[Stage Direction]
Third report of standing committee on miscellaneous private bills.-Mr. Maybank.

Mr. G. RUSSELL BOUCHER (Carleton):: In accordance with standing order 25, Mr. Speaker, Beauchesne, second edition, I should like to move, seconded by the hon. member for Saint John-Albert (Mr. Hazen):
That Bill No. 301, an act for the relief of Aldoria Rodier ddt St. Martin, referred to in the third report of the standing committee on private bills, presented to this house this day, be referred back to the standing committee for further consideration and report.
This is a bill for divorce which was brought before the senate committee, where evidence was taken therein in full. After the applicant had presented his ease, counsel for the respondent stated that they had no evidence to adduce in rebuttal of the allegation made by the applicant. The committee of the other house agreed to the divorce and recommended that it be granted. On presentation of the bill a few days ago to the miscellaneous private bills committee of the House of Commons, there appeared the evidence taken in the senate, the recommendations of the senate committee, and, although the counsel for the respondent had stated before that committee that they had no evidence to offer in rebuttal of the evidence of the applicant, a letter from the respondent herself was, I submit, wrongly admitted into evidence by the committee of this house. By virtue of that letter, objecting to certain procedures and certain evidence given, the committee of the House of Commons I believe rejected the bill.
My point is this. A committee of the upper house sitting as a court, having gone into the evidence in detail, having passed upon it, having had witnesses before it who were examined and cross-examined, and counsel for the respondent having stated that there was no defence to offer, I think it was improper and unjust that a letter should be received from the respondent, taken into consideration and
dealt with by the committee of the House of Commons without opportunity of cross-examination, without evidence being given under oath, and in actual repudiation of the findings of the committee of the upper house. The committee of this house saw fit to give a decision contrary to that of the upper house. This is surely a grave miscarriage of justice.
I think any member of this house who has practised in a court of law will realize the great danger there is in accepting evidence by way of letter, after the case has been closed following a full formal hearing, and taking the weight of that evidence into consideration in deciding upon the disposition of any matter previously considered by a court. Any man with legal experience would realize that it is very improper to receive a letter of that kind anywhere, whether it be a committee of inquiry or a court of any kind. I think it is not only a reflection upon the findings of a very able committee of the other place to overrule a considered opinion reached upon evidence properly adduced and subject to examination and cross-examination; it is an aspersion upon the upper house to have a committee of this house take this action in view of the good work being done in the other place in connection with divorce matters. I believe this would be a dangerous precedent for this house to establish, and it would be doing a grave injustice to a citizen of this country who has taken the only legal recourse available.
Therefore I urge the house, though we are practically at the last day of the session, to adopt the motion and give this applicant the right to a proper hearing and a proper disposition of a proper application to these houses of parliament.


Mr. D. KING HAZEN (Saint John-Albert):: I rise to support the motion that has been moved by the hon. member for Carleton (Mr. Boucher). I am a member of the committee on miscellaneous private bills which dealt with this matter a day or two ago. Petitions for bills of divorce are heard by a committee of the other place, who sit as a court and hear the evidence of the petitioner and his or her witnesses, and the evidence of the witnesses for the defence, if any. If justice is to be done in these cases-


Mr. SPEAKER:: Order. I am sorry to interrupt the hon. member, but if he will look
Private Bill-Divorce

at standing order 38, which sets out the motions which are debatable and those which are not debatable, he will see that a motion of this kind is not subject to debate. I permitted the hon. member for Carleton, the mover of the motion, to make an explanation, but I do not think a debate would be proper. If it is the wish of the house that a representative of the committee should be permitted to give a further explanation, however, I believe that would be proper.


Mr. CRUICKSHANK:: Am I to understand that half an hour of the time of the house is to be taken up on a silly divorce case, when I am not allowed to speak about flood conditions?


Douglas King Hazen: Do I understand, Mr. Speaker, you have ruled that I am not to be permitted to say anything on this matter, in which I believe a great injustice has been done?


James Horace King: The hon. member should realize that I have no choice in the matter; the standing order says a motion of this kind is not debatable. If the hon. gentleman believes he should give some explanation, I will permit him to do so, but I would ask him to be as brief as possible.


Douglas King Hazen: Thank you, Mr. Speaker; I shall endeavour to be brief. I do not wish to make a long speech, but there are certain matters which should be brought to the attention of the members of this house in connection with this case. As I was saying, petitions for divorce come before a committee of the other place. That committee sits as a court. It hears the evidence of the parties, and then arrives at a decision. If justice is to be done in these matters the principles of justice must be observed and the rules of evidence must be followed.


James Horace King: Order. I am sorry, but the hon. member must realize that he is not giving an explanation. Is it the pleasure of the house to adopt the motion?


Mr. MAYBANK:: I am not sure that I heard your ruling, Mr. Speaker, but I understood you to say some explanation could be given by a member of the committee. If that is so, as chairman of the committee I should like an opportunity to speak, but of course without endeavouring to prevent any other member from speaking. I believe there are some things that should be said.


James Horace King: I believe it would be only fair to give the hon. member, who is chairman

of the committee, an opportunity to explain the matter, but I would ask him to be as brief as possible.


George Alexander Cruickshank: May I talk about the floods for the same length of time?


Douglas King Hazen: Surely if the chairman of the committee is to have the right to speak I should have the opportunity to speak first, because I wish to censure the committee-


James Horace King: Order. If the house does not agree, I shall have to apply the rule as it is. Motions of this kind are not debatable. Is it the pleasure of the house to adopt the motion?


Mr. LENNARD:: I was paired with the Minister of Trade and Commerce (Mr. Howe). Had I voted I would have voted for the motion.


Mr. JACKMAN:: I was paired with the hon. member for Jacques Cartier (Mr. Marier). Had I voted 1 would have voted for the motion.


Mr. HODGSON:: il was paired with the hon. member for York North (Mr. Smith). Had I voted I would have voted for the motion.



PARLIAMENTARY RESTAURANT

Hon. ALPHONSE FOURNIER (Minister of Public Works):: I wish to move:
That the report of the civil service commission relating to the permanent appointment of Mr. William Jennings as manager of the joint parliamentary restaurant, House of Commons, laid on the table of the house on Wednesday, June 23, 1948, be now approved.


[Stage Direction]
Motion agreed to.


Hon. PAUL MARTIN (Minister of National Health and Welfare):: On May 17 in answer to a question by the hon. member for Mackenzie (Mr. Nicholson)-Hansard, page 3980-certain replies were given with respect to practising physicians in this country. I now wish to table a supplementary and more complete reply to that question.



TELEGRAPHS AND TELEPHONES


[Stage Direction]
Moore
Mutch
Nixon
Parent
Power
Reid
Richard (Ottawa East)
Rinfret
St. Laurent
Sinclair
Townley-Smith
Viau
Warren
Weir
Whitman
Winters-^77.
Mr. COYLE:: I was paired with the hon. member for St. Ann (Mr. Iloaly). Had I voted I would have voted for the motion.


Mr. SINNOTT:: I considered it a waste of time and did not vote.


Mr. DROPE:: I was paired with the hon. member for Northumberland, N.B. (Mr. Maloney). Had I voted I would have voted for the motion.


Mr. LOW:: I was paired with the hon. member for Athabaska (Mr. Dechene). Had I voted I would have voted for the motion.


Mr. LITTLE:: I was paired. Had I voted I would have voted against the motion.


Mr. CLEAVER:: I was paired with the hon. member for Bow River (Air. Johnston). Had I voted I would have voted against the motion.


Mr. CARDIFF:: I was paired. Had I voted I would have voted for the motion.



REVISION OF CLASSIFICATION OF COMMITTEE


James Horace King: I have the honour to table a report received from the civil service commission with respect to the revision of classification of committee clerks of the House of Commons.


Mr. GLEASON BELZILE (Parliamentary Assistant to the Minister of Finance):: Mr. Speaker, yesterday on the orders of the day the hon. member for Ottawa East (Mr. Richard) asked three questions with regard to the telegraph and telephone service. The
first question was:
What section of the telephone and telegraph services has been taken over by the Department ~c Finance from the Department of Public
Works?
The answer is the telephone section having to do with the Ottawa area. The second question was:
Will the employees of the Department of Public Works now engaged in this work be transferred to the Department of Finance on the same conditions of employment and salary.
The answer is: Yes; one employee has 'been transferred. The third question was:
Has the department entered into any negotiations with the Bell Telephone Company ot Canada Limited?
According to his notice of the question the hon. member also wished to know whether this company had made a survey of the lines in the building, and, if an agreement had been reached, what were its terms. A preliminary survey is being made by the company in conjunction with the public works department, but no agreement has been entered into.

Manitoba Natural Resources Act



INDIAN AFFAIRS


Mr. D. F. BROWN (Essex West) moved:: That the fourth report of the special joint committee on Indian affairs, tabled on June 22, 1948, be now concurred in.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Hon. J. A. MacKINNON (Minister of Mines and Resources) moved the first reading of Bill No. 398 (from the senate), to amend the Manitoba Natural Resources Act.
Motion agreed to and bill read the first time.
James Horace King: When shall the bill be read a second time?


Mr. MacKINNON:: Now.


James Horace King: By leave of the house.
Mr. MacKINNON moved the second reading of the bill.
Motion agreed to and the house went into committee, Mr. Macdonald (Brantford City) in the chair.
On section 1-Short title.


Mr. ROSS (Souris):: Will the minister explain the bill?


James Angus MacKinnon: Prior to 1930 all ungranted or waste lands in the province of Manitoba were vested in the crown in the right of the Dominion of Canada, and were administered by the government of Canada for the purpose of the dominion, subject to certain conditions and stipulations contained in the agreement for the surrender of Rupert's Land by the Hudson's Bay Company to Her Majesty the Queen.
In August 1928 the present Prime Minister of Canada secured the approval of council to an order which provided that, pursuant to an agreement entered into with the representatives of the government of the province of Manitoba, the province would be placed in a position of equality with the other provinces of confederation with respect to the administration and control of its natural resources as from the entrance of the province into confederation in the year 1870.
A commission consisting of three persons was appointed to inquire into and report as 
to what financial readjustments should be made to effect the desire of the province and the dominion that the province be placed in a position of equality with the other provinces of confederation with respect to the administration and control of its natural resources. As a result of the commission's report, the dominion agreed -to 'transfer to the province for administration and control by the province all the unalienated natural resources within the boundaries of the province, subject to any trust existing in respect thereof and without prejudice to any other interest, other than that of the crown, in the same.
The findings of the commission were agreed to by the government of Canada and the government of the province of Manitoba, and were made the subject matter of an act of the parliament of Canada and of the legislature of the province of Manitoba confirming the same. Subsequently the agreement was confirmed by the parliament of the United Kingdom by an act entitled "The British North America Act, 1930", assented to on the 10th day of July of that year and being chapter 26 of the statutes of the United Kingdom for the year 1930.
The agreement provided, inter alia, for the transfer of unalienated public lands in the province of Manitoba from the dominion to the province. Section 2 provides that the province will carry out in accordance with the terms thereof every contract to purchase or lease any crown lands, mines or minerals and every other arrangement whereby any person has become entitled to any interest therein as against the crown, and further agrees not to affect or alter any term of any such contract to purchase, lease or other arrangement by legislation or otherwise except either with the consent of all the parties thereto other than Canada, or in so far as any legislation may apply generally to all similar agreements relating to lands, mines or minerals in the province or to interests therein irrespective of whom the parties thereto may be.
Under this provision the province could by passing a law of general application expropriate every power site in the province of Manitoba. In this respect it would have the same power that is possessed by the original provinces of confederation. For example, the province of Nova Scotia could, by passing an act of the legislature, expropriate every power site in the province of Nova Scotia; or it could by a similar act expropriate any one or more of the power sites in the province. It is doubtful, however, whether Manitoba

Manitoba Natural Resources Act
could, under the provisions of section 2 of the agreement referred to, expropriate one or two of the power sites in the province, as it could be argued that the law would not be of general application, and therefore any rights granted by the dominion prior to the transfer of the resources to the province could not be interfered with other than by consent of the parties to the arrangement other than Canada. If this contention be well founded, the province of Manitoba would not be in a position of equality with the other provinces of confederation, and as that was the intention of the parties when the resources were transferred, the present bill is to remove any doubt as to the power of the province to do that which the original provinces of confederation could do with respect to property and civil rights within their respective jurisdictions.
The effect of the present bill is to put Manitoba in the same position, as, for instance, Ontario, Quebec and Nova Scotia in respect to their natural resources and to confer upon the legislature of Manitoba the power to deal with civil rights in that province. If the bill is passed it does not confer any power on the government of Manitoba, but it does remove any doubt as to the power of the legislature of the province to deal fully with the property and civil rights of the citizens of Manitoba. Whether or not, in the event of the legislature exercising its power, compensation is to be paid to the owners of property expropriated is a matter for the consideration of the legislature of the province and not for the consideration of parliament.


Mr. CHURCH:: The agreement is all right so far as it goes, 'but I call attention to the fact that in Ontario we had a policy like this to bring the boon of cheap electric light and power to the cities and towns and rural areas of the province as far back as 1907, forty-one years ago. That power is distributed at actual cost, not to make dividends for corporation shareholders.	_ _
I would point out that there is a provision in the Navigable Waters Protection Aict, which puts all navigable streams in all provinces under the dominion government, represented by the Minister of Public Works. This agreement should have been exempted from the provisions of the Navigable Waters Protection Act.


Mr. STEWART (Winnipeg North):: I have no Objection to this bill, but I have one or two questions to ask in view of the fact that the city of Winnipeg will be affected by it. It is
well known that in Manitoba there is potentially a serious power situation. The estimates which were made before the war as to the power required by Manitoba after the war have gone sadly awry. In an attempt to meet the situation, the power resources of the province are being pooled under the provincial government, and certain steps are being taken for that purpose. Some of the leases would have expired in 1962, but there is one between the city of Winnipeg and the federal government which runs in perpetuity. That lease covers the plant at Pointe du Bois, where the city of Winnipeg hydro generates its power. The province, by the passing of Bill No. 109, which is concurrent provincial legislation, can expropriate these sites whenever it pleases.
I am also led to believe that this bill is in the form requested by the Manitoba government. Have any representations been made by the city of Winnipeg to the minister or the government concerning this legislation?


James Angus MacKinnon: So far as I know, the city of Winnipeg has made no representations to the government. It may have made representations before I came into the department, but I have no knowledge of them. I am informed that the city had promised full co-operation with the province in the pertinent legislation which was passed by the Manitoba legislature.	.


Alistair McLeod Stewart: I thank the minister for that answer. The reason I asked was that in Winnipeg we have a very cheap rate for power. The hydro has a surplus of $1,000,000 a year. Many people in Winnipeg have expressed the fear that once the power sites are expropriated, the rates for heating and lighting may be increased. But in view of what the minister has said I have nothing further to say.


Mr. MUTCH:: The evidence that I have as the result of an inquiry from the city of Winnipeg itself is that the management of the city hydro regard alternative "C" of the Hogg report as being the most satisfactory longterm solution with respect to a potential power shortage.


John Sylvester Aloysius Sinnott: I wish to commend the Premier of Manitoba for his foresight in bringing forward this bill. At the present time the rural horsepower in Manitoba is 30,000, which is a good deal short of the amount needed. At the present time there is an attempt to electrify all rural Manitoba. Under this bill the rates of the city of Winnipeg will not be affected. It is the intention of the government of Manitoba to see that all rural
Inquiries oj the Ministry

Manitoba has power. Under this bill it is intended to assess all rural users at the same rate.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Title agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
On the order for consideration of a resolution with respect to development of the national capital:
Mr. MACKENZIE KING:: Stand until later this day.


Mr. BRACKEN:: Will the Prime Minister say whether lie intends before prorogation to deal with either of the two resolutions standing in his name?


William Lyon Mackenzie King: There is under government notices of motion only one other resolution, in the name of the Minister of Finance. I do not think that will be proceeded with.


Mr. GREEN:: What about those under government orders?


William Lyon Mackenzie King: I beg my hon. friend's pardon. My hon. friend is referring to resolutions with respect to the Geneva agreement?


John Bracken: Yes.


William Lyon Mackenzie King: I would say that they will not be proceeded with this session.


Mr. GIBSON (Comox-Alberni):: Will the Prime Minister indicate whether it is the intention of the government to proceed with the adjourned debate on the annuities bill?


William Lyon Mackenzie King: I think my hon. friend will discover that it is not the intention to proceed with it.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. H. W. TIMMINS (Parkdale):: I should like to direct a question to the Minister of Reconstruction and Supply, or to his parliamentary assistant. Is the minister aware that there is a desperate shortage of gypsum lath for house-building purposes in Ontario? Will he take into consideration the placing of gypsum lath under import permit so as to give immediate relief to the house-building 
situation? I do not see either the minister or the parliamentary assistant in the house.


Alphonse Fournier: The parliamentary assistant will be in a little later. He has some supplementary estimates to submit to the house, and I hope that he will them answer the hon. member.



CIVIL SERVICE


[Stage Direction]
On the orders of the day:
Alistair McLeod Stewart: There are two questions which I should like to direct to the Minister of Justice. Under the civil service loyalty regulations, what provision is there for an appeal where a person is rejected? Do regulations exist in writing governing security tests?


Right Hon. J. L. ILSLEY (Minister of Justice):: The answer to the first question of which my hon. friend gave me notice is this: There are no civil service loyalty regulations. As was indicated in the statement made to the house on June 22 (Hansard, page 5629) it is the view of the government that "loyalty to the state of employees in positions of trust ;s an essential aspect of the efficient conduct of public administration". The civil service commission has to satisfy itself as to the character and habits of persons appointed by it to government employment. Where the Civil Service Act and regulations are not applicable, the sole responsibility in this regard falls upon the departments themselves. This responsibility as to character and habits includes the suitability of individual employees from the point of view of security.
In the opinion of the government it would not be appropriate to provide for anything in the nature of a tribunal of loyalty. The government, and the civil service commission within the provisions of the law which governs it, must accept responsibility for all aspects of administration, including that of adequate security within the government service.
The second question was: "Do regulations exist in writing government security tests?" The answer to that question is that there are no regulations governing security tests. However, in the discharge of the government's administrative responsibility the attention of departments and agencies is drawn to the importance of security measures, and procedures have been approved for determining the suitability of employees from a security standpoint.
As was indicated in my statement of June 22, in the government's view loyalty is not

Inquiries oj the Ministry
susceptible to any precise series of tests, and the only specific instruction which has been given by the government on this subject is that which I mentioned at that time, namely, the special case of those who are members of or associated with communist and fascist organizations.



WESTERN AND EASTERN DELIVERIES FOR EXPORT

[Stage Direction]
On the orders of the day:
James Arthur Ross: I desire to direct a question to the Minister of Trade and Commerce. A similar question was asked on June 24 and the answer was not very clear. The question which I should like to have cleared up is whether it is now a fact that the prairie wheat producers must deliver their wheat to the Canadian wheat board, while the eastern wheat producer may market his wheat direct and sell it to the United States or to other countries? The answer given the other day was ambiguous. The question was asked whether a permit was required, and the minister said that the wheat could be exported at this time. I should like a clear answer to the question.


Mr. G. J. McIURAITH (Parliamentary Assistant to the Minister of Trade and Commerce):: Perhaps I can take the question as notice and answer it later in the day. I understand the question has to do with soft wheat export.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Mr. GORDON B. ISNOR (Halifax): I desire to ask the Minister of Transport when I may expect a return ordered on June 21 for production of papers with respect to appointments to the Canadian maritime commission. I hope I shall receive it today.
Hon. LIONEL OHEVRIER (Minister of Transport):: If not today, I will undertake to see that the hon. gentleman gets it as quickly as possible.



LABOUR CONDITIONS

[Stage Direction]
SEAMEN^S STRIKE-CONGESTION AT TORONTO DOCKS
On the orders of the day:
Thomas Langton Church: I should like to ask the government a question based on the congestion on the Toronto docks on account of the seamen's strike. While I appreciate what the government has done about
the shipping on the lakes and about the present strike on the lakes, nevertheless the people are afraid to go on the docks to take the steamers, and it is delaying the delivery of fruit, vegetables, coal and oil, and causing serious congestion. I know it is difficult to bring the parties together. Can the minister give some hope of a settlement before the house closes?


Hon. HUMPHREY MITCHELL (Minister of Labour):: I have nothing to add to what I said yesterday.



LINDSAY, ONT. INVITATION TO MEMBERS TO ATTEND OLD HOME WEEK

[Stage Direction]
On the orders of the day:
["I should like to address a question to the Secretary of State for External Affairs. Is the minister yet in a position to state what the government's policy is concerning the recognition of Israel?\nRight Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): I have to give a negative answer to the hon. member's question. As all hon. members know, there is a truce in effect between the contending parties in the Palestine dispute. As I have stated previously in the house, it is the wish of the government to avoid taking any action or making any statement which, rightly or wrongly, might be construed by either party as prejudicial to its position during the period of the truce."]
Clayton Wesley Hodgson: I received a telegram this morning from the old home week committee of my home town of Lindsay. I should like to invite you, sir, and all hon. members, to visit us between July 1 and July 10. I send a special invitation to the Minister of Labour, because we have no't had any labour troubles, disputes, or anything of the kind in that town since confederation.



[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Peel):: Mr. Speaker, I renew my standing invitation to all to come to Peel a't any time during the next- year.
I wish to direct a question to the Secretary of State for External Affairs. In view of the disturbing press reports with respect to starvation conditions in Berlin, and the apparent move of the Soviet to drive out the other powers from that part of Germany, will the minister indicate what official Canadian personnel are in Berlin at the present time, and also what steps are being taken to protect the interests of Canadians, official or otherwise, in that city?
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): Mr. Speaker, the hon. member let me know just before the house convened that he would ask that question. I have asked my officials for the information. I went to my office just a moment ago, but found that it was not yet ready. I understand that a part of it has to be obtained from the Department of National Defence. The hon. member had
Inquiries of the Ministry

told me that he wished do know those who were there who had dependents with them. That information is being obtained, and I shall give it to the hon. member on my supplementary estimates if there is no opportunity ito do it before.
With respect to the food situation, there is very little I can add to what has already been published in the newspapers. Hon. members know that the Secretary of State for Foreign Affairs at Westminster yesterday made a statement about the situation in Berlin. That is in accordance with the information we have. Of course there is a tense situation there- communications have been interfered with- and it is one that is giving us all concern; but I hope it may be relieved. There have been tense situations there before, and they have been adjusted. I know that every possible effort is being made to adjust this one.
[Later
Mr. ST. LAURENT: This morning the hon. member for Peel asked about the number of persons constituting our mission in Berlin. There are four officers and ten additional members of the staff, and they have in Europe seventeen dependents. We do not know whether they are all in Berlin or in the western zone of Germany or elsewhere at the present time. We do know that some of these dependents are still in Berlin.


[Stage Direction]
On the orders of the day:
Alistair McLeod Stewart: I should like to address a question to the Secretary of State for External Affairs. Is the minister yet in a position to state what the government's policy is concerning the recognition of Israel?
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): I have to give a negative answer to the hon. member's question. As all hon. members know, there is a truce in effect between the contending parties in the Palestine dispute. As I have stated previously in the house, it is the wish of the government to avoid taking any action or making any statement which, rightly or wrongly, might be construed by either party as prejudicial to its position during the period of the truce.



FLOOD CONDITIONS


[Stage Direction]
On the orders of the day:
George Alexander Cruickshank: I should like to direct a question to the parliamentary assistant to the Minister of Finance, and he can probably give me an answer later in the day. Has the sum of $5,000,000 or more-and if so, how much- been granted for the relief of the distressed people of any country other than Canada?


Gleason Belzile: I take notice of this question, and with the kind permission of the hon. member for Fraser Valley I will give an answer later.


George Alexander Cruickshank: I should like to direct a question to the Minister of Labour.
I am not sure whether it concerns his department, but I think it does. Is full recompense to be made to the Japanese who were evacuated from British Columbia? If so, what will be the cost? Will it equal $5,000,000?


Humphrey Mitchell: I do not know, Mr. Speaker, what this has to do with the matter, but I shall be glad to look into it for my hon. friend.


George Alexander Cruickshank: And give me an answer?


Humphrey Mitchell: The hon. member will get an answer; he need not worry about that. It may not be the kind of answer he wants, but he will get an answer.


Gleason Belzile: This morning the hon.
member for Fraser Valley asked if any moneys, in the amount of $5,000,000 or over, *have been granted to any country other than Canada for the relief of distressed people, and if so, how much?
It is not possible to break down by countries the amounts which Canada has contributed to the relief of distressed people, since the contributions were made to international organizations.
Canada's contribution to UNRRA amounted to $154 million. The appropriation for post-UNRRA relief was $20 million, and an appropriation of $5'4 million was made in each of the years 1947-48 and 1948-49 for Canada's contribution to the budget of the international refugee organization.
The contributions made by Canada under the combined United States-United Kingdom-Canada program of military relief totalled

Supply-National Revenue
$95-6 million, but a portion of the cost of these supplies has been recovered, and additional recoveries may be made.



OATS AND BARLEY


[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I do not know, Mr. Speaker, just to whom to direct this question, but I presume the Prime Minister would be the one. Is it the intention of the government to make its decision known as to whether oats and barley will shortly be brought under the wheat board act?


William Lyon Mackenzie King: I am not in a position
to aiiswer that question at the moment, but possibly during the course of the day an answer might be given to my hon. friend.



INCOME TAX ACT


[Stage Direction]
Hon. DOUGLAS ABBOTT (Minister of Finance) moved the second reading of and concurrence in amendments made by the senate to Bill No. 338, respecting income taxes.
Mr. MACDONNELL (Muskoka-Ontario):: We could not hear a word. I do not know what the amendments are or what they are about.


