PRIVILEGE


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, I rise to a question of privilege. I wish to ask the indulgence of the house, as a matter of privilege, while I correct an error I made yesterday in my speech on the budget. At page 2807 of Hansard I am reported to have said:
The total reduction in personal income tax is about $70 million, but the reduction in the excess profits tax which will come into effect at the end of this current year is $279 million, or nearly four times as much.
And then I added. "I took the figures from the minister's own budget". I am sorry I made an error in calculation and I should like to correct it. I stated that the reduction in the excess profits tax which will come into effect at the end of the year was $279 million. This is not correct. This reduction is not the one which will come into effect at the end of this year but is the anticipated reduction made by the previous Minister of Finance in his last budget.
The minister stated that the total tax reductions in the current year would be $160 million. Reductions in personal income and gasoline taxes total, according to the minister, $150 million, of which $40 million is gasoline tax. Therefore the figure of $70 million which I gave is incorrect; it should be $110 million. This means then that the reduction in the excess profits tax from December 31, 1947- when it will end-to March 31, 1948 will be $10 million. The result is that the total excess profits tax for the fiscal year ending March 31, 1948, is estimated at $160 million as against $449 million for the fiscal year ending March 31, 1947. But while I am correct in saying that there will be a reduction of $289 million, not $279 million, the present Minister of Finance is responsible for only $10 million in this financial year. Therefore my statement yesterday was to that extent in error and I am pleased that the house has allowed me to make this correction.



INDIAN ACT

[Stage Direction]
Third report of joint committee of the Senate and the House of Commons appointed to examine and consider The Indian Act.- Mr. Brown.

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

Mr. PROBE:: 1.	What position in the R.C.M.P. is now held
by Mr. F. J. Mead, former deputy commissioner?	.
2.	What are the duties of such position?
3.	Is lie on pension? If so, how much?
4.	Does he receive any salary, allowances or expenses in connection with any duties now being performed?
5 Who is the present deputy commissioner of the R.C.M.P.?


Mr. ILSLEY:: 1.	Special official and consultant.
2.	Special official and consultant in connection with general problems of a police nature such as those connected with industrial disputes, the Japanese question, the youth movement. etc.
3.	No.
4.	Yes.
5.	Deputy Commissionner H. A. R. Gagnon, C.B.E., A.D.C.


HALIFAX HOTEL
Mr. GILLIS:: 1.	Did the federal government purchase the Halifax Hotel in Halifax, Nova Scotia? If so, for what purpose?
2.	From whom was it purchased?
3.	What amount of money was paid for the hotel, including the legal fees for transactions necessary for the transfer?
4.	Who acted as the agent of the government in making the purchase and was any commission or salary paid?
5.	When was this hotel built and what was the original cost of building?


Mr. ILSLEY:: 1.	Yes, for the use of the Royal Canadian
Mounted Police.	[DOT]
2.	The Commercial Housing Limited, Halifax, N.S.
3.	$100,000 for the hotel and its contents.
4.	Messrs. Burchell, Smith, Parker and Fogo, Barristers and Solicitors, Halifax. No commission or salary paid but only their account
for professional services.
Questions

5.	The original part of the hotel had been erected in 1861, but other portions have been added to it at various times, especially the upper stories. The original cost is not known.



VETERANS BUSINESS AND PROFESSIONAL LOANS ACT

Mr. POULIOT:: 1.	In virtue of the Veterans' Business and Professional Loans Act, and in each province, how many loans have been (a) applied for, and (b) granted?
2.	What is the total amount of the loans granted in each province, in virtue of that act?


Mr. MAYHBW:: 1 and 2. (a) No record is available as to the number of loans applied for which the banks do not forward to the department of veterans affairs for concurrence. The department of veterans affairs has concurred in the
following applications	up to	and including
May 5, 1947:		
Province	Number Amount	
British Columbia ...	... 203	$ 391,66 1 57Alberta 	... 319	542,556 88Saskatchewan 	... 185	322,889 28Manitoba 	... 124	238,416 65Ontario 	... 656	1,112,052 47Quebec 	... 134	213,538 34New Brunswick 	... 45	65,112 50Nova Scotia 	... 70	104,425 32Prince Edward Island	.. 26	38,601 00Total 	... 1762	$3,029,254 01(b>
Reports of loans granted by the banks	are made quarterly. The figures for the period	January 15, 1947, when the i	let was proclaimed, to March 31,	1947, are	as follows:Province	'"Number * Amount	British Columbia ...	... 57	$112,712 80Alberta 	... 114	185,390 40Saskatchewan 	... 43	67,572 33Manitoba 	... 35	68,190 66Ontario 	... 179	275,132 98Quebec 	... 36	67,790 00New Brunswick 	... 9	15,529 00Nova Scotia 	... 13	15,621 66Prince Edward Island	.. 7	8,300 00493	$816,239 83
"Subject to adjustment.
The difference between the number and amount of loans concurred in and the num-oer and amount of loans made, is due to (1) difference in dates; (2) delay in delivery f 
equipment, etc., for which loans were concurred; (3) delay in making loans pending completion of legal formalities.



QUESTIONS PASSED AS ORDERS FOR RETURNS

[Stage Direction]
Canada's occupation forces in europe
['I think this will make eight. That is my recollection. I believe there were six in before tonight.\nProgress reported.\nOn motion of Mr. Mackenzie the house adjourned at 5.50 p.m.\nThursday, May 8, 1947']
Mr. GIBSON (Hamilton West):: Return tabled.



Mr. BLACK (Cumberland):: 1.	What was the total of kilowatt hours of electric energy generated in each of the past five fiscal years by provinces?
2.	What amount of such electric energy in each province was generated and sold or distributed by (a) the province or an agency thereof; (b) the municipalities within each province; (c) private corporations or interests?
3.	What electric current so generated and sold or distributed was (a) subject to federal sales taxes, corporation taxes, and other dominion government taxes; (b) exempt from such taxes?
4.	What amount was the amount of such taxes payable each year in each province?


BARBARA ANN SCOTT
[Stage Direction]
On the orders of the day:
Mr. KARL HOMUTH (Waterloo South):: Perhaps the question which I am about to ask should be addressed to the Minister of Finance (Mr. Abbott), but the Prime Minister might take this as a notice. In view of the alarming news in this morning's papers with regard to the Olympic status of Barbara Ann Scott, I wonder if the government has cabled or will cable our Olympic representative in England. Mr. J. C. Patteson, to see that her interests are protected.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I would be the first to do everything in my power to protect the inter-

Inquiries of the Ministry
ests of Miss Barbara Ann Scott, but I think the young lady is more than able to take care of herself.


SUGAR BEETS
[Stage Direction]
On the orders of the day:
Robert Wellington Mayhew: It will be recalled that on Friday last the hon. member for Lethbridge (Mr. Blackmore) asked three questions of the Minister of Finance (Mr. Abbott). I propose now to answer the first and third questions; the second will be answered by the Minister of Labour.
The first question was as to how many acres of sugar beet contracts had been signed by the Canada and Dominion Sugar Company by noon, May 5. The answer is that we are informed by the Canada and Dominion Sugar Company that up to May 5 they had signed contract for 26,029 acres of sugar beets.
The next question was whether or not the government had considered how adversely Canada's failure to produce beet sugar to her plant capacity in 1947 might affect the willingness of the United States to grant Canada sugar from the international pool in 1948. In reply I would state that sugar is not allocated to Canada by the LTnited States, but through the international emergency food council of which Canada and the United States, as w'ell as many other countries, are members. Beet sugar production in Canada in 1946 was 30 per cent greater than the average for 1935-39. This is a greater increase than that of any other beet sugar producing country. Given at least average climatic conditions it is expected that production in Canada in 1947 will exceed that of 1946. In the light of these facts there can be no adverse reflection upon Canada's contribution to the world sugar position.


Hon. HUMPHREY MITCHELL (Minister of Labour):: The hon. member for Lethbridge asked what steps the government contemplated taking to enable Ontario beet growers to protect their labour supply from being attracted from them by the tobacco growers. I am not aware of any serious difficulties that occurred in 1946 because of competition between tobacco growers and those engaged in the raising of sugar beets. I am advised that the labour supply was adequate for both those branches of our agricultural economy. As my hon. friend knows, the control over the movement of labour was abolished some time ago and it is not the intention of the government to direct anybody into the sugar beet or tobacco fields. That was a war emergency and, thank goodness, it is past and gone.
I might say that it is anticipated that the labour supply for agriculture generally in Ontario will be tight this year. Policies which have been so successful in the past, one of which was the recruitment of labour in the southern states for the tobacco fields, will be carried out this year. The dominion-provincial machinery for the supply of seasonal farm labour will be in operation in 1947. It is anticipated that there will be some hundreds of former Polish soldiers arriving in Canada' in the course of the next few weeks, and they will be apportioned in consultation with the provincial authorities.


EVAPORATED MILK
[Stage Direction]
On the orders of the day:
Mr. K. R. DANIEL (Oxford):: I should like to direct a question to the Minister of Agriculture (Mr. Gardiner) and I am sorry I have not given him notice. While my question may not be a matter of national emergency, judging by the number of telephone calls I received while I was home over the week-end it must be very close to it. My question is this: What portion of the recent one cent per tin increase in the price of evaporated milk is to be received by the producer, the processor and the wholesaler? Will the minister please provide the same breakdown with regard to the price rise in cheese and butter?


Mr. DEPUTY SPEAKER:: I would think that is a question which should go on the order paper.


ALLOTMENTS TO CANADA FROM INTERNATIONAL POOL
[Stage Direction]
On the orders of the day:
Mr. JOHN T. HACKETT (Stanstead): Will the parliamentary assistant to the Minister of Finance state how many short tons of sugar have been allotted this year to Canada by the international food pool?
Robert Wellington Mayhew: I am sorry I cannot give the hon. member an answer today, but I shall see that he gets it.
Inquiries oj the Ministry


FARM IMPLEMENTS
[Stage Direction]
On the orders of the day:
Mr. N. J. M. LOCKHART (Lincoln):: I am sorry I did not have an opportunity to give notice of this question, but according to a message I have just received it is of most urgent importance, particularly to a couple of young farmers. I will direct my question to the Minister of Agriculture although there may be other ministers who are affected. This young man says it is impossible for him and some of his neighbours to get tractors. Will the minister state what is the actual situation? This man says that he cannot go on with his spring work.


Right Hon. J. G. GARDINER (Minister of Agriculture):: That is not a question which I would be in position to answer, nor would any of my officials, because it concerns others.
I would point out that there is a shortage of tractors. Farmers write in to me saying that they are not able to get tractors. The fact is that there are not the tractors available in Canada today to meet the demand. As to why these particular men are not able to get . theirs, I cannot say without, having more information.


Norman James Macdonald Lockhart: It is reported that forty per cent more are being manufactured in the United States than were manufactured last year. Perhaps we might get a larger quota.


James Garfield Gardiner: There is an agreement with the Americans as to how many come here.


AVAILABILITY TO VETERANS FOR CONSTRUCTION OF HOUSES
[Stage Direction]
On the orders of the day:
Mr. G. K. FRASER (Peterborough West):: I should like to direct a question to the parliamentary assistant to the Minister of Reconstruction and Supply. I have not given him notice, but I do not think it is necessary, because this is really urgent. Will he tell the house what is being done by his department to see that veterans are able to secure cement in order to construct their houses? There is a desperate shortage throughout the country at the present time.


An hon. MEMBER:: Order paper.


Gordon Knapman Fraser: That is not for the order paper.


Mr. G. J. McILRAITH (Parliamentary Assistant to the Minister of Reconstruction and Supply):: That is a type of question which

it is difficult to answer offhand, particularly without notice. The production of cement in Canada today is higher than at any time in the history of the country. The veterans are receiving the priorities with respect to their housing which have been outlined previously.


