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

Mr. NICHOLSON:: 1.	Since the National Housing Act was passed, with how many approved renting institutions has the Central Mortgage and Housing Corporation entered into contracts with a view to constructing rental housing projects?
2.	How many units have been completed?
3.	What are the monthly rentals for such units ?
4.	How many institutional housing corporations have been established by life insurance companies in Canada?
5.	How many housing projects have been commenced by such holding companies?
6.	How many units have been completed?
7.	At what monthly rents are they available?
8.	How many loans have been approved under part 3 of the National Housing Act, according to provinces?
9.	How many rural housing units have been completed, according to provinces?
10.	What was the average amount of the loans in each case?


Mr. McILRAITH:: 1.	No contracts have been entered into with lending institutions with a view to constructing rental housing projects. However, the corporation has approved the acquisition of land by one lending institution in Winnipeg and by two lending institutions jointly in Montreal on the understanding that rental housing projects will be erected on the land. Details of the projects have not been submitted nor approved, nor have any guarantees been made to the lending institutions concerned with respect to return on their investment.
The corporation has also approved the investment of one lending institution in Toronto in acquiring land and erecting a six unit rental project. However, in this case the corporation has given no guarantee to the lending institution concerned with respect to return on the investment.
Approval of these investments has been given in accordance with section II (subsection 9) of the National Housing Act, 1944.
2.	None.
3.	Answered by No. 2.
4.	32, by Housing Enterprises of Canada Limited, the single institutional holding company formed by all life insurance companies operating in Canada.
5.	32, to April 30. 1947.
6.	643, to April 30, 1947.
7.	Maximum monthly rentals for the projects, as fixed by the wartime prices and trade board, vary according to the type of housing accommodation supplied, e.g.: single houses, row housing, and multiple dwelling units, and by the number of bedrooms, etc., per unit. Rentals range from S40 to $85 per month.
8.	Part III of the National Housing Act 1944 has not yet been proclaimed. Consequently no loans under it have been approved.
9 and 10. Answered by No. 8.



INCOME TAX-ARRANGEMENTS WITH PROVINCES

Mr. BLACK (Yukon):: 1.	During what years has the government of Canada collected income taxes for the provinces of Canada and is it still collecting them?
2.	Has the government of Canada granted to the provinces during those years amounts in lieu of such taxes?
3.	Has the same treatment been accorded the provinces and Yukon territory with respect to the suspension of those grants?
4.	If so, did the government of Canada suspend such grants to the provinces in proportion to their profits on the sale of liquor?


Mr. ABBOTT:: 1 and 2. It is assumed that these questions relate to the suspension by provincial governments of the collection of income and corporation taxes pursuant to the Dominion-Provincial Taxation Agreement Act, 1942. These taxes were suspended in the years 1941 to 1946 inclusive and in lieu therefor the government of Canada made certain stipulated annual payments to the provinces.
3.	The corresponding action taken in the case of the Yukon territory was outlined in parliamentary return No. 128.
4.	No.



NATIONAL FILM BOARD-&quot;CANADA CARRIES ON&quot;

Mr. FRASER:: 1.	What was the total cost of production for the films "Canada Carries On" put on by the National Film Board for the years (a) 1945; (b) 1946?
2.	How many different subjects were produced?
3.	What was the total revenue raised from all sources for the use of these films for the years (a) 4945; (b) 1946?


Mr. McCANN:: 1.	(a) $98,174.57; (b) $128,981.63.
2.	1945, 11; 1946, 12.
3.	(a) 1945-$2,638.36-after costs of prints
and promotion; (b)	1946-$2,901.63-after
costs of prints and promotion. (These figures refer only to revenue received from theatres
Questions

and do not include sales of prints of the films made to Canadian and foreign purchasers as these figures are not deemed to be revenue.)



RADIO BROADCASTING-TIME MADE AVAILABLE TO POLITICAL PARTIES

Mr. FULTON:: 1.	What is the total amount of time made available without charge by the C.B.C. to national political parties on the national and French networks in a full year on the basis of the arrangement now in effect in that regard?
2.	What is the value of this time in terms of money ?
3.	Is any charge for this time collected, from the private stations who carry these broadcasts? If so, give details of rates and total amount collected?
4.	In the alternative, are the private stations required to carry these programmes without recompense? _ If so, how much time is so taken from the private stations in a full year and what is the arrangement in this respect?


Mr. McCANN:: 1.	(a) Trans-Canada network 12J hours;
(b)	French network 12J hours.
2.	If this time were sold for a commercial programme the charges would amount to $54,328.
3.	No.
4.	These broadcasts are scheduled in time reserved for C.B.C. programmes under the arrangement with basic affiliated private stations.



INCOME TAX-COMMISSIONER AT REGINA

Mr. PROBE:: 1.	Is there at present an income tax commissioner for Regina division?
2.	If so, who is he and when was he appointed to this post?
3.	If not, how long has this post been vacant and who is acting in this capacity pending appointment being filled?
4.	Have representations to fill the vacancy been received from public groups or citizens, and what action has been taken?


Mr. McCANN:: 1.	Yes.
2.	Mr. W. H. Bailey, C.A., appointed May 12, 1947.
3.	Answered by No. 2.
4.	No.



WAR ASSETS-SCRAP METAL

Mr. DANIEL:: 1.	How much copper and brass, and alloys thereof, has 'been sold as scrap metal, by War Assets Corporation since the end of the war to date?
2.	What types of scrap were sold, and what was the quantity and price received for each classification?

3.	Who purchased this scrap and what was the price paid by each purchaser, and what amount did each buy?
4.	What export permits were issued for scrap sold to dealers for brass and copper?
5.	Who received these permits?
6.	What amount of scrap was covered by each permit?


Mr. HOWE:: It is not the policy to answer questions of this kind. The answer could be of value only to those having the material mentioned for sale, and the purpose would be to get the prices to know what his competitors are bidding; therefore I would ask that the question be dropped.
Question dropped.



RADIO BROADCASTING-&quot;POPULAR PLAYHOUSE&quot;

Mr. FRASER:: 1.	Does the C.B.C. broadcast the play "Popular Playhouse?" If so, on what day and what hour is this broadcast and over what stations?
2.	If broadcast by C.B.C. what is the total cost of each broadcast including leased wires, editing, and all other expenses incidental to this programme?
3.	Over what stations is this play broadcast?


Mr. McCANN:: 1.	This programme was terminated on April 24, 1947.
2.	See No. 1.
3.	See No. 1.



MARKETING OF SOWS WITH PIG

Mr. ROSS (Souris):: How many sows with pig have been marketed in the various provinces of Canada by months, since January I, 1947, to date?


Mr. GARDINER:: No information.



NATIONAL HOUSING ACT

Mr. NICHOLSON:: 1.	How much has been spent by the federal government under part 5 of the National Housing Act during the past year for (a) investigating housing conditions and the adequacy of housing accommodation in Canada; (b) investigating the factors affecting the cost of construction and the measures which may be taken to secure economies and increase efficiency; (c) encouraging production of plans and designs to stimulate low-cost production; (d) studies made of land utilization and community planning?
2.	What universities or provinces have received grants provided by section 26, part 5 of the National Housing Act?
3.	How much of the $5,000,000 to be appropriated from the consolidated revenue fund for carrying out the provisions of part 5 of the National Housing Act were spent as of March 31, 1947?


Mr. McILRAITH:: 1.	During the fiscal year 1946-7:-
(a) $40,065.

Questions
(b)	$12,500 approximately.
(c)	$5,989.
(d)	$69,662.
2.	Grants under part V, section 26 of the National Housing Act, 1944, have been made to the university of Toronto and Laval university. No grants have been made to provinces under this section.
3.	$266,317.14.



OIL COMPANIES-GRANTS FOR STORAGE FACILITIES ASSISTANCE IN MANUFACTURE OF BURNERS

Mrs. STRUM:: 1.	What amount of money, if any, has been granted by the government to oil companies, to assist in supplying storage facilities?
2.	What amount of money, if any, has been granted by the government to assist manufacturers of oil burners?


Mr. McILRAITH:: 1.	None in so far as this department is concerned.
2.	None in so far as this department is concerned.



FORD MOTOR COMPANY-ADVANCES FOR EXTENSION AND NEW BUILDINGS

Mr. ROSS (St. Paul's):: 1.	Did the government of Canada, from 1939 to date, advance money to the Ford Motor Car Company of Canada Limited (a) for the extension of buildings; (b) for new buildings?
2.	If so, how much for (a) extensions; (b) new buildings?
3.	Has the government of Canada sold to the Ford Motor Car Company of Canada Limited (a) the extensions; (b) the new buildings?
4.	If so, how much did the government of Canada receive for (a) the extensions; (b) the new buildings?


Mr. McILRAITH:: 1.	(a) No.
(b) Yes.
2.	(a) Answered by 1(a).
(b) $94,617.06 was advanced to Ford Motor Company of Canada Limited for the construction of a building on lands at Ojibway, Ontario, owned by Canadian Steel Corporation Limited and leased by the crown.
3.	(a) and (b). No.
4.	(a) and (b). Answered by 3.



QUESTION PASSED AS ORDER FOR RETURN


Mr. ARGUE:: What were the salaries and expenses paid to all the Prairie Farm Assistance Act inspectors who were working in the electoral district of Wood Mountain during 1946?



POSTAL SERVICE


Hon. ERNEST BERTRAND (Postmaster General):: Yesterday the hon. member for Dauphin (Mr. Zaplitny) asked me a question as to the projected air service between Winnipeg and Flin Flon for the carriage of air mail. Inquiry is being made to determine the degree of postal advantage and to ascertain the cost of such a service.
MOTIONS FOR PAPERS	'



CORRESPONDENCE WITH FRED ROSE

Mr. BENTLEY:: For a copy of all correspondence exchanged between Fred Rose and the Department of Justice and/or the Minister of Justice since October 31, 1946.



IMMIGRATION-REQUESTS FROM COMPANIES, ETC., TO SEEK WORKERS ABROAD

Mr. CASTLEDEN:: For a copy of all orders in council, correspondence, telegrams and other documents in the possession of the Department of Mines and Resources and the Department of Labour, relating to the entry into Canada of any persons, arising out of any application or request from any company, corporation, organization or industry, as from June 30, 1946, to date.



CIVIL SERVICE ACT


[Stage Direction]
Hon. COLIN GIBSON (Secretary of State) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a bill to amend the Civil Service Act to provide, inter alia, a statutory basis within the act for veterans' preference in appointments to the civil service; to provide for payment of increased salaries to the chairman and members of the civil service commission; payment of annual increases in rates of compensation to temporary employees; and for the establishment of certain temporary positions, appointments thereto, and remuneration thereof.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.
Business oj the House


[Stage Direction]
On the order:
Government notices of motions-The Prime Minister-That on and after Tuesday, the 27th of May, 1947, the provisions of standing order 15 be suspended in relation to the procedure and order of business from 8 to 9 o'clock p.m. on Tuesdays -and Fridays until the end of the present session; and that on Wednesday the 28th day of May, 1947, and all subsequent Wednesdays to the end of the present session the sittings shall in every respect be under the same rules as provided for other days.
Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, before this motion is made, may I have the permission of the house and of Your Honour to make a statement respecting the business of the house.
My hon. friend the leader of the opposition (Mr. Bracken) asked on Monday if I would give the house a statement on legislation remaining to be introduced. I said I would do so on Thursday. On reflection it seemed to me to be preferable to give the statement today, in the light of the resolution which is now before us on the order paper. I believe, if the house has before it a statement of the business which remains to be disposed of, hon. members will be inclined to take a more favourable view of the resolution about To be proposed.
The legislation still to be considered by the house falls into two main divisions. The first division includes measures of which notice has already been given and which will be found in today's order paper under
1.	Introduction of bills;
2.	Government notices of motion;
3.	Government orders; and
Li Votes and Proceedings of yesterday (Tuesday, May 20, 1947).
The second division includes measures of which no notice has been given up to the present, but which I shall presently seek to outline.
First a word about the measures of which notice has been given.
Under introduction of bills" there appears notice of an act to amend the Canadian National-Canadian Pacific Act, 1933. That measure has not as yet been introduced.
Under "government notices of motion" there are the following resolutions respecting:
A bill to amend the Civil Service Act.
A bill respecting industrial relations and investigation of industrial disputes.

