[Stage Direction]
Mr. RALPH MAYBANK (Winnipeg South Centre) presented the first and second reports of the standing committee on miscellaneous private bills, and moved that the first report be concurred in.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. BROOKE CLAXTON (Minister of National Defence):: Mr. Speaker, yesterday the hon. member for Comox-Alberni (Mr. Gibson) asked me.what steps are being taken to search out mines that are reported floating near the west coast of Vancouver island. I should tell him that these mines are loose, and cannot be dealt with by minesweeping. Navy tugs and other small vessels are used for locating and destroying the mines. During the past two years sixteen mines have been found and destroyed. As the hon. member will see, the number is not large.


Mr. GIBSON (Comox-Alberni):: May I ask a supplementary question? I think the minister is familiar with the mine problem of the Pacific coast, arising of course from the breaking loose and drifting of Japanese mines. It will probably last a year or two. In view of the increasing frequency with which these mines are being found, will the minister consider instructing the officials of his department, in co-operation with those of fisheries and transport, to carry out an additional patrol of the Pacific coast? The matter will be a serious one in the coming year.


Mr. FRASER:: Send the Canadian coastguard after it.


Brooke Claxton: The situation is being carefully watched. I believe there is some indication that the number of mines is increasing, but still the figures are not large. The officers of the Department of Transport as 5849-256
well as those of the Department of Fisheries and the Department of National Defence are co-operating in watching the situation, and they will take any steps that seem justified by conditions.



EXPORT TRADE


[Stage Direction]
On the orders of the day:
Mr. JOHN BRACKEN (Leader of the Opposition):: I wish to direct a question to the Minister of Trade and Commerce. It has to do with a report of the Canadian Exporters Association that the decline of Canadian sales in British empire markets has reached alarming proportions and that some lay-offs in employment have already been necessary in exporting industries. I wish to inquire whether the brief of the Canadian Exporters Association has been received and what is the nature of the reply the government has given or intends to give.


Right Hon. C. D. HOWE (Minister of Trade and Commerce):: Mr. Speaker, the brief mentioned by the leader of the opposition was received, and the nature of the reply is now receiving consideration. I might say that the brief does not refer to the United Kingdom market but to the markets in other British dominions. The fact of the matter is that each British dominion has its own austerity program, similar to that of Canada, and any decrease in imports from Canada is dictated by internal restrictive regulations of a type similar to those which we are facing in Canada.


John Bracken: It refers more to the sterling area.


Clarence Decatur Howe: That is correct.



FLOOD CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. WILLIAM BRYCE (Selkirk):: Mr. Speaker, I wonder whether the parliamentary assistant to the Minister of Agriculture has an answer to my question of yesterday.
Mr. ROBERT MeCUBBIN (Parliamentary Assistant to the Minister of Agriculture): The question asked yesterday by the hon.
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member for Selkirk was drawn to my attention this morning, and I can assure him that serious consideration will be given to the matter when the minister returns.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Gordon Knapman Fraser: Mr. Speaker, I should like to direct a question to the acting Minister of Mines and Resources. I have had a great number of letters lately in regard to the difficulty in getting transportation from England to Canada. Does the minister know whether there is a shortage of ships or can he tell the house anything about it?


Hon. J. A. MacKINNON (Acting Minister of Mines and Resources):: For a considerable time there has been a great deal of difficulty -and it still exists-in connection with passenger transportation from the United Kingdom to Canada. As to the announcement I made recently with reference to bringing immigrants to Canada by air, one reason for that arrangement was the great shortage in shipping facilities.


Gordon Knapman Fraser: There is a delay of four months, and I was wondering if anything could be done about it.



CANADA SHIPPING ACT AMENDMENTS TO ACT OF 1934

[Stage Direction]
The house resumed from Monday, May 17, consideration of the motion of Mr. Chevrier for the second reading of Bill No. 300, to amend the Canada Shipping Act, 1934.
Mr. JAMES SINCLAIR (Vancouver North):: Mr. Speaker, in rising to say a few words on the bill I think I should first commend the minister for introducing it. Each of the amendments in the bill is a definite step forward, either for the protection of the travelling public who use our deep-sea and coastal steamers, or for the improvement of working conditions of the men who serve on those ships.
Some regret may be expressed that all the amendments which might be considered desirable at this time have not been proposed, but certainly a good forward step has been taken.
The minister in his speech used what to me was a startling phrase when he said that seamen had always been favourites of the law. I think that most of us who recall stories of the sea which we read as boys, or who have had some knowledge of the conditions under which

our merchant marine seamen work, will be inclined to think that, far from being the favourites of the law, seamen have been favourites for the attention of the law, and that the law which protected the ordinary civilian worker did not afford the same protection for seamen at sea.
The reason for this is a simple one. The master of a ship at sea can scarcely be compared to the manager of an industrial plant ashore, because the manager of a plant ashore has both the police force and the ordinary courts of the country to enforce infractions of the civil or criminal code, whereas the master of a ship at sea has no such help. Moreover, he has the direct responsibility for the lives of all those under him. And so great power was given him. But often with that power there was great abuse, and unfortunately the seamen did not enjoy the protection of the law courts of the country which other groups have had.
Since there are few maritime members, not much attention is paid to seamen's problems. Certainly no one in this house has talked a quarter as much about the seamen of Canada as prairie members have talked about coarse grains. What advantage the seaman has obtained in recent years has been won by himself through seamen's unions in Great Britain, the United States and this country. Whatever improvements have been made, the seamen themselves were the ones to force the issue. They are a difficult group to organize, because of the shifting nature of their employment, and they have been many times at the mercy of the shipowners. The result of course has been to render seafaring not very attractive to the average young Canadian. Too many of our ships are manned by men who did not begin to follow the sea as a career but rather drifted into the occupation, which is not healthy for any form of employment. The efforts of the unions, however, have lifted the lot of the average seafarer and also made the vocation a more attractive one so far as the average Canadian is concerned.
It will be some time, however, before wages and working conditions of the average Canadian seaman will equal those of the Canadian industrial worker, and this for a simple reason. Our seamen come into immediate competition with those of every other nation. It is all very well in Canada, within our single economic union, to lift the working conditions and pay of competing industrial workers, but when Canadian seamen manning Canadian ships have to compete with the ships and seamen of other countries, a very different situation arises.

Canada Shipping Act
Senator Paterson put on the record of the upper house the wages paid today to ablebodied deep-sea seamen of various nations.
I should like to run over it. The able-bodied seaman in the United States receives $192 per month plus board. Canada is the next highest, paying $170. Look at the other countries with whom we have to compete: Norway, $101, the United Kingdom $96, Sweden $86, Denmark $85, the Netherlands $74, France $79, Yugoslavia $84. Shipowners therefore - have a difficult problem in trying to keep Canadian ships in competition against the low wages paid by their competitors.
One of the recent grievances of Canadian seamen has been the fact that though while at sea they accepted ship's discipline, they felt that they should not be under ship's discipline when at home in Canadian ports. The Canada Shipping Act provided that if they left the ship in a Canadian port without being paid off they were deserters and liable to imprisonment, a condition which does not affect the ordinary worker who decides that he does not want to work any longer for a certain plant and leaves it. I am pleased to see an amendment designed to change this condition, so that once the ship has got into a Canadian port and has been properly secured, the Canadian seaman will have the same right to leave his employment as the Canadian industrial worker. There is also provision for proper qualification and certification of Canadian seamen, and this is a positive forward step.
I mentioned earlier that too often the seafarer has drifted into his occupation. Any steps taken to recognize his occupation and to lift its standards will make it a more attractive one, and the provision for a permanent register of certification of able-bodied seamen will be welcome.
I think that this measure might have contained a provision for the training of apprentice seamen such as the Scandinavian countries and Great Britain have provided in the past. The best way to attract young men to the merchant marine as a career is to provide them with merchant marine training on floating training schools such as the Scandinavian countries and the United Kingdom provide for their young men.
The hon. member for Skeena (Mr. Archibald) said that the provision of a continuous discharge book for seamen was the one bad spot in the bill-an amendment, incidentally, introduced by the senate; but I do not agree with this view. I would regard this as one of the good things in the bill, in that a-continuous discharge book is a valuable record for the good seaman. At present with individual voyage discharge slips if he has 5849-256J
a bad record on discharge he can destroy that slip, which he cannot do with a continuous discharge book on which the entry of his character and qualifications is made by the master. At the end of each voyage, if his record is good, it will do two things. First of all it is the record of a good seaman which he can use to advantage in seeking future employment either afloat or ashore, and secondly, it is an added protection to the public, because, the good seaman being more likely to get employment, it means that ships are better manned. I would heartily support the new change providing for a continuous discharge book, and I hope too that in the discharge book the method the British use for recording qualifications will not be followed. In the British marine a seaman can only be assessed as "very good" by the master, or the master can decline to report on him. There is too great a gap between a good seaman, an average seaman and an inferior seaman. I think the rating which the Royal Navy uses and which goes from exceptional to superior, satisfactory, fair, or unsatisfactory, would be a better range and would be a better assessment for the seaman and for the shipping master hiring seamen.
There is one other feature about such a classification. It is a real assistance to discipline. Today some seamen do not care how they are discharged, whether their discharge slip is bad or good, for they can destroy it if it is bad. But with a continuous discharge book many a seaman for fear of a bad discharge will conduct himself better and be of more help on the ship than he would if he knew that, at the end of the voyage, he could tear up his discharge if it is unsatisfactory.
The provision for the right of the dependents of a seaman to launch an action in case of a fatal accident is another step in bringing the seaman as a worker more in line with industrial workers in Canada. The dependents of the industrial worker for some years have had the right to sue the employer in the case of an accident which resulted in the death of the breadwinner. The provision to extend that right now to the dependents of the seamen is another forward step.
The schedules at the end of the bill are also improvements. There is provision for medical examination of the men on the ship before they start on a voyage. That is certainly an excellent practice to follow in any industry where the men are at such close quarters for long periods of time. The provision for examination of the food and the certification of the cooks is another excellent one. I know that at home in
Canada Shipping Act

British Columbia, in our mines and logging camps, the morale of the camp pretty well depends on the ability of the cook. That condition is, I imagine, even more marked at sea. The proper qualification of cooks, certification before they embark on voyages, and the examination of food, will do much to improve the working conditions of the men who are afloat.
Having said some agreeable things about what the bill contains, perhaps I should express regret that there are certain provisions it does not contain.
The people of British Columbia and the daily press have been most anxious to obtain better protection in the way of radiotelegraph for our coastal steamers. We have had two or three wrecks with fatalities in recent years, partly attributable to lack of rescue equipment and lack of proper radio services to attract rescue equipment. There are two things about British Columbia, of which perhaps eastern members are not aware, although we British Columbians try to keep others well posted on the virtues and qualities of our province. One thing is the large volume of coastal passenger traffic we have on our coast. The reasons are fairly obvious. We have no north Or south road along the British Columbia coast; the most northerly road ends thirteen miles north of the city of Vancouver. Many people in the city of Vancouver have never been on a train, but have nevertheless travelled up to Alaska and down to California by boat.
The second thing is the fact that we have many islands-one very large one. It is not perhaps as famous as the island in the maritimes, but it is bigger in point of size, population and wealth. Vancouver island has a population of 200,000. Access back and forth between the mainland and these islands is naturally by boat. We have in addition a great volume of traffic, particularly in the summer, up and down the mainland coast. Most of the people on the lower mainland have summer homes or spend summer holidays in little resorts on the lower hundred miles of coast. One of the heaviest movements of people up and down the coast occurs in the summer months, the little coastal boats often carrying 1,500 and 2,000 people. Then there is the United States deep-sea traffic plying between United States cities and Alaska, in which use is made of our waters. For these reasons we have a much heavier coastal passenger traffic, I think, than any other part of Canada.
The second point I raise is the nature of our coast. Of course at times we are prone to use ecstatic terms about our mountains, inlets

and islands, our blue seas, and so on. But these things have another side. The coast of British Columbia is heavily indented by long fiords-there are thousands of little islands, reefs and shoals, strong tides and winds-and is an extremely dangerous coast to navigate. The very low record of wrecks we have had in the past has been attributable mainly to the great skill of our navigators. They get little help from lights or signals, and some navigators call it the black coast. If you come up north by water from Seattle in the state of Washington to the United States border, there is never a time that you cannot see a light behind and a light ahead. Once you come to the British Columbia coast, navigation lights are few and far between. It is the rare stretch where you can sight one light. Having left one light behind, you maintain a reckoned course as best you can, allowing for wind and tide, until you open up the next light. The disastrous accident we had last fall with the loss of the Gulf Stream was the result of failure to open a hidden light. Passing on to the north, once you get past the Alaska border, again the seaway is almost as bright as the main street in a city. These conditions-the blackness of our coast, the narrow inlets and many islands, our long fiords, our heavy rain in winter, and even worse, our fogs, all combine to make coastal traffic on the British Columbia coast a matter of proceeding through perilous waters. That is why we feel that the coastal traffic should be protected in every possible way, especially by sufficient wireless apparatus and operators to enable a call for assistance to go out in case a boat strikes a reef, a rock or another boat, and a disaster occurs.
It was the intention that the Canada Shipping Act should provide such protection, because there is a provision, which is in the original bill although it is not included in the amending bill, to the effect that any ship carrying fifty or more passengers more than 200 miles from place to place, must carry a radiotelegraph operator. If the ship carries 250 or more passengers, it can go only ninety miles without a telegraph operator, and a ship carrying more than 500 passengers can go only twenty miles without a telegraph operator. I presume that clause was framed with good intentions, but the steamship companies get around it in an easy way. The framers of the act, when they used the phrase "from place to place", were probably thinking in terms of proper harbours to which a ship could return when in distress, and from which aid could go out in the way of salvage tugs or high speed launches, a harbour at which there would be listening posts watching for signals.

Canada Shipping Act
On the British Columbia coast the places which can be so described include only Vancouver, Victoria, Nanaimo, Port Alberni and Prince Rupert, the public harbours. The steamship lines get around this regulation because of the words "place to place". On a trip north to Prince Rupert, a ship carrying 400 passengers going 500 miles-a thousand mile round trip-can easily avoid carrying a radio operator by stopping at some point; before reaching the 90 limit mile they can stop at a little logging camp or some little fishing village, or any place where there is a float, just as long as they stop and start again thus beginning a new voyage. I submit that the intent of the act is being evaded by that practice, and the people of British Columbia want to see that provision complied with. When we are in committee I intend therefore to move an amendment to section 406, changing the word "place" to the words "public harbour", in order that these provisions, which are sensible provisions, as applying to the type of ship that can go on voyages of various lengths, shall apply to voyages between public harbours, places from which aid could go to a ship in distress.
The ship operators, of course, being aware that they are evading the spirit of the law, tell the public that all is well because they now have these new radiotelephones and the masters and men can operate them without radio operators and can call help immediately in case of need. This may sound plausible enough, especially to an ordinary civilian who realizes what a great advance the radiotelephone is over the old radiotelegraph using the Morse code. The actual fact of the matter is that the very opposite is the truth as far as the use and practicability of the radiotelephone and radiotelegraph are concerned on the British Columbia coastal ships.
In the first place the radiotelephone is a much more intricate mechanism than the ordinary radiotelegraph sending machine. It is much more likely to get out of order, because it is more intricate, and neither the skipper nor the mate has the skill to repair such an apparatus. Then tihe radiotelephone, both the sen-ding and receiving machines, must be accurately tuned. Mistuning, as you know from experience with radio sets in your own homes, blurs speech and signals. In the third place, unintelligible speech over a radiotelephone may well ruin the whole point of the message. We all have had this happen when listening to the radio. Occasionally we may have heard ourselves on the radio, and at times I am sure we have been amazed at the way we blurred and slurred our own
speech, even we who are accustomed to speaking. How much more likely is a mate or a master, in time of emergency, rushing to a radiotelephone with which he has had very little practical experience, to blur and slur his speech and make his message unintelligible to anyone receiving it at the other end.
Ordinary radio interference from other electrical apparatus on the ship affects a radiotelephone signal very much more thah a radiotelegraph signal, because of the very much -higher frequency of radiotelephony. The same is true of static. We all know the effect of static on most radio sets, especially car radios; and that, too, is a factor to be considered in the dispatch of messages by radiotelephone. Our British Columbia coast is described by those with radio experience as being extremely spotty, by which they mean that reception is good at times but that in -the same spot an hour or two later it may be very bad. This also leads to the condition known as fading, under which a radiotelephone message simply fades out, another experience I think most of us have had with our own radios at home.
The next feature is the nervousness and excitement of the operator, if he is not a competent radiotelephone operator. If the boat has run on a rock or has run down a fishing boat, and the master or math 'goes to operate the fairly complex radiotelephone, it is quite likely he will turn the .wrong switch or do the wrong thing or forget part of the routine necessary in the operation of such a machine.
Another -possibility is the jamming of a distress call by the many fishing boats and tug boats on- our coast, all of which use the same channel as the coastal steamers. The radiotelephone is -a great thing for the tug boats and fishing boats on our coast, enabling them to maintain contact with their base and to pass messages back and forth. The one ohannel we have is filled almost all the time; and any coastal ship attempting to break into that channel with a distress signal would have very little hope of getting through.
Another point is the failure of the radiotelephone channel allotted to coastal ships in British Columbia to reach the deep-sea ships which are also plying our coast and which operate on another frequency. But the last and most important reason that the radiotelephone operated by the master or mate is absolutely inadequate and insufficient for real protection is this. The most important thing about sending a message from a ship is not so much that it be sent but that it be received. The very
Canada Shipping Act

best distress message sent out would be valueless unless somewhere in the area someone else was listening. Of course the classic instance of that was the Titanic disaster. At the time the California was only twenty-five miles away, but the operator had gone to bed and did not hear the distress call. If every coastal ship on the British Columbia coast with radio service is to have a radiotelephone on the wall, operated by the master or mate when there is need to send out a call, there will be very few people to receive such messages. Other ships will be similarly equipped, and there will be no real listening watch.
On the other hand, a radiotelegraph operated by an operator-or even better still, both radiotelephone and radiotelegraph-provides complete protection both in regard to dispatching messages and in being fairly certain that those messages will be received. In the first place the radiotelegraph as such is a simple mechanism, not likely to be out of order and easily repaired. In the next place it sends a clear and distinct signal. Probably everyone here who has used the radio at all knows that many times when you cannot get a particular program you can hear, loud and clear, the dash-dot-dot of some distant radiotelegraph station. There is also much less interference and static because of the lower frequency used in sending these messages. No jamming by fishing boats is possible, because the operators on fishing boats and tugs are not telegraphers; they use the radiotelephone. The operators on deep-sea ships are all telegraphers and all listen. Finally radiotelegraph is much more reliable, because it is operated by a man whose job it is to run that mechanism and do nothing else. In case the mechanism breaks down, he can repair it. The actual sending of messages is a. job for which he is trained; and above all, since this is his only job, he is also maintaining a listening watch for signals from other ships in the area, something which is not done with the radiotelephone, and so can take action when a distress signal is received.
When our coastal ships in British Columbia are forced to carry an operator they often try to save a little money-though the cost of one operator carried on a ship is not very great- by making him perform other duties. They say, "Oh, that man is just sitting up there all day long. That is a lazy man's job. We must make him freight clerk or purser," using him as an operator only when the ship is wrecked and he has to send a signal. Of course the objection there is the main objection to the radiotelephone, the fact that when he has other employment he can not maintain the listening watch which all ships should maintain

to help others in distress. Then, naturally, more and more of his time will be devoted to his other job and he will not spend the necessary time on the maintenance of his equipment, while at the same time he will get rusty in his technique. The argument that it is a lazy man's job could be applied equally to the lookout at the masthead, but what ship could do without him? It could be applied also to the firemen in the fire hall or the policeman on patrol. There are jobs where it seems the chief function is to wait for an emergency which everyone hopes will not occur; but when it does the man must be trained and ready to deal with it.
One other point was raised by the companies in objecting to the campaign waged by the daily press at home for proper enforcement of the Canada Shipping Act as far as radio operators are concerned. They said it was possible for the operator to be a purser or freight clerk if he would rig up a loudspeaker attached to the radiotelephone in his operator's cabin, and as he worked away at his figures as a purser or clerk he could be listening with one ear to the broadcast coming from behind. I have been on these coastal boats a great deal and I have seen these loud-speakers rigged up. If the man is working he has it turned down, because he cannot add figures and at the same time listen to a noisy radio. But far more frequently you will find, rather than the loudspeaker attached to the radiotelephone set being on, it is attached to an ordinary radio bringing music from Vancouver or Victoria, completely ruining the value of such a hookup.
Actually the present law, if properly enforced, does not permit this dual job of radio operator and freight clerk or purser. The Canada Shipping Act itself provides that in those cases where a radio operator must be carried by a ship he must maintain a daily log, and must make an entry in that log every fifteen minutes when on duty. That is an excellent thing. To begin with, it shows that he is awake, and it also permits him to time any messages he receives with respect to weather or traffic in the area, or any distress signals. The actual time schedule of an operator on duty is given in appendix 4 of the Canada Shipping Act, showing that if this law is enforced and the operator is required to keep a log with entries every fifteen minutes, obviously he cannot have another job such as purser or freight clerk.
Therefore, while complimenting the minister on the excellent amendments he has brought forward to other parts of the Canada Ship-

Canada Shipping Act
ping Act, I feel that one thing has been overlooked. I refer to a minor change in section 406 of the act, where provision is made for radio operators on coastal ships. When the appropriate time comes in committee of the whole I intend to move a simple amendment; that this word "place" be changed to "public harbour", which I think was the intent of those who framed the legislation in the first place.
Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, I wish to say only a few words on second reading. A principle is being introduced for the first time into the Canada Shipping Act which affords ground for some dissatisfaction.
Since the war, Canadian legislation has lost the characteristic of applying to everyone at all times and in all circumstances-a characteristic which has made Canadian legislation, and that of countries upon which our form of government is patterned, admired throughout the world. Gradually there have crept into the legislation of this parliament, while we have been struggling to get back to parliamentary government as distinct from government by the executive, devices whereby legislation, although enacted by parliament, may be modified by the executive. The executive has retained the power to modify legislation in such a manner that the executive finds itself master of all situations. A bill introduced a little while ago affecting foreign exchange control was susceptible to amendment by the minister to whom the control was entrusted to such an extent that the legislation was practically obliterated. In that instance it was competent to the minister at any time to repeal rules, regulations and orders which determined how currency should be admitted and administered, thereby permitting the minister in spite of the rules and regulations to determine what should be done.
I find in this bill the same spirit expressing itself. It is a dangerous departure from what has always been a characteristic of Canadian legislation; thus the law becomes uncertain and subject to the whim of the administrator to such an extent that at no time can anyone be sure just what the law is; nor is he capable of observing it, because it may be amended at any time without notice.
To give point to what I have just said, I would refer the house to section 11 of the bill.


Mr. SPEAKER:: Order. The hon. member knows that on second reading it is not proper to discuss specific sections.


Mr. HACKETT:: I am not discussing a section. I am merely citing it as an instance of a violation of a principle.


James Horace King: I was going to suggest that if the hon. member wished to discuss any
particular section he might wait until we reach the committee stage.


John Thomas Hackett: No, that is not my intention. I had intended merely to draw to the attention of the house the fact that the amendment embodied in this section of the bill gives to the minister the privilege of amending the law whenever he sees fit so to do.
In section 11 of the bill it is provided that- -the minister may, if he thinks fit, and upon such conditions, if any, as he thinks proper to impose, exempt any ship from any requirement contained in sections 113, 114, 132 and 133, or dispense with the observance of any such requirement in the case of any ship-
And so on. My point is that this amendment to the shipping act enables the minister at any time he sees fit to wipe out, as it were, those sections of the Canada Shipping Act which have been relied upon for many years for the protection of the lives of seamen and of people travelling by sea.


Mr. CHEVRIER:: Will the hon. member permit an interruption?


John Thomas Hackett: Yes.


Lionel Chevrier: Before the hon. member goes further, may I make the comment that this section is much the same as section 78 of the United Kingdom act. If the hon. member's contention is correct, then I would point out that the same principle is in effect in the same manner in the British act as in the Canadian.


John Thomas Hackett: That is just the ground of my complaint-that the socialization of the British act, which places in the hands of the administration the power to alter legislation whenever the executive deems it wise to do so, impairs the fundamental continuity and certainty of legislation.


Lionel Chevrier: But the British section has been in existence for quite some time; it is not a recent amendment.


John Thomas Hackett: If the minister examines the British amendment carefully I believe he will find that it follows a trend which has become quite marked in British legislation in the last few years. It is a trend which is detrimental to our legislative system, because it undermines the stability of legislation by making one law apply to one group of people and then, if the administration does not wish to apply it to the next group, operates in such a maimer that all the administration has to do is to pass an order in council, with the result that the law is suspended or changed. I submit that this is an introduction, into this realm at least, of a new principle, one which cannot
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but make for uncertainty and insecurity at a time when security and certainty in legislation are characteristics that are highly desirable.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Macdonald (Brantford City) in the chair.
On section 1-Department.
Mr. LANGLOIS:: Mr. Chairman, before we proceed with the clause by clause discussion of this bill I should like to make a few remarks. It is not my intention to make elaborate comments upon the proposed amendments to the Canada Shipping Act, 1934, as eventually we will have the privilege of discussing the bill further in detail once we reach the clause by clause discussion stage.
My intention in rising at this time is to draw the attention of the committee to what I consider to be a few shortcomings in the bill which deeply concern me. First, however, I should like to make a few remarks on the definitions contained in this bill. The other place, as we call it in this house, has seen fit to amend the definition of home-trade voyage. I am in full accord with what was decided upon by the senate, but I am not prepared to accept the amendment passed in the senate with regard to inland voyage and minor waters of Canada. I doubt the desirability of changing these two definitions. I submit that the definition of inland voyage should be read most carefully in connection with the regulations covering certificates of inspection. We are giving to masters of ships the privilege of sailing in zones in which they could not sail before. I submit that this committee should give careful consideration to the fact that by amending the definitions of inland voyage and of minor waters of Canada we are extending the certificates of competency given to masters of ships without compelling them to increase their knowledge of navigation and of the waters in which they will be permitted to sail in the future.
The bill before us provides for a new definition of sailing ship intended to comply with the recommendations of a commission headed by Mr. Justice Cannon which sat in 1942 to consider navigation of small boats on the St. Lawrence and to recommend proposed amendments to the act in order to bring these ships within the act. May I be permitted at this stage to read two of the three recommendations made by Mr. Justice Cannon on October 20, 1944. I quote:
Certificates:	Since there are still a number
of masters on vessels of under 150 tons gross, especially on the smaller vessels, which have no certificates and cannot pass the necessary exam-

inations, because of lack of education; it is suggested that if the regulations concerning "service certificates" could be amended so that this type of certificate could be still available by undergoing an oral examination, up to January, 1948. The masters not at present holding any certificate could all avail themselves of this opportunity; since the majority of them have quite a number of years of experience.
The third conclusion in the report of Mr. Justice Cannon deals with a special class for vessels engaged in the St. Lawrence coastal trade. This reads:
Special class of vessel:	It is suggested that
motor driven vessels of under 150 tons, gross, classed as sailing vessels under the steamship inspector's regulations, may be put into a special class of "motor vessels" having their own particular regulations concerning equipment, _et cetera, since they are actually of a special class, but not properly defined and therefore as far as equipment and certificates are concerned, never positive whether they are "motor vessels" or "sailing vessels."
At this point I wish to draw the attention of the committee to the fact that up to today we have adopted in this special trade on the St. Lawrence a system of tolerance. We gave a classification of sailing ship to ships which were not sailing ships at all, but were really and truly motor ships. We gave this special privilege to ships under 150 tons, and that is my explanation of why the Hon. Mr. Justice Cannon in his report confined his conclusions and recommendations to this type of vessel under 150 tons gross tonnage. However, Mr. Chairman, I feel that by accepting the wording of Mr. Justice Cannon's report as it is, the government and the department are not doing the right thing. We are creating a special class of ships, taking into consideration not the territorial waters in which they are to sail, not the dangers and other difficulties of navigation which they may encounter in this trade, but rather the size of the ships. To my mind it is the same thing as if the registrar of motor vehicles in Ontario told a man that he did not need a driving licence if he drove a jeep, but that he must have one if he drove a truck or a bus. I believe sincerely that if the master of a ship is not qualified to sail a ship of 151 tons he is not qualified to sail a ship of 148 tons. Therefore I respectfully suggest that we create a new class for this special type of vessel, but that we do not limit this class to a certain tonnage, but rather take into consideration the territorial waters in which the ship will be permitted to sail, and require of the masters of these ships and the owners the qualifications and the necessary requirements as to provision for life-saving equipment and the prevention of fires that must be required of a ship engaged in that trade.

Canada Shipping Act
On certain types of vessels it is impossible to insist on the various requirements laid down by the Canadian steamship inspection board. For example, we are creating a new class of ship as far as certificates of competency are concerned, but we put these ships, even one under 150 tons, as far as inspection is concerned, in the same class as a ship of 1,000 tons. The inspection regulations say that a ship with a crew of seven persons on board must have two lifeboats, each of which is large enough to accommodate the whole crew of the ship. One of these lifeboats should be class one while the other should be class three. But you cannot demand this requirement of the owner of a ship of 50 tons because there is not room on the boat deck of that ship to locate the two lifeboats.
In forming this new class I respectfully suggest, as I said before, that we should take into consideration the waters in which the ship is to sail, the dangers to navigation, the trade in which she is to be engaged, and the number of crew she is to carry. If we want to help this trade on the St. Lawrence, help the coastal trade of Canada, we shall have to face the problem in this way, otherwise we will not improve it.
I again suggest that this class should not be limited to 150 tons. I think that the amendment passed by the senate relating to inland voyages should help to convince the government and this committee that it should be so. As a matter of fact the other place has just granted to masters of ships engaged theretofore in the trade on the lakes and inland waters of Canada permission to sail their ships from Father Point to the west point of Anticosti island. We have only to increase this limit of the inland waters a few miles more and we cover the whole of the St. Lawrence coastal trade. If we are to use territorial limits, this limit should include the whole of the gulf of St. Lawrence including Chaleur bay. If we are going to ask the masters of these ships to hold certificates of competency we should be very careful in outlining the requirements necessary for the attainment of such certificates. I myself do not think that we should require from the future masters of these ships that they know celestial navigation. As a matter of fact, today we are asking these captains who are to sail only in the St. Lawrence that they know how to navigate by celestial bodies. Well, I should like somebody to point out to me a spot on the St. Lawrence river where you can have a good horizon, good enough to navigate by celestial bodies. We teach them to use a sextant, which they are not even compelled to carry on their ships. What is the use of having them learn the course which
shows them how to handle a sextant when they are not compelled to have them on their ships when they go to sea?
In making regulations having to do with these new certificates we should ask these men to learn how to adjust their compass and to know pilotage. We should insist on pilotage; we should insist that they know pilotage regulations in the St. Lawrence river and the international rules of the road. We should teach them navigation in sight of the coast. That is the only type of navigation they will be called upon to use. We are wasting our time if we ask them to know geometry, to know how to use a sextant, which means of navigation they will never use in their trade.
I also wish to offer a few comments on the amendment brought in by the senate to the clause covering desertion. I am not in accord with the hon. member for Skeena who yesterday criticized this amendment by the senate. I ask hon. members of this committee to consider carefully the expressions in this amendment where we require that, before the crew can go on a legal strike, the ship be placed in a port of safety or rather in security. I think we should be very careful, when we give power to the harbour master or the master of a ship to determine whether or not the ship is in security, not to give them the privilege of extending that to tidal harbours or tidal ports.
Personally I know of one example where a ship suffered heavy damage and caused very severe damage to a sister ship when her lines broke owing to the carelessness of the crew. She was damaged when the tide ran out because the lines broke. When I ask this committee to consider carefully this amendment we are dealing with, I am not at all trying to take something away from seamen, whom I want to see afforded the best treatment, but I am insisting that we should be very careful not to give them in this act something which will finally work against themselves. I am thinking at the moment of danger to the lives of seamen, whom we want to protect today.
The same can be said of ports where there is no shelter. No one knows when a storm may come up and a ship will break her lines and be cast adrift, and ninety-nine times out of a hundred she will ram a sister ship tied at the same wharf. Therefore, if we are going to leave the clause as it stands, I would impress upon the minister the necessity of bringing to the attention of the officers of his department the importance of this matter and giving instructions to the harbour master not to consider ships in security, unless he is satisfied that in case of emergency tlfere will be at
Canada Shipping Act

least a skeleton crew on hand to look after the ship, should a storm or any other unforeseen event take place.
I come now to the definition of Canadian ship in the shipping act. I have heard many hon. members, both in the house and outside, ask in very convincing words for the establishment in this country of a Canadian merchant marine. I agree with them, and their case has my full support and sympathy. But how can we have a Canadian merchant marine without having a Canadian ship? I have only to quote section 3 of the act of 1934 as it stands today to convince this committee that if we want to be logical with ourselves when we ask for a Canadian merchant marine we should have a Canadian ship. Section 3 of the act of 1934 reads:
Every vessel, which is about to be built or is being built or equipped in Canada and which, when completed, launched and/or equipped will be a ship registrable in Canada as a British ship, .may, as to a vessel about to be built, and shall, as to a vessel being built or equipped, be recorded, pending registration, under an assigned number and a temporary name in the office of the registrar of British ships at the port in Canada at or nearest to which such vessel is about to be built or is being built or equipped.
Further, in the interpretation of the terms at the beginning of the act, item 5, section 2, "Interpretation", the words British ship are defined as follows:
"British ship registered in Canada," and "ship registered in Canada" means a ship registered in Canada either under the provisions of this act or under the provisions of the Merchant Shipping Acts before the coming into force of this act.
Further still, a ship registered in accordance with this act is also defined, the definition being at item 8, "Interpretation", section 2, of the Canada Shipping Act:
"Registrar" means a registrar of British ships.
This act does not give us a legally true Canadian ship. Moreover, may I be permitted to read part of the Canadian Citizenship Act, section 47, in which we set out the necessary qualifications that one must have to become a Canadian citizen. Section 4, part I of the citizenship act reads:
A person, born before the commencement of this act, is a natural born Canadian citizen:-
(a) if he was born in Canada or on a Canadian ship.
Again in section 5 of the same act we find the following:
A person, born after the commencement of this act. is a natural-born Canadian citizen:-
(a) if he is born in Canada or on a Canadian ship.	[DOT]

In the same act we find in the interpretation section 2, item (b), where Canadian ship is defined:
A "Canadian ship" means a "ship registered in Canada" within the meaning of the Canada Shipping Act, 1934.
I have just proved, I think, that no such Canadian ship exists under our Canada Shipping Act, 1934. What I have just said comes, in my opinion, into conflict with the Canada Shipping Act as it stands today. I am also of the opinion that the effect of amending the act in order to give us a Canadian ship does not come into conflict with the merchant shipping agreements passed by the imperial conference of 1930 where common status was given all ships of the British commonwealth. The aim of the imperial conference of 1930, in relation to merchant shipping, is set out clearly in the following quotation from the report of the conference on the Operation of dominion legislation on merchant shipping, 1939. I quote the following excerpt, found at pages 12 and 13, giving the terms of reference of the conference. At page 12:
Merchant Shipping
12.	The imperial conference of 1926 also considered the general question of merchant shipping legislation. On this subject the conference pointed out that, while uniformity of administrative practice was desirable and, indeed, essential as regards the merchant shipping legislation of the various parts of the empire, it was difficult to reconcile the application, in their present form, of certain provisions of the principal statute relating to merchant shipping . . .
At page 13, section 13:
13.	On further examination of the problems involved, it appeared more convenient that the committee and the special subconference should be organized as a single conference. After consultation between the respective governments this view received general acceptance, and the terms of reference to the present conference accordingly include, in addition to those set out above, a reference -
"To consider and report on the principles which should govern, in the general interest, the practice, and legislation relating to merchant shipping in the various parts of the empire, having regard to the change in constitutional status and general relations which has occurred since existing laws were enacted."
Just one other citation from the report of the same conference of 1929, at page 40, item 97, where common status is defined as follows:
97. Common Status

(a) There should be agreed uniform minimum qualifications for ownership to govern the admission of ships to registry in all parts of the British commonwealth of nations. The provisions of section 1 of the Merchant Shipping Act, 1894, would appear to form a suitable basis for that purpose.

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I want to emphasize the words "suitable basis".
(b)	Ships complying with these agreed qualifications for ownership and registered in any part of the British commonwealth of nations will possess a common status for all purposes and will be entitled to the same recognition as is now accorded to British ships.
Further, it is my contention that my suggestion is therefore not in contradiction to or in disagreement with the draft agreement as to British commonwealth of nations merchant shipping, and I beg to quote this draft agreement as reported in the report of the imperial conference of 1930, part I, summary of proceedings. At page 31, I find the following :
Part I
Common Status Common Qualifications
Article 2-(1) No ship shall be registered in any port within the British commonwealth so as to acquire the status and recognition mentioned in paragraph (2) of this article unless it is owned wholly by persons of the following description, namely:-
(a)	Persons recognized by law throughout the British commonwealth of nations as having the status of natural-born British subjects;
(b)	Persons naturalized by or in pursuance of the law of some part of the British commonwealth;
(c)	Persons made denizens by letters of denization; and
(d)	Bodies corporate established under and subject to the law of some part of the British commonwealth and having their principal place of business nothin the British commonwealth.
(2) Every ship so owned and duly registered within the British commonwealth shall possess a common status for all purposes and shall be entitled to the recognition usually accorded to British ships.
Then article 3 proceeds to state on what special items it was desired that this common status be given as far as registry was concerned. I quote just the first and last part of the sentence in article 3:
Article 3-The laws, regulations, forms and procedure relating to the matters following, that is to say:-
There is then given the enumeration of the various items mentioned, and the section *continues:
. . . shall be substantially the same throughout the British commonwealth and so far as possible be based on part I of the Merchant Shipping Act, 1894.
I particularly draw the attention of the committee to the adverb "substantially."
I could go on quoting further excerpts from this report of the imperial conference, but I think I have given enough of them to satisfy this committee that there is no conflict whatsoever between my suggestion and what was agreed upon in this draft agreement of 1930.
I also beg to draw to the attention of this committee the fact that the British commonwealth merchant shipping agreement was signed in London on December 10, 1931; that is, just one day before the Statute of Westminster which, by sections 2, 3 and 5, granted to Canada the right to legislate without taking any notice of the Colonial Laws Validity Act.
In closing my remarks on this subject, I wish to quote Doctor Maurice Ollivier's "Problems of Canadian Sovereignty", at page 138, in which he says:
So, the dominion exercised that right

He is talking of the right given by the Statute of Westminster.
-by passing a new merchant shipping act in 1934.
By passing that act, the dominion has exercised its absolute right of legislating with respect to ships, wherever they may come from, when they happen to be in Canadian waters; it has exercised its right to legislate as to ships registered in Canada-
I want to emphasize the words "right to legislate as to ships registered in Canada."

whether they be in Canadian waters or elsewhere, subject in that case to local laws when the ships happen to be in non-Canadian waters or ports.
There is therefore no doubt whatsoever that this parliament has the right to legislate or has the legislative power necessary to create this much needed Canadian ship. I hope also, in closing my remarks, that once this Canadian ship is given to Canada, our government will take steps to protect this Canadian ship while engaged in the Canadian trade. Part IV of the draft agreement of 1930 gave equal treatment to all ships of the British commonwealth in the following terms, by article 10, to be found at page 32 of the report of the 1930 conference:
Each part of the British commonwealth agrees to grant access to its ports to all ships registered in the British commonwealth on equal terms and undertakes that no laws or regulations relating to seagoing ships at any time in force in that part shall apply more favourably to ships registered in that part, or to the ships of any foreign country, than they apply to any ship registered in any other part of the commonwealth.
Article 11 provides:
While each part of the British commonwealth may regulate its own coasting trade, it is agreed that any laws or regulations from time to time in force for that purpose shall treat all ships registered in the British commonwealth in exactly the same manner as ships registered in that part, and not less favourably in any respect than ships of any foreign country.
Canada Shipping Act

Article 12 of the same draft agreement reads:
Nothing in the present agreement shall be deemed-
(i) to derogate from the right of every part of the commonwealth to impose customs tariff duties on ships built outside that part . . .
I beg the committee to note that this draft agreement gave us the privilege of imposing customs tariff duties on ships built outside this country. By introducing legislation tending to reserve the coastal trade of Canada to our Canadian ships, either by means of customs tariff duties on foreign-built ships or otherwise, then and only then will Canada encourage the creation and maintenance of a Canadian merchant marine and develop a stable and flourishing shipbuilding industry in this country.
Therefore, Mr. Chairman, I sincerely hope that the government will immediately consider the desirability of introducing further amendments to our shipping act in order to give us, together with, a Canadian merchant marine, a true Canadian ship which will soon fly a true Canadian flag on the seas of the world.


Mr. WINTERS:: I should like to say just a few words on this act as it applies to fishing craft, and some of the definitions concerning them.
By this act it will be noted that ships of more than ten tons register are classified as steamships if they have any means of propulsion other than sail. That is a restrictive feature on our fishing fleet, which has its tradition in sail, though of recent years it has in some measure modernized itself, first by putting a donkey engine on the deck to hoist the sails and anchor, and more recently, with the growing demand for fresh fish and the need for speed in getting to and from the fishing banks, by a trend toward propulsion. As a matter of fact, almost all the schooners and ships in the fishing fleet are now equipped with diesel engines; but they are the same type of ship as we had twenty years ago-the hull form is the same; they have the masts and sails, though they are not used to the same extent, and they are substantially and basically the same type of ship as when they had no means of propulsion other than their sails.
It seems an unusual hardship on the fishing fleet to classify these boats as steamships and therefore require them to submit to all the regulations applying to steamships, including the qualifying requirements for officers and particularly engineers. There are also the inspections during the building of a ship which must be conformed to, and in that way an additional hardship is imposed. Ships are

built today in exactly the same way; the same kind of timber, the same skill and the same designs are used as were used twenty or thirty years ago, when Nova Scotia developed traditionally as the province that specialized in wooden ships and iron men.
This provision seems to bear most heavily on the engineers, who are in fact fishermen who in many instances were forced to leave the work in the dories and fishing boats and take work on board what we call a fishing schooner or what might be termed a mother ship. They have done so by reason of disability, or for some other cause. They have become proficient in looking after diesel engines and other propulsion units, to the point where they are just as competent as an engineer holding higher qualifications, but under this act and the regulations they are debarred if they are not qualified.
I must say the minister has seen fit in certain cases to exercise some leniency and discretion in allowing such people to qualify. I have brought two or three cases to his attention, and he has made it possible for the men to undergo a special examination by the board of steamship inspection and obtain temporary certificates permitting them to operate. This is possible, however, only in special circumstances, and it is a dispensation in all such cases. Under the act there is no coverage which would permit these men to qualify, and in time I believe that will result in an unnecessary hardship upon the fishing fleet which is struggling along, doing its best to conform to the regulations and to progress. Nevertheless, with its roots deep in history and tradition which go back to the sailing days it is pretty difficult for our fishermen to change quickly; so I would ask the minister to give us time in that respect and extend all the leniency and discretion within his power.
I would say this is a good bill; there is no question about that. It will work for the over-all betterment of our mariners and the merchant marine. In time I am sure our deep-sea fishing will develop to the point where we can conform to all the regulations in this measure, but at the moment we cannot; it is just impossible. So we shall have to be shown some leniency during the transition period, which may last for a considerable time.
To say, as the bill does, that all ships of less than ten tons are sailing ships and all those of more than ten tons are steamships, if they have any method of propulsion other than sail, is drawing the line too fine and placing it too low, in my interpretation of this act. A ten-ton boat does not engage in

Canada Shipping Act
fishing on the deep sea, and therefore plays very little part in the deep-sea fishing industry. In the schedule to the act respecting the international labour conference, however, I note that the dividing line is drawn at vessels of 200 tons gross register. It seems to me that would be much more fitting, and would give us a certain latitude which is needed.
I should like to bring another point to your attention, Mr. Chairman, in connection with sick mariners' benefits. These come under part V of the act; but I should like to refer to the matter at this time, if I may. There are two points in particular which affect us, and from the speech of the hon. member for Skeena I would gather that the same things apply on the west coast. One feature is that fishermen who leave a Canadian port and for some reason-disability, failure of some kind, or something else-are obliged to seek shelter in a foreign port, do not become eligible for sick mariners' benefits in that foreign port. On the west coast that would apply to fishermen leaving Vancouver ports and touching in Alaska or the United States. On the east coast our boats occasionally touch the United States; they frequently go to Newfoundland and St. Pierre and Miquelon, and there is the possibility that they may go to other foreign ports.
With particular reference to our east coast fishermen, it is traditional and part of the industry that they take on bait in Newfoundland. In the spring of the year it is often hazardous to get to Newfoundland. There are often ice floes and other difficulties of weather and navigation. Recently, with the trend whereby, to some extent, our fishing fleet is manned by Newfoundlanders, it has been the practice to have some of our Nova Scotia vessels lie over in Newfoundland through the winter months, and set out on their first fishing trip of the year from a Newfoundland port, before they touch a Canadian port. They leave from Newfoundland, catch their cargo of fish-if they are lucky- and return that cargo to a Canadian port.
Under the interpretation of the applicable sections of the act, these fishermen have not been able to qualify for merchant seamen's benefits, presumably because the act reads that the first payment for the calendar year must be made before the ship makes its first fishing voyage in that year. This seems to be interpreted to mean that the ship must leave a Canadian port on its first trip in order to qualify for merchant seamen's benefits.
This appears to draw an argument almost to a point of absurdity. One of our schooners registered in Lunenburg, but lying over for the winter in Newfoundland, will leave Newfoundland, go to the banks, take its catch of fish, return to Lunenburg and find that it is disqualified for merchant seamen's benefits. But if that same schooner leaves Newfoundland, touches at the extreme eastern end of Nova Scotia, then proceeds to the fishing banks and returns its catch to Nova Scotia, it can qualify for merchant seamen's benefits. By so doing, it increases its cost of operation, and seems to put itself at a disadvantage which is in no way justified. I would strongly urge the minister to give this case exceptional consideration. I understand that it is administered by the Minister of National Health and Welfare. He is familiar with the circumstances; but I thought this would be a good time to discuss the matter. If an amendment to the act is necessary I should be pleased to bring it in, and I am confident hon. members would support it.