Gordon Knapman Fraser: Will the parliamentary
assistant check this matter and give a full answer tomorrow?


THE BUDGET
[Stage Direction]
The house resumed from Tuesday, May 6, 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. W. ROSS THATCHER (Moose Jaw):: Mr. Speaker, in taking part in this debate I should like first to join with others who have congratulated the new Minister of Finance (Mr. Abbott) upon the capable way in which he introduced his first budget. I tell him sincerely that it is a pleasure for those of us who are inexperienced in the house, particularly on the opposition side, to work with a minister who remains at all times courteous and friendly'.
Some people look upon the budget merely as a balance sheet of the nation's affairs. If it shows a surplus, they feel in a general way that it is a good budget. I think most members of the house will agree that this is a rather superficial viewpoint. I agree that a balanced budget is desirable, and I think that wherever possible the government should present. one. But I do not think that a surplus should be the controlling aim of the Minister of Finance, because after all it is conceivable that a budget might be balanced on the hardships and difficulties of the Canadian people.
In analysing the effectiveness of this budget I think we should look at the way in which it proposes to meet the major problems facing this nation today. As I see it, if this budget is a good one it should do three things. First, it should provide tax relief particularly for Canadians in the lower income groups; second, it should extend social services; and third, it should make plans to keep employment at a high level in the future. If this is a good budget it will, in my' opinion, meet those tests; but if it is not a good budget, it will fail to do so.
During the year the minister reported a surplus of $352 million. After the tremendous

The Budget-Mr. Thatcher
deficits of the war years I think most Canadians will welcome that rather agreeable figure. At the same time, as the minister himself admitted, we must remember that that surplus was achieved by very unusual methods, such as the sale of war assets. Moreover it was achieved by removing subsidies on certain articles which vitally affect the cost of living, a procedure which is causing real hardship among our small wage earners in this country. Therefore I am in agreement with the hon. member for Muskoka-Ontario (Mr. Macdon-nell), although for different reasons, that the government should not be too proud about this surplus.
For the ensuing year the minister is forecasting a surplus of $190 million in round figures. Whether that surplus will be achieved or not depends largely upon economic conditions. I understand that if Ontario and Quebec should soon sign tax agreements with the dominion government the federal treasury will have to pay out annually an additional $110 million. Therefore I suggest that it is problematical whether the government will achieve the surplus that is forecast for the coming year.
A comparison of governmental receipts today with pre-war receipts is interesting. In the last fiscal year according to the minister's statement the federal receipts were $2,984 million. In 1938, the last year of peace they were only $516 million. That means that our taxes in Canada today are still roughly about five times what they were prior to the war. Some people are wondering if this very great discrepancy can be justified. *
The main change brought about by the budget, indeed so far as I can see about the only change, was the provision for a reduction in the personal income tax. That was a welcome provision, yet the reduction was considerably less than we were originally led to believe. At page 2554 of Hansard the Minister of Finance stated:
Under this new schedule, the average amount of tax will be reduced by about 29 per cent.
Newspapers all across the country featured this statement. Perhaps my mathematics are not what they should be, and I speak subject to correction, but so far as I can figure it out, the personal income tax has only been reduced by about 15 per cent-not 29 per cent.
At page 2552 of Hansard, according to the ministers figures, personal income tax receipts in the fiscal year 1946-47 amounted to $695 million. At page 2567 of Hansard the minister estimated that in 1947-48 personal income tax receipts will be reduced by $110 million. That works out, as far as I can see, to a reduction of 15 per cent or a little better, and not 29 per cent. There is quite a difference. Notwithstanding that fact I am quite prepared to admit that taxpayers in the upper and middle income groups have been given a real measure of tax relief. But the budget fails completely to provide proportionate benefits for those who are in the lower rungs of the economic ladder.
Once again when we first look at the minister's figures we may think that the lower income groups are being given a substantial reduction; the figure of 54 per cent was mentioned as the reduction being made for those in the lowest bracket. But when you boil these percentages down to dollars and cents you see that the concessions do not amount to very much. The actual increase in take-home pay is increased by 50 cents for those in the lowest category and by one or two dollars a month for those in the next brackets. In other words the reduction is far below the tax relief that would have been granted if the minister had raised the exemption levels.
What is even more significant is the fact that no relief whatever is given by the budget to wage earners who do not make enough money to pay income tax, and more than half of all Canadian wage earners are in this category. In other words the group hardest hit by the increase in the cost of living gains nothing by this budget.
The minister saw fit in his budget address to lecture Canadian business, and perhaps Canadian business needed to be lectured, on the need for business to get busy and reduce prices. But a day later another minister saw fit to make an announcement in the house which permitted the prices of butter, cheese and eggs to go up. There is no consistency there, because these articles affect very considerably the cost of living. On the one hand the government's decontrol policy is allowing the cost of living for the small wage earner to increase steadily. On the other hand the government gives him no help whatever by way of reduced taxation. I do not think that this budget is giving the "little man" a fair deal, and I contend1 that this is the first defect of the budget.
The second question which I think we should ask ourselves in analysing the budget is this. Does it attempt to extend social services? As hon. members know, in this country today there are many Canadians such as our aged, our crippled and others, who are living in conditions of hardship, and some even in conditions of poverty. The only security that these people can have is through adequate social service measures. The government made a
The Budget-Mr. Thatcher

start in building up a system of social services in Canada some years ago when it introduced the family allowances bill and the Unemployment Insurance Act, but there are still three yawning gaps in Canada's system of social services. We lack health insurance; we lack unemployment assistance; we still lack adequate national old age pensions, and even if the new old age pension bill is introduced next week I think we shall still lack adequate old age pensions.
In its proposals to the dominion-provincial conference in August, 1945, the government had this to say at page 28 of its brief:
. . . there still remains a tremendous job to be done in improving the national health and in extending the benefits of modern science and medical care to all parts of the nation and all sections of the population.
At that time the government urged the early implementation of a comprehensive social security programme. Dealing with costs it had this to say:
A significant volume of social security payments, flowing into the consumer spending stream, will stabilize the economy of the country as a whole and work against a fall in the national income. Social security payments therefore become, in these circumstances, a powerful weapon with which to ward off general economic depression.
These are good statements, Mr. Speaker, but if the government really believes them, and I think it does, why has more not been, done about them?-because even the government's supporters will admit that since August, 1945, Canada has not gone very far along the road to social security. Instead the government has used as a reason, or an excuse, for not proceeding, the failure of the dominion-provincial conference.
In his budget the minister had this to say about social services as reported at page 2548 of Hansard:
The government of Canada looks forward to the day when the agreement of all or substantially all the provinces will make possible the achievement-
Then he goes on:
... of a comprehensive programme ... of . . . social security.
Surely in view of the huge surplus which the government professes to have shown, we might have expected more in the way of social security. The budget presented by the Minister of Finance contrasted sharply with the budget which was presented in the British House of Commons a few weeks ago by the chancellor of the exchequer, Mr. Dalton. Here is what Mr. Dalton had to say in his budget speech about social service in Great Britain:
During this last year we have made history in the social services. We have mounted witli-

out halt or hesitation the great social programme which the electors voted for when this majority v'as returned. The National Insurance Act, the National Health Service Act and the Industrial Injuries Act have been placed upon the statute books and family allowances have been paid from August 1, 1946, and the higher old age pensions has been paid from the beginning of last October. We are entitled to say that the new Britain represented by this House of Commons has taken the cost of social security proudly in its stride, and the money has been found, and the measures passed and tile benefits are being enjoyed by those entitled to them.
I ask the house to contrast that budget statement with the one made by our own Minister of Finance. Britain, ravaged and devastated by war; Britain, with her trade and with her industries disrupted, has still been able to bring in a system of social security which includes every person in the British isles. Poor as they are, they have found the money to do these things.
Today six provinces have agreed to the dominion proposals. I understand that a seventh'is almost ready to do so. I wonder whether the government could not consider the institution of social services in the provinces which have already signed the agreement. In my opinion the failure of the government to extend social services is the second defect of the current budget.
The third question which we should ask ourselves in analysing this budget is, what steps have the government taken to maintain a high level of employment in the future? Many people in this country today are worried lest the current economic boom may soon end. They are worried about the possibility of another depression, and consequent unemployment such as we had prior to the last war. The minister himself must share these fears, because time and again in his budget he referred to the fact that our present levels of prosperity and high employment are temporary, and that sooner or later we must expect a reduction. At page 2548 of Hansard he said:
Our revenues are based on very high levels of production, incomes and imports, which we probably cannot expect as normal levels in future years.
And again on page 2549:
Our surplus is a real one . . . but 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.
In other words, the minister admitted in his budget speech that he is expecting that levels of income and prosperity may soon be lower; yet so far as I can find in the budget, there is no indication anywhere that the government has tangible plans to do

The Budget-Mr. Thatcher
something about that situation. We in the C.C.F. believe that this is the third major defect of the budget.
The government's attitude toward trade is typical of their lack of planning. About one-third of our national income comes from exports, and about three out of every eight workers depend on the healthy condition of the export trade, for their jobs. In his white paper on "Employment and Income" tabled in the house in April, 1945, the Minister of Reconstruction and Supply (Mr. Howe) had this to say:
"Post-war collaboration along equally bold and imaginative lines is essential if expanded world trade is to reinforce domestic employment policies and contribute to freedom from want . . ."
And again:
The government has pressed and is continuing to press actively for a wide collaboration in the reciprocal reduction and removal of trade barriers-agreements must be reached at an early date.
And yet two years after this statement of government trade policy we in Canada have not had one single tariff decrease. Instead a few months ago, the minister announced that on dozens or even hundreds of articles the tariff which we had in the pre-war years would be reimposed. These tariffs had been suspended during the war. I wonder whether the reimposition of pre-war tariffs, is the bold and imaginative trade policy which the government has spoken about. Personally I cannot see anything imaginative about such a policy. It seems to me on the contrary that the government's trade policy is timid and vacillating. The present budget has not one tariff decrease in it. In view of the deteriorating position of our export trade today I think this situation could be very dangerous.
During the past two years Canada, for humanitarian and business reasons, extended loans and credits to European countries to the amount of several billion dollars. These credits allowed our foreign trade to reach almost fantastic proportions. But many Canadians have not realized that the prosperity' which we have enjoyed has been artificial, and it still is artificial. Today these loans are being used up very quickly, and yet the economy of the countries in Europe is still so badly crippled that when the loans are gone it is doubtful whether they will be able to continue to buy in Canada. Here is what a Reuters correspondent had to say about it some weeks ago:
It is probable that, within a year from now, Britain will simply not have enough money to buy all the goods that the overseas primary producing countries will want to sell her. France, and most of the other European importing countries, may be in an even worse case.
In other words, our country is faced with the blunt fact that very shortly we are likely, unless something happens, to see our export trade drop very considerably. Today we in Canada are watching our credits and loans being used up, knowing that when these credits are gone we face a shrinkage of our markets; knowing that if that shrinkage comes, we shall have considerable unemployment; and yet all that the government has to say in its budget speech about trade is this-and I quote from the minister's speech:
We hope that out of the negotiations will come sufficient reductions in tariffs to make it practicable to establish an international trade organization.
Surely too much is at stake to base our trade policy on a hope, yet that is precisely what the current budget does.
At the moment the Geneva trade conference is sitting. Before our delegation went to Geneva this parliament was given no opportunity to discuss the policy which they would follow there, nor was it given an opportunity to debate the policy which the delegation would take to the imperial conference which preceded it. Perhaps the Geneva conference will succeed. I think everyone in the house and in the country hopes that it will; yet newspaper reports which come from Geneva seem to be increasingly pessimistic so far as I can see. If that conference does fail I ask the government what alternative policy it has to offer the people of Canada.
The budget, moreover, gives no indication of better planning in the domestic field. This is very strange, in view of what the Minister of Reconstruction and Supply had to say a few years ago in the white paper to which I have referred, and from which I quote the following, at page 1:
In setting as its aim a high and stable level of employment and income, the government is not selecting a lower target than "full employment."
On page 4:
. . . it will be necessary in this (post-war) period to initiate plans and programmes to provide over later years for the successful pursuit of policies directed to the attainment of high and stable employment and income.
And on page 14:
Government expenditures, like private expenditures, play an important part in determining the level of employment and income.
These are very fine and, I think, correct statements; but despite these laudible objectives I can see little indication that the government has done very much about them. That is to be regretted because there are so many projects which Canada urgently needs today. To refer to only a few, I would point
The Budget-Mr. Rowe

to irrigation works in western Canada. In the west we are facing another drought cycle, yet very little is being done to remedy the situation. Irrigation works are self-liquidating and eventually would not cost the taxpayer anything. There are other projects of a like nature.
Our criticism of this budget is that it does not plan. It holds out no hope whatever that we can have steady and enduring prosperity in peace time. I contend that the third requirement of a good budget has not been ailed by the government. The budget, then, has overlooked the lessons which were learned during the war years. It has failed the people of Canada in this critical time in three respects: first, by its failure to provide tax relief for Canadians in the small income category; second, by its failure to extend social services; and third, by its failure to plan for future full employment. In short, it has not provided security for the people of this nation.
(Translation):
Mr. Speaker, I should now like to say a few words in French so as to emphasize the following inference; In these critical times, the budget has frustrated the hopes of the Canadian people on three main points.
First, it has not lightened the small wage-earner's burden of taxes.
Second, it has introduced no social service proposals.
Third, it has suggested no definite plans to prevent an unemployment crisis.