The latter bill is a most important measure. It contains in all over seventy sections.
Under "government orders", the following measures appear among those already introduced. I am enumerating them because I wish the house to get a picture of the whole.
First and foremost, I would mention the resolution respecting the measure to amend the Old Age Pensions Act. In addition, there are:
An act to amend the Publication of Statutes Act;
An act respecting article 41 of the charter of the united nations;
An act to amend the Canadian Commercial Corporation Act;
A resolution respecting pensions or other superannuation benefits for senior appointees of the Department of External Affairs serving outside of Canada;
An act to vary the Saskatchewan natural resources agreement ;
An act to amend the National Housing Act, 1944;
An act to amend the Penitentiary Act, 1939;
An act respecting the Beauharnois Light. Heat and Power Company;
A resolution respecting a bill to amend the Exchequer Court Act;
An act to amend the Merchant Seamen Compensation Act;
A resolution respecting a bill to amend the Railway Act;
A resolution respecting a bill to amend the Fisheries Research Board Act;
An act to amend the War Charities Act, 1939;
An act to incorporate the Port Alberni harbour commissioners.
In Fofes and Proceedings of Tuesday, May 20, 1947, will be found notice of a resolution in the name of the Minister of Justice respecting a measure to amend the Judges Act, 1946; one, in the name of the Minister of Agriculture, respecting a bill to amend the Prairie Farm Assistance Act, 1939; and a measure in the name of the Secretary of State for External Affairs, to provide for the accession of Canada to the convention on the privileges and immunities of the united nations.
May I now reply specifically to the request made on Monday by the leader of the opposition for a statement of government legislation which remains to be introduced. All that I have mentioned so far has already appeared, or some notice of it has been given, in one or other of the publications of the house, but the following measures have still to be introduced -and may I say that most of them are prac-

Business oj the. House
tically ready now. There may be one or two that will be delayed before they are introduced, but I expect to see them on the order paper shortly.
First and foremost, there are the bills which arise out of the budget resolutions. They include:
A bill to amend the Excise Act.
A bill to amend the Income War Tax Act.
A bill to amend the Special War Revenue Act.
I understand that the number of these bills is about twelve in all. There are the following additional measures to be introduced by the Minister of Finance:
A bill to authorize agreements with certain provincial governments;
A bill to amend the Superannuation Act;
A bill respecting Canadian National Railways financing and guarantee;
A bill respecting Canadian National Railways refunding and financing;
A bill to amend the Trust Companies Act;
A bill to amend the Insurance Act;
A bill to amend the Veterans Business and Professional Loans Act;
A bill to amend the Farm Improvement Loans Act;
A bill to amend the Municipal Improvements Assistance Act.
The following bills are to be introduced by other ministers:
A bill to amend the criminal code and possibly a separate bill to amend the criminal code respecting certain pari-mutuel charters;
A bill to amend the Identification of Criminals Act;
A bill to amend the Interpretation Act;
A bill to amend the Royal Canadian Mounted Police Act;
A bill respecting jurisdiction of United States service courts;
A bill respecting the dominion fuel board;
A bill to create a maritime commission;
A bill respecting the east slopes of the rockies;
A bill to amend the Senate and House of Commons Act.
In addition to these measures, there are to be introduced the following resolutions:
A resolution approving the peace treaties with Italy, Hungary. Roumania and Finland;
A resolution approving the constitution of the international refugee organization;
A resolution approving the instrument of amendment of the constitution of the international labour organization;
A resolution respecting the conservation of fisheries on the high seas.
In addition to all this, I would say there remains such legislation as may grow out of the reports of the standing and special committees of the house. The latter include the committees on redistribution; the Dominion Elections Act; joint special committee on the Indian Act; committee on canteen funds; sessional committee on railways and shipping; committee on broadcasting.
I would remind the house that there is still before it a resolution to constitute a committee on human rights and fundamental freedoms, the debate on which is not yet concluded.
The debate on the budget has been in progress for some time past. It also is not yet concluded.
Finally, I must remind hon. members that all estimates of the present year remain to be passed, including those which have been before the house for some months, together with the usual supplementary estimates, also the appropriation bills to be based thereon.
As far as I am able to see at the moment, the statement I have made includes all the measures the government propose to introduce at the present session. 1 cannot guarantee that all will be proceeded with, nor can I guarantee that, as the session runs on, some matters may not arise which will require the introduction of additional measures. Of such at present I have no knowledge.
I must leave it to hon. members themselves whether they will not be prepared to endorse unanimously the motion I am about to bring before the house, which is to the effect that from next week on the-government is to take for its business the hour now reserved for private and public bills on Tuesdays and Fridays, also that the house is to sit on Wednesday evenings. Some understandings on some matters may have been reached with some hon. members by my colleagues the Minister of Veterans Affairs and the Secretary of State for External Affairs. As regards any such, I think we can find a way of meeting them in the course of the session. Near the end of the session there may be some private bills to which we shall have to give a night or two. I hope hon. members will see that here is a programme which, unless we are all prepared to expedite the business of the house, may carry us, not to the end of the summer but to the end of the year.


An hon. MEMBER:: Merry Christmas.


William Lyon Mackenzie King: I suggest that tomorrow hon. members cut this statement out
Business of the House

of today's Hansard, place it in their pocket-books or paste it in their hats, and look at it occasionally as the business proceeds.


Mr. BRACKEN:: I wish to thank the Prime Minister for this full statement of a full programme for the next few months. I wish to say on behalf of those who sit with me that we are prepared to support this motion.


Mr. MacINNIS:: No motion has yet been made.


Mr. McCANN:: It is coming.


John Bracken: We are prepared to support the programme suggested by the Prime Minister.


Mr. COLD  WELL@: Mr. Speaker, has the motion of the Prime Minister been moved?


William Lyon Mackenzie King: No. I made this statement in advance, in the hope and expectation that when the motion is moved it will carry unanimously. Did the hon. member for Rosetown-Biggar wish to speak on the statement?


Mr. COLD  WELL@: I was going to speak on the motion.


William Lyon Mackenzie King: Then I will move:
That on and after Tuesday, the 27th of May, 1947, the provisions of standing order 15 he suspended in relation to the procedure and order of business from 8 to 9 o'clock p.m. on Tuesdays and Fridays until the end of the present session; and that on Wednesday the 28th of May, 1947, and all subsequent Wednesdays to the end of the present session the sittings shall in every respect be under the same rules as provided for other days.


Mr.  M. J. COLD WELL@Rosetown-Biggar: I had an opportunity this morning of discussing this resolution with my colleagues, and they desire me to say that we are prepared to agree to the taking of the two evening hours, one on Tuesday and one on Friday, but we feel that the members still need Wednesday evening. My colleagues are not agreeable to taking that at the present time.
What has been said this afternoon by the Prime Minister about the very large amount of business yet to be done emphasizes again the desirability of doing something about the arrangement of the business of this house. It is obvious that we cannot proceed to do the business of parliament in the manner in which we have been accustomed to do it in bygone days. The British House of Commons, from which we take much of our procedure, owing to the pressure of business over the last number of years has had to devise ways and means of curtailing debate. We have tried to do that by agreement among the 
parties, but we have failed. I know that on occasions I have given what amounted to a promise to other members of the house as to the number of speeches, and so on, but it is difficult to live up to any such undertaking. Something will have to be done about the rules.
In the interests of the health of the members of parliament we should not be sitting in this city all through the hot summer weather. Something needs to be done about the times of sitting of the house. Personally I favour the assembling of the house in the autumn for, say, six weeks, to get through the debate on the address, bring down some of the legislation, and try to conclude the business of the session by June 1. It is obvious that the days of three and four months sessions are gone, and something will have to be done to facilitate the business of the house and protect the health of the members. For several years past, members of the house have been unable to get away for a holiday and be with their families during a period when they can enjoy the sunshine. Judging from the long list of government business presented by the Prime Minister, if we deal with these matters properly we shall be here until September at the earliest. I wanted to place these views before the house in order that we may be thinking about them with a view to facilitating the business and protecting the health of hon. members.


William Lyon Mackenzie King: I should like
to say a word in reply to my hon. friend. First of all, I wish to thank him and members of his group for agreeing to allowing the government to have the hour on Tuesday and Friday used for government business. I am afraid that I shall have to ask my hon. friend and his group to allow us to sit on Wednesday evenings. I would point out that it is easy to arrange the business of the house so that if, for example, on a Wednesday evening a number of members may wish to take the evening off, we can find some bills or estimates which all of us will agree are noncontroversial, and have them brought forward at that time. The British House of Commons has an enormous amount of business to transact and it manages to get through all its business with about one-third of the house present at any time of the day. I do not think that a member is called upon to be in his seat throughout all the time the house is sitting. If hon. members receive the bills in time to see what they contain, they can govern themselves accordingly. I believe that by arrangement between the leaders the programme can be made satisfactory.

Business of the House
With regard to the summer, I think that all of us would like to have some time off for a vacation, and perhaps none more than members of the government. I notice that often it is forgotten that, in addition to all the business of the House of Commons, members of the ministry have to carry on as well the business of government, whether the house is in session or not. It is a pretty heavy task, when the house is in session, to attend to correspondence, arrange for interviews, receive delegations, hold daily meetings of the cabinet, and consider the many matters that have to be discussed. I would draw attention to this fact, and it is one of the reasons why business is taking up so much time of parliaments today: there is a new class of public business altogether which has come to the fore since the war.


Mr.  M. J. COLD WELL@Rosetown-Biggar: That is right.


William Lyon Mackenzie King: It is concerned with matters of international relations. In that connection, there are the meetings of the united nations organization which are fixed for the autumn months. There are various international bodies on which members of the government and leaders from the opposite side are represented. I think we would be wise to seek to have the autumn reserved for that class of meetings and, as far as possible, to encourage other nations to bring their business on in the autumn instead of at a time when, in most countries, the houses of parliament would be normally in session.
I do not think I need to say more than that the real way to get through the business of the session is by having fewer and shorter speeches.


Angus MacInnis: Mr. Speaker-


William Lyon Mackenzie King: I closed the debate.


Mr. KNOWLES:: The Speaker did not announce that.


Angus MacInnis: I do not think the Speaker announced that. I thought the Prime Minister was really opening the debate when he spoke.


William Lyon Mackenzie King: May I say to my hon. friend that I did think I was concluding the debate when I spoke. If I had thought my hon. friend was going to rise, I would have done him the courtesy of waiting until he had spoken. However, I would ask the house to give him an opportunity to speak.


Some hon. MEMBERS:: No.


Mr. CRUICKSHANK:: He would not say anything anyway.


Mr. SPEAKER:: Order. I would direct attention to the fact that I understood the Prime Minister was concluding the debate, since no one else had risen; and I was about to put the question to the house.


Some hon. MEMBERS:: Question.


James Horace King: If the hon. member has unanimous consent, he may proceed, but it should be well understood that the debate will be closed after that.


John Bracken: In view of all the circumstances, Mr. Speaker, I suggest that the hon. member be allowed to speak.


Angus MacInnis: It is customary, I believe, for a motion to be moved and then for a statement to be made in support of that motion. Then if the mover of the motion wants to close the debate he has an opportunity of doing so. On such occasions, however, the Speaker advises the house that if the hon. member moving the motion then speaks, that closes the debate, and that was not done on this occasion. I had thought some of the hon. members to my right would wish to speak, and I did not want to get in between them and the mover of the resolution.


Some hon. MEMBERS:: Question.


Angus MacInnis: When this motion was moved I understood the cooperation of the house was requested. You can shout me down, but that is not the way to get the cooperation of this group.
It seems to me a number of mistakes have been made in preparing the programme for this session. We now have an enormous programme laid before us. If that programme had been before us when we were discussing other matters we would have realized the work that was ahead of us before the session could be concluded and we could have made arrangements accordingly; but that was not done. What I see now is that we are asked today to give away Wednesday evenings. In a few weeks we shall be asked to sit on Saturday.


Some hon. MEMBERS:: Hear, hear.


Angus MacInnis: And many of those now pounding their desks will not be here. By the time we finish there will be a bare quorum in the house. Then within another few weeks we will be asked to sit mornings.


Some hon. MEMBERS:: Hear, hear.


Angus MacInnis: We shall be dealing with the business of this house in a way in which it should not be dealt with. Hon. members
Inquiries of the Ministry

are being paid to give due consideration to the legislation that is brought before parliament, and they should stay here until that legislation has been dealt with in an orderly way. We should not be like a bunch of school boys, trying to get away as quickly as we can. I know of no other business institution that carries on its business as the business of this house is carried on. I would ask the Prime Minister to give hon. members an opportunity to do their work in a way that will be a credit to parliament and a credit to the country, instead of shoving a great part of it through at the end of the session without proper consideration as has been done every session since I have been here.	.


James Horace King: Is it the pleasure of the house to adopt the motion?


Some hon. MEMBERS:: On division.
Motion agreed to on division.



FOREIGN EXCHANGE


[Stage Direction]
On the orders of the day:
Mr. J. H. HARRIS (Danforth):: I should like to address a question to the Minister of Finance, of which I have not had an opportunity to give him notice. I will ask him to accept this as notice, if necessary. The adverse balance of trade between Canada and the United States has doubled in the first three months of this year as compared with last year. I should like to ask the minister to make a statement to the house as to the effect this trade trend will have on our reserve of United States dollars. If he is not prepared to make (hat statement this week perhaps it could be made early next week, after he has had an opportunity to study the matter.


Douglas Charles Abbott: Perhaps I can answer that question now. I have a somewhat similar question from the hon. member for York South (Mr. Cockeram), in which he says:
In view of the grave concern arising in Canada over Canada's exchange position with the United States, will the minister consider making a statement to the house at the earliest possible date as to the exact position, and what action if any is contemplated by the government to meet the situation?
I do not think it is desirable to make frequent statements as to our exchange position, and in this connection I have nothing to add to what I said in my budget speech on April 29.



EDIBLE OILS


[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I wish to direct a question to the Minister of Finance arising out of a statement appearing in the press today that a deal has been concluded between the government of Canada and the Peron government of the Argentine under which Canada will sell additional amounts of newsprint to the Argentine in exchange for vegetable oils from that country. Is the minister in a position to make a statement on this matter?


