PRIVILEGE


Mr. F. E. LENNARD (Wentworth):: On a question of privilege I wish to refer to a Canadian press dispatch appearing in the Globe and Mail this morning, to the effect that at a one day conference sponsored by the national council for Canadian-Soviet friendship, held in Ottawa yesterday, some- -one hundred delegates, including parliamentarians, labour and other representatives attended, with Professor Barker Fairley of the university of Toronto acting as chairman in the absence of Leslie Roberts, Montreal writer, and president of the council.
By failing, sir, to name the parliamentarians who were among the one hundred delegates a reflection is cast upon members of this house. I wish it to be distinctly understood that I was not one of them.


Mr. MACKENZIE:: On a point of order, I do not think for one moment that the point raised by the hon. member was a question of privilege. Every hon. member of this parliament is free to do as he wishes with respect to any motion or movement on parliamentary or economic history.



MR. REID-REFERENCE TO ARTICLE IN WINNIPEG &quot;TRIBUNE&quot;

['My hon. friend will have to wait for the ministers of the departments to\nspeak for themselves.\n*']
Mr. THOMAS REID (New Westminster):: On a question of privilege, Mr. Speaker, I wish to refer to an article which appeared in the Winnipeg Tribune under the heading: "Pastor wants house gym for saggy M.P.'s." My objection is to the last paragraph in which I am described as, "Thomas Reid, the Progressive Conservative". I have been called a number of names in my day, Mr. Speaker, but this is the first time I have been referred to as a Progressive Conservative, and I wish to make a correction.



[Stage Direction]
Right Hon. IAN A. MACKENZIE (Minister of Veterans Affairs) moved:
That votes Nos. 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55 and 56 inclusive, dealing with external affairs, and referred to the committee of supply on March 4, 1947, be withdrawn from that committee and referred to the standing committee on external affairs for consideration and report.
He said: This is a repetition of the practice of last year.
Motion agreed to.
Mr. GRAYDON:: May I ask the Minister of Veterans Affairs if it is the intention of the government to take similar action this session with respect to other departmental estimates?


Ian Alistair Mackenzie: That is a question for the Prime Minister to answer, not for me.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: My hon. friend will have to wait for the ministers of the departments to
speak for themselves.
*



CANADIAN FORCES


Hon. BROOKE CLAXTON (Minister of National Defence):: On April 30 a question asked by the hon. member for Nanaimo (Mr. Pearkes) was passed as an order for return. The question as originally asked, and as it appeared in the Votes and Proceedings, referred to decorations to personnel of the Canadian army only. A correction appeared in Hansard, making the reference to the "armed forces," but the return tabled referred only to the army. I should now like to file a supplementary' return to include foreign decorations awarded to personnel of the other services.



INDIAN ACT


Mr. D. F. BROWN (Essex West) moved:: That the third report of the special joint committee of the Senate and the House of Commons appointed to continue and complete the examination and consideration of the Indian Act, presented to the house on Wednesday, May 7 last, be now concurred in.


[Stage Direction]
Motion agreed to.


Mr. GEORGE BLACK (Yukon):: With the leave of the house I present to the honourable the House of Commons of Canada in parliament assembled the petition of a number of Canadian and British subjects residing in Yukon, petitioning parliament that the district of Mackenzie and Northwest Territories be not included in or added to the electoral district of Yukon, and stating their reasons for the petition.



PRIVATE BILL


[Stage Direction]
Bill No. 180, to incorporate workmen's circle of Canada-Mr. Croll.


[Stage Direction]
Hon. LIONEL CHEVRIER (Minister of Transport) moved the first reading of Bill No. 181 (from the senate), to amend the Merchant Seamen Compensation Act.
Motion agreed to and bill read the first time.


[Stage Direction]
Bill No. 182, for the relief of Robert Lussier.-Mr. Maybank.
Bill No. 183, for the relief of Robert Rosaire Loiselle.-Mr. Maybank.
Bill No. 184, for the relief of Marjorie Evelyn MacPherson Puley.-Mr. Maybank.
Bill No. 185, for the relief of Sarah Rafferty Jackson.-Mr. Maybank.
Bill No. 186, for the relief of Ida Berman Zatz.-Mr. Maybank.
Bill No. 187, for the relief of Patricia Ellen Burt Williams.-Mr. Maybank.
Bill No. 188, for the relief of Charles Alfred Michel Kelly.-Mr. Maybank.
Bill No. 189. for the relief of Pearl Summers Slater.-Mr. Maybank.
Bill No. 190, for the relief of Aime Jacques. -Mr. Maybank.
Bill No. 191, for the relief of Grace Evelyn Smith Copeland.-Mr. Maybank.
Bill No. 192 for the relief of Jessie Gertrude Noel Magee.-Mr. Maybank.
Bill No. 193, for the relief of John Luchuck. -Mr. Maybank.
83106-188J
Questions
Bill No. 194, for the relief of Rhondda Blanche Peace Hurford Smith.-Mr. Maybank.
Bill No. 195, for the relief of Mabel Grace Mattinson.-Mr. Maybank.
Bill No. 196, for the relief of Marcel Simonon.-Mr. Maybank.
Bill No. 197, for the relief of Marian Susan Willson Roberts.-Mr. Maybank.
Bill No. 198, for the relief of Jean Gainfort Grossman.-Mr. Maybank.
Bill No. 199, for the relief of Evelyn Mildred Cook Stone.-Mr. Maybank.
Bill No. 200, for the relief of Lily Elizabeth Harris Cunningham.-Mr. Maybank.
Bill No. 201, for the relief of Mildred Merica Ruth Goodreau Synder.-Mr. Maybank.
Bill No. 202, for the relief of Harry Powell. -Mr. Maybank.
Bill No. 203, for the relief of Margaret Patricia Fairhurst Richards-Mr. Maybank.

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

Mr. GRAYDON:: 1.	What was the_ area of that tract of land known as the "British Block" which was expropriated during the war in the province of Alberta by the government?
2.	How many settlers were evacuated through such expropriation?
3.	Upon what basis were they compensated?'
4.	Have representations been made since the said expropriation with reference to further-adjustments?
5.	If so. what steps have been taken by the government in this respect?


Mr. CLAXTON:: 1.	Approximately 700.000 acres, of which approximately 600,000 acres were obtained from the province of Alberta, 2,000 from the Canadian Pacific Railway, and 98,000 from various private parties.
2.	234.
3.	The value of (a) land and buildings or (b) the grazing and other leasehold interests as arrived at in 1941. In all cases releases were obtained indicating the willingness of the persons concerned to accept the compensation offered. In no case was it necessary to make a reference to the exchequer court.
4.	Yes.
5.	The matter has been considered from time to time and it is the view of the government that the settlements made were fair and equitable, all relative factors having been fully considered by competent valuators and other local authorities familiar with the area.
Questions


PARK STEAMSHIPS LIMITED-SALE OF VESSELS
Mr. CASTLEDEN:: 1.	Were any ships belonging to Park Steamships Limited sold to (a) H. R. MacMillan Export Company ; (b) Canadian Transport Company. or any of their subsidiaries?
2.	If so, what are the names and the tonnage of each such ship?
3.	On what date were these ships commissioned?
4.	What was the net price received for each of these ships?
5.	What was the cost of these ships to the Canadian government?


Mr. McILRAITH:: 1. (a) No; (b) Yes, to Canadian Transport Company Limited.
2. Name	Tonnage
Albert Park 			 10.000
Cromwell Park 			 10,000
Louisburg Park 			 10,000
Mewata Park 			 10,000
Sapperton Park 			 10.000
Seacliff Park 			 10,000
3.	Date of
Name	commissioning
Albert Park 		.... April 12, 1945
*Cromwell Park 			 Februarv 15. 1945
Couisburg Park 		.... February 11. 1944
Mewata Park		.... February 3, 1944
.'Sapperton Park 		.... January 8. 1944
Seacliff Park		.... October 18. 1944
4. Name	Sale price
Albert Park 			 $ 525,582 19
Cromwell Park 			 526,780 82
Louisburg Park			 476.632 88
Mewata Park 			 497,095 90
Sapperton Park 			 501.764 38
Seacliff Park 			 505.893 16
5.	Total cost
Name	of building
Albert Park 			 $1,577,899 43
Cromwell Park 			 1.577,712 98
Louisburg Park 			 1.704,773 32
Mewata Park 			 1,713,023 26
Sapperton Park 			 1,704,752 86
Seacliff Park 			 1,710,233 37
	Net operating
Name	Revenue
Albert Park 			 S 396,019 76
Cromwell Park 			 853,537 27
Louisburg Park 			 620,131 29
Mewata Park 			 902,004 43
Sapperton Park 			 749,630 71
Seacliff Park 			 560,289 26
	
Net cost
Name	to government
Albert Park	 $ 1,181,879 67
Cromwell Park	
724,175	71Louisburg Park	
1,084,642	03Mewata Park	
811,018	83Sapperton Park	
955,122	15Seacliff Park	
1,149,944	11


RADIO BROADCASTING-&quot;RADIO WORLD&quot;
[Stage Direction]
Mr. DIEFENBAKER;
1.	What is the total amount expended in each of the years 1945, 1946 and 1947 to date by the Canadian Broadcasting Corporation for (a) advertising; (b) other purposes in the nature of public relations?
2.	What amount of the said expenditure was paid to Radio World or to its owner or publisher?
Mr. McCANN:: 1.	(a) Year ended March 31:
1945	_ $ 31,796.96
1946	_	29,130.23
*1947 -	33,662.33
(b) Year ended March 31:
1945	_ $114,262.42
1946	_	121,236.29
*1947 _	130,729.00
2.	Year ended March 31:
1945	- $ 3,606.25
1946	-	7,955.00
*1947 -	13,095.00
*Final expenditures cannot yet be determined ow'ing to outstanding accounts.


CANCER RESEARCH
[Stage Direction]
Mrs. STRUM;
1.	Has any public body been set up in Canada to coordinate cancer research?
2.	If so, how does it function?
3.	Has any initiative been taken in setting up cancer diagnostic clinics and treatment centres?
4.	What financial aid is being given to cancer research centres by the government?
5.	What fellowships are being granted for purposes of cancer research?
6.	What facilities are available for postgraduate training of suitable doctors in diagnosis and treatment of cancer?
Mr. MARTIN:: 1.	Yes. The National Cancer Institute of Canada incorporated as a voluntary, nonprofit organization, under part II of The Companies Act, on March 24, 1947.
2.	Representatives of the following organizations have been requested to form a voting body who will administer the affairs of the institute through a board of directors: Canadian Cancer Society; Medical Research Division of the National Research Council; Association of Canadian Medical Colleges; Diagnostic and treatment cancer centres;

Questions
Royal College of Physicians and Surgeons; Canadian Medical Association; Canadian Public Health Association; Department of National Health and Welfare; Dominion Council of Health; National Federation of Canadian Universities.
The organizational stage in the institute is almost complleted and the first official appointments will be made by the various national organizations or associations at their annual meetings to be held during the next two months.
All universities and research centres have been notified to submit applications for grants before June 1 for the present year. Requests for assistance, already received by the institute, amount to approximately $200,000 and the majority of these requests indicate that they will have to be continued for a period of years in order to attract first-class personnel and retain their services for a sufficiently long period to complete their several projects. Not all research centres have had an opportunity to file their applications and thus it may be assumed that the annual recurring budget for research alone will amount to approximately $300,000.
No public appeal has yet been made on behalf of the institute. On inauguration the sole assets of the institute consisted of a grant, from the King George V silver jubilee cancer fund, amounting to $150,000 each year for three years, subject to the annual approval of it he trustees of the King George V fund.
The permanent headquarters of the institute is, in the first instance, located at Ottawa, and permanent administrative staff will be appointed by the voting members of the institute at the first meeting after their appointment.
3.	Yes. The provincial departments of health through various foundations or commissions have set up cancer diagnostic clinics and treatment centres.
4.	Funds are available through the national research council for cancer research. Under the dominion proposals to the provinces, special reference to cancer research is made in the health grants under the health insurance section. The national cancer institute has not yet been in a position to formally request financial aid from the government apart from the sum voted by the trustees of the King George V silver jubilee cancer fund.
5.	Graduate fellowships for physicians, chemists, biologists or other trained research workers will be made available by the National Cancer Institute of Canada after the projects and personnel have been approved by the
scientific advisory committee of the medical Research Division of the national Research council.
6.	The faculties of medicine in the Canadian universities and the special provincial diagnostic and treatment foundations or centres are equipped to provide facilities for post-graduate training in this field.


NATIONAL FILM BOARD-FILMS PROHIBITED FROM PUBLIC SHOWING
Mr. CASTLEDEN:: 1.	Have any films made by the National Film Board been prohibited from public showing in any province of Canada?
2.	If so. what films and in what province?


Mr. McCANN:: 1.	Yes.
2.	(a) "Our Northern Neighbour"; (b) in the province of Quebec.


IMMIGRATION-DISPLACED PERSONS
Mr. WINKLER:: 1.	How many applications for immigration to Canada have been accepted up to May 1, 1947, for which as yet there was no transportation?
2.	What is the procedure when an inmate of a displaced persons camp in Germany wishes to contact Canadian immigration officers with the purpose of applying for entry into Canada?
3.	Under section 3 of the Immigration Act, subsection (e) where a member of a family wishing to migrate to Canada is physically unfit for reasons caused by war, to pass the medical examination, what procedure may relatives now in Canada use to satisfy the minister such invalid will never become a public charge?


Mr. GLEN:: 1.	Information not available.
2.	Applications for the admission to Canada of displaced persons are filed by relatives. Arrangements for- their examination by immigration teams in Germany and for transportation to Canada is made by the intergovernmental committee on refugees.
3.	The department conducts an investigation on the result of which admissibility either with or without security is determined.


MOTOR VEHICLES-SHIPMENTS FROM CANADA
Mr. CAOUETTE:: How many touring cars were shipped from Canada, between June, 194tj and March, 1947 inclusive, by the following companies:	Ford
Motor Company, General Motors Company of Canada. Chrysler Corporation of Canada?


Mr. MacKINNON:: This information is not available. Only the total export figure is given and no attempt is made to classify the individual make of cars.
Orders for Returns


HALIFAX HOTEL-TRANSFER TO FEDERAL GOVERNMENT
Mr. GILLIS:: 1.	What commissions or professional fees, if any, were paid to the Commercial Housing Limited of Halifax, Nova Scotia, in the transfer of the Halifax Hotel to the federal government?
2.	What amount of money, if any, was paid to Messrs. Burchell, Smith, Parker and Fogo; barristers and solicitors, Halifax, Nova Scotia, on their account for professional services in connection with the transfer of the Halifax Hotel to the federal government?


Mr. ILSLEY:: 1.	None.
2.	$780.90.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. PEARKES:: 1.	Has Canada entered into a contract for the sale of condensed milk to Great Britain? If so, when and at what prices, also what quantities have been shipped?
2.	Has any condensed milk been shipped to Malta? If so, by whom?
3.	Have permits to ship condensed milk to Malta been denied to other applicants?
4.	To what other countries has condensed milk been shipped?
5.	What stocks of condensed milk are available in Canada?
6.	When will the prohibition of the sale of condensed milk in certain areas of British Columbia be removed?


WAR ASSETS-BLANKETS
Mr. CASTLEDEN:: 1.	What price was received by war assets for blankets sold to (a) the Netherlands government; (b) lumber contractors; (c) wholesale dealers?
2.	How many blankets have been disposed of by War Assets Corporation to date to the above groups?
3.	What wras the cost of these blankets to the Canadian government?



SAM GAGNE

Mr. POULIOT:: il. Was Mr. Sam Gagne employed in the Department of National War Services and subsequently in the labour department, at the office of the registrar in Quebec City?
2.	If so, from what date to what date?
3.	What is his age and military record?
4.	Was it part of his duties to notify the draftees (N.R.M.A. men) to report for medical examination and for military service?
5.	Did he occupy other positions in the government service? If so, what were they?
6.	How much did he receive (a) for salary; (b) for his travelling expenses, and (c) for his living allowances?



SURVEY OF HOUSING OCCUPANCY AND NEEDS

[Stage Direction]
Mr. TIMMINS;
Has any survey of housing occupancy and/or housing needs in Canada been made by the Central Mortgage and Housing Corporation or any other government department or agency since November, 1946?


Mr. BENTLEY:: For a copy of all correspondence exchanged between the government of the province of Saskatchewan and the dominion government from January 1, 1938 to April 30, 1947, regarding the construction of a proposed bridge across the South Saskatchewan river at or near Saskatchewan Landing, Saskatchewan?



RAILWAY ACT AMENDMENT


[Stage Direction]
Hon. LIONEL CHEVRIER (Minister of Transport) 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 Railway Act to make provision, inter alia, for an increase in the salaries of the commissioners and for an annual grant of two hundred thousand dollars for a period of ten years towards the maintenance of the railway grade crossing fund.
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.


[Stage Direction]
On the orders of the day:
Thomas Reid: Has the attention of the Minister of Reconstruction and Supply been called to the educational film now being shown in motion picture theatres throughout Canada showing the development of atomic energy, and in which seven or eight countries are specifically mentioned as contributing to research and discovery? As no mention was made of the great part this country took, will the minister endeavour to find out why the name of Canada was omitted?


Right Hon. C. D. HOWE (Minister of Reconstruction and Supply):: I have not seen the film and have no knowledge of it, but I shall be glad to make inquiries.

Inquiries of the Ministry



TRANS-CANADA AIR LINES LAYOFF OF PILOTS AND MECHANICS

[Stage Direction]
. On the orders of the day:
Mr. RALPH MAYBANK (Winnipeg South Centre):: I also should like to direct a question to the Minister of Reconstruction and Supply. Notices in Winnipeg papers on Saturday show a considerable layoff of men from Trans-Canada Air Lines. Has the minister been apprised of this, is he informed upon it, and can he make any statement with regard to it?


Clarence Decatur Howe: I am aware that Trans-Canada Air Lines, who have been conducting an intensive training programme for pilots and mechanics, felt that they had graduated from that programme more men than were needed immediately. The result is that men were sent home with the understanding that a priority list had been established, and when requirements justify it the men will be recalled. However, the committee on railways and shipping, government-owned, is to meet tomorrow and it will have before it the president and officers of Trans-Canada Air Lines. I would suggest to my hon. friend that more details can be obtained at that time.



USE OF OIL-DRIVEN LOCOMOTIVES-EFFECT ON MARKET FOR NOVA SCOTIA COAL

[Stage Direction]
On the orders of the day:
Hon. LIONEL CHEVRIER (Minister of Transport):: The hon. member for Cumberland (Mr. Black) on Thursday inquired whether steam locomotives on Prince Edward Island were to be replaced by diesel engines. He also asked if large unit diesels are being tested between Montreal and Halifax.
Replying to the first part of the question, the Canadian National Railways inform me that they are taking steps to substitute diesel-electric locomotives for the present steam locomotives on the island division. Apart from the economies which will result, the use of diesel locomotives in place of steam power will relieve the Prince Edward Island car ferry of the transportation of cars carrying coal for locomotive use, but will not materially reduce the number of railway employees on the island. When viewed in relation to the production of Nova Scotia coal generally, the change-over from steam to diesel locomotives will have no effect at the present time as the railway is prepared to accept all the coal offered by maritime mines, and even if in the future the situation should revert to pre-war conditions
the quantity involved could not be more than \\ per cent of the current coal requirements of the railway from maritime mines.
With regard to the second part of the inquiry, the management of the Canadian National advise that the electro-motive division of General Motors, who are builders of diesel engines, have offered to the railway for a few test runs one of their new diesel electric locomotives. It is therefore proposed to use it on the main line between Toronto, Montreal and Halifax for a few test trips some time in June. Its performance will be carefully watched by the technical officers of the railway without any commitment whatsoever on the part of the railway, and when the test runs have been completed it will be returned to the owners.


Mr. BLACK (Cumberland):: This policy is destroying one of the best local markets we have in Nova Scotia for our coal. It is one more step towards destroying the market-


Mr. SPEAKER:: Order.


Lionel Chevrier: If the hon. gentleman had listened to the reply he would have seen that no such thing is going to happen.



KING'S COUNSEL


[Stage Direction]
On the orders of the day:
Mr. W. A. TUCKER (Rosthern):: Mr. Speaker, the hon. member for Kindersley (Mr. Jaenicke) has just been created King's Counsel. As a fellow member from Saskatchewan I should like to extend to him, on behalf of the house, congratulations on a well deserved distinction.



RADIO BROADCASTING


[Stage Direction]
On the orders of the day:
Gordon Graydon: May I ask the Minister of Reconstruction and Supply a question? Perhaps he will not want to answer it today, but if he can do so, so much the better. In the press recently some reference has been made to the prohibiting of the use of two-way radio telephones which were installed in certain automobiles coming over from the United States to Canada. It is not indicated in the press whether this is serious or whether many automobiles are involved, but perhaps the minister or some member of the government will clarify the situation for the. house so that we may know where we stand.
The Budget-Mr. Gardiner


Clarence Decatur Howe: The Radio Act of Canada provides that only Canadian citizens may broadcast with radio sets in Canada. The law in the United States is exactly the same. Therefore when Americans bring broadcasting sets across the line, the apparatus is sealed at the boundary-there is no great inconvenience to the owner-so that it cannot be used for broadcasting in Canada. The same practice prevails with regard to a Canadian car going into the United States. Later there may be a change in the law, but until that change is made on a reciprocal basis the present practice must be continued.


Gordon Graydon: Are many automobiles involved so far?


Clarence Decatur Howe: I suppose the number is considerable-perhaps a few hundred; but it is small in proportion to the number of automobiles passing across the boundary.



