[Stage Direction]
Mr. JEAN FRANCOIS POULIOT (Temis-couata) presented the first report of the standing committee on debates, as follows:
Your committee has given careful consideration to its order of reference under date of May 10, 1948, which reads as follows:
"That the advisability of continuing the publication of the revised edition of debates and the distribution of the unrevised edition of same, be referred to the said committee."
Your committee has heard Mr. Edmond Cloutier, King's Printer and Controller of Stationery, and Mr. Earl C. Young, Editor of Debates and Chief of Reporting Branch, House of Commons, and Mr. Yves Fortin, Production Supervisor of the Printing Bureau.
Your committee recommends:
1.	That the designations "unrevised" and "revised" editions be discontinued, and the day to day edition be known as the daily edition and the bound volume as the bound edition.
2.	That members be allowed eight calendar days, from the date on which the speech is made, to submit to the debates office necessary and permissible corrections in their speeches as reported in the daily edition, and that no corrections submitted after this period be accepted.
3.	That the pages of each daily edition be submitted to the printing bureau not later than nine days after the daily edition is published, and that once proofs of the corrected pages have been approved by the debates office they be assembled by the printing bureau for the bound edition.
4.	That the pages of the daily edition be kept intact so that, after permissible corrections are made, the pages of the daily edition can be used for the bound edition as originally printed, and that changes suggested by members be confined strictly to correction of errors and essential minor alterations.
5.	That effect be given forthwith to the recommendation contained in paragraph 4 above, for the present session and succeeding sessions.
6.	That no order for reprints of a member's speech be received by the debates office after the expiration of seven days from the date of the daily edition in which it appeared.
7.	That the distribution list of complimentary copies of debates allotted to members be hereinafter forwarded by the joint parliamentary distribution branch to the printing bureau for distribution.
Your committee further recommends that the government consider the advisability of increasing the number of complimentary copies of the daily edition of debates to members from 10 to 16.
All of which is respectfully submitted.
Jean Francois Pouliot,
Chairman
Mr. POULIOT:: Mr. Speaker, by leave of the house I move, seconded by Mr. Mclvor, that the first report of the standing committee on debates, presented this day, be now concurred in.


Mr. GRAYDON:: I should like to ask the hon. member who has moved concurrence in this report how long it will be, under this new arrangement, before the bound Hansard will be available to members and the public.


Jean-François Pouliot: Mr. Speaker, if I may be permitted to reply, the first bound volume will appear approximately one month after the time expires which is allowed for any necessary corrections-that is, something over a month after the opening of the session. Each month thereafter we shall have one bound volume of Hansard, representing about one month's sittings.


Mr. FLEMING:: Mr. Speaker, many of us in this part of the house could not hear the report which the hon. member for Temis-couata has just read. I would ask that opportunity be given to members to scrutinize the report, and that to that end the motion for concurrence be deferred. If we are called upon to vote now, we shall be voting upon something we really know nothing about.


Some hon. MEMBERS:: Carried.


Donald Methuen Fleming: Mr. Speaker, it is only proper that the motion should stand over until the members know what they are voting on.


Jean-François Pouliot: I will leave it as a notice of motion for Friday.


Mr. SPEAKER:: The hon. member may move the adjournment of the debate.
On motion of Mr. Pouliot the debate was adjourned.
Questions



PRICES-CHANGE IN PERSONNEL OP SPECIAL COMMITTEE

Hon. LIONEL CHEVRIER (Minister of Transport) moved:: That the name of Mr. Zaplitny be substituted for that of Mr. Irvine on the special committee on prices.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Second report of standing committee on industrial relations.-Mr. Cote (Verdun).

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I desire to table the annual report of the federal district commission for the calendar year 1947.


Lionel Chevrier: Mr. Speaker, I wish to table the annual report of the national harbours board for the calendar year 1947. The French edition has been delayed in the printing, but will be available shortly.



QUESTIONS

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

Mr. MENARY:: Have steps been taken by the Bank of Canada to curtail the volume of new capital investment in Canada, and if so, what were they?


Mr. BELZILE:: Under existing conditions the volume of new capital investment in Canada is limited primarily by the available physical supply of labour, building materials and equipment rather than by monetary or financial policies. It is understood however that the Bank of Canada has expressed the view to the chartered banks that under today's conditions, when the rate of capital development is straining Canada's manpower and material resources, it is undesirable that funds required for the financing of capital expenditures should be obtained through an expansion of bank credit. The budget speech dealt in a general way with the economic and financial aspects of this question.
nails


Mr. COYLE:: 1.	How many pounds of nails were imported from the United States during each month in 1947-1948?
2.	What is the approximate selling price per pound in Canada?


Mr. McILRAITH:: 1.	Imports of nails from the United States:
1947	1948
Month	Lbs.	Lbs.January	
920,800	424,500February	
215,500	510.700March	
496,100	400,500April	
680.800May	
805,200June	
648,400July	
848.000August	
1,286,200September	
768,400October	
989,900November	
569,800December	
670,2002.	Not known. Price would vary according to dealer or locality. There is no ceiling on nail prices.


EXPRESS RATES
[Stage Direction]
Mr. TOWNLEY-SMITH:
1.	Has the board of transport commissioners control over express rates as well as freight rates?
2.	Have express rates recently been raised?
3.	If so (a) how much; (b) upon what authority?
Mr. CHEVRIER:: 1.	Yes.
2.	Yes (competitive tariffs only).
3.	(a) 21 per cent; Ob) section 332, Railway Act.


FARMB0R0UGH, QUE., POST OFFICE
Mr. CAOUETTE:: 1.	Is there a post office at Farmborough, Quebec ?
2.	If so, what is the name of the postmaster?
3.	If not, for what reason was this post office closed ?
4.	Will the said office be reopened in the near future?


Mr. BERTRAND (Laurier):: 1.	Not at present; temporarily closed 3rd October, 1947.
2.	See answer to No. 1.
3.	The postmaster, Louis St. Germain, resigned on 26th September, asking that his resignation be effective immediately, and no one could be found to take over the office.
4.	Yes, provided a suitable person can be found to take over the post office.


POSTAL SERVICE-CARRYING OF MAILS BY AIR
Mr. GAGNON:: 1. Has the Postmaster General or any officer of the Post Office Department entered into negotiations with the Canadian Pacific Air Lines for

Questions
the carrying by that company, on the same terms as Trans-Canada Air Lines, of letter mail, whether prepaid at air mail rates or not, as specified in the statement made by the Postmaster General on May 20?
2, If so, what was the result of such negotiations?


Mr. BERTRAND (Laurier):: 1.	Yes.
2.	Negotiations continuing.


NEWSPRINT
Mr. DORION:: 1.	What was the newsprint production during 1947, in each province?
2.	What was the newsprint consumption in Canada during the same year?
3.	To what countries has newsprint been exported, and what quantity to each country?
4.	What conditions are imposed for ,a permit to export newsprint?


Mr. McILRAITH:: 1.	Estimated total Canadian production 4,446,789 tons. Provincial figures not yet available.
2.	Estimated Canadian consumption 273,485 tons.
3.	Exports from Canada, by countries:
Country	Cwt.
United Kingdom	 1,110,409
Eire	 175,877
Aden	 600
British East Africa	 867
Southern Rhodesia	 15,422
Northern Rhodesia	 223
Union of South Africa	 731,233
Nigeria	 2,209
Sierra- Leone	 897
British Sudan	 1,652
British India	 290,830
Burma	 1,122
Ceylon	 33,281
British Malaya	 59,716
Bermuda	 6,083
British Guiana	 13,207
British Honduras	 717
Barbados	 4,910
Jamaica	 56,962
Trinidad	 27,345
Leeward and Windward Is	 2,240
Hong Kong	 88,083
Malta	 4,312
Newfoundland	 823
Australia	 3,231,842
Fiji	 637
New Zealand	 488,672
Argentina	 1,003,637
Belgian Congo	 4,325
Bolivia	 31,311
Brazil	 597,778
Chile	 173,679
Country	Cwt.
China	 627,884
Colombia	 180,011
Costa Rica	  24,147
Cuba	 354,946
Ecuador	 71,068
Egypt	 31,268
French West Indies	 403
Madagascar	 523
Germany	 627
Greece	 41,364
Guatemala	 24,585
Hayti	 987
Honduras	 203
Iceland	 M91
Mexico	 435,667
Netherlands	 121,674
Netherlands East Indies	 21,198
Netherlands Guiana	 1,472
Netherlands West Indies	 1,531
Nicaragua	 3,191
Panama	 35,850
Paraguay	 1,101
Iran	 786
Peru	 54,701
Portuguese Africa	 5,299
Salvador	 26,753
San Domingo	 2,653
Spain	 476
Syria	 2,513
Turkey	  2,179
Alaska	 3,389
Hawaii	 137,485
Philippine Islands	 49,845
Puerto Rico	 155,171
Uruguay	 244,465
Venezuela	 80,794
United States	 73,506,975
Total	 84,415,576
4.	No export permit required.


WJARTON, ONT., EMERGENCY AIRPORT
Mr. CASE:: 1.	What is the total amount of expenditures to date on the emergency airport near Wiarton, Keppel township, Grey county?
2.	Is the work on this airport now complete? If not, what are the anticipated expenditures to complete same?
3.	Was the work on the Wiarton airport let by contract, and if so, what was the amount?
4.	If not by contract, on what basis was the work undertaken?


Mr. CHEVRIER:: 1.	8676,658.83.
2.	(a) No; (b) $45,000.
3.	Total amount of contracts, $534,369.50.
4.	Not applicable.
Questions


HOSPITALS-TUBERCULOSIS
Mr. NICHOLSON:: 1.	How many hospital beds were there per thousand persons in Canada, by provinces, in
(a)	1931; (b) 1941; (c) 1947?
2.	What was the death rate per 100,000 population from tuberculosis in each province in the last year for which statistics are available?


Mr. McILRAITH:: 1. Number of hospital* beds per 1,000 persons in Canada, by provinces, 1931, 1941, 1946f:
1931	1941	1946Canada 	7-6	90	9-4Prince Edward Island..	6-0	6-3	7-3Nova Scotia 	7-2	9-3	10-2New Brunswick 	5-8	7-0	7-7Quebec 	6-7	8-9	9-1Ontario 	8-0	8-9	9-2Manitoba 	8-2	9-8	10-0Saskatchewan 	6-7	8-4	10-5Alberta 	8-0	9-8	10-8British Columbia	10-0	10-7	9-2
Include acute disease hospitals, tuberculosis and mental institutions and homes and hospitals for incurables. Private and dominion hospitals not included. fl947 figures are not available.
2.	Death rates (preliminary) per 100,000 population from tuberculosis in each province, 1947:
Rate per
100,000
population
Canada	 42-6
Prince Edward Island	 67-0
Nova Scotia	 49-8
New Brunswick	 53-6
Quebec	 65-6
Ontario	 24-4
Manitoba	 41-7
Saskatchewan	 26-4
Alberta	 31-3
British Columbia	 44-3


QUESTION PASSED AS ORDER FOR RETURN
Mr. ARGUE:: 1.	(a) How many crop inspectors were employed under the Prairie Farm Assistance Act in each crop year since 1939; (b) what was the total amount of salaries, wages and expenses paid to these inspectors in each of the above years?
2.	In how many townships were payments made in each of these years?


MOTION FOR PAPERS
Mr. ARGUE:: For a copy of all plans and blueprints prepared by officials of the Prairie Farm Rehabilitation Act, from January 1, 1947, to date, pertaining to location, costs, size and type of structure of dams and irrigation works on the South Saskatchewan river.


Mr. GARDINER:: I think that all of the blueprints and reports of the engineers have already been tabled in the engineer's report. If there are any others, they will be tabled.


James Horace King: Carried, subject to the reservation made by the minister.


URANIUM
[Stage Direction]
On the orders of the day:
Mr. C. W. HODGSON (Victoria, Ont.):: I should like to direct a question to the Minister of Mines and Resources, or to the government generally. Is the government aware that the largest body of uranium ore on the North American continent has been found, and proven by diamond drilling, in Haliburton county within about seventy miles of the Chalk river plant?



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: On Monday my hon. friend the acting leader of the opposition (Mr. Graydon) asked if I would give the house a statement of the legislation that is still to be brought down before the conclusion of the session. I need not make mention of measures that already appear on the order paper. They should however be kept in mind in reviewing the legislation that remains to be dealt with.
In the Votes and Proceedings of yesterday hon. members will see a notice of a resolution for the approval of the international wheat agreement. That resolution will appear on tomorrow's order paper. The following measures, as hon. members are aware, are being considered by committees of the house: an act to provide for the investigation, conciliation and settlement of industrial disputes; an act to amend the Loan Companies Act; an act to amend the Dominion Elections Act, 1938; an act to amend the War Veterans' Allowance Act, 1946; an act to amend the Veterans' Insurance

Inquiries oj the Ministry
Act; an act to amend the Veterans' Rehabilitation Act. An act to amend the Yukon Placer Mining Act, and an act to amend the Yukon Quartz Mining Act are before a committee of the Senate. There will of course be the bills which arise out of the budget resolutions, and which include the following: a bill to amend the Income War Tax Act; a bill to amend the Dominion Succession Duty Act; a bill to amend the Excise Tax Act; a bill to amend the Excise Act; a bill to amend the customs tariff.
Other measures to be introduced will include: a bill respecting Canadian National Railways financing and guarantee; re-introduction of the Income Tax Act; a bill to amend the Criminal Code; a bill to amend the Judges Act; a bill to amend the Lord's Day Act; a bill to amend the Government Annuities Act; a resolution and bill to amend the Yukon Act; a resolution and bill respecting the Northwest Territories commission; a bill to amend the Land Titles Act; a bill to amend the Manitoba Natural Resources Act; a bill to amend the Saskatchewan Natural Resources Act; a resolution and bill to amend the Diplomatic Service (Special) Superannuation Act; a bill to amend the Board of Transport Commissioners Act; bills respecting a tax convention between Canada and France and Canada and New Zealand; a bill to amend the National Battlefield Commission Act.