Mr. STUART (Charlotte):: Mr. Chairman, I would speak briefly along the lines followed by the hon. member for Queens-Lunenburg when he referred to the amendment whereby boats of ten tons are classed as steamships, and come under the same regulations. There are several amendments which I feel will greatly inconvenience fishermen of Charlotte county and other sections of the maritime provinces. This amendment is one which I am sure will be discussed by fishermen in that section of the country, and which will be strongly opposed.
In the section of the maritimes from which I come will be found hundreds of small islands, ledges and shoals where the sardine fisheries operate, and where the movement of tide is very rapid. The water is shallow to a point where many sections of that area are still uncharted. Many of the channels navigated by fishing boats today cannot be found on the charts supplied by the department in Ottawa. Experience, and years of cruising in these dangerous waters by men who began in their youth to take part in that business, have qualified them to carry on in that section. I feel, however, that boats used exclusively in passenger and freight coastal service in any part of the maritime provinces, or any other section of the dominion, should come under government inspection. Indeed, perhaps in many cases that inspection should be more rigid than it has been in the past.
I remember speaking briefly about two years ago on this same matter, wThen I referred to the loss of the Robert Cann in 1946 off Grand Manan island. The Robert Cann was an old boat. Anyone who has had experience on salt water would know it was not fit for
Canada Shipping Act

the service it was trying to render at that time. However, there was a scarcity of that type of boat, and it was allowed to carry on. Consequently in February, 1946, a tragedy involving thirteen persons took place.
I say the boat was not fit for the job, because these thirteen persons who were lost when the boat sank got into a lifeboat sixteen feet long, and crossed the bay of Fundy on the same night. They perished while crossing. I feel the regulations covering boats of this type should be quite rigid. The ordinary fishing boat, however, should in my opinion be exempt from these regulations. I say that because today in all branches of the fishing industry of the maritime provinces the boats being used are much larger than they were ten years ago. The great percentage of boats would come under the regulation we are now discussing.
Then, I should like to touch briefly upon the matter of loss of life and loss of boats in the maritimes. I believe if we go through the records we shall find that the hard, tough types of men are in this business in the maritimes; most of them came up the hard way, and the loss of life and of boats and equipment in the maritime provinces is as small as in any other part of the world. In fact down there today one would find only a very small percentage of boats insured. I would say that 99 per cent of the boats in the fishing industry today in the maritime province do not carry insurance. It is seldom that we hear of the loss of a boat.
Then, I would discuss briefly the matter of inland waters. I can remember as a boy hearing this discussion take place on many occasions. That section in which the sardine industry is carried on has always been known as inland waters; there is a different classification altogether when one goes outside the bay of Fundy.
Some time in the thirties-I do not remember the exact year-a regulation came into force making it necessary that masters of boats of ten tons or over have certificates.
I remember the circumstance well, because I was on the water at that time. One of the qualifications was that the applicant must have been the skipper of a boat of ten tons or over for a period of ten years before making application for a licence. I happened to be one of the few who had had his name on the register of a boat for that number of years. I made application and received my certificate; but at that time there were many men from the same section in which I live who were better qualified than I but

who failed to obtain their certificates at that time, owing to the fact that they had not had their names on the registers of boats of ten tons or over for a period of ten years. Those little technical points have made it difficult in that part of the country for fishermen and boatmen to carry on.
I would refer now to the regulation of the department whereby life-rafts, dories, lifeboats, fire-extinguishers and all equipment of that kind must be aboard a fisherman's boat today before it can pass inspection. I have seen boats in my section of the country' so laden with this equipment that, by the time they had aboard all that was necessary, there was very little room left for nets, winches, drags and all the other equipment, required for fishing purposes.


John Lambert Gibson: And they were not seaworthy by that time.


Andrew Wesley Stuart: The statement of the hon. member for Comox-Alberni is true. I have seen life-rafts which had to be placed on top of the houses of the boats, thereby making them top-heavy. But in order to qualify it was necessary that such equipment be carried. The men who man these boats today are perfectly qualified to look after their own interests. Should an accident happen, I would much rather be with them than with less qualified seamen who are in charge of larger boats.
The department should give consideration to simplifying the regulations with regard to boats engaged in the fishing industry. It would make it much easier for these men who work with their two hands to make a living. My experience with these men extending over a great number of years is that they are the last people in the world to ask for charity, but they do like to have a little liberty. I know hundreds of these men and they cannot afford to go to navigation school. They have come up the hard way. A compass is something they play with as children. I have met many men during my lifetime who are very capable on salt water but perhaps could not box a compass or would not know what a parallel rule looked like. But they can take you out and bring you back home again. I urge the minister to consider carefully limiting these restrictions, because at the present time these men are bothered and worried by them.
Where I live many boats engaged in coastwise shipping carry on trade between Canada and the United States. As I have stated before in the house, about 75 per cent of what we produce down there is sold in the United States. These boats, particularly those from

Canada Shipping Act
my own section, carry these commodities to the United States. I believe you will find that the United States regulations are as rigid as those of any other country, but these men have little difficulty in entering United States ports with Canadian cargoes. They are not bothered to the extent that they are in their own country. Therefore I ask the minister to take boats of ten tons and under, the type of boat that is used by hundreds in the fishing industry, out from -under these regulations. Rather than have officials of his department call in these fishermen and ask them to ground their boats to see whether the cylinder-heads or other things of like nature are in good condition, these men should be permitted to judge as to the standard of their own equipment, because in many cases they are better qualified.


The DEPUTY CHAIRMAN:: May I
remind the committee that we are on the first clause, which deals with definitions. Some hon. members have related their remarks to the definitions, but a general discussion at this time would not be in order. I would ask hon. members to reserve any remarks they desire to make until we reach the clause to which they would be applicable.


John Lambert Gibson: This is a very complicated bill, and I imagine that many hon. members who do not come from the coast regions do not realize its implications. I would suggest that the Chairman call the clauses slowly as he goes along. I should have liked to have this bill referred to a special committee. I know it was considered in the other place, but there is a wealth of maritime experience available in this house. There are shipowners, sailors and others who could be most helpful to the minister. If you will just go slowly, Mr. Chairman, I think we can be helpful to him because I am sure we all want to be.


Mr. MacINNIS:: Mr. Chairman, I have no complaint to make in regard to your generosity in allowing debate, but I was not able to be present when the motion for second reading was carried and I should like to say a few words now, which I hope you will permit me to say, and leave whatever else I have to say until we reach the particular section.
Yesterday the minister mentioned that this was an important bill, and I agree with that. Canada was very backward in regard to shipping legislation until 1934 when the shipping act was passed, although it was not brought into operation until 1936. That being the case, I wish the minister had referred these amendments to the committee on marine and fisheries, so that we could have had expressions
of opinion from shipowners, ship operators, sailors and other personnel on board ship, from both the coasts and the lakes. I am sorry the minister did not do that, because we now have this bill before us without having had an opportunity to look at it.
I am also sorry that no consideration was given to the suggestion of ship radio operators that provision should be made for proper radio protection on seagoing ships. The hon. member for Vancouver North referred to this, and I shall not say anything more about it for fear that I might repeat what he has said. I just want to say I regret that we have been shoved into this, without having had an opportunity to examine the bill and also without those who are interested having been given an opportunity to put their case before us.


Lionel Chevrier: Perhaps I should reply to what the hon. member for Vancouver East has said. The hon. member says he is sorry the bill was not sent to a committee in order that representations might be made by those interested.


Angus MacInnis: Or recommendations.


Lionel Chevrier: I should like to point out that over a year ago a special committee was set up in the Department of Transport. That committee went into the question of amendments to the shipping act most carefully. It sat for over a year and listened to representations by groups from all across Canada. I have a list of them here which I could detail to the hon. gentleman. Then the bill went to the other place where it was referred to the committee on transportation. It was before that committee for almost two months and representations were heard from groups all across the country.
If it had gone to a committee as the hon. gentleman thinks it should have, I doubt very much if it would have come back in time for us to deal with it before prorogation, especially if it received attention equal to that which it received in the departmental committee. The house seems to think that this bill should be put through at the earliest possible opportunity, but of course not without proper discussion. I can assure hon. gentlemen that the only reason why I felt that it should come to the house is that it could receive the same attention here that it would elsewhere.


Angus MacInnis: I gather from the speeches that the minister makes in the house that he gives a great deal of attention to the matter he has in hand, but to have a bill put on our desks yesterday and then dealt with partly yesterday and partly today is not giving us an opportunity to deal with it properly.
Canada Shipping Act


Lionel Chevrier: I had no objection yesterday to putting it over. I hope the hon. member is not of the opinion that I am forcing this; I have not the slightest idea of doing that. If the committee feels that it should be put over, I am quite willing. Parliament has had an opportunity of seeing the bill. It was introduced in the senate early in March. Surely hon. members have had the time to look at the bill-perhaps the hon. gentleman has not, but it was there and it was available.


Angus MacInnis: The minister pointed out yesterday that the bill we have before us now is not necessarily the bill that was introduced in the other place. It was amended in the other place. There was not much point to my studying the bill that was introduced in the other place before I knew what they were going to do with it. The minister himself mentioned that in some respects this is a different bill from that which was introduced in the other place.


Lionel Chevrier: There are some amendments.


Mr. HAZEN:: Did the committee which the minister said was set up by the government, and which went into this matter carefully-


Lionel Chevrier: By the department.


Douglas King Hazen: -listen to any representations made by the fishermen of Lunenburg or the fishermen along the bay of Fundy, New Brunswick?


Lionel Chevrier: No.


Douglas King Hazen: They should have. The hon. member for Queens-Lunenburg said a minute or two ago that the fishermen of his constituency could not comply with the provisions of this bill. When an hon. member rises in his place and makes a statement of that kind- and I think he was correct in his statement- some attention should be given to it. When the hon. member for Charlotte, who has been a fisherman himself, and who has lived among fishermen, speaks as he did this afternoon about the great difficulty the fishermen in his constituency and along the bay of Fundy, New Brunswick side, will have in connection with certain sections of this bill, consideration should be given to his remarks.
If this matter is not to be referred to a committee it seems to me that if these hon. gentlemen see fit to move amendments to certain sections of the bill they will have the support of a good many members of this committee.


John Thomas Hackett: I am not clear as to the effect of this legislation upon the goelette with the auxiliary engine, which performs such valu-

able service on the St. Lawrence. The definition of a sailing ship in the act as it stands now provides for a sailing ship which has an auxiliary engine, whereas the amended definition appears to exclude such a ship. In view of the importance of that type of craft on the St. Lawrence I should be very glad if the minister would tell us what is the effect of the amendment.


Lionel Chevrier: We have not come to that
subsection.


John Thomas Hackett: I am willing to wait.


The CHAIRMAN:: I think it would be
better.


John Thomas Hackett: I am agreeable to that.


Mr. DORION:: I should like to ask a question on subsection 4 of section 1, which reads:
"Inland waters of Canada" means all the rivers, lakes and other navigable fresh waters within Canada, and includes the river St. Lawrence as far seaward as a straight line drawn from Cap des Rosiers through West Point Anticosti island extending to the north shore.
I notice that this subsection replaces a previous one which read, "as far eastward as a line drawn from Father Point to Point Orient." What was the reason for this change? If there are some good reasons for it, I submit that this subsection should include all the north shore of the St. Lawrence as far as Blanc Sablon. I think the section should read: "a straight line from Cap des Rosiers to Blanc Sablon." I wonder why the area from the west point of Anticosti island to Blanc Sablon is not included in the subsection.


Lionel Chevrier: The reason for the change is, in the first place, that it was asked for by the certified officers and by the Dominion Marine Association. I also think that certain groups in the province from which my hon. friend comes requested the change. While the line eastward is extended some distance it was felt that that distance is not too considerable, having regard to the fact that the river and the gulf at that point are sheltered to a large extent. Replying directly to the question, the definition was chosen because, I am informed, it is the old legal definition of the limit of the river. It follows the proclamation of 1763 which read:
. . . and the coast of the gulf of St. Lawrence to Cap Rosiers, and from thence crossing the mouth of the river St. Lawrence by the west end of the island of Anticosti, terminates at the aforesaid river of St. John.


Frédéric Dorion: The river St. John is much farther down.

Canada Shipping Act


Lionel Chevrier: This is not exactly what has been chosen for the definition, but it was felt that if the most easterly line were extended to Cap des Rosiers it would be more in accordance with the experience and the competence of those who hold certificates in that trade.


J. G. Léopold Langlois: I take it that this line which goes through Cap des Rosiers and the west point of Anticosti island excludes Ellis Bay. If we take that amendment which was proposed in the other place we are going to exclude pulpwood carriers on the St. Lawrence in the Anticosti island service, whilst we are going to have them coming further down or east in this trade on the south coast of the St. Lawrence. I wish to point out to the hon. member that Ellis Bay on Anticosti island is quite an important pulpwood producing centre, and these carriers will be interested in going there. We are excluding Ellis Bay by this line, which misses it by only a few miles. Speaking from memory, of course, I should say that a line from Cap des Rosiers through the west point of Anticosti island misses Ellis Bay by five or six miles at the most.


Frédéric Dorion: You are right.


J. G. Léopold Langlois: Ellis Bay should at least be included. I have another question to ask. We are going to extend the limits of these certificates for inland waters at present granted to the masters of these ships. Are we going to extend the limits of the certificates of inspection granted to these inland water ships? I think the limits of both should go together. If we are going to give the captain the right to sail his ship in the new zone, the ship should have its inspection certificate extended to cover this new zone. I know it has been the practice of the department to grant this permission under the former certificate of inspection for inland waters by means of an endorsement. I think they were under class 1 inland certificates of inspection and they were permitted to make trips east of Father Point up to the eastern limit set by a line going from Cap des Rosiers through the west point of Anticosti island, and this only for a few months in the summer, extending to somewhere in the middle of October. Are we now going to make it a standard practice to extend this certificate of inspection for inland water ships to the line going from Cap des Rosiers to the west point of Anticosti island?


Lionel Chevrier: The answer to the question is yes. The certificate of inspection will be extended in order to comply with the extended definition. The steamship inspection board have given the amendment careful consideration, and they feel that it is in
compliance with what was asked for by the certificated officers and the Dominion Marine Association; and also they are of opinion that the inspection regulations will not be affected in any way.


John Thomas Hackett: Is there any objection to including Port Meunier and Ellis Bay within inland waters?


Lionel Chevrier: I have just sent for a map to see the position. I should not like to answer offhand.


J. G. Léopold Langlois: Is it intended by the department to require in the future more in the way of certification of masters in inland waters?


Lionel Chevrier: Yes. Unquestionably there will have to be a tightening up of the examinations in respect of certificates of competency for officers who will be trying to qualify.


Frédéric Dorion: May I ask why the description, in subsection 6, of minor waters of Canada is not the same as in subsection 4 with respect to the line eastward?


Lionel Chevrier: There is no difference in the definition of minor waters save that which has been made necessary by a change in inland waters and home-trade voyage.


Douglas King Hazen: I wish to ask a question about subsection 9, which defines sailing ship. Why has there been such a drastic change in this respect? The old section reads:
"Sailing ship" (except as may be provided under the load lines rules) means a ship propelled wholly by sails, and includes a ship not in excess of 150 tons, gross tonnage . . .
Now, according to the amendments, we are getting to vessels of ten tons. Section 2 provides:
Ships not exceeding ten tons register tonnage . . .
And so on.


John Thomas Hackett: That is the question I asked.


Lionel Chevrier: There is some confusion between subsection 9 of section 1 and section 2. One refers to a sailing ship and its definition, and the other refers to exemption from registry, and they are not the same. Answering the first question, what is the effect of the definition of sailing ship:	Some years ago
the Cannon commission was appointed to inquire into small boat navigation on the St. Lawrence river, and one of the facts disclosed was that many of these small boats were operating without steamship inspection and without certificated officers. The commission
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came to the conclusion that it would be advisable to make these small vessels subject to steamship inspection because of the number of collisions that had taken place. The object of subsection 9, subparagraph 89, is further to define "sailing ship" by simply saying that it means a ship propelled wholly by sails, so that from now on that vessel, even if it be a sailing ship, will be subject to steamship inspection and will have to abide by the requirements regarding certificated officers. Subsection 2 deals with an entirely different matter. It has to do with exemption from registry.


Douglas King Hazen: I am afraid this amendment is going to work a great hardship on boats engaged in coastal trade along the shores of the bay of Fundy. I am not familiar with their business, but sometimes I go down to the wharves in the harbour in the city in which I live and I see these boats. I could name some of them. They have sails, and they also have an engine to assist them. These boats are engaged in coastal trade, and they go along the shore at no great distance from land. A definition of this kind, coupled with the other sections of the act, will work hardship in many cases. The hon. member for Charlotte should know more about the matter than I do, because he is more familiar with that line of business. I think it will be hardly fair to some of these people.


John Thomas Hackett: Does this mean that the goelette with the auxiliary engine, even though it is of 150 tons, is to be treated- as a steamship?


Lionel Chevrier: That is right. The answer is yes, and that is exactly what Mr. Justice Lucien Cannon recommended in his report dealing with small boat navigation. In the lower St. Lawrence particularly, there are small boats which are-I do not like to use the phrase "menace to navigation"-a problem at any rate for the Department of Transport, and the object was to see whether ways and means could be found of meeting that situation. Some of the recommendations of the commission were carried into effect otherwise than by legislation and this is the first occasion on which it has been possible to bring them under steamship inspection.


John Thomas Hackett: Was the finding to the effect that the goelette was a problem-I will not say menace-because it had an auxiliary engine?


Lionel Chevrier: No.


John Thomas Hackett: Because it would seem that no effective attempt is being made to
	I
solve the problem by merely taking these goelettes, which are more manoeuvrable and which could be less of a problem by reason of the auxiliary engine, and making them steamships, leaving the sailing ship free from the rules that apply to steamships.


Lionel Chevrier: I hope I did not create an unfavourable impression in my hon. friend's mind when I used the word menace. Mr. Justice Cannon certainly never used that expression in his report. What I did have in mind was that it was a problem, and he was anxious to see that it should be solved. I think the hon. gentleman will realize that it is in the interests of safety of navigation on our waters that everything should be done within reason to avoid collisions, and it was found by the various committees that dealt with the matter that the goelette was a small boat and should be subject to the ordinary laws of steamship inspection. That applies equally to the vessels which are now in the coastal trade in the bay of Fundy, referred to by my hon. friend.
Why should it be such a hardship? He says it will be a terrible hardship.


Douglas King Hazen: I did not say exactly that.


Lionel Chevrier: Why should it be a hardship when the object is to safeguard navigation and the protection of life? It is not done in order to penalize people who should not be penalized. It is done with one thought in mind, and that is safety of navigation. Why are our laws amended? Why are the highway laws of the provinces amended from time to time? Sometimes motorcar drivers do not like the amendments, but these laws are amended in order to avoid accidents. That is the intention of this legislation.


John Thomas Hackett: I understand that, and I am not criticizing the attempt to make life at sea less perilous. But why do you exclude the sailing ship from the legislation which is being enacted for purposes of safety?


J. G. Léopold Langlois: Before the minister
answers, I think I should add a few remarks which I am sure will clarify the situation. I must first state to this committee that I am a member of a St. Lawrence motor vessel association, and I am also their elected vicepresident. We carefully considered the conclusion of Mr. Justice Cannon's report at our last annual meeting in December. The association feels that some legislation should be passed regarding the classification of ships of that special type, and that some regulations should be passed regarding the certificates which we are to require from their masters.

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But the association is of the opinion that the special class this section creates should not be limited to 150 tons. As I said when speaking a while ago, it is just like permitting the driver of a jeep to go without a driving permit while you require it of a driver of a bus or a truck on the highways.
I want this to be clear in the minds of the members of this committee. We are not objecting but rather are pleased to get rid of this system of tolerance under which we were regulated before. We know perfectly well that those ships were not sailing ships, and it was only because of the good graces of the department they were so considered. This situation has led us into all kinds of trouble, as to where the line of demarcation between a motor ship and a sailing ship'was and so on.


Andrew Wesley Stuart: May I ask the hon. member a question?


J. G. Léopold Langlois: Yes.


Andrew Wesley Stuart: Are the boats
he mentioned fishing boats or boats in some other line?


J. G. Léopold Langlois: They are commercial boats.


Andrew Wesley Stuart: They would not be engaged in the fishing industry?


J. G. Léopold Langlois: No, not at all. As I say, there was always trouble as to where the line of demarcation was; when did a ship cease to be a sailing ship and become a motorship? We are pleased to be rid of this problem. I should like to impress on this committee that it is important not to limit the size to 150 tons. If the master of the ship is a danger to navigation when he sails a ship of 151 tons, he is just as much a danger to navigation when he is in a smaller ship, even if the tonnage differs by only a few tons.
I should also like to have the assurance from the minister that the government intends to follow the report of Mr. Justice Cannon. In his report Mr. Justice Cannon wanted a special class to be created for these small ships. He limited that class to ships below 150 tons. I want to be sure that we are at least creating a special class for ships below 150 tons gross tonnage. By the new sections I see that we are putting our schooners, as we call them, under the term "steamship", as far as certificates of masters are concerned. But we do not create a special class as far as inspection is concerned. If this section goes through, we are going to require of the owner of a small schooner the same thing that we require today of the owner of a ship of 1,000 tons gross tonnage. I gave an
example a while ago. Are we going to ask the owner to have two lifeboats on a small ship with a beam of, say twenty feet, where we know there is no room for them? I think I mentioned that before. We should rather take into consideration the territorial waters in which that ship is going to sail and the number of crew she is to carry. The same goes for the certificates we are to require for these captains. Are we to require them to know the secrets of geometry and of celestial navigation? Are we to ask them to use a sextant when we do not even compel them to have one on board? What is the use of asking them to go through nautical schools and learn all about geometry and celestial navigation when we do not compel them to carry the instruments by means of which they can put this theory into practice? If we are to create special certificates for this class of ship, I think we should insist rather on pilotage, checking compasses, the rules of the road, seamanship, et cetera.


William Ross Macdonald: Order. Should the hon. member discuss that matter under the title of sailing ship?


J. G. Léopold Langlois: It comes under another clause?


William Ross Macdonald: It wTill be more in
order under a subsequent clause. I think the committee agreed that we would go through the bill section by section, and that all discussion would be directly relevant to the clause under discussion.


J. G. Léopold Langlois: I think this is relevant because the two clauses are so closely related to one another.


John Thomas Hackett: I think the discussion
is in order. We are dealing with the sailing ship and we are dealing with the type of certificate that should be issued to the sailing ship as defined. I submit with all deference that the discussion is in order.


Some hon. MEMBERS:: Go on.


J. G. Léopold Langlois: As I was saying, Mr. Chairman, we should ask of these future masters of these ships that they should know well what will be required in the type of trade in which they will be engaged. We should limit ourselves to that. If we are going to take into consideration the territorial waters where the ship is going to sail, I think that those limits-and I am speaking for only my own part of the country-should be the St. Lawrence river and the whole gulf of St. Lawrence, including Chaleur bay. I respectfully submit, Mr. Chairman, that due consideration be given to that; because if we
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do not do that, we shall cause prejudice to those whom we want to help by this section.


Lionel Chevrier: I am afraid that there is a great deal of misapprehension about what is proposed by this subsection. If the committee will look at the definition, they will see what it says, and it means exactly what is written there. For instance, the hon. member for Stanstead wanted to know whether a sailing ship was excluded. If a sailing ship has no boilers, no engines or no mechanical equipment, it is not subject to steamship inspection. There are many of these vessels upon the waters, I presume.


John Thomas Hackett: If the minister will permit me to interrupt, what I really wanted to know was if the auxiliaries which are generally found in a goelette excluded them from the category of a sailing ship?


Lionel Chevrier: No. I said that the goelette was covered: by the subsection, and therefore would be required to have steamship inspection. I do not think there is any doubt about that.
Then the hon. member for Gaspe asks why the limit should be placed at 150 tons. If one looks at the definition, he will find that is exactly what is not being done. The former definition mentioned 150 tons, but that is being removed; and the present definition simply states that "sailing ship" means a ship propelled wholly by sails, in order to cover the point made by Mr. Justice Cannon in his recommendation.


Andrew Wesley Stuart: It would appear to me, Mr. Chairman, from this discussion that a certain group who were in the coastal . trade perhaps had equipment which did not * meet the approval of the transport department, and in order to bring them into line it is going to force the fishermen to come into line also. I believe that there should be a provision in this regulation whereby men engaged in the fishing industry should be exempt from these regulations. If I am mistaken in this statement I am about to make, I should like to be corrected. For a crew to apply for and receive sick mariners' benefits, I believe the boat must be of ten tons or more. Many boats engaged in the fishing industry today were built to that specification in order to qualify their crews for sick mariners' benefits. The government now brings in this legislation and the boats will be under steamboat inspection.
I believe this will be harmful to the fishing industry in the bay of Fundy, and in my opinion this type of boat, if used exclusively in the fishing industry, should be exempt from these regulations.


Douglas King Hazen: The hon. member for Charlotte has just referred to the fishing industry and the men engaged in going down to the sea in ships on the bay of Fundy. I referred to those men a few moments ago, and also to the coastal trade along the shore of the bay of Fundy, which I thought would be affected. Since then it has occurred to me that another class of fishermen will be very much affected by this amendment. Those are the fishermen in Miramichi bay and the bay of Chaleur, many of whom have their headquarters at Caraquet and other points in the northern part of New Brunswick. These men have small sailing schooners, most of which are equipped with engines to assist them when there is no wind. If you amend this act as you now propose, by cutting out subsection 9 as it is at present worded and inserting this other clause, then I think you are going to work a hardship on these fishermen as well. You may ask what that hardship is.


Lionel Chevrier: That is just what I was going to ask the hon. gentleman.


Douglas King Hazen: This is just another reason why this matter should have been referred to a committee. Then we would have been sure of our ground and sure of what the act means. I know something about certain sections of the shipping act, but I know less about other sections, and I must say we are now on a section about which I do not know a great deal. But it seems to me the hardship is that, if I understand the regulations correctly, you are bringing these fishermen under certain laws which require them to possess certain qualifications as engineers, masters and so on, before they can sail these ships. These men have acquired great experience over the years-


Lionel Chevrier: That is not the effect.


Douglas King Hazen: Then what is the effect of it?


Lionel Chevrier: The effect is to make them subject to steamship inspection. The ordinary inspection is once a year, but in the case of a small ship not in excess of 150 tons, such as the hon. member for Charlotte referred to, it is provided in another section of the act that the inspection shall take place only once every four years. Surely that cannot be called a hardship on the particular fishing vessels in which hon. members are interested.


John Lambert Gibson: The further the committee goes along with this bill, the more we appreciate what an excellent suggestion it was that the bill should have been studied by a committee. It is such a long

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time since the Canada Shipping Act was opened up in this house that it seems to me time the members here had an opportunity to call before them the examiners of masters and mates, for one thing. Then I believe many hon. members would be glad to have an opportunity of questioning the heads of the steamship inspection branch, because I can tell the minister quite frankly that it often seems to me they are practically a law unto themselves. Personally I have found them extremely competent and fair, but on the other hand some of the requirements they occasionally impose upon some sections of the fishing industry have caused considerable hardship and certainly have brought forth unfavourable comment to me, as a member of parliament.
I do not know whether I am in order at the present time, but I should like to move, seconded by the hon. member for Skeena, that this bill be referred back to the house with a recommendation that it be referred to a specal committee for further study.


William Ross Macdonald: I heard the hon.
member's motion, but there is no procedure under which that could be done at the present time, so I would have to rule that this motion is not in order.


Mr. ARCHIBALD:: I remember a case when I was first elected to this house, in connection with these steamboat inspectors. Take a fishing boat perhaps fifty feet dong. They will go on board one of these wooden hulls and apply the rules that would be applied to a boat built of steel or iron. Here is one thing they [DOT]did. They demanded that a watertight bulkhead be put up in the forepeak. If that were put on a wooden hull, such as they build on the west coast, dry rot would set in. You cannot apply these rules to wooden hulls. Again, they demand a certain number of watertight bulkheads through the boat. Space on these boats is so confined that you might want a way through, but you could not afford one of these manholes clamped on with about six screws; you would require a door. As far as I am concerned, it is not so much that I oppose the inspection. I am all for it, but I do not want a rigid inspection which will be to the detriment of the fishermen in carrying on their work. There should be definite regulations applying to these hulls, not the same as those applying to boats of greater tonnage.


Lionel Chevrier: The regulations are not the same for passenger ships or ships of large tonnage as for the smaller ships. The regulations vary; and of course the steamship inspector has to see that effect is given to the regulations as they exist. In this new type of
sailing ship I would not think the inspector would apply the same regulations that he would apply to the larger hull and the greater tonnage. I find that the inspectors in the department are fair in their attitude. When there is a complaint that they seem to be going beyond a reasonable interpretation of the regulations we ask them to reconsider the position, and generally we have no difficulty in that regard.


J. G. Léopold Langlois: Speaking on this section a short time ago, apparently I was misunderstood by the minister. I am quite aware that this section does not limit the tonnage to 150 tons, but I wanted to convey to the minister that we make no difference when we come to the certificates of inspection we grant for these ships only. In this section we are not limiting it; and the point I want to make is that, if we do not limit it as far as inspections are concerned, we should not limit it as far as the certificates of competency are concerned. I asked if we were going to create a special class, and I was pleased to hear the minister say that the inspectors will not be asking as much of a small ship of that kind as they will ask of a larger ship. The inspection regulations vary according to the class of the ship and according to the limits of the certificate you want. There are different kinds of inspection certificates; we have class 1 and class 2 inland, and the same for home trade. I am glad the minister has mentioned, if he has not actually given the assurance, that the inspectors will not require the owners of these ships to comply with the regulations which apply to the larger ships.


Lionel Chevrier: I think I can give the assurance now. The hon. member for Charle-voix-Saguenay raised a question about the line of demarcation between the north and the south shore. I sent for the map, and I find that it extends from Cap des Rosiers to the west point of Anticosti island, on a straight line to the north shore, which would strike-


Frédéric Dorion: Thunder River.


Lionel Chevrier: Very close to Riviere au Tonnerre, perhaps a bit east of it between Magpie and Riviere au Tonnerre.


Frédéric Dorion: The line should be drawn from Cap des Rosiers to the St. John river. If a line were drawn from Cap des Rosiers to the St. John river it would be satisfactory.


Lionel Chevrier: The committee gave that consideration-the committee in the department-as well as the committee in the other place, and I should not like now to change it. They have given it careful study, and I would prefer to leave it as it is.
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Robert Henry Winters: I should like to say this, that I agree with the remarks of the hon. member for Skeena. While the inspectors in my experience have always shown good judgment, they are bound by regulations and, first and last, they will stick by the regulations, just as they should do.
I do not believe the committee has a clear idea of just what a ten-ton boat is. A ten-ton boat would be about 35 feet long with a seven or eight foot beam. In my part of the country, where we are concerned primarily with deep-sea fishing, a ten-ton boat is strictly an inshore boat. In many instances they are used for scallop dragging. There is a big fleet of scallop draggers about that range in size. All those boats will be obliged to undergo steamship inspection. In many instances they are obliged to build racks on the after part to carry as many as four dories for accommodation of as few as six men. They are obliged to be pulled out on a marine railway; have the tail shaft pulled and have the engine stripped down for periodic inspection. In my opinion, and in the opinion of most fishermen who know these boats, those regulations are too severe. Regardless of the tolerance or discretion an inspector may want to use he is obliged to administer the regulations; and therein lies the difficulty.


Andrew Wesley Stuart: With reference to what was said a few minutes ago, may I point out that the boats in the bay of Fundy which are carrying on in the coastal trade come under the scrutiny of the Department of Transport. Right in my own riding a new boat was built last year. After its purchase, suitable anchors had to be secured, and other chains to meet the requirements of the Department of Transport.
I am not asking that boats in this class should be exempt from these regulations. Any boat carrying on coastal trade should in my opinion have regular inspection, and should qualify for that type of thing. But in the fishing industry you have a different type of work and a different type of boat.
A few moments ago the minister referred to loss of life. I assure the committee that in the maritime provinces the loss of life in the fishing industry, through all sorts of weather, winter and summer, is less than the loss of life in any lake in Ontario for one year. The loss of life is very small indeed, and the men in the industry are most capable. If boats of ten tons are brought under this regulation it will be harmful down there. There will be

protests from every section of the maritime provinces.


Douglas King Hazen: Hear, hear.


Angus MacInnis: I have listened to the point made by the hon. member for Charlotte. If a person owns his own boat and wishes to go out fishing in it, there is not much reason for having inspection. But if a person owns a boat and hires fishermen to work in it, surely the same regulations should operate as if it carried passengers. What a man does with his own life is, within limits, his business; but when he has control of other people's lives, then he must be made to provide the necessary protection. If the government makes these regulations, then I think they should be followed.


Harry Grenfell Archibald: But the trouble is this. I remember, in connection with the halibut fleet, the inspectors insisted that they carry lifeboats, while they wanted to carry dories, which were just as satisfactory. They could not manage lifeboats. It is like putting a noose around one's neck, and then tying a stone to it.
I do not want to criticize the inspectors, because I recognize the necessity of having them. But I believe that the Department of Fisheries should have been called in on this, so that we would know where we were getting.


Lionel Chevrier: I do not think there will be any difficulty about the application of the regulations. I think it will not be found that steamship inspectors will try to enforce on small vessels the same regulations as they would on the larger ones. It follows from these afnendments that no special regulations will have to be made for this type of ship. As I tried to say a moment ago, I am sure the existing ones will be applied with discretion and care.


Douglas King Hazen: Do all steamships under the regulations have to have radiotelegraph installations; if not, what class of ships do?


Lionel Chevrier: The answer is no.


Douglas King Hazen: That they do not have to?


Lionel Chevrier: Yes, that is right.


Douglas King Hazen: Apparently under the regulations some of them do, according to section 40 of the bill.


Lionel Chevrier: The question was as to whether all steamships do.


Douglas King Hazen: If not, what class of ships do?


Lionel Chevrier: Perhaps we could leave that until we reach the section.

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Douglas King Hazen: Would a schooner equipped with a motor, such as they have on the Caraquet coast, classified as a steamship, be obliged to have radiotelegraph?


Lionel Chevrier: No.


John Lambert Gibson: From what the minister has said, so far as the application of the act is concerned the most important factor would seem to be who has a hand in the drafting of the regulations. We have the act, and then we say we will make regulations to give exemptions thereby modifying what the act purports to do. Is there any possibility of getting an assurance from the minister that some of the very able gentlemen on the committee might be called into consultation when these new regulations are being drawn up?


Lionel Chevrier: I believe I can give assurance to the committee that the regulations which will be drawn up will be made having regard to the representations made here, and to representations which hon. members may care to make at a later date. The object of the regulations is of course, to make the act work. If the regulations were not in harmony with the legislation there would be no point in enacting them.
I believe hon. members will find that, once the bill is passed, the steamship inspection branch and officials of the department who are concerned will adapt the regulations to meet the circumstances as they find them, and have regard to the representations which have been made here.


Andrew Wesley Stuart: Would the
minister give the assurance that hon. members who are very much interested will have an opportunity of placing their views before those responsible for the act?


Lionel Chevrier: The hon. member may place his views before me at any time.


Andrew Wesley Stuart: Can the minister assure me that the type of boat to which I have been referring will not be included in these regulations?


Lionel Chevrier: I cannot assure the hon. member of that. I could give no such assurance, because that would not be in accordance with the intention of the act. My hon. friend asks me to say that a certain type of ship will be excluded. I can tell my hon. friend that I shall consider the representations he has made with regard to the type of ship he is interested in and pass them on to the steamship inspection board so that in drafting the regulations following the passage of
the bill an effort may be made to meet the circumstances which exist on the coast in which he is interested.


[Stage Direction]
Section agreed to, on division.
Sections 2, 3 and 4 agreed to.
On section 5-Other grades.
J. G. Léopold Langlois: Paragraph (b) of this section refers to steamships of under 150 tons gross tonnage. If I understand this section aright, we are creating a new type of certificate of competency for the masters of these ships, and I want to submit again that this should not be limited to ships of 150 tons. We have received assurance from the minister that, as far as inspection is concerned, there is to be a special class created for this special type of ship. This section deals with the certificate to be given to the master of the ship, but it is limited to ships of 150 tons. That was the point I intended to convey to the committee, but apparently I was misunderstood.
If we create a special certificate of competency for this class of ship, the certificate should not be limited to ships of 150 tons, it should be limited by the territorial waters in which the ship is going to navigate. I respectfully submit that due consideration should be given to this question. I hope the minister will be able to change the section so that the new class will not be limited to ships of 150 tons.


Douglas King Hazen: What kind of certificate is referred to in this section? Is it a certificate of seaworthiness or a certificate for the officers?


Lionel Chevrier: For the masters and mates.


John Lambert Gibson: I agree with what the hon. member for Gaspe has said. It is just as difficult to navigate a ship of 150 tons as it is to navigate a ship of 1,000 tons. As the hon. member for Gaspe has said, the controlling factor should be the waters in which the ship is to operate. A ship of 150 tons can be just as great a menace to navigation as one of 10,000 tons.


[Stage Direction]
Section agreed to.
Section 6 agreed to.
On section 7-Certificates for naval officers.
Douglas King Hazen: The new section will read:
A person who has attained the rank of lieutenant in the executive branch of the Royal Canadian Navy is entitled to receive from the minister a certificate of service as master of a foreign-going steamship without examination.
Does the term "foreign-going" steamship refer to a ship registered on Canada?
The Budget-Mr. Abbott


Lionel Chevrier: Yes.


[Stage Direction]
Section agreed to.
Sections 8, 9 and 10 agreed to.
On section 11-Exemptions by minister.
John Lambert Gibson: We are
going so rapidly that we cannot even read the sections.
Section agreed to on division.
Sections 12 to 16 inclusive agreed to.
On section 17-Repeal.


John Lambert Gibson: We are putting through this bill and I do not think anyone has the foggiest idea of what it is. It is going through and that is all.


[Stage Direction]
Section agreed to.
On section 18-Certificate of discharge.
John Lambert Gibson: I should like to speak on this section although I have not read it. I shall read it for the edification of hon. members of the committee. It reads:
18. Subsection one of section one hundred and eighty-two of the said act is repealed and the following substituted therefor:
182. (1) The master shall sign and give to a seaman discharged from his ship, either on his discharge or on payment of his wages, a certificate of his discharge in a continuous discharge book in a form approved by the minister, or any form approved by the proper authority in that part of His Majesty's dominions in which the ship is registered specifying the period of his service and the time and place of his discharge, but not containing any statement as to his wages or the quality of his work unless requested by the seaman.
Progress reported.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



THE BUDGET


Hon. DOUGLAS ABBOTT (Minister of Finance) moved:: That Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
He said: Mr. Speaker, in the budget speech last year I was able to say that the circumstances of the time were much more favourable than in any of the immediately preceding years. This year I can again report, so far as

Canada is concerned, an unprecedented rate of economic activity and a new record of progress in our government accounts. But no minister of finance can survey world events of the last twelve months without thinking more in terms of problems and difficulties than of progress and achievement. From the time of Stalingrad and El Alamein until last year the western world had seen its fortunes improve year after year, first in war and then in reconstruction. Last year brought a check to this advance and for many countries a series of troubles and misfortunes. As between nations, strife and bickering increased and once more the threat to political security became a real one. There is still cause for optimism, both in regard to the great political issues and in economic and financial affairs, but it must be an optimism tempered with a realistic appreciation of the formidable difficulties that must be overcome if we are to achieve peace and prosperity for the world and for Canada.
It has clearly been this international background that has exerted the dominant influence on our own affairs during the past year. Of its political aspects I need not speak tonight. They have been on the tongues and in the hearts of us all in the last year and we have recently had in this house a masterly exposition of their bearing upon Canada's external relations by my colleague, the Secretary of State for External Affairs. In the economic field, adverse weather in western Europe of an extreme surpassing the records of centuries, following upon the losses and destruction of war, greatly intensified troubles of a more persistent nature. Britain tried without success to re-establish the convertibility of the pound and to forgo discrimination in her import controls. One country after another was forced to reduce consumption and restrict imports in order to conserve rapidly dwindling exchange resources. This gathering crisis in international finance and trade led not only to the recasting of reconstruction plans on less ambitious lines but also to an intensive re-examination of the economic position and prospects of Europe and ultimately to the formulation and enactment of the Marshall plan, or, as it is now called the European recovery program. The enactment of this large-scale, well-thought-out, great-hearted approach to the restoration of international economic health represents, in my opinion, a triumph not only for the individual statesmen who conceived and moulded it but also for the United States congress which rose to this occasion as it has risen to other great emergencies.