Douglas Charles Abbott: An arrangement of the kind mentioned has been made. I had not thought I should take the time of the house to outline its terms, and I prepared a press release which is going out this afternoon, giving the particulars. However, my hon. friend and perhaps other members are interested, so I shall be very glad to give the house the details of the arrangement.
For some months we have been facing special difficulties in securing essential supplies of edible oils at reasonable prices. Since early in the war, as a result of a worldwide shortage, world supply and distribution of fats and oils have been the subject of discussion and allocations by international committees of which Canada has been a member, and under arrangements recently agreed upon we are entitled to import in 1947 about the same amounts as last year. However, that alone does not assure us supplies. Some of the sources from which we drew heavily last year are no longer available to us; and our need for imports is greater because domestic production of lard and other animal and marine oils and fats is running below last year's levels.
We have been confronted by a very difficult and serious situation. If certain negotiations had fallen through, we should have found ourselves lacking nearly half of our imports of edible oils. Moreover, since the larger part of our domestic supplies does not become available until later in the year, the full impact of this shortage would have fallen in the summer months. Less than half of normal supplies would have been available. Important industries would have been completely disorganized, particularly the baking industry. Shortening for household purposes would virtually have disappeared from retail stores.

Inquiries oj the Ministry
To meet this situation we have concluded arrangements which will go far toward assuring us of our minimum 1947 requirements of edible oils. The most important source of these oils available to us this year is the Argentine republic. We have therefore been negotiating with the government of that country to sell us up to 18,000 metric tons at prices which, while above last year's, are considerably below open market quotations prevailing at present, and in all the circumstances can be considered as not unreasonable. We have now reached a firm arrangement for 9,000 tons of oil, and negotiations covering a further 9,000 tons are well advanced.
In discussing these arrangements with us, the Argentine government has drawn our attention to the fact that they have been experiencing serious difficulties in securing their minimum supplies of newsprint and that their country is being less favoured in regard to supplies of newsprint from Canada than other countries also dependent on Canadian supplies. They were only prepared to make edible oils available to us under a special arrangement whereby newsprint tonnage would be made available to Argentina equivalent to the tonnage of oils received. Under this arrangement, which has been agreed to, if the full 18,000 tons of oil is received, the newsprint tonnage sent in return will be less than one-half of one per cent of total Canadian production, estimated at 4,350,000 tons for 1947. The arrangement will therefore have no significant effect on other shipments, domestic or export. If ordinary commercial newsprint shipments to Argentina continue, and I have no reason to believe they will not, the amount of Canadian newsprint going to that country will be somewhat greater than last year, but slightly below the 1940-45 average.
In order to avoid the complications involved in imposing export control, we are implementing our part of the bargain by instructing Canadian Commercial Corporation to buy newsprint from all the Canadian producers, in amounts depending on their production, and sell it to Argentina.


John George Diefenbaker: I should like to ask a supplementary question. Did the Peron government ask the Canadian government to permit the sending of Mosquito aircraft from Canada as part of the quid pro quo for delivery of oil?


Douglas Charles Abbott: No.


Mr. JACKMAN:: May I ask the Minister of Finance at what price newsprint will be sold to the Argentine government? Is it the
same price that the Canadian Commercial Corporation will pay the newsprint companies?


Douglas Charles Abbott: I am afraid I have not that information.



CIVIL SERVICE


[Stage Direction]
On the orders of the day:
Mr. W. CHESTER S. McLURE (Queens): Mr. Speaker, I should like to ask a question of the Secretary of State. Is there any truth in the report published in the Ottawa Citizen of yesterday that the government is considering instituting a five-day week in the civil services. It is now on a 362-hour week.
Hon. COLIN GIBSON (Secretary of State):: So far as I know, no consideration has been given to the matter.



EMIGRATION


[Stage Direction]
On the orders of the day:
Mr. RODNEY ADAMSON (York West):: Mr. Speaker, I should like to ask a question of the Secretary of State for External Affairs. The question, I believe, is so important and of such pressing urgency that I ask Your Honour's indulgence and that of the house while I give three sentences of explanation of the question.
My question is: Will the Secretary of State for External Affairs take steps to see that the Canadian passports carried by the expatriate Yugoslavs now in process of returning to their homeland are protected in such a way as to prevent their alteration or transference to other persons, and ensure that each Canadian passport issued to this group will be easily identifiable on its reentry into Canada?
I ask this, Mr. Speaker, because first, from press reports, it is obvious that this exodus is a communist-inspired movement; second, because of the trouble with passports issued to those persons going to fight in the Spanish war whose passports were removed from them in Spain, and many of which passports have subsequently been used by international communism; and third, because the Canadian passport is today considered as the most valuable international document of identity.
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): Mr. Speaker, although I received notice of the hon. member's question only a few moments before coming to the house, I can give the hon.
Inquiries oj the Ministry

member assurance that the department will continue to take all practicable means to safeguard the integrity of Canadian passports. Further, the suggestions contained in the letter covering his notice of question will receive careful consideration.



PERMISSION TO REENTER CANADA-AMOUNT OP CAPITAL EXPORTED

[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Peel):: May I ask the Prime Minister if he is in a position to answer the question asked yesterday by the hon. member for Duiferin-Simcoe (Mr. Rowe), which he said he would take into consideration today?


William Lyon Mackenzie King: The hon. member is referring to the question of export permits granted to persons returning to Yugoslavia?


Gordon Graydon: Yes.


William Lyon Mackenzie King: I have asked my colleague the Secretary of State for External Affairs (Mr. St. Laurent) if he would make a full statement to the house in the matter.
I believe there is considerable information to be gathered before a proper and complete answer can be given. I believe my right hon. friend proposes to make a statement tomorrow, is that not so?
Mr. ST. LAURENT: I hope so.



PRAIRIE FARM REHABILITATION


[Stage Direction]
On the orders of the day:
Mr. E. D. FULTON (Kamloops):: Mr. Speaker, I should like to ask the Prime Minister or the Minister of Agriculture whether, inasmuch as I did not hear the Prime Minister mention a bill extending to British Columbia the principles of the Prairie Farm Rehabilitation Act, is it still intended to introduce that legislation at this session?


James Garfield Gardiner: The matter referred to has been under consideration by the government, and I hope to be able to make a statement about it tomorrow.



RAILWAY ACT


[Stage Direction]
On the orders of the day:
Gordon Graydon: May I ask the Prime Minister or the Minister of 
Transport whether included in the list of legislation yet to be brought down is an amendment to the Railway Act?


Hon. LIONEL CHEVRIER (Minister of Transport):: It is all ready. The resolution is on the order paper, and I hope to be able to deal with it next week.



THE BUDGET


[Stage Direction]
The house resumed from Tuesday, May 20, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Mac-donnell (Muskoka-Ontario), and the amendment to the amendment of Mr. Coldwell.
Mr. W. GARFIELD CASE (Grey North):: Mr. Speaker, I take note of the time, and I shall fix my course for 4.30. That would appear to be about correct.


Stanley Howard Knowles: No; 4.28.


Wilfrid Garfield Case: I hope I do not need the two extra minutes.
I have listened to the suggestion made with respect to the length of the sessions and the health of the members, and I feel it is an important one. While I sat here today I thought it would be a good idea to start in by ripping those awnings off the windows so as to let a little honest-to-God daylight into this impressive and depressing chamber. I am sure the architect who was responsible for this building must have placed the windows there for some purpose. There is no doubt that glass could be placed in them which would reflect light, and, on occasions, we could have the benefit of some daylight. The leader of the C.C.F. has said that we miss all the sunshine, and he is right.
This afternoon I am privileged to take part in an important debate. In doing so I feel I am favoured inasmuch as I did not lead off at the time when the presentation of the budget had had a certain stimulating effect-an effect, however, which died suddenly after the Canadian people had an opportunity to examine exactly what the budget meant.
It is customary, so it seems, to compliment the Minister of Finance, but I feel on this occasion I shall have to confine myself to complimenting him only upon his personality and his genial manner, because there is

The Budget-Mr. Case
nothing in the budget which merits compliment. I shall proceed in a moment or so to indicate why I take that view.
The minister presented to the house a budget in which he indicated a surplus of $352 million. It is only fair to say that he had no more to do with that surplus than did the man in the moon. The minister had only recently arrived from the Department of National Defence, and upon taking office in the Department of Finance he received a legacy, so to speak, from the sale of capital goods, the cost of which we have never been advised. Possibly more than $2 billion worth of goods, which Canadians bought through the purchase of victory bonds and through taxation, were sold for a total of $372 million. In spite of that enormous sum, the best the minister could indicate was a surplus of only $352 million. Yet it was so great that he himself did not know what to do with it. He proceeded to indicate a tapering off in the over-all amount of income tax, but in doing so he did not think of the little fellows who were earning a mere subsistence. He did not change the level at which the tax would apply.
This year he has budgeted for [DOT] a surplus, but with certain- qualifications. He has taken a rather gloomy attitude toward the future, and he is much in doubt as to his ability to deliver the goods. Because of the attitude of the Minister of Finance and the government generally there has been a failure to inspire business or to encourage private enterprise to play its full part, at a time when that inspiration and encouragement are so necessary in the affairs of this nation.
I feel that we might well weigh in the balance the experience of the minister's predecessor, who was charged with the responsibility of raising vast sums of money to carry this nation through a very trying period in our history. He proved himself equal to the task of extracting from the Canadian people, by taxation and by the sale of victory bonds -the best security in the world-at a time when patriotism was running at great heat, untold billions of dollars. But with his mind fixed upon such a large target he failed to weigh in the balance the capabilities of the Canadian people in time of peace and so we found in the estimates last year that the former minister of finance, backed by his years of experience, budgeted for a deficit of approximately $300 million.
When the present Minister of Finance appeared before the House of Commons he gallantly pointed out that through the good management of his predecessor he was able
to present a surplus of $352 million. I wonder if the Canadian people realize that they were just about $700 million out in their estimates. In other words, it was nothing more or less than a pure guess. A school boy could have come just about as close to it. If the present Minister of Finance with his limited experience can budget more accurately, then there is no reason to believe that the administration needs any particular financial talent to administer the affairs of the Department of Finance. I say that we must wait and see. I think the Minister of Finance would have shown greater courage and would have inspired the people of Canada had he copied the example of his predecessor and budgeted this year for a. deficit of a quarter of a billion dollars, cut right across the levels of taxation and unshackled the restrictions which are handicapping this nation as it fights its way to greater heights in peace time.
I should like to refer to the way in which the budget has been accepted. During the war I remember listening to a talented lady address a public meeting. She said, "If you want to know how the war is going, do not read the headlines, just look at the financial sheet." If you want to know how much this government has inspired business in this country, just turn to the financial sheet in your daily newspaper and there you will find a shrinkage in values to the extent of millions upon millions of dollars.
I am saying this with all kindness and respect, because in making my criticism I want it thoroughly understood that I bear no personal ill will toward any of those sitting opposite. I appreciate indeed the responsibilities which they have assumed, but at the same time as a member sitting on this side of the house I can afford to be critical of their methods. This government has carried on government at the administrative level, but I challenge any member of the government to stand up and say that they have solved one major national problem since the closing days of the war.


Mr. MACKENZIE:: I accept that challenge.


Wilfrid Garfield Case: Good; you will have an
opportunity-


Ian Alistair Mackenzie: I say that this government has done the finest job of rehabilitating the returned soldier of any country in the world.


Wilfrid Garfield Case: One can always depend upon the Scottish people to accept almost any challenge and argue a point whether they are right or wrong.
The Bridget-Mr. Case


Ian Alistair Mackenzie: Especially a silly one.


Wilfrid Garfield Case: There is no one I would rather have accept that challenge than the right hon. gentleman who has just spoken, because there is no one for whom I have greater respect, and there is no one who has been more complimentary to myself.
I wish to deal now with what I consider to be the national problems facing this country, and then I shall assess the value the government places upon the manner in which it has solved these problems. For instance, I am going to ask: Does the government believe that it has solved the housing problem? My experience is that there are scores upon scores of people who are still seeking shelter. There are thousands who believe that government policy has been such as to hamper the construction industry, and that the restrictions which have been retained have handicapped the manufacturers and suppliers.
A resolution was passed by the council of my home city and addressed to the Minister of Reconstruction and Supply (Mr. Howe). The clerk of the municipality has communicated the resolution in the following terms: As a result of requests received from the Owen Sound rehabilitation council and from various citizens, the city council has instructed me by resolution, passed unanimously at its meeting held May 12, 1947, to write you requesting that controls upon building materials for the Owen Sound area be removed in order that the same may be released to individuals desiring to undertake the construction of their own homes and to complete homes upon which construction has been started and cannot be completed owing to inability to obtain necessary materials.
I think I should point out in this connection that in the past eighteen months, the municipal corporation has sold to individuals, 187 building lots upon the condition that the purchasers thereof will construct a dwelling before obtaining title thereto. None of these purchasers to date, has been able to complete his dwelling and claim his deed, due to the fact, in almost every ease, that building materials cannot be secured by individuals who have no priority.
The local government bodies are charged with the responsibility of finding some means by which they can provide shelter for their people. Their appeal to the government is to get the building industry out of the muddling mess they have been put into, and give private enterprise a chance to show its worth.
I ask the government: Has it solved the problem of production? Goods are in short supply. Almost any article of great necessity is difficult to obtain. I have heard hon. members claim that they are unable to secure even a shirt, but I believe that that situation has improved somewhat. But the government has failed to solve the problem of supply or production.