Mr. MACDONNELL (Muskoka-Ontario):: All by June 30.


William Lyon Mackenzie King: I think hon. members will find that most of these last-mentioned measures are relatively simple and non-controversial and may not occasion much in the way of discussion. I am not saying that the resolutions on the budget may not occasion debate. There are still a few more I should mention. These are possible measures. I do not say that they will be proceeded with, but perhaps it is just as well to take notice of them at once. Measures which may be introduced in the senate are: a bill to amend the Insurance Companies Act; a bill respecting the Quebec Savings Bank Act; a bill to amend the Bankruptcy Act.
Additional measures which may be introduced in this house are: a bill to amend the Exchequer Court Act; a bill to amend the Petition of Right Act; a bill to amend the Supreme Court Act; a bill to amend the Tariff Board Act; a bill to amend the Criminal Code (race meetings). I hope to introduce, and trust the house will receive its provisions favourably, a bill respecting the development of the national capital.
In addition to these measures there will be such legislation as may arise from reports of standing and select committees, in addition *to specific bills which have already been referred to them and further supplementary estimates. As always it is necessary to see things from as many sides as possible in advance. I should add that from time to time, measures may come forward, or may have to be brought forward, which are not thought of at the moment. I have not in mind any other measures being introduced. I do not wish to say that something may not arise between now and June 30 which may necessitate some further measure or measures being introduced.
As hon. members have just remarked, there are still but five weeks in which to complete this program, if that is to be done by the end of June. I hope that we may be able, among the parties themselves, so to organize business as to ensure the attainment of that end.


Mr. G. R. PEARKES (Nanaimo):: Arising out of the Prime Minister's statement, may I ask the Minister of National. Defence whether the legislation which is forecast in the speech from the throne for the amalgamation of the army, navy and air force acts of Canada has been drafted?


Hon. BROOKE CLAXTON (Minister of National Defence):: Yes, the legislation is ready, but, as the hon. member knows, it would amount to the amalgamation of some sixteen acts, which would run to over 300 sections, and it is felt that it would not be possible to dispose of it at this stage of the session without unduly prolonging the session. We can, we believe, get along under the existing legislation until next session.



WHEAT BOARD


[Stage Direction]
On the orders of the day:
Mr. P. E. WRIGHT (Melfort):: I should like to direct a question to the Minister of Trade and Commerce or, in his absence, *to his parliamentary assistant. When may we expect the annual report of the wheat board to be placed before the agriculture committee?


Mr. G. J. McILRAITH (Parliamentary Assistant to the Minister of Trade and Commerce) :: Mr. Speaker, I will take notice of the question and bring forward an answer.
Inquiries of the Ministry



WARTIME HOUSING


[Stage Direction]
On the orders of the day:
Mr. DONALD M. FLEMING (Eglinton): I should like to direct a question to the Minister of Reconstruction and Supply, arising out of a report appearing in last night's Ottawa Journal. Perhaps the parliamentary assistant will answer or take note of it. Will the government take steps to stop the removal of trellises, which is taking place at the present time, from houses built by Wartime Housing Limited in Wrightville?
George James McIlraith: I saw the story in the paper, but I do not know whether the trellises of wartime houses are being removed. I shall look into the matter and see what can be done.



SIR STAFFORD CRIPPS


[Stage Direction]
On the orders of the day:
Mr. H. W. TIMMINS (Parkdale):: According to a report in the press last night, Sir Stafford Cripps is coming to Canada to confer with us respecting economic matters affecting Canada and the United Kingdom. I wonder whether the minister can tell us anything about it.


Hon. DOUGLAS ABBOTT (Minister of Finance):: So far as I am aware, Sir Stafford Cripps is not coming to Canada in the immediate future. He may be doing so later on.



QUESTION AS TO RECOGNITION BY CANADA

[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. In view of the widespread sympathy in Canada for the new state of Israel, is the minister in a position to tell the house whether or not the government will grant it recognition?
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): The matter is still under consideration, and as soon as a decision is arrived at I will, as promised some days ago, communicate it to the house.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Mr. T. J. BENTLEY (Swift Current):: May I ask the Minister of Transport whether the freight increases granted by the board of transport commissioners, in respect of all commodities to which it applies, will apply on the Hudson Bay railway?


Lionel Chevrier: I went into that question fully when my estimates were being discussed, in answer to a question raised by the hon. member for Saskatoon City, and if the hon. gentleman will look at Hansard he will find a complete statement there.


Thomas John Bentley: I did, but it was not as complete as it should be.



S.S. &quot;ABEGWEIT&quot; INQUIRY AS TO STRUCTURAL CHANGES

[Stage Direction]
On the orders of the day:
Mr. W. CHESTER S. McLURE (Queens): Mr. Speaker, on May 12 I asked the Minister of Transport, as will be seen at page 3860 of Hansard, about structural changes in S.S. Abegweit. May I ask when I can have a reply.
Lionel Chevrier: The structural changes to which my hon. friend refers have to do, I presume, with the planking of the space between the two rails on the Abegweit. That is a matter which is still under consideration, and I am not able to give my hon. friend a reply at this time.



THE BUDGET


[Stage Direction]
The house resumed from Tuesday, May 25, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Mac-donnell (Muskoka-Ontario), and the amendment to the amendment of Mr. Coldwell.
Right Hon. J. L. ILSLEY (Minister of Justice):: 
Donald Methuen Fleming: Hear, hear.
The Budget-Mr. llsley


James Lorimer Ilsley: Yes-"hear, hear." I think that the mentality of the members of the opposition generally is all wrong in this matter of surpluses. In the United States of America there is a tradition with regard to surpluses which is different from ours. The belief there is that it is the duty of the government, not only in especially good times but in normal times, to effect a reduction of the national debt as rapidly as possible. From what I read in the weekly and monthly publications of the United States, I understand that pressure is put on the leaders by the membership of the house of representatives to make sure that all outgoings-not only current outgoings but loans and so on-are met out of operating revenues, and also that provision is made for progressive and rapid reduction in the national debt. That is done on a sound instinct; it is done on the instinct that guides prudent and successful people in their ordinary business enterprises.


James MacKerras Macdonnell: Mr. Speaker-


James Lorimer Ilsley: I would ask my hon. friend just to wait; I shall have a hard enough time, probably, before I get through.


Mr. ROSS (Souris):: We are with you on that.


James Lorimer Ilsley: I do not want to have too many interruptions. But that is the tradition in the United States of America. I think we should attach more importance to that here. If we could have substantial surpluses over the next few years and reduce the national debt, it would make a great difference. Suppose we were able to reduce the debt by two and a half billion dollars. That would result in an interest saving of just under $70,000,000 a year, which would make it far easier for governments to meet the legitimate needs of the people. It is a crippling thing, and a defeatist attitude, to think that you must go on piling debts higher and higher on the ground that taxation of the people is plunder. The money, it must be understood, is not taken and divided among the cabinet ministers. The money is taken and applied to the reduction of the debt owed by the people of the country. From the standpoint of the man in the street, the ordinary people of the country, I think the policy of debt reduction, certainly in times like these, is a right policy.
The hon. member for Brandon (Mr. Matthews), who is a shrewd and experienced member of this house, the other night said this, as reported at page 4324 of Hansard:
I have no hesitation in saying that the minister has a sound idea in reducing our indebted-

ness each year to the largest possible degree now, when times -are good. You may call it cyclical budgeting, if you wish, but I call it plain common sense.
And plain common sense it is. Of course there is another important reason why extensive reductions in taxation should not take place at the present time.


Mr. JACKMAN:: What about the individual? Surely the same reasoning applies.


James Lorimer Ilsley: Yes.


Harry Rutherford Jackman: Why do you not do something?


James Lorimer Ilsley: Let me quote from the budget speech as reported at page 4063 of Hansard:
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 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.
And later on:
Now is the time to lay the foundation for employment budgets in future, while fighting inflation at present.
I would commend that sentence to the judgment and consideration of the members of this house.
There is another consideration that I think ought to be placed before the house. Our income tax level now, on the average, is lower than that of the United States of America. The United States of America is taking dramatic steps for assistance in European recovery. If we in this country had a stock of United States exchange, I presume that we would be doing what we have done consistently in the past-that is, we would doubtless be assisting by the extension of credits for European recovery, because we have such a heavy stake in European recovery. But we cannot do that, or we cannot do it to any appreciable extent, because of our exchange position. On the other hand, we shall be supplying goods. Undoubtedly there will be large offshore purchases, as they are called, from Canada under the European recovery plan being administered by the United States of America. But it would be undesirable, I feel sure, having in

The Budget-Mr. Ilsley
mind public opinion in the United States, to have a situation arise such as this: that the people of the United States should be keeping their taxes up to the high levels they have now attained, and that Canada, not contributing toward European recovery by way of credits, should seize the opportunity to push her taxes down and cash in on the situation in such a way that we would inevitably be severely criticized and penalized by others.
I come now to the main part of the speech that I rose to make. I listened with great interest to the hon. member for Muskoka-Ontario (Mr. Macdonnell) on Friday evening. He said two or three things in his speech that I want to use more or less as a text. They are good principles. He said that what we needed-I am not quoting him verbatim, but just giving the effect of his words-in considering these matters is realism, clear thinking, and intellectual honesty. I want to apply those tests to some of the criticisms that have been made of the government's financial policy, and to some of the positions that have been taken by the opposition.
To begin with, I submit that if the hon. gentleman had applied those tests to one instance he gave, he would not have given it. On Friday afternoon he told the house that the taxation on the average Canadian family of five was something over $1,300, and he arrived at that figure by taking the per capita taxation in Canada and multiplying it by five. That is one place where the multiplication table just does not apply. A family of five usually includes two or three young children; and to take the average per capita taxation, all the money raised from the rich and the poor, from corporations and from individuals, and get a per capita amount and then say the average family of five is paying five times as much as the average individual in Canada, is a gross fallacy and should not have been used by an hon. member ordinarily as careful as the financial critic of the opposition.
The budget speech strikes me as having those qualities outlined by the hon. gentleman-of realism, clearness of thought, intellectual honesty and recognition of the facts; and I want to congratulate the Minister of Finance (Mr. Abbott) not only on recognizing those facts but on his devotion to duty in acting accordingly. He knew he would run into a barrage of unreasonable, demagogic opposition criticism, but he did what he knew he ought to do. He defended his decision in a budget speech of unanswerable logic. His course of action will be approved by large numbers of Canadians today, but, more
important still, it will be approved by all Canadians in the years to come.
As I said at the outset, the statement has been made that our action in restoring the Canadian dollar to par in terms of United States dollars on July 5, 1946, was the sole cause, or at least the chief cause, of our loss of United States dollars in 1947, and was thus indirectly the reason for the restrictions introduced last fall. Some of those who take that position work themselves up to a high pitch of assurance indeed. For instance, the other evening the hon. member for Eglinton said:
We have had a sample of it in this country since the great blunder-
Everything is either "plunder" or "blunder".
-the great blunder in the middle of 1946 and the constant flight of United States dollars from Canada ever since, a flight and a policy which almost brought this country to economic ruin in 1947.
Well, the responsible critics do not go that far, but some of them do say this was one of the greatest mistakes in our financial history. I should like to reply to this charge, because I regard it as entirely unfounded.
Let us recall the situation. The revaluation of our dollar was part of our policy of price control. On July 5, 1946, I recommended that four steps be taken: first, that the price ceiling be changed from a general to a specific basis; second, that subsidies be continued where needed to continue price control; third, that price ceilings on imports be set not on a fixed price but on an imported cost plus a limited mark-up basis; and fourth, that the Canadian dollar be raised to par with the United States dollar.
Four days earlier, on July 1, 1946, price control in the United States had lapsed or collapsed; it had ended, and the step here in Canada was taken having in mind that fact among others. We took the step we did for several reasons. First, we knew that sooner or later there would be an inevitable adjustment of our prices to United States prices. We could not see any reason why, by keeping our dollar ten per cent below the United States dollar, we should inflict upon our people permanently a cost level and price level ten per cent higher than that of the United States. In the second place, we were making heavy loans to Great Britain, and the revaluation of our dollar would encourage imports from Great Britain and reduce the necessity of credits. Third, our whole policy of price control was gradual decontrol, not sudden decontrol as in the United States; and if price control was to be retained and eased off by
The Budget-Mr. Ilsley