THE BUDGET


[Stage Direction]
the minister of finance
The house resumed from Friday, May 9, consideration of the motion of Hon. Douglas Abbott t 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. '
Right Hon. J. G. GARDINER (Minister of Agriculture):: The discussion on the budget has been proceeding since two weeks ago tomorrow, when the Minister of Finance presented his first budget to this house. On that occasion we were all inspired by the manner in which the speech wras delivered, and those of us at least who sit on this side of the house were also inspired by the contents of the speech and the proposals made therein. We have been listening during the past week to a discussion carried on for the most part from the other side of the house. That discussion was introduced by the hon. member for Muskoka-Ontario (Mr. Mac-donnell) speaking for the official opposition, and his speech was followed by one made by the leader of the C.C.F. party (Mr. Coldwell). Each of those speakers introduced an amendment to the resolution, and I presume that it is those amendments which we were discussing during the greater part of the last week.
In order that the house may be reminded of the contents of the first amendment I

should like to read at least a part of it. The financial critic of the official opposition has set forth his opposition in an amendment which, apart from his reference to the dominion-provincial conference, is stated in two criticisms, namely, that the proposals of the Minister of Finance:
(a)	offer no relief from the oppressive burden of indirect and hidden taxes on staple necessities that compose the family budget, all of which taxes directly increase the cost of living;
(b)	offer no encouragement to those engaged in the development of our natural resources, especially mining and agriculture . . .
I am not going to read to the house the part of the amendment which has to do with the dominion-provincial conference because I intend to confine my remarks largely to what is contained in these first two sections.
The hidden taxes referred to are no doubt customs duties, excise tax, sales tax and taxes which might be termed excise or special taxes. They are estimated to net the government $1,045 million. The direct taxes are estimated at $1,155 million. In other words, each of the two forms of taxation is estimated to bring to the government approximately the same amount. There has been considerable criticism particularly of the indirect taxes, which will bring in about one-half the net revenue. It has been somewhat of a surprise to me that the official opposition should rest their case largely upon a criticism of the indirect taxes which are to be placed upon the people of Canada during the next year.
In my reading of the history of Canada, particularly its political history, I have always been under the impression that the members of the Conservative party were strong advocates of the indirect system of taxation, and that the Liberal party, over a long period of years, had been a strong advocate of the direct system of taxation. As a matter of fact in the convention of 1919-shortly after the Conservative government of the day, during the first war had brought in for the first time an income tax measure-the Liberal party went on record not against the income tax itself but against the manner in which it was being administered by the then government, and indicated to the people of Canada that it was a part of any taxation system which might be placed in effect in Canada by a Liberal government.
I have said that I was surprised that the official opposition should take the position which they took with regard to indirect taxes. But when one reads the amendment carefully, one does not need to be so much surprised. All that the amendment says is that

The Budget-Mr. Gardiner
the opposition believe that the Liberal government, formed by a Liberal party, should have gone farther than they did go in the matter of reducing these indirect taxes. That is possibly a criticism which could be expected. But if it is intended to have the people of Canada believe that if we were to have a Conservative government returned in Canada we should have decreased indirect taxes, then I would refer hon. members and also the people of Canada to the record of the Conservative party in that regard.
If one goes back over the years one finds that each time that party has been in power in Canada they have not only in their first budget but continuously in one budget after another raised the indirect taxes, and particularly the tariffs, against the people of this country. Probably I should not need to go any farther back than to the most recent government of that type which we have had, to be able to say that during the period they were in office, in the special session held in 1930 and in the regular session held in 1931 when they brought down their first budget, they raised tariffs to the highest levels at that they had ever been in the Dominion of Canada, even under the old national policy. Then having raised the tariffs to the highest levels at which they had ever been, they increased the next type of indirect tax, known as the sales tax, from one per cent to six per cent in two succeeding budgets. With regard to the excise tax, in each of the first three budgets brought down by the Conservative party during that period of time they increased the excise taxes upon the people of this country.
I need only say that if the Conservative party expect the people of Canada to believe that if they were returned to power they would lessen the indirect taxes upon the people, it will require a much stronger declaration on the part of that party than the mere statement that the Liberals should have gone farther.
On the other hand we have the Liberal record in connection with matters of this kind. The Liberal party went out of office in 1911, as is within the memory of most hon. members sitting in this house, on the issue of reciprocity and the general reduction of tariffs in Canada. They remained out of office until the end of the first war. When they came back and took over the government of Canada in the difficult circumstances which followed that war, the government of the day reduced tariffs continuously throughout their period in office, and also reduced the sales tax as well as other excise taxes, so that at the end 83166-189
of their period in office the rates of taxation in those lines stood at low levels as compared with any previous periods in Canada. And I might go further and say that all forms of indirect taxation in Canada today were brought into being in the first instance by a Conservative government. It is true that some have been maintained in part by the Liberal governments which succeeded those Conservative administrations, but in only one instance has there been an increase in one of these indirect taxes. That was the instance referred to a moment ago by the hon. member for Peel (Mr. Graydon), when he said I might have gone a little further. Yes. I might have gone a little further and said the sales tax was increased by the present government in the budget of 1936. in order to take care of the costs which had been placed against the people of this country while the previous government was in power. The intention of the government was to reduce that taxation, just as it had done in other instances. But, Mr. Speaker, we have been through a war which lasted for six years. During those six years the cost of carrying on government was greatly increased, with the result that up to the present time it has not been found possible to reduce that particular form of taxation.
However, in spite of the fact that we were in the midst of war; in spite of the fact that prior to the war tariffs had been greatly reduced under the present government, we went further and entirely removed the duty on farm implements entering Canada, thus carrying out the pledge that had been given to the people of Canada by the Liberal party and repeated over a considerable period of time. So I say that if the people of Canada are looking for a government that is likely to decrease indirect taxes at any time, if they base their inquiries upon the experience of the past they will look to the Liberal party, which on every occasion it has been in power has carried out that undertaking to the people of this country.
Now coming back to the statement made in the amendment itself, may I say that this amendment was added to by the leader of the C.C.F. party (Mr. Coldwell). He did not criticize the amendment of the official opposition. He did not say any portion of that amendment should be left out. He merely added to it. In the amendment introduced by the leader of the C.C.F. party he said the budget should be opposed on two points, and directed the attention of this house and this country to the two particulars in connection with which he suggested the Minister of Fin-

29C2
The Budget-Mr. Gardiner

ance should be condemned. The amendment condemns the minister because his proposals-
(d)	fail to raise the income tax exemption levels; and
(e)	fail to make any provision for the more than half of our population who are compelled to live on incomes below the present exemption levels.
The discussion which has followed the introduction of these two amendments has caused those of us sitting on this side of the house to marvel at the difficulty experienced by speakers in both groups on the other side of the house in keeping out of each other's preserves. That is not at all surprising when one reads the amendments again. They might have been drawn in one room by the same individuals. They might have been brought to this house in a desire on the part of those sitting in the two groups opposite to find themselves working together against the government on this occasion. But whatever the reason for the drafting of the amendments in their present form, we have these two amendments before us. The C.C.F.'ers are constantly putting up arguments in favour of the Conservative amendment, and vice versa. One would almost think they are more concerned about agreeing on this occasion than about settling the problems of the people of Canada.
The Minister of Finance did not ignore those in low income brackets, as has been suggested, those who do not pay income tax. He stated they constitute over half our taxpayers, and therefore are responsible for the care of over half our people. He said there would be no increase in taxes which would affect them. He even stated he would not endanger their position for the further benefit of those in the income tax brackets. His statement is to be found at page 2554 of Hansard for April 29, 1947, and is as follows:
If we raised exemptions above the levels established last year, we should in fact be sparing so many from income tax that it would be unfair to the large number of the people who are below the present exemption levels, because we would inevitably be forced to rely for necessary revenues upon indirect taxes which would bear more heavily upon the low income groups.
In a statement of that kind there is no ignoring of this particular group, which bears the full effect of tariff and other indirect taxes, and which represents about half the population of Canada.


An hon. MEMBER:: Over half.


James Garfield Gardiner: 
Mr. ROSS (Souris):: They don't milk cows in Saskatchewan now.


James Garfield Gardiner: My hon. friend has never been in Saskatchewan or he would know they do milk cows; and he would know, too, that they would have to go without butter in some parts of Canada if the people in Saskatchewan did not milk cows.
The hon. member for Qu'Appelle stated this, as reported at page 2933 of Hansard:
The great majority of our families fall below $1,500 a year. Not only does this man lose out on his milk, but he loses out on his butter and shoes which are now out from under the ceiling-
The Budget-Mr. Gardiner


Mr. A. J. BROOKS (Royal):: May I at the outset congratulate the Minister of Finance (Mr. Abbott) on his delivery of the budget a ' few days ago. I think I am only being fair when I say that his delivery was good, but I am afraid that the budget was not as good as it sounded. I should also congratulate the Minister of Agriculture (Mr. Gardiner), who has just taken his seat. We always find it easy to listen to him. So far as delivery is concerned his speeches are always good. It secure to me at this time, Mr. Speaker, that n the race which we know is now' in progress for the leadership of the Liberal party, there are many contestants.


James Garfield Gardiner: We have not as much practice as you fellows.


Alfred Johnson Brooks: I should like to say to some of those who are also in the running that they will have to look to their laurels so far as the Minister of Agriculture is Concerned. A speaker with the great faculty that we all know the minister possesses with his flair for soap box oratory, and his ability to make people believe that black is -white, when he is turned loose in a convention I am satisfied that he will give a hard run to the other contestants. So far as his speech of today is concerned I would say that now the Minister of Agriculture is one step up on the other contestants, and we shall have to wait until they speak to see where they are to stand.
On May 6 of this year we had enjoyed peace for two years. It is well I think to compare, as has been done, the budgets prior to the war with the one that we have today. Before
the war our budgets ran in the vicinity of $500 million. A few days ago the Minister of Finance asked for $2,400 million odd.


Mr. ABBOTT:: The amount was $2,100 million.


Alfred Johnson Brooks: That is what the minister expects to spend; that is not his estimate of revenue.


Douglas Charles Abbott: The $2,100 million is the
estimate of expenditures.


Alfred Johnson Brooks: The minister has estimated the expenditures at $2,100 million, but he is asking the people for $2,400 million. Whether the expenditures will come within the $2,100 million we shall have to wait and see. During the war the people did not complain-


Douglas Charles Abbott: Before any proposed reduction in taxes. I want the hon. member to be correct in his figures.


Alfred Johnson Brooks: I have taken the minister's own figures.


Douglas Charles Abbott: Before the proposed reduction in taxes.


Alfred Johnson Brooks: Nevertheless it is between four and five times as great as it was before the war. We can understand that. During the war the budgets were heavy. A million men were in the armed forces. These men had to be clothed and fed. We had to build a large navy; we had to spend millions of dollars on aeroplanes. Money was poured out like water, and it was easy for us to realize that we had to have a tremendous amount of money to carry on.
The people of Canada did not begrudge this money; they did not complain at the heavy burden of taxes which was placed on them to raise that money. The same thing applies to the first year after the war. No one in Canada complained about the great amount of money that was being spent at that time. We knew that the soldiers had to be brought home; we knew they had to be reestablished; we knew- that there were balances on contracts which had to be paid, and there were millions of dollars which we were not called upon to collect in ordinary time. But I should like to say to the minister that the war has been over for two years. We, and the people of Canada, realize that there should be no great expenditures such as those that are anticipated. Many people are paying taxes today. The million young men who were in the army during the war are paying taxes. They are not receiving their livelihood, they are not receiving their pay from the government; they are contributing
The Budget-Mr. Brooks

and helping to bear the burden. We know also that we do not expect-and anyone would be foolish to expect-that in the immediate post-war period, or even in the years to come, we can get back to what one might call the normal payment of taxes that we had before 1939. It would be ridiculous for us to expect, such a thing. We know that during the war children's allowances were granted to the people of this country and that it cost $245 million more than we were paying in 1939. We also know that the net debt of this country increased from S3 billion to $13 billion, in round figures. The interest on this $10 billion must be paid, and it has increased the interest debt of the country somewhere between $300 and $400 million. We all realize these things. We also realize that of the thousands of men who came back, many were wounded, many required hospitalization and pensions which the government must pay for years to come and which will require many millions of dollars. But in spite of all these things I submit that we .should not today be paying $5 where it cost ois only $1 before the war. I say that in *spite of all these expenditures that I have mentioned. I think that the people will say that there is gross extravagance on the part of any government which requires them to do this.
What I am about to say may seem like going from the sublime to the ridiculous, but some lion, members on this side of the house have mentioned the nuisance taxes. I come from a small town in New Brunswick. One of our chief industries is the manufacture of soft drinks. I receive many letters from people in my own community and nearby asking that the tax on soft drinks be reduced. I say to the government, surely with all the millions of dollars wTe collected, this tax on soft drinks could have been taken away and the children given the opportunity to buy their "pop" without paying two or three extra cents a bottle for it. The same thing applies to candy bars. We have often heard the expression that it is "like taking candy from a kid." Well, the government today has placed itself in the position of depriving the children of candy or taking candy from children due to the tax on candy bars.
Another point to which I should like to refer is the $250 which is taken off the exemption on income tax of a married man if his wife goes out to work. I know in my own province-and the situation is the same in many parts of Canada-we have many married teachers and nurses who assist in the family budget. We know that there is a great scarcity of teachers all across Canada.
I Mr. Bro.ks.1
We know that there is a great scarcity of nurses. It would seem to me that if the government had the interest of the people at heart they would have done away with this $250 charge and allowed married women in these professions and in others as well to carry on.
I should like to say a few words about veterans affairs. I take this opportunity to congratulate the Minister of Veterans Affairs (Mr. Mackenzie) on the decision he made a few days ago to permit a student pensioner attending university to receive his full allowance. It was a just and fair act. As the minister knows, many of us in the veterans committee last year took that very stand. I am glad that the minister has at last done away with this injustice; but I should also like to call the attention of the house to the fact that last year $667 million were voted for veterans affairs. The amount expended was $607 million. Therefore there was a saving of $60 million on the veterans affairs estimates. When I read this it seemed to me that we were saving money at the expense of the veterans. I do not think anyone wishes that we should save money at the expense of these men.
I should like to mention to the minister some other matters which have been pressed very strongly and which I believe are just as important as the giving of the full allowances to students. One is the raising of the basic rate of pension. When I point out again, as I have pointed out before, that the rate of pension in Canada has not increased since 1920, you will realize the difficulty that pensioners are having in order to live on what seems now a very meagre amount. One reason why the pension has not been increased, it has been said, is that since 1920 the cost of living has not risen in Canada. I believe the Department of Labour has so stated. I do not think there are many people in Canada today who will agree that the cost of living has not greatly increased since the year 1920.
But there is another point. The standard of living of the Canadian people has risen considerably since 1920, and on the basis of that standard of living alone the pensioners should have a much higher basic pension than they receive today. Recognizing this fact, in the United States they have increased the basic rate of pension 20 per cent within the last year.
I would also point out to the minister that the widows and children of pensioners receive what I would call scant treatment. If we consider the present rates of pension payable, the widow with children has an entirely

The Budget-Mr. Brooks
inadequate provision for a decent standard of living. The widow with two children, if the rank of her husband was below that of captain or flight lieutenant, receives a total of $87 a month, which includes $27 for the two children. Should the two children be over twelve years of age, a family allowance of $16 a month is payable.
It is manifestly impossible for a widow to provide adequate shelter, clothing, food, education, medical and dental treatment for three adults on $103, and I would recommend to the minister that this matter be given careful consideration. The seriously disabled pensioners are in the same position. These men find it impossible to supplement their pension with employment. There is no employment even for able bodied men particularly in my part of the country. We hear the minister's department making radio appeals to businessmen across Canada to give old soldiers a chance to work.
I consider that the department and the country owe more to those old men who fought in two wars than an appeal over the radio for someone else to give them a job.
I would turn now to another matter, Mr. Speaker. In concluding the budget address on April 29 last, the Minister of Finance reminded us that in two months' time we shall have occasion to celebrate the eightieth anniversary of the founding of confederation. He pointed out that the men of 1867 had faith in the future of the united Canada which they were striving to build. By making comparison, he emphasized the fact that we had travelled a long way since that time, until today we occupy a position of high responsibility in world affairs and one of great respect. His last words, at page 2562 of Hansard, were:
If we continue to show the courage, the unity and the spirit of cooperation which inspired the fathers of confederation, and which inspired our people during these last war years, our achievements in the peacetime years ahead will, I am confident, be equally striking.
We agree with that; there is no doubt about it. The name of Canada does stand high in this world today, but it was placed there, as you and I know, by the men who fought the war of 1914-18 and again from 1939 to 1945.
This afternoon, for a short time, I hope I may be pardoned if I speak particularly of a part of Canada which we feel has done its full share and more in the building up of this great country, but which for some untold reason has been shamefully neglected and prevented from receiving a fair portion of the benefits and prosperity which have blessed other parts of Canada.
I will not rehearse the facts, which are so well known by everyone conversant with the history of the maritime provinces. I will not tell you how at confederation we were considered to be, and were, I believe, in fact, the most prosperous part of the dominion. We lost nearly all our manufacturing industries in the succeeding years. Our young people were forced by thousands to leave our three provinces and they came to the west, they went to the United States, until today there are, it is said, more maritimers in the New England states than there are in the whole of the three provinces.
This is the story which has been told many times, and as many times have successive governments promised that these grievous faults would be corrected. I will speak of our situation as we find it today. The maritime provinces today, more than two years after the close of the war, find themselves with
30,000	unemployed. We find that our people are leaving by hundreds. We find there is no new industry being established in these provinces. As a matter of fact, the industries that were established are still leaving. I have only to refer to the speech made by my hon. friend the member for Cape Breton South (Mr. Gillis) a few days ago indicating that in every town and city in Nova Scotia one can find some industry which has folded up and come to Quebec or Ontario. The same could be said of my own province.
Go into any town and the people will tell you there used to be a shoe factory here, a cotton mill there, farm machinery manufacturers somewhere else. Today they have moved away. That is the situation now. Only on April 11, a month ago, an industry which had been in the town of St. Stephen since 1879 pulled up stakes and moved to Toronto. I have here a newspaper heading which reads:
New Brunswick loses industry. Soap factory and household name disappear when factory closes.
This was a factory that used to employ many people, turning out 125 tons of soap a week. It was bought by Lever Brothers some time ago and they recently closed it and moved the machinery to Toronto, so that today there is nothing left but the empty shell of a building. I could mention many others, but the member for Cape Breton South did a good job in that regard the other day.
National policies since confederation until the outbreak of the second world war have placed the maritimes under a great handicap. In 1939 the treatment we received from Ottawa became if anything shabbier and more unfair than it had been before. We had hoped for war industries and we had just reason to expect that such industries would be estab-
The Budget-Mr. Brooks

lished in the maritime provinces. For one thing, we were close to the sea and rve had the people to work in those factories. It *would have saved this country many millions of dollars in the cost of transportation if factories had been established down near the seaboard. And the great bottleneck in transportation on our railways would have been avoided. But as the hon. member for Queens-Lunenburg (Mr. Winters) pointed out the other day, this w'as not done; and as far as manufacturing, was concerned, our situation during the war was worse instead of better. Figures tabled in the house show that $790 million were spent by the government out of the taxpayers' money in the construction of new factories in Canada during the war. Of that $790 million, New Brunswick got $5,004,000, or -63 per cent, a little better than one-half of one per cent. Nova Scotia fared a little better; they got 2-3 per cent. But less than three per cent of the total of $790 million which Ottawa poured in the development of new industrial capacity in Canada was invested in the Atlantic provinces. We have ten per cent of the country's population, and if rve had received one-tenth of the total amount spent, we should have received $79 million. Instead of that we received $23,012,000, or $55,988,000 less than what we consider to be our just share.
Then we also consider some other statistics. I do not wish to repeat what the hon. member for Queens-Lunenburg said the other day. The aggregate amount of all the contracts awarded by the Department of Munitions and Supply was $11,997,200,000. Of this, $10,660,-
300,000	or all but $1,366,900,000, went to Ontario and Quebec. On the basis of population again, $1,199,720,000, or ten per cent, should have been spent in our three provinces. Instead of that, the expenditure in those provinces was $380 million, or about three per cent. The difference between what we should have had on a straight population basis and what we got works out to $819 million. I think that the house and the country should not forget that we shouldered our full share of that expenditure of $11,997200,000.
You may ask me, Mr. Speaker, why it is that I mention these figures. The reason is obvious, I think; it is to show that we have been discriminated against, and to indicate the extent to which this discrimination has gone. We are asking for certain improvements. Our papers today are asking for the building of the Chignecto canal, something which would cost only a tithe of the amount which we were denied during the war. We are asking for the building of a causeway across the strait of Canso, something else which I

believe we are entitled to when you consider the great contribution which we have made to the dominion. We are asking for a few million dollars in order to save hundreds of thousands of acres of the finest agricultural land there is in our province. Not only do we think we are not asking for too milch, we believe we are not asking for nearly enough when we urge that consideration be given by the rest of Canada to the development of these projects.
In order to make a living today, what do they tell our maritimers to do? Well, a short time ago in this House of Commons we were told to move to Ontario, to come up here to seek jobs.


Ian Alistair Mackenzie: Terrible.


Alfred Johnson Brooks: The Minister of Veterans
Affairs laughs. I wonder what he is laughing about. Is he laughing at the idea of maritimers moving out of their own country?


Ian Alistair Mackenzie: No. I think it is a
terrible suggestion.


Alfred Johnson Brooks: Is he laughing at the idea of their being exiled to some other part of the country? As a member of the government I should have hoped he would be more sympathetic than that and would assist in some way to establish industry or create work in that part of the dominion. We consider ourselves just as good as any other part of this dominion, and history will prove that is so.


Ian Alistair Mackenzie: So I believe.


Alfred Johnson Brooks: We have done our part
and made our contribution to this country, but the government, Mr. Speaker, have asked us to send our young people to other parts of Canada in order to find work. The government have asked them to leave their homes, their friends and their loved ones, and move away. Years ago we had one mass exile of people in the maritime provinces, and I will say that we do not want another, and I do not think we are entitled to another.
These are not only my own ideas that I am expressing this afternoon. I should like to read an article which appeared in the Financial Post a few weeks ago, dealing with the situation in the maritime provinces:
What follows the war boom in the maritime provinces?
Their unemployment figures in recent months have been among the highest in Canada. Prices in the fishing industry have slumped so seriously that informed estimates predict fishermen's income will be only half last year's. Maritime coal mines are again in the throes of labour trouble. A three-month communist-led strike of deep-sea fishermen has just ended.

The Budget-Mr. Brooks
It goes on to say:
The critical national importance of these problems emphasizes the value of the work now being undertaken by the institute of public affairs at Dalhousie university.
People will say: Why not help yourselves? Well, the people are endeavouring to help themselves, and the institute of public affairs at Dalhousie university has undertaken an investigation into some of the reasons why these difficulties are coming upon us.
I should like to refer to the question of freight rates. We know that the board of transport commissioners are sitting at the present time and discussing the question whether freight rates should be increased. Nothing is more vital, I should say, to the maritime provinces than the freight rate structure, because we have to buy our goods from Ontario and Quebec, and the cost of freight is added to the cost of those goods. We have to pay the freight on the article as well as the price of the article when it arrives in the maritime provinces. On the other hand, when we sell to Ontario and Quebec we again have to absorb the freight rate so that we get it both going and coming. Any increase in the freight rate structure-


James Horace King: Order. I believe that a ruling was made previously that a discussion of freight rates at this time is not in order, as the matter is at present before the board of transport commissioners.


Alfred Johnson Brooks: Thank you, Mr. Speaker. I have nothing further to say on that subject.
A few days ago I mentioned the marshlands of the maritime provinces. I had hoped that when the Minister of Agriculture spoke this afternoon, he would mention some definite policy with regard to these marshlands. The hon. member for Cumberland has spoken many times on this question, as have other members from the maritime provinces. I have never heard a member from the maritime provinces on any side of the house object to the millions of dollars which we have been spending for the Prairie Farm Rehabilitation Act. We have always felt that it was needed, that it was a good idea, and that we should back it. We are now asking that money be spent on our marshlands, of which there are estimated to be about 100,000 acres; and I can tell this house that this land is as rich as any to be found anywhere in Canada. I have none of these marshlands in my own constituency, but a few years ago I had the opportunity of seeing them at Windsor, Nova Scotia, where I was in charge of a military camp, which I might add was built on the marshlands. While I do not wish to digress, at that
time it was felt that this was a peculiar place to build a military camp costing $4,000,000. The land was below sea level, and I remember that one night during a terrific storm the dikes broke and the bay of Fundy wandered at will over the camp, particularly around the hospital, which was built in the very lowest part. It cost nearly $30,000 to repair the damage done at that time. The farmers cannot afford to lay out $30,000 to repair dikes, so this is a problem not for the farmers of Nova Scotia and New Brunswick but for the government of Canada, the different provincial governments and the municipal organizations. I hope that some time soon the minister will make a pronouncement on the policy of the government in connection with these marshlands.
A few days ago, speaking to the house about lumber, I mentioned that we should have a larger quota for lumber from the maritimes, and said that our birch was being destroyed by dieback, a plant disease. I said then we were likely to lose a billion feet of lumber, which would also mean a great loss in wages, and that in five years' time this lumber would be a total loss. At that time I asked the minister if he would increase the quota on birch and hardwood for the maritimes in order that this large amount of lumber would not be lost. In reply the minister said:
That is true. We were asked to set a free quota for infested birch. The difficulty is that the lumber from infested birch is exactly like the lumber from good birch, and the result would have been that all the hardwood cut in the maritime provinces would have been infested birch by the time it came on the market.
In other words the minister suggested that the people of the maritime provinces were so dishonest that if given permission to cut and export infested birch they could not be trusted to do so. I make another appeal to the minister to reconsider the matter, because, as I pointed out previously, in a short time this lumber will be a total loss. Not only shall we lose some millions of dollars from the sale of the lumber; we shall lose employment for many hundreds of men. and that is something our provinces cannot afford.
There are many other matters I should like to mention, but I see my time is pretty well gone. We have recommended that the Chignecto canal be constructed. I need not take time now to point out what a great advantage this would be to our provinces from the point of view of trade. We have recommended that we be given a larger lumber quota. We have recommended that the government assist us in connection with the marshlands.
The Budget-Mr. Brooks

So far as my own province is concerned I should like also to mention the matter of a national park. At the outset let me say that I do not blame the federal government for the fact that while every other province has a national park, and some have two or three, we have no national park in New Brunswick. With the great increase in tourist traffic we expect, and which I am sure we will get in this country, a national park up the Saint John river would be a great asset to New Brunswick. Our provincial government has been derelict in this matter, but I hope the federal government may be able to put some pressure on the local government to the end that a national park may be established in our province within the very near future.
In closing. Mr. Speaker, I should like to quote from a statement made by the Minister of Justice (Mr. Ilsley) in an article appearing last year in the Monetary Times:
On the whole, our country has come through the war in good order and with unimpaired strength. We have many problems hut we have much to be thankful for. The prospect of the years ahead is not untroubled and certainly we have no reason for complacency. Nevertheless we can count many blessings for which there is cause to give thanks and there are no problems ahead which sober good sense, tolerance and unity of purpose cannot solve.
I am sure we all agree with that statement. There are no problems which tolerance and good sense cannot solve. I have outlined the problems of the maritime provinces, and I believe that with tolerance, good sense and sympathy on the part of the other sections of this dominion these problems can be solved for the three little provinces down by the sea. We are not devoid of resources. We have agricultural land as fine as there is anywhere else in Canada. We have fine timber lands; we are told that spruce grows faster in the maritime provinces than in almost any other part of the world. We have great apple orchards in the Annapolis valley, and they are being developed also in the Saint John valley. We have the finest fisheries to be found anywhere in the world; as is well known, the north Atlantic, with its cold water, produces the very finest of fish. So with our primary resources if some means could be devised, through tariffs or in some other way, by which we could have some manufacturing in those provinces so that our people would have a balanced economy, I believe there would be no finer place in this dominion than the three maritime provinces.