Some hon. MEMBERS:: Hear, hear!


Wilbert Ross Thatcher: In short, Mr. Speaker, it has not provided for the material security of the nation.


Some hon. MEMBERS:: Hear, hear!
(Text):


Hon. W. EARL ROWE (Dufferin-Simcoe):: I have listened to budgets in this parliament from several ministers of finance, and I feel that I too must congratulate the new Minister of Finance (Mr. Abbott) on the presentation of his government's financial statement. The presentation of a budget is always a solemn occasion. I can well remember ministers of finance who seemed to be nervous and fearful of the outcome, but I was a little doubtful when I observed the genial new Minister of Finance present what was in a way a bigger budget than any we have had, with much more assurance-in fact in comparison with many other ministers of finance he seemed to display almost reckless assurance-that everything was going to be all right anyway.

I could not help thinking of the difference between this budget and budgets that have been presented in this house in the past. I believe the first budget to which I listened in this house was for $340 million. Prior to the war, as the hon. member for Moose Jaw (Mr. Thatcher) has just said, the revenue in Canada was $436 million. In 1946-47, almost two years after the war, we find ourselves with a revenue, from taxes, of $2,459 million.
In his presentation of the budget the minister pointed to many decreases in our tax burdens, but as was said by the previous speaker, they are not exactly as they look on paper. They do not come into effect until the first of July, and therefore the 29i per cent average reduction in income tax is actually only 14-^ per cent; and when you consider that almost fifty per cent of Canadian taxation is indirect, in the form of sales tax and many other levies, then the reduction is only about seven per cent. It is therefore not very much of a decrease.
I know that those interested in business, in the development of this country, and in the question of providing employment, are greatly alarmed that there was not a real decrease in our taxation. Only 52-5 per cent of our taxes today represent direct levies, while 47-5 per cent are indirect; in other words, one-half is received through the front door and the other half is brought in by the back door. But they all come from the Canadian people just the same. And there is no consideration, may I point out, for the poor man as regards the sales tax on the shoes he buys for his children.
We are, it is true, in a time of post-war prosperity, and no one should assume we are preaching depression if we suggest that we may return to normal times sooner or later. But there is little preparation in this budget. There are only expressions of fear from the government, but there is little preparation for the day that might very well come upon us. I do not mean by that we have to recede to a day of depression. I think this country is strong enough to endure even the weaknesses of the government now responsible for the management of its affairs. I have great faith in Canada, and one needs great faith in view of the reckless experiments we observe from time to time.
The true test of whether we are taxed in accordance with our business ability is not alone in the rate of taxation, or the number of dollars which are collected now or what might have been collected in 193S or 1939. The test must have reference to the proportion of the tax to national income. I say to those on the government benches-and I have given

The Budget-Mr. Rowe
some thought to this matter, which I think is worthy of note-that in 1938, the year before the war, on our national income, which it is true was much less-it was at that time about five billions whereas it is approximately now twelve billion dollars-the proportion of the tax was only 8-55 per cent. The year following the war, with a national income of twelve billion dollars, we are extracting from the people in direct and indirect taxation $2,459 million, or 20-49 per cent of the national income. If there is a business man within sound of my voice I would ask him to take cognizance of this situation; for the rate is 150 per cent higher than what was imposed upon the national income in 1938 and 1939.
I feel that in view of this trend the government might well have considered reducing our taxes further. In the third year following the war, the huge spending machine that was built up of necessity during the war might be dismantled. At least we should have some signs of an attempt to dismantle it. I realize that the veterans' payments, family allowances and old age pensions all must be provided for. But surely the time has come to insulate our economy against the days when we may return to a more normal condition. I cannot help but think that while our economic position internationally is strong, there is no one so optimistic who does not pause to realize that when we return to normal times, this period of more or less inflated economy will be changed to a certain extent. I cannot help but think that the government must have listened to many throughout the country. It must have listened to the leader of the opposition (Mr. Bracken) when he urged them to reduce taxation by at least 33^ per cent; and on the strength of the government's own estimates submitted to this house, that could have been done. Last year the taxation burden upon the people was very heavy. I realize, however, that you cannot decrease taxation so long as there is inefficiency and reckless extravagance in government; and, Mr. Speaker, I charge this government with being reckless in their extravagance in maintaining a bureaucracy which was built up, evidently through necessity in time of war, and adding to a regiment of civil servants which should have been decreased instead of increased. Unless we get down to hard, sound business-


Humphrey Mitchell: I thought my hon. friend was going to say, let us get down to hard times.


William Earl Rowe: No one contributes more to hard times, Mr. Speaker, than those who talk
about them; and if this government fail to tax themselves into hard times, they will likely talk themselves into hard times.


Humphrey Mitchell: You will never get full employment as a prophet of gloom. Don't be so gloomy about it. You talk as though you w-anted a depression in this country.


William Earl Rowe: I was telling you that there
was no need for a depression; but if you have something new on employment, I shall be glad to have it.


Humphrey Mitchell: We have the highest
employment figures in the history of this nation.


William Earl Rowe: You have many things higher. I am telling you that you have the highest taxes, too, in the history of this nation.
I am not going to be sidetracked, Mr. Speaker. The minister often does not contribute much when he himself is speaking, and he always contributes less when I am speaking. But I do say that one of the reasons-and no one knows it better than the minister who has just interrupted me, why we have these high taxes. There were 2,655 added to the department of the controller of the treasury and 492 to the Department of Agriculture. I know there is a lot of help needed there, but I wonder if 492 were necessary to that department. It is little wonder that 237 had to be added to the civil service commission to count the numbers going into the other departments. No wonder it is difficult to relieve the burden of taxation.
The minister has heeded the call for some reduction in taxation, and has given a few reductions where it is most politically expedient. But business has had no relief; corporations have had no relief; development enterprise has had no relief. There is no relief or encouragement for individual endeavour, individual initiative or private enterprise, which some of those on the other side still believe is the fair way of developing a nation's economy and giving employment.
But, sir, we have the hidden taxes that are bringing in about fifty per cent of this revenue. About fifty per cent of the revenue is being recklessly spent in adding more and more to the government bureaucracy to carry out functions of departments that are supposed to be almost extinct. Today if a farmer puts a wire fence around his field, or buys a cake of soap for the kitchen, he pays hundreds of taxes, and they are covered up accordingly in the costs. You do not need to take my word for it, Mr. Speaker. You and the minister are both hero worshippers of the ex-minister of finance. I remember what he
The Budget-Mr. Rowe

said in 1941, and I quote from his speech as reported in Hansard of April 29, of that year, at page 2354:
These indirect taxes are not such as I should be comfortable in recommending in normal times but when the need for revenue is great and when the need for concentrating our energies on the successful prosecution of the war is so vitally necessary, we must have recourse to taxes which if not good taxes are better than others which we have rejected.
Nuisance taxes and the ones which he referred to are not good taxes, but Mr. Speaker, they are still with us. The war is over and the government is now boasting about a surplus. Surely if these taxes were not good taxes in a time of emergency, in that bitter and tragic time, when we needed money to fight an enemy, they are bad taxes when we are boasting of a surplus. As I say, the people are asking that these nuisance taxes be removed; they are asking the government to give them room to breathe and room in enterprise to meet some of the ordinary taxes. Even if the government has decided to hold on to these nuisance taxes and indirect taxes until just a few months before an election, surely they might have been humanitarian enough to take the nuisance tax off soft drinks and the baby's candies at this time. Surely they would still have enough left, because there will be a list of taxes a page long that can be removed at election time. Not only will they be removed then, but they will have to be removed economically if the government does not want to tax this country into a depression, let alone talk it into it.
I can hear the rumblings over in the east block when that budget was being prepared: "When are we going to have an election?" "We are not going to have one this year; go easy boys, leave them on." Yes, the need is evident, Mr. Speaker, when it is realized that these hidden taxes are not only on luxuries; they bear just as heavily on the poor man's family requirements as on the rich man's family. They are, however, different to this extent. They can be taken more or less by painless extraction. Years ago if a man happened to mangle his leg in the bush it was sawed off without an anaesthetic. But as a result of the thankful march of science we have arrived at the point where he is taken away and, through the use of ether, the leg is removed very gently. It doesn't hurt as much, but the man winds up without a leg just the same. At the present time we find that this government has dealt with only about fifty per cent of taxation. Under the present tax system, as the present prosperity recedes, we automatically raise the percentage of tax to the national income. Just as the previous
fMr. Rowe]
speaker has mentioned, in this budget the taxes are raised. This year the taxes are as high on the poor man's requirements as they were last year. The effect of taxes over the whole dominion is higher because of the increased cost of living, and because of the increased cost of production. The sales tax was 8 per cent on a $100 article; it is now 8 per cent on a $125 or $150 article under inflated prices that prevail at present.
I noticed that the day before the budget was brought down the Minister of Finance tabled the report of the foreign exchange control board. In that it is evident, from the point of view of trade, Canada is on a fantastically dangerous road. We are paying for our purchases in the United States, and we are selling our products elsewhere for money we have already lent. In other words, we are paying for our own exports at the present time.
The day before the budget was brought down the Minister of Finance brought in the report of the foreign exchange control board. I do not think it was ever intended that it would get as much publicity as the budget. The budget was more political, and this was more factual. But at page 13 of the report of the foreign exchange control board for the year 1946 we see where we bought $430 million worth of merchandise more than we sold to the United States. This is $74 million more of an adverse balance of trade than we had in 1939.
We have had, true, a balance of $100 million in non-monetary gold, and that was in spite of the fact that this government in an arbitrary manner last July reduced the price of gold $3.50 an ounce, and did nothing in this year to restore any encouragement to the gold mining industry which probably did more in time of depression than did any other industry to pull this country through. And if they were preparing for the days that some of them say are going to be less prosperous than today, then surely they might have given some slight attention to some form of development which would increase prosperity and enable us to withstand an adverse balance if there was one.
Our tourist trade netted us $83 million last year. That was $20 million less than 1929. Our net interest and dividend payments are up. They were $204 million, or $32 million more than they were in 1929. Our payments for freight and shipping is put at $66 million, or $32 million more than in 1929. And the miscellaneous items are listed at $82 million, which is $68 million more than 1929.
All in all we are down $603 million in our accounts with the United States of America

The Budqet-Mr. Rowe
in the year 1946. We would have been worse off bad it not been for certain war supplies which were sold to the United States. We are told that $372 million worth of war supplies were sold. They were paid for out of wartime taxation, and in many cases they were sold for a fraction of what they cost. The proceeds from sales of war assets have been used in peace time to cover peacetime inefficiency. Thus we have a political surplus of $350 million instead of a factual deficit, on operating deficit, of $20 million.
Now, I do feel that no one would think for a minute that it is a fair presentation to the people of Canada. I ask the government this question: When they had so much money lying around, and such inflated revenues, why did they not present their budget to the people of Canada in a businesslike way? I know if I presented to the company for which I am responsible a financial report such as this, I would be apt to be put in gaol.