I ask further: Has the government solved the agricultural problem? All I have to do is to point to the thousands upon thousands of vacant farms throughout Canada to show whether farming has lost its attractiveness, or whether the government has inspired people to return to the soil and dig from the good earth the wealth the nation depends upon, the food that the world is seeking to prevent starvation. It is true that many factors enter into this question. Farming has not lost all its attractiveness, and I would be the first to encourage a return to the farm lands of this country. I believe there is something in store for our farmers, but the tendency is to make it so attractive for people to leave the farms and seek to earn their living in urban centres, in the bright lights, that it is almost impossible for farmers to carry on and secure the help they need for their farms. Indeed the farmer cannot depend upon a thirty-six hour, a forty hour or a forty-four hour week or an eight hour day. His time is set by the sun, and he must employ his labour and talents from daylight to darkness in order that his work can be completed. However, we find the natural tendency is to encourage people to become more or less dependent upon some central authority. In other words we are developing amongst our people a nation of leaners rather than leaders. The natural trend is toward governmental paternalism. In time, then we look back and assess this period in our day and generation, we shall find that it was one of the most dangerous periods through which we have passed.
History, Mr. Speaker, has a habit of repeating itself. Students of history will tell you that when the great Roman empire was on the-march, when they were beating their ploughshares into swords, they were masters and monarchs of all they surveyed; but the moment they began to make it more attractive for people to live in the urban centres, when their people began to flock into their towns and cities from the great agricultural lands, the great nation began to crumble and decay, and today not a vestige of that empire remains. As a matter of fact we hear no more of the great Roman empire.


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


Wilfrid Garfield Case: If the hon. member would like to ask one.


Percy Ellis Wright: Does he think that the suggestion of the financial critic of the official opposition, the hon. member for Muskoka-

The Budget-Mr. Case
Ontario (Mr. Macdonnell), of increasing the interest rates, would encourage the buying of these unoccupied farms?


Mr. FERGUSON:: Figure it out for yourself.


Wilfrid Garfield Case: To begin with, I have not the speech of the hon. member before me, and I do not know whether the hon. member who has asked the question would put the proper construction upon it, but I shall tell him that from my own point of view interest rates are directly related to our general over-all economy. One has a direct relation to the other, but just where the balance is I am not going to indicate at this time.
I have spoken of houses; I have spoken of production; I have spoken of agriculture and I am now going to ask if the government has solved or even indicated its ability to solve the problem of holding this nation together * in the sense that we appreciate national unity.
I want to tell you, Mr. Speaker, that they have almost wrecked confederation, and I say that with all sincerity; because they have gone forward by hook or by crook, by intrigue or by persuasion, to bring into line seven of the provinces of Canada, to get them to make an agreement with the central authority, while they overlook the fact, that within this great dominion, in the two central provinces, reside over sixty per cent of the entire population of Canada. From this same area comes over seventy per cent of the entire revenue of the dominion.


Mr. GIBSON (Comox-Alberni):: All
through tariff.


Wilfrid Garfield Case: If there had been a desire to arrive at a uniform agreement there would have been common ground on which they could have traded. As a matter of fact I cannot understand why the government should seek to lay down a formula which had to be accepted in its entirety when they would have been making equally good progress had they accomplished any one part of the programme.
It seems strange that the impression should be abroad that by having one central taxing authority and by passing out money to the various provinces which are not charged with the responsibility of raising the money, you can lower taxation. The direct opposite is likely to be the result. No government should spend money that it is not responsible for raising. The government which raises the money should spend it and answer to the people from whom the money comes. That is the only way we can properly assess, criticize or determine their ability as administrators.
I can think of the days gone by in the history of the country, when it was determined that we should become a confederation, when there gathered first at Charlottetown, Prince Edward Island, and later in the city of Quebec, those who later were known as the fathers of confederation. If we think that our task today is a difficult one, we have only to imagine how much more difficult their task must have been in those early days when they faced problems which were practically unknown. And yet by a series of compromises they were able to bring about the birth of a great nation. I would remind the house that this same confederation is held together in a spirit of compromise. It is held together indeed by a very delicate thread, and it would not take a great deal to upset it. The present administration is charged with the awful responsibility of determining our future course. It transcends all political parties or partisanship of any kind. We know the difficulties that are experienced, but no one can charge the premier of Ontario with blocking the agreements, when all you have to do is to refer back to the time when a farmer from Elgin county by the name of Mitchell F. Hepburn walked out of the conference and would not even enter into negotiations. Therefore, sir, I say to you that you have before you a clear picture which is apparently unsatisfactory to those who are responsible for the negotiations.
I now come to the matter of trade. Our over-all trade picture has attractive features, but I am thinking of our position with respect to the United States of America, and I am asking myself a lot of questions. I am sure the Minister of Finance and his advisers must be greatly concerned about the constant draining off of United States dollars or United States exchange at a time when we need that exchange to carry on our business. I could not understand why the exchange situation was levelled at parity, and I asked the then minister of finance, now [DOT] the Minister of Justice (Mr. Usley) where the pressure came from. With all due respect we must accept the answer he gave the other day in reply to the hon. member for York West (Mr. Adamson). Nevertheless I say to him and I say to the government that there must have been pressure from some source, because to my knowledge, and I have been a fairly regular attendant at the house sessions, no member of the House of Commons ever rose in his place and advocated parity with the United States dollar. Do hon. members ever stop to realize the advantage that we enjoyed? Yet the Minister of Finance referred to this in his budget address and said that on the
The Budget-Mr. Case

whole it was working out satisfactorily, or words to that effect. Do hon. members ever stop to think that this is a time when we are seeking to expand Canadian markets? For a time we enjoyed the great advantage, when our Canadian dollar was worth only ninety cents in the United States, or conversely the [DOT] United States dollar would buy SI .10 worth of goods in Canada. It was not only the trade with the United States of America, but trade we were seeking to develop in Latin America, the very trade that the Minister of Finance referred to this afternoon with Argentina. All this was wrapped up in the standard value of the United States dollar. Then, what happened with respect to our gold mining industry? After all, gold remains a standard of value because it is durable, and we have plenty of it in our hinterland and in our rocks, but we must encourage miners and free enterprise to take this precious metal and put it where it can be used in a monetary sense as a backlog for the nation's trading balances.
I think it was the hon. member for Kenora-Rainy River (Mr. Benidickson) who made the remark that the best thing that could happen to Canada would be for the United States to raise the price of gold. I regret that we take that attitude, because this is one instance in which Canada can indeed offer to give a sense of leadership. We should not have to wait for the United States to increase the value of gold. For our own protection and for the benefit of one of our great natural resources, one of the largest employers of labour, we should set our course to encourage the mining of gold. It would be within the realm of possibility to pay $40 an ounce, for native-mined gold, or even more; because once you have paid $40 an ounce for gold you are no longer paying interest upon that sum; you have a durable medium of exchange which will satisfy all trading balances throughout the civilized and trading world.
Now I have said that the government has failed to give leadership and inspire industry, that it has failed to solve one major national problem, and I have been challenged by the Minister of Veterans Affairs. I have no dqubt that when he speaks on the budget he will indicate clearly the problem he feels he has solved, and if he refers to his own particular department I will pay him this compliment:
I believe he is making every effort to solve his problems as they arise.
I believe, too, I should be complimentary to the Minister of Mines and Resources (Mr. Glen). I was sorry to hear of his rather serious illness, but I had it in mind to convey to him the compliments to which I intend now to give expression. He has shown a sense of leadership in setting up a joint committee of the Senate and House of Commons to examine the Indian Act. I believe that as a result of his initiative there will come some source of help and enlightenment in the building up of the Indian population of Canada who were our first citizens. I feel it is a great honour to have been associated with that committee of the House of Commons and the Senate. The members have been faithful in their attendance and sincere in their approach, and that is one place where I always feel quite happy, because politics are entirely forgotten and we work together for something that will bring to Canada and Canadian Indians some measure of relief which will free these people from that feeling of inferiority from which they have suffered.
The former secretary of state, now Minister of National Health and Welfare (Mr. Martin), might have been commended for a noble act when he brought into the house the citizenship bill, which was received in Canada with a great deal of fanfare, and which he so ably piloted through this house. It was well received, but unfortunately he put it on the auction block and offered it for five dollars. The first bidder was the Prime Minister; then the minister knocked it down to one dollar, and yesterday the Postmaster General said he would put it out in the form of postage stamps. I think it is in order to ask him how many postage stamps one has to buy in order to obtain a citizenship certificate.
May I remind the Minister of Finance that he continues to discriminate against married women. He has put the married women in a different class from any other Canadians, and I think that should be resented. In our hospitals and other institutions where women were willing to work, and where they are badly needed, he has said in effect that every woman may earn $750 a year before becoming liable for taxation, but that so far as married women are concerned, for every dollar the married woman earns over $250 her husband will have to take it off his exemption. That is a rank discrimination.
Another respect in which there has been neglect is that no consideration has been shown for parents with children over twenty-one who are going in for higher education. It is not every parent who is financially able to see his children through school so far as higher education is concerned. The better his education, the better equipped he is mentally and academically, the greater becomes a young man's potentiality as a taxpayer. I certainly think that some provision should be made for exemptions for parents of young men and women attending university, going in for

The Budget

Mr. Case
medicine, law, or any other recognized profession, in order that such parents might be encouraged to divert some of their money towards that purpose. I for one know something about the sacrifices generally that are made in that respect.
The Postmaster General set out to solve his problems by introducing a bill which gave him wide powers to grant bonuses up to $800,000 to rural mail carriers. But that solved nothing. The rural mail carriers should be put upon a basis where allowance would be made for depreciation in respect of equipment, and they should be entitled to join in some superannuation scheme on a contributory basis. If that were done it would satisfy a lot of rural mail carriers.
As a matter of fact, speaking of superannuation. I suggest that if this government showed a sense of leadership it would long ago have given consideration to some method of superannuation for members of parliament, so that the moment a man arrived here he would begin to pay into a superannuation fund, and if he were rejected at the next- election, if he failed to return he would have laid the foundation for a contributory old age pension on his own behalf. Many who are in this house today have spent their lives in the public service. Under the scheme I suggest they would eventually be superannuated or would have some guarantee of economic security in their advanced years. There are many politicians, I might saj-, who find themselves poorer instead of being enriched after long years of public service, and that is not a very fine tribute to the appreciation which the people have of their public servants.
I have said that there has been no leadership. I have been here for a number of years, and apart from the citizenship bill and the Indian affairs investigation which is under way, and which I hope will result in something, I have yet to find any major piece of legislation which would inspire our citizens. There is no overall planning. There is no programme of expansion or building, and we know that our country is languishing from lack of direction.
I look upon our municipal councils as the very bulwark of democracy. They live close to the people and can interpret the people's needs and wishes better than any other level of government. We know that services are badly needed. Take, for instance, our educational institutions. Thousands upon thousands of dollars must be spent, and spent immediately; and certainly over a period of years hundreds of millions will be spent to guarantee to our children a proper education. Would members of the House of Commons be surprised to learn that in Saskatchewan alone almost one thousand Indian children are being denied education because there are no schools? That is a direct responsibility of the federal government, leaving the municipalities out of it. We are in dire need of more educational institutions.
Again, take our hospitals, gaols and asylums. Consider the hospital situation, particularly as regards mental patients. Some members may have read a series of articles in Liberty magazine by D. M. LeBourdais on what the writer terms "Canada's shame" with regard to our mental hospitals. I am not going to attempt to deal conclusively with this matter, but I would refer to the situation in the province of Quebec, where there is one mental institution housing 6,200 of these unfortunate souls who are condemned to a life of despair, sorrow and darkness, with about ten part-time doctors or psychiatrists. The inmates are sleeping in the corridors, anywhere a place can be found to put them. Moreover if you will read the report of General R. B. Gibson, a commissioner appointed under order in council P.C. 1313, regarding the penitentiary system in Canada and turn to page 11 you will find that he said:
A population of 1,100 is too large to be handled efficiently in one institution, and the facilities available in St. Vincent de Paul penitentiary are inadequate to deal with a population of that size.
Mr. Speaker, no one of these institutions can properly house 1,100 persons. Yet we have across Canada a situation with respect to our mental institutions which is a disgrace indeed to organized society. I have pleaded with this government to use the credit of the country and the public services to construct such buildings, which ordinarily fall in the non-taxable class, for the purposes of educational institutions, gaols, asylums and hospitals. If that were done at least it would be a lead. While some have said that the adoption of this plan would be a blow at big business, I want to say to you, Mr. Speaker, that it would leave a field for big business that would inspire others to further achievements in the development of Canada. It would encourage the return to this country of thousands of our young men who have gone to the United States and other parts of the world; and among them are scientists and engineers whose ability we miss and whose devotion to science and engineering would make a great contribution to the people of this nation. If you think I am wrong about that, I want to read into the record a state-

The Budget-Mr. Case

ment by one whom I consider sufficient authority to back me up on this issue. I quote as follows:
Once a nation parts with the control of its currency and credit, it matters not who makes the nation's laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its conspicuous and sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile.
These words come from the Prime Minister (Mr. Mackenzie King) in an article entitled, "The Issues as I See Them", published in Maclean's magazine of September 15, 1935. That was when the right hon. gentleman was in opposition, and they were the fine words he used to describe the issues as he saw them then. Since that time, to the credit of the government or his administration, they did create the Bank of Canada as a complete public institution. We could use the facilities of the Bank of Canada to guarantee the things which this nation is crying for. I am not asking for a hand-out. I do not want to associate myself with any bonuses or gratuities which are not earned. I subscribe to the theory that a dollar which is not earned has no value. As a matter of fact I will venture to say that you could walk down the street in the city of Ottawa with a handful of brand new ten dollar bills, and if you attempted to give them away nobody would want them because people would question whether they had any value. In other words the value of money depends entirely upon its acceptability and upon confidence in your system of government. I am reminded by someone back of me that I might try that experiment. But that very same gentleman offered me his roll yesterday and I questioned its value because I thought he was altogether too generous. Even yet I think it is fictitious.
May I say, Mr. Speaker, that when a workman works, he earns his living by the sweat of his brow. We can process our natural resources, such as our rocks, our minerals and our forests, and we can erect structures which will become an asset to the nation, and what does the worker do when he is paid? Well, ordinarily he might buy himself a package of cigarettes for thirty-three cents, and twenty-five cents of that or thereabouts will be for taxation purposes. Let me say to you, Mr. Speaker, that if you go for a shopping tour in Ottawa this afternoon with your wife-


Mr. REID:: It is a half holiday this afternoon.


