[Stage Direction]
Sixth report of the standing committee on banking and commerce.-Mr. Cleaver.


Hon. DOUGLAS ABBOTT (Minister of Finance):: Mr. Speaker, I wish to table copy of order in council P.C. 1994 of May 20, 1947, the effect of which is to postpone from June 30 to September 30, 1947, the issue of a proclamation terminating the War Exchange Conservation Act, 1940.
Hon. members will recall that many duties on imports from the United Kingdom were temporarily eliminated, and others were substantially reduced below the British preferential rates in effect in 1939, as a wartime measure under the War Exchange Conservation Act. It was provided that this act should expire on the date of the issue of a proclamation under the War Measures Act declaring that a state of war no longer exists, or on such earlier date as may be fixed in a proclamation of the governor in council.
In view of the decision to conduct tariff negotiations on the basis of Canada's pre-war rates of duty, an order in council was passed December 30, 1946, providing for the issue of a proclamation on June 30, 1947, terminating the War Exchange Conservation Act. It now appears probable that the negotiations in progress at Geneva will not be completed by June 30. Accordingly, the government have decided that it is not desirable to restore the regular rates of duty on that date, and have postponed to September 30 the issue of the proclamation in question.



POSTAL SERVICE


Hon. ERNEST BERTRAND (Postmaster General):: Mr. Speaker, hon. members will no doubt be interested in knowing that it has been decided to issue a special postage stamp to commemorate. Canadian citizenship. The stamp will be of the 4-cents denomination. Arrangements are being made for its sale on or as soon after the 1st July next as possible. The new stamp will not replace the current 4-cents red, but will be supplementary to it. It is expected that the special stamp will be available during a period of two or three months.

Inquiries of the Ministry


Mr. GRAYDON:: May I ask whether this special stamp will be the same size as the ordinary postage stamp? I notice that in the United States they are reducing the size of their stamps for convenience' sake, and I wondered if the government here was doing the same.


Ernest Bertrand: It will be a little smaller than the special Graham Bell stamp.


Gordon Graydon: The Graham Bell stamp was pretty big.


Mr. BOUCHER:: May I ask the Postmaster General if it would not be most appropriate to put the picture of Barbara Ann Scott on the new citizenship postage stamp, thus exemplifying true Canadian citizenship?


Mr. STEPHENSON:: In view of the statement which the Postmaster General has made with respect to new postage stamps, will the Secretary of State tell us how many people in Canada have taken out citizenship papers up to the present time? It might be well to tell us how many at $5 and how many at $1.


Hon. COLIN GIBSON (Secretary of State):: I could not give these figures offhand. I think the question ought to go on the order paper.



IMPORT AND EXPORT CONTROLS


[Stage Direction]
On the orders of the day:
Douglas Charles Abbott: Mr. Speaker, yesterday the hon. member for York South (Mr. Cockeram), asked a question arising out of a Reuters dispatch from London to the effect that the purpose of Mr. Graham Towers' visit to England was to discuss, first, a second loan from Canada and, second, reimposition of certain Canadian wartime import and export controls. He was good enough to give me notice of his question. I am sorry I was not here yesterday to answer it, but I do so today.
The dispatch was the usual newspaper speculation as to Mr. Towers' visit. As the house knows, he has been in the habit of visiting London and Washington at various times to discuss with the central bank and the treasury officials matters of mutual interest to the respective countries. That is the purpose of his visit to London. Before his departure he and I did not go into all the matters that he proposed to discuss, but I can say that he was neither instructed nor requested to discuss either of the specific matters referred to in my hon. friend's question.



DOMINION-PROVINCIAL RELATIONS INQUIRY AS TO RESUMPTION OF CONFERENCE WITH PROVINCES

[Stage Direction]
On the orders of the day:
Mr. J. M. MACDONNELL (Muskoka-Ontario):: I should like to address a question to the Minister of Finance, of which I have given him notice. Will the minister comment on the statement of the premier of Nova Scotia, as reported in the press of last Friday, that the dominion government, as indicated in the Minister of Finance's letter of April 21 last-and here I quote the words attributed to the premier of Nova Scotia-"has abandoned the idea of securing compensation in return for vacating the fields of amusement and pari-mutuel taxes?" In the light of the statement, will the minister further say whether the way is not now open to a resumption of the dominion-provincial conference?


Douglas Charles Abbott: That of course is a matter of
opinion. I would not think the fact that, as stated in my letter, the dominion has stated it will be its policy to vacate the pari-mutuel and amusement tax field as soon as circumstances will permit, would of necessity have any bearing on the question of a further dominion-provincial conference. As the house knows, seven provinces have already entered into, or are in the process of entering into, tax agreements for five years, and therefore so far as these provinces are concerned there is nothing to be gained by a further conference. As to whether this makes it easier for other provinces is of course purely a matter of opinion.



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
Mr. F. S. ZAPLITNY (Dauphin):: I wish to direct a question to the Minister of Reconstruction and Supply, arising out of a telegram I have just received from the Dauphin board of trade. The telegram refers to the proposed air service between Winnipeg and Flin Flon commencing June 1, and strongly recommends the inclusion of an air mail service on this route. Is it the intention of the government to include the air mail service between these two points?


Right Hon. C. D. HOWE (Minister of Reconstruction and Supply):: I am aware
that the air transport board has licensed a private operation for service between Winni-
Inquiries of the Ministry

peg and Flin Flon. However, the hon. member will appreciate that post office contracts are given by the Postmaster General. Perhaps my colleague can answer the question.


Frederick Samuel Zaplitny: I should like to direct
a question to the Postmaster General. Is he prepared to make a statement now pursuant to the serious consideration he has given to the request of the hon. member for Churchill (Mr. Moore) for an air mail service between Winnipeg and Flin Flon?


Ernest Bertrand: I am not in a position to answer
the question immediately, but I shall take it as a notice and answer it either tomorrow or the day after.



INQUIRY AS TO REASON FOR INCREASED PRICE

[Stage Direction]
On the orders of the day:
Mr. D. G. ROSS (St. Paul's):: In view of the announcement in this morning's press that there is to be an increase in the price of nails, will the Minister of Reconstruction and Supply say whether the companies which manufacture the nails are working to full capacity, and whether the question of price is the reason for the present shortage of nails in Canada?


Clarence Decatur Howe: The nail plants .[DOT]are working to capacity to the extent that dhey can obtain steel rods. It is hoped that :the increased price for nails will divert additional raw material into the nail plants.



RENT CONTROL


[Stage Direction]
On the orders of the day:
Mr. STANLEY KNOWLES (Winnipeg North Centre):: I should like to direct a question to the Minister of Finance. Is there any law or regulation permitting landlords of residential premises to increase rents by any amount greater than the ten per cent referred to by the minister some time ago? There seems to be a lot of confusion about this.


Some hon. MEMBERS:: Order.


Stanley Howard Knowles: Will the minister make a statement?


Mr. SPEAKER:: Order. I suggest to the hon. member that he put his question on the order paper.


Stanley Howard Knowles: It is urgent, Mr. Speaker.



EMIGRATION


[Stage Direction]
On the orders of the day:
Hon. W. EARL ROWE (Dufferin-Simcoe):: I am sorry I did not notify the Prime Minister of this question. Recently there have appeared in the press, statements that large numbers of Yugoslav Canadians are leaving this country. I should like to ask the Prime Minister if it is a fact that some fifteen hundred are leaving Canada to return to the seat of government of Yugoslavia, and if so, whether they have received export permits to take with them $2 million worth of equipment and materials. In this morning's Montreal Gazette there appears the statement that Canada has been blackballed by Yugoslav communists as a country where people jump from buildings and commit suicide and where the common man has no future because of the capitalistic system.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: My hon. friend is surely not serious in expecting that. I should be able to answer the question immediately. I shall be glad to get him what information I can as to the numbers who have secured export permits. I doubt whether I can give confirmation or the reverse of the accuracy of his statement about what happens in Yugoslavia.


William Earl Rowe: It appeared in the Gazette.


William Lyon Mackenzie King: That does not necessarily mean it is correct.


William Earl Rowe: Perhaps I may be permitted to ask another question of any member of the government. Do they know anything about this holus-bolus exodus from Canada at a time when we need population? I can appreciate the Prime Minister's reply and I am sorry I did not notify him of the question. Surely some member of the government knows something about it.


Mr. ALAN COCKERAM (York South):: Apropos of the question asked by the hon. member for Dufferin-Simcoe (Mr. Rowe), I should like to put a supplementary question to the Minister of Finance. Can he inform the house how much capital is being exported by the Yugoslavs who are leaving the country, and whether export permits have been granted with respect to that capital?


Douglas Charles Abbott: I will take note of the question.

The Budget-Mr. Kirk


Mr. COCKER  AM@: I desire to direct a question to the Minister of External Affairs. Has the government given assurance to the Yugoslav emigrants now leaving Canada that at the end of the five year period they will be allowed to reenter Canada? Are they travelling under Canadian passports, and if so, are they retaining their Canadian citizenship?
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): The hon. member sent me notice of the question, which I received just as I came into the house. I can say at once that the government gives no assurance to Yugoslavs or to anyone else about their rights to reenter this country. They have to ascertain their rights from the existing Canadian legislation. With respect to the other portions of the question, I shall make inquiries from both the Department of External Affairs and the Department of Mines and Resources. Of course, if Canadian citizens of Yugoslav origin apply for Canadian passports they have the right to get them. I will also inform the hon. member how long a naturalized Canadian, travelling from Canada on a Canadian passport, can be away without endangering his Canadian citizenship under his certificate of naturalization.



REQUEST FOR INCREASE IN PRICE FROM $36 TO $50 AN OUNCE

[Stage Direction]
On the orders of the day:
Mr. LEWIS MiBNARY (Wellington North): I should like to direct the following question to the Minister of Finance. Will the government consider raising the price of gold from $35 to $50 an ounce? During recent months the price of copper has been increased 100 per cent, zinc 100 per cent, lead 150 per cent, and there has been a substantial advance in nickel-
James Horace King: Order.


Air. MENARY:: In 1932-33 the then government raised the price of gold from $20 to $35 an ounce-


James Horace King: I would advise the hon. gentleman that the next time he has a question to ask and the Speaker rises and calls order, he be kind enough to resume his seat.
Mr. MENARY-: I am sorry, Mr. Speaker. I did not know you were on your feet.



THE BUDGET


[Stage Direction]
The house resumed from Thursday, May 15, 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. Macdonnell (Muskoka-Ontario) and the amendment to the amendment of Mr. Coldwell.
Mr. J. R. KIRK (Antigonish-Guysborough):: First of all, I should like to join those speakers who have preceded me in this debate, in offering my congratulations to Minister of Finance (Mr. Abbott) on the excellent presentation of his first budget, and on the message of good cheer and hope which it contained.
The wide acclaim being accorded to the minister is indeed well deserved; and the measure of his worth is indicated by the generous manner in which he himself bestowed upon his predecessor in office much of the credit for such an inspiring budget.
An intelligent examination of the sound economic and financial status of this nation at the present time is, I submit, a remarkable tribute to the manner in which the finances of Canada were handled during the war-a period which was certainly the most anxious in our history. So, at this point, Mr. Speaker, I pay my humble tribute to the man who worked hard and long, who gave his efforts and ability unstintingly to the service of his country with such superb success as has made this budget possible, the former minister of finance (Mr. Ilsley). In extending my congratulations to a minister of the crown, it is with added pleasure that I do so, in view of the fact that he is a native of my own province.
In an effort to contribute to this debate, Mr. Speaker, I propose to invite the attention of the house to matters which are full of importance to the every-day life of many thousands of Canadians, and particularly to the section of the country which I have the honour to represent.
Two of Canada's greatest primary industries, fishing and agriculture, form a major means of livelihood to which the people of Nova Scotia daily devote their lives and efforts. I do not think that I am being repetitious, and certainly I disclaim any platitude, in stating that the farmers and fishermen of Canada must at all times be regarded as the backbone of this country. They know no fixed hours; they observe no particular holidays. Yet, Mr. Speaker, when one lives with them and among them, as I do, the conclusion is inevitable that here indeed is Canada; here are the men and women who are daily actually making the greatness of this nation. And so I state that
The Budget-Mr. Kirk

any matters which affect the daily lives of such people must be regarded with respect and assumed to be of importance by the government and by this house.
All hon. members know of our individual efforts with various government departments on behalf of our constituents, and it is true, we can often accomplish much good without inviting the attention of the whole house to the work in hand. However, what I have to say today has not, I think, been mentioned by other speakers, and I shall therefore take a few moments to place some suggestions before the house on behalf of that part of Canada usually referred to as "the maritimes".
To maritimers, it was indeed a pleasure to hear the hon. member for Davenport (Mr. MaoNicol) address this house, one week ago today, in the interests of the maritime provinces. Representing as he does not only a riding in central Canada but a riding in one of our most highly industrialized centres, the hon. gentleman's remarks were particularly gratifying and encouraging.
Few there are in Canada today who can vie with the hon. member for Davenport in personal knowledge of the outlying districts of our vast country. The interest he has shown in the problems confronting each section of Canada displays the wide viewpoint of a true Canadian-one which all Canadians might well strive to attain; and his spirit of unity and tolerance should be extolled and emulated if Canada is to find herself a truly great and united nation.
It is inspiring to those living in the maritime provinces to know that we have such a good friend in central Canada as is the hon. member for Davenport, and I am proud to pay this tribute to him.
Now, Mr. Speaker, in the fisheries industry, it must be admitted that much important progress has been made during the past few years. We are gradually approaching a point where all people directly concerned with this industry are cognizant of the necessity for scientific approach to it, whereby we may compete successfully with those countries which for many years past have been miles ahead of Canada in fisheries policies.
The present Minister of Fisheries (Mr. Bridges) is indeed to be congratulated on the fine work he is doing in the development of Canada's fisheries. I was more than pleased to learn of the expansion to be made in the department's field service. The establishing of fisheries schools and the training of young veterans in the scientific aspects of the industry will, I am sure, be most beneficial in promoting the welfare of our fisheries and our fishermen. However, in spite of whatever

progress may have been made and which is likely to be made in government policy in this sphere, I think that we must at all times bear in mind that it is the welfare of the fisherman himself which must be the nucleus of any policy for our fisheries. And no matter how many national or international conferences may be held with reference to our fisheries, or how vigorously the scientific aspect of the fisheries may be pursued, we must at all times have the general well-being of the fisherman himself as a paramount consideration. This is a reason for my having mentioned at the outset that matters which may appear to be unimportant in comparison to other major items in the budget are nevertheless of the greatest importance to the daily lives of our people. This is a function of parliament which I suggest must be borne in mind constantly by each government department and by the house as a whole.
The coast line in the counties of Antigonish and Guysborough is, as is well known, very rugged, and this makes the work of our fishermen more difficult and dangerous than it is in most other places. During the fishing season it is essential that the fishermen take advantage of every possible hour in order to secure as large a catch as possible. In the present circumstances there are days lost unnecessarily all during the season because it is not possible for the fishermen to go out in their boats. I realize that during the war years it was not practicable for the government to undertake work to overcome these handicaps. However, I have no hesitation in stating now that any post-war undertaking of the government must recognize and implement much needed and overdue construction work in this respect. I strongly urge the planning and early construction of suitable wharves and breakwaters. True, the fishermen of years ago did not have such facilities; but surely, Mr. Speaker, the fishermen of today are entitled to share in the progress of our civilization. However, sir, I have to state that rather than enjoying the fruits of such progress, our fishermen, in comparison to their fellow workers in the industrial areas, seem to have been forgotten, and the available results of our modem advancement have been denied to them. The construction of good wharves and the erection of adequate breakwaters is, I insist, an immediate necessity in many parts of the maritimes, and I trust that the representations which are being made in this respect will * bring good results. This is not a work which requires any great outlay of money, but it is one which for many years to come will react to the benefit of this great and essential industry.

The Budget-Mr. Kirk
In this connection I also urge the immediate necessity for a complete change in dredging operations in the maritimes. The present position is entirely unsatisfactory, and in my opinion it can be improved immensely. I recommend the acquisition by the government of a sufficient number of large and small dredges to do the work which at present remains undone because the dredges now in use are ineffective, or because of a lack of dredging equipment. The unfortunate result of the present position is that men are actually prevented from accomplishing their work, or are severely handicapped in their efforts to do it. This is one suggestion which would solve some of the existing difficulties, and the expenditure involved would be a wise and beneficial investment for the government to make.
In another matter of practical help for our fishermen, the policy of other countries has been to erect small cold storage and freezing plants at many convenient points. Such plants have the twofold effect of preserving the fish catch and of maintaining a sure supply of bait. The lack of bait prevents fishing activities on those days when no bait is available. The erection of such small plants as I mention would solve this problem. In those few places where there are such plants, they have been highly successful. In advocating such a policy, I do so with the knowledge that the increased return enjoyed has more than justified the expenditure involved. I say that we have long since passed the stage when such facilities are regarded as extravagant. They are now actually a necessity.
In advocating such material advantages for the fishermen, I am not unmindful of the necessity for our concern with his more personal welfare. I need do no more, I am sure, than to mention the grave hazards faced by the fishermen day by day. We have, it is true, tried to minimize these to some extent, However, I know of places where the hazards can be greatly lessened, and to this end I urge the adoption of some suggestions which I shall make-suggestions which, I may say, are the direct result of representations made to me . by the fishermen themselves.
I suggest that a more thorough system of bell buoys and whistle buoys would be highly desirable as a measure of increased safety for small-boat fishermen. I am aware that there are objections to this measure because of the possibility of confusion. However, I suggest that at many points of danger which exist at present, no confusion whatever would result. Rather would there be, I maintain, a great deal of security which in too many instances
is now absent. The cost of installing such safety measures is trifling; the benefits would be great. I know that it is not a lack of a sense of responsibility which has prevented the adoption of such measures, but I would urge the government to undertake this very simple and inexpensive work as soon as possible.
I wish to mention another item respecting aids to fishermen which has already been emphasized in this house, notably by the hon. member for Queens-Lunenburg (Mr. Winters). As I have stated, I wish to avoid repetition and so I shall content myself with voicing my support and endorsement of the proposal. I refer to the maintenance of an adequate coast guard patrol. Every year in the maritime provinces we are forcefully, and all too often sadly, reminded of the necessity of an adequate coast guard. In common with other hon. members from the maritimes and British Columbia, I look forward to early action on this proposal.
In the other great primary industry of agriculture I welcome the progressive leadership given to the industry by the right hon. Minister of Agriculture (Mr. Gardiner). Of course most of our farms in the maritimes are not comparable in size with those in central and western Canada, but we maritimers are fully aware of their vital necessity in our lives. Maritime farmers have done, and are continuing to do, a really splendid job, and are producing ever-increasing quantities of farm products. In our agricultural policy wre must continue to pursue the programme which has been given such successful impetus and direction during the past few years. Not only must we expect full and good production from our farmers, but we must also assure to the farmer a just and reasonable return from his difficult and highly important work. While maritime farmers have increased their production, especially during the war years, very often under severe difficulties, the unfortunate fact remains that they could be producing still more. Again I shall try to avoid repetition by saying briefly, and as strongly as I can, that the reclaiming of the marsh lands of the maritimes is an urgent, desirable and highly advantageous undertaking.
Perhaps I cannot do better than repeat the remarks of the Minister of Agriculture as made to this house on May 30, 1946, at page 2013 of Hansard:
We are looking for land upon which to settle men coming back from overseas, upon which to settle persons who are coming from the overpopulated areas in other parts of the world, and upon which to settle the sons and daughters of our farmers in different parts of Canada who
The Budget-Mr. Kirk

The Budget-Mr. Hackett

young men and women who were in various branches of the services, need a great measure of encouragement in order to devote their best efforts, their intelligence and their ambition to the building of this great nation. I think we may take pride in the fact that our country's present economic status, and our expectation for the future in the light of Liberal government policies, will provide the encouragement which I mention as being needed. Indeed, the same encouragement is there for those of us of an older generation to help and guide the younger Canadians in their work.
And so, Mr. Speaker, I say that we have every reason, in the light of this year's budget, to look forward to the future greatness of Canada with full faith and complete confidence.
Mr. JOHN T. HACKETT (Stanstead): "We have just ended a year in which our accounts show a surplus-a surplus larger than the accumulated total of all the previous surpluses in our history. Today we see a Canada enjoying a degree of prosperity never exceeded in living memory. We look forward to a year of high production and incomes. . . . Our available manpower is almost fully employed, with some surpluses in special areas and trades and equally real shortages in others. Demand continues to outrun supply in many lines of business. Our exports remain at high levels, limited in most cases only by our own ability to supply. Imports are pouring into the country from the south in large volume, without appearing to divert much demand from our own production. Private business is proceeding to expand, repair and improve its capital on a scale so large that its plans will be severely limited by scarcity of materials, equipment and labour. Some increases in inventories are occurring but apparently not on a large scale, presumably because the pressure of demand in most cases is so excessive that neither producers nor dealers can keep ahead of it. Consumer purchasing continues to expand and there is as yet little sign in Canada of any widespread unwillingness or inability on the part of consumers to buy what is being offered to them."
Mr. Speaker, these are bold and ringing words, but they are not mine. They are the words of the Minister of Finance (Mr. Abbott).
Are they true? I assume that they are; I ike to believe that they are. But should it nappen that any of the legislation embodied in what we have been pleased to call the omnibus bill be challenged before the courts; should it come about that the right of parliament. to invade the provincial field of legisla-

tion be challenged; should someone question the right of the executive to take unto itself all the prerogatives of parliament-yea, should some citizen deny the power of parliament to surpress the elementary rights of citizenship; should someone say that those rights which have been arrogated to itself by parliament, upon the basis of a national emergency, are not properly taken because no national emergency exists, then the first witness to be summonsed to dispel the fiction and to show up the falseness of the so-called national emergency would be the hon. gentleman who has spoken so truthfully and so well of his country.
The Minister of Finance tells us that employment is complete, that trade is unrivalled, that earnings are greater than ever; that we are a happy, a prosperous and a vigorous people going forward to our destiny. And those statements are made by a responsible minister after a colleague, only a few short weeks before, had said that there exists a national emergency which justifies the suppression of the constitution of this land!
I mention this, not with any desire to be disagreeable to the minister-no. I mention it so that the fiction-I was going to say the farce-of this national emergency might show its painted face and its withered limbs once again to the scorn of right-thinking people in this dominion.
And what of the budget itself? I will not attempt to criticize it in detail. Had the minister consulted me, or had he been interested in what some at least on this side of the house think, he would have done away with the excess profits tax. I think, in the first place, that "excess profits" in this sense is a gross misnomer; the person who devised that name was a master of the art of propaganda. There is something in this unseemly combination of words that savours of selfishness, something that savours of impropriety which should not be applied to the tax. This terminology should be banished from the sober and accurate language of a taxing statute.
But I go further and say I believe that the treasury itself would have been richer at the end of the taxing period had this excess profits tax been eliminated immediately. Because the minister knows, as do others who have some acquaintance with business, that it is only natural that he who has a savoury bit in prospect would wait until his participation in the benefits therefrom would be greater than if taken under the excess profits tax legislation. I submit that even if such action were contemplated, the statement should not have been made that the tax was to be abolished. I do think there are some things which either