The Budget-Mr. Abbott
The impact on Canada of the developing financial difficulties of countries in western Europe and elsewhere was reflected in our own exchange difficulties. We faced limitation on our sales abroad for currency which we could use in the United States, and we had to sell too much of our production on credit. Meanwhile, because of our high level of economic activity and prosperity, our imports were going up by leaps and bounds, both in quantity and in cost. The surplus in our current transactions with other countries dwindled and threatened to disappear. Our sales on credit continued in many cases because of commitments already made. The consequences, of course, are now all too familiar to this house. Our exchange reserves were reduced to dangerously low levels. We were forced to impose distasteful restrictions on our imports of both consumer goods and capital goods. We found it prudent to arrange for a credit from the Export-Import bank of Washington. We have tried to restrict our domestic consumption, particularly of relatively less necessary articles which have a high United States dollar content. We have taken other positive measures to increase our exports. In these and other ways we have endeavoured to re-create that surplus in our balance of payments which must be the basis for any re-establishment of our international position.
From our point of view, the operation of the European recovery program will be of real importance. It will be important, first, in its effects in strengthening those countries which have been and will in future remain essential markets for our products and, secondly, in making it possible for us to sell our exports to these countries now for United States dollars which we can use to pay for our own imports from the United States. These are clearly great advantages, but I wish to emphasize that the program will not in itself solve our exchange problem. It should help to assure us much larger cash markets for our exports than would otherwise be available but we must make the goods available for export by increasing production, by being sparing in the use of imports and by holding our domestic consumption in reasonable check. We must re-create and make as large as possible the current account surplus to which I have referred. The magnitude of that surplus will determine two things: first, the extent to which we can replenish our exchange reserves and, second, the extent to which we can continue to play our part in providing assistance to the European nations which must be put back on their feet.
Clearly our own exchange difficulties will severely limit our capacity to provide such assistance, but I think it would be the desire of this house and of the Canadian people to continue to play our part in this field to the extend of our. capacity. Our exchange reserves are still abnormally low. At the end of March they were $607 million, of which $50 million represented drawings upon the Export-Import bank loan. At the end of April they were $668 million, including S80 million drawings upon the loan. These totals, however, reflected not only the use of that loan but also the effect of certain transactions of a special or nonrecurring character. Nevertheless, making due allowances for any abnormal factors on both the favourable and unfavourable sides, I think we have a right to be gratified with the first six months' operations of the emergency program we put into effect last fall. We have stopped the abrupt decline in our exchange reserves and have started to rebuild them; we have reduced our imports from hard currency areas and obtained an increasing proportion of our needed supplies from other sources, and we have had an encouraging increase in our exports to the dollar area as well as to the world as a whole. But our cash reserves must still be increased substantially before we can regard our exchange position as satisfactory. W'e can neither be too hasty in relaxing the irritating controls we have had to impose nor too optimistic in appraising our capacity to give further assistance to world recovery.
Our domestic economy has continued to boom, despite the international shocks that we have received and despite the inroads we have made during the last three years into our backlog of demands accumulated during the war. The pace of economic activity has been such as to strain our resources. Shortage of labour in certain sectors of the economy has been acute, and despite the substantial expansion of our industrial capacity the shortages of certain categories of materials and/or products have been by no means eliminated. Our national production has increased but only moderately so on an over-all basis when account is taken of the effect of adverse weather on crop production last year. In any case, once full employment is reached as it was last year, any expansion in total output is bound to be limited and gradual. Our gross national production in 1947 exceeded $13 billion, up by 13 per cent over the previous year, but most of this increase, was due to the rise in prices and wage rates.
When one examines the figures of national income, production and expenditure in 1947, which are set forth in the white paper serving as an appendix to this budget-and I hope its
The Budget-Mr. Abbott

improved form will prove more helpful to hon. members-it is notable that in 1947 expenditures by governments on goods and services were reduced, despite the increase in prices. [DOT]This reduction, which was confined to expenditures of the dominion government, arose, of course, from the virtual disappearance over the past year of our purely war and demobilization activities. The largest total increase in dollar expenditures in 1947 over previous years was by consumers, but the proportionate increase was small and when allowance is made for changes in prices, the increase in the volume of consumption was in fact on only a moderate scale.
The most striking feature of the national expenditure last year and now is the high level of capital expenditure on new construction, industrial plant and equipment, public utility projects and residential housing. It is this, together with the high level of domestic consumption and of exports, which is keeping us so fully employed and, indeed, straining our economic capacity. It is also one of the main forces behind our huge volume of imports. The very large increase in these expenditures between 1946 and 1947, both in dollars and in real terms, brought the totals up to levels far beyond anything ever before experienced or expected. A survey of intentions, recently made by the department of reconstruction, shows that further substantial increases in such expenditures are anticipated for 1948, but these increases are largely accounted for by higher costs. There is some evidence here and there of industrial expenditures being restricted now or deferred because of higher costs, but the backlog, particularly of utility expenditures and housing demands, is very large and it seems unlikely that there will be any serious falling-off in this strategic item of national expenditure despite a wholly understandable reluctance on the part of business to pay present high costs. This government has, of course, been deliberately restricting its own expenditures on construction and equipment during the last two years, partly because of the high cost of such work under current conditions but more fundamentally because of its desire to keep excessive national expenditure within bounds and to defer wherever possible the construction of useful projects until the time when private expenditure will be lower and additional government work will help to maintain employment and income.
To most of us, the rise in prices has been the immediate pressing fact of our economic life. There is no need to go into statistics and details here. The main index figures are set forth in the white paper. Our prices have gone up

quite substantially in the past fifteen months. They are now closer to American levels than previously, but they still lag behind in terms of the total increase over pre-war figures. In most countries prices have continued to advance substantially and the upward surge of our prices has been part of a worldwide movement exerting its influence on us through imports and exports. In Canada, moreover, the process of removing subsidies and price ceilings has now been nearly completed, leaving prices free to adjust themselves to cost and market conditions once again. For these and other reasons, Canadian prices have moved up much more closely in line with world prices for imports and exports, an adjustment that we had to face at some stage and which has been made much easier by the return of our dollar to parity with the United States dollar. These adjustments have accounted for a substantial part of the increase in our prices since the last budget. However, part of this increase is also due to the fact that the aggregate volume of expenditure in Canada is pressing upon our limited supplies of resources and manpower. As consumers, we are bidding eagerly for a limited supply of goods, throwing into the auction not only most of our current incomes but also part of our past savings and additional funds obtained by instalment credit. As producers, we are spending a record-breaking volume of funds in the construction, repair and equipment of industrial plants, commercial' establishments, public utilities and housing, bidding against each other for a highly limited supply of construction labour and materials. An inevitable result of this endeavour to do too much too quickly is the persistent upward pressure on the price level. Whether undue advantage is being taken of this condition of eager demand and short supply and whether there are other factors in the situation are questions which have been under prolonged investigation by a special committee of this house.
The policy of the government has been to return to a free price system and to moderate the inevitable increases in prices at this time by whatever fiscal and other methods are possible under such a system. Neither this government nor this parliament has either the political mandate or the constitutional power to maintain indefinitely in peacetime a strait-jacket of controls over prices, production and distribution. Our whole economy has been organized to operate on a price basis through private incentives and private initiatives, not by centralized direction. I believe that the great majority of Canadians want it to work that way, want it to work by free and open competition and not by government direction

The Budget-Mr. Abbott
on the one hand nor on the other hand by direction of the irresponsible power of monopolies, cartels and other organized groups.
It would have been more comfortable had we been able to return to a free price system under general conditions of stability, balanced production and abundant imports. Fate did not afford us that opportunity. We cannot now retain over-all controls and subsidies in the hope that conditions will soon return to normal. We have consequently removed controls on all but a very few items where shortages are so acute that no reasonable increase in price could either correct them, on the one hand, or bring about a better distribution on the other. We have, of course, been forced, against our will, into emergency control of imports and of a few prices where import restrictions have produced temporary shortages, but this exceptional necessity does not alter or vitiate the basic policy which I have described.
Apart from residual measures of price control and the operation of the Combines Investigation Act, the government has actively countered inflationary pressure by its budgetary and financial policies. It has also done what a government could do to meet inflationary pressure by the most fundamental method, that is, by stimulating increased production to satisfy excessive demands.
Our budget policy has been clear and explicit. We have striven to bring expenditures down and to keep them down. War activities have been curtailed as rapidly as possible. Economy has been observed in the expenditures we have had to make. We have deferred wherever possible expenditures on construction, new equipment and new projects in general. Some we have had to undertake because of the urgency of the need or, as in the case of expanded research facilities, because of the value of the returns we expect to get in the future; but the government and the treasury have been tough in approving expenditures, particularly for new projects, for equipment and for construction. We have been more restrictive than would probably be wise in normal times, and more restrictive, I believe, than private industry has been.
On the taxation side, our policy has been to reduce our taxes where they were impeding work and production, but otherwise to keep them as high as is reasonably practicable in the circumstances, in order to produce a surplus that could be used to make the loans and investments we are required to make and to reduce the huge debt that we necessarily accumulated during the war. Some tax reductions have been made, of course, to encourage 5849-2571
the expansion of production, and some because the burden of income tax on individuals which had to be imposed in wartime was greater than that which could reasonably be borne in peacetime, however urgent the financial or economic necessity. At the termination of our wartime tax agreements with the provinces, we were obligated to reduce our rate of corporation tax, and consideration for the revenue requirements of the provinces led us also to give up some of our wartime taxes. By and large, however, the taxation aspects of our budget policy, as well as the expenditure aspects, have been primarily directed to countering the inflationary pressures threatening Canada in recent years.
The results of our budgetary policy are evident in the figures. Our total expenditures of all kinds were reduced from $5,136 million in 1945-46 to $2,634 million in 1946-47, and there was a further substantial reduction last year to a total of $2,199 million. Our revenues, on the other hand, declined only from $3,013 million in 1945-46 to $3,007 million in 1946-47, and the further decline last year was very moderate, considering the substantial reductions in tax rates, because the total for the year was no less than $2,869 million. From this it is evident that we had a surplus of revenue over expenditure, in the accounting sense, of $670 million in 1947-48, following one of $373 million in 1946-47. This surplus-considerably larger than our largest pre-war total budget and large enough to gladden the heart of any minister of finance-would not be justified as good policy were it not for the need to check inflationary forces at this time and to redeem our debt as quickly as we can under circumstances as favourable as they have been. There will never be a better time to reduce the burden of our national debt. We can do it now without hardship and thereby get ourselves in better position to bear the extra burdens we may have to assume when our national income becomes less buoyant or other untoward developments occur.
In order to judge the effects of our budget policy upon the income and expenditure of the nation, we must make a number of adjustments and take into account our loans and investments, our borrowings and repayments. First, we must correct our surplus of revenue over expenditure for those items included on both sides of the accounts that are essentially bookkeeping entries and not actual payments; for example, the amount set aside in the reserve for loss on realization of our active assets, which is shown as an expenditure but which does not represent any actual payment of cash. These adjustments change our accounting surplus of $670 million to a cash surplus of
The Budget-Mr. Abbott

$727 million. Then we must add the cash we hare received from sources other than revenue, mainly repayments of debts and amounts received in annuity and pension funds. Adding these items to our cash surplus brings our total up to $1,181 million. The largest item of this nature is the repayment by the foreign exchange control board of $220 million of advances formerly made by the government to enable it to acquire exchange reserves, and which are repaid with the Canadian dollars obtained when these reserves are liquidated. Normally we do not make public the amount of our reserves or such figures as these until much more time has passed, because this would assist and encourage speculation. However, because parliament required full and up-to-date information in order to deal intelligently with the emergency exchange measures. I made information currently available during the last few months. I have therefore brought the information up to date but I propose to revert hereafter to our normal policy.
A moment ago I spoke of the total of our cash surplus plus the amounts of cash received from loan repayments and increases in certain funds as amounting to $1,181 million. This amount together with our cash balances on hand at the beginning of the year represented the total cash funds available to the government during the year, after taking care of the year's budgetary expenditures. A substantial portion of these funds was used to make loans and investments which gave rise to income and expenditures in Canada and which cannot, therefore, be considered as anti-inflationary. The principal items of this character were our loans to the United Kingdom and other countries for use in purchasing Canadian exports, which amounted in all to $499 million. Less important items having the same effect were portions of the advances for the Veterans Land Act and to crown companies, and the payments made out of the deposit account which we held for UNRRA. It is difficult to draw an exact line, but it would, appear that the total of these payments likely to give rise to income or directly to expenditure on goods and services would be less than $600 million. The remainder of this large cash fund-over a billion dollars, in fact

was used not for current expenditure nor for loans and investments but to reduce outstanding government debt in the hands of the public and the banks.
The ways in which this was effected are worth noting. The largest part of the total, approximately $536 million, was used to redeem government securities. This was in addition to those redemptions financed by

the issue of new securities. A further small amount of funds was made available in a similar but indirect way to lend money to the Canadian National Railways to enable them to redeem their securities. Still another portion of these funds accomplished the same purpose in being paid over for purchases of our own securities before their maturity. This was done in the operation of the securities investment account, which is the account used for the investment in our own obligations of surplus funds on hand. Last year our security holdings on this account increased by S4-1C million, nearly as much as our net redemption of debt. These securities may be held as temporary investments of surplus cash balances or until the securities mature or are cancelled but their purchase for purposes of this account has the same economic effect as the retirement of debt.
The fiscal policy and action which I have described have been accompanied by a cessation of the wartime increase in the monetary supply and a tightening in the field of credit. The cash reserves of the chartered banks were slightly lower in 1947 than they had been in 1946-when they had reached their peak. The supply of active money-as indicated more accurately than before by the new statistical series recently compiled by the Bank of Canada

reached its peak in October, 1946, at just over $4 billion and has remained during the past year at a level slightly below that figure. Any increase which has taken place in the total Canadian deposits of the chartered banks since October, 1946, has been in the inactive savings deposits held by the public primarily as investment of their savings. It was possible to have this stability in our active money supply because the government was able to reduce its outstanding securities held by the banking system and so largely offset the effect of the substantial increase which took place in chartered banks' loans and non-government investments. I will not endeavour here to go into the details; the important features for 1947 have been explained and emphasized by the governor of the Bank of Canada in his last annual report.
Members of this house and others will also have noted that the government and the Bank of Canada permitted market forces to bring about some increase in the yield on government securities during the past few months. This increase in interest rates at this time is not expected to have any great effect in restraining the high level of capital expenditure that is going on under present circumstances and which is contributing towards an inflationary situa-

The Budget-Mr. Abbott
tion in Canada, but such effect as it may have will be in the right direction. However, I do not believe that any reasonable increase in interest rates would act as a serious brake upon business expenditures under the circumstances of today nor would it serve effectively to persuade consumers to spend less and save more of their income.
Perhaps I might amplify this statement. Looking at the supply side of the market for funds, I cannot attach great importance to the influence of interest rates on the volume of savings by the general public. It is difficult to believe that the mass of small savers are likely to reduce their living expenditures under current conditions, merely because they can obtain a higher interest rate on the money they would save. It is possible, of course, that higher rates would induce the public to increase its purchases of government bonds but this would not be anti-inflationary unless they were doing so by increasing their current savings. Otherwise it would simply represent a switch from idle savings deposits to bonds and have no national economic effect.
Analysis of the demand side of the market leads me to the conclusion that no reasonable increase in interest rates is likely to affect materially the action of the industrial borrower. In that field demand is so intense that it would take a really substantial change in interest rates to dampen his enthusiasm and make him defer his capital project. But a rise in rates sufficient to produce these results would cause so drastic a fall in the prices of bonds and such chaotic conditions that I doubt whether any responsible person would recommend it as a deliberate policy. What we need is a slowing down, not a sudden cessation, of the capital development which has been taking place at a pace which has been straining our resources.
Without any further discussion of the economic background, I propose now to note briefly the main points concerning our expenditures and revenues in the past year and then to consider what the prospects are for this new fiscal year and what policies and measures should be adopted.
As is now the custom, detailed information concerning our expenditures, revenues, assets, liabilities and main financial operations for the last fiscal year are included in the white paper constituting an appendix to the budget, and I would suggest that hon. members and others examine this at their leisure-if the use of that term is applicable to hon. members of this house. The figures are, of course, preliminary, as it takes some time to close the accounts for an organization as vast and varied as the government of Canada.
As I have already stated, our total expenditures amounted during the fiscal year 1947-48 to $2,199 million and our total revenues to $2,869 million, leaving us with a surplus now estimated at $670 million. This is, of course, a large surplus-in absolute terms and in relation to the magnitude of our revenues and expenditures. It is larger than we anticipated last year, because our revenues turned out to be very much higher than we expected. Our revenues are sensitive to increases in prices and incomes and in expenditure 'on less essential or luxury goods and they increase more than in proportion to the rise in incomes and prices at times such as these. In forecasting our revenues at the time of the last budget, we had, of course, assumed a rise in prices and incomes, but we had to be reasonably conservative in doing so. Any minister of finance, should and would, I think, tend to err on the safe side. Our forecast proved to be much too conservative; prices, wages, profits and expenditures, all increased much more than we had anticipated. As a consequence, our revenues from the sales tax, the personal income tax, and the taxes on corporate profits were all substantially higher than we had counted on in the budget. The same was true of customs revenue, because both the volume and the prices of imports were much higher than we had expected a year ago. It was also true of special receipts and credits.
I have already explained the important role which this large surplus has had in helping to hold in check the inflationary forces which have threatened us in the past year. It is these very forces, and the extent to which they have prevailed, that have caused the surplus to be as large as it is. Had we not geared our tax system to produce such a surplus in these conditions, prices would have risen more rapidly than they actually did.
Expenditures have turned out to be slightly higher than I forecast a year ago, but mainly because I have come to the conclusion that this year the amount to be added to our reserve for possible losses on ultimate realization of our active assets should be $75 million rather than the amount of $25 million, provided each year for the previous seven years. This will be sufficient roughly to offset the charges which have been made to this reserve during the past two years and will restore the reserve to a level which I believe will be more in keeping with the magnitude of our assets and the proportion of them which consists of loans to overseas countries.
Apart from this item, our budget forecast of total expenditure turned out to be very close to the mark. Total expenditures, excluding the $75 million appropriation to the gen-
The Budget-Mr. Abbott

eral reserve, amounted to $2,124 million against a budget forecast of $2,100 million. Expenditures in many cases were affected by the rise of prices and incomes, just as revenues were- for example, the higher general level of wages and salaries required higher levels of civil service salaries, and the cost of both materials and construction considerably exceeded the levels upon which the estimates were based. On the other hand, expenditures were held in check in certain cases by the difficulty in getting labour, materials and even contractors for construction projects.
As compared with the previous year, the chief features in our expenditures last year were the great reductions in the war and demobilization expenditures of national defence, and in expenditures on termination and liquidation of war contracts, on cost of living subsidies and on veterans' benefits. There were, on the other hand, increases in payments to the provinces and in expenditures on health and welfare, public works and transport facilities. The details are set forth clearly in the white paper and the salient points are summarized in the text of that document, so I will not take the time of the house to recapitulate them here. It might, however, be appropriate to make the comment that last year's expenditures stilil included fairly substantial items-particularly on subsidies, foreign relief, veterans' benefits, and housing-that are essentially temporary, post-war reconversion requirements which should largely disappear in time, though they may, of course, be replaced by other items.
In discussing the effect of last year's cash surplus upon the economic situation, I have already spoken of the main features of our disbursements by way of loans, advances and investments, and I will not endeavour to repeat any of the comments here. The details are set forth in the white paper. Our borrowing operations during the last fiscal year were not such as to call for much in the way of special comment. I have referred already to the short-term loan, arranged with the Export-Import bank of Washington, about which I gave details earlier this session in the debate on our emergency exchange legislation. The only securities sold to the general public during the year were Canada savings bonds which were on sale throughout the year, a new and second series being offered in October last. Gross sales during the fiscal year were $309 million. Leadership on the part of employers was of great importance, and more employers than ever expressed the belief that it was in their interest to assist in the carrying out of a successful canvass of employees.
During and since the intensive sales period, reports from many employers have testified to the value of the special features of the Canada savings bond and of the payroll savings plan in promoting satisfactory employee relations, stability in family resources and continuity of purchasing power. The net amount of Canada savings bonds outstanding rose from $483 million at March 31, 1947, to $655 million at March 31, 1948.
Figures of our total funded debt and its composition as of March 31 last are given in the appendix, and I need not weary you with that detail here nor, I think, with figures of our debt redemptions during the year. Our net debt, of course, declined during the year by the amount of our surplus, and this reduced the total as of March 31 to $12,378 million. Although this represents a decline of $1,043 million from the peak of two years ago, it is still a very high figure and a reminder of the need we face to manage our revenues and expenditures in such a way as to throw off the maximum practicable surpluses under such prosperous conditions as we enjoy today.
The average interest payable on our funded debt outstanding as of this date was 2-66 per cent, compared with 2'65 per cent a year earlier.



FORECAST FOR 1948-49 BEFORE TAX CHANGES

[Stage Direction]
The total expenditures provided for in the main estimates this year are approximately $1,985 million. Actual expenditures under individual votes normally fall at least a little short of the estimates, because the vote itself is the outside limit rather than the best forecast of probable expenditures. This year, however, with increased prices and salaries, with the development of post-war departmental programs, and with better recruiting results in the armed services, I would not expect the margin between votes and expenditures to be as great as last year, particularly as the treasury board restricted severely the introduction of new projects or of expanded programs in screening the estimates. There will also be substantial supplementary estimates later this year, though I do not expect quite such large supplementary estimates and further supplementary estimates this year as we had last year. The major increases to be covered by supplementary estimates that are now known are additional amounts for veterans allowances and disability pensions and for freight assistance on feed grains beyond July 31. There is a considerable variety of smaller items to be covered as well. In addition, there are some new or increased statutory expenditures, including, for example, the gold

The Budget-Mr. Abbott
mining assistance payments and certain health grants announced last week. Allowing for the same provision as last year for our general reserve against losses on the ultimate realization of active assets, and apart from any expenditure arising from new developments in policy, I would estimate that our total expenditures in this new fiscal year will be very close to those of last year, notwithstanding the increase in prices. I am, therefore, putting down a forecast of 12,175 million.
While it is not possible or appropriate at this stage to make any allowance for major developments in policy not yet decided upon by the government, I feel we cannot afford to overlook the possibility that developing events in the international field may sooner or later make it necessary to increase our expenditures on national defence. The main essentials of the international situation and of the defence problem are already publicly known. As yet, the situation, despite its threatening appearance, has not led the government to believe that an immediate expansion in our defence activities now is necessary. Events are marching swiftly, however, and we must be prepared to change our program on short notice. While we would not be justified in forecasting higher expenditures this year on this basis, I think we must bear these circumstances in mind later in considering our tax policy.
I turn now to the revenue side of our accounts. Assuming no change in existing tax laws, we now estimate that our revenues in this fiscal year will amount to $2,724 million. In making this forecast, we assume some small further increases in wages and other incomes and some prices, a small increase in our national production, normal crops, and no serious industrial disputes or other setbacks to production and income. These are, I would say, conservatively optimistic forecasts. Prices, wages and profits may increase much more if inflationary forces prevail. Good crops would increase our real production and our revenues above what I have assumed and forecast. On the other hand, serious difficulties in our export markets, poor crops, prolonged stoppages of production or an abrupt decline in capital expenditures of Canadian business might reduce incomes and our tax base and make our estimates appear too optimistic. We have made these forecasts carefully, fully conscious that our last year's estimates proved unduly conservative. We believe them to be fair and honest figures, given the assumptions I have made.
With the consent of the house, I shall place on Hansard at this point a summary table
showing the forecast for this fiscal year of revenues from each main source, compared with the actual receipts last year.
Forecast of Revenues
Forecast Actual Fiscal Fiscal year year 19-48-49	1947-48
(Preliminary) (Millions of Dollars)
Customs duties	
25-6	293Excise duties	
200	197Sales tax (net)	
395	372Other excise taxes	
270	268
Income tax
Personal	
675	660Corporate	
520	364Excess profits tax	
60	227Interest and dividends, etc. 38	36Succession duties	
32	31Miscellaneous	
4	4Total tax revenue	
2,444	2,452Non-tax revenue	
190	178-Total ordinary revenue ... 2,634	2,630Special receipts and credits 90	239Grand total revenue	
2,724	2,869
It will be noted from this table that we anticipate in general relatively little change in the aggregate receipts from taxes, $2,444 million against $2,452 million, but substantial changes in the receipts from individual sources of revenue. Excise duties are expected to remain stable at about $200 million. Customs duties last year reflected the abnormal level of imports particularly in the months just prior to the imposition of our import restrictions. As a result of these restrictions and of lowering of tariffs under the Geneva agreements, customs duties this year are being estimated at $250 million against $293 million last year. Taking into account the partially offsetting effects of higher prices, the loss of certain excise taxes and new or increased taxes, we estimate that the total yield of excise taxes, including the sales tax will exceed that of last year by $25 million. In the case of personal income taxes we estimate a moderate increase, the effect of increasing incomes not being fully offset by the fact that the reductions in rates made in last year's budget will be effective for the full year. We are also estimating that there will only be a modest decrease in the combined yield of corporation and excess profits taxes; the excess profits tax ceased to apply to profits earned after January 1, 1948, but the consequent decline in this tax should
The Budget-Mr. Abbott
[Stage Direction]
be largely offset by the rising yield of the ordinary corporation tax due to increased earnings.
In regard to non-tax revenue, I anticipate a moderate increase due to the increasing return on investments and some increase in post office receipts. However, special receipts and credits, which include receipts from sales of war assets, refunds of previous years' expenditures, and various items previously of a bookkeeping nature, are expected to decline from $239 million last year to approximately $90 million during the current year.
With anticipated expenditures of $2,175 million and revenues of $2,724 million, it would appear likely that in the absence of any tax changes we should have a budgetary surplus of $549 million in the current fiscal year. However before coming to the tax changes which I shall recommend, I wish to refer to certain additional transactions in our government accounts which are extremely important from the economic standpoint and important also in appraising the significance of this prospective surplus.
The surplus is in terms of expenditures in the accounting sense and does not include our loans, advances and investments which, in fact, require disbursement in cash as much as do expenditures, have in many cases similar economic effects and differ only in giving rise to an asset or claim which we show on our books. I have already noted some of the important items in this category in speaking of our operations last year. It is not possible to forecast these items for the new year in detail nor with great accuracy, but I think I can safely predict that we shall have some fairly substantial items of this character this year, as we did last year. Provision is made in the estimates already tabled for loans and investments of approximately $51 million, of which $50 million is for various purposes under the Soldier Settlement and Veterans Land Acts and approximately $1 million for the construction expenditures of the national harbours board. We must also anticipate some loans to the Canadian National Railways and other government corporations and enterprises, although at the present time I am unable to forecast the magnitude of these.
The important items in the last few years have been those relating to the financing of exports. In this current fiscal year, we sh&ll not have such large loans to overseas countries as we did last year, but we shall have some. I should expect that, taking into account what we know about our prospective balance of payments for the current fiscal year, we shall have to use an important part of our

budget surplus to finance the excess of our exports of goods and services over our import of goods and services. This will include the Canadian dollars which we must find to finance exports to foreign countries on credit and to buy United States dollars from Canadian exporters which we must add to our reserves or use to pay our debts abroad. This use of Canadian dollars to finance current international payments adds to incomes and national expenditures and should be deducted from our surplus in appraising the real effect of government operations on the inflationary situation. We should deduct in a similar way that part of our domestic loans and investments which will be used on capital expenditures or for other spending purposes.
Moreover, a substantial portion of our redemption of debt this coming year will take the form of the repayment of refundable taxes, and we must expect that a large proportion of this particular type of debt repayment will give rise to current expenditures and cannot be reckoned anti-inflationary. The law requires us to repay before the end of this fiscal year the refundable portion of the taxes on the income of 1943, which we have estimated at $150 million for personal income taxes and $67 million for excess profits taxes. In addition, the government has decided that in view of the increasing difficulty of tracing the movement of taxpayers and identifying them, and in order to save the heavy expenses of a double issue of cheques to over one million recipients, the refundable tax that was collected on that part of the personal income of 1944 that was subject to such tax, will be repaid at the same time as the refundable tax on 1943 incomes. This will mean an additional refund of $80 million or a total for the two years combined of approximately $230 million. That part of these refundable taxes and of our loans and investments that will be used to finance expenditures will account for a large part of our surplus and only the remainder will have an important anti-inflationary effect. Consequently, it is upon this remaining portion that we should concentrate in considering our budget policy.

[Stage Direction]
From the information I have given, it is clear that if our budget problem were simply and solely to find enough revenue this year to meet our expenditures, defined in the narrow accounting sense, we could afford to reduce taxes by a substantial amount. But that is not our budget problem, and if we approached our affairs in such a shortsighted manner, we would betray the responsibility which the people of Canada have entrusted to us.

The Budget-Mr. Abbott
In the first place, we must look further into the future than this year. Quite apart from any effort to influence the economic situation, which I will consider later, we must bear in mind that times are exceptionally good at present, economically and financially, and it would not be prudent to rely on such conditions continuing indefinitely. We should now be preparing for times when markets and employment are not so favourable-or at least when we will have to spend money to support them and to meet other expenditures that turn up when business turns down. Our surpluses now are temporary surpluses and will quickly disappear when we have more difficulty in selling our goods abroad and less capital expenditure by business in Canada. We should, therefore, be putting away what we can now for a rainy day. In our case, we put it away by paying off debt.
Secondly, we face today very great uncertainties in international affairs and, as I said, we may be confronted at any time on short notice with a large increase in expenditures on national defence. As long as that remains a possibility, we should have some considerable margin of safety in our revenues to take care of such an increase in our expenditures; otherwise, *we would have to add to the other disturbing effects of an expanded defence program the complications of sudden inflationary expenditures or sudden increases in taxes. A substantial surplus will help to keep our powder dry.
Thirdly, this government and this parliament must accept a considerable measure of responsibility for influencing and, indeed, directing economic trends in so far as that ran be done within the framework of our political and economic principles. Were we only a small municipality, unable to influence the mighty economic forces determining the prosperity of our citizens, it would still be wise for us to look further ahead than this year and to put something by at present. But for those charged with responsibility of directing the affairs of the nation as a whole, the case is very much stronger. What we do will affect the fortunes of our citizens and their cost of living. If we diverted our prospective surplus into a reduction of taxes now, it would add hundreds of millions of dollars a year to the already intense demands of Canadians for goods and services-but it would add nothing to the volume of Canadian goods and services available for sale. People would try to buy more, but there would not be more to buy. unless the effort to get it resulted in more imports that we cannot afford and which we would have to shut out somehow or other. Prices would be sure to rise. Some people 5849-258
would profit, but others would lose out to the higher cost of living. The apparent benefits of tax reduction would prove to be a mirage except to those strong or fortunate groups which can profit more than they suffer by higher prices.
There is another aspect to it. As a nation we are struggling now to live within our means so far as foreign exchange is concerned, and to get enough reserves to enable us to be masters of our own affairs and not dependent on what we can earn from month to month or on help from others. In this emergency we are having to use restrictive government controls that most of us dislike and that are alien to our whole way of doing business. We want to get rid of them as soon as we can. If we do not, they will not only stay but spread into other fields. To get rid of these controls, we must build up an export surplus-we must try to export more or import less, or both. We cannot do that if we are trying at the same time to increase substantially our purchases of goods and services in Canada-because we are already producing and selling practically all that our resources of labour and material make possible. Therefore, it would not be sensible to make any general reduction in our taxes now and thereby increase the amount that people and businesses can spend on goods and services. To slash our taxes now would fasten controls more securely on our national life.
I believe that all parties in this parliament and most Canadians share the view that the national budget is no longer merely a matter of the government accounts that should be balanced every twelve months on some financial rule of thumb. We view the national budget now as an integral part of the nation's business, influenced by and having an influence upon the state of employment, income and prices. I think we would all agree that in times of widespread unemployment and insufficient demand for goods and services our expenditures should be increased in order to support employment and incomes, and that they could and should exceed our revenues under such conditions. Now we are at the opposite extreme and we should follow the opposite course. We should deliberately budget, as a matter of policy, for substantial surpluses in times like these. Only that way can we hold inflationary forces in check. Only that way, over the course of many years, can we make up at least in part for the deficits we shall have in less favourable years and prevent an indefinite spiralling up of our national debt, already at a very high level as the sequel to two wars. Now is the time to lay the
The Budget-Mr. Abbott
[Stage Direction]
foundation for employment budgets in future, while fighting inflation at present.
Some friends have suggested to me, seeing this surplus in prospect, that I should adopt the device of burying part of it in some sort of reserve for future expenditure on national defence, national development, or social security. Such an arrangement, they say, would make the surplus less visible and less of a temptation to those who, for one reason or another, feel that taxes should' be reduced or expenditures increased, notwithstanding the wisdom of acting otherwise. This could be done. We could announce, with appropriate fanfare, the creation of a national development fund or a national welfare fund' -and put into it several hundreds of millions of this year's revenues and provide that the fund was to be used under some specified circumstances in the future. This would, of course, be simply bookkeeping; it would alter nothing in reality; it would simply complicate a situation that is more easily understood as it is now. Bookkeeping funds for meeting future liabilities have their place 

but only, I think, for meeting contractual liabilities incurred now to be paid in the future, like insurance or pension or annuity liabilities. As a means for transferring revenues from one year to meet expenditures in another they are unnecessary, if parliament and the public can appreciate the relatively simple reasons for budgeting for surpluses in good years and for deficits in poor years. I believe the simple and straightforward presentation of * the budget problem is the best one, and that hon. members of this house and others outside will support the policy I propose on its merits without the support of artificial devices.
The arguments of general policy are reinforced by specific circumstances applying to the important types of tax. In the case of the personal income tax, we have already had *three substantial reductions since the end of the war, and ours, I believe, is now, by and large or for the majority of people, the lowest income tax in the English-speaking world, with the highest exemptions. It has been reduced to levels which, under present circumstances, offer no serious impediment to work or initiative-at least, none that could be removed by any further reasonable reduction. Its details have been improved-and we will continue to improve them. Its administration has been greatly strengthened and, as the larger staff overtakes accumulated arrears, it will continue to gain in efficiency, smoothness and fairness.

In the case of corporations our tax, together with provincial tax, is substantial but slightly lower than that in the United States, and corporations in both countries are thriving at present, to say the least. There appears no need to reduce our corporation tax either on grounds of incentive or to release more corporate profits for capital expenditures or for dividends. In this field, too, there have in recent years been considerable improvements in detail that make the tax more equitable and less burdensome in special and unusual cases.
In the field of commodity taxes, we have still retained in many cases the higher rates introduced during the war, as well as the basic rate of sales tax adopted before the war. We have dropped, of course, the war exchange tax, because it was discriminatory and because it was adding substantially to costs of production. We have also removed our sales tax from equipment and machinery, used in production, to help keep costs down and improve our competitive position. We have reduced our tariffs as a part of a deliberate plan to encourage and develop trade. We have relinquished the important field of gasoline taxes wholly to the provinces. We have repealed the tax on sugar and lowered the duties on tea and coffee to help keep the price down. We have repealed the sales tax on the domestic use of electricity. We have made other more specific changes to meet specific problems or for special reasons. But we have not reduced the heavy wartime taxes on tobacco, liquor and other beverages or the taxes on a wide range of those less essential goods or services considered proper means of raising the additional revenue required for war and reconversion needs. The present circumstances are not appropriate for far-reaching reductions in these indirect taxes. Demands are so excessive in relation to supply that we cannot rely upon competition or other market forces to ensure that the consumer would get the benefit of any general or widespread reductions we might make. Producers or distributors are in a favourable position to gain whatever the treasury gives up, and they could probably find plausible reasons for doing so, notwithstanding the high levels of profits at present.
In regard to possible reductions in the income tax, there is another consideration which I feel I should explain at greater length, and that is the comparison between our levels of income tax and those in the United States-a comparison which appears to be regarded as one of considerable importance. I must confess that I am repeatedly surprised that from this

The Budget-Mr. Abbott
comparison conclusions are almost always drawn unfavourable to Canada, despite very strong evidence to the contrary.
In order to set forth the facts as clearly as possible, I would like now with the consent of the house to place on Hansard tables comparing the Canadian and American taxes at various levels of income:
Comparison of Personal Income Tax in Canada and United States for 1948 These comparisons are made up on the following assumptions
Canadian Tax
1.	No allowance made for medical expenses, pension contributions, charitable donations, or other deductions. Taxpayers claiming such deductions would pay less tax than shown.
2.	All income over $30,000 assumed to be investment income and subject to additional 4 per cent tax.
3.	Family allowances for children taken into account as being in lieu of income tax relief for children.
United States Tax
1.	Deduction of 10 per cent of income up to a maximum of $1,000 claimable by every taxpayer in lieu of deductions for medical expenses, charitable donations, state taxes, etc.
2.	All taxpayers assumed to take full advantage of the provision for splitting incomes between husband and wife.
3.	New York State income tax included in calculation.
Single Taxpayer-No Dependents
Amount by which
U.S.A. Tax Canadian
Income	Canadian	including State	tax exceedsTax	Tax	U.S.A. T;760 ...	5	800 ..	.. 5	20	900 . .	. . 16	35	1.000 . .	.. 29	50	1.100 ...	.. 44	65	1.200 ...	.. 61	81	1.300 . .	. . 80	97	1,400 ..	.. 100	113	1,500 ..	.. 120	129	1.300 ..	.. 180	177	32.000 ..	.. 2 20	209	112,250 ..	.. 270	249	212,500 ..	.. 320	290	302,750 ..	.. 370	332	383,000 ..	. . 420	376	443,500 ..	.. 520	471	494.000 ..	. . 620	566	545,000 ..	.. 835	760	757,500 ..	. . 1.465	1,342	12310.000 ...	.. 2,253	2,034	21920,000 ..	.. 6.515	6,250	26525,000 ..	. . 9,015	8,918	9730.000 ..	.. 11,728	11,762	50,000 ..	.. 23,456	23,893	75,000 ..	.. 39,418	41,025	100.000 ..	.. 56,631	59.697	200,000 ..	.. 133.056	140,310	
5849-258i
Married taxpayer-No children
Amount
Income	Canadian tax	U.S.A. tax including state tax	by which Canadian tax exceeds U.S.A. tax$	$	$	'%1.400	10	1,500	25	1.600	...! io	40	1.700	.... 22	55	1,800	.... 36	70	2,000	.... 70	100	2,250	
120	137	2,500	.... 170	174	2.750	.... 220	212	83.000	.... ' 270	251	193.500	.... 370	332	384,000	
470	412	585,000	.... 670	578	927.500	.... 1,260	1,048	21210,000	.... 1.990	1,556	43420.000	.... 6.140	4.512	1,62830.000	
11.315	8,366	2.94950,000	.... 23.043	18,078	4,96575,000	.... 38,968	32,245	6,723100.000	.... 56,143	47,841	8,302200.000	
132,493	119,429	13.064
Married Taxpayer-Two Children of Family Allowance Age
Net
	position		Amount
	of		by
	Canadian		which
	taxpayer		Cana-
	after		dian
receiving	U.S.A.	net taxaverage	tax	positionfamily	including	exceedsCanadian allowance	State	U.S.A.Income	tax payments	tax	tax$	$ $	$	$1,800	10 + 134	1.900	22 + 122	2,000	36 -f 108	2,250	80 4- 64	2,500	130 4- 14	2.750	180 36	12	243.000	230 86	50	363,500	330 186	125	614.000	430 286	203	835.000	630 486	364	1227.500	1,208 1,064	797	26710,000	1,930 1,786	1,299	48720.000	6,040 5,896	4,120	1,77630,000	11.205 11,061	7,878	3,18350,000	22,933 22,789	17,439	5,35075,000	38,848 38,704	31,544	7,160100,000	56,013 55,869	47,068	8.801200,000	132,343 132,199	118.502	13,697
The figures which are included in this table for the United States give full effect to the recent reductions enacted by congress, including the option of splitting the income of married persons between husband and wife. They take account, too, of the standard deduction
The Budget-Mr. Abbott
[Stage Direction]
of 10 per cent of income in lieu of other deductions, which I understand is claimed by 85 per cent to 90 per cent of American taxpayers. On the other hand, the Canadian figures represent the maximum possible tax that would be paid in Canada, with no deductions counted for contributions to charity or pension funds, and no deductions for medical expenses. They are based as well on the assumption that all income in excess of $30,000 is investment income, subject to the additional 4 per cent tax. In the case of taxpayers with children, the receipt of family allowances is. taken into account in the comparison, since these are clearly understood to be in lieu of additional income tax exemption for persons subject to income tax. The United States, of course, has no corresponding allowances. The American figures include taxes payable in New York state as typical of the taxes now levied by more than half the states. Any lack of comparability in these figures is such as to make the Canadian tax appear high by comparison.
Despite the common conception of lower taxes in the United States, it is clear from this table that at many points the Canadian tax is lower. Indeed, taking into account the number of taxpayers at various income levels, I am able to make what is to me the striking statement that three out of every four Canadians would pay more income tax on their present income if they lived in the United States rather than in Canada. As these tables show, it is mainly in the fairly well-to-do class of married taxpayers that American taxes are appreciably lower, and that result is now achieved principally by the unique feature, recently adopted in the United States, of allowing the splitting of income between husband and wife for tax purposes-a feature which was extended to the whole of that country when there appeared no other means of achieving equity as between those states where this privilege existed through local laws and those states where it did not. Were this provision not a part of the American law, there would be only a moderate difference in the amount of tax payable, even at these high levels of income for married persons. I know it will be difficult to dissipate the general misconception that seems to prevail regarding the respective levels of personal income tax in the two countries, but I venture to think that any thoughtful person who takes the trouble to examine the figures carefully will conclude that most statements made in this connection, if not entirely wrong, are at least considerably exaggerated.
[Mr. Abbott.l

[Stage Direction]
After considering all these matters. I have come to the conclusion that the budget this year should contain no general tax changes. There are a number of specific changes which should be made to improve our tax system and which I think can be made for that purpose, without seriously worsening the inflationary danger or seriously offending against the principles which we should follow in general. These I shall now propose and explain. They will involve reductions in taxes of types and in places where reductions will be most helpful. But they are to be regarded as exceptions rather than the rule. The general policy for this year should be to use our surplus to reduce our debt and thereby to fight inflation in the manner most suited to our type of government and our way of life.
In the field of personal income taxes, I am proposing one change of significance which will, I believe, be accepted with commendation on all sides of the house. Having in mind the large number of elderly people living on small fixed incomes, and out of consideration for the particular trials and increased expenditures that usually come with advancing years, I am proposing that an additional exemption of $500 be granted to a taxpayer of sixty-five years of age or over. Many of these elderly people living on small pensions or other forms of fixed income with no opportunity to participate in the increased wages, salaries or profits enjoyed by other sections of the community, are particularly hard hit by the higher costs of living which present boom conditions have brought about. This group of our citizens is entitled, I think, to special consideration at this time. This special exemption follows a precedent established both in England and in the United States, and its effect in Canada will be that no taxpayer of sixty-five or over will pay tax until his income exceeds $1,250 if he is single, or $2,000 if he is married. This change will apply for 1948 and will cost about $5 million in revenue for a full year.
In order to encourage the continued search for new sources of minerals, oil and gas in the interest of developing our natural resources and conserving United States dollars, I am also proposing to extend for another year the allowances and tax credits now granted the mining, oil and gas industries in respect of exploration and off-property drilling expenses.
It is also proposed to increase the penalty rates applying to unpaid taxes from the present 4 per cent and 7 per cent to 6 per cent and 8 per cent respectively. These higher penalties

The Budget-Mr. Abbott
will provide an additional spur to the payment of the proper amount of tax on the due date and contribute to greater equity as between individual taxpayers. At the same time, I feel that it will also be appropriate to make provision for the payment of interest by the government on taxes overpaid by the taxpayer. I am therefore proposing that interest of 2 per cent per annum be paid where the amount of overpayment is $5,000 or less, and one-half of 1 per cent on the excess over $5,000.
Some hon. MEMBERS:: Oh, oh.


Douglas Charles Abbott: I do not wish to encourage the lending of money to the government at high rates of interest, and the rate of two per cent is the rate which was paid on compulsory savings.
As hon. members and the public at large will recall, I introduced at the 1947 session of parliament a revision of the Income War Tax Act which has become known generally among those interested as Bill 454. It will be remembered that this bill received only first reading at that time, and was allowed to stand over for study by members of parliament, lawyers, accountants, businessmen and taxpayers generally throughout the country in order that we might have the advantage of the broadest possible consideration of this [DOT] important measure. I may say that the opportunity thus afforded to study the bill has resulted in a very thorough examination of its provisions and the various individuals and organizations which have submitted briefs are to be congratulated on the constructive nature of their suggestions. These have been of great assistance to myself and the officials engaged in redrafting the bill.
In keeping with the intention I announced last year, I plan to reintroduce the revised bill as soon as the budget resolutions have been disposed of in the expectation that the new measure will be enacted this year. However, because its final passage may not come until towards the middle of the year, I am now proposing that its effective date be postponed until the beginning of 1949, rather than have it apply retroactively to the beginning of the present year, as I had earlier planned to recommend. Anticipating the adoption of this proposal by parliament, I will introduce some minor amendments to the present Income War Tax Act applicable to 1948 which will anticipate certain features of the new bill that it is felt desirable should be brought into effect for the present year. These amendments are of relatively minor importance and will be dealt
with fully when we are discusing the 1948 amendments to the Income War Tax Act.
In the field of commodity taxes, I have felt it necessary to frame my proposals in the light of the government's general fiscal program, and am, therefore, not proposing any sweeping or drastic reductions in tax rates. I have considered, however, whether anything might be done by way of a direct contribution toward reducing the cost of living at one of those points where it has been felt most acutely, that is, in the cost of food, and where it would create little additional inflationary pressure. As a positive step in this direction I have decided to propose to parliament that substantially all of the items of food not now exempt from the sales tax be put on the exempt list from tomorrow onward. As I have said before in this house, most of the standard food items such as bread, butter, milk, cheese, eggs, salt, sugar, fresh fruit and vegetables, and fresh meats are now exempt from sales tax, and the items taxable at the present time are comprised largely of canned, packaged, processed or otherwise prepared foods. Under the proposed change practically all the items in this latter group will be exempt from tax. In general the new exemptions will include fruits and vegetables, whether canned, frozen or dehydrated, including jams, jellies and marmalade; fruit and vegetable juices; prepared meats and poultry, whether canned, smoked, cooked, frozen or dried; canned soups; canned fish; prepared cereal breakfast foods excluding beverages; biscuits and cookies; yeast and ready mixed flour preparations; spaghetti and macaroni and one or two other items of lesser importance. The revenue loss involved in granting these exemptions will be of the order of $20 million in a whole year.
It is my hope that the removal of the 8 per cent tax from this long list of items will result in a reduction in prices as soon as the reductions can be passed along to consumers. I appreciate that this tax is imposed at the point of manufacture or wholesale distribution, and has already been paid, therefore, on goods now in stock in retailers' hands. At the same time, I wish to make the position clear that there will be no refunds or credits of tax to manufacturers or wholesalers in cases where they accept the return of goods previously delivered in respect of which taxes are repealed by this budget.
Again having in mind the needs of the average household, I am proposing that the 25 per

The Budget-Mr. Abbott
cent retail purchase tax be lifted tomorrow from silver-plated knives, forks and spoons and from alarm clocks of a retail value of $10 or less. This change will remove from the scope of the retail sales tax items of common use in the home. I am also proposing as a measure of alleviation to the blind that Braille watches be exempt from the tax. The revenue reduction involved in these changes will amount to about $600,000 for a full year.
Hon. members will recall that a year ago the dominion government withdrew its gasoline tax on the ground that this field was one that had been traditionally occupied by provincial governments and had been entered by the dominion under the emergency conditions of wartime. It will be recalled, too, that on several occasions it has been represented to the federal government by provincial governments that the dominion should also withdraw from the other fields in which the provinces have been normally regarded as having a particular interest. These included principally the dominion tax on the consumption of electricity, which was withdrawn last November, and the dominion tax on amusements and pari-mutuel bets. In regard to these latter two fields I am proposing that the dominion taxes cease to be imposed from tomorrow onward. This amendment will apply to the 20 per cent tax on admissions to theatres and the like, the 25 per cent tax on expenditures in other places of entertainment and the 5 per cent tax on pari-mutuel bets. Our revenue will be reduced by an estimated amount of $23,500,000 a year as a result of dropping these taxes. May I be permitted here to express the hope that in these cases where the dominion government removes taxes of this kind and withdraws from the field, the taxpayers of Canada will receive the benefit of such action and that, so far as possible, provincial taxing authorities will refrain from stepping in?
In another field I am proposing that the 3 per cent excise tax on imports from general tariff countries be repealed. The tax in its present form is a vestige of a levy first imposed in 1932 which applied originally to imports from all countries. Its scope of application has been gradually narrowed until at the present time it serves only as a needless encumbrance to trade with a relatively limited number of countries. The revenue from this source last year was about $2,100,000.
Several other miscellaneous changes of a minor character are also proposed. The tax of

sixty cents a gallon on spirits used in making vinegar will be removed. This tax was intended to encourage the production of cider vinegar but I understand has not had this effect, and at the present time only increases the consumer cost of a food item in widespread use. A minor change will be made in the tax on matches by adding an extra bracket in the rate schedule to apply to books or packages containing a very small number of matches. As a result of representations I have received from religious and educational leaders to the effect that the 25 per cent tax imposed on 16-millimetre projectors for films and slides is discouraging the further use of such projectors in schools, churches and other institutions, the tax will be removed from 16-millimetre projectors. Wheel chairs for the use of invalids will be exempt from the sales tax, and other minor amendments affecting hay-binders and presses and rope used by fishermen will also be made in the sales tax.
Turning to a field somewhat removed from that just discussed, I wish to outline two significant changes that I will propose in the field of succession duties. The house will recall that the dominion entered this field for the first time in 1941. We entered it not as a temporary wartime measure but as a permanent step in a direction which we felt might eventually lead to a national uniform system of death duties. This end was further promoted by the withdrawal of the death duties imposed by the seven provinces which entered into the dominion-provincial tax rental agreements. It is, therefore, a fact that the measure of relief I am about to propose is possible to a large extent because of the assurance I have that as a result of the provincial agreements it will be fully effective in at least seven of the provinces.
The measure that I have particularly in mind in this connection is that whereas in the past the smallest size of estate subject to dominion duty has been $5,000, I am proposing that no estate of a person dying on or after January 1 of this year will be subject to duty unless it exceeds $50,000. In effect, this means that the dominion government is withdrawing completely from the field of succession duties as this affects the smaller estates. The significance of this change will be realized when it is considered that about 90 per cent of the estates of deceased persons in Canada will henceforth be completely free of dominion duties. This relief will result in a great saving in the administrative burden of handling a great volume of small estates, will expedite the settlement of

The Budget-Mr. Abbott
the affairs of many deceased persons and, above all, will relieve the beneficiaries of these small estates of any dominion duty on the bequests they receive. It is estimated in this connection that at the present time in a full year the revenue loss involved in this change will be in the neighbourhood of $5 million.
I am suggesting another change as a measure of encouragement to charitable bequests. Whereas, under the present law, up to one-half of an estate may be left for charitable or educational purposes exempt from succession duty, in the future this limit will be removed and any amount of the estate may be given to charity free of succession duty. This measure has been urged on me for some time by religious and educational leaders, and in a society where our great public institutions still depend to a large extent on private support I feel that a measure of this sort is justified in the general public interest.
There will also be several other minor changes of a technical character in the succession duties act of which the principal will be to define the basis of share situs in the case of companies as the place of incorporation of the company, the basis now generally adopted in our succession duty treaties with other countries.
All these amendments to the Dominion Succession Duty Act will be effective as from the first of this calendar year.



