada in thirty equal annual principal payments without interest. The other debt owing by the province to Canada for advances for its provincial share of relief works, to the amount of approximately $14 million, is to be amortized over a period of thirty years, with interest at 2f per cent per annum.
This places the province in a much sounder financial position and., as such,, improves considerably the credit of the province.
For greater uniformity, the province has agreed to change its fiscal year, the idea being to have all the provinces end their fiscal year on March 31. in other words, at the same time as the federal government.
Thus, we, the taxpayers of that province, have been spared the annoyance and costly intricacies of a double taxation scheme, and the dominion guarantees revenues sufficient for
the province to discharge its primary functions, better than before and with full confidence. To those who doubt the practical effect of the agreement, I wish to quote a paragraph taken from the budget speech of the premier of Manitoba, delivered on March 27 of this year:
In lieu of taxes which, being based upon the ability to pay, are widely variable, we shall have a stable minimum revenue which will enable us to spend more freely, yet without imprudence, revenues which we receive from other sources. It is in consequence of this fact that the expenditures which we shall propose for the year ending March 31, 1948, will be increased by more than the increase in our revenues, which we enjoy under the dominion provincial agreement itself. Moreover, this stability has already resulted in a further improvement of our credit manifested by the favourable sale of $4,820,000 provincial bond, issued by public competition in November last, after it was known that we were reaching an agreement with the dominion government. The over-all cost to the province of this issue was 2-6 per cent, lowest cost in Manitoba's history, for a public competitive bond issue of this character.
It will be seen from that, Mr. Speaker, that this temporary agreement has at least accomplished that much, in that it has relieved the province of a heavy debt burden, that it has improved the credit of the province, and that it has ensured the province of an annual minimum revenue. This, to my mind, is most important, because the province, to speak of one at the moment, has definite yearly obligations that must be met and cannot wait. Whether there is a crop or not, the children must go to school, and the province must see that they have at least a teacher to teach them the three "It's" and a minimum of facilities. The same thing goes with the development of the resources of the province, and so on.
Furthermore, the province must see to it that the health of its people gets a minimum of protection. Epidemics do not wait for increased revenues. I am now speaking of bare minimum but, of course, this should not be the objective. When the production of the province increases, the federal grant increases. On top of that, the government has already taken the jurisdiction over unemployment insurance and has already instituted a national employment service. I mention it now because it was part of the original proposal of the commission.
This is what has been done. There still remains considerable to be done. The problem of preventing the recurrence of the provincial relief debt burden has not been solved. Now that we have cured the sore, it is, to my mind, most important that we should take preventive measures against its recurrence. This is just as important, if not more important.
The Budget-Mr. Jutras

The federal government has made an offer in that respect which awaits the general ratification of all nine provinces.
As I said previously, the federal government has instituted unemployment insurance and a national employment service. Further to that, should all provinces join in, it is ready to pay eighty-five per cent of the cost of unemployment insurance benefits to persons able and willing to work, who are not entitled or who have ceased to be entitled to unemployment insurance benefits; in other words, to put it bluntly, to pay eighty-five per cent of the cost of direct relief. Here again, the best way to deal with it is to plan the economy of the country in such a way that there will be a minimum of unemployment.
This is where the government's development and public investment programme comes into the picture. It is extremely important, to my mind, that the public works programme in the country should be gauged from a central focal point, and this can be done properly only by the federal government. This is the reason why the federal government has offered the provinces planning grants, public investment projects, has agreed to extend grants, public investment projects, has agreed to extend its national resources and development programme and research programme, and has proposed to give assistance to projects such as roads to open new areas, roads of national importance, and roads for the promotion of tourist traffic. I suppose every one of us knows of more than one instance where this suggestion would be of tremendous assistance to the people. I for one, in my own constituency, have a large area which could be described as the entire southeast section of Manitoba, which is in extreme need of drainage. I admit there are great difficulties. The cost of doing a good job of draining the entire section of the province has been estimated at as high as one million dollars.
It goes without saying that the province has not been in a financial position in the past to spend that much money. It has tackled the problem and has given local drainage here and there. I believe the work started and contemplated over a period of years adds up to practically a quarter of a million dollars. Eventually I suppose the province will complete the job, but it will be far more costly done by bits and pieces and it will take many years.
If assistance could be given to the provincial government for the drainage of that area, the work could be completed in a few years. It would mean that the entire area would be a productive area in a few years and, instead