The Budget-Mr. Hackett
should be done or should be kept behind the walls of that vast and ever-changing reservoir of government policy.
My friends to the left probably will not share this sentiment: I am not of those who are profoundly impressed by the idea of planning. I like to plan for myself, and I am quite willing that my neighbour plan for himself, but the difficulty comes when we begin to plan for others who do not wish to be planned for. I am brought to this observation by the fact that after the war we entered upon a brave new era, and the minister of finance at that time-the Minister of Finance of today will correct me if I am wrong; I looked for the text but could not find it-went before a dominion-provincial conference here in Ottawa and outlined the government's great new plan. It was a plan to tax ourselves roundly during periods of prosperity and build up a treasure _ house into which we might delve in periods of depression, when taxes would be lowered and public works started that the people might have bread. I thought to myself as I listened to the budget speech how quickly plans vanish. My hon. friend and his party may have wished to continue in the plan that they outlined, but there is a master who has to be obeyed, however pious the wish that runs contrariwise. The electorate insisted on reduction in taxation, and reduction in taxation was made. Plans for the rainy day, plans for high taxes during a period of prosperity-and this is a period of unrivalled prosperity-plans for bad times and public w'orks then to be undertaken- all these plans went into the receptacle which in the end receives all plans, the ash can.
Now about housing. I have heard my friend to the left tell the Minister of Reconstruction and Supply (Mr. Howe) that his plans had failed, and I heard the minister the other day himself speak of one of his measures-I think it was Housing Enterprises Limited, but I am always uncertain, Mr. Speaker, when I approach these multiple activities of government; when I begin to talk about them. I feel that the night is dark and I am very far from home. But his plans, like the plan about which I spoke a moment ago, found their way one by one into the same receptacle. Until we have broken this stiffnecked Canadian people of its waywardness, of its desire to do things for itself in its own way, we are not going to fasten the collar of bureaucracy upon them. They are going to do things in their own way, and when it is attempted to force other ways of doing it upon them, those other plans will invariably fail. So I listened the other day 83166-208J
to the minister telling the story of the abandonment of that particular plan, just as he abandoned making aeroplanes and abandoned the monopoly of the air, and just as other plans must shortly be abandoned.
But I want to make this suggestion to the ministry, ere it is bereft of all its powers of doing something for the little brother, the people. It is unfortunate that all1 the housing has been done in the cities, that all the building has been done there. Oh, I know some gentleman is going to say that this act and that act provides for housing in the country, but the houses that have been built in the country, whether for the veteran or for somebody else, are so negligible in number that we can forget them right away. We have seen the already substantial industrial development of our own country greatly increased by the exigencies of war. We have added to our plant capacity. We had to make munitions of every type, and we took into this great and new plant a new army of workers. We took in the mothers and the wives and the daughters of the Canadian people to participate in the great work of urgency; they came from the land, from the villages, from the parishes into the industrial centres. This is not one of the minor tragedies of the war. There they are going to stay, and there the government has attempted to build houses for them. If the government had consulted me I would have suggested to them that they make a great effort and offer some enticement to these brave people who had come from the land into the cities, to summons them to go back home, back to the soil. I would have attempted to entice them back by building for them good, warm and attractive houses near the source of all that is rich and good in any country- the mother earth. The government has overlooked that opportunity.
I come to another point that I would like to have heard the minister deal with more fully and more effectively. I need not assure the minister that I do not hold myself out as a person of deep learning in economics, but I do know that Canada is one of the great trading nations. This country in terms of population is small, almost insignificant; yet it ranks third or possibly fourth among the great trading nations of the world. This country exports somewhere between 35 and 40 per cent of its production. What portion of it is manufactured? I do not exactly know, but if you assume that newsprint is manufactured goods, if you assume that cheese, butter and bacon are manufactured goods, I make bold to suggest that at least half our exports are manufactured goods. We can live as we are living now if
The Budget-Mr. Hackett

we can find markets, external markets, foreign markets for these goods. Where are we to find these markets? In the past always, I may say, we have bought more from the United States than we have sold to that country. To pay our debt to the United States we have relied upon the proceeds of our sales to other countries, which we have converted from pounds-sterling or other currency into dollars which the United States have accepted in settlement of our accounts. Today, outside of the United States, there are no foreign markets. There are markets to which we are shipping goods, but we are shipping goods which are paid for how? By credits that we have established. They are paid for by ourselves.
I should have been very happy if the minister had brought to bear upon that problem some of his experience and some of the information which association brings to him, because we all know that this condition cannot persist. It must come to an end, and shortly, unless there be a change. I should have liked the minister to deal with this topic, because it seems to me it is the most important question which confronts us as a people today; it is all important to our economic survival. Unless we can find markets for our manufactured products, for the products of our farms, of our forests and of our fisheries; unless we can find markets which can give us in exchange for our goods something which we can use in the United States to settle for our excess purchases there-oh, I am not one of those who thinks the world will come to an end if we have hard times-'there will be a drop in our standard of living, there will be unrest, discomfort and suffering among our people. Our people will be able to survive only if they go back where most of them came from, to the land, and any government which neglects that fundamental truth is not alert to the great possibilities and dangers which confront our people.
I should have been glad had the minister been a little more explicit, a little more careful when he talked of our reserves of United States dollars. To one who read his speech casually, to one who listened to it even with great attention, as it was my privilege to do -and possibly if too many of my party friends were not listening, I may say with a wee bit of pride for he comes from a part of Canada that is dear to my heart, he was not sufficiently explicit. I wish he had told us exactly how rapidly our reserves of United States dollars are disappearing; for we should then have been in a much better position to appreciate our plight.
I am going to ask the minister to do several things, but one thing that I want him to do, and I believe he will do it, is to tell the house exactly what inroads we made upon our United States reserves last year, and what so far this year. I understand that up to July 5, 1946, we were accumulating rather rapidly, and that after that we not only lost what we had accumulated but made heavy inroads into our reserves; that in fact we were in deficit something over $600 million. If I am wrong, so much the better; but if it be true, we should know it; we should know the full unvarnished truth whatever be the cause.
There is another matter-and this is one that is somewhat difficult to talk about because it affects our hearts as well as our heads and to many of us it affects the heart first; we are told that Mr. Towers, the governor of the Bank of Canada, is in England. We know that in the annual report of the Bank of Canada Mr. Towers has sounded a note of warning. We know that in his report on the foreign exchange control board he has sounded another note. "The testing period lies ahead." he says. He points out in guarded language, but in language that is ominous nevertheless, that there must be a change or Canada will find herself in a most difficult situation. Most people would like to know what the facts are. In this house in the last few months we have heard much about charity. In the last few days we have heard much about justice. They are great virtues. But there is one that underlies them all, and that is truth. We are entitled to the truth in this house, the whole truth, and I implore the minister to take the house into his confidence.


Douglas Charles Abbott: He has.


Mr. HACKETT:: I am not of those who are scornful of the skilled man, of the man who has made a specialty of banking or economics and who occupies a position of trust in one or in many departments of government. I do not wish to belittle these men; but, sir, I have respect for the wisdom of the men of affairs; I have respect for the experience of this house, close as it is in the wisdom of the electorate, and I believe that however great be the perils that surround us, the best way to meet and overcome them and the best way to allay the uneasiness that pervades the whole country is for the minister to take the house into his confidence and let the house know exactly what the situation is.
The house would like to know what markets are available anywhere in the world. The house would like to know where our commodities, whether the products of the farm or the forest, of our fisheries or our industrial

The Budget-Mr. Ilackett
plants, might be sold. The house would like to know the necessities, the actual condition, of those to whom we have made advances. There appeared the other day in a government publication, under the heading "Canada's cost of war, aftermath estimated at twenty billions of dollars", a few concise and revealing statements. The statement I am reading from shows what amounts had been disposed of by gifts, by mutual aid, and by loans. Anybody who totals these figures will find that the three billions of our national debt at the beginning of the war shrink into insignificance compared with our largesse during and since the war.
I am not arguing that it was not a wise thing to do; I am not arguing that we should not go further; but I do say that this house should not be asked to take the responsibility of a decision which may involve our own survival until it has all the facts clearly stated and in a form fully intelligible not only to parliament but to the people of this dominion. I do not think I am going too far when I say that possibly owing to habits of secrecy which was cultivated, perhaps necessarily, during the war, there is a tendency today not to trust parliament. There is a tendency to do things in an arbitrary way because they have been advocated by the experts. Again, T do not wish anyone to think that I am criticizing the experts. The experts have their place. They have made special studies and investigations. But I believe that all their technical knowledge should be tried out with the touchstone of experience, and I do not think it is well that this country should further advance into the realm of indebtedness until all the facts have been clearly brought to parliament.


Douglas Charles Abbott: Will my hon. friend allow a question?


John Thomas Hackett: Certainly.


Douglas Charles Abbott: What facts does he believe have been withheld from parliament, other than the day to day foreign exchange position of the foreign exchange control board?


John Thomas Hackett: Well, I will not-


Douglas Charles Abbott: If I might complete the sentence, I would say that the report of the board-


John Thomas Hackett: I do not think that the hon. gentleman's statement on our relations with the United States and the position of the United States dollar was one that- the ordinary individual could understand, and I do not think it was one which set forth in all its implications, as it should have been set forth, our real position.


Douglas Charles Abbott: That is a matter of opinion, Mr. Speaker. But the report of the foreign exchange control board was in strict accordance with the statute which called for it. It was a full and complete report; it gave the position as at December 31, 1946, and it was tabled at an earlier date than the statute called for.


John Thomas Hackett: That may be, but it dealt with the period of a year, and it did not break it down into two, when there were two different sets of conditions applied. There were the first six months when the Canadian dollar was at a discount of ten per cent and, as I understand, we were accumulating reserves. There was the period subsequent to that when we were eating up our reserves and we not only ate up what we had accumulated during the first six months but made vast inroads into our reserves; and as I read the report, I do not think that was set forth as amply as it should have been.
But I do not want my hon. friend to feel that I am critical in the sense of hostility. Our Canadian problem is a great problem and it requires the good will and work of everybody, be he expert, be he minister or be he humble member of parliament. I believe it will inure to the benefit of Canada; it will inure to the benefit of those whom we wish to aid, if we do not act until all the facts are before us.
Now what is the position in England? I do not know. We have varying reports. Public, men, public servants come here and they make statements which are contradictory. I am hopeful that when Mr. Towers returns we may have information which will be more nearly complete, more reliable, and which will enable us to set a course that will be for our own benefit and for the benefit of those whom we wish to aid.
If the moneys which we are advancing are serving the purpose for which we are advancing them; that is, if they are tending in those countries which are receiving them, to prime the pump, that is one situation. But if they are not serving that purpose, if there is no hope of inducing the pump to bring forth water from the well, or if the well be dry, it is well that we should know it. I am only suggesting that we take those precautions which a prudent administrator would take, which a careful merchant would take, which a successful farmer or manufacturer would' take. We want to know the facts. We want the benefit of the expert's advice. But we want to be in the position of bringing to bear upon
The Budget-Mr. Herridge

these problems the wisdom and experience of the Canadian business man and the Canadian member of parliament.
There is one other item I will ask the minister to keep his eye upon. We seem to be drawn into a great number of international organizations. I have been, I will not say horrified, but amazed at the great cost of these ventures. I should like to be quite certain that we are not paying more than our share and that no unnecessary payments are being made for these purposes.
There is just one additional word that I wish to say and I hope it will not be misunderstood. There seems to be a growing tendency on the part of the government to send forth civil servants as its emissaries to internationl gatherings. I am the first to admit that in our service we have able men. Recently in the state of New York we have seen one of them play a major role. But, Mr. Speaker, in my view that is not his place. Where policy is being made, where leadership is required for a country, there should be present the minister or his elected deputy. I am not critical of the individual, but I wish to point out that between the two German wars every country in continental Europe underwent a parliamentary crisis and there developed a powerful executive which completely annihilated parliamentary and democratic institutions. This may happen to us. I deem it my duty to point out that Caqada's growing habit of being represented by civil servants who some day may have to serve under another government is subversive of our whole scheme of government and is tending to undo the very excellent Canadian civil service.


Mr. H. W. HERRIDGE (Kootenay West):: I am sure everyone in this house enjoys listening to the hon. member for Stanstead (Mr. Hackett). I always appreciate listening to his sincere and, should I say, charming witness to the ideas and the tempo of the mid-Victorian period. I am quite sure he is conscious of the possibility of the near future as far as the economy of Canada is concerned, and that he is fully conscious of the vulnerable position Canada occupies with regard to exports and foreign markets. But, Mr. Speaker, he is recommending to the house the orthodox policies of the past which have produced nothing but war, depression, and war again. I shall have something more to say later in that respect, but I rise first of all to support the proposals with regard to the budget placed before this house by the hon. member for Rosetown-Biggar (Mr. Coldwell). I do so because I think those proposals were consistent and logical. Why are they con-
sistent and logical? Because they represent the approach of a movement which has a conscious social objective and is moving toward a definite goal.
I am not going to take much time now to deal with other aspects of the budget except to say that so far I do not think the arguments put forward for higher exemptions have been satisfactorily answered in this debate from the other side of the house. I must say that I am one of a good number of members of this house who very much deplore the fact that this government has not seen fit to remove the restrictions still placed upon cooperatives. I greatly enjoyed the speech made by the hon. member for Swift Current (Mr. Bentley). I think he gave an excellent exposition of the cooperative movement in this country and the stand of its members with regard to present taxation of the cooperatives. Why was he able to do that? Because he knew what he was talking about. He has spent his whole life in the cooperative movement, and he knows what it means to the average workingman and to the average farmer. I think the government lacks imagination in this respect-this government which placarded the country prior to the last election and assured the people that they stood for a new social order. There is no more inexpensive way for this government to contribute to the building of a new social order, a new economic democracy, than to assist the cooperative societies and organizations by removing these restrictions.
Again I think this government shows lack of imagination even in minor matters, as for instance, in the tax on electrical energy and the tax on soft drinks and chocolates. The youth of this country are organized into various groups. In my constituency there are teen-age groups, through which young people get together to take part in social activities in the community. Yet this government has not sufficient imagination to give these boys and girls, these young Canadians, a pat on the back by making it possible for them to have soft drinks at the pre-war price. May I say that the manufacturers of these beverages in my riding have informed me that if the government will take the tax off they are willing to sell the drinks at the previous price of five cents a bottle. But the government has not imagination enough to make that inexpensive concession to these young Canadians and say: We are willing to exempt you from that taxation because we are getting plenty out of the old sinners.
This afternoon I want to deal particularly with the wider aspects of the situation which the hon. member for Stanstead mentioned.

The Budget-Mr. Herridge
First I wish to quote briefly from an editorial which appeared in the Ottawa Citizen of May 9:
War-Scared Businessmen
When the businessmen of La Chambre de Commerce of Montreal are assured in their annual report that the single "greatest psychological factor" hampering Canada's "return to normal" today is fear of another war, it is time that the rest of the Canadian business world laid that fantastic bogey. It is a product of stupid propaganda and silly hysteria-confined entirely to this continent.
Nowhere in Europe today among responsible statesmen is there any fear of war. Certainly the Soviet Union is in no posture to wage it. Characteristic of the widespread European view that the next war-if it ever comes-is a long way off, is the recent declaration of Mr. Jan Masaryk, Czechoslovakia's foreign minister and president of the world federation of the united nations association. He knows both Europe and North America as few statesmen know these continents. And he finds that the united nations delegates are far more optimistic now that world differences and world complexities will yield to peaceful treatment than they were only six months since.
What is wanted, however, is that the united nations must be backed up by the "enthusiasm of which people the world over have shown themselves capable in battle and reconstruction." In other words, not only must every kind of political, cultural, religious, labour, intellectual, and youth and other organizations rally behind the united nations and its purposes, but the businessmen of the world must come to see that it is their business too to help to remove the misgivings, misunderstandings, suspicions and hatreds which encumber the economy of the nations and check or frustrate their commerce.
I think the gentleman who wrote that article had a sound and realistic approach to the present situation. In that respect, Mr. Speaker, I may say that is not only the opinion of the editor of the Citizen, but I find it is also the opinion of a good number of progressive thinking business men and others in this country, and I want to approach the subject along those lines. There is no question but that thinking people in this country realize that we are approaching a difficult period. There is a great deal of uncertainty with regard to the future. What is our position? The hon. member for Stanstead (Mr. Hackett) asked the government to define where our possible markets lay, and he offered certain orthodox proposals and remedies. We must think of this, that at the present time the British government has completed a trade pact with Poland; that trade negotiations are going on between the British government and the Soviet Union; that there are possibilities the Soviet Union may supply other countries with food and obtain from British commonwealth countries the goods they require, the wool they need from Australia, and the machinery and
electrical equipment required from other British countries. At the same time those who know the facts realize that the United States is making terrific inroads in the South American markets. Where are the markets of the future? Regardless of our political philosophy, whether we are capitalists or socialists, if we are realistic in approaching this situation we must appreciate that, as far as Canada is concerned the markets of the future lie in war-torn Europe or in substandard Asia, and I think it is on that basis we must try to work out a solution.
I mention this, Mr. Speaker, because many people in this country are today realizing more than ever the dependence of Canada's economy on foreign trade. This afternoon I wish to emphasize the necessity for the development of foreign trade and therefore, for this purpose, the development of satisfactory international relations. In speaking on this subject, I am conscious of my responsibilities as a representative of the people. When I come to deal with this international situation as it bears on world trade, as it bears on this budget and on future budgets in this house, as it bears on the budgets of the provincial legislatures and on the budgets of the common people of this country, I am more than ever conscious of my responsibilities. In my mind's eye I can see the smelter workers of Trail in my constituency, tramping up and down to the smelter; I can see the small farmers, the fruit farmers, working their land; I can see the people living in the villages and towns carrying on their ordinary activities. At the same time I can look back and see in my mind's eye the effects of the last depression and realize, as one who served in the first war, what a critical period in history we are now reaching; and I can see, as clearly as the day I discerned them at close range, the rows of crosses at Ypres and the Somme. It is in that spirit that I approach this question. In my opinion it is essential that we approach this matter objectively, not in any ultra partisan spirit; and it is essential that in dealing with this question this parliament particularly should be a strictly deliberative assembly and not a propaganda sounding board. I believe we have to review the question as a whole, and that is a difficult thing for many people to do in times like these. Did you ever stop to think, Mr. Speaker, that in looking at even an ordinary tree no two people see it in exactly the same focus. One will see one side; another will see the other; one will see it in blossom and the other will see it in leaf. I believe that if we are to find a solution we can all work together to bring about
The Budget-Mr. Herridge

we must take what I would term a worm's-eye and a bird's-eye view of all these important questions.
In dealing with this question this afternoon,
I intend to attempt to analyse opinions, motives and situations in the spirit of objective inquiry, and on that basis I erect the structure of my argument. Before proceeding to, shall I say, the correct trading aspect of the situa- . tion, I want briefly to review the history of the past. Without question, in the field of external affairs the major concern of the British people at this time is centred on the relations of the western democracies, or perhaps I should say the western capitalist democracies, and the Soviet Union; and as far as North America is concerned, our major concern is the relation of the United States, as our nearest neighbour, with the Soviet Union. In looking back over the history of external affairs as it has been related to this house,
I think we may say without question that control of foreign policy remains one of the unsolved or only partly solved problems within our democracy. To some extent this is due to the apparent remoteness' of the question as far as the average person is concerned. Foreign affairs have in the past been very remote to the average person carrying on his or her daily activities. It is also due in part,
I think, to the fact that, in the majority of cases, democratic forms of government have been developed primarily to improve internal conditions. We are only beginning to develop an understanding of the fact that we must be directly concerned with what is happening in other countries. This has been particularly true of Canada. We have only accepted our direct responsibility in external affairs during the last twenty-five years; but the impact of the second world war and the principles enunciated in the charter of the united nations have stimulated multitudes of people in this country to take a direct and daily interest in external affairs and our relations with other countries. So when I speak on this subject this afternoon I am conscious that I, together with others in this house, represent the aspirations, the wishes, the desires and the hopes of hundreds of thousands of people in this country.
A discussion of external affairs in this house usually takes place on a resolution sponsored by the government or by a private member, or on estimates, or on particular occasions, or during major debates. I am taking this opportunity this afternoon to deal with this subject in this major debate, because I believe it is directly related and directly connected to our trading position and therefore to the development of our economy which, as I said before, 
concerns this budget and future budgets in this house, as well as the budgets of average Canadians. In going over the records of this country, I find that a perusal of history indicates that this and previous governments have a record of fine sentiments rather than progressive policies in the field of international affairs, A very well known gentleman in this country, I think it was Andre Seigfried, said on one occasion that, although collective security represents a conviction, as far as Canada is concerned to date it has been a conviction de luxe. The principles of collective security have, in times past, been loudly talked about; but, as far as I can find from the records, neither this nor any preceding government has taken a strong stand for collective security when the opportunity presented itself. Today in every critical international situation precious hours of peace have ticked away without the voice of Canada being heard fearlessly throughout the world. What is our record in that respect? I do not think it is one of which we should be proud, in times of peace. AVe did not speak out in behalf of collective security on the question of sanctions during the Abyssinian war. AVe failed to speak out in support of a democratic government in Spain. Then I think the crowning achievement of this policy under which collective security was purely a sentiment de luxe, as I say, occurred just a few days prior to the outbreak of the last war, when Canada proudly recognized the then king of Italy as emperor of Abyssinia. I think that was the climax of a record which we must seek to change.
The records of this house, as I read Hansard of the past, clearly indicate to me that on many occasions when hon. members have sought to develop Canadian opinion or to arouse the Canadian public to a definite and dangerous situation, the Prime Minister (Mr. Mackenzie King) has discouraged debate on external affairs. He has asked hon. members to restrain themselves, and to limit debate.
In my opinion and, I think, in the opinion of a good many members in the house a ventilation of these great and mighty matters would have informed the Canadian people and would have given Canada the ability to speak with a stronger voice. In my opinion, as I read the history of the past, in respect of foreign affairs this government and preceding governments have depended upon time, the follies and foibles of other governments and the shortness of human memories to give the appearance of reality to a policy barren of a single definitive statement in support of collective security, until war was inevitable.