stages, as was done subsequently and I am sure wisely done, a step of this kind would be of great assistance.
Few policies of a Canadian government ever received such general acceptance. The opposition took no exception to that policy. There was some suggestion that we should have done it in two stages instead of one; that is, five per cent then and later another five per cent, but we replied to those criticisms at the time. The opposition took no exception to bringing our dollar back to par. To listen to them here one would think they had opposed the step. They did nothing of the kind, nor did the public at large. One has only to look at the newspaper headlines of the day to see the widespread approval that was given. It was not until much later that any volume of criticism developed. This was based on hindsight, not on foresight; but as I shall now show, it is not valid criticism even now. The hindsight on which it is based makes a false appraisal of causes and effects.
The first statement made is that the step we took unduly encouraged imports from the United States and discouraged exports to that country. First I shall deal with the imports. There is no doubt that there has been a large increase in the volume of imports from the United States, though apparently the peak has been passed. The financial critic of the opposition stopped at February; he did not go on to March, and of course he had not the figures for April. When we recall that this increase in the volume of imports from the United States has taken place in the face of a forty per cent increase in United States prices, surely it is unreasonable to think another ten per cent would have made any difference, or certainly much of a difference. One of the main reasons why Canadian importers were bringing in so much from the United States was that prices were going up in the United States, and they thought the time to buy was before prices went up further. But there were other reasons. Half our two billion dollars' worth of imports from the United States are essentials we have to import, regardless of the exchange rate. Imports of such commodities as coal, steel, cotton and manufacturing components come in anyway-when production is at a high level in Canada. The volume of these imports rises when our production rises and falls when our production falls, regardless of the exchange rate. The cost of such imports is only a part, and often a small part, of the cost of production or the cost of capital expansion; and a mere ten per cent on the price of such imports would have no effect whatever on their volume.
fMr. Ilsley.]
It has been estimated that not more than twenty-five per cent of Canada's imports from the United States are consumer goods. Here the volume of imports would be more sensitive to price; but even in this field the purchasing power of the Canadian consumer has been so great during this period that in all probability the revaluation of the dollar has had no appreciable effect on volume. But while the volume of imports from the United States was affected, if at all, only to a negligible extent by the revaluation, the importation from overseas was much more sensitive. Prices of European goods were very high by Canadian standards, and many of them were consumer goods that could hardly be classed as essentials. The demand for these goods is very responsive to price - changes. Whatever was the proper policy with reference to imports from the United States, there can be no doubt about one thing: we want to encourage importations from overseas countries, and the revaluation of the dollar worked in that direction.
Some irresponsible statements have been made about the extent to which the imports were increased by the revaluation. I am glad however to note that the financial critic of the opposition has ceased emphasizing this feature of the revaluation-he did in his speech last Friday at any rate-and seems to be concentrating entirely upon its effect on the import of capital, about which I shall speak in a few moments.
I come now to our exports. So far as I can ascertain, the revaluation has had no effect in diminishing our exports. One can imagine conditions when depreciation of our dollar would encourage exports by giving us a better competitive position in foreign markets. But in conditions of today, with our costs of production such as they are and our exchange rate at its present level, our exporters are able to sell on a competitive basis in any of the markets of the world. So here the argument against revaluation falls down completely.
Even in the tourist industry, which is economically a species of export, there is no evidence at all that the revaluation has diminished the flow of tourists to this country or that a devaluation would increase it. The cost of vacations in Canada is, in all probability, lower than the cost of vacations in the United States; tourists from the United States obtain many of their dollars from the unofficial market anyway; they are quite free to obtain Canadian funds from the unofficial market, and there is nothing in the figures to indicate

The Budget-Mr. Ilsley
that the revaluation effected any slowing down of tourist movements into this country.
The only export industry upon which the revaluation admittedly had some effect was the gold mining industry. It was recognized from the start that this industry, by its very nature an anticyclical industry, would be adversely affected to some extent, and compensatory measures have accordingly been adopted. A careful, well-reasoned estimate made by a writer in Toronto Saturday Night placed the probable increase in exports of gold to the United States under a ninety-cent Canadian dollar over the exports of gold under a hundred-cent Canadian dollar at not more than 815,000,000 a year. But there were other export industries which used the revaluation as the occasion for increasing their prices. This is the reason I said there was no ascertainable net effect in diminishing or discouraging exports from Canada to the United States or to other hard currency countries.
I understand that Premier Drew placed the figure I have just given as $15,000,000 at 8100 million a year, but without any facts whatever to support his figure, which, in my judgment, is a completely wild one. Taking the imports and exports together, therefore, everything indicates that the revaluation had nothing but a negligible effect on our balance of payments with the United States on current operations- that is, when we consider exports and imports together, the whole situation.
Now, let us look at the effect it had on capital movements. It is on this point that the financial critic of the opposition speaks with immense assurance. This is what he said in his speech last Friday at pages 4244 and 4245:
The second result was the measure taken then to cut off American investment, practically like turning a tap. It has been a natural and, I submit, inevitable and useful part of the economic structure of the country from the outset that we should have American investment, and free American investment . . . That was cut off . . . It does seem an irony. In the first six months of 1946 nature was beginning to take its course. We were receiving American investments at the rate of $25,000,000' a month, which was very useful, and then we cut them off . . . American investments in this country are out of balance, as I said a moment .ago. They are natural to us, and we cannot go on importing as we are now unless the Americans will again invest.
Let us look at the kind of investment that was being made by Americans in Canada prior to revaluation. Most of it was the speculative purchase of Canadian securities-many of them government securities. Americans were buying these securities believing that our dollar was valued too low and that it would
inevitably have to be revalued. The investment was the purchase of existing securities- securities either of governments or of existing enterprises; and most of it was a purchase for speculative reasons. This is not the kind of investment that we really welcome. Indeed, for years I used to worry when I learned of increasing speculative American purchases of our securities. I realized that we were simply running into debt to a foreign country, placing a mortgage, as it were, upon our own resources to residents of the United States-a mortgage that was sure to be called at some uncertain and unfavourable time when the holders of the securities decided to sell them.
To hear the financial critic of the opposition one would think that the kind of investment that the revaluation discouraged was the investment of risk capital, the kind of capital that develops new enterprises, the kind of investment which we welcome. But this was not for the most part the kind of investment that was being made, nor was there anything in the revaluation to discourage that beneficial type of investment. Investors of risk capital have been able throughout to obtain Canadian dollars in the unofficial market, indeed for most of the period at around 90, the very price to which we are told we should reduce our dollar.
If anyone were to ask my personal opinion as to why risk capital did not come in last year, I would say it was because of the repeated rumours that have been circulated that the Canadian dollar was to be devalued to 90 cents, or lower if necessary, a course which has been advocated in the house by members of the official opposition. It is not that kind of prospect, but exchange stability, that investors of risk capital have been seeking; and I am glad to say that we have begun in recent months to see confidence returning in our exchange and an increasing volume of risk capital being invested in this country.
When the financial critic says that we could go on importing if we could go on borrowing American money, this is true. But to go on basing our imports on great and ever greater borrowing from abroad would not be a desirable development.


James MacKerras Macdonnell: What about investments?


James Lorimer Ilsley: To employ a term used by the financial critic, it would be living off our fat and doing so with a vengeance-


James MacKerras Macdonnell: Not if it were investments.


James Lorimer Ilsley: -and paving the way for serious trouble in the future. Even if it were
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desirable, devaluation now would not cause the 1945-46 type of investment to be resumed, because the expectation of another appreciation of our dollar would be absent.
Then it is said there should be some devaluation. The opposition has been confused in its advocacy of devaluation. There has been a tendency on the part of some members, notably the hon. member for Rosedale (Mr. Jackman), to talk as if the Canadian dollar should be free, should be allowed to find its own level; but this view is not general, and for very good reasons. The financial critic has never been bold enough to go this far. He has been selecting 90 cents as the proper level. Why 90 cents rather than 95, or 85 or 80, nobody knows; but 90 cents it is, so far as he is concerned. I am glad to note, however, that in his speech on the budget he has not resumed his advocacy of a depreciation to 90 cents. I do not know whether there is some opposition policy other than the one he has just stated. Indeed he did not in his speech advocate any depreciation. However, the last opposition policy to be stated in the house is devaluation to 90 cents.
Now, everything I have said indicates that a devaluation to 90 cents would have no significant effect so far as curtailment of the volume of American imports is concerned, no significant effect on increase in the volume of Canadian exports, and no effect whatever on increase in the volume of desirable American investments in Canada. Its only certain effect would be an unfortunate increase in the Canadian price level, and an almost certain reduction in imports from the United Kingdom and other overseas countries. Surely such a policy has nothing to commend it.
It is also said that the true value of our dollar is indicated by the value of Canadian dollars in the unofficial markets in the United States. Nothing could be more fallacious than this allegation. The unofficial market in the United States is in no real sense a market in Canadian dollars.


James MacKerras Macdonnell: How can the minister say that? He has just referred to investments through the unofficial market.


James Lorimer Ilsley: But it is not an indication of the true value of the Canadian dollar.


Some hon. MEMBERS:: Oh, oh.


James Lorimer Ilsley: If hon. gentlemen will please hold their peace I will tell them in a moment. It is merely a market in limited-use Canadian dollars. The Canadian dollars that are sold in the unofficial market in the United States can be used only for a severely limited number of

purposes. They can be used by tourists in Canada; they can be used for capital investment in Canada, but they cannot be used for the great bulk of ordinary commercial transactions, such as payment for goods and services, freight charges, interest on dividends, or to settle any other current payments owing to Canadians. The official rate is rising at the present time. The resoluteness with which we are setting our exchange position in order is creating a growing demand in the unofficial market in the United States for these limited-use Canadian dollars, but that market is no indication of the true value of the Canadian dollar and no guide whatever to what the natural or proper rate ought to be.
The financial critic of the opposition said last Friday, as reported at page 4246 of Hansard:
To me a convincing argument and one that outweighs all others is the appeal to realism. When you find things happening between people who are trading with each other freely, that comes as close to realism as you can get. To me it is not real for us here in Canada to sit in an ivory tower saying our dollar is worth one hundred American cents when actually it is being traded in the United States at between 92 and 93 cents. We too much resemble King Canute.
When the hon. gentleman says this he is violating the principles which he laid down in his own speech-those of clear thinking and realism. He is using an argument which is specious; he is spreading a fallacy; he is misleading the public.
It is said that had we not taken this step there would have been no need for the November restrictions.
If what I have said is correct, it will be seen that the restrictions would have been necessary whether or not we had taken the step of July 5, 1946. The perpetuation of a cheap Canadian dollar would not have stopped our loss of exchange to the United States, probably not to any extent at all, and certainly not more than to a very minor extent. The proper policy to restore our exchange position was a policy which, while not discriminatory, was discriminating-that is, inviting and encouraging the imports we wanted, and excluding the imports we did not want; a policy which accomplishes the ends really desired, not many other ends which are thoroughly undesirable, such as raising the Canadian price level, discouraging imports from the United Kingdom, and the others I have mentioned.
It was said by the member for Muskoka-Ontario, quite inexcusably, that since the adoption of the present restrictions our present position in United States dollars shows little or no improvement over the low point of last

The Budget-Mr. Church
December. His authority for this statement is, he says, the Ottawa correspondent of Maclean's magazine, whose bald statement he takes in preference to the figures given by the Minister of Finance in his budget speech. When Canadians realize that our holdings of hard currency exchange sank rapidly and steadily all through 1947 to a low of $461 million on December 16 last, and that by the end of April, 1948, they have climbed again to $588 million, apart altogether from what we have borrowed from the Export-Import bank, they will see not only that the downward trend has been arrested, but that an upward trend has been substituted for it and that our position is righting itself. How, then, can he say that the policy of November 1947 has failed? We have every reason to be gratified by the results of that policy.
I believe, for the reasons I have given, that our revaluation policy was sound at the time we adopted it, and that it continues to be sound today.


James MacKerras Macdonnell: Mr. Speaker, perhaps the minister will allow me to ask one question. I do not like to be accused of inaccuracy. I try not to be inaccurate. It is quite true that I did give as an authority Maclean's magazine; nevertheless I thought I had independent evidence also. I believe it is a fact that no less a person than the governor of the Bank of Canada pointed out that while for the moment there is apparently a rise-


An hon. MEMBER:: What is the question?


James Horace King: I would suggest that the hon. member ask his question.


James MacKerras Macdonnell: I am asking whether the minister is aware that the governor of the Bank of Canada, in giving evidence before the senate committee, pointed out that while for the moment there is a rise, there are heavy payments that will come, and that the rise pointed out for the moment is to a considerable extent misleading.


James Lorimer Ilsley: My hon. friend should have waited until he had the facts before he made the kind of speech he made last Friday.