Humphrey Mitchell: Did you hear the comment that has just been made?


William Earl Rowe: No; are you going to transmit it to me? What is it?


James Garfield Gardiner: Just as well you do not know.


William Earl Rowe: Well, there would be no chance of the Minister of Finance being there with me; but probably some of the rest would make fair company. But I know this, that those in the cabinet who are laughing can laugh this off just as glibly as the Minister of Finance can say it. That is a sample of the glibness and of the smug complacency which prevails throughout the department of finance, and even at a time when our revenues and expenses are two or three times higher than they were, and a couple of times higher than they should be.
There seems to be a reckless assurance that nothing can happen. Like the reckless optimist, they do not care what happens as long as it does not happen to them. They do not seem to have taken seriously the thought that this will ever end. It is like the group who had a party, and when the party was over they did not know what to do with what was left over, or what was not spent.
What has this government done to lighten the burden of these payments to the United States? The Minister of Agriculture (Mr. Gardiner) is almost moved to tears when he tells us about what his department and the country have done for Great Britain. But his colleague the Minister of Finance does not tell the same story. I see according to page
15 of this same report of the foreign exchange control board that we exacted $150 million in gold from the British people in order partly to offset this adverse United States balance.
I notice further that the Minister of Reconstruction and Supply (Mr. Howe), through the wartime prices and trade board, allows, in respect of lumber to house the poor, cold Britisher at the present time, a charge almost twice that which is charged in Canada. But when the Canadian wheat producer sells Great Britain wheat they must sell it at $1 a bushel beneath what they can get on the world market.
Such, Mr. Speaker, is the policy of this government, which does not know where it is going. I realize, too, that we have collected $87 million of United States funds from sales to UNRRA. A few weeks ago the leader of the socialist party, to my left, suggested we were charging too much in Canada for pulp and paper. But I observe what the Minister of Finance says at page 15 of this same report, namely that that was one of the main items which saved us from further disaster.
What is this government doing about it? The simple answer is: Nothing. They have no fixed policy. In fact, they have as many policies as they have ministers of the crown. I think the Right Hon. the Minister of Agriculture should be a minister without portfolio, as well as heading the department of agriculture, because it would seem that he speaks for all departments of government. He went out west a month ago and announced an immigration policy.


James Garfield Gardiner: And you did not vote against it.


William Earl Rowe: He said 12 million people would be brought to Canada by his government.


James Garfield Gardiner: And in the house you would not vote against it.


William Earl Rowe: You did not bring that in, because the Minister of Mines and Resources (Mr. Glen), who is in charge of the immigration branch, evidently made another speech altogether. I will give you his; it is not the same as yours at all. Evidently he was away too. You have been wrong in your own department so much I hope you do not attempt to make him wrong in his.


James Garfield Gardiner: You voted for it.


William Earl Rowe: According to the Vancouver Province the Minister of Agriculture stated that we want millions from Europe, that we need 12 million. When he came east to
The Budget-Mr. Rowe

Edmonton he dropped his figure a bit. As he came east his figure got lower, and by the time he reached Edmonton it had dropped to 10 million. But in the matter of immigration I say that if anybody is to give the policy in parliament, then surely the Minister of Mines and Resources, as the responsible minister, should be left with that responsibility. Evidently his figure is not the same as that of the Minister of Agriculture.


James Garfield Gardiner: It is about the same.


William Earl Rowe: Is it about the same? But it sounds different, and it was said differently, and the people do not believe it is the same. I would ask those who are not interrupting me to find any similarity at all in those two statements.
On the one hand we have the verbatim report of the statement of the Prime Minister, the real minister in charge of immigration-not the political minister-when he says at page 2645 of Hansard of the present session:
It is of the utmost importance to relate immigration to absorptive capacity. In the past, Canada has received many millions of immigrants but at the same time many millions of people have emigrated. Of the latter a large proportion were young people born in Canada, and others who had benefited by education or training received in Canada. The objective of the government is to secure what new population we can absorb, but not to exceed that number.
It is reported by the British government that 300,000 from the United Kingdom are ready to go to the dominions. Plans are said to be under way for the transportation of 200,000 to Australia. It is reported that plans are laid for 40,000 to go to South Africa. Yet here we are, the senior British dominion, faced with uncertainties brought about by the different policies that have been enunciated. We find now that because of those uncertainties there is virtually a blockade against British immigrants coming to Canada.
The Minister of Agriculture went west and announced a new policy of national socialism; suppose we should call it Liberal national socialism. I have an article here but I know he recalls it well enough to make it needless for me to read it.


James Garfield Gardiner: You do not understand it.


William Earl Rowe: Evidently you did not understand it very well because 3rou said that anything that a corporation would make in times of prosperity, they should give to you in taxes, and yet when they had a loss in other times they should bear the loss themselves. The minister understands how to add up revenue.
TMr. Rowe]
He also can add four or five hundred more civil servants to his department, a department that has been dismally responsible for the failure-


James Garfield Gardiner: You had better stick to your paper.


William Earl Rowe: Well, if I stuck to agriculture as close as you did I would hope to do a better job than you have done.


Mr. MACKENZIE:: Nobody in Canada believes that.


William Earl Rowe: You are not a farmer.


James Garfield Gardiner: You had better try sitting on the treasury benches for a little while.


William Earl Rowe: Thank you, but I would not sit with those who are sitting there now.


James Garfield Gardiner: The people did not leave you very long when you were sitting here.


William Earl Rowe: I am not inviting myself. No doubt the right hon. minister feels that it is good talk in certain quarters, and I can understand that because his friendship to those to my left has been more obvious and more conspicuous than any of the speeches he has made. I can understand why he would take that attitude. We do not seem to have one government; we seem to have one that is masquerading with two policies, one for the country and one for parliament. The minister states and the governor of the Bank of Canada states that our chance of untangling ourselves from the North American orbit is through a return to free exchange trading. The Minister of Agriculture was sent to London by the Prime Minister to make a wheat agreement. He made an agreement which is virtually an agricultural cartel, a cartel embodying agreements covering nearly all our farm products, tying soeialistieally our whole economy to the European system and making it impossible for us to sell our farm products in the United States. If our farmers were allowed to sell their products in the United States, as our lumbermen and manufacturers are allowed to sell theirs, you would have a rectification of our balance of trade almost immediately. As the minister knows well, our farmers would receive thirty per cent more for their products. The Minister of Reconstruction and Supply (Mr. Howe) raised lumber prices fifteen to twenty-five per cent to increase production, and that lumber is going to house the shivering Britishers, but the Minister of Agriculture, even though his customers are starving over there and the production of farm items is falling off in almost every line, states that if we

The Budget-Mr. Rowe
are to have stabilized prices for farm products, then prices cannot rise every time costs of production rise.	*


James Garfield Gardiner: What would the poor taxpayer have done?


William Earl Rowe: You had better talk to the farmers; there are enough taxpayers among them to know what you haven't done.


James Garfield Gardiner: What would the poor
taxpayer have done if he had had to pay thirty per cent more for his food?


William Earl Rowe: I have just as much regard
for the taxpayer as the minister has and my party would never have exacted such impositions on him as the minister's party has.


James Garfield Gardiner: Five cents per pound
for butter when your party was in power.


William Earl Rowe: And we got for him more
than world prices, and your government gets him less. I shall have a little more to say about that later on, if the minister will wait in patience. The Minister of Agriculture assures us that the British government will not break its agreements for Canadian farm products, but as a matter of fact he has broken nearly every agreement he has made with the British. He has established a precedent and set the pace for the breaking of agreements. His bacon agreement of 1946 has not been consummated. He has failed to meet his egg agreement of 1946. His cheese agreement of 1943-44 fell short of fulfilment; his cheese agreement of 1946 was another lost hope. His evaporated milk agreement of 1940-41 was a dismal failure, and his evaporated milk agreement of 1942 was an idle dream. What does the Minister of Agriculture do in order to salvage some of the agreements he has made?
With his other socialist friends he has repeatedly anticipated an early depression. In consequence he agrees to sell 600,000,000 bushels of Canadian wheat four years in advance to the British government at prices ranging downward from $1.55 to $1 a bushel, and accordingly is selling to the British government at prices ranging from fifty cents to $1.23 less than the prices the wheat board are quoting to other customers. It is common knowledge that the greatest contributor to a depression is the bear operator, and one of the greatest bear operators in Canada today is the Minister of Agriculture.
No government with a vestige of prudence would sell any farm products short, let alone 600,000.000 bushels of wheat. The facts of the situation are that they make this British socialist government the single purchaser of our export surplus of wheat. We now observe the novel spectacle of a Liberal government
in Canada closing the grain exchange in Winnipeg and a socialist United Kingdom government opening the corn exchanges in Liverpool. We have our government today pleading with the farmers to produce more, but they are told that if their costs rise they will not get increased prices.
When the wheat board bill was being discussed in parliament the government tabled an international agreement and our delegates were sent to London to discuss that agreement. It is common history that the conference in London broke up because the British government would not agree to a price of $1.20 for the crop year 1949-50, and $1.10 for the crop year 1950-51, the first year after the agreement expired. When the British empire agreements were made I can recall Liberal members of parliament denouncing them vigorously for a full six weeks. There are some hon. members here now who were here then and I know it would be embarrassing to them if I read some of their speeches. I have not the time to do so, but I know it would be amusing.


Ian Alistair Mackenzie: It might do you good.


William Earl Rowe: It would not do you any
good. I think it would be amusing for the rest of the house to hear what some of those who sit so complacently on the government benches had to say. I know that the minister who just interrupted me was one. I think he ridiculed the British preference proposals.


Humphrey Mitchell: What was the price
then?


William Earl Rowe: You were not there.


Humphrey Mitchell: Oh, yes, I was.


William Earl Rowe: You were down in the corner. I can remember now; you were one of the conscripts to liberalism.


Humphrey Mitchell: I want to say to my hon. friend that he never had a chance to be a conscript and the Minister of Labour was never a conscript-and I speak in a military sense-I was a volunteer.


William Earl Rowe: Does the minister mean that he volunteered to become a Liberal? I did not know that.


Humphrey Mitchell: I said I was not a conscript.


William Earl Rowe: The ministers who are so glib in interrupting me were most vigorous in their opposition, and I can remember that very well. I remember at one time they twitted the Right Honourable Mr. Bennett for receiving only six cents more for wheat on the
The Budget

Mr. Rowe

British market, but here today we are asked by the same glib-tongued critics to take 11.25 a bushel less.


Ian Alistair Mackenzie: Did you not vote for it?


William Earl Rowe: Yes, I voted for British preference, but you did not.


Ian Alistair Mackenzie: Did you not vote for it when it was before the house?


William Earl Rowe: No, I did not vote for the wheat agreement.


Ian Alistair Mackenzie: You were not here.