The Budget-Mr. Herridge
Our records show that when the United States and Great Britain were in agreement we were courageous enough to say, "me too." When the United States and Great Britain were in disagreement Canada was mum. My major point in this connection before proceeding to anything further I have to say this afternoon is that, according to the records of the past, Canada has allowed precious moments to pass and to tick away' without raising its voice fearlessly on behalf of collective security. I am appealing this afternoon that that policy be changed.
We are in a splendid position as a nation small in numbers and great in potential wealth. We agree that, so far as our position in the world today is concerned, we are living in one of the vital spots of the world. We are in a splendid position, as a member of the British commonwealth of nations, as a good friend and neighbour of the United States and as a neighbour of the Soviet Union, to interpret the policies of these nations one to the other, and to act as mediator in a world which offers great possibilities for those who have courage to speak. I ask this government at this time to speak up for Canada.
A second world war has been fought and has been won at the cost of terrible sacrifice in life, human suffering, human happiness and treasure. We have affirmed our belief in the charter of the united nations. And it is because of that fact, because of the history and experience of the past, and because of our position that hundreds of thousands of Canadians are expecting some action on the part of this government in support of the principle of collective security', before time ticks away, once again.
I shall go on now to deal briefly with a situation that exists in the world today, because it is of great concern to hundreds of thousands of Canadians, and that is the attitude of the United States to the Soviet Union and to the European problem. We are very much concerned in this question at the present time, because we are supporters of the united nations charter.
I am dealing particularly for a few moments with the American policy with regard to aid to Greece and Turkey, and in that connection I wish to quote brief statements from the state department of the United States government. I have very little time at my disposal. If I had more I could produce plenty of documentary evidence to support my argument. However, at the present time I shall be as brief as possible in the presentation
of the documentary evidence supporting my argument. This is taken from a state department statement with regard to the situation in Greece:
There is no indication that the Soviet Union will change its attitude of hostility toward the present Greek government.
That is the common argument that the state department takes. Here we have the basing of military aid to a nation because it cannot expect the U.S.S.R. to discontinue its verbal hostility to the present Greek government.
And then, passing on, I want to point out briefly to the house what President Truman said in, this connection, and also what the food and agriculture organization of the united nations, which we support, have recommended. President Truman said:
A militant minority, exploiting human want and misery, was able to create political chaos which, until now, has made economic recovery impossible.
And the food and agriculture organization reports:
Not until governmental arrangements can be worked out which have the confidence and support of the great mass of the Greek people can a clear and consistent economic programme be established.
Again President Truman says:
Greece must have assistance if it is to become a self-respecting democracy. The United States must supply that assistance.
And the food and agriculture organization reports:
A proposed united nations advisory mission should replace all other international and foreign economic missions in Greece.
Then again President Truman says:
. . . the united nations and its related organizations are not in a position to extend help of the kind that is required.
And the food and agriculture organization reports:
In addition to the economic and social council itself, a number of united nations agencies might be interested in such a mission, including FAO, the international bank, the monetary fund, the international labour office, united nations educational, scientific and cultural organization, the proposed international trade organization, and other specialized agencies.
Again President Truman says:
Congress should provide authority for assistance to Greece and Turkey in the amount of $400 million for the period ending June 30, 1948.
And the food and agriculture organization reports:	[DOT]
Greece will need an initial international loan for 1947-48 of at least $100 million.
The Budget-Mr. Herridge

Again President Truman states:
Congress should authorize the detail of American civilian and military personnel to Greece and Turkey and provide for the instruction and [DOT]training of selected Greek and Turkish personnel.
And the food and agriculture organization reports:
Greece should reduce expenditures for military purposes as rapidly as increasing international confidence and increased reliance on the united nations make possible.
I say in that connection that a foreign office official1 of the British government admitted to a question asked in the house that something under 2,000 officers of the present Greek army previously served in a German security force. I mention that only to indicate the type of government it is proposed to assist at the present time.
The Manchester Guardian, a first-rate Liberal paper in the old country, and one which most Liberals whether they live in England or on the North American continent respect, recently straightforwardly declared that Englishmen should be ashamed of the existence of the present government in Greece, and concluded that Greece should be cleared of British troops in the very near future, because it becomes more and more difficult to justify their presence there. Let us not forget that the present British government inherited a most difficult situation on that score, and that at the present time those troops are being withdrawn.
Then, so far as Turkey is concerned, every informed person knows that Turkey is governed with an iron-fist rule. It is not a democracy. It is a country where liberals are jailed-and when I refer to "liberals" I speak in the broad sense which would apply to some of my hon. friends opposite. They are not allowed to spread their ideals. Trade unionists are suppressed. I am sure that without doubt, hundreds of thousands of Americans and Canadians are shocked by this bolstering up of the Greek government, this suggestion of help for that government on a military basis, and help for Turkey which, to date, denies freedom to her own citizens.
The great majority of Canadian people realize that the Greek people require help, and are in support of financing Greece in order to overcome the conditions existing there at the present time, and to develop self-liquidating projects.
Now, passing on, in an effort to show the situation as it really exists, I should like to point out who are supporting this policy, a policy which was commenced in 1917 and has

been continued by certain people from that date to this. I am going to deal with the record of those who are the most vehement exponents of this policy and also with the record of the opponents of this policy. First of all, I deal with the financial press of the United States. What do the Wall Street papers have to say? Wall Street opinion is well expressed in the Wall street weekly, Barrons, which, commenting on the present policy in the United States, has this to say:
He (President Truman) had to pay lip service to the Roosevelt policies with a few cliches about the united nations. Mr. Truman cannot be thanked too gratefully for his honest and straightforward presentation of reasons for embarking on a course so alien to that of his widely worshipped predecessor.
There is no question about this course being alien to the policies of the late President Roosevelt. Recently the Wall Street Journal had this to say:
Greece and Turkey are only starters, all eastern and central Europe and much of Asia could come within the active scope of such operations.
Even Mr. Bevin, on his return from the conference at Moscow, publicly announced that the press-and by that he meant the capitalist press of the world-did a great deal to hinder the progress of the Moscow negotiations. Leading oil companies of the United States are, without exception, solid in their support of this policy, and included in the list of prominent supporters is the famous Mr. Gerald K. Smith, who is always against constructive progressive action.


Stanley Howard Knowles: You mean infamous, not famous.


Herbert Wilfred Herridge: Yes, infamous.
I am not here to defend the Soviet Union. I realize the provocative statements that are made from time to time in that country and that much of their propaganda, so far as Canada and the United States are concerned, appears stupid. I would recommend that they employ good Canadian or United States publicists, because it is obvious that the Russians do not understand the psychology and outlook of the Canadian and the American people. I realize all that. At the same time a great section of the press of this country and particularly in the United States have been most unfair to Russia throughout the years. I have in my hand references and press clippings going back for twenty years, which indicate that these papers on this side have not told the truth but have done everything to create distrust, suspicion and misunderstanding and to disorganize our relationships with Russia,

The Budget[DOT]-Mr. Herridge
Whom do we find among the great exponents of this policy of protecting United States capitalism in Europe? One of the most vehement exponents of this policy, one of the leading exponents continually since 1917, has been the former President Hoover, from whose palsied hands the late President Roosevelt rescued the economy of the United States. Why is that? It is clear to anyone who has read the record and followed the speeches and statements of ex-President Hoover. In 1907, Hoover was a mining engineer employed by British interests in the far east prior to the first world war. He became a successful capitalist in collaboration with large British corporations, and between 1909 and 1910 he floated and had a major interest in eleven Russian oil companies. By 1912 he was associated with the British multimillionaire, Leslie Urquhart. He floated the Russo-Asiatic Corporation, whose shares rose from $16.25 in 1913 to $47.50 in 1914, and in that same year the corporation in which Hoover was the leading shareholder, obtained the following concession from the Czarist regime: 2,500,000 acres of land, including vast timberlands, and waterpower; estimated gold, copper, silver and zinc reserves of 7,262,000 tons; twelve developed mines; two copper smelters; twenty sawmills; 250 miles of railroad; two steamships and twenty-nine barges; blast furnaces, rolling mills, sulphuric acid plants, gold refineries; huge coal reserves. The total value of these properties was estimated at $1,000,000,000. We all know, if we read the records carefully, that, under Hoover as food administrator for the United States in Europe after the last war, food was shipped from this continent and used by Hoover for political purposes. It was given to German commanders and German generals to distribute to populations which had become politically acquiescent. On October 13,	1931,
Hoover, when president of the United States, stated in an interview with the San Francisco News:
To tell the truth, the ambition of my life is to stamp out Soviet Russia.
We place Mr. Hoover's interests and policies beside the statement made by Henry Wallace in New York when he said:
The plan to condemn Russia is really secondary to "that push for oil."
That policy has continued from 1917 down to this day. It is not related to the interests of this country or to those of Europe. It is strictly related to monopoly capitalism, and if these people are allowed to go on unchecked and to defeat the aims and purposes of the united nations the world will be plunged once again into another war.
Now let us see who is opposed to this policy of military aid to Greece and thus opposing the united nations. There are millions of progressive Americans who are opposed to this policy of military aid to Greece, and millions of British people; the cooperative organizations of Great Britain; the trade unions of Great Britain; numerous groups of veterans in the United States; large numbers in western Europe; Turkish Liberals; the federal council of churches of the United States; hundreds of thousands of Canadians; Sir John Boyd Orr, the great British scientist and forward-looking person; Senator Pepper and other senators and congressmen of the United States; the former Mayor LaGuardia, whose recent splendid article, "Don't Finance Foreign Armies," expressed a strong opposition to this policy. In addition to that, we have Henry Wallace, a former vice-president of the United States, in my opinion the most lovable and individual figure in American political life today, that great descendant of a truly great United States family. I had the honour to meet him a few hours before he left for Great Britain by air and to have a conversation with him concerning the present situation. I soon realized why he has inspired multitudes of ordinary people in the United States and Great Britain. There is a warmth and bigness in him that mark him off from all his rivals. I am certain of this, Mr. Speaker, that, should Mr. Henry Wallace decide to come to Canada he can be assured of audiences in the thousands who support his policies.
What is the record of the man? Coming from a good, progressive United States family, a Liberal capitalist, he was editor of Wallace's Farmer, serving the farmers of the middle west. As secretary for agriculture in the United States, Wallace was able promptly to bring order out of the chaos of farm misery. He effected a masterpiece of planning for the common man.
As secretary of commerce, he faced a greater task, giving effect to his belief that the greatest social objective which confronts mankind, is to lift the level of substandard peoples up to ours, as the pathway to peace. As vice-president of the United States he was frequently referred to by the late President Roosevelt as "commonsense Henry". This latest phase in his courageous career is no break with the past. He is continuing his fight for the positive constructive view of society, both at home and1 abroad. We all know he was welcomed in Britain and endorsed by many members of the British House of Commons. We all know of the reception he received in Sweden and France
The Budget-Mr. Herridge

and of the reception he is receiving at the present time throughout the western United States.
X notice that in the Ottawa Journal recently our own Prime Minister made some criticism apparently of Mr. Wallace speaking abroad. In the Ottawa Journal of April 26 the Prime Minister is reported as saying that he thought it is a most astonishing thing for the former vice-president of the United States to go to Britain, and that an unfortunate example had been set. In reply to that, I just wish to point out to our Prime Minister that we are members of the united nations, and the first words of the united nations' charter are: "We, the peoples of the united nations", and so on. It is no longer, "we, the governments of a postwar world". It is no longer, "we, the governments of the united nations", or "we, Mr. Prime Minister King," "we, Mr. Attlee", "we, Mr. Truman", or "we, Mr. Stalin", but "we, the peoples of the united nations". On that basis, Henry Wallace was fully justified in making his great bid against policies that will lead us to war.
All I am asking, Mr. Speaker, is a fair approach to this situation. I cannot do better than quote from a speech made to the Canadian club on June 20, 1945, by Mr. Dana Wilgress, at that time ambassador to the U.S.S.R. I shall quote from a copy of the manuscript he used on that day. Mr. Wilgress speaks with twenty-nine years' experience in private business, as a trade commissioner and as an ambassador to that great country. I shall quote only a sentence or two, because my time is rapidly slipping by. I suggest that hon. members secure a copy of that speech and read it. It is one of the best balanced presentations of the subject I have read to date. Mr. Wilgress had this to say:
It is the duty, therefore, of all British countries to try to understand the Soviet Union and to promote good relations with that country.
In conclusion, he had this to say:
I repeat, it is the duty of each and every Canadian to try and learn as much as possible about the Soviet Union.
I wish I could have dissertated at length on some aspects of this question, but I wish to present my concrete proposals. Now is the time of decision as to whether we are to go forward with new policies based on new ideas, or whether we are to accept the Victorian policy of orthodox ideas and trade as outlined by the hon. member for Stanstead (Mr. Hackett) who preceded me. Now we are to decide as to whether the surpluses of the North American continent are to be invested in assisting other and low-standard nations, or

whether we are to permit ourselves to be driven to economic isolation and to economic nationalism. It is a question, in my opinion, and in the opinion of many Canadians, of trading our way to peace and making preparation for that now, or of economic nationalism leading to war.
I submit the following programme as at least a signpost to peace. I do not underestimate the difficulties, but I think we must have the will and the purpose if we are to overcome the present tendencies in some parts of the world. Canada should take a very strong stand at the united nations on adherence to the principles of collective security. We should desert the policy of collective security de luxe which existed in former days.
In the near future, President Truman will visit Canada. He will be welcomed by all shades of opinion in this dominion, whether we agree with his policies or not, because he is the head of a great country, a great neighbour of ours. I would suggest that it would be a good gesture-and it is surprising what gestures can do at times in an unsatisfactory climate-for this government to send an invitation to Mr. Stalin to visit Canada. I do not know whether he would come or not, but at least it would be a gesture, and would show our friendliness. This government should initiate trade discussions-


Mr. DEPUTY SPEAKER:: Order. I must inform the hon. member that his time has expired.


Herbert Wilfred Herridge: May I have two or three minutes to finish?


Some hon. MEMBERS:: Go on.


William Ross Macdonald: With the unanimous consent of the house, the hon. member may continue for a few minutes.


Herbert Wilfred Herridge: This government should initiate trade discussions with the U.S.S.R. immediately. Other people are taking an active part in that respect and I think we must.. This government should immediately commence trade discussions with the U.S.S.R. because, if we sell them goods, it will mean jobs. I know it is a complex and complicated situation, but it is essential for us to explore every field in that respect.
This government should undertake the planning and development of the Canadian north to develop friendly relations with the U.S.S.R. The government should also commence a long-term treaty of friendship with that country. I shall not outline a programme such as that, but I do think the programme is an essential if this budget and more par-

The Budget-Mr. Campbell
ticularly future budgets of the house, of the provincial legislatures and of the Canadian people are to be satisfactory in the days to come. The programme which I have enunciated to the house, Mr. Speaker, has the support of hundreds of thousands of people- make no mistake about that-in many walks of life, business, farming and working people. If action is taken along these lines; public and private investment are channelled first into social security measures at home and large-scale development of our natural resources and public services and low interest and long term trading credits abroad are instituted, budgets of this parliament are more likely to be satisfactory in the future.
The point I wish to make before concluding is that in this modern industrial world our surpluses must go first into social security, development of public services at home, and to the lifting of levels of the substandard people abroad. If we are not willing to do that, economic nationalism is inevitable, and, with that, future war. But the achievement of these objectives is not possible as a result of government action alone. In conclusion, I wish to quote from Prime Minister Attlee's speech on the second anniversary of V-E day in London. This is what he said:
We shall never get a lasting peace if it depends only upon agreements between governments. We shall only get it by agreement between peoples and it must not be a passive agreement, but an acute constructive promotion of peace. I want to see a relationship growing up between the peoples of all countries towards the united nations such as we have in our own country between the people and parliament.
I just wish to say this in conclusion: The muffled drums of discontent with present policies at home and abroad are beginning to roll in this country, and I am certain that, if this government does not change direction, those muffled drums will soon be sounding a tattoo, a call to action in support of policies that will change the social and economic climate of our times and lift the hearts of men above the fears and suspicions which envelop U3 today.