James Horace King: These are amendments
proposed by the senate to Bill No. 338, respecting income taxes.


James MacKerras Macdonnell: We could not hear at all what was said. We did not even know what was being talked about.
Motion agreed to; amendments read the second time and concurred in.

The house in committee of supply, Mr. Macdonald (Brantford City) in the chair.
DEPARTMENT OF NATIONAL REVENUE Taxation division

297. General administration, including authority to create positions and make appointments, within the division, notwithstanding anything contained in the Civil Service Act and the said positions and staff so appointed are hereby wholly excluded from the operation of the said act, $1,813,574.


James MacKerras Macdonnell: This is the administration section of the taxation division, which deals, I take it, mainly
with income tax. I should like to have the minister say something about the organization of this department. As we all know, over the years a great deal of complaint has been made about delays which I think were to some extent inevitable; however, a great deal of discussion has taken place about them. What is being done to obviate the delays which have been so inconvenient to the taxpayer?-sometimes a stronger word than inconvenient would not foe out of place.
Hon. J. J. MoCANN (Minister of National Revenue): I am glad of the opportunity to say something in reference to the taxation division of the Department of National Revenue. This vote has to do with administration. We at head office are responsible for the administration of the Income War Tax Act, the Excess Profits Tax Act, the Dominion Succession Duty Act, the Canada-United States of America Tax Convention Act of 1943, the Canada-United States of America Tax Convention Act of 1944, the United Kingdom income tax agreement of 1946, the Canada-United Kingdom Succession Duty Agreement of 1946, the provincial corporation income tax of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia and Prince Edward Island, and the war salaries order in respect to cases which are not already settled.
As the hon. gentleman knows, the head office of the division is here in Ottawa, and we maintain offices from coast to coast-from Vancouver, Victoria and Yukon across the continent to Sydney, Nova Scotia. We have in all twenty-four or twenty-five offices. In these offices we have an administrative staff including the head office staff, of approximately twelve thousand people. The district-offices are distributed as well as possible, having in mind both the convenience of the public and economy in the administration of the offices.
As the hon. gentleman will understand, returns are made to these several district offices, and cases of assessment where there may be difficulties are referred to head office for adjudication. As to the delay in making assessments, which undoubtedly there has been, I think any fair-minded person will say that is entirely excusable, at least to a point, because of the enormous increase in the amount of work that has to be done. During the war years, as a result of increased taxation and the higher level of earnings of the .people generally, the number of returns greatly increased. For 1946 the returns were approximately 3,565,000. The returns for 1947, which came in at the
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end of May, and the corporation returns which came in at the end of June, will number from
3.800.000	to 4,000,000.
As to the backlog of work to be done to catch up with the assessments, that has been contributed to by several factors. During the war years, for instance, we lost a great number of assessors, auditors and accountants because industry competed with the government for the services of these employees. Industry was able to pay more money to people who could do that work than the government at that time was prepared to pay. That situation has been remedied to a certain extent by a readjustment of salaries throughout the division within the past eighteen months, and also because industry finds that now there is not the need there was during the war years for people who have particular qualifications in the matter of auditing and working out their assessments.
I give this example to the hon. gentleman; I think he can readily understand it, as anyone can-and that is no reflection on my hon. friend. Take a man who has been working in our department. It is the easiest thing in the world for him to go to a firm and say, "I saw your assessment. I had something to do with it in the department, and I believe that if I were in your employ I could show you how to save a considerable sum of money in your taxation." Of course they are glad to pick uip that man and pay him perhaps trwice what we are able to pay him according to the regulations. That is quite legitimate; it is good business for him to do that. But things of that kind depleted the staff of the taxation division; and for that reason, together witli the increased number of returns during the war years, a backlog of work has accumulated.
I am happy to say this condition is being remedied to a great extent. As at June 15 our employees numbered approximately 11,568, which is an increase of about 2,500 over the number we had two years ago. Assessments now are being made at the rate of about
350.000	a month, so we feel that before very long that backlog of work will be cleared away.


James MacKerras Macdonnell: Would it be convenient at this point for the minister to tell us what the backlog is?


Mr. McOANN:: I can give it in terms of months. We are about eighteen months behind in our assessments. We hope within a year or two, when we get our staff sufficiently well organized and have the people we desire to get and who will be competent to do the work, that within twelve months after the returns are received all the assessments will be

made, and we shall be able to start the next year with the decks clear. I believe that is a worthy and desirable objective, and that it is good business 'to shoot at that target. Judging by the reports made to me privately as to the progress of the work, I have great hopes that we shall be able to attain that objective within the next year or eighteen months.


James MacKerras Macdonnell: I appreciate the enormous task the department has had to perform, but taking the figures the minister has given, if my arithmetic is correct I find it difficult to see how he can expect to clear up the backlog in anything like the time he has mentioned. Let me see if I have correctly apprehended what the minister said. I understood him to say the backlog was approximately eighteen months. Let us take the returns for a year at 3,700,000, which is just in between the figures for the last two years. If my arithmetic is correct, that would mean a backlog of roughly five and a half million returns. The figure the minister gave as to the rate of progress was
350,000	a month, or 4,200,000 a year, which would be an excess of only about 500,000 over an ordinary year's operations. If my figures are right, unless there is some catch in what I have just said, it would seem more like ten years that will be required.


James Joseph McCann: Oh, no.


James MacKerras Macdonnell: Then tell me where I am wrong.


James Joseph McCann: The figures I gave the hon. gentleman have to do with the backlog of work, over and above the current work.


James MacKerras Macdonnell: When the minister said eighteen months I took it to mean eighteen months measured in the number of income tax returns that come in, at the rate of nearly four million a year.


James Joseph McCann: I dio not know that I can suggest anything further, except to say we hope that at the end of eighteen months to have the backlog cleared up, and will then be in a position to make assessments of the current year's work.


James MacKerras Macdonnell: I do not wish to be unduly persistent. However I should like to be clear on this: When the minister says there are arrears of eighteen months, is it correct to say that the arrears of eighteen months amount to 5,000,000 returns?


James Joseph McCann: No, that is not correct.


James MacKerras Macdonnell: What does it mean, then?

Supply-National Revenue_________


James Joseph McCann: The arrears of which I have spoken are not current returns for this year, which are due only on the 26th, which is today. Last year an extension was made to May 31. Those returns came in only at that time. I said there were approximately
3.800,000	of those returns as a backlog of work, and we expect to have cleaned it up within the next eighteen months. It may be optimistic to think that that can be done, in view of the increasing number of returns being put in.


James MacKerras Macdonnell: I shall come back to that point later.


Mr. HERRIDGE:: I wish to refer to a matter which concerns seriously the southeastern part of British Columbia. I refer to the necessity for the establishment of a district office in that part of the country. I know a committee was appointed-I do not know whether it was an interdepartmental committee or not-to inquire into the matter.
I am sure from their point of view they did what they thought was best. It was proposed to establish an office at Kelowna to serve the Okanagan, and rightly so. Here is a huge area of 40,000 square miles, with over 75,000 people. This area had a production which was valued last year at $127,000,000, and it is not served by a district office of the income tax branch.
It is not as though this situation existed on the prairies, where one can take a car and drive a hundred miles in any direction. As a matter of fact we can do business with Vancouver just as conveniently by train or by mail as we can with Kelowna. Therefore the bulk of business from east and west Kootenay is done through the Vancouver office. We have a large mining and smelting industry, a large lumbering industry, and we do considerable farming. These people are anxious to see a district office established in that area so they may have the opportunity for personal contact which we cannot get by writing letters to Vancouver. I would ask the minister to give the matter serious consideration. I represent one of the most productive constituencies in Canada, one which produces immense wealth, and I think some consideration should be given to the establishment of that office. My suggestion is that the city of Nelson would be the most central point from which to serve the area.


Mr. CASTLEDEN:: Has the collection
department authority to take wheat cheques from the Canadian wheat board? Is it the practice of the minister's department to get cheques payable to farmers from the Canadian wheat board and to hold them against the
arrears of income tax which the department claims those farmers owe?


James Joseph McCann: I have never heard of that being done. If a farmer gets a cheque from the wheat board and wishes to endorse it to pay his tax, that is an ordinary method of doing business.


George Hugh Castleden: Are any cheques taken by your collection department and held back from the farmer to be applied against his arrears of income tax?


James Joseph McCann: No, unless there is a garnishee.


George Hugh Castleden: I have a copy of a letter received from the director of income tax in Regina. It is dated June 5, 1948, and is headed, "Collections, J. R. B. 2139". It is addressed to Mr. William Nikota, of Hamton, Saskatchewan, and states:
Re 1946 income tax, $261.40.
In connection with the account outlined above, may the request contained in this office letter of 'the 19th of May, 1948, be expedited, please, in order that the Canadian wheat board cheque No. 053342 for $44-2.20 may be forwarded on to you.
I should like to have this matter looked into. If this kind of thing is being done, I hope it will be stopped, because there is no authority, surely, for that kind of action.


James Joseph McCann: We are doing nothing for which we have not the authority. If that has been done without going through the proper channels and the proper legal procedure, it will not be continued. The hon. member will readily understand that if John Jones is in arrears and owes money, after proper notification if he has not complied with it, it may be necessary to issue a garnishee against money coming to him.


George Hugh Castleden: This is done only
through garnishee?


James Joseph McCann: Yes.


George Hugh Castleden: Would they hold the whole amount of his cheque?


James Joseph McCann: I do not know the circumstances of each case.


John George Diefenbaker: There are one or two questions I should like to ask in connection with the collection of income tax. I believe that one of the greatest reasons for the reduction in agricultural production, at a time when food is more necessary than it ever was before, is that the farmers as a whole, while they do not resent the payment of income tax and are willing to do their part in that direction, as they must, do resent what they regard
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as snooper tactics in the investigation of income tax. I shall give an example of this sort of thing which causes resentment.
First I should like to find out from the minister what authority there is for any departmental official to say to young people who work during their summer vacations in order to make it possible for them to go on, to collegiate or university, and who by that method would earn about $400, that whatever they earn immediately becomes part of the father's income. Having earned $400 or more, the father is denied the right to include his son and daughter as dependents. This is carrying bureaucratic tyranny to a limit which parliament ought not to countenance. After all, there are members in all parts of the house who were willing to work during their summer vacations in order to earn sufficient to enable them to continue at school. I have some further questions to ask, but I would like the minister to tell me first under what authority such a ruling has been made.
'Mr. McCANN: I have heard a similar criticism from other sources. My personal understanding is that the provision is statutory, and we are only administering the law as we understand it in the statutes.


John George Diefenbaker: Where is the
statutory authority for it? I have not been able to find it. Certainly I do not ask the minister as head of the department to do other than carry out the law, but I should like to know what section authorizes any officials to make a decision which cannot but be detrimental to the opportunity of many young men and women during their vacations to earn something with which to carry on their education. While the minister is having the section looked up I will continue with other questions.


Harry Rutherford Jackman: There is no section, so the hon. member had better not wait too long.


John George Diefenbaker: The minister is
ascertaining how this came about, and I am interested in finding out the justification.
The first question I should like to ask has to do with investigations in general of farmers who are required to make income tax returns. I should like to know how many of the staff the minister has just referred to are engaged as investigators in connection with farmers' income tax returns. How many of those investigators are operating in Canada as a whole, and how many in Manitoba, Saskatchewan and Alberta?
The next question I place before the minister is this:	What is the total amount of
income tax collected from farmers in Canada 
as a whole during the current year, and how much of that was payable in the three western provinces? The reason I ask that is that our farmers in the western provinces feel _ that they are being harassed in connection with the collection of income tax to a greater extent than farmers in other provinces. I ask that question to clarify the situation and to see the actual picture.
About nine months ago an investigation took place in Saskatoon. Certain officials of the income tax department were suspended. It was alleged that they had participated in some kind of arrangement with farmers or taxpayers in general whereby the actual amount to be paid by the individual was concealed in whole or in part. Following the investigation, which the minister told the house about last fall, there were some suspensions. Various investigations took place among farmers, and I am led to believe that several admitted that they had had their income tax returns fixed up in a way that was more generous to them than to the income tax department. Have any prosecutions taken place? Are any being proceeded with? Has the matter been dropped, and if so, is that the end of it?
I should like to ask another question in connection with investigations. On one occasion I asked the minister whether searches were being made of safety deposit boxes in banks without consent of the taxpayer. The answer given was that such was not the fact. I believe every person should discharge his responsibility by paying his income tax, but I do not think anyone can justify an investigator going into a bank and having blanket authority to open up safety deposit boxes. That authority should be given by an order of the court; they should not have that authority on the basis of their own initiative, thereby invading the rights of the individual.
I asked the minister if there had been cases where safety deposit boxes had been opened under ex parte orders issued by a court without the knowledge of the taxpayer. I asked that because while the minister answered me in the negative I have had two or three complaints from farmers in Saskatchewan that they have reason to believe that their safety deposit boxes were entered. The minister said that they would not be without the authority of a court order. Are there cases in which court orders have been issued without the knowledge of the taxpayer?
These are matters which I think our people have a right to know. However commendable may be the efforts of the department-and they are-to assure fairness in the making of

Supply-National Revenue
returns, parliament must be equally astute in seeing that the rights of the individual shall not unnecessarily be invaded, or invaded at all outside the law.
I was particularly struck by the answer given by the minister to the hon. member for York-ton with regard to the holding of certain wheat board certificates as security for income tax in arrears. I am glad the minister was able to give the assurance that that was not being done. It would be an interference by a bureaucrat with the rights of an individual, something that should not be countenanced under any circumstances.


James Joseph McCann: As I remember the hon. member's questions, the first had to do with internal inspection. There are 332 inspectors from one end of Canada to the other. I have not the breakdown as to where they are located, but the last figures I had showed that they were fairly well divided among the several provinces. As far as returns or assessments from farmers are concerned, they are not kept in the division under occupational categories. I could not give the percentage of taxation collections made from farmers, any more than I could give them for textile workers or for any other occupation.


John George Diefenbaker: Has that been
stopped? We did get those figures a couple of years ago.


James Joseph McCann: We have not the information here, but we can get it. It would entail a great deal of work to keep the figures up to date.
My hon. friend referred particularly to a situation in Saskatoon involving a number of employees. I do not intend to name them. After a thorough investigation, both by the officers of the local Saskatoon office and by our office inspectional staff-which is sometimes confused with the inspectional staff which we call the intelligence staff, having to do with matters of evasion-it was found that a number of employees in Saskatoon had been guilty of fraudulent practices and an entire disregard of regulations. They were suspended, and since then some of them have been dismissed. It is not intended to take any legal action against them by way of prosecution.
I regret that such a thing as this should happen, but if you are to run a department efficiently and have honesty among your employees and fair dealing with the public, you cannot condone practices of the kind. I am sure my hon. friend will agree that were he in my position, or some other position of trust, or in business for himself, and found
that some of his employees were dishonest and would not obey the regulations, he would not continue to employ them.


John George Diefenbaker: Quite a number of farmers participated in this fraud to the detriment of the department, 'by falsifying returns. What happened to them?


James Joseph McCann: Those cases were dealt with like any other taxpayer's and if there were penalties applicable they were put into effect. If it was within the province of the division to impose those penalties they were applied.


John George Diefenbaker: Were they applied at all?


James Joseph McCann: I am told they were; and if prosecutions were called for, they were undertaken or will be undertaken.


John George Diefenbaker: How many taxpayers were involved in this fraud?


James Joseph McCann: I cannot give the details.


John George Diefenbaker: Would not the
minister's official know? I understand that it runs to about fifty.


James Joseph McCann: I do not know.


John George Diefenbaker: Can the minister not find out from his official?


James Joseph McCann: I will try to get that information and give it later in the day.


John George Diefenbaker: Will the minister also give later in the day the other information I asked for, as to the number of investigating officials in connection with income tax in Manitoba, Saskatchewan and Alberta? That should be readily available. I understand the total number is 332. I would also ask the minister to file a statement showing the amount of the assessments of income tax for farmers in the three western provinces, as well as the amount for the dominion. When the minister tells me he has not the figures in that form, all I can say is that I know the department has them; the minister must have been misinformed because the records are there.


James Joseph McCann: Let me correct my hon. friend. I said we had not those figures here. They are on record in the office.


John George Diefenbaker: Will the minister also table that today?


James Joseph McCann: Yes.


Mr. MOORE:: Have farmers in Ontario who failed to file their income tax returns within the specified time been visited by income tax officials and had their income arbitrarily assessed? I have heard that certain officials
Supply-National Revenue

representing the income tax department have gone to farmers and asked them for their bank pass books, and on the basis of the entries therein have arbitrarily assessed the farmers' income; and that in some cases the arbitrary assessment was considerably higher than it should have been.


James Joseph McCann: There has not been any arbitrary assessment. Our inspectors have assisted the farmers in Ontario, as in the other provinces, in making their returns. In Ontario, inspectors both from the district office and from head office, French and English, have attended public meetings which were called in certain districts by the farmers themselves, and have there discussed the problems of the farmers with a view to giving them information which would assist them in making their returns.
I do not want the idea to go out that we are making victims of farmers. Here is the position. Income taxation started in 1917 and a great many of us did not like making out our returns then any better than the farmers do today who have only been making their returns for a year or two. But the law is the law and must be complied with.
What we have done to help the farmers is this. We have put out a book called The Farmer's Guide-one book for eastern farmers and another applicable to the particular type of farming that is done in the western provinces. This was done with a view to educating the farmers to keep records of their business done throughout the year. The farmers throughout Canada asked to be assisted as business people. Business people are compelled to keep records, and farmers should keep records, but the great majority of them keep no records. We are attempting to educate them to keep records. We have had many requests for this booklet, and have distributed 700.000 copies of it among the farmers throughout Canada in the last six or eight months.
I have heard of no great protest from the farmers themselves. On the contrary I have received many letters of commendation and thanks for the assistance that we have been attempting to give the farmers in keeping records of their business. But it is going to take a few years to educate the farmers, just as it did the rest of us, to keep records and play their part as other citizens do who are in business. We are not doing anything arbitrarily. We are handling the matter as tactfully as it can be handled, and I have no doubt that in two or three years we shall have obtained the results we expect.


Ronald Stewart Moore: I appreciate the minister's reply. I was not trying to make the point that the farmers should not have to pay taxes. I believe that people in the farming industry ought to pay taxes as do people in other industries. But I do hope that the minister will continue along the line he suggested and make these forms as simple as possible. That is one of the main reasons why they object to filing them.


John George Diefenbaker: It would take a Philadelphia lawyer to make them out now.


Ronald Stewart Moore: That is it. The present form is more like the Domesday book, which was introduced into England by order of William the Conqueror, than a tax form. I hope that in the next two or three years everything possible will be done to make the form simpler.


James Joseph McCann: Work is progressing actively on the simplification of the forms. It might interest hon. gentlemen to know that the present form, complicated as it looks and is, is a better form than the one submitted by the Canadian federation of agriculture, because it is a more businesslike form.


James Arthur Ross: I want to follow up the answer given by the minister to the hon. member for Lake Centre. He said that 332 inspectors were out. That does not mean farm inspectors alone?


James Joseph McCann: No.


James Arthur Ross: We should be given a breakdown, because the minister realizes that as the work is carried on there are different types of inspectors. There are those who deal entirely with farm returns, those who deal with business returns, and so on. Of the 332 inspectors we should be told how many are dealing with farm returns and how many are dealing with business returns.
I should like to endorse what the hon. member for Lake Centre said about the young people. That has been a bone of contention for a long while. These young people are actively assisting in the production of foodstuffs on the farm, and some consideration should be given to them. I hope something satisfactory can be worked out there. The minister was going to get us that information. We should get that information before the item passes.
I should like to deal with the Saskatoon mix-up. Will the minister give us the number of informations which were laid, the prosecutions which were started, the number that

Supply-National Revenue
were withdrawn and the number that were actually proceeded with?


Mr. HLYNKA:: The minister is quite right when he says that until two or three years ago farmers were never asked to pay income tax. This thing is quite new to them. The minister says that as years go by the farmers will become educated. I agree that the farmers are getting real education at the present time. The inspectors come around, compute their taxes for the past few years, and tell them that they have to come through with a payment, regardless of the conditions under which they live.
I should like to deal with two points. No farmer objects to paying a legitimate tax which is levied against him. I have not met a single farmer who objects to paying the same tax and on the same scale as anyone else pays who receives an income. What the farmers do object to is the arbitrary method of sending out inspectors who call at the home of the farmer and ask him what he was worth in 1940 or 1941 and what he is worth today, and then by simple subtraction telling him that he has to pay $1,000 or $2,000, or whatever it may be. In my own constituency farmers have been asked to pay more income taxes for the past three years than they are worth. That is unfair. Why did not the government tell the farmers that they were expected to keep books for 1941, 1942, 1943 and 1944? Not a word was said about income tax then. All of a sudden, after the election of 1945, these inspectors were sent out and told the farmer that he would have to produce his account books for 1941, 1942, 1943, 1944 and 1945. That sort of thing is unreasonable. It is something that should not be permitted to continue.
I appeal to the minister to instruct his officials-and I think it will pay not only the department but the country, and it will be the right thing to do-to forget about these back taxes. It would pay the country, even if we lost a little of the money that could be squeezed out of the farmers, if the income taxes for 1941, 1942, 1943 and 1944-that is, until the department actually issued instructions to collect these taxes-were permitted to fall by the wayside. I do not say that we should not collect taxes from farmers who are well off. Certainly if you can prove to the farmers that they did have income, why should they not pay? I am sure that they will not object; but this idea of slapping a few thousand dollars in a lump sum on a farmer is just the thing that is going to be unjust to the farmer. Furthermore-and I do not particularly object to this-it is going to sweep from western Canada the representatives of the minister's party, because the farmers feel that 5849-376
that is unjust, and that it is an unfair way of collecting taxes.


Mr. SINCLAIR:: They did not do it last Thursday.


Anthony Hlynka: I would not be too optimistic about last Thursday if I were my hon. friend.


John Ewen Sinclair: Your party certainly
should not.


Anthony Hlynka: The fact remains that you cannot continue to enforce something that is unjust. I say to the minister that he is quite right; he is doing his job well. He is quite right in getting the tax that is levied upon the farmers for the years 1945, 1946, and up to the present time and the same would apply to the future. But he is not right when he sends out a bevy of inspectors who are chasing after the farmers from one end of western Canada to the other and telling them that they have to come through with income tax for 1941, 1942 and 1943. It is unfair.
The other day a farmer told me that he went to town to buy certain articles, and when he returned home he found that his wife and children were crying. He asked them what was the matter. His wife said that the income tax inspector was on the premises. She said that he had been terrible. The farmer asked where he was. She said, "If you go out to the pigpen you will find him. He is counting the pigs, but you will recognize him; he is wearing a hat."


Some hon. MEMBERS:: One o'clock.


Alphonse Fournier: Perhaps I was wrong in not seeing every hon. member of the house, but I spoke to the leaders of the three parties, and they agreed that we should sit through until three o'clock. If there is no serious objection-


John Ewen Sinclair: I object to that, because the arrangement last night was that we would rise at one and sit again at two.
Progress reported.
At one o'clock the committee took recess.
The committee resumed at three o'clock. PRICES



MOTION FOR CONCURRENCE IN REPORT OF SPECIAL COMMITTEE

Paul Joseph James Martin: That the report of the special committee on prices appointed the 10th of February, 1948, presented to the house on Friday, June 25, 1948, be now concurred in.
Report oj Prices Committee


John Bracken: May I ask a question before the debate proceeds? Is it the intention to conclude this debate before proceeding with any other estimates this afternoon?


Paul Joseph James Martin: That is the intention and the hope.


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


Some hon. MEMBERS:: No.


John Bracken: Surely we are to have an explanation of the matter.
Mr. DONALD M. FLEMING (Eglinton): The Minister of National Health and Welfare (Mr. Martin), as chairman on the special committee on prices, has moved that the house concur in the report which was tabled yesterday. It is my intention to review, as briefly as may be, some of the essential features of the report and some of the conclusions that flow from it.
In the first place I do not know how many members of the house have yet had the time or opportunity to read this report; it was distributed in mimeographed form late yesterday. It runs to something over seventy pages, and it may be that at this stage hon. members of the house have not had adequate opportunity to digest it. It is in the hope of assisting members that I desire to make some comments on the highlights of this report.
At the outset I point out that this is a majority report. When it was adopted at 1.30 a.m. yesterday by the committee, the motion for adoption was supported by the Liberal and C.C.F. members present at the time of the vote. It was opposed by the Progressive Conservative and Social Credit members.
The rise in the cost of living is a matter of general concern. Concern over the vaulting cost of living is not the exclusive right of any party or person in this house. It is a matter of the greatest concern to us all, just as it is a matter of lively concern to all Canadians.
The report contains some significant figures. The first appendix gives the figures on the rise in the cost of living in recent months. When the war ended the cost of living index stood between 118 and 120. At the end of May, 1948, the cost of living index was 153-3. The food index has shown an even more amazing climb. When the war ended the index was at a figure of approximately 135. At the end of May it had jumped to 191-2. We have in Canada today a condition of inflation-not of course in the sense of the inflation which Germany experienced after the first war, or the inflation of China today, but nevertheless a condition of inflation. Our Canadian dollar, in terms of purchasing powder compared with its

purchasing power before the war, is worth just two-thirds of w-hat it was then worth. Today we have a sixty-five cent dollar.
The government of course has misjudged the situation. Last October on his return from Europe, the Minister of Finance (Mr. Abbott), at a time when the cost of living index stood at 138, said it was in the process of levelling off, that it would not go much higher, and that it was the expectation of the government that it would level off at not more than 145. I have already indicated, Mr. Speaker, that the index has continued to climb, and that at the end of May it had reached the figure of 153-3.
This committee in its majority x-eport has been busy tooting its own horn. You will find in not only one but sevei-al places in the report statements by the committee to the effect that it has conti-ibuted toward checking rises in the cost of living, that the mei'e fact that the committee has been sitting and has been conducting inquiries has resulted in people who have goods for sale taking lower prices than they otherwise would have taken. There may be the isolated case where that has happened, but in the approximately 4,000 pages of printed evidence taken by this committee, there just is not evidence that warrants such a finding.
The majoi-ity on the committee, the govei-n-ment membex-s, have been busy trying to keep up their courage by whistling. Apparently it was necessary in the government strategy, that any discussion on the question of the cost of living be kept off the floor of the House of Commons. And, of coui-se, the government majority on the committee has sought to justify the existence of the committee on some other basis. In all frankness I think the government majority might have said that was the purpose the committee could best serve.
However, I wish to comment briefly on the evidence as to the alleged usefulness of the committee. The one case to which the committee can point, where an individual said he was reducing the price of his product as the result of a request from the committee, was that of a baker in the city of Montreal, where aecoi'ding to my recollection he has one or two shops. He said he was going to reduce his bread from fourteen to thirteen cents a loaf. That was the only case; and on evidence of this kind the government majority on the committee purports to justify the existence of the committee and these four and a half months of sittings. It was a good advertising stunt on the part of that particular merchant. He obtained national advertising. I think it shows he was a realist and a good businessman, and that he really pulled the leg of my hon. friend the chairman of the committee.