TARIFF PROPOSALS

[Stage Direction]
When I presented the budget last year, I referred to the tariff negotiations which were then taking place at Geneva under the sponsorship of the economic and social council of the united nations. These negotiations were successfully concluded in October. The results are embodied in the general agreement on tariffs and trade which was made public on November 18. The successful outcome of these negotiations has been a most encouraging development in the international efforts that have been undertaken since the end of the war to establish better economic relations between nations. This general agreement is the most comprehensive international agreement ever concluded for the reduction of barriers to trade, having regard both to the volume of world trade affected and to the scope of the undertakings. The reductions and concessions in tariffs which each of the twenty-three participating countries and separate customs territories represented at Geneva agreed to grant one another apply to approximately one-half of total world imports.
At the conclusion of the Geneva conference, eight of the participating countries, including the United States, the United Kingdom and Canada, agreed to make these reductions effective provisionally as from January 1, 1948. Since that date, four additional countries either have brought their concessions into provisional effect or have indicated their agreement to do so in the near future. Consequently, Canada is at present receiving the benefits of the Geneva reductions on a very large part of her total export trade. Similarly, Canada has granted the Geneva concessions in the Canadian tariff to the other signatories since the beginning of the year.
The Canadian concessions were extended provisionally by order in council under the authority granted to the governor in council in the Customs Act. The Canadian concessions negotiated at Geneva will be brought into effect finally, and the general agreement will be ratified, only after the approval of parliament has been secured. The agreement was submitted to parliament at the opening of this session, and is now before the standing committee on banking and commerce where it is being examined in detail. The further legislation necessary for the implementation of the agreement will not be proposed until after the committee's report has been received.
The budget resolutions concerning tariffs and customs which I am introducing at this time are confined to two matters. It is proposed to make a number of adjustments in the existing tariff to bring it into line with present needs and conditions. It is further proposed to make a number of changes designed to facilitate the importation from the United Kingdom of important supplies which we need in Canada and in respect to which the United Kingdom has been experiencing particular difficulties in her efforts to re-establish her pre-war position in this market
The adjustments in the tariff which I am proposing are all downward adjustments. No increases are proposed. Some of the reductions are designed to take account of technological changes which have occurred in the last few years; some would effect reductions in costs of production; some would remove complexities and facilitate administration, and a number
The Budget-Mr. Abbott
[Stage Direction]
would embody reductions already made by order in council in response to immediate circumstances that have arisen from time to time. In general, the changes proposed would effect some reductions in co3ts of operation in a number of important industries including the mining industry, the building industry, and in certain parts of the dairy products industry.
Among the resolutions which I am introducing tonight, there is a proposal to suspend temporarily the British preferential duties on cotton and rayon piece goods. As hon. members know, the United Kingdom has for many years supplied an important part of our requirements of these commodities. During the war, the United Kingdom was unable to keep her place in our market. Since the end of hostilities, continued efforts have been made to restore the production and exports of this great staple of British trade. However, the shipments which the United Kingdom has been able to make to Canada have not increased as rapidly as we had hoped both from the standpoint of what our consumers need and from the standpoint of our desire to reduce the large gap in our balance of payments with that country. At present, British exporters of cotton and rayon piece goods are encountering difficulties in their efforts to expand sales to Canada because their laid-down prices in this country, after payment of duty, are higher than our converters and consumers can afford to pay. The proposal to suspend the duties temporarily would help to reduce the obstacle arising out of the price situation.
We have received assurances from the United Kingdom that the reduction in landed prices made possible by any removal of duties would be passed on to Canadian buyers. We have been assured also that the United Kingdom government will take all possible steps to see that the target which has been set for shipment to Canada of 80 million yards of cotton piece goods in 1948 will be met. With these assurances, the suspension of duties should make it possible for Canadian consumers to obtain essential supplies of cotton and rayon piece goods at lower prices and in substantially larger quantities than would otherwise have been the case.
I am therefore proposing that the British preferential duties on cotton and rayon piece goods be suspended until June 30, 1949. There
will be an opportunity to review this whole matter on the basis of the results achieved before that date. In accordance with our commitments in the Geneva agreement, under which preferential margins may not be widened, the proposal to suspend the British preferential rates on cotton and rayon piece goods includes a reduction in the most-favoured-nation rates on these items by the same amount until June 30, 1949. However, the imports of cotton and rayon piece goods from scheduled countries are limited by the quota under the Emergency Exchange Conservation Act.
Finally, among the resolutions pertaining to tariff and customs matters, I am including a proposal which would enable the governor in council to relieve certain goods or classes of goods from special dumping duty. Under this proposal such relief could be granted in cases where the governor in council determines that the importation of the goods is necessary to meet essential requirements in Canada or could be used to advantage in Canada without causing hardship to Canadian producers. In view of continuing scarcities, it is clearly desirable that it be possible to grant relief from dumping duty in such circumstances.
It is estimated that these reductions in tariff duties will result in a reduction in revenue of some twelve to fourteen million dollars in the current year.

[Stage Direction]
It is estimated that, taken altogether, the tax changes and tariff reductions which I have proposed will reduce our revenues in a full year by over 170 million and in the remainder of this fiscal year by something over $60 million. Deducting this latter figure from my forecast of revenues before tax changes will leave us with anticipated revenues for the current year of approximately $2,664 million. On this basis the anticipated budgetary surplus for the year will be reduced to $489 million. We shall have of course additional receipts of cash from repayments of loans and from the accumulation of annuity, pension and insurance funds, but these, it is believed, will be substantially less than last year, because we are not likely to be receiving repayments from the foreign exchange control board nor nearly as large a repayment of the United Kingdom

The Budget-Mr. Abbott
1942 loan. When we have made the loans and investments which the year's operations will require and have paid back the refundable taxes for 1943 and 1944 which of course is a form of debt retirement, we shall find that our remaining cash surplus will not in fact be a large one. Moreover, we could not allow our budgetary surplus to be reduced much further without running the risk that the sum total of the government's financial operations this year might have an inflationary, rather than antiinflationary, effect.
It may be of interest to note that if we followed the budgetary practices of the United States government, under which they include on the one side all receipts except borrowings, and on the other side all disbursements except redemption of debt, we should have a small surplus in this coming year. The practices that we follow are better, I believe, in that they present a truer accounting picture of our different types of transactions and show more clearly the changes in our net debt and assets, but the American practice has certain advantages in times like these when it is desirable to take an over-all view of the government's financial operations in deciding what is the proper budget policy from the point of view of the effects upon the national economy.
A substantial portion of the requirements for this year which I have described arise directly out of the war; this is true of a portion of our expenditures, particularly on veterans benefits, housing and subsidies. It is also true of some of our loans and investments, and, of course, the refundable taxes arose from wartime operations and will be mostly repaid by the end of this year. If no new types of expenditure are undertaken, and if economic conditions remain favourable, we can expect a decline in our requirements in future years, but even in such circumstances we could not expect a drastic decline. The effects of two world wars on our public debt cannot be escaped, however severely we may economize. The wars have also left us a heritage of pension bills. The new international situation and the dangers of total war have brought us continuing high costs for national defence. But these are not the only factors. The activities and scope of government in Canada have been extended by popular consent and, indeed, by popular demand. Parliament and the government have a wider responsibility than before the war,
particularly in the field of economic affairs. Our expenditures inevitably reflect this extension. Social, security is an expensive undertaking, and we have moved substantially into this field since before the war and are now spending hundreds of millions of dollars each year upon it. We are already undertaking much more in national development, trade promotion and the support of prices of primary products. All political parties and the public generally take it for granted now that governments must bear some responsibility for maintaining employment when large-scale unemployment threatens. That is bound to be a very expensive responsibility if economic circumstances outside of Canada become adverse.
With these wider responsibilities already assumed and in contemplation, with the public demand there is today for additional government responsibilities and expenditures in many fields, we must anticipate large budgets in future, and we cannot lightly reduce taxation in any field. Those who advocate increased expenditure should bear in mind the weight of our budgetary problems in the future. There is no inexhaustible source of revenue that we can tap. There are limits to what we can spend without raising additional revenues, if we are to prevent inflation and the hidden burdens which is imposes. I wish to appeal particularly to hon. members at this time to bear thoughtfully in mind our future budgetary problems when considering new proposals for government activity, social security, or other expenditures. In the world of today we must be prepared to undertake much that is new, much that is daring, much that is big. We must also be prepared, however, to pay the price, and it is in our budgets that that price is brought home to us.
I think we can well take pride in the prudent, responsible and effective way in which the financial and economic affairs of this country have been managed both during the war and since the war has ended. I hope I am not one given to overstatement, but I doubt whether any nation in the world has a better record in this field.
Canadians I think are realists. We do not expect to get something for nothing. We know that things have their price. We are proud of the advances which we have been
The Budget-Resolutions
[Stage Direction]
able to make in the field of social security, and in assuring to our people a better and a fuller life. We know that to attain these great purposes, we must frame our policies and direct our efforts towards achieving and maintaining a high and expanding level of employment and income. That is what we have done, and that is what we are continuing to do. The record speaks for itself. Canada today enjoys a level of employment, prosperity and national income, and a standard of living and of real social security never achieved before in the history of our country. That that is so, Mr. Speaker, is due in large measure to the wisdom, the vision, and the supreme qualities of statemanghip possessed by a man who for more than twenty years of the last quarter century has been the head of the government of our country, the present Prime Minister of Canada (Mr. Mackenzie King).
I want to table now the budget resolutions.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Income War Tax Act and to provide:
1.	That, in addition to other deductions, a deduction from income for the 1948 taxation rear of $500 be allowed to an individual who ias attained the age of 65 years prior to the 2nd of the year;
2.	That, for the 1948 taxation year, interest be allowed at the rate of 2 per cent per annum on overpayments of tax to the extent of $5,000 and i per cent per annum on overpayments in excess of $5,00-0' (no interest less than $1 to be payable) ; and that the rates payable on overdue taxes be increased from 4 per cent and 7 per cent to 6 per cent and 8 per cent, respectively;
3.	That special deductions from income or taxes be allowed to taxpayers engaged in exploring or drilling for natural gas. oil or minerals in respect of expenses incurred in 1949 operations on the same basis as the deductions allowed in respect of 1948 operations;
4.	That, for the 1948 taxation year, no expenses in respect of the earning of wages or salary may be deducted except where a taxpayer is an employee of a person whose principal business is transport and his duties require him to be absent from his home regularly, in which case expenses for board and lodging may be deducted, and where a taxpayer is employed to sell property or negotiate contracts, is required to pay his own expenses and performs his duties away from his employer's place of business, in which case expenses may be deducted from commissions or other fees; and
5.	That the 15 per cent income tax on nonresident persons be extended to apply to patronage dividends paid on or after May 19, 1948.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Dominion Succession Duty Act and to provide, effective with respect to any succession upon the death of a person on or after January 1, 1948:
1.	That the general exemption of estates not over $5,000 be extended to estates not over $50,000;
2.	That the limit on exemptions for gifts to charitable organizations of 50 per cent be removed; and
3.	That for the purposes of the act, shares of companies incorporated in Canada shall be deemed to be situated in Canada.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Excise Tax Act and to provide, effective on and after May 19, 1948:
1.	That the sales tax on the following list of articles be repealed:
(a)	shortening; soups; rice; yeast; jrogurt; barley; split peas; peanut butter; biscuits, cookies and similar articles; pastry, cake, biscuit and similar mixes; cereal breakfast foods not including beverages; foods prepared and sold exclusively for feeding infants; fruit, canned, frozen, dried or evaporated; fruit juices which consist of at least ninety-five per cent of pure juice of the fruit; jams, jellies, marmalades and preserves; corn syrup, table syrups and molasses; meats and poultry, cooked, canned, frozen, smoked or dried; canned fish; spaghetti, macaroni and vermicelli; vegetables, canned, frozen or dehydrated, but not including pickles, relishes, catsup, sauces, olives, and similar goods; vegetable juices; and
(b)	hay presses and complete parts thereof; auxiliary internal combustion engines incorporated into agricultural implements or agricultural machinery, and complete parts thereof; crushed stone or crushed gravel; articles imported by or for public museums, public libraries, universities, colleges or schools, and which are to be placed in such institutions as exhibits; wheel chairs and complete parts thereof specially designed for the use of invalids;
2.	That the excise tax on the price of admission to places of amusement be repealed;
3.	That the excise tax on charges made in places of entertainment be repealed;
4.	That the excise tax on bets on horse racing be repealed;
5.	That the retail purchase tax on watches specially designed for use of the blind, alarm clocks selling to the user at not more than ten dollars each, and plated table knives, forks and spoons, be repealed;
6. That the special excise tax of three per cent on goods imported into Canada from general tariff countries be repealed;
7.	That the rates of excise tax on matches be amended to provide for a proportionate rate of tax on packages of smaller sizes; and
8.	That the excise tax of 25 per cent be repealed on 16 mm projectors for slides, films or pictures, and that the tax be extended to

The Budget-Customs Tariff
cover projector mechanisms, sound equipment, arc lamps, lenses, bases, and film magazines or reels for moving picture projectors.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Excise Act to repeal, effective on and after May 19, 1948, the excise duty on spirits used in the production oi vinegar.

[Stage Direction]
1. Resolved, that it is expedient to introduce a measure to amend the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, as amended, as follows:-
(a)	By repealing subsection one of section three and substituting the following:-
"3. (1) Subject to the provisions of this act and of the Customs Act, there shall be levied, collected and paid upon all goods enumerated, or referred to as not enumerated, in schedule A to this act, when such goods are imported into Canada or taken out of warehouse for consumption therein, the several rates of duties of customs, if any, set opposite to each item respectively or charged on goods as not enumerated, in the column of the tariff applicable to the goods, subject to the following conditions, viz.:
(a)	The rates of customs duties, if any, set forth in column (1), 'British preferential tariff', shall apply to goods the growth, produce or manufacture of the following British countries when conveyed without transhipment from a port of any British country enjoying the benefits of the British preferential tariff into a sea, lake or river port of Canada:
United Kingdom of Great Britain and Northern Ireland
Union of South Africa
Australia
New Zealand
India
Pakistan
Ceylon
Eire
Newfoundland
British West Indies, including:
Bahamas
Jamaica
Barbados
Trinidad and Tobago Antigua
St. Christopher-Nevis
Dominica
Montserrat
Virgin Islands
Grenada
St. Vincent
St. Lucia
Turks and Caicos islands Ascension Bermuda British Guiana British Honduras British North Borneo Brunei Basutoland
Bechuanaland Protectorate British Solomon islands protectorate
Cyprus
Channel islands Cayman islands
Cameroons, British sphere of the
Cook islands
Fiji
Falkland islands Gold Coast Gambia
Gilbert and Ellice islands Isle of Man
Kenya Colony and Protectorate Malay States, Federated Malay States, Unfederated-
Johore
Kedah
Kelantan
Perlis
Trengganu
Malta
Mauritius and dependencies thereof
Northern Rhodesia
Nyasaland Protectorate
Nigeria Colony and Protectorate
New Guinea
Norfolk island
Nauru, Mandated Territory of
Papua
St. Helena
Southern Rhodesia
Sierra Leone
Straits Settlements
Seychelles
Sarawak
Somaliland Protectorate Swaziland
Tanganyika Territory Togoland, British sphere of Tonga or Friendly islands Uganda Protectorate Western Samoa Zanzibar
Any other British colony or protectorate or territory under British trusteeship, admitted to the benefits of the British preferential tariff in Canada, in the manner hereinafter provided:;
Provided, however, that goods entitled to the benefits of the British preferential tariff shall be accorded such benefits when such goods are shipped on a bill of lading consigned to a consignee in a specified port in Canada when such goods are transferred! at a port in a British possession, and conveyed without further transshipment into a sea, lake or river port of Canada;
(b)	The rates of customs duties, if any, set forth in column 2, 'most-favoured-nation tariff' shall apply to goods the growth, produce or manufacture of any British or foreign country to which the benefits of such most-favourednation tariff shall have been extended in the manner hereinafter provided or to goods the growth, produce or manufacture of any foreign country to which the benefits of the intermediate tariff applied on May 1, 1948, when imported into Canada direct from a country entitled to the benefits of the most-favoured-nation tariff;
(c)	The rates of customs duties, if any, set forth in column (3), 'General Tariff', shall apply to all goods not entitled to admission under
The Budget-Customs Tariff
[Stage Direction]
the most-favoured-nation tariff or under the British preferential tariff, or to goods entitled to rates of customs duties more favourable than those of the British preferential tariff;
(d)	Proof of origin, as prescribed by the minister, shall be furnished with the bill of entry at the customhouse for goods admitted to entry under any of the tariffs in schedule A; and the decision of the minister shall be final as to the tariff or surtax applicable in any case to imported goods by reason of their origin;
(e)	Goods for which entry is claimed under the most-favoured-nation tariff must be bona fide the growdh, produce or manufacture of a country which has been admitted to the benefits of the most-favoured-nation tariff and a substantial portion of the value of each manufactured article must have been produced by the industry of such country,
(f)	Every manufactured article to be admitted under the British preferential tariff must be bona fide the manufacture of a British country entitled to the benefits of the British preferential tariff, and a substantial portion of the value of the manufactured article must have been produced by industry in one or more of such countries."
(b)	By repealing subsection one of section four and substituting the following:
"4. The governor in council may, by order, from time to time:
(a)	Extend the benefit of the British preferential tariff, in whole or in part, to any British colony or any protectorate or territory under British trusteeship not named in paragraph (a) of section three, and from and after the date specified in such order the British preferential tariff shall apply to goods the growth, produce or manufacture of such colony, protectorate or territory, subject to the provisions of this act;
(b)	Withdraw the benefit of the British preferential tariff, in whole or in part, from any British country or colony or any protectorate or territory under British trusteeship, which has received the said benefit, and from and after the date specified in such order the most-favoured-nation tariff or the general tariff, as mentioned in the said order, shall apply to goods the growth, produce or manufacture of any such British country, subject to the provisions of this act;
(c)	Extend to any British country the benefit of rates of customs duties more favourable than those of the British preferential tariff, and from and after the date specified in such order the rates of duties so ordered shall apply to goods the growth, produce or manufacture of such British country, subject to the provisions of this act;
(d)	Withdraw from any British country to which they have been extended rates of customs duties more favourable than those of the British preferential tariff, and from and after the date specified in such order the British preferential tariff, the most-favoured-nation tariff or the general tariff, as directed in the said order, shall apply to goods the growth, produce or manufacture of such British country, subject to the provisions of this act;
(e)	Extend the benefit of the most-favourednation tariff, in whole or in part, to any British or foreign country goods, the growth, produce

or manufacture of which have previously been subject to the rates of customs duties set forth in the general tariff, and from and after the date specified in such order the rates of duty set forth in the most-favoured-nation tariff, so far as they are mentioned in the said order, shall apply to goods the growth, produce or manufacture of such British or foreign country, when imported into Canada direct from a country entitled to the benefits of the mostfavoured-nation tariff, subject to the provisions of this act;
(f)	Withdraw the benefit of the mostfavoured-nation tariff, in whole or in part, from any country to which it has been extended, and from and after the date specified in such order the rates of customs duties set forth in the general tariff shall apply to goods the growth, produce or manufacture of such country, subject to the provisions of this act;
(g)	Every order passed under the authority of this section shall be published in the Canada Gazette."
(c)	By repealing section six and substituting the follow'ing:
"6. (1) In the case of goods exported to Canada of a class or kind made or produced in Canada, if the export or actual selling price to an importer in Canada is less than the fair market value or the value for duty of the goods as determined under the provisions of the Customs Act, there shall, in addition to the duties otherwise established, be levied, collected and paid on such goods, on their importation into Canada, a special or dumping duty, equal to the difference betw'een the said selling price of the goods for export and the said value for duty thereof; and such special or dumping duty shall be levied, collected and paid on such goods although not otherwise dutiable.
(2)	The special duty imposed by the preceding subsection shall in no case exceed) fifty per cent ad valorem and the following goods shall be exempt from such duty:
(i)	Goods of a class subject to duty under the Excise Act;
(ii)	Goods which though of a class or kind made or produced in Canada, are not offered for sale to the ordinary agencies of wholesale or retail distribution or are not offered to all purchasers on equal terms under like conditions, having regard to the custom and usage of trade;
(iii)	Goods or classes of goods declared exempt by any order or regulation made by the governor in council.
(3)	Duties and taxes imposed in the country of export shall be disregarded in estimating the value for the purpose of the said duty.
(4)	'Export price' or 'selling price' in this section means the exporter's price for the goods, exclusive of all charges thereon after their shipment from the place whence exported direct to Canada.
(5)	If at any time it appears to the satisfaction of the minister that the payment of the special duty by this section provided for is being evaded by the shipment of goods on consignment without sale prior to such shipment, the minister may in any case or class of cases authorize such action as is deemed necessary to collect on such goods or any of them the same

The Budget-Customs Tariff
special duty as if the goods had been sold to an importer in Canada prior to their shipment to Canada.
(6)	If at any time it appears to the satisfaction of the minister that any person owning or controlling or interested in a business in Canada and also in any other country, or any person carrying on a business in any other country and owning or controlling or interested in a business operating in Canada, and by reason thereof is enabled to import goods for further manufacture or assembling or for resale, and while complying with the legal requirements on importation disposes of such imported goods, whether in the form as imported or as further processed, assembled or manufactured, at prices below the duty paid value thereof as entered at customs plus or including all charges upon the goods after shipment from the place whence exported direct to Canada, including sales, distribution and advertising costs, and plus, if any, the cost of processing, assembling or further manufacturing in Canada, the minister may declare that goods of such class or kind were and are on importation subject to an additional special or dumping duty not exceeding fifty per cent, and authorize such action as is deemed necessary for the collection thereof.
(7)	If the full amount of any special duty of customs as herein provided has not been paid on goods imported, the customs entry thereof
shall be amended and the deficiency paid upon the demand of the collector.
(8)	The minister may make such regulations as are deemed necessary for carrying out the provisions of this section and for its enforcement.
(9)	For the purpose of this act goods shall not be deemed to be of a class or kind made or produced in Canada unless so made or produced in substantial quantities; and the governor in council may provide that such quantities, to be substantial, shall be sufficient to supply a certain percentage of the normal Canadian consumption and may fix such percentages."
(d)	By repealing section eighteen.
2. Resolved, that schedule A to the Customs Tariff be amended by striikng thereout tariff items 15. 65a, 82'(b), 82(c), 180d, 186, 199g, 208i, 211b. 216d, 232e, 269, 271, 274, 275, 296b, 296e, 326c, 328,- 349b, 359 . 364, 386(d), 386(p), 392a, 403(a), 410a, 410h, 4I0m, 410n, 410o, 410o(ii), 410q. 410w, 410y. 412, 413, 427c, 427f, 431c, 431d, 431g, 437, 438b, 438c, 438d, 438e, 439c 442d, 445m, 445n, 445o, 476, 539, 587, 587b, 657, 682a, 692 and 693 (iii), the several enumerations of goods respectively and the several rates of duties of customs, if any, set opposite each of the said items, and by inserting the following items, enumerations and rates of duty in said schedule A:
o
-I
					Rates in Effect Prior to		
Most-	General Tariff	Rates Proposed in this Budget	Item	Preferential Tariff	Favoured- Nation Tariff	British Preferential Tariff	Most- Favoured- Nation Tariff	General Tariff15	Free 20 p.c. 20 p.c.	Free Free 15 p.c. 15 p.c.	Free 18 p.c. 15 p.c. 15 p.c.	20 p.c. 20 p.c. 20 p.c. 20 p.c.15 p.c. 15 p.c.	15 p.c.	
20b	Illipe butter		5 p.c.	10 p.c.	25 p.c.	15 p.c.	20 p.c.	25 p.c.
							
65a	Special dietary breads and biscuits under regulations						
		Free	7$ p.c.	10 p.c.	Free	71 p-c.	10 p.c.
79d	Mulberry trees, cuttings, roots and buds, for seri-						
		Free	Free	30 p.c.	121 p.c.	121 P-c.	30 p.c.
							
82	(b) (i) Raspberry, loganberry and blackberry bushes						
or roots	each	Free	1 ct.	1 ct.	Free	1 ct.	(ii) Rhubarb roots	each	Free	i ct.	1 ct.	Free	9/10 ct.	(c) (i) Asparagus roots	each	Free	i/5 ct.	i ct.	Free	9/40 ct.	J ct.(ii) Strawberry plants	each	Free	1 ct.	i ct.	Free	1 ct.	1 ct.180d	Photographs, paintings, pastels, drawings and other	art work and illustrations of all kinds, n.o.p., whether originals, copies or proofs, for reproduction in periodical publications enjoying second-	Free	9 p.c.	25 p.c.	Free	9 p.c.	25 p.c.Provided that goods which are entitled to entry free of duty or at a lower rate than as indicated in this item shall not be entered at the rates specified in this item.	
181b	Paper, in single sheets, containing not less than 144						
	square inches, not exceeding *012 and not less than						
	[DOT]003 of an inch in thickness, specially processed and	Free	7$ p.c.	35 p.c.	17j p.c.	25 p.c.	35 p.c.
186	Paper calendered to between *006 and -008 inch thick-						
ness adapted for the manufacture of shot shells; and felt board sized and hydraulic pressed, and covered with paper or uncovered, adapted for the manufacture of gun wads	Free	Free	Free	Free	Free	Free1	15 p.c.	221 p.c.	25 p.c,
g
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[Stage Direction]
The Budget-Customs Tariff
192e
Gasket stock, wholly or in part of vegetable fibres, coated or impregnated, in sheets or rolls, when imported by manufacturers of gaskets, for use only in the manufacture of gaskets in their own factories
Free
192g
Hoofing felt, single ply, not coated or impregnated, in rolls containing not less than 500 square feet, when imported by manufacturers of asphalt roofing (including shingles and siding) for use only in the manufacture of such materials in their own factories
Free
198c
Tape, coated, not exceeding three-eighths of an inch in width, for use exclusively in the recording and reproduction of sound	
5 p.c.
199g
Duplex backing papers or wrappers including those printed and/or skived for use in the packaging of photographic roll film; inter-leaving and wrapping paper, for packaging flat photographic films and photographic papers; when imported by manufacturers of photographic films and photographic papers for use in their own factories in the packaging of such films and papers	
5 p.c.
208i
(i) Animal glands and animal glandular organs, and extracts thereof, wet or dry, (whether alcoholic or not), when imported by manufacturers of pharmaceutical or medicinal preparations for use exclusively in the manufacture of such preparations in their own factories	
Free
208i
(ii) Animal bile, in liquid or paste form, not further processed than concentrated, for use in the manufacture of bile acids	
Free
211b
Kyanite, crude or calcined, but not further processed than ground	
Free
21Gd
Phthalic, anhydride, adipic, abietic, maleic and succinic acids, hexamethylene diammonium adipate, hexamethylene diammonium sebacate, hexamethylene diamine, caprolactam, and ethyleneglycol, when imported by manufacturers of synthetic resins, for use exclusively in the manufacture of synthetic resins, in their own factories	
Free
216e
Materials of a kind not produced in Canada when imported to be used for plasticizing synthetic resins....
Free
Free
7i p.c. 10 p.c.
12J p.c.
Free
Free
Free
Free
Free
Free	Free	Free	Free25 p.c.	15 p.c.	22$ p.c.	35 p.c.35 p.c.	17$ p.c.	25 p.c.	35 p.c.35 p.c.	5 p.c.	12$ p.c.	35 p.c.15 p.c.	22$ p.c.	25 p.c.Free	Free	Free	FreeFree	Free	15 p.c.	25 p.c.25 p.c.	Flee	4$ p.c.	25 p.c.Free	Free	Free	FreeFree	15 p.c.	25 p.c.Free	Free	Free	Free15 p.c.	20 p.c.	25 p.c.Free	15 p.c.	25 p.c.
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The Budget-Customs Tariff
Tarifi Item	-	British Preferential Tariff	Most- Favoured- Nation Tariff2161	Materials of a kind not produced in Canada when imported for use only in the manufacture of the goods specified in tariff items 237 (a), (b), (c) and (d), 238a, 238b, 238c, 238d, 238e, 238f and 238g	Free	Free219g	Yeast, dead or inactive, containing only those vitamins inherent in or developed by the yeast during its culture or propagation in which the Vitamin D does not exceed 1,000 International units per gram, when valued at more than twenty-five cents per pound, under regulations which the Minister may prescribe	Free	Free225a	Ouricury wax	Free	Free231d	Synthetic resin glue	15 p.c.	17* P-c.231e	Phenol when imported by manufacturers of synthetic resin glues, for use only in the manufacture of such glues in their own factories	Free	Free232e	Cereal or starch products which require only to be ground in order to form, when mixed with cold water, an adhesive paste	per pound	3/5 ct.	li cts.236e	Surgical bandages and slabs composed of textile fabrics specially coated with Plaster of Paris compound...	10 p.c.	10 p.c.246c	Finely divided metals or compounds of metals, whether dry, or suspended or dissolved in a liquid, for use exclusively in the manufacture of glassware and of tableware of china, porcelain or semiporcelain	Free	Free263b	Methyl ethyl ketone, furfural, methyl normal propyl ketone and methyl isobutyl ketone, when imported for use only in the refining of oils	Free	FreeGeneral Tariff	Rates in Effect Prior to Rates Proposed in this Budget	British Preferential Tariff	Most- Favoured- Nation Tariff	General TariffFree	Free	Free	Free15 p.c.	20 p.c.	25 p.c.Free	15 p.c.	20 p.c.17} p.c.	20 p.c.	25 p.c.25 p.c.	15 p.c.	20 p.c.	25 p.c.10 p.c.	5 p.c.	7} p.c.	10 p.c.25 p.c.	15 p.c.	18 p.c.	25 p.c.Free	Free	Free	Free2 cts.	3/5 ct.	1-7/20 cts.	2 cts.35 p.c.	25 p.c.	25 p.c.	35 p.c. and 4 cts. per pound22} p.c.	Free	Free	22} p.c.17} p.c.	20 p.c.	30 p.c.25 p.c.	Free	Free	25 p.c.
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[Stage Direction]
The Budget-Customs Tariff
263c
263c 269 271	Materials of a kind not produced in Canada for use only as catalysts in the refining of petroleum	 Products of petroleum, n.o.p.:- (i)	Lighter than -8236 specific gravity (40-3 A.P.I.) at 60 degrees Fahrenheit, .per gallon (ii)	'8236 specific gravity (40-3 A.P.I.) or heavier at 60 degrees Fahrenheit	per gallon Lubricating oils composed wholly or in part of petroleum :- (a)	Valued at less than 25 cents per gallon, per gallon (b)	N.o.p		Free -J- ct. i ct. 1} cts. 10 p.c. Free
274	Petroleum coke, ground or unground		
275	Liquefied petroleum gases for heating, cooking or	
	illuminating purposes, when imported in containers.	10 p.c.
295b	Vermiculite, crude, or not further processed than	
	ground and screened		Free
296b	(i) Magnesite, dead-burned, sintered, caustic cal-	
	cined or plastic magnesia		15 p.c.
	(ii) Magnesium carbonate, basic or otherwise, excepting crude rock		20 p.c.
296e	Magnesite, calcined, and magnesium carbonate, not	
	further manufactured than ground, when imported by manufacturers of insulating materials for use exclusively in the manufacture of such insulating materials, in their own factories		Free
309a	Granules, whether or not coloured or coated, for use	
	in the manufacture of roofing, including shingles and	Free
326c	Blanks of uncoloured clear glass, when imported by	
	manufacturers to be used exclusively in the manufacture of silvered mirror reflectors or acid-etched reflectors or refractors, for lighting systems		Free
328	Spectacle and eyeglass frames and parts thereof,	15 p.c.
		
Free
1 ct.
i ct.
21 cts. 12} p.c Free
12} p.c
Free
15 p.c. 20 p.c.
Free
Free
9 p.c.
17} p.c
25 p.c.
2 cts.
1 ct.
2} cts. 20 p.c. Free
25 p.c.
25 p.c.
30 p.c.
30 p.c.
Free
25 p.c.
10 p.c. 20 p.c.
Free Free 15 p.c. 10 p.c.
| ct.
5 Ct.
1* cts.
12* p.c.
Free 15 p.c.
10 p.c.
10 p.c.
15 p.c. 20 p.c.
20 p.c.
Free 20 p.c.
15 p.c.
Free
15 p.c. 15 p.c.
Free 15 p.c. 20 p.c. 10 p.c.
1 ct.
* ct.
2\ cts.
m p.c.
Free 20 p.c.
13* p.c.
10 p.c.
15 p.c. 27* p.c.
20 p.c.
Free 27* p.c.
15 p.c.
9 p.c.
17* p.c 20 p.c.
Free 25 p.c. 25 p.c. 25 p.c.
2 cts.
1 ct.
2* cts.
20 p.c.
Free 25 p.c.
25 p.c.
25 p.c.
30 p.c. 30 p.c.
30 p.c.
Free 30 p.c.
25 p.c.
10 p.c.
20 p.c. 25 p.c.
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The Budget-Customs Tariff
Tariff Item	-	British Preferential Tariff	Most- Favoured Nation Tariff348f	Copper covered steel wire not less than one-quarter inch in diameter and rods, when imported by manufacturers of trolley, telegraph and telephone wires, electric wires and electric cables, for use only in the manufacture of such articles in their own factories..	Free	10 p.c.349b	Alloys of magnesium, viz.: ingots, pigs, sheets, plates, strips, bars, rods and tubes	5 p.c.	10 p.c.354c	Aluminum capsules for bottles	Free	7J p.c.On and after March 31, 1950	15 p.c.	22$ p.c.359	Gold and silver, in ingots, blocks, bars, drops, sheets or plates, unmanufactured; gold and silver sweepings; bullion fringe or gold fringe; scrap jewellery, fit only to be remelted, under such regulations as the Minister may prescribe	Free	Free364	Diamond dust or bort and black diamonds, for borers; diamond dust mixed with a carrier, in cartridges, the component material of chief value being diamond dust	Free	Free376b	Materials imported by manufacturers of sintered hard metal compounds of the tungsten carbide type, for use in the manufacture of such compounds in their own factories	Free	Free386	(d) Sheets, hoop, band or strip, coated or not, polished or not, when imported by manufacturers of saddlery hardware and saddles for use exclusively in the manufacture of such articles, in their own factories	Free	Free(p) Sheets or strip, of iron or steel, hot or cold rolled, with silicon content of -075 per centum or more, when imported by manufacturers of electrical apparatus, for use in the manufacture of electrical apparatus in their own factories	Free	12$ p.c.General Tariff	Rates in Effect Prior to Rates Proposed in this Budget	British Preferential Tariff	Most-Fa voured-Nation Tariff	General Tariff10 p.c.	Free	10 p.c.	10 p.c.25 p.c.	5 p.c.	11$ p.c.	25 p.c.30 p.c.	15 p.c.	22$ p.c.	30 p.c.30 p.c.	Free	Free	Free	Free15 p.c.	20 p.c.	25 p.c.Free	Free	Free	Free12$ p.c.	17$ p.c.	27j p.c.10 p.c.	Free	Free	10 p.c.Free	Free	Free	F ree7$ p.c.	20 p.c.	20 p.c.5 p.c.	12$ p.c.	15 p.c.12$ p.c.	Free	12$ p.c.	12$ p.c.7$ p.c.	20 p.c.	20 p.c.
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The Budget-Customs Tariff
392a Forgings of iron or steel, in any degree of manufacture, hollow, machined or not, not less than 12 inches in internal diameter; and all other forgings, solid or otherwise, in any degree of manufacture, rough turned or rough machined or not, of a weight of 20 tons or over	
403 Wire, of steel:-
(a) Spring, not less than -40 per centum, by weight, of carbon, when imported for use exclusively in the manufacture of springs for mattresses, cushions or upholstery:-
(i)	*128, *116, *104 and -092 inch in diameter, with
a tolerance not to exceed -003 inch	
(ii)	144, -080, 072, 064, 05G and -048 inch in
diameter, with a tolerance not to exceed 003 inch	
F ree
Free
5 p.c.
409q
Auxiliary internal combustion engines incorporated in or attached to agricultural implements or agricultural machinery	
Free
409r
Milk evaporators for dairying purposes and complete parts thereof	
Free
410a
(i) Loading machines; shaker trough, belt trough, chain or elevating conveyors; air engines; flameproof enclosed driving motors; of a class or kind not made in Canada, and parts of all motive power or machinery mentioned in this item, for use exclusively in mining operations	
Free
(ii) Trucks or tractors, self-propelled, mounted on wheels or on endless tracks, including motive power, when of a class or kind not made in Canada, for use exclusively underground in mining operations; parts of the foregoing	
Free
(iii) Diesel-powered self-propelled trucks, mounted on rubber-tired wheels, side or rear dump, having a rated capacity, by struck volume, of not less than 9£ cubic yards and, by payload weight, of not less than 15 tons, and complete parts thereof, for off-highway use in carrying minerals, ores, rock, stone, sand, gravel and other excavated materials in open-pit mines, quarries, gravel and sand pits or at construction sites	
Free
15 p.c
5 p.c. 5 p.c.
Free 10 p.c
Free
Free
10 p.c
30 p.c.
7* P-c-7* p.c.
Free 25 p.c.
35 p.c.
27| p.c.
Free	15 p.c.
10 p.c.	25 p.c.
Free	5 p.c.
15 p.c.	15 p.c.
15 p.c.	20 p.c.
10 p.c.	25 p.c.
Free	10 p.c.
10 p.c.	25 p.c.
Free	10 p.c.
15 p.c.	22* p.c.
15 p.c.	22* p.c.
Free	17* p.c.
15 p.c.	22* p.c.
15 p.c.	22* p.c.
Free	17* p.c.
30 p.c. 35 p.c.
7* p.c. 20 p.c.
30 p.c.
35 p.c.
12! P-c. 35 p.c. 35 p.c. 30 p.c. 37! P-c.
27! P-c. 30 p.c. 37! P-c.
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27* p.c.
27* p.c.
The Budget-Customs Tariff

Tariff Item	-	British Preferential Tarifi	Most- Favoured- Nation Tariff410h	Equipment and integral parts thereof for distributing stone dust in mines	Free	Free410m	Diamond drills and core drills, not including motive power, electrically operated rotary coal drills, and coal cutting machines, of a class or kind not made in Canada, and parts of the foregoing, for use exclusively in mining operations	Free	Free410n	Diamond drills and core drills, not including motive power, and electrically operated rotary coal drills, n.o.p., and parts of the foregoing, for use exclusively in mining operations	Free	lOp.c.410o	(i) Coal heading machines; electric or magnetic machines for concentrating or separating iron ores; automatic scales for use with conveyors; and integral parts of all the foregoing, for use exclusively in mining or metallurgical operations	Free	Free(ii) Chock release apparatus, for use in coal mines to facilitate the safe removal of chocks forming the roof support	Free	Free410q	Pumps and vacuum pumps, and complete parts thereof, for use exclusively in the extraction of precious metals by the chlorination or cyanide processes...	15 p.c.	15 p.c.410w	Machinery, n.o.p., forthe concentration or separation of ores, metals or minerals, viz.: flotation machines, flotation cells, oil feeders and reagent feeders for flotation machines and flotation cells, pumps, vibrating and impact screens, jigs, magnetic separators, magnetic pulleys and filters, for use in the concentration or separation of ores, metals or minerals, and integral parts of all the foregoing	5 p.c.	7J P.c.410y	Heavy duty mine hoists, of a size and capacity not made in Canada	Free	Free
General
Tariff
lOp.c.
Free 10 p.c.
Free 10 p.c. 20 p.c.
20 p.c. 10 p.c.
Rates in Effect Prior to Rates Proposed in this Budget		
British Preferential Tariff	Most- Favoured- Nation Tariff	General TariffFree	5 p.c.	10 p.c.Free	Free	FreeFree	10 p.c.	10 p.c.Free	10 p.c.	10 p.c.Free	Free	FreeFree	10 p.c.	10 p.c.15 p.c.	17a p.C.	20 p.c.15 p.c.	171 P-c.	20 p.c.Free	5 p.c.	10 p.c.
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[Stage Direction]


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The Budget-Customs Tariff
412e
427o
427f
431c
Machinery, being presses for use in the printing of newspapers and telephone directories, of not less value by retail than fifteen hundred dollars each, of a class or kind not made in Canada, and complete parts thereof, not to include saws, knives and motive power; mechanical deliveries or conveyors for use with newspaper printing presses		Free
Articles and materials which enter into the construction and form part of the machines and apparatus provided for in tariff item 412a, when imported by manufacturers of such machines, apparatus and parts thereof, for use exclusively in the manufacture of such goods in their own factories under such regulations as the Minister may prescribe		Free
(i) Machinery and apparatus, of a class or kind not made in Canada, and parts thereof, specially constructed for preparing, manufacturing, testing or finishing yarns, cordage, and fabrics made from textile fibres or from paper, imported for use exclusively by manufacturers and scholastic or charitable institutions in such processes only		Free
(ii) Materials for use in the manufacture of the goods specified in tariff item 413 (i)		Free
Machinery and apparatus for dairying purposes, viz.:-Power churns, power milk coolers, power fillers and cappers, power ice cream mixers, power butter printers, power cream savers, power bottle sterilizers, power brine tanks, power milk bottle washers, power milk can washers; ice-breaking machines, valveless or centrifugal milk pumps, sanitary milk and cream vats; none of the foregoing machinery to include motive power		Free
Machines for the manufacture of veneers and plywoods, viz.:-Veneer clippers; veneer clipper knife jointers; veneer glue spreaders; veneer jointers; veneer lathes; automatic veneer reelers with supporting trays and hoists; automatic veneer unreelers, veneer conveyers specially designed for use with automatic veneer reelers and unreelers; veneer taping machines; complets parts of all the foregoing..	Free
Machinists' or metal workers' precision tools and measuring instruments, viz.:-Calipers, micrometers, metal protractors and squares, bevels,	
Free
Free
5 p.c. 5 p.c.
15 p.c.
10 p.c.
Free	Free	Free	FreeFree	10 p.c.	15 p.c.Free	Various	Various	Various10 p.c.	Free	5 p.c.	10 p.c.10 p.c.	(T	oo numerous to lis	t)35 p.c.	Free	15 p.c.	35 p.c.10 p.c.	25 p.c.	35 p.c.35 p.c.	Free	10 p.c.	35 p.c.
>
The Budget-Customs Tariff

Tariff
Item
431 e -Con.
431d
verniers, gauges, gauge blocks, parallels, buttons, mercury plumb bobs, dividers, trammels, soribers, automatic center punches, hand speed indicators, straight edges, key seat clamps and other clamps and vises used by toolmakers for precision work, precision tools and measuring instruments, n.o.p.; parts of all the foregoing, finished or not	
Engineers', surveyors' and draftsmen's precision instruments and apparatus, viz.:-Alidades; altazimuth surveying instruments; aneroid barometers, engineering, military and surveying; angle prisms; boards, military sketching; box sextants, clinometers; compasses; cross staff heads; curves, adjustable, irregular, railroad and ship; curvimeters; drafting instruments of all kinds, including fitted cases containing the same; dipping needles; drafting machines; heliographs; integrators; levels, tripod and hand or pocket types; levelling rods; liners, section; meters, portable for hydraulic engineering; pantographs; planimeters; protractors; parallel rulers; parallel ruling attachments; poles, ranging; pedometers and paceometers; plane tables, military and topographic; scales, flat and triangular; slide rules; splines; straight edges, steel and wooden; taeheometers; tallying machines, pocket; tee squares, steel and wooden; telemeters; theodolites; transits, tripod and hand or pocket types; triangles of all types; tripods for use with any of the foregoing instruments; parts of all the foregoing, finished or not	
British
Preferential
Tariff
Mosb
Favoured-
Nation
Tariff
Free	9 p.c.
Free	9 p.c.
43 lg
Fixed or stationary meters, of a size or capacity not made in Canada, for hydraulic engineering; gauges, indicators and recorders for water or other liquid levels, volume or flow, of a class or kind not made in Canada	
Free
17J P-C.
General Tariff	Rates in Effect Prior to Rates Proposed in this Bud	;etBritish Preferential Tariff	Most- Favoured- Nation Tariff	General Tariff10 p.c.	Free	10 p.c.	10 p.c.(9 p.c. on some)	10 p.e.	Free	10 p.c.	10 p.c.(9 p.c. on some)	20 p.c.	Free	20 p.c.	35 p.c.(18 p.c. on some)	
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The Budget-Customs Tariff
431h
438b
Geophysical surveying precision instruments and equipment for use exclusively in prospecting foi, or in the exploration and development of, petroleum, natural gas, water wells and minerals, or for geophysical studies for engineering projects, including the following: magnetometers; gravity meters and other instruments designed to measure the elements, variations and distortions of the natural gravitational force; field potentiometers, meggers, nonpolarizing electrodes, and electrical equipment for making measurements in drill holes; instruments and equipment for seismic prospecting; geiger muller counters and other instruments for radioactive methods of geophysical prospecting; electrical and electronic amplifying devices and electrical thermostats designed to be used with any of the foregoing; all the foregoing of a class or kind not made in Canada, and repair parts, tripods and fitted carrying cases for any of the foregoing	
Free
Locomotives, cars and coaches and repair equipment, belonging to railroads, brought temporarily into Canada for the purpose of clearing obstructions, fighting fires or making emergency repairs on railway lines within Canada; detector cars when imported to test rail in tracks in Canada	
Bearings, clutch release; bearings graphite; bearings steel or bronze backed, with non-ferrous metal lining; bearings, steering knuckle thrust; bushings, graphited or oil impregnated; ceramic insulator spark plug cores, not further manufactured than burned and glazed, printed or decorated or not, without fittings; collars, crankshaft thrust; compressors, air; commutator copper segments; commutator insulating end rings; tapered discs of hot lolled steel, with or without centre hole, for disc wheels; distributor rotors and cam assemblies; door bumper shoes; electric wiring terminals, sockets, fittings and connectors and parts and combinations thereof, not to include battery terminals; gaskets of any material except cork or felt, composite or not, parts and materials therefor; ignition contact points; keys for shafting; auxiliary driving control kits, designed for attachment to motor vehicles to facilitate their operation by physically disabled persons and parts thereof; lenses of glass
P'rce
Free
30 p c.
Free
2} P-c. Free 15 p.c. Free Free
15 p.c. 15 p.c. 22J- p.c. 10 p.c. Free
Free 20 p.c.
30 p.c. 30 p.c. 30 p.c. 15 p.c. Free
Free 35 p.c.
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[Stage Direction]
The Budget-Customs Tariff