Mr. MAX CAMPBELL (The Battlefords):: The Minister of Finance (Mr. Abbott) brought down his budget on April 29. First of all, I wish to congratulate him on the clear, concise manner in which he presented it and on the large amount of information that it contained. There were some statements in the speech that possibly have not received the consideration that they should have received in the house, and my comments this afternoon are to be along the lines of discussing these particular statements.
The first one is that Canada is enjoying a degree of prosperity never exceeded in living memory. I think we can all agree that we are living in that high degree of prosperity, at least a great many of us; but I am worried as to what the future holds regarding that prosperity, and as I go on I shall explain what I mean. The minister did not tell us directly, but he did tell us in a roundabout way that this prosperity is due to the last war. It was caused by the war; I do not think there is any doubt about that, as I believe the minister will agree. The minister also gave a warning when he said that we cannot afford to be complacent; and later he said at page 2545:
Any such forecast in these uncertain and abnormal times is subject to a wide margin of possible error and to many qualifications. In particular, we must expect that the figure will be less than that I have mentioned-
With that part I am not concerned.
-if a substantial recession should occur in the United States later this year.
There is a warning there that has not been noted to any great extent in the speeches that have been made in the house so far in this debate. If a recession does take place in the United States it will most certainly be reflected in our Canadian economy.
If anything, the minister's speech was too optimistic. He should have put more emphasis on this warning. I picked up the Christian Science Monitor of Thursday, May 15, 1947, and I saw the following:
Nation heading for "bust," former New Deal aides caution '
America's economy is heading towards a "bust" and something should be done about it quickly. That is the conclusion of an eleven-man committee on economic stability, headed by Chester W. Bowles, which made a fifteen thousand word report today, containing a nine-plank emergency programme, to Americans for democratic action. The committee declares that ominous signs of recession are increasing, asserts that never so far in history has the nation staved off an economic recession when conditions have got out of hand, but adds hopefully that the tools are available to prevent a prospective slump.
Then it details a series of drastic measures and so on. Further, it says:
The committee urges President Truman u. name at once a price-adjustment board under "an outstanding business leader" to guide the downward course of prices from their present "fantastically high levels."
It gives a list of the members of the Bowles committee. These men were probably all concerned with the planning of prices during the war. Then it goes on:
The warnings and recommendations from this New Deal voice of the recent past came as stock-market prices were sliding to a new low for
The Budget-Mr. Campbell

1947 on Wall street, and as repeated reports from Russia declared the Kremlin was basing its policies on an expected American slump.
Then further on:
Sharp stock-market decline reflects pessimism. Physical volume of retail sales are 8 per cent below a year ago. Large inventories are now "highly vulnerable" to price declines. Plant and equipment expenditures are tapering off-
And so on. Then it goes on:
We must face up frankly to the fact that never before in our history have we succeeded in staving off a break-down in our economy when conditions have got out of hand. Doubts must be dispelled. The government should announce its firm intention to stave off such a recession and to underwrite a high level of prosperity.
A few days ago I picked up another magazine, Collier's, of March 29, 1947, and I found an article headed "Let's Talk Business," by Beardsley Ruml. I quote:
Frankly I see no objection to discussing in public the possibility, even the probability of a falling of business activity and of employment in the coming year. I know that many leaders in business and government are against such talk, that they would like to treat the subject as a skeleton in the closet, with the door shut and locked.
That is exactly the attitude which a great many members here take when those of us in this group discuss these matters.
The conclusion for 1947, therefore, writes itself. The unusual forces that were responsible for the high level of demand and of employment in 1946 have been weakened. No sufficient replacement forces are in sight and consequently we must anticipate a growing recession of business activity.
The United States government have thrown almost all controls out of the window and have left private enterprise to regulate itself. It has no efficient way of doing this; when prices start falling there is no telling where they will stop, and this may result in a panic and possibly develop into a major depression.
Our economy and that of the United States are kept operating by capitalists reinvesting their profits. Just as soon as they stop doing that, the trouble starts. Our whole economy depends on whether profits are held or spent, which seems to me to be a foolish way of conducting our national business. Big business has been putting great pressure on this government to remove controls, and this government has weakly given way, with the result that prices have risen so high for many things that consumers are turning away and leaving them on the shelves.
Investment capital is becoming uneasy. For example, Housing Enterprises Limited have cancelled the 1947 housing programme. They realize that houses being built and sold at 
present prices can never be paid for by the ordinary working man. Once prices start to fall, factories and businesses generally are going to cut their staffs, and soon we shall have unemployment, which may affect a large percentage of our population. I am worried about this situation because we are not ready for a recession. No plans whatever have been made to meet one, and I am anxious to see a conference called between the dominion and the provinces so that plans can be prepared to cushion any depression that might come.
We are living in a world which is desperately anxious to have the leaders of the nations find a solution of many perplexing problems which face the world today. People want nothing so much as peace and an opportunity to live quietly by their own firesides, with some hope of security and a chance to live. It is more than two years since the collapse of Germany, and we have not even begun to make any headway toward the solution of the many vexatious world problems.
The Prime Minister (Mr. Mackenzie King) and this government, together with the provincial governments, can, if they only will, give some real leadership in the matter of dominion-provincial relations, and I am sure that is what the public of Canada want. They want unity in a time like this. What will happen to hundreds of thousands of our people if we should go into another recession or depression without having decided who is to be responsible for such important matters as unemployment and other problems?
Surely the political leaders of today can forget their differences and get around the table and discuss and decide upon the allocation of jurisdiction and responsibility for such matters as unemployment, health, national marketing, a labour code, the social security measures that we all want, and a programme of public works to act as a cushion against this depression that might come.
In all sincerity, I would ask the Prime Minister to reconvene the dominion-provincial conference, and with the same sincerity I would also appeal to the provincial premiers. They have a golden opportunity to give leadership here in Canada, not only to Canada but to the world. How can we expect world leaders to work together if our own leaders cannot work together? Bury the hatchet; forget any prejudices you might have, forget past differences and think for once of the people of Canada. Canadians who have the best interests of the country at heart want unity, because in unity there is strength. Canada is today calling on her statesmen for leadership, and will not tolerate for long any

The Budget-Mr. Campbell
leader who, for political or any other reasons, refuses to cooperate for the good of the country. The report of the Rowell-Sirois commission on dominion-provincial relations, in its recommendations had this to say at page 275:
While the commission believes that new governmental machinery should be kept at a minimum, it nevertheless considers that special provision should be made to facilitate cooperation between the dominion and the provinces. In an earlier day, when the functions of government were relatively few and administrative organization relatively simple, it may have been possible for dominion and provincial governments to operate largely in watertight compartments. But with the great expansion of governmental functions, and the growing complexity of administration, it is no longer possible to do this without serious loss of efficiency and economy in government. Cooperation between the autonomous governments of the federal system has today become imperative. The commission recommends as the principal means to this end that dominion-provincial conferences, which have hitherto met at infrequent intervals, should now be regularized, and provision made for frequent meetings, say every year. It urges further that the conference should be provided with an adequate and permanent secretariat for the purpose of serving the conference directly and of facilitating cooperation between the dominion and the provinces in general.
I now wish to comment on another part of the finance minister's speech, in which he says, as reported at page 2554 of Hansard:
The exemption levels established last year are high enough to exempt completely from tax more than half the people earning incomes in Canada.
' Again on page 2543, he makes the statement to which I have already referred:
Today we see a Canada enjoying a degree of prosperity never exceeded in living memory.
I think it is a sad commentary on our economic system that in a time of Canada's greatest prosperity more than half of our people earning incomes get less than S750 if single or $1,500 if married; and that 96.4 per cent of our farmers are getting less than $1,500 a year. The question that I should like to ask the house is whether a million or so of the Canadian people must always remain poor, when in a time of such great prosperity they are having as low a standard of living as the minister's speech shows.
Mention has been made of the United States many times and reference has been made to the high standard of living there. It is claimed that the United States has the highest standard of living in the world. I believe that for a great many of the people in the United States that is true. I have another magazine here,
Magazine Digest of May, 1945, and in it there is an article by Senator Claude Pepper, in which he says:
During the past year, at least ten million workers in this country received an average of less than $1,300 a year. This is considerably less than 65 cents an hour straight time on a 40-hour week, 50-weeks-a-year basis. And that figure

ten million workers-doesn't include those in agriculture, the professions, or government or domestic service.
Even with an income of $1,300 a year-and many receive less than that-these families are unable to maintain life on a fair standard, in terms of today's prices. War labour board investigators find that an average family of four people should have a minimum income of $1,454.72 a year. That works out to 73 cents an hour. This is the standard, set for relief workers by WPA in 1935, given in terms of today's costs.
Then he goes on and finishes up by saying:
The much-talked of "workers' prosperity" obviously has not been felt by these ten million workers and their families.
This is in a country which boasts, as I have said, of having the highest standard of living in the world. Surely this article, together with the statement of the Minister of Finance, is a tragic admission of the failure of what we call the capitalistic system or what some people call private enterprise.
Coming back to the statement of the Minister of Finance that Canada is enjoying a degree of prosperity never exceeded in living memory, I said at the beginning of my remarks that we should stop and take a good look at present-day conditions and ask ourselves what we can expect in the future. I do not think anybody will deny that our prosperity-prosperity for fifty per cent of the population-is due to the war and conditions which have arisen out of the war. Billions of dollars were pumped into circulation during the war, and since the war Canada has been lending and giving to Great Britain and other countries close to $2 billion with which to buy the products of farms and factories. No doubt we are experiencing the greatest boom in all our historv. What I want to know is: How long will it last? That is the major problem we in this House of Commons must face. Shall we hold our position? Are we going forward to new levels where all our people have a high standard of living? Or shall we slide back into another depression?
The war has been over for more than two years and we have been in the process of unwinding our war machine and our war economy. I was very much interested in a book I ran across the other day, which was written by Stuart Chase and entitled, "For This We Fought". This is Stuart Chase's latest book and in it he tells the story of the
The Budget-Mr. Campbell

veterans in the United States. I should like to say right here that we in Canada have provided for our veterans possibly better than has the United States, but still we shall probably find that the condition which applies in the United States applies here as far as a great many of our veterans are concerned. Chapter 1 of this book is entitled, "Men in New Suits"; chapter 2, "Service Centre"; chapter 3, "What the Veterans Want"; chapter 4, "What the People Want"; chapter 5, "The Five Year Miracle". In that chapter Stuart Chase tells of the w-onderful production which was achieved in the United States and of the building up of the tremendous army which was built up there. Then he goes on to chapter 6, entitled "Let Down", which I wish to comment on. That tells of the let down of the veteran in the United States. Stuart Chase has this to say at page 57 of the book, "For This We Fought":
To unwind a total war economy is, of course, as much of a planned operation as to wind it up. American planning was good enough to build an army of 160,000 men to 10,000,000, practically overnight, while doubling gross national product. But nobody in power wanted very much to be responsible for unwinding-with the exception perhaps of Mr. Bowles. President Truman had a programme, but he was not expert in pushing it, while congress treated it with disdain. The national association of manufacturers demanded the removal of all price controls.
Pretty much the same story that we have seen here in Canada.
The New York Times led a powerful press campaign to turn the whole economy over to the unfettered forces of free competition.
That was what they did, and now they are paying for it. But here is something I am sure we do not have in Canada:
The Sentinels were organized by business men in Detroit, pledged not only to end all war controls-
And listen to this.
-but to repeal all social legislation since 1933.
I do not need to comment on that.
The mood of Civvy Street was to refuse responsibility for the changes which history had forced upon the country. Let nature take her course, and let us organize to get ours-this seemed to be the general idea. As I write, two million organized workers have been on strike or threatening to strike. Westbrook Pegler can hardly keep up with them. Many angry people would like to make strikes illegal. President Truman's threat to draft workers when they strike against the government has evoked both applause and bitter resentment. Yet millions of fellow citizens cannot be moral delinquents. There must be a human cause for this outbreak of strikes.
Of course there is a cause.
To discern the causes one needs to look coolly at the situation and keep his temper, but that
fMr. Campbell.]
is not easy, especially if one is emotionally involved in the outcome. It is easier to think that some stubborn, greedy and unreasonable persons on the other side are purposely thwarting us. Workers see managers of great corporations, bloated with war profits, standing in the way of their just rights. Managers see "communists" and "foreign agitators" standing in their way. Editors see wicked bureaucrats encouraging wicked labour leaders.
All these pictures are askew. Certainly there are wilful egotists in the labour movement, as elsewhere in the community. There are some pretty mean chaps running corporations here and there. The strike crisis in 1946, however, is the product of the rank and file-far too many of them to be written off as undesirables. Look at the telephone girls, or the locomotive engineers. If they are wicked and greedy, so are we all.
Then he asks this question:
What is troubling the workers? Chiefly fear for their security. They have vivid memories of the depression. "Am I going to lose my job again?" they wonder . . . "If the shutdown comes, can I stay in this town, or must I move again? Where do I find a house if I do move? What is going to happen to the kids?"
I could read the whole book, and I am sure all hon. members would be interested.
I should like to point out that business cycles and price levels in Canada have followed pretty closely those of the United States. In order to give the house an idea of how those cycles have operated in the past, I am going to make use of a chart which is to be found at page 455 of the book, "Economic Behaviour." This chart traces the booms and depressions that have taken place in the United States for the last 150 years, and in order to give hon. members a picture of how these price levels have varied during that time, I have had the chart enlarged. The line running through the middle represents normal prices, and of course the lines above and below represent prices during the booms and depressions. In that period of 150 years there have been thirty-one booms and twenty-six depressions. The first sheet shows the price levels for the years 1790 to 1863. If the minister is interested in this chart I will send it over to him when I have finished with it.


Douglas Charles Abbott: I never could read graphs.


Alexander Maxwell (Max) Campbell: This gives a pretty good idea of how price levels have been going up and down. Sometimes they remain normal for a year or two, but not for very long at a time. I ask, how can business men or farmers or fishermen have security under a system where the price levels rise and fall to that extent?
The second page of the chart gives the price levels from 1864 to 1937, and it will be noticed that prices remained down for a ten-year period beginning in the thirties. I need

The Budget-Mr. Campbell
not take up more time with this, though if I had time and had been able to find the material I should like to have made an analysis of just what causes these depressions. During the lifetime of many hon. members we have had two major depressions in Canada, which were relieved by war; and the question we must ask ourselves is, do we need to have a war to take us out of the next depression which, according to many economists, may come within a very short time? In this sort of economy I ask, where does the little man come in, the man who works hard and saves his money with the idea of going into business or perhaps buying a little farm? Probably he will be forty or fifty years old before he can accumulate enough capital for his purpose, and if he should decide to start in business during one of these boom periods it will be just too bad for him, because he will most certainly go bankrupt. Just picture for a moment the misery and desolation of the man who has a family, who loses everything and has to start all over again at the age of fifty. Look at the experience of veterans of the first war who went into business or who bought farms, machinery and stock at inflated prices. They struggled on for twenty years, and many of them still owe large sums of money. Think of the many letters members of this house receive from people who are past their best working years, and who now find it almost impossible to get work. Apparently the only thing this government can do is to give them jobs around these parliament buildings. Only last winter one of these old men between sixty-five and seventy died up here with a snow shovel in his hands.
Then I went to the "Canada Year Book" to ascertain how many registered failures we have had in Canada. I found that from 1923 to 1941 inclusive there had been 34,555 commercial failures in Canada, and this includes only those who went into bankruptcy; it does not take into consideration those who quietly folded up and faded away. In this book from which I obtained the chart, Stuart Chase stated that in the United States 100 great corporations got eighty per cent of all war contracts, and that upwards of 500,000 small business men went out of business in that country during the last war. Part of Canada is in a depression right now. We have heard most of the members from the maritimes tell of the need for new industries there. The hon. member for Cape Breton South (Mr. Gillis) has pleaded for his miners in Nova Scotia, where a large proportion of the people depend for their livelihood upon one company. The Dominion Steel and Coal Company has gobbled up a large part of the natural resources of the maritimes and cannot or will not spend the money needed to bring the coal mining machinery up to date. Think of the worker worrying about how long his job will last. Possibly he has bought a house on the instalment plan and remembers that during the previous depression his father or his buddy lost his home.
Look at the insurance figures. Over eighty per cent of Canadian policy-holders lost their insurance during the thirties. One of the worst indictments of the present system is the report of the insurance companies given many times in the house as to what happens to 100 average young men by the time they reach the retirement age of sixty-five years. Statistics show that one will be wealthy; four will be well to do and able to enjoy comfort and recreation; five will be working for a living, with no prospects for relief from drudgery; thirty-five will have died, in many instances leaving families enduring hardships, and fifty-five will be dependent upon friends, relatives or charity.
Mr. Speaker. I do not like this capitalistic system, but I do say to the house that it is the system I do not like, and that I have no personal animosity whatsoever toward capitalists. I have known many wealthy men and, as a rule, they are pretty fine fellows. They average out about the same as any other group in the community. But what I do object to is the system which gives only half of the people at a time like this a decent standard of living. A system of that kind is not good enough. If it were possible for everyone to make profits and to get along under a profits system, I would be for it. But under this system there is no doubt that the multitude must work for a pittance in order to make profits for the few.
May I say one more word, because I have only a few moments left in which to speak. The system under which we now operate has had the effect of driving our young men from the farming communities to the cities. After spending some time in this section of Canada and having had an opportunity to see the type of work factory workers do, I have advised young men in my home community to stay on their farms, and not to come to the cities looking for cushy jobs, because such jobs are seldom found. The position of a man who must stand at a machine all day, and perhaps perform only one motion, and who must be at his work on the dot at a certain time each morning does not compare favourably with that of the boy on the farm; and for that reason I have advised them not to leave their farms.
At six o'clock the house took recess.
Railway Act

After Recess
The house resumed at eight o'clock.



RAILWAY ACT


[Stage Direction]
Mr. STANLEY KNOWLES (Winnipeg North Centre) moved the second reading of Bill No. 24, to amend the Railway Act.
He said:	Mr. Speaker, it is with considerable feeling and a consciousness of the deep significance of this measure that I rise to move the second reading of Bill No. 24. I am very happy to have associated with me as the seconder of this motion my hon. friend the member for Kenora-Rainy River (Mr. Benidicksen); I trust that this association across the floor will be evidence of the non-partisan nature of this bill and of our concern that it be treated as in the interests of the railroad workers of Canada.
In the United Kingdom there is an interesting practice whereby members of parliament who wish to be associated in support of a measure in addition to the mover and seconder are permitted to attach their names to legislation presented to the House of Commons. If that practice were followed in this parliament the list of sponsors supporting this measure would, I am sure, be a lengthy one. In addition to the hon. member for Kenora-Rainy River on the government side there would be, I know, all the members from the Greater Winnipeg area, also the hon. member for Fort William (Mr. Mclvor), the. hon. member for Brandon (Mr. Matthews) and, indeed, government supporters from all railway centres in Canada. Further, on this side of the house there would be a long list of supporters of this measure. To begin with, I would mention the hon. members for Calgary West (Mr. Smith) and Calgary East (Mr. Harkness). To my left I would mention the hon. member for Lethbridge (Mr. Black-more) and the hon. member for Bow River (Mr. Johnston). I see already certain members looking to me and expressing the hope that I will include them, and I am very happy to include the hon. member for Vancouver South (Mr. Green). In fact, this list of individual names, Mr. Speaker, is not to be taken as restricting the generality of the foregoing, and that applies particularly to members of my own group. To be fair, I ought to list all the C.C.F. members, but I will mention particularly the hon. member for Winnipeg North (Mr. Stewart), the hon. member for Selkirk (Mr. Brvce), the hon. member for Dauphin (Mr. Zaplitny), the hon. member for Churchill (Mr. Moore), the hon.
TMr. Campbell.]
member for Rosetown-Biggar (Mr. Coldwell), the hon. member for Regina City (Mr. Probe), the hon. member for Saskatoon City (Mr. Knight), the hon. member for Humboldt (Mr. Burton), the hon. member for Moose Jaw (Mr. Thatcher), the hon. member for Weyburn (Mr. McKay), the hon. member for Swift Current (Mr. Bentley) and the hon. member for Vancouver East (Mr. Maclnnis).
There is one other name that, I feel sure, would have been found amongst the supporters of this measure, namely that of the Prime Minister (Mr. Mackenzie King). I say that because many years ago he was interested in a situation similar to the one the recurrence of which this bill seeks to prevent. In the days when the Prime Minister was in opposition back in 1919, he led a fight for the restoration of pension rights that had been lost in the year 1910, and I say to his credit that one of his first achievements after he succeeded in forming a government in the early twenties was the restoration of those rights. So I know of his interest in the matter that is now before the house.
There is, as hon. members know, wide support for this measure across the country. I have under my hand a sheaf of letters which I personally have received from correspondents in eight provinces of this country, all except the province of Prince Edward Island, and I have been told by many other members that they, too, have received numerous letters asking them to support Bill No. 24.
The purpose of the bill is to protect the pension rights of railroad workers against loss due to absences of various kinds, including loss when out on strike, and it grows out of the unfortunate experience of 1910 which I have already mentioned, and of 1919 to which I have made frequent reference in this house.
Section 122(l) (c) of the Railway Act gives to railway boards of directors authority to establish retirement or pension plans. This bill would add to the appropriate paragraph the following words:
Provided that in the administration of any railway retirement or pension plan, leave of absence, suspension, dismissal followed by reinstatement, a temporary lay-off on account of reduction of staff, or absence due to an industrial dispute, strike or lock-out, shall not disqualify any railway employee from any retirement or pension rights or benefits to Which he would otherwise be entitled.
In other words, the purpose of this amendment is to make it perfectly clear that the pension rights of railway employees, provided that such other conditions as are laid down in