Report of Prices Committee
However, the committee has seen fit to do something else. It has tried to justify its existence by the length of its report. So we have a report of almost prodigious length, measured in terms of what the committee has really accomplished; a report padded with repetitions. In other words, having little to show for its efforts, the committee has sought to write a long report to give the impression that the report has value.
Now I have some direct observations to make upon the report itself. The first observation is that the report was steam-rollered through the committee. Bear in mind, sir, that the committee continued its public sittings right up until Thursday noon of this week, and members of the committee saw the draft report for the first time Thursday morning. Several members were appointed a drafting committee and given copies of a draft report late the night before, too late to read it; but the committee sat down with a draft report in front of it for the first time on Thursday morning, a draft which was placed before us by the chairman and vice-chairman. The committee sat through the whole day, and at one-thirty Friday morning purported to adopt that report.
What was done at the meeting? There was discussion, a good deal of it; but in every case it came down to this: the opposition members on the committee were told, not once but repeatedly, that they might make observations, they might discuss the report, they might offer amendments, but unless those amendments were simply matters of dotting the i's and crossing the t's they would not pass. We were told that before we even began to discuss the amendments. You will realize, of course, Mr. Speaker, that as far as any participation by the members of the committee in writing that report went, what went on was little more than an empty formality. The essentials of the report were settled and determined before the committee ever saw it. When the report was submitted the committee was told that no amendment of substance would be tolerated.
Is this kind of procedure likely to elevate parliament, parliamentary institutions and parliamentary procedure in the minds of the public? I say that no tactic will more quickly and effectively undermine the confidence of the people in parliamentary institutions than steam-roller methods of this kind.
But that is not all. For several days past the press has in advance carried portions of the contents of this report. I am sure it must have shocked some members of the committee to find, when the report was finally submitted to them on Thursday, that it tallied verbatim with reports which had been appearing in, the
press for some days in advance, as to recommendations and statements the report would contain when made public. That is a shocking state of affairs, that the press or others should have access to a draft report, which was railroaded through a committee, before the members of that committee even had an opportunity of seeing it.
We find in this report what purport to be findings of fact. You will recall, Mr. Speaker, that in the resolution passed by this house last February the committee was given three tasks to perform. First, we were to find out the causes of the recent rise in the cost of living. Second, we were told to examine and report from time to time as to prices which had been raised above levels justified by increased costs. Third, we were to report upon rises in prices due to the acquiring or withholding from sale of goods by persons in excess of their own reasonable requirements.
These were the three tasks the committee was directed to perform. There is not time to review in detail what purport to be the findings of fact in this report. The committee was described by the Prime Minister (Mr. Mackenzie King) and others who participated in the debate in the house as a fact-finding body. I cannot go over the findings in detail, but I do wish, to comment briefly on them.
In the first place many of them are not according to the evidence. Others represent a lopsided, distorted and unfair presentation of the evidence. In the next place, the government majority on the committee has seen fit to turn this document into a vehicle of Liberal political propaganda. I am obliged to use the mimeographed copy of this report in referring to its contents; and I note on pages 14 and 15, for instance, that the government majority on the committee, the persons who really carried the report, though they were told to inquire into the causes of the recent rises in the cost of living, have seen fit to go back to the first great war, and to conjure up pictures of the relief lines in the days of depression. That is not the only evidence in this report that the government majority on the committee saw fit to turn it into a vehicle for political propaganda. There are many others, and I hope to have an opportunity of briefly indicating some of the more important examples.
Surely in a matter of this kind, where a parliamentary committee is purporting to reach findings of fact, parliament, or the committee in the first place, should make a complete statement of the facts and then reach a considered finding in reference to those facts. What has happened here? It has written page after page after page of general material in which expressions like this frequently occur:
5928	COMMONS
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"in certain lines of business" certain individuals and persons did certain things of which the committee does not approve.
Let me make this abundantly clear: wherever there was evidence before the committee that an individual was profiteering, then I say, with emphasis, that the committee should have said so and should have stated the facts on such things in detail, put them on the record, and reached its judgment about the individuals concerned. But that is not the way in which the majority on this committee has gone about its task. All the way through this report, in two-thirds of it, you will find this idea iterated and reiterated: that certain individuals in certain lines of business have done certain things-a general condemnation, without any attempt to separate those who were responsible for such things from those who were in no sense tarred with the brush of such actions.
This is an absolutely improper approach to the task. Where individuals have been responsible for lifting prices unwarrantably, those individuals should have been censured in this report. That is no excuse for a general smearing of all companies in any particular business. In that respect this report is a highly deplorable and incomplete document.
. The majority of the committee has been at great pains to find certain causes for the rise in the cost of living. Mr. Speaker, you will search in vain through the pages of this report for references to the extent to which government policies-many of them directly inflationary in their nature-have entered into the rise in the cost of living. Similarly you will search the pages of this report in vain for any reference to the extent to which government taxation has entered into the continually increasing cost of living.
Why is it that this report, which is so voluminous and so generous with its words in so many other respects, has seen fit, in the wisdom of the government majority, to maintain a most discreet and awesome silence on two of the leading causes for the rise in the cost of	living-inflationary	government
policies, and government taxation? It is in those respects and in others a woefully incomplete report of the proceedings of the committee. As a result there are certain aspects of it upon which I shall have to enlarge later, and I only mention that in passing.
When I come to what are called the conclusions in this report, hon. members will see why I say that the whole report bears clear evidence of the fact that on the part of the government majority it was written in a state of panic following three recent by-elections in

which the government candidates went down to defeat. It has been coloured for considerations of political expediency, on the part of the government majority.
We find at an early stage in the report what are described as conclusions. I have always thought it was usual to put the conclusions at the end of any document, but the committee has seen fit to put the conclusions at the beginning of the report. Why? Apparently the majority in the committee were very anxious that these conclusions at least should be read, even if people did not have the patience to go further into the report.
These "conclusions", sir, as you will note from reading the report, are recommendations; they are not conclusions at all. They are recommendations because they ask the government to do certain things. Why should these so-called conclusions appear, and by what name shall they be called? I propose to call them recommendations in the report, because that is the name given to them in the further supplementary estimates tabled in the house this morning. As item 934 we find an amount of $50,000 for the following:
To provide for the expenses of a commission to be appointed under part I of the Inquiries Act, to inquire into prices and related subjects, as recommended by the special committee on prices.
Therefore, with this approval in the government's further supplementary estimates, I choose to call these conclusions "recommendations". How does it come about that these recommendations appear in the report?
May I recall to members of the house the course of the debate which took place in the house early last February. We of the Progressive Conservative party said that the committee should have the power to make recommendations. We urged that. But what were we told? The Prime Minister had something to say about that, and the reasons why in his drafting of the resolution there had been no reference to any power to make recommendations.
At page 749 of Hansard for February 2 the hon. member for Lincoln (Mr. Lockhart) asked: "What about recommendations?" The Prime Minister in his answer said that so far as he was concerned the committee was not being given power to make recommendations, but that if they came back later and thought they should have the power to make recommendations, he would be prepared to treat sympathetically the request of the committee. From time to time in committee the subject of asking for power to make recommendations arose, but the committee did not place any motion of that kind before the house.

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Therefore it was with no little surprise that members of this committee found themselves confronted yesterday at 12:45 a.m. with a whole volume of recommendations. Bear this in mind, that everything the committee had done in four and a half months, sitting day in and day out, had been done on the basis that the committee was only a fact-finding committee and had no power to make recommendations. Many of us were surprised, indeed amazed, to find the press carrying a statement a few days before opposition members of the committee saw the draft report -a statement that the committee would make recommendations. We said it could not be so, because 'the committee had been told it had no such power.
It remained then for the vice-chairman of the committee, the hon. member for Winnipeg South Centre (Mr. Maybank) to introduce in the committee this chapter of recommendations. It is worth remembering that it was this same hon. member who, when this matter was under debate in the house on February 3 last, said that Your Honour should rule out of order the Progressive Conservative amendment which sought to give power to the committee to make recommendations. He saw fit to say that the committee was to be a fact-finding committee, and that if it were given the power to make recommendations it would usurp the functions of the cabinet.


Ralph Maybank: On a point of order, the hon. member is not quoting me correctly. If he desires to quote what I said in the house, I would request that he do it directly and not by paraphrase.


Mr. FLEMING:: It will give me very great pleasure to quote the hon. member's language in the house, as it is found at pages 819 and 820 of Hansard, where he deals with the amendment of my leader. The hon. member states that the effect will be to change the nature of the committee entirely from that of a factfinding committee, that the committee would then be advising on government policy. Then on page 819 the hon. member is reported as follows:
I submit that that procedure is quite foreign to the parliamentary system of this country.
He is referring to committees recommending matters of policy.


John George Diefenbaker: Read the amendment.


Donald Methuen Fleming: I have been asked to read the amendment of my leader; I shall come back to that. The hon. member went on to say:
Government policy is to be designed by that committee which we commonly call the cabinet,
which has that responsibility and which must at all times have the confidence of the House of Commons. That in itself seems to me sufficient to require that a ruling should be given denying the validity of the amendment of the leader of the opposition.
What was that amendment? The amendment recommended that the said resolution be amended by inserting certain things, and then I come to the part that is of practical relevancy, which reads:
2. By adding at the end thereof the following clause:
"That as well as reporting its findings the committee shall from time to time make recommendations to the House of Commons, as in the opinion of the committee may be considered necessary to secure as far as possible fair and just returns to producers, employees and employers and fair and just practices in marketing and distribution that will safeguard the interests of consumers as well as of producers."
Bear in mind that the remark of the Prime Minister which I quoted had reference to recommendations in general. That remark was made in reply to a question which wTas asked before the amendment of my leader was introduced in the house.
The hon. member for Winnipeg South Centre went on to say-and I ask hon. members to bear his words in mind when reading the recommendations appearing in this report:
In addition to the fact that these amendments would direct the committee to be a policy-making body, thereby usurping the functions of the cabinet, they seek to put the committee in the position of recommending expenditures of public money.
And later on:
-and the advisability of reverting to the payment of subsidies, which, of course would also mean the payment of public money.
The report contains a recommendation for the payment of subsidies, one of the very things on which the hon. member sought to have that amendment ruled out of order. He continues:
A committee making a recommendation of that kind would be a body, not charged with the responsibilities of government, taking on the functions of government even to the extent of dipping into the public purse and directing expenditures therefrom.
And this is his parting shot:
All this, I submit, shows that these amendments are not designed only to give direction to a fact-finding body, but are designed to change the fact-finding body completely, making it a body which would have power to bring in recommendations on all manner of things, many of which could be relatively distant from the actual question of prices themselves, and very far afield from the original motion.
I do not know whether the hon. member regards himself as a prophet, but those words
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of his are prophetic if you look at the recommendations that this committee has seen fit to bring in. I emphasize that the rules under which it proceeded, the whole basis of this inquiry of four and a half months was that it had no power to bring in recommendations.
These recommendations were submitted at the end of a long day; at exactly 12.45 a.m. they made their first appearance. When the government majority on the committee through the chairman and the vice-chairman saw fit to place in the hands of the members of the committee the draft report upon which the members were to pass, it did not include these recommendations. That part was held back until the conclusion of a long day at 12.45 on Friday morning. The recommendations were read then and put through in the space of minutes. I took objection on a point of order, and the chairman saw fit to overrule the objection. The rest of the committee were playing the game according to the rules that had been laid down by the house, but it remained for the government majority on the committee, backed by the ruling of the chairman, to change the rules in favour of government policy in the last half of the ninth inning of the game. There were two sets of rules, one for the opposition members of the committee, and -another set which was brought in during the dying minutes of the committee's sessions to suit the interests of the government.
Not only that; look at these recommendations. Some of them deal with matters that were never before the committee at all. The second one deals with the combines investigation commission, and suggests that the funds placed at its disposal are not sufficient. The commissioner was before the committee, and he did not say that he needed more money. Where that recommendation comes from, one does not know; but I do say that if money is needed to make the combines investigation commission more efficient for the purpose of finding evidence of combines that are inimical to the public interest through profiteering of any kind, then the house would be willing to authorize whatever expenditure might be required for that purpose. As I said, the commissioner said nothing about that, and it does not appear anywhere in the evidence.
Then we are asked to deal with such things as a uniform system of business accounting, which we are told has been advocated by various business associations in Canada. There is no evidence that came before the committee from business associations of Canada asking that a uniform system of business accounting be imposed by force of law on businesses in general. We heard about this for the first time when this recommendation appeared on our desks about one o'clock yesterday morning.
(Mr. Fleming.]
There is reference to rent controls. I am sure hon. members of the committee would have been very glad to consider the question of rent controls, but here we have a recommendation dealing with a matter on which the committee had no evidence. The only thing in regard to rent control that the committee heard about was whether controls on commercial accommodation should be continued or discontinued last March. We had no evidence at any time on the subject of the rent control of housing accommodation. It may be that the recommendation contains the substance of the views of practically all hon. members on this subject, but I am pointing out that this committee has brought in a recommendation on a matter in connection with which it had no evidence whatsoever.
I come to two other recommendations. One recommendation is for the removal of the excise taxes that rvere imposed as part of the government's restrictive program last November. It is a very sound recommendation; but where were the voices, during those many months from November, 1947, down to the present, of those hon. members who so glibly took up this proposal and hustled it through in the early hours of yesterday morning? They were the ones who stood up and supported the stand of the government in railroading those taxes through and imposing them by radio. At that time they saw fit to approve the principle of the imposition of taxes by radio. In this finding, commendable as it is, we see evidence that at last government members have wakened up, that at last they are beginning to pay some attention to the feelings of the people of this country with regard to these iniquitous taxes.
But that is not the only way in which the government members on this committee have in a practical way, whether they realized it or not, expressed themselves in terms of condemnation of government policy-of a government policy, incidentally, very stubbornly adhered to by this government. They say now that the government ought to give consideration to a relaxation of the import restrictions. It is the same thing again, Mr. Speaker. We of the official opposition-other opposition members can speak for themselves -fought these import restrictions on the basis on which they were imposed-yes, imposed by radio decree by the Minister of Finance. The government members on the prices committee should now be congratulated on having at least recovered a sense of reality, a sense of their obligation to the people.
In a word, sir, these recommendations, smuggled into the report in the dying moments of the session, show quite clearly that

Report oj Prices Committee
they have been written by political hands for a political purpose. This apparently is to be the new Liberal platform. It is hard to conceive of these recommendations being introduced by the chairman of the committee and the vice-chairman, themselves respectively a minister of the crown and his parliamentary assistant, without their having been carefully reviewed in advance and enjoying the doubtful distinction of cabinet approval. Whether that be so directly or not, we may be very sure that apparently here we have, in embryo form, the new platform which the Liberal party proposes to write at its forthcoming convention in August next.
I make this observation. It is quite clear that the person principally responsible for the drafting of the report-and I strongly suspect that it was the Minister of National Health and Welfare-has written it deliberately with a view to nudging over the C.C.F. so that the Liberal party can find a place well to the left of its present position. In many respects it has succeeded in out-C.C.F.'ing the C.C.F. That is no doubt the reason why the hon. member for Cariboo (Mr. Irvine), the C.C.F. member on the committee at the time the report was adopted, endorsed and voted for the report. If the government wants to write that kind of platform with that political view in mind, I suppose it has a right to do it, and the people will have an opportunity to judge just how much weight they should attach to recommendations of this kind, written to temper the winds of political expediency, and also apparently to take refuge from the winds of public disfavour as expressed in three recent by-elections.
I wish to make this general comment on the nature of the inquiry conducted by the committee. As a review of the price structure and as an investigation seeking to ascertain the reasons for the rise in the general price structure, it is woefully incomplete. I draw this to your attention, sir, that the committee dealt with only a few commodities. It investigated bread, butter, meats, fresh fruits and vegetables, and some textiles. In none of these cases did it investigate the commodity from the stage of its primary production until it is sold to the consumer. It took one stage, or at most two stages only. In the first place, I repeatedly asked the committee when it had completed its bread inquiry to bring in its report on bread. But government members said: Oh. no; it is not ready yet, because we shall have to go back and investigate the milling industry before we can complete our report on the bread industry. But the committee saw fit, through its government majority, to bring in its report yesterday without having made any investigation into the milling industry.
On butter we heard evidence from co-operatives, traders and storage warehouses, but not from retailers. On meats we heard from the packers, but not from wholesalers or retailers. On fresh fruits and vegetables we heard wholesalers, but nothing from retailers. On textiles we heard from primary manufacturers of three textiles, but we heard nothing about the intermediary stages before the textiles reach the ultimate consumer.
No attempt was made by the committee to seek a pattern of the price structure. These commodities we selected, were chosen largely because their prices were pressing on the consumer. These selections may have been sound, but I draw attention to this, that there is no ground for saying, as the report does say, that the committee has made a representative selection, or that it has found a pattern; for the committee has not touched on other foods, nor has it inquired into clothing, boots and shoes, fuel, and many other commodities.
To illustrate hotv incomplete an inquiry of this kind was from the point of view of getting at the nub of the problem, which is the price paid by the consumer, I draw this to your attention, Mr. Speaker: that in our inquiry into the prices of wool-. It has just been intimated to me, sir, that you are about to rule that I am under a time limit. I shall have to argue against it if you make that ruling. I am far from finishing the main portion of my speech, and I consider that on a government motion moved by a minister I am under no time limit.
But I had better put my amendment on record now. I move, seconded by the hon. member for Vancouver-Burrard (Mr. Merritt):
That the said report be not concurred in but that the same be referred back to the special committee on prices for the purpose of amending it by deleting the conclusions therein and substituting therefor the following conclusions:
(a)	That the government should give consideration to the immediate removal of all special excise taxes levied and collected as from November 18, 1947;
(b)	That the government should give consideration to immediately exempting from sales tax and excise tax all articles that enter into the family budget;
(c)	That the government should give consideration for the benefit of those in the lower income groups to immediately reducing the income tax and increasing the exemptions;
(d)	That positive and practical steps be taken forthwith to eliminate extravagance and thereby reduce the cost of government;
(e)	That in the opinion of the committee the continuing increased cost of living and rising prices are substantially attributable to the government's inflationary policies.
It is my purpose now to review the reasons for this amendment.
Report oj Prices Committee


James Horace King: I am sorry to interrupt the hon. member, but I have to draw his attention to the fact that he has spoken for forty minutes.


Donald Methuen Fleming: Mr. Speaker, may I speak to that ruling? I have already stated in substance my view on the point. I am speaking to a government motion, moved by a government minister, and under the rule there is no time limit applied to the speech of the first speaker of the opposition. I have material here that I should like to lay before the house as to why these inflationary policies of the government have been responsible to a substantial extent for the increase in the cost of living. Unless you stop me, sir, I propose to assert my rights to speak.


James Horace King: The hon. member will realize that I have no option but to draw his attention to the fact that he has exceeded his forty minutes. I would also call his attention to standing order 37, which reads:
No member, except the Prime Minister and the leader of the opposition, or a minister moving a government order and the member speaking in reply immediately after such minister, or a member making a motion of "no confidence" in the government and a minister replying thereto, shall speak for more than forty minutes at a time in any debate.
Since this is not a government order, I am bound to call the attention of the hon. member to the fact that he has spoken for over forty-five minutes.


Donald Methuen Fleming: I am sorry, Mr. Speaker, but I have to appeal your ruling.


Some hon. MEMBERS:: Oh, oh.


Mr. FRASER:: You can't take it.


Mr. LESAGE:: I never heard such a weak speech.


Mr. LANGLOIS:: It is not a ruling.


James Horace King: I must remind the hon. member that I did not make a ruling; I called his attention to the standing order. One of the duties of the Speaker is to keep order in the house. Standing order 12 says:
Mr. Speaker shall preserve order and decorum, and shall decide questions of order, subject to an appeal to the house without debate.
I did not decide a question of order. In calling the attention of the hon. member to the fact that he is not allowed to speak more than forty minutes, I was just keeping order.


James MacKerras Macdonnell: This is probably the first time that unanimous consent has not been given.


Paul Joseph James Martin: I am sure my hon. friend does not intend to keep the house very long. I think I would be expressing the views of most hon. members if I said that the hon. gentleman should be allowed to continue.


Some hon. MEMBERS:: Hear, hear.


James Horace King: If the hon. member has the unanimous consent of the house, he may proceed.


Some hon. MEMBERS:: Agreed.