of being a source of expense to the province, would be a source of revenue for both the provincial and the federal governments.
In the same district, a move has been on for over twenty years to get the tourist highway project, known a3 the Piney highway, which would be a source of great tourist revenue to the province and to Canada. It has been recognized by authorities and a great many people as a scenic highway, and our friends to the south have repeatedly, year in and year out, made representations to Canadians to have this road built so that the}' may be able to come to Canada. It goes through an area extremely rich in wild life, big and small game. It is full of possibilities. It has been started by the province, but the province has made but a start. This is a perfect example of what could be done. If the federal government could give some assistance, I am sure this project could be successfully concluded in a very short time. I am positive that the revenue from it would be far in excess of the investment made. The more we delay developments of this kind, the more we delay the full expansion of the country.
In addition to these benefits, under an agreement with all the provinces the dominion would continue, of course, to pay family allowances. It would, further, pay an old age pension to all those seventy years of age at the rate of $30 without the means test and would assume the total payments and administration of the pension. On top of that, it would contribute fifty per cent of the cost of pension to those from sixty-five to sixty-nine years of age, at the rate of $30 a month, including administration. It would contribute sixty per cent of the cost of any specific item in a provincial health insurance scheme. It would provide additional grants in relation to general public health for preventive medicine. It would contribute fifty per cent of the cost to lower the age from forty to twenty-one years for blind persons, increase the maximum allowance to $30 and provide for treatment. Finally, it agreed also to give loans at cost for the building of hospitals in the provinces. These are the suggestions made to the provinces should the other provinces join in.
Mr. Speaker, there it is in black and white, how the federal government has already partly met the problem of 1937 and how it suggests it can be met fully. It asks little from the provinces. It promises stability to the provincial governments, and, above all, it promises a great deal to the people of the provinces. Not one of the provinces has been able to give to its own people the health and social services

The Budget-Mr. Cockemm
that the federal government is ready to give the people with their cooperation. Not even the rich provinces, or the wheel horses as they liked to call themselves at the last conference, have been able to do that, and it will be a long time before they are in a position to do so.
Ever since the proposals of the federal government were made known, one member after another in the opposition has been demanding this or that benefit, as if they were the originators of the idea. And better than that, we have seen members of the official opposition demanding development programmes copied word for word from the proposals, and yet never missing an opportunity to undermine the chances of a dominion-provincial agreement.
If they have no confidence in the government, why do they want to place the whole responsibility of old age pensions on the federal government? And why do they ask for such-and-such development programmes? I submit that everyone should start at the beginning, and lend a hand to lay a firm dominion-provincial foundation. I am sure that every individual member, particularly members of the opposition could be of great assistance in bringing about a successful conclusion to the signing of those agreements. As I look across the floor, I cannot help but think of the leader of the opposition (Mr. Bracken). When this question came to the fore I was a student and the leader of the opposition was my premier. He was a champion of that question in those days. I hope that he will gather up enough of that old western spirit to get in there and pitch, and help solve that problem once and for all.