Railway Act
railway pension plans are met, cannot be lost or abrogated because of a break in service for any of the reasons indicated in the proviso which I have just read. I am sorry to have discovered, on consulting my legal friends, that it does not seem to be possible by legislation to correct the injustice of 1919. I refer to the pension rights that were lost both in that year and in 1918 by Canadian Pacific employees who were out on strike at that time. The purpose of this amendment has to do with the future-from this day forward. Its purpose is to prevent the recurrence of such an injustice. That is the reason I am asking the House of Commons to add this amendment to section 122(1) (c) of the Railway Act.
As hon. members know, I have spoken a good many times on behalf of Canadian Pacific employees who lost their pension rights because of the strikes of 1918 and 1919, and I shall continue to press their case as thoroughly as I can in whatever way it seems possible to try to secure justice for them. But the bill before us does not relate to these men. As I have already said, it has to do with the future, from this day forward.
The situation today is vastly different from what it was in 1919. To begin with, at that time in many cases pension plans were on a non-contributory basis. Rightly or wrongly- I think wrongly-that argument is advanced in discussing the 1919 case. It no longer is an argument so far as the present or the future is concerned. All railway pension plans are now on a contributory basis. I am sure that those who agree with me that something should yet be done for the 1919 men will have no hesitation in saying that, now that pension plans are on a contributory basis, the rights of railway employees under these benefits should most definitely be protected.
In addition to the change in the structure of the pension plans, one might add that opinions have moved a great deal forward since the 1919 strike. In those days it was necessary for the present Prime Minister in his book, "Industry and Humanity", to argue in these words:
If lifelong public service in industry is to receive its fitting reward, years that are denied the opportunity of employment should not be subjected to the humiliation of dependence on jharity.
It is no longer necessary to argue these view's; theoretically they are now generally accepted. Some of us may not be satisfied with the extent to which they are practised, but the principle is recognized today by industry that employees are entitled to protection in the form of pension rights. So has the view
of society as a whole changed considerably. We no longer think of old age benefits, whether it be to people retiring from industry or to our older citizens generally, as a form of charity or hand-out, but rather as a right to which people are entitled. Therefore, because of these changes not only in the structure of pension plans, but changes that have taken place in the attitude of industry and in the thought of our people, I submit that this is a measure the principle of which really has the support of hon. members in all sections of the house.
In terms of another debate which the house has not yet concluded, may I borrow a phrase and say that this bill is, in effect, a bill of rights for the railroad workers of Canada. I am sure many will share my hope that the day will come when there will be a similar bill of rights for all workers in this country, when all pension rights will be protected; but I ask the house not to allow the fact that we have not yet reached that point to tempt members to fail to give that right at least to this section of workers for whom basic provision is already set out in the Railway Act.
I do not wish to speak further; I hope that by listing, as I have, a great many hon. members as joining with me in sponsoring this bill it will put them on record as in support of it and make it unnecessary for too many to speak, so that we can get the bill dealt with tonight. On that basis and on behalf of the railroad workers of Canada, I present to parliament this bill of rights, this bill designed to protect their pension rights and benefits. I take pleasure in resting the case for them in this high court of parliament.
Mr. W. M. BENIDICICSON (Kenora-Rainy River):: It gives me a great deal of satisfaction to associate myself with the hon. member for Winnipeg North Centre (Mr. Knowles) in seconding this amendment to the Railway Act. I want to thank the hon. member for his willingness to allow me to be associated1 in such a direct way with this bill.
I was not long a member of the house before it was brought to my attention by my riding that there was a long-standing injustice there resulting from some railway labour difficulties of the period 1918 and 1919. Immediately on looking into the file to see what the situation was, I found that this was a problem which had been before the Department of Labour for a great number of years.
Tribute has been paid tonight not only to many of those in the house who have been taking an interest in correcting an injustice of the past but to those who are sympathetic to the bill in order that there cannot possibly be a recurrence of injustices that have previously
Railway Act

taken place. In paying a tribute to hon. members present, I wish also to pay a tribute to my predecessors from the constituency of Kenora-Rainy River, both of whom were railway workers and who, I found on investigation of the file, had for many years been endeavouring to rectify the situation of our fellow townsmen who find themselves today without pensions as a result of what I think is a harsh attitude taken after severance of employment for a few hours in 1918 on the Canadian Pacific railway. Those predecessors were the late Mr. H. B. McKinnon and the Hon. Peter Heenan. who himself at one time was Minister of Labour of the dominion government.
I cannot take credit for the drafting of the bill before the house, much as I appreciate being associated with it. However I am looking forward to this bill being sent to the railway committee of the house which, I think, will ensure that from a legal point of view and from the point of view of principle, it will be given a careful review. By the bill being sent to that committee, opportunity will be given for representations to be made and persons to be heard both from the railways and from the union organizations. It may be possible that there are some technical and legal objections to the amendment as now drafted. If it is not possible to accept the amendments as drafted I feel sure the principle is such a good one that it ought to be carried into the new labour bill that will be presented to the house shortly, and the benefits will then accrue not only to railway workers but to all workers who are under the jurisdiction of the federal Department of Labour.
In order that the house may have a little indication of the kind of grievance that we hope will be corrected in the future, I should like to place on record a statement that has been provided me by the International Association of Machinists, lodge No. 28 at Kenora, who report facts of the 1918 strike. As I say, reference has been made to some of our workers who are at least seventy years of age and over and who have no pension rights. In 191S there was a railway strike at Kenora involving just a few individuals. It lasted for only a few hours. The men were called out by the head man of the local organization whom they respected and who was in a position of authority over them at that time. He represented an organization with whom the Canadian Pacific Railway Company saw fit to negotiate. No one was either paid off or reengaged and there was no real break in service. The company engaged no one else in the place of those who were out, "and was put to no expense. The men themselves in a matter of hours found that they had been

called out unwisely or without authority of those in higher authority in the lodge outside our town. As soon as they learned of this situation, they immediately went back to work. It is therefore very unjust to say that these people who at that time may have been over the age of forty, which was the top age at which people would be entitled to enter a pension scheme, should have been denied that pension, notwithstanding that some of them had worked as long as fifty years for the Canadian Pacific Railway Company at the time of their retirement. I know there are others who wish to contribute to this debate and consequently my remarks tonight must now be concluded in order to give them that opportunity. I thank the hon. member for Winnipeg North Centre (Mr. Knowles) again for bringing this most important matter before the house, and I hope it will receive not only good discussion tonight but consideration in the committee. I hope that the principle will be kept before the house when the labour bill is presented before the session concludes.


Mr. J. H. BLACKMORE (Lethbridge):: I, too, have had considerable correspondence with respect to the injustice which a number of railroad employees have sustained by reason of the cancellation of pension privileges because of a break in their services. The last one of these letters arriving contains four cases of injustice which, I believe, will rather surprise the house.
The first one is that of a conductor who was out for just two years and was reinstated with full seniority but denied his pension. The second is that of an engineer who had a similar experience, and the third is also the case of an engineer with a similar experience. The fourth case is that of another conductor who had the following unfortunate story to tell.
This man entered the service on June 10, 1907, and was dismissed on April 1, 1931, and reinstated on November 1, 1933. He has record merits 106 to his credit and has three demerits for only a trifling error which he committed because of the tremendous rush of work which was upon him on the particular occasion. This man at the age of sixty-five will have forty-three years' service of a highly meritorious quality with a break of only two and a half years, but he will have no pension.
I believe all members of the house will agree that the men to whom I have referred as being mentioned in this letter have sustained a serious injustice. Labourers ought to be rewarded according to the length and quality of their service. All members will, I

Railway Act
believe, agree with that. Retirement pension is part of the labourer's just reward. The faithful labourer's title to his pension is therefore a sacred right that ought to be protected by law.
This Bill No. 24, if it should become law, would, as I understand it, protect the right of the labourer to his pension. I therefore gladly support the bill and refrain from further speech in order to enable some more of the many members who, I know, would like to rise and support it to have the opportunity.


Mr. RALPH MAYBANK (Winnipeg South Centre):: I assure you, Mr. Speaker, that two minutes is all I need to put before the house my views on this subject. With the general idea underlying the bill I am most heartily in accord, but I have some doubt as to whether the wording of the bill is adequate for the purpose. I have a good deal of familiarity with the circumstances which have given rise to this piece of legislation that is proposed tonight.
Hon. members have given examples of men who had suffered as a result of the unfortunate industrial disturbance of 1919. I am afraid that if I were to undertake to give examples of men who have suffered greatly by reason of that occurrence and the actions of the employer afterwards I would keep the house here until a late hour tonight. I should think that hundreds, yes, many hundreds of real personal friends, very well known to me, are among those whose stories I could tell.
I feel, however, that this legislation, drafted just as it is, may not accomplish what the mover, the seconder and all other sponsors have in mind. I believe it ought to go to a committee. Whether it gets second reading before going there or whether it should go to the committee for study is, I believe, quite immaterial, but I think it ought to go tonight to some committee, and the question arises whether it should go to the railway committee or to the committee on industrial relations.
I believe that all those who support this legislation will agree that if we are to consider the matter properly it would be wiser to have the bill go to the industrial relations committee, whether after second reading or simply being sent there for study and report. I have had an opportunity of discussing this matter with the two ministers who are concerned, railways and industrial relations respectively, and I am happy to be able to say that there will be no difficulty from the point of view of either of them.
I am not going to take the responsibility of moving that the bill go to a committee; I rather think the Minister of Transport will
deal with that himself. But I would suggest that it be the industrial relations committee to which it should go because, despite the fact that it is an amendment to a railway act, the subject matter belongs in that committee naturally; and the same is true of another piece of legislation before the house at the moment. When it comes up I should like to see it go to the industrial relations committee. I believe lion, members will all agree that we should apportion work to committees according to subject matter, rather than according to the name of the act being dealt with.
I close with that thought.
I only wish to record that I am strongly in favour of the idea underlying the introduction of the. bill. I am the more so by reason of the fact that I was intimately connected with the industrial disputes of the day which caused this trouble, and also by reason of the very large number of friends I have who suffered as a result of that industrial dispute. If anything can be done to prevent that sort of thing in the future, to make sure that other men will not suffer as these old working mates of mine have suffered, I shall certainly be glad that I had a hand in trying to get that legislation on the statute books.	,


Mr. DANIEL McIVOR (Fort William):: It has been my good fortune to serve in divisional points and become thoroughly acquainted with railroad men. and I would say that they would compare favourably in character and unselfish service with any group of men, workers clerical or otherwise, in Canada. I have ridden the freights with them and I have learned to know them, at all hours of the day and night. There is, in my opinion, no one better entitled to any benefit of the doubt than railroad men.
In addition to the trouble of 1919. with which I was quite familiar, I would give as my argument in support of this amendment, however it may be fixed up legally to make it of use, the case of a young man, married, a credit to Canada, who during the depression was on the spare board. It was his job, but because he did not work for more than two or three days a month, or perhaps not that, his priority for pension was limited to the time he worked. I do not think it is fair. I could stay here for an hour speaking on this question, but it is far better for me to listen myself out of trouble.


Mr. L. A. MUTCH (Winnipeg South):: I rise to support this amendment, not because of any particular knowledge that I claim or that may be acceded to me by my railway friends on railway matters, but I am interested in the principle involved in this legislation and,
Railway Act

so far as I am in the habit of committing myself, I am committed to supporting that principle. I rose to say that, whatever committee this bill goes to, and whether it goes to it before or after second reading, I hope that the amendment will be reported back to the house and that this parliament will at this session implement the principle which is at stake in this legislation.


Mr. C. E. JOHNSTON (Bow River):: Just before this bill passes, Mr. Speaker, I wish to say a word or two. I do not intend to go to any great lengths. I have been warned that I should not read all the articles which I hold in my hand lest I talk the bill out, and I do not want anyone to get the idea that I am trying to do that. All members of the Social Credit party are in favour of supporting the principle of this bill. We do think, however, that it should go to the committee, so that we may be absolutely sure that the wording of the bill, when it is presented to the house, will be such that it will convey the ideas that all hon. members hope will be in the bill. We are pleased to have this opportunity of putting ourselves on record.


Mr. C. C. MILLER (Portage la Prairie):: I rise also, Mr. Speaker, to support what has been said in favour of this bill to amend the Railway Act. In the riding which I have the honour to represent there are a good many railroad men who have suffered an injustice, just as previous speakers have said has been the case in their ridings. I think any member who has any knowledge at all of railroad men or their problems, should be in favour of an amendment such as this; and I certainly hasten to support the bill before the house.


Mr. WILLIAM BRYCE (Selkirk):: I do not want to take much of the time of the house, Mr. Speaker, but I also have in my constituency a good many of these men who will be affected by this bill. I want to assure hon. members that I am whole-heartedly in support of it.


Mr. T. J. BENTLEY (Swift Current):: Like some of the other hon. members who have spoken, I also have as constituents a number of men who will be affected by this bill, and I therefore feel that I should at least say a word or two on their behalf. Like the hon. member for Fort William (Mr. Mclvor), I have also ridden on freight trains with some of these gentlemen, but I do not know whether it was under the same circumstances. I was either riding side-door Pullman, blind baggage, or on the rods, and these men were kind [Mr. Mutch.J
enough to allow me to go from here to there when I did not have the price of a ticket. Therefore I feel that I owe them a considerable vote of thanks. However I think this bill has all the merit that the mover and those who supported him stated that it had. For that reason I hope it passes this house unanimously.


Mr. RODNEY ADAMSON (York West):: Mr. Speaker, I do not wish to take up much of the time of the house either. All I wish to say is that, having seen the injustices caused by the old act, which is archaic, I wish to support the principle of this bill.


Hon. HUMPHREY MITCHELL (Minister of Labour):: Mr. Speaker, I feel that I should say something. I have railway men in my constituency. I have probably been associated with railroad organizations longer than any other member in this House of Commons, but I still believe in the sanctity of contract, and I think this should be said. I am still old-fashioned enough to think that the best agreements are those negotiated between free men. At the moment there is in existence in each of these railroads an exceptionally good pension scheme. Do not forget that this thing cuts both ways. You cannot have one law for the rich and one for the poor. If you are going to deal with one industry, you should deal with all of them. I am speaking just for myself now, and that is why I say there is something in the sanctity of contract. When you establish a pension scheme it must, by the very nature of things, be based upon what I think the insurance people call its actuarial soundness. I am not opposing the principle of pension for those engaged in industry, but I believe it is a question which should be discussed between those who are engaged in the industrial structure and are concerned with it. You can have a lock-out or strike which may completely destroy a pension scheme when you go right across the board; and those things should, in my judgment, be given due consideration.
I think I have fought for pension schemes as long as any member in this house, but I believe that they are better done through contractual relations between employers and employees. The railroad organizations of this country are probably the best organized and have had the longest contractual relations of any in the history of this country. In the main, they have got along well together.
I want to say that, in my judgment, they stood second to none during the war period in promoting the interests of industrial stability in the Dominion of Canada.

Railway Act
The hon. member for Winnipeg North Centre (Mr. Knowles) spoke of a bill of rights. In the last week we have heard a good deal here about a bill of rights, and I think it is time that somebody spoke about a bill of responsibility. I was not feeling very well the other evening, because I had a bad cold, and was not able to listen to the Minister of Finance (Mr. Abbott), but I shudder to think what would have happened if this government had not been courageous in action-and assumed the responsibility that went with it-in connection with a certain incident in this country, as a result of which people were called to their just reward in the penitentiaries.
In these days of, might I say, emotional stress and strain after a great war, it is necessary at least that the members of this house assume some responsibility for the leadership which, in my judgment, is necessary in this difficult period. I know something about the emotional conditions after the last war. I know something, as I think do many hon. gentlemen in this house, about the emotional conditions that exist in certain sections of this country at the moment. Let me say clearly that I am not for one moment opposing the principle of pensions for men and women engaged in industry and commerce and, if necessary-to extend it a bit further-in the agricultural structure of this country. Let me make that quite clear, because I know what emphasis will be put on my remarks of this evening. But I say that we should look at both sides of the matter. It would not be fair to the working men and women if you set in motion a policy of insurance which was actuarially unsound. Let that be clearly understood. Who know best-the parliament of this country or the ranking officials of the labour organizations and the industrialists When they sit. down and fashion an instrument predicated on the principles I have enunciated to see to it that the men and women engaged in a particular industry receive a pension when their days of labour come to an end? A great deal of legislation has been passed by this house and by the legislatures of this country in that regard.
But let me say also that I have knowledge of strikes and lock-outs in this country where the industry itself was being destroyed, and I am not blaming either the one side or the other in that regard. There are always two points of view to a dispute. But when you are passing basic legislation, which is to become part of the law of the land, you must be very careful. Some of us have some knowledge of what is necessary in connection with pension schemes of this description. I want to
say to my hon. friend and the trade unionists in this house that the whole history of insurance provisions in the many trade union organizations of North America during the last twenty-five years shows many plans that were conceived without full knowledge of the actuarial conditions that should be met in order to see to it that, after many years of payment into such funds, those contributing would receive the pensions to which they were entitled. I have only to refer to the experience of my own organization, which made the same grave error some years ago; and I am sure other hon. members know of other organizations-not only labour organizations, though I am more familiar with those-which have had the same experience.
I emphasize this point, that it is very easy to stand up and say, "Three cheers for the red, white and blue", but I do not think you are doing justice to the men themselves, to the organizations they represent in Canada or to the good sense of this House of Commons unless you take a sound, commonsense point of view in connection with legislation of this description.


Hon. LIONEL CHEVRIER (Minister of Transport):: Mr. Speaker, I think I should commend the house for two things this evening. The first is the unanimity of opinion which seems to prevail in regard to at least the principle, of this legislation. In that respect may I say immediately that if there is the same unanimity when I have to bring before the house matters concerning my department, I shall be very happy. The other point for which I think I must commend the house is the fact that hon. members have decided to speak so briefly. I refer particularly to the sponsor of the bill (Mr. Knowles) and the hon. member for Lethbridge '(Mr. Blackmore), who generally are inclined to be somewhat long-winded but who, this evening, spoke very much to the point, I am particularly happy that the hon. member for Lethbridge did not see fit to speak on his monetary' theories and seek to establish that this change could be brought about in that manner, because if he had I am afraid we would not have reached a decision on this bill this evening.


Charles Edward Johnston: Why bring it up now, then?


Stanley Howard Knowles: I could have spoken on old age pensions.


Lionel Chevrier: Let me tell the house-


Mr. LOW:: Just wasting time yourself.


Lionel Chevrier: My hon. friend need have no worries about the time I may waste, because
Railway Act

I think I can conclude the remarks I have to make before the time allotted to private and public bills has expired. I think the house will agree to one thing, namely, that the purpose of the legislation is something which should receive careful consideration. The hon. member for Winnipeg North Centre spoke of the fight the Prime Minister (Mr. Mackenzie King) led many years ago in connection with lost pension rights, and I am sure if the Prime Minister were a private member today he would feel as he felt then. But I do not believe the Prime Minister would have introduced this kind of legislation because, while I have a great deal of sympathy for the railway workers and others who may have lost their pension rights, as my colleague the Minister of Labour (Mr. Mitchell) has just said there are other factors which must be taken into account. That is that if the legislation non' sponsored by the hon. gentleman does not meet the situation, or, in fact, endangers or makes the situation of certain railway workers worse, then we should be very careful to avoid disturbing the present position in regard to pension rights. When I speak I can deal only with those who are employed by the Canadian National Railways. I do not know the position in the Canadian Pacific Railway Company, though I understand that it is very much the same.
The provisions of this bill are sweeping, not only because they have to do with railway workers but also because, as my hon. friend the sponsor admitted, other workers in other spheres of industrial activity may seek the same sort of legislation. I have no quarrel with that, but I say we must be careful about the manner in which we proceed. So before legislation of this kind is enacted, it is a sound principle to ascertain what the position of the law' is and what it has to say in reference to the pension rights of railway workers. If it is found deficient, then let us amend it. If one goes to the source he finds that there are three acts having to do with pension rights of railway workers; and I repeat that I speak only in reference to the Canadian National Railways. First, there is the Intercolonial and Prince Edward Island railway employees' provident fund, which was established in 1907 pursuant to the act bearing that name, later amended in 1913. Then, there is the Grand Trunk railway superannuation and provident fund, which was established pursuant to an act of 1874, and, finally, there is the Canadian National Railways pension fund. If this legislation w'ere enacted without similar changes being made in the legislation governing those funds which, as the Minister of Labour said, have been found actuarially

sound, and which have been approved by the Department of National Revenue, then I do not think such legislation would have much effect. Let me quote rule 16 of the Canadian National Railways pension rules, which covers practically everything my hon. friend asks. That rule reads:
16. The following need not necessarily be considered by the pension committee as a break of continuous employment or continuity of service:
(1)	Absence on leave.
(2)	Temporary lay off on account of reduction of forces.
(3)	Suspension or discharge if followed by reinstatement or reemployment within one year with the approval of the head of the department.
In reaching a conclusion as to whether there has been a break in continuity of service the fact of the employee entering other employment during such absence, whether on leave or from suspension, discharge, or lay off, may be considered by the pension committee.
So with but one exception, that having to do with strikes or lock-outs, the pension plan covered by rule 16 of the Canadian National Railways fund is practically the same as the amendment sought by my hon. friend. Before enacting legislation such as this, therefore, one should be very careful that a plan which has been built up over the years is not upset.
For reasons I shall give in a moment I do not believe this bill should be given second reading, but I do think it should be studied in principle. I believe the principle my hon. friend has enunciated should be given careful consideration, and I make that statement because of the words which are appended at the end of the proviso. Perhaps I should read the whole proviso, which is as follows:
Provided that in the administration of any railway retirement or pension plan, leave of absence, suspension, dismissal followed by reinstatement, a temporary lay-off on account of reduction of staff, or absence due to an industrial dispute, strike or lockout, shall not disqualify any railway employee from any retirement or pension rights or benefits to which he would otherwise be entitled.
That, to my mind, notwithstanding what has been said by the hon. member, immediately raises doubt as to the retroactivity. And I agree fully with the hon. member for Winnipeg South Centre (Mr. Maybank) that there is a doubt that this legislation may not meet the situation my hon. friend has in mind. He did say that he had not in mind retroactivity, but that he had in mind the future only. The fact that he says that does not decide the issue, because a definite meaning is expressed in the words used, which I have just read, namely, "to which he would otherwise be entitled." There is a doubt, and those words might indicate that when an employee is rein-

The Budget-Mr. Beaudry
stated he would be permitted to make retroactive payments into the fund. If this were allowed, then the legislation might well be unconstitutional. Then, it might well become a money bill and is invalid.
Furthermore, I mentioned two pension plans other than that of the Canadian National Railways. I mentioned that of the Intercolonial and Prince Edward Island railways. Those are railways owned by the government of Canada, and the employees of those railways are employees of His Majesty. If that be so, that raises an additional doubt which, added to the doubt as to retroactivity, might immediately make the legislation such that we would have to vote sums of money concerning the men who would be reinstated or who would be taken on after suspension, and so on, as set out in the legislation my hon friend sponsors. And if that is so, there is great doubt about the validity of the measure.
Then, again, there is the additional point about the schemes. I am informed by those who are familiar with the schemes that Bill No. 24 would purport to take away the exercise of certain discretion by the pension board. The pension board of the Canadian National Railways is composed of seven men, three of whom represent labour and four of whom are appointed by the railway company. There are cases where employees have been guilty of offences which would not entitle them upon reinstatement to their service prior to dismissal, but it would be extremely unfair to grant a man who has been dismissed for cause in all cases a greater right than would be granted to an employee who resigns, without any black marks against him, and who would be considered a new employee upon reemployment.
There were a number of other points which struck me as I read this legislation. However I understand my hon. friend wishes to say a word or two in reply, and I shall not speak longer at this time. Let me say this, however, in conclusion, that, so far as the principle of the bill is concerned, in my view it should receive further consideration by a committee of the house.
So far as the legislation itself is concerned, I think there is doubt as to its constitutionality, as to its validity and as to its retroactiveness. Those are points which I think should be settled before second reading of the bill is given by the house. I therefore believe that the principle of the bill should be studied by a committee before whom witnesses, either from the railway or from the brotherhoods, would be called, and from those who have set up and established pension plans.
Since the hon. member placed the bill on the order paper, I have given some thought as to which committee it should be referred to, and if it is the will of the house my suggestion would be that it go to the industrial relations committee which would be more suitable than the committee on railways, canals and telegraph lines. I therefore move:
That this bill be not now read a second time, but that the subject matter thereof be referred to the standing committee on industrial relations.