Donald Methuen Fleming: May I thank the house for its courtesy. I assure you, sir, that I shall endeavour to conclude my remarks as quickly as I can.
I was dealing with the point that the committee had touched only part of the problem of the rise in prices. The thing that we are concerned with is the rise in prices to the consumer. To show how incomplete has been an inquiry of this kind from the point of view of arriving at conclusions as to the reasons for the rise in general price structure, I mention these facts brought out in evidence.
Our inquiry into the price of wool showed that the amount to which the increase in the price at the manufacturing level, the primary producer's level, contributed to the cost to the consumer is only fractional; but the clothing cost index shows this, and these are government figures: in March, 1947 the level was 133-1. In March, 1948 it was 169-9, a rise in that year, sir, of 36-8 points. But look at what has been contributed !by the primary producer toward this price rise. The amount that would be contributed by the manufacturer to the cost of a man's suit of clothes would be just $3 in that year. Everybody knows how much the price of men's clothes has gone up in that period. But at the manufacturer's level, which is the only one the committee dealt with, the rise would amount to only S3 in the price of the suit. On an overcoat, only $3 of the total rise was accounted for in that way. According to my recollection the figure was S1.40 on a topcoat. If 3'ou will pardon this illustration, in the case of ladies' hosiery we were told that the proportion of increase in cost that could be attributed to the primary manufacture level, with which we were dealing, was sixteen cents a pair. Where do we find the reasons for the rise in the cost to the consumer of the remainder which is the great bulk of the rise in the cost to the consumer, which has, so far as the committee's study is concerned in its report, remained an unanswered question, an unfathomed problem? In the result, sir, I have to say this, that the committee, based on a partial survey of some aspects of half a

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dozen commodities in the country, has seen fit to try to exempt the government from blame that properly attaches to government policy for much of the rise in the cost of living.
The government, sir, had the powers to deal with this problem. It had the law at its back, because the wartime prices and trade board general order, to which the house gave the force of a statute a year ago last March, specifically makes it an offence under the law of this country to charge for any commodity a price that is higher than just and reasonable; or to accumulate goods in excess of those required by the individual responsible for his own reasonable purposes. The Bank of Canada was available to the government, and according to the stated purpose in the preamble to the act, it was to be available to eliminate the humps and hollows in general business conditions. The powers of the Bank of Canada were available to try to prevent runaway prices. Then, there is the combines investigation commission with very wide powers. And lastly, but by no means least, there is the power of the government to use the taxing power either for the purpose of taxation or for the purpose of exempting from taxes as the case may be. In every one of those cases the use made by the government of its powers has not been, in my submission, to contribute to a reduction in the runaway cost of living.
May I just mention quickly one or two examples?-because I am trying to hurry along. Take fresh fruits and vegetables. Until the government on November 17 last imposed an embargo on the importation of certain vegetables and restricted the import of certain fruits and put a complete embargo on others, their prices had not soared, but then overnight there grew up a consumer's panic, and prices soared. At or about the end of February or the first of March the government saw fit to impose a price ceiling on these vegetables which were in such short supply, a situation which the Canadian producer was in no position to meet at that time of the year; and the committee, sir, has the audacity to commend the government for acting promptly in that situation, after they had sat back, after creating the condition on November 17 in which these prices soared almost overnight, sat back for three months before they moved to check the runaway prices of those commodities.
As to the Bank of Canada, the evidence given before the committee by Mr. Towers did not leave very much hope that the powers assigned by statute to the Bank of Canada will be used to check this runaway 5849-377
cost of living. Mr. Towers said in effect that, apart from drastic action of the kind that he apparently was not prepared to contemplate, the only thing that the Bank of Canada could do to end it was done, namely, to ask the chartered banks in March of this year to tighten up on loans to commercial enterprises. That is all. In the light of the evidence, it would appear that the powers of the Bank of Canada are not available to be used to check the things that have contributed, within bank policy and government policy with which it is allied, to the increase in the cost of living and the increase in the price level.
In the light of the amendment-and I am trying to hurry now-I shall touch on this question of taxation as it enters into the cost of commodities. In this respect the committee had some evidence before it. But the majority on the committee in this case has seen fit to ignore completely the evidence on this point, has seen fit to ignore completely this entire subject and to write a report that is silent as to the place of taxation; although, may I remind you, Mr. Speaker, that they slipped into the body of recommendations a recommendation for which you will find no counterpart in the pages and pages of narrative in the report.
On the subject of taxation we of the Progressive Conservative party hold the view, as to indirect taxes, that because they are passed on to the consumer, they contribute to increasing the cost to the consumer. That is the nature of the tax. An indirect tax is one that is passed on, by the person on whom it is imposed in the first instance, to the ultimate consumer. You see that in the case of the sales tax and the excise tax. They are passed on and they pyramid as they go on. A year ago I gave the house the instance of stockings that started out at a price of SI a pair when produced by the manufacturer, bearing an eight per cent sales tax at that point but which had pyramided, by the time the stockings had passed through the hands of the wholesaler, the jobber and the retailer and reached the consumer, to a tax of not eight per cent but 14-8 per cent. All kinds of instances of that sort can be found in which the tax pyramids to a greater height than that.
Then I wish to refer to the subject of direct taxation, and when I do so I am thinking of taxes like the income tax. We say that is a tax which bears heavily on the individual pocketbook and is one that cries for remedial action in times like these; because taxes of that kind should be reduced in times like these in order to come to the rescue of the man who is caught between
Report of Prices Committee

the upper and nether millstones of limited income and this rising cost of living.
The government had a great opportunity to use its direct tax policies in a remedial way to meet the exigencies of the hard-pressed taxpayer, above all, those in the lower income brackets, by reducing the tax and by increasing exemptions. In saying that I wish to be quite clear. We of this party have supported the principle of reasonable budget surpluses in good times, but we have said that surpluses of the kind budgeted for this year bear no resemblance to reasonableness under conditions like these, where so many people with small incomes are having such a desperate time today to meet the cost of living.
What has been the government's tax policy? Let me say just a word first as to the excise taxes imposed last November. They were imposed in many cases on the necessities of life; and now, after we heard last Tuesday from the Minister of Finance (Mr. Abbott) a statement that there is no truth in the newspaper reports that the government was proposing to lift the excise taxes which were imposed last November, we find this committee bringing in by a side wind a recommendation directly on that point.
Let no one think the removal of the excise taxes or the other indirect taxes like the sales tax, which applies still to too many items that enter into the cost of living of the average Canadian family, would not reflect itself in a reduced cost of living. Let me just remind you, Mr. Speaker, and the house of what happened last November when the government brought in these increases in taxes. It added for a little sugar-coating a couple of reductions in taxation, one of them being the reduction in the tax on electricity. What happened? The dominion bureau of statistics reflects the fact that, in the month following the removal of that electricity tax, there was an astonishing effect on the cost of electricity to the consumer, the Canadian family. According to the statistics reported by the dominion bureau of statistics, fuel and light for the month-that is, the month following November 18-^showed an actual drop of 2-3 points. Is there any reason to doubt that, if the government would remove other indirect taxes, the consumer would enjoy a similar reduction in the cost of living?
If it is the intention of the government really to take seriously the recommendation of the committee in this respect, then let them not boggle about it; let them not try to preserve face by purporting to adopt a recommendation from a committee. Let them

boldly take action now and remove these taxes while parliament is in session. Let them bring in their bills now for the removal of these taxes. Away with the excise tax imposed last November! Away with the sales tax as far as it applies to all the commodities that enter into the family budget of the Canadian family! Away with all the other excise taxes that apply to many of these necessities of life which have a direct bearing on the cost of living to the Canadian family!
On the subject of taxes, Mr. Speaker, let me tell you that the committee had some evidence on this point. Here is the evidence given by one of the textile manufacturers who was before the committee. This presentation was filed with the committee just within recent days. This company, Canadian Celan-ese Limited, shows in its breakdown of taxes that no less than 15-9 per cent of its total dollar volume of sales goes to pay taxes; and of that, 12-8 per cent goes to pay dominion taxes. If we are looking for some opportunity to bring the cost of living down closer to the capacity of the Canadian people to pay, let the government take immediate action to reduce these taxes the Canadian consumers are paying, because they are being paid by the Canadian consumer. I refer to these indirect taxes; and I ask the government also, even at this late date in the session, to deal with the question of trying to preserve to the Canadian of small income the proportion of his income which they are taking now in income taxes and which he badly needs to meet the increases in the cost of living.
Lastly, Mr. Speaker, I wish to refer to controls; and I do not intend to take time to go into the whole subject. I should have liked to have time to deal with them and to read extracts from the evidence on the matter. We had much evidence on the subject of controls, and we had from Mr. Graham Towers the statement that the country cannot expect to use controls to cope with the general rise in the price level unless it is prepared to apply a general over-all price control policy. He said that control would have to include wages and salaries, and would have to be a far more rigid over-all control than existed in time of war. He also recognized that it would have to be generally acceptable to the Canadian people and have their strong support. Otherwise, Mr. Speaker, as you know, you would have the black market running wild.
Similar things were said by Mr. Taylor, chairman of the wartime prices and trade board, the man closer to the enforcement of controls than any other person in Canada, as to the impossibility of maintaining a general over-all price control or of reimposing such

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controls today. I asked what would happen if today the government sought to push back prices, as parliament is sometimes invited to dio, to the 1946 level. His reply was, "Complete chaos." I asked why, and his .answer was simply that the primary producer just would not produce, because he will not produce unless there is a profit incentive for him. If you are going to talk about pushing back prices and enforcing a rigid over-all price control policy, then, according to Mr. Kenneth Taylor, you will just not get production.
In conclusion, Mr. Speaker, I say the problem, in the last analysis being one of scarcity, will be solved only by greater production. That will be the only final solution. Anything that stands in the way of production; anything that results in production being curbed or discouraged. is directly contributing to inflation in Canada. Among those things which are causing inflation are these government policies which are having the effect of discouraging production.
The Progressive Conservative party does not [DOT]believe that the way out of the problem of a rising level of prices is to grind down the farmer. Today the farmer is simply enjoying rights which he has been denied for a long time. He has not hitherto been receiving fair play, and we of the Progressive Conservative party will oppose any policy that denies the primary producer the fair fruits of his labours.
Nor are we prepared to support any government policy that will have the effect of increasing bureaucracy in Canada and of imposing controls that have as their ultimate effect a restriction of production. If we follow policies that restrict, policies that control, which will have the effect of discouraging production, then our last state will be worse than our first.
Therefore, Mr. Speaker, I submit that the course which ought to be followed right now by this government is to do away with these taxes which have done so much to raise the cost of living, taxes which, with the increased prices, have themselves risen in amount because they are percentage taxes, and these income taxes that are taken from the pockets of the people, money they badly need to meet this increased cost of living. And, sir, this government should abandon the policies I have referred to, which have had the effect of restricting production and discouraging the producer.


Mr. DEPUTY SPEAKER:: Is the house
ready for the question?


William Lyon Mackenzie King: I should like to raise a point of order in regard to the amendment. The house may direct a committee as to what it is to inquire into. It may enlarge the order of reference by means of an instruc-5849-3771
tion, but it cannot tell a committee in advance what it must find. That is what this amendment seeks to do. It states:
That the said report be not concurred in but that the same be referred back to the special committee on prices for the purpose of amending it by deleting the conclusions therein and substituting therefor the following conclusions. . .
In other words, by this amendment the house would be telling a committee which it had appointed to inquire into a matter what its conclusions must be. Here are five findings that are to be made by the committee. Surely a motion to that effect is entirely out of order.
I would refer as well to standing order 65, section 2:
(2) It shall always be understood that no member who declares or decides against the principle of a bill, resolution, or matter to be committed, can be nominated of such committee.
Here my hon. friend has already decided against the matters that are to be referred to the committee, and has indicated what the committee is to find. According to the rules governing the setting up of a committee, he could not even be a member of it. Obviously the amendment is out of order.


Mr. MacINNIS:: I have no particular reason for wishing the motion to be declared in order, but I would refer to Beauchesne, third edition, page 204, citation 570, where I find these words:
When the motion to concur is proposed the report may be referred back to the committee for further consideration or with instruction to amend it in any respect. It is not competent for a committee to reconsider and reverse its own decision, but if the house resolves that such reconsideration is necessary, the correct procedure is for the house to give the committee instructions which will enable it to consider the whole question again.
The committee is not dealing with this matter; it is being dealt with by the house at the moment.


William Ross Macdonald: I shall take the representations that have been made into consideration and give a ruling in due course.


Mr. C. C. I. MERRITT (Vancouver-Bur-rard):: Mr. Speaker, I had not thought I would be speaking at this juncture, after the compelling criticism that has been leveled at the government in connection with this report. I should have expected them to make some attempt to defend themselves following the brilliant speech by the hon. member for Eglinton (Mr. Fleming) to which we have just listened. From the unwillingness of any hon. member on the other side of the house to make an attempt at least to justify what the
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government and the maj ority on this committee have done, I feel one is led to the conclusion that they cannot make any defence, that they have none to offer.
In view of that fact, and in view of the lateness of the session I hope I shall not speak at any great length. However, as seconder of the amendment whose fate you have just taken under consideration, Mr. Speaker, I think I should address a few remarks to the house. I sat as a member of this committee since its inception in February, and during the course of such lengthy hearings one cannot help but form some conclusions.
I do not want to repeat anything that has been so ably said by the hon. member for Eglintoni with regard to the way in which the deliberations of the committee were conducted, but I must make a few remarks with respect to the fourteen recommendations brought before the committee about one o'clock yesterday morning. The hon. member for Eglinton has pointed out how some of them are critical of the government and critical of the government's policies. Six of them are directly critical of the government. Four more are innocuous enough as recommendations, and will have no effect at all in reducing prices. There is another series of four which I think one could describe as the ash-can sections, because each one of them has in its wording the obvious way in which it can be thrown into *the ash-can as soon as the house rises.
I wish to protest against any idea that I *was a party to any of those recommendations. I was a member of the committee, so far as the rest of the report was concerned. Although I did not concur in it, and was opposed to it, nevertheless the rest of the report refers to the work of the committee. But this part II of the report, as I call it, the conclusions or recommendations, is not even the recommendations of the majority of the committee. They are the recommendations of a group of Liberal members on the committee, headed by one of the cabinet ministers. They are inspired, not so much from the evidence adduced before the committee, but from' the dissatisfaction of those members with the policies of the government. While the main part of the report can be called the report of the committee on prices, I can only call these fourteen conclusions or recommendations the second Brei'thaupt report. If they are not that, then, as the hon. member for Eglinton says, they are a preview of a Lansdowne park platform in August.
I wish to make it perfectly clear and plain that, as a member of the committee, I resented the attempt to make me a party to the washing of dirty cabinet linen in public; because

when we consider that the recommendations -of which the six most important are directly critical of the policies followed by the government-were brought in at this last moment by a member of the cabinet, we can only reach the conclusion that there is a split in the cabinet, and that that split in the cabinet is having a lot to do with the difficulties of this country in facing our present problems, particularly the problem of the rising cost of living.
It is interesting to see what those six recommendations are. There is the recommendation that the import restrictions be relieved. There is the recommendation that the excise tax be removed. There is the recommendation for a change in rental controls, and then there is the recommendation which is perhaps more important than all the others in its application to the great clambake which will take place in August, namely recommendation No. 12, which contains the veiled suggestion that the Minister of Agriculture (Mr. Gardiner) should not be allowed to proceed with his announced policy with regard to the export embargo on cattle.
Some of these are proper recommendations to make. I believe we have advocated all of them but the last from this side of the house right through the session. Furthermore we voted against the introduction of the policies about which the Minister of National Health and Welfare (Mr. Martin) is now complaining. But there is just one thing I would say to him, and that is that he should fix up those things on his own side of the house, and not try to use a committee-at least not one of which I am a member-to fry his fish.
With regard to the rest of the report let me point out that this is a political document entirely; it is not a contribution to the understanding by the Canadian people of the causes of price increases in this country. It could not be considered an attempt at enlightenment of the public. It is a verbose document, and it is inconclusive because it was insufficiently considered.
Right through the course of the investigation, as a member of the committee I have taken the position that we should not load ourselves with so much work that we could not bring in some useful findings with respect to matters which we were investigating. And when we come up to just the day before yesterday-almost the last day of the session- and have thrust before us this long sixty-page report, which took all day to read, let alone to consider, one can see what very little consideration was given to the report by the committee.

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I have no doubt that a great deal was thought, of it by the Minister of National Health and Welfare, or whoever was its author. But the committee itself had practically no chance to consider it at all. It does not represent a serious attempt to convey to the Canadian people the reasons for the rising cost of living.
I should like to make another general observation about the report and about the work of the committee. I was greatly impressed by the fact, which was brought out time and again in evidence, that the government had, without the committee, all the means at its disposal whereby it could get the information it wanted and could take the action it wanted.
We had before us some of the senior officers of the government-some very able men, indeed. We had before us Mr. Taylor, chairman of the wartime prices and trade board; Mr. Graham Towers, and many other officers in government departments. Their evidence was most helpful. Indeed I believe it was tfle most important evidence we heard, because they knew, and they told us, why the cost of living had been going up-and they had certainly long before told the government the same things as they told us.
I was greatly interested in one bit of evidence given by Mr. Taylor. The press of this country during the sittings of the committee had a lot to say about the high profits made by companies engaged in the selling of butter. It came like a bolt from the blue. The evidence of Mr. Taylor was that he knew of these butter profits long before the committee was set up, away back at the beginning of *December when he was having one of his periodic conferences with the dairy industry. Information about the rise in the price of butter during the fall was known to the government, and yet no action was taken by the government upon that information. It did not need this committee to bring out information with respect to the butter situation; the government knew of it all the time.
It is interesting to note that there were officials of the government very close to the meat situation. They had to be, because the government is in the meat business. There was nothing discovered by this committee that those officials did not know. There was not one bit of that evidence that required the actions of this committee to elicit. I have no doubt that the purpose of setting up the committee was simply to turn pressure away from the government in the house.
When we turn to the report we find that it is completely unbalanced. It is so unbalanced that it is clear it is designed only as an attempt to exonerate the government from
responsibility for rising prices. This was a serious committee set up to find out why these prices were rising. We spent ninety-five per cent of our time in investigating the activities of firms in a few lines of business. We spent very little time and gave very little consideration to the much more important problems that are behind the activities of those firms in their various fields.
I suggest that the kind of problem we should have been studying was the relative positions of production and consumption of the goods in Canada which enter into the cost of living. We should have been finding out whether we had enough production and, if not, why not. We should have been trying to see that production was increased. We should have been examining into the question of consumption, and we should have brought in a report to the house showing how these two vital problems contribute to a rise in the cost of living. The fact that we did not go into those fundamental things; the fact that we dismissed them with a few hours of evidence and with a few words in the report shows how political a document this is and how it was not really an attempt to grapple with the problem.
I should like to speak for a few minutes with reference to the last paragraph of the amendment moved by the hon. member for Eglinton, which reads:
That in the opinion of the committee the continuing increased cost of living and rising prices are substantially attributable to the government's inflationary policies.
There is no direct reference in the report to the influence of government policy on the price level, but in the recommendations of the Minister of National Health and Welfare government policies are inferentially deemed to have made such a contribution to the cost of living. After hearing evidence on the prevailing price levels of a number of commodities, I am of the opinion that those levels were the direct result, or one might even say the considered aim, of government policies.
Mention has been made of the high rate of taxation, of the twenty-three cents in the dollar which goes to the dominion government in taxes these days. Mention has been made of the sales tax and of the easy-money policy of this government which contributed to the increase of purchasing power in Canada, one of the causes of rising prices as found by the committee.
When you come to examine the various commodities dealt with you find a most extraordinary thing. In some cases the domestic wholesale price was fixed by the government, either directly or indirectly, and
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in other cases there was a direct connection between government policy and the increase in the price. Let me just deal with the commodities we did examine.
In the case of butter we had evidence that the wholesale price had gone up to between sixty-nine and seventy cents at the time the ceilings were put on. We had evidence that the wartime prices and trade board were instructed early in December to consider the price at which they would reimpose the ceiling. We had evidence from Mr. Taylor that they could not make that decision until they knew what price would be fixed by the government for the export of cheese to Great Britain. When they knew that price at the end of December they were able to put on the ceiling of sixty-seven cents.
We had evidence that the price of butter is directly related to the export price of cheese and that if the prices board had fixed the ceiling price of butter below two and one-eighth times the export price of cheese there would have been no 'butter production in Canada. In effect, the government put a floor price of sixty-seven cents under butter, and the price we are now paying in Canada is a direct result of government policy.
Similarly with meat. We had evidence which showed that by far the largest rise in the price of pork, namely, four cents from seventeen to twenty-one cents a pound, occurred on January 1, 1947. That price rise immediately followed the negotiation of the new export bacon contract. We had evidence at the same time that the increase in the price of pork caused buyers to increase their consumption of beef, thereby sending beef prices upward. There again a floor price was put under these commodities by the government, and the price of meat as it is today is the direct result of government policy. If the people of Canada are complaining about those prices, they know precisely where to place the responsibility.
With regard to fruits and vegetables, it was only too clear that prices rose as they must when you cause a scarcity condition in any commodity. It was inevitable that the import restrictions on fruits and vegetables would bring about exactly what happened. Although there were cases of high prices and very large profits among fruit and vegetable dealers which should be condemned, the fact remains that it was the policy and the action of this government in imposing import restrictions which made it possible for these things to be done, and it is idle to criticize a few individuals for what they did when the certain result of their policies could easily have been foreseen by the government.

I conclude my remarks by referring to the last recommendation of the committee, No. 14, which reads as follows:
The committee wishes to emphasize the fact that increased production at home and abroad is the only permanent solution to the problem of high prices. The present shortage of commodities is world-wide, forcing world prices to high levels, which in turn are forcing Canadian prices upward.
There it is pointed out, and of course it is true, and we did not need a committee to tell us, that it is production and production alone which can bring prices down. WThen considering how far the government is responsible for rising prices I think it is a fair question to ask, what is their record in the stimulation of production? I think we shall find that, far from having any clear policy designed to increase the production of goods in Canada, the government have taken every step they could to restrict production and dam it back and to interfere with the abundant flow of goods in Canada, It is those restrictive policies, which I know the government say have been forced upon them by events, which day by day are becoming more and more responsible for rising prices in Canada.
We shall never have increased production if we maintain the present rate of taxation. Everyone knows that. The government know it just as well as I do, but they have not been able to stop their extravagance and get our taxes down. In the committee we saw the direct relationship between import restric-ions and prices. That was evident in the fruit and vegetables field. There is no doubt in my mind that the government's import restrictions are contributing greatly to increased prices in Canada today. At the same time, under the policies of the foreign exchange control board we are stifling the entry of capital into Canada and making it more difficult than ever to import goods and to increase the supply of goods in this country. We have heard in recent months in this house the Minister of Finance (Mr. Abbott) and the Minister of Trade and Commerce (Mr. Howe) say over and over again that Canada's capital goods development is placing so great a strain upon our supply of manpower and materials that it is necessary to cut it back and not to spend so much money on capital development. We have the Canadian dollar maintained at par under the foreign exchange control board. The import restrictions on goods and the maintenance of the Canadian dollar at an unreal figure are two ways of creating scarcity in Canada and consequent rising prices. Rising prices must be the inevitable result of the continuation of these policies, and we shall

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never get out of our present situation unless those policies are reversed.
I was most interested to read in the press the other day that the president of the New York curb exchange had visited western Canada and looked over various opportunities there. He was quoted as saying: "You have plenty of opportunities in this part of the country, and we have plenty of capital in the United States seeking a profitable outlet, but you cannot expect capital to walk into a trap." That is the situation brought about by the government's exchange policy. It has stopped the influx of capital which in turn would have enabled us to increase our importation of capital goods and would have lessened the pressure of purchasing power on the price of all other goods that we have in the country or that we wish to import. If, Mr. Speaker, the government should find some way of attracting capital into Canada the import restrictions could be taken off in a moment.
I point out to the government, who are so fearful of an adverse balance of trade with the United States that we must restrict everything we do, that until 1920, for the first fifty years in the life of Canada we had in almost every year, not only an adverse balance of trade with the United States but an over-all adverse balance of trade.
We were always importing more than we exported of our own production. In none of those years was it necessary to put on import restrictions to create scarcities in Canada and to cause our prices to rise in a way to distress our people. In each of those years people abroad, having confidence in Canada and realizing that it was a country in which it was safe and wise and profitable to invest their money, came in here and added to our store of foreign exchange with their own savings. By that action we were enabled to build up the productive forces which we have in Canada today and of which we are so proud.
The Minister of Finance and the Minister of Trade and Commerce have complained about our tight manpower situation. They have suggested that, since we have full employment, the only way to improve our present difficulties is to put on excise taxes and to cut back consumption and production. Why should we cut back production and consumption because we have full employment? Why should we not go after the manpower bottleneck, step up our immigration program and, alongside of new capital, bring in the new people to work in Canada to enable us to get after this production which the minister recommends so strongly?
In the first four months of this year, according to figures given in the house the other day, only 32,500 people came into Canada; I do
not know how many left. That is at the gross rate of 100,000 a year. Well, Mr. Speaker, in the great days of this country when we were trying to go ahead instead of to cut back, when we thought a rise in prices was a sign of prosperity instead of a thing we should shrink from, we had 200,000, 300.000 and 400,000 people coming to Canada every year. We had the money coming in with them to assist us in putting these new Canadians to work. We had prosperity all round and a happy and contented people, not a people worrying as to where they would get their next day's supply of bread and butter.
What I dislike particularly about the restric-tionist policy of the government is this. If ever I learned anything while sitting on the committee on prices I learned that the policies of this government in cutting off the flow of goods in Canada, in cutting back production and in attempting at the same time to reduce our consumption by these various control measures which we all know so much about this session, are bound to lead to further reduc- . tion in production and further rises in prices. So long as you stop goods coming in; so long as you stop the increase of our production facilities; so long as you keep this country with a manpower shortage and allow in only a trickle of people every year, so long will you keep your high prices. It is time that the government completely swallowed themselves and reversed their policies. It is time they stopped excessive taxation; it is time they stopped restricting trade; it is time they stopped stifling capital development, and it is time they went after the manpower shortage instead of sitting back and saying that because we have not the people we cannot do anything in this country.
In spite of the recommendations and conclusions in this report, I suggest that we pay no attention to it. I suggest that we set the dollar free, that we set trade free, that we set the Canadian people free to go about production in Canada in their own way and as they see fit. I suggest that we make this country a mecca for all free people who are vigorous and want to work, who want to have opportunity. Then we shall have production, and when we have production we shall have reduction in prices.
In these days we have an opportunity of gathering our forces together to go on to be a great nation. The test of whether we have a good government in Canada is whether people outside our borders who have money to invest, or who want a future in a country of opportunity, are looking to Canada as a place where they want to invest their money or to make that future. If you have an inflow of capital and people, then you have a good
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government. If you do not have these two things; if you dry them up, you have a bad government. Anyone who knows about the figures of immigration of people or capital today knows we have a bad government now.


William Ross Macdonald: Before the hon. member for Yancouver-Burrard (Mr. Merritt) spoke, I informed the house that I would consider the representations which were made with respect to the amendment which was moved by the hon. member for Eglinton (Mr. Fleming). Since then, I have had an opportunity of doing so. If the amendment is an instruction to the committee to do certain things, I would refer hon, members to Beau-chesne, third edition, citation 407, which reads:
An instruction is a motion empowering a committee to do something which it could not otherwise do, or to direct it to do something w'hieh it might not otherwise do.


John George Diefenbaker: Are you going to
allow any discussion before you make your ruling, Mr. Speaker? You retired for the purpose of considering some representations; but, as I understood it, with great respect, you gave no indication that you would make a decision without having further representations.


William Ross Macdonald: The Prime
Minister (Mr. Mackenzie King) raised the point of order. The hon. member for Vancouver East (Mr. Maclnnis) discussed the subject. I am not going to shut off discussion immediately, but I should point out to the house that discussion on a point of order should be limited. The Speaker must decide when he feels that he has heard enough representations.
I shall be glad to hear any representation from the hon. member for Lake Centre '(Mr. Diefenbaker) which he wishes to make.


John George Diefenbaker: I refer you again, sir, to citation 570 to which reference was made by the hon. member for Vancouver East. I shall read it and then I shall endeavour to apply this amendment and bring it within the ambit of this particular reference. The citation reads:
When the motion to concur is proposed the report may be referred back to the committee for further consideration or with instruction to amend it in any respect. It is not competent for a committee to reconsider and reverse its own decision, but if the house resolves that such reconsideration is necessary, the correct procedure is for the house to give the committee instructions which will enable it to consider the whole question again.
The report that has been moved for concurrence sets out fourteen recommendations 
made by the committee. I might just mention one as an indication of the type. Paragraph 9 reads:
The committee is of the opinion that the government should consider whether the time has not come to remove the special excise taxes on commodities in common use in Canada.
As I see it, the amendment moved by the hon. member for Eglinton follows that paragraph so directly that it is inconceivable on the authorities, I submit, that Your Honour can come to any other conclusion than that it falls directly within the provisions of the citation to which I have referred. I would point out that the amendment reads as follow's:
That the said report be not concurred in but that the same be referred back to the special committee on prices for the purpose of amending it by deleting the conclusions therein and substituting therefor the following conclusions. . .
I submit, Mr. Speaker, that is actually what citation 570 says:
... be referred back to the committee for further consideration or with instruction to amend it in any respect.
The amendment consists of the deletion of twelve recommendations and the substitution of five recommendations particularly set out in it. I submit that it comes entirely and completely within the purview of the citation that has been brought to your attention.
Mr. ST. LAURENT: May I say a word in answer to the hon. member? Will he look at paragraph (e) of the proposed amendment, and will he undertake to say that it is competent to this house to say to members of the committee:
That in the opinion of the committee the continuing increased cost of living and rising prices are substantially attributable to the government's inflationary policies.
As is stated in paragraph (e).
The matter can be referred back to the committee for consideration, but the house cannot say to the committee that the committee shall have such -and such an opinion. That is something which the committee can adopt or not after it has considered the matter. But it would be a queer system of democratic government if it were competent for this house to say to the committee what opinion it should have on a certain matter. The house can say to the committee members, "Reconsider and express your conclusions"; but the house cannot say to them, "You shall reconsider and it shall be your opinion" that such and such is so.