Mr. ALAN OOCKERAM (York South):: In presenting the budget, as reported at page 2546 of Hansard, the minister has this to say:
I need hardly say that hon. members will find that report worthy of careful study.
The minister was referring to the foreign exchange control board report for 1946, and it is my opinion that both the minister and Mr. Graham Towers, governor of the Bank of Canada, went out of their way to overemphasize the temporary favourable exchange situation. The report of the foreign exchange control board for 1946 shows that there was an unfavourable balance of $603 million with the United States; that Canadian expenditures in the United States amounted to $2,178 million and that United States expenditures in Canada amounted to $1,575 million. To meet this deficit, reserves of gold and United States
dollars were reduced by $263 million, and the remainder of the deficit, namely $237 million in gold and convertible exchange, was received from countries other than the United States; and $103 million represented an inflow of capital, and exchange adjustments.
In connection with that $103 million, I should like to read from an article which appeared in last night's Evening Telegram regarding the exchange situation between Canada and the United States:
The reason for this selling of Canadian stocks is said to be that there is something of a "scare" as to the position of the Canadian free dollar. While the yield on Canadian stocks is satisfactory, American investors, it is said, are unwilling to gamble on the future of the Canadian free dollar.
In the case of Montreal Power, which had a good number of American shareholders, local financial houses felt that there was a good basis for switching into other Canadian stocks. But the uncertainty as to the free dollar, and the various rules and difficulties surrounding international dealings, set up a hedge that American interests are unwilling to jump.
American holders, it is stated, accepted the $25 offered by Quebec Hydro for Montreal Power shares, and took their money back into the States, taking a loss of around eight per cent on the "free dollar" market.
The analysis which is in the report is, in my opinion, entirely misleading because it represents the end of the year periods in 1945 and 1946 and does not truly represent the situation which was brought about by the parity announcement which the then Minister of Finance (Mr. Ilsley) made on July 5 last. In my opinion, the minister should have given two statements, one dealing with the exchange situation from January 1, 1946, to July 4, 1946, and one dealing with the situation from July 5 until the end of the year. Then I think a further statement should have been presented to the house bringing the situation up to date to March 31, 1947.
The governor of the Bank of Canada, Mr. Graham Towers, has stated on a number of occasions since the first of the year that our deficit with the United States on account of commodity trade has rapidly increased during recent months. The minister suggested that members of this house should study this foreign exchange control board report, and I have tried to do so. It is my opinion that whoever was responsible for the preparation of the report did a first-class job of publishing a statement designed to conceal the facts. A calculation based on figures which were published in July, 1946, the date on which the devaluation of the Canadian dollar took place, showed the Canadian reserve of gold and United States dollars to be in the neighbourhood of $1,636 million, United States. It
The Budget-Mr. Cockeram

would appear that our loss in United States dollars and gold reserves from that date to the end of the year was $392 million for a six-month period, not $263 million for the twelve-month period, as was stated by the minister and as shown in the report. This annual rate is almost three times that indicated in the report by the minister and represents a loss in exchange at the rate of $750 million a year. If the minister had given us the true picture as it has been developing since July 5, 1946, he would have revealed not only quite a different situation as far as declining gold reserves and United States funds are concerned, but also that our deficit on commodity trading account with the United States has been steadily growing, especially in recent months.
Commodity trade and gold are the basic items in our United States dollar situation. In 1946 some $430,000,000 of our $603,000,000 deficit with the United States arose from commodity trade, and this deficit has been accumulating at a rapidly increasing rate. If we take the four quarters of the year 1946, those deficits were $93,000,000, $120,000,000, $126,000,000 and $158,000,000, while in the last quarter of 1945 our total loss in United States reserves was approximately $10,000,000, and the average for the years 1935 to 1939, prior to the war was $90,000,000 per annum.
Our accounts with the world are set out in one schedule, our accounts with the United States in another, but our position with the United Kingdom is studiously avoided in the report. Why were these figures not given in such a manner as to reveal the whole truth? In 1946 we exported to Britain $597,000,500 worth of goods. In the same year we imported from Britain $201,400,000 worth of goods. All we could take from Britain, or all that Britain could supply us, was less than $201,500,000. We therefore took from Britain gold to the extent of seventy-five per cent of all that we would take from her in goods, namely, $150,000,000. This resulted in Britain going out and buying, with the very scarce dollars she had, gold to turn over to us, which eased our exchange position with the United States last year. Britain has taken up half of the billion and one-quarter loan that we made, but while we are making the pretence of helping her through a loan authorized by this parliament, we are forcing her to go out in the market and use her scarce and1 precious dollars to buy gold to turn over to us. In effect, what we did last year was to exchange part of the proceeds of our loan to Britain for British gold.
In Canada we are making our gold miners produce with one hand tied behind their backs.