Tariff
Item
438b -Con.
438c
British
Preferential
Tariff
Most-
Favoured-
Nation
Tariff
General
Tariff
Rates in Effect Prior to Rates Proposed in this Budget
British
Preferential
Tariff
Most-
Favoured-
Nation
Tariff
General
Tariff
for motor vehicle lamps and for light reflectors; lock washers; magnetic plugs; piston ring castings in the rough, with or without gates and fins removed; propeller shaft tubes of steel bonded by rubber; rails of lock seam section, corners, locks and catches, unplated ventilators and parts thereof, the foregoing being of metal other than aluminum, for the manufacture of window sashes for bus bodies; steel bolts, studs, plugs, rivets or nuts, capped with stainless steel, and parts thereof; switches, relays, circuit breakers and solenoids and combinations and parts thereof; vacuum control assemblies and parts thereof; vulcanized fibre in sheets, rods, strips and tubings; all of the foregoing when of a class or kind not made in Canada and for use in the manufacture or the repair of the goods enumerated in tariff items 424 and 438a, or for use in the manufacture of parts therefor	
Free
Free
30 p.c.
Free 10 p.c.
Free 25 p.c.
30 p.c. 35 p.c.
Ammeters; arm rests and wheel housing lining of indurated fibre, pressed to shape; axle housings, one piece welded, machined or not, including parts welded thereto; carburetors; chassis frames and steel shapes for the manufacture thereof; cigar and cigarette lighters, whether in combination with a cigarette holder or not, including base; control ventilator gear box; cylinder lock barrels, with or without sleeves and keys thereof; dash heat indicators; engine speed governor units; external ornaments unplated, not including finish or decorative moulding; fluid couplings, with or without drive plate assemblies; front axle cross channel king pin support section assembly of steel, in the rough; fuel pumps, vacuum pumps and combinations thereof; gasoline gauges; grilles not plated, polished or not before assembly, and parts thereof not plated or polished, not to include added finish or decorative moulding; hinges, finished or not, for bodies; horns; instrument bezel assemblies; instrument board lamps; instrument panel, glove compartment, ,
0 £ K
[Stage Direction]
The Budget-Customs Tariff
luggage compartment, hood compartment and door step lamps and wire assemblies; locks, electric ignition, steering gear, transmission, or combinations of such locks; mouldings of metal, with nails set in position, lead filled or not; oil filters; oil gauges; pipe lines of tubing, rigid or flexible, covered or not, with or without fittings and tubing therefore for oil, fuel, air, or liquid for actuating hydraulic brakes; purifiers for air; purifiers for oil or gasoline; radiator shutter assemblies, automatic; radiator water gauges; radiator shells not plated nor metal finished in any degree; shackles, bearing spring; speedometers; spring covers of metal and closing strips or shapes therefor; stampings, body, cowl, fender, hood, instrument board, of metal in the rough, trimmed or not, but not metal finished in any degree; starter switch assemblies; steering wheels, rims and spiders therefor; sun visor blanks of gypsum weatherboard; thermostatic controls; throttle, spark, choke, and hood lock release assemblies, including buttons therefor; tire clamping rings of steel, plated or not; universal joint ball assemblies; voltage control regulators; windshield and window wipers; parts of all the foregoing; all of the foregoing when of a class or kind not made in Canada and for use in the manufacture or repair of the goods enumerated in tariff items 410a (iii), 424 and 438a or for use in the manufacture of parts therefor	
Free
20 p.c.
(1)	Provided, that if the above articles are imported for use as original equipment by a manufacturer of automobiles, motor vehicles, electric trackless trolley buses or chassis enumerated in tariff items 438a, 424 and 410a (iii) whose total factory output during the year in which importation is sought does not exceed ten thousand complete automobiles, motor vehicles, electric trackless trolley buses or chassis, and provided that not less than forty per centum of the factory cost of production of such automobiles, motor vehicles, electric trackless trolley buses or chassis, not to include duties and taxes, is incurred in the British Empire, the rates of duty under this item shall be....
(2)	Provided, that if the above articles are imported for use as original equipment by a manufacturer of automobiles, motor vehicles, electric trackless trolley buses or chassis enumerated in tariff items 438a, 424 and 410a (iii) whose total factory output during the year in which importations is
Free
Free
30 p.c.	Free
Various
20 p.c. Various
30 p.c. Various
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[Stage Direction]
00
25 p.c.
Free
The Budget-Customs Tariff

Tariff Item	British Preferential Tariff	Most-	General Tariff	Rates in Effect Prior to Rates Proposed in this Budget	Favoured- Nation Tariff	British Preferential Tariff	Most-Fa voured-Nation Tariff	General Tariff438c -Con.	sought exceeds ten thousand automobiles, motor vehicles, electric trackless trolley buses or chassis, and provided that not less than sixty-five per centum of the factory cost of production of such automobiles, motor vehicles electric trackless trolley buses or chassis, not to include duties and taxes, is incurred in the British Empire, the rates of duty under this item shall be	Free	Free	25 p.c.	Free	Free	25 p.c.438d	(3) Provided that the Governor in Council may make such regulations, if any, as are deemed necessary for carrying out the provisions of this item. Front and rear axles; brakes; clutches; drums; hubs; internal combustion engines; steering gears; magnetos ; rims for pneumatic tires larger than thirty inches by five inches; transmission assemblies; hydraulic or fluid couplings and torque convertors; drive shafts; universal joints; steel road wheels; power dividers or transfer cases; and parts of the foregoing, when of a class or kind not made in Canada, and imported by manufacturers of the goods enumerated in tariff items 410a (iii), 424 and 438a for use only in the manufacture of motor trucks, motor buses and electric trackless trolley buses, or for the manufacture of chassis for the same	Free	171 pc.	27] p.c.	Free	17] p.c.	27] p.c.(1) Provided that if the above articles are imported for use as original equipment for motor trucks, motor buses and electric trackless trolley buses, or for chassis for the same, by a manufacturer of the goods enumerated in tariff items 410a (iii), 424 and 438a, and provided also that during the year during which importation is sought, not less than forty per centum of the factory cost of production of such motor vehicles and chassis therefor, not to include duties and taxes, is incurred in the British Empire, the rates of duty under this item shall be	Free	7] p.c.	271 pc.	10 p.c. Free	25 p.c. 7] p.c.	35 p.c. 27] p.c.(2) Provided that the Governor in Council may make such regulations, if any, as are deemed necessary for carrying out the provisions of this item.	
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The Budget-Customs Tariff
438e
Parte, n.o.p., for automobiles, motor vehicles, electric trackless trolley buses or chassis enumerated in tariff items 438a and 424, not to include wireless receiving sets, die castings of zinc, electric storage batteries, parts of wood, tires and tubes or parts of which the component material, of chief value is rubber:-
(1) Brake linings, and clutch facings whether or not including metallic wires or threads:-
(a)	When made from crude asbestos of British
Commonwealth origin	 Free
(b)	When made from crude asbestos, n.o.p...	15 p.c.
(2) Automobile and motor vehicle engines, stripped, n.o.p., and complete parts thereof, n.o.p.
Free
(3) Parts, n.o.p., electro-plated or not, whether finished or not	
Free
Provided, that parts in chief value of iron or steel which were classified for duty purposes under tariff items 427 or 446a, as of January 1, 1936, shall be dutiable at	 Free
(4) Parts, n.o.p., of brass or copper, whether finished or not	 Free
439c
Farm wagons, including four-wheeled farm wagons equipped to be tractor-drawn; farm sleds; logging wagons; logging sleds; and complete parts of all the foregoing	
Free
25 p.c 25 p.c
25 p.c
30 p.c
25 p.c 27 p.c
15 p.c
442d
Materials, including all parts, wholly or in chief part of metal, of a class or kind not made in Canada, when imported by manufacturers of goods entitled to entry under tariff items 410g, 4101, 410n, 410o, 410p, 410q, 410u, 410w, 410z, 411, 411a, 411b, 427b, 427c, 427f, 428c, 428e, 440k, and 447a, for use in the manufacture of such goods in their own factories, under such regulations as the Minister may prescribe	
Free
p.c.
Provided that materials and parts which are entitled to free entry or to a lower rate of duty than is specified in this item shall not be dutiable under this item.
35 p.c.	Free	25 p.c.35 p.c.	15 p.c.	25 p.c.35 p.c.	Free	25 p.c.40 p.c.	Free	30 p.c.15 p.c.	22$ p.c.40 p.c.	Free	25 p.c.40 p.c.	Free	27 p.c.25 p.c.	Free	15 p.c.15 p.c.	22$ p.c.10 p.c.	Free	10 p.c.
35 p.c. 35 p.c.
35 p.c.
40 p.c. 45 p.c.
40 p.c. 40 p.c.
25 p.c. 35 p.c.
10 p.c.
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[Stage Direction]
The Budget-Customs Tariff

Tariff
Item
445m
445n
445o
British
Preferential
Tariff
Most-
Favoured-
Nation
Tariff
(i)	Flameproof electric switchgear, for use underground in coal mines, and complete parts thereof Free
(ii)	Flameproof electric transformers, rectifiers,
cable-connecting devices, trailing cable extensions with couplers moulded on, junction boxes, and complete parts of the foregoing, when of a class or kind not made in Canada and for use underground in coal mines	 Free
20 p.c.
10 p.c.
Electrical instruments and apparatus of precision of a class or kind not made in Canada, viz.:-Meters or gauges for indicating and/or recording altitude, amperes, comparisons, capacity, density, depth, distance, electrolysis, flux, force, frequency, humidity, inductance, liquid levels, ohms, operation, power factor, pressure, space, speed, stress, thrust, synchronism, temperature, time, volts, volume, watts, weight; complete parts thereof	
Free
15 p.c.
(i) Acid-free capacitor tissue and paper, plain and gummed; metal cans, extruded, plated or unplated; automatic record changers; parts for pickups; bias cells and holders; frames, yokes, brackets, pole-pieces, gaskets and field covers, separate or assembled for use in speakers with mounting diametor not exceeding 6| inches; cones, spiders, spiders suspensions, voice coils and voice coil dust covers, separate or assembled; magnetic structures and parts thereof for permanent magnet speakers; glass dial crystals and scales and metal dials or scales made by the silk-screen process; metal cabinet escutcheons without crystals, plain or finished; high frequency circuit switches and essential components thereof; high frequency iron cores with or without inserts moulded therein; motors and gears for automatic tuning; radio frequency ceramics; raw low loss mica; sheets and punchings of low loss mica; tube shields and parts thereof; vibrators; vulcanized fibre in sheets, rods, strips or tubing; high frequency coil forms and tubing having an outside diameter not
Rates in Effect Prior to Rates Proposed in this Budget
General
Tariff
30 p.c.
British
Preferential
Tariff
Most-
Favoured-
Nation
Tariff
General
Tariff
Free
20 p.c.
30 p.c.
[Stage Direction]
37] p.c.
30 p.c.
15 p.c. 15 p.c.
Free 10 p.c.
221 p.c. 22] p.c.
15 p.c. 20 p.c.
37] p.c. 30 p.c.
30 p.c. 35 p.c.
[Stage Direction]
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The Budget-Customs Tariff
445o -Cm.	exceeding one inch; for use in the manufacture or the repairs of the goods enumerated in tariff items 445d, 597a, and other apparatus using radio tubes, or for use in the manufacture of parts thcre-	Free
	(ii) Metal powders; etched aluminum foil; alloy resistance wire having a diameter of less than [DOT] 005 inch; spring-drive motors for record turn-tables; automatic record-centering mechanisms with tone arm, not including motors or turntables; metal cabinet escutcheons with crystals, plain or finished; when of a class or kind not made in Canada and for use in the manufacture or the repair of the goods enumerated in tariff items 445d, 597a, and other apparatus using radio tubes, or for use in the manufacture of parts therefor		Free
	(iii) Materials and parts, not including motors, for use by manufacturers of apparatus using radio tubes, or of parts therefor, in the manufacture, in their own factories, of the goods enumerated in tariff items 445o (i) and 445o (ii)		Free
476	Surgical and dental instruments of any material;	
	surgical needles; clinical thermometers and cases therefor; X-ray apparatus; microscopes valued at not less than fifty dollars each, retail; complete parts of all the foregoing		Free
tSOa	Invalid wheel chairs, with or without motive power,	
	and parts thereof		Free
499a	Walnut shell flour, wood flour, and bark flour		Free
604a	Ponderosa pine lumber (pinus ponderosa) and Califor-	
	nia sugar pine lumber (pinus Lambertiana), not further manufactured than planed, dressed, or	Free
523n	Seamless cotton bags		15 p.c.
	and, per pound	
Free
Free
Free
Free
10 p.c. 5 p.e.
Free
22! P-c-
30 p.c.	Free Free	Free	30 p.c.30 p.c.	10 p.c.	20 p.c.	35 p.c.Free	30 p.c.	30 p.c.Free	20 p.c.	30 p.c.10 p.c.	25 p.c.	35 p.c.15 p.c.	20 p.c.	30 p.c.30 p.c.	Various	Various	VariousFree	Free	Free	F ree20 p.c.	25 p.c.	35 p.c.15 p.c.	224 P-c.	45 p.c.12$ p.c.	224 P-c.	40 p.c.15 p.c.	20 p.c.	25 p.c.15 p.c.	Free	10 p.c.	15 p.c.Free	174 P-c.	274 P-c.20 p.c.	15 p.c.	20 p.c.	25 p.c.Free	Free	Free	Free25 p.c.	15 p.c	224 P-c.	25 p.c.4 cts.	4 cts.
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The Budget-Customs Tariff
Tariff
Item
Cordage, exceeding one inch in of vegetable fibres, n.o.p.... „ On and after July 31, 1949.
circumference, wholly
British
Preferential
Tariff
7* p.c. 17* p.c.
Most-
Favoured-
Nation
Tariff
12* p.c. 22* p.c.
585a Tall oil, tall oil pitch and blended tall oil and tall oil pitch	
587 Coke, n.o.p	
Free
Free
Free
Free
654a
Pins or pegs of synthetic resin used as bristles in the manufacture of brushes	
Free
p.c.
[Stage Direction]
Mouthpieces in the rough, screws, aluminum pipe fitments, pipe bowls moulded from briarwood dust, bowls of wood not further processed than frazed, corn cobs and corn cob bowls not further processed than shaped, when imported by manufacturers of tobacco pipes for use in the manufacture of such pipes, in their own factories	
Free
Free
682a
Net floats of any material except wood, for use exclusively in commercial fishing	
Free
Free
Collections of coins and/or medals; postage stamps; medals of metal and other metallic articles, which have been bestowed as trophies or prizes and received and accepted as honorary distinctions, or which have been donated by persons or organizations abroad for such purposes; trophy cups of metal and other metallic prizes (not usual merchantable commodities) won abroad in bona fide competitions, or donated by persons or organizations abroad for such purposes in Canada. The foregoing not to include medals, trophies or prizes which are regularly presented by organizations or business companies to their members, employees or representatives	
Free
Free
General Tariff	Rates in Effect Prior to Rates Proposed in this Budget		
British Preferential Tariff	Most- Favoured- Nation Tariff	General Tariff25 p.c.	17* p c.	22^ p.c.	25 p.c.25 p.c.	Free	15 p.c.	20 p.c.	25 p.c.Free	Free	$1.00	$1.00per ton	per ton20 p.c.	15 p.c.	20 p.c.	25 p.c.25 p.c.	Free	Free	25 p.c.15 p.c.	20 p.c.	25 p.c.Free	Free	Free	Free15 p.c.	20 p.c.	25 p.c.Free	Free	Free	FreeVarious	Various	Various
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The Budget-Customs Tariff
693	(iii) Antiquities (other than spirits or wines) produced prior to January 1, 1847, under such regulations, including proof of antiquity, as may be prescribed by the Minister	Free	Free696b	Provided that, notwithstanding anything to the contrary in this Act or in any other law or regulation relating to Customs, antiquities as described in part (iii) of this item shall, for entry thereunder, be relieved from the requirements as to origin or British Empire content. Films produced by or issued under the authority of government tourist bureaux, railway authorities, airway authorities or steamship companies; subject to such regulations as the Minister may prescribe	Free	Free696e	Phonograph records for bona fide libraries, and being the property of the organized authorities of such libraries and not in any case the property of individuals or business concerns, under such regulations as the Minister may prescribe	Free	Free848	All machinery and apparatus and parts thereof (including motive power) and drilling mud, for use exclusively in exploratory or discovery work in connection with, and development, depletion and production of petroleum or natural gas wells; seamless, lapwelded and electric welded iron or steel easing, tubing and drill pipe for use in connection with natural gas or oil wells	Free	FreeFree	Free	Free	FreeFree	Free	Free	FreeFree	10 p.e.	15 p.c.Free	15 p.c.	20 p.c.	30 p.e.Free	Free	FreeFree	Free	Free	Free
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[Stage Direction]
The Budget-Customs Tariff
3. Resolved, that schedule A to the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, as amended, he further [DOT]mended by striking thereout tariff items 523, 523a, 523b, 523e, 523j, 523k, 5231, 524a, 532b and 561, the several enumerations of goods respectively and the several rates of duties of customs set opposite each of the said items, and by inserting the following items, enumerations and rates of duty in said schedule A:
Tariff
Item
British
Preferential
Tariff
Most-
Favoured-
Nation
Tariff
General
Tariff
Woven fabrics, wholly of cotton, not bleached, mercerized nor coloured, n.o.p	
and, per pound
On and after July 1, 1949	
and, per pound
Free 15 p.c.
3 cts. 15 p.c. 3 cts.
25 p.c. 4 cts. 25 p.c. 4 cts.
523a
Woven fabrics, wholly of cotton, bleached or mercerized, not coloured, n.o.p	
and, per pound
On and after July 1, 1949	
and, per pound
Free
17$p.c.
3 cts. 17$ p.c.
3 cts.
27$ p.c. 4 cts. 27$ p.c. 4 cts.
523b
Woven fabrics, wholly of cotton, printed, dyed or coloured, n.o.p.:-
(i)	Valued at more than 80 cents per pound...
and, per pound
On and after July 1, 1949	
and, per pound
(ii)	Valued at 50 cents or more but not more than
80 cents per pound	
and, per pound
On and after July 1, 1949	
and, per pound
(iii) Valued at less than 50 cents per pound..
and, per pound
On and after, July 1, 1949	
and, per pound
Free 17$ p.c.
Free
17i'p.'c.
Free
mp.'c.
(iv) Woven fabrics, wholly of cotton, commonly known as denims, when imported by manufacturers for use in their own factories in the
manufacture of garments	
and, per pound
On and after July 1, 1949	
and, per pound
Free 17$ p.c.
3 cts. 17$ p.c. 3 cts.
5 p.c.
3 cts. 22$ p.c. 3 cts.
7* p.c. 3$ cts. 25 p.c. 3$ cts.
3 cts. 17$ p.c. 3 cts.
32$ p.c. 4 cts. 32$ p.c. 4 cts.
32$ p.c. 4 cts. 32$ p.c. 4 cts.
32$ p.c. 4 cts. 32$ p.c. 4 cts.
32$ p.c. 4 cts. 32$ p.c. 4 cts.
Rates in Effect Prior to Rates Proposed in this Budget
British Preferential Tariff	Most- Favoured- Nation Tariff	General Tariff15 p.c.	15 p.c.	25 p.c.3 cts.	4 cts.17$ p.c.	17$ p.c.	27$ p.c.3 cts.	4 cts.17$ p.c.	17$ p.c.	32$ p.c.3 cts.	4 cts.17$ p.c.	22$ p.c.	32$ p.c.3 cts.	4 cts.17$ p.c.	25 p.c.	32$ p.c.3$ cts.	4 cts.17$ p.c.	17$ p.c.	32$ p.c.3 cts.	4 cts.
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The Budget-Customs Tariff
523e
523j
523k
524a
532b
Woven fabrics wholly of cotton with cut pile, n.o.p_
and, per pound
On and after July 1, 1949	
and, per pound
Shadow cretonnes, wholly of cotton, with printed
warp and plain weft	
and, per pound
On and after July 1, 1949	
and, per pound
Gabardines, wholly of cotton, with not less than 280
ends and picks of ply yarn per square inch__
and, per pound
On and after July 1, 1949	
and, per pound
Woven fabrics, wholly of cotton, composed of yarns, of counts of not less than 80 and not more than 99, including all such fabrics in which the average count of the warp and weft yarns is not less than
80 and not more than 99	
and, per pound
On and after Julyl, 1949	
and, per pound
Fabrics with cut weft pile, wholly of cotton or of cotton and synthetic textile fibres or filaments....
and, per pound
On and after July 1, 1949	
and, per pound
Woven fabric, wholly of cotton, for covering books.
and, per pound
On and after July 1, 1949	
and, per pound
Woven fabrics wholly or in part of synthetic textile fibres or filaments, not to contain wool, not including fabrics in chief part by weight of silk, n.o.p_
and, per pound
On and after July 1, 1949	
and, per pound
Free	10 p.c.	32$ p.c
	3$ cts.	4 cts.
15 p.c.	25 p.c.	32$ p.c
	3$ cts.	4 cts.
Free	15 p.c.	32$ p.c
	3$ cts.	4 cts.
10 p.c.	25 p.c.	32$ p.c
	3$ cts.	4 cts.
Free	15 p.c.	32$ p.c
	3$ cts.	4 cts.
10 p.c.	25 p.c.	32$ p.c
	3$ cts.	4 cts.
Free	7$ p.c.	32$ p.c
	3 cts.	4 cts.
12$ p.c.	20 p.c.	32$ p.c
	3 cts.	4 cts.
F'ree	20 p.c.	32$ p.c.
	3$ cts.	4 cts.
5 p.c.	25 p.c.	32$ p.c.
	3$ cts.	4 cts.
Free	12$ p.c.	35 p.c.15 p.c.	27$ p.c.	35 p.c.Free	5 p.c.	45 p.c.40 cts.	40 cts.22$ p.c.	27$ p.c.	45 p.c.40 cts.	40 cts.
15 p.c.
10 p.c.
10 p.c.
12J p.c.
5 p.c.
15 p.c.
22$ p.c.
25 p.c. 3$ cts.
25 p.c. 3$ cts.
25 p.c. 3$ cts.
20 p.c. 3 cts.
25 p.c. 3$ cts.
27$ p.c.
27$ p.c. 40 cts.
32$ p.c. 4 cts.
32$ p.c. 4 cts.
32$ p.c. 4 cts.
32$ p.c. 4 cts.
32$ p.c. 4 cts.
35 p.c. 4 cts.
45 p.c. 40 cts.
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4. Resolved, that any enactment founded upon the foregoing resolutions to amend the Customs tariff or to have come into force on the nineteenth day of May, one thousand nine hundred and forty-eight, and to have the foregoing resolutions imported or taken out of warehouse for consumption on and after that date, and to imported for which no entry for consumption was made before that date.
schedules thereto shall be deemed applied to all goods mentioned in have applied to goods previously
The Budget-Customs Tariff
The Budget-Mr. Macdonnell
Mr. J. M. MACDONNELL (Muskoka-Ontario):: Mr. Speaker, before moving the adjournment of the debate, I wish to make a few brief observations, as is customary on these occasions. My first words must be words of congratulation to the minister. I do not know whether I shall go quite as far in praising him and the government to which he belongs as he has gone himself. But we will all agree that the minister has given us a thoughtful and interesting picture of our national position.
I congratulate the minister upon putting a good face on things. The minister is a good lawyer and he knows that good lawyers are called in to present hard cases. I think he has not had too easy a time of it tonight.
I shall, like him, be entirely non-political in aill I shall say. And indeed, before I take my seat, I shall express concurrence in certain of the measures which he has proposed. But the first thing I should like to do is to make some general observations on a subject which he has already dealt with, and that is the general position of our country, and one or two of the chief problems which we face.
The first problem I wish to mention, and perhaps the problem which is of the most pressing importance, is the economic position which we are in with regard to the United States. I would draw that to the attention of the house by making a brief quotation from a newspaper called the Winnipeg Free Press. The Winnipeg Free Press is a newspaper which from time to time shows signs of independence. Indeed I believe from time to time we have been told that it is independent. However I always note that, as an election comes around, it seems to line up and know exactly where it belongs. However, this is written in a moment of independence; therefore I read briefly from its issue of May 14:
In the annual report which he will soon make to parliament Mr. Abbott may be expected to face frankly the grave situation in which Canada now finds itself. If he is frank he will admit that all measures so far taken by the government to save dollars have fallen far short of a basic solution of our problem. He will have to admit, indeed, that no solution is yet in sight.
The minister will realize that my congratulations have come to an end and I now wish to take a somewhat different tone. I think the minister has skated delicately and cleverly around this problem. He has referred to it; it has been mentioned. But I think the minister has really not gone at it very seriously. Indeed, I think we have been left with some rather misleading impressions.
The minister has a surplus. The minister had a surplus a year ago and at that time I

think the minister was very naturally pleased -perhaps a little elated-with it. I do not think we can expect the minister to be unnecessarily elated by his surplus this year, though I think the position he took at that time was not realistic. But I say it is wise for him to remember that this surplus is very queer, because all the reasons for it are bad ones.
First of all, we have the reason that the estimate made a year ago was so wide of the mark. I am sure I would be the last man to put the blame upon any of the able civil servants. Where I put the blame is that we have had legislation lagging so far behind and we have had administration lagging so far behind that I can well imagine that, with tax returns years behind, the department has had great difficulty in making an estimate.
Other reasons have been glanced at by the minister: one, the fact that prices have risen so drastically from time to time, and also the fact that, for reasons with which we are all familiar, the government itself practically instituted a spending spree in the United States. That also increased the surplus. But I do not think I need say more about that. I do not think the minister is too elated about that this year because, after all, they have a surplus in Great Britain, but nobody feels that the surplus in Great Britain has solved or begins to solve their problem.
The minister indicated in various ways that he was not too easy in his own mind. He spoke about the "irritating controls" which the government has had to impose. He was not exaggerating there. Then he spoke about the exchange reserves which had sunk to "dangerously low levels". He was speaking very frankly and realistically there. Then he said that no one can survey the world without thinking more of "problems and difficulties than of progress and achievement". That is a very sound statement, and I think it is a good thing the minister did have that in mind.
We look about us and find many things, and I shall refer to them briefly, because I am not forgetting that this speech is to be a short one; we find many things which conduce to anything but self-congratulation. First of all, the hon. member for Cape Breton South (Mr. Gillis) reminded us the other day that, in spite of the tremendous employment of which we talk so much there are 27,000 unemployed, I forget whether he said in the maritime provinces or in Nova Scotia.
Then, of course, we have high prices and, constantly, the bad housing situation. Then we have a condition where our dollar is worth only sixty-five cents as compared with 1939.

The Budget-Mr. Macdonnell
Then we have the taxes for an average family of five now working out to 1990 as against $193 in 1939. The average family of five has an over-all tax now of about $1,300.
Then, when we look abroad-I come back to the United States-we find that Canada has gone over to the great majority and that we are now short of United States dollars too. The only difference between ourselves and the other nations is that we asked for it. We were well enough off; we were getting along quite well, thank you, in June, 1946; but we did not know that we were well off. I am reminded of the epitaph of a man who had a rather sardonic nature. He must have taken time off to write his own epitaph, because he said: "I was well; I wished to be better; I am here". In June, 1946, we were getting along quite well, but then we decided arbitrarily to change the value of our dollar and since then we have been getting along very badly, worse and worse.
The effects of our action were really two. First of all, we lost $1,100,000,000 of precious United States reserves that we had. Second, and perhaps still worse, we cut off like turning a tap the United States investment in this country which had been one of the regular, normal and necessary aspects of our economic life for decades, I might almost say generations. We cut that off like turning a tap and we have persisted in the operation which keeps it cut off. We were getting United States dollars at the rate of $25,000,000 a month but we cut it off. Having shut off the dollars, we had to shut out United States goods.
We then set up certain powers, powers which the Minister of Finance does not like any better than we like them here. He did not give them any blessing tonight. He referred to them sadly and a little regretfully, but there they are. Arbitrary powers were given to the minister of all the talents.


Clarence Decatur Howe: Narrow, low comedy.


James MacKerras Macdonnell: Cannot I even compliment the minister? What I want to point out is that these powers of last autumn that we heard so much about and that were going to do such wonders, "they ain't been allowed to work." According to responsible authority, we find that actually we imported more goods from the United States in January and February of this year than we did in January and February of 1947. How that makes sense, I do not know, but it almost looks as if the minister by his training-it might be quite natural-is much more interested in large construction than he is in small construction and therefore is more interested 5849-260J
in letting in materials of various kinds from the United States for large construction. I must hurry on.
I want to say just one thing. We have not only distorted our economy abroad; we have distorted our economy at home by government action. The minister was engagingly frank when he referred to the results produced by government policy. He said:
... we are spending a record-breaking volume of funds in the construction of industrial plants . . . public utilities and housing, bidding against each other for a highly limited supply of construction, labour and materials. An inevitable result of this endeavour to do too much too quickly, is the persistent upward pressure on the price level.
Why would not there be a pressure on the price level? I shall explain that in a moment. This is engaging frankness with a vengeance because the reason for this tremendous expansion is that for several years now we have had a special policy of accelerated, unusual and exceptionally high depreciation which has stimulated, again according to I he best authorities, a building campaign of $1,400,000,000. Think of that. We have that competition and that is why probably my hon. friend to my left here cannot get any nails. They are building all kinds of large construction and we cannot have nails now for the poor man. In the meantime we have these tremendously large projects on hand.
I was struck by this statement and I could hardly believe it. Apparently it is true that by this special depreciation we have stimulated the increase of our industrial plant to the extent where it will be 377 per cent over 1939. It is scarcely creditable when we find that the comparable figure in the United States is 50 per cent.


Clarence Decatur Howe: Is that bad?


James MacKerras Macdonnell: In other words, the minister thinks that we in Canada can go seven times as fast as the United States. He will need seven-league boots to do that. That, is one of the reasons why we cannot have houses, that is one of the reasons why we have prices going through the roof. I do not need to say anything more because the words of the Minister of Finance have made it clear. He has used words which I hope I would have used myself, but I am very grateful to him for using them. We are trying to do "too much too quickly"; not "too little and too late," but "too much too quickly."
This feverish expansion has, of course, greatly lessened the production of consumer goods. You cannot be building factories to make tools and at the same time have men and materials for consumer goods. As I say, that is the
The Budget-Mr. Macdonnell

reason why prices have gone up. There is a simple illustration, perhaps not a very clever one; but to my mind we are rather like a farmer who starts to build out of his resources a great barn which, incidentally, in the end may prove to be too large for his needs, while in the meantime he neglects entirely the production of necessities for his family.
Before I take my seat, I wish to make one or two remarks about the details of the budget. The minister has already seen the approval of the whole house for his relief for elderly people. I wish to say that I think his argument for budgeting for a surplus is sound for the reasons that he gave: in the first place, because of the unusual and unprecedented and very likely non-continuing size of our present income and, second, because of the possibility, regrettable though it be, of the need for additional defence expenditures.
I have referred to the relief for elderly people. Then there is the reduction in the sales tax on foods. I would like to think that the minister may have attended the recent annual meeting of our party, but I do not think any people have a patent on that idea any. more than he has.


Mr. ROWE:: Except they put it on.


James MacKerras Macdonnell: Yes.
One other thing I wish to say, however, is that if anything were needed to prove the soundness of the arguments which were used in this house just two months ago against that absurd additional excise tax, it is the present action of the minister in relieving these other taxes while leaving that tax still on. That [DOT]tax, Mr. Speaker, will stand as a monument of unregenerate political pride, and the friends of the party to which the minister belong can only *hope that they will have better monuments to mark their achievements. Mr. Speaker, I move the adjournment of the debate.
Motion agreed to and the debate adjourned.



CANADA SHIPPING ACT AMENDMENTS TO ACT OF 1934

[Stage Direction]
The house resumed consideration in committee of Bill No. 300, to amend the Canada Shipping Act, 1934-Mr. Chevricr-Mr. Macdonald (Brantford City) in the chair.
William Ross Macdonald: The committee was
dealing with section 20-


Angus MacInnis: Mr. Chairman, when the house rose at six o'clock it was my understanding that we were dealing with clause 18.


Lionel Chevrier: I think the hon. gentleman is right. We were dealing with clause IS when the house rose.


William Ross Macdonald: I understood that clause 18 had carried. However I shall now call clause 18.
On section 18-Certificate of discharge.


Angus MacInnis: What is meant by "a continuous discharge book"? Is that a departure from the principle which is now in effect?


Lionel Chevrier: It is to this extent. Under the act as it now stands, a seaman may have a discharge book if he so wishes. It is not compulsory; it is voluntary. This amendment requires him to have a continuous discharge book, in which may be entered by the master a record of his services on the ship in which he is engaged.


James Sinclair: In what way is the record of the man to be entered? What are the classifications?


Lionel Chevrier: The classifications are not changed. The discharge book will be the same as that which now exists. As it is now, the seaman may ask for the book, and in it are recorded a list of headings having to do with his service, his classifications and the like. The terms of the book are not changed; they are identical; but this section provides that the discharge book must be of a continuous nature.


John Thomas Hackett: There is nothing obligatory upon the master to provide such a book. He merely has to give a certificate if the seaman comes to him with the book for the purpose of having an entry made. That is the situation, is it not?


Lionel Chevrier: The department provides the book.


[Stage Direction]
Section agreed to.
On section 19-Payment over of property of deceased seamen.
Angus MacInnis: This clause deals with the property of a deceased seaman, master or apprentice. Why is the property of a person in this occupation dealt with differently from the property of the citizen who is not a master, seaman or apprentice? Is this some particular kind of property that may come into the hands of the minister? I am asking this question because it seems to be a departure from ordinary principles in dealing with the estate of a deceased person.

Canada Shipping Act


Lionel Chevrier: It is a departure to this extent, that it will expedite disposition of the
assets of the deceased seaman. It deals only with the wages owing to him, and the assets that he might possess at the time of his death. The relative section is 222. Heretofore the provisions were different to the extent that the ordinary rules of law applied. The rules of law still apply, but it is much less expensive under the amendment for the dependents of the seaman to obtain the assets than it was before.


James Sinclair: Does it apply only when the seaman dies on the high seas or in a foreign port, or does it also obtain when he dies in a Canadian port or anywhere in Canada?


Lionel Chevrier: It applies regardless of where he dies.


James Sinclair: If the seaman dies in
Canada, why should his estate not be handled in the normal way? I can understand that if a seaman died abroad or in a foreign port there might be a little difficulty in the handling of his estate, because the master of the ship would be the first to take possession of his effects; but surely if a seaman dies in Canada or on a Canadian ship in a Canadian port, would not the ordinary processes of the law apply?


Lionel Chevrier: If he were to come under the ordinary process of the law as set out in section 222, the property would have to be disposed of in accordance with an order of the court, which is a matter of some cost to the claimant; whereas by this amendment it will not be obligatory to obtain an order of the court. It may be paid to the dependent, or to the executor or the executrix or whoever is rightfully entitled to it.


John Thomas Hackett: Where does parliament get jurisdiction in that matter? It would seem to me that if death took place in a port or within any province there might be a question of civil rights arising which would make this section of rather uncertain value.


Lionel Chevrier: This section applies to a case where the property or the assets of the deceased come into the hands of the minister. There are numerous such cases in the administration of deceased seamen's estates.


John Thomas Hackett: My question arose out of the question of the hon. member for Vancouver North.


J. G. Léopold Langlois: It might also be timely to add that this covers property which comes into
the hands of the minister through the master of the ship, and covers only personal effects of the seaman which are left on board after his death.


[Stage Direction]
Section agreed to.
On section 20-Steamships to carry certificated cooks.
Douglas King Hazen: Who has the minister in mind to examine the applicants for cooks?


Lionel Chevrier: There will be set up in
the department a directorate which will handle not only the matter of the examination of cooks but also the provisions of the other international labour conventions. When these are approved, the necessary machinery will be established under the nautical services branch.


John Thomas Hackett: Does the question of proficiency come under the civil service?


Lionel Chevrier: No.


Douglas King Hazen: Has any fee been fixed that the applicant will have to pay who applies for a position as a cook on a ship?


Lionel Chevrier: Nothing has been fixed. The regulations have not been established, but I presume that will be worked out in due course.
On section 21-Governor in council may make regulations to give effect to conventions.


Angus MacInnis: Has the government taken steps to ratify the various conventions of the international labour organization? Do these come under the jurisdiction of the federal government?


Lionel Chevrier: The government has
taken steps to ratify the four conventions approved at Seattle. As regards the second question, Canada is one of the nations that belong to the international labour organization, and if nations concerned agree to ratify the various conventions adopted there, they become effective. Canada has signified its intention of ratifying these four, so that when nations having a tonnage of more than 1,000,000 gross tons registered shipping approve the conventions, they will become effective in this country.


Angus MacInnis: I had in mind that some of the conventions approved by the international labour organization come under the jurisdiction of the provincial governments, and consequently the federal government is not in a position to ratify them. That used to be the explanation given here to account for the small number of ratifications by Canada of

Canada Shipping Act
conventions of the international labour organization. I assume these four are in the schedule to the bill and that they cover matters that come under federal jurisdiction.


Lionel Chevrier: Yes. The hon. gentleman has answered the question.


Douglas King Hazen: Why should there be a distinction between the man who wants to get a job as a sailor and the man who wants to get a job in any industry in the country? The man who looks for a job as a sailor must first have a medical examination, but no provision of that kind applies, so far as I know, to any other citizen of the country if he is looking for a position in industry.


Lionel Chevrier: I do not know whether I can answer the question to the satisfaction of the hon. member. All I can say is that Canada subscribed to the convention, and it was signed by this country and is submitted to parliament for approval in this bill. If it' is the wish that it be not approved, that is a different matter, but I presume that the w'hole problem was discussed and disposed of at the Seattle convention.


Douglas King Hazen: I was wondering whether this matter had ever been brought to the attention of the seamen's unions. Do they favour it?


James Sinclair: The seamen's union of British Columbia were in favour of it. I may say that in our province there are several industrial occupations in which a medical examination is insisted upon before any man can secure employment. Any man who wishes to work underground must have such an examination. The reason the sailors themselves are keen on this provision is that a serious situation could easily develop if a man with an infectious disease or some deficiency embarked on a voyage with healthy men. It is more imperative that an examination be made of such men than in any other industry and I am sure the seamen welcome it most.


Lionel Chevrier: The seamen were represented by one if not two delegates, perhaps more, at the international convention.


Harry Grenfell Archibald: I cannot make out from this whether any amendment has been made in the Canada Shipping Act to this effect, so far as the question of health is concerned. Under the Canada Shipping Act, a seaman may go to sea and the boat may be wrecked. Suppose, let us say, as a result of an accident, he was paralyzed. When he comes back to Canada he has to come back in the ship he sailed in; otherwise he does not get medical attention in Canada. Has that been rectified?


Lionel Chevrier: There is no provision covering that situation, because I am not empowered to bring it forward. The part dealing with the sick mariners' fund is under the department of national health. The point my hon. friend has in mind is covered, I should think, under the workmen's compensation act, which was introduced the year before last and approved.


[Stage Direction]
Section agreed to.
On section 22-Offences.
J. G. Léopold Langlois: I would point out to the minister the expression, when "the ship is placed in security". Will the minister give an assurance that tidal ports and tidal harbours will never be considered as ports of security or places of safety?


Lionel Chevrier: I am afraid I cannot give that assurance. The wording is there and it would be a matter of interpretation. It says that the seaman shall not be guilty of the offense of desertion after his ship and cargo have been placed in security. What is security is a matter of interpretation. I should think that if the ship were securely moored that would end it.


J. G. Léopold Langlois: You are going to leave the interpretation of security to the harbour master and I suppose the department will be issuing instructions to him. The meaning of security, I contend, should be determined here.


James Sinclair: Or the ship's master.


J. G. Léopold Langlois: Yes. That is the kind of assurance I want. Suppose the tide runs out; even though the ship is well moored, if there is no one to look after the lines she will break loose and cast adrift, becoming a danger to all, and endangering the lives of other sailors.


Lionel Chevrier: I should think that at the time the ship is placed in security and the tide has not risen or gone out, the seaman has observed the terms of the clause. If afterwards something happens I do not think the seaman would be to blame.


James Sinclair: Suppose a seaman wanted to go on strike. Subsection 2 says it is permissible and it is not desertion now, provided that he has made the ship secure to the satisfaction of the harbour master or the master of the ship. Where there is no harbour master, as is the case in many ports in British Columbia where deep-sea ships come for timber, it would be easy for the ship's master, by assertion, to declare that the ship was not secure and so hold up the men indefinitely from any action they might want to take with respect to

Canada Shipping Act
striking. I suggest, as does the hon. member for Gaspe, that a much more specific definition of what is security should be right here in the act, to protect both the ship and the rights of seamen. It is not good enough to leave that to the interpretation of either the harbour master or the ship's captain.


Harry Grenfell Archibald: If men are going to go *on strike on the Pacific coast they will wait until the boat ties up in Vancouver. That is the only logical place where they would walk out. They can walk out as soon as the boat is tied up and there are enough personnel to look after the lines. It would be well known on both sides that the boat was securely tied up, with the shore personnel to look after it. I do not think you would have to bother a great deal about that.


[Stage Direction]
Section agreed to.
Sections 23 to 26 inclusive agreed to.
On section 27-Records of service.
James Sinclair: With regard to this record of service which is to be kept at the central registry of the Department of Transport here in Ottawa, will that include just the period of service on various ships, or will it also include the record of the man on discharge from various other ships, so that in the event of a man's losing his continuous discharge book, he could get a duplicate record from the central registry here in Ottawa?


Lionel Chevrier: It includes complete records, I am informed.


John Thomas Hackett: Is any duplicate record of the book kept? I do not think so.


Lionel Chevrier: Yes; I am informed there is.


Harry Grenfell Archibald: In the other place the department's officers stated they wanted to do away with the continuous discharge book. Would the minister not reconsider bringing that back and having separate discharge papers for every voyage? One short voyage can destroy the whole work of a lifetime. It is tough enough as it is, in the case of officers on the Pacific coast, piloting a boat up there. By running on a rock, through just one misguided move, they have lost the benefit of years of good service. You are doing the same thing with a seaman before he even gets started. On a voyage of a couple of weeks, a bum skipper or a bum first mate who has it in for one man can drive him to the point where he will blow up and the skipper or first mate will hand
in a record that will be hanging over that man for his life. There is no sense in my moving amendments here. I should like to see the government do it, and I would be only too glad to support one to make provision for separate discharge sheets for every voyage. If the man wants to present them, there is his record; and the majority of them would be good. Under the qualifications that you now intend to demand for a seaman, you are going to ask for three years' service before he is considered an able-seaman, and he will have to produce records for it. The majority of the records would be good. He might have one bad discharge sheet, but he would not have to present it. He could hold that out.


James Sinclair: That is the point.


Harry Grenfell Archibald: Many people make
mistakes that they hold back on. I really make this appeal to the minister, because I am certain it would make a great deal of difference in labour relations on the boat.


[Stage Direction]
Section agreed to.
Sections 28 to 30 inclusive agreed to.
On section 31-Cabin passage and fifteen dollars a day.
Lionel Chevrier: In order to help members, perhaps I should say here that these sections 352 and 353 have been amended at the request of the pilots' association. The only change here is the substitution of "fifteen" in place of "three" dollars. The departmental officials thought the revision should be made because of increases in costs which have taken place over the years.


[Stage Direction]
Section agreed to.
Sections 32 to 35 inclusive agreed to.
On section 36.
Lionel Chevrier: Perhaps I should say here, with reference to section 36, that this relates to the statement which I made in the house the other day concerning classed ships, ships which are classed by Lloyd's or the British Corporation. The act now provides for inspection once a year; but ships that are classed under these corporations are already inspected annually. So it was considered unnecessary that classed ships be inspected over again. Hence the provision has been inserted that classed ships may not be required to be inspected each year. Then paragraph (p), which has to do with the holding of periodic boat drills, has been inserted in the act so as to carry out the recommendations of the in-
Canada Shipping Act

vestigation which had to do with the sinking of the S.S. Emperor. The commission on that occasion made as one of its recommendations, that on all-ships of a certain size there should be periodic boat drills, so that the seamen would be capable and able to act in a case of emergency.


John Lambert Gibson: Will the minister say what the size is of the ship to which he refers, where a periodic boat drill is demanded?


Lionel Chevrier: It has to do with cargo boats only; it has to do with cargo boats of all sizes.


J. G. Léopold Langlois: As the minister mentioned only the British Corporation and Lloyd's, am I to understand that they are the only two classification societies which will be considered in regard to this section?


Lionel Chevrier: No. All classification
societies will be considered. I just mentioned those as examples.


Andrew Wesley Stuart: I should like to ask the minister a question in connection with the matter referred to by the hon. member for Comox-Alberni, having to do with regulations for the holding of periodic lifeboat drills on cargo boats. Does this mean on the coastwise ships?


Lionel Chevrier: Yes.


Andrew Wesley Stuart: That includes coastwise ships?


Lionel Chevrier: Yes.


Andrew Wesley Stuart: On many of those boats in my section of the country there would be only two men employed, and three on a good-sized boat.


Lionel Chevrier: If the hon. member looks at the section, he will see that this makes provision for regulations. The regulations have not yet been made, and I am sure that a condition such as he refers to will be taken into consideration in making the recommendations.


J. G. Léopold Langlois: Will these boat drills take place before an inspector of this department, or is it a boat drill that will be carried on on board under the supervision of the master of the ship and recorded in the log only?


Lionel Chevrier: It would be under the master of the ship, I am informed. But the regulations would cover a situation such as that.


[Stage Direction]
Section agreed to.
Sections 37 to 39 inclusive agreed to.

On section 40-Minister may relieve ships from compliance with this part.
John Thomas Hackett: This is another clause like clause 11 to which I directed some remarks on the second reading of the bill. Roughly, this section is similar to section 11 of the bill; it refers to section 133a of the act; it gives to the minister certain powers. This section gives to the minister, on the recommendation of the chairman of the board of steamship inspection, the power to delete substantial portions from the statute.


Lionel Chevrier: But only in case of emergency.