Mr. ANGUS MacINNIS (Vancouver East):: Mr. Speaker, as other speakers in this debate have done, I wish to extend my congratulations to the Minister of Finance (Mr. Abbott)
on this, his first budget speech. I hope I may be able to congratulate him on a more thorough achievement after he presents his next budget. As to the fears expressed this afternoon by the Minister of Agriculture (Mr. Gardiner) that there was some collaboration between this party and the Progressive Conservative party, I wish to tell the minister not to let it disturb his peace of mind, because there is no collaboration.


Gordon Graydon: You are speaking for
us, Angus.
Mr. MacINNIS; I am glad to hear that. It is difficult to move amendments to a budget, and sometimes to other measures, as we have found out on several occasions during the present session. However, I should like to let the Minister of Agriculture know that there is extensive collaboration at the present time between the Conservatives and the Liberal party right across Canada. They have carried it a long way in British Columbia, so far indeed that now they cannot part. In the other provinces it is proceeding apace; and the more it proceeds, the better we like it.
The Minister of Finance began his budget speech with a reference to the difficult budgets of the war years, budgets which, he said, were evidence of what the people of Canada can do under the stimulus of war. What the people of Canada can do under the stimulus of war is now history. What we can do under the stimulus of peace, if we can find a stimulus for peace under the present system, has yet to be discovered.
The outstanding feature of the minister's budget speech was his lack of faith in what the Canadian people can do under the stimulus of peace. I came to that conclusion after listening to such statements as these, during the course of his speech; and I turn first to one which appears at page 2544 of Hansard, where he states that consumers are spending more and saving less than normal, with present incomes, and that we must be prepared for reductions in this spending.
It seems to me that the first statement should be followed, not by the statement that we must be prepared for reductions in spending, but by a statement something like this; "We can produce more now than ever we did before; consequently we can increase our spending."
Then, at page 2546, after forecasting a gross national income of nearly 112 billion, some $900 million greater than 1946, the minister went on quickly to state that this forecast was subject to a wide margin of error "in these uncertain and abnormal times", particularly if a substantial recession should occur in the United States later this year.

The Budget-Mr. Maclnnis
There is not much faith there. Has the government no plan for Canadian prosperity? Must we follow in the wake of our neighbour to the south, if they proceed to disaster?
At page 2545 of Hansard the minister states that one of the main supports of high current production is the result of our loans to Great Britain, France, Belgium, Holland and other countries, and he states that these loans are essentially transitional measures. If those loans are contributing to our prosperity, why not continue them? If to discontinue them means not prosperity but depression-and that is the inference to be drawn from the minister's words-why should we discontinue them? The need in Europe is great; but if we can make goods available to the people of other lands, is there any reason why we should not increase consumption in this country? These are some of the questions I should like to hear the minister answer.
Then at page 2548 of Hansard the minister said:
Moreover, our revenues are based on very high levels of production, incomes and imports which we probably cannot expect as normal levels in future years.
Why not? Because we expect a depression in the United States; and because they expect a depression in the United States, we must have a depression here. That is the purport of the minister's statement.
Then, at page 2549, referring to the budget surplus he said that, while our surplus is a real one, "it has been obtained at high levels of revenue and expenditure which do not necessarily give an accurate indication of the shape of things to come." The conclusion one must draw from this statement is that the government is giving up all hope of directing or controlling the economy of this country.
Then, at page 2561 the minister comes back to the possibility of a recession in the United States, when he stated:
On the other hand, it must be conceded that some recession in the United States this year is by no means impossible.
And the United States, you know, got back to a so-called free enterprise system before we did. He continues:
A substantial recession in that country would be bound to have some effects on our own situation, and this in turn would adversely affect our revenues.
During the years I have been in the house I have heard many protests against our colonial dependence on Great Britain. What is the sense of attaining full status of nationhood within the British commonwealth of nations merely to become an economic appendage to the United States? Cannot Canada have economic and social policies over
which Canada has some control? It is this lack of faith in the future of Canada, and in our ability to do things for ourselves, which is, to me, the disheartening thing in the budget.
The Minister of Finance referred several times to the wonderful record of this country in the war. But what he failed to say in that connection is what is really important, namely, that to attain that wonderful record the government took the initiative in providing the organization and the money to make our war effort effective. That record could never have been achieved if our war effort had been left to private enterprise. No one, indeed, would have thought of leaving it to private enterprise. So that if anything is clear in the budget, it is that the government has abandoned all intention of directing our peacetime economy. It is leaving the providing of our needs to private individuals who are solely concerned with their own profits. Indeed the minister himself admits this when he states, at page 2559 of Hansard:
Business confidence and available funds are so high that a good many businessmen are competing more in their efforts to expand their investment quickly than in getting down their costs and keeping down t'he prices at which they sell their products.
If this statement is correct-and I imagine it is; otherwise the minister, a believer in the private enterprise system, would not have said it-I would ask: Why the elimination of the excess profits tax, so as to give them more money to play around with?


Mr. GIBSON (Comox-Alberni):: To create more jobs.
Mr. MaeINNIS: But they are not creating jobs. That is exactly what the minister said.


John Lambert Gibson: [DOT] Capital investment creates jobs.
Mr. MaeINNIS: I agree with that, and I shall have something to say about it later on. That is so, provided that it is proper capital investment, and not uneconomic capital investment.
But what does the minister expect? So long as the government leaves production of the economic needs of the people to the caprice of private enterprise, it can have no effective control over the nation's welfare. As a matter of fact, it can be only a sort of office boy for private enterprise. And for the hon. member who just interrupted, let me tell him that big business itself is becoming frightened; frightened of itself.
In this connection let me quote from an editorial which appeared in the issue of the Monetary Times which came to hand this
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morning. This is the issue for May, 1947. The title is, "Price Increases and Private Enterprise." It begins by making reference to some remarks made b}' the hon. member for Qu'Appelle (Mrs. Strum) in this house, and continues:
With the end of price controls, management has regained control of the nation's economic machinery.	*
Not the people of Canada, but management.
Except for the safeguard that the government can reinstate price controls if it believes the public is being fleeced, management has now regained the opportunity, which it has long demanded, to prove that it can make a better world under private enterprise than appears likely under any system of socialistic or communistic operation.
Let us see how. according to the Monetary Times, private enterprise is doing that:
If private enterprise is to prove to its detractors that it can be trusted with control of our economic system, it must first of all curb the inflationary spiral that has been set in motion by the more grasping and therefore the less foresighted of its members.
Prices must be brought under control,-
These are the people who were shouting a few months ago for the removal of all controls.
-and manufacturers who are taking advantage of the removal of ceilings to raise prices out of all proportion to values, must be made to realize that as sure as night must follow day, they are fashioning the noose that will hang us all.
Examples are evident in store displays any day of the week which lead the observer to wonder how long the public will stand for it. Bits of twisted iron fashioned into garden furniture for a king's ransom. Poorly made chairs and tables at double the prices and half the quality of pre-war years. Electric and mechanical contrivances with life expectancy of a third, now cost triple, pre-war standards.
That is where all this shouting for the removal of controls has 'landed us We have been put in the hands of private individuals who have no responsibility to anyone but themselves. We have been told of the wonderful things that were happening in the United States, to which country the minister referred so often, where controls had been removed. There they are also depending on free enterprise, so-called. The government there surrendered to big business pressure sooner than ours did, and consequently the danger of a depression or a major catastrophe is much closer than it is here. Speaking in Washington a few days before the minister's budget speech was delivered, President Truman appealed to private enterprise to bring down prices and to prevent an "economic cloudburst." He said:
A group saw fit to sabotage price control and represented to the public that prices would come down in a free market. This has not taken

place and. as a consequence, many American families are spending savings, cashing war bonds and postponing medical care and have gone into debt to an amount fifty per cent more than a year ago.
The same thing is happening here in Canada. We are following the pattern closely even to the Minister of Finance urging business to lower prices. Instead of wasting time pleading with big business, the Minister of Finance should profit from the experience which was so effective in achieving high production and maintaining stable prices during the war. Early in his speech the minister mentioned that consumer purchasing was continuing to expand and that there were few signs of an unwillingness or inability on the part of the consumer to buy what was offered in the market. I cannot agree with that and I think the same statistics that are available to me are available to the minister. I have in my hand here the "Monthly Review of Business Statistics", issued by the bureau of statistics, for March 1947; and it states: Retail and Wholesale Sales
Dollar sales of retail stores in January, 1947, were 43 per cent greater than in the same month of 1946, about the same average gain as was shown throughout the year.
And again:
Though dollar sales have 'been moving steadily upward, there is evidence that the real volume 9! goods sold has been levelling off. MTen the index of retail sales is adjusted for changes in retail priecs. it has been in recent months only four per cent above its level of the corresponding month a year ago compared with six to eight per cent several months ago and twelve to thirteen per cent in the spring and early summer of 1946.
At the wholesale level a flattening out even in dollar sales is indicated by sales results for recent months. Compared with the same month of the preceding year, sales in January and December were respectively 9-4 per cent and 13-8 per cent greater in contrast to an average gain of 18-7 per cent for the w'hole year of 1946. Accompanying this trend, there have been increases in inventories in almost all trades, and at the end of January the dollar level of inventories was 29 per cent greater than a year ago.
There is still another indication that consumer purchasing power is running low. This is to be found in the increase in instalment or credit buying. A news item in the Toronto Daily Star of March 22, 1947, points out that as durable goods were coming on the market, consumer purchasing power was beginning to dwindle. The government took cognizance of this fact early in the year, January 15 to be exact, when it lifted the restrictions on-consumer credit. A survey of Toronto merchants since that time, in the words of the Toronto Daily Star news item, shows that buying on the instalment plant has been scorching right along. More merchandise on

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the counters, less cash in Mrs. Consumer's purse, and easier terms have combined to lift instalment selling out of its wartime doldrums.
That is merely an indication of the increasing poverty of the people. The news item points out further that advertising of credit terms has become widespread. Storekeepers are finding the need to advertise credit sales, and they would not do that if they could sell everything they had to sell by cash sales. Goods are sold for as little as ten per cent down with eighteen months to pay for household goods, and twenty per cent for clothing. The article finishes by saying that it is expected that, as durable goods become more plentiful, instalment buying, will bounce even higher. This means that the consuming public, particularly that half of the population below income tax exemption levels, cannot buy the things- they need without mortgaging their future. Instalment buying is included in the retail sales statistics. All that happens through instalment buying is that goods bought this month, next month and the month after will not be bought eight or nine months hence. As I said, it is mortgaging the future in order to buy today.
That production is catching up with demand can be seen by anyone walking along the streets of any city, and the twenty-nine per cent increase in inventories reported by the bureau of statistics is merely a confirmation of that fact.
Speaking in the budget debate last year, I said that under our present system the ordinary thing was for supply to overcome demand. I pointed out further that that was the root cause of all modern depressions. That is true, and it is the reason everybody today is thinking about the depression which is around the corner. During the depression of the thirties we were always looking for prosperity around the corner but you do not have to look for the depression around the corner. Unless we do something about the matter, the depression will meet us more than half way. If, as I said, the ordinary thing is for supply to overcome demand, then the obvious thing to do would be to increase consumer purchasing power as goods become plentiful. If there was any social purpose underlying our production and distribution that would be the logical thing to do. We could and should go without many things we should like to have in order to build up our capital structure so as to produce a greater abundance of consumer goods, and during the time we were doing that consumer goods would be in short supply because the labour and material required were being used for the production of capital goods.
But as soon as we had the capital structure built we should be able to increase our consumer purchasing power. But what we have is just the very opposite. We are generally prosperous, as prosperous as a working class can ever be under capitalism, so long as we have a large-scale investment of capital. As soon as investment falls off, although our means of producing the things we need have increased, we have to go without because we have not the means to buy, and as I mentioned before, we then have the depression that everyone seems to be expecting. Although, according to the Minister of Finance's speech, the government is momentarily expecting a depression


Douglas Charles Abbott: No, no; I did not say any such thing.


Angus MacInnis: -a falling off in private investment.


Douglas Charles Abbott: I did not say any such thing. I know my hon. friend wants to be fair. I did not make any such statement, nor did I imply any such statement.


Angus MacInnis: As a matter of fact, if the minister had been in the house at the beginning of my speech he would have heard me quote from his speech on several occasions where he said that, and if I had the time at my disposal I would quote it again.


Douglas Charles Abbott: My hon. friend will not find anything in my speech where I said expressly or impliedly that I anticipated any immediate depression. I did not use the word "depression" anywhere in my speech.


Angus MacInnis: It depends on what-


Douglas Charles Abbott: It depends on the meaning you want to take from it. My hon. friend wants to take a meaning which was not there.


Angus MacInnis: It just depends on what the minister calls "immediate". Here is what the minister said, at page 2544 of Hansard:
. . . and consequently they are probably spending more and saving less than they normally would with incomes at present levels . . . We must be prepared for reductions in some or all of these abnormal expenditures.
Then at page 2545 of Hansard, after forecasting a gross national income of nearly $12 billion, some S900 million greater than in 1946, the minister went on quickly to state that this forecast was subject to a wide margin of error "in these uncertain and abnormal times."


Douglas Charles Abbott: What is my hon. friend quoting from?


Angus MacInnis: I am quoting from the
minister's speech in Hansard.
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Douglas Charles Abbott: "The minister went on to state"; I did not use these words.


Angus MacInnis: No; the minister did not use these words, but they are close to what he said and contain the implications of what the minister intended.


Mr. GILLIS:: Read the words again.


Angus MacInnis: "In these uncertain and abnormal times" particularly if a substantial recession should occur in the United States later this year.


Douglas Charles Abbott: "Particularly if"; of course.


Angus MacInnis: Yes, "particularly if."


Mr. MICHAUD:: We could not have a depression here.


Clarence Gillis: We have it in half the country. Take your own province of New Brunswick.


Angus MacInnis: Then, at page 2548 the minister said:
Moreover, our revenues are based on very high levels of production, incomes and imports which we probably cannot expect as normal levels in future years.


Douglas Charles Abbott: There is no suggestion there of an immediate depression. That is a perfectly clear statement of fact.


Angus MacInnis: As I said before, it depends exactly on what the minister means by "immediate". Indeed in one place he referred to the possibility of a depression occurring in the United States this year.


Douglas Charles Abbott: I want to correct my hon. friend. I did not use the word "depression" at any point in my speech.


Clarence Gillis: Recession.


Angus MacInnis: I do not think that is correct either.


Douglas Charles Abbott: You will not find it. I can assure my hon. friend he will not find it there.


Angus MacInnis: I shall find it and show it to the minister afterwards.


Douglas Charles Abbott: If I were a gambling man I would offer a small wager.


Angus MacInnis: I am not a gambling man but I do not mind taking a chance on a sure thing.
I wish to sav a few words on dominion-provincial relations and social security. As I said the last time I spoke in the budget debate,
I am not going to try to apportion the blame for the break-down in the dominion-provincial conference. But since the responsibility for convening the conference of necessity rests on the dominion government, the dominion government should call the conference again as

soon as possible. I would say "as soon as possible" is as soon as the session has finished. That conference should continue in session until an agreement is arrived at, or until it is made clear beyond the possibility of a doubt who is preventing an understanding.
An agreement on taxes is only a small part of what must be done if we are to attain for the people of this country the economic advantages and social security which can come only from cooperation between the dominion and the provinces.
There is an urgent need in this country for a national social security programme that will be adequate in its provisions and that will apply all across the country. It must make provision for every Canadian citizen who for any reason is prevented from earning a living. I have before me the proposals of the dominion government to the dominion-provincial conference of 1945. These proposals were drawn up some time in the summer of 1945 and at least to a person of my way of thinking they make good reading. I will quote just two or three paragraphs from page 1:
The preparations must be undertaken against the background of severe depression and the enormous dislocation of war. Under the conditions which existed for nearly a decade prior to 1939, the Canadian economy did not provide adequate opportunities for employment and enterprise: the deficiencies in the provisions for social welfare became strikingly apparent; the structure of government finance in our federal system developed basic strains and weaknesses. The war came before solutions to these problems were reached.
And on the same page:
The demonstration of the potentialities of the Canadian economy has been one of the outstanding features of the past few years. In a relatively short time national production was doubled. Nearly one-half of this greatly expanded output was devoted to war. In spite of this large effort, the general level of civilian consumption was not reduced: for the lower income groups it was significantly increased.
If we can do that in war; if we can do that when a big share, perhaps half of our economy is devoted to war, is there any reason why we cannot do it in a peacetime economy? If any province or any number of provinces are standing in the way of that being accomplished, these being the proposals of the dominion government, it is up to the dominion government to let the country know who are preventing these things from being done.
To me the disturbing factor is that the government does not seem any longer to be interested in its own social security programme. It seems to have given up the idea, if it ever had one, of instituting a wide pro-

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gramme of social development. The need for social security cannot be met by a small improvement in old age pensions. The eligible age for old age pension is, of course, too high, but the criterion for social benefits should not be based on age. A person of sixty, or fifty or forty, if he or she is prevented from earning a living, should have just as valid a claim on the state for a reasonable standard of living as a person at the age of 70 or over.
I know the question will be asked, who will pay for it? My time is nearly up and I will merely say this. It can be provided for only out of the production of the country. If we are to have an old age pension or old age benefit that will take care of people over fifty, or sixty, or sixty-five, whatever the age we take, it means that those between the age of eighteen and that other age must be willing to produce the goods and services that those older people consume. It is just as simple and concrete as that.
Since we cannot do it by distributing the goods and service direct it can be done only by taxation. I would say-and this applies particularly to members on my right-that the people in this country who were shouting for tax reductions since the end or even before the end of the war have done a disservice to Canada, particularly when they shout for tax reductions and in the same breath ask for government expenditures of every conceivable kind. These things cannot be done without a transfer of income from those who have it to those who do not.
To this group one of the disappointments tof the budget is that the income tax exemptions were not increased.


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


Angus MacInnis: If you are quick I am willing to answer it.


Julian Harcourt Ferguson: Do you believe in no tax reduction and continued expenditures, as the government is doing today? You referred to the group on your right. Do you believe in no tax reduction and continued spending?


Angus MacInnis: I do not know just what my hon. friend means by continued spending. As regards continued spending, we can get our opportunity to deal with that when the estimates are before us. Then let everyone say whether he wants or does not want this or that estimate passed, and then call for a vote on that estimate. In regard to increased taxation, or no lowering of taxation, I say that if we expect people below the exemption levels to live decent lives and be good citizens
on incomes of that amount, there is no reason why those of us above that level should not be willing to pay our taxes. That is the position I take.


Julian Harcourt Ferguson: Will the hon. gentleman answer my question?


Angus MacInnis: That is all the answer I will give.


Julian Harcourt Ferguson: Don't debate. You cannot answer.


Angus MacInnis: In his concluding remarks the Minister of Finance used these words, which have already been quoted by the hon. member for Royal:
If we continue to show the courage, the unity and the spirit of cooperation which inspired the fathers of confederation and which inspired our people during these last war years, our achievements in the peacetime years ahead will, I am confident, be equally striking.
The "if" there is the big question mark, and I would tell the minister that, no matter how much we wish it, there can be no unity without identity of interest, and there can be no identity of interest unless we have a single objective. And we have not a single objective in this country. You cannot have a single objective in a society in which you glorify the right of everyone to do as he pleases, to get as much as he can and to give as little as he must. That is private enterprise and there is no hope of unity in a system of that kind.


Mr. ROBERT FAIR (Battle River):: Like other members who preceded me, I want to extend congratulations to the Minister of F'inance (Mr. Abbott) on the eloquence with which he delivered his first budget speech. I believe congratulations should also go to the cheering section on the government side of the house for recognizing some points that were not expressed in the budget, and perhaps congratulations should go as well to some of the ministers who supported the Minister of Finance in their own little ways, though, after all, things were not just as the picture would seem to be.
I also want to congratulate the hon. member for Vancouver East (Mr. Maclnnis) on the progress he is making in learning social credit terms. I hope his knowledge of the technique of social credit is as complete.


Angus MacInnis: If the hon. member will support me in what I have said with regard to taxes, I will agree with him.


Robert Fair: The hon. member for Vancouver East is getting on to our programme very quickly.
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The Minister of Finance, in dealing with the monetary question, told us that at the end of March, 1947, we had an unmatured funded debt of $16,524,164,000. That, I may say, is in contrast with approximately three and a quarter billion dollars as at March 31, 1939, just before the war broke out. In 1947-48 interest is estimated to run to $437,517,000, as compared with approximately $128 million for the last fiscal year before war broke out. This means that our interest is now almost four times what it was before the war. In my opinion, a large percentage of that interest is not necessary and might better be employed for the payment of many of the things we in Canada need much worse than we need the payment of interest to individuals who, after all, are creating credit which is based on the ability of the people of Canada to produce and deliver goods and services. I feel that there is no need whatever for a budget such as the one delivered by the minister, and I think the minister himself was just a little bit ashamed at having to deliver such a budget. I am sure we all realize that it is not his alone, but that he received quite a little help in preparing it. At page 2553 of Hansard, under the heading of "Tax policy" we find this:
Economic considerations alone would hardly justify immediate tax reductions. As I have already stated, there are still substantial inflationary pressures pushing our prices and costs up. Reductions in taxes may add up to these pressures in some measure, though they should reduce some of the demand for higher wage rates.
Then, along in the second column, the minister says:
Therefore, whatever may be argued from the point of view of immediate economic effects, or long term debt policy, one must reach the conclusion that those who must hear them are not ready to support income taxes on the present scale. In fact, I am sure that were our present levels of personal income tax to be continued, they would constitute a serious impediment to a full working effort and a brake upon the drive and initiative of men and women in all groups and . classes.
Farther down in the same column, he says:
It would appear that if Canadians are asked to carry tax burdens which, after making due allowance for lower cost of living or lower cost of doing business or other offsetting factors, are significantly heavier than those imposed by the United States, there is a risk of a serious drain of Canadian personnel to the south for this reason alone.
Then on page 2554, under the heading 'Personal income tax", the minister has this to say:
This is the tax that at present levels is proving so unpopular and is causing difficulty. To overcome the situation which I have described a sub-

stantial reduction is necessary and I do not feel that we can afford the reduction required in this field and also substantial reductions in other forms of taxation in the face of the responsibilities which Canada finds upon her shoulders in this post-war period.
I said a few moments ago, Mr. Speaker, that it was unnecessary for the Minister of Finance to come to the house and tell us that he expected to expend so much money in interest during the present fiscal year. The same thing applies to our national debt, because had the policy been adopted which Social Crediters have consistently advocated in this house since we came here first in 1936, Canada would not have a national debt of the present proportions. I might say that we have been supported in the past-I am not sure whether their minds have as yet been changed-by some of the Liberals on the other side of the house. For instance, in the past we had the support of Mr. McGeer-now Senator McGeer-Mr. Arthur Slaght, who represented the constituency of Parry Sound, and for some time the hon. member for Rosthern (Mr. Tucker) also supported that view.