Mr. T. L. CHURCH (Broadview):: Mr. Speaker, I have always had a great respect for the present Minister of Finance (Mr. Abbott); I have admired his urbanity and the way in which he has treated members who are not on his side of the house. I wish to point out one or two things concerning the policy of the government and the brain trust back of the government, although I wish it to be understood that I am not criticizing officials,
because, after all is said and done, matters of policy in the end are decided by the government itself.
Hon. gentlemen opposite were very largely to blame for the scuttling of the British empire by the policy they adopted at Bretton Woods, followed by the United States loan agreement, which have proved most disastrous to the cause of the empire and of Great Britain.
We also know what happened at the Geneva trade conference in February last year. For eight months we could get no information about what was going on at Geneva in the making of trade pacts over the head of the House of Commons while parliament was in session. Then in October or November our delegates came back and the government inaugurated their austerity program, which pretty nearly wrecked this country and the empire. Parliament was called for December 5.
I wish to refer to some government policies which are most unfair to Ontario and Quebec, which are paying over seventy per cent of the cash taxes of this country. The government took away their sources of revenue, and that, as well as the heavy burden of taxation from which we are suffering, has caused a great deal of unrest.
I wish we had the municipal system in vogue in this parliament. Our system of responsible government, which in my opinion, is not responsible government at all, is one hundred and fifty years old. If we had the more modern municipal system the estimates could be considered by the minister, the chief officials and certain members from all parties in the house, who could strike off certain expenditures. There is no reason why this country, years after the close of the war, should be spending money like water over the head of parliament. We have been too extravagant. Economy is not wanted. Parliament never hears of the expenditures until it conducts a post mortem on the estimates and after interim supply has been granted for nearly nine months. This parliament knows practically nothing of the action taken.
The budget address is probably the last time that a private member has a chance to say anything about world conditions and what is going on in this country. I contend that if we had the municipal system it would give the committee the right to revise proposed expenditures, because the present policies of the government are very largely wrong. We need some system of checks and balances in relation to expenditures. If the municipalities used the system we use in this house they
The Budget-Mr. Church

would all go bankrupt, but they are bound by the Municipal Act. The Municipal Act does not give them power to spend money like water as the government of the day is doing. Sections of the Municipal Act provide that none of these charges can be made except on a year-to-year basis, and in certain cases money bylaws for capital expenditure have to be voted on by the people.
If the government are sincere about the present budget they should hold an election. I believe that the election has been delayed for some time to come. I say that this budget was very largely made at Washington. We have those periodical excursions all over the seven seas. Our ambassadors and financiers are making these excursions. Donald Gordon has recently been issuing statements across the border. Then we have those conferences all over the world. For a month now we have had green grass and flowers, and the birds have been congregating and chattering. So do we in conferences; the same applies to our delegates and financiers and all the rest of them. They are on the seven seas. We are now having conferences. We are a nation of conferences. One mistake we made was in surrendering to Washington too much political, military, economic, financial and social initiative. This is nothing but a Washington-made budget over the head of parliament, following out what was done at Geneva away back in February 1947.
If we look closely at the budget we shall see that it is nothing but window-dressing, preparing for an election. What has become of the old Liberal doctrine of the people ruling in the country? The people do not rule. Now we have a family compact. Who controls the family compact? The brain trusts and the officials who give this advice. As I said the other day, there is an old Scotch proverb which says, when you go away up in the clouds be sure you keep one foot on the ground. We have no such thing as that here. It was referred to by me the other day on the amendment of the minister to abolish the penny bank.
There is no such thing as thrift in this country today. The government do not appreciate thrift because they bring in these astronomical figures running into billions and billions of dollars. In the civil estimates they are spending nearly $2 billion; whereas in 1896 the Tupper government spent $36,000,000, and the population has gone up only one-fourth since. Before the war the government spent $400 million on civil estimates; today it is up to $2 billion, with-
[ Mr. Church.]
out any control over the expenditures; so much so that interim supply is passed for about nine months of the year, and over the head of parliament, and we cannot strike off one dollar. I am opposed to this principle. What has become of the principle of government by the people, of the people and for the people? It does not exist in Canada today. The executive rule the land from coast to coast. They bring in a budget and the whole House of Commons has to swallow it. You cannot strike off a dollar. If you do, the government is defeated and must resign.
If we had the municipal system here we would be able to strike off from one-third to one-half the present cost of civil government in Canada, and give the people back home in the constituencies a chance. Mr. Fielding and Sir Wilfrid Laurier said that the sales tax should never go above a maximum of four per cent. It went to six, then to eight. They did cut it to four on food; it should come down to two. The reduction should apply not only to food, but to clothing and all the necessities of life.
If the budget is what the minister, the financiers and the government say it is, then the government should hold an election on it. If it is a popular budget, the government should go to the country on it. It should be decided by the electors. Why is the government afraid to hold an election in Canada and get the verdict of the people on it? I tell the house that it is a blessing that Ontario and Quebec did not adopt the Sirois report. It is the most mischievous report I have ever read. It is taxation without representation. We pass interim supply without any information. This system of taking such huge sums of money, nearly a billion dollars above what we need in 1948, is wrong. We are taking too much money out of the pockets of the taxpayers.
The minister says that such a policy will save us from inflation. Have hon. members ever heard of such a ridiculous doctrine? I do not know where it was invented. I can tell you that this system of taking all that money out of the workingman's pocket and using it for the purposes indicated, more than the minister needs, is against the principle of the Municipal Act, which requires expenditures to run only from year to year. By this system we are creating inflation. This system of budgeting amounts to putting your hands in the workingman's pockets until there is nothing left, particularly when we remember that taxation is very high, and the high cost of living is added on to it. Not enough has been charged to capital. Too much has been charged to pay-as-you-go.

The Budget-Mr. Church
This generation is suffering in flesh and blood. Why should the sins of the who-le human race be carried by this generation of people in Canada? A large part of the present budget should be charged to capital and not to income, because there is no income to justify it. There is no retrenchment, and no attempt at reduction of taxation. It makes the poor people back in the constituencies wonder what the House of Commons is for. The executive over our heads can pass a budget like this, and nine months of supply, without any real discussion at all of any of the individual items of the estimates. We find no retrenchment at all, but sky-high extravagance in every department of the public service.
No attempt is made to reduce taxation. The reduction of taxation is held in contempt by the various departments. You have only to look at the estimates to find that out. The poor working classes had hoped that at this session they would receive a reduction in the high income tax. The hon. member for Muskoka-Ontario (Mr. Macdonnell) the other day referred to the working classes and the small income tax payer. A reduction in these high taxes is badly needed by this class of people. In Britain they have reduced the income tax. In that country two million people do not now pay income taxes at all. The minister in his budget made a comparison with taxes in the United States and Britain, and published two tables. His comparison was most unfair, because there are many differences. As a result of the policies which hon. gentlemen opposite have put into effect, a person today, if he wishes to exist at all, has to utilize what little saving he has put by or any little money investment he may have.
Last year the house had not much opportunity to discuss the main or supplementary estimates. As I pointed out when we voted interim supply last month, while it is true that the minister must have money to run the services of the country, businessmen, retail merchants and others have been looking for retrenchment in government expenditures. Practically all we are doing now in committee of supply is holding a post mortem after the money is spent. That is no way to conduct the business of the country.
The government are spending money like water. I can see no sign of retrenchment in the main estimates or in the supplementaries. We are being asked to vote large sums of money for bonuses, subventions and subsidies for the prairie provinces, and the other provinces do not get anything. There are many items here for interim supply, one for S80 million, another for $17 million, and so on. These expenditures, under this method of conducting
the business of the country, really mean expenditures and taxation without representation. The house is abdicating its functions to the executive. It is a dangerous principle. Expenditures for civil government in the days of Sir Wilfrid Laurier amounted in 1897 to $36 million, and the population of the country has increased by only one-third or one-quarter since; but the civil estimates are now nearly two billions.
There should be some better way of conducting public business. The municipalities would be bankrupt if they did business in this way. The auditor general should have wider powers to deal with some of these expenditures. The Minister of Finance may take this humorously, but it is no laughing matter for the working classes I represent. Government extravagance and lack of retrenchment, added to the high cost of living, are becoming scandalous, and the public will not stand for it. We should have some redress of grievances before the executive spend money in this way by interim supply.
I have referred to the sales tax. Who pays the income tax? Taxation, so far as the industrial workers are concerned, is levied at the source? But what about the rest of the community? I am not here to criticize any particular class, and I do not mind saying that I have a great admiration for the farmers; but according to the figures supplied by the dominion bureau of statistics, for the last year of record, there were 705,973 farms in the country and only a small percentage of the farmers filed any income tax returns. The total cash income of farmers, reported by the bureau of statistics, in 1946 was $1,769,632,000, and it went over the two billion dollar mark last year. The bureau explains that farm cash income does not include income accruing to farmers from outside sources, nor does it include the value of products consumed in the farm home.
Who are the people who are prosecuted in our courts for offences in connection with income tax? I can find no farmers being prosecuted for violations of the act. And so far as the other offences are concerned, in connection with controls, for example, the people who are prosecuted are those who live in the cities. One druggist in the city of Montreal was fined only five dollars for giving out as an aid to his business pounds of butter. There should be some uniform, reciprocal system about prosecutions for all, not for some. I have always maintained that the principle of confederation for us to observe should be "each for all and all for each", because I do not believe in having legislation that does not apply to all classes
The Budget-Mr. Church

of citizens. Prosecution should be impartial, and not just for industrial workers; but this is not so.
The official opposition in this house have been urging economy in government, but without any success. Take the main estimates for this year and you will find they are sky-high in eveiy department of the public service. People have no idea where the money will come from. The opposition have done their duty by trying to point out where economies could be effected, but the government goes on spending freely.
One matter to which I would call the attention of the house is the practice of nonresidents of coming into Ontario and taking part in provincial elections. Outsiders from other provinces are coming in, visiting provincial constituencies and making speeches. I have never taken part in any election held in any other province, either in the maritimes, on the prairies or in British Columbia, but I find, in almost every newspaper I pick up, reports indicating that some of my hon. friends to the left have been going around Ontario addressing meetings. I am not questioning their right to do so, but I have always taken the view that it is not the right thing for anyone to go into another province and take part in provincial or municipal elections, unless he is a ratepayer there also.
I listened the other day to my hon. friend the member of Davenport (Mr. MacNicol), for whom I have a great deal of respect, discussing conditions in the maritime provinces, especially in connection with hydro-electric power. May I point out to hon. members that in the operation of our hydro-electric development in Ontario for cheap light and power we never receive one dollar by way of grant from the federal treasury. I object, therefore, to paying a third of the cost of steam plants or anything of that kind in other provinces.
What we need in Canada is a sound protectionist policy of bonuses, subventions and subsidies to solve the economic problems of each province. How has development been brought about in Ontario? The industrial development by the use of electrical equipment in Toronto, Brantford and other cities in the province has been the result of a policy of protection, and we have done a great deal under the British preferential agreements and the Ottawa agreements, requiring United States industrial institutions to have plants in Canada. But hon. gentlemen opposite, with one wave of the hand, by means of Bretton Woods, the American loan,

and the notorious Geneva undertaking, have destroyed all the great preferential trade of empire.
Why can we not have preferential trade within the empire? This government, through its free trade policies, has made it difficult for Canadian industry to carry on. Take the agricultural implement industry. Through the protectionist policy, that industry was built up in Canada, giving work to thousands of our people. The Massey-Harris Company, for instance, provided employment for a great many of our fellow Canadians, but the policy of this government has endangered that industry. There would not be an industry left in Canada if the government had its way, and the industrial provinces will pay for it in the years to come. I do not believe in the free trade doctrine, with all this wave of internationalism.
In my opinion the maritime provinces are largely to blame for the condition in which they find themselves at the present time, under their free trade theories. They moved certain head offices to Montreal. With their rich resources and their supply of coal they could have developed industries, and they cannot now expect to rap at the door of the dominion and claim bonuses, subventions and subsidies toward their power development. I introduced a bill in 1923 for the establishment of a national fuel policy, and I received little support from the maritimes except from the late Senator Logan and the present Hon. Mr. Justice Carroll.
As regards immigration, I agree with the views put forward by the Canadian Legion in their meeting at Saskatoon yesterday when they called for more British immigration. We have now taken our fair share of the displaced persons, and something should be done immediately. Otherwise the cream of immigration will go from the British isles to Australia and New Zealand where they are welcomed. The governments there are welcoming large bodies of British people, our own kith and kin, who saved our shores in the last war, with only the aid of the dominions, and, two years later, with the help of our devoted allies to the south. Immigration from the British isles should receive more attention, and there should be mass immigration from there now as there is to Australia.
As I said recently, what are we going to do about Newfoundland when the election takes place on June 3? I dealt with this matter away back last year in connection with the Labrador bill. I believe that the doctrine should be taken up actively by Britain and by Canada, namely, that of lease-lend by which all the bases were given up from Newfoundland right down to British Guiana. That lease