Wilfrid Garfield Case: Then do it tomorrow afternoon, and I will go with you. In going around the

shops in Ottawa, spending what you would spend in an average budget, a matter of about $25, how many of you realize that almost $8 of the $25 you spend goes for taxation purposes? That is the situation which exists at the present time. Even the best of these people need some sense of leadership, but above all they need the facilities which this nation can provide. Rich though it is in resources, the only way in which we can guarantee the new heaven and the new earth that the Prime Minister spoke about during the dark days of the war is to give effect to the productive genius of this nation, to encourage all our people to put their shoulders to the wheel and earn their living by the sweat of their brows and not depend on any hand-outs.


Mr. RONALD MOORE (Churchill):: Mr. Speaker, more than sufficient time has elapsed to permit the country at large to digest the sensational sections of the budget. The result, it would appear from information at hand, is such that, instead of finding himself or herself with a potentially greater income, the man or woman with an average pay cheque or envelope finds the opposite to be the case. In fact, the months of May and' June will see them further behind, financially speaking.
On numerous occasions the attention of the house has been directed to the tables illustrating the "percentage reduction from present rates" of income tax to that of the proposed rates of income tax. When one looks at the tables in question it cannot be denied that it is correct that the government can save the taxpayer a sum of money ranging from fifty-four per cent in the lower brackets to seven per cent in the upper brackets over the amount contributed currently. However, an examination of another set of government statistics, appearing in the same document with the tables of reductions, reveals that "the cost of living and wholesale price index" has steadily risen in the instance of all items from 124 in June, 1946, to 127 in December, 1946, to 128 in February of this year. These figures are taken from the budget in Hansard of Tuesday, April 29, 1947, and can be seen on page 2600 of that document. The same table gives a more dreary picture in the instance of "wholesale prices", which reveal a figure of 142 for June, 1946; 145 for December, 1946; 148 for January, 1947, and 153 for February, 1947.
It would be most enlightening to know whar the price index reveals for the current month, now that prices are really starting to climb, with the lifting of subsidies and price ceilings on a long line of goods.

The Budget-Mr. Moore
Allow me to illustrate in another fashion what I have just noted. It is found that in the ease of a married man with two children of family allowance age the government will save this man with an SI,800 annual income the truly stupendous sum of $16 in his next income tax return. That is about thirty cents a week. If this typical family uses only three pounds of butter a week the saving in income tax is completely wiped out by the action of the government in removing the subsidy on butter. Add to this the rising cost of eggs, Cheddar cheese and other staples of the dinner table, and the so-called saving in income tax gradually mounts to a sizable deficit. The humotous side, if such it can be called in dealing with a serious subject of this kind, is that today the family in question is also paying more money in higher prices, whereas the so-called saving in income tax, running as high as fifty-four per cent, does not take effect until July 1 of this year.
I should like to deal for a few moments with the basis on which the reductions in income tax have been computed in the present budget. The Minister of Finance has said that the reductions are as high as fifty-four per cent in the lower brackets, and as low as six and seven per cent in the higher brackets. As we check the figures in the budget there can be no doubt that this is true; but one thing has bothered me. I wonder why the income tax reductions this year have been computed on a percentage basis. People who have made a study of previous budgets introduced in this house tell me that reductions have always been computed on a dollar basis. If the amount to be contributed in income tax were either increased or decreased in any previous budget, the differences were given on a dollar basis. Of course it is quite easy to convert the percentage basis to the dollar basis, and in order to develop the argument I wish to present this afternoon I am going to do that at the present time.
Let us take, for example, the fifty-four per cent reduction in income tax paid by those coming within the lower income brackets. For a single person earning $800 per annum, this reduction of fifty-four per cent means a saving of $6 in the amount of money he will contribute to the federal treasury this year. Last year he had to pay $11, so that the saving is fifty-four per cent; but the dollar saving is only $6 per annum. Take the case of a married man with no children, whose annual income is $1,800. He, too, saves fifty-four per cent. This year the new income tax rates will save him $16, while on the basis of a full twelve months' period the dollar saving 83166-211J
will be $32. Let us consider for a moment the man who receives a much larger income and who has been given a reduction of only seven per cent. According to the tables, the income tax reduction of seven per cent applies to incomes of around $200,000 or more. Of course such incomes will be made up of salaries, investments and so on; but the seven per cent reduction on $200,000 amounts to $10,385 per annum. Then take the case of a man receiving an annual salary of $5,000. His reduction in income tax is fourteen times greater than the reduction given the man in the $1,000 a year bracket. Similarly the reduction given the man earning $10,000 per annum; his reduction in income tax is almost thirty times greater than the reduction of the man earning $1,000 a year.


John Lambert Gibson: But how much more does he pay?


Ronald Stewart Moore: That has nothing to do with the point I want to develop, but I have the tables here which I shall be glad to let the hon. gentleman have if he would like to see them, giving the reductions in income tax for the three groups I have mentioned.	,


Mr. JOHNSTON:: It doesn't make any difference what he pays; it is what he has left after he pays it.


Thomas John Bentley: He doesn't want an answer to the question; he just wants to be funny.


Ronald Stewart Moore: I appreciate the hon. member's question, since I endeavour to study these questions as deeply as possible. The point I am making is that I believe the government should1 have completely eliminated the income tax on all incomes within the lower brackets. During the past two years the trades and labour council and the Canadian Congress of Labour have submitted briefs asking that all incomes within the lower brackets, that is up to $2,000 for a married person and $1,000 for a single person, should be absolved from the payment of income tax. I think a careful study of the budget indicates that this could be done and the government could still maintain sufficient revenue adequately to carry on the services of the country. As we peruse the pages of the present budget we find that the reduction in personal income taxes amounts to around $70,000,000 a year, while the reduction in the excess profits tax amounts to $269,000,000, or approximately four times as much. The taxation statistics put out by the Department of National Revenue for 1946 show the amount collected in taxation from the income group I have been discussing, that is those receiving from $1,000 to $2,000 per annum,
The Budget-Mr. Moore

in round figures amounts to approximately $145,000,000. So I submit that if the government had wished to do so they could have largely eliminated taxation in this field and made up the difference by way of extractions from the excess profits tax.
I do not want any hon. member to think I have anything against companies and corporations in Canada which are making profits, but I think the excess profits tax is a fair tax because it is based upon profits which are greater than normal. During the depression years from 1936 to 1939 we found that a large number of Canadian companies were able to make pretty fair profits. When the war broke out, the excess profits taxation was imposed, under which the average profit for the four years mentioned was known as the standard profit. Anything in excess of that became excess profits and subject to heavy taxation. I believe the government should continue that plan into the peacetime era. I believe it should be continued for this reason, that in Canada today we have a twenty-seven year backlog of production. First, we had the depression, during which a considerable backlog of production developed. Then, we had the war period, when another backlog of production developed. We also have foreign markets, and at the present time our industries are running all-out in an effort to supply them. So today the profits of Canadian industry are the highest in the history of this country, and I think the government should take steps to collect a large proportion of that money in taxation, which could be used to provide better social services to our people.


Harry Rutherford Jackman: If the hon. member would permit a question, what would he do in the case of a small manufacturer who made $15,000 during the standard period, we will say, and who is now doing three or four times that amount of business because of his abilities and the work he has put into his concern? Would the hon. member take all that profit away from him, or would he allow that manufacturer to grow?


Ronald Stewart Moore: I take it, Mr. Speaker, that companies and corporations are very much like individuals. There may be two individuals in a certain line of business. One will make a success; the other will not be able to get along so well. I believe a case such as that mentioned by the hon. member should be considered by the government, and if it is found necessary to make reductions in such a case, then I believe those reductions should be made so that the taxes on those industries which are not as successful would be

lower. However I do not see that this argument has very much weight at the present time. There may be some industries in regard to which certain reservations would have to be made; but, generally speaking, Canadian industry is running all-out today and making greater profits than ever before. I have in my hand a number of press clippings: "B.C. Pulp and Paper doubles its profit this year. Nets $991,000." Another, "Borden's Milk sales the highest in four years." Another article is headed "76 per cent profit gain for oil company"-and this is the Canadian Oil Companies Limited. Another states "Sears, Roebuck doubled" its profit, and another states, "Price's net profit shows 123 per cent boost."
Those are things which I think the government should cash in on. It should use the excess profits tax to the full, and collect taxes in order to provide social services for this country. No one believes more fully than I do in the services rendered by the federal government, but I think it is following a wrong policy in not fully taxing big business in Canada. There are other advantages which would occur if the suggestion were followed that taxation on smaller incomes be wiped out. One would be a tremendous saving in the labour of administration which goes into the work of compiling, printing and checking income tax papers of the groups which should not be paying taxes on small earnings. This saving in work would then permit the harassed revenue department to concentrate still more on larger incomes, which would result in still greater revenues for the government in tracking down those who are not now paying the income tax they should be paying.
It is true that this is another problem. Yet it is a fact that the removal of income tax from the lower levels would permit revenue officials to concentrate more on those who -are avoiding their responsibility by not paying their full share of income tax. This does not mean that the great bulk of income tax returns are incorrect, because it is felt that the great majority of people are inherently honest. However, among those in the higher brackets there is a fair percentage who are not paying all that the tax laws require. It is this group which I have in mind, and which revenue officials will admit exists in goodly numbers.
Whilst I am on this subject of taxing still further the higher income tax payers, I might observe that action should have been taken in absolving from taxation the incomes of married women who are working and earning sums less than $1,000. It has been the experi-

The Budget-Mr. Moore
ence of many that married women who go out and earn some money in addition to that earned by their husbands, usually do so because there is an economic need for such earnings.
I do not believe the average husband desires that his wife should be a bread-winner. But if it is necessary, in these days of high living costs, for both to earn a livelihood, then some assistance should be given these people by lowering the amounts they should pay in income tax to the federal treasury.
I cannot help coming to the conclusion that a reduction of the amounts to be collected in income tax in the near future has resulted in no benefits such as the government attempted to visualize in the budget now under discussion. I do not wish to say more at this time with respect to the personal income tax.
I now turn to the excess profits tax. I am of the opinion that a most serious error has been made by the government in reducing its income from this source. Since the name implies that these are "excess profits", there should have been no argument whatsoever as to the reduction or otherwise of this tax. Apparently, according to the government, it is perfectly satisfactory for large business organizations and individuals not to be taxed as heavily on their more-than-normal profits.


Douglas Charles Abbott: Would the hon. member permit one simple question? How does he define normal profits?


Ronald Stewart Moore: When I refer to normal profits I refer to what the government established as the standard profit on which excess profits taxes were based. I regret that I did not use the word "standard".


Douglas Charles Abbott: I do not wish to argue with the hon. member, but that is the difficulty, and it is also the basis of the unfairness of a so-called excess profits tax in peace time. However, as I said, I do not wish to interrupt. '


Ronald Stewart Moore: According to the figures in the budget, the revenue from the excess profits tax will mean that the federal treasury stands to gain approximately $500 million. It is possible that the saving granted to large business groups in respect of their excess profits tax will be more than sufficient to meet the federal government's obligations in respect of old age pensions payments. I could go through the budget and show other instances where the amount saved by business in reduced excess profits taxes would pay for the cost of other essential services. And hon. members should note with care that these are excess profits.
I cannot by any stretch of the imagination worry myself about the so-called burden
carried by big business when called upon to pay the treasury taxes on their excess profits. After all, this is not a matter of paying taxes on ordinary profits. Again I emphasize that these are taxes on excess profits. According to the income tax laws, there is more than enough leeway for these large corporations to meet many obligations, which can include large amounts of money for all sorts of expenses, depreciation, sinking funds, and a great host of other items which are properly deductible under the law from excess profits. With these facts in mind, it can scarcely be said that the keeping of the excess profits tax at its former level 'would be a hardship on big business.
The government is considering amending the statute which deals with the excess profits tax. If this change is to be implemented, plans should be made to retain that objective whereby taxes on excess profits would continue to remain at a high level so as to ensure the government a large source of income and at the same time permit further tax reductions in the salaries of those in the lowest income brackets.
A study of the revenues the government expects from the huge taxes on items such as candy, soft drinks, chewing gum and other similar items reveals that these revenues are not so great when compared with total revenues expected. It is granted that the figures will reach a sum of about $32 million, most of which will be taken from the small allowances of young children, and from poor people, who indulge in consuming these penny products.
To make up for this loss of revenue, if these so-called nuisance taxes were either wiped out or reduced considerably, the taxes on such items as pari-mutuel bets, luxury products which only the wealthy can afford, might well be raised to meet the difference. Beyond question, the revenues received from parimutuel bets should be much higher than they are at the present time, on the principle that if people have money to throw away at race tracks the government should take advantage of this tendency and collect every possible cent. As the racing business is conducted today, most of the money does not go to the betting fans but rather into the coffers of the operators. I would much rather deprive race track operators of some of their dollars than increase the cost of a chocolate bar for a child. As the situation stands today, that is what is taking place.
One of the items which contributes to the aigh cost of living is the sales tax which, in my view, in many ways could be described as one of the nuisance taxes. Since there are
The Budget-Mr. Moore

few items not subject to sales tax, a reduction of one or two per cent in this tax would reduce the cost of living by an almost similar amount. This is a subject the government might well consider, and thus give some reduction in the cost of living.
There are a number of matters to which the government should give immediate consideration, and which should be included in the next budget presented to the House of Commons. One of these is an increase in pensions for the blind. I am sure most hon. members have within the past four or five months received letters and resolutions requesting increased pensions for blind persons. Any move on the part of the government to increase these allowances to blind people would be a worthy gesture.
I should like to devote the time remaining at my disposal to a discussion of matters affecting my own constituency. I come from a part of the country which is comparatively new so far as development is concerned. The matter with which I should like to deal now has been brought to the attention of this house already by the hon. member for Portage la Prairie (Mr. Miller). It has to do with the completion of No. 10 highway from The Pas to Flin Flon, Manitoba. No doubt hon. members will wonder why I bring up this matter in the house since it is a purely provincial issue, but I do so because the government set a precedent during the war years by contributing funds to provincial governments for the construction of highways in mining areas. This was done particularly in Ontario and Quebec. I shall not take the time to give the details of the moneys provided by the federal government to construct highways in those areas.