Mr. LOW:: Times have changed.


Robert Fair: Someone says he is not in now and he does not believe in that way any more, anyway.


Mr. JOHNSTON:: He is Liberal leader in Saskatchewan now.


Robert Fair: I was rather amused the other day-I think it was Friday-when the Minister of National Revenue (Mr. McCann), who administers the medicine, rose to speak in support of the Minister of Finance, and in his own polite way told the Progressive Conservatives and the C.C.F. that they should withdraw their amendments and shut up, that the budget was good anyway. As we all know, the Minister of National Revenue is a medical doctor and in his practice is in the habit of administering bitter medicine. I feel that on this occasion he chose to put a little chocolate coating on it so that the patients would not notice the effect while the medicine was going down.


An hon. MEMBER:: It was bad medicine.


Robert Fair: I do not feel that he can fool the workers of Canada with the speech he made. They are just as wise now and just as much opposed to the taxing programme as they were before that speech was delivered. We find that at the first of this year the exemption for a single person is $750, and that for a married person is $1,500. Then again, in the case of a married woman who is working or otherwise getting an income ol

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$250, if the amount does not exceed $750 her husband finds the amount of his exemption decreased by the amount of the wife's income over and above $250. If the income exceeds $750, they are both classed as single persons.
Some time ago there was some mention made of this in the press under the heading of "Tax on Marriage". I take it from this that this is a move by the government to discourage marriage because by being married, building their homes and running them as they should be run, people are penalized by way of income tax levies. The clipping reads as follows:
In a free society it is not the business of the state to seek by applying special pressures to drive married women out of remunerative occupations and thus compel them either to work in their own homes or not to work at all.
It was done by Hitlerite Germany, but it should not be done iby Canada. In Germany it undoubtedly contributed to the discrediting of matrimony, since women were able, as they will be able here if the (dominion government's income) tax scheme is persisted in, to evade such pressures by making their sex relationships informal and impermanent.
The tax is a tax on being legally married, not on maintaining a joint household.
I believe there is an injustice there which is placed upon married women in Canada. Many of them find that they are compelled to work, since gome of them are separated from their husbands, and are at the same time supporting families. The husband is either not in a position to, or will not, support the family and the married woman is compelled to do so and at the same time pay more taxes than she should.
Then again, the present budget does not, in my opinion, afford relief for many who are in the low-income tax brackets or those who are below that level. When I say that, I mean that those who are in the low-income tax brackets do not get very much relief, and those below that level find that the cost of the things which they have to buy in order to live has increased considerably, and there is nothing in the budget to help them. We find that a number of the men and women whom we sent overseas, who during the war had all the supplies they required, are now back in civilian life trying to get reestablished, and with our present heavy income tax levy and low exemptions they are having quite a time doing anything about it.
In addition we have a number of nuisance taxes such as those on soft drinks, which I understand today cost seven cents, though I do not use them; on chocolate bars, which cost eight cents, on theatre tickets, postage stamps, and so on. These nuisance taxes should have been removed, because they were put on during
the wartime period, and at least the shooting war has been over now for two years.
This afternoon the Minister of Agriculture (Mr. Gardiner) told us about the high income of the farming population, but he did not tell us what the farmers' expenses were. In my opinion, and as I shall try to show later on, the financial position of the farmers is not as bright and rosy as the minister tried to make us believe. As things stand, it is like the Scotsman who gave his little baby five cents to go to bed and to sleep; then, as soon as the baby went to sleep he came along and took back the nickel and had it for the same purpose the next night. Then we have the increased cost of living. Many people do not believe the index is accurate, and in my opinion they are quite correct in their judgment. If you go into a restaurant, into a hotel or into any store you find the prices of the things you have to buy considerably increased in comparison with the basic period, 1941. In addition to the price we have to pay for our meals, in some cases we find that after you have had a meal and have walked a few blocks you are all ready to eat another meal, because the servings have been cut down so much and in fact have almost disappeared as far as butter and sugar are concerned. I believe it is now time to discontinue the rationing of butter, because last month the bureau of statistics told us that our production of butter had almost doubled. I do not see the use of making butter if you do not go ahead and consume it. Meat rationing has been done away with for some time, and we find very few people, if any, suffering, as they did not during the time meat was rationed. In the case of butter, as was the case with meat, some people do not use all their coupons, and they pass either the coupons or the butter to their friends. So I think at least everyone living at home is getting pretty well all that he needs.
Dealing with the income tax of farmers, I feel that an injustice has been done farmers all across this country in that connection. Until very recently, perhaps within the last year or eighteen months, many farmers did not know they were required to file income tax returns. Many did not have sufficient incomes to require the filing of a return. It is curious that no move wras made by the government to collect income taxes during the war period, when high production was needed. Perhaps the government realized that if they insisted on having their pound of flesh at that time the farmers would not work eighteen or twenty hours a day, as many of them did, or
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[DOT] might go on a slow-down, strike as some of the other occupational groups have done. About a year and a half ago, however, just after the Christmas and New Year's holidays, thousands of income tax blanks were sent out and the farmers were asked to fill them in. Only a small percentage of the farmers kept accurate records, and those farmers were able to file the returns. Those farmers who did not keep records were asked to come to certain towns all over the prairie provinces, where they were met by a number of assessors from the income tax branch. Where a farmer could not produce records these assessors made up an income tax return on the accrual basis. By that I mean they went back to January 1, 1941, and got an inventory of the farmer's holdings as at that time. Then they took another inventory as at the end of December, 1945, and assessed a certain portion of the difference as income for each of the years in between. Then, if they found the farmer taxable they had him pay the tax. Perhaps that system is all right to overcome a farmer's failure to keep records, but I feel that injustices were done the farmers in making up those forms. In most cases, of course, farmers are not bookkeepers. The assessors did have some knowledge of bookkeeping, so that the farmers did not question the statements they made up but. if they had the money, gave their cheques for the amounts involved. In many cases, however, farmers who thought they were out of debt had to go back to the bank and borrow in order to pay their income tax.
Some of those income tax returns included amounts running up to $800, in the case of some of my bachelor neighbours, representing that portion of their upkeep which was supposed to have come from the farm. In my opinion, that should not be done. In 1942 we had a discussion in this house on farmers' income tax, and at that time I felt that we had gained at least some redress for the wrongs that were being done the farmers. On the back of the blue form used by farmers we still find this note re farmers' receipts and expenses:
4. Produce used from "family garden" and small sums usually termed "pin money" obtained by the wife, sons or daughters, by their own efforts, need not be taken into account.
At that time I felt that the minister had met the objection, and that we would have no further trouble, but we find the. practice of charging the farmer for the items above still being followed. Only a few months ago I was told by one of the assessors that they charged up $50 per individual in each family for the produce used out of the garden, including fowl, butter, eggs, and so on. In my opinion,

since there is no exemption whatever for the wife and family of the farmer, no income tax should be charged on these small items.
I feel also that the farmers have already paid far more than their share of income tax, indirectly. I say this because farmers have been delivering their produce to the market for the past number of years at prices far below the cost of production. They have been given no credit for this. Severe losses accrued during the depression years, particularly between 1930 and 1940, and during the better years since 1942, with better prices, the farmers have been busy clearing off their debts. But while doing that, and in addition to taking care of a condition over which they had no control at all, they were compelled to pay income tax as I have already stated. We have also subsidized the world wheat market for a period1 of years at a price of $1.55 a bushel for the best wheat grown in the world. If our government wants to be a good fellow with the other countries of the world, why does it not let the Canadian taxpayer pay the subsidy, rather than the farmers and principally the prairie farmers? There might have been some justification for that, but there is no justification at all for having the Canadian farmer subsidize the world wheat market. Then again we have subsidized to the extent of many millions of dollars the consumers of Canada by supplying cheap wheat for flour, so that they may have cheap bread, and may not have a cost of living increase.
Then again, in order that our soaks in the country may have their liquor at a cut price, including the water, we have also subsidized the distillers for some time past. That programme I understand is now discontinued. At the present time and for some time to come the farmers of Canada are subsidizing the British consumer to the extent of the difference between $1.55 a bushel and the price of wheat on the world market, on a minimum of
160,000,000 bushels in 1946 and again in 1947.
Again I ask the government: Why not have all the people of Canada stand the cost of this subsidy, rather than have the farmers do it? In my opinion, the farmers are the geese in Canada which lay the golden eggs. Every attempt should be made to encourage agriculture and do everything possible to bring it into a prosperous condition; because that prosperity on the farm is reflected among all classes all across the country.
Perhaps the government may find some comfort in telling us, as the Minister of Agriculture (Mr. Gardiner) has done on more than one occasion, that the prices arranged by the government have been agreed to by the Canadian Federation of Agriculture. I feel that

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that organization, and those smaller organizations of which it is composed, as well as the individual farmers and other consumers who make up those organizations, should have a little light on the prices that are being accepted on behalf of the farmer. It is up to the individual farmers to become organized, as do other occupational groups, and see to it that they get what is properly coming to them, which they have failed to do in the past.
I am quite satisfied that until that is done the farmer will continue to be, as he has been in the past, the slave of the Canadian people. The time has come when that should cease. I think it is a good time now, also, to tell the farmers of Canada that they should consolidate their positions, and that the picnic, as some people describe it, will soon be over.
We have in Canada a potential production which will far more than supply our own needs. Even during the period of war, when hundreds of thousands of our young men and women were not occupied in farming, we were able to supply ourselves and also to export hundreds of millions of dollars worth of our produce to countries overseas. And as the countries overseas which were over-run during the war, and others also which participated in the war, make progress toward becoming selfsustaining, the picture for the Canadian farmer will not be so rosy, if we note the history of agriculture following the first great war.
So I say again that this is a good time to warn the farmers of Canada to put their houses in order, before it is too late. I should also say, in that connection, that in the government's immigration policy steps should be taken to see to it that the people they bring in are placed in industries other than agriculture, because we have enough on the farm at the present time to feed two or three times the number of people in the country. To put more people on the farms will only mean increasing our production and, for that reason, under our present programme, cutting down prices of present farm production.
Perhaps one of the best ways to show the condition of farmers is by putting on record the number of farmers who have been paying income tax in the past, the amounts of income tax paid, and the average paid each year. I have here a table covering the years 1930 to 1938 inclusive, and setting forth the information to which I have referred. I have a similar table giving the same information from 1939 to date, and I should like to place these tables on Hansard.


James Horace King: Has the hon. member *nanimous consent to table these figures?


Douglas Charles Abbott: What are they?


Robert Fair: They are tables which give the number of farmers paying income tax, the total amounts they paid, and the average amounts.


Douglas Charles Abbott: Who provided the information?


Robert Fair: It is contained in a return brought down in my name.


Mr. McCANN:: Then they are already on record.


Robert Fair: No, they were given as a return, and are not on record up to the present time.


James Horace King: They can go on only with unanimous consent.


Gordon Graydon: If the hon. member has an order for return he ought to be allowed to put it on.


James Horace King: Unless there is unanimous consent we cannot permit it.


Gordon Graydon: Then he can read it.


Robert Fair: Am I compelled to read these papers?


James Horace King: If the hon. member has not unanimous consent he will have to, yes.


Charles Edward Johnston: Who objects?


Douglas Charles Abbott: If these are tables prepared by the Department of National Revenue, then I think probably we can consent to their being put on record.


Robert Fair: They have been prepared by the government and tabled in the house.


Douglas Charles Abbott: In that event, so far as I am concerned, they may be put on record.


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


Some hon. MEMBERS:: Agreed.


Robert Fair: The first table I shall place on record shows the number of farmers paying income tax between the years 1930 and 1938, with the amount of income tax paid, and a fourth column showing the average amount paid. It is as follows:
FARMERS FAYING INCOME TAX Amount.of
Number of income	Average
Year	farmers tax paid tax paid
1930	
2,276	$131,910	$ 57 951931	
653	36,379	55	711932	
249	27,620	110	921933	
262	22,334	85	241934	
416	24,083	57	881935	
694	46,609	67	161936	
921	76,395	82	951937	
1.000	78,081	78	081938	....	1,309	124.836	95	37
The Budget-Mr. Fair

The second table gives for the years 1939 to 1945 the same information as that contained in the one I have just placed on Hansard, and breaks this information down by provinces. The table is as follows:
Returns assessed with tax
	Number of		Tax
Province	farmers		levied
1939-40	Fiscal Year		
Prince Edward Island.. 13	$	4,213Nova Scotia	... 29	1.844New Brunswick . ...	.... (x)	U)Quebec 	... 33	2,743Ontario 	... 671	63,998Manitoba 	... 157	7,389Saskatchewan 	... 123	7,110Alberta 	... 644	61,649British Columbia . ..	... 51	2,603Canada 	... 1,721	151,549Average tax paid,	$88.	1940-41	Fiscal Year	Prince Edward Island.. 4	$	3,300Nova Scotia 	... 13	955New Brunswick	... (x)	(x)Quebec 	... 18	40.592Ontario 	... 569	54,566Manitoba 	... 186	6,992Saskatchewan 	... 437	30,821Alberta 	... 575	59,931British Columbia ...	... 67	7,162Canada 	... 1,869	204,319Average tax paid.	$109.32.	1941-42	Fiscal Year	Prince Edward Island.. 12	$	1.334Nova Scotia 	New Brunswick	... (x)	(x)Quebec 	. . . 49	13,874Ontario 	... 239	20,922Manitoba 	... 107	6,725Saskatchewan 	... 666	59,771Alberta 	... 275	38,155British Columbia . .	.. . 140	9,322Canada 	... 1,488	150,103Average tax paid.	$100.88.	1942-43	Fiscal Year	Prince Edward Island.. 12	$	1,539Nova Scotia 	... 17	5,690New Brunswick ....	... 11	459Quebec 	... 72	5,205Ontario 	... 784	79,834Manitoba 	... 392	34.661Saskatchewan 	.. . 1,544	205.835Alberta 	... 497	63,113British Columbia ...	... 240	43,876Canada 	... 3,569	440,212
Average tax paid, $123.34.
(x) Less than 3 taxpayers, grouped to conceal identity.

Returns assessed with tax
Number of Tax
Province	farmers	levied
1943-44 Fiscal Year		
Prince Edward Island..	70	$ 9,811Nova Scotia 	25	10,784New Brunswick	41	6,833Quebec 	129	20,180Ontario 	1,234	181,270Manitoba 	1,903	176,446Saskatchewan 	2,450	416,737Alberta 	1,060	176,121British Columbia 	659	113,705Canada 	7,571	$1,111,937Average tax paid, $146.87.	1944-45 Fiscal Year	Prince Edward Island..	82	21,573Nova Scotia	83	29,125New Brunswick 	44	5,392Quebec 	251	73,935Ontario 	4,000	810,023Manitoba 	. 5,562	1,012,045Saskatchewan 	3,465	828,167Alberta 	. 1,316	342,379British Columbia 	911	213,069Canada 	. 15,714	$3,335,870Average tax paid, $212.29.	1945-46 Fiscal Year	Prince Edward Island..	, 190	24,209Nova Scotia 	. 56	33,085New Brunswick 	, 72	25,294Quebec 	, 280	59,913Ontario 	. 5,589	1,086.178Manitoba 	. 7,955	1,866,590Saskatchewan 	. 7,958	2,587,632Alberta 	4.459	1,114.000British Columbia 	. 852	317,025Canada 	. 27,411	$7,113,926Average tax paid, $259.52.	In 1945, the best year so far, the percentage	of farmers in the provinces paying income tax	is listed below:	Per centPrince Edward Island	... 2-1Nova Scotia 	... 1-0New Brunswick 	... -3Quebec 	... -7Ontario 	. .. 3-1Manitoba 	... 17-0Saskatchewan 	... 18-4Alberta 	... 12-1British Columbia	... 11-6Today the Minister	of Agriculture told us	that in all of Canada 3-7 per cent	of farmerswere entitled to pay income tax. That, in my	opinion, will give a	better picture of the	condition of Canadian farmers than	any tableswhich could be shown	or speeches made by	people who do not	know what	they are
The Budget-Mr. Fair
talking about. I feel that at the present time income tax levies are too heavy and exemptions are too low. These things certainly help to cut production.
In support of that, I have a table showing production of hogs, which I shall read into the record. These are the figures for the hog population of Canada at June 1 in each of the years mentioned:
1937		 4,016,000
1938	!!	 3,527,000
1939		 4,364,000
1940		 6,002,000
1941	 6,081,000
1942		 7,125.000
1943	  8,148,000
1944		 7.741,000
1945	  6,026,000
1946		 5,377,000
I am sure that when we get the record for 1947 it will show a drastic reduction from the figures I have just given.
I believe that at the present time the heavy income tax levied against farmers is to a great extent responsible for the cut in production. Even at present rates it will be noted that for every four hogs the farmer turns out for himself, after reaching a profit of $500, he must turn out one for Mr. Abbott. Farmers do not relish doing that.
Also the method of paying the bonus on barley, oats and feed wheat does not satisfy farmers who are producing grain. They feel, and properly so, that if they- are to produce grain and feed hogs they are entitled to exactly the same treatment as the man who does not grow grain but feeds it to hogs. In other words, the bonus on feed grains should be paid to the man who raises the hogs. In many cases those who feed grain are much nearer to their markets and have an advantage over those who grow the grain and feed it.
We have quite a number of complaints about farmers having to pay income tax on returns from the production of poultry, eggs, cream and that sort of thing. I have here a sample letter which was sent to me from Vermilion not very long ago. It refers to an article in the Edmonton Journal which advocated the stopping of p.oduction of these small items if the farmers were compelled to pay income tax, and it reads:
I am enclosing a clipping from the Edmonton Journal of December 13, 1946, out of the letter box.
For the last three or four years this has been my idea and I would safely say the idea of at least 95 per cent of the farmers of this district. If our dear friend Mr. Ilsley wants to cut into our profits anywhere from a third to forty-two per cent he better come to the farm and help feed these pigs and milk the cows after we get through working in the fields the usual short eight hour day the farmer puts in.
If the powers that be had the brains we figured they had when we sent them down to look after our affairs they would remove the butter ration in less than six months by simply allowing the cream cheques for pin money for the wives and children of the farmers. I can name any number of farmers who are not milking just for that reason and not bothering to feed pigs in spite of the literary wandering of our pig man, Mr. Gardiner, that farmers make more money out of selling grain.
He goes on to say that he believes he has made his position clear. I am trying to state to the house the stand taken by thousands of our farmers at the present time. Farming is our basic industry and it should be encouraged in every way possible. While newspapers and other records state that our farmers' debt is reduced, and I agree that it is reduced to a certain extent, those authorities who send out those figures must also agree that the farmers' equipment has reached a state where they will have to buy practically a full line of farm equipment just as soon as it is possible to get it. In many cases that will cost the individual farmer thousands of dollars. Farm homes and outbuildings are run down, and many farm homes require electrical and other appliances which are not there at the present time and which should be available to our farm population.
At the present time the prices of our farm products are stabilized to a great extent, but the prices of things the farmer needs are on the increase. There should be a subsidy on the manufacture of binder twine in order to hold down the price. Our farmers are complaining bitterly about the increase in items of production over which they have no control. While the prices of their products are pegged, the prices of things they have to buy are allowed to increase.
An amendment to the Prairie Farm Assistance Act is long overdue, and I hope the Minister of Agriculture will bring in this legislation so that we may have an opportunity to discuss this at greater length. Many farmers feel that this should be on an individual farm basis and in that way many of the injustices now created would be done away with. I have here a brief which was presented to the government on April 16 by the Alberta Farmers Union and the United Farmers of Canada, Saskatchewan section. In their summing up they recommend a four-year average for income tax purposes to replace the present three-year period. Then they say that in the case of dispersal sales of live stock, an equivalent number of animals to those owned on January 1. 1941. be considered a capital asset and not subject to income tax. I believe that request is fully justified. If a man invests
The Budget-Mr. Stuart

money in land and proceeds to grow grain on it and raise hogs and that sort of thing he gets an exemption from income tax on the sale of his land and equipment, but the farmer who buys live stock is compelled to pay a tax on his total live stock sales. I believe consideration should be given to this matter at an early day.
Then they advocate an allowance for labour of farm families in connection with production on the farm and also that the exemptions be raised to $1,200 for single and $2,400 for married persons. In my opinion, those exemptions would meet the situation very well. They recommend also that there be no further responsibility' for collection of income tax on farm wages and that there be a board of arbitration on income tax cases. There are a number of other things which I shall place on the record when we are discussing the several items of the budget.
Before men and women are no longer able to work, I hope that we shall present them with an old age pension of $50 a month at the age of sixty years, so that they will not have to wait until they are ready to pass away. I should like to finish by quoting a few lines as follows:
A Tired Woman's Epitaph Here lies a poor woman who always was tired, For she lived in a house where help wasn't hired;
Her last words on earth were: "Dear friends,
I am going
Where washing ain't done, nor sweeping, nor sewing.
And everything there will be just to my
wishes,
For where they don't eat, there's no washing dishes;
I'll be where loud anthems will always be ringing,
But having no voice I'll get clear of the singing.
Don't mourn for me now, don't mourn for me never,
For I'm going to do nothing for ever and ever.
In conclusion, I am going to advocate once again the adoption of the Social Credit policy which we hope will be put into effect; and, as a means of bringing this about, that the Bank of Canada be used for the purposes the Prime Minister (Mr. Mackenzie King) said it would be used in his famous Saskatoon speech.


Angus MacInnis: Mr. Speaker, on a question of privilege. During my remarks this afternoon I said that the Minister of Finance (Mr. Abbott) had anticipated a depression in the United States. I find now that the minister said "recession" and there is a great deal of difference.
At six o'clock the house took recess.
IMr. Fair.]
After Recess
The house resumed at eight o'clock.



PRIVILEGE


[Stage Direction]
Mr. SOLON E. LOW (Peace River): I rise at this time on a question of personal privilege. My attention has been drawn to an article on the front page of today's Montreal Gazette headed:	"Jaques admits Social
Crediters following 'Christian front' line". The writer, Arthur Blakely, goes on to say:
This will probably come as something of a shock to Social Credit leader Solon Low, but Norman Jaques told the Gazette in another interview that he did not intend to form a wing of the Christian front or the Christian national crusade in Canada "because the Social Credit party is already' doing the same work in this country."
My point of privilege is this. The writer of the article presents an entirely misleading case, and since my name, and that of the movement of which I have the honour to be president, have been brought into what in reality is a private quarrel between Mr. Jaques and some others, I want to make it clear that neither the social credit movement in Canada nor the group of social credit members in this house takes its lead from Gerald L. K. Smith, nor is associated with him in any way. Except for the meagre reports we have read in the press, thirteen of us know nothing about the work Mr. Smith is doing or about the movement called the "Christian Front", which it is reported he heads in the United States.
The social credit movement finds its inspiration in the constructive principles of abundant living as taught by the Saviour of mankind, and in the economic teachings of Major C. H. Douglas of Scotland.