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John George Diefenbaker: May I ask the minister just one question? Is his objection to the amendment directed entirely against paragraph (e) ?
Mr. ST. LAURENT: No. My objection to the amendment is to the form in which it is drawn, because the amendment purports, not to send the matter back to the committee for reconsideration but to send it back to the committee saying to the committee what judgment it shall express; and that is something which it is not in the power of the house to do. I cannot dictate to my hon. friend what his opinion or his judgment shall be. I can ask him to reconsider a matter, but I cannot dictate to him what his judgment or his opinion shall be.


William Ross Macdonald: I wish to thank hon. members for assisting the Speaker to come to a conclusion. Apparently both members who have spoken are agreed that this is an instruction. The question arises as to whether it is mandatory; and if it is mandatory, is 'it beyond the powers of this house? I refer hon. members to Beauchesne, third edition, the first part of citation 409, which reads as follows:
An instruction which is generally made when a bill is committed, is not mandatory, and it is therefore customary to state explicitly in the motion that the committee "have power" to make the provision required. The intention is to give a committee power to do a certain thing if they think proper, not to command them to do it.
This amendment gives no discretion to the committee. It is required to do the things which are set forth in the amendment.
I note that paragraphs (b) and (c) in the amendment deal with a matter that has been voted on by the house. On May 27 the house voted against the amendment of the hon. member for Rosetown-Biggar (Mr. Coldwell), which was to the effect that the government had failed to remove or substantially reduce the burden of sales and excise taxes which bore most heavily on those suffering from low income and the high cost of living.
It is a well-known principle, as stated In May, thirteenth and fourteenth editions, that no question shall be offered to the house which is substantially the same as one on which their judgment has already been expressed during the current session.


James Arthur Ross: What about the committee report?


William Ross Macdonald: I would also refer to the point raised by the Secretary of
State for External Affairs (Mr. St. Laurent). I would point out that the last paragraph of the amendment purports to dictate an opinion to the committee, which procedure is against all rules of parliamentary practice. For these reasons I declare the amendment out of order; and I believe the last one in itself is sufficient to justify me in doing so.
Is the house ready for the question?


Some hon. MEMBERS:: Question.


Mr. IRVINE:: Mr. Speaker-


John Bracken: Did you rule this amendment out of order, Mr. Speaker?


William Ross Macdonald: Yes.


John Bracken: Then, with all respect, Mr. Speaker, I must appeal against your ruling.


Joseph Arthur Lesage: You are too late.


John George Diefenbaker: What is too late around here?


Some hon. MEMBERS:: You are.


William Irvine: Mr. Speaker-


John Bracken: Hon. members may take the position that it is too late, but the country will not take that position.


William Ross Macdonald: Order. I understand that the leader of the opposition appeals against the Speaker's ruling with respect to the amendment.


John Bracken: That is right.
Mr. DEPUTY SPEAKER put the question as follows:
On motion of Mr. Martin, seconded by Mr. Mitchell, that the report of the special committee on prices be concurred in, the hon. member for Eglinton moved in amendment that the said report be not concurred in but that the same be referred back to the special committee on prices for the purpose of amending it by deleting the conclusions therein and substituting therefor other conclusions.
I ruled the amendment out of order on the ground that it was mandatory and contrary to citation 409 of Beauchesne, third edition. I also ruled it out of order on the ground that at a previous sitting of the house the matter had been voted upon, and that it was a well known principle that no question should be offered which is substantially the same as one on which judgment has already been expressed at the current session. Finally I ruled the amendment out of order because it purported to dictate an opinion to the committee, which is against the rules of parliamentary practice.
*&42
Report of Prices Committee


Lionel Chevrier: I was paired with the hon. member for Cumberland (Mr. Black). Had I voted I would have voted to sustain Mr. Speaker's ruling.


Mr. ABBOTT:: I was paired with the hon. member for Stanstead (Mr. Hackett). Had I voted I vrould have voted to sustain Your Honour's ruling.


Air. ISNOR:: I was paired with the hon. member for Colchester-Hants (Mr. Stanfield). Had I voted I would have voted to sustain Your Honour's ruling.


Frank Exton Lennard: I was paired with the Minister of Trade and Commerce (Mr. Howe). Had I voted I would have voted against Y'our Honour's ruling.


Harry Rutherford Jackman: I was paired with the hon. member for Jacques Cartier (Mr. Marier). Had I voted I would have voted against Your Honour's ruling.


Lewis Elston Cardiff: I was paired. Had I voted I would have voted against Mr. Speaker's ruling.


Clayton Wesley Hodgson: I was paired with the hon. member for York North (Mr. Smith). Had I voted I would have voted against Your Honour's ruling.


Charles Delmar Coyle: I was paired with the hon. member for St. Ann (Mr. Healy). Had I voted I would have voted against Mr. Speaker's ruling.


William Irvine: Mr. Speaker, I think I had better begin my remarks on this motion for concurrence by moving another amendment. I do so now, instead of at the conclusion of my speech, for two reasons. The first is that I might speak so long I might forget to move it, and in the second place if I move it now Your Honour will have plenty of time to have it ruled out of order without holding up the house. I therefore move, seconded by the hon. member for Vancouver East (Mr. Maclnnis):
That the report be not now concurred in, but that it be recommitted to the select special committee on prices, with instructions that they have power to amend the same so as to revise sections i and 7, respectively, of the chapter of the report entitled "conclusions", in order to propose for the consideration of this house:
(1) Immediate imposition of a substantial tax on excess profits, to curb inflation and to provide money for necessary subsidies.

Report oj Prices Committee
(2) (a) immediate restoration of a comprehensive system of price controls and of the machinery necessary to make them effective.
(b) Restoration of the policy of subsidy payments wherever they may be necessary to bring down prices of foods, feed grains and other necessities.
And that the committee for such purpose be revived.
I suppose it is only natural that the representatives of the various parties coming back to the house from a committee such as the prices committee iwould hold sharp differences in their viewpoints on matters of political significance. -I listened to the hon. member for Eglinton ('Mr. Fleming) with a good deal of interest, and noted that he held the opinion that the report, especially that part of it which is referred to as conclusions or recommendations to the house, had been brought about as a result of or because of certain influences which have developed of late. He charged the government with having come toward the C.C.F. some distance, and probably implied that the C.C.F. wrould go toward the government if it supported the government.
I do not wish to follow that line very far. The amendment I have already moved will speak for the C.C.F., because it contains our point of view. But I was surprised, in listening to the hon. member for Eglinton, to discover that his party, including the hon. member himself, had changed its mind so quickly on matters of importance.
For example, in the amendment which he moved and which was ruled out of order, reference was made to the sales tax, and the increasing of exemptions for income tax. It will be recalled that the C.C.F. included both those principles in its amendment to the budget moved only a short time ago, and that at that time members of the official opposition sitting to my right voted against it.


James Arthur Ross: Coupled with what else?


William Irvine: They voted against it.


John George Diefenbaker: But coupled with
what else?


William Irvine: Hon. members can tell us what else.


James Arthur Ross: You have misinterpreted the whole thing.


Gordon Graydon: You put a brick in the bouquet.


William Irvine: The fact is that that is what happened. I am not saying anything against hon. members; I am just trying to state the facts.


James Arthur Ross: And you are just missing it,


William Irvine: I do not wish to get into any political argument. I do not mind doing so, but I do not wish to do so.


James Arthur Ross: Give the house the whole of the facts.


William Irvine: I am making a very gentle answer-


James Arthur Ross: And very misleading.


William Irvine: - to a very pointed innuendo in my hon. friend's remarks. If hon. members desire it, I shall have to go further than that, although I do not wish to do so.
This was a good committee in many ways. I want to pay a tribute to the hon. member for Eglinton and his associates as well as to all the members of that committee. Although we fought as we are doing here, it was really a pleasure to work with them. I certainly learned to appreciate all of them more than I ever did before, and I hope that they did not learn to appreciate me less.
I wish to pay a tribute to the able counsel. If it had not been for the splendid work which they did we would not have accomplished what we did in the time at our disposal. A similar tribute should be paid to the secretarial staff and the committee clerks who worked so assiduously.
I am abo going to compliment the chairman. I think when we have said some nice things about a person we can always hit a harder blow and he may not feel it so badly. I want to compliment the chairman upon his fairness and his efficiency throughout the entire proceedings. I congratulate him upon having any recommendations at all in the report.
As the committee knows, we had no authority to bring in recommendations. As the hon. member for Eglinton says, we tried to get that authority but failed. I think the committee would have been much more effective if we had had the right to make recommendations. But when the chairman has the vision and courage to go beyond what is expected and to take the consequences I think he should have a word of appreciation.
Speaking about the recommendations, I think we can say, first, the very fact that they are there means that it has been recognized that it was necessary to do something. Second, it means that the government and parliament are expected to do what has to be done. Third, the recommendations state what, in the opinion of the committee, should be done.
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I shall have something to say about how I disagree with some of these, although there are some with which I agree. I cannot understand the objections of my hon. friends to the right to these recommendations. I recall that they were most anxious when the setting up of the committee was proposed that it should have power to make recommendations and, now the committee has made recommendations, my hon. friends are the first to take objection.


Donald Methuen Fleming: They are the wrong kind of recommendations.


William Irvine: They are probably the
wrong kind for my hon. friend, but they have afforded him an opportunity to say what he has said and for me to say what I am saying. They afforded him an opportunity to move an amendment which was ruled out of order, and they afforded me an opportunity to move an amendment which I hope will not be ruled out of order. At any rate, we have an opportunity to discuss the committee and the issues with which it dealt, which are still of great importance to the Canadian people.
I am not so much concerned about the right of the committee to bring in recommendations as I am about what the government intends to do with those recommendations now that they have been made and, secondly, about how far those recommendations go in the direction that we want them to go to meet the situation. Those are things which are of importance to me.
I think the fact that some of the things which I have mentioned in the amendment, and which were mentioned in the original motion but in far less specific language, are in a sense a tribute to the position taken by this party from the very beginning. It will be remembered that we did not want this committee. It was not that we were opposed to finding facts; it was not that we thought there was not a good deal that might be learned; it was simply that we took the attitude at that time that the situation was so pressing that immediate action was required on the part of the government. If that had been forthcoming I am quite sure that we would have supported a committee like this, because of the information which such a committee could provide.
The whole tenor of the suggestions of the committee is in the direction of the proposals which we made earlier in the session with respect to prices and cost of living. As I say, the recommendations do not go as far as I want to see them go; otherwise I would not have moved the amendment that I have moved.

As hon. members all know, the committee was investigating high prices. I want to take this opportunity to say it is likely that in a few years we shall have another committee investigating low prices, which will be just as difficult a thing to investigate and to solve. We shall have that because of the system under which we are living, the fact that it is up today and down tomorrow.


An hon. MEMBER:: Oh, oh.


William Irvine: My hon. friend laughs
because apparently he does not understand it. He takes it out in humour. I like humour. If the hon. gentleman will tell me the joke, unless it is himself, I will laugh with him. I should not like to laugh at him. As I say, the committee was investigating high prices. The Stevens committee was investigating low prices. In a catch-as-catch-can, free enterprise, competitive system there is no power on earth that we know of that will keep things on an even keel. There is no means of controlling things except the desire for greater profits, which leads both to low prices and high prices, depending upon how the pendulum is swinging.
The committee began at the points where increases in prices were most pronounced which, as we discovered, were in matters of food and clothing. We investigated butter, bread, meat, vegetables, fruits and eventually textiles. I agree with the hon. member for Eglinton that perhaps we did not proceed in an efficient way by taking up those prices which happened to be most pressing, nor did we deal with things in a logical way. I agree also with him when he says we did not get very far. We concluded just about the time we should have been beginning. We have not even scratched the surface of the job that was given to us. So we can only speak of the very limited field which we have covered.
The point I would make in that connection is that the basic industries were never touched at all, even though they have both a direct and an indirect effect upon all the commodities that we were trying to study. The price of steel, the price of gasoline and of other commodities all have their effect on the price of bread, and even on the price of butter. But we made no examination into that. We plunged right into butter and pretty nearly stayed there most of the time. The investigation was lacking in thoroughness there, but that was not the fault of the committee. I think it will be agreed that we did all that any committee could have done with such a subject in the time we had at our disposal.
One of the industries which I think should have been investigated, and the committee

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should have stayed here all summer and done it, was the steel industry, also fuel, farm machinery, binder twine, boots and shoes-


An hon. MEMBER:: Hardware.


William Irvine: Hardware, if you like; commercial rents, freight rates, the manufacture of construction materials and other important industries of that type.
I want to make a comment or two on the findings of the committee with respect to the causes of higher prices. The factors of significance which were regarded as being causal of high prices, in the findings of the committee, were: first, the rise in external prices, that is to say, prices in countries other than Canada with which we must deal; second, the increase in costs of production; and third, the expansion of purchasing power in relation to the goods and services available. I want to make a comment on each of these alleged causes.
With regard to external prices, it is clear that Canada's prices have been rising for some time. Our price rises in Canada become external prices to other countries, causing them in turn to raise their prices still higher because our prices went up. Our relationship in that respect to other nations is pretty much that of an industry in Canada to inter-related industry, and so the spiral will continue just because we have allowed our prices to rise higher and become external prices to other countries.
As to the increase in production costs, I think we begged the question there, because it is more than likely that any increase in production costs must have been caused by the increased prices of certain materials which enter into costs, and not having found what made those prices rise, we should not just assume that there was an increase in costs of production which caused the recent price increases. I think that is begging the question.
As to the third factor, the expansion of purchasing power, I am hoping that the hon. member for Lethbridge (Mr. Blackmore) or some of his associates will enlighten us on that. The purchasing power abroad in this country today is alleged to be more than is necessary to purchase the goods that are available on the market. I believe that the hon. member for Lethbridge and his associates would like to have still more purchasing power distributed. However, they will be able to deal with that point. Of course there can be no doubt that the expansion of purchasing power is a vital factor, and we cannot afford to ignore it, whether it is raised by the hon. member for Lethbridge or in the report of the prices committee. There is a vital connection between the amount of money in circulation at any time and the amount of goods on the market to be
bought, and these factors in a society such as ours must have a direct bearing on prices and cause them to go higher or lower as the case may be.
Having found these causes, the committee should, I suggest, have been vested with sufficient power to make recommendations on howto cope with the effects which we have noted until the causes could be removed, and secondly, to advise how this parliament should proceed to remove the causes of high prices.
I think it will be agreed that the most important point in the causes is the implied shortages in relation to effective demand. I am almost afraid to use the words "supply and demand"; we heard so much of them in the committee. There supply and demand were more or less represented by those who talk so much of it as a law of peerless perfection, which works in such a way that supply is always demanded and demand is always supplied. But that just does not happen, or there would have been no need for the committee.
The question is this, as I see it: Shall we use wisely the principle of supply and demand, or shall we allow the undirected principle of supply and demand to use us? Demand, properly understood, is the measure of a nation's capacity to consume goods; that is the sum total of any rational demand. Supply is the measure of a nation's capacity to produce the goods demanded. These two factors, if used wisely in a planned economy, would be safe guides to our economic policy. But demand in a private enterprise economy means the measure of the total monetary income of would-be consumers, and supply means the measure of what it is profitable to produce. Both supply and demand are hampered by a private enterprise economy. I must not stop to develop that because I see my time is running out.
Everyone knows that shortages in essentials such as food, clothing, homes, and the like will mean higher prices in a competitive market under our present system of private enterprise. That is precisely the first problem with which we have to deal. That was the problem to which the committee had to address itself; for, even if a fuller production were achieved so that shortages were in part at least abolished, the best way of reducing prices would still have to be given consideration, because the need for price controls continues to exist up to the point where shortages cease. Shortages will unquestionably send prices up until only those who have the money can buy, and those who have not the money will not be able to buy. That will, of course, shorten the demand and start us down the hill, and that is where
Report of Prices Committee

you begin to move on toward the next committee which will be dealing with how to raise prices.
We had similar shortages during the war and we dealt with them. This government dealt with them in a manner which I think met with the general approval of the people of Canada, to a great extent at least. We found, during the war, that prices would not go down voluntarily; that nobody intended to bring them down voluntarily. The fact is that prices rose during the war in spite of patriotic fervour, and, but for controls, would have skyrocketed. So that if prices were not reduced voluntarily in time of war, we may be sure that will not happen in time of peace. I want to quote in that regard Mr. F. A. McGregor, combines investigation commissioner, who said this at page 157 of the report:
Under our wartime price legislation the freedom of individual sellers to decide their own prices was sharply curtailed. It had to be, because we were living in a period of serious shortages. Under such conditions competition was not the appropriate public safeguard.
There is also the observation of Mr. K. W. Taylor, chairman of the wartime prices and trade board, who said at page 58 of the evidence:
Shortages . . . are numerous and widespread and some of them are severe ... A 5 or 10 per cent shortage can drive prices up rapidly.
In that connection also let me emphasize again that there is no hope of bringing prices down voluntarily. I, and other hon. members, asked witnesses time and time again whether they wanted to bring the prices down voluntarily, and they laughed at the question instead of taking it seriously, and humorously said that they were in a system in which it was necessary for them to make good while making good was possible; that if they did not make good then, they would go to the bad at some other time, and that, therefore, they were taking all the slack in that they possibly could whenever it slackened up, so that they could take it in. That was the attitude of all the witnesses.
I want to quote next Mr. Graham F. Towers, governor of the Bank of Canada. He was questioned at pages 3361 and 3369 of the evidence as follows:
Q. Have you any suggestions to this committee how prices can be brought down by voluntary methods?
A. No, sir.
Q. That being the ease would you say there is practically no chance of prices going down throughout the world as a whole, and particularly here in Canada where of course we are most interested, as long as the world scarcity of food continues?

A. I think that is probably the case.
Mr. Thatcher:	Unless controls come back?
the Witness:	Unless prices are forced down
by controls.
At page 10 of the committee report the following appears:
The committee does not feel that the interests of Canadian consumers would be safeguarded by a system of over-all price and related controls.
Then it goes on to make a suggestion that a measure of price controls might be advisable here and there. I want to emphasize strongly my view that it is not possible to control prices effectively in spots. I think the criticism which has been made in this house and elsewhere about price controls is that you must make it comprehensive and you must have the weight, of public opinion behind you. I think that is a fair statement. I do not believe that we can effectively control prices by just having one item here and another item there under control. In that connection I want to quote again Mr. K. W. Taylor, chairman of the wartime prices and trade board, who was perhaps the most authoritative witness whom we had before the committee on matters of this kind. He said:
As I said before, efficient price control, the fixing of prices, is just the beginning of your problem; that the fixing of prices is just the first step. You have got to have a great range of controls which must buttress and support your fixed prices.
None of this is an argument against price controls in emergencies, when prolonged physical shortages of goods are inescapable.
Mr. Graham Towers had this to say under questioning:
Q. Would you need to have an over-all control?
A. Yes. If you didn't start off that way it would very soon become that.
Q. You could not apply it to just some commodities?
A. I hesitate to say you could not apply it to Yo-Yo's without going beyond that; if you see what I mean.
Q. I mean that is an extreme case? A. Yes.
Q. We are speaking now of action to reduce the general price level.
A. Then I think it would have to be an overall affair.
Why then could we not suggest over-all control at least until such time as we have got over these shortages? The answer is given again by Mr. K. W. Taylor, chairman of the wartime prices and trade board, who said:
Under the Canadian price ceiling policy the general level of retail prices, or the cost of living, was kept almost completely stable for more than four years. This was achieved by a vigorous combination of supply controls, production

Report of Prices Committee
directives, export controls, bulk purchasing, subsidies and rationing. It was a tough and realistic policy, very ably administered and firmly enforced; but its success was predicated on the whole-hearted acceptance of the policy and the procedures by practically all industries, groups, sections and classes.
That is another very fair statement that we shall have to accept, but I do not think we are right if we leap to the conclusion that there is no popular support for this today.


John Lambert Gibson: That
includes labour controls.
Mr. IRVINE; Don't worry about that, my hon. friend. I am not asking for controls for anybody that I am not willing to impose on myself; nor do I ask it for one class that I am not willing to impose on some other class.
Mr. SINCLAIR; You are on a fixed salary. Mr. HARTT: That is right.
An hon. MEMBER; Six o'clock.


William Irvine: I have at least twenty minutes left.
Mr. HARTT; I do not mind.


William Lyon Mackenzie King: I am rising merely to ask if there is not a desire on the part of the house to sit an hour later at this time.


Some hon. MEMBERS:: Yes.


William Lyon Mackenzie King: I gather that most hon. members are in favour of so doing. Unless there is objection it might be agreed that we shall sit until seven.


John Bracken: At noon we were willing to give every opportunity to try to finish the work today, but hon. members opposite did not seem to accept that., and an hour was lost. I respectfully suggest that we should not try to finish in a few hours all the work that is before us tonight. It must be quite evident that it is too much work to attempt to complete tonight. We should not be asked to vote the millions of dollars that remain to be voted in the few' hours that are remaining. I am not now criticizing anybody. But I do suggest that it is too much to expect that all these estimates will go through in three hours tonight. We might as well accept that as a fact and guide ourselves accordingly.


William Lyon Mackenzie King: May I say to my hon. friend I am not suggesting that for a moment. I am not suggesting, nor would I suggest that we should try to get through everything tonight. I heartily agree as to that. I think, however, it is the desire of hon. members to make as much progress as they
can today so that so far as next week's proceedings are concerned, we shall be able to conclude the session earlier in the week than might otherwise be possible. Since an objection is made to our continuing longer at present, I will not ask the house to sit beyond six o'clock. We shall resume the sitting at eight,
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


William Irvine: When the house rose at six o'clock I had been pointing out that the recommendations made by the committee with respect to price controls were half-hearted and that the committee proposes to deal only partly with controls. I had quoted Mr. Taylor and the prices board to the effect that price control must be a comprehensive undertaking if it is to be successful. I had also indicated that there were some people who thought that popular support, which was one of the reasons why price controls during the w'ar were so successful, could hardly be expected from people during times of peace. It is claimed today that public opinion would not support a policy of price controls sufficiently to make it work. That is an assumption.
It has been said that these controls were supported by all sections of the Canadian people during the war because of the great need for winning, and because of the danger in which the nation found itself, but that such support would not be available once the war ended. I submit, Mr. Speaker, that all the evidence is to the contrary. I believe that the people of Canada would be glad voluntarily to support a system of proper controls in peacetime as in war, provided that the same need is there and that they have a proper objective for so doing. I would support that opinion by referring to the last Gallup poll on controls a few months ago, which showed that more than seventy-five per cent of the people favoured the reimposition of controls.
I now wish to turn for a moment to high profits and their relation to prices. I do not hold the view-nor do I think any member of my group does-that high profit which may be made by any individual concern is in itself of great importance in affecting the price level. But we say that a profit system which goes all the way down the lines does have a tremendous effect on the price level. In our inquiry we have found that high profits in some instances were made by individual corporations. As a matter of fact, that


James Horace King: I wish to give a ruling on the amendment moved by the hon. member for Cariboo (Mr. Irvine), and seconded by the hon. member for Vancouver East (Mr. Maclnnis). The amendment proposed for the consideration of the house is for the restoration of price controls and of the machinery necessary to make them effective. I would call the attention of the house to section 2 (a) of the amendment, which reads as follows:
Immediate restoration of a comprehensive system of price controls and of the machinery necessary to make them effective.
This is substantially the same question that was negatived by the house when it divided on an amendment proposed by the hon. member for Rosetown-Biggar (Mr. Coldwell). If hon. members will look at Votes and Proceedings No. 3 for December 9, 1947, at page 45, they will see that amendment, which was in these words:
This house regrets that Your Excellency's advisers have failed to use the powers provided by parliament to control prices-
In view of the decision given this afternoon by the Deputy Speaker I feel bound to rule this amendment out of order.