By arbitrary revaluation we put our gold producers at a disadvantage, so that our net exports of gold are about half what they normally should be; instead of allowing and encouraging our own gold mining industry to produce the gold we exacted it from Britain. Surely the minister is not going to lead the country to believe that we could do this year after year. The $87,000,000 realized through UNRRA will not be realized again and, in February, 1947, we turned over $74,000,000 in gold to the international monetary fund.
If the minister had told us the whole truth, and explained the situation as it actually is, he would have said that we have about a year to go, as events have been developing up to date. Our expenditures are higher in the United States by many millions and our receipts are very much lower. The minister has resorted to a specious argument to indicate that the dollar revaluation of July 5 last really makes no difference. It makes $3.50 an ounce difference in Canadian dollars to our gold mining producers, and, if continued, may put many Canadian marginal producing mines out of business. It makes it more difficult for our exporters to sell to the United States, and easier for the United States to sell to us. Normally, such might be desirable, but why this government wanted to accentuate a difficult United States dollar situation is beyond my understanding.
In my opinion, the officials of the Bank of Canada, together with the officials of the Department of Finance and the present Minister of Finance, thought that Canada was equally as powerful as the United States treasury and the federal reserve system of banking in the United States, with the result that they created a situation in this country whereby our economy is virtually placed under the control of a nation twenty times as wealthy as we are. Knowing the damage they have done, they are like men sitting in a poker game which has got beyond their limits, watching their stakes being constantly whittled away, without having the courage to quit and admit the game is too steep for them, thus protecting their remaining cash.


Douglas Charles Abbott: The Toronto stock exchange.


Alan Cockeram: and business in Canada, must pay in the way of provincial and municipal taxes. That, Mr. Speaker, indicates a serious situation arising in our national economy.
I, for one, believe that some economies could be exercised and help materially to reduce the cost of our federal government in Canada, but I do not believe that, through this medium alone, can that situation, by which one-fifth of the national income is required to finance the federal government of this nation, be changed. When we realize that a half billion dollars is required annually to finance the debt of this country, and another half-billion dollars is required for what is considered essential ordinary expenditures; when we realize that the defence of this nation entails an additional cost of a quarter billion dollars, we have some conception of why 12,000,000 Canadians today find themselves confronted by the federal government with an annual budget in the neighbourhood of $2 billion. We have essential expenditures also for social services, such as family allowances, which today total one-quarter billion dollars, and old age pensions, the cost of which will increase as our legislation is broadened and extended to meet present-day needs.
While I do not disregard the fact that economies can and should be exercised in the expenditures by the various departments of government, I do not believe that the effect of these economies, no matter how rigid they may be, would be sufficient to meet the present situation.
I, for one, am prepared to recognize that the billion dollar budgets that we have acquired during the war are something that will remain with us in the future. Believing that, and recognizing that economy alone will not meet the problem of better fitting this nation to carry such a load, I suggest to this house that we must make another approach that will better enable the people of Canada to meet the costs of government which, as I have pointed out, have shown such a tremendous increase during the past nine years.
In my opinion, when a nation turns to stabilize its economy after a terrible conflict such as we have just passed through, there is no better place it can turn to lick its wounds than by developing the natural resources of the country.
If we are to maintain the high standard of living, high cost of government, high percentage of employment, then we must direct our efforts into avenues that will create new wealth. The department of this government that is chiefly charged with that responsibility is the Department of Mines and Resources. I find, on reviewing the record, that the total expenditures of the Department of Mines and