The Budget-Mr. Church
should be cancelled now once and forever. It is a 99-year lease, practically a freehold. It was done to aid America in the battle of the Atlantic against invasion. That lease should be cancelled and should be charged up to lease-lend. Newfoundland will not be talked out of the empire any more than Canada will be. Newfoundland will have to be fought out of the empire.
I have never known a time equal to the last four years when, as Mr. Churchill says, more effort has been made to scuttle the empire and liquidate it. That effort has been made not only in India, but in the Suez, Egypt, Palestine, with the loss of the Mediterranean lifeline, and in many other parts of the world where that policy has been carried on. Britain will not sit down and be content to be a second-class power and allow dollar statesmanship to cripple her forever. She still rules the waves and "Britons never shall be slaves" as James Thomson, the great Scotch poet said, when he wrote "Rule Britannia" at the time of the Spanish Armada.
A retired United States admiral said recently that the United States has now taken Britain's place and rules the waves. That was not so at Pearl Harbor. I am against Britain being a second-class power, notwithstanding all that is said and done. I am opposed to any more scuttling of our empire. Many things looked impossible. The mother country kept world peace and security for centuries against dictators-against Philip of Spain, Louis XIY, Napoleon and twice in our own generation against the Kaiser and Hitler of Germany. Next to the Christian church no other agency has done as much for the freedom of the world and for liberty and civilization as the mother country has done on the seven seas. Did not the battle of Britain in the last war look impossible? Everything looked impossible including the battle of the Atlantic, as did the exploits of Drake, Raleigh, Nelson, Blake and others. The mother country, notwithstanding the terms of the Bretton Woods agreement and the hard terms of the United States loan, can live a few more months the hard way. We see the utter collapse of statesmanship in America and also in this Geneva dollar pact proposition.
As I said the other day regarding Canada, it has never had a foreign policy. The foreign policy of Canada is "We have no commitments; parliament will decide." Our foreign policy is to be linked up with the United States. I am a great admirer of the people of the United States, and of what they did. It was of the utmost importance. We should have the most friendly relations with them
because, with Britain and the dominions, they are the hope of the world. There should be the most friendly relations between Britain, the dominions and the United States.
We are now making the same mistake again. We are trying by the UNO to appease Russia and are adopting an appeasement policy. She does not want it and she refuses it. The United States did not have a foreign policy until recently when they adopted the ERP, Mr. Marshall's program, which has not yet been put into effect to any great extent, although it is now getting beyond the blueprint stage. However I will say this. The policy which they are now pursuing is on again, off again and on again, and all that kind of thing. That country decides one thing about Palestine and marches up the hill today politically, then tomorrow marches down the hill for the sake of safety as a nation as it sees the partition difficulty. That is meant for local consumption in the coming election as well.
The committee on foreign affairs, which has been meeting recently, and whose appointment I opposed, is one of the most mischievous committees we ever had. One has just to read the papers of the last few days to find out what they are saying down there. They have government officials before them. What are the government officials doing? They are deciding the foreign policy of the government themselves in these matters, over the heads of the House of Commons, while we are in session. Did you ever hear of such functions in a committee on foreign affairs? They want more embassies on the seven seas. As I said the other night, if UNO at Lake Success were only to close down for a year, we might have some hope for peace. Our parliamentary association turned itself into a pan-American association. It forgets all about the empire and goes on thinking, as Time magazine said recently, that we are becatning, in an economic way, the 49th state in the union. As I said, the officials should not be laying down these foreign policies of their own volition over the head of parliament now in session.
Then there is the matter of extravagance of the various departments. For instance, let us take the Department of External Affairs. They have ambassadors and embassies on the seven seas, consuls and consuls-general. There are trade commissioners, but these are useful in obtaining trade. A big trade conference is opening next Saturday in Toronto. I hope the Minister of Trade and Commerce (Mr. Howe) and many members of the house will go there to see what can be done. Having all these officials overseas is useless duplication. The trade commissioners do fine work; but why
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should we have carloads of these other ambassadors on the seven seas? Most of them are not ambassadors; they know nothing at all about diplomacy, except what they learn by experience. We have various ones going around the seven seas making speeches along these lines as well, and the empire is being scuttled accordingly.
I can say this about economy. It is talked of by all the ministers when they speak. The Minister of Finance has been comparing his budget with that of Britain and the United States. Economy is talked of by all the ministers, but that is only for us. Economy is the last thing the minister thinks of, because he has his experts, secretaries, first secretary, second secretary-they are copying the external affairs department-third secretary, fourth secretary, fifth secretary; and where do the public come in while all this is going on? This matter of economy is the last thing the ministers think of. It is not for them to practise. The public must save, or where would the money come from for ministers to spend? We have been told that over and over again. Where would the money come from for the ministers to spend if the people did not save?
The greatest wheeze, as a writer says, is the newly invented economic doctrine and theory, solemnly supported by a lot of honest deputies, no doubt, but who misjudged the situation. What they say is their policy is made by the brain-trusters and others. They are all good men, and some of them should know better than to swallow all this and make it a political budget instead of a financial and economic one, and make the public pay this vast taxation as a remedy against inflation. They say that for the Minister of Finance to collect several hundred million dollars more than he requires will, in some mysterious way, make for a sounder economy. But I cannot find that in any of the modem textbooks. The only way to get back to a sound economy would be for the minister to cut the coat according to the cloth and to stop the huge waste now going on on the seven seas. We can only do that if the minister takes a strong stand, and if we stop borrowing from foreign countries. My principle has always been to tell the people the truth, the whole truth and nothing but the truth, but that is not what is done in this budget. The government should not be afraid to tell the people they have made a mistake, and should never have a budget that legislates against human nature as this one does.
On April 6 the budget was brought down in the old country. The National Review says it was a political budget of Sir Stafford Cripps, containing little to hearten the people of the mother country in the face of the austerity

now prevailing there. The keynotes are dependence upon America; that they must continue to lavish public money on socialist projects, and that this money must be obtained from the enterprising and thrifty. It is the old story of taking money in excessive amounts from those who have to pay the taxes. That budget contained some remissions, trifling in themselves but large in the aggregate to the less well to do, while the taxes on alcohol and tobacco were further increased. But in that budget there is a capital levy on incomes from investment. This is a political purchase tax, and it has established a precedent. The higher income groups will pay very heavily when this is added to the already heavy burdens they carry.
The socialists are blind to the damage being done their country. They think only of keeping power for their party and of putting good socialists into comfortable jobs. If these aspects were uppermost in the minds of the socialist government, however, it was otherwise with the general public. The orgy of extravagance, the lavish scale on which ministry officials live, says the National Review, the absence of thrift displayed by the government of Britain, all have appalled the electorate. They are asked to save. Why should they? What can be the use of saving when money is squandered in this way? Money and more money is to run out of the leaking government pool. It has to come out of the pockets of the people. That is what will be done here in Canada also, I am afraid. The government have taken- the sales tax off some articles of food1, which was a fine gesture, but they should have extended it to include clothing.
It is against this background that certain tax changes in the budget must be considered. We see these taxes in Britain, and over here we try to copy and imitate Britain in many ways. We see what happened at Geneva and all the rest of it. The present tax rate not only discourages saving; it incites people to spend whatever they have. With reference again to the special levy in Britain, this falls most heavily on the enterprising and the thrifty and at the- same time spares others, while the tax relief granted does the same thing.
I say here, Mr. Speaker, that I am for an empire policy. I agree with Mr. Casey, the outstanding Australian statesman. I am in favour of an empire conference on trade, defence and migration. As Mr. Casey said on April 18, we need a great empire leader who will go through the empire with a flaming sword. The United Kingdom is blind to the bright pictures and happy prospects tying

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latent in the dominions, particularly in South Africa and Australia. It is vital that she should decentralize her population throughout the British commonwealth. Until she ceases regarding herself as an isolated community and plans her economy accordingly the people of the United Kingdom have little hope of rising above their present drab austerity. Mr. Casey went on, to say:
There are in England men of character, experience aiul vigour who are virtually unemployed. The empire's talent is at present wrapped in a napkin. British citizens could have the sun, moon and stars if they stirred out of their lethargy.


Mr. DEPUTY SPEAKER:: Order. I must inform the hon. gentleman that his time has expired.


Thomas Langton Church: I can conclude in just a moment. Mr. Casey went on to say that they could again take their place in the country of nations as a great power b37 the policy he names, and I believe that is so. I suggest that Britain should help the dominions before giving help to any of these mandated countries, where her efforts have not been appreciated. As Lieutenant-General Sir Alan Cunningham said, but for outside interference Britain would have brought the Palestine problem to a happy ending, and so she would if she had been left alone to do so and not have been interfered with by the UNO, and the way Washington and the UNO changed so often about it.


Thomas John Bentley: Mr. Speaker, we have had quite an interesting debate on the budget. A week ago last evening the government rolled out their big gun and gave us quite a barrage. Then last Thursday the heavy artillery of the official opposition was brought up in the person of their financial critic. Since then we have had a series of smaller guns; then today the Liberals rolled out another big one and turned him loose on us.
I am not going to deal with many of the questions raised by those who have spoken previously, though after a while I am going to offer one particular criticism of the budget. Before doing so, I want to draw to the attention of the financial critic of the Progressive Conservative party some things he said to which I would not care to have to subscribe. Early in his remarks he dealt with the minister's predilection for the easy spending of the money under his control, and endeavoured to persuade the minister that he should reduce expenditures. He suggested that this could be done in several ways. I want to refer to two statements, the first

appearing on page 4240 of Hansard, where the hon. gentleman said in part:
I suggest to him, with every desire to be helpful, and I am sure he knows that that is always my wish, that there is only one way to economize, and that is to give people less money to spend.
I want to make it clear that at that time the hon. member was speaking of the money the minister made available to heads of departments. In justice to the hon. gentleman, I do not want it thought I am trying to show he was referring to the people of the country. Then, on the next page he went on to say:
. . . that is, he should not argue with people over what they would like to spend; he should tell the departments what he is going to allow them.
That may sound like a quite unimportant statement, but if that is the position the hon. gentleman would assume if he were Minister of Finance I should say that is as close to a financial dictatorship of this country and of a duly elected parliament as anything could be. The suggestion is that the Minister of Finance should tell the head of another department, for instance the Minister of National Health and Welfare:	"Here is the
money you can have. To the extent that you can replace with better clothes the rags of some unfortunate Canadian citizens with this money, you may do so; but beyond that you may not go." That is the implication of a statement of that kind.


James MacKerras Macdonnell: Would the hon. gentleman permit a question? I am sure he does not want to be unfair.


Thomas John Bentley: I do not.


James MacKerras Macdonnell: Does he not realize that I was suggesting purely a method? Of course I was not suggesting that the Minister of Finance would do it in any arbitrary or unthinking way, but that he would have his own means of arriving at what he thought was the proper amount. It was purely a matter of technique.


Thomas John Bentley: That was not a question. However, the hon. member for Muskoka-Ontario has had an opportunity to clarify a statement that disturbed me a good deal. As I say, I should not like to see the Minister of Finance of this country have such powers.
Another thing the financial critic of the official opposition said was that the desire for security on the part of the Canadian people was stifling the spirit of adventure. He mentioned the fact that a poll taken among the people had indicated that about thirty-eight per cent of those questioned would like
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James MacKerras Macdonnell: You do not object to that, do you?


Thomas John Bentley: No. I am very glad that they have been helped to that extent; but I do say we should have that opportunity available to the fullest extent; so that all children who in primary and secondary schools have shown themselves capable and who wish to go ahead, should be able to do so, and should not be prevented because of failure of family finances to supply them with those things they require in order to continue their education.
The hon. member mentioned the matter of attempting to stir up class distinctions in this country, and thereby to bedevil the country. I can assure him that I agree in his dislike of those things. But again I wish to point out that we cannot expect Canadians, any more than other people, to be content forever with luxury on the hill, and mud shacks or slums, or whatever it may be, surrounding it. Wendell Willkie pointed that out in his book, and we can see it every day. My goodness, anyone who has worked among the people of this country must have seen the time when, through 5849-280
pure unfortunate circumstances, people have had to reduce themselves and their families to a meagre existence, not because of any fault they have committed in their work, or the industry in which they were engaged, but simply because of some circumstances over which they had absolutely no control. And when we pick intelligent and able people, and know they are willing to work, and when we suddenly find them reduced to a class of work which will not compensate them the way in which they should be compensated if they are to keep their families, we cannot blame them if at times they form themselves into classconscious groups and become extremely angry about conditions in the country which has reduced them to that position. As I say, I am not trying to be discourteous to the hon. member. I simply want to draw these things to his attention, because I know from the very decency there is in him he will see the justice of what I am saying.
I should like to make one reference to what was said by the hon. member for Rosedale (Mr. Jackman), at page 4355 of Hansard. From his speech it was evident that the hon. member for Rosedale had only one criticism to direct against the government. His speech conveyed to me the idea that the government was not doing too badly in its general policies, but that if the hon. gentleman's party were in power they would do the same things but would do them much better. That was the impression I got from his speech. I will quote what he said on just one point, because I have not time to go through all his speech. He said:
I would point out, however, that the policy of double depreciation was another example of faulty planning.
This from a member who has never shown much inclination to favour planning of any kind! He goes on:
Hindsight shows it to have been totally unnecessary and to have aggravated the inflationary tendencies already existing in our economy. Had we needed to create employment, it would have been a fine thing, but once again our economic managers-	-
Meaning the government, I suppose.
-saw dimly through dark-coloured glasses.
I would point out to the hon. member for Rosedale that the government on the opposite side of the house has constantly taken from the big business interests of this country any guidance it has ever accepted from anybody. The chambers of commerce and boards of trade have more influence on the government of this country at the present time than have any other bodies.
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Douglas Charles Abbott: That is rubbish, the same old story.