John Thomas Hackett: Well, how clear is that? The minister will note that the section we are considering, which is section 40 of the bill, but which is to be section 488A of the shipping act, is in these terms:
Notwithstanding anything in this part, the minister, on the recommendation of the chairman of the board of steamship inspection, may relieve any ship registered in Canada or the owner of any such ship from compliance rvith any of the provisions of this part or regulations made thereunder relating to steamship inspection, excepting provisions relating to radiotelegraph installations in ships, in any specific case of emergency where the minister may deem it necessary or advisable in the public interest, to such extent, in such manner and upon such terms as he may consider proper in the circumstances . . .
The minister will not think me facetious if I tell him that the wonderful capacity of the government to create emergencies does not leave me wholly satisfied that an emergency may not be created without a great deal of justification. In this instance we are dealing with part VII of the Canada Shipping Act, which is under the heading "Safety," and it is in this part that all measures providing for the safety of the crew, the passengers and the ship are enacted. Under section 40 of this bill the minister, upon the recommendation of the chairman of the board of steamship inspection -who as a rule is not unfriendly to the minister-may delete nearly all these safety provisions from the statute. Glancing over these provisions hurriedly, I see that they include safety and inspection certificates; provision as to safety convention, ships not registered in Canada; limited and other voyages; overloading passenger ships; safety precautions, radio equipment and so on. It is the story of the protective devices which the experience of long years of seafaring have placed upon the statute books.
I admit mournfully that within the last three or four years the government has enacted legislation like this. That is, the government has placed it within the power of the executive

Canada Shipping Act
to thwart by executive determination, which is by order in council, legislation embodied in statutes. As a result, there is no fixity in the legislation; there is no permanency in it. Legislation ceases to be applicable to all persons in all cases. It may be applied to A and it may not be applied to B if the governor in council has the approval of the chairman of the board of steamship inspection. No one knows what it takes to convince the chairman of the board of steamship inspection, and no one knows exactly what the law is, because at all times and without notice it is subject to change.
My criticism is levelled at this particular statute. Section 40 is evidence of a tendency which, if persisted in, is bound to undermine the respect Canadians have had for statute law, because it will be variable, indeterminate, and subject to alteration without notice to the parties. I am going to ask the minister if he will be good enough to explain to the committee why such drastic changes are being introduced into this act. I hope he will find a better reason than saying the parliament in Britain has recently passed similar legislation.


Lionel Chevrier: I think I can give my
hon. friend more than one good reason why it is being placed in the statute in this manner.
In the first place, this section, as well as the one of which my hon. friend complained this afternoon, was discussed at quite considerable length in this house under the transitional powers act.


John Thomas Hackett: I am aware of that.


Lionel Chevrier: I do not know whether the hon. gentleman raised the same point


John Thomas Hackett: I did.


Lionel Chevrier: but certainly members of his party raised the point. Those two sections were fully discussed at that time, and it was stated by myself that they would be inserted in the Canada Shipping Act in the amendments to be brought down this session.
This order in council has been in force since 1942. and has worked well. Had it not been in effect, it would have been impossible to keep ships moving. My hon. friend says it is not sufficient to say there is a similar provision in the United Kingdom act. I am not giving that as a reason, but we all like to turn to the British parliament and to cite what is being done there, where they have had far more experience than we have had in maritime matters.
Then, if my hon. friend had read a little further-though I am sure he has read it all- he would have seen that the danger of which
he complains is mitigated substantially by these words:
. . . but the minister shall not relieve any ship or owner from compliance with any such provision to such extent or in such manner as would permit any ship to proceed to sea or make any voyage or trip in an unseaworthy condition, that is to say, unfit by reason of the defective condition of her hull, equipment or machinery, or by reason of undermanning, overloading or improper loading, to proceed to sea or make any such trip or voyage without serious danger to life.
During the debate on the transitional powers measure, I think I was asked how many such exemptions had been given. I do not recall at the moment how many there were, but the number was not great over the years the provision has been in force. Certainly I am able to say that no accident or death or injury to anyone arose by reason of the order in council.


John Thomas Hackett: But would the minister say why it is necessary in peacetime to perpetuate a measure to which we all bowed under the exigencies of war? During the war we yielded up the ordinary processes of democratic government. But now that the war is over, why should the minister be entitled to declare whether or not there is an emergency. He may be a very good and able man; but why should an individual be able to tear up a statute, simply because he believes there is an emergency. We all know that, amid the stresses of the type of life to which the minister and others have devoted their many talents, emergencies of one kind of another come forward rapidly. What is the reason today for deleting from a statute many of these lifepreserving measures, many of these measures which have become law as a result of the experience to which the minister has referred, measures that have been on the statute books unchallenged and untouched until the war?


Lionel Chevrier: Because if this section were not included or if it were not approved, many ships and their cargoes would be tied up and unable to move. I can think of one particular instance where I was called late at night by the master of a ship, who pointed to the fact that he had a huge cargo which would be subject to loss unless he were given an exemption under this section. On the matter being referred to the chairman of the steamship inspection board he reported it was a case of emergency, and recommended that section 488 should not be applied and that the exemption should be given.
If that provision had not existed by virtue of the War Measures Act the ship would have been tied up until a complete inspection could have been made. There are times when it is
Canada Shipping Act

not possible for inspectors to make the annual inspections to see that the boilers, hulls and equipment are in first-class condition. Again, when it appears to the satisfaction of the chairman of the steamship inspection board, who communicates with the inspector in the locality where the ship is situated, that it is a case of emergency, he so recommends to the minister who, as a rule, accepts the advice; because, speaking for myself, I have not the technical knowledge which would permit me to make a decision. I must rely upon the advice I receive from the steamship inspector.


John Thomas Hackett: I do not wish to overstate the case, nor do I wish to be disrespectful to the minister or to say things which would be disagreeable to him. But I must tell him in all sincerity that I think an application of the principle he is advocating is subversive of the whole theory of statutory enactment, and of the rule of law. That rule of law cannot in any respect be dependent upon the whim or good temper or honesty of an individual. A statute containing a provision like this ceases to be a rule of law, and becomes a rule of an individual. That is one of the dangers confronting us today.


John Lambert Gibson: I would say to the hon. member for Stanstead that in the operation of ships some flexibility has to be allowed for the exercise of discretion by the minister, or the chairman of the steamship inspection service. I have in mind a vessel out on whaling operations, which is due to come in for inspection on September 1. Their normal season does not end until probably the middle of October.


John Thomas Hackett: That is not what we are discussing.


John Lambert Gibson: There
should be some discretion left.


John Thomas Hackett: That is not what we are discussing. We are giving to the minister the right to tear page after page out of the Canada Shipping Act. It is a pure act of volition, depending upon his judgment and integrity-


Lionel Chevrier: In a case of emergency.


Angus MacInnis: Mr. Chairman, it is not often I find myself in agreement with the hon. member for Stanstead; but I do at this time.


John Thomas Hackett: With some regrets.


Angus MacInnis: Although, as I say, I do not often find myself in agreement with him, I have great respect for the sincerity of his

point of view and also for his judgment. The minister said that the order in council under the War Measures Act was in effect since 1942. It came into effect in wartime, when we were short of ships, when there was an emergency and when the ordinary rules of safety did not and could not apply. Why today, three years after the war is over-or in the future, perhaps ten years after the war is over-a provision like this should remain, I do not know.
The minister referred to one case where he was called up during the night where a ship with cargo was laid up and unable to move. The question is: Why was that allowed to happen? Why was not the ship examined before she was loaded? If one is going to say, "Well, we have to get out, even if the ship is not inspected; we will have the minister give us a permit in order to sail"-surely that is making a monkey out of the law. Even with my slight knowledge of law, I suggest that would be poor law indeed.
In a committee today I made an attempt to have a slight variation made in a section in another bill. My suggestion was to use an expression somewhat similar to the one I see at the top of this bill-"notwithstanding anything in the preceding section". I was told that was not good law. Here we find the wording goes this far: "notwithstanding anything in this part". It is not a section, but a whole part of the act. The minister could throw the whole act under the table, and give permission to do things the act does not permit. I suggest that is not good law, although it has been in effect since 1942. There was good reason for it at that time, but that reason does not apply today.


Lionel Chevrier: Yes, the reason is the same today as it was then.


Andrew Wesley Stuart: Only last year a company in my constituency had a freighter built in Nova Scotia. Certain equipment required could not be installed in the particular area where it was built. Because of this section in the act, the owners were allowed to bring the boat across the bay of Fundy to the New Brunswick side in order to have the equipment installed. In cases of that kind this section is most helpful.


Harry Grenfell Archibald: Surely there must have been something in the Canada Shipping Act prior to these provisions which have been mentioned. Inspectors must have had some degree of leeway; because I know I have been told to lay off chipping a double bottom, because I was going right through. All that

Canada Shipping Act
was keeping me from the water was rust. I could see that, of course. There must have been some leeway at one time or another prior to these provisions being brought in. I wonder if this is necessary.


Mr. BAKER:: I should like to add a little to what has been said by the hon. member for Comox-Alberni. You must have a certain amount of flexibility. For example, you might have a highly perishable cargo which would be ruined if not moved immediately, which is often the case. It might be that a ship was awaiting inspection but was needed right away in order to move that cargo. It will be noted that section 488A does not take away responsibility for the safety of the ship, the loadline or anything else. The law must be complied with, otherwise the owner and the master are responsible. I believe that a certain amount of flexibility should be permitted and the master given some discretion in the matter. Shipping, particularly sea shipping, is different from any other industry. I think this is an important section.


James Sinclair: I want to make a point in connection with this section in support of the amendment that I said on second reading I was going to move in connection with radiotelegraph service. It will be noted that this section grants great powers to the minister with relation to relieving a ship from various inspections which it should pass, but the minister is not given any leeway with regard to one service. In about the fifth line of the section it says:
. . . excepting provisions relating to radiotelegraph installations in ships . . .
I draw those words to the attention of the committee, because they show clearly that those who drew up the Canada Shipping Act put that service and that inspection above all others. The minister cannot relieve a ship of any responsibility in that connection.


Douglas King Hazen: I tried to get a copy of the merchant shipping act of Great Britain from the library but was unable to do so. Apparently there is only the one copy and it is out.


John Thomas Hackett: I thought the minister had it.


Lionel Chevrier: He is innocent.


Douglas King Hazen: The minister has told us that this proposed amendment follows along the lines of the merchant shipping act of Great Britain. Has the same wording been adopted here as was adopted in Great Britain? I
presume that this was by way of amendment to the merchant shipping act and I should like to know when the amendment was made.


Lionel Chevrier: The amendment to the merchant shipping act of the United Kingdom was made in 1906. I can speak only from memory, but the wording is not exactly the same; there is some variation.


Douglas King Hazen: As I read this section, it does not state who shall determine whether a specific emergency exists.


John Thomas Hackett: The minister does that.


Douglas King Hazen: It says the minister may deem it necessary or advisable in the public interest, but it does not say he is the person who determines that a specific emergency exists. Is that the intention?


Lionel Chevrier: The intention is that, on representations made by various masters or ship owners or steamship inspectors, he may relieve the ship from compliance with this part.


Angus MacInnis: It seems to me that subsection 1 is drafted to apply only to a period of emergency, and in my opinion a period of emergency should be capable of definition. Subsection 2 reads:
Subsection one shall have force and effect only during such period or periods as the governor in council may determine.
That means that any time can be considered a period of emergency. We should have more information as to what creates or causes an emergency when we are asked to give these wide powers to the minister. That explanation has not been given. There were some fantastic statements made in regard to what this section might prevent being done. The hon. member for Charlotte mentioned a ship which had not had its machinery installed and which could not. be moved from one place to another in order to have the machinery installed. Surely that is a fantastic thing, because that ship was not going to sea.


Andrew Wesley Stuart: I beg your pardon, the ship was going to sea.


Angus MacInnis: It could not go to sea without its machinery.


Andrew Wesley Stuart: It could go across the bay of Fundy.
Canada Shipping Act


Angus MacInnis: I think I know that bay nearly as well as my hon. friend. This is important legislation and surely it cannot be justified by the feeble arguments that have been put forward.


John Lambert Gibson: It appears to me that the hon. member for Vancouver East is of a suspicious nature. Apparently he assumes that an individual who happens to own a boat is a capitalist and it is better to put him out of business. You cannot order things at sea the way you can order a taxi business in Vancouver. Emergencies arise and the minister must be given some power.


Angus MacInnis: If the hon. member for Comox-Alberni did not feel so guilty he would not think I was suspicious. I realize that emergencies do occur at sea, and it is because I do not want emergencies to occur that I do not want the minister to be given these wide powers that may send ships to sea that are not worthy to go to sea.


Mr. CHURCH:: It is a dangerous principle to substitute the minister for the board of steamship inspection. We had a measure like that temporarily during the war. The law should provide for the safety of the public.
Progress reported.



BUSINESS OF THE HOUSE

Mr. FOURNIER (Hull):: Tomorrow we shall resume the second reading of Bill No. 280, to amend the National Housing Act, 1944. If that is concluded, we shall take up the second reading of Bill No. 229, to amend the Customs Act. If we make much progress we shall proceed with the second reading of Bill No. 228, to amend the Excise Act, 1934.


Thomas Langton Church: What about the Department of Justice? It will be the eighty-seventh day of the session.


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


[Stage Direction]
Budget Papers presented by the Honourable D. C. Abbott, M.P., for the information of Parliament on the occasion of the Budget of 1948-49

[Stage Direction]
The purpose of this appendix is twofold:
(1)	to make available in one place and in convenient form, as a supplement to the budget, some of the more comprehensive economic statistics prepared by the Dominion Bureau of Statistics and other government agencies;
(2)	to present a preliminary review of the government accounts for the fiscal year which ended on March 31, 1948.
4108
The Budget-Appendix
[Stage Direction]
Part I
tables of economic statistics
Some ot these tables were originally published elsewhere; others appear for the first time in this Appendix. They were selected or designed to provide a bioad factual background to assist in the analysis of the Budget accounts and proposals from an economic point of view. Each is prefaced by a short comment.
The first gioup of tables (Numbers 1 to 15) relates to what are usually referred to as the National Accounts (not to be confused with the Public or Government Accounts). The nature and source of these statistics are described more fully on pages 939 to 946 of the Canada Year Book for 1947. Broadly speaking, they attempt to display and analyse the income, production and expenditure in dollar terms of the Canadian people as a whole for the calendar years 1939 (largely a pre-war year), 1944 (when Canada's war effort was at its peak), 1946 and 1947. Estimates for 1947 are preliminary.
Beginning with a comprehensive statement showing estimated National ncome and Expenditure, the tables proceed to break down the global figures into various segments to illustrate the changing pattern of income and expenditure and to show the relationship between Government Accounts and the National Accounts.
Then follows an analysis of Canada's balance of international payments and foreign exchange reserves.
Finally, a group of tables is presented relating to employment, production prices and money supply.
of Stati^fhnV=nfeStimKateS°(f the. National Accounts for this Appendix the Dominion Bureau mil o!	of revisions on the basis of later information in the figures for
StotistiJa1l9Reviewdy publlshed' These revised figures will also appear in the next issue of the Canadian
National Income and Expenditure
It is estimated that during 194i the Canadian people produced goods and services valued at $13-2 billion, exceeding the previous year by 13%. Most of the increase was accounted for by higher prices and the remainder by greater physical output. After deducting the indirect taxes included in the prices of goods and services and business costs such as depreciation, the net income accruing to Canadians during 1947 is estimated at $10-8 billion, two and a half times as much in dollar terms as in 1939. All types of incomes shared in these increases.

The Budget-Appendix

[Stage Direction]
-	1939	1944	1946	Prelim. 19471. Salaries, wages and supplementary labour income..	(M 2,565 32 776 901	ILLIONS OF D 4,869 1,068 1,755 1,904	OLLARS) 5,195 340 1,950 2,065	6,111 83 2,318 2,308
4. Net income of agriculture and other unincorporated				
5. NATIONAL INCOME (1+2+3+4)					
	4,274 726 582 -1	9,596 1,123 881 +220	9,550 1,201 839 -37	10,820 1,571 906 -132
				
7. Depreciation allowances and similar business costs.				
9. Gross National Product at Market Prices (5+6+7+8)					
	5,581	11,820	11,613	13,165
				
Shown below are the ways in which the annual output of the nation was utilized. During 1947 government expenditure on goods and services continued to decline in both relative and absolute terms but this decline was more than offset by increased private spending on investment and consumption. Last year spending by federal, provincial and municipal governments absorbed less, by value, of the goods and services produced by Canadians than in any year since 1940 and proportionately even less of total output than in 1939. The demands upon output represented by investment in Canada in plant, equipment, housing and inventories rose sharply from $1-7 billion in 1946 to $2-8 billion in 1947, an increase of more than 65%. Personal expenditure rose by more than a billion dollars from 1946 to 1947.

[Stage Direction]
(Millions of Dollars)
Prelim.
1.	Personal expenditure on consumer goods and
services	
2.	Government expenditure on goods and services
(a)	excluding mutual aid, UNRRA and military
relief	
(b)	mutual aid, UNRRA and military relief___
3.	Gross home investment-
(a)	plant, equipment and housing	
(b)	inventories	
4.	Export of goods and services (*) (excluding mutual
aid, etc.)	
5.	Imports of goods and services^)	
6.	Residual error of estimate	
7.	Gross National Expenditure at Market Prices
(1+2+3+4+5+6)	
3,828	6,253	7,712	8,736749	4,127	1,732	1,454960	97	38554	756	1,321	2,042329	-83	387	7801,449 -1,328	3,566 -3,539 -220	3,197 -2,871 +38	3,581 -3,599 +133
5,581	11,820	11,613	13,165
(>) Minor adjustments have been made to the figures of current receipts and payments shown on page 21 of "The Canadian Balance of International Payments", 1948, Dominion Bureau of Statistics, to achieve consistency with the other component series. (See also Table 13).
The Budget-Appendix

[Stage Direction]
Personal income rose by $645 million or 7% from 1946 to 1947, a considerably higher percentage increase in wages, salaries, farm incomes and other forms of personal earnings being offset by sharp reductions in military pay and allowances and veterans' benefits. Transfer payments to persons by all governments, such as family allowances, old age pensions, veterans' benefits and unemployment payments, formed about 8% of personal income during 1947 as against about 6% in 1939, despite the decline in non-recurring payments to veterans which were at their peak in 1946.

[Stage Direction]
-	1939	1944	1946	Prelim. 19471.	Salaries, wages and supplementary labour income.. Deduct: Employer and employee contribution to social ins. and govt, pension funds	
2.	Military pay and allowances	2,565 -35 32 901 564 250 6	(Millions c 4,869 -134 1,068 1,904 783 264 11	f Dollars) 5,195 -145 340 2,065 877 1,123 10	6,111 -165 83 2,308 937 826 103. Net income of agriculture and other unincorporated business	4.	Interest, dividends and net rental income of persons. 5.	Transfer payments to persons (excluding interest) (a) from government	(b) charitable contributions made by corporations	6. Personal Income (1+2+3+4+5)	4,283	8,765	9,465	10,110
Whereas personal income increased by $645 million from 1946 to 1947, direct taxes fell by $10 million, leaving an additional $655 million for spending or saving. In fact, personal expenditure on goods and services rose by $1,024 million, reflecting the increased availability of durables like automobiles and household appliances as well as higher prices. Accordingly, personal saving out of the year's income declined by $369 million between 1946 and 1947.

[Stage Direction]
-	1939	1944	1946	Prelim. 1947
1. Personal direct taxes(l)		(Millions of Dollars)		
				
(a) income taxes	61	771	711	694(b) succession duties	28	40	54	61(c) miscellaneous	32	25	31	31Total direct taxes	121	836	796	7862. Personal expenditure on consumer goods and services-	(a) goods	2,477	4,309	5,518	6,371(b) services	1,407	1,895	2,200	2,395(c) net expenditure abroad	-56	49	-6	-30Total personal expenditure	
3. Personal saving-	3,828	6,253	7,712	8,736(a) personal saving excluding farm inventories...	274	1,800	998	688(b) net changes in farm inventories	60	-124	-41	-100Total personal saving	334	1,676	957	5884. Personal Income (14-2+3)	4,283	8,765	9,465	10,110
(') Tax collections excluding $76 million estimated refundable income and excess profits tax in 1944.

The Budget-Appendix
During 1939 Canadians saved 8% of the personal incomes at their disposal after payment of direct taxes. In response to the appeal for savings and the shortage of consumer goods, this ratio rose steadily during the war years, being estimated at 21% in 1944. The tendency to save rather than to spend was still above pre-war levels in 1946, but in 1947 the savings ratio returned to approximately 1939 levels.

[Stage Direction]
-	1939	1944	1946	Preliminary 1947	$ millions	%	$ millions	%	$ millions	%	$ millions	%Personal consumer expenditure	3,828	92	6,253	79	7,712	89	8,736	94Personal Saving	334	8	1,676	21	957	11	588	6Personal disposable incomeC1)	4,162	100	7,929	100	8,669	100	9,324	100
(*) Personal income less personal direct taxes (See Table 4).
Per capita income at the disposal of individual Canadians, obtained by subtracting from total personal incomes the direct taxes paid by individuals and dividing the remainder by the total Canadian population, was $369 in 1939, $662 in 1944, $704 in 1946 and $741 in 1947.

[Stage Direction]
-	1939	1944	1946	Preliminary 1947Population	11,267	11,975	12,307	12,582Personal Income	$	380	732	769	804Deduct Personal Direct Taxes	per capita	%	11	70	65	63Personal Disposable Income	$	369	662	704	741
The Budget-Appendix

[Stage Direction]
Corporation profits, both before and after tax, were at record levels during 1947. Dividends paid out did not keep pace with the increase in profits after tax, so that undistributed profits set aside during the year rose from $411 million in 1946 to $609 million in 1947, or by nearly 50%.

[Stage Direction]
-	1939	1944	1946	Prelim. 1947598 -112	(Millions c 1,221 -603	f Dollars) 1,421 -670	1,821 -804
486 -287	618 -284	751 -340	1,017 -408
				
				
	199	334	411	609
				
(1)	Includes depletion charges and is adjusted for corporate losses, renegotiation of war contracts and conversion to a calendar year basis.
(2)	Taxes paid or payable in respect of the calendar year's income, excluding the refundable portion of the excess profit tax. (See Table 10).
(*) Includes charitable contributions made by corporations. (See Table 3, Item 5 (b)).
(4) (See Table 11).

[Stage Direction]
Investment in plant, equipment, inventories and housing absorbed 21% of the gross national product during 1947 as against 15% in 1946 and 16% in 1939.

[Stage Direction]
-	1939	1944	1946	Prelim. 1947
		(Millions of Dollars)		
Plant, Equipment, and Housing-Total (')	554	756	1,321	2,042New Residential Construction^)	145	157	338	466Other New Construction	126	189	349	556New Machinery and Equipment	283	410	634	1,020Inventories-Total	329	-83	387	780Grain in Commercial Channels (3)	127	-14	-46	22Farm Grain and Livestock^)	60	-124	-41	-100All Other Inventories (4)	142	55	474	858Gross Home Investment (s)	883	673	1,708	2,822Percentage of Gross National Product	16%	6%	15%	H%
(') Includes private businesses and institutions, and publiely owned public utilities.
(-) Excludes construction by Wartime Housing Limited which is included with Government expenditure on goods and services (Table 2).
(3)	Value of physical change.
(4)	Change in value. Includes privately financed industrial and trade inventories.
(6) See Table 2, Item 3.
[Stage Direction]
The Budget-Appendix

[Stage Direction]
In the table on the next two pages (No. 10) an attempt is made to bring together in one statement and under uniform headings the transactions of all governments in Canada on a calendar year basis. (See explanatory note below table).
Using the statistical methods appropriate to the calculation of the National Income and Expenditure (which differ somewhat from the accounting methods used by governments) it is estimated that during the calendar year 1947 federal, provincial and municipal governments took in as revenue $4,058 million and spent $3,141 million, leaving an overall surplus of $917 million of which $774 million was attributable to the federal government and $143 million to the provincial and municipal governments. The year before the federal government showed a deficit of $228 million and provincial and municipal governments a surplus of $101 million.
Expenditures by governments may be divided into two main categories : expenditures for the purchase of goods and services, and so-called transfer payments, i.e., family allowances, old age pensions, the greater part of the interest on the public debt, veterans' benefits, etc., which do not arise from current production of goods and services. The first category represents the demands which governments place on the annual output of the nation. Transfer payments, on the other hand, simply add to the sums available for spending or saving by the recipients.
During the calendar year 1944, at the peak of Canada's war effort, the federal government absorbed 38% of that year's production of goods and services and provincial and municipal governments an additional 5%. By 1946 federal expenditures on goods and services had fallen to 9% of the gross national product, while similar provincial and municipal expenditures had risen to 6%. During the calendar year 1947 provincial and municipal expenditures continued to rise and federal government expenditures to fall, so that now, as in pre-war years, provincial and municipal governments together absorb a larger share of current output than the federal government.

[Stage Direction]
GOVERNMENT EXPENDITURES ON GOODS AND SERVICES AS PERCENTAGE OF GROSS NATIONAL EXPENDITURE^)
1939	1944	1946	Prelim. 1947	$ Millions	%	S Millions	%	$ Millions	%	$ Millions	%Gross national expenditure at market prices	5,581	100	11,820	100	11,613	100	13,165	100Federal government expenditure on goods and services	225	4	4,547	38	1,094	9	616	5Provincial and municipal expenditure on goods and services	524	9	540	5	735	6	876	7
(i) See Table 10.
The Budget-Appendix

[Stage Direction]
GOVERNMENT TRANSACTIONS RELATED TO THE NATIONAL ACCOUNTS(') (*)
-	1939	1944	1946	Prelim. 1947
	(Millions op Dollars)			
Government Revenue				
Direct Taxes-Persons		121	836	796	786
Income and Excess Profits-				
Federal		46	771	711	694
	15			
Succession Duties-				
16	20	30Provincial	28	24	34	31Miscellaneous-	3	6	6	5Provincial and Municipal	29	19	25	26Direct Taxes-Corporations	123	630	699	839Income and Excess Profits-	98	599	668	711Provincial	14	4	2	93Withholding taxes-federal	11	27	29	35Indirect Taxes	709	1,380	1,502	1,745310	922	957	1,136 609Provincial and Municipal	399	458	545	Investment Income	78	306	356	315Federal	-11	159	154	113Provincial and Municipal	89	147	202	202Employer and Employee Contributions to Social Security and	Pension Funds	35	134	145	165Federal	6	77	80	95 70Provincial and Municipal	29	57	65	Transfers from Other Governments-	Provincial and Municipal	83	159	164	208Total Revenue	1,149	3,445	3,662	4,058463	2,577 868	2,625 1,037	2,819 1,239Provincial and Municipal	686	Deficit (or surplus-)	54	2,610	127	-917Federal	2	2,760 -150	228	-774 -143Provincial and Municipal	52	-101	Total Revenue plus Deficit (or minus Surplus)	1,203	6,055	3,789	3,141Federal	465	5,337 718	2,853 936	2,045 1,096Provincial and Municipal	738	
(*) This table is designed to include only those transactions which have relevance for the national accounts, and consequently the surpluses or deficits shown here do not agree with those shown in the various public accounts. It has been necessary to adjust the conventional accounting statements of fiscal year revenue and expenditure to exclude purely bookkeeping transactions as well as the purchase and sale of capital assets. Extra-budgetary funds such as unemployment insurance, workmen's compensation and 

The Budget-Appendix
TABLE 10-Concluded

[Stage Direction]
1944
Prelim.
(Millions of Dollars)
Government Expenditure- Goods and Services	
5,087
1,829
1,492
Federal-excluding mutual aid, UNRltA and military relief		225
-mutual aid, UNRRA and military relief	
Provincial and Municipal	 524
3,587
540
97
578
876
Transfer Payments	
Federal	
Provincial and Municipal
175
552
172
1,555
1,359
1,267
1,052
Subsidies...
Federal .. Provincial
257
6
236
174
5
Transfers to Other Governments- Federal	
159
208
Total Expenditure
1,203
6,055
3,789
3,141
Federal	
Provincial and Municipal
738
5,337	2,853
718	936
2,045
1,096
pension funds have been added, and surpluses or deficits of Government enterprises are likewise included. In the federal accounts some of the more substantial adjustments are as follows: addition of national defence recoverable expenditure, allocation of war refunds to prior years, adjustment of corporate taxes to an accrual basis, elimination of sales of war assets to business, and elimination of British Commonwealth Air Training Plan write-off from expenditure. In addition the federal figures have been adjusted to a calendar year basis by using the monthly figures published by the Comptroller of the Treasury. Government loans to foreign countries or accumulation of gold or foreign exchange are not included with government expenditure.
[DOT]1116
The Budget-Appendix

[Stage Direction]
The following tables are designed to illustrate how investment expenditures during the four years 1939, 1944, 1946 and 1947 were financed and the changing position of governments in the balance between saving and investment. Whereas in 1946 federal, provincial and municipal governments together spent more than they received (see also table 10), thus adding to the total demand upon the national output, in 1947 revenues of all governments exceeded expenditures by $917 million, thus supplementing the savings of individuals (which fell sharply in 1947) and businesses and offsetting to some degree the inflationary pressures in the economy.

[Stage Direction]
-	1939	1944	1946	Preliminary 1947
		(Millions of Dollars)		
Personal saving	334	1,676	957	588Undistributed corporation profits	199	334	411	609-19	37	67Inventory revaluation adjustment^)	-56	-2	-8	-18Depreciation allowances	582	881	839	906Residual error of estimated)	-1	+220	-37	-132Total	1,058	3,090	2,199	2,020
(') The adjustment has been made only to grain held in commercial channels. (2) See Tables 1 and 2.

[Stage Direction]
-	1939	1944	1946	Preliminary 1947883 121 54	(Millions 673 27 2,610 -220	>f Dollars) 1,708 320 127 f38	2,822 -18 -917 [133Net increase in foreign assets (including foreign ex-	Govcrnment deficit (+) or surplus (-) (!)	
1,058	3,090	2,199	2,020
				
0) See Table 13.
(2)	See Table 10.
(3)	See Tables 1 and 2.
[Hr. Abbott.]

The Budget-Appendix
Canada's balance of international payments
This table and the one that follows are designed to display the principal features of Canada's international balance of payments on current account and the related changes in the capital items.
Adding together on the one side the value of exports and other current receipts from abroad and on the other side the value of imports and other current payments to the outside world, Canada's international accounts showed a small surplus during the year 1947, a deficit on current account vis-a-vis the United States of some $1,138 million being balanced by a surplus vis-a-vis the rest of the world of a somewhat larger amount. The year before-1946-there was a surplus on current account of $357 million. The reduction in the current balance is accounted for principally by a very large increase in the value of imports from the United States.

[Stage Direction]
-	1939	1944	1946	Preliminary 1947
		(Millions or Dollars)		
Net Balance-				
Merchandise	377	2,032	667	287U.S.A.excluding non-monetary gold	-128	331	-430	-892non-monetary gold	184	110	96	99U.K. and other Empire1)	259	1,774	628	774Other Countries	62	87	373	306Interest and Dividends	-249	-193	-248	-273U.S.A	-193	-161	-209	-238U.K. and other Empire	- 75	- 47	- 46	- 40Other Countries	19	15	7	5Tourist Trade	68	61	86	78U.S.A	70	61	86	83- 4	- 42	- 1Freight and Shipping	- 17	70	92	46U.S.A	- 15	- 73	- 68	-115U.K. and other Empire	4	136	103	112Other Countries	- 6	7	57	49All other transactions	- 53	-1,222	-143	- 53U.S.A	- 34	-237	- 88	- 75U.K. and other Empire	- 8	-984	- 16	30Other Countries	- 11	- 1	- 39	- 8Total current balance (unadjusted)	126	1,018	454	85U.S.A	-116	31	-613	-1,138U.K. and other Empire	176	879	669	872Other Countries	66	108	398	351Less Mutual Aid, U.N.R.R.A. etc	
Total increase (l) in foreign assets (including	-960	- 97	- 38foreign exchange)	126	58	357	47Adjustment for national accounts	5	- 31	- 31	-65Adjusted total (2)	121	27	326	-18
(') Other sterling area countries are included with U.K. and other Empire for 1944, 1946 and 1947. (2) See Tables 2 and 12.
The Budget-Appendix
[Stage Direction]
During 1947 the Canadian Government financed the purchase by overseas countries of goods and services in Canada to a value of $563 million (apart from official contributions such as UNRRA) while other capital transactions resulted in additional net lending abroad of some $228 million. Since there was only a small current account surplus (see table 13) out of which to finance this lending, reserves of gold and U.S. dollars required to be drawn down to the extent of $743 million.

[Stage Direction]
-	1939	1944	1946	Prelimi- nary 1947
United States and Other Non-Empire Countries	(Millions of Dollars)			
Net balance on current account- U.S.A	-116	+ 31	-613	-1,138Other	+ 66	+108	+398	+ 351Total (including Mutual Aid, UNRRA and Military Relief)	- 50	+139	-215	- 787Related Changes on Capital Account- Net New Issues (+) or Retirements (-) of Canadian Securities	+ 24	- 74	-238	-231Net Sales (+) or Purchases (-) of Outstanding Securities.	+ 87	+225	+274	+ 4Export Credits and Interim Advances	
Other Net Capital Movements	-164	+ 77	-210 + 77	-140 - 54Mutual Aid, UNRRA, Military Relief	-	-126	- 92	- 38Special Receipts of Convertible Exchange from Sterling Area	+ 2	+ 55	+150	+505Decrease (+) or Increase (-) in Canadian holdings of gold and U.S. Dollars	(1)	-278	+251	+743Balancing Item!2)	+101	- 18	+ 3	- 2Total	+ 50	-139	+215	+787
O) Included with "other net capital movements".
<2>
Includes multilateral settlements (in 1939) and errors and omissions in all years.
-	1939	1944	1946	Prelimi- nary 1947United Kingdom and Empire Countries Net balance on current account-	( +137 + 39	Millions c +746 +133	f Dollars +500 +169	) +632 +240
+176	+879	+669	+872
Related Changes on Capital Account- _ Net New Issues (+) or Retirements (-) of Canadian				
	-120 - 5	-	34 -	27	-	77 -	54 -652 +89 +164 -	5 -150 + 15 + 1	-	41 -	9 -423 + 104
Net Sales (+) or Purchases (-) of Outstanding Securities.				
		+ 57 + 2 -834 - 55 + 4 + 8		
	+ 42			
				
	- 2			-505 	1 + 3
Decrease (+) or Increase (-) in Canadian holdings of				
	- 91			
				
	-176	-879	-669	-872
				
(1) Other Sterling Area countries are included with Other Empire countries for 1944, 1946 and 1947. (*>
Includes multilateral settlements (in 1939), and errors and omissions in all years.

The Budget-Appendix

[Stage Direction]
Canada's holdings of gold and United States dollars at the outbreak of war and at the end of each subsequent calendar year were as follows:

[Stage Direction]
-	F.E.C.B. and Bank of Canada	Dominion Government	Private C1)	Total
		(Millions of Dollars)		
Sept. 15, 1939	238-7	22-4	132-0	393-1Dec. 31, 1939	272-8	33-4	98-0	404-2Dec. 31, 1940	309-3	20-8	2-0	332-1Dec. 31, 1941	164-1	23-5	187-6Dec. 31, 1942	242-9	75-6	318-6Dec. 31, 1943	573-2	76-4	649-6Dec. 31, 1944	800-1	102-1	902-2Dec. 31, 1945	1,275-9	232-1	1 508-0Dec. 31, 1946	1,222-3	22-6	1 244-9Dec. 31, 1947	458-4	43-3	501-7
(*) Exclusive of working balances.

[Stage Direction]
Since 1939, the Canadian labour force has grown rapidly as a result of natural increase, immigration and the high wartime demand for labour, the effects of which are still perceptible. During 1947, employment continued at high levels, dropping slightly in February, 1948 because of seasonal influences. Unemployment has recently remained at the low level of approximately three per cent of the total labour force.

[Stage Direction]
-	June 1, 1939	June 1, 1944	June 1, 1946	May 31, 1947	Nov. 8, 1947	Feb. 21, 1948
		(Thousands of Persons)				
Total Population 14 years and over		8,294	8,885	9,093	9,225	9,298	9,343
Total Labour Force, including Armed						
Forces	4,068	5,304	5,036	5,040	5,062	4,943Armed Forces	10	779	122	35	33	34Civilian Labour Force	4,658	4,525	4,911	4,995	5,017	4,908Employed	3,763	4,443	4,785	4,904	4,930	4,752Nonagricultural	2,483	3,257	3,511	3,741	3,862	3,787Agricultural	1,280	1,186	1,274	1,163	1,068	965Unemployed	895	82	126	91	87	156Persons Not in the Labour Force	3,626	3,581	4,060	4,195	4,248	4,401
Note: The estimates for June 1, 1946, and later do not in all cases agree with the estimates shown in the labour force bulletins of the Dominion Bureau of Statistics. To take into account the fact that the labour force surveys do not cover approximately 100,000 persons living in institutions the number of persons not in the labour force has been increased correspondingly. Similarly, to take account of the omission of Indians living on reservations and persons in inaccessible areas, the nonagricultural employed and persons not in the labour force have both been increased by 83,000.
4120
The Budget-Appendix

[Stage Direction]
The following tables are designed to give an approximate idea of the physical volume of industrial and agricultural production. They show an increase during 1947 in the volume of all types of industrial production and some decline in agricultural output partly attributable to less favourable weather conditions.

[Stage Direction]
INDEX OF PHYSICAL VOLUME OF INDUSTRIAL PRODUCTION, 1939-1947 Seasonally Adjusted, 1935-9 = 100
-	Total	Mining	Manufac- turing	Non- Durable Manufac- tures	Durable Manufac- tures	Electric Power1939	109	118	108	108	108	1081940	130	127	132	121	152	1151941	157	135	164	140	205	1281942	185	130	200	154	276	1421943	199	118	217	167	302	1551944	199	106	220	173	299	155i945	176	102	192	170	229	1541946 	159	103	169	163	179	1591947	176	113	187	174	208	1721947, by months-	174	110	185	174	203	171176	107	189	175	212	173177	113	189	177	209	174178	115	189	179	206	175175	112	185	175	203	180176	115	187	174	209	181July	171	111	181	168	202	184168	109	178	169	194	174175	110	187	173	210	171179	116	191	176	218	169178	115	191	176	217	156179	119	191	175	218	1611948, by months-	178	118	189	176	212	166182	123	194	182	216	162

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-		1939	1944	1946	1947
			(Millions)		
Wheat	521	417	414	341Oats	... (bush.)	384	500	371	279Barley	103	195	149	141Rye, flax seed, mixed grain	62	76	68	60Shelled corn, buckwheat, peas and beans, dry	(bush.)	18	20	20	15Potatoes and turnips	4	4	4	3Hay and clover, alfalfa, fodder corn, grain hay-	(tons)	22	25	23	24Tobacco	(lbs.)	108	105	141	116Milk production	15,781	17,624	16,956	17,214Meat production	(lbs.)	1,490	2,729	2,350	2,220

5849-261i
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Measuring changes as from the base period 1935-39, the Canadian cost of living index is still 16 points below the United States index at the latest date for which figures are available, although during 1947 and the first quarter of 1948 the Canadian index rose more rapidly than the U.S. index. Most of the difference is attributable to a smaller rise in food and clothing costs in Canada since the base period, even though these two items account for most of the recent rise in the Canadian index.

[Stage Direction]
INDEX NUMBERS OF THE COST-OF-LIVING 1935-39=100
All Items	Foods	Clothing	Rents	Canada	U.S.A.	U.K.	Canada	U.S.A.	U.K.	Canada	U.S.A.	U.K.	Canada	U.S.A.	U.K.Monthly Averages-	1939	102	99	104	101	95	104	101	101	107	104	104	1021940	106	100	121	106	97	121	109	102	143	106	105	1031941	112	105	131	116	106	124	116	106	185	109	106	1031942	117	117	132	127	124	119	120	124	200	111	109	1031943	118	124	131	131	138	123	121	130	176	112	108	1031944	119	126	132	131	136	124	122	139	173	112	108	1031945	120	128	134	133	139	126	122	146	174	112	108	1041946	124	139	134	140	160	125	126	160	173	113	109	1051947	136	159	160	194	144	186	117	111	1947-January	127	153	134	146	184	124	132	179	174	113	109	106February	128	153	134	147	182	124	132	182	171	113	109	106March	129	156	134	149	190	125	133	184	170	113	109	106April	131	156	134	152	188	124	137	185	171	113	109	106May	133	156	134	155	188	120	140	185	171	115	109	109June	135	157	134	158	191	119	142	186	173	118	109	110July	136	158	ioi(>)	160	193	101(9	143	185	102(9	118	110	100(9August	137	160	100	161	197	99	146	186	102	118	111	100September	139	164	101	165	204	100	152	188	101	118	114	100October	142	164	101	171	202	101	154	189	102	120	115	100November	144	165	103	174	203	103	157	190	102	120	115	100December	146	167	104	179	207	103	159	191	102	120	115	1101948-January	148	169	104	182	210	104	161	192	103	120	116	100February	150	168	106	186	205	108	165	195	104	120	116	100March	151	167	186	202	170	196	120	116	April	152	187	173	120	
(9 New Interim Index, based on June 17, 1947=100.
s
it*
to
The Budget-Appendix
The Budget-Appendix

[Stage Direction]
The following tables are based on a new series prepared by the Bank of Canada. An explanation of the method of calculations is given in the Bank's annual report for 1947, pages 31 to 35.
It will be noted that the money supply, after rising steadily throughout the war years, levelled off during 1947.

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Money Supply	December 31,	March 31,1939	1944	1946	1947	1948(Millions of Dollaes)	Currency Outside Banks-	Notes*')	247	930	1,031	1,046	1,032Coin<*	34	60	65	66	66Total Currency	281	990	1,096	1,112	1,098Bank Deposits-	Chartered Banks	Demand^3*	853	1,862	2,291	2,296	2,201Active Notice <4>	197	363	614	597	629Other (excl. Dominion Govt.)(5)	157	153	229	233	263Total	1,207	2,378	3,134	3,126	3,093Deduct Floats	-1S6	-US	-828	-S62	-$46Net Total	1,071	2,135	2,806	2,764	2,748Bank of Canada "Other" Deposits*7)	18	28	94	68	87Total Bank Deposits	1,089	2,163	2,900	2,832	2,835Money Supply	1,370	3,153	3,996	3,944	3,933
(i) Note circulation of Bank of Canada and chartered banks, excluding notes held by chartered banks.
<*) Subsidiary Coin issued by the Mint less coin held by Bank of Canada and chartered banks in Canada.
0>
Chartered banks' public demand deposits in Canada.
M>
Chartered banks' public notice deposits in Canada other than estimated aggregate quarterly minimum balances in personal savings accounts and non-personal notice deposits.
w Chartered banks' Canadian dollar deposits of provincial governments, Canadian, United Kingdom, and foreign banks.
<6>
Cheques on banks as shown in chartered bank month-end returns to the Minister of Finance.
Cn Bank of Canada Other Deposits as shown on published month-end statements-i.e. excluding Dominion Government, chartered banks and foreign deposits.
[Stage Direction]
The Budget-Appendix
TABLE 20-Con.

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Related Bank of Canada and Chartered Bank Assets	December 31,	March 31,1939	1944	1946	1947	1948Dominion Government Securities, Gold & Exchange-	290 425 752	(Millio	NS OF D	OLLARS)	2,321 2,006 271	1,476 3,745	811 3,718	1,068 3,512Other Dominion Government Securities-	
752	2,277	3,745	3,718	3,512
					
	1,467 -US	4,598 -7 20	5,221 -S66	4,529 -272	4,580 -111
					
					
	1,322 1,767 -t.SU	3,878 1,593 -2,060	4,855 2,297 -2,856	4,257 3,084 -s,us	4,469 3,000 -3,298
					
					
Total Related Bank Assets						
	1,545	3,411	4,296	4,198	4,171
					
<[DOT]>
Bank of Canada gold and foreign exchange holdings less the amount of foreign currency deposit liabilities.
ft) Bank of Canada and chartered bank holdings of Dominion Government Treasury Bills, Deposit Certificates, Treasury Notes and any other short term issues sold direct to bank of Canada and chartered banks.
do) Bank of Canada and chartered bank holdings of Dominion Government direct and guaranteed securities other than those shown as banking issues and exclusive of any temporary advances in connection with purchase of Victory Loan issues.
<ll>
Chartered banks' temporary advances to the public in connection with the purchase of Victory Loan bonds at time of issue.
ft*) Canadian dollar deposits of the Dominion Government at chartered banks and Bank of Canada.
ft* All loans in Canada of the chartered banks other than temporary advances in connection with Victory Loan issues, plus chartered banks' holdings of provincial, municipal and "other" securities, and Bank of Canada holdings of Industrial Development Bank capital stock.
ft*) Estimated aggregate minimum quarterly balances in chartered banks' personal savings deposits in Canada plus non-personal notice deposits in Canada.
The Budget-Appendix
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Part II

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Summary of Revenues and Expenditures 1947-48
1.	It is estimated that total taxation revenue for the fiscal year 1947-48 will be $2,542,031,000, a decrease of only $5,830,000 from the previous year. Taking into account non-tax revenues and special receipts and credits (which were substantially lower than in the two previous fiscal years), total revenues were $2,869,409,000, approximately 5% lower than the previous fiscal year.
2.	Expenditures, on the other hand, declined by $434,776,000. Ordinary expenditures show an increase of $146,310,000, but this was more than offset by a further substantial drop in expenditures attributable to the war and its aftermath.
3.	The net result was a budgetary surplus, or decrease in net debt, of $669,958,000.
SUMMARY OF REVENUES AND EXPENDITURES (>) (Thousands of Dollars)
-	1943-44	1944-45	1945-46	1946-47	Estimated (2) 1947-48Ordinary revenues	
Capital refunds	
Special receipts and other credits	
Total revenues	
Ordinary expenditures	
Capital expenditures	
War and Demobilization expenditures.... Special expenditures	
Government Owned Enterprises	
Other charges	
Total expenditures	
Surplus (+) or Deficit (-)	S 2,570,094 93 194,831	$ 2,300,097 79Q 386,509	$ 2,363,162 . 376 649,647	S 2,588,531 110 419,235	8 2,630,219 62 239,1282,765,018	2,687,334	3,013,185	3,007,876	2,869,409630,381 2,622 4,587,023 37,496 1,307 63,425	767,376 3,164 4,418,446 7,506 1,358 47,762	1,061,902 4,508 4,002,949 17,358 1,334 48,177	1,236,235 11,200 1,314,798 31,926 10,682 29,386	1,382,545 16,461 634,668 63.540 18,697 83.5405,322,254	5,245,612	5,136,228	2,634,227	2,199,451-2,557,236	-2,558,278	-2,123,043	+ 373,649	+ 669,958
0) For the usual detailed tables comparing revenues and expenditures as estimated for the fiscal year 1947-48 with actual revenues and expenditures for the preceding four fiscal years, see pages
(2) The Government's fiscal year ends on March 31 but the books remain open for some time thereafter in order to record expenditures made to April 30 (as provided for by section 32 of the Consolidated Revenue and Audit Act) and to provide for adjusting entries. Final figures for the fiscal year ending March 31, 1948, are not yet available, and the figures relating thereto appearing in this Part must be regarded as preliminary.