Resources for 1938, excluding the immigration and Indian affairs branch, total $11,368,472, or 2-05 per cent of the total expenditures in that year.
In the estimates now before this house, the expenditures of the Department of Mines and Resources, excluding the immigration and Indian affairs branch, are estimated at $14,301,303, or -68 per cent of the total expenditures for the year. In other words, at a time when this nation should be directing its efforts toward the development of its natural resources, toward the creation of new wealth, toward efforts that will give gainful employment, we reduce the percentage of 2-05 per cent of the total expenditures made in the last pre-war year, to -68 per cent for this year.
In my opinion, the efforts made in the direction which I have advocated were little enough in 1938, but today I believe the country will agree that they are pathetic.
When I realize that one of the greatest responsibilities of any government in Canada is the maintenance of a high national income in order to maintain employment, maintain our standard of living, maintain and increase our standard of social services, I believe the effort of this government to encourage and assist the development of the natural resources with which we are endowed is nothing short of pathetic.
The other day Prime Minister Attlee of Great Britain, in his speech in the British House of Commons, stated:
Dangers to world civilization from another world war are greater today than they were between wars.
If that statement is true, as I believe it to be, then as a nation we should be extending every effort to develop our natural resources.
As one example of this, I would cite the case of gold. I believe that this nation should make every effort now to encourage gold mining in this country. I suggest this not alone because of the gainful employment it will create, nor because of the new wealth it will produce and the assistance that it will be to us at the present time in our foreign exchange position, but I believe all-out encouragement is necessary now as a move toward the future security and defence of this nation. It is a well known fact that during the last war the allies were able to purchase essential war materials from Spain and Portugal, and other necessary materials from South America and Turkey, because we had gold to make in payment for the same.
Further, I do not believe, nor do I advocate, that we today should build aeroplanes,

The Budget-Mr. Archibald
guns, battleships, et cetera, on a big scale for our security in the future, because I recognize that these would likely be obsolete if and when they would be needed. I believe, however, that we should, for our own security, make every effort to develop the gold resources of this nation, in order that we may have the economic strength to defend ourselves should a great conflict overtake us, and into which we would be drawn because of our geographical position.
I would point out that that great nation to the north of us, Russia, is sparing no effort to seek out and utilize the latent mineral resources of that country. Compare that effort with that of Canada, where in this year, 1947 this government proposes to spend 0-68 per cent of its expenditures toward the encouragement of developing and utilizing our natural resources.
I further believe that an aggressive policy of encouragement to the development of our natural resources would lighten the burden of every taxpayer, because it would create new wealth, create gainful employment, bolster our exports and place this nation in a far more substantial and healthy position to carry out the present-day costs of government.
If some action of this kind were undertaken by this government it would do more than any other single action we could take to meet the serious situation which has arisen whereby one-fifth of the national income is now siphoned off to meet the costs of federal government alone. I would further point out that, unless this situation is met, and a serious effort is made immediately to do so, our position will become progressively wmrse in Canada.
In the past, great mines which have created millions of dollars in new wealth, great pulp and paper companies which today are bringing millions of dollars annually in United States funds, were undertaken by the investment of private capital. Today, if we are to continue to siphon off one-fifth of the national income to cover the costs of federal government alone, to say nothing of the percentage of the national income which is required to maintain provincial and municipal governments, very little will be left for investment that will develop our naitural resources. For this reason, I believe it is essential that the seriousness of the situation be recognized and. action be taken by this government immediately to place our economy on a more stable and more productive basis than is indicated in the budget now before this house.


Mr. H. G. ARCHIBALD (Skeena):: Mr. Speaker, we are discussing the budget tonight. Budgets may come and budgets may go, but
seemingly the cost of living goes on forever. When goods are scarce and prices go up they always rise ahead of wages. When prices begin to fall it means unemployment. Therefore this budget might be balanced at this time, but tomorrow it might be absolutely meaningless in the case of a depression, or a recession, which is the more fashionable word at the present time.
This evening I should like to air some of the problems that face our citizens in the northern part of my riding of Skeena and in the Yukon Territory. Representations have been made from time to time by such bodies as the Atlin board of trade and the British Columbia-Yukon chamber of mines over the excessive costs of freight and passenger service into those areas. The Atlin district of British Columbia and the Yukon Territory are well known because of their history of gold mining. They came into prominence during the war because of their key geographic position at a time when there was danger of invasion by the Japanese. That part of the country has contributed in the past and is still contributing to the prosperity of Canada. It is certainly true that by far a greater proportion of wealth has been taken out of there than has been put in over a period of time, and this more so than in any other portion of the country.
There is still great unexploited wealth in that area, as is pointed out in a bulletin issued by the Department of Mines and Resources entitled, "The Yukon Territory" which was printed in 1944. On page 17 it states:
To date, production of minerals in the Yukon has come from a few rich deposits. No area has been thoroughly prospected and little drilling has been done, except for placers. Prospecting has been handicapped by the remoteness of the territory and the severity of the winter climate, but much of the geology of areas that have so far received little active attention is favourable for the occurrence of minerals. This factor, together with the variety and widespread distribution of the lode and placer prospects suggest possibilities for expansion in mineral development.
Perhaps the greatest drawback to the development of that area is the complete dependence upon air transportation. At the present time that territory must be developed with modern industrial equipment such as large dredges which cannot be transported by old-fashioned ground equipment or by air. This is recognized by the provincial government of British Columbia, which at the present time, as I understand it, is willing to build its section of the road from Atlin to the Yukon border if the federal government will build their section from the Yukon border to the Alaska highway. That section of road would be only twenty-seven miles in length. I know that the Depart-
The Budget-Mr. Archibald