Thomas John Bentley: Results are what count. The proof of the pudding is in the eating. Every time this government passes legislation you can find commendation for that legislation in the pronouncements of chambers of commerce, or if you go back you can find recommendations from chambers of commerce and boards of trade for such legislation; but every time you find recommendations coming from agricultural groups or from labour unions you find the government fighting those recommendations to the last ditch.


Douglas Charles Abbott: That is rubbish too, and nobody knows it better than my hon. friend.


Thomas John Bentley: I shall deal with that a little later when I speak of farm organizations. At the moment I wanted to point out to the hon. member for Rosedale that the people in whom he places his economic faith, the leaders of big business in this country, were pleased with the double depreciation feature and many other government policies when they came in; and if, as he says, hindsight is better than foresight, he and his friends in big business must be indulging in that hindsight, because now they are weeping at the results of some of the policies which they believed were good a few years ago.
I now come to the main part of my criticism of the minister's budget. I shall not bother referring to Hansard, because if you pick it up and read it through you will not find the matter to which I am about to refer mentioned in it in any way whatsoever. But before coming to the main part of my remarks, let me say that this budget gives no taxation relief to the lower income groups in Canada, and there is no assistance of any assured kind for the consumers of this country. True, the minister took off the sales tax, but without any assurance that the saving will be passed on to the consumer. The minister made that quite definite. There is no relief, not even a little bit of relief, for the kids of the country who, for their parties and so on, have to extract another two cents from the old man to buy a. soft drink. In fact there is no relief in this budget whatsoever for the vast majority of the Canadian people.


Douglas Charles Abbott: That tax brought in $23,000,000 last year.


Thomas John Bentley: Well, Mr. Speaker, I do not think it is a matter of pride to take $23,000,000 from the kids of this country.


Douglas Charles Abbott: We take it from people who drink Scotch and soda too.


Thomas John Bentley: Any time I buy Scotch I will willingly pay the tax if only the kids can have their soft drinks free of tax.


Douglas Charles Abbott: Drink milk.


Thomas John Bentley: We can moralize all we like, on what adults and kids should drink, but at their little social affairs the children like to imitate their elders by having something to drink. Their elders, of course, forbid them alcoholic drinks; so the children have the habit of using soft drinks, and the government comes along and takes $23,000,000, because people are trying to teach their children to be temperate. There are spiritual values in democracy, but every piece of legislation passed by this house is based on purely materialistic thinking, and it is time we put a little bit of spirituality into some of our legislation.
In the budget there is no suggestion whatsoever of any taxation relief for our co-operative organizations. There is no suggestion that the three per cent tax imposed on co-operatives two years ago is to be removed. Again I point out that that is one of the most unjust taxes that has ever been imposed on any body of people in this country. It is a tax which is entirely unjustified. I will grant that it does not put a heavy financial load on most of the co-operatives, although a few of them find it difficult to carry this tax load.
But it is not because of the financial load it imposes that I complain. The co-operative movement was absolutely built up as a free enterprise, non-profit business, and when that three per cent tax was imposed it put upon the statute book of this country a law which declares that co-operatives which claim to be non-profit, free enterprise organizations are profit-making institutions. I wish that this house and the government could see that point of view. Nobody invests in a co-operative organization for the sake of getting interest on the money invested. It is purely a case of a small or large group of people getting together and saying, we will build something of our own to serve us in some particular way, in order to save the money that we have in our pockets. But when they have saved their money this government comes along and says: Before you can get that money back into your pockets, a certain portion of it we are going to call profits, on which you must pay income tax. There is no justification for an income tax of that kind.
I have before me a number of resolutions, but I shall quote only one of them today, since the minister has given an undertaking that Bill No. 454 will come up shortly after the budget

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resolutions are disposed of. Here is a resolution that was passed unanimously by the congress of the Co-operative Union of Canada, held in Saskatoon on March 9, 10 and 11, 1948. The congress of the Co-operative Union of Canada is a combination of the various co-operatives in this country and also includes the active and able council of co-operatives in the province of Quebec. In this resolution they ask that the recommendations the congress made on March 22, 1946, should be given effect to by legislation. They do not want the tax applied by the means I indicated a few moments ago. They do not want this applied to any co-operative which comes in this particular group which I am going to quote for the benefit of the house:
(1)	It is controlled exclusively on the basis that no member shall have more than one vote.
Mr. Speaker, there can be no more democratic organization in the world than a business organization in which every shareholder, regardless of the amount of his investment, has only one vote. No small group of individuals can control the policy of that institution. To that extent, that makes it a pure co-operative. I continue with the resolution:
(2)	The net surplus arising from member business after payment of expenses and setting aside of depreciation and necessary reserves is allocated among its members in proportion to the business by each with the association or organization, pursuant to a prospect held out in its act of incorporation, bylaws, or contract with its members. If an association or organization desires to place in reserve a sum in excess of that which the minister deems necessary the setting aside of such additional reserve shall not disqualify such association or organization from exemption from tax, but such reserves shall be subject to tax in its hands.
That is fair enough. They ask only for the necessary reserves; then, if they desire to get more, the minister shall decide in his discretion whether they need these extras, and even if he decides that they do, they are prepared to have these reserves taxed according to other corporation taxes. I continue:
(3)	The surplus so allocated is paid to the members in cash, or in such other form as the association or organization may by bylaw determine, provided that the amount so allocated be reported when required by the minister, and, if income of the member, shall be taxable in his hands in the year in which it is allocated.
age dividends of any one year any of those dividends become income in the hands of the member, the final receiver, then that is part of his income and is taxable in his hands.
_ (4) It pays not more than a moderate rate of interest on share capital of the association.
5849-280i
A moderate rate of interest I believe, generally speaking, among co-operatives is 3 to 3J per cent.
In other words, if in the allocation of patron-
(5)	Not more than one-third of its business in any year is done with non-members.
A co-operative cannot very well refuse to deal with those who come into its place of business who may not be members; but if not more than one-third of its total patronage is from non-members, they believe they should qualify as co-operatives, as I have explained. If more than one-third is, it would be obvious that they could get to such a size in doing non-member business that they would be more in the nature of a profit-making concern than a co-operative.
(6)	Notwithstanding the foregoing, any association or organization shall pay income tax on that portion of its net surplus arising from nonmember business which it does not distribute to non-members.
That means that they are fair. They say that, even though we are a co-operative, and do not do business with over 33j per cent nonmembers; even if we do business with only one non-member we recognize that that business is profit business unless we return his dividends to him. If we do not return his dividends to him we recognize that the profit there is taxable in our 'hands, and therefore it is quite proper that it should be taxed. I continue:
The surplus of any association or organization directly or indirectly owned or controlled by one or more of the said associations or organizations shall not be liable to taxation under the said acts, provided it conducts its business or enterprise in the manner above set forth. Nor shall any patronage dividend distributed by it to its member associations or organizations be liable to be taxed in their hands if the member associations or organizations, in turn allocate the dividend so received to the members on a patronage basis.
That means, Mr. Speaker, if a number of co-operative associations federate themselves for the purpose, tve will say, of manufacturing some of the goods they propose to distribute through their local co-operative associations, then the earnings of the federated organization, if they are allocated back to the individual co-operative associations, and from there to the individual members, should not be taxable as income in the hands of either the federated co-operative or the individual co-operative which is affiliated with each, and shall become income only when it is private income in the hands of the individual who finally receives it.
That is my main criticism of the budget today, not because there is no other criticism,
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but because other hon. members have dealt or will deal with the other features. I did not want this opportunity to pass without drawing to the minister's attention the need for abolishing the three per cent tax on cooperatives, which was imposed by his government in 1946.


Mr. W. D. WYLIE (Medicine Hat):: Mr. Speaker, while I do not pretend to be a financial wizard; yet, after listening to the interesting and sometimes convincing speech of the Minister of Justice (Mr. Ilsley) this afternoon, I am still convinced that the budget was what so many hon. members have said it was, a big disappointment, not only to the majority of hon. members, or perhaps I should say, to hon. members of the opposition, but to many of the Liberal members who, when the vote comes, will of course vote with the government.
It was a big disappointment to Canadians generally, the working classes and the farmers. We all realize how the cost of living has increased, and with no tax relief conditions will be much harder. While I must say that the farmers are perhaps better off at the present time than they have been for years, yet they have been more or less forced out of many lines of production because of the income tax. I refer particularly to hogs. The raising of hogs in the southern part of my province is almost out of the question. That has happened as a result of the income tax. That is one reason; another reason is the shortage of feed. In the raising of hogs on a farm, the feeding is done in the early hours of the morning and in the evening. Therefore it is really overtime work. The farmers complain that they are not going to raise hogs for Mr. Abbott. That is the general contention in my area.
The leader of this party, the hon. member for Peace River (Mr. Low), in his speech offered some good suggestions. I feel sure that if they were adopted they would ease conditions in this country not only for the working classes and the farmers but for everyone in general.
Here and there there was some trimming of indirect taxes, just enough to mollify the public and kid them into thinking they were getting something back from a generous government. This policy is always defended on the ground that it is anti-inflationary. It seems to me that the government does not want the people to keep the money they earn. The government says that the people will only spend it and send up the cost of everything, and thereby help to increase the market for scarce commodities.

The public could understand that reasoning in 1945, in 1946 and even in 1947. But this is 1948, three years after the war. Many goods are in fair supply now, but clerks are looking at each other and watching business walk by the window because the tax siphon is too efficient.
Goods are high priced, because wages and costs of materials are high and the sales and excise taxes are so heavy. The chances are it would take a fair-sized recession or depression to force them down to pre-war levels, and I am sure the government does not want either of those eventualities. The public possibly could take some more of this anti-inflation treatment if it were convinced that the government, while preaching, was doing a bit of practising, but the signs do not point that way.
Ottawa still keeps an army of temporary civil servants with no great display of economy. They are paid by taxes. Ottawa keeps expanding offices all over the country, competing for office space with business, and thus driving up rents. These inflated rents cannot help having some effect on increased prices. That is not the way to buck inflation, but it is the government way. The government does these things while it milks the average taxpayer. It says in effect, "You give your money to us. We do not want any inflation, no, sir, not in Canada, but it is O.K. if we do a little inflating of our own".
That is just about the way the public see it. The poor taxpayer would dearly love to have a little surplus of his own after listening to the surplus mentioned in this budget-$670 million. The taxpayer would even like to put a little bit away for old age. The conditions today for the average middle man are entirely different from what they were in the time of our fathers and our grandfathers.
I wonder if it occurs to the government that the average taxpayer today would like just that chance. It does not follow that if he got a cut in income tax and in other taxes he would buy all the scarce goods in sight. He might put away enough money so that he could retire and not be dependent on a $30 a month dole from the government, and I think that would be a good idea. The $30 might be eaten up as it is today when we are fighting inflation with the cost of living beyond the 150 index mark.
If the government must save us from ourselves, just as a means of siphoning money to prevent inflation, it should take the money not to spend it all itself but rather to give some of it back to the taxpayer. Compulsory savings were used in wartime for that purpose, and it could work today instead of having us robbed blind.

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We have had comparisons of income tax with the United States, and according to the table that appears on page 4066 of Hansard there is little difference until you get over the $2,500 mark. That is as far as income tax is concerned. But it is the other taxes that we are concerned with.
We have the taxes on cars. We pay from $500 to $600 more for a Ford or a Chevrolet or a Plymouth and up to $800 or $900 on a Chrysler, above the price in the United States. That applies not only to cars but to many pieces of electrical equipment; one might say all of it. The same is true of farm machinery and many other items. When, therefore, we discuss taxation as between the two countries, I think the conditions are entirely different.
We must go farther than the actual income tax. Income tax today is, of course, doing nothing but taking the money out of our pockets so that we shall not have it to spend. That was done with the 25 per cent that was put on last fall on many goods; in fact, on almost anything you -wanted to buy. That was done for exactly the same purpose. It is true that the government has taken the admission tax of 20 per cent off theatres and the tax off some of these other things such as pari-mutuels, but most of the provinces have put it right back on. Alberta is the only province I know of that has not. Ontario is doing it; Saskatchewan has done it, and most of the other provinces are doing it. Alberta is not putting that tax on. I think that is to their credit. The minister expressed the hope that the provinces would not, but I believe legislation was passed by most of the provincial legislatures some time ago to get the tax when it was released by the dominion government.
The eight per cent sales tax could very well have been taken off completely. That should have been done two years ago. At the present time it is taken off certain items. I am sorry the minister did not see fit to take it off soft drinks, chocolate bars and candies, as the hon. member for Swift Current (Mr. Bentley) suggested. I think it is time the kiddies got back to their nickel drink. I have received many letters from manufacturers of soft drinks this year wanting this tax removed. I think the sooner that is done, the better.
There has been an announcement by the minister that interest will be paid on overpaid income tax. While the interest is very small, it may be some incentive, but I think the greatest incentive to make people pay the tax is the increase in the penalty. It is now up to seven and eight per cent.
The minister said, as reported at page 4067 of Hansard:
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 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.
It may and it may not. I often wonder why the government does not pay something on the money it has deducted through the payroll system. It used that money in some cases for fifteen months with no interest paid on it, and that amounts to a substantial sum quite often. It also treats the wage earner or the man on salary in a way different from that in which almost any other taxpaying citizen is treated.
I think that when anyone hires out for $150 a month, he is entitled to that. That is an agreement reached between him and the employer. But along comes the government and says that so much income tax must be deducted at the source. It is about time that was discontinued, unless the government sees fit to pay about the amount of the penalties it imposes, either six or eight per cent. If that were done, it would certainly help. I hope the government will soon see its way clear to stop that tax deduction at source.
Getting back to the 25 per cent that was put on last November, I would point out that there is one thing that is doing; it is discouraging buying. It has stopped people from buying what they wanted and what they have done without during the war years. I refer particularly to frigidaires, gas refrigerators, cars, and many other things. A few minutes ago I mentioned the tax that has been put on cars. I have here the opinion of an authority, the president of the Ford Motor Company of Canada, Mr. Greig. This is what he has to say in connection with the 25 per cent tax:
The effect of "excessive" excise taxes on passenger automobiles eventually will be reflected in a dwindling market and must inevitably result in reduced employment in the Canadian motor car industry . . .
That is a statement by the president of the Ford Motor Company. Farther on he says:
This onerous excise tax was piled on top of the eight per cent sales tax, which remained unchanged . . . The government made it clear that the purpose of this heavy tax was to hold down-discourage, if you will-the buying of passenger cars in Canada and thus to conserve a proportion of the United States dollars expended for imported parts and materials used in their manufacture.
We strongly feel that effective import controls have removed the last vestige of need for an
The Budget-Mr. Wylie