Douglas Charles Abbott: That was to open up new mining areas.


Ronald Stewart Moore: I agree that it was to open up new mining areas. Flin Flon grew rapidly from a village in 1930 to its present size. The provincial government of Manitoba began the construction of this highway just before the war, but the construction was stopped after the outbreak of the war and for some reason they have not been able to get going again. About fifty miles of the highway needs to be constructed. This is through a difficult country and the cost of construction will be high, possibly between $450,000 and $500,000 to complete the road. Apparently the Manitoba government does not feel that it is financially capable of undertaking the job.
The people in Flin Flon have become rather tired of having to depend upon the railroad

for communication with the outside world. Although the service is as good as could be expected from a second class railroad, it is not good enough for a city the size of Flin Flon. There is a growing feeling throughout the whole district that No. 10 highway should be completed as soon as possible. It would be greatly appreciated if the federal government could see its way clear to contribute at least a part of the cost of constructing this highway to the provincial government.
There is another angle from which this matter of constructing this road can be approached. According to a report made the other day by the provincial government of Manitoba, the premier of that province has announced a surplus of $4,000,000 for last year. At one time the present leader of the official opposition (Mr. Bracken) represented the provincial constituency of The Pas in the Manitoba legislature. This was when he was the premier of the province. This matter was brought up the other day by the hon. member for Portage la Prairie, a member of the Progressive Conservative party.
I think I shall send a copy of his speech to the Honourable Errick Willis, minister of public works in the provincial government, who is a member and leader of the provincial Progressive Conservative party. There is a coalition government in Manitoba and I would hope that the federal Progressive Conservative group and the provincial Progressive Conservative group could get together with the minister of public works of the province in order to bring about the much needed completion of highway No. 10.
There is just one other item with which I should like to deal at this time. This was brought up yesterday by the hon. member for Dauphin (Mr. Zaplitnv) when he discussed a telegram which he had received from the board of trade regarding the inauguration of an air service between Winnipeg and Flin Flon via Dauphin and The Pas. The people in Flin Flon are particularly interested in having an air mail service included in that service and I would ask the ministers concerned to give every consideration to the inclusion of an air mail service which is so much desired by the people living in this northern area.


Mr. J. I. HAMEL (St. Maurice-Lafleche):: Mr. Speaker, before proceeding with my remarks on the budget in my own language, I think this would be a proper time to congratulate my English-speaking colleagues who have used the French language in part of their speeches. To my mind they were well advised in doing so, because they showed to the

The Budget-Mr. Hamel
people of this country their desire for a better understanding between our people. My remarks will deal, first, with the budget and then, second, with federal-provincial relations.
As far as the budget itself is concerned, I would point out that in my opinion it is unfair to the low income groups whose situation will be worse in 1947 and 1948 than it was during the war. Coming to the federal-provincial relations, I intend to make clear that the federal proposals are based on five equivocals and they face the provinces with three alternatives. First, they are faced with the alternative of signing the agreement and giving away their legislative autonomy in the matter of direct taxation. Second, they are faced with the alternative, as far as Quebec is concerned, of losing some $50 million. Third, which arises from the second alternative, is the serious consideration by these provinces to withdraw from confederation.
(Translation):
Mr. Speaker, I wish to say a few words on the budget. I do not intend to play the financial expert, but simply to discuss this document as would the average citizen, who will be called upon to pay the costs.
Most newspapers have given a lot of publicity to the reductions announced in the speech of the Hon. the Minister of Finance (Mr. Abbott), whom I am pleased to congratulate for the extraordinary ability he showed in defending what, in my opinion, was a bad cause.
The budget introduced on April 29 last, is bad because it is antisocial and prejudicial to the family, for the following reasons:
First, indirect taxation remains at the same level and, according to forecasts, will produce $300,000,000 more than last year. One does not have to be a financial expert to realize to what extent indirect taxation, added to the price paid by the consumer, increases the cost of living.
Second, the reductions announced in the income tax are absolutely misleading. When they are considered in relation with the general economic policy of the government and the country, it becomes plain that wage-earners in the lower brackets will be more heavily burdened in 1947 and 1948 than last year.
A few figures will suffice, I believe, to prove that statement. Take the single man earning $750 a year. He will be entitled to a reduction of $6 on his income tax; on the other hand, due to the cancellation of subsidies which he previously enjoyed on certain goods, due to the increased prices of certain essential commodities, he will be more heavily burdened than last year.
Supposing that he consumed one pint of milk every day, or 183 quarts per year, he will have to pay $5.49 more on account of the removal of the milk subsidy. If he pays $12 per month for his room, the rental increase will mean for him the payment of $14.40 more during the year. Supposing, further, that he consumes one pound of butter per week, he will have to pay, under that item, $5.20 more. I could keep on adding to that list. In fact, he pays $6 less for income tax, but for three essential commodities he will have to pay $25.09 more. Can any one advance seriously the claim that the position of people in the lower salary brackets is being improved?
Those facts are all the more striking when the position of family heads is considered. Let us take the case of a married man with no children whose yearly income is $1,600. The tax reduction from which he will benefit will amount to $12. He will have to pay $10.95 more for his milk. If his rental was $20 per month, he will have to add $24 a year on account of the 10 per cent increase, and probably $7.50 to cover the rise in the price of butter. The net result is a decrease of $12 in his income tax and an increase of $42.45 in the cost of living, hence a net decrease of $30.45 in his purchasing power merely for those items.
The position of the married man with two children is still worse. If his income amounts to $1,800 the tax reduction in his case is $10. He will have to pay $21.90 more for his milk on the basis of two quarts per day. For his rent, supposing he pays $25 per month, he will have to pay $30 more for the full year. As regards butter, the extra expenditure will be $10.40, if his family's consumption is two pounds per week. The net result is a reduction of $10 in his income tax and an increase of $62.30 in the cost of living; hence a net decrease of $52.30 in his purchasing power.
Such a state of things will, to my mind, give rise to labour conflicts which are always very unfortunate for the people as the whole. In order that the working masses might be provided with a suitable purchasing power, all wage-earners, and married persons more particularly, whose income did not exceed $3,000 should pay no income tax.
To prevent our middle class-for which I have a great deal of sympathy-from being taxed too heavily as a result of the exemptions granted small wage-earners, the government should resort to radical means and bring about a monetary reform in order to reduce the budget by some $450,000,000, which amount only represents the interest we must pay.
If the small wage-earner, after considering his own case, looks over the treatment afforded corporations which draw their income from
The Budget-Mr. Hamel

profits, he will wonder whether at present, when companies are accumulating profits that are perhaps unequalled in history, it is fitting to eliminate taxes on excess profits.
Mr. Speaker, I wish to emphasize that I am not a socialist. In comparing the pros and cons of state enterprise with those of private enterprise, I favour the latter on principle. However, I cannot help realizing that if private enterprise is unable to exercise self-discipline and to be content with reasonable profits, it will be the main cause of its own downfall. I am ndt unaware that, during the war, revenue derived from capital was heavily taxed. However, in that sphere, we must not lose sight of certain things.
In the first place, as a result of the war, personal income tax has increased far more than corporation income tax.
At page 930 of the "Canada Year Book" for the year 1946, I find that personal income tax receipts increased from 46-5 millions, in round figures, in 1939 to 763 millions, in round figures, in 1945, representing an increase of over 1600 per cent.
Income tax levied on corporations, dividends and interest increased from 95 millions in 1939 to approximately 303-5 millions in 1945, representing an increase of slightly over 300 per cent.
On the other hand, as happens in practically every war, income derived from capital increased far more than that derived from labour.
Again, at page 908 of the "Canada Year Book" for the year 1946, I find that income derived from labour increased from $2,540,000,000 in 1939 to $5,037,000,000 in 1945, while income derived from investments increased from $782,000,000 in 1939 to $1,811,000,000 in 1945.
After deducting income tax in both cases, I find that income derived from labour increased by approximately 171 per cent from 1939 to 1945, while income from investments increased by some 220 per cent.
In view of the above, I wonder how the government could be justified in maintaining a tax on the incomes of small wage-earners while announcing at the same time the abolition of the excess profits tax.
I repeat that, in my humble opinion, such an attitude will give rise to industrial disputes for which the greater responsibility will fall upon the government. In order to ensure "ocial peace and the normal distribution of production which can be derived from our economic organization, it would be but fair and just to decrease the return on capital and increase the return on labour; but we are I Mr. Hamel.]
doing exactly the opposite. No wonder that subversive theories find suitable ground in our country.
The present budget is antisocial because it grants no relief to the small taxpayer, but it is even more so as far as families, and especially large families, are concerned.
Let me give in that connection a few examples of injustice. First, the income tax reductions granted for the first two children are greater than that granted for the third child and so on.
I have here a copy of the 1946 income tax form used by taxpayers. Let us take, for example, the case of a married man whose income is $1,800 per annum. If he has not children, he will pay income tax to the extent of $172 per year. If he has one child, he pays $118 or $54 less. If he has two, he pays $64 or $108 less. The reduction is $54 for each child.
A man with three children pays $21. The average reduction for each child is brought down to $50.33. But a man with four children pays $7. The average tax reduction for each child comes down to $41.25.
This unfair treatment is coupled with the decreasing rates of family allowances.


Mr. LESAGE:: Would the hon. member permit a question? Is he actually suggesting that the head of a family with four children pays $21 income tax on a salary of $1,800?
Mr. HAMEL; Those figures are taken from the last income tax form which has been distributed to taxpayers for 1946. My hon. friend will observe that the present budget is based on the same principle.


Joseph Arthur Lesage: But it is precisely this injustice which is removed by the present budget.
Mr. HAMEL; I shall prove that the injustice remains.


Joseph Arthur Lesage: Not on a salary of $1,800 per year.


René Hamel: Perhaps not on the same salary.
But when I look into the position of the married man with a monthly income of $200 in 1947, here is what I find, according to the income tax reduction schedule for 1947, on page 24 of the publication issued by the Department of National Revenue. He is granted a $2 monthly reduction for his first children. But this drops to $1.75 for the eighth child.
On the other hand, while family allowances amount to $8 in the case of the first children, they come down to $2 for the eighth child.

The Bridget-Mr. Hamel
If I add to the above remarks that indirect taxes are in no way reduced but greatly increased because of the rise in the cost of living, I must conclude that the present budget is absolutely antisocial and detrimental to the family.
I wish to say a few words now on federal-provincial relations.
According to our constitution, to whom does the power of direct taxation belong? Does it belong to the provinces exclusively? Have provincial legislatures concurrent jurisdiction with the federal parliament in these matters? Have provincial legislatures higher jurisdiction than the central authority?
Some hon MEMBERS: No.


René Hamel: All those questions can be discussed by experts in constitutional law. But one thing is generally admitted and the act is very clear on this point. Provincial legislatures have the power of direct taxation. Section 92 (2) of the British North America Act is positive and unequivocal.
(Text):
In each province the legislature may exclusively make laws in relation to matters coming within the classes of subjects next hereinafter enumerated; that is to say,-
2. Direct taxation within the province in order to the raising of a revenue for provincial purposes.
(Translation):
In view of that legislation and of the outbreak of war, the Dominion government asked the provinces, in 1942, to relinquish temporarily their right to direct taxation.
Due to the war also, the provincial legislatures agreed to the Dominion's request, but in my opinion they did wrong. Now that the war is over, the time has come to find a permanent solution to that important problem. At the present time it seems that the ' stand taken by Ottawa towards the provinces is as follows: We have invaded the field of direct taxation and we intend to stay. Whether or not you sign the proposed agreement depends on you. If you sign, we will give you in return, in the case of the province of Quebec, something like 50 million dollars.
If you refuse to sign, and it is up to you- cynical is it not-we shall not give you anything and we shall continue to collect personal and corporation income taxes as well as succession duties, in the same manner and at the same rate for all provinces. To remove any doubt in regard to my interpretation of the Dominion government's attitude, I shall quote 83166-212
the following from the budget speech delivered by the Minister of Finance on April 29
last:
Should all three provinces entertain agreements effective this year, our expenditures will be increased lby an additional $110 million or thereabouts. If they do not, then we can reduce our net debt in proportion.
It is obvious, Mr. Speaker, that the two central provinces cannot afford to give the dominion government a 100 or 110 million dollars per year.


Mr. GAGNON:: True.