[Stage Direction]
Amendment agreed to.
James Horace King: The hour for public and private bills having expired, the house will now revert to the business in hand before six o'clock.



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 of ways and means, and the amendment thereto of Mr. Macdonnell (Muskoka-Ontario), and the amendment to the amendment of Mr. Coldwell.
Mr. ROLAND BEAUDRY (St. James):: Mr. Speaker, may I make some brief comments concerning the budget. If one had any doubts about the merits of the budget now under consideration these would have been dispelled long ago by the type of criticism which has been directed toward it by the various parties of the opposition.
This criticism has added little to the hope, wish or thought, in any quarter, that the country might find a sounder financial document to guide us through the coming year. The budget itself, however, and the minister's introductory speech do give the majority in this house substantial cause to hope and trust that under this government Canadians will be gradually relieved of their tax burden.
I heard with particular interest the minister's reference to the disturbing migratory movement toward the south;. I refer to the introductory part of his budget speech, in which he recognized that a good many Canadians find, each year, that the pastures are greener elsewhere, and in which he expressed the hope that the present budget will tend to make our own pastures more verdant. I concur in his recognition of the fact, and his expressed hope; and I fervently pray that at some near date he may be able to offer Canadians a perspective other than that of taxes, even

The Budget-Mr. Beaudry

decreased taxes, almost from birth to death- not to mention the post mortem cess on what may have been saved from the tax collector.
Far be it from me to berate this government for this state of our affairs. We gathered a lot of impetus in our disregard for a man's right to retain his earnings, during the period 1914-1921-and habit is a hard taskmaster. However we seem to have regained a more proper outlook on the relationship between expenditure and normal revenue; and this, I am sure, should incite Canadians to remain in this country.
May I suggest to the minister that two more strokes of his brush might help to give our pastures a greener tint. One affects almost exclusively the part of Canada for which I sit in this house. I would submit to the Minister of Finance (Mr. Abbott) that his purpose would be achieved in part if he would bend some of his efforts toward obtaining for Canadians of the French language more adequate representation in what constitutes the greener pastures of the civil service- the higher brackets financially and executively. To him and the other members of the cabinet I would point out that the assurance of better things to come in that field would have undoubted influence over my compatriots of the French language in keeping them at home.
The other suggestion is with respect to the country at large. May I suggest to the Minister of Finance that in his future taxation plans he might incorporate some means of telling Canadians that they are not born in this country with the taxation millstone forever around their necks, some means of inciting Canadians to remain at home instead of emigrating at the rate of thousands a year, some means of ensuring that, if from the age of puberty to the age of near senility they must pay tribute to him, there may come a time in their lives when they can prepare to meet their Maker without first filing an income tax return.
Concretely, may I suggest to the Minister of Finance that from the age of fifty-five onwards, Canadians be entitled to a decrease in the current rate of income taxation, a decrease based both on their age and on the amount of income they are fortunate enough to have accumulated or to earn?
May I urge that, beginning with the taxation year in which a Canadian citizen has reached the age of fifty-five, he be given an exemption of five per cent of the taxable amount of his income for each year of age he has reached from and over fifty-five, until the age of sixty-one, inclusively, and that from then on the exemption increase by ten per cent for each year of age? In practice this

would mean that a man of fifty-eight would pay eighty per cent of the tax which his neighbour of forty would pay on a similar revenue, that a man of sixty-two would pay fifty per cent of the tax which he would have paid had he been ten years younger; and it would also mean that a man of sixty-seven would become free from his duties to the country, income-taxationwise.
There may be some objections pertaining to the amount of taxation a rich man of seventy years of age might evade. But there would be no difficulty, I am sure, in setting a limit to the amount of revenue to which this provision should apply, and perhaps I might suggest that the average Canadian would be well protected and would not be discriminated against if the maximum revenue to which this exemption might be applicable were set at $8,000 a year.
The bureau of statistics sets the normal expectancy of death in Canada at 66-29 years for women and 62-95 years for men. In the light of this, it could hardly be thought that, by such an exemption as I advocate, the country would suffer a considerable loss of revenue. But the minister would do what few ministers of finance in any country have found it possible to do; he would instil in the heart of every Canadian the hope that, at some time, they might thumb their nose at his minions. That, of course, might be enough to prolong the life of every citizen by some years.
We are daily legislating toward achieving some measure of state-controlled financial security for old age. Should we not also legislate for those Canadians who would rather provide for that security themselves, with a greater measure of pride and satisfaction- and more economically to the country?
Pension plans and insurance plans are encouraged by the government and exemptions are given on amounts contributed toward them by the tax payer; yet there is generally a toll on their benefits. Would it not be more logical for these exemptions to remain applicable, and to ensure that, if a beneficiary lives long enough to enjoy the fruit of his savings, he shall do so to the fullest measure possible and not only after a division of spoils with the lord1 high collector?
Should not Canada grant that a man has carried his full share of the financial burden of the country when he has contributed to the full extent of his financial resources for forty years, and should there not be a tapering off from then on, so that those fortunate few who have escaped the scythe may also avoid the scalpel of our income amputation revenue department?

The Budget-Mr. P. C. Black
I believe that the minister has figures indicating that the proportion of citizens in this country with revenue bearing incomes for the treasury is somewhat lower than six per cent in the sixty year old category. I am sure that no one in Canada would begrudge that six per cent a slightly richer old age, least of all the Minister of Finance whose physical appearance would lead one to believe that he himself would enjoy the exemption for quite some time.
There are some few in this house who seem to believe that along with our brand new citizenship certificates should go a brand new treasury certificate, valid for $20 a month for life. The minister has it in his power to grant, with the rights of citizenship, another right, that to a tax-free old age and to a modified taxation in later middle age.
I hope that these will soon go hand in hand. This duality of rights would, I believe, instil in Canadians more faith in their future than the pessimistic prophecies of the apostle of a commonwealth or of a credit which has nothing social about it unless perhaps its promised manifestations are used as tokens for parlour games at social gatherings.


Mr. PERCY C BLACK (Cumberland):: I have nothing but good will personally for the Minister of Finance (Mr. Abbott) who brought in this budget. I am not sure, however, that he has not taken something that rightfully belongs to Nova Scotia, because we have had able finance ministers from that province, including his predecessor, the present Minister of Justice (Mr. Ilsley), Hon. James Layton Ralston, the Hon. E. N. Rhodes, Hon. W. S. Fielding, and Sir Charles Tupper.
The budget is for the 1947-48 period. It is for the third post-war year. We as Canadians are proud of our achievements during the war and our favoured position in comparison with other countries of the world. It is well that we have a high national income, and we must maintain it in order to meet the cost of government. But it is becoming painfully evident to every housewife in the low and moderate income groups that much of the increased income the minister talks about is swallowed up in the increased cost of articles that go into the family budget.
The ordinary expenses of the government increased $200 million in 1946-47. The budget for the current year shows a further increase in costs of seventeen departments of government, with the supplementary estimates still to be provided for. The government appears to love to tax for its own fast increasing expenditures and also for provincial governments which would like some fields of this taxation for their own purposes.
83166-209i
Many will be pleased that there has been a reduction in the income tax, and it could not be otherwise with war expenditures no longer necessary. Relief goes to those in the higher tax bracket. They have been severely taxed and few will begrudge them the relief this budget brings, but there is no relief for those in the lower and middle brackets. Their indirect taxes are not reduced by a penny. Their direct tax relief is cancelled out by higher costs. Already living costs have increased this calendar year in an amount greater than tax reductions to be enjoyed by half the income taxpayers of Canada. Business, moreover, has been greatly disappointed that there have not been cancellations or reductions in taxation imposed on business during the war. The Halifax Chronicle sized this up in a heading: "Business gets little out of budget- except lecture".
The Minister of Finance reports the national income in the last fiscal year to be $11,100 million. It is a matter of interest to all Canadians to know where this originates. About three-quarters, or $8 billion, is credited to the central provinces of Ontario and Quebec. The three premiers of the prairie provinces in recent signed statements claimed that the agricultural income for Manitoba last year was $250 million; for Saskatchewan $388 million and, for Alberta, $432 million, or a total of SI,070 million. Nova Scotia is reported by the bureau of statistics as having had $34,700,000. We are told that British Columbia is rolling in wealth and prosperity. Its population increased from 817,861 in the 1941 census to 1,020.000 in 1946, according to the ration book and other returns, and this is, to a considerable extent, a drain on us in eastern Canada. It is already planning on three additional members after the next census, and these will probably be at the expense of Nova Scotia.
It is recognized that the maritime provinces are not sharing in the prosperity of other parts of Canada. Coming from Nova Scotia, I take pride in the development of Canada as a whole, but my first duty is to the mari-times which need all the help they can get, and I appeal to parliament for more than "sympathetic consideration". Nova Scotia has a great history. There would have been no Canada without it. Responsible government started there, as did free schools. Confederation had its beginning in Nova Scotia. We have done our part in peace and war. Nova Scotia has great resources in farms, mines, fish, lumber, industry and tourist attraction. The tourist branch at Ottawa has only thirty on its staff for all Canada, while the film board has over six hundred. Unfortunately most of our production has been in the raw unfinished
The Budget-Mr. P. C. Black

form, exported to provide the least employment to our home people. We have raised and educated our population and a large portion have gone to build up other parts of Canada. They have been leaders in banking, in industry, in the professions, in education and in statesmanship. Many Nova Scotians now feel that we have too much statesmanship for others and not enough looking after our own interests.
It is recognized that we have not prospered in confederation as have other parts of the country. The government and many of the public men in office at Ottawa seem to take it for granted that this has to be our lot. If we had been told at confederation that we were to be "unprivileged", the "have not" province, the "poor relation", terms we now hear so often, there would have been no confederation, and we would have made our own way as part of the British empire. Although I still believe in Canada, I also earnestly believe that we in Nova Scotia who have contributed so much over the years deserve better treatment within the Canadian nation.
This government and their party have been given support by the people of Nova Scotia rarely equalled in any country, and our people are now more and more convinced that we have had too much politics and we have not had fair treatment. They recognize that we have some disabilities and they must be overcome so that we may share in Canadian prosperity. That many men outside the mari-times are now of this opinion was recently illustrated when the hon. member for Davenport (Mr. MacNicol) came whole-heartedly to the support of our cause. I am pleased that to some extent I was instrumental in inducing him to come to the maritime provinces last summer. This great Canadian geographer, industrialist and parliamentarian, who has criss-crossed and covered Canada many times in his travels, has taken up the cudgels in our behalf. From his wide, embracing store of knowledge of the nation, he proclaims us to be the forgotten part of Canada. I appeal to every public man and businessman, irrespective of their politics, to come to our rescue and to aid us in our plight.
I have heard several other hon. members ask privately "why do we stand for things as they are?" My answer is, too much politics.
I do not like to repeat and enumerate our disabilities and grievances, but continued neglect makes repetition necessary. Hon. members have been told again and again about war contracts. From July 14, 1939, to December 31, 1916, the maritime provinces received $380,500,000, while Quebec had $5,223,600,000 and Ontario $5,436,700,000, a comparison of $10,660,300,000 to our $380,500,000 in the maritimes.
In shipbuilding contracts the government now passes us by. When all yards have to be worked to capacity we had some contracts. Now when the government can pick and choose, Halifax and Pictou are not on their list.
The government had many crown companies operating during the war. On page 35, dealing with the budget, the capital assets of the crown companies still operating are listed at $85,755,000. Not one dollar of capital expenditure included in this amount was made in either Nova Scotia or the maritimes. There are also large expenditures, which I shall not refer to in detail, at Chalk river, running to $27 million. The trading company known as the Canadian Commercial Corporation has large contracts for $300,872,575 for all Canada, but only $2,151,351 had application to Nova Scotia. This has to do with price stabilization and export credits.
There never has been and never could be a like opportunity to establish industries in Nova Scotia with peacetime potentialities as during the war and the years since. However, this appears to have been farthest from the thoughts of those entrusted with the spending of the billions of dollars of war moneys.
There were large expenditures for military camps and airfields, but these have all been wrecked and made useless for peacetime industry and development, thus giving rise to the impression that, in their origin, the benefit of contractors was a greater consideration than the future well-being of the people in these localities. Debert, now a wreck, was the scene of approximately a $14 million expenditure. Contractors benefited from $4 million expended at Windsor; Cornwallis, about $10 million; Shelburne, over $4 million; the Exhibition grounds, Halifax, $1 million ; Maitland, $3 million; and Point Edward, Cape Breton Island, $3 million; with like expenditures totalling in all more than $50 million there has been practically nothing to assist the permanent building up of our province and the providing of peacetime employment. One peacetime establishment, the naval college, was transferred to Royal Roads in British Columbia. I had an opportunity of visiting Royal Roads and I regret exceedingly that the college was taken from Nova Scotia although it now has a magnificent site.
Although we have heard much about the Canso bridge or causeway, and Premier MacMillan did announce before the last election that the Minister of Reconstruction and Supply (Mr. Howe) had approved this construction, nothing has been done except a survey which was made under pressure. The

The Budget-Mr. P. C. Black
Jacques Cartier bridge at Montreal was built at a capital expenditure of $19 million and five per cent bonds issued. Deficits have accumulated totalling $6,822,000, all guaranteed or paid by the federal government. The St. Lawrence bridge cost $23 million plus deficits, but no such expenditures in Nova Scotia at Canso or Halifax harbour!
The Chignecto canal has been before this house repeatedly, and it has been projected ever since the Acadians first came to Nova Scotia. It is warranted both as a commercial and as a defence undertaking, and it would have been built long years ago except for the fact that our part of Canada has been in the "have not" class.
Central Canada has had $243,752,399.78 expended on canals, and there have been accumulated deficits of $114,130,209.81, or a total of $357,882,609.59. There is an additional expenditure of $275 million projected on the St. Lawrence canal. We in Nova Scotia have a canal, the small St. Peters canal, started in 1854, suspended in 1856, resumed in 1865, finished in 1867-all before confederation; also a small canal for fishing boats in Guys-borough. But the Chignecto canal, a construction which would enhance the entire economy of the maritimes, has been put off from the days when the Indians and early settlers used this crossing.
We contributed to the construction of the Canadian Pacific railway, but we were never permitted to have it enter Nova Scotia. We also contributed to the Grand Trunk Pacific costing hundreds of millions of dollars, and all we got was the election cry, "Listen to the whistle of the Hong Kong train." The Sydney-Pictou-Moncton railway waits with other Nova Scotia projects for rebuilding. It now runs up and down, in and out and round about, so that at modern railway speed everyone that rides it would be a "humpty dumpty."
There has been the possibility of cheap tidal power plants at Petitcodiac, Chignecto and
other places, providing large blocks of still cheaper secondary power, but they have remained only mirages.
The Minas basin ferry service was in operation for more than forty years between Kingsport, Parrsboro and Wolfville. The government of Nova Scotia had the motor ferry boat Kipawo built and operated from 1928 under subsidies. It was required for war purposes, and traffic was then compelled to go 150 miles during the shortage of gasoline and rubber. Our people willingly put up with this during the war, but naturally they expected the service to be restored at its conclusion. However, this boat the Kipawo, was sold in Newfoundland by War Assets Corporation for about its cost price-$26,000- and no boat, among the hundreds built and leased by the government, was made available for the resumption of this service, although local parties had agreed to undertake its operation.
I have received repeated representations from the boards of trade and others, the last being as follows under date of May 3 of this year:
A report of the Valley board of trade, held in Kentville, Wednesday evening, was given by W. C. Mosher, who stated that efforts are being made to restore the ferry service between Parrsboro, Wolfville and Kingsport, although the railway is not interested in the project, the matter is being taken up.
Money for everything but not for this service, which was a matter of pride to the people of the localities served but now a further proof of decadence. I may say that the $26,000 realized from the sale of this boat will now go into the surplus funds to swell the $352 million reported by the Minister of Finance as a surplus.
I obtained a list from the war expenditures committee of some of the ships acquired by the government during the war, and money or costs did not appear to be a factor. There are sixty-three ships in this list, and I am going to give the costs on some of them:
Cost repairs and rents while
Ship's name-Length-Name owner	under R.C.N.
Fifer yacht, 104 feet, Empire Stevedoring Co., Vancouver $	29,958	41Andre Dupre yacht, 125 feet, Marine Industry	
31,008	21Rayon D'Or, trawler, 140 feet, Maritime Fisheries, Quebec	41,347	78H.C. 60 yacht, 97 feet, Eastern Motorship Co., Halifax_	27,213	68Norsal, fishing vessel, 128 feet, Powell River Co., Vancouver ($15,048.00 per year) Total	;	14,835	02G.	V. 14 gate vessel, 135 feet, Marine Industries	
52,225	33H.	C.P. yacht, 53 feet, Fulford ($1.00 rental)	
484	57
Cost of
reconditioning for return to owners or cash settlement $	17,985 98
9,010 73 103,361 51 10,049 25
16,500 00 24,906 44 22,448 52
Reported to war expenditures committee. Sixty-three vessels in all, yachts, tugs, fishing vessels,
trawlers, motor launches, gate vessels, motor vessels, et cetera.. Some vessels were chartered at $1.00 per year, plus repairs while in operation, overhaul costs before being returned to owners.
The Budget-Mr. P. C. Black

Our people are supposed to be pleased when they learn that private owners, in addition to the return of their boats, were awarded costs of repairs in excess of their original value. No ferry boat! No post-war industries for us! Sugar refinery closed! Rolling mills and airplane factories and other plants closed! The plate mill made into scrap! Not so in central Canada.
To show how we fared in Nova Scotia in comparison with central Canada, I am going to quote a few sentences from the proceedings of the committee on war expenditures on May 30. 1946. at page 527:
Mr. Cote, M.P. (Verdun): ... it is my duty towards the corporation (war assets) and the Department of Reconstruction and Supply to tell you, Mr. Chairman, that the people of Verdun and the outskirts of Montreal generally, will derive a great benefit from the setting up of this multiple-tenancy occupancy of that building in Verdun ... In Verdun there was no industry before . . . Close to forty industries are now operating, not all full time yet, but most of them will be before long, and they will provide employment to around four thousand people . . . I think the members will agree with me . . . that the corporation and the Department of Reconstruction and Supply deserve credit for what has been done there.
Mr. Black (Cumberland):	Before Mr. Berry
answ-ers, it seems that it is in the Montreal and Toronto areas where they are to reap the benefit of the application of this policy, where new industries are being established. I was wondering if by some happy circumstance that policy could be extended to our province, more particularly to Amherst, where there are a number of large buildings . . . they have as fine a record in the building of planes as . . . any other place in Canada.
There is the subject of government assistance for our marsh lands in Nova Scotia and New Brunswick. There was never in the history of this parliament a better case made out for a special project, and it does not need further argument from me.
The government has been pleaded with by the ministers of agriculture of Nova Scotia and New Brunswick and others to announce its permanent policy, and to get work under way this year while the weather is favourable. The federal Minister of Agriculture (Mr. Gardiner) made his budget speech but made no reference to this.
All the members from Nova Scotia have had a recent letter from Hon. Mr. Mackenzie, Minister of Agriculture of Nova Scotia, dated May 6, asking for action. I quote a few sentences from his annual report to the provincial legislature, Department of Agriculture, page 150. I am not quoting from his letter, although I have it here:
Repairs to dykes and aboiteaux on Nova Scotia marsh lands have been carried on for some years past on an emergency basis, pending

the approval of a more comprehensive policy providing for a long-term constructive programme that will eventually restore these fertile dyke-lands to their normal productive capacity.
In former times when these marshes were at the peak of production they contributed much wealth to the adjoining and neighbouring upland farms which in most cases were too small in acreage to successfully carry on without the hay, pasture, and grain produced on the dyke-lands. If Nova Scotia is to expand farm production, these marsh lands must be rehabilitated, for it is in these areas that the majority of our productive and potentially productive farms are located . . . Nova Scotia must have more crop land and as these dyke-lands are fertile and productive and when properly drained and protected from tides compare favourably with the best prairie soils, the rehabilitation is simply a matter of conserving an important and necessary natural resource.
Both federal and provincial authorities have now accepted the principle that the rehabilitation of the marsh lands is of national importance and that the undertaking should be organized on a permanent basis.
There is very much more I could say, Mr. Speaker, I have in my hand a report called "Fifty Years of Progress on Dominion Experimental Farms". At the front is a picture of the federal Minister of Agriculture, and it is quite proper that it should be there. I was interested in seeing his report on the experimental farm at Nappan in my constituency. I am going to read just a few lines from that, at page 103:
The dyke-land of this farm forms a part of one of the largest tracts of dyke-land on the continent. . . These vast dyke-lands will ever remain a tribute to the work of the French, for it was they who first won them from the tides of Fundy.
I say with a little shame, that no such tribute could be paid to the men who are carrying the responsibility for rehabilitating these lands at the present time. The provincial governments of Nova Scotia and New Brunswick are prepared to do their part. The property owners are prepared to do their part, but it is impossible for them to do so without the assistance of the minister and the government at Ottawa. The minister last year laid down a general policy the undertaking involving quite an expenditure. He has approved repeatedly, but the difficulty is that no action is taken. There is nothing being done, and the people who are interested in farming down there are becoming more and more discouraged.
The operation of the coalfields, a great national industry in Nova Scotia, was under the control of the federal government during the war, but this has been far from satisfactory. The government has paid out large subsidies for the production of coal, for