Mr. W. F. KUHL (Jasper-Edson):: Mr. Speaker, without wishing to give offence to any of the hon. gentlemen who have preceded me, I wish to say that at no time have I been adept in the art of making a hogshead of lather out of an ounce of soap; so I shall make my remarks as brief and to the point as I can, in view of the general desire to terminate this session as quickly as possible.
It was my pleasure and privilege to be a member of the prices committee, though not from its inception. I commenced my service with it at the end of April, in the position previously occupied by my colleague the hon. member for Bow River (Mr. Johnston).
First I should like to endorse the compliments which have been paid by previous speakers to the chairman of the committee, the counsel and the members as a whole, but in endorsing their remarks, I must say there was a notable omission from the compliments that were extended. I believe the witnesses who appeared before the committee, representing various businesses, also deserve a compliment for the contribution they made to the work of that committee, and I wish them

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to know that, as a member, I certainly appreciate the information I obtained. I believe they should be complimented, not only for the information they gave and the patience with which they submitted to cross-examination, but also for the manner in which they overlooked what in some instances 1 consider were positive insults. Perhaps that language is somewhat strong, but sometimes I felt that if I had been in the place of the witness I would have been tempted to make much stronger replies to the questions asked.
I voted for the setting up of this committee in the first place; not because I felt that anything startling or unusual would be revealed, but because I felt that, information might be brought forward which would dispel some of the false impressions abroad in the country, and also that, as a result of the work of the committee, we might be better able to determine what should be done in the circumstances. I believe a good deal of information was placed on the record which, if the public could become aware of it, would dispel certain false impressions which are abroad.
As has been indicated already by the hon. member for Eglinton (Mr. Fleming). I opposed the adoption of the report by the committee. Manj' of the reasons for which I felt I was justified in opposing it were advanced by the hon. member for Eglinton. In the main I believe the criticisms he offered were quite justified and I endorse most of them.
But I had an additional reason for opposing adoption of the report. I think my chief reason was the attitude adopted by the government members, which I resented very much. When I spoke on the motion to set up this committee I said I thought one reason the government was glad to take that action was that for the time being it would silence the wrath of the people with respect to the high cost of living. It would enable the government to offer the excuse that a parliamentary committee was investigating the matter, and as long as that committee sat they could transfer the responsibility from themselves to the committee. The committee has now finished its work; certain recommendations have been made, but I agree with those who have suggested that it still remains to be seen how effective those recommendations will be if carried out. Personally I consider them woefully inadequate to meet the situation.
The attitude on the part of the government members of the committee which I resented so much was expressed in the manner in which many of the witnesses who appeared before the committee were dealt with. I resented
the suggestion that, instead of being regarded as public benefactors, most of the witnesses who appeared there seemed to find the atmosphere like that of a sort of inquisition. They were looked upon as public enemies, who had to account for some wrongdoing. That was the impression I received from the manner in which many of the questions were asked; and I am going to read a few excerpts from the records of the committee to substantiate what I have said. I would not say that applied in every instance; nevertheless in many cases it was true.
Naturally I tried to discover a motive, and the only motive I could arrive at was that up to that time-and it is still the case-the government were not prepared to meet their responsibility in the way I at least think they should. The government have not met their responsibility because they have not done those things I believe they should do for the people of Canada, and therefore the government must look for a scapegoat. I considered the attitude they took toward many of these businessmen was because they were looking for a scapegoat for their own sins. They were attempting to make private business the scapegoat for their sins. In my view it was most unfair for the committee, and furthermore I believe it is a dangerous attitude to take.
From all sides of the house we have heard expressions of fear of the communist menace with its danger to the private enterprise system and freedom in general. The government, the Liberal party and the Progressive Conservative party nominally at least represent themselves as being the champions of the private enterprise system. Yet if one goes over the evidence somewhat carefully he will find that a concerted effort was made in the committee to discredit private business-or at least it had that effect. I am satisfied, from the newspaper reports which went out in consequence of some of the questions asked in committee, that many of the public are under the impression that a large number of businessmen are just a lot of bloated profiteers and chiselers. I believe there is too much of that impression abroad. There has been too much of it abroad for too long a time, without those wiho claim to be the champions of private enterprise lending any more emphasis to it.
Just to indicate a little more specifically what I mean, I should like to refer to one instance of this. While I think of it, perhaps I should say at this juncture that I can understand hon. members of the C.C.F. party doing that, because they have come out flat-footed and have said they are opposed to the private
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enterprise system and opposed to profit. Therefore it is in their political interest to discredit private business as much as they can so as to give them an excuse for nationalizing industry.
However I cannot understand that attitude on the part of those who pretend to be the champions of private enterprise. Therefore I resented the attitude taken by some of the Liberal members on the committee when dealing with some of these matters. The case to which I shall refer is one where possibly we cannot altogether excuse the people involved. But again, as has already been pointed out, I think the .circumstances are attributable to government policy. It was the government which was really responsible. They made possible the circumstances under which these things could happen. Then government members have the gall to turn around and blame someone for taking advantage of those circumstances.
Here is one instance of it-and in this particular instance I think the general public would get the impression that most of the fruit and vegetable business was carried on in this manner, and that profits of this kind, were made regularly in that business. This is the case of Mr. Ruben Marlow, general manager of Marlow and Company Limited of Toronto. It is the case of the famous four carloads of potatoes. I should like to indicate here the way in which this man was spoken to and in which he was treated, which I thought was unfair and uncalled for, in view of the conditions for which the government itself was responsible.
The hon. member for Victoria (Mr. May-hew) was in the chair at the time, and it is his remarks I am going to quote. This/is what he said to Mr. Marlow:
I want to say this; it is my opinion, and it is a little more than an opinion that, in this particular transaction, both the government and its departments were trying to see that there was a supply of new potatoes on the market. The foreign exchange control board released American funds for this purpose. It would appear to me you took advantage of the situation and you prevented potatoes from getting to the public at a reasonable price. In other words, you did not live up to the spirit of the regulations which existed at that time. You took an exceedingly high mark-up. I certainly will draw this to the attention of those writing the report because I think you are doing a disservice, not only to yourself and to the people of Canada, but to the other people in your own business.
Then, when I myself pressed the witness to make a comment upon that statement, the acting chairman said this further:
I fully understand the explanation you make. As far as I am concerned there is no explanar\Ir. Kuhl.]
tion at all, there is no justification for it. There is no justification in your having taken the mark-up on the potatoes which you did at that time. That is my opinion. Those who are writing the report -will have to deal with it in their own way. I feel it is my duty to make that quite plain. As I see it, I consider it one of the most outstanding cases of its kind that has yet been brought to the attention of this committee.
So far as I recall, it was shown that this particular wholesaler had made 43 per cent on the sales of two carloads of potatoes. That is undoubtedly a very high profit. He justified it himself. He considered that it was fair, in the light of prices of vegetables at that time. I considered these statements of the vicechairman a most unwarranted censure of a businessman. In any event, I think the committee could have made statements of that kind among themselves, without saying it to the man personally.


Mr. MAYHEW:: I should like to put the hon. member right, if he will permit me to do so. This gentleman had been buying potatoes for $6.25 a sack and had been selling them at $12 a sack in Montreal and Toronto. So that is 43 per cent on his sales, and I think I was quite right in bringing the matter to the attention of the public.


Walter Frederick Kuhl: I am not saying there should not be some censure in the matter. I have not the actual figures here, but the report of the committee says it was 43 per cent on sales. In any event, it affected only four carloads of potatoes and, as I say, the circumstances were precipitated by the government itself. They put the ban on overnight, and they made it possible for this man to make that money. Then they proceed to blame him for making it.
If that were typical of the whole of the vegetable industry I might understand a censure of that kind being made in this instance. But -when it is a mere drop in the bucket-


An hon. MEMBER:: How do you know?


Walter Frederick Kuhl: There was no evidence in the committee that it was a common condition.


Mr. MIOHAUD:: I should like to ask the hon. member a question with respect to potatoes. I understand he implies that the government had interfered at that time with the marketing of potatoes. I am not quite clear on the point he makes, and I would ask him to state clearly if he did make that statement.


Walter Frederick Kuhl: No, I did not say that the government interfered. I was criticizing the attitude taken by the acting chairman at that time in speaking about the witness in the

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fashion I have indicated, when in fact the responsibility for the circumstances was that of the government. They placed the ban on potatoes and created the scarcity.


Mr. MICHAUD:: What ban?


Walter Frederick Kuhl: I could understand that attitude on the part of members of the C.'C.F. party, because a't all times they are attempting to show up business in the most unfavourable light possible. That, was possibly one of the strongest remarks made by the C.C.F. members on the committee, and it was quite unwarranted considering the evidence 'that was given later. Here are the words of the hon. member for Moose Jaw in addressing one of the witnesses, as reported on page 3713 of the proceedings:
Would it not look to this committee that this is one of the most shocking examples of a company not showing their strength in order to keep these prices down? There is no sense of public responsibility there because if every company in Canada took the view that you have been taking we would have uncontrolled inflation in this country andi an inevitable depression. I do not know what your justification is for that time taking such a terrific and abnormal profit.
That is typical of the questions asked and the inferences drawm by the C.C.F. members of the committee. I can, well expect that, because it is their ambition and objective to substitute nationalized industry for private industry and they will do anything they can to discredit private industry.
I should like to make one more reference to the criticisms of the hon. member for Moose Jaw. I have often said that if the truth were known members of the C.C.F., socialists and others who subscribe to a like philosophy are not as much opposed to profit as they are envious because they are not making the profits themselves. Actually I think they believe in the profit motive for themselves, and I have a little quotation which will substantiate that. This is our good friend, the hon. member for Moose Jaw, speaking to Mr. Wolfe, general manager of the Ontario Produce Company. Mr. Wolfe said:
Let me put it this way. If we were able to get the Toronto trade together to maintain a lower level on the price of our produce could we not likewise get them together to hold prices up at some time when supply and demand could bring lower prices?
Mr. Thatcher:	I am not suggesting you
should have got together, but I think possibly you could have set an example. It looks like the example you set was a bad one. You took all you could get. Maybe I would do the same thing if I were in your spot.
When C.C.F. members are off-guard they really reveal what they feel inside. As I say,
I can understand that type of criticism emanating from C.C.F. members, because they claim they' are opposed to the private enterprise system. It seems to make no difference what is discussed in this house or in the committees, the discussion always resolves itself eventually into a debate on the principles espoused by the various political parties. The questions asked in the committee were coloured by the particular philosophy subscribed to by the hon. member asking them. That is quite natural.
As I said in the beginning, innuendoes that the private enterprise system is responsible for the high cost of living should not emanate from members on the government side. They represent themselves as being the champions of private enterprise and they should so conduct themselves. There was altogether too much time taken up in the committee in an effort to blame private business for the high cost of living.
The hon. member for Cariboo (Mr. Irvine), who just preceded me, made some statement, about profits being high. I think I followed fairly closely all the evidence that was given and outside of the potato case and one or two others there were few instances where there were what one could call high profits. In most instances the profits were quite modest and in some cases there were none at all. There were times when the profits were less than they were under controls.
I should like to refer to a statement with regard to mark-up and controls by Mr. Steinberg of the Steinberg groceterias. He was being questioned by the hon. member for Moose Jaw as follows:
Q. You are telling us the retailer has not benefited particularly or has not made any greater profits with controls off than he did when they were on?
A. No, I would think the retailer has made less.
Q. Has made less?
A. Yes.
Q. Then he has not benefited by the fact controls were removed?
By Mr. Kuhl:
Q. Therefore the consumer has benefited as a consequence of the controls coming off?
A. I would say yes.


Mr. THATCHER:: Prices went up 25 per cent notwithstanding.


Walter Frederick Kuhl: We are talking about profits, not prices. The hon. member for Cariboo stated that profits were greater, and I am just giving an instance where a retailer said his profits were less after the controls had been taken off. The hon. member for Cariboo said that profits have increased since 1939, but that is only part of the picture. As production
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increases, it is only natural that profits will increase correspondingly, even though the profit rate is no higher. I have not any figures before me, but I think that is the case. While profits have increased since 1939, I think it is taken for granted that the rate of profit is in conformity with that increase and is certainly no higher.
I have here another statement which I think will be of interest to the consumers of Canada. I know that when I or anyone else makes statements of this kind those who are not actuated by the best of motives may say I am trying to defend big business.
I do not want to see anyone taken advantage of, no matter who he is. The truth and the whole truth should be known about the situation. I think the general public has had the impression that tremendous profits are being made by the packing plants. I have heard that all over the country.
Here is an interesting statement in connection with the profits on meat by Mr. Millard, president and general manager of Swift Canadian Company. He was being questioned by the chairman of the committee, as follows:


William Ross Macdonald: I wonder if I could ask a
question. If you take schedule 4 for 1946 and 1947 you will see that for most of those months in those two years-
That is 1946 and 1947.
-you show a loss on meat operations, or operations of your meat department, yet your general net or profit and loss position as contained in schedule 3 shows that for most of the years from 1936 to 1947 you have made substantial profits. Now where do you make profits if you do not make them in the meat department?
There was one packer who showed that he had not made any profits in the meat department.


Wilbert Ross Thatcher: He made his profits in by-products.


Walter Frederick Kuhl: Quite true. Mr. Millard
replied:
Well, perhaps in by-products, glue, tankage, the shortening department, butter, poultry, eggs and cheese.
The point I am replying to is the general impression that there is profiteering in meats, that meats have been sold at colossal profits.


Wilbert Ross Thatcher: That is only their accounting methods.


Walter Frederick Kuhl: I have quoted the statement of the manager of the company and if the hon. gentleman could have shown otherwise he should have done so at that time.


Wilbert Ross Thatcher: He did.


Mr. HARTT:: Have him arrested for perjury if he did not tell the truth.


Walter Frederick Kuhl: I could continue to quote evidence from the report itself to show that the colossal profits alleged by many are not being made, but, on the contrary, that profits all the way through are very modest and that the high cost of living is not attributable to exorbitant profits.
I endorse wholeheartedly the suggestion made by the hon. member for Eglinton (Mr. Fleming) that government policy is largely responsible for the high level of prices.


Maurice Hartt: That is not the case.


Walter Frederick Kuhl: It is a question of whether it is a fact or not, and the sooner the hon. gentleman recognizes some of these facts, the better it will be for him and all the rest of us. While on that point, may I say that some of our Liberal friends should be clothing themselves in sackcloth and ashes for attempting to place the blame for high prices on private business when they themselves are responsible for those high prices, and if they continue in their present course they will find that they are driving this country right into the arms of socialism and communism.


Maurice Hartt: Why?


Walter Frederick Kuhl: I think I have given the hon. gentleman sufficient information on that point. By their attitude in the committee, the government members have done a great deal to discredit private business in the eyes of the public, and those who are gullible will be driven to say: If that is what private enterprise is and does, let us do away with it, and let us have instead C.C.F. and communism. There is too much of that attitude abroad already without so-called supporters of private enterprise lending any more emphasis to it. It is time that the members of the Liberal party did a little soulsearching and discovered what the real facts are which contribute to the high cost of living.
I endorse wholeheartedly the suggestions which have been made that the government do much more with respect to the taxation angle. That particular aspect interested me most in examining the witnesses. I attempted on most occasions to get a statement from the various witnesses as to the proportion of their costs represented by taxation but not many of them were very definite until on the last day we received a statement which the hon. member for Eglinton has put on the record indicating that around fourteen per cent of the cost of commodities was represented by dominion taxation.

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I know that the opinion is held by both orthodox economists and socialists that there must be taxation. I grant that at the moment when we have well-nigh full employment a certain amount of taxation is necessary, but certainly taxation on the lower incomes could be completely eliminated. In regard to the questions I put to the witnesses, it was suggested both :by the chairman and by some of the witnesses that it was ridiculous to think of eliminating taxation. Those who hold that view hold it purely because they have not yet had their eyes opened with respect to the relationship of money to wealth. They still have much to learn.
In conclusion, I quote the last recommendation of the committee, which states:
The committee wishes to emphasize the fact that increased production at home and abroad is the only permanent solution to the problem of high prices.
I think that is one of the most important statements made by the committee. It is, of course, obvious and self-evident that increased production is the only solution, but the question which arises is, how are we to bring about that increased production? The recommendations which the government has included in this report are woefully short of any methods of stimulating production to the levels necessary to produce prices. Consequently I urge that the government members consider the taxation angle, for their own sake. There is no particular reason why I should be concerned about them personally; but, after all, we are all Canadians; we all want the highest standard of living which this country is capable of producing, and we all desire to retain our freedom. As I have already suggested, unless some appropriate action is taken in the near future to stimulate production to higher levels, and particularly to enable the people in the lower income brackets to acquire more of this production then I fear that we may be driven into the arms of totalitarianism. I think the circumstances at the moment are that serious, and therefore I urge that the members of the government consider this taxation angle seriously before it is too late.


Angus MacInnis: Shortly after we reconvened here early in the year we had to deal with this question of prices and the high cost of living. Today in the closing hours of the session we are again dealing with the question of prices and the high cost of living. That is wise and proper because, of all the questions that are troubling the minds of the people of Canada today, the
most pressing is that of the high cost of living. The problem is important and impelling because it affects the people so intimately and so many of them. Perhaps seventy-five per cent of the people of Canada today find difficulty in making ends meet, in keeping their families properly fed and clothed, in keeping out of debt and that sort of thing, on account of continually rising prices.
To make ends meet has always been a struggle for the great majority of the people of every country, but since the end of the war it has been next to impossible in Canada. Since the beginning of 1946 the rise in prices has been crushing living standards like a steam-roller.
When we were discussing the setting up of the committee in February last, I said I did not consider it necessary for the government to appoint a committee to find out what was causing prices to rise. Further, I said the government had abundant information on the question. I pointed out that the same factors were operating to raise prices in 1948 as operated to raise prices in 1941. The government knew what the underlying factors were in 1941 and applied the remedy, and if they were prepared to apply the remedy, and convince the people of Canada that it was the remedy, then there was no use in having an investigation. The investigation was being instituted, I said, solely to prevent embarrassment to the government in the house.
I pointed out that the cause of rising prices was not necessarily the profiteering of private corporations or private individuals; that such profiteering where it existed was merely incidental; that the cause of rising prices was short supply and heavy effective demand. To the extent that there was profiteering, it was the inevitable consequence of the operation of the system under which we are living. There is no use in complaining about it or in thinking we will get away from it.
When the hon. member for Cariboo (Mr. Irvine) spoke this afternoon he said that in a few years from now we would likely be investigating, not high prices but low prices. We had an investigation into low prices not so very long ago. I am afraid that many hon. members have either not read the report of the price spreads commission, or, if they have read it, they have forgotten about it. In order to refresh their memories and perhaps stimulate their curiosity so that they will take a little time off and look into the report, I am going to read two or three short paragraphs from it. May I say the report was signed by five or six Conservative members
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who are not now members of the house and three Liberal members, only one of whom is here at the present time, namely the Minister of Justice. A report that the Minister of Justice signs is not to be thrown aside without consideration. On page 5 of the report I find the following:
The depression has, furthermore, demonstrated that the strong and the organized are attaining an ever-increasing position of dominance in our economic life; that economic power is becoming concentrated. With this concentration, old theories of economic control are proving inadequate.
If that was true in 1934, and it was, how much more true is it today because of the development and concentration of economic powers in the last fourteen years?
Then, on the next page I find this:
Fundamentally, the problems which confronted the commission are those of a transitional economy, in which simple competition still prevailed in some parts, monopoly had succeeded it in others, and monopolistic or imperfect competition characterized the rest.
That again is the situation today, as was very well indicated by the committee on cartels a few years ago, and by the evidence given by the commissioner of the Combines Investigation Act when he appeared before the prices committee. It seems to me amazing that even the hon. member for Jasper-Edson (Mr. Ku'hl) can- not be convinced by the evidence of economic exploitation that is coming to light every day.
About five or six months ago the combines investigation commissioner held an investigation into the combine in dental supplies. Broadly speaking, he found that they were making us pay through the nose for our false teeth. And the evidence brought out by the prices committee showed that when we had paid for these teeth the price of food went up so high that we did not have anything to chew. Just a few weeks ago we had another report from the commissioner, this time on eyeglasses. Surely to goodness we should awake to the fact that these things do not arise from the innate depravity of human beings. They arise because of the competitive struggle of making an existence, as the committee of 1934 said in its report on page 7:
It is the fierceness of the struggle, not any unusual depravity in the men concerned, which leads to the adoption of such practices. No one businessman can afford to follow the dictates of his conscience and refuse to conform. If he did, he would be eliminated.
In the economic world in which we are living today, to be eliminated in the struggle for existence is not a thing to contemplate with any degree of complacency. Tomorrow most

hon. members will go to church and will hear sermons on the golden rule, to do unto others as you would have them do unto you. But on Monday morning we have another golden rule-there is one for Sunday and another for the resit of the week'-which is, "Do others before they do you." That is the system under which we are living, and that is why we have the conditions which are complained of ait the present time. I am not complaining about people doing things that circumstances compel them to do in order to survive in (the business world. My complaint is that the representatives of the people should allow such things to be done.
The committee's report is, to say the least, disappointing. In one of the paragraphs in the conclusion, I believe it is stated that the mere fact that the committee was sitting, if it did not prevent prices from rising, at least prevented them from going up as much as they might have done if the committee bad not been sitting at all. Perhaps that is true. Perhaps the words of Longfellow-
(Nothing useless is, or low;
Each thing in its place is best.
-would apply in this instance, and perhaps some good was done. But when you come to the cost of living index and see how it has gone up since this committee was organized, you will see that the committee has not done so much after all. At page 14 of the report I find this:
In 1946, prices began to rise more quickly and then accelerated rapidly under the pressure of factors that are examined. By April of 1948, the index had risen to 151-6. while on the first of January, 1946, it stood at 119-9. This was an increase of 26 per cent or twice the increase which had occurred during the war years.
Hon. members will note that the paragraph begins by saying that in 1946 prices began to rise rapidly and became accelerated under the pressure of the factors that they were investigating. As a matter of fact, prices went up in every instance as soon as controls were removed. I am not saying it would be an easy matter to maintain controls. My hon. friends to my right must accept a large share of the blame-and there is no use in their blaming the government-for the removal of these controls by the government. They are both competing for the favour of the same people; and the government undoubtedly was afraid that if they did not remove controls, the official opposition might make capital out of that fact.
The report gives only the index figures for April. The cost of living index for May is still higher. I do not know why it was not given here. In May it was up to 153-3. That

Report of Prices Committee
is a rise of 33-4 points since January 1, 1946. When we come to food, the index is up a great deal more. In January 1, 1946, it stood at 132-8; in May, 1948, it stood at 191-2; or, in other words, it was up in that period of about seventeen months by 58-4 points, or almost 44 per cent.
Did hon. members ever contemplate or ever try to analyse the way in which this rising cost of living affects the various sections of the community? For those in the upper and middle income brackets it is not particularly important. They do either one of two things: they save less, or they buy fewer luxuries. Their standard of living does not suffer. But when j'ou come down to the lower income brackets, and that includes at least sixty-five per cent or seventy-five per cent of the people of Canada, the situation is different. Among that number there are a relatively small number who can, through economic pressure, do something to raise their income as the cost of living goes up. But the great mass-that is, the unorganized worker, the small farmer, the small businessman, the person on superannuation, the person on a small pension such as old age pensioners and the like-cannot do anything to raise their income, and they get the full force and effect of the rising cost of living.
When this matter was discussed in the prices committee-I was not there at the time, having left the committee to go to another one-Mr. J. S. McLean, president of Canada Packers, said, in reference to rising prices, as reported at page 2201 of the evidence and proceedings:
When prices get too high people stop buying. Now, in so far as it is an exemplification of that, it is not only desirable, it is inevitable. When housewives make up their minds they can't afford to buy any food at the current price they stop buying.
When housewives decide that they cannot buy food, they do something else besides stopping to buy food. They get mad. The housewives of Canada today are mad-


Walter Frederick Kuhl: At whom?


Angus MacInnis: I will leave that for my hon. friend to answer.


Walter Frederick Kuhl: What is your answer?


Angus MacInnis: They find that they cannot buy the food, the clothing and the other things their families need.


Walter Frederick Kuhl: Whom do they blame?


Angus MacInnis: They blame the government and perhaps their blame is well placed. I believe they blame my hon. friends to the
right, too, considering the results of recent elections. However, it is not necessary to go into that now; we can go into it at some other time. Perhaps anything we might say would be only a guess anyway. The fact of the matter is that, as the supply of goods on the consumer market is increasing, prices are not going down but are going up. If you looked for a suit of clothes two years ago every suit you saw in a store window bore the words "with priority only". You could not buy a shirt or a pair of pyjamas or a score of things now in plentiful supply in the stores; but in 1616 prices were lower than they are today. I direct attention to what the dominion bureau of statistics has to say on this matter, and I should like hon. members to understand that this situation is dangerous. It is the prelude to a depression; and you cannot just leave it alone unless you are convinced the government can do nothing; that we are the playthings of fate; that when a depression comes you take it and that when war brings a boom you take that also. Surely no self-respecting people should take an attitude like that. I have before me the Canadian Statistical Review for April, 1948, issued by the dominion bureau of statistics. The portion preceding what I am about to read contained a summary of the improvement in production and referred to the government surplus and things of that kind. Then it went on to say:
In contrast to the strength shown by data on production and employment there has been some evidence that the volume of goods moving through retail channels is smaller than it was a year ago. Retail sales during the first quarter of 1!M8 were up only 11-4 per cent over the first quarter of 1947. even though Easter sales fell entirely in March this year. But the index of retail commodity prices was up almost double this amount, about 22- per cent, an indication that the physical volume of goods sold is dorvn.
The evidence is that, as our ability to produce goods increases, the ability of the people to buy and consume those goods decreases. Some hon. members may remember that the Minister of Finance (Mr. Abbott) referred to this matter in his budget speech. In this debate I suppose I am not allowed to quote him; but he pointed out that, people were using up not only their current income but also the savings they accumulated during the war. It is even worse than that. They are not only consuming all their current income; they have not only consumed their savings; but they are now- buying on credit, paying in instalments, and that cannot continue for very long. When they have reached their limit in instalment buying they will have only their current income, less what is required to pay the instalment purchases, and then sales will
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decline faster than they declined in the period referred to by the bureau of statistics.
This is the situation facing the country. Surely we should be able to do something about it, but in my opinion there is nothing in the report of the committee that will help in a material way to remedy this situation.
Before resuming my seat, since I do not want to prolong this debate unduly, I should like to refer to just one other matter. As I said earlier, the committee was appointed in order to avoid embarrassment to the government. The report is made in order to avoid the same embarrassment; and the inquiry recommended is intended to keep people quiet, in the hope that something will happen between now and when the house meets next winter. One of the very few submissions made to the committee by organizations came from the Canadian association of consumers. The brief was read and spoken to by the president, Mrs. R. J. Marshall, and the secretary. Mrs. F. E. Wright. In my opinion they presented an excellent brief, for which they are to be highly commended. They gave some information as to the effect of high prices on family life. What I am about to read appears on pages 1076 and 1077 of the minutes of proceedings and evidence of the committee. They refer to a study of the effect of the increased cost of living on family life, made by the Hamilton family service bureau in November and December, 1947. This survey covered seventy families, averaging 5-8 persons, with an average income in 1947 of SI,820. The survey showed that most families spent from 24 to 39 per cent of their income, or amounts ranging from S24 to S45 a month per family for food in 1939, but that in 1947 they had to spend from 40 to 80 per cent of their income, or from S50 to $100 a month to buy the same quantity of food. The wages of ordinary workers have not gone up by anything like that amount. Then they say:
These surveys and widespread reports which we have had from consumers lead us to believe:
(a)	Family living costs have increased to a much greater extent than wages and family income;
(b)	The standard of living is being lowered;
(c)	Many families are reducing the quantities of their food purchases below an adequacy for nutritional health;
(d)	Excessively high prices, particularly of essential commodities, are likely to result in many families exhausting their savings, going into debt or over-extending themselves in instalment buying.
That is exactly what I have said is already being done. That statement is supported, not only by the evidence brought forward in this brief, but by reports coming from various parts of Canada and also the United States.