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Muskoka-Ontario), and the amendment to the amendment of Mr. Coldwell.
Mr. A. W. STUART (Charlotte):: In rising to take part in this debate I should like, first, to join with others who have congratulated the Minister of Finance (Mr. Abbott) on the capable manner in which he has introduced his first budget. It certainly must have given

The Budget-Mr. Stuart
the minister a certain source of satisfaction to announce an encouraging budget and a surplus. During the debate we have heard the minister criticized for announcing a surplus, it being described as blood money and taken from the taxpayers of this country, inflicting great hardship. It would be interesting, however, to know what the opposition would have had to offer if the Minister of Finance had declared a large deficit rather than a surplus. I have little doubt that such a circumstance would have given a better opportunity for constructive criticism, and full advantage would no doubt have been taken.
The changes in .taxation in the budget is the portion upon which the greater part of the debate has centred. To many it appears displeasing; to many others it is acclaimed as a popular budget, when it is considered that nine out of every ten taxpayers in the country will receive a reduction of twenty-nine per cent, and in the lower brackets in some cases the reduction is as much as fifty-four per cent. Since 1942 the total reduction in personal income tax is fifty-one per cent, which I look upon as an enormous reduction. For the year 1947, if we take into consideration six months at the present rate and six months at the new rate, a married man with two children with an income of 82,000 a year will pay a tax of $52. The tax for a full year under the new rate would be $36. It would be difficult, I believe, to convince the Canadian people that the rate of tax charged on this income is unreasonable. I would make one other comparison which, to me, is interesting, perhaps owing to the fact that I live on the United States border. A married taxpayer with no children, with an income of $2,000, would pay, under the new rate for 1948 an income tax of $70. In the United States, under the new reduced rates passed by the house of representatives, the tax on $2,000 would be $106. At the present time it is $152, and most of the states in the union have a state income tax in addition to the federal tax.
During the budget debate in 1945-46 and no doubt in other years as well, on many occasions hon. members of the opposition brought to the attention of the house the difference the Canadian income taxpayers were obliged to pay in comparison with the United States and other countries. It is noticeable that during this debate no comparisons have been made in this respect, which would indicate that the tax levied on incomes in Canada was satisfactory in comparison with taxes levied in other countries. An
improved condition such as this is worthy of commendation, but obviously it has received little publicity during the debate this year.
Another thing which I believe took much of the sting out of the debate was the fact that just recently the leader of the opposition (Mr. Bracken) suggested that the income tax in this country should be reduced by 331r per cent. When the reduction of twenty-nine per cent was made the margin between that suggested by the leader of the opposition and the actual reduction which we shall receive left little material for honest criticism. Here I should like to read a letter from a citizen of the United States, which was taken from the Ottawa Citizen of May 6. It is addressed to the editor and is a tribute from the United States to Canada. It reads as follows:
To the Editor of the "Citizen"
Having been born in Ottawa and having been a resident for almost twenty years until a few years ago. I still hold Canada very dose to my heart. My husband and I regularly go up to the Boston public library to read the Ottawa Evening Citizen, and I have always noted the numerous letters from people complaining of the poor state of affairs that exists in Canada as compared with the United States. It is very seldom that an American because of his great pride in his wonderful country will admit to United States deficiency as compared with another country; this is why I send along a clipping from the Boston Traveller in which it is pointed out-
And this is the clipping:
"Canada's economic record through the war was extraordinarily fine. Its excellence did not have to be established by comparison with our own. The Canadians kept production costs under control, kept the cost of living down, avoided the OPA debacle and did their full share in the war without turning everything topsy-turvy at home ... If the Canadians can make ends meet, with social programmes in many cases more advanced than our own, and can cut income tax nearly thirty per cent, is there any earthly reason why this country cannot do at least half as well as Canada? What is there about, that imaginary boundary line which makes a real difference?"
So you at home may be proud of good old "Canuck land" and of the men who have given Canada a record praised and envied by other countries.
Mrs. Charles S. Kennedy.
Another matter I wish to discuss briefly is that portion of the debate that explained little, and I refer to tariff negotiations taking place at Geneva at the present time which are of great importance to this country. I should like to quote a short paragraph from the statement of the Minister of Finance, which appears at page 2560 of Hansard:
I have already referred to the tariff negotiations now taking place in Geneva. These are of the greatest importance to Canada. We hope

The Budget-Mr. Stuart
and expect that out of them will, come sufficient reductions in tariffs to make it practicable to establish an international trade organization and to agree upon a code of international behaviour in regard to import restrictions, export subsidies and other commercial policies. Canada is, of course, prepared to make tariff reductions and reductions in preferences in exchange for tariff reductions by the United .States and by other countries. We do not expect one-sided bargains. We are ready to do our full share.
May I say at this point that I have been tagged a free trader for quite some time, justly so I believe, since I believe in freer trade than exists at the present time.
I well remember going as a boy with my father to Eastport, Maine, and other cities and towns along the coast in the United States. In those days the breakwaters and bridges were not lined with customs and immigration officials. At that time we on the border lived in harmony and the maritimes were as prosperous as any other part of Canada. If you had a few quintals of fish or any farm produce to sell you had little trouble with the officials. In fact, if there was one-and very often I saw none at all

you had no trouble. The immigration inspectors and customs officials did not interfere with you. Purchases were made and you returned home without any interference at the Canadian border. When the same condition comes into existence once more the maritime provinces will again take their rightful place among the prosperious provinces of this dominion. The strangulation of trade by excessive tariffs is responsible for conditions in the maritime provinces today.
My next words will be those of congratulations to the hon. member for Queens-Lunenburg (Mr. Winters), who spoke in this debate on May 6. Many of the problems which he pointed out as having an adverse effect in Nova Scotia would apply to New Brunswick as well. As reported at page 2837 of Hansard of May 6 the hon. member said:
Then, too, we must not lose sight of the fact that many products are manufactured in central Canada under the protection of tariffs, and we in the outlying provinces are forced to buy from these sources goods that we could obtain cheaper from other countries if there were no tariffs.
This condition is in no way reciprocating because the maritime provinces are unable to compete in the markets of central Canada. Owing to our geographical position, the products of these provinces must be disposed of in the markets of the United States and other countries where they can be transported by water, rather than by rail.
This situation is responsible for the feeling in the maritime provinces that we do not have an equal opportunity of advancing as
rMr. Stuart.]
rapidly as other parts of Canada, and that our progress is being retarded by conditions such as this.
At Eastertime I was in the town of St. Stephen, New Brunswick, and in conversation with a government employee of that town, he informed me that he had purchased an electric refrigerator in Calais, Maine, just prior to that date. A duty of twenty-five per cent had been paid and eight per cent sales tax on the duty paid value or 35 per cent total duty. The cost was still S60 below the price for the same article on the Canadian side of the border.
The protection given the Canadian manufacturers in cases such as this is called tariff. To a maritimer it is subsidy, and when obliged to pay the great spread between Canadian and United States prices on articles such as these, which today are not considered luxuries, but necessities, we are "subsidizing" industry in central Canada. I have yet to be convinced to the contrary.
Another selfish attitude taken by manufacturers of central Canada is the discrimination shown regarding prices paid by citizens of their own provinces, and elsewhere in Canada. With the protection given the manufacturer, why should a maritimer be obliged to pay from fifty to a hundred dollars more for a car in Halifax than a citizen of Ontario would pay. At least one price should prevail in every part of Canada.
I can assure you, Mr. Speaker, in my own county for example, the products of Ganong Brothers, St. Stephen, New Brunswick, can be purchased in Vancouver for the same price as is paid in the maritime provinces. The canned goods produced in our canneries, in Charlotte county, are one price to all citizens of this dominion.
This gross discrimination on the part of manufacturers in central Canada should be rectified immediately. Too much advantage is being taken of the protection afforded by way of tariff, or subsidy, which in my estimation are one and the same thing.
Canadian manufacturers are today exporting cars, farm "machinery", electrical appliances for household use, dynamos, and many other manufactured articles. In many instances they are being criticized for exporting goods that are greatly needed at home, and many citizens of our own country are unable to purchase cars and machinery to be used in connection with their business.
In this export market we meet keen competition. Regardless of this fact, however, we are able to procure our proportional part of that export business, and in many instances

The Budget-Mr. Stuart
the export price is much less than the Canadian people are obliged to pay, the manufacturers again taking advantage of tariff protection. I fully realize the absolute necessity of Canada exporting not only manufactured articles, but raw materials as well; our prosperity can usually be gauged by the volume of that export business. This should not be supported, however, at the expense of Canadian taxpayers; and wherever possible they should receive the benefit of reduced cost of production.
As an illustration in this case, I can point out a condition that existed in my own province for many years, and I trust that in doing so I shall not be responsible for another lengthy discussion on nails. In Saint John city, the Pender Company manufacture the greater part of the nails that are used in eastern Canada, and many thousands of pounds were exported to the United States previous to the war. On many occasions I have seen these nails being sold in the State of Maine for a dollar or more per keg below the price charged in Canada.
I am fully aware of the fact that this is called "dumping"; in other words, exporting the surplus below the cost our own people are obliged to pay, and although this method is common practice with manufacturers, it would appear to be a more patriotic duty to pass this saving along to our own people, rather than to those in foreign lands.
I believe it was in the year 1928 that the Mackenzie King government decided to lower the duty on automobiles coming into Canada from the United States. This procedure automatically reduced the cost of the cars manufactured in Canada. Ottawa was immediately besieged with delegations of automobile manufacturers from all parts of central Canada. I well remember the gloomy picture they presented to the government of that day, that if the government insisted on carrying out this policy, the manufacturers would be obliged to close their factories, throwing thousands out of employment, because it was utterly impossible to continue operating with any reduction in the cost of the finished article. Regardless, however, of the presentations made on behalf of the manufacturers, the price was reduced. What was the result? The following year, 1929, more automobiles were manufactured and sold in Canada than in any previous year in our history. Employment in this industry was greatly increased, the volume of business increased, and a saving was passed along at the same time to our people, without industry suffering any undue hardship.
We in the maritime provinces find ourselves in a position, as I have stated, whereby markets must be found outside Canada for our production in both raw materials and manufactured commodities.
At the present time the fishermen of the New England states are strenuously opposing the importation of fish from the maritime provinces into the United States. The protection they are seeking, by way of tariff, would completely bar our fishermen from exporting to that country. Should this tariff be imposed, I hesitate to predict just what would happen to our enormous fishing industry in the maritimes. When at least the fate of sixty per cent of our markets hangs in the balance and could turn adversely, if the United States government so decide, one can realize the seriousness of our predicament. The Minister of Fisheries is aware of the situation and is doing everything possible to have adjustments made as soon as possible.
My own opinion is that the New England fishermen are perfectly justified in asking for this protection, because the tariff regulations in Canada have completely barred them from our markets, while our Canadian fishermen were given every opportunity of competing in United States markets. Why the government of this country took this discriminating attitude has never, to my knowledge, been explained satisfactorily. It certainly was not the welfare of the Canadian fisherman that was given consideration, since in no way could the New England fishermen find a market in Canada. This the fishermen of this country are unable to do themselves.
We hear national unity discussed on many occasions. It is a goal worth striving for, and should be the aim of every loyal citizen of this dominion. But let us not lose sight of an even greater accomplishment-international cooperation and good will. In striving to attain that goal, the greatest obstacle one will be obliged to encounter is the tariff wall, the obstacle that has been responsible for wars, depressions, and world-wide calamities, because the imposition of tariffs is beneficial to a minority group, but detrimental to the backbone of our country, the primary producers. When that wall has been scaled, we shall have gone a long way in assisting the custodians of wrorld peace and happiness who, I believe, are sincerely seeking a solution of world problems.


Mr. D. G. ROSS (St. Paul's):: In rising to take part in this debate my first words must be of congratulation for the splendid way in which the new Minister of Finance (Mr. Abbott) presented his budget to the house.

The Budget-Mr. D. G. Ross

I must say that it was a difficult task for him to perform, because he did not have anything to give and he gave it well.


Douglas Charles Abbott: The same to you.


Douglas Gooderham Ross: That remains to be
seen.


Ian Alistair Mackenzie: As one Doug to another.


Douglas Gooderham Ross: The Minister of Finance reminds us what the. Canadian people could do under the stimulus of war. Of what they did the Canadian people can be justly proud. Their accomplishment was a magnificent one. But the war is over and the stimulus is gone.


Ian Alistair Mackenzie: No.


Douglas Gooderham Ross: It has been over for two years-[DOT]


Ian Alistair Mackenzie: It is not over.


Douglas Gooderham Ross: -and the people are tax weary. The cost of living has risen by thirty per cent since 1939. Those are the bureau's figures, which take into consideration only the bare necessities of life. I am sure the cost of living is much higher than that. As I said, there is little cause for satisfaction amongst the people of Canada with the insignificant reduction in taxes which the people will have to put up with. What was so necessary, namely, the replacing of the wartime stimulus with a peacetime stimulus by way of relief from taxation, is conspicuous by its absence from this budget.
Everybody knows that in order to maintain our prosperity in this country production is needed and also trade. That is the only way the cost of living can be reduced. The more rapid is the exchange of goods and services as between the individuals of the country, the more prosperity and the higher the standard of living. I said that it was the people of Canada who were responsible for Canada's splendid war effort. They were responsible for forcing the government to a full-out war effort in the early days. Let me remind the minister that it took the government a long time to get going. Between 1939 and 1941 practically nothing was done. It was thought that it was a phony war, that Canada was going to fight a moderate war, a comfortable war; that is what was told us by some of the cabinet. The house was told that we could not build tanks, that we could not roll steel for the armour plate, and that we could not do many other things. It was only after the fall of France that the government woke up and there was a real stimulus felt, because with the fall of France it was thought that
we might have to defend our own shores and that the British fleet might have to come to this side of the Atlantic. There was a stimulus of a panicky nature thrust upon us when we realized how badly alarmed they were in Great Britain, how ill-prepared they were, and when we realized the great strength of the nazi regime. But all through there has been lack of foresight on the part of the government. With all the facilities at the command of the government they should have known- and I am sure the government knew it-and we should have been told that war was inevitable and we should have got busy and prepared for it. On every person's tongue at that time was the old saying, "Too little and too late."
At last, under this stimulus of public opinion and the continued prodding of the official opposition at that time, the government started to build plants and to aid in the extension of others throughout the country- in and around Toronto such plants as Malton, de Havilland, Research Enterprises, Small Arms, Massey-Harris and many others. But no thought was given to the housing problem, to where these thousands of employees who came in there were to live. Time after time the then Minister of Munitions and Supply (Mr. Howe) was asked what was to be done about housing these people who were flocking into the metropolitan district of Toronto. The minister lacked foresight and so did the government. What happened? Just what we said would happen. That was that we did not have room for the accommodation of these people. Every time we asked the government to do something, they said it was up to our own people. Still these plants were on the outskirts of the city. Still the government lacked foresight. If they had done something about the matter and provided housing for these people on the outskirts of Toronto, this problem would have been solved. It was not our job. They all flocked into the centre of the city and conditions of living were terrible at that time, and still are. These people are still there and they are mostly in the city, although some of them are out a little bit. But no thought was taken for that. If the government had put up houses at that time around where these plants are, the cost of construction of those houses would have been half what it is today, and we would have had these houses now, which we have not got. There was plenty of labour at that time. In the early stages there were carpenters and so on who could have been used and we would not have had this problem we have at the present time.

The Budget

Mr. D. G. Ross
The reason I am recalling these things is that I feel apprehensive about the future of this country. What are we to expect in the days that lie ahead? Is there to be the same foresight used by this government as was used before-too little and too late? I note the minister's rosy picture of the present day and of the immediate future and I congratulate him on his cautious forecast for a longer period, but I do not agree with him to the full. He says that Canada is enjoying a degree of prosperity never exceeded before in living memory. That may be so, to an extent, but it is difficult for a family whose salary is SI,500 a year and under or even higher than that-$2,000 a year and under-to take a rosy view when the cost of living has risen so high and taxes are still so heavy. I shall have more to say about that later. Then again, the minister says:
We look forward to a year of high production and incomes. Indeed, we would appear to have ample excuse for self-satisfaction and easy optimism, if we took account only of our own immediate situation here at home. Our own position is favourable and encouraging, but beyond the Atlantic and Pacific half the world works slowly and painfully to rebuild its ruins, and until much more progress has been made in both economic and political aspects of international affairs, we cannot afford to be complacent.
I know it is difficult to forecast the future, but with all the facilities and the maehinery of government, the brain trust, the statistical department and the hordes of other officials, some idea should be forthcoming but we have not got it. Wte must remember that our prosperity depends on the maintaining of our foreign trade. Thirty-seven per cent of Canada's whole business must come from that source. Now, what is the situation? I have a statement here I should like to table, if I might have the consent of the house, showing the loans to the various countries.


James Horace King: Order. Has the hon.
gentleman unanimous consent to place the document on Hansard?


Thomas Reid: What is he tabling?


Douglas Gooderham Ross: It is a statement of the loans to various countries, and how much of them has been used up.


Some hon. MEMBERS:: Agreed.


Douglas Gooderham Ross: The table is as follows:
Loans
United Kingdom	 $1,250,000,000
Used	 540,000,000
$	710,000,000
Belgium	 $ 100,000,000
Used	 51,000,000
$	49,000,000
		 $	60,000,000 17,634,646
Used 			
	$	42,365.354
Czechoslovakia 	 Used 		.... $	19,000,000 3,875,448
	%	15,124,552
France 	 Used 		.... $	242.500.000 145.400.000
	$	97,100,000
Netherlands 	 Used 		.... $	125,000,000 66,973,321
	$	58,026,679
Netherland Indies ....	.... $	15,000,000 5,400,000
	$	9,600,000
Norway 		.... $	15,000,000 5,400,000
	%	9,600,000
Russia 		.... $	3,000,000 2,866,098
		133,902
Total amount of loans $1,829,500,000 Used	 838,549,513
Left	$ 990,950,487
It will be seen that we lent $1,250,000,000 to Great Britain, which loan is being rapidly used up. Loans to other countries are in a similar position; in fact we are buying for cash and selling for credit; we had an adverse balance of trade with the United States. How good is the credit? What will happen when the loans are exhausted? It seems to me that this must give us food for thought. As will be seen, these loans total SI,829,500,000. The amount used so far is $838,549,513, leaving a balance of $990,950,487. So it will be seen that about half these loans is gone. Nearly all the loans were made in 1946. To my mind, if we take these figures into account, Canada's trade position is not so rosy as it may appear. Our prosperity will be with us just as long as those loans last. The credits were given, of course, for the purpose of helping these countries get on their feet. This nation cannot continue for ever to give credits to these countries. Our future can be gauged only by the progress made by these countries in rehabilitating themselves. In the meantime we are holding ourselves up by our boob-straps.
Though our position is considered by many to be strong for the present, as I see it the position is as follows. We have a favourable balance of trade with all countries other than
The Budget-Mr. D. G. Ross

the United States, excluding mutual aid, amounting to $954,000,000. Our adverse balance of trade with the United States, excluding mutual aid, is $496,000,000, or $603,000,000 including mutual aid. The credits we have given various countries have been used to the extent of $838,550,000. If we take this away from the $954,000,000, our favourable balance of trade with all countries other than the United States, and this leaves us a favourable cash trading balance with the world of $115,-
450,000,	or an adverse cash trading balance with the world, excluding mutual aid, of $380,-
450,000,	or an adverse cash trading balance with the world, including mutual aid, of $487,000,000.
I do not think this is anything about which we should be complacent, especially when we remember that our adverse cash balance with the United States was $603,000,000. Under the circumstances it seems obvious that we cannot increase that unfavourable balance indefinitely. From this one can see how dependent we are upon the economy of the United States, and upon the British commonwealth. I now ask this question. What steps have the government taken to improve our trading balance with the United States? Either we must have more exports to that country or quit buying from it. What are the prospects for the absorption of more of our goods by the United States market? Under modern conditions of exchange we cannot get the same amount of convertible money that, we could get previously, because we cannot get it from the continent. Certainly there is nothing in this budget which indicates that any steps whatever have been taken along these lines. Do we have to wait for a report from the Geneva conference? How long will that be? How long will it take to implement the results of that conference? How much freer will trade be after the Geneva conference is over? Just here I should like to read a short note of warning by the governor of the Bank of Canada:
Canada cannot continue indefinitely to sell on credit in overseas markets while she is incurring a substantial cash deficit in her balance of payments with the United States.
Then later he said:
During the transition period, while our overseas customers are being financed largely on credit, we shall have to meet most of our balance of payments deficit with the United States out of our own resources. Fortunately we reached the end of the war with large United States dollar reserves. This gives us the opportunity to follow now the kind of multilateral non-restrictive trading policy which it is so greatly in our interest that other countries should adopt. It is obvious, however, that the successful functioning of this policy depends

on our being able to realize, in due course, sufficient cash-i.e., freely convertible currency -from our overseas trade to meet our requirements in the United States.
The extent to which overseas countries can pay cash for their net imports from Canada will depend in turn on how soon they can restore their capacity to produce and to export to cash markets.
I do not want to be a prophet of gloom, but unless there is far greater acceleration in the rehabilitation of these countries abroad I am afraid we are in for a bad time. How vigorously is the government prosecuting its trade with the countries of South America? The one saving factor at the present time, of course, which makes for full employment is the tremendous amount of construction going on; but the construction industry can be responsible for the consumption of only a small amount of wheat, bacon, cheese, hogs, beef and other agricultural products, and other export markets must be found. In addition, some of our manufactured goods will have to be absorbed by other countries. Is the government putting forth its best efforts in fostering trade within the British empire and commonwealth? I hope it is. Somebody must buy these products or we are in for a bad time.
Now I ask, is the government prepared to meet the onslaught of a sudden depression? There is no war stimulus now, and the stimulus of production is lacking in the budget. Having regard to the past record of the government in matters of' foresight, one cannot help but be apprehensive. Will the government wait and see until a depression hits us? If a depression comes in this country, it will come quickly and a government policy must be ready to have work started practically the next day, not next year. Is it again to be a case of too little, too late? There can be no excuse for the government of this country when it does not call another dominion-provincial conference. For its failure to do so, it must take the consequences, and the blame must be placed squarely on this government's shoulders.
When I read the minister's remarks about a surplus, I was indeed surprised. When I first heard him my impression was one of agreeable surprise. "Here" I thought, "is where the people of Canada are going to get some real relief from taxation, at last." He said that we had just ended a year in which our accounts showed a surplus, a surplus larger than the accumulated total of all surpluses in history. And in that fine ringing voice of his he made all hon. members on

The Budget-Mr. D. G. Ross
that side of the house thump their desks. I thought about how happy the people would be.
But then we found that he did not have a surplus, at all. It has been stated several times that there was a deficit of $20 million, and a return of capital of $372 million, which, of course, should be used to pay off debt. It was not, as the minister said, a surplus larger than the accumulated totals of all the surpluses in our history. There was no surplus at all; and that, in spite of the fact that during that time the payment of $50 million or $60 million at least in subsidies had been discontinued, and despite the further fact that the actual revenue exceeded the revenue forecast by $509,271,000. In 1946 the minister budgeted for a deficit of $260 million, so that it was in excess by $249 million over the forecast. Still they had a deficit.
Of course I am aware of the fact that there are some non-recurring, temporary and abnormal expenditures, some of which were mentioned by the minister. I shall not read his words in this respect, but shall simply point out that he budgeted for a surplus of $190 million over expenditures. Has he taken full cognizance of non-recurring expenditures? Does the government propose to pay off some of our national debt ? We should know it now. Or is it anticipated that there will be a larger surplus by the end of this year, or just before the next general election? Will there be a whopping big surplus which can be used for political purposes? The surplus budgeted for is about $190 million or $185 million. I see by the papers that it will be less than $190 million by $10 million, now that the premier of Nova Scotia has been coerced into signing an agreement. I notice, by the way, that the premier is not pleased about it.
Mr. Mcl'LRAITH: He is a pretty good man, though.


Douglas Gooderham Ross: This evening's issue of the Ottawa Journal states this:
Acceptance of dominion government financial proposals on the basis of new concessions made by Ottawa-
And so on. It refers to "new concessions." Some more of the auction sale going on. What a time they are having with him! And I wonder if the government has an auctioneer's licence.
Then, as reported in the press, Mr. Macdonald said that it is his intention-
-of continuing his fight for "just provincial demands and claims" and quoted the words of a ringing Scottish war song: "They have not seen the last of my bonnets and me."
And, believe me, I don't think they have seen the last of him.


Ian Alistair Mackenzie: All the blue bonnets are over the border.