The Budget-Mr. P. C. Black
which Nova Scotia should be grateful, but the government's policies have not given good results. Experienced miners were encouraged to enlist and men with no experience were sent to the coalfields throughout the war while heavy income taxes discouraged overtime work. We should be producing 8,000,000 tons of coal a year, worth $50,000,000, but there has been continuous dissatisfaction among the miners, and the industry has been in the worst position in more than twenty years. I want to thank the Minister of Labour (Mr. Mitchell) on behalf of all Nova Scotia for his efforts in settling this long-drawn-out and very unnecessary strike.
While I am not taken into consultation very often, I feel that the members from Nova Scotia should forget partisanship and work together. There is much I could say with [DOT]egard to the subject of dominion-provincial igreements as it applies to Nova Scotia. I set out my views in a radio address on February 18, in which I stated, "From a money standpoint it is now difficult for Nova Scotia to refuse the last offer of subsidy payments and our provincial taxpayers would suffer by a refusal." I am, however, against the trend of centralization and dictation emanating from Ottawa.
I read with interest Premier Macdonald's address before the Halifax junior board of trade and his commendation of the efforts of the Nova Scotia government in the depression years to keep the province solvent. I am especially interested in that because I was a member of the government of Nova Scotia at that time. We were then administering affairs in Nova Scotia with a revenue around $8,000,000, while $22,000,000 is now expended. We needed additional revenue, but we did not impose a provincial income tax in Nova Scotia and it has never been imposed. But what has been the result? When the federal government took over the entire income tax they increased taxation more in Nova Scotia than in any other province-from nothing to the highest level. Other provinces had only the income tax increased that they had already imposed. Nova Scotia got no credit for its thrift or for imposing higher taxes than other provinces on gasoline, car licences and other things. Nova Scotia financed its own requirements and issued its own bonds during the depression years. It met all its obligations and kept all its municipalities solvent. The four western provinces were largely financed by the federal government during the depression period by federal treasury bills as follows: Total treasury bill debt:
Manitoba	 $24,734,451.82
Saskatchewan.. 80,441,852.44
Alberta	 26,212,000.00
British Columbia 34,112,249.99
Total	$165,500,554.25
When the federal government entered into separate agreements with the four western provinces, they made settlements of these treasury bills, which were still owing by these provinces, the total being dealt with as follows:
To be cancelled	 $55,456)164.06
To be repaid (out of proceeds of natural resources settlement)	 15,987,500.00
To be refunded (without interest)	 49,729,979.99
To be refunded (with interest over a period of 30 years at 2-58 which liquidates the principal as well)	 44,326,910.19
We in the east were not consulted when this settlement was made. The four western provinces are rolling in wealth and national income in comparison with the maritimes, but no comparable treatment is accorded to us. Our people got first information through the boastings of the western premiers in the press.
Nova Scotia met the impact of the depression as best it could, and many municipalities, including Cumberland, never went on relief. The province did not pay for shelter or rent and property holders made heavy contributions, all of which saved the federal government large sums. Nova Scotia still has a funded debt of $25,389,000 of 41 per cent bonds and $15,185,000 of 5 per cent bonds, making a total of $40,574,000 carried from the depression years. If Nova Scotia had the same consideration as the four western provinces
this debt would be settled by:
Cancelling	 $13,592,000
Allowance for natural resources
Nova Scotia helped pay for __________ 3,918.000
By refunding without interest . ..	12,189,000
By having paid off in 30 yearly instalments at 2f per cent interest and principal	 10,875,000

In previous sessions I have referred to the unfairness of the federal tax on electricity. The tax is on the cost to users of electricity generated by private enterprise and my county of Cumberland pays about $150,000 a year, while Montreal and other places served by government generated electricity and low cost financing escape paying such taxes. Heavy corporation taxes increase our costs on privately generated electric energy, but not on government hydro electricity. The tax is on the cost to users, not on the kilowatts, so that users
The Budget-Mr. P. C. Black

from the smaller and less efficient plants pay the heavy taxes. Nova Scotia built 218-5 miles of rural electrification last year, subsidized and encouraged its construction in an effort to bring modern conveniences to rural communities; and the federal government makes no contribution, assumes no responsibility, but lays on heavy electric taxes under the guise of war. Nova Scotia has a programme to build 500 miles of rural electrification next year and the following years, and Ottawa will gather in more taxes from us.
I join with the hon. member for Royal (Mr. Brooks) in his protest against Ottawa's treatment of Nova Scotia and New Brunswick with respect to the marketing of birch affected by "dieback". This affects hundreds of millions of feet of hardwood in these provinces. I resent the insinuation of the Minister of Reconstruction and Supply (Mr. Howe) that lumbermen of the maritime provinces cannot be trusted. We have a well established lands and forests department in Nova Scotia, now presided over by Hon. J. H. MacQuarrie, who stated in Halifax on May 10:
People at Ottawa do not know what they are doing. Ottawa was to blame for the fact that Nova Scotia lumbermen could not market birch affected by dieback, wood that would be useless in five years or less . . . We have not ceased one iota in our efforts and we will continue our efforts until we do get relief for the people of Nova Scotia. They (Ottawa) do not seem to have the faintest knowledge of the situation.
This is one more proof that Nova Scotia's interests get little consideration at Ottawa today. Surely the requests of the department in Nova Scotia should be accepted.
I have not told the whole story, but private members from all parts of Canada should join forces with the hon. member from Davenport, so that we in Nova Scotia will not be "the forgotten part of Canada."
I do not want hon. members to think, even if we have not had fair treatment and even if we have not prospered as we should, that we have not great resources and great production, shipped away, it is true, mostly in the rough and unrefined form when industry should be based upon it at home. This was well pointed out by the hon. member for Colchester-Hants (Mr. Stanfield) in his splendid speech in this debate when he said:
Many Canadians who have never been to the maritimes seem to have the idea that maritimers are only heweTS of wood and drawers of water. This certainly is a mistaken idea. The maritimes are a beautiful country and the maritimers are the highest type of Canadian citizens.
Nova Scotia must indeed have great wealth as well as great thrift, or it would not have the capacity to purchase the long list of articles and commodities from central Canada

totalling many millions of dollars every year with a minimum of reciprocation. The heads of industry and bankers marvel at our purchases of motor cars, trucks, tires, batteries, farm machinery, cement, electric motors, tobacco, sugar, flour, radios, medicines, tools, jewellery and a hundred and one articles, and still we are able to educate our boys and girls so that they may be enticed away from home to take places at the top all over Canada. We are now told that there is to be a big increase in freight rates on our purchases and sales. We in the maritimes threw in our lot with Quebec and Ontario and, if they are to supply us with our necessities such as motor cars, trucks, cement, farm machinery, electric motors and such articles, I think we have the right to have them delivered to us freight paid at the lowest factory prices.
For better or for worse, we are part of Canada which has a proud place in the world today. Our people are more and more coming to the opinion that we have not had a fair deal. We in Nova Scotia want our proper place as an integral part of this great and expanding country.


Mr. W. F. KUHL (Jasper-Edson):: Mr. Speaker, consideration of a national budget raises the question of fundamental principles which govern in the national economy. To say that we cannot achieve national greatness unless we lay down and pursue sound long-range objectives and sound fundamental principles is to make an assertion which is selfevident. The point at issue, however, is what constitutes sound long-range objectives and sound fundamental principles. Each political party represented in this house considers that the fundamental principles and objectives to which it subscribes are sound, even though they are at variance with those of other parties. These principles therefore cannot all be right and neither can they all be wrong; and I doubt very much that it will ever be determined in this house which of these principles are sound and which are not. The political party atmosphere will not permit such to be done. "My party; right or wrong, my party," remains the dominant attitude of all political parties in this house. The most that can be hoped for is that the discussion and debate upon these issues in parliament will enable the electors to draw their own conclusions and determine their own course of action, and in the few moments at my disposal I wish to make my small contribution to that end.
So confused are the issues today that it is necessary that we define more carefully than ever before each and every term we use. There

The Budget-Mr. Kuhl
can be no intelligent discussion of any subject until we first define our terms. As simple as they are, such terms as "democracy," "freedom," "security" and so on, today mean different things to different people. That is equally true of many other terms we use such as "capitalism," "free enterprise", "private enterprise," "full employment," "socialism," "communism", and so forth. Such confusion is abroad today that we find totalitarianism masquerading under the cloak of democracy, slavery being represented as freedom and anti-Christianity being propagated under the sacred name of Christianity. How imperative therefore that we have a clear conception of what is involved in the terms which we use. I should like to use my time on this occasion to indicate my conception of some of the terms to which I have referred.
I wish, first of all, to indicate what conditions I think must prevail before our society can be characterized as a genuine democracy. As to definitions, I prefer the one given by Major C. H. Douglas, the founder of social credit principles, when he said that democracy is government in accordance with the will of the people. This means that in a genuine democracy the ^people should be able to get the results they want from the management of their affairs.
Accepting this as a general definition of democracy, I think it is fair to say that systems which have been designated as democratic have failed dismally to produce results in accordance with the will of the people. Even in countries where the outward forms of democracy have been most successfully established, the people have obtained very few of the results they wanted. On the contrary they have had insecurity, poverty, want and war meted out to them, and have seen individual freedom diminishing at an alarming rate. Instead of government in accordance with the will of the people, we have had government contrary to the will of the people.
The people of Canada are not getting from their present government the results which they desire. The people of Canada are willing and able to produce the things required for a standard of living very much higher than what they are at present enjoying. The standard of living which the people are entitled to enjoy should be limited only by their willingness to produce and their capacity to consume. At the present level of prices that should certainly represent an income of at least $4,000 a year, tax free, for every family of four. And as industry gets back to capacity production on a peacetime basis a substantial improvement on that amount should be possible.
I say, sir, that the people of Canada are willing and able to produce goods and services necessary to sustain and improve such a standard of living. But they can neither raise production completely to those levels, nor can they bring about the complete distribution of that production unless their efforts are accompanied by certain actions which the government must take, actions which the people themselves cannot take and which must therefore be undertaken by the government on their behalf.
The present government has not taken such steps and has not legislated in such a manner as to permit the people to produce to the limit of their desire to consume, and which will permit them to consume to the extent of that production. The present government is not governing in accordance with the will of the people of this country.
The question therefore arises: how can a government be compelled to govern in accordance with the will of the people? Before this question can properly be answered, another matter of fundamental importance must be determined, and that is the real purpose and function of parliament. Parliament today has departed a very great distance from its real purpose and function. I consider that Major Douglas has stated the purpose of parliamentary institutions as well as anyone has. In a speech at Buxton on June 9, 1934, he made the following statement:
Instead of electing representatives to inform hankers and industrialists (who understand the technique of their jobs perfectly) how to do them, and to pass a multitude of laws which, while providing unnecessary jobs for large numbers of people who could be better employed still further impede industry, the business of democracy is to elect representatives who will insist upon results and will if necessary pillory the actual individuals who are responsible either for the attainment of results or their non-attainment.
It is not a bit of use asking democracies to decide upon matters of technique; and it is quite certain, as has already been demonstrated, that if you throw a plan to a democracy it will be torn to shreds.
It is not the business of the parliamentary machine to reform, for instance, the financial system. It is the business of the parliamentary machine to transmit the desires of the people for results out of the financial system, and to transmit to the people the names of individuals who are responsible for the financial system, so that by the exercise of the right of eminent domain, which has undoubtedly been established as vested in the representatives of the people, they may if necessary take steps to remove those responsible for impeding the will of the people. If it is pleaded in extenuation that those in charge of any particular function of the state, such as finance, do not know how to produce the results desired, then it is the business of parliament to provide them with all the advice available. But if they will neither take action within a

The Budget-Mr. Kuhl

reasonable period of time and will not accept advice if provided, then it is the business of the representatives of the people to remove them, whether they are alleged to be operating under a system of private enterprise or as public departments.
In the fewest possible words Major Douglas contends that the chief duty of a member of parliament consists in seeing that the people get the results which they want from the management of their affairs, and not in suggesting the methods by which those results can be obtained.
In another part of his Buxton speech, Major Douglas makes the following comment upon the situation into which parliament has drifted as a consequence of concerning itself about methods instead of results:
We elect parliamentary representatives at the present time to pass laws of a highly technical nature, not to ensure that certain results are achieved. As a result of this, not merely in this country but everywhere in the world, as far as my observation takes me, we are witnessing a set of second-rate experts in the seats of government ineffectively endeavouring to give technical direction to a set of first-rate experts who are actually carrying on the functions by which society lives.
I agree whole-heartedly with these statements and I suggest it is imperative that Canadians take steps immediately to rehabilitate democracy in Canada in accordance with the principles suggested by Major Douglas. It is not the duty of members of parliament to pose as experts on methods. It is quite in order for a member of parliament to be an expert on methods, but it is not his function as a representative of the people. It is his business to see that the people get the results which they want. And if he is not an expert himself, it is his duty to see that experts are hired to devise methods by which results can be obtained.
Therefore, on behalf of the electors of Jasper-Edson, whose spokesman I am privileged to be, I demand that the government, and in particular the Minister of Finance (Mr. Abbott) see that methods are devised which will permit the electors of Jasper-Edson, along with the rest of the people of Canada, to produce to the limit of their desire to consume, and which will permit them to buy to the extent of that production, without in any way interfering with their individual and personal freedom.
If the experts at present employed are either unable or unwilling to produce the results desired within a reasonable period of time, then the government should dismiss them and replace them with individuals who can and will produce results. I quite realize, however, that the voice of one member of parliatMr. Kuhl.]
ment, or of even a dozen, is not sufficient to compel the government to take action along these lines. Were a majority of members from both sides of the house to do so, I am satisfied that it would not be long before such results would be forthcoming. The reasons that a majority of members in this house will not rise and make such demands of the government are twofold: party politics and lack of organization on the part of the people, such that they can insist upon obedience to their *will. The political party system makes it very difficult for the people to exercise their democratic privileges and assume their personal responsibilities, even if they are so inclined. The political party system cannot properly serve democracy. Once every four or five years, the people are given an opportunity to vote simultaneously for a candidate and a party platform. The people as a whole have no voice in deciding the contents of these platforms. They are prepared by a small minority group with an eye to vote-catching. Often the platform deals for the most part with methods, concerning which neither the drafters of the platform nor the general public are qualified to form a wise judgment. Nothing could be more confusing. Elections find the voter wondering whether to vote for a candidate, a platform or a political party.


Mr. SMITH (Calgary West):: How did you get elected?


Walter Frederick Kuhl: I grant that I was elected on a political party basis, but I am trying to indicate in what way it can be improved.
During the election campaign, each party viciously attacks the platforms and the candidates of the other parties. The people being unorganized become the victims of high-pressure propaganda in which extravagant promises, abuse, deceit and even intimidation are used to trick them into voting power-seekers into office.


Arthur Leroy Smith: I spoke
against you in your constituency and we lost our deposit, but I think you will agree with me that I never said one word in criticism of you. Will you not admit that?


Walter Frederick Kuhl: I appreciate that very much. That was mutual.


Mr. HANSELL:: It would not have made much difference anyway.


Walter Frederick Kuhl: After the election, the successful candidates cannot be controlled by the electorate. They vote themselves their own indemnities and submit to the dictates of a few party "bosses" who are the party organization between elections. The policies which

The Budget-Mr. Kuhl
have been implemented under party government are certainly not in accordance with the will of the people.
Political parties need a considerable amount of money to maintain their organizations and their propaganda. Those who provide the party funds expect favours for their support. Having paid the piper, they can compel the party "bosses" to play any tune they desire. The results are exactly *what may be expected under the circumstances. The history of political parties has been an unsavory record of graft, patronage, and political corruption.


Arthur Leroy Smith: You are not talking about Alberta now, are you?


Walter Frederick Kuhl: I grant that so long as there are political parties, no matter what name they assume, they are subject to the same abuses, although we hope that we have a cleaner record in our party than has been the case with some of the older parties.
Political parties divide the people into conflicting camps-each striving to win their support to vote them into office and each attempting to discredit the other parties. Under such a system no representative, however sincere, can possibly serve the interests of the people effectively. The party system makes this impossible. "Every kingdom divided against itself is brought to desolation", and if one may judge by the results of the political party system in every country, it has all but succeeded in achieving this. There is no reason or need for the people of Canada to be divided into a number of conflicting political camps, because all people want substantially the same results from the management of their affairs.
All people want and must have adequate food, clothing and shelter, even though their individual tastes in this respect may vary considerably.
All people want security in old age or when they suffer loss of income through illness, unemployment or other causes
All people want the personal and individual freedom to worship God according to the dictates of conscience; to choose or refuse to do whatever they wish, provided that in so doing they do not interfere with the same right of every other individual; to acquire by their honest efforts their fair share of the desirable things of life, such as education, property, luxuries and so forth.
The only difference of opinion which exists is regarding the methods by which these results can be obtained. However the people, as the supreme authority, should not be concerned with methods.
The concern which the people should have is for an organization through which they 83166-2104
can secure obedience to their will. Workers in industry, farmers and others, have found it necessary to organize as unions in order to gain the objective they want. Because the principle underlying trade union movements is right, they have had a measure of success in securing better working conditions and wages. Political and economic systems can be made to function in the best interests of the people, if they will organize for that purpose, just as trade unions organize for a more limited purpose.
It is gratifying to me to observe that such an organization has already commenced in Canada and that it is growing daily. The movement and the organization to which I refer is the Union of Electors. This movement is something new in the political life of Canada, but it is already far beyond the stage of infancy. Its greatest strength is at the moment in the province of Quebec, which is evident from the attention which the hon. members from the province of Quebec are paying to the hon. member for Pontiac (Mr. Caouette), who was elected to this parliament, not as a member of a political party, but because of the assurance which he gave the electors of Pontiac that- he would at all times demand the results which they desired.
The Union of Electors is not a political party. It is a union of the voters who are organized to get the results desired in common by all the people, irrespective of race, religion or party affiliation.
The objectives of the Union of Electors are:
1.	To state the results wanted from the management of the affairs of the country in all spheres affecting the lives of the people.
2.	To control the elected representatives of the people at all times, and through them, all the people's governing bodies, local, provincial and national.
3.	To insist on and enforce obedience to the will of the people on all matters of policy.
It is only through such an organization of the electors that Canada or any other country can experience government in accordance with the will of the people. I am indeed glad, therefore, to see such an organization of the people developing in Canada, and I intend to do everything I can to encourage it and assist it until it encompasses the majority of Canadians from Vancouver to Halifax.
In my remarks thus far, Mr. Speaker, I have indicated some of the circumstances which I think must prevail in our society before it can be characterized as a genuine democracy. I have suggested that the duty of members of parliament in a democracy
The Budget-Mr. Kuhl

proper should be confined to securing results rather than devising and debating methods. I realize, however, that we shall not alter our course without a period of transition. Until the people are organized to demand otherwise, parliament will continue to discuss methods rather than results. Before concluding, therefore, I intend to contravene the principles which I have just enunciated, by making a few remarks concerning methods.
Judged from the point of view of orthodox budgets, this budget is no doubt as good a budget as any orthodox economist could draw up. My general criticism is that an orthodox budget does not reveal the true facts about the national economy. In a substantial measure, this budget falsifies and conceals the real economic facts and conditions of this country. I deplore this situation and, on behalf of the people who sent me here, I protest against it.
I say that this budget falsifies and conceals the real economic condition of the nation because it deals only with money which the government extracts from the taxpayers and indicates no relationship between the money in the hands of the people and the goods and services which they are expected to buy.
The question at the root of the whole situation is one of the monetization of real wealth. In the highly industrialized and power-mechanized system of production of today, a barter system of exchange is obviously impossible. The only means whereby the people can draw from the pool of national production is through the monetization of that pool of production. Money must be created and must be put into circulation before goods can be either produced or distributed. In a modem economy this is done largely through loans to industry created and lent by the chartered banks. The orthodox economist assumes that this means is sufficient to enable the people to buy back their production. He believes that the total money in the hands of the people is always equal to the total of the prices of goods which they are expected to buy. He believes that production and income are one and the same thing. Because he believes this, he concludes that if part of the national production is to be diverted to public services of various kinds, the only method of doing so is to take from the people in taxes an amount of money sufficient to divert to public service whatever part of the national production is required. Such a conclusion would be sound if the premise upon which it is based were sound. I contend, sir, that the premise is most unsound, and therefore any conclusion based upon it must also be unsound.

In normal times when there is not an abnormal expansion of capital goods, as during a war, and immediately following a war. income does not keep pace with production. Money income is always less than the price value of production. This premise is not conceded by orthodox economists, but it is nevertheless borne out by the facts of industry. Because money income is never equal to national production in normal times, I say it is unnecessary and unsound for a government, with control over the nation's money, to go into debt or to levy taxes in order to divert part of the national production to public services.
In normal times a country suffers from a lack of purchasing power as compared with its producing power. There is an actual physical shortage of money in the hands of all the people collectively as compared with the total prices of goods. An increasing proportion of our national production remains unmonetized. This unmonetized portion of national production has been partly monetized in the past by government borrowings of newly created bank money which is paid out for public works, bonuses, subsidies and for other governmental purposes. This does not balance the economy, however, for this money is charged to the national debt to be collected through taxes. But it is mathematically impossible for the people to buy the total of national production and pay these taxes as well. The most popular misconception as to why the poor are poor is that the rich are rich. Many imagine that their incomes are low because the incomes of others are too high. The implied remedy is, therefore, to tax the rich. I am not suggesting that the rich ought not to be taxed, but I do assert that it is impossible to distribute the whole of national production by taxing the money from the rich and giving it to the poor.


Ernest George Hansell: That is the socialist idea.