ment of Mines and Resources has this under consideration and I sincerely hope that it can see its way clear to start that work this year.
The British Columbia-Yukon chamber of mines has, since 1945, carried on a struggle to have the freight rates and passenger rates of the Canadian Pacific Air Lines Limited lowered to those prevailing on the main line. To any government interested in such key points as our northern territories, especially those of northern British Columbia and the Yukon, it should be apparent that aid should be given to the people of those territories in their struggle to live in and develop the territories. The cost of living for people in those areas is such that it makes it difficult for them to operate and continue to live in that part of the country. I should like to give details of the cost of some of the things they buy, and these prices are as late as January 8 of this
year:
Bread	
25	cents a loafMilk	
25	cents a quartEggs	
90	cents a dozenPotatoes	
10	cents a poundOranges	
$1.80	cents a dozenGasoline	
80	cents a gallonWood	$25.00 a cord
Electricity 25 cents a kilowatt hour, plus eight per cent federal tax on the amount.
I understand that the rates for electricity in the more heavily settled portions of the country range from two to four cents per kilowatt hour, while these people have to pay twenty-five cents. The returns paid to industry and the worker are not a great deal higher than would be paid to workers and industry in more accessible parts. Some governments are showing an interest in northern development and are seeing to it that special considerations are given to their people in such areas. It behooves our government to do likewise if they wish people to settle in our northern territories.
Perhaps the greatest barrier to the development of the Atlin and Yukon territories is the complete monopoly in transportation and, unless this monopoly is recognized and dealt with, it will in the final analysis have a detrimental effect upon the development of the territory. For example, with transportation as it is at present, Atlin may well be regarded as being completely isolated. During the period from June 1 to October 15, the district is serviced by lake transportation. This service is given by the White Pass and Yukon Railways, which have a franchise on the lakes. Therefore, having their high freight rates and service protected by lack of competition, they have for the past ten

years not given any passenger service on Atlin lake, thus leaving all such travel to the one and only air line serving the district, namely, Northern Airways. The capacity of the White Pass and Yukon railway equipment is limited and inefficient, making the transportation of big machinery out of the question, and the handling of tonnage too small to interest large mining operations. During the remainder of the year, the only method of obtaining freight is by air, unless the ice is suitable for travel; then freight is brought in by tractors and, if very good, by trucks. This mode of travel is not always safe, because there have been several cases of equipment going through the ice.
To bring freight in by air costs five cents a pound air freight and eight cents air express. This is brought in from Carcross, Yukon Territory, to Atlin, British Columbia, a distance of seventy-five miles, or approximately forty-five minutes flying time. The service is very poor, because they make trips with freight at their convenience, when they have a full load. The passenger service is the biggest headache. Rarely does the plane have even a single seat, because the majority of the passengers are crowded in with the freight and mail. The present year-round rate for passenger fare is $23 one way, or a little over thirty-two cents a mile, compared with 6-86 cents a mile from Whitehorse to Vancouver. It may be argued that this high price is necessary owing to the shortage of pay-loads regularly, but only twenty-seven miles of road have to be built by the federal government in order to alleviate the condition. The competition of road service would no doubt bring down the cost of air transportation and at the same time would facilitate the expansion industrially of that area. Surely a government which believes in competition would aid in bringing about that happy state rather than leave it in the present condition.
The British Columbia-Yukon chamber of mines has been fighting the high costs of passenger and freight charged by Canadian Pacific Air Lines between Whitehorse, Mayo and Dawson city. Their original complaint with respect to the service of the Canadian Pacific Air Lines and discrimination in tolls charged was dated June 15, 1945. They have carried on voluminous correspondence with Canadian Pacific Air Lines and the air transport board over this matter since that time. During this long struggle, they have seen an improvement in the type of equipment come into effect, equipment that should be able to operate more cheaply than the original equipment could. However, a decision of the air