Douglas Gooderham Ross: What will be popular with the people of Canada? The popular thing would be a real effort on the part of the government to reduce ordinary expenditures.
I realize, of course, that there are some necessary uncontrollable expenditures, but there are others which are really unnecessary and which are controllable.
Then, as to the matter of extravagance, the government is still so war-minded that it continues to think in terms of war finance. What is a million among so many? What is a hundred thousand, even? It does not make much difference. It seems that a hundred thousand is just chicken-feed these days. That is the trouble with them; they cannot get down to brass tacks so as to see that if you keep a dollar off here or there you will save the taxpayer some money.
I now come to a point about which I must complain. It seems to me impossible to get a straight answer to a straight question in the house. On May 31, 1946, I received a return to a question I had asked in the house, as follows: "What is the total number of employees of the government of Canada including employees of boards and commissions appointed by the federal authority as of March 31, 1946?" And this second question was asked, "What is the total amount of salaries, wages and allowances paid to such employees in March, 1946?
This return left out War Assets Corporation and the harbours board. Of course War Assets Corporation is, I suppose, just chicken-feed. Information respecting the harbours board came to me afterwards as a supplementary, but I had to dig up the information about War Assets Corporation. I knew that they had employees, and that they were spending money.
This year I asked exactly the same question, but added the words "and corporations". Of course all employees of crown companies are employees of the federal government; there can be no question about that, and that includes even the Canadian Broadcasting Corporation. But the Canadian Broadcasting Corporation was not included in this return, despite the fact that all employees of crown companies are employees of the federal government.
I do not know even yet whether the return is complete; indeed I believe I can say it is not complete, However, I shall compare the figures as best I can, from what I have at my disposal, and I shall give the totals which, it seems to me, are important. I shall not give details respecting individual items. Perhaps

The Budget-Mr. D. G. Ross

I might add that the hon. member for Peterborough-West (Mr. Fraser) asked a similar question, but the figures he received do not jibe with those I received. Some of the figures are the same, but not all of them. He asked for the number of employees as at January 1, 1947, and my question was as to how many there were on December 31, 1946. There was a considerable decrease in respect of several items in only one day.


Mr. McILRAITH:: That is all right, it was the end of the year.


Douglas Gooderham Ross: While I am speaking about this matter of returns, I should like to know why it is that a minister of the crown can obtain figures so quickly. Of course his figures refer only to the civil service of Canada, and they do not refer to the number of employees. It took fifty-two days for me to get an answer to my question when I asked how many people were employed by the government of Canada. The Minister of National Revenue (Mr. McCann) made a great play in the house about the reduction in the number of civil servants. Well, those were civil servants. But what the country wants to know is not so much with respect to the number of civil servants in the country; the people want to know the reduction in the total number of employees of the federal government. That is what they are interested in. They want to know how much money we have to pay them. Despite the fact that the minister showed a reduction of 21,000, that still represents an increase of 52,000 since before the war.
Then, here is an interesting fact. When the minister placed his figures on Hansard last Friday he left out the figures for all corporations. In addition to that, ten other departments were left out. I cannot understand it. In the return which I received some smaller branches were not included, such as the House of Commons, the library, the Senate, the international joint commission, the tariff board and the Veterans' Land Act. There were 2,141 people not included in that return. It just does not make sense. The sum total of the whole thing is that we have 173,961, plus the 2.141; that is the total taking into account the employees of all crown companies and the ones omitted from the return. We paid them at the rate of $317,544,000 a year, leaving out the 2,141 employees. On March 31, 1946, we had 148,711. not including those in the House of Commons and so on, and we paid them $254,865,000, which is not chicken-feed. When we consider that in March, 1944, 
we had only 145.500 and in March, 1945, we had 149,700, we will realize the increase there has been in that length of time.
As I have said before, there seems to be very little effort on the part of the government to make a real reduction in the number of people employed in the government. We do not know whether in the case of those who were left out of the return there has been an increase or a decrease. There is no use in putting stuff on Hansard like the minister put on the other day, because it gives a false impression of how many people are employed by the government and have to be paid by the taxpayers. If the minister wants to put it on he should take the return that was tabled on March 17 and make a comparison. He will then get somewhere. It is all very well to say that there is a reduction in the number of civil servants, but we know there are lots of people employed who do not even belong to the civil service. One thing about it is that there is one government employee in Canada for every seven people.*


Brooke Claxton: That is not correct, and I should like to know where the hon. member got that figure.


Douglas Gooderham Ross: It was tabled in the house.


Brooke Claxton: The figure is about 1-24 per hundred in the ease of federal government employees.


Douglas Gooderham Ross: You had better get the return and look at it.


Brooke Claxton: The per capita rate in Canada is lower than that of any other civilized country.


Douglas Gooderham Ross: It is roughly 179,000 and you can divide that into 12,000,000; perhaps my arithmetic is not very good.


Ian Alistair Mackenzie: How does that work out?


Douglas Gooderham Ross: I do not know.


Brooke Claxton: It is one zero out.


Ian Alistair Mackenzie: Only 1,000 per cent wrong; that is all.


Douglas Gooderham Ross: 
James Horace King: I am sorry to interrupt the hon. member but he has exhausted his time.


Douglas Gooderham Ross: I have a few seconds more. I just wish to say a word about dominion-provincial relations. We know that certain agreements have been signed. We do not know what they are. Are they all the same, or is each one different? If so, what are the variations? I do not think parliament should be kept in the dark as to what they are. The Prime Minister (Mr. Mackenzie King) has talked so much about national unity. Why not let us have real national unity? Let him practise what he preaches without coercion. Canada must be kept a strong confederation with the least centralization of power in government. Confederation was not consummated in secret, but in the spirit of compromise in the open. Two great statesmen helped by another; Sir John A. Macdonald and Sir George Etienne Cartier, helped by the Hon. George Brown who sank their prejudices for the good of Canada, were responsible. The opportunity is there for the Prime Minister to emulate their example. The consummation of a reconfederation is devoutly to be wished.


Mr. LIONEL BERTRAND (Terrebonne) (Translation):: I don't propose to speak at any great length, Mr. Speaker. I am- not in the
The Budget-Mr. L. Bertrand

habit of doing so. I do make it a habit, however, to seek some novel, original angle, and present, it as briefly as possible. While my few remarks shall bear solely on the matter of income tax, and possibly imply a measure of criticism, I do wish to point out at the outset that they are not meant to cast any reflection on the hon. the Minister of Finance (Mr. Abbott), whose ability is now a by-word and to whom the people of this country are indebted for the budget under review, nor the hon. the Minister of National Revenue (Mr. McCann), whose worldly wisdom and public-spiritedness are so widely appreciated. They do aim, however, at drawing those ministers' attention to a few peculiarities which, in the matter of income tax, appear to me unjustified and are a cause of discontent among the people.
I fully realize that the income tax district offices, the one in Montreal for instance, have had and still have more work than they can handle. As a result of wartime full employment, high wages, lowered basic exemptions, and compulsory savings, from 1941 to 1946 the great majority of wage-earners were subject in the first place to tax deductions at the source and, in the second place, were required to file an income tax report prior to April 30 of each year. Now, according to whether deductions at the source had been too large or too little in relation to earned income, income tax reports have meant a refund or a request for additional payment. In some cases, where reports were assessed only after two or three years, it was only at the end of those two or three years that the individuals concerned were sure that their report was in order. Yet, if the taxpayer in filing his report has made a mistake because the form was too complex for him or for any other reason, he finds, in the case of a claim, that he must pay over and above the amount required, additional interest amounting to several^ dollars. Had the return been assessed immediately, that is to say during the same year, the interest claimed would have been much lower, but as the months slip by, interest charges accrued which means that the taxpayer must pay them in full simply because the assessors did not find time to do their work sooner.
It will be claimed that from the governments point of view, deduction at the source represents the very best method of collecting income tax. Granted. Still, the business man, whose expenses, even of a current nature, can easily be taken into account as a part of business expenditures-an advantage which is not afforded the small wage-earner-files his return only during the four months which follow the end of the calendar year. It may be 
objected that if wage-earners filed their return only at the end of the year or on April 30 of the following year, it might prove difficult or impossible to collect the heavy taxes due. This also I admit, but for the very reason that the wage-earner pays his income tax by weekly or monthly instalments, he deserves special consideration. Personally, I feel that administrative zeal overreaches itself by claiming interest from a taxpayer, particularly if the latter is in no way to blame for the delay which is the responsibility of departmental officials, and particularly if it is obvious that he simply made a mistake and has not the slightest intention of swindling the dominion treasury.
In my constituency, several cases are, to say the least, rather peculiar and I am sure that the same applies elsewhere. Several taxpayers have received notices of assessment, even recently, for income tax returns filed, say in 1943; in addition, they are requested to pay an interest which appears to have been fixed rather arbitrarily. On the other hand, several individuals have been requested to pay money for the year 1945-plus interest of course- and threatened with penalties if they fail to do so; the government, however, owes them money for the year 1944, but fails to make a refund, although it certainly will refund the money some day, but without paying any interest. There should not be one law for rich and one law for the poor. I wish to suggest a few things to the government which are prompted by my eagerness to help the small wage-earners:
_ (a) In my opinion, the assessment of the income tax return filed by salaried persons, that is those who pay the tax at the source, should be made within twelve months following the date on which it is filed.
(b)	Any government claim in connection with this return should be made also within twelve months. If I suggested that there should be no claim for interest, the government would immediately point out that such a course is impossible. I bow to their decision, but I wish to add that when the claim is made after the twelve months term, which I mentioned before, it should not include any interest-that would be the government's penary or at least only the interest accrued during the year involved.
(c) Any refund should be made by the department within twelve months after the income tax return has been filed. If there is any longer delay, the taxpayer should secure the same rate of interest which would be charged to him were he in default.

The Budget-Mr. L. Bertrand
Some may look down upon those suggestions. However, they are of general interest and have, I believe, the merit of not having been made frequently in the house. The government sets a definite date for the filing of income tax returns. Well and good. But the taxpayer is entitled to similar protection. If he claims a tax refund, I do not see why the Department of National Revenue should not also be required to discharge its obligations within a specified period.
I shall even go further. In my opinion, if during twelve months the rvage-earner has been deprived of the interest on his money, due to the fact that, his income tax was deducted at the source, he should be entitled to a further consideration. It might for instance relieve the taxpayer from the obligation to pay his tax if, once his report has been filed, the total unpaid balance is under $50. It might also take the form of a deduction, from the total tax payable, of a sum of $25 to $50, according to salary earned, which would compensate the wage-earner for his interest losses and certain other general expenses of a social character that the business man can easily claim as expenses of management but which the wage-earner must absorb without any compensation whatever.
I have a further suggestion. I have frequently got in touch with the district office, and asked that certain claims for fairly large amounts, made by the income tax department after several years' delay, might be paid by monthly instalments. I secured cooperation. However, many are the people who currently complain that the district collectors' offices are too strict when it comes to exacting payment of claims, that they demand payments that are too heavy to bear, that they bring before the courts people the good will or the temporarily straitened financial condition of whom they have refused to admit. I shall not remain silent when wage-earners of my constituency are ill-treated by the collectors' offices, especially when claims which should have been presented within fifteen months after the filing of the income tax return, are sent only at the end of three or four years. The cost of living has gone up, the wages are lower than during the war years and the financial position of a lot of people has been seriously altered in the last two years. I believe each district office should have a special department, made up of a few employees answerable directly to the national revenue department at Ottawa, whose duty would be to consider complaints from taxpayers who receive claims and who are not in a position to pay them in a. lump sum. Such
a board would examine cases on their merits, making with the people concerned whatever arrangements would b# satisfactory to both parties. Where payment is made by instalments, the interest which is still collected on the unpaid balance

at the rate of 7 per cent I believe-should be cancelled.
I felt it my duty to mention those facts, which give rise to a good deal of dissatisfaction among the people. I think the government should take them into consideration. I believe that the Ministers of Finance and National Revenue will be sympathetic. As regards the budget itself, it gives me much satisfaction. I should have preferred higher basic exemptions; however, I appreciate as a significant step the new scale of rates which means a material reduction in the tax. I would have hailed the abolition of the tax on soft drinks, and I feel that the luxury tax should have been, if not entirely abolished, at least considerably reduced. Some other forms of relief should also have been given. The government have felt that in 1947 they had first to help the people with small and middle incomes, postponing until next year, as stated, relief for industries and corporations and important cuts in several indirect taxes and levies.	The present budget gives direct
encouragement to people in the lower income brackets. No one could question that. That is why the working class and the people with small incomes are satisfied with it, especially since family allowances paid in 1947 will no longer be subject to any deduction or recovery. Quite a step has been taken in the right direction.	The Minister of Finance deserves
commendation; I ask him, on behalf of my electors, not to swerve from the right path he has just taken.
(Translation):


Mr. R. R. KNIGHT (Saskatoon):: Mr. Speaker, may I at the outset congratulate my hon. friend from Moose Jaw (Mr. Thatcher) on the fine speech he made in the house a few days ago and on his pluck in using the French language here. That was very difficult for him as it is for me tonight.


Mr. LESAGE:: One would not think so.


An hon. MEMBER:: You are doing very well!


Robert Ross (Roy) Knight: I cannot speak this beautiful language fluently, but I am able to read it fairly well and I listen to it with pleasure when my hon. friends opposite make speeches, but I have no chance to speak French, and I need practice.
Tonight, I am expressing myself in French to congratulate Les Compagnons de Saint-Laurent. Montreal troupe that won the trophy
The Budget-Mr. Knight

awarded during the drama festival held in London, Ontario. They performed Moliere's beautiful play: Le Medecin malgre lid, the first which I read in French.
I am also happy to note that Mr. Bill Walker, from my province of Saskatchewan was judged the best artist of the festival.
Now, Mr. Speaker, let us get back to business; the budget must be discussed, and with your permission, I shall continue in English with which language I am far more familiar.
(Text):
The budget is a distinct disappointment, first of all, to those who looked upon it to reduce some part of the cost of their living. That cost of living has been steadily rising and still rises month by month. These people thought they would get some relief from the budget but they got none. The excise tax, the luxury taxes and the sales tax remain the same and the cost of living continues to go up. These taxes I have mentioned must concern the great mass of the people-people who perhaps pay no income tax at all or pay very little. They must, however, buy groceries and clothes and must pay rent, and practically all their income is used for that purpose. They usually have no savings, no war bonds, and such of these as some people did gather during the war years they have had to sacrifice to bolster their wages or their small salaries so that the bonds have gone back into the hands where they usually repose.
I wish to name here some of these objectionable taxes. First, there is the tax on the consumption of electricity. I have already on another occasion brought to the attention of the administration the inequity of this tax, because it is applied on the amount of money, on one's electric bill, rather than on the amount of the electricity consumed. This means that a person in a high cost of production area like my own is paying much more for electricity, in point of tax, than the person in an area of low cost of production such as Ottawa. This tax, though not the method of its application, might have been defended in the war years on the ground that it conserved electricity; but, now that the war is over, it is still discouraging the use of that source of energy, and that is a result which is no longer to be desired, because electric light and power should be cheap to everyone.
We have heard much about the prices of chocolate bars and soft drinks. I do not want to labour a point that has already been covered by other speakers, but I feel, in justice to those who have written to me on

the subject, that I should here bring forth the views of my constituents upon the matter.
I think I should state that they consider that the present would be a good time to get rid of these nuisance taxes, which bear particularly heavily upon youth and upon school children. The amount of pocket money which the school children have has no doubt been decreasing in proportion to the amount of money in their parents' pockets, and that latter is a decrease for which this government must accept some share of the responsibility. Everyone would like to see an increase in production and in the use, too, of consumer's goods, but we find standing in the way of that another tax which could very well be reviewed, and that is the tax on many goods sold by jewellers and hardware merchants.
Young veterans trying to establish themselves in their homes are hard to convince that an alarm clock is a luxury, or that knives and forks belong to the same category. Surely the tax upon those things should now be dropped and even the tax on some of the real luxuries, on the ground that it is about time that people should be allowed to get some of them after the long dearth of the war years.
Having concluded, then, that this budget has done nothing to reduce the cost of living, we need not be surprised that everywhere there are rumblings of demands for increased wages and salaries. I was pleased to see that the public school teachers of my own city of Saskatoon were granted an increase of $100 a year the other day; and it is stated quite distinctly in a newspaper that I read that it was given out of recognition of the steadily increasing cost of living. This general demand for an increase in wages and salaries has been brought about by one thing, and by one thing only; that is, the mark-up on the price tags in the stores.	.
Having discussed what the budget did not do, we might look for a moment or two at what it did. The reduction of income tax to be paid by the individual was widely heralded, I think perhaps more so than was justified. The minister gave the figures of the reduction on a percentage basis, and on that basis it looks very fine. I think it went as far as fifty-four per cent on some of the smaller incomes. But when you translate that percentage reduction into dollars and cents, you do not buy very much with the proceeds. What does this loudly heralded reduction mean, for instance, to the single man in the lower bracket who earns $800 a year? I mean, what does it mean in money? Well, beginning with next July, this man will get a reduction in his tax of exactly fifty cents

The Budget-Mr. Knight
a month. How does that look in view of the increased cost of living of which I have spoken? Someone has pointed out that the family of four earning $150 a month who might hope to enjoy a reduction of nineteen cents a week, if they live until next July, actually pay out many times that amount a week in increases in the price of food.
My main criticism, then, of this feature of the budget, is that the consumers of the country, and particularly the consumers who cannot afford it, are being mulcted to build up a surplus, and to pay substantial sums by way of reduction in income tax to those who enjoy the higher incomes; and I might say here that I do not mean those few who have incomes of $200,000 or whatever was the amount that was discussed here this afternoon. This money that is being used to reduce the tax on more fortunate people's incomes is being found in part by the removal of government subsidies on many essential commodities like sugar, milk, tea, soap and things of that kind, and all this while the government contemplates complete removal of the excess profits tax during the current year. If we look at the budget from that angle, it furnishes no relief to all those people who are not in a position to pay income tax at all. or to those who are in the low brackets of income.
This idea that the tax was reduced most in the brackets of the lower income is just an illusion. These last-named people should not be paying any taxes at all, and that brings me to a statement of my belief, namely, that the government should have reduced taxation by raising the. exemption, in the case of a single person, to at least $1,000 a year before he would have any income tax to pay and, in the case of married persons, to $2,000 a year upon the same terms. That would, of course, have reduced further the number of people who pay income tax. The number of such now, as the minister admitted in his speech, is already less than fifty per cent of those earning incomes. That is a serious admission of the low standard of living of these Canadians in a land of plenty, in what has been described as the peak year of all peak years. There is no indication that the minister or the government to which he belongs has any remedy to meet that situation. Indeed, he rather implied at pages 2548 and 2549 of Hansard that the situation would get worse. It is the apparent lack of any such plan or any such remedy that furnishes us in the C.C.F. with our greatest ground for criticism, for there is no apparent provision for a social service programme.
It is a long time now since the dominion first met with the provinces to work out something for their mutual benefit, but the government is still drifting and is doing no planning, or at least there is no evidence of any. There should be blueprinting of a social service programme and grants should be made by way of provision for research and for such planning. Of course the government lays the blame for the failure of the conference on certain other quarters, and I may say that with that view I largely agree. But the fact that the blame is not altogether their own does not absolve them of their responsibility. They are the party which is charged with the government of this dominion. The government should enter into further agreements for the provision of this social security with the provinces that have already signed. I was glad to see by my paper today that Nova Scotia has joined the number of those with whom an agreement has been reached.
The government points to the amount of money in the savings banks and in bonds as a backlog of purchasing power in the hands of the people. Well, fifty per cent of the people of Canada have no such backlog and they are the people who spend their all on consumer goods. The people who have this backlog are not spending it on consumer goods. They are looking around for places for profitable investment of those funds, investment which will in turn produce more consumer goods but will not increase the purchasing power which is necessary to buy them. When that condition exists, we are in danger of the oft-predicted depression, or as the Minister of Finance (Mr. Abbott) put it this afternoon, recession. If and when that occurs, it will find us again a nation divided, with no over-all plan to meet it.
Having criticized the budget, I should like to turn to some of the criticism of it which has come from the official opposition. May I say that I have sincere sympathy, in a personal way, with the hon. member for Muskoka-Ontario (Mr. Macdonnell) who spoke for the official opposition. I have sympathy with him because he was suffering from ill-health. I see that he is not in his seat tonight, and I sincerely hope that he has made a complete recovery. But I must say that he did not feel any more feeble than was the material of his speech. While comparisons are invidious, I cannot help comparing that speech with the concise and virile statement made by the hon. member for Rosetown-Biggar (Mr. Coldwell), who criticized the same budget, but who did so from a totally different viewpoint.
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I was interested in the reference made by the hon. member for Muskoka-Ontario to what he called the middle class. This he defined as made up of those whose incomes were between $3,000 and $7,500 a year. May I tell him, although he does not need to be told, that in terms of money-and those are the terms which he understands-that is not the middle class of this nation. As a matter of fact, the number of people who receive incomes of the mean of those two figures-that would be $5,250-or, say between $5,000 and $6,000 according to the Canada Year Book, in- 1942 was 8,390. In 1943 there were 9,691; and these are the numbers the hon. member for Muskoka-Ontario characterized as the middle class people of this country the population of which is in the neighbourhood of eleven million. I was interested in this reference by the hon. member to classes, interested, too, in his plea for better interest rates so that those who do not work could have a better standard of living from their investments. The word "class" coming from the hon. member has some significance, since he is a leader in the Tory party, particularly when it is coupled with the little slip he made in the house when he characterized the electors as stupid. I know that was just a slip of the tongue, and perhaps he should not be held to account for it, but taken together with the other matter it has perhaps some significance. When the hon. member was a boy this word "class" was in very common use and had a very different meaning. The class to which one belonged in those days was not altogether a matter of the possession of money. In those days they spoke of such things as birth and breeding and culture, but now my hon. friend falls into the error of which he accused the Minister of Finance in making his rebuttal speech the other day, when he said in reference to the minister, "He talks of nothing but money, money, money." I might say to some of my hon. friends of the Tory party that this is the third session I have been in this house, and since I have been here some of them have discussed little but money, money, money.
So my hon. friend designates the middle class as those who are in possession of incomes of between $3,000 and $7,500 a year, I presume irrespective of how they get it. In his speech the hon. member referred to this middle class -and I want to make it perfectly clear that the term is his-as the backbone of the country. I was reminded of a conversation I had with an old Englishman once as we stood resting our oxen at the end of a furrow. He had been a gardener on some old country estate, and in conversation with me one day about conditions in England he used an

expression very like that of the hon. member for Muskoka-Ontario, when he said, "The aristocracy, God bless them; they are the backbone of the country. Why, at Christmas time the master 'ad us all up to the big 'all and gave us a bottle of whiskey and a bag of oranges for the children." My friend did not explain how it came about that his master was the purveyor of all the oranges and all the whiskey; his thinking, of course, did not go that far. In those days, however, the masters retained enough of the old feudalism about them to acknowledge their responsibility to others. If they believed that they ruled by divine right, as some of them did in all good faith, at least they felt some responsibility to the people whose work made that rule possible. In many cases they were men of some culture and some feeling. Rightly or wrongly they despised the nouveau riche of the new industrialism, who in modern society had no particular regard for their workers but, when those workers became old or crippled, threw them into the lap of a paternalistic municipal or other governmental authority. Tire Tory party, which my hon. friend so ably represents, has of course now transferred its allegiance to this commercial and industrial class, and speaks at all times in favour of its privileged position.


Mr. GREEN:: Of course that is a lot of rubbish you are talking now.


Robert Ross (Roy) Knight: As my hon. friend spoke I could not help thinking that perhaps those of us who were present at the time the hon. member for Muskoka-Ontario was giving his rebuttal were witnessing an historic event. I asked myself, is this the swan song of the Tory party? It sounded like a swan song. Toryism is almost dead throughout the world. It is true that in one other place in the British empire, that is in my native Ulster, they have a Conservative government; but there are several reasons for its survival there. By long tradition it has been associated with what they call the Unionist cause, but I want to tell the house that some of its legislation has been most progressive, in fact so progressive that if anyone else were to bring it about they themselves would characterize it, as would hon. gentlemen to my right, as socialistic. This Conservative government in the north of Ireland is being wise in the economic sense. It is travelling ahead with the times. I must remind my reactionary friends in this house who belong to the same party that the Ulster government has a board which completely controls all road transport in that country, both freight and passenger. The Minister of Agriculture (Mr. Gardiner), who is not in his seat at the moment, I think will

The Budget-Mr. Stanfield
know that they have the tightest controls in their marketing regulations, that in fact everything produced in the area over which they have jurisdiction undergoes government inspection before it is allowed to be shipped out of the country. That is a Conservative government; but it is not a Tory government. In the matter of electricity there is an electric light board which controls the production and distribution. That government is moving with the times; that government may survive, while I think Toryism here will die a natural death.