Walter Frederick Kuhl: Orthodox economists, including the Minister of Finance (Mr. Abbott) do not say that the poor are poor because the rich are rich, but the government's financial policy implies that such is their belief. In the debate upon the subsidy question, the Minister of Labour (Mr. Mitchell) asserted that all subsidies have come out of taxation and must necessarily do so. Such a statement certainly leaves the implication that the only method of helping the poorer is to tax the richer. I take issue with the Minister of Labour when he says that subsidies have come out of taxation.


Humphrey Mitchell: Where do they come from; out of the sky?

The Budget-Mr. Kuhl


Walter Frederick Kuhl: I am going to tell the minister presently if he will maintain his patience.


Ernest George Hansell: He would not have made that remark if he had known.


Walter Frederick Kuhl: Up until the present budget the government has incurred huge deficits which have been met by government borrowings of newly created bank money. This freshly created bank money which was borrowed by the government was used to meet governmental expenditures including the payment of subsidies. It is true that these borrowings are charged to the national debt and are collectible through taxation, but the fact of the matter is that the debt is never collected; it is merely refunded, the principal remaining and the interest compounding.
It is therefore incorrect to say that subsidies have come out of taxation. They have come out of newly created bank money, which is borrowed by the government, but which is never collected in taxation.


Humphrey Mitchell: Will the hon. member permit a question? Will he say the taxes he paid last year were in the same category, that they did not come out of himself?


Walter Frederick Kuhl: No; I grant that part of the money which the government uses is derived from the people in taxes, but also much of the money which the government uses to pay subsidies and meet other expenses is freshly created bank money borrowed by the government and charged up to debt which is not collected from taxes.


Humphrey Mitchell: Backed by production.


Walter Frederick Kuhl: In other words, part of the national production which could not be, and was not monetized through the usual routine of business, was monetized by the government through the use of debt money. I contend, sir, that if any part of the national production must be monetized by the government in order that the people as a whole can avail themselves of the total production of the nation, then that monetization must be brought about free of debt and free of taxation. This I consider to be one of the most important and most sacred duties of any modern government.
When the state, through its appropriate financial agency, issues debt-free, tax-free money in payment for public services, bonuses, subsidies, et cetera, it is not playing Santa Claus, and neither is the public getting something for nothing. When the government creates and pays out money in this manner, it is merely acting as the agent of all the people in monetizing goods which already exist, which have been produced by the people
and therefore belongs to them, but which they cannot acquire until such goods are represented by money.
Socialists contend that the state cannot distribute goods which it does not own. The fact that this is being done every day through family allowances, old age pensions and in many other ways, proves the fallacy of such a contention. When the government augments the regular incomes of the people with money sufficient to raise total income to where it is equal to total production, consumers can buy all goods offered for sale whether they are privately produced or publicly.
Had governments monetized the unmonetized portion of national production with debt-free and tax-free money in the past, there would be no national debt today and there would be no interest charges to be paid in the form of taxes. The national debt is a national lie. Canadians have always paid their way physically in anything they have ever done, whether it was the promotion of peacetime enterprise or the waging of war. The only costs in doing anything are physical costs, that is, human energy and physical materials. Canadians, collectively, have always met all physical costs. Then how can it be logically argued that a national debt is unavoidable?
The only reason that there is a national debt is that governments have not been faithful to their sacred trust. The highest and most sacred prerogative which the crown can enjoy is the exclusive monopoly of the creation and issue, in the original instance, of all the money of the nation. Successive governments in Canada have, by degrees, surrendered this most sacred prerogative into the hands of private persons.
As a consequence of this most dastardly betrayal, the whole nation is now in bondage to the mere handful of individuals who exercise this prerogative. Instead of these private persons proceeding to the crown for the use of sums of money, the government now goes cap in hand to these private purveyors of financial credit, and mortgages the entire nation to them.
This nefarious practice has now reached such proportions that the interest charges alone on the national debt are almost equivalent to the total governmental pre-war expenditure, and the end is nowhere in sight under the present financial policy.
I say, sir, that those who have been and who continue to be responsible for these reprehensible circumstances should be regarded as arch-criminals, who should be tried for their crimes and punished accordingly.
The Budget-Mr. Kuhl

In an earlier debate in this house, one of the C.C.P. members, the hon. member for Cape Breton South (Mr. Gillis) in disparaging tones suggested that the Social Credit members do not believe in anything except just printing a lot of money. Such a statement carries with it the implication that money in a modern economy is of very little consequence, and that very little attention need be paid to the manner in which it is created and put into circulation. Such a statement merely indicates how badly the hon. member for Cape Breton South and those who think as he does, are misinformed on the subject of money.
I readily grant that the things which make up a standard of living are the goods and services which the people are capable of producing and desirous of consuming, but the point which the hon. member for Cape Breton South seems to overlook is that the production and distribution of goods and services in a modern economy are absolutely impossible without the use of money. The starting point of every economic activity today is money. No matter how great the natural resources of the country may be, and no matter how willing and able the people may be to develop those resources, not a wheel in industry turns until money is first put into circulation.
Money is the mainspring in a modern economy, and without it the economy stops dead. Money is the master-key to the whole economic question. Hence those who enjoy the privilege of creating and issuing the money of the nation hold the power of life and death over the people of the nation by virtue of that privilege. Is it any wonder that one of the oldest bankers, Baron Rothschild, at one time said, "Permit me to create the money of a nation and I care not who makes its laws"?
The private bankers today are the sole arbiters in Canada as to how much money goes into circulation, as to where it goes into circulation and as to the terms under which it goes into circulation. This places governments and the people entirely at the mercy of the private bankers of this country. It is positively idle, therefore, to suggest that money is of very little consequence in a modern economy.
What is the problem of the old age pensioners? It is purely a money problem. Those who ask for more generous pensions take it for granted, and' rightly so, that goods and services are available in sufficient quantities to maintain them in decency and health. But all that they are lacking is money with which to acquire the goods and services which are available in abundance.
What is the problem of the blind and the otherwise incapacitated? It is nothing but a

lack of money with which to buy the goods and services which are available in abundance. What is the problem of the farmers and other primary producers? It is nothing other than money which must be paid out in the form of subsidies and bonuses in order to guarantee them their proper proportion of the national income.
Almost every individual in the nation considers that his income is too low and that his taxes are too high. In other words, he is lacking in money. And so one could go through the entire economy and find that the problem in almost every case is a lack of money. It is taken for granted, and rightly so, that the goods and services are available, or will be before long, to support the higher incomes which are demanded.
However the only source of money which the government chooses to use to attempt to augment the incomes of the people is nothing but debt and taxation, both of which aggravate the situation instead of improving it.
The Progressive Conservative members deserve the criticism which they receive for advocating increased services and decreased expenditures in one and the same breath; for, were they in the seats of the present government, their source of money would also be nothing other than debt and taxation. They plead, of course, that they would eliminate extravagant expenditures; but, even were they to do so, the amount of money which would be secured by that means would be a mere bagatelle, as compared with what is required to bring about a balanced economy.
The C.C.F. members seem to suggest that they advocate sources of money other than taxation, but a close analysis of their statements indicates that their proposals for raising money for governmental purposes involve nothing other than taxation and are therefore no different from the proposals of the Liberals and the Progressive Conservatives.
The hon. member for Melfort (Mr. Wright), in the debate upon the subsidy question, stated that the money for subsidies under a C.C.F. administration would come out of increased production. Such a statement may seem to mean something else, but it cannot mean anything other than that the money would be derived from taxation, for, regardless of by how much production is increased, all other economic factors are increased proportionately. If national production is doubled, the deficiency between income and production is also doubled, and no scheme of taxation can ever bring about the complete distribution of national production. The C.C.F. proposals are therefore just as inef-

The Budget-Mr. C. T. Richard
fective as are those of the two old parties; in fact, they are exactly the same kind of proposals.
Therefore, inasmuch as all our major national problems resolve themselves into the one problem of an insufficiency of money, I contend that the system of debt and taxation must be completely abolished except for the purpose of redistributing part of the national income, if such is deemed necessary, and for the purpose of withdrawing excess credits if such a situation should ever arise. All funds required by the government for the purpose of monetizing the unmonetized portion of national production must be provided by the government through its own financial agency, debt-free and tax-free.
The rectification of this one fundamental feature of our national economy is the key to the solution of all our problems. The nationalization or socialization of any part or of all of industry and finance, whether monopoly controlled or not, is as unnecessary as it is undesirable, to bring about a complete and equitable distribution of national production.
The people of Canada, on their individual initiative as responsible private enterprisers, are willing and able to produce all that they will ever desire to consume. So long as the government, as the agent of the people, sees to it that the entire production of the nation is monetized so that it can be distributed in its entirety, I am prepared to depend upon the people working privately upon their own initiative to raise the production of the country to any desirable level whatsoever.
With sufficient money in their hands at all times to buy their fair share of national production, economic security with individual and personal freedom becomes a reality for each and every Canadian.
In a world of confusion, the people of Canada have a better opportunity than those of any other country in the world to assert themselves as the supreme authority in the land and so establish a genuine democracy that will ensure a high standard of living with the freedom to enjoy it. Thus Canada may demonstrate to the world that the causes of economic disaster, aggression ^nd war, which exist in the organization of society, may be removed by the people themselves. This is the challenge which faces the people of Canada today. They may apathetically drift along the course now leading us to disaster, or they may lead the world toward that genuine Christian democracy which will enable all nations to live at peace with one another.
Mr. C. T. RICHARD (Gloucester); Mr. Speaker, although the debate on the motion before the house has now been progressing for upwards of two weeks, yet from the other side of the house we have heard so little of a really constructive nature that I hesitate to take part in this debate, for there is hardly anything to refute-


Arthur Leroy Smith: Don't let
that bother you.


Mr. RICHARD (Gloucester):: -particularly from your extreme left. As to the particulars of the budget, I intend to say very little. I should like, however, to be permitted to make a few remarks in a general way on the situation of the maritime provinces. I believe this situation is a subject which is quite relevant to the one we are discussing at the present time.
If no real criticism has come from the other side of the house or even from the press of the country I believe it is due to the fact that our opponents and our critics have been taken by surprise and that in the matter of concessions in taxation the budget disclosed much more than they anticipated. Indeed, prior to the presentation of the budget there was such a pressure brought upon this government and upon the Minister of Finance (Mr. Abbott) to wipe out all controls and to make sweeping reductions in taxation that, after hearing the Minister of Finance, we may say of him that he is bold when being cautious and even cautious when he is bold.
I share the opinion, however, with some other members of the house that perhaps the Minister of Finance could have shown a smaller surplus by extending certain services or else by reducing taxation along some lines. But we on this side of the house-knowing the Minister of Finance as we do, as a true Liberal-know that he has the interests of the people at heart and that, should an emergency arise, he will certainly make good use of that surplus.
I believe that we can say that this budget, although not the first one since the cessation of hostilities, may be called the first peacetime budget, for it has all the earmarks of peacetime economy. We have had several budgets since hostilities ceased, but there were such extraordinary expenditures to be made, such as those for bringing from overseas all our troops, rehabilitation, replacing those soldiers in their former positions, maintaining a large personnel and many other matters arising out of the war that it was necessary to maintain a high rate of taxation. This budget we find is quite commensurate to our needs and quite within our means.
The Budget-Mr. C. T. Richard

We may, therefore, call it a peacetime budget, for we find alleviation in the matter of taxation and we find that we are again getting into our normal way of life. We are, therefore, charting our course to a permanent peacetime economy, which must be planned on a firm basis, which must be planned shrewdly, which must contain policies which, projected. into the future, will ensure that, whatever happens outside our own boundaries, we shall not strike shoals which may be dangerous to our own domestic economy. We must adopt policies whereby every province and every section of the country will derive equal advantages. We fashion policies whereby no province will benefit at the expense of another and no one section will expand industrially while another section languishes. I believe that we have not followed that course in the past. I believe that we have adopted policies-both fiscal, tariff and otherwise-whereby industry has been centralized in just two provinces in this dominion, and naturally so has capital, to the great detriment of the other provinces, particularly our own maritime provinces.
I crave the indulgence of the house to be allowed to speak for a few moments about conditions in the maritimes along the lines which I have just mentioned. I know that hon. members, after hearing members from the maritimes, may think that we are provincial, and that we are forever bewailing our lot; but I want to remind hon. member*1' that we feel we have grievances which are real; and until a solution of these problems is found, I say that we shall not have a true economy in this country.
You often hear it said that in the maritime provinces we discuss parting or separating from confederation. It may be true that perhaps at times we regret that we ever entered confederation; but I want to assure the house that it is my belief that at no time was public opinion ever crystallized to the point where any decision was arrived at to take that step. . We cannot understand, however, how the rest of Canada cannot see that we have grievances, that we have not shared equally with the other provinces in the advantages accruing from confederation, and that no real effort has been made to see what caused that result and whether this down trend in our economic life cannot be stopped.
It is true that we have appointed commissions to study conditions in the maritimes, and I may mention two particularly: the Duncan royal commission, and the White commission. I might also mention the Rowell-Sirois commission which embraced conditions

in the maritimes. I now wish to refer to these commissions for one particular purpose, and that is to show that those commissions came to the decision which I desire to point out here. I wish to read just one paragraph from the Duncan royal commission report to show how it proves our case. This quotation from the Duncan commission report is found at page 20 of the report of the White commission:
We are far from saying that the dominion, within its sphere of control, has done all for the maritime provinces which it should have done.
It then goes on to quote how Canada, a
vast country, had to look after new provinces and was preoccupied in other business, as it were, and how possibly the maritimes- the old provinces-were neglected. Then the conclusion of that paragraph is as follows:
But reasonable balance is within accomplishment if there be periodic stocktaking.
That is the suggestion made by the DuncaD commission.
In support of my claim that we did not derive all the benefits which should have accrued from confederation to the maritime provinces, I read from the White commission report at page 20:
We are in accord with the claim of the maritime provinces and with the finding of the Duncan commission that these provinces have not shared proportionately with the other provinces of Canada in the economic advantages accruing to the dominion as a whole from confederation and in our recommendations have *taken it into account as one of the most impressive elements in their case for more favourable financial arrangements.
The recommendations of those two commissions were carried into effect in so far as financial arrangements are concerned. Increased subsidies were granted. Freight rates were cut down. But I submit that these were only palliatives which never did settle firmly and finally the problems of the maritimes, and it was never the intention to settle them by these recommendations.
There are those who contend that the situation in the maritimes would have arisen notwithstanding confederation, and that these conditions were bound to come. I do not quite share this opinion. I believe that our situation today is due to confederation, to the relinquishment of the rights which we then possessed and the granting to the central power of responsibility for policies, the exercise of which brought about the conditions in the maritimes today. It is not pleasant perhaps to go back to conditions existing several generations ago. However, probably it is necessary to do so in order to ascertain what caused the economic situation that exists in

The Budget-Mr. C. T. Richard
the maritimes today. Sometimes these things are not brought about by one event but by a chain of events which culminate in a situation which has not been foreseen.
Let me take you back, sir, to the days of confederation. We in the maritimes were prosperous; we were the most prosperous section of British North America. We were masters of our own customs and excise; we held the gateways through which would flow our foreign trade both export and import. We knew the progress that had been made in the country to the south, how they had developed their ports on the Atlantic seaboard. We could visualize, therefore, that our own future would be patterned along the same line and that we would reach the same prosperous condition they enjoyed. When we entered confederation, therefore, we knew we were jeopardizing a great deal. So it is not surprising that when confederation was first discussed in the maritimes the leaders of industry at that time did not entirely agree with it, because they knew just what it would mean to jeopardize the advantages we then possessed. However, confederation was put forward for the purpose of uniting the provinces into an economic unit, as well as for military purposes. That induced the leaders of the maritimes to enter into the pact, for it became quite evident that the provinces needed an outlet to the sea; that some day they might be attacked, and the St. Lawrence route alone was not sufficient to ensure their defence.
Therefore we -went into confederation. When we compare our position at the time of confederation with our position today; when we view the progress that has been made in the country to the south, the development of their great ports of Boston, New York, Philadelphia and Portland; when we realize that we have the same geographical position and the same energetic people, with only an imaginary line separating us-when we consider all these things we wonder why, from an economic point of view, we have remained at a standstill and progress has passed us by.
I have shown that no personal motives induced us to enter confederation. The sole aim of the maritimers was to build a strong nation, and I may say the attitude of the maritimers has not changed one iota since that time. We have supported every move and every expenditure that have been made to develop this into a great country. We contributed to the development of the west, even though hon. members from that part of the country may not see it in that way. We assisted in a costly immigration policy from 1900 on, though we could see we had not the
advantages possessed by the west and that, therefore, we would derive very little benefit from such a policy. Our railways having been built practically at the expense of the public treasury, we contributed our share to the construction of the railway systems of this dominion. We encouraged the development of the inland water route by the construction of canals between our lakes and by the deepening of the St. Lawrence river in order to make Montreal one of the greatest ports in the world, even though we knew it was to our own detriment. In every way the provinces aimed first to make of this a great country, notwithstanding the fact that sometimes it might have been detrimental to the best interests of the maritimes themselves.
Need I cite any more examples to show our -unselfishness in the history of our country since confederation? May I point out again that when the subject of a rapprochement between the provinces and Ottawa was discussed, the maritimes were the first to come forward and offer their cooperation; and here today we are relinquishing certain rights to the dominion government, though again this is to our detriment, because these money grants, being based on population, will not bring the same benefit to us since our population will not increase in the same ratio as that of the other provinces. Again we have worked against our own interests and for the benefit of Canada, to make it a great country. I am sorry that up to the present these conferences have not been successful. The whole problem as I have seen it-because as a member of the New Brunswick government prior to the last war I attended two of these conferences-is the suspicion and distrust the provinces feel for the central authorities in Ottawa; and until that distrust is banished from their minds there will not be a successful conclusion to these conferences.
I would not speak about these maritime matters at such length if the other evening the hon. member for Davenport (Mr. Mac-Nieol) had not made certain suggestions to improve our economic conditions. I wish to thank him for what he said and for the support he has given us, and if I answer him I want to assure the hon. gentleman that I do so in a friendly way. He told us that to improve the economic position of the maritimes it would be necessary to develop Grand Falls to the full' extent. I want to tell him that prior to 1925 the Liberal government of New Brunswick had all plans prepared for that development, but the Conservative party came into power and turned everything over to the International Paper Company. From
The Budget

Mr. C. T. Richard

that day forward the province of New Brunswick lost control of Grand Falls. Then he also advocated construction of the Chignecto canal. I want to say that we approve the stand he has taken, that everyone from the maritimes stands behind this project. I believe it would bring to the maritime provinces the New England markets, which are the natural markets for the maritimes since they are closer to our shores. We cannot expect the upper provinces to be the sole markets for our exportable surplus in sea, forest or farm products. In my estimation the New England states are our natural markets, as they were before, confederation.
A moment ago, Mr. Speaker, I told you how Grand Falls was lost to the province of New Brunswick by being turned over lock, stock and barrel to the International Paper Company, that octopus in the power and paper field. That was one occasion when we were sold down the river, but I will tell you of another. In 1911, when the question of the approval of the trade treaty between the United States and Canada came before the Canadian people, by flag waving and the slogan, "No truck nor trade with the Yankees", we were hoodwinked into refusing that approval, something we have regretted ever since. That was another occasion when we were sold down the river.


Mr. ISNOR:: By whom?


Clovis-Thomas Richard: By the Conservative party that come into power, controlled by the industralists of central Canada who made us believe that they had a ready market for all we could produce, but who today too often consider us as their poor cousins.
Since my time is limited, I should now to say a few words about something which is peculiar to the maritime provinces, and which means a great deal to them. I refer to the fishing industry. Only a few days ago I came across some figures which showed that the production of sea products from the maritime provinces has been valued at 831 million, and this figure does not include the processed value, which is considerable.
This administration has done wonderful things for the fisheries. It is the first administration which has ever really helped the fishermen by giving them assistance in the construction of their boats, in the establishing of processing plants and freezing plants, and in the securing of new markets. Today in the person of the Minister of Fisheries (Mr. Bridges) we have a man who does not waste his time or the time of the house in saying what he proposes to do, but rather goes ahead and does things. I am sure every member from the maritime provinces will stand back of him in that. However the fishermen in the maritimes need better facilities.
Before concluding, let me say that I blame no political party, and no particular regime for our situation. Sometimes I admit that we are partly to blame ourselves. Our whole economic future depends upon the establishment and the promulgation of certain policies by the central government, and by the financial institutions over which we have no control, except indirectly.
We of the maritimes do not ask for any special privileges or hand-outs; rather, we wish to share in the progress of the country. We are convinced that Canada cannot be a great nation if one section of it is economically weak. The strength of confederation may be likened to a chain which is as strong as its weakest link. We therefore urge our administration and our financial institutions, all those who are interested in making this a great nation, to study our problems. We ask every maritimer-because there are some to be found from coast to coast-to become good will ambassadors on our behalf, and to preach what we have been attempting to show the country. When I say that there are mari-timers from coast to coast I mean that, because of economic conditions, they have been forced to leave our provinces and have established themselves successfully in all parts of Canada. At one time, indeed if not today, the heads of four of the biggest banking institutions of Canada were maritimers.
Maritimers are maritimers always. They cannot forget the land of their birth, that land whose beauty in its rivers, its lakes, its mountains and its seashore is unexcelled anywhere. But those maritimers are also Canadians at heart. While they may be maritimers by attachment, they are Canadians first and always. Perhaps their feelings are best expressed in the words of that maritime poet who said:
Friends I have found in far and alien places;
Beauty and ardour in unfamiliar faces.
But deep in my heart is the land I call home,
Canadian am I in blood and bone.
On motion of Mr. Case the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Questions
Wednesday, May 21, 1947