excessive excise tax as a means of conserving United States dollars. The fact that our national surplus is in the neighbourhood of $800,000,000 is a clear indication the excise tax on automobiles is not needed for purposes of revenue.
That is from a man who, I think, really knows what he is talking about.
While I am on that subject of the shortage of United States dollars, there is one other thing I should like to mention. It is reported in the press, of course, by the Minister of Agriculture (Mr. Gardiner) that the ban on the export of cattle to the United States may be removed in the near future. That is one way of easing the dollar situation. The large ranchers in southern Alberta-with ranches that run up to 5,000 and 6,000 head of cattle- all agree that that should be done. They are quite willing to accept the Canadian price, but there is one thing they want and that is to be able to hold that market. That is our natural market. It is a market we have always depended on, especially in southern Alberta, because we are far removed from the heavily populated centres. By removing that ban, I am sure the government would receive much assistance. I think I would be quite safe in saying that $100 million or perhaps $150 million would be received, depending on the number of cattle allowed to go into the United States. That is our natural market in that area. Those ranchers are certainly hoping to see that release.
Coming back to the eight per cent sales tax, I am reminded of a statement that was made in this house back in 1931 when the Conservatives sat to the right of the Speaker and the Liberals to the left. This is what the present Prime Minister (Mr. Mackenzie King) had to say in 1931 in connection with the sales tax which was put on at that time:
Where does my right hon. friend expect to get most of his taxation? He expects to get it out of the sales tax (4 per cent) and from the excise tax of one per cent on everything that comes into the country.
What does that mean? The sales tax, as we all know, bears most heavily on the great mass of the people, yet the wealthiest people are receiving a partial exemption on their income tax, and that additional burden is placed on the great body of the people through the sales tax . . . This is the deathknell of everything in the way of freedom of trade!


Mr. JOHNSTON:: And of the Liberal party.


William Duncan McKay Wylie: I wonder if the Prime Minister spoke to the Minister of Finance before this budget was presented. I wonder what he thinks of the eight per cent sales tax now in the light of the statement he made when he was in the opposition in this house back in 1931? Times

have a way of changing. I am quite sure that he feels that, now it is on, it might just as well stay there.
During this debate various subjects have been covered, and there is one that I want to mention in passing. It is our housing situation in this country. I want to make some criticism of the wartime houses that have been built in my city of Medicine Hat. We have seventy-five houses that are now just about completed and, Mr. Speaker, I would really call them shacks-but shacks that are costing, I imagine, between $5,000 and $6,000 each. There is no basement in them, as all hon. members know. Those houses are all rented to returned boys who went overseas and fought for us for five years. When they come back we offer them a house like that at a rental of $22.50 to $27.50 a month. I contend that those boys should have had something just a little bit better than that; and when they are paying their rental, I think it should be considered as another payment on a house they would eventually own. Some of those boys have come back without arms and without legs, moved into those houses and will be there for the rest of their lives paying rent.
I was pleased to hear the hon. member for Comox-Albemi (Mr. Gibson) mention the trans-Canada highway. That is one way I can think of in which a part of that huge surplus could be used. It could be used in building a trans-Canada highway from one end of Canada to the other, that Canadians can use. On my trip home last year I covered part of it. I can assure you, Mr. Speaker, that between North Bay and Sault Ste. Marie it is a disgrace, and certainly is not doing our tourist trade any good. I have spoken to many Americans who have driven fifty or sixty miles on that highway, then turned around and gone back through the United States. That is poor advertising, and something it will take years to overcome.
The hon. member for Comox-Alberni mentioned some very good points, and I hope the Minister of Reconstruction and Supply (Mr. Ho\ve), or whatever minister is responsible, will see fit to adopt some of those suggestions. On Monday morning of this week a motor cavalcade left Brandon on its way through to the coast. Those people stayed in Medicine Hat last evening and were to leave this morning. There were about seventy-five in the party when it reached Medicine Hat, where two more cars and ten other people were to join them. The party will continue on to Lethbridge, Nelson and right through to Vancouver, advocating the southern route for the trans-Canada highway. Those people realize that something must be done, and I think it is up

The Budget-Mr. Wylie
to the dominion government, which has ways of collecting money that the provinces do not have. I believe this should be made a national policy, as it is in the United States. If we leave it to the individual provinces one may build a hard-surfaced highway from end to end of the province, while another will not; that is the situation at the present time. So it is to be hoped that something will be done in that respect.
Before I conclude, I want to touch upon a matter I have discussed in this house every year since I have been here. That is the question of irrigation in western Canada. Irrigation is very important to the people of the drought area, and when we see nothing being done year after year we wonder just what the intention of the government is in that regard. We realize that a start has been made on the St. Mary-Milk river dam, and we appreciate what has been done. That dam will cost a million dollars or more, but many other things have to be done in connection with distributing the water to be held in that dam, and the sooner a start is made, the better it will be.
The local branch of the Canadian Legion took up this matter at the convention in Saskatoon this week. They think the attitude of the government with respect to irrigation in entirely wrong; that is, dealing with it more or less as a relief measure. Irrigation is much more important than that, and should not have to wait until we have unemployment in this country.
The hon. member for Lethbridge (Mr. Blackmore) has told us about the sugar beets we could raise in that part of the country. If we had irrigation we could grow more sugar beets. Any vegetables that can be grown could be raised in southern Alberta, where we have ample sunshine. In addition, small fruits, all kinds of grains and grasses, hay and anything else you care to mention could be raised there, and I believe a greater effort should be made in this respect.
At the present time, of course, we have more or less to rely on the Prairie Farm Assistance Act. That has been of great assistance and is certainly appreciated by many farmers in that area. But for what they receive through P.F.A.A. bonuses many of those farmers would be on relief. I was just looking at the report of the Department of Agriculture for the year ended March 31, 1947, and I noticed that, since 1939, under the Prairie Farm Assistance Act the farmers have been paid almost $73,000,000. Of course Saskatchewan received most of that money; but when we consider what is being expended
under that legislation, and when we consider what can be done by spending a few million dollars on irrigation, I believe the right policy would be to push ahead with irrigation just as quickly as possible.
Perhaps the government may want to use another method to make rain. Years ago we had a man named Hatfield in that area, and what he shot into the clouds to make it rain no one will ever know. A new method is being tested now, not only in this country but extensively in the United States; that is, the possibility of making it rain through the use of dry ice. I understand that the national research council is carrying on investigations along this line. Only the other day I had a resolution from the Medicine Hat chamber of commerce in connection with the use of dry ice for this purpose. This resolution was also sent to the government, and I hope they will study it very carefully. It is quite short, and I should like to read it:
Whereas it is now publicly known that the dominion government of Canada is favourably disposed towards carrying out investigatory experiments in Canada of dry dee bombardment of clouds to create artificial precipitation of rain;
And whereas the Medicine Hat chamber of commerce is firmly convinced that all that area adjacent to the Cypress hills in Alberta, which includes that of the city of Medicine Hat and district, is a district of heavy cloud formations during the greater part of the growing season;
And whereas we feel that this is the logical point to carry out investigatory experiments;
And whereas there appears to be the existing facilities for the said experiments, located in this area at the Department of Xational Defence experimental station, Suffield, Alberta.
Be it therefore resolved that we urge that these experiments be carried on within this area as early as possible.
We have all the facilities at Suffield, which is a national defence experimental station. We also have plenty of clouds in that area. Of course I realize that, to make these experiments a success, the clouds must be of a certain formation and at a certain height; but I hope those experiments will be carried on in this district this summer. I assure the house we would all be glad to see it rain in the first two weeks of July. That is the time we always need it, so I would suggest that the government carry out their experiments toward the end of June or early in July. If they can make it rain I am sure the people of that area will be thankful indeed.
In conclusion, let me say it is up to the government to improve conditions, and this can be done through our democratic system of government. I believe that is the only way to do it. We must make conditions in this coun-
The Budget-Mr. J. A. Ross

try such that we do not have to worry about communism or any other ism that might endanger us.


James Arthur Ross: Mr. Speaker, the annual 'budget presented on May 18 by the Minister of Finance (Mr. Abbott) is most disappointing to the average Canadian citizen. While the figures he set forth show a surplus of about $670 million for the past year, other adjustments bring that up to $727 million; and cash received from other sources added to the cash surplus brings the total up to $1,181 million, as mentioned by the minister.
With the high cost of living in Canada today, with the heavy taxation and with our dollar value at approximately sixty-five cents, these citizens of Canada are entitled to greater income tax exemptions than are now allowed in Canada. The federal tax in 1939 was $38.76 per capita, whereas today the federal per capita tax is $198. Last year the minister budgeted for a surplus of about $190 million, and the result at the end of the year was several times that figure. For the coming year the minister is budgeting for a surplus of approximately $489 million; I hope he is somewhat closer to the figure than he was a year ago.
In 1939, in round figures, there were approximately 46,000 civil servants with the government. Today there are over 150,000 persons in government employment in this country; and in that I include the civil service. We find a great deal of extravagance and wasteful expenditure of public money by the present federal government. The minister may say, "Where would anyone reduce those expenditures?" My colleague the hon. member for Peterborough West (Mr. Fraser) spent a full forty minutes in discussing the national film board. I am not saying they do not render useful service, but I do say there is an extravagant waste of money in that set-up. The estimates this year show in this regard an expenditure of $3,537,000, or an increase of $776,518 over last year. I am sure that great savings could be made in this respect, and a useful service extended to the people throughout the country.
There has been sitting a special committee on prices, which committee many people across this nation believe is now a complete farce. Heavy expenditures are being made there to retain legal counsel, secretarial staff and help of other kinds. The committee has been sitting since February 10, and in those three and a half months has held about sixty sittings. The last statistical summary from the Bank of Canada sets forth the cost of living index, and it shows a steady increase
[Hr. Wylie.]
from month to month up to the present time. That increase is still climbing, just as if the committee had never sat.
On May 24, as reported at page 4324 of Hansard the hon. member for Brandon (Mr. Matthews) placed a set of figures on record, and his speech was referred to this afternoon by the Minister of Justice (Mr. Ilsley). I shall have something to say about the minister's speech somewhat later in my remarks. The figures placed on record by the hon. member for Brandon show that, during the years 1939 to 1947 inclusive, sums paid to farmers of Canada in subsidies, bonuses, freight payments and other payments amounted to no less than $528,979. The hon. member gave the Minister of Agriculture (Mr. Gardiner) great credit for having brought about all this legislation.
I am not arguing about .the point the hon. member was attempting to make; but I take issue with the fact that he did not go farther and tell the plight of the farmers in his riding and throughout the Dominion of Canada because of the great loss they have suffered at the expense of legislation brought down by this government.
If we take all this into account, the difference during those years between what the farmer actually received for cereals, meats, dairy products and other products, and the average prevailing world market prices or United States prices is considerably over a billion dollars. In other words, the Canadian farmers have subsidized the consumers of Canada and of Great Britain with foodstuffs during those years to a value of over a billion dollars. That is a great contribution to be made by the agricultural producers of this country when one realizes that they were the only people so controlled during those years and the only producers in Canada today still kept in a strait-jacket by the government and forced to market under controls to certain designated countries, and that they are prohibited from shipping their produce to other countries because of embargoes imposed by this very government.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


James Arthur Ross: Mr. Speaker, at six o'clock I was discussing the amount which the agricultural producers of Canada had contributed since 1939 in subsidizing the consumers of this country and Great Britain. I want now to refer to the average losses suffered by the prairie farmers because of the United