Benoît Michaud: Hear, hear.


Robert Ross (Roy) Knight: The hon. member for
Restigouche-Madawaska (Mr. Michaud)' says "Hear, hear." Well, I might say to him that when I hear him talking about his maritime potatoes I sometimes think he should read the legislation that the same Ulster government has enacted in regard to the marketing of potatoes, and the regulations which have been put into effect by that so-called Conservative government concerning other agricultural matters. I notice the hon. member talks our C.C.F. language when he talks about the interests of his own constituents in regard to the matter of potatoes. In fact I would have you know, Mr. Speaker, it is a remarkable fact that many hon. members speak as we do when they have at heart the particular interests of their constituents.
Well, let us leave Restigouche-Madawaska and go back to our Tory friends. I have characterized the things they represent as dead. The Tory party is certainly dead in Saskatchewan; and in spite of the rumours I hear coming from that province in regard to political alignments I refuse to believe that the Minister of Agriculture who, whatever else he may be, has been a doughty fighter against Toryism all his life, can condone the resurrection of that party to any degree, even as a matter of political expediency. There is no doubt in my mind that, while the Minister of Agriculture has no political power in Saskatchewan today, he has certain influence with those who belong to the same political faith. Toryism is certainly dead in England. A short time ago I had a talk with one of the most prominent educators in that country, who, I think, put the matter very well. He said, "In Britain the new order has come to stay. These new men in course of time will probably be divided. Some of them will become more conservative; some of them may become more liberal, going a little to the left, but never again will they be Tories. They will always be new men. The decks have been
washed clean for a new state of affairs, for a new philosophy in which privilege shall have no place." But my hon. friends of the Conservative party will say that Toryism is not dead here. Well, I shall admit that. I admit that in one section of this country it is still putting up a fight for its existence. It is girt about and embattled, but even here Catiline is at the gates.
Mr. FRANK T. STANFIELD (Colchester-Hants): Mr. Speaker, in rising to say a few words in this debate I do so realizing that but two short years ago we were all very happy that the terrible war in which we had been engaged for nearly six years was about over. Japan was about to collapse, and nobody was worrying a great deal about taxes, or anything else. But we were suddenly faced with changing from an all-out war economy or war effort to a peacetime economy, and we have gone a long distance in those two intervening years to make the readjustment. Suddenly taxes became our public enemy number one. But fortunately we were able to keep our national income at the highest level in our history. Hundreds of millions of dollars were rolling into the treasury of our government. We were told what wonderful savings the government was making in expenditures for the past year, and the millions upon millions from War Assets Corporation that were pouring into the treasury each month.
I was greatly surprised that the Minister of Finance (Mr. Abbott) did not have a larger surplus and was not in a position to make a greater reduction in taxation. However, we have to give the minister credit where credit is due. He has greatly reduced the income tax where reduction in taxes was most needed and deserving, namely on the middle class of people, which people constitute the backbone of Canada or any other democratic country. There is also a sizeable reduction to those with incomes of $2,500 or less, which I am sure is acceptable and commendable. Everyone will welcome these reductions and will admit they will greatly assist in building confidence among our people towards a healthy peacetime economy.
However. I hasten to add, notwithstanding the reduction in the budget, that taxation still remains very high, and I feel there will be as much demand from the people for a further reduction in the next budget, because they have become very weary' of being taxed every time they turn around.
One thing I should like to bring to the minister's attention is that the exemption of $100 for each child under the age of sixteen is very small and meagre. What encouragement is there for a man and a woman to bring up a

The Budget-Mr. Stanfield

family today? How far will $100 go in keeping a child a year in this day and age? Not very far. It would seem that at least an exemption of $300 for each child under sixteen years and $500 for each child over sixteen years would be much more in keeping with present day standards.
The next matter to which I should like to direct attention, is that I feel strongly the excise tax imposed on soft drinks should have been removed. The nickel soft drink was just part of our way of living on this continent for many, many years. Nobody objected to the tax during the war. Almost everyone-especially the children, and even members of parliament-enjoys his favourite soft drink. Also, especially at this time, when one might say all governments are in the beer and liquor business-and I may also add, are encouraging its sale-I certainly believe the government should have given the public back its nickel soft drink. A child should not have to break his or her dime for what he or she calls a drink of pop. With all the big surplus the government speaks about, to leave the excise tax on soft drinks is merely ridiculous, to say the least.	-	,
One hears a great deal these days about the great profits some companies have been able to make in the past two years. Well, here is what the Bank of Canada says about the returns of some 700 companies for the year 1945 : They were lower than for the years 1937 to 1939. In fact, the per cent of return of profit on invested capital in 1945 was approximately twenty per cent less than that earned in the 1937-39 period when the volume of business was much less than in 1945. These comparable figures are not available for 1946. But they are certainly higher than in 1945; and why should they not be when everything else is nearly fifty per cent higher than in 1937 to 1939? I am sure, however, that the balance sheets of the 700 companies will show that the return on their invested capital in 1946 was somewhat greater than in the 1937-39 period. And, as I said before, there is no great reason why this return should not be greater. May I also add that there will be few years as satisfactory as 1946 from the point of view of either the employer or the employee. There will be many leaner years.
Now, just a few words about high prices. They are certainly high compared with what we were used to paying, say, three years ago; and some prices are perhaps too high today. But we have likely reached a peak in these high prices, and most of them may be lower before they are higher. I would very much like to make the following observation: Our national debt and the necessary function of

our government can only be carried with our national income at about its present level, if we are to maintain our present standard of living. So, if prices are to fall to any great extent, as some people would like to see them fall, why, it is just going to be too bad for us; and it makes me shudder to think just what it would do to the surplus the minister predicted for the present year. You cannot have your cake and eat it too. We can not have a happy and contented land if the products we produce should recede in value in any marked degree, and it is just as well for us to remember that. There may be some levelling off in the economy of our country to adjust this and that; but I, for one, sincerely hope to see things do nothing more than merely level themselves off.
Before I go any farther, I want to say "Thank you," and extend my sincere appreciation to Donald Gordon for the splendid way he served this country during the war and for eighteen months thereafter. He has now gone back to the Bank of Canada, and I wish him many years of happiness. He had to withstand a great deal of abuse while he was administering our price control system. But he did the job fearlessly, ably, and impartially, and his name will long be held in high esteem throughout Canada.
As for controls, I can say I always agreed that they were absolutely necessary during the war years, and for eighteen months thereafter. But since the first of this year they are having entirely the opposite effect, and are retarding our readjustment and our production back to a normal peacetime economy.
At this time I should like to associate myself with the hon. member for Northumberland, Ontario (Mr. Drope) in advocating doing away with the hon. member for Northumberland, radio tax. If there is any need or justification for this tax, I fail to see it.
When it comes to the so-called hidden taxes, such as the luxury tax, sales tax, tobacco and gasoline taxes and all the rest of them, during the war these taxes were O.K., but now many of these should be done away with or greatly reduced, because they are a considerable factor in the increased cost of living. However, this question has been ably dealt with by other speakers, so I will now pass on to our own province of Nova Scotia.
Many Canadians who have never been to the maritimes seem to have the idea that maritimers are only hewers of wood and drawers of water. This certainly is a mistaken idea. The maritimes are a beautiful country and the maritimers are the highest type of Canadian citizens. They live a pleasant, happy and enjoyable life. If you do not believe me just go down there to live, and

The Budget-Mr. Stanfield
find out for yourself. Unfortunately, on account of its geographic location, it is not the easiest place in Canada to make money or watch the bright lights of our large cities.
Every year thousands of our young people from Nova Scotia leave their province for the large cities of the United States, Ontario and Quebec, attracted by their glamour, fascination and the greater economic reward for their efforts. But those who have remained in dear old Nova Scotia have carried on bravely and have not asked for a great deal of assistance from anyone. Money spent on federal buildings and other federal expenditures in Nova Scotia has been mere chicken-feed compared with that in most of the other provinces.
And now we understand freight rates will be given a nice fat increase, and are we in the maritimes to be the goats again? Ontario and Quebec will say, "Well, if we can afford to pay increased freight rates, you people can too, and if you cannot it is your own fault." It is hard to overcome a thousand miles of geography from Halifax to Montreal, and the good people of the maritimes are deserving of much kinder consideration from the people of the rest of Canada than they receive in the matter of freight rates. Is it going to be the same old story this time?
Even when we ask for a few dollars to repair and reclaim our marsh lands we receive only a few nice words and are extended the hope that some time something may be done. But, no, they just cannot spare a dollar. Why? That is the burning question we would all like to have the Minister of Finance ansrver. I feel that the Minister of Agriculture would like to see the work of reclaiming our marsh lands carried into effect. My colleague from Cumberland was the first to advocate this policy and, if his advice had been followed, the marsh lands would today be a great productive source of income to the maritime farmers. But what is actually the case is that many of these lands have become so bad that they are just waste areas today.
I can see nothing, not even a glimmer of hope, in this budget for the people of Cape Breton island for better transportation over the strait of Canso. The road traffic will have to depend on a little ferry boat operated and owned by the province of Nova Scotia to get from the mainland to the island or vice versa. They will still have to keep company with the ice cakes in the winter and wait their turn to get on the ferry in the summer. I believe the rest of Canada owe it to the people of Cape Breton at least to give them the assurance that a bridge or causeway will be built across the strait of 83166-192J
Canso from the mainland of Nova Scotia to the island of Cape Breton at the earliest possible date.
Also there is nothing in the budget that I can see to make it easier for Nova Scotians to make a living in their own province. We thank the minister for the reduction in income tax; it is much appreciated, but to us in Nova Scotia it is somewhat the same as the poor man receiving some left-overs from the rich man's table.
Not a thing to help us overcome that thousand miles of geography between Montreal and Halifax. What the province of Nova Scotia needs is, first, some assistance to put some of our present resources on a more scientific basis, which changing conditions have greatly affected and, second, some definite programme should be worked out to make it advantageous for many light industries to locate, carry on and prosper in our province.
I fully realize that this is easier said than done, but I am convinced that much can be done. There are a lot of good jobs and positions in our province, but the whole trouble is that there are not enough of them. As I said before, our economy needs to be strengthened to overcome that thousand miles of geography. And I see nothing that this government is doing to help our position. It is not any hand-out the people of Nova Scotia need or would take; we have always been able to pay our bills in the worst of times and have a little change left for the collection plate on Sunday morning. We are still part of Canada, although to listen to a lot of people around here one would often wonder. What we would like is a definite programme to strengthen our economy and increase the number of good jobs and positions in our province.


Jean Lesage: Mr. Speaker, may I be allowed to add a voice from eastern Quebec to the chorus of congratulations which welcomed the budget speech which was delivered in a masterly way by a master in financial matters? My remarks will be confined mostly to this much talked about subject of personal income tax. The Minister of Finance (Mr. Abbott), when delivering his budget speech, said with great accuracy, as reported on, page 2553 of Hansard:
The rapid rate at which taxes had to be increased in Canada during the war, experienced against our North American background of a long history of low taxes and relative freedom in economic affairs, has given rise to an acute tax consciousness.
The Minister of Finance was well aware of the public feeling when he said that there was an acute tax consciousness and when he added that, even after two substantial reduc-
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tions made in the two last budgets, the present levels of personal income tax are regarded as excessive by a large proportion of the public. There is no doubt that such a feeling exists generally with the people of Canada and that taxes would have been more acceptable and more tolerable if they had been increased gradually and under normal conditions to the present levels for peacetime production, national development and social security. In fact, when the people realize that the personal income tax for 1948 is levied to provide revenues for social security services such as old age pensions and family allowances they will recognize that, according to the principles of social justice, the combination of a fairly distributed system of personal income tax with the application of a good social security programme is the only way for a government to attain its proper end, that is, to do common good to the citizens of the nation. The only way to arrive at such an end is by collecting from the citizens who can afford it the amounts required to provide the bare necessities of life to those who, through no fault of their own, are deprived of them. That is social justice in its healthiest principles and in its best application.
You will often hear people say-and at times they are well informed people-that the personal income tax involves inequality of charges because too many citizens escape its provisions. One has to admit that that is true to a certain extent, but theoretically and even in fact, because the cases of evasion are the exception, it is still based on the fairest principles of taxation as long as it does not take away from the citizen what is necessary for him and his family to live according to the general standard of living in the country. If it is granted that in order to give sound administration to the country, in order to pay the interest on the national debt, in order to provide for social security, money has to be levied in taxes, I wonder by what system of taxation we could replace the present one.
Should we abandon completely or in part direct taxation and replace the revenues so lost by an increase in indirect taxation? A good example of indirect taxation is the sales tax. Our sales tax is already at the rate of eight per cent, and one has to admit that it increases the cost of living, that it increases the cost of things to the consumer because it applies to some of the necessities of life, such as clothing and furniture. This means that people in the lowest brackets of income have to pay not only the sales tax but an accumula-
tion of profits over and above the tax. I agree with the hon. member for Peace River (Mr. Low), who is reported on page 2814 of Hansard as saying:
But from the point of view of the common man there is much more to be said for the removal of many of them at the earliest possible time. These are the taxes which are responsible for the increasing costs of production. They are applied at various stages of manufacture and the assembly of consumer and capital goods, so that they have a general pyramiding effect upon prices. The ultimate consumer is the goat who has to pay them.
The hon. member for Rosetown-Biggar (Mr. Coldwell) gave the same opinion. I quote from page 3810 of Hansard'.
This year he (the Minister of Finance) expects to collect $325 million through the sales tax. Again let us remember that these bear most heavily upon those whose incomes are small, and like the tariff, the excise tax and so forth, they are hidden taxes; they are subjected to pyramiding as the articles pass from the wholesales to the retailer, to the ultimate consumer and so on.
In emphasizing the injustices of indirect taxes, both these hon. gentlemen blame the government for not having removed some and even many of them. At the same time the same hon. gentlemen, knowing as they do, that the government needs every cent of the money it will collect in taxes also blame the government, and with more emphasis, for not having reduced more sharply the rates of income tax, and mainly for not having raised the amounts of exemption. One has to be consistent. If the government is to reduce the direct taxes to such an extent that this will mean a considerable loss of revenues the money so lost will have to be collected in the form of indirect taxation.
According to the forecast of the Minister of Finance, the personal income tax in 1948 would bring to the government an amount of $625 million. At a rate of eight per cent the sales tax would bring $325 million, which means that if we replace the personal income tax by an increase in the rate of the sales tax we shall have to triple the rate and to bring it up to around twenty-four per cent instead of eight per cent. Would that mean protecting the lower income taxpayer? I do not have to elaborate and answer. Everybody can see clearly that it would bring about the greatest injustices.
What I have said about the sales tax could be said as well about any other indirect tax, and may I say again, even though the personal income tax has imperfections, according to the best principles of social justice the fairest tax that any government can levy

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is the personal income tax. But the division of the tax among the various classes of taxpayers must be made according to distributive justice; that is to say, the scales and exemptions must be so distributed as to leave to everyone, first, the minimum necessary to meet his family expenses and, second, the incentive to produce to the maximum of his ability and to improve his standard of living. These two factors, together with the needs of the state, have to be taken into account and coordinated in setting up the exemptions and scales. They were taken into account last year and this year by the past and present ministers of finance, whom I congratulate on the manner in which they have done their best to protect the Canadian family.
To my great astonishment I have read editorials blaming the Minister of Finance for having proposed an income tax system which does not protect the family. I have studied the reasons given for such charges and I think the persons who made them did so onlj' after a rapid glance at the tables given in the budget. Could it be after such a rapid glance that the hon. members for Rosetown-Biggar and Peace River made their charges, accusing the Minister of Finance of not having sufficiently relieved the taxpayers in the lower income brackets? Well, 'they know. As an example, I took the tables placed in Hansard by the hon. member for Rosetown-Biggar at page 2808. There one may notice that a man without children earning an income of $2,500 would have to pay, at present rates, an amount of $243. In 1948 his tax will be $170. A married taxpayer with two children and with family allowances, earning an income of $2,500. would benefit by a reduction of $63 in 1948. The reduction for the married taxpayer without children would be $73. The reduction for. a married taxpayer with two children would be $63; that is to say, a difference of $10 in favour of the married man without children; but what counts is not so much the reduction itself as the amount which has been left to the taxpayer at the end of the
year While the married taxpayer without children would have to pay in 1948 an amount of $170 in taxes, the married man with two children will receive $144 in family allowances and his income tax will be $130, which means that the net position of the married man with two children at the end of 1948 will be an income of S2.514. Not only will he not contribute by an over-all direct tax disbursement to the general welfare of the community; but, owing to the fact that people without any children and people earning large incomes have paid their shares, he will receive $14 more than his actual income. Is such a policy not one that is protecting the father of a family? It is an example of a married man with only two children.
Let us not forget that the more we reduce the income tax rates, the less difference in disbursed money there is between the various classes of income taxpayers. For instance, in the years when the exemptions were at $400 for each child and the rates in some cases were as low as three per cent the exemptions for certain classes of married income taxpayers meant only a reduction in tax of $12 per child. As I said, it all depends on the rates of income tax. The lower the rates, the smaller the difference in disbursed money.
It is important at this point to study the combined effect of family allowance payments and tax reduction. One has to remember that for children under sixteen years of age the exemption is S100 plus family allowances. For the lower brackets of income taxpayers the amount of family allowances received represents more than $400 in exemption on income. With the leave of the house may I place on Hansard a table showing the value of family allowance payments calculated as an equivalent deduction from income under the income tax at various levels of income. The table is prepared for a married man with two children in 1948. It starts with an income of $2,750, because for lower incomes the amount of tax paid is offset by the amount received in family allowances. The table is as follows;
Family Allowance calculated as an equivalent deduction from income under the income tax at
various levels of income
(Married Man-two children)
Family	Equivalent	Income Deduction	Total	Income DeductionAllowance	Income	now given in	Income	perIncome	Payment	Deduction	addition to F.A.	Deduction	Child$	$	$	$	$	$2,750	144	870	200	1.070	5353.000	144	720	200	920	4605,000	144	720	200	920	4607.000	144	600	200	800	40010,000	144	480	200	680	340
The Budget-Mr. Lesage

For instance, with an income of $2,750 a married man with two children will receive family allowances payments of $144. The equivalent income deduction for the whole of the $144 is $870; we have $200 of income deduction now given in addition to the family allowances; we arrive at the total for the two children of $1,070, which means that the equivalent in income deduction per child is $535, when before the war the deduction per child was $400. In the range of incomes from $3,000 to $5,000 the equivalent income tax per child is $460, and from $5,000 to $7,000 the equivalent income deduction per child is $400. It is interesting to note that at levels of income up to $7,000 the deduction from income is never less than $400 per child, when the total exemption from income tax per child over sixteen is only $300. The expenses for a child over sixteen are higher than for a child under sixteen and the deduction is smaller. There is an anomaly there, brought about by the reduction in the rates which have given an increased value to family allowance payments calculated
on the equivalent deduction from income tax. May I submit respectfully, Mr. Speaker, that in order to reestablish a better balance the exemption for a child over sixteen should be increased to at least $400.
It has been argued in this house that the proposed reductions in personal income tax for 1947 and 1948 were protecting the people in the middle and higher brackets of income to a greater extent than those in the lower income groups. At this stage, with the permission of the house, I should like to place on Hansard a table showing the distribution by income groups of combined income tax reductions and increase in family allowance benefits in 1948 over 1946 as provided in the budget speeches of June, 1946, for 1947 and April, 1947, for 1948.


Mr. DEPUTY SPEAKER:: Has the hon. member unanimous consent?
Some lion. MEMBERS: Carried.


Jean Lesage: I will hand the tables to Hansard:
Distribution by income groups of combined tax reduction and increase in family
allowance benefit
Benefit to 550,000 to 600.000 exempt taxpayers. ... Benefit to taxpayers having incomes under $2,000.. Benefit to taxpayers with incomes $2,000 to $3,000 Benefit to taxpayers with incomes $3,000 to $5,000 Benefit to taxpayers with incomes $5,000 to $10,000 Benefit to taxpayers with incomes $10,000 to $25,000 Benefit to taxpayers with incomes over $25,000....
* As provided in June, 1946, budget speech, f As provided in April, 1947, budget speech.
			Total
1947*	1948f	Total $	per centReduction	Reduction	Reduction	Reduction($ millions)	($ millions)	($ millions)	24	24	10045	43	88	8540	42	82	8020	33	53	6011	31	42	509	15	24	336	11	17	25155	175	330	
Of the total benefit of $330 millions:
60 per cent is given taxpayers having incomes up to $3,000.
75 per cent is given taxpayers having incomes up to $5,00087 per cent is given taxpayers having incomes up to $10,000. 12 per cent is given taxpayers having incomes over $10,000.
Hon. members will remember that in the budget speech of June, 1946, from 550,000 to 600,000 taxpayers were exempted from income tax, and it meant a reduction of $24 million. The total reduction announced in 1946 for 1947 was $155 million and the reduction announced in the last budget speech in April, 1947 for 1948 is $175 million, which makes a total of $330 million. Of this figure of $330 million the benefit to taxpayers having incomes under $2,000 was, for 1947, $45 million and, for 1948, $43 million; that is to say, a total of $88 million; for taxpayers with incomes from $2,000 to $3,000, the benefit was $40 million in 1947 and $42 million in 1948, which amounts to $82

million altogether, and they are the largest figures in the whole scale which will appear in the table placed on Hansard.
The total reduction for taxpayers with incomes under $2,000 was 85 per cent from 1946. The benefit was of 80 per cent to taxpayers with incomes from $2,000 to $3,000, On the whole amount of $330 million, 60 per cent is given to taxpayers having incomes up to $3,000.
The Minister of Finance was right in believing that the verdict of responsible persons would be that he has gone as far as he could afford to go under the present circumstances. The new rates bring about a material reduction in all brackets of income and, together

The Budget-Mr. Lcsage
with the reductions announced last year for 1947, they will relieve the people of Canada of a heavy burden. May I give a few examples.
We have already covered the fact that in 1948 a married man with two children of family allowance age will benefit by the sum of $14 in family allowances over the tax he will pay. A married man with two children of family allowance age and earning $3,000 in 1946 did not receive anything in family allowances and paid a tax of $259, which means that he had to live on $2,741. In 1948 he will receive $144 in family allowances and pay $230, thus being left with $2,914, instead of $2,741 in 1946. A married man with five children and earning an income of $3,000 in 1946 did not receive any family allowances and paid a tax amounting to $144.65. In 1947 his family allowances, calculated at the strict minimum of $312, will exceed by $106 his tax of $206, and in 1948 it will exceed the tax of $170 by $142; which means that his net position or, if you prefer, the amount he will have at his disposal in 1948, will be $3,142 when his earned income is $3,000. When a married man with two children, and earning $2,500 a year, has at his disposal in 1948, thanks to the combined effect of income tax reductions and family allowances, an amount of $2,514 and a married man with five children, and earning $3,000 has $3,142. we can say that almost all taxpayers with families not only will not have their incomes cut by direct taxation but also will receive money from the government in excess of earned income to help them raise their families.
The ultimate importance lies in the amount of money at the disposal of married persons to help them raise their families. When the taxpayers realize up to what levels of income the amount of family allowance receipts will offset income tax payments, they will admit, I am convinced, that the budget presented by the Minister of Finance is truly a relief for the Canadian family.
For a one-child family it is $2,100; for two children, $2,560; for three children, $3,030; and for four children, $3,500; and so up. However, I sincerely deplore the fact that it has not been possible for the Minister of Finance to give some relief to taxpayers with incomes below $5,000 who have children of over twenty-one years of age attending college or university. The father of a large family wishing to complete the education of his children cannot attain the objective to which he has devoted his life. When he wants to give his children the best heritage possible the law comes along and takes away from him the very money he needs to further their education.
I wonder if it would not be possible at this time to reconsider the resolution and bring in an amendment to the clauses dealing with exemptions, by which amendment the age would be altered from twenty-one to twenty-five for children attending college or university. It may be argued that this would be an exemption in favour of the rich. No, Mr. Speaker. The exemption I am asking for is in favour of the father in the lower income groups, the so-called middle class, who works all his life to give his children the chance to be more valuable assets to their country. Let us not forget that it would mean only an insignificant loss in revenue.
Before resuming my seat, I should like to deal with a criticism most often heard against the budget. There is a strong feeling expressed in this house by the hon. member for Rose-town-Biggar, the hon. member for Peace River and others that the exemptions of $750 for single persons and $1,500 for married persons should have been raised to $1,000 and $2,000 respectively. I myself regret that it has not been possible to do something in that direction at this time.