René Hamel: In my humble opinion, three solutions may be contemplated by the Quebec and Ontario legislatures.
In the first place, they can yield to the ultimatum of the Dominion government, accept the proposals and relinquish their legislative autonomy in the field of direct taxation which may become by far the most important.
In the second place, they can refuse to submit to the ultimatum from Ottawa and thus lose 50 million dollars per year to the benefit of the central government.
In the third place, and in my opinion it is a logical result of the second solution-those provinces may seriously consider their withdrawal from Confederation.
I do not intend to discuss each of the three solutions. I shall simply point out a few reasons which, to my mind, fully justify the stand taken by the province of Quebec and the rejection of the Dominion proposals by its premier. The proposals are based mostly on evasion.
First, the Dominion's evasive attitude in offering temporary agreements and claiming at the same time that their chief purpose is the creation of a permanent system of social security.
Second, the Dominion government is being unfair in taking advantage of possibly different circumstances in other provinces to thrust an identical solution upon Quebec and Ontario. Separate agreements in this instance are unfair and create uncertainty. Some provinces are kept wondering if their neighbours have been granted better terms.
Third, the doubt being fostered in the public mind as to the real reasons for the pressure from Ottawa. The public is led to believe that the main reason for the agreement is to guarantee the Canadian people a plan of social security which they would be first to enjoy whereas, in my humble opinion, the real reason for the Dominion's insistence on the exclusive right to direct taxation is a desire for more freedom to engage in foreign commitments, such as export credits, last year's

The Budget-Mr. Hamel

remission to Great Britain of an incalculable debt and, finally, the billion and a quarter loan to the United Kingdom.
Fourth, the doubts cast in every responsible people's mind by the statement of the Hon. Minister of Finance, on January 25 last, when he said:
In stating the particulars of this programme, the substantially higher payments now being offered by the dominion .to the provinces must be taken into account. The increased direct payments offered the provinces will require a proportional adjustment in the previously offered expenditures for the implementation of social security programmes and public investments.
Fifth, ambiguity as to the real object pursued by the central power. In view of the difference between the preliminary and final proposals, there is doubt as to whether the real intention, the real object of the central power is not, first and foremost, that of interfering with provincial jurisdictions, of controlling the expenditures of the provinces, in short, of placing them under trusteeship.
Ambiguity as to the objects; ambiguity as to the real meaning of the proposals; ambiguity as to the real motives behind the proposed agreements; ambiguity as to their duration; ambiguities resulting from separate agreements; ambiguities in the statement of the Minister of Finance, as appearing in his press release of January 25, 1947.
Mr. Speaker, I am not a supporter of the Union Nationale, but I cannot refrain from commending the stand taken by the premier of the province of Quebec, when he refused to jeopardize, on the strength of such ambiguities, the provincial legislative autonomy in such an important section of the fiscal field.


Mr. HARTT:: There is a real premier!


René Hamel: Mr. Speaker, the present and future importance of these financial discussions between the federal and provincial governments, cannot be hidden from the [DOT] people. My hon. friends are laughing, but they may not be laughing later on. Whether we like it or not, in my humble opinion, the fact that the central power has monopolized, resides all the fields already available to it, the complete fields of direct taxation, will inevitably reduce the provincial governments to the rank of servants of the central power. What is being done today will also be done tomorrow. Then, as now, the provinces will be told to sign some agreement, to accept certain terms, or be deprived of all help. Today, in a matter of subsidy for general provincial administrative purposes, Ottawa orders:	"Accept certain terms or I shall
deprive you of $50,000,000 a year"-as far as the province of Quebec is concerned. But

tomorrow, dealing with a special subsidy for educational, agricultural or health purposes, Ottawa will say: "Certain agreements have been concluded with UNESCO; unless you accept the non-confessional school system, you shall be deprived of such a subsidy. Unless you adopt such or such a method, such or such a system of farming, you shall be deprived of such other subsidies" and inevitably the Quebec people will have to sacrifice piecemeal their traditions, their culture, their characteristics, for the safeguard of which they had to wage a two-century struggle.
Moreover, it seems that the central government displays an inconceivable cynicism when the}- ask the province of Quebec to renounce its legislative autonomy as regards direct taxation, at the very moment when the treatment meted out to the French-speaking minority is more unfair than it has ever been since the battle of the Plains of Abraham.


Maurice Hartt: That is certainly untrue.


Paul-Edmond Gagnon: It is quite true.


René Hamel: I might perhaps point out a few examples of such treatment.
Let us consider first the housing question: the dominion government takes it upon itself to meddle with that problem by granting money and priorities.


Joseph Arthur Lesage: It has to do so, since the provincial government takes no action!


René Hamel: As a result, in all metropolitan areas, except those of the province of Quebec, the building of houses in 1946 showed an increase of 12-71 per cent. In the case of the Quebec metropolitan area-and I call the attention of the hon. member for Montmagny-L'lslet to that fact-it has decreased by 7-40 per cent from 1945 to 1946. For the Montreal metropolitan area-I ask the hon. members on the other side of the house to note those figures-the decrease in 1946 as compared with 1945 is 22-47 per cent, while general building in this country increased by 12-71 per cent, according to figures on housing that were published by the dominion bureau of statistics.


Mr. BELZILE:: Would the hon. member permit me a question?


René Hamel: Certainly.


Gleason Belzile: Do the statistics to which my hon. friend has just referred include the houses built under the veterans housing act?


René Hamel: They relate to general building, and I may say to my hon. friend that I propose to discuss the stand taken by the Minister of Reconstruction and Supply (Mr. MAY 21, 1947
The Budget-Mr. Hamel
Howe). I shall prove that in the case of all grants which the government pays in connection with the building of houses for veterans or others, the province of Quebec is the least favoured of all.


Joseph Arthur Lesage: Because the veterans are less numerous there.


René Hamel: Ottawa has entered the sphere of social welfare through the establishment of family allowances. I have studied various systems of allowances in some thirty countries, British or other, and I must say that none of the methods followed includes a decreasing rate when the children exceed a certain number; on the contrary, the trend is toward the increase of the benefits for the larger families. Here, in Canada, because it so happens that large families are especially to be found among the French Canadians and certain non-British new Canadians, there has been developed a system which is duplicated nowhere in the world, and through which the following result is obtained:
Outside the Northwest Territories and Yukon, where the average allowance per child is $5.87, Quebec has the lowest rate, $5.88, while it is $6.62 in Ontario.


Paul-Edmond Gagnon: That is for Ontario.


René Hamel: Now, Mr. Speaker, what about the dominion civil service? With respect to the French-speaking element, the situation in that sphere is such that, as my hon. friends opposite will no doubt admit, since I presume they are honest and sincere, it threatens to shower ridicule upon all members of the federal house.


An hon. MEMBER:: That is true!


René Hamel: According to the 1941 census, the French-speaking minority represents 30-27 per cent of the whole population while the proportion of French-speaking employees did not exceed 12-25 per cent. I do not hesitate to say that the government service is thus depriving the French-speaking population of some $30 to $40 million and of some 20,000 employment opportunities. This state of things has caused such a commotion in the province of Quebec that a public and independent organization, such as the Montreal Chamber of Commerce, fully realizing that this intolerable situation threatened good understanding and national unity, felt in duty bound to submit a report to the Gordon Commission. The Quebec legislature unanimously sent the 83166-212J
dominion government an official protest and was supported by the hon. members opposite as well as by the Quebec Liberals.
As a result, the government, in an attempt to ignore the unjust state of things they wish to maintain and to blind the observing and accusing eye, instead of righting this revolting unfairness, has decided to leave out of the census all differentiation pertaining to racial origin. In the last census, that of 1946, they already took steps to this end by omitting, in open violation of the Statistics Act, Chapter 190, section 19, this differentiation which is required by law.


Paul-Edmond Gagnon: That is true I


René Hamel: There is not one Frenchspeaking deputy minister in 22; this has been unheard of since confederation. Yet, it is claimed up and down the province that the Prime Minister, who is responsible for these appointments, is the friend of French-Canadians. The joke has worn threadbare.
Even the dominion proposals, however, uphold an intolerable discrimination. Subsidies vary according to each province, here as elsewhere; the per capita grant paid to the province of Quebec will be the lowest in the country. Ontario's will amount to $18.04, Alberta's to $18.64, Saskatchewan's to $19.03, Nova Scotia's to $19.20, New Brunswick's to $19.69, Manitoba's to $19.77, British Columbia's to $21.29 and Prince Edward Island's to 824.31, while that of Quebec will be only $17.29, namely, $2.37 less than the average rate.


An hon. MEMBER:: What was it at the time of confederation.


René Hamel: Let my hon. friend be patient and I will inform him of what happened at that time when it came to divide the debts.


Paul-Edmond Gagnon: He is annoyed by all this.


René Hamel: In view of those facts, I say without hesitation that the present dominion proposals are indefensible as far as the province of Quebec is concerned, and those who support them are shouldering a heavy responsibility towards future generations, and I wish it to be known that I am above party politics. That responsibility is even greater since hon. members to your right, sir, are, according to some newspapermen, perhaps the most brilliant to sit here for many generations, that responsibility is even greater because those hon. members are absolutely unable to correct discriminations which, I sincerely hope, must deeply humiliate them. Before asking their French-speaking compatriots to approve a
The Budget-Mr. Arsenault

programme that will inevitably weaken provincial authority to the benefit of Ottawa, my hon. friends should seriously consider the attitude they should take and place the welfare of their compatriots above party politics.
(Text):


Mr. BONA ARSENAULT (Bonaventure):: Mr. Speaker, the hon. member for St.'Maurice-Lafleche (Mr. Hamel) who has just resumed his seat has interpreted the nationalist or the autonomous point of view in so far as federal provincial relations are concerned. The hon. member is an experienced lawyer. He is an able speaker, but unfortunately, I am afraid he has not succeeded in convincing many members this afternoon.


Paul-Edmond Gagnon: Not on your side.


René Hamel: Maybe we know why.


Bona Arsenault: There are two over there who are convinced, but they were convinced before listening to the speech. I have listened carefully to the hon. member's speech, and from the notes which I took while he was speaking I gather that the hon. member for St. Maurice-Lafleche and those whom he represents still wonder what are the real reasons for the federal proposals to the provinces. In the second place, he claims that the federal proposals violate provincial autonomy. If I am wrong. I wish to be corrected.


René Hamel: I did not get the first reason, but the second is certainly true.


Bona Arsenault: All right. Third, he claims that the province of Quebec has an exclusive right in matters of direct taxation. Fourth, he denounced the separate arrangements between the federal government and the provinces as being an unjust practice. I shall endeavour to answer the hon. member point by point, and it is a very easy task, Mr. Speaker. The hon. member represented his school of thought in so far as federal-provincial relations are concerned. I represent another one, and I am proud of it.
Let me deal with the first point: What are the reasons for the federal proposals to the provinces? A careful study of economic fluctuations in Great Britain and Canada covering a period of 150 years indicates that since 1815 we have suffered from fourteen major economic depressions at various intervals ranging from six to ten years: in 1815. economic crisis; in 1825, economic crisis; 1836, economic crisis; 1847, economic crisis; 1857, economic crisis; 1866, economic crisis; 1885. 1895, 1905, 1915, 1921. 1929, 1937-economic crises.


René Hamel: Would the hon. member permit a question?


Bona Arsenault: Certainly, with pleasure.

(Translation):


René Hamel: Is the hon. member suggesting that the depressions he mentioned were not exactly universal, that they did not extend to England, France, Belgium and the whole world, but only to Canada?


Bona Arsenault: It was universal precisely because no country had done anything to prevent it and in making such offers to the provinces, the Dominion government is seeking to avoid the next depression, which would be the fifteenth.
(Text):
From the sad experience of the past and particularly from our more recent experience of the thirties, we should be desperately blind if we did not now take the necessary steps to adopt measures in order to protect the Canadian population, as I have just said in French, against the calamity of another economic crisis, which, according to the trend of the past and under the conditions which have prevailed so far, is due for 1949 or 1950. Therefore it is the duty of this government and our first duty as members of this parliament to see to it that the Canadian people of all regions and all classes, the Canadian people whom we represent in this house, do not experience once again at least in our lifetime the social injustices, the sufferings and the iniquities which will be brought about by another, the fifteenth, economic crisis.
In a country as great as Canada, so immensely rich in lands, forests, fisheries, minerals and other natural resources, with a small population of not quite 13,000,000 inhabitants, we do not want, as was suggested by the hon. member for St. Maurice-Lafleche, to go back to the conditions which prevailed in 1921, for example, or in 1930, or even to the conditions which prevailed from 1937 to 1939, because, if we remember well, the last economic crisis was sunk in the rivers of blood of the last great war. We do not want to see again in this country thousands of Canadians on direct relief, or living in a state next to starvation merely because of the lack of proper provision in the constitution of this country, or the lack of collaboration between federal and provincial powers, or, in other words, because of the blindness, the short-sightedness and the foolishness of men.
If peace is to guarantee anything to the Canadian citizen it must at least guarantee full employment, just compensation for employment, and the establishment of a liberty of enterprise truly and positively democratic. The sort of economy we have

The Budget-Mr. Arsenault
experienced in the past, particularly from 1918 to 1939, between the two world wars, cannot guarantee either full employment, just compensation for a good day's work, or the establishment of a truly democratic liberty of enterprise. I for one would hate to think that future conditions of employment in this country could be, as has been the case in the past, solely determined by the private judgment, good or bad, of individuals, ignorant or speculative or selfish or short-sighted, who. within less than twenty-five years, have led the Canadian population to the graveyards of two major economic crises.
That is to say, Mr. Speaker, that, from now on, economic forces will have to be curbed or guided in this country. From now on, if we want to avoid the tragic consequences of another economic depression the responsi-oility for full employment in Canada must rest upon the federal government. We cannot go back to the past. We are headed for the future; and in the future this Canadian government will have as its first duty to exercise a guiding influence on the propensity of the Canadian people to consume; for example, partly through the government's scheme of taxation, partly by influencing rates of interest or promoting investments, and partly by other devices such as developing Canada's international trade, for example, and so forth. Whether we like it or not, this means that we have now reached the point in our economy where, in these ever-changing world conditions, this country needs a certain amount of planned economy; that we have reached a point where the devices necessary to ensure full employment will involve a larger extension of the traditional functions of the federal government.