The Budget-Mr. Archibald
transport board, arrived at on February 15, 1947, states that the board is unable to discover that any discrimination against these centres exists; and that, in spite of the fact that more modern equipment is now flying over that area, which should lower the costs considerably. It is also a fact that a greater amount of activity is apparent in that territory than existed during the war. Therefore pay loads will be on the increase.
It can be argued successfully that one company, on being given a monopoly, should be able to operate at more reasonable rates than if competing lines were servicing the area, and seemingly this argument is recognized inasmuch as Canadian Pacific Air Lines have the sole right to operate passenger and freight service through this area. However, when a company is forced to make a profit by the nature of the system we live under, I believe it should become apparent to the government that help should be given to outlying areas, such as Dawson city, in order to cut down their costs. This can be accomplished through paying a subsidy to the company operating the mode of transportation or by a more rigorous perusal of their accounts than seems to be the case. That discrimination exists in this area is exemplified by a night letter which was sent by Mr. H. W. Firth, secretary manager, British Columbia-Yukon chamber of mines, from Dawson city to Mr. C. S. Booth, secretary of the air transport board, room 123, No. 3 Temporary building, Ottawa, Ontario, on February 24, 1947, reading as follows:
Your letter February 1 received. We note fare Whitehorse to Edmonton now seventy-five dollars. Whitehorse to Vancouver now eighty-nine dollars. But more particularly fare from Whitehorse to Fairbanks reduced to thirty-five dollars one way. Understand run leased to Canadian Pacific Air Lines further that same is dependent upon questionable volume of passenger revenue. Apparently subsidies direct or indirect are paid to lessee to provide service into foreign country. When may we Canadians expect relief from exorbitant fare Whitehorse to Dawson, sixty dollars one way presently charged under an exclusive subsidized monopoly. Delay in rectifying apparent prima facie case of discrimination and in our opinion outright favouritism shown carrier absolutely incomprehensible to this organization.


John Ritchie MacNicol: Has the hon. member the return fare from Whitehorse to Dawson?


Harry Grenfell Archibald: I am sorry I have not that data at hand.
I believe that this night letter in its way is the best example that I can give of the problem facing these people. Again the government has within its power the opportunity to solve this question by putting through a road from the Alaska highway to
Dawson city. This would provide a method of lowering rates faster than all the petitions that could be made before such boards as the air transport board. It would also give an opportunity for small independent businesses to be established in such towns as Dawson. For example, the Dawson city miners have been trying to operate a cooperative store there but, owing to the fact that they have to bring in such large quantities of goods in a short time during the summer season, they simply cannot get far enough ahead in order to carry a sufficient stock to make that business grow. Now that the Alaska highway is in that country, I believe it would be an economic proposition to ask the government to tie in with it existing industrial centres so that they could be given a chance to grow and develop.
Again, I should like to point out that other countries are developing their northern districts with all the aid that the power of the state can command. If we expect to keep pace and at the same time prove the ability of our democracy to exist, we must do likewise.
On motion of Mr. Benidickson the debate was adjourned.

The house in committee of supply, Mr. Golding in the chair.



DEPARTMENT OF NATIONAL HEALTH AND WELFARE

[Stage Direction]
200. Departmental administration, $531,954.
Item stands.
DEPARTMENT OF NATIONAL REVENUE General administration, $1,168,648.
Item stands.
Progress reported.
It being five minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.
Wednesday, May 14, 1947