I suggest to the government that it should do more than what is contained in this milk and water report-more water than milk. Something more is required. But before we leave here, and after this report is endorsed-and I suppose we have to endorse it, because it is the best we can get-we should have some assurance from the government that it will pay some attention to the report; because, unless we have that assurance, we are not doing anything to ease the misery of the people, and to stave off the catastrophe which will overtake us unless we change our methods.


Mr. E. D. FULTON (Kamloops):: Mr. Speaker, since the amendment moved by the hon. member for Eglinton (Mr. Fleming) has been ruled out of order, and since the amendment moved by the hon. member for Cariboo (Mr. Irvine) met the same fate, what is before the house at the present is a motion for concurrence in the report of the prices committee. Since I do not think any members of the official opposition have yet spoken directly to that report, but rather have discussed our own amendment, I should like to say at the outset that we are totally unable to accept the report, and that we find it a mere vague collection of words designed, as has been said and has been proven, to divert the attention of the people, and particularly of the housewives, from the object of what should be their real censure, namely the government's policies in their effect on prices; and to try to divert some of their attention, to prices outside Canada-anywhere but where it should be directed, and that is on the shoulders of the government.
It is for this reason mainly that we cannot support the report or vote for its adoption. The hon. member for Eglinton, in his extremely able and telling speech of this afternoon, has analysed most of the deficiencies in the report. Its conclusions are wrong. The committee has not served its purpose, because it did not report on the real causes of the increases isn prices. It did not actually say what the actual evidence proves, and indeed whaJt some parts of its own report lead to as the only obvious conclusion, namely, that the government's policies almost exclusively have been responsible for the increased cost of living in Canada.
Speeches of hon. members in the C.C.F. patty in this debate have imported a certain air of unrealism. They have introduced into the debate the theory of over-all controls and the theory of a planned economy as against the free enterprise system. In their usual fashion they have sought to leave the impression that anyone who takes part in free enter-

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prise is out to do his neighbour-in fact that was the statement of the hon. member for Vancouver East (Mr. Maclnnis). He stated that the philosophy of the free enterprise system is "to do others before they do you."
They are welcome to that point of view. It indicates the unreal world in which they live. The fact that they have that point of view, and put it forward with obvious sincerity, makes it impossible to believe that they are putting it forward merely for political purposes. It is impossible to 'believe that that is their only reason. It is certainly one of their reasons; but if that were the only reason one might say, "Well, at least they ore realists so far as their own interests are concerned; at least they are trying to get into power by painting a picture which they know to be untrue." But unfortunately-or perhaps fortunately-that is not 'the whole situation. I am beginning to think they really do believe it.


John Lambert Gibson: Oh. they can't be that stupid! I don't believe that!


Edmund Davie Fulton: It would appear that the hon. member for Comox-Alberni (Mr. Gibson) gives them credit for even greater subtlety than I do. However I am glad to have the reassurance he gives me, because I was beginning to think that the C.C.F. really thought that what they say about free enterprise is actually true. I am glad to know they do not, and I am glad also to have the confirmation of an independent member, free from political bias.
In any event, that is what they say they believe about the free enterprise system, that it has a social philosophy based upon the principle of doing others before they do you. In any event, that is the basis of their approach to this whole situation. Consequently they have introduced a note of unreality into the debate.
Let me sav, before going on, that there is one part of their argument which should be answered clearly and in such a way as to leave no doubt in the minds of hon. members, the C.C.F. party, or the people of Canada, and that is for me to say that they are not the only party which has at heart the welfare of the average man and woman in Canada. That, of course, is the impression they have been seeking to leave in the country for many years.


Angus MacInnis: That is scarcely peculiar to the C.C.F.


Edmund Davie Fulton: It is with a spirit of selfrighteousness that they have introduced into this debate the suggestion that they are the only ones who have at heart the interests of 5849-378
the common people of Canada. That, of course, is not a fact. The fact is that I believe everyone in the House of Commons, every party in the country, has at heart the interests of the people of Canada. We criticize the government, yes; we say their policies are not working in the best interests of the people of Canada. But we do not say they are doing this deliberately. The only people who say that about the government, about the official opposition and about anyone else who disagrees with them, is the C.C.F. That, I suggest, proves clearly again the world of unreality in which they live.
It is not possible to look into people's minds and to know what goes on in those minds. But I would tell my hon. friends that I do not think those tactics work with the people. I tell my hon. friends that this party certainly has at heart the interests of every man and woman in Canada as much as they have. Indeed I believe it could be said that, we have more at heart the interests of the people in Canada, because rve do not live in that unreal world in which my hon. friends the socialists live.
We do not want to introduce into this debate or into the debate on every problem which comes up in the House of Commons this theoretical question of the substitution of a planned economy for our present system. We do not want to conduct our debates on that basis, because we prefer to advocate things which can be and should be done now to relieve the Canadian people from the increasing burden of the cost of living in Canada today. That is where our approach to the matter is a great deal more realistic than theirs because, as the hon. member for Eglinton said this afternoon, we have suggested and will continue to suggest things which should be and can be done to relieve that burden and to check the increasing cost of living.
Before I proceed further to analyse the things which should be done, I should like to deal with some of the points raised by hon. members of the C.C.F. who have taken part in the debate this evening. In the amendment moved by the hon. member for Cariboo, there was a great similarity to certain recommendations in the report of the prices committee, and particularly in the first paragraph of the amendment where there is a recommendation for the reimposition of the excess profits tax and a reversal to a policy of subsidies. Those are the recommendations contained in paragraphs 5 and 8 of the recommendations of the prices committee. It shows how closely the minds of the government-those who drew up the report anyway-and the C.C.F. run
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together on this and other related matters. We find the C.C.F. party strongly criticizing the report and some of its recommendations; yet we find here, as in so many other matters, they are at one as to the solution which should be adopted. They are also similar in this respect, that in the same way in which the government has failed to find or put forward a solution of the problem, I am sure that the recommendations of the C.C.F. would have equally little chance of success.
One fact emerges from the remarks of the hon. member for Cariboo and the hon. member for Vancouver East, namely, that the CjC.F. solution of this problem is in a reversal to a system of over-all price control. The hon. member for Cariboo devoted almost all his remarks to that idea. He quoted certain evidence given before the committee by Mr. K. W. Taylor, president of the wartime prices and trade board. The whole tenor of the portions of the evidence which the hon. member quoted was to the effect that, under the present stresses and strains, the free enterprise system would result in a certain upward pressure on prices. The hon. member quoted with approval those portions of the remarks of the chairman of the wartime prices and trade board, and he referred to him as being a highly qualified witness in this and other related matters.
That being the case, I am sure the hon. member will give equal credence to other passages of the evidence of the same witness, because those passages are important in connection with this particular matter. In the early stages of the committee meetings, Mr. Taylor was discussing the question of the reversion to over-all price control, the very matter the hon. member for Cariboo was discussing this afternoon. The relevant portion of the witness' remarks in that particular connection is to be found on page 61 of the minutes of proceedings and evidence of the committee. Mr. Taylor saidi this:
A "free economy" is predominantly based upon and organized by a system of free prices- free, .that is, within the general framework of the law. In a free economy, prices constitute the main guide to production, and are at the same time the balance-wheel of supply and demand. Rising prices for one commodity indicate relative shortage and invite both increased production and economy in consumption; falling prices, in turn, indicate relative surplus and produce a tendency to ease up on production and to increase consumption. In other words, it is this constant flexibility of prices that helps to keep production and consumption in reasonable balance and harmony.
I do not think even the hon. member for Cariboo in any of his remarks this afternoon disagreed with that portion of Mr. Taylor's

evidence. The witness went on to say this with respect to an over-all system of price control;
If a community embarks upon a system of fixed or administered prices, it must invent some substitute for the flexible price system as a means of finding out what people really want, and what they want more of, and what they want less of. Failing such a substitute, the principle of freedom tends to disappear, and the government has to decide what, will be produced and in what quantities. The free price system has many imperfections, but there has not yet been developed any other system that will preserve in essence what I call a "free economy."
Administered or government-determined prices inevitably entail considerable government control over the details of production and distribution. And the wider the range, and the longer the duration of administered prices the more detailed must these controls become.
I think I should emphasize, out of a considerable background of experience, that the fixing of a price is only the beginning of price control. During the war years we found that the making of actual price decisions was not too difficult, and formed only a minor part of our work. It was the efforts to assure supply, to estimate what was needed, to see that things were fairly (! istribated, to protect the consumer against upgrading or degradation of quality, it was the interminable investigating, checking and blocking of loop-holes for evasion that made up by far the larger part of each month's work.
None of this is an argument against price controls in emergencies, when prolonged physical shortages of goods are inescapable. But I do suggest that these considerations should be carefully weighed whenever any broad extension of continuing government price fixing is proposed.
We have already heard of how in another portion of his remarks the chairman of the wartime prices and trade .board spoke of the chaos that would result from a roll-back and the imposition of over-all controls. Those two portions of his evidence go together. The portion with which I am concerned and the point I want to make here is that the chairman of the wartime prices and trade board admits that if you start control you have to go the whole way. You cannot have partial control and partial freedom in our economy.
The hon. member for 'Cariboo dealt with another portion of Mr. Taylor's statement in his remarks this afternoon, when he admitted that shortages exist. In fact I think he went so far as to admit that shortages are the main cause of the present increases in prices under the present system. I suggest that if he believes that he will agree that at present there is only one solution consistent with the maintenance of our free system, and that is increased production. Greater production, greater abundance is the solution. That is the main solution, the main requirements for a restoration of

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balance in our economy and for lower prices. And in order to achieve more production we need, not more taxation but less taxation. That is the inconsistency in the hon. gentleman's proposal which he made this afternoon, because there he advocated more taxation.
1 think the hon. gentleman's party, that is, the C.C.F.. as a whole agrees with the position he took this afternoon when he said it was not possible to control prices in spots. We all agree with that. If he will admit that it is impossible to control prices only in spots, why will he not take the other logical step and admit that it is not possible to control our economy only in spots, that you cannot have control of prices unless you have control over all the costs entering into production. There must then be control of raw materials, wages, prices of farm products; control of the whole economy.
Based upon the remarks of the chairman of the wartime .prices and trade board, that conclusion is inescapable. As he said, if you remove the incentive from the price system you have to substitute something in its place. Under the system of our hon. friends the socialists, that substitute would be compulsion. If you stop the working of the free enterprise system you must use force, or you will have complete stagnation. Take away the incentive to production and you will not get production. Therefore you will have to resort to something else, and the only possible thing you can resort to is force

it is force or famine. Compulsion is what it comes to under their system.
Take the case of butter. There you have a prime example of what we have been talking about. Price control of butter was re-introduced last January. I want to refer to some of the discussion which took place in this house recently. I do not agree with the hon. member for Middlesex West (Mr. McCubbin), the parliamentary assistant to the Minister of Agriculture (Mr. Gardiner), when he says we need not be concerned about a butter shortage next fall. I think we shall probably have one. If you compare the export figures of dairy cattle to the United States this year and last you will find that exports are running about double last year's volume. I have here the latest Department of Agriculture Live Stock Market Review of June 24. and on the first page it gives the exports of dairy cattle to the south, totalling for the week 4,761 head, making a total to date this year of 46,417. For the same week last year the exports were 884 head and, from the first of last year to June 26, 22,338; so that exports for the week were five times 5849-378-1
greater this year than last, and the figures for the year to date are twice as high this year as last. This export of dairy cattle to the United States is, of course, accompanied by a reduction in the production of butter in this country-and again is caused by the removal of incentive to produce butter, resulting from control without compulsion.
The logical conclusion of the solution advocated by the C.C.F., namely, the restoration of over-all controls in peacetime, is the use of force to secure production. That can be made as a statement of fact, because we can see in the words of C.C.F. speakers, themselves, that that is what they want. We know, from listening to their remarks in this country, that is what they want and what they are prepared to contemplate. To substantiate the statement I have made, I remind the house that the hon. member for Cape Breton South (Mr. Gillis), when speaking on the labour estimates on June 24, said we would have to revert eventually in this country to a system of directed labour. His words can be found at page 5822 of Hansard. That was the system he wanted. That is the system they contemplate and would like to see in effect in this country-control of prices, direction of labour, the complete abolition of freedom. We surely can accept their own words for that. They are not in power in this country; but let us look at what is happening in the United Kingdom. There they have just that. They have to have it. I do not think the majority of the people there want it; I do not know if even the labour government wanted to bring it in; but in order to implement their plan, they had to have it- and they have it-control of prices and compulsion of labour. Incidentally, Mr. Speaker, a fact which my socialist friends of the C.C.F. overlook when they talk about controls is that the price level in the United Kingdom, where they have complete controls, has risen more rapidly and to a higher level than the price level in Canada or in the United States.
This is what the system of controls imposed in wartime and maintained in peacetime has done to the wholesale price level in the United Kingdom. I am quoting from the Statistical Summary of the Bank of Canada for April, 1948. In 1937 the wholesale price level in the United Kingdom stood at 109-5, and it rose by 1945 to 170-2. By March, 1948, it had risen to 218-7, or a rise between 1937 and March, 1948, of 109-2 points.


Maurice Hartt: Where was that?


Edmund Davie Fulton: In the United Kingdom. The wholesale price level in Canada in 1937 stood
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at approximately the same level as in the United Kingdom, 109-7 in Canada as against 109-5 in the United Kingdom. In Canada it had risen by 1945 to 134-4 and by March, 1948, to 190-5, or 28 points below the level in the United Kingdom at the same date. In the United States, that great free enterprise country living under a system which my socialist friends to my left condemned, the wholesale price level in 1937 stood at 107-1. By 1945 it had risen to 131-3 and, by March, 1948, to 200-2, or 10 points above ours and 18 points below the level in the United Kingdom. So there you can see what happens when you get the facts and figures under a controlled economy-control of prices, control of farm products, control of what people shall produce and when and where, and direction of labour; compulsion right across the board- and with all that you have a higher price level and a greater increase in the price level than you have in the United States, where you have free enterprise, and greater than in Canada where we are beginning to get back to free enterprise and where we have relatively a measure of abundance and could have more if the government would do those things we advocate that it should do.
Coming to the report itself, I find many reasons why one cannot concur in it. Not only does it fail, as I said at the outset, to attribute the real reasons for the increase in prices in Canada, but it contains a number of inaccuracies. On page 5, for instance under the heading of "Summary of Findings", the report says:
The committee is convinced that its action in conducting spot examinations in those commodities that are particularly vulnerable to price increases at the present time has had a deterrent effect on individuals and firms engaged in processing, handling or selling these and related commodities.
I wonder whether the committee is really convinced; I wonder whether the people who drew up this report are convinced, which I doubt. While they may be convinced that what they say is correct, the outstanding fact in the minds of the people of Canada is that the longer the prices committee has sat, the higher prices have gone. So I say there is no ground whatsoever in fact for the statement made there, and no ground for the drafters of the report to have that conviction lto which they refer.
On page 48 of the report I find a substantial error in the compiling of the figures. This is perhaps a relatively small matter, but I think it should be set right immediately, because it gives am entirely wrong impression of what the committee found. A comparison is given of the gross profits earned by some firms

in the fruit and vegetable industry, covering five months from November to March in 194647 and 1947-48. In the first column the total in dollars is given as $80,904; in the second column, $165,539. Therefore the committee feels it is justified in saying that the net operating profit more than doubled. If you will add up the figures in the first column you will find that there is an error of $30,000 in addition. The total is just all wrong. The total should be $110,188, which means that the profits in the second period were a great deal less than double the total in the first period. Actually when one analyses it further he finds that the error is that they failed to show that one of the figures in the first column was an operating loss of $29,284 wdiioh, when subtracted from the total, leaves -the total of the first column of figures correct, but gives an entirely erroneous impression. It fails to show that the profit system is what we have always said it is, namely, not only a profit system but a profit and loss system; but the assumption which the committee makes, based on that -as to the reason for the increase in the cost of living, is entirely erroneous, and gives a wrong impression about how business is carried on. I think the chairman should see to it that the report is corrected in that particular and that any harm done is remedied.
I think what was said this afternoon by the hon. member for Eglinton (Mr. Fleming) and by the hon. member for Vancouver-Burrard (Mr. Merritt) sufficiently analysed the main weaknesses in this report and sufficiently showed the true situation and the true cause of the rise in prices. Therefore I will not attempt to duplicate the presentations which they have made; but in summary form I do want to indicate, first, wherein government policies have been responsible for the increase and what steps we would take, what steps we urge the government to take, to meet the situation and to relieve -the people of Canada of the increase and to get living costs down again.
First, rising prices have come about because of shortages in essential commodities. That initial shortage situation can hardly be blamed on the government. It was caused by the war. But it. was aggravated by our decision, properly taken and agreed to by all, to extend relief and rehabilitation to the United Kingdom and to Europe. The point I make there is that the government knew about that shortage. It knew that its program of relief and rehabilitation would aggravate these shortages, yet it took no adequate steps to ensure that our production of these essential commodities would be increased to meet those commitments which we have to fulfil.

Iti/ioii of Price* Committee
The second cause of increase in prices is, of course, inflation, increase of the amount of money in circulation in proportion to the goods available for sale. In that connection the government's policies are directly responsible for the increase in the cost of living. As an illustration of what I have in mind, I want to refer to the last budget. Although we had a surplus of $700 million as a result of high taxation, we were told that if we left the money in the taxpayers' pockets we would increase inflation. We were told that they did not know how to spend their own money, and that the government would have to spend it for them. We were told that it will be spent on debt reduction. Therefore, instead of being a taxpayer's budget, instead of being a people's budget, it became a bondholder's budget; that is all. What is the difference? If you retire bonds and put $100 for that bond back into circulation, back into the taxpayer's pocket, he has it to take out and spend. Therefore you are not preventing inflation, because just, as much money is going back into circulation. But instead of the taxpayer having more of his income in his pocket and getting relief in that way, by a lowering of the tax rates, now he has to take this little capital, which he saved before, and spend it to meet the increase in the cost of living.
The third reason is, of course, the embargoes on imports from the United States, which immediately created a series of serious shortages in Canada and set the stage for speculation. The government, having invited speculation, now seeks to pass all the blame for the situation off on to the comparatively few who indulged in speculation.
The fourth is the procedure with relation to food prices. We remember what happened last November when, well in advance, the government announced that contracts with the United Kingdom were to be re-negotiated at increased prices. Food prices immediately went up in anticipation of that re-negotiation. The same thing is happening now with relation to the price of beef. In an effort to win the election in Saskatchewan the Minister of Agriculture has been forecasting for a month the lifting of the embargo against the export of beef cattle. What could happen as a result? What the government invited happened. The farmers have held off their beef in anticipation of the lifting of the embargo, with two results: first, a growing shortage of beef on the market, and second, an increase in the price of that which remained. That is another instance of a direct, almost a deliberate, invitation to a price rise. And yet the embargo has not been removed.
Finally, we have the excise taxes which increased by 25 per cent the cost of many commodities basic in our cost of living.


Douglas Charles Abbott: Such as?


Edmund Davie Fulton: These taxes, which have done more than anything else in recent years to increase the cost of living are, we hope, to be removed in the near future. Certainly the committee's report recommends it.
I wish the government would not be so sensitive to the criticism of its own members because, from authoritative statements reported in the press, one understands that, had this criticism not been made, the government might have already removed some of those taxes. One can only hope that either the government will become a little less sensitive to criticism by its own members, or that its own members will develop a better sense of timing in their approaches to the government.
In conclusion, I should like to list briefly the five measures that we would put into effect, and which should be put into effect now, to deal with the situation. First, we should free the dollar to encourage imports and thus relieve shortages and give increased production. Second, we should remove the embargoes which keep out the goods we require, thus cutting down the shortages. Third, we should remove the 25 per cent excise tax, and the sales tax from basic commodities, thus reducing the price of many essentials. Fourth, we should lower taxes and increase exemptions, thus leaving people more money in the lower income brackets, and family groups more money in their pockets to meet the increased costs, and leave more money free for investment and expansion. Fifth, we should immediately institute a large-scale natural resources development program to produce more at home and to increase the wealth and prosperity of this country.


Ralph Maybank: Mr. Speaker, in the first place, I believe certain remarks should be made by me with reference to something which was said this afternoon by the hon. member for Eglinton (Mr. Fleming). He made what I should think it would be fair to say was an attack on the very idea of this committee making recommendations.


Donald Methuen Fleming: In the circumstances.


Ralph Maybank: In the circumstances, as he desires to interject. I am quite agreeable to put that in because, in keeping with my attitude all through my work on the committee, I desire to please him' as much as possible.
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He said in effect that we were shorn of the right to make recommendations. He further said in effect that we were thus shorn of the right to make recommendations by reason of an amendment from his side of the house which was ruled out of order, and ruled out of order on my motion. Well, I suppose with respect to the last part of his statement he is substantially correct. I did move that the amendment made by his leader, I believe, was out of order. But of course there are few people besides himself who would come to the conclusion that, because an amendment moved by his leader was out of order, the committee itself had tape pasted across its mouth and could not make recommendations if it saw fit to do so.
If he desires so particularly and so vehemently to parade his own obtuseness he should blame himself and not the Liberal members of the committee. If he did not know he had the same rights to express his opinion as to what should be done, surely he cannot blame me. He cannot blame anyone but, himself. The simple truth of the matter is, as the house will recall, than an amendment was moved directing the committee to act in a certain way. I took the position, at the time I contended that the amendment was out of order, that the house was directing into the hands of the committee-and the word "directing" is the one I wish to underline-the work which is usually that of the cabinet. That was the whole point. It was the directing of the committee to act in a certain fashion; and it seemed to me that an amendment of that sort, particularly coming from the non-responsible section of the house -and it will be noted that I did not say the irresponsible section of the house-


An hon. MEMBER:: A distinction without a difference.


Ralph Maybank: -was, by its very
nature, out of order. It is true that I have used the words "irresponsible" and "nonresponsible". It may seem to some hon. members that it is a distinction without a difference. However, if they think that- and perhaps there is some truth in it-it is their privilege to do so.


Harry Rutherford Jackman: The hon. member's sense of humour is not as good as that of the house.


Ralph Maybank: But that does not say at all that these members of the committee, sitting down to consider the evidence, were precluded from saying that, upon a review of the evidence, they had found certain things. Over and over again the hon. member for Eglinton made the statement that we were thus shorn, and when I heard it I considered [Mr. MaybankJ
that it was not worth answering. I did not really think he believed that his liberties had been so greatly curtailed. I felt that he was just complaining from time to time for the purpose of complaining.


An hon. MEMBER:: That is because the hon. member is so obtuse.


Ralph Maybank: I listened to his remarks in his customary querulous accents, took a firm grip on myself, remained patient and said nothing. It was not until he came to us this afternoon making confession of his lack of acumen and lack of wit that I realized that such was not the reason. All the time I thought he was simply saying these things for the purpose of satisfying a spleen against the government or something of that sort. It was not until then that I realized that such was not the reason at all. I then came to find out that indeed he had been blind to the fact that he had had no liberties shorn from him at all. Had I realized the tenderness of his intellect at the time he was making these complaints, I would have then endeavoured to correct his error; but I felt that it would be presumptuous of me to talk to him at that time and explain his error. I thought I would be told that I was trying to teach my grandmother to suck eggs or something like that.
There is one other .point to which the hon. member has adverted on which I think I have a right to make some comments. He asserted that these conclusions were not brought in until a certain hour in the morning; I think it was 12.30.


Donald Methuen Fleming: 12.45 a m.


Ralph Maybank: All right, 12.45 a.m. It does not make much difference. I am not concerned with the exact hour and minute. The point is that he says he received this information too late. I would call to his attention, and assert for the benefit of the house, the fact that he was not taken by surprise at that time, that conclusions or recommendations were possible for us to make or that it was within our capabilities to make them; because a drafting committee was struck. He was on the drafting committee. The drafting committee met several days before the time these recommendations were brought before the main committee, and it was then asserted that the right to make recommendations naturally existed. So he was not taken by surprise.