William Earl Rowe: You did not vote for the imperial preferences in 1932. Yours was the party which rebelled because we were receiving only $10 million more than world prices. You now ask us to support your government when you are going to receive $200 million less a year. The Minister of Agriculture made just one mistake about the Hon. Mr. Strachey, the British food minister. The Hon. Mr. Strachey is a clever man, but he is an Englishman working for England. The Minister of Agriculture made one mistake; he thought Mr. Strachey was working for Canada. The Minister of Agriculture is a great politician but a tragically impotent businessman.
The government knock down the price of wheat and force the western farmers to grow oats and barley while the world pleads for wheat. They seize the oats and barley and have it fed to Canadian hogs to try to salvage the remnants of the broken bacon agreements, and when all that fails they call on the taxpayers of Canada to put up enough money to keep the Danish hog producer out of the British market. Such is this negative policy of the present government.


James Garfield Gardiner: Why not get a new speech?


William Earl Rowe: No one needs a new speech more than the minister, who has interrupted. You will find little but politics in anything he has said in the last ten years. Let me tell him that the farmers are not asking for a new speech from him but for a new policy, and the minister hears the rumbling in the mulberry bushes; make no mistake about that. If there is an unpopular man among the farmers of this country it is the right hon. gentleman who just interrupted.
I have already mentioned wheat prices and the disadvantage under which our Canadian producer sells.


An hon. MEMBER:: Make your own
speech.


William Earl Rowe: Mr. Speaker, I will do like
ministers sometimes do in the question period and say: If you have any further questions to ask, meet me out in the hall and I can explain there with less embarrassment to yourself and the gallery and the government. I have already mentioned wheat prices and why the farmers are dissatisfied with the present government. Personally I like the right hon. gentleman who interrupted very much, much more than I do politically. He is a much better politician than statesman ,and everybody knows very well why.
I turn now to hog prices. On March 1, last, the price of hogs in Toronto was $16.50 and $29.08 in Chicago. Cattle were $15 per 100 pounds in Toronto and $25.15 in Chicago. Lambs were $16 in Toronto and $23.60 in Chicago. On March 6, the price of wheat in Canada was $1.35 against $2.89 in Chicago. Potatoes were $1.64 per 100 pounds at Saint John, New Brunswick, and $2.70 in New York. Oats were 61J cents in Winnipeg and ninety-nine cents in Chicago. Butter was forty-two cents in Montreal and sixty-nine cents in New York. And now after the Minister of Agriculture has made such unique progress in demoralizing our Canadian agriculture, he says that here the wheat farmers are on their own, that the government will not pay any further losses. Speaking in this house on February 25, last, as reported at page 768 of Hansard, he said that the government would stand for no further losses, that the farmers had to do their own stabilizing hereafter. The farmers now realize that they have a ceiling and no floor, and it is no wonder that the agricultural walls are beginning to collapse all over the country.
A word on international trade. Those of us Who sat in this house in 1932 can remember how the members of the Liberal party at that time spent six weeks in opposing the empire agreements and finally voted against them. But now the Liberal party, after all these years, realizes what a splendid foundation those empire agreements were for negotiating trade agrements with the United States. Two weeks after the present Prime Minister (Mr. Mackenzie King) came into power he completed the negotiations for an agreement which Mr. Bennett had begun with the United States.


William Ross Macdonald: I must remind the hon. member that his time has expired.


Some hon. MEMBERS:: Go on.


William Ross Macdonald: With the unanimous consent of the house the hon. member may continue.

The Budget-Mr. Rowe


William Earl Rowe: As my genial interrupting friends have permitted me to go on I will be sporty enough to say that they can interrupt me as much as they like. I am sorry the Prime Minister is not here just now but am glad that he was able to be in the chamber at the opening of the sitting. He was leading the opposition in this house at the time of the empire trade agreements in 1932 and how well I remember him saying on one occasion that they were the work of a Tory conspiracy. What does the Liberal party think today of that Tory conspiracy? On April 14 last the Acting Prime Minister (Mr. St. Laurent) in answer to a question is reported at page 2000 of Hansard to have said:
I think we all regard the empire preferences as something quite precious which we do not intend to give up unless we get something which together we consider to be better than what we already have.


Ian Alistair Mackenzie: May I point out to my hon. friend that the empire preferences were Liberal policies introduced by Fielding in 1897 and had nothing to do with the Ottawa agreements, which were quite a different thing.


William Earl Rowe: That is true, and the hon. member for Vancouver Centre said that away back in 1932, but unfortunately he was not present to support the policy of Laurier in 1898, but in 1932 he saw fit to oppose them. I cannot understand why he would do that. If I had been in the hon. member's place I would have supported the old Liberal chieftain, and I should like here to compliment Laurier who had a much stronger British preference policy than the hon. member's present leader has.
I see by the Financial Post that Mr. Clayton, under-secretary for external affairs in the United States, stated recently that the reason why so many United States industries moved to Canada in 1932 was the preferences which had been secured by the Bennett government in the empire trade agreements. Mr. Clayton is no more politically-minded than you or I-


Ian Alistair Mackenzie: Speak for yourself.


William Earl Rowe: My hon. friend has, of course, every right to be proud of Vancouver, but other cities in western Canada are anxious to get more industrial plants and they appreciate that many United States industries set up branch plants in Canada as a result of the empire trade policies which my hon. friend's leader on one occasion called a Tory conspiracy.


Ian Alistair Mackenzie: The growth was
because of Liberal policies.


William Earl Rowe: But it was some satisfaction at last to hear the Acting Prime Minister say "We all regard the empire preferences as something quite precious." It was some satisfaction to find that those who came to scoff in 1932, like the hon. member for Vancouver Centre, remained to appreciate the empire preferences in 1947. There is an old saying that some day the chickens come home to roost. What the Bennett government did in those days made it possible for the present government to boast about so many things which they have since done as a result of those agreements.
The Prime Minister no doubt may speak with the cautious dignity of his years; the Minister of Finance (Mr. Abbott) may give his budget with more reckless assurance, but I believe that the country is doubtful as to who is leading Liberalism in Canada today. I should like to compliment the Minister of Agriculture. I believe he is probably leading Liberalism at the moment. In fact I shall go a step farther and say that I cannot conceive of any conspiracy in Canada to supplant Liberalism in this country by a policy of national socialism which would be more effective than the leadership he has given. We often wonder why we see the friendship between those to your right, Mr. Speaker, and those to our left. One promises socialism of industry in the future while the other gives us socialism of agriculture in the present. The utopia of the socialists to our left is to control industry first and agriculture last. That has now been supplanted by the Minister of Agriculture, who gives us the modern form of Liberalism which is to control agriculture first and industry last. The government supporters call this modem Liberalism; the taxpayers call it stream-lined socialism. Similarity between these two socialistic groups is no less conspicuous now than their friendship. One discourages free enterprise by reckless talking; the other discourages its progress by reckless taxation.
There is nothing so fearful as fear. I do not want to twit the Minister of Labour (Mr. Mitchell) who said he was twitting me the other day. I do not think either he or I have contributed anything by preaching depression in this country. I am satisfied-and I know he and every hon. member who listens to me this afternoon will agree with this-that there is nothing more important than to tell the world of the strength of Canada- To speak seriously, Canada is a strong government. As I said at the outset, it must be strong or it could never endure this administration-


Humphrey Mitchell: You just said "government"; don't change the record.
The Budget-Mr. Rowe


William Earl Rowe: The letter killeth but the spirit giveth light. May I say that there is nothing so fearful as fear. In that there may be vague hopes of political success for the C.C.F. socialists, the party to my left. The only hope they have is in a depression. I say, Mr. Speaker, that no single factor contributes more to a depression than their continuous talk about depression and of a return to the 1932 period. I say that in all sincerity.


Mr. KNOWLES:: Who has talked about a depression for the last hour?


William Earl Rowe: I have not. I have emphasized on many occasions that we are going to return to normal prosperity- Surely the hon. member knows the difference between that and a depression.


Stanley Howard Knowles: The. hon. member has been talking about a recession for the last .hour.


William Earl Rowe: I wras talking about a return to normal prosperity, and if the hon. member for Winnipeg North Centre (Mr. Knowles) is so foolish as to think we are not going to return to normal prosperity, then he would make a bad colleague for his party if they ever assumed the responsibility of controlling all the industries of Canada.


Mr. WRIGHT:: Tell us what "normal prosperity" means in your language.


William Earl Rowe: Normal prosperity in my language would not mean depression in yours, if you were telling the truth.
Nothing can do more to frighten and hinder venture capital than talking of a depression. If the Minister of Finance were here he would say the same thing. Canada is a great country and can endure minor weaknesses, and it has endured the talk and noise of those to my left. Unless we have a return to a depression hon. members to my left have very little chance of ever assuming power.
We should develop our own resources by having more courage: Let us think of the courage which won the war; let us think of how we can win the peace. If we get down to hard business and give enterprise a chance to breathe we shall have prosperity. Let us, however, beware of false economy. At the present time half of our taxes come from an inflated national income through indirect and wartime levies. Let us prevent depression by preparing for normal times. Let us encourage development by reducing taxes further. The war is now over. For twenty-five years, those who sit to your right drummed across the dominion national unity as their watchword
[Mr. Mitchell.)
and political war cry. It was bannered and heralded from coast to coast. I urge their leader with all his years of experience-and I say in all sincerity I regret that he is not here this afternoon-that in the twilight of his years, after having flown the banner of national unity to meet political expedience, he use it once more to see if we cannot halt the trend toward centralization of government, to see if we cannot tear up the blueprint of the federal wartime control system which we adhered to during the war because we thought it was necessary. Let him now make national unity a slogan of reality. Let him restore to our provincial governments their rightful place in the constitutional government of this country. Surely if our forefathers could meet almost a hundred years ago and establish the unity which was then established, the man who has carried the banner of national unity for a quarter of a century so glibly can now, before he leaves office, do something to bring the provinces together. Today they are wider apart than they were when the present Prime Minister took office. In all sincerity, I would urge the government to consider meeting the provinces once more to see if they cannot revive and restore the unity which their regime has evidently shaken so badly.


Mr. LIGUORI LACOMBE (Laval-Two Mountains):: The income ta.x reductions which are being over-publicized are quite deceitful. The wage-earners in the lower brackets are always the hardest hit. Can anybody with a family lead a decent life under the circumstances imposed by the present budget? The government is reducing the income tax, whereas it should be stamped out altogether for this category of wage-earners. Is it reasonable to tax the salary of the head of the family who is drawing such a small salary?
People earning between $1,800 to S3.000 should not pay income tax, owing to the increase in the cost of living. For the same reasons, salaries of single persons earning up to 81.200 should be tax free. And married people without children should pay no income tax up to $2,000.
Let us examine our so-called, commercial prosperity. As a matter of fact it is nonexistent. I can prove this statement by quoting the following warning given by Mr. Towers, governor of the Bank of Canada:
Canada cannot continue indefinitely to sell on credit on overseas markets, while it must make up with American dollars the huge deficit in its commercial balance with the United States.
Under long-term contract, we are selling a considerable amount of our products at prices below those at present prevailing on the inter-