An hon. MEMBER:: Why was it not done?


Jean Lesage: I will tell you in a few moments.
I believe that an income of $750 is not enough to provide the necessities of life to a single person living in a city or town. On the other hand, there are three main arguments against an increase in the exemption at this time, and they warrant thorough consideration. First, there is the fact mentioned by the Minister of Finance that the exemption level as established last year, taking effect on January 1 of this year, exempts completely from tax more than half the people earning incomes in Canada. I know I shall hear my hon. friends of the C.C.F. say that is because the standard of living in Canada is too low, but we have to take the facts as they are.


Clarence Gillis: But it is still too low.


Jean Lesage: I think something should be done to increase the standard of living, not only by this government but by the provincial governments.


Clarence Gillis: That is right.


Jean Lesage: Second, we should not forget that the exemptions in Canada are higher than in Australia, New Zealand, Britain and the United States.


Clarence Gillis: There is no social security in this country.


Jean Lesage: You say there is no social
security?
The Budget-Mr. Lesage


Clarence Gillis: Not comparable with that in the countries 3'ou mentioned.


Jean Lesage: Yes, but they pay for it otherwise, and we shall see that in a few moments.


Clarence Gillis: And spend it back.


Jean Lesage: Here is how it goes in these socialistically governed countries. In the United Kingdom the combined effect of basic exemptions and earned income allowance of one-sixth-the budget of April 15, 1947-is to exempt income up to the following amounts: single person, S540; married person, $884, or a little more than half what we have here; married, one child, $1,165; married, two children, $1,456.


Ian Alistair Mackenzie: That is the socialist government.


Clarence Gillis: Did you ever check what the dollar buys?


Jean Lesage: In the United States where a dollar does not buy what a dollar buys here-


Mr. NICHOLSON:: Have you the state tax?
Mr. LESAGE-it is not proposed to change exemptions under the bill passed by the house of representatives. The present exemptions are as follows: single person-$500; married person-$1,000; and for children $500. But in addition, a deduction equal to ten per cent of income is allowed in lieu of deductions for charitable donations and medical expenses; and they have to pay, through a contributory system, for their old age pensions.


Clarence Gillis: And what else?


Jean Lesage: 
Clarence Gillis: I should like to be speaking right after you.


James Horace King: Order.


Jean Lesage: I have given two. The third one is that an increase from $750 to $1,000 and from $1,500 to $2,000 would have resulted, in the words of the Minister of Finance at page 2554 of Hansard'.
... in a very substantial loss of revenue because it affects all taxpayers, including those in the highest brackets, and the saving for each taxpayer is his highest rate of tax applied to the increased amount of his exe7uption. ... If, as some have suggested, we restored the pre-war levels of exemptions, we should have to sacrifice more revenue than the whole of that sacrificed by the rate reductions I am now proposing, and we would be doing practically nothing by such action to reduce the rate of tax on additional earnings for those who remain subject to income tax. It is the high marginal rate of tax on additional earnings that discourages additional work, enterprise and initiative, and consequently we must aim in our reductions at cutting down these marginal rates of tax.
The loss of revenue, as a matter of fact, would have been something around $275 million for 1918 when the forecast loss due to the proposed reductions should be $175 million in 1948.


Clarence Gillis: Why not go on then and use the Bank of Canada to finance a lot of these things?


Jean Lesage: I did not know that the hon. member was becoming a little of a social crediter.


Clarence Gillis: The hon. member is a socialist.


Charles Edward Johnston: It is a good idea, though is it not?


Jean Lesage: I am not so sure about that.


Clarence Gillis: The hon. member is a socialist, and that is socialist mechanics.


James Horace King: Order.


Jean Lesage: I do not have to repeat the reasons given by the Minister of Finance for being careful at this time. I do not have to repeat what I said at the beginning of my remarks about the obligation which would be ours to replace by indirect taxation the revenue the government would lose by a further cut in direct taxation.

The Budget-Mr. Lesage


Charles Edward Johnston: The people are concerned with what you are going to do with it. The people want some relief. Give the government your suggestions.


Jean Lesage: I am going to make my suggestions to my hon. friends of the Social Credit party in French, because I thought the hon. member for Pontiac (Mr. Caouette) would be here, as to what should be done about their "union des electeurs" and I am starting now. I am convinced that hon. members will be pleased tomorrow to read the translation in Hansard.


Charles Edward Johnston: I hope you learned something from the hon. member for Pontiac. He gave you a good talk the other day.


Jean Lesage: I think the hon. member has a good deal to learn. He should first read French history and see what happened when a man by the name of Law, a financier, tried exactly the system the hon. member is proposing now and sent France into bankruptcy, and Law's actions were a background of the French revolution.


Charles Edward Johnston: I read some French history in the budget to the effect that over ninety per cent of the farmers in Quebec are receiving less than SI,500 a year.


Jean Lesage: It is too bad that the hon. member does not understand French.


Charles Edward Johnston: But I can read the budget.


James Horace King: Order.
(Translation):


Jean Lesage: I have here what amounts to a tale on Social Credit by de Maupassant. It is the story of Mr. Law, a very clever piece of writing by Henry de Jouvenel in his book
Huil cents ans de Revolution Frangaise. I may have time to read it later on.
(Text):
I do not have to repeat the reasons given by the Minister of Finance for being careful at this time. I do not have to repeat what I said at the beginning of my remarks about the obligation which would be ours to replace by indirect taxation the revenue the government would lose by a further cut in direct taxation, but Mr. Speaker, I believe I should insist on that subject in my mother tongue.
. (Translation):
When on Wednesday last, the hon. member for Pontiac (Mr. Caouette) rebuked the hon. the Minister of Finance (Mr. Abbott) for
failing to remove the tax on incomes of less than S3,000, he mentioned the hundreds of so-called "pressure cards" he had received clamoring for removal of the tax.
I have received a number of such cards myself. The only point they make is that members should be as generous with the taxpayers as they were with themselves when voting themselves a S2,000 exemption. I feel it is high time the people knew that $2,000 exemption only did justice to the members of parliament. Indeed any taxpayer is entitled, in computing his tax, to deduct from income such expenses as are directly incurred in the discharge of his duties as long as they are justified and whether they be travelling expenses, living expenses or what are commonly called office expenses. In the performance of their duties, as members of parliament, hon. members incur yearly travelling, accommodation and administrative expenses well in excess of $2,000. Before hon. members were granted that exemption, they were in an unfair situation because the right to deduct those expenses from their taxable income was not recognized. The $2,000 exemption did not place the members of parliament in a privileged situation; on the contrary, that provision only partially decreased an injustice and placed them on an equal footing with the remainder of the taxpayers.
Let us see what would be, under the present circumstances, the effect of an increase of that exemption to $3,000 on the public finances. \\ e must start from this principle, because it is the only sound one in economics, that the government must take in taxes what it spends on public administration and on social security programmes, particularly on old age pensions and family allowances. The Minister of Finance figures that personal income tax receipts will amount to $695 million in 1947 and $625 million in 1948. If exemptions were brought up for everybody to 83,000, the revenue would amount in 1948, according to my information, to about $200 million, which means a two-thirds reduction or $425 million on the expected returns. If the Canadian people hope that the government will continue to pay for old age pensions, family allowances, pensions to blind and health services, which cost more than $400 million a year-and I am convinced that such is the wish of all my constituents-we will have to find elsewhere the money required for those ends. If the funds are not secured through direct taxation, they must be obtained through indirect taxation.
The Budget-Mr. Lesage

I quote the very words uttered by the leader of the Social Credit party, the hon. member for Peace River (Mr. Low):
Indirect taxes are hidden taxes which increase the cost of production and the cost of living.
They are levied at various stages of the production of goods and, therefore, as each middleman must make a profit on the tax itself, the latter is increased manifold before it is passed on to the consumer. Thus, for instance, according to the budget, the present 8 per cent sales tax will bring in $325 million during the next fiscal year. If the government decided to raise the level of exemptions to $3,000, they would lose $425 million, and if they wished to recover that amount by raising the sales tax rate, it would be necessary to boost it to approximately 20 per cent. This means that the prices of some essential products would be increased not only 12 per cent, but that much plus the additional, I should say the multiplied profit accruing to the agent, the wholesaler and the retailer. The prices to the consumer, in the case of certain articles, would thus be increased 50 per cent or even more. The small wage-earner would suffer therefrom, as he would be compelled to pay the increased cost of goods and necessities of life. That is one of the main reasons why I submit that direct taxation, income tax being the finest example of this method, agrees' better than any other with the princpiles of distributive justice.
Mr. Speaker, since I still have a few minutes at my disposal, I should like to quote a few excerpts from a book written by M. Henry de Jouvenel and entitled Huit cents ans de Revolution Franqaise:
The financial genius that was Law or Lass conceived evei'y form of modern credit. He showered them on a distressed country with the cheerful faith of an inventor who ascribes universal powers to his discovery.
That applies to our social credit system, does it not?
M. de Jouvenel continues by pointing out that up to 1721 Mr. Law had scattered all over France paper-money worth billions. A further excerpt will underline the similarity with the Social Credit policy and that of the Electors' Union.
No more debt, no more taxes, no more bankruptcy, no more class distinctions! Life had become one grand festival where, as at the open air stock exchange of the rue Quineam-poix, according to Buvat, "thronged all kinds of people, scholars of the Sorbonne, priests and friars who took part in the trading, "as well as lords and lackeys, courtiers and criminals, courtesans and duchesses who danced and fraternized.


Mr. GAUTHIER (Portneuf):: Hear, hear.


Jean Lesage: . . . Many grew rich so quickly that footmen who had become masters continued to climb, through force of habit, behind their newly bought carriages . . . Under the magic wand waved by the Edinburgh goldsmith's son, precious stones, velvet, silk and gold adorned at a moment's notice the shoulders of beggar girls and destitutes. . . .Millions were pouring from the printing press. . . .
They were printing money just as the supporters of social credit would like to print it.
Millions were pouring from the printing press. Bourdon, a cafe waiter, picked up 30 and Chambery, a floor polisher, collected 40. The Chaumont woman, a small-ware dealer in Namour, garnered 100. Duhautehamp, a painter suddenly engaged 90 servants. The sale of high titles became such a prosperous business that the comte d'Evreux, of the House of Bouillon, married the daughter of Crozat, a former lackey, although she was but thirteen years of age. The marquis d'Oise, of the Villars-Brancas family, still in a greater hurry, became engaged, in consideration of an annuity and an endowment of 4 million, to the two-year old daughter of a financier, Andre, whose 10,000-pound notes were exchanged, a few months later, for a lunch.	_	_
It was an area of madness in which the whole social hierarchy collapsed.
Then came the selling out and afterwards the crash of stocks, and finally the flight of Law and panic.	_
All classes were ruined, and they voiced the same lament in front of the bank's closed doors; the first comers were smothered, and the corpses were then picked up and brought under the smashed windows of Law's house, under the Louvre balcony, in the gardens of_ the Palais-Royal. Public execration was rising, and no longer made any distinction between, law, the regent and the king.
Pestilence became rife, as happens in every sinister era, and it killed 100,000 people. In 1721, bankruptcy and death had ended the feast.
Social credit had been resorted to, Mr. Speaker.
A dishonoured government, a nobility and a clergy who were disgraced, a people who felt their sufferings all the more because their fall had been sudden, after they had believed for a full year that they had attained happiness; weakness at the top, anger at the bottom; such were the results of Law's sojourn in France.
I shall have concluded in one minute, Mr. Speaker. With the permission of the house-


James Horace King: I am sorry, but I must remind the hon. member that he has spoken for forty minutes.
(Text):


Jean Lesage: By leave of the house, Mr. Speaker, I would ask for time to say one word more.


James Horace King: If the hon. gentleman has unanimous consent.


Some hon. MEMBERS:: Agreed.

The Budget-Mr. J. E. Smith
(Translation):


Jean Lesage: Before concluding, Mr. Speaker, may I be permitted to caution against a number of swindlers, those who have sent or might be tempted to send these so-called pressure cards. I have myself made a serious checkup of the names of those who sent them to me and I found that not 2 per cent of them would pay income tax under the proposed rates. I caution them, as I am by duty bound, for were the government to raise the exemption to $3,000, the small wage-earners would be those who would be the victims, as they would receive less in old age pension and family allowances, and they would pay more in indirect taxes, 'thereby paying the exemptions granted to those who would have swindled them. Indeed, these demagogues do not work for the benefit of the average farmer, the humble worker or the ordinary family man, but for their own advantage, exacting from those who have to save their money to eat, the sum of 5 cents for one or two cards that cost only a fraction of one cent.
In concluding, I ask the hard-working people of the splendid constituency I represent in this house to throw out of their homes, of their public organizations, these swindlers, these visionaries, these irresponsible demagogues, who attempt to stir up public opinion by unattainable promises in the hope of quenching their own thirst for power and domination.


Mr. J. E. SMITH (York North):: Mr. Speaker, in rising to make a few observations in this debate, I desire to join with those who have preceded me in extending congratulations to the Minister of Finance (Mr. Abbott) upon the excellent manner in which he presented the budget to the house, and also to congratulate the government upon the contents of that budget, containing as it did a report of a splendid surplus and announcing welcome tax reductions for a great many people throughout Canada. It has, I am sure, been very well received throughout the country, and I submit that it merits the support of the members of this house.
The budget, reflecting the general prosperity of Canada, and revealing the excellence of the job accomplished by this government in reconversion from wartime to peacetime production, has been inspiring to the Canadian people, and tended to create confidence. It has tended to create confidence in Canada and also to create confidence in the government, and at a time when confidence means a very great deal in our national life.
The minister, in presenting a picture of prosperity in Canada, was careful to draw
attention to the fact that we live in a world still disorganized after many long years of war, and that until such time as peace, prosperity and plenty are restored to all the countries of the world, there is no need for us here in Canada to be complacent.
Events of recent years have made the world small indeed, and we as Canadians must face up to our responsibilities of citizenship, not only as Canadians but as citizens of the world. Our future in Canada depends in large measure upon two factors:	How we
are able to get along among ourselves here in Canada, and how we are able to get along with the rest of the world.
Here in Canada we have many reasons to give thanks that our lot has been cast in a happy place. If we would stop more often to count our blessings, and less often to air our grievances I think we could be here in Canada a more happy and more contented people. We face the future in a world still disorganized and weary after long years of war, a world in which there is still a threatening force no less terrifying than war itself. But as Lloyd George said in one of his great speeches of the first war, while there may be shadows in the valley, there is sunshine on the hills. So as Canadians today we are looking to the hilltops, where the sun shines brightly with the hope of better days in the world at peace.
Here in Canada where we are able so soon after a strenuous period of war to present a budget of the quality presented here last week, there is certainly no need and no place for pessimism. We have every reason to look forward to the future with confidence. We know that industry has been converted almost entirely from war-time to peace-time production, and that employment and production are at high levels. Foreign trade has reached heights never before attained and, best of all, the outlook for continued trade and employment is good.
Despite the high volume of production, demand for products of our primary industries continues to exceed production, and the government is to be commended for seeking to give continuing security and stability to the incomes of our farmers by negotiating long-term sales agreements for our products.
Farmers of Canada did a magnificent job during the war, and they did that magnificent job under extreme difficulties. They are continuing to do a magnificent job of production in this post-war era. The coming of peace did not eliminate all the problems of the farmers. The most serious problem confronting farmers today is the acute shortage of farm help. It is not only a matter of wages,.
300S
The Budget-Mr. J. E. Smith

as some people point out, because farmers in the district I have the honour to represent are prosperous. They offer good rates of wages for farm help, and still are unable to obtain it. The only solution, as I see it, is for this government to take the initiative in bringing to Canada a large number of farm workers; not hundreds, but thousands of such farm workers could be absorbed on the farms of Ontario, and within a very short time. I think we need have no fear concerning bringing to Canada a large number of immigrants of this type. However, in our immigration policy we must guard against bringing to this country any of those who have tendencies toward communism or any other ism in opposition to democracy, and not in keeping with the ideals of our democratic way of life.


Mr. FULTON:: Including socialism.


John Eachern (Jack) Smith: Not only must we guard against the influx of communists to this country, but I hope that those communists who have been convicted of treason against Canada will, at the expiry of their prison terms, have their Canadian citizenship revoked. They should be deported to those countries which claim their higher loyalty.
We have had a long discussion in the house regarding controls, and I think the people of Canada have reason to be thankful to the government for its control policies. Controls have served Canada well, and I think in the matter of decontrol we have been proceeding quickly enough. But there is one feature of housing control which I should like to mention, one feature which I consider has lingered long enough on the stage of our national planning. I think the time has come when that regulation in connection with housing, which prohibits people who own their own homes from moving into them, should be dispensed with. It may be said that this will cause evictions; but I submit that the hardship and suffering of evictions are no less heartrending than the sufferings occasioned in those cases where people, many of them elderly and who, by virtue of lives of thrift and industry, own their own homes, are now unable to move into them because of these regulations. I should hope that the regulations might be altered in the not distant future.
Income tax reductions announced in the budget will afford a welcome measure of relief.
I think the minister was right in his statement that there had grown up in Canada an acute tax consciousness. Had this been allowed to fMr. J. E. Smith.]
continue without any reduction in taxation at this time, I agree with the minister that it would have worked against the best interests of Canada and been a hindrance in our reconversion programme.
Like many others, I would have been happy if the tax reductions had continued further, and particularly into that field of so-called nuisance taxes. I am going to mention only one tonight, and to say that I agree most heartily with those hon. members who have advocated the removal of the tax on radio receiving sets. I submit that this tax should be abolished, and for three reasons. First, apparently so far there has not been devised an efficient and economical manner of collection and enforcement; second, it should be abolished because it is unpopular, for the simple reason that so many people know that so many other people do not pay it; and. third, and most important of all, it should be abolished because the ownership of radio receiving sets is now so general in Canada that there is no need for a special tax as a special privilege. If money is needed for the upkeep or maintenance of the Canadian Broadcasting Corporation, it might just as well be taken from the general .revenue, thus saving the people of Canada the nuisance and expense of this special levy.
As I said at the outset, our future in Canada depends in large measure upon two factors, namely how we are able to get along together here in Canada, and how we are able to get along with the rest of the world. We look out upon a troubled world and read anxiously and hopefully as conferences are held from time to time throughout the world seeking to establish peace and order throughout the world, and sometimes we are restless and impatient at the bickerings and disagreements between nations. But should we in Canada be too critical of the nations of the world in their disagreement if we honestly look at ourselves and examine the present position of dominion-provincial relations in this country?
I am sure that it was a matter of great regret to all Canadians, irrespective of their political affiliations, that better results did not come from the recent dominion-provincial conferences. Today, looking to the future of Canada and looking to the problems which we face, both nationally and internationally, I agree with those who say that this matter of dominion-provincial relations is one of our most important internal problems. Turning back the pages of history to the stirring days preceding confederation, we

The Budget-Mr. J. E. Smith
find that in those days there was strong support for a legislative union with a system of government providing a single parliament for the whole country. However, the fathers of confederation, in their good judgment and in the light of the then existing conditions, could not be expected to foresee the future of almost a century and they decided upon a federation which provided for provincial governments as well as a central and national government.
There were difficult problems to settle in bringing about confederation, difficulty as to division of power between the national and the provincial governments. Many of those difficulties are with us today. They are so great and so important that it is becoming abundantly clear that, until we settle them, our progress as a nation will be hampered and our plans for the good and welfare of our people will fall short of what we would have them be.
In the confederation debates in Upper Canada in 1865 a supporter of confederation said:
I am satisfied that one of the great advantages of this union will be found in this, that we will be raised above our sectionalism and come to feel and act as the citizens of a great country.
Canadians everywhere tonight reecho that wish. If we are to achieve the greatness which we deserve; if we are to attain to our rightful destiny we must face up to our problems, not as Ontario Canadians, not as maritime Canadians, not as Quebec Canadians or not as western Canadians; we must face up to them as Canadians. The problems which we face are of such magnitude as to test our best Canadianism.
I said that there was general disappointment of the failure of the dominion-provincial conferences and there has been some discussion in an attempt to assess the blame for those failures. However, I think the people of Canada are not merely so concerned as to who was responsible for the failure of those conferences as they are concerned with the fact that the failure of the dominion and the provinces to come to an agreement is holding up many measures of vital concern to the future of the Canadian people. This government's social security programme cannot be fully effective until some agreement is reached between this government and all the provinces. The issues at stake are so great and so far-reaching that, even in the face of what might seem to be impossible and
insurmountable barriers, I should like to see this government take the lead in making another attempt to settle this question. I think the only way to settle these problems satisfactorily is to call a dominion-provincial conference, and I submit that this government would be rendering a great national service by reconvening the conference at as early a day as possible.
When such a conference is held-and I hope it will be-I suggest that those who sit around the conference table representing the provinces and the dominion should discuss something more than who is to tax whom, and how much. I am sure the people of Canada would like to see the representatives of the provinces and of this national government discuss seriously, honestly and free from provincial or political bias, the problem of overgovernment in Canada. We should like to see them discussing in a businesslike manner the ways and means of eliminating duplication of services rendered by the national and other branches of administration. Overgovernment is a burden on the taxpayers of Canada; it continues to grow and it is a burden about which we do very little.
I am sure the people of Canada would like to hear representatives at a dominion-provincial conference discuss a national health policy which would ensure our people against the economic disaster which is visited upon so many through sickness and disease. We should like to see the representatives of the provinces and the dominion agree on a policy of cooperation in the establishment of a hospital building programme which would provide adequate and modern hospital facilities, not only in the great centres of population but in the small communities all across Canada. We should like to see the dominion and provincial leaders discuss ways and means whereby our aged citizens would be better cared for.
The people of Canada would like to hear a discussion at this conference of the matter of jurisdiction and responsibility, so that cooperation would be possible in a great national plan of reforestation whereby the rich resources of our land could be perpetuated for coming generations and our waste spaces made fruitful and productive. These and many other great national problems might well be the topic of discussion at a reconvened dominion-provincial conference, with the possibility of great good to all the people of Canada.
Understanding within our borders is one of our primary needs today, and I repeat that this makes the matter of dominion-provincial relations one of our leading internal problems. To meet the challenges which we face, to meet the problems which confront us, we must have a
The Budget.-Mr. J. E. Smith

spirit of understanding and cooperation between all the people of Canada; we must have a spirit of understanding and cooperation between all branches of government in Canada. To that end I am suggesting that we should call as quickly as possible a dominion-provincial conference. If this national government does its part with this conference and the failure and disappointments of the past are forgotten I am satisfied that the people of Canada will be quick to judge if there are still around at conference tables those who are more interested in playing politics than in playing ball with the rest of Canada.
Coming as I do from Ontario, one of the richest provinces of this country, I want it to be known unmistakably that, no matter how we may have been misunderstood, no matter how wre may have been misrepresented, we in Ontario are ready and anxious to throw in our lot as Canadians with our fellow Canadians from coast to coast in a united effort to build a better Canada.
On motion of Mr. MacNicol the debate was adjourned.
It being three minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.



END OF VOLUME III