[Stage Direction]
4.	Although the final figures are not yet available, it is estimated that grand total revenues for the fiscal year 1947-48 will reach $2,869,409,000. This indicates a decline of $138,467,000 from the previous year. The overall revenue total in recent years has included varying but substantial amounts of special receipts and credits arising out of bookkeeping adjustments of war and other expenditures and reflecting also the sale of war assets. These special receipts and credits, which are largely non-recurring, showed a sharp decline in 1947-48, which more than accounted for the decline in grand total revenues. Ordinary revenues, which reflect more accurately the Government's cash revenue, amounted to $2,630,219,000, an increase of $11,488,000 over the previous year.
﻿MAY 18, 1948
The Budget-Appendix
ANALYSIS OF REVENUES (Thousands of dollars)
-	1947-48	Percent.	Change from 1946-47Direct Taxes- Individual Income Tax	
Corporation Income Tax	659,828 .364,131 227,030 66,717	23-00 12-69 7-91 2-32	- 34,702 +125,339 -221,668 + 13,005
Total Direct Taxes	 Indirect Taxes-			
1,317,706	45-92	-118,026293,012 196,794 640,758 3,761	10-21 6-86 22-33 0-13	+ 55,657 + 750 + 61,734 - 5,945
Total Indirect Taxes	 Non-Tax Revenues-			
1,134,325	39-53	+112,19677,758 75,800 24,630	2-71 2-64 0-86	+ 4,780 + 6,361 + 6,177Return on Investments	
Other Non-Tax Revenues	
Total Non-Tax Revenues	
Special Receipts and Credits	
TOTAL REVENUE	
Less estimated amount of refundable Income	178,188	6-21	+ 17,318239,190	8-34	-180,1552,869,409	100-00	-168,667 + 30,200NET TOTAL REVENUE	2,869,409	100-00	-138,4675.	Of grand total revenues, 46% was derived from direct taxes on incomes of individuals and corporations and from succession duties, 39 [DOT] 6% was obtained from indirect taxes and the remaining 14-4% was from non-tax revenues and special receipts and credits.6.	A remarkable feature of the 1947-48 fiscal year was the great buoyancy of tax revenues, in pace with the rapidly expanding national income. Despite substantial tax cuts in personal income tax in 1947 and the fact that earlier reductions in corporation and excess profits tax became fully effective on revenues during the year, the total yield from taxes declined by only $5,830,000.7.	No further reserve was set up during the year for the refundable portion of excess profits tax or individual income tax. In accordance with statutory provisions calling for repayment of the refundable portion of tax collected in respect of 1942 before March 31, 1948, payments amounting to $84,210,000 were made during the year, including small amounts in respect of other taxation years. The amount of the reserve for refundable excess profits tax and personal income tax held at present, classified by the tax years to which it relates, is shown in the table below:Taxation Year	Refundable Personal Income Tax	Refundable Excess Profits Tax$ 150,000,000 80,000,000	$ 67.700.000 73.000.	000 71.000.	000 17.300.000
Gross Total		230,000,000	229,000,000
['] Corporation fiscal'years ending in 1946.
The Budget-Appendix

[Stage Direction]
8.	The personal income tax which yielded $659,828,000 retained its position as the largest single source of revenue. The substantial tax reductions which became effective on January 1 and July 1, 1947, resulted in a revenue lower by $34,702,000 than that of the previous year. This was a reduction of only 5%, a very small decline in relation to the extensive reduction in rates. The continuing high revenue from this source reflects the increased incomes and the high level of employment throughout the year.
9.	Corporation income tax and excess profits tax, both levied on business profits, yielded a total of $591,161,000, a decline of $96,329,000 from the previous year's total. The corporation income tax yield of $364,131,000 was $125,339,000 more than in the previous year and indicates the result of the increase from 18% to 30% in the corporation income tax which became effective on January 1, 1946, as well as the high level of business profits in 1947. The excess profits tax yield of $227,030,000 was $221,668,000 less than in the previous year, showing the effects of the change made in the tax on January 1, 1946, as well as the reduction in the rates of tax.
10.	Revenues under the headings "Taxes on Dividends and Interest" and "TAXES ON RENTS AND ROYALTIES" are derived from special taxes, largely on income going to non-residents of Canada, levied under authority of section 9b of the Income War Tax Act. In 1947-48 revenue under this heading amounted to $35,889,000, an increase of $5,753,000 over the previous year. This increase reflects higher dividend payments during the year and the extension of the 5% tax to dividends from wholly-owned subsidiaries going abroad to parent companies, which became effective on April 30, 1947.
11.	Succession duties, yielding $30,828,000, showed a marked increase of $7,252,000 over the previous year. Although there has been an increase in revenue from this source every year since succession duties were first levied in 1941, the sharp increase in 1947-48 was largely due to the fact that seven provinces have rented this field of taxation to the Dominion and consequently there were no provincial duties in these provinces to be deducted from the higher Dominion rates which have prevailed since January 1, 1947.
12.	Net revenues from customs import duties reached the all-time high of $293,012,000, exceeding the receipts of the previous year by $55,657,000. This very high revenue reflects the heavy import trade resulting from the extensive capital investment program, the high level of consumer purchasing power, and the widespread demand for goods, factors which were so much in evidence during the year under review and which contributed so largely to the serious depletion of the country's supply of United States dollars.
13.	Excise duties, which are levied exclusively on alcoholic beverages and tobacco products, brought in a total revenue of $196,794,000, an increase of $750,000 over the previous year. The revenue from alcoholic beverages declined slightly and that from tobacco products increased moderately, by $953,000. As in previous years, the smokers' contribution to the federal treasury was considerable, with the overall revenue from tobacco products (including the yield of the additional taxes imposed under the Excise Act on tobacco, cigarettes, cigarette papers and tubes), amounting to $177,141,000. This is 7-2% of the total revenue from taxes.
14.	Under the heading "Excise Taxes" are included a wide variety of taxes levied on commodities and services under the Excise Tax Act. The most important of these taxes from the point of view of revenue is the sales tax which yielded a gross revenue of $383,012,000 during 1947-48, an increase of $54,939,000 over the previous year. This increase of 16-7% reflects the increased supply of 

The Budget-Appendix
commodities available for consumption during the year and the generally higher price level. Since November 17, 1947, this tax has not applied to electricity and gas used in dwellings.
15.	The second largest revenue source among the excise taxes is the tax on tobacco products which yielded $68,606,000. Although this amount is $7,712,000 less than that for the previous year, this decline in revenue is almost entirely due to a variation in the procedure for remitting the tax which resulted in revenue being included in March 1947 which would normally have been reported in April, thus increasing the revenue for 1946-47 at the expense of 1947-48.
16.	The revenue from several excise taxes showed marked increases during the year. With increased production due to more abundant supplies of sugar, the revenue from soft drinks increased 27 * 5% and that from candy and chewing gum increased by 37 -7%. The revenue from the tax on automobiles and tires and tubes almost doubled in 1947-48 due to the greater production of automobiles during the year and to the increase in the tax which became effective on November 18, 1947. The tax program announced on that date also resulted in increased revenue from phonographs, radios and tubes, and from electrical and gas appliances. Among those items which yielded reduced amounts were cigarette papers and tubes, toilet preparations and soap, and transportation and communications. The tax on sugar which was repealed on November 17, 1947, yielded a smaller revenue than the previous year and a clean-up amount of $2,208,000 is shown for the gasoline tax which was repealed as from April 1, 1947. Refunds of excise taxes declined from $29,845,000 in the previous year to $10,685,000, which represents at more normal level of refunds than that which prevailed during the war and immediate post-war years.
17.	Some of the sources which showed an increase in revenue and the amounts of the increase in each case are as follows:
Increase Increase over 1946-47
Automobiles, rubber tires and tubes	$	15,609,000
Beverages	 5,132,000
Candy and chewing gum	 5,002,000
Electric and gas appliances	 2,817,000
Phonographs, radios and tubes	 2,800,000
Special excise on importations	 928,000
Amusements	 817,000
18. Some of the sources which showed a decrease in revenue and the amount of the decrease in each case are as follows:
Decrease from 1946-47
Cigars, cigarettes and tobacco	$	7,712,000
Cigarette papers and tubes	 524,000
Sugar	 767,000
Toilet preparations and soaps	 376,000
Trunks, bags and luggage	 748,000
Transportation and communications	 400,000
19.	Small amounts of tax revenue are derived from the tax on chartered bank note circulation which decreases from year to year with the decline in circulation of such notes as provided by statute; from the taxes on the net premium income of insurance companies; from a tax on the export of electric energy from Canada, and from a tax on the export of furs from the Northwest Territories. Revenues from all of these taxes for 1947-48 amounted to $3,761,000. This is $5,945,000 less than in the previous year, and the decline is largely
4128
The Bridget-Appendix
[Stage Direction]
due to the reduction in revenue from the tax on net premium income of insurance companies, resulting from the provision that taxes paid to the provinces on premium income after December 31, 1946 could be deducted from the tax paid to the Dominion. Such taxes are imposed in Ontario and Quebec, but have been withdrawn in the seven other provinces under the Dominion Provincial Agreements.
20.	Non-tax revenues for 1947-48 are estimated at $178,188,000, an increase of $17,318,000 over 1946-47. Receipts from the Post Office amounted to $77,758,000, an increase of $4,780,000. These receipts exceeded the cost of operating the Post Office by about $8,000,000, if we take no account on the credit side of the value of services rendered free of charge to other departments, and, on the debit side, of rentals and other costs of premises occupied by the Post Office. Return on Investments realized $75,800,000, an increase over the previous year of about $6,361,000. The larger items making up the total of return on investments are: interest on advances to Canadian National Railways, $18,858,000; Bank of Canada profits, $18,828,000; interest on loans to Foreign Exchange Control Board, $5,101,000; Foreign Exchange Control Board profits, $10,833,000; interest on bonds held in Securities Investment Account, $11,509,000; interest on loans to National Harbours Board, $2,025,000; interest on loans to Provinces, $1,241,000; interest on loans to Canadian Farm Loan Board, $628,000; Soldier Settlement Board, $1,955,000; interest on loans to Foreign Governments, $2,501,000; and interest on advances to Canadian National Railways for purchase of railway equipment, $1,121,000.

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21.	The estimated total of Special Receipts and Credits for the fiscal year 1947-48 is $239,190,000 as compared with $419,345,000 for the previous year. Of this total $226,924,000 represents receipts arising from war, demobilization and reconversion expenditures and consists of Refunds of Previous Years' War, Demobilization and Reconversion Expenditures, $133,687,000; Sale of Surplus War Assets, $61,200,000; and Miscellaneous War Demobilization and Reconversion Revenues. $32,037,000.
A breakdown of Refunds of Previous Years' War, Demobilization and Reconversion Expenditures, with details of the larger items, follows:
National Defence-
Refund by United States Treasury in respect of advance payments made during the war years on equipment and
supplies, $32,200,000; sundries, $6,500,000	$	38,700,000
Reconstruction and Supply-
Refunds on contracts in connection with cost audits and re-negotiation, $58,000,000; return of working capital advances from pre-financed plants, $5,020,000; sundries, $5,200,000	v ...	68,220,000
Amounts received by Canada in partial settlement of military relief arrangements with the United States, the United Kingdom, other countries and UNRRA, consisting of $4,500,000 payable to Canada from UNRRA in respect of goods turned over to UNRRA by the Combined Military Authorities, and $3,145,000 representing the proceeds of sale of certain motor vehicles turned over to the Combined Military Authorities but not transferred to recipient countries as military relief but sold in the liquidation of
the combined military relief operations	 7,645,000
Crown's investment in Wartime Oils Limited, Previous Years'
War Expenditure transferred to "Active Assets"	 1,250,000
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The Budget-Appendix
Transfer of a portion of the credit balance in the United Kingdom General Settlement Account. (This account was established in 1945-46 to record transactions arising from the implementation of the terms of the Canada-United
Kingdom Financial Settlement Agreement)	 5,000,000
Amortization of capital expenditure in connection with War
Supplies Ltd. orders	 11,000,000
Sundry Departments	 1,872,000
[Stage Direction]
22.	The amount of $61,200,000 realized during the year through the disposal of surplus war assets, does not include the residual cash balances or value of accounts receivable carried by War Assets Corporation as at March 31, 1948.
Miscellaneous War, Demobilization and Reconversion Revenues, totalling $32,037,000 includes: The sum of $9,773,000 representing the transfer thereto of special funds set up in previous years to provide for compensation in respect of injuries to employees in defence projects; $8,115,000 of profits including $3,615,000 of customs duty and excise tax drawbacks, in connection with War Supplies Limited Account; $3,640,000 derived from the operation of Park Steamships Limited; $4,700,000 housing rentals from Central Mortgage and Housing Corporation, and $2,500,000 of a credit adjustment arising out of the transfer of this amount to "Active Assets" from accountable advances made to Canadian Arsenals Limited.

[Stage Direction]
23.	Actual revenues again exceeded the budget forecast by a substantial sum, reflecting in part at least the continuing rise in national income and expenditure throughout 1947 which it would scarcely have been prudent to anticipate, even if it could have been foreseen, in the preparation of the budget.

[Stage Direction]
Source of Revenue	Budget Forecast of Revenue	Actual Revenue	Increase (+) or decrease (-) in revenue as compared with budget forecastTax Revenues	(t 230.000 200.000	lousands of do 293,012 196,794	lars) + 63,012 - 3,206
Excise Taxes:			
	325.000 250.000	372,327 268,431	+ 47,327 + 18,431
			
			
	575,000	640,758	+ 65,758
Income Taxes:			
	515.000 460.000 30,000	659,828 591,161 35,889	+144,828 + 131,161 + 5,889
Corporate Income Tax and Excess Profits Tax				
			
	1,005,000	1,286,878	+281,878
			
	26,000 4,000	30,828 3,761	+ 4,828 - 239
			
			
	2,040,000 160,000	2,452,031 178,188	+412,031 + 18,188
			
			
	2,200,000 90,000	2,630,219 239,190	+430,219 +149,190
			
Total Revenue				
	2,290,000	2,869,409	+579,409
5849-262J
The Budget-Appendix

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24.	According to preliminary calculations, grand total expenditures during the fiscal year 1947-48 were $2,199,451,000, a decline of $434,776,000 from the previous year. Demobilization and reconversion expenditures contracted still further, counterbalanced by some increase in ordinary expenditures and other items.
ANALYSIS OF EXPENDITURES (Thousands of Dollars)
Ordinary
Expenditures
Demob, and Reconversion Expenditures
Total
Change in Total from 1946-47
Public Debt charges	
Subsidies and Payments to Provinces under
Tax Agreements	
Family Allowances	
Old Age Pensions and Pensions for Blind
Persons	
Unemployment Insurance Act'1)	
Veterans Benefits Pensions and aftercare<s>..
Agricultural Subsidies and Assistance....
Wartime Prices and Trade Board and Subsidies Related to Price Control	
National Defence	
Reconstruction and Supply	
Other Ordinary and Demobilization and Reconversion Expenditures	
466,422
155,891
263,165
58,090
35,124
96,219
12,087
294,910
997
230,325
33,313
57,560
194,553
63,235
54,677
Total
1,382,545
634,668
2,
466,430
10,386
155,891
263,165
7-09	+ 47,128
11-97	+ 18,024
59,087
35,124
236,544
33,313
1-60
1-51
+ 13,642 + 1,198 -265,186 - 37,803
57,560
195,190
75,322
8-87
-	69,956 -192,421
-	63,750
349,587
+ 25,690
017,213
-533,820
Capital Expenditure	
Special Expenditure	
Government Owned Enterprises Other Charges	
Grand Total Expenditures
2,
16,461
63.540 18,697
83.540
2-	89 0-85
3-	80
+ 5,261 + 31,614 + 8,015 + 54,154
199,451
-434,776
0) Administration and Government Contributions.
<2>
Includes Veterans Land Act but not additions, alterations and improvements to departmental hospitals.
25.	The principal changes in expenditures are summarized in the above table which, for purposes of comparison with the previous year, combined ordinary and demobilization and reconversion expenditures.
26.	For the first time in ten years, interest charges on the public debt fell below the previous year, a direct result of the reduction in debt during the year. The decline in interest charges alone was $8,940,000 to which have been added other savings in public debt charges amounting to $1,446,000, to give the total reduction shown above of $10,386,000.
27.	The largest single increase during the year-$47,128,000-was in the total of payments to Provinces, including statutory subsidies and payments under the tax agreements. The increase in the tax agreement payments, amounting to $28,117,000, is a result of the payment during 1947-48 of $63,000,000 due under the wartime tax agreements. The remainder is largely attributable to the payment of $8,031,250 to each of the Provinces of Alberta and Saskatchewan arising out of the Natural Resources settlement.
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The Budget-Appendix
28.	Family allowances payments rose by $18,024,000, or about 7%, mainly as a result of the changes in the income tax provisions relating to dependetn children, which became effective as from the beginning of 1947 although there is, of course, a steady rise from month to month due to natural increase. The increase in old age pensions and pensions for blind persons of $13,642,000, which represents more than a 30% increase from the previous year, indicates the effect of the higher rate of pensions and revised income qualifications. Government contributions to unemployment insurance and administrative expenses under the Act showed a moderate increase. During the year the costs of National Selective Service were combined with administration of the Unemployment Insurance Act.
29.	A major drop in expenditures relating to veterans accounted for almost one-half of the total reduction in ordinary and demobilization and reconversion expenditures during the fiscal year. Payments of war service gratuities and re-establishment credits, alone, declined from $318,325,000 in 1946-47 to $84,135,000 in 1947-48. There was also a drop of nearly 50% in the costs of treatment. Pension costs relating to veterans of World Wars I and II, on the other hand, continued to increase.
30.	The further withdrawal from wartime controls is reflected in the substantial reductions in expenditures under the headings of agricultural subsidies, price control and subsidies directly related to price control. As shown in the above table, agricultural subsidies and assistance declined by $37,803,000 from the previous year and the costs of price control administration and related subsidies (including payments to flour millers) by $69,956,000.
31.	As demobilization proceeded, National Defence expenditures declined by 50% from the previous year, most of the reduction being attributable to the Army.
32.	Expenditures of the Department of Reconstruction and Supply continued to decline. Of the $63,235,000 spent by that Department under Demobilization and Reconversion during 1947-48, $38,620,000 was attributable to housing developments.
Capital Expenditures
33.	Expenditures charged to capital during the fiscal year 1947-48 totalled $16,461,000 compared with $11,200,000 in the previous fiscal year. The main items are cost of dredging the St. Lawrence Ship Channel, construction and improvements in connection with civil airways and airports, the construction of the new Prince Edward Island car ferry and improvements of terminal facilities.
Special Expenditures
34.	Special expenditures are estimated at $63,540,000, an increase of $31,614,000 over 1946-47. The largest single item of expenditure under this category was a payment to the Canadian Wheat Board of $31,450,000 to cover the amount of established deficits in respect of certain special operations of an emergency character conducted by the Board during war and post-war years, as provided for by Vote 582 of the Further Supplementary Estimates for 1947-48. Advances to the Prairie Farm Emergency Fund accounted for $10,744,000 and $13,900,000 was expended for subsidies on oats and barley used as feed for live stock.
Government Ow'ned Enterprises
^	35. Total expenditures under the classification entitled Government Owned
Enterprises which comprises the losses of and non-active advances to Government Owned Enterprises established before the war and operated as separate corpor-
The Budget-Appendix
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ations, were $18,697,000 in the fiscal year ended March 31, 1948. The increase of $8,015,000 over the expenditure of the previous year was occasioned mainly by the larger deficit of the Canadian National Railways and the inclusion for the first time in many years of the deficit of the Trans-Canada Airlines.
Canadian National Railways
36.	The operating revenues of the Canadian National Railways for the calendar year 1947 totalled $438,198,000, an increase of 9-4% over those of
1946.	Operating expenses of the Railway totalled $397,123,000, an increase of 11-2% over those of 1946.
The net operating revenue of the railway was $41,075,000 and after deducting $13,136,000 for taxes, and for equipment rentals and joint facility rentals, there remained a net railway operating income of $23,711,000. Other income less deductions totalled $4,228,000, resulting in $27,939,000 being available for interest. After payment of $23,822,000 in interest on funded debt held by the public and $20,002,000 in interest to the Government on temporary loans for capital and refunding purposes, there was a net cash deficit of $15,885,000. This amount was paid to the railway by the Government and charged to expend-ture.
The operating deficit of the Prince Edward Island Car Ferry and Terminals for 1947 was $932,000, compared with $888,000 in 1946.
Canadian National Steamships
37.	The Canadian National (West Indies) Steamships, Limited, had an operating surplus of $829,000 in the calendar year 1947 and earnings on the Company's Replacement Fund totalled $267,000. From the total income of $1,096,000, there were paid $470,000 for bond interest and $103,000 for interest on Government advances, leaving a resulting income surplus of $523,000. Of this income surplus the sum of $267,000 was retained in the Replacement Fund and the remainder, namely $256,000, was paid to the Government in reduction of advances made in prior years for deficits.
Trans-Canada Airlines
38.	The Trans-Canada Airlines North American service had total operating revenues in 1947 of $15,297,000. In the same period operating expenses totalled $16,796,000, resulting in an operating deficit of $1,499,000. After payment of invested capital of $262,000, there was a total deficit of $1,761,000.
The Trans-Atlantic service had total operating revenues of $5,483,000 in
1947.	Operating expenses amounted to $5,342,000, resulting in an operating surplus of $141,000. After payment of interest on invested capital of $5,000, there was a surplus of $136,000.
Deducting the surplus of $136,000 on Trans-Atlantic service from the deficit of $1,761,000 on North American service there was an over-all deficit of $1,625,000. The accumulated surplus of Trans-Canada Airlines at December 31, 1946, totalled $255,000. After deducting this amount from the over-all deficit for 1947 there remained a net accumulated deficit of $1,370,000, which amount was paid to the Airlines by the Government.
National Harbours Board
39.	The operating income of the National Harbours Board for the calendar year 1947, after payment of interest to the public but before depreciation, reserve for replacements and interest on Government advances, was $3,827,000 compared with $4,143,000 in the previous year. Interest paid to the Government in the fiscal year ended March 31, 1948, totalled $2,025,000.
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The Budget-Appendix
Financial assistance provided by the Government to the National Harbours Board and charged to expenditure under the category Government Owned Enterprises totalled $509,000, divided as follows: $67,000 for the operating deficit of Churchill Harbour and $70,000 for the operating deficit of Quebec Harbour; $264,000 for non-active advances to meet the deficit of the Jacques Cartier Bridge at Montreal; and $2,000, $55,000, $3,000, $24,000 and $24,000 for capital expenditures at the Harbours at Churchill, Quebec, Three Rivers, Saint John and Halifax.
The elevators at Port Colborne and Prescott operated at a profit during the year and $87,000 was paid to the Government.
Other Charges
40.	Total expenditures in this final category are estimated at $83,540,000 compared with $29,386,000 in 1946-47.
41.	Most of this is represented by the amount of $75,000,000 which has been credited to the general reserve to meet possible losses on the ultimate realization of active assets. This is an increase of $50,000,000 over the amount of $25,000,000 set aside for this purpose each fiscal year since the account was established in 1940-41. During the year, $55,416,000, representing the writeoff of the Western Provinces' Treasury Bill indebtedness was charged ot the reserve as provided for by The Western Provinces' Treasury Bills and Natural Resources Settlement Act. At March 31, 1947, the general reserve was $153,669,000, and as a result of these credit and debit transactions the reserve at March 31, 1948 stood at $173,253,000, or a net increase of $19,584,000.
42.	The other items in this category which affect the net debt are: the provision for reserve for conditional benefits under the Veterans' Land Act and the annual write-off of Soldier and General Land Settlement and Veterans' Land Act aggregating $6,602,000.
43.	The loss of $50,000 on seed grain and relief accounts administered by the Department of Mines and Resources does not increase the net debt as the write-off is from an amount already set aside in the non-active accounts to provide for revaluations and losses.
44.	The last item in this category reflects a change in the Canadian National Railways Securities Trust Stock, which was decreased by $1,885,000 representing the retirement of equipment. The deficit in the Canadian National Railways for the calendar year 1947 does not reduce the Dominion's equity as the amount of the deficit is paid to the railway by the Government and charged as Government expenditure under the category of Government Owned Enterprises. The item of $1,885,000 is a contra item and does not increase the net debt. It appears on the revenue side under the heading of Special Receipts and Credits.

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45.	In addition to the expenditures already detailed the Government makes disbursements for loans, advances and investments which are treated as "active assets" and are deducted from total gross liabilities in arriving at the figure of net debt. The net increase in these active assets during 1947-48 was $453,654,000.
The details in regard to the items accounting for this net increase together with those for the four previous fiscal years will be found in the table on page 94.
The Budget-Appendix
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Changes in Active Loans, Advances and Investments, 1947-48 (thousands of dollars)
Loans and Advances-
Railways and Steamship Companies- Canadian National Railways	
Increases Decreases
81,717
Sundry Government Agencies
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National Harbours Board	 26
Soldier Settlement and Veterans Land Act...	35,966		
Sundry Crown Companies	 9,146		
Other	 11,632
45,112	11,658
Provincial and Municipal Governments
63,629
United Kingdom and Other Governments
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United Kingdom, loan under The War Appropriation (U.K. Financing) Act,	1942	 111,285
Union of Soviet Socialist Republics 

 loan for
purchase of wheat	 2,500
Export Credits Insurance Act	 130,830		
United Kingdom Financial Agreement Act, 1946 368,000		
Other	 3,314
498,830	117,099
Miscellaneous-*
Sundry munitions contracts-
(Department of Reconstruction & Supply)	 610
Other	 4,153		
4,153	610
Investments-
Canadian Farm Loan Board	 100		
Canada's subscription to International Bank for
Reconstruction & Development	 16,250
Export Credits Insurance Corporation Capital
Stock	 2,500
Other	 2,012
18,850	2,012
Net Total of Changes in Loans and Advances and Investments	,.... 453,654
Note: Annual changes in active loans and advances and investments for the five fiscal years ended March 31, 1948 appear on page 94.

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The Budget-Appendix
Railway and Steamship Companies
46.	There was a net increase of $81,717,000 in loans to the Canadian National Railways in the fiscal year 1947-48. Advances of $53,550,000 were made for the retirement of funded debt of the Company held by the public. Advances for the purchase of capital stock of Trans-Canada Airlines totalled $15,100,000. Advances of $11,000,000 were made pending Parliamentary approval of the appropriation for the Railway's 1948 deficit. An advance of $5,886,000 was also made for capital purposes of the Railway. Repayment of amounts due to the Government under various Hire-Purchase Agreements covering railway equipment acquired in previous years aggregated $3,819,000.
Sundry Government Agencies
47.	Advances to the National Harbours Board for capital purposes at Vancouver and Montreal were reduced during the year by $26,000.
48.	The net increase in the fiscal year in advances for Soldier Settlement and Veterans Land Act purposes amounted to $35,966,000. This increase was occasioned by net advances of $38,066,000 under the Veterans Land Act, less the sum of $2,100,000 written off and charged to Consolidated Deficit Account.
49.	Net advances to sundry Crown companies increased by $9,146,000. The main items contributing to this change were as follows: advances aggregating $22,500,000 to the Central Mortgage and Housing Corporation; $2,500,000 representing capital surplus of Export Credits Insurance Corporation; reduction of $5,000,000 to the Commodity Prices Stabilization Corporation and a reduction of $9,100,000 in advances to the Agricultural Prices Account.
Provincial and Municipal Governments
50.	Loans in this category decreased during the fiscal year 1947-48 by $63,629,000. This reduction reflects the adjustment authorized, under The Western Provinces Treasury Bills and Natural Resources Settlement Act, in the indebtedness of the four western provinces to the Government of Canada. Of this reduction, $55,416,000 was charged to the Reserve for Possible Losses upon the Ultimate Realization of Active Assets.
United Kingdom and Other Governments
51.	Net advances under this heading increased by $381,731,000 during the fiscal year 1947-48. The largest single item in this category consisted of the advances under the United Kingdom Financial Agreement Act, 1946, aggregating $368,000,000. At March 31, 1948, the Government of the United Kingdom had drawn down $1,008,000,000, out of a total loan of $1,250,000,000 authorized by this Act. The Canadian dollar obligation of the Government of the United Kingdom under the authority of The War Appropriation (United Kingdom Financing) Act, 1942, was reduced by $111,285,000, leaving a balance outstanding at the fiscal year end of $331,479,000.
52.	Advances made during the fiscal year to foreign governments and their agencies pursuant to agreements made under the Export Credits Insurance Act increased by $130,830,000. Advances were made to the various countries as follows: Belgium $16,000,000; China $20,046,000; Czechoslovakia $10,315,000; France $49,945,000; Netherlands $28,536,000; Netherlands Indies $5,900,000; and Norway $1,906,000. In addition unpaid interest was consolidated and added to the loans under the terms of the agreements in the amount of $248,000 in the case of Belgium and $150,000 in the case of Norway. Belgium repaid $2,112,000 during the year.
The Budget-Appendix
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53.	The Government of the Union of Soviet Socialist Republics repaid during the fiscal year $2,500,000 of a loan obtained under the authority of the War Appropriation Act in the amount of $10,000,000. This payment completely liquidated the loan on its due date.
Investments
54.	In the fiscal year 1947-48, Canada paid $16,250,000 on its subscription to the capital stock of the International Bank for Reconstruction and Development. This payment was made in the form of non-interest bearing notes. The remaining amount of Canada's subscription to the capital stock of the Bank, namely, $260,000,000, can only be called to meet obligations of the Bank on securities of or guaranteed by the Bank.
55.	A further payment of $2,500,000 was made for the capital stock of the Export Credits Insurance Corporation. This payment completes the Government's subscription to the capital stock of the Corporation.

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56.	During the fiscal year ended March 31, 1948, Government obligations to a total of $2,856,342,539 matured or were called for redemption. Of this amount, $1,333,293,471 was renewed or converted into new issues, and cash required to retire the balance was provided as follows: $325,000,000 from the sale of a new issue of two year bonds to the Bank of Canada and the chartered banks, $263,530,150 from the sale of Canada Savings Bonds Series II, $200,000,000 from the sale of a new issue of Treasury Notes to the Bank of Canada, $100,000,000 from the sale of an issue of Deposit Certificates to the chartered banks, $50,000,000 from the issue of notes to the Export-Import Bank, and $584,518,918 from cash balances.
57.	During the year, Government issues of securities amounted to an estimated total of $2,271,823,621 exclusive of the recurring issues of Treasury Bills which were issued to refund similar securities maturing during the year. Of this total, securities in the amount of $1,645,000,000 were issued to the Bank of Canada, and in the amount of $280,000,000 to the chartered banks. Drawings on the $300,000,000 Export-Import Bank Loan amounted to $50,000,000 during the fiscal year, and, in accordance with the loan agreement, notes maturing in three, four, and five years from the date of the withdrawal were delivered to the Bank.
58.	Canada Savings Bonds were the only securities offered to the general public during the year. Net sales of Series II amounted to $263,530,150 during the period, while there were net redemptions of $92,394,150 in Series I of these bonds.
59.	The fortnightly issue of three months Treasury Bills was continued during the year. The amount outstanding remained unchanged at $450,000,000 throughout the year. Average yield on the last issue sold during the fiscal year was -411%.
60.	The average rate of interest on the Dominion's direct funded debt (including Treasury Bills and Deposit Certificates) outstanding at March 31, 1948 was 2-66%, compared with 2-65% at March 31, 1947.
61.	The following Tables show the details of loan flotations and debt redemption during the fiscal year.

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Issued to Chartered Banks
Two Year Bonds______
Deposit Certificates.
Issued to Bank of Canada
Six Months Treasury Notes....
Six Months Treasury Notes....
Six Months Treasury Notes....
Six Months Treasury Notes....
Two Year Bonds	
Issued to The Export-Import Bank of Washington
Three Year Notes	
Four Year Notes	
Five Year Notes	
Issued to General Public Canada Savings Bonds, Series II-Net...
Grand Totals	
Issue
Date
Mar. 1, 1948 Mar. a, 1948
May 1, 1947 Sept. 1, 1947 Nov. 1, 1947 Mar. 1, 1948 Mar. 1, 1948
Mar. 1, 1948 Mar. 1, 1948 Mar. 1, 1498
Nov. 1, 1947
Maturity
Date
Mar. 1, 1950 Sept. 3, 1948
Nov. 1, 1947 Mar. 1, 1948
May
Sept.
Mar.
1, 1948 1, 1948 1, 1950
Mar. 1, 1951 Mar. 1, 1952 Mar. 1, 1953
Nov. 1, 1957
Interest
Rate
Price to Government
%
t
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2h (.') 2*
2* (')
2!
Yield at Government Price to
100-00
100-00
100-00
100-00
100-00
%
0-625
0-625
0-	625
1-	347
2-500
2-82
Total Amount Issued
180,000,000
100,000,000
280,000,000
200,000,000
550.000.	000
200.000.	000
550.000.	000
145.000.	000
1,645,000,000
16.667.000	(a) 16,667,000(a)
16.666.000	(a)
50,000,000 (a)
263,530,150
2,238,530,150
Renewals or Reconversion Included in Amount Issued
550.000.	000
200.000.	000
550,000,000
1,300,000,000
1,300,000,000
Amount Issued for Cash
(i) In addition to the interest charge, the loan from the Export-Import Bank carries (a) Payable in United States dollars.
, commitment charge of a of 1% on the unutilized portion.
180,000,000
100,000,000
280,000,000
200,000,000
145,000,000
345,000,000
16.667.000	(a)
16.667.000	(a)
16.666.000	(a)
50,000,000 (a)
263,530,150
938,530,150

ib-
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The Budget-Appendix
The Budget-Appendix

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Maturity or Call Date	Interest Rate	Where Payable	Amount
	%		$
May 1,1947		If 4		373.259.000 33,293,471 550.000.	000 88,485 56,191,000 37,523,200 200.000.	000 50,012,350 550.000.	000 269.897.000 239.713.000 308,255 37,329,374 92,394,150 2,141,354 280.000.	000
July 1, 1947				
Sept. 1,1947		1		
Oct. 1, 1947		2f 4	London	
Oct. 15,1947 (>)				
Nov. 1, 1947 0)		5		
Nov. 1, 1947				
Feb. 1, 1948 (')		3f f		
Mar. 1, 1948				
Mar. 1, 1948		If		
Mar. 1, 1948				
Non-Interest Bearing Certificates (Net)				
War Savings Certificates (Net)				
Canada Savings Bonds, Series I (Net)		2f		
Various 0)				
	i	Canada	
	8		
Total Bonds and Certificates				2,772,132,639 84,209,900
Repayment of Refundable Portions Excess Profits Tax and Personal Income Tax				
			
Total Redemptions of Debt				2,856,342,539 1,533,293,471
Less: Amounts Renewed or Converted (°)				
			
Provided from Cash Resources				1,323,049,068
			
(*) Maturity date October 15, 1952, claled for redemption October 15, 1947.
(2) Maturity date November 1, 1957, called for redemption November 1, 1947.
(s) First call of First War Loan.
(*) These issues were vested by the Treasury of the United Kingdom in August, 1941, and January, 1942. Amounts purchased during the fiscal year were cancelled. The actual redemptions for the year at the rate of $4.03 to the pound were approximately $212,000. The difference between this figure and $2,141,354 shown in the table is due to revaluation of the outstanding sterling issues from a par figure of $4.86 2/3 to the pound to $4.03 to the pound.
(5) Total from previous Table $1,300,000,000 and School Fund Debentures, viz. $33,293,471.

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62.	The Government's financial operations are not confined to collecting revenues and making expenditures in the narrow accounting or budgetary sense of that term. Very substantial amounts of cash are received and disbursed in other ways-ways which do not affect at all the amount of the budgetary surplus for the year. Such receipts and disbursements must also be taken into account when considering the role of the financial operations of the Government in the nation's economy.
63.	The following table has therefore been drawn up with a view to summarizing the various sources of cash funds received by the Government during the year and the various purposes for which cash funds have been disbursed. It also serves to account for the decrease of $448-6 million which has taken place in the Government's net cash position between March 31, 1947, and March 31, 1948; in this connection, however, it should be noted that the amount of the Government's cash balances shown for this purpose and for the purpose of year-end balance sheets is not the actual amount of cash held on March 31st but rather such amount corrected for the various year-end adjustments reflected in the balance sheet.
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The Budget-Appendix

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(Millions of Dollars)
Source of Cash Funds-
1.	Net balance of cash funds remaining out of current year's revenues	 $
Consisting of:
Excess of revenues over expenditures for the year (i.e. budgetary surplus)..	$	669-9
Add back items included in total expenditures which did not represent
current outlays of cash	 107 [DOT] 7 (*)

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Less items included in total revenues which did not represent current receipts
of cash	 50-6(1')
$	727-0
2.	Repayments of loans and advances	$
Consisting of amounts received from-
Foreign Exchange Control Board	®	220-0
United Kingdom under War Appropriation (U.K. Financing) Act, 1942.	111-3
Miscellaneous U.K. and other governments	 6-0
Agricultural products and agricultural prices support account	 9-1
Provincial and Municipal governments	 1'9
Miscellaneous loans and advances	 3-6
$	351-9
351-9
3.	Repayments of balances arising from agreements of sale of Crown assets	$	1-94.	Increases in	Insurance, Pension and Guaranty	accounts	
85-25.	Increases in	sundry suspense accounts	
14-9$	1,180-9
Application of Cash Funds-
1.	Increase in loans and advances	$	625-2
Consisting of amounts advanced to:
Canadian National Railways	$	81-7
United Kingdom (under United Kingdom Financial Agreement Act,
1946)	 368-0
Other Countries (under Export Credits Insurance Act)	 130-8
Crown Companies	 6-6
Various Veterans (under Soldier Settlement and	Veterans Land Acts)..	38-1
$	625-2
2.	Increase in working capital advances
3.	Increase in investments	
Represented by:
Increase in investment in Canadian Farm Loan Board	$	0-1
Increase in miscellaneous investments	 2-5
[Stage Direction]
(*) Annual amortization of bond discounts and commissions, J10-0 million; write-down of assets-Soldier Land Settlement and Veterans Land Act Loans, $2-1 million; provision for reserve for conditional benefits under Veterans Land Act, S4-5 million; provision for reserve for possible losses on ultimate realization of active assets, $75-0 million; Natural Resources Settlements Provinces of Saskatchewan and Alberta, $16-1 million.
(t) Premium, Discount and Exchange, $3-9 million; Transfer to Active Assets-Loans and Advances- Wartime Oils Ltd. and Canadian Arsenals Ltd., $3-7 million; and 1936 and 1937 Saskatchewan Seed Grain Guarantees (non-active), $9-8 million; Amortization and profits from War Supplies Ltd., $19-1 million; Employees Compensation Clearing Accounts-Defence Projects, $9-1 million; and U.K. Settlement Scheme, $5-0 million.
The Budget-Appendix
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4.	Reduction in deposit and trust accounts	
5.	Reduction in deferred credits	
6.	Cost of loan flotations (portion to be amortized)	
7.	Reduction in funded debt (net)	$
less increase in floating debt	
8.	Amounts transferred to securities investment account	
48-4
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5-6
536-1
1,629-5
Excess of cash funds applied over funds made available-accounting for net decrease in cash
position between March 31, 1947 and March 31, 1948	$	448-6Cash balance at March 31, 1947	$	484-5Cash balance at March 31, 1948	
35-9Reduction in Canadian dollar balances	$	435-2Reduction in U.S. dollar balances	
12-7Reduction in Sterling dollar balances	
0-2$	1,180-9
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The Budget-Appendix
64.	It will be noted that in order to arrive first of all at a figure representing the cash funds provided from current operations (i.e., the excess of revenues over budgetary expenditures), an adjustment must be made for items included in revenues which do not represent cash receipts and also for items included in expenditures which do not represent outlays of cash. When these adjustments are made, the net balance of cash funds remaining out of current year's revenues is found to be $727-0 million.
65.	To this total should be added an amount of $351-9 million representing repayments of loans and advances, $1-9 million representing repayments of balances arising from agreements of sale in respect of Crown assets, $85-2 million representing increases in various insurance, pension and guarantee accounts, and $14-9 million representing increases in sundry suspense accounts.
66.	The total of all these items is $1,180-9 million, which with cash on hand at the beginning of the fiscal year would represent the total cash funds available to the Government after taking care of the year's budgetary expenditures. The lower half of the table shows how these cash funds were applied or disbursed and the balance remaining at the end of the year.
67.	It will be noted that of the total funds available the sum of $634-0 million was spent in the acquisition of active assets-$625-2 million by way of increases in loans and advances, $2 [DOT] 6 million by way of increases in investments and $6-2 million by way of increases in working capital advances. The sum of $43 [DOT] 1 million was accounted for by a reduction in deposit and trust accounts, $5 [DOT] 6 million by a reduction in deferred credits, and $0 [DOT] 7 million by cost of loan flotations which will appear as expenditures in future years as it is amortized over the term of the relevant loans.
68.	Of special significance is the fact that the remainder of the cash which was disbursed during the year, namely $946 [DOT] 1 million went to reduce the amount of Government securities outstanding in the hands of the public. The net retirement of funded debt amounted to $584 [DOT] 5 million, but there was an increase of $48 [DOT] 4 million in floating debt, making net retirement in total debt of $536 [DOT] 1 million. In addition, however, an amount of $410-0 million of Government securities was purchased from the public and transferred to securities investment account.