The Budget-Mr. Lacombe
national market. As long as we follow such methods, the commercial prosperity of Canada will remain artificial. The presents and gifts which the government granted and is still granting to overseas countries forecast a dire future for our country.
Our Canadian economy cannot survive on such a basis of commercial exchanges. Let us not forget that our trade with the United States is important inasmuch as our economy is concerned. In 1946 our exports to the United States amounted to $894 million while we exported only $610 million worth to Great Britain. How is the United Kingdom paying for these exports? Not with its money. It digs into our pocket-book in order to pay the debts it owes us. On the whole, we are being fooled. We are sending to Great Britain wheat, meat, minerals, building materials, thousands of automobiles, while our own people cannot obtain an automobile and must purchase nails, tin and all their building materials on the black market. England enters into commercial agreements with European countries like Poland, and these agreements are based upon considerable quantities of products which England is buying from Canada on credit. - As far as England is concerned, this is a true political economy; for Canada, it simply means abandoning our economy and our prosperity.
It is high time that we look toward the United States inasmuch as our trade is concerned. Canada needs United States dollars urgently, otherwise we shall have to face the most terrible inflation. The danger is imminent. Commercial institutions are continuously warning the government. Canada should reduce to its lowest possible minimum the credit sales of its export products. We cannot maintain our commercial balance by continuously floating loans. These facts must be revealed. The Canadian people should not delude themselves and live in a dreamland. Our country must not be duped into a state of illusive prosperity.
I now wish to draw to the attention of the government the considerable increase in the cost of living. It seems that every effort is being attempted to bring about inflation. In spite of an adverse vote of the House of Commons, the government abolished the subsidy paid to milk producers. In the interests of producers and consumers, parliament went on record as being against the removal of this subsidy. The Canadian people, through their representatives, requested that it be continued. Our so-called champions of democracy did not pay any attention to this request. Once more, they infringed upon the prerogatives and sovereignty of parliament. Like 83166-1824
dictators, they rule by orders in council. They also recently discontinued the subsidies paid to butter producers and producers of other vital foodstuffs. Thus the small wage-earners will be all the more exploited. The decrease in income tax, embodied in the present budget, will be null and void, because the consumer will pay much higher prices for the milk and butter which are essential to the existence of his family. This budget was devised for reasons of strategy and appeasement. The government has been doing so for many years. It endeavours to appease and postpone action. It learned this during the war. It acted gradually, step by step, when it wished to induce us to participate in the war, and again to have us swallow mobilization and conscription. Always the same indirect means, the same promises and commitments which are never fulfilled.
Through the servility of the Canadian Broadcasting Corporation, which has been its maid of all work, for the last ten years the government has been spreading its insidious propaganda over the air. This publicity agent has become its servant, its slave and its monopoly. It lent its broadcasting facilities to communist spies and traitors. It refused to outlaw the communist party. Recently, in a public address in Great Britain, Tim Buck severely criticized and insulted Canada before the whole world. And Tim Buck is still free; he was never put out of the way. But Laval-Two Mountains is being done away with. The Liberal party cannot tolerate a member who keeps his word and honours the mandate he received from his constituents. It cannot forgive the one who is now speaking to you, the victories he obtained* in 1940 and 1945, despite the bandits who were stealing or manipulating the contents of ballot boxes. I have nothing but contempt for those who are trying to suppress me today. The people are with me, and I scorn the petty politicians. They are inferior beings who are appreciated as such by their fellow-Canadians. Time is a great master. Envy was not created by God, but by the devil. And God is stronger than the devil. God annihilated all plots of Lucifer. Hitler the antichrist, his ally Mussolini, were caught in their own snares. Stalin, the sacrilegious, atheist and godless potentate; Stalin the cherished child of the Liberal party; Stalin, the grand master of espionage in Canada and throughout the world, will meet his Waterloo like all the others. Ambition and injustice kill their authors. Some persons have no other object in life. They are the first to disappear. They will no longer be here; I will remain because I always lined
The Budget-Mr. Lacombe

up with truth. Because they have no ideal of beauty and truth, persons with a partial, disloyal, unfair and persecuting mind inevitably bog down in the mire of their own lives. Since the redistribution of electoral divisions will cost the public treasury considerable amounts of money, I consider it my duty to refer to this matter, which I intend to examine more thoroughly at the end of my remarks.
A while ago, I referred to the possibility of an economic crisis which will be inevitably brought about by the policy of the government. In support of this statement, let me quote the opinion of the experts of the Banque Canadienne Nationale:
Before the war, our favourable commercial balance with the United Kingdom approximately counter balanced, year in and year out, our deficit with the United States. But the pound sterling can no longer be converted freely against American dollars. Although London promised to reestablish the free convertibility of its pound on July 12 next, it is to be feared that this will be impossible. This action would not give us any American dollars, whatever be the amount of our favourable commercial balance with the United Kingdom, as long as we do not procure Great Britain with the means of paying its purchases in Canada.
At the end of their report the financial experts of the same bank give this solemn warning:
As long as our trade with the United States shows a deficit which we cannot normally make up, the state of prosperity which certain people proclaim will be artificial. We should not create an atmosphere of false prosperity which will only lead us to a tragic awakening.
Nevertheless the government is opening our doors wider and wider to immigration. Is it relying on the artificial prosperity of Canada? It should be very cautious if it does not wish to witness once more the period of unemployment and extreme poverty we went through a few years ago. As long as we can not give employment to our own fellow citizens, we should close our doors upon immigration. Our own people should come first. If we tolerate that foreigners fill the jobs to which our own workers are entitled, we shall deny them their right to existence, we shall be ignoring the sacrifices of our veterans on the battlefields.
Now let us examine a much talked-about subject, dominion-provincial relations. The powers of the dominion and the provinces with regard to taxation are defined in the British North America Act. If the federal government had adhered to that act, all these useless discussions and unending conferences could have been avoided. In spite of the privileges granted the provinces, the federal government keeps on infringing every year

upon the taxation domain reserved to the provinces, by violating the jurisdiction determined by our constitution.


Mr. MICHAUD:: Which?


Liguori Lacombe: I do not wish to be interrupted without my permission, in accordance with the rules of the house. I want my forty minutes.


Benoît Michaud: All right.


Liguori Lacombe: The most serious danger is this interference by the central government as regards the collection of taxes granted- the provinces by the British North America Act. In support of my statement, I refer to the memorandum of the chamber of commerce of the district of Montreal. More than four thousand businessmen protested against this invasion of provincial jurisdiction by the federal government. This memorandum states that the economic and taxation problems cannot be solved by a violation of the constitutional rights and prerogatives of the provinces. Ottawa will never be able to subdue the prerogatives which the provinces hold in their own right. In his budget speech the Minister of Finance (Mr. Abbott) raises no hope as to a possible reopening of discussion between the federal government and the provinces on this most important national subject.
Mr. Speaker, I find, as many others do, that the attitude of some members of this house is strange. They are loud in their demands for tax reductions. These same members voted for Canada's participation in the war, mobilization and conscription. Their vote brought death to more than fifty thousand of our young men. They are the ones who supported the handing over of thousands of millions in gifts to England.
Those whose votes accumulated a debt of S20 billion which the taxpayer must now foot, are not entitled to be inconsistent to such an extent. Are they now satisfied with their work? Canada is the laughing-stock of the world. We are excluded from world peace conferences. Canada is either playing the part of a secondary nation, or takes no part at all. Its territory is invaded by the soviet spies whom this country has fostered. Communist cells are multiplying in this country under the benevolence of the present government which refuses to outlaw the communist-minded Labour-Progressive party. The same government refuses to appoint an ambassador to the Vatican. And yet, peace, charity and justice shall come from nowhere but the Vatican. But the next war will spring from the Jewish and masonic clique who are against the appointment of an ambassador to the Vatican.

The Budget-Mr. Caouette
This war will come sooner than we think, in a world armed to the teeth with infernal machines invented by the diabolical genius of a few persons. The next war will not spring from Christian Spain, already condemned by Mr. Wilgress, who was then representing our country at the united nations. It will come from atheistic and godless Russia. Where the Lord is not, there we find hatred, ambition, domination, injustice and wholesome death. As ever, thanks to our imperialists, our colonials, and those men without backbone, we shall be caught in the turmoil. When that day comes, the world shall have lived.
Referring once more to the redistribution, I wish to draw the attention of the house to the following facts. At the very first meeting of the House of Commons committee appointed for the purpose of readjusting the representation in this house, I submitted to the members of the committee representations which I deemed fair and reasonable. I then asked that the towns of Laval des Rapides and Pont Viau be annexed to the riding of Laval-Deux Montagnes. According to the 1941 census, Laval-Deux Montagnes had a population of 33,498 persons. Since that time, this figure has increased considerably. If the members of the committee had accepted my viewpoint, they would have done justice not only to Laval-Deux Montagnes, but also to Argenteuil. As a matter of fact, according to the 1941 census, the population of Laval-Deux Montagnes, together with that of Laval des Rapides and Pont Viau, which actually belong to 1'IIe Jesus, would have totalled 38,082 persons. Nobody can deny that such a population was sufficient, when one compares it to the population of Glengarry, 18,000; Vaud-reuil-Soulanges, 22,498; Stanstead, 27,972.
The ACTING SPEAKER (Mr. Golding); Order. I must call the hon. member's attention to the fact that he cannot discuss the redistribution bill because that bill is before a special committee.


Mr. RINFRET:: Let him go on.


Liguori Lacombe: I am actually discussing the budget, Mr. Speaker; the redistribution of the federal divisions will necessarily involve expense.
The ACTING SPEAKER (Mr. Golding); Order. That matter is before a special committee, and it is not in order for any hon. member to discuss it until that committee has made its report.


Édouard-Gabriel Rinfret: Let him go on.


Stanley Howard Knowles: Oh, no. What are rules for?


Liguori Lacombe: All right, Mr. Speaker; I will wait and discuss the question when the report of the committee is made in the House of Commons.


Benoît Michaud: That is better.


Mr. REAL CAOUETTE (Pontiac) (Translation) :: Mr. Speaker, I wish to speak on behalf of the electors of Pontiac county, of the Electors' Union of the same county, of the Electors' Union of my province and of Canada at large, since everyone in Canada wants the same results.
I am responsible neither to nor for any political party; I am only responsible to my constitutents and I must therefore speak in their name.
It was my intention to say a few words about redistribution, but I shall not do so until the committee has submitted a report.
As for the budget, the liberal press and controlled radio have tried to impress upon the population that the Minister of Finance (Mr. Abbott) had revealed himself an ideal treasurer and that his budget would be hailed throughout the country. It is rather the opposite. Everyone expected that exemptions would be boosted to at least $1,000 for single persons and $2,000 for married persons. Nothing of the kind happened. The young man earning over $750 per year ($14.45 per week) will still be unable to keep his small income entirely to himself, and that also applies to married persons whose income exceeds $1,500 per year (or $28.85 per week). The government demands its share. Income tax, therefore, is levied on as many people as before.
True the amount to be paid has been reduced, but the reduction is very slight, as far as the small wage-earners are concerned. The income tax of a person who is single and who earns $1,000 per annum will be $26 lower than last year, that is to say, 50 cents less per week. That person will pocket an extra half dollar, which is a most comforting thought when, at the same time, there is an increase of 10 cents a pound in the price of butter, 4 cents a pound in that of cheese, 14 cent a dozen in the price of eggs, all of which results from the policy of the very government which decided to substitute rising consumer prices for producer subsidies.
Those who are in the higher income brackets ought to be more thankful than anyone else to Mr. Abbott. Granted, the income tax of the single taxpayer earning $1,000 is decreased by $26 and that of a father earning $2,000, is reduced by $32, but that of the single taxpayer who has the good fortune of netting himself $5,000 is lower by $370, while if his income
The Budget-Mr. Caouette

amounts to 810,000, he pockets $785 more than previously. The hon. minister annually favours the single taxpayer in the $50,000 bracket with $2,598.
Apart from these income tax cuts, insignificant as far as ordinary incomes are concerned, the budget offers no new features.
True to the practice followed by his predecessors, the Minister of Finance has presented us nothing but a statement of our estimated revenues and expenditures. The people of Canada have had nothing more. One finds no statement of our assets and liabilities. We have no means to know which side of our balance sheet shows greater progress, if our country has increased its wealth and what part of that increase is to be divided among the country's shareholders, the Canadian people. The budget speech is silent on those points. Can one imagine a business firm being satisfied with a simple statement of its revenues and expenditures? What company knows nothing of its assets and liabilities?
Is there also a company that fails to distribute dividends when it is prosperous?
Is Canada prosperous? Yes, if we are to believe the Minister of Finance. But what makes, according to him, the prosperity of Canada? Where is it to be found? Does it reside in the amount of goods exported from the country or in the amount consumed by our people?	.
In the minister's mind, it consists probably in the amount of money that may be extorted from the taxpayers without causing open revolt.
The Union of Electors stood for the removal of income tax on all incomes under $3,000 per annum. Personally, I have received thousands of petition cards and signatures-


Some hon. MEMBERS:: What a farce.