René Hamel: Would the hon. member
permit another question?


Bona Arsenault: Certainly.
(Translation):


René Hamel: Will the hon. member
permit a question? Is he satisfied with the present distribution of public moneys in Canada?


Bona Arsenault: We are surely not
satisfied, since the Dominion government has been trying for two years to conclude agreements with the provinces in order to establish in Canada a taxation system that would be exactly suitable to present conditions. It is quite clear that we are not satisfied-it is self-evident.
(Text):
Under the worn-out system of laissez-faire, no means is open to the federal government of this country to rectify economic distress except through competitive struggles for outside markets. We have now to learn-and this is important, because this is where wars come from-how to provide permanent prosperity and full employment in this country by applying adequate and proper adjustments to our domestic policy. International trade should cease to be what it has been in the past, a desperate expedient to maintain employment at home by forcing sales on foreign markets, by merely shifting our unemployment problems to other countries. This government, conscious of its responsibility toward the Canadian people and strong in the experience of the past, is seeking the best possible devices in order to achieve that end of attaining full employment and assuring the progress and prosperity of this country.
In so far as the prevention of economic depressions is concerned, we cannot but readily admit that the federal government has grave responsibilities. And in order that this government may stabilize-and I should like the hon. member for St. Maurice-Lafleche to listen to this carefully-the volume of employment in Canada in such a way as to prevent another economic crisis, it is essential that our fiscal policy be perfectly harmonized with our international trade policy, with our tariff policy and with our monetary policy, all four of which fall under federal jurisdiction.
In making its proposals to the provinces, the federal government has clearly expressed its views on how the objectives set forth can be attained. Its view may be summarized briefly by quoting four paragraphs from page 7 of the federal proposals of August, 1945. They are:
First, to facilitate private enterprise to produce and provide employment.
Secondly, to promote bold action by the state in those fields in which the public interest calls for public enterprise in national development.
Thirdly, to provide through public investment, productive employment for our human and physical resources when international and other conditions adversely affect employment.
Fourthly, to provide on the basis of small regular payments against large and uncertain individual risks for such hazards and disabilities as unemployment, sickness and old age.
The hon. member for St. Maurice-Lafleche claimed that federal proposals violate provincial autonomy. I shall not place in doubt the sincerity and good faith of the hon. member, and of those who have opposed and are still opposing the federal proposals to the provinces. But what I will place in doubt is their ability to seize the urgent problems this
The Budget-Mr. Arsenault

government has to solve in the best interests of the whole of the Canadian community, with a broad Canadian outlook on such problems.
Prosperity, as peace, is indivisible. It is impossible for one province or group of provinces in this country to be prosperous while others are maintained under a struggle of want and fear. In 1867 we decided that this Canada should be one nation, from one ocean to the other. If we have not changed our view, we today must let this nation act as such, when the life or death of the Canadian population is involved.
We have heard a lot from the hon. member for St. Mauriee-Lafleche about provincial autonomy. May I state, in the most forceful language possible, that there are no more able, no more efficient and no more sincere champions of provincial autonomy, that real autonomy for example which means the guarantee of fundamental rights to each and every province in confederation, than the members of the Liberal party in this House of Commons. And I challenge anyone in the house or outside it to point his finger to a single item in the federal proposals to the provinces which violates any of the fundamental rights guaranteed the provinces by confederation.
Hiding behind a smoke-screen of so-called liberty of the individual, of so-called provincial autonomy, of so-called respect for constitutional rights-and it is all for political purposes; they might as well admit it-those opposed to the federal proposals constitute themselves-
(Translation):


René Hamel: Mr. Speaker, on a point of
order. The hon. member for Bonaventure (Mr. Arsenault) has no right to impute motives.


Some hon. MEMBERS:: They are not
motives.
(Text):	-


Bona Arsenault: -the most effective agents, not only of economic depression, but of the establishment of communism in this country; for I do not believe for one moment that our democratic system can survive another major economic crisis in Canada.
They pretend to see a question of fundamental rights where there is nothing but a matter of dollars and cents. They endeavour to paralyse the action of this government which for two long years has struggled to try to compensate for the deficiency in our constitution on financial and fiscal matters in endeavouring to establish the best possible basis of federal and provincial cooperation, as an essential part of a kind of new deal which must be worked out in order to readjust our fiscal system, to encourage public investment and the expansion of private industry, to open markets to agriculture and primary industry, to expand our export markets and to maintain a high level of national income-not merely a higher standard of living-to ensure continued opportunity for full employment and to devise a sound and consistent programme of post-war reconstruction and public works, and to widen and develop social security services in Canada. All these measures are devised in order to protect and to safeguard the Canadian public against another economic cataclysm. Those who today, under various pretexts, oppose the means of achieving those objectives, by way of federal-provincial collaboration, certainly do not realize the awful harm they are doing their country.
We who represent constituencies from Quebec will recall that until 1937, under the pretext of infringement upon provincial autonomy, old age pensions were denied the old people in the province of Quebec, pensions such as provided by the Old Age Pensions Act.
(Translation):


Paul-Edmond Gagnon: Did Mr. Taschereau do
that?


Bona Arsenault: Certainly. It was
passed by Mr. Taschereau in 1936.
(Text):
While the other provinces of Canada were taking advantage of the Old Age Pensions Act, for ten long years we in Quebec were arguing, as we are arguing today, over provincial autonomy; and this at the cost of millions and millions of dollars lost forever to our old people. At the same time the population of Quebec was subject to federal taxation to the extent of about one-third of the total revenue of Canada. For a period of ten years the aged people have lost millions of dollars, while they have paid millions in taxes for the benefit of the aged people of other provinces. Since 1937, when the aged people in Quebec were first able to take advantage of the Old Age Pensions Act, have we in Quebec lost any of our so-called sacred rights?
It will be remembered that when the measure providing for family allowances was introduced by the Mackenzie King government in 1944 the cry of so-called provincial autonomy and so-called sacred rights was raised in the province of Quebec and in at least one other province. For weeks and weeks in this house members of the Con-

The Budget-Mr. Arsenault
servative party forcefully denounced the establishment of family allowances throughout Canada.


Stanley Howard Knowles: But they stood up and voted for them.


Bona Arsenault: Have we in Quebec lost any of our so-called sacred rights by permitting family allowances to be distributed in Quebec on the same basis as they are distributed in other parts of Canada? After two years of experience in the distribution of family allowances, who will take the risk to deny to any low wage-earner's family in Canada the right to take advantage of the Family Allowances Act on the pretext or even the ground that it might transgress some confused section of the British North America Act?
And again today, at a time when it is found essential, in the best interests of all the provinces of Canada and of the Canadian population at large, to put some order in our Canadian homes, to prevent an economic depression, to check deflation which affects the low wage-earners of this country in the worst way, which leads individual enterprise and small industry to bankruptcy and which constitutes the hot bed of revolutionary ideas and communism, we still hear from some people the cries of provincial autonomy, constitutional rights and sacred rights.
I am all in favour of provincial autonomy, but not that type of autonomy which teaches to the younger generation of this country that Ottawa is the capital city of some foreign nation where there are to be found bitter enemies of confederation and provincial autonomy.
The third point raised by the hon. member for St. Maurice-Lafleche was that the province of Quebec has the exclusive right in matters of direct taxation. Direct taxation is one of the grounds upon which they fight the federal government proposals.
(Translation):


René Hamel: Mr. Speaker, I wish to
remind the hon. member that I did not use those words.
(Text):


Bona Arsenault: I am happy to find out that the hon. member for St. Maurice-Lafleche is already changing the views he expressed in his speech.
(Translation):


René Hamel: That is untrue!
(Text):


Stanley Howard Knowles: How long since you changed your own?


Bona Arsenault: Section 92, subsection 2, of the constitution gives the power of direct taxation to the provinces "within the province in order to the raising of a revenue for provincial purposes." However, it is a fact that section 91, subsection 3, of the British North America Act gives the Canadian parliament the power of raising of money by any mode or S3rstem of taxation. That means direct as well as indirect taxation. This power has been confirmed over and over again by the judicial committee of the privy council. For instance, a decision of the judicial committee in 1932 in Silver Brothers versus the Attorney General for Quebec and the Attorney General for Canada reads:
The two taxations, dominion and provincial, can stand side by side without interfering with each other, *but as soon as you come to the concomitant privilege of absolute priority they cannot stand side by side and must clash; consequently the dominion must prevail.
In connection with the federal right to direct taxation, there is another decision of the judicial committee in 1924 in Caron versus The King, whieh reads:
The dominion income tax is intra vires of the dominion parliament, and its application to the salaries of a provincial government minister is valid.
The last decision I should like to quote is one given in 1937 in Forbes versus the Attorney General for Manitoba, which reads:
Lastly, there is here no conflict between the dominion and provincial income tax legislation. Both income tax may co-exist and be enforced without clashing, and theTe is no room for the application of the doctrine of the occupied field.
In view of the very text of our constitution and the many decisions of the judicial committee granting the Canadian parliament unlimited power in the matter of direct as well as indirect taxation, how can this government be accused of wanting to reach some agreement '"ith the provinces for the sole purpose of securing new fields of taxation when it is so clearly established that the Canadian parliament has already both fields of taxation, direct as well as indirect, at its unlimited disposal.


Some hon. MEMBERS:: Six o'clock.


Bona Arsenault: It will take me only five minutes to finish.


James Horace King: Has the hon. member unanimous consent?


Some hon. MEMBERS:: Go on.
The Budget-Mr. Arsenault


Bona Arsenault: Where and how do the federal proposals infringe on provincial autonomy? There have been repeated demands for a new conference with the provinces following the failure of so many dominion-provincial conferences. The hon. member for St. Mauriee-Lafleche claims that a separate arrangement between the federal government and an individual province is following an unjust practice. If the autonomy of any province is to be respected, then a conference of the provinces would have no power over that individual province.
Seven provinces have now accepted the federal government proposals in order to avoid double taxation. No new conference of the provinces could make those seven provinces give up their agreements with the Canadian government. No new conference of provinces could force the remaining two provinces to enter into a financial arrangement with the federal government if they do not want to. The idea of renting by one government of fields of taxation to another government is a tragic admission of a serious weakness in our constitution, but a dominion-provincial conference would have no power to amend the constitution, no more than it has the power to dictate the course that any individual province should follow.
However, there should be a permanent division of the direct taxation field between the federal government and the provinces. In order to achieve that objective, there would have to be an amendment to the constitution in connection with the division of fiscal powers. It is obvious that certain of the direct taxation powers should be assigned exclusively to the provinces, but this has not as yet been done, either by the text of the constitution, or by the decisions of the judicial committee.
The amendment of our constitution should not be long delayed, unless the Canadian government reaches a satisfactory basis of cooperation with all the provinces. The risk of another economic depression and of communism is too great in this country for us to lose any more time arguing over such an important issue.
(Translation) :


Mr. RAYMOND (Beauharnois-Laprairie):: Will the hon. member permit a question?


Bona Arsenault: Certainly.


Maxime Raymond: Inasmuch as taxes are paid by the same persons, where is the advantage in having them collected by the Dominion government rather than by the provincial government?
	.
(Text):


Bona Arsenault: It is a matter of what the federal government is aiming at to avoid double taxation in this country. Time is for action, and I do not see that we have too much time ahead of us. I suggest that the whole question of federal-provincial relations should now soon be referred to the people of Canada as the main issue to be settled at the earliest possible day by way of a general election; and wishing that for the good of this country we some day in Canada benefit by perfect harmony between the federal and provincial powers, may I be permitted, before resuming my seat, to quote two paragraphs from page 408 of "Problems of Canadian Sovereignty", by Doctor Maurice Ollivier:
Two classes of people have been the enemies of Canadian unity; those who have placed another country above Canada in their love, affection and admiration, ever stressing the alleged superiority of that country over our own, and secondly, those nationalists with a narrow provincial concept who have constantly attacked the federal power just as if .the provinces were not represented at Ottawa and were not part of the federal system but separate entities fighting a foreign government.
They have wilfully confused provincial rights with minority rights and constantly refused to acknowledge that what benefited one province *was for the advantage of the other.
Canada as a whole cannot be happy and prosperous when one part suffers from poverty, sickness, deplorable living conditions or drought whether these be the result of low wages, bad housing or an act of God.
We should, therefore, bend our efforts to maintain in this country popular government, individual liberty and social justice as the only means capable of assuring to all an equal chance to work and to profit from the better life that comes with material progress, in other words, of guaranteeing to all, freedom from want and freedom from fear, remembering that economic and political nationalism has always, in the past, created racial strife and world disasters.
On motion of Mr. St. Laurent the house adjourned at 6.07 p.m.
Thursday, May 22, 1947