Donald Methuen Fleming: Mr. Speaker, I am sure the hon. member will not w'ish to leave a remark like that on the record if its accuracy is not. supportable. I attended a meeting of the drafting committee, but at no time in my

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hearing was any such statement made about recommendations. I never heard any suggestion that recommendations were coming until the dying moments of that all-day session.


Ralph Maybank: I am sorry to foe obliged to take issue with the hon. gentleman in such direct fashion. Others were present at the time. The fact that it was open to us to make recommendations was stated. Whether the hon. member heard that statement or whether he did not hear it, I do not know. But of the fact that the statement was made,
I am quite certain.
Mr, FLEMING: It certainly was not stated while I was present.


James Horace King: Order.


Ralph Maybank: I do not think I should follow that matter up any further. Other members of the drafting committee were there, and they know what happened. In view of the fact that the hon. gentleman could so misunderstand his powers as a member of the committee, as I have already delineated, it will not be difficult for this house to understand that matters can be stated in front of the hon. gentleman and he will not even know they are being stated.
The hon. member has also objected-and I cannot help thinking there is in a way some justification for the complaint-that he did not even see the recommendations that some of us intended to bring in until quite late, although he would have seen them earlier if he had not attempted all throughout the proceedings to delay matters as much as possible. But that is just by the w'ay.


Donald Methuen Fleming: On a question of privilege, Mr. Speaker-


Ralph Maybank: I assume there is justification for that sort of thing.


Donald Methuen Fleming: On a point of order, Mr. Speaker, the hon. gentleman has just asserted that I attempted to delay the proceedings as much as possible. That is entirely at variance with the facts. I sought to make the proceedings in that committee something of a reality in a discussion of the contents of this draft report, and not to swallow' something that the chairman or the vice-chairman attempted to stuff down the throats of the committee.


Ralph Maybank: Now that the hon. gentleman has again interrupted, now that he has made another speech-


Donald Methuen Fleming: Stick to the facts.


Ralph Maybank: -now that he has finally
come to the end, and his clack, too, has subsided, may I remark that it would be well for him to raise points of order that are points of order, and not merely to endeavour to inflict upon the house, one, twro, three, four, five, six, seven, eight, nine, ten speeches. There is no point of order in that. I am describing what I believe was his attitude in the committee, and I have a right to describe it as it appeared to me. He has a right to deny it at the appropriate time, and to describe his attitude or that of anybody else. But to be continually getting up and making more speeches is an abuse of the privileges of the house. I do not object to points of order or points of privilege being taken. But that sort of thing, just making another speech, is an abuse of the privileges of the house. It is .patent that it is taking advantage of this House of Commons.
Since I have made reference to these recommendations, if they may be so called- I do not care what you call them-being brought in so late; if there is objection to that, the hon. member supplied the reason they should not have been brought in earlier. He complained that there were 'leaks here and there; that this thing and that were in the newspapers 'before we ever brought in the report. That was the statement the hon. gentleman made. I do not know whether it is right, but that is his own complaint. Incidentally, since he knew all about it from u'hat w'as in the newspapers, it is remarkable that he should be so greatly taken by surprise when the .report was actually brought in.
I want to point out that members of that committee had no povTer to impose secrecy upon other members. Some people say that when matters are laid before a committee they should be kept secret until they are formally made public. I do not know' whether or not that is right, but the fact is that we had no power to impose secrecy upon any member of the committee. So it seems to me that when you do not want matters to be made public before they are what one might call complete, the best thing to do is wait for the proper time to bring them in. I admit that imposes a bit of strain upon people when they see recommendations, perhaps surprising recommendations, at a late stage; but those are the facts. There had been leaks. Why invite more? This is not intended .as any reflection upon the hon. member for Eglinton. I am not even suggesting that if the recommendations had been, placed in his hands sooner he would have handed them to the press. That is not the suggestion at all. I.t is simply, as he points out, that persons were discussing the report before it was presented; articles were appearing in
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the press, and that in itself would be reason for delay in presenting some portions of the report.
Having said so much by way of discussion of some of the points raised by the hon. member for Egliaton, may I make a general observation, with regard to the report and its nature. Hon. members on the one side take the position that it is a sort of all-out attack on business. Other hon. members seem to think we have not gone far enough in that regard. That is an entirely wrong view to take of it. All through the report-and it is replete with references of this sort-it is indicated that there is no attack on business in general. There is no belief on the part of the committee that business has been acting badly or improperly, that it has been gouging extra profits or anything like that. It is suggested that in some cases there may have been improprieties or a departure from good, ethical practices, and that if this is the case the government should endeavour to find a way of curbing that sort of thing. The intention of the committee, 'as expressed in the report, is no more than that. A fair reading of the report will bring that out clearly. I emphasize the words "a fair reading of the report", because it is quite obvious that the Tories are not giving it a fair reading, nor have they any desire to do so. I am quite content that their only desire is the desire they indicated when the committee was set ivp. They made up their mindls then that the committee would not function; and it is my opinion that they did their best to make their prophecy come true. But if others will read the report fairly they will realize that there is no general attack on business. This is neither a whitewashing nor a smearing report. I think some hon. gentlemen on that side of the house would like to have made it a complete whitewash, but that cannot be done.


Donald Methuen Fleming: On a point of order, Mr. Speaker, the hon. member has just now imputed motives. He just stated in terms that the members of the official opposition did not want findings that would be anything but a whitewash. That is most improper, and I ask the hon. member to withdraw it.


James Horace King: The hon. gentleman should realize that this afternoon I was very generous with him. I had some reason to believe that he himself was imputing motives, but I did not intervene. So I do not think the hon. gentleman should interrupt the hon. member who has the floor.


Donald Methuen Fleming: Do you rule that there is no imputation of motives in what the hon.

member has said? I say he is quite improperly imputing motives.


James Horace King: The hon. gentleman may proceed.


Ralph Maybank: Well, Mr. Speaker, this additional interruption is characteristic of the attitude of the hon. member throughout, from the time this committee was proposed up to the present moment. I might as well warn the house now that probably we shall have a great many more puerile interjections of this kind. It is a Tory complex, I have been told. So that you may have some idea of the further puerilities that will stem from that source, I call attention to the length of time taken by the hon. member in discussing such things as where the conclusions should occur in the report, the pagination of the report, and so on. These are matters of vast consequence to the hon. member. It might interest the hon. gentleman and others to know that this way of publishing conclusions, at the beginning of a report, seems to be sanctioned by practice. Whether or not it is the most logical way, it is often done. The last report I happened to see in which this practice was followed was the report by the famous price spreads committee, which was recommended and piloted through by Mr. Stevens, a member of the then Tory government. Surely, after pointing out that this was the way it was done then, these Tories, who naturally worship everything in the past, falling down before their gods four, five and six times a day, will no longer question the fact that this committee placed these recommendations at the beginning of the report. As far as I know, no point of order has yet been taken in connection with that statement.
Further puerilities to which I might direct attention-


Clayton Wesley Hodgson: Well, it is still eighteen months from an election.


Ralph Maybank: Now the interjections are coming from another part of the Tory phalanx. Evidently the signal has gone from one part of the chamber to another, to have some person in another area take up the attack and make as many interjections as possible. They might just as well not waste their time with that sort of thing.


Clayton Wesley Hodgson: Do not waste your time in my riding either.


Ralph Maybank: They will not have any effect upon me, in my delineation of them. There is one feature about the Tory speeches which have thus far been made, which is quite revealing. That came from the hon. member for Nanaimo (Mr. Pearkes). It

Report oj Prices Committee
showed, possibly without thinking, the whole attitude of his party with reference to this problem or any other, when he attacked the government policy by saying-I should have said that it was the hon. member for Van-couver-Burrard (Mr. Merritt)-


Charles Cecil Ingersoll Merritt: Another mistake.


Ralph Maybank: I apologize to the hon. member for Nanaimo, wherever he may be. And I have no desire to misname the hon. member for Vancouver-Burrard, either. It was he who unwittingly showed their whole policy with respect to everything when he declaimed so emphatically that the real problem is a tight labour market-and those are my words, not his; I have paraphrased slightly. It was the labour market, according to him, that was the cause of everything.
That just illustrates what they want. They want to have a labour pool. If they can get a labour pool they can get labour cheaper. If they can get labour cheaper they can have lower prices; and that is their solution of all the ills in the world.


Charles Cecil Ingersoll Merritt: I was just quoting the Minister of Finance (Mr. Abbott).


Ralph Maybank: I see that was not a point of order, after all. In those words the hon. member epitomized the attitude of the Tory party and the Tory mind all over the world.


Edmund Davie Fulton: And the minister epitomized it in the same words.


Mr. GRANT:: Another lightweight.


James MacKerras Macdonnell: Have you nothing to say in favour of this report?


Ralph Maybank: Various references were made by the hon. member for Eglinton and others about some of the recommendations. As I recall it, scorn was poured upon the recommendations respecting the reduction of the excise tax.


Charles Cecil Ingersoll Merritt: Just the way it was
brought in.


Ralph Maybank: Oh, yes, yes, yes. I will say this for the hon. member for Vancouver-Burrard: He did not vote against it at any rate. He went home. He did not vote.


Charles Cecil Ingersoll Merritt: At one o'clock in the morning.


Ralph Maybank: The hon. member for Eglinton, however, who has declaimed so vigorously this afternoon about the reduction of the tax, and how it should have been reduced long 5849-379
ago-in fact, reduced before it was ever put on -did vote against it. He voted against the proposition that consideration should be given to the practicability of cutting out that tax now. Despite all his oratory this afternoon, the facts are that he voted against that recommendation; and he voted against every other recommendation, too. I suppose it would be trite to observe that actions speak louder than words. But it is true, is it not?


Charles Cecil Ingersoll Merritt: You voted both ways on that.


Mr. PARENT:: No; that was Hackett.


Ralph Maybank: I wish also to call this to the attention of the house: the hon. member for Eglinton, and others, have inveighed against what they have called the incompleteness of the report, and have inveighed against what they call its too great voluminousness. I wish to remind them and to tell the house that there is no record of any proposal of any kind by them as to what evidence should be reviewed, as to what recommendations might be made or as to what recommendations might not be made. There just is not any positive contribution on the part of those gentlemen to be found in the records at any stage of the consideration of this report. And it is not as though they had not apparently been giving thought to it because, as a matter of fact, they were continually talking about stopping the committee work and making an interim report about something or another.


Charles Cecil Ingersoll Merritt: Will the hon. member permit a question?


An hon. MEMBER:: Sit down.


Charles Cecil Ingersoll Merritt: Is it not a fact that the hon. member, while chairman of the committee, told me that if I had any suggestions to make I was to put them into the form of a motion and he would have them voted down? Will the hon. member tell me whether it was worthwhile to put forward any recommendation after his statement?


Ralph Maybank: This last speech hardly requires any reply. The hon. member seems to complain that he was admonished-not once; he is quite right about that, but many times- to put proposals into the form of a motion. Over and over and over again they were admonished, exhorted, urged to do something. But they could not do anything except captiously to criticize. Why should he, a parliamentarian, object when he was requested to put a proposition into the form of a motion? Why should he object to that? Is that not a proper thing to do? And from what he now says, the house will recognize the truth of what I am
Report of Prices Committee

saying, that there was no contribution at any time by any of those members in the committee. They were trying captiously to criticize and, if possible, to hold back; and if that statement is not true, they acted as if it were true.


Charles Cecil Ingersoll Merritt: You have not answered my question yet.


Mr. REID:: It is not unusual for them.


Ralph Maybank: No, as the hon. member for New Westminster (Mr. Reid) points out, it is not. It is not unusual to have such an attitude as that from them.
Some consideration has been given to the pages of this report. It has not been pointed out that, in the main, the report is a digest of evidence. That is what takes up most of the large volume we have before us. No one has suggested that it is an unfair digest of the evidence. I think such a digest of evidence is bound to be inadequate. I feel that when you have so great a volume of evidence to review you are almost certain to do an inadequate job of pressing that into a relatively small number of pages.
At any rate, however, the best that could be done was done; and I conceive that it is a very good job, although I feel there must be some inaccuracies. I consider that it must be inadequate in some respects; but, all things considered, I believe it is a fair digest. It is never consciously unfair, and there is no singling out of evidence one way to the detriment of a case which might have been presented the other wTay.
Let me call to the attention of the house the fact that those hon. members who have criticized the report never made any reference to the fact that the evidence was presented there in digest form to the house. As a matter of fact, they talked as though they did not want the house to know it. It is there for any person to read and determine whether, in that light, the conclusions are reasonable.
The conclusions and recommendations are not put forth dogmatically. Everyone, except the hon. members who offer no assistance, admits that the problem of high prices is a most difficult one. In general that problem in Canada has been seriously affected by external prices. I do not know whether they would deny that, but they probably will. Take zinc for example, which is exported in part. The high price of that commodity in Canada is bound to be affected by what is obtainable for it in the foreign markets. So with hundreds and hundreds of the articles which we have for sale in Canada; they are affected by export prices.

So far as import prices are concerned, it is also patent that we are buying in markets where prices are high and that high-priced articles enter into production .in this country and are bound to affect prices here. But my hon. friends do not wish to admit that; they do not wish to say anything about that, and they do not wish to let anybody else say anything about it either.
That is the reason for this dissertation before the evidence is digested. That is the reason for these conclusions being arrived at. I ask that some of the conclusions be looked at shortly. In effect the first one says it probably would be good business to have continued the scrutiny of prices. That is all it says, that it probably would be of value. The hon. member for Eglinton voted against that.
It is suggested there as well as elsewhere- the hon. member took exception to this- that there is some reason for thinking that the committee sittings had had a salutary effect upon the price structure or the price level. I must admit that that is an imponderable; you cannot be sure that that is so. However, the capable women who came before the committee representing the Canadian association of consumers, a large association of keen-eyed students, asserted that they believed such to be the case. One large manufacturer stated recently that if it were not for the sittings here he would raise his prices, that he would raise them as soon as the committee rose. He was cross-examined at some length to make sure that he had not been misheard, but he was positive about it. I happen to recall it quite definitely. There were other statements of the same sort.
The hon. member for Eglinton went on to say that you should not make too much out of that. I subscribe to the idea that one swallow does not make a summer, but I think there is some reason for believing -that if there is a continued possibility of your being called up 'before an organization to explain why you are doing certain things, there will be salutary results. As I say, the hon. member for Eglinton voted against that. I do not know whether the hon. member for Vancouver-iBurrard did or not.


Charles Cecil Ingersoll Merritt: Do not worry; I would have voted against it.


Ralph Maybank: The second recommendation is in connection with an important arm in the administration of the government, namely, the combines investigation commission. We feel that it would be well to strengthen that. Surely there cannot be any objection to that. Surely every person here

Report, of Prices Committee
who is interested in doing what can be done to keep down prices, to see that prices are not fixed improperly, would be in favour of that. But, as I say, they are against that.
Then I come to the word "profiteer." The third recommendation is that flagrant cases of profiteering should be prosecuted. The hon. member is against that; the Tories are against that. It might very well be that the law under which such prosecution would take place might be strengthened. I think it should be. I feel that it would be much easier to discharge duties under a brief for the defence than under a brief for the prosecution, with the law as it is. Without attempting anything in the nature of iperse-cution, I think good purposes would be served by making that law stronger in order to hit out at plainly flagrant cases of profiteering.
During his speech the hon. member said that we have been indefinite in our report, that we have said that certain people seem to have done so-and-so and that something else had happened, that nobody has been named. Surely that was the fair way to report. What would he have said if this committee had asserted that John Doe was guilty of an offence? What would he have said if the committee in an ex parte examination of the matter decided that certain people were guilty and should be prosecuted?


Donald Methuen Fleming: You preferred a general smear.


Ralph Maybank: That is the sort of thing he would like this committee to do but he did not have the temerity to make a motion to that effect, although today he says this committee should have reported that certain people were guilty. The evidence was not sufficient for that and the committee wanted to be fair. It is now that the hon. member discloses himself as desiring to be unfair, although I am quite sure he will be the first one to deny that he has any such intention.
I observe that you are becoming rather restive, Mr. Speaker, because it would seem that I have come to the end of my forty minutes. I would suggest that I be allowed to continue for a minute or two, more particularly since I have been interrupted a few times. But if there should be any person who desires not to grant that to me, naturally I shall be content, because the house has been most patient in listening to me thus far.


Some hon. MEMBERS:: Go ahead.


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


An hon. MEMBER:: Yes'.


An hon. MEMBER:: Not past eleven
o'clock.


Gordon Knapman Fraser: We get Charlie McCarthy tomorrow night.


Ralph Maybank: I am quite sure the hon. member will be much better entertained. Of course I would not suggest that that probably is the proper mental level for him.
The next paragraph requires no particular comment. The committee felt that if it was possible, having conserved the United States dollars necessary for the time being, to get away from these bothersome and nuisancelike importation controls on fresh vegetables and fruits, that should be done. Of course the committee has to make a recommendation of that sort with some care. We must consider the labour which the people of Canada have put into the business of producing these vegetables. My own thought is that to remove prohibitions of that sort at the present time when the farmer's labour is done would not be the right and fair thing to do. It is worded deliberately in a careful manner because there are both consumers and producers to take into consideration.
I pass over with only a word the recommendation with reference to the taxing of profits. Again every person must agree that that is a difficult sort of law to work out. But if improper profits are being made, if profits rise so high that they are clearly beyond what is reasonable, then indeed it does not seem unfair to tax them, because that is where the wealth is. That is a carefully worded section. There is no general attack on business in it.
As to the remaining subjects respecting accounting and inventory reserves, I would point out that many companies, by declaring inventory reserves, have hidden, both from their shareholders and from those who work for them and from the general public, some of the wealth they have made. With many that is not so. It was shown that one company instituted a reserve policy and followed it automatically through all the years. But with other companies one could not tell without considerable search what their profits were, and it does not seem to me that there should be any objection to a complete revelation of what their profits are. Remember this, that these companies operate by virtue of a charter which has been granted to them by the legislature, and they are given a limited liability. There should not be anything objectionable in requiring a full disclosure, because they are selling their goods to the public as a whole; they are dealing with citizens of the country as labour, and they are selling their securities on the market
584!)-3791
Report oj Prices Committee

by virtue of the sort of annual financial statement they make. Surely, then, it is not unreasonable, when we have granted a limited liability to that kind of artificial person, to require them to disclose what the truth is respecting their business.
I could go on and speak of each one of the recommendations which have been made, but I shall not take up the time of the house to do so at any greater length. As usual, I wish to say I am grateful to hon. members for having listened to me and for having given me extra time to finish up on one or two subjects on which I wanted to speak.


John George Diefenbaker: Mr. Speaker-


Mr. MACKENZIE  ICING@: Before my hon. friend speaks, I should like to ascertain the wishes of the house about sitting after eleven o'clock.


Some hon. MEMBERS:: No.


William Lyon Mackenzie King: That settles it.


John George Diefenbaker: The address to which we have just listened indicates beyond words the close relationship which those on the government side of the house bear to those in the socialist party, for you will notice, Mr. Speaker, that not one word of criticism passed the lips of my hon. friend in regard to those sitting to our left.


Mr. KNOWLES:: He did not have time.


John George Diefenbaker: Here is a most interesting situation. On this which was supposed to be the last day of the session, a motion was made by my hon. friend the Minister of National Health and Welfare (Mr. Martin) in his dual capacity as minister and as chairman of this committee, and pot one word passed his lips. For the first time in this house, on a motion as important as this, the chairman of a committee saw fit to throw the report into the house, say nothing about the attitude of the government with regard to it, and allow a discussion, on a matter as important as this, to continue all day without any suggestion on the part of any minister of the crown as to what the government intends to do with regard to this problem.
It is most interesting to discuss, even in the few minutes at my disposal, the series of events which impelled the committee, without power to report-indeed the Prime Minister (Mr. Mackenzie King) himself said that this committee should not have that power, because he pointed out that it would cause political arguments if it had that power-


William Lyon Mackenzie King: May I say to my hon. friend that when he says "power" he is

using the wrong word. I said the committee should not be instructed to bring in recommendations, because they might take their time in debating political policies. I never said the committee had not power.


John George Diefenbaker: I will refer my right hon. friend to the page. I shall not quote his remarks, because the hon. gentleman who preceded me succeeded in speaking sufficiently long to deny to us any discussion at length of what he said here this evening. The Prime Minister's remarks will foe found at pages 749 and 750 of Hansard, and when this debate is adjourned and the next opportunity comes I shall quote them.
I was dealing with the series of events. There were by-elections and there were pilgrimages. My hon. friends opposite, who for four long years sat silent in regard to this problem, and who during the last two years never opened their mouths with regard to it, suddenly developed courage. My hon. friend the member for Waterloo North (Mr. Breithaupt) led this valiant band of six to the Prime Minister, according to press reports of the highest authority, and there and then the Prime Minister found himself in a position where he had to take the Minister of Finance (Mr. Abbott) to task because the Minister of Finance had been faithful in carrying out government policy during the last several months.


William Lyon Mackenzie King: May I say to my hon. friend that is absolute nonsense. I never took the Minister of Finance to task in my life, nor did he ever take me to task.


John George Diefenbaker: My right hon.
friend speaks but the truth, because so often infallibility has been his belief in his own decisions. There is no doubt about the truth of what I was saying, and the press must have been prescient, because its prophecies indeed came true. Last Saturday, a week ago today, information passed along the corridors of this house to the effect that, as a result of this meeting, the six members had convinced the Prime Minister that all was not as well as he said it was, following the results of the byelections. I am going to read what he said then. There was no suggestion then that inflation was not being controlled. There was no suggestion then that high prices were prevailing in this country, because the Prime Minister said, and I quote from the press statement:
While inflation may be bad, and takes time to control, it should never be forgotten that
there is one thing worse than inflation and that is depression.

Report of Prices Committee
These are the words that indicate the change of mind between June 9 and June 19, one week ago today. The Prime Minister said:
The federal government, at the risk of its own immediate popularity, has so shaped its policies as to restrict further inflation in the present, and to lessen the possibilities of depression later on. This, too, is a course of action not too readily understood.


William Lyon Mackenzie King: What did my hon. friend say after the by-election?


John George Diefenbaker: I was not in power. The Prime Minister was giving alibis.


Stanley Howard Knowles: Farther away from it than ever.


John George Diefenbaker: Well, of course,
again the interruption of my hon. friend to the left indicates the close relationship oetween these two parties in the house.


George Hugh Castleden: What happened in
Saskatchewan?


John George Diefenbaker: I listened to my hon. friends. I have not been dealing with my hon. friends to the left, but they find it necessary to interrupt.
Within ten days a report was handed to certain members of this committee on prices. I say that one week ago today certain members of this committee, the government members, had the eight recommendations or so in their possession. Who gave them the recommendations? Will the Prime Minister answer who gave them the recommendations? Was it he, or the members of the cabinet who gave them to that committee that was to find facts on evidence? On the 9th of June the Prime Minister said, all is well.
Tile federal government, at the risk of its own immediate popularity, has so shaped its policies as to restrict further inflation.
And a few days later a report is handed to the members of the committee with the attitude, according to the hon. member for Eglinton, You take it, and if amendments are suggested they will be voted down. That, Mr. Speaker, is the attitude that should be taken by any committee chairman, by any vice-chairman, or by anyone connected with the committee.


Paul Joseph James Martin: I am sure the hon. member will permit me to say that I was in the chair when the resolutions were discussed, and I am sure the hon. member for Eglinton and every other hon. member of the committee will recall that I made no such remark.


Donald Methuen Fleming: It was made repeatedly by the vice-chairman.


John George Diefenbaker: We are at least succeeding in getting a word from the hon. gentleman who has interrupted.


Mr. WARREN:: He can look after himself.


Stanley Howard Knowles: Go build a house.


An hon. MEMBER:: Mortimer Snerd.


John George Diefenbaker: I am not going to make any observation about that. Then, within a few days these recommendations are handed out. Again I ask the Prime Minister, who was it that one week ago today drafted or handed certain members of the committee, certain government members of the committee, the recommendations that it was desired the committee should give? Surely wTe have the right to hear from the Prime Minister. Surely this country had the right to hear from the Prime Minister today. What is the government going to do about it?
According to the press of a week ago, and again it was prescient, as soon as the recommendations come before the house-possibly the Minister of National Defence is not following this-


An hon. MEMBER:: He lives in Montreal.


John George Diefenbaker: Has he anything to say about it? What is the attitude of the government? I ask, why have they not given the necessary moneys to the combines investigator, as provided in recommendation No. 2? Two years ago they said, "Put teeth in the law and we will prosecute Qombines and monopolies." Now they say it was lack of money.
What is the next one? Recommendation No. 3 reads:
That the government amend the regulations of the appropriate legislation, if that be found necessary, so that immediate specific action can be taken wherever the evidence discloses flagrant cases of profiteering at the consumer's expense.
What do they want that for? They have the powers already under the Combines Investigation Act. They have it already in the Wartime Prices and Trade Board Act. They say again, as a stall, that, if necessary, further change be made. What is the government going to do about this recommendation, because did the recommendations not originate with the government? What is the government going to do about this?
That the government consider the removal of import restrictions now in effect on certain fruits and vegetables.
Surely this country has had the right today to learn what the government will do on this
Report of Prices Committee

report, not next year, not next session, but before this session closes. Let us do something in this house in regard to prices, whether along the lines here suggested or along whatever lines may be necessary for the purpose.
Since it is eleven o'clock, I move the adjournment of the debate.
On motion of Mr. Diefenbaker the debate was adjourned.



BUSINESS OF THE HOUSE

Stanley Howard Knowles: What will be the business on Monday?


William Lyon Mackenzie King: On Monday the house ought to be prepared to take up anything that is left on the order paper in any order.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, June 28, 1948