David Réal Caouette: My hon. friends opposite should open their ears and shut their big mouths if they wish to understand.


Mr. GAUTHIER (Portneuf):: Why don't you shut yours?


An hon. MEMBER:: I too have received some.


David Réal Caouette: Hundreds of requests came to me, asking for the removal of income tax on all incomes under $3,000 per annum. The Honourable Minister of Finance has completely forgotten that voters throughout the country have made similar representations and are clamouring for the exemption from taxation of all incomes under $3,000 per annum.
Of course the budget which has been brought down represents the total of taxes and expenses of the government. His Holiness Pope Pius XI stated in Quadragesimo Anno that those who control money and credit are the masters of our lives and without their permission no one dares even breathe. Without the permission of those who control money and credit, no one dares even breathe.


Mr. COTE (Matapedia-Matane):: Did you read it in Latin?


David Réal Caouette: My hon. friend should read it in French in order to get it through his thick skull and grasp its true meaning.
Who controls money and credit in this country? Who controls the economic lifeblood of the Canadian people? It is certainly not the government since they spend their time digging into the pockets of the taxpayers and taking their money away from them.


Mr. BRUNELLE:: They are "diggers".


David Réal Caouette: They dig into the
pockets of the Canadian taxpayers to take away from them the money which they have earned by the sweat of their brow.


An hon. MEMBER:: Shame.


David Réal Caouette: And they spend all the taxes which they levy on scarcities while there are in Canada tremendous possibilities for development.


Benoît Michaud: Hear, hear.


David Réal Caouette: There are tremendous physical resources which could provide the Canadian people with comforts, freedom and security through the distribution of money and purchasing power to the consumers, and this we can do by the distribution of a national dividend out of the profits which the people of this country, as individuals, have earned by their labour, in the 300 years since the discovery of Canada. Mr. Speaker. . .


An hon. MEMBER:: It's 400 years!


David Réal Caouette: Four hundred years. All the better.
Mr. Speaker, after three or four hundred years of toil on the part of our ancestors, the first settlers of Canada, when those citizens have worked hard at scientific development, and have progressed, is the Canadian people to be deluded into the belief that Canadian society is forging ahead? It is heading for disaster, for it shows a deficit instead of a profit. Instead of surplus of assets, we are shown an increase of liabilities. Electors are being misled, the Canadian people is being

The Budget-Mr. Caouette
hoodwinked, dazzled by figures purely and simply made up by Canadian bankers. Mr. Speaker, money and credit are controlled by the leaders who gave the signal for war in 1939, the leaders who started the depression in 1929. Those who control credit and money are responsible for the last ten years and for World War II. Unless and until the government does away with those "controllers" of our economic blood, or deprives them of their powers over this nation, there is no use hoping for a better democracy or a better standard of living for Canadians. In a country like ours, wealth cannot be distributed as long as it is held by those who "control" the economic life-blood, those who want, by all means, to create destitution in the midst of abundance, who wish to kee_p the people in a state akin to slavery. Unless such a situation is done away with, our country will turn more and more to communism.


An hon. MEMBER:: Hear, hearl


David Réal Caouette: Mr. Speaker, in 1931 the same Pope Pius XI stated, in quadra-gesimo Anno:
Our leaders have forsaken their noble tasks and have become the servants' of private interests.
Our leaders have become but the slaves of financiers; such is the meaning of that excerpt. In times past, I believe, Canada had a good Conservative government, but it was no better than the Liberal government. In 1935, depression was still with us; it ended only in 1939, when Hitler, the scapegrace, decided to invade poor Poland. Therefore, it was Hitler who put an end to the 1929-1939 depression and brought prosperity to the world, since we enjoyed its benefits only during the war.
During the war, the government has borrowed fabulous sums of money; it has increased our national debt to such an extent that it will be impossible to repay it, since according to the budget speech now in the red in the amount of some $17,000,000,000.
Mr. Speaker, during the 1939-45 war, an Englishman, a German and a Canadian were talking about science and the progress it had made during the war.


An hon. MEMBER:: That one has whiskers on it.


David Réal Caouette: So have you, my friend. Speaking first the Englishman said:


An hon. MEMBER:: We have heard it before.


David Réal Caouette: In order to show how his country was advanced in science, the Englishman said: "My friends, when a man dies of heart trouble, we take out the old heart, put in an artificial one and the man comes back to life." The German meant to prove that science had made such progress in Germany that when a man had his head cut from the shoulders they had a special glue with which to stick it back in place and that after the operation the patient was feeling fine. The Canadian found that very funny and started to laugh. "In Canada," he said, "science is much more advanced than that. We have found out long ago how to replace a human heart by an artificial one. Sticking one head on shoulders is easy in Canada, we can even stick a dozen heads on the same shoulders. AVe have made even further progress, because men without head and without heart are at the helm in our country.
Mr. Speaker, after the war years we have gone through, there are some unemployed in the country. We find them everywhere in Canada, in Montreal, in Quebec and in all other cities; yet the Minister of Finance states that prosperity prevails in Canada. Representations have been made from all over the country urging the minister of Finance to bring down a sensible budget, in line with Canada's assets. Representations have even been made by little children asking that taxes on chocolate and soft drinks be removed. Protests have come from all parts of the country. I have here a wire requesting the repeal of the tax on soft drinks. I have a letter from an educational institution of my riding and a wire from the Val d'Or Bottling Works stating that the quantity and quality of soft drinks even at five cents a bottle would equal the pre-war standard. Poulin and Son, Rouyn bottlers, have sent me the following wire:
Do utmost to repeal soft drink sales tax plus bringing price back to five cents and benefiting public. Quantity and quality will remain the same in each bottle. Counting on your help.
Here is another one from A. N. Drouin, of Val d'Or:
You may rest assured that the quality of my products will remain the same and the retail price five cents should the tax on soft drinks be removed.
I have also a letter from Saint-Michel-Archange School, Rouyn, Quebec, asking for the removal of the tax on soft drinks and stating that the same request was made last year without any tangible result. I quote from that letter, the following excerpt:
As we explained last year, the said tax is still in force despite the fact that the war has been over more than seventeen months. The two-cent
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war tax represents a 40 per cent increase in the pre-war price and, an our opinion, no other Canadian product is saddled with such a heavy tax.
Our school hoys and school girls drink the greater part of our soft drinks. Since they have but little money available for the purchase of a few delicacies, they are often compelled to envy their comrades who can afford those harmless drinks which they covet but are unable to buy owing to the two-cent increase.
I submit that these children should be granted by the Minister of Finance their request for the privilege of buying and consuming chocolate bars and soft drinks.
I have here, Mr. Speaker, another letter asking for the removal of the tax on soft drinks. It was sent to me by the Sacred Heart League in Rouyn. But the Minister of Finance takes no heed. Such representations are not coming only from Pontiac county but from everywhere in the country.


An hon. MEMBER:: What about Coca-
Cola?


David Réal Caouette: Coca-Cola and Pepsi-
Cola as well. These requests are coming perhaps from your own children also.


Benoît Michaud: Milk is much better
for them.


David Réal Caouette: Mr. Speaker, some
people are beginning to realize that prosperity in Canada depends upon the exportation of many of our products. We think that by exporting our goods we increase the wealth of the country. I asked a question last week on the production and export of automobiles in Canada. Canadians are anxious to buy cars in many cases for their business while shortages are being created in order to force those who secure those automobiles to pay four, five and even six hundred dollars extra on the black market.
During a ten-month period, from June, 1946, to March, 1947, Canada has exported 33,238 passenger automobiles while the Canadian people are clamouring for cars.
It is claimed that those countries where motor cars have been shipped are suffering from distress and dire poverty; why then send them automobiles to drive in? We should send them foodstuffs instead and keep our automobiles for our own people who need them.


Mr. GAGNON:: That is right.


David Réal Caouette: Then we would serve our own people before serving people from other countries.


Paul-Edmond Gagnon: Quite true.


David Réal Caouette: The commodities which find their way into the homes of our own people are a true yardstick of our prosperity.
His Holiness Pope Pius XI said in the Quadragesimo Anno encyclical that the economic system will serve its true purpose only when it provides everyone with a share of the goods which nature and industry can supply. That share should be sufficient to provide everyone with the means required for an honest livelihood.
When shall each and every citizen of this country be assured of at least a decent living? When Canadians are given the buying power that will guarantee them a decent livelihood, a decent competency.
That is why the budget speech of the Hon. Minister of Finance should have included a paragraph-I should have been delighted to find it there-granting each and every Canadian citizen a national dividend based on surplus production, in fact on their own buying power, out of salaries and profits.
If Canada is really and truly prosperous, why not grant this dividend to this country's shareholders, to everyone of its citizens? Companies do it for their own shareholders; why cannot Canada do it for its shareholders, those who hold a stake in Canadian society?
Mr. Speaker, we now hear about communism more than ever before. There is talk of legislation to outlaw communism. Already, in the province of Quebec, a law was enacted some ten years ago prohibiting communistic activities within the province. Representations have already been made, in Ottawa, to have the labour-progressive party banished from Canada- Possibly hundreds more will be made within six months or a year.
Mr. Speaker, it will be useless to enact anticommunist legislation, measures to abolish the labour-progressive party, or padlock laws. Never shall we be successful in checking communism through legislative means. There is but one easy and swift way of checking its spread and that is by guaranteeing every citizen of the country a decent competency, a minimum standard of living and the possibility of earning his keep and avoiding unemployment. If we ensure that our citizens enjoy these benefits there will never be any threat of communism in Canada.
To support what I have just said, I wish to read from a series of publications entitled "Construire" (To Build) an article by Rev. Father Dugre in number 10 of that series:
Doctors tell us that germs are present everywhere, that we swallow them wholesale, but that they are dangerous only in so far as they fall on favourable ground. So, Russian propaganda is ever present; but if the Canadian or Quebec

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social state is in such a healthy condition that the germs fall among a happy people, communism will ever strike inattentive ears.
"Thank you. We are doing all right. We can still do without a revolution."
Would that not be our best defence? We are offered the Russian style of happiness; let us oppose it to our own sort of happiness; let us organize a social life that will challenge all competition, develop for ourselves and the poor, those easy victims of communism, a beneficent and general prosperity that will leave no room for discontent and will relieve the plight of our families, of our young boys and girls and of the overflow of our population. Then we may feel secure. If, on the contrary, we should limit ourselves to appeals to patience, to hopes for eternal bliss in the midst of poverty, without consideration for a minimum of earthly happiness, we would be betraying the Church.
If there is a country where material wellbeing is possible, it is Canada. In the wealth which God has placed at our disposal, for us to develop, we must find a full rich life or else we are clumsily transgressing the will of our Creator. Yet he is not to blame. The guilty ones are those shortsighted statesmen, who would try to justify their inertia by such excuses as "strictest economy" or by contending that "unemployment is worldwide," as though the function of money were not to serve the people and as if our vast and young Canada were in the same condition as those overcrowded countries of the Old World.
Here is another very important paragraph, Mr. Speaker:
Let us leave unto Caesar the task that belongs to Caesar and ask him to consider our lowly citizens. He has the responsibility over those questions on which depends social happiness, bread and butter, houses for our people, the establishment of our youth, joyful employment and the movement of money. Caesar will have to exert himself. Some poisons act as remedies: the fear of communism will begin to inject wisdom into needed reforms. Let us not delude ourselves: our democracy is imperfect, often hypocritical and heartless. It overdoes "taking into serious consideration" warranted complaints, requests for readjustment, reform, assistance and land. It is too weak towards the powerful, too harsh on the little man. Hence, speculation, abuse pluralism, questionable contracts which give rise to bitterness, envy and desperate actions. None of this should happen in our young country with a potential prosperity from millions of sources hampered by filthy lucre or reserved for immigrants.
Mr. Speaker, my time is almost up, but I could carry on for another forty minutes; however, I shall await a further opportunity to continue the education of my hon. friends from the Little Chicago section.