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69.	It is estimated that the gross unmatured funded debt (including Deposit Certificates, Treasury Bills and the estimated refundable portion of personal income tax and excess profits tax) of the Government of Canada outstanding at the close of the fiscal year 1947-48 will amount to $15,957,381,000, details of which may be found on page 54. Other liabilities consisting chiefly of Deposit and Trust Accounts, Insurance, Pension and Guaranty Accounts are estimated at $1,243,689,000. The gross liabilities of the Dominion on Mardh 31, 1948, therefore, are estimated at $17,201,070,000. On the other side of the balance sheet there are active assets estimated at a total of $4,996,525,000, consisting of cash, loans, advances and investments, less a reserve of $173,253,000 for possible losses on their ultimate realization. If the amount of net active assets is deducted from the amount of gross liabilities, there results a figure of $12,377,798,000, representing the estimated net debt of the Dominion as at March 31, 1948.
70.	The decrease in the net debt for the year is estimated at $669,958,000. This of course is the amount already reported as the over-all estimated surplus for the fiscal year 1947-48.
The Budget-Appendix

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The following is a condensed estimated balance sheet together with details of non-active assets:
of the Dominion,

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(estimated)
Liabilities-
(thousands of dollars)
Floating Debt-
Matured Funded Debt Outstanding	
Stock and other obligations payable on demand
Interest due and outstanding	
Outstanding cheques and warrants	
Post Office Account	
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32,460 252,034 78,458 102,000 10,000 
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474,952
Deposit and Trust Accounts-
Post Office Savings Bank	 36,750
Indian Trust Funds	 18,500
Miscellaneous	 58,000
[Stage Direction]
	113,250
Insurance, Pension and Guaranty Accounts-
Government Annuities	 430,000
Insurance Fund-Civil Service	 21,235
Insurance Fund-Returned Soldiers	 24,580
Veterans' Insurance Account	 2,300
Unemployment Insurance Fund-Cash	 8,400
Other Insurance and Guaranty Accounts	 750
Civil Service Superannuation Account	 90,315
Civil Service Retirement Fund	 14,675
Permanent Services Pension Account	 7,880
Other Pension Funds	 2,800
[Stage Direction]
	602,935
Deferred Credits	 3,700
Sundry Suspense Accounts	 29*300
Province Debt Accounts	 11,920
Reserve for contingent liabilities	 7,632
Funded Debt Unmatured-
Payable in Canada-
Bonds, Deposit Certificates and Treasury Bills	 15,290,807
Refundable portion of personal income tax and excess profits tax
(estimated)	 459,249
Payable in New York	 198,000
Payable in London	 9,325
[Stage Direction]
 15,957,381
17,201,070
Assets-
Cash including investment in the Foreign Exchange Control Board and holdings in the
Securities Investment Account	$
Departmental Working Capital Advances	
Loans and Advances-
To Canadian National	Railways	 760,725
To United Kingdom and Other Governments-
United Kingdom, The War Appropriation (U.K.
Financing) Act, 1942	$	331,479
United Kingdom Financial Agreement Act, 1946.	1,008,000
Export Credits Insurance Act	 466,330
Other (U.K. and Other Governments)	 40,000
[Stage Direction]
 1,845,809
To Sundry Government Agencies-
Canadian Broadcasting Corporation	 2,000
Crown Companies	 53,557
National Harbours Board	 85,090
Soldier Settlement and Veterans' Land Act....	143,900
Other	 14,800
[Stage Direction]
	299,347
To Provincial and Municipal Governments	 107,745
Miscellaneous	 9,685
1,372,763
14,800

3,673,311

The Budget-Appendix
BALANCE SHEET-MARCH 31, 1948-concluded (estimated)
(thousands of dollars)
Assets-Concluded Investments-
Bank of Canada Capital Stock	$	5,920
Central Mortgage and Housing Corporation Capital Stock	 25,000
Canadian Farm Loan Board-
Advances and Capital Stock	 21,123
Canada's subscription to capital of-
International Monetary Fund	 300,003
International Bank for Reconstruction and Development	 65,036
Balances receivable under agreements of sale of Crown assets.. 11,531
Miscellaneous	 60,204
[Stage Direction]
$	488,817
Province Debt Accounts	 2,296
Deferred Charges-Unamortized discounts and Commissions on Loans	 72,654
Sundry Suspense Accounts	 19,384
'	$4,996,525
Less-Reserve for possible losses on ultimate realization of Active Assets	 173,253
$	4,824,267
Net Debt, March 31, 1948 (estimated)	 12,377,798
$	17,201,070
NET DEBT-MARCH 31, 1948 (estimated)
(thousands of dollars)
Net Debt represented by-
(A) Expenditures for Capital Purposes and Non-active Assets-
Public Works-[DOT]
Canals	$	240,092
Railways	 435,783
Miscellaneous	 338,003
Military Property and Stores	 12,617
Territorial Accounts	 9,896
Canadian Pacific Railway (old)	 62,791
Canadian National Railways Securities Trust Stock	 378,519
Canadian National Railways Stock	 18,000
Loans and Advances Non-active-
Canadian National Steamships	 11,797
National Harbours Board-
Chicoutimi	$	3,811
Churchill	 16
Halifax	 12,498
Montreal (Jacques Cartier Bridge)	 7,086
Port Colborne Elevator	 1
Quebec	 27,828
Saint John	 17,325
Three Rivers	 3,985
[Stage Direction]
	72,550
Soldier and General Land Settlement	 16,526
Seed Grain and Relief Advances	 89
Miscellaneous Non-active Accounts	 2,457
$	1,599,120
(B) Consolidated Deficit Account-
Balance, Consolidated Deficit Account brought forward from March
31, 1947	$	11,453,361
Excess of revenue over expenditure excluding amounts charged under
(A) above, fiscal year ended March 31, 1948 (estimated)	 674,683
[Stage Direction]
 10,778,678
$	12,377,798
The Budget-Appendix

[Stage Direction]
71.	Indirect or contingent liabilities of the Government include the guarantee of the deposits maintained by the chartered banks in the Bank of Canada, guarantees of certain bond issues and bank loans, commitments under housing legislation, and certain other guarantees.
Guaranteed Bond Issues
72.	Bonds and debenture stocks guaranteed by the Government were outstanding in the hands of the public in the amount of $521,949,171 as at March 31, 1948, a decrease of $45,005,355 during the year. This decrease was caused chiefly by the redemption of two Canadian National Railways 3% bond issues: the $20,000,000 issue due February 1, 1952 was called for redemption on February 1, 1948 and the $25,000,000 issue due February 15, 1953, was called for redemption on February 15, 1948.
Guaranteed Bank Loans-
(1)	Farm Improvement Loans
73.	Under the provisions of the Farm Improvement Loans Act, 1944, the Government guarantees loans made by the chartered banks to farmers for certain authorized purposes. The amount of the guarantee is limited to 10 per cent of the aggregate principal amount of the guaranteed loans made by each bank. Figures for March 31, 1948, are not yet available, but at February 28 a total of 41,722 such loans had been made to a total amount of $33,631,453.71, and the Government's contingent liability at that date was $3,363,145.37, compared with $1,564,865 at March 31, 1947.
(2)	Veterans' Business and Professional Loans
74.	Under the provisions of the Veterans' Business and Professional Loans Act, the Government guarantees loans made for certain purposes by the chartered banks to veterans domiciled in Canada. The total of such loans is limited to $25,000,000, and the Government's guarantee is limited to 25 per cent of the loans made by a bank if that bank's total loans do not exceed $1,000,000 and to 15% of the loans mamde by a Bank in excess of $1,000,000. At December 31, 1947, the Government's contingent liability for loans made under this Act amounted to $1,216,571.12.
(3)	Guaranteed Bank Loans to Acadia Coal Company
75.	P. C. 1188 of March 29, 1946, authorized the Government to guarantee the extension of bank loans not exceeding $730,000 to the Acadia Coal Company Limited to assist the company in opening and developing the McBean seam on a fully mechanized basis. At March 31, 1948 loans for the maximum amount authorized were outstanding.
(4)	Guarantees under Part II, Export Credits Insurance Act
76.	Under authority of P. C. 4690 dated November 12, 1946, the Minister of Finance was authorized on behalf of the Government of Canada to guarantee under the provisions of the Export Credits Insurance Act the guarantee of the Republic of China of the payment by Ming Sung Industrial Company, Ltd., of the cost of Canadian-produced goods and Canadian services to a maximum

The Budget-Appendix
amount of $12,750,000 to be advanced by Imperial Bank of Canada, The Bank of Toronto and The Dominion Bank, subject to an agreement dated October 30, 1946, between the Company and the said Banks, and to guarantee the securities given by the Ming Sung Industrial Company Ltd., for repayment of amounts drawn against credits established by the Banks in accordance with the agreement.
This guarantee was made at the request of the Government of China, which itself has guaranteed the payments to be made by the Company and the securities to be given by the Company and has undertaken to indemnify the Government of Canada against loss in connection with the guarantees so requested.
As of March 31, 1948, letters of credit issued and special credits established by the said banks in favour of the Ming Sung Industrial Company totalled $9,997,320.00. Total payments by the banks under these letters of credit or special credits amounted to $6,106,850.87, and the liability of the Government at the end of the fiscal year is, therefore, $6,106,850.87.
Guarantees on Land Assembly Projects undertaken by Lending Instititions
77.	A new provision was added to The National Housing Act, 1944, at the 1947 Session of Parliament to empower and encourage lending institutions to acquire suitable blocks of raw land within or adjacent to urban centres and develop this land into serviced lots for housing construction. Subject to the lending institutions undertaking to develop the land acquired and sell this land under terms and conditions satisfactory to Central Mortgage and Housing Corporation, the Corporation is authorized to guarantee the total investment of the lending institutions in the land and development, including interest on the investment at a rate not to exceed two per cent compounded annually. In return for the guarantee the lending institutions agree to pay to the Corporation any amount recovered from the sale of such land, in excess of the total investment and the amount of the accrued interest. At the termination of the Agreement any unsold land in a project is to be conveyed to the Corporation.
At the end of March, 1948 agreements had been entered into with various lending institutions respecting six land assembly projects. The total estimated investment in these projects was $1,197,267.03. No claims have been made to the Corporation under the provision of the guarantee.
78.	The following table shows details of the bonds and debenture stocks guaranteed by the Government outstanding as at March 31, 1948:
The Budget-Appendix
[Stage Direction]
Bonds and Debenture Stocks Guaranteed bt the Government op Canada as at March 31, 1948
Date of maturity			Issue	Interest rate	Estimated amount outstanding
				%	S
April	1,	1948..	New Westminster Harbour Commissioners	41	700,000Sept.	1,	1951..	Canadian National	ii	48,022,000Aug.	1,	1952..	Saint John Harbour Commissioners	5	667,953July	10,	1953..	Canadian Northern	3	1,162,768Feb.	1,	1954..	Canadian National	5	50,000,000Mar.	1,	1955..	Canadian National (West Indies) Steamships Limited	5	9,400,000June	15,	1955..	Canadian National	4!	48,496,000Feb.	1,	1956..	Canadian National	4i	67,368,000July	1,	1957..	Canadian National	4,	64,136,000July	20,	1958..	Canadian Northern	3i	5,636,507Jan.	15,	1959..	Canadian National	3	35,000,000May	4,	1960..	Canadian Northern Alberta	3i	550,727May	19,	1961..	Canadian Northern Ontario	3i	3,603,183Jan.	1,	1962..	Grand Trunk Pacific	3	26,465,130Jan.	1,	1962..	Grand Trunk Pacific	4	7,999,074Jan.	2,	1967..	Canadian National	2i	50,000,000Oct.	1,	1969..	Canadian National	5	57,728,500Nov.	1,	1969..	Harbour Commissioners of Montreal	5	19,000,000Feb.	1,	1970..	Canadian National	5	17,338,000Various dates	1948-54..	City of Saint John Debentures assumed by Saint John	Harbour Commissioners	Various	371,2295	1,473,495(<	5	848,406«	4	5,954,741U	4	27,458521,949,17179.	The following table gives a summary of the Governments guarantees and other contingent liabilities outstanding, other than guarantees of bond issues:
Deposits maintained by the Chartered banks in the Bank
of Canada	 $519,211,261
Bank advances, re Province of Manitoba Savings Office..	4,344,078
Province of Manitoba Treasury Bill	 3,350,000
Loans made by chartered banks under the Farm Improvement Loans Act, 1944	 3,363,145*
Loans made by chartered banks under the Veterans'
Business and Professional Loans Act	 1,216,571**
Guaranteed Bank Loans-Acadia Coal Company		730,000
Guarantees under Part II of the Export Credits Insurance
Act	 6,106,851
Loans made by approved lending institutions under The
Home Improvement Loans	Guarantee Act, 1937.. ..	32,861
Loans made by approved lending institutions under The
Home Extension Plan	 1,959
Loans made by approved lending institutions under Part IV of the National Housing Act, 1944, for home
extensions	 5,554
Loans made by approved lending institutions under
Dominion and National Housing Acts	 Indeterminate
Guarantees of Land Assembly Projects under National
Housing Act	 1,197,267
* As at Feb. 28, 1948.
** As at Dec. 31, 1947.

The Budget-Appendix

[Stage Direction]
Revenues
Expenditures
Loans and Advances and Investment Unmatured Funded Debt
The Budget-Appendix

STATEMENT OF REVENUES FOR THE LAST FIVE FISCAL YEARS (Thousands of Dollars)
-	1943-44	1944-45	1945-46	1945-46	Estimated 1947-48$	$	$	S	$Tax Revenue- Direct Taxes- Direct Taxes on Incomes-	Individual Income Tax	
Tax on Interest and Dividends	813,435 25,671	767,755 27,053	691,586 26,824	694,530 28,428	659,828 33,929Taxes on Rents and Royalties	1,272	1,546	1,486	1,708	1,960Corporation Income Tax	311,379	276,404	217,834	238,792	364,131Excess Profits Tax	468,718	465,805	494,196	448,698	227,030Total Direct Taxes on Incomes..	1,620,175	1,538,563	1,431,926	1,412,156	1,286,878Succession Duties	15,020	17,251	21,447	23,576	30,828Total Direct Taxes	1,635,495	1,555,814	1,453,373	1,435,732	1,317,706Indirect Taxes-	Customs Import Duties	167,882	115,091	128,877	237,355	293,012Excise Duties-	Spirits, malt, etc	65,922	72,133	91,274	97,820	97,675Cigars, cigarettes and tobacco	79,906	83,142	98,228	101,163	102,116Licences	37	37	39	40	37Less Refunds	-3,741	-3,390	-2,815	-2,979	-3,034Total Excise Duties	142,124	151,922	186,726	196,044	196,794Excise Taxes- Taxes on Commodities-	Sales Tax	339,256	404,109	326,253	328,073	383,012War Exchange Tax	118,913 6,000	98,164 6,480	41,198 6,701	338 16,340	Automobiles, rubber tires and tubes	31,949Beverages	19,059	19,442	16,657	18,635	23,767Candy and chewing gum	12,602	12,874	11,904	13,277	18,279Cigars, cigarettes and tobacco	54,688	62,306	70,229	76,318	68,606Cigarette papers and tubes	6,159	6,658	4,645	6,943	6,419Electric and gas appliances	3,032	4,057	1,272	7	2,824burs	4,199	5,217	4,976	3,102	3,139Gasoline	24,930	29,671	29,836	36,220	2,208Matches and lighters	2,874	3,117	3,675	4,088	3,967Phonographs, radios and tubes	491	1,112	646	2,526	5,326Special excise on importations	508	545	787	1,185	2,113Sugar	13,048	11,744	9,974	11,339	10,572Toilet preparations and soaps	5,327	6,347	7,107	7,522	7,146Trunks, bags, luggage, etc	4,170	4,134	4,711	5,710	4,962Wines	1,710	1,772	2,066	2,394	2,342Sundry	2,579	2,977	3,811	5,109	4,716Taxes on Amusements and Services-	Amusements	12,019	12,284	13,387	14,552	15,369Tax on pari-mutuel bets	1,683	1,904	2,188	2,510	2,519Transportation and communication	22,379	24,205	26,893	27,931	27,531Stamps, including payment of taxes on jewellery, chinaware, cabaret	attendance, etc	16,734	18,296	21,697	24,437	24,301Licences, interest and miscellaneous	331	369	302	313	376Less refunds (mainly sales tax)	-34,342	-194,719	-114,005	-29,845	-10,685Total Excise Taxes	638,619	543,065	496,910	579,024	640,758Other Taxes-	Chartered bank note circulation...	457	350	270	220	188Insurance Companies	6,481	7,182	7,951	8,796	2,960Miscellaneous	753	702	751	690	613Total Indirect Taxes	956,316	818,312	821,485	1,022,129	1,134,325Total Revenue from Taxes	2,591,811	2,374,126	2,274,858	2,457,861	2,452,031

[Stage Direction]
The Budget-Appendix
STATEMENT OF REVENUES FOR THE LAST FIVE FISCAL YEARS-Concluded
(Thousands of Dollars)
-	1943-44	1944-45	1945-46	1946-47	Estimated 1947-48Non-Tax Revenue-	$ 61,071	$ 66,056 60,749 4,586	$ 68,613 70,915 4,954	$ 72,978	% 77,75848,281	69,439	75,8008,732 2,154 13,045	2,098	1,730Premium, discount and exchange	3,900 19,00014,080	16,322	16,355	
133,283	145,471	160,804	160,870	178,188
					
	2,725,094	2,519,597	2,435,662	2,618,731	2,630,219
					
Special Receipts and Credits- Refunds of previous years' Special	221	53	20	10	4Special Receipts-War Appropriation	98,918 216	352,918 177	626,616	412,763	225,764161	170	138Canadian Wheat Board-	2,971	589	2,625 22,400 7,143	1,762	16Canadian National Railways- Net credit due to increase in Canadian National Railways Securities	37,838 53,448 26	22,631 174	Investment in Crown plants trans-	2,053	1,250193,638	385,905	649,602	416,758	227,082Capital and Non-active Accounts- Capital Accounts- Refunds of previous years'	93	728	376	110	62Non-active Accounts- National Harbours Board, reduc-	19	10	82193G and 1937 Saskatchewan Seed Grain Loans Guarantees- Adjustment pursuant to The Western Provinces Treasury Bills and Natural Resources	9,773 256Canadian National (West Indies) Steamships, Limited, reduction	164	549	1,105	Canadian Pacific Railway- Repayment of loan made under Unemployment Relief Act, 1932	1,000	Write-downs to Consolidated Deficit Account- Canadian National Railways Securities Trust Stock-reduction due to retirement of equipment dur-	1,308 54	1,885 50Seed Grain and Relief Loans	29	36	45	Total Capital and Non-active	1,286	1,332	421	2,587-	12,108Total Special Receipts and Credits..	194,924	387,237	650,023	419,345	239,1902,920,018 155,000	2,906,834 219,500	3,085,685 72,500	3,038,076 30,200	2,869,409Less estimated amount of refundable Income and Excess Profits Taxes..	
2,765,018	2,687,334	3,013,185	3,007,876	2,869,409
					
The Budget-Appendix
[Stage Direction]
STATEMENT OF EXPENDITURES BY MAJOR CATEGORIES AND BY DEPARTMENTS FOR THE LAST FIVE FISCAL YEARS (Thousands of Dollars)
1943-44	1944-45	1945-46	1945-46	Estimated 1947-48Okdinaby Expenditure	$	$	$	$	$Agriculture	8,841	9,424	10,319	13,300	16,284Auditor General's Office	348	361	379	390	405Civil Service Commission	456	461	479	593	670External Affairs, including Office oi	Prime Minister	1,596	1,974	4,583	5,216	7,624Finance-	Interest on Public Debt	242,681	318,995	409,134	464,395	445,455Cost of Loan Flotations and Annual	Amortization of Bond Discounts and	Commissions	19,285	20,679	22,311	12,139	10,917Premium paid on redemption of called	bonds	5,842	71	50Subsidies to Provinces	14,449	14,445	14,447	14,383	33,394Miscellaneous Grants and Contribu-	tions	528	531	617	95	113Civil Pensions and Superannuation	356	325	293	253	228Government contribution to Superan-	nuation Fund	2,299	2,341	2,696	3,161	3,489Old Age Pensions, including pensions to	blind persons	30,377	32,187	(*) -	(') -	(') -Premium, Discount and Exchange	16,348	14,734	9,172	Compensation to Provinces under	Dominion-Provincial Taxation Agree-	ments-	Income and Corporation Taxes	83,678	82,977	94,343	94,380	122,497Gasoline Tax	11,757	10,357	3,709	Administrative and Sundry Expendi-	ture	4,472	4,724	7,569	3,599	11,389Fisheries	1,696	2,159	3,262	3,599	4,236Governor General and Lieutenant Gov-	ernors	222	223	227	252	233Insurance	183	185	199	212	254Justice	2,673	2,696	2,848	3,194	3,914Penitentiaries	2,799	2,936	3,258	3,806	4,663Labour	1,170	1,446	1,620	2,010	2,295Unemployment Insurance Act, 1940-	Administration	5,171	5,113	6,185	7,496	17,624Government Contribution	12,344	12,746	12,514	15,200	17,500Government Annuities-	Payments to maintain reserve	32	257	294	977	750Legislation-	House of Commons	1,915	1,612	2,235	2,786	3,161Library of Parliament	77	72	74	90	104Senate	562	485	727	881	951General	86	95	98	167	270Chief Electoral Officer, including elec-	tions	88	179	3,091	144	129Mines and Resources-	Administration	167	168	164	173	263Immigration	1,262	1,309	1,524	2,047	2,806Indian Affairs	5,177	6,162	4,466	5,948	7,174Lands, Parks and Forests	1,586	1,831	2,689	4,962	Lands and Development Services	5,738Surveys and Engineering	1,272	1,610	1,323	3,444	Special Projects	2,534Mines and Geological Survey	1,125	1,216	1,303	1,847	Mines, Forests and Scientific Services	5,530Munitions and Supply	14	19	(2) -	(2) -	(s) ' -Dominion Fuel Board Administration	Coal subsidies and subventions	2,165	2,737	(2) -	(2) -	(2) -National Defence-	Administration	36	33	38	28	235Sundry Services	32	34	89	225	402National Health and Welfare	1,617	1,725	7,294	8,616	11,040Old age pensions, includingp ensions to	blind persons	-	(*) -	33,715	35,928	58,090Family allowances	172,632	245,141	263,165
0) See Department of National Health and Welfare.
(2)	See Department of Reconstruction and Supply.
(3)	See Department of Finance.
[Stage Direction]
The Budget-Appendix
STATEMENT OF EXPENDITURES BY MAJOR CATEGORIES AND BY DEPARTMENTS FOR THE LAST FIVE FICSAL YEARS-Continued (Thousands of Dollars)
-	1943-44	1944-45	1945-46	1946-47	Estimated 1947-48Ordinary Expenditure-Con.	$	$	$	*	$National Revenue (including Income	Tax)	17,721	20,114	22,630	28,551	37,315National War Services	547	838	Post Office	48,485	54,629	57,730	64,213	67,800Privy Council	80	81	419	808	1,300Public Archives	124	124	127	149	163Public Printing and Stationery	235	232	238	293	579Public Works	12,281	13,169	16,283	26,360	35,620Reconstruction and Supply	-	969	2,103	1,932	12,087Dominion Fuel Board Administration,	Coal subsidies and subventions	(4) -	(*) -	2,339	1,776	1,172Royal Canadian Mounted Police	6,678	7,183	7,284	8,604	10,460Secretary of State	831	864	954	157	1,362Trade and Commerce	4,196	3,497	4,053	7,361	8,366Canada Grain Act	2,089	2,333	2,303	2,415	2,647Mail Subsidies and Steamship Subven-	tions	800	869	994	1,103	(6) -Transport-	Administration	397	402	418	491	594Air Service	3,593	3,939	4,196	5,653	10,483Marine Service	4,504	4,897	4,893	5,964	6,852Railways and Canals	4,107	4,294	4,415	4,709	5,343Maritime Freight Rates Act	5,058	4,733	4,345	4,871	5,091Mail Subsidies and Steamship Sub-	ventions, including Canadian Mari-	time Commission	1,773Veterans Affairs-	Departmental Administration	176	196	1,142	1,680	1,743Pensions (War 1914-1918 and military).	38,998	39,372	39,996	40,771	41,113War Service gratuities and re-establish-	ment credits	-	20,228	(6) -	(e) -	([DOT]) -Treatment and after-care of returned	soldiers and allowances to dependents	14,050	19,845	28,551	44,303	47,019Soldiers Settlement and Veterans Land	Act	837	1,391	3,160	6,551	8,087Total Ordinary Expenditure	630,381	767,376	1,061,902	1,236,235	1,382,545Capital Expenditure	Railways	692	630	2,313	2,654	3,820Public Works	1,930	2,534	2,195	8,546	12,641Total Capital Expenditure...	2,622	3,164	4,508	11,200	16,461War, Demobilization and	Reconversion Expenditure	National Defence-Defence Research	4,090	6,001National Defence-Army-	Army Services	1,312,348	1,243,733	935,006	208,106	Internment Operations	1,100	1,580	1,002	135	Inspection Board of the U.K. and	Canada	10,522	8,362	6,124	86,627Inspection Board of Canada	-	-	819	Sundry	4,835	8,080	7,446	8,064	1,328,805	1,261,755	949,578	219,124	86,627National Defence-Naval Services	369,656	417,099	241,759	64,873	43,795National Defence-Air Services-	Overseas War Establishment	383,888	759,070	Overseas Operations	197,076	4,779)	Home War Establishment	312,761	227,942	Western Hemisphere Operations	-	108,032	37,697	58,130Air Training	233,893	272,342	Training Organization	-	_	74,770	11,962	Repatriation and Demobilization	-	-	72,153	16,325,	
(4) See Department of Munitions and Supply. (') See Department of Transport.
(e) See War Demobilization.
4152
The Budget-Appendix
[Stage Direction]
STATEMENT OF EXPENDITURES BY MAJOR CATEGORIES AND BY DEPARTMENTS FOR THE LAST FIVE FISCAL YEARS-Continued
(Thousands of Dollars)
War, Demobilization and Reconversion Expenditure-Con.
National Defence-Air Services-Con.
Restricted Servicing Units	
General Servicing Units	
Surplus Equipment Units	
Headquarters and Commands Administration	
Sundry	
Reconstruction and Supply (formerly Munitions and Supply)- Administration, reconversion and operation of Crown Companies and/
or Crown Plants	
Administration	
Housing Developments	
Production and transportation subsidies for Canadian steel producers,
etc	
Research and development of jet engines and aircraft	
Expansion of Industry	
Emergency Coal Production Board-
Acquisition of U.K. Assets	
Acquisition of U.S. Assets	
Liquidation of Contracts	
Termination of Contracts	
National Research Council	
Sundry	
Agriculture-
Disposal of agricultural products rendered surplus by the war	
Freight assistance on western feed
grains	
Fertilizer subventions and freight
allowance	
Subsidies and bulk purchasing of fertilizer	
Subsidy on western wheat used exclusively as feed for live-stock....
Subsidy on milk and milk products- Premium on hog caracsses suitable for
export to U.K	
To provide for reserve stocks of feed
grains	
Sundry	
External Affairs-
Contribution to International Refugee
Organization	
General post UNRRA relief	
Sundry	
Finance-
Comptroller of the Treasury	
Payment of premiums on the purchase of Dominion of Canada Registered
Stock	
Wartime Prices and Trade Board-
Administration	
Subsidies due to application of Order
placing a ceiling over all prices.
Advances for payment of drawback claims to millers and other manufacturers of wheat products	
1943-44	1944-45	1945-46	1945-46	Estimated 1947-48$	$	$	%	$38,6231	-	-	14,8841	17,109	-	-	815J	17,880	11,315	124	102	97	84	930,666	1,369,456	524,330	99,271	58, ISO10,784	2,5009,957	8,841	6,858	4,140	1,325-	-	-	33,163	38,6207,8404,500672,804	205,039	112,675	-	-	-	-	C) 12,663	a onn	1,964	1,906	-	-	-	21,620	1,065-	-	151,846	55,200	6,6002,640	2,932	2,385	4,005	120-	-	3,137	5,565	665690,401	218,776	278,807	147,140	63,2351,876	1,194	354	958	817,754	15,943	17,317	18,828	20,005903	446	438	283	-	-	-	-	5974,500	7,471	7,864	6,474	4,42129,505	42,330	41,659	36,759	1,8653,855	14,091	9,573	4,506	5,6321,292	715	1,274	1,551	4344,608	5,864	4,499	1,757	35164,393	88,054	82,978	71,116	33,3135,46816,960640	296	383	837	43640	296	383	837	22,4718,404	9,216	9,369	6,072	1,88313	14	12	11	813,705	12,720	14,753	12,738	6,06081,519	107,338	97,819	88,778	34,50020,500	19,700	14,750	26,000	17,000(7)	Included in previous years in Expansion of Industry. 
The Budget-Appendix
STATEMENT OF EXPENDITURES BY MAJOR CATEGORIES AND BY DEPARTMENTS FOR THE LAST FIVE FISCAL YEARS-Continued
(Thousands of Dollars)
-	1943-44	1944-45	1945-46	1946-47	Estimated 1947-48$	$	$	$	$War, Demobilization and Reconversion Expenditure-Con. Advances to the Canadian Wheat Board to cover deficits in certain Board operations	13,058	(s)	(s)House Conversion Program	841	4,053	1,764	c)	(9)Old Age Pensions, increased benefits...	3,062	8,788	(10) _	(10) _	(10)Halifax V-E Day disorders and explosion	4,610 248 946	2,127 161 988	Expenses of investigations	
Sundry	417	1,632	375128, 461	176,519	144,271	136,875	59,826Labour-	3,478 1,378 9,346	1,632	701	15	'333	3	National Selective Service program...	11,098	11,268	11,230	(")Removal of enemy aliens from pro-	2,545	2,137	2,203	3,161	Vocational training for discharged	members of the Canadian Armed Forces	167	602	4,365	13,049	6,750Vocational Schools-Payments to Provinces	_	_	607	2,442	3,265Sundry	2,724	3,877	3,712	2,757	1,72119,638	19,664	22,859	32,654	11,736Mines and Resources- Prince Rupert - Terrace - Cedarvale	5,750 894	2,499 511	8	262	45	Aerial Photography	51	572	944	750Sundry	2,761	2,753	2,633	1,509	1,1479,405	6,814	3,475	2,498	1,897National War Services-	10,910 1,727 2,550 15,187	15,933	13,070 859	1,856 8,193 25,989	316	29	14,245	29	National Health and Welfare- Old Age Pensions, increased benefits...	(12) _	(5) -	9,103	9,517	997Sundry	(!3) _	1,340	2,135	157	103-	1,340	11,238	9,674	1,100Privy Council- Canadian Information Service (formerly Wartime Information Board)...	759	1,700	1,229	(10)	Sundry	86	58	43	45	15845	1,758	1,272	45	15Public Works	6,467	6,500	6,205	3,651	1,264Royal Canadian Mounted Police	4,967	S,709	4,775	1,896	1,584Trade and Commerce-	8,798	6,749 670	Sundry	745	1,772	682	1349,54S	7,419	1,772	682	134Transport	9,941	16,433	15,013	9,723	5,675Acquisition of airfields and works from United States Government....	66,600	18,661	Veterans Affairs- Treatment-Defence Forces	11,449	26,298	50,982	26,940Pensions-Defence Forces	-	11,939	22,200	33,763	40,945Additions, alterations and improvements to departmental hospitals, including land purchases	5,738	7,371	8,334	6,700(8)	Included in Special Expenditure.(9)	See Department of Reconstruction and Supply.(10)	See Department of National Health and Welfare.
(n) Included in ordinary expenditure (Unemployment Insurance administration). (1J) See Department of Finance.
(ls) Included in Pensions and National Health.
(u) Included in Department of External Affairs.
The Budget-Appendix
[Stage Direction]
STATEMENT OF EXPENDITURES BY MAJOR CATEGORIES AND BY DEPARTMENTS FOR THE LAST FIVE FISCAL YEARS-Continued
(Thousand of Dollars)
-	1943-44	1944r-45	1945-46	1946-47	Estimated 1947-48S	$	$	$	8War, Demobilization and	Reconversion Expenditure-Con.	Veterans Affairs-Con.	Post-discharge rehabilitation benefits. War service gratuities and re-establish-	-	2,468	32,131	96,762	78,300(1S) -1,165 32,759	239,585 774 328,359	318,325 273 508,439	84,135 5 237,025
-				
Pensions and National Health-					
	6,456 5,637 1,724 472				
					
					
Post-discharge re-establishment						
	3,663 17,952				
					
	1,763	2,960	2,453	2,181	840
Write-off of Air Training Plan Loans and					
Advances as per United Kingdom Financial Agreement Act, 1946				425,000 766,862 34,463 142,852		
Mutual Aid (excluding administration)...	912,578	792,200			
Military Relief			50,199 11,093			
Canada's Contribution to UNRRA		55				
					
Total War, Demobilization and Re-					
	4,587,023	4,418,446	4,002,949	1,314,798	634,668
					
Special Expenditure					
Agricultural and Relief Projects		3,751	3,869	4,423	4,432	5,665
Prairie Farm Assistance Act,. 1939-					
	217	188 1,295	327 12,052	333 6,597	500 10,744
Advances to Prairie Farm Emer-	2,578				
gency Fund						
Wheat acreage reduction plan-					
Administration	848	261	159	Payments of awards to farmers	30,102	1,707	397	2	Deficits-Canadian Wheat Board	(i«)	20,562	31,450Provision of reserve to meet deficits	resulting from the operations of the	Canadian Wheat Board not previously provided for	186	Subsidies on oats and barley used as feed	for live stock-	Dept, of Agriculture	13,900Reimbursement to Canadian Wheat	Board for expenses of regulating deliveries of grain-	Dept, of Trade and Commerce	733Reimbursement to Canadian Commer-	cial Corporation for expenses in purchasing materials, etc., on behalf of Dept, of National Defence-Dept, of	Trade and Commerce	548
Total Special Expenditure...	37,496	7,506	17,358	31,926	63,540
(16) Included in ordinary expenditure.
(16) Deficits charged to the War Appropriation in 1944-45.
[Stage Direction]
The Budget-Appendix
STATEMENT OF EXPENDITURES BY MAJOR CATEGORIES AND BY DEPARTMENTS FOR THE LAST FIVE FISCAL YEARS-Concluded
.	(Thousands of Dollars)
1943-44	1944-45	1945-46	1945-46	Estimated 1947-48%	%	$	$	$Government Owned Enterprises	Losses charged to Consolidated Deficit	Account- Prince Edward Island Car Ferry and	698	773	688	888	932Canadian National Railways	8,962	15,886 1,370 137Trans-Canada Airlines	National Harbours Board	30	59	86	114	
Total Charged to Consolidated					
	728	832	774	9,964	18,325
Loans and advances non-active-					
National Harbours Board		579	526	560	718	372
					
Total government-owned enter-					
	1,307	1,358	1,334	10,682	18,697
					
Other Charges					
Write-down of assets chargeable to Con-					
solidated Deficit Account- Reduction of soldier and general land					
settlement loans		553	325	36	232	3
Reduction of Veterans' Land Act					
Advances					129	2,097
Yearly established losses in seed grain					
and relief accounts- Department of Mines and Resources.	29	36	45	54	50
Cancellation of Canadian Farm Loan					
Board Capital Stock		5	1	1		
To provide a reserve for possible losses					
on ultimate realization of Active Assets		25,000	25,000	25,000	25,000	75,000
Provision for reserve for conditional					
benefits under Veterans' Land Act...			464	2,663	4,505
Canadian National Railways Securities					
Trust Stock-reduction due to retirement of equipment					1,308	1,885
Canadian National Railways Securities					
Trust Stock- Net changes in Dominion's equity in					
Canadian National Railways		37,838	22,400	22,631		
					
	63,425	47,762	48,177	29,386	83,540
					
Grand Total expenditures...	5,322,254	5,245,612	5,136,228	2,634,227	2,199,451
4156
The Budget-Appendix

[Stage Direction]
(Thousands of Dollars)	.
Fiscal Years Ended March 31
"	1944	1945	1946	1947	Estimated 1948Loans and Advances Railway and Steamship Companies- Canadian National Railways	.... Canadian National (West Indies).	$ Cr. 3,907	$ 83,608	$ 43,614 Cr. 450	$ Cr. 20,521	$ 81,717Net Total, Railway and Steamship Companies	
Sundry Government Agencies-	Cr. 3,907	83,608	43,164	Cr. 20,521	81,7172,000 151 55,202 Cr. 49,948 Cr. 41,100 23,392	National Harbours Board	
Soldier Settlement and Veterans Land Act	
Sundry Crown Companies	
Sundry Crown Plants, privately	Cr. 127 Cr. 2,090 63,317 57,007 Cr. 11	8 3,948 Cr. 16,774 Cr. 10,909 38	Cr. 66 18,677 Cr. 20,087 Cr. 4,997 Cr. 40	Cr. 26 35,966 9,146Other	
Net Total, Sundry Government Agencies	
Provincial and Municipal Governments.. United Kingdom and Other Governments- United Kingdom, loan under The War Appropriation (U.K. Financing) Act, 1942	
Union of Soviet Socialist Republics- Loan for purchase of wheat	
United Kingdom, Australia and New Zealand-Air Training accounts... United Kingdom-British Commonwealth Air Training Plan-Settle-	Cr. 11,632118,096	Cr. 23,689	Cr. 6,513	Cr. 9,763	33,454Cr. 437	15,599	Cr. 4,350	Cr. 2,530	Cr. 63,629Cr. 42,392 9,083 5,403 200,000 13,244	Cr. 55,098 81,586	Cr. 63,946 Cr. 2,500 Cr. 249,50 Cr. 200,000 Cr. 9,311 67,412	Cr. 95,800 Cr. 5,000 4Cr. 2	Cr. 111,285 Cr. 2,500United Kingdom, food advance ac-	10,613	Cr. 21,301 267,983 640,000	Export Credits Insurance Act	
United Kingdom Financial Agree-	130,830 368,000Cr. 11,884 16,766	Cr. 71,158 Cr. 4,215	Other (U.K. and Other Governments) 	
Net Total, U.K. and Other Governments	
Miscellaneous- Dominion and National Housing	123,308	Cr. 139,114	Cr. 3,314190,220	Cr. 38,272	Cr. 334,541	646,766	381,731Cr. 532 Cr. 3,964 Cr. 61	Cr. 1,240 7,975 Cr. 74	Cr. 14,721 Cr. 757 Cr. 74	Sundry munitions contractors etc., (Department of Reconstruction and Supply)	
Sundry Loans and Advances	
Net Total, Miscellaneous	
Net Total, All Loans and Advances	Cr. 10,868 Cr. 4	Cr. 610 4,153Cr. 4,557	6,661	Cr. 15,552	Cr. 10,872	3,543299,415	43,907	Cr. 317,792	603,080	436,816
[Stage Direction]
The Budget-Appendix
ANNUAL CHANGES IN ACTIVE LOANS AND ADVANCES AND INVESTMENTS FOR THE LAST FIVE FISCAL YEARS-Concluded
(thousands of dollars)
Fiscal Years Ended March 31
	1944	1945	1946	1947	Estimated 1948
Investments Central Mortgage and Housing Corporation Capital Stock				25,000 Cr. 2,401 36 33 Cr. 250 2,000		
	Cr. 5,005	Cr. 5,001		Cr. 600 48,750 299,970	100 16,250
Canada's subscription to capital of International Bank for Reconstruction and Development						
Canada's subscription to capital of International Monetary Fund						
Central Mortgage Bank Capital Stock..					
Export Credits Insurance Corporation Capital Stock			500			2,500
Polymer Corporation, Ltd					42,886 13,503 4,297	
Balances receivable under agreements of sale of Crown assets						Cr. 1,972 Cr. 40
	5,521	1,754	770		
					
	516	Cr. 2,747	25,188	408,806	16,838
Net Total of changes in Loans and Ad-					
	299,931	41,160	Cr. 292,604	1,011,886	453,654
					
5849-264i
The Budget-Appendix

[Stage Direction]
Date ol Maturity
Rate
Per
Cent
1948,	May	i
	July	i
	Sept.	i
	Nov.	i
1949,	Feb.	i
	Nov.	i
1950,	Feb.	i
	Mar.	i
	Nov.	i
	Nov.	i
1951,	Feb.	i
	Mar.	i
	June	15.
	Nov.	15.
1952,	Feb.	1
	Mar.	1
	Oct.	1
[Stage Direction]
1953,
[Stage Direction]
Mar.
[Stage Direction]
1
[Stage Direction]
1954,
[Stage Direction]
Mar.
[Stage Direction]
1
[Stage Direction]
1955,
[Stage Direction]
May
[Stage Direction]
1
[Stage Direction]
June
[Stage Direction]
1
[Stage Direction]
June
[Stage Direction]
1
[Stage Direction]
1956,
[Stage Direction]
Nov.
[Stage Direction]
1
[Stage Direction]
Nov.
[Stage Direction]
1
[Stage Direction]
1957,
[Stage Direction]
May
[Stage Direction]
1
[Stage Direction]
Nov.
[Stage Direction]
1
[Stage Direction]
1958,
[Stage Direction]
June
[Stage Direction]
1
[Stage Direction]
Sept.
[Stage Direction]
1.
[Stage Direction]
Nov.
[Stage Direction]
1.
[Stage Direction]
1959,
[Stage Direction]
Jan.
[Stage Direction]
1.
[Stage Direction]
Nov.
[Stage Direction]
1.
[Stage Direction]
1960,
[Stage Direction]
June
[Stage Direction]
1.
[Stage Direction]
Oct.
[Stage Direction]
1.
[Stage Direction]
1961,
[Stage Direction]
Jan.
[Stage Direction]
15.
[Stage Direction]
1962,
[Stage Direction]
Feb.
[Stage Direction]
1.
[Stage Direction]
1963,
[Stage Direction]
July
[Stage Direction]
1.
[Stage Direction]
Oct.
[Stage Direction]
1.
[Stage Direction]
1966,
[Stage Direction]
June
[Stage Direction]
1.
[Stage Direction]
Sept.
[Stage Direction]
1
[Stage Direction]
Perpetual
[Stage Direction]
1948, April 9 Treasury Bills
[Stage Direction]
April 23 Treasury Bills
[Stage Direction]
May 7 Treasury Bills
[Stage Direction]
May 28 Treasury Bills
[Stage Direction]
June 11 Treasury Bills
[Stage Direction]
June 25 Treasury Bills
[Stage Direction]
Sept. 3 Deposit Certificates.. 1950, June 15 Non-Interest Bearing
Certificates	
War Savings Certificates	
[Stage Direction]
31
3
31
3
2}
31
3
21
21
4 41 3
3
4 31 3
3
3
[DOT]410
[DOT]410
[DOT]410
[DOT]411
[DOT]410
[DOT]411
[DOT]625
Refundable portion of personal income tax and excess profits tax (estimated)	
2(«)
Payable in Canada - Payable in New York Payable in London__
[Stage Direction]
Where Payable
[Stage Direction]
Amount of Loan
[Stage Direction]
Annual Interest Charge
[Stage Direction]
$
[Stage Direction]
cts.
[Stage Direction]
$ cts.
[Stage Direction]
Canada
[Stage Direction]
200,000,000
[Stage Direction]
00
[Stage Direction]
1,250,000
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
33,293,470
[Stage Direction]
85
[Stage Direction]
1,331,738
[Stage Direction]
83
[Stage Direction]
Canada
[Stage Direction]
550,000,000
[Stage Direction]
00
[Stage Direction]
3,437,500
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
344,267,000
[Stage Direction]
00
[Stage Direction]
6,024,672
[Stage Direction]
50
[Stage Direction]
Canada
[Stage Direction]
49,987,650
[Stage Direction]
00
[Stage Direction]
1,624,598
[Stage Direction]
63
[Stage Direction]
Canada
[Stage Direction]
267,800,000
[Stage Direction]
00
[Stage Direction]
4,686,500
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
50,000,000
[Stage Direction]
00
[Stage Direction]
1,625,000
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
325,000,000
[Stage Direction]
00
[Stage Direction]
4,875,000
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
335,690,000
[Stage Direction]
00
[Stage Direction]
5,874,575
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
400,000,000
[Stage Direction]
00
[Stage Direction]
7,000,000
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
(i) 50,250,000
[Stage Direction]
00
[Stage Direction]
1,625,000
[Stage Direction]
00
[Stage Direction]
New York
[Stage Direction]
16,667,000
[Stage Direction]
00
[Stage Direction]
416,675
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
(3) 649,969,592
[Stage Direction]
50
[Stage Direction]
19,306,027
[Stage Direction]
50
[Stage Direction]
Canada
[Stage Direction]
60,000,000
[Stage Direction]
00
[Stage Direction]
1,950,000
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
f3) 50,500,000
[Stage Direction]
00
[Stage Direction]
1,625,000
[Stage Direction]
00
[Stage Direction]
New York
[Stage Direction]
16,667,000
[Stage Direction]
00
[Stage Direction]
416,675
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
324,945,700
[Stage Direction]
00
[Stage Direction]
9,748,371
[Stage Direction]
00
[Stage Direction]
New York
[Stage Direction]
16,666,000
[Stage Direction]
00
[Stage Direction]
410,650
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
(<) 676,355,489
[Stage Direction]
00
[Stage Direction]
20,089,767
[Stage Direction]
00
[Stage Direction]
London
[Stage Direction]
3,854,446
[Stage Direction]
18
[Stage Direction]
125,269
[Stage Direction]
50
[Stage Direction]
Canada
[Stage Direction]
40,000,000
[Stage Direction]
00
[Stage Direction]
1,200,000
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
55,000,000
[Stage Direction]
00
[Stage Direction]
1,650,000
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
(3) 855,607,410
[Stage Direction]
50
[Stage Direction]
25,414,081
[Stage Direction]
50
[Stage Direction]
Canada
[Stage Direction]
391,015,850
[Stage Direction]
00
[Stage Direction]
10,752,935
[Stage Direction]
88
[Stage Direction]
Canada
[Stage Direction]
1,111,261,650
[Stage Direction]
00
[Stage Direction]
33,337,849
[Stage Direction]
50
[Stage Direction]
Canada
[Stage Direction]
263,530,150
[Stage Direction]
00
[Stage Direction]
7,247,079
[Stage Direction]
12
[Stage Direction]
Canada
[Stage Direction]
88,200,000
[Stage Direction]
00
[Stage Direction]
2,646,000
[Stage Direction]
00
[Stage Direction]
London
[Stage Direction]
2,613,504
[Stage Direction]
07
[Stage Direction]
104,540
[Stage Direction]
16
[Stage Direction]
Canada
[Stage Direction]
276,687,600
[Stage Direction]
00
[Stage Direction]
12,450,942
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
1,197,324,750
[Stage Direction]
00
[Stage Direction]
35,919,742
[Stage Direction]
50
[Stage Direction]
Canada
[Stage Direction]
289,693,300
[Stage Direction]
00
[Stage Direction]
13,036,198
[Stage Direction]
50
[Stage Direction]
Canada
[Stage Direction]
1,165,300,350
[Stage Direction]
00
[Stage Direction]
34,959,010
[Stage Direction]
50
[Stage Direction]
New York
[Stage Direction]
100,000,000
[Stage Direction]
00
[Stage Direction]
4,000,000
[Stage Direction]
00
[Stage Direction]
New York
[Stage Direction]
48,000,000
[Stage Direction]
00
[Stage Direction]
1,560,000
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
1,315,639,200
[Stage Direction]
00
[Stage Direction]
39,469,176
[Stage Direction]
00
[Stage Direction]
London
[Stage Direction]
2,856,821
[Stage Direction]
32
[Stage Direction]
92,846
[Stage Direction]
69
[Stage Direction]
Canada
[Stage Direction]
1,295,819,350
[Stage Direction]
00
[Stage Direction]
38,874,580
[Stage Direction]
50
[Stage Direction]
Canada
[Stage Direction]
54,703,000
[Stage Direction]
00
[Stage Direction]
1,777,847
[Stage Direction]
50
[Stage Direction]
Canada
[Stage Direction]
1,691,796,700
[Stage Direction]
00
[Stage Direction]
50,753,901
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
55,000,000
[Stage Direction]
00
[Stage Direction]
1,650,000
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
75,000,000
[Stage Direction]
00
[Stage Direction]
307,500
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
75,000,000
[Stage Direction]
00
[Stage Direction]
307,500
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
75,000,000
[Stage Direction]
00
[Stage Direction]
307,500
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
75,000,000
[Stage Direction]
00
[Stage Direction]
308,250
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
75,000,000
[Stage Direction]
00
[Stage Direction]
307,500
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
75,000,000
[Stage Direction]
00
[Stage Direction]
308,250
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
100,000,000
[Stage Direction]
00
[Stage Direction]
625,000
[Stage Direction]
00
[Stage Direction]
Canada
[Stage Direction]
303,215
[Stage Direction]
04
[Stage Direction]
Canada
[Stage Direction]
225,866,165
[Stage Direction]
22
[Stage Direction]
6,775,984
[Stage Direction]
95
[Stage Direction]
Canada
[Stage Direction]
15,498,132,364 68 459,248,899 77
[Stage Direction]
419,593,236 26 4,495,740 52
[Stage Direction]
15,957,381,264 45
[Stage Direction]
424,088,976 78
[Stage Direction]
15,750,056,492 88 198,000,000 00 9,324,771 57
[Stage Direction]
98-70% 1-24% 0-06%
[Stage Direction]
15,957,381,264 45
[Stage Direction]
100-00%
[Stage Direction]
(*) Redeemable at 1001 per cent. (!) Redeemable at 101 per cent. (3) Redeemable at 101 per cent. (*) Redeemable at 101 per cent. (s) Redeemable at 101 per cent. (6) Interest on refundable portion
Amount outstanding includes Amount outstanding includes Amount outstanding includes Amount outstanding includes Amount outstanding includes of personal income tax only.
8 250,000.00 redemption bonus. $5,435,342.50 redemption bonus. $ 500,000.00 redemption bonus. $6,696,589.00 redemption bonus. $8,471,360.50 redemption bonus.
[Stage Direction]
Wednesday, May 19, 1948