Mr. LANGLOIS:: Thank you, sir, you are very kind.


David Réal Caouette: If for one moment after the bringing down of the budget I had been allowed to enact a bill or to replace the hon. minister of Finance, my first step would have been to deprive the banks of their power to 83166-183
create money, that is to say, the credit of the nation; I would have forbidden all those Canadian bankers to create money or credit in this country and I would have transferred that power to the government. If a single banker had then tried to create credit or money he would have been treated in the same way as any other individual who is guilty of counterfeiting five dollar bills or bills of any other denomination; I would immediately have asked the officials of the Department of Finance to distribute one hundred dollars to each Canadian citizen, for a period of six months, instead of straining themselves to find ways and means of taxing the people.


An hon. MEMBER:: That is not enough.


Pierre Gauthier: You should have given more.


An hon. MEMBER:: The period is too short!


David Réal Caouette: I would have immediately told the people, by means of the radio and the newspapers, you will not receive any more cheques for that amount before six months.
Some may say that a* family of ten would get $1,000 and a family of twenty, $2,000. But there can never be more than thirty-six people in one family.
Distribution would be general for the benefit of every Canadian. People would be encouraged to work and to produce more. I would tell them that during the next six months no new money will be issued, that they will earn their wages as usual, without anybody being socialized, and that at the end of that period, if they have produced more, they will be given more. If they have produced much, they will receive much. If they cease producing and there be more money than products, money surpluses will have to be taxed where they lie. They will have to be taxed if there is too much money in circulation for the available goods. This would be in the interest of our people. In this way, employees and workers would be encouraged to work and to produce more. We have the example of the subsidies which were granted during the war to encourage production. When they were removed, prices went up. Consumers could not buy as much as before and producers had to produce less because of a curtailed demand. Therefore I suggest that subsidies should be continued while controls should be removed in this country. The Minister of Finance, as well as the hon. members opposite, claim that to distribute the sum of $100 to each Canadian citizen would be sheer folly. Parliament has

The Budget-Mr. Caouette

the power and the duty to assume control of the issue of money and credit in the country and to distribute them fairly in order to help all our citizens and to provide them with the security and the freedom which would be theirs if purchasing power were based upon the tremendous possibilities of Canada. Mr. Speaker, my hon. friends have voted themselves an additional 82,000 last year; did this increase in their indemnities make them any lazier than they were last year?
An, hon. MEMBER:	You have accepted
it yourself.


David Réal Caouette: Yes I did and I would accept an additional $2,000, but before doing so I would vote $2,000 for my constituents and for the citizens of Canada. Mr. Speaker, I am not easily offended but sometimes I cannot help it.


An hon. MEMBER:: Go ahead, you are
doing fine.


David Réal Caouette: Mr. Speaker, is it impossible to carry out such a programme? The Liberal party frowns as much as I do upon communism.


Some hon. MEMBERS:: Hear, hear.


David Réal Caouette: Likewise the Conservative party.


Some hon. MEMBERS:: No.


David Réal Caouette: And I think that the
members of the C.C.F. party are not fond of it either.


Some hon. MEMBERS:: We are not too sure about that.


David Réal Caouette: Members of the Social Credit group are flatly and irrevocably against communism in all its forms.


Some hon. MEMBERS:: Hear, hear.


David Réal Caouette: Mr. Speaker, if we wish to ward off communism, it is time the members of this house united their efforts in fighting the rise of communism in this country. In order to do so, it is time we struck a balance of this country's assets and liabilities, we determined the profits earned by the work of organized society and distributed new money to all members of that society who shared in the economic and social activities which led to Canada's vast production, a society which represents the great physical producing power of our country.
Mr. Speaker, were everyone in this house to contribute toward giving the Canadian people that guarantee, toward giving

Canada to the Canadians, toward using Canadian money and production to the advantage of the citizens of our country, I could warrant that communism would never win any ground here, because our people would be happy and fully satisfied, knowing that Canada would henceforth be theirs and realizing how grand it is to live in such a wealthy country as ours, in a country that needs no one from outside to dictate to it. Let us be worthy of our responsibilities. We are all responsible to the Canadian electors and not to a party. Our duty demands that we deprive the financial magnates of their power to control and that we place the assets of the country at the service of the Canadian people.
(Text):


Mr. DANIEL McIVOR (Fort William):: After listening and catching the odd word, I am sure that some of us have regrets at not having a real knowledge of French so that we could; understand the oratory and enthusiasm to which we have just listened. However, I still see the Minister of Finance (Mr. Abbott) delivering his budget. He stood up; he spoke up; he had something that he was extremely proud of, and then he sat down. If other hon. members did the same thing we would not have the urgent need for improvement in our acoustics.
I had some regrets when I heard the budget. I thought the luxury taxes would be eliminated. I had not understood thoroughly the reductions that had been made. Of course, to me jewellery and jewellery stores should not be taxed as luxuries because they sell things which are absolutely necessary to the home life of Canada. Take clocks and watches and wedding rings. Anybody would admit that the use of a wedding ring is necessary for the upbuilding of a good home. I congratulate the minister on the announcement which appears in the press today that $17,500 will be proposed in the supplementary estimates for the support of the Olympic games. I think it is in keeping with good Liberal policies, and it is telling the youth of Canada that they should keep fit physically and mentally. I am sure that when the Olympic games are on and our own flag rolls up high, when our lady from Ottawa, Miss Barbara Ann Scott, takes part, whether she wins or not, we shall be extremely proud of her.
This brings to mind one of the outstanding needs of the House of Commons-and it is not loud speakers that I am going to speak about. The outstanding need of the House of Commons is, first, a good gymnasium and, second, a good swimming pool. When we

The Budget-Mr. Mclvor
come here and the session opens we are in fit physical shape, but we have to do so much sitting around that we do not get our physical exercise or our setting up exercises unless we do them in our own rooms. I can see men putting on fat. Hon. members will agree that fat is a dead weight, and doctors will tell us that it is a tug on the heart; therefore we should have a good gymnasium. I hope that when Ottawa is beautified we shall have this institution to help to beautify the human body.
I should like to make some reference to the provinces. Perhaps somebody with more weight and intelligence could deal with this matter better than I, but I am going to deal with it in my own way. I look on Canada, the land of my adoption, as a big family. A properly regulated Christian family has authority somewhere. It should be in the father; sometimes it is in the mother, but it is usually in a combination of both, since they are one. The family of Canada should not have its authority in British Columbia; it should not have it in Quebec; it should not have it in Ontario; it should have it here in Ottawa. There should be an authority that Canada will be proud of. I do not think we would be very proud of our cabinet ministers if they went so far as to change the constitution of Canada to the detriment of our country. I hope that there will be no breakdown in that regard. I am thinking of the song that is sometimes sung here, "The more we are together, the happier we will be."
I should like to congratulate the minister in that he did not forget old age pensions. In that respect he supported what was contained in the speech from the throne. Some people outside the house thought there would be an increase in old age pensions. If the pension is increased to S30 I hope that every province in Canada will add as much as British Columbia has added to it, and therefore there will be a decent pension for our old age pensioners. As I said before, if the Liberal government is left long enough in power I expect that one day the old age pension will be $50 a month.
I should like to speak of the pensioners of the first great war. I have congratulated the Minister of Veterans Affairs (Mr. Mackenzie) behind his back on the work that he, his committee and1 the government have done in looking after the pensioners of the recent war, but I find that pensioners of the first war need some consideration. I have had delegations call on me, and I had sense enough not to promise more than I was sure of. I had one 83166-1831
group of men tell me of a pensioner who was getting a 100 per cent pension, and this is what I found. He pays $33 a month rent; groceries, $30; coal, $10, and that does not heat the house very well; meat, $12; milk $9; bread, $2.50; light and telephone, $7.50, making a total of $104. All he gets is $100, and his rent is to be raised $5 a month because of the change in the rental regulations. The same amounts I have given do not include anything extra for medicine; they do not include anything for clothes for himself or his wife. They do not include anything for insurance or the odd bottle of ginger ale, and I think the Minister of Veterans Affairs will give more consideration to these pensioners. I have advocated before that employees on railways and elsewhere should have a national pension sponsored by a central authority in the dominion government. It should be contributory, because, as we know men who earn good1 salaries are inclined to spend their money as they receive it and they are nearly always broke the first week after they get their pay. But if a man is compelled to contribute to a pension fund he will have something in his old age. Alternatively, he should be compelled to put his money into annuities.
In Fort William there are two things that we would like the government to pay a little more attention to. Our hospitalls are in straitened circumstances. When I think of our hospital and what it is doing for the dominion government, I suggest that we should have more consideration in connection with the building of the new McKellar hospital wing. I am informed by our hospital board that fifteen beds are necessary at all times for veterans and1 Indians. I will not say more about that just now, but I think some attention should be given to it.
When I spoke before in the house I mentioned an outstanding need in northwestern Ontario and west of Fort William, and that is that some consideration be given to the distress under which gold miners are trying to do their work. We have in the Shebandowan district a splendid place for operations in gold mining and we think some relief should be given. We have these resources that are perhaps second to none in all Canada.
Some reference was made this afternoon to the Minister of Agriculture (Mr. Gardiner). A good deal was said, and then I thought of the farmers in my own district and the benefit they have derived from the experimental substation there. I can remember when I bought eggs at fifteen cents a dozen by the case, but farmers do not have to sell eggs at that figure today. They are better off and are better sat-
The Budget-Mr. Mclvor

isfied than they have, ever been, and1 we hope that we shall not find it necessary to go back to the old way of doing things.
When I think of the reduction in taxation proposed in this budget, and how it affects me, I can see that it will give me a little more money to spend, and if there is anything I like to do it is to spend money that is my own, so that the more I get in the form of a reduction in taxes, the more I shall have to spend. I think, therefore, that what is given in the budget in this way comes in very handy.
I am sorry that the children cannot get their chocolate bars and soft drinks, but I am informed by a doctor of dentistry that this is not so bad because it is a splendid thing for children's teeth when they do not have so much sugar. I know from my experience as a boy that the more candy you eat, the oftener you have to go to the dentist.
When I think of the reduction in taxes I think of a donkey we had on the farm at one time. If you twisted his tail something was bound to happen and you would not be standing there when it did. But if you twisted the donkey's tail the donkey would be there just the same. You did not change the donkey. Well, you can find fault with this budget all you like, but the reduction it makes is a splendid thing and' I congratulate the minister.


Mr. JACKMAN:: Mr. Speaker, I understand that the house would like to go into supply and, since it is almost six o'clock, with your permission I would ask that you call it six o'clock.


William Ross Macdonald: Mr. Jackman moves that the debate be adjourned.
Motion agreed to and debate adjourned.

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


DEPARTMENT OP NATIONAL DEFENCE
[Stage Direction]
Normal services-	_	_
190. Grants to military associations and institutes, as detailed in the estimates, $113,350.
Ian Alistair Mackenzie: The object in calling the item is merely to get it before the committee and not for discussion. I would ask that it stand.
Item stands.


DEPARTMENT OF MINES AND RESOURCES
[Stage Direction]
130. Departmental administration, $183,173.
Ian Alistair Mackenzie: The purpose here is also to get the item before the committee.
Item stands.


Mr. STIRLING:: May I ask how many departments are now in?


Ian Alistair Mackenzie: I think this will make eight. That is my recollection. I believe there were six in before tonight.
Progress reported.
On motion of Mr. Mackenzie the house adjourned at 5.50 p.m.
Thursday, May 8, 1947