The Budget-Mr. J. A. Ross
Kingdom-Canada wheat agreement from August 31, 1947, to April 31, 1948, which is in the present crop marketing year.
A comparison between the revenue received by the Canadian farmers, including producer certificate payments of twenty cents a bushel which are now being distributed, and the price of class 2 wheat averaged by months, shows a loss per bushel for the 1947 crop to date of $1.50 a bushel. There were 127.305,668 bushels delivered in those nine months under the agreement, showing a loss of $191,891,763 for the first nine months of this marketing year. On the same basis, wheat destined for domestic consumption within Canada averaged a loss of $1.50 a bushel. There were 54,755,418 bushels delivered, showing a loss to the producers of $82,401,104. Thus the prairie farmers in wheat alone, in the first nine months of the 1947-48 crop marketing year, subsidized the consumers of Canada and Great Britain to the amount of $274,292,867. That is quite a figure. Remember, this is the second year of the United Kingdom-Canada wheat agreement. The loss per bushel to the producers this year is almost double what it was in the first year of the wheat agreement. Those figures are on the record by the ministers of this government.
If the proposed international wheat agreement is carried into effect, it will be absolute proof that Canadian wheat producers will have no opportunity of regaining the hundreds of millions of dollars which they have already lost under present governmental marketing operations.
Producers within other exporting countries such as the United States, which will be a signatory to the international wheat agreement, received the benefit of prevailing world prices while they were at a reasonably high figure through these past years, and they took advantage of their situation. But the government of this country saw to it that our producers should not secure those prices. I have seen a copy of the agreement from Washington, and unless there are considerable changes made our producers will never regain any of this great loss which they have suffered. It is far too great a contribution to ask any one class of this nation to bear, much as we are agreed as to the necessity of keeping down the cost of living. Other methods could have been taken which would have assured that our agricultural producers would receive their fair share of the national income along with manufacturers and producers of other necessities of . life in this country.
This afternoon the Minister of Justice (Mr. Usley), who was minister of finance during the war years when much of this legislation controlling the farmers was brought into effect, spoke 5849-281
in favour of the present budget. He said that he thought this government should follow the example of the United States government and budget to pay off the national debt. If that be true, why not budget consistently for this purpose? Why was this suggestion not made a year ago when the minister brought down the budget? But there was no indication of any such thing at that time. Last year's proposed surplus would not indicate that the thought had occurred to any member or official of the government. When the present Minister of Justice was minister of finance no member of the government was more responsible than he for certain regulations which put the producers of this nation in a strait-jacket which prevented them from receiving world prices for their products. I admit that he received a lot of advice from his colleagues, but he was responsible for the legislation which came under his department. And now he suggests that we should copy the United States. I think he might well be a party to seeing that our farmers shall receive assistance on the same basis as United States producers are receiving assistance today and have received it through past years.
The Canadian government have refused and are refusing to allow the export of agricultural products from Canada to the United States, despite the fact that this trade would correct a great deal of our United States dollar exchange difficulties which the Minister of Justice mentioned this afternoon. He and his colleagues are more responsible for our exchange situation today than anyone else I know.
I shall certainly support the amendment moved by my colleague the hon. member for Muskoka-Ontario (Mr. Macdonnell) that "this house is of the opinion that the government does not possess the confidence of the country." So much for the budget, because I do not want to repeat arguments that have been made by other members.
During the past week-end and early this week it was my privilege, along with other members of the parliamentary committee on veterans affairs, to visit the city of Saskatoon and attend the dominion convention of the Canadian Legion which is now in progress. Upon our arrival there last Saturday, we were informed of the passing of a great Canadian. May I be permitted, Mr. Speaker, to speak of him as one of ourselves, Comrade Colonel J. L. Ralston. He was a man of great courage, high principles and sterling character. To those who were not privileged to sit in this house with him, if they want real proof of his courage and self-sacrifice I suggest that they read the speech delivered by this great Canadian in the House of Commons on the evening
The Budget-Mr. J. A. Ross

of November 29, 1944, which will be found recorded in Hansard of that year at page 6657. He certainly proved what a great Canadian he was at that time by his selfsacrifice.
Following the drumhead service on Sunday afternoon, and at the ceremonial opening of the convention on Sunday evening, the legion hymn was sung, "Old Soldiers Never Die, They Simply Fade Away," and there seemed to be more significance than ever in that hymn on that rather sad occasion. I was happy to think that the first business transacted at the business session on Monday morning was the passing of a resolution of condolence to the widow and son in the sad loss of a great husband and father.
As I sat on Monday and listened to the legionnaires in that great convention of over one thousand delegates deliberating on their problems, problems created as a result of two great world wars, and thought of the present worldwide international unrest that was referred to by the Minister of Finance (Mr. Abbott) when he pointed out that we might, on short notice, have to expend a great deal of money for national defence in this country, although it was not evident, this was brought home to me, Mr. Speaker, and I decided that it was my duty to avail myself of the first opportunity in this chamber to speak of the international peace garden. I want to compliment the hon. member for Brandon (Mr. Matthews), because on July 11, 1947, he cited the history of this undertaking. He made his remarks during the course of the discussion of the estimates on parks and historical sites under the Department of Mines and Resources, and I wish to compliment him on his fine presentation at that time. I thought he did a much finer job at that time than he did last Tuesday afternoon in his budget address. Certainly he did much more for the interests of his constituents as a whole whom he has the honour to represent, and the citizens throughout this country.
I have never before spoken on this particular matter, but I wish to say that the area of the garden consists of some 2,340 acres, 1,452 acres in Canada donated by the Manitoba government and 888 acres on the United States side, donated partly by Washington and partly by the state of North Dakota. This garden is situated in the Turtle mountains, a range of hills rising to some 2,500 feet above sea level. They extend forty-five miles east and west and twenty miles north and south, and are located midway along that great undefended 3,987 miles of boundary line between Canada and the United States, and midway along the
[Mr. Ross (Souris).)
southern boundary of the Souris constituency which I have the honour to represent at present in this house.
The international peace garden is incorporated under the laws of Manitoba and North Dakota, and has been recognized by both Canadian and United States governments. Further work on this project should be the responsibility of the federal government; first, because the whole proposal is international. The dominion government has already expended, through the province of Manitoba, approximately $52,000 on this area. It is interesting to recall a paragraph of the speech from the throne at the opening of the Manitoba legislature on February 29, 1932, under the leadership of Mr. John Bracken who has always been an ardent supporter of this garden, and is now the leader of the official opposition of the House of Commons. He said:
A memorable event of the past year is the provision made for the peace garden in the Turtle mountain region of Manitoba and North Dakota. This international project ought to have a prominent place in the peace chronicles of the present era when every thinking person in the world is compelled to realize that one of the most important questions facing our civilization is that of world peace, friendship, and co-operation.
An editorial in the Winnipeg Tribune of that date said:
It is a worthy, a splendid project, and one that has the enthusiastic approval not only of the people of Manitoba and western Canada, but of other millions in both countries . . . Some of the most magnificent monuments in the world have been erected to commemorate lost causes, vanished glories and ruined hopes. A peace garden, let us hope, will symbolize in its own living beauty, ever more cordial relations between the two countries.
On July 24, 1932 the official opening of the garden took place and people were assembled from great distances in the central west, both Americans and Canadians.
I should like to give a few facts concerning the present status of this international peace garden. First of all, as to the board of directors for this year, 1948, I will just give the principal officers. They are as follows: Honorary president: W. V. Udall, Boissevain, Manitoba; president: D. G. McKenzie, Winnipeg, Manitoba; chairman: John A. Stormon, Rolla, North Dakota; first vice-president: M. S. Colquhoun, Deloraine, Manitoba; second vice-president: Russell Reid, Bismarck, North Dakota; treasurer: Lieutenant-Colonel A. J. Robbins, 496 Ash street, Winnipeg, Manitoba; assistant treasurer: John A. Stormon, Rolla, North Dakota; secretary: Myrtle Baldwin, Rolla, North Dakota; assistant

The Budget-Mr. J. A. Ross
secretary: E. T. Johnson, Boissevain, Manitoba; assistant secretary: Henry Sunderland, Dunseith, North Dakota. There are some seventeen directors from all parts of the United States and Canada scattered throughout these two great areas, which speaks well for the people in that area. The booklet goes on to point out that for 133 years this great stretch of boundary line between Canada and the United States has been a boundary of peace without warship, fort, soldier or gun. It states that:
Two great world wars, and the economic and financial problems arising therefrom, and possible military requirements in the future, are drawing these nations into continuous and closer collaboration and co-operation. This practical demonstration is proof positive that peace between nations is more than an idle dream; it is an accomplished fact.
Then it cites the various reasons why these sites were selected. One of the reasons was that of the natural scenic beauty of the area; second, the wide variety of trees, shrubs and wildflowers found growing there; third, the abundance of wild life, including birds, native to the district; fourth, the large number of small lakes located in the Turtle mountains; fifth, the location being almost the geographical centre of the North American continent; sixth, it being located on the only hard-surface highway running north and south across the continent, extending from northern Manitoba through the United States, down into Mexico, and extending into the countries of South America; seventh, no physical barrier, such as rivers, lakes, mountains or gorges, standing in the way of the free movement of people across the boundary in the area designated. Then it gives the pledge which appears on the plaque as follows:
To God in His Glory
We two nations dedicate this Garden and pledge ourselves that as long as men shall live, we will not take up arms against one another.
Then it says:
In addition to a beautiful garden, our plans contemplate the erection of an international peace tower as a symbol of peace between our two great nations, and a suitable war memorial to the thousands of young men and women who gave their lives in the last two world wars in the defence of everything we hold to be dear in life. Associated with this memorial is to be a little chapel where friends of loved ones may seek comfort and consolation.
Plans are being made for tourist accommodation, picnic grounds, public assemblies and recreational facilities.
Customs and immigration offices will be erected on the site to facilitate the movement of people across the boundary.
A great deal of public support is already manifest. Women's organizations, churches, service clubs, boards of trade, returned soldiers'
5849-281J
organizations and many similar bodies, as well as a large section of the public, are evidencing a desire to help in the promotion of this worthy project.
Large sums of money will be necessary. We are budgeting for $100,900 for 1948. Financial support must be forthcoming from governments, public bodies, business institutions and we hope from tens of thousands of peace-loving citizens.
There is much more in the booklet, but I do not want to take up the time of the house to read it.
More and more, may I say, will United States tourists be drawn northward by the magnetic attraction of our national parks. I noticed in the Christian Science Monitor of yesterday many pages devoted to the tourist trade, and the same newspaper on May 21 stated that in 1948 United States tourists are due to spend 115 billion. It sets out in a number of paragraphs the way in which this money will be spent, indicating that a good deal will be spent by tourists coming to Canada. The Canadian people are looking for a great part of that money which will be spent by tourists, and I do not know what could be finer than to have the bulk of these tourists come through that peace garden, with all that it signifies of sacrifice on the part of our peoples in the two world wars.
I wish to compliment the people who met from different parts of Canada and the United States and originated the idea, bringing about the organization and having it incorporated as they have done. May I emphasize the intriguing fact that, instead of being situated in the far east or in the distant west, this garden is located actually within thirty miles of the exact centre of the North American continent. Surely that is a fitting place for it, for this tall and commanding peace tower, proclaiming to the world the friendship between our two great nations.
Again I compliment the hon. member for Brandon (Mr. Matthews) upon having dealt with the question so efficiently on the estimates last year. I could have waited and done so this year in connection with the estimates; but I thought it would be more effective, and I hope it will be, coming from him. I appeal to the minister to have this 8100,000 set aside annually for a period of years to create what the board has in mind, in the Department of Mines and Resources, under parks and historical sites. If that is done, I trust that the minister will give this matter the just consideration which it so well deserves. Surely it befits these two great nations and the peoples of these great lands; and therefore I make an earnest appeal, on behalf of the people of Canada, that we play our part, together with the people of the United States, in furthering this fine project.
The Budget-Mr. Burton


Mr. J. W. BURTON (Humboldt):: Mr. Speaker, while the hon. member for Souris (Mr. Ross) and I no doubt can readily agree that the farmers of the country throughout the years have not received a fair share of the national income, yet I believe I would be correct in saying that the two of us have arrived at that conclusion by a different process of reasoning. And while I have no desire to delay the continuation of the budget debate by going into details with regard to what my colleagues and I in this group, on different occasions, have presented to the house as to the reasons why the farmers have not been receiving their fair share of the national income, and our opinion as to what should be done to rectify that situation, yet when the hon. member for Souris was speaking I could not help thinking of the time when the party to which he belongs was in office, and when I sold wheat at the lowest figure at which I have ever sold it in my life.


James Arthur Ross: So they did all over the world.


Joseph William Burton: I will deal with that. I must say also that at that time I sold beef cattle, which were fit for the show ring, at such a ridiculously low price that it was a shame even to bother taking them to market. My hon. friend says that was the condition throughout the world. Yes, but we must remember that at that time there was a man high in the ranks of the hon. gentleman's party who promised the people of the country that he would blast his way into the markets of the world.
I cannot take time to discuss the many excellent speeches that have been made in this debate, but there is one to which I wish to refer, and that is the speech made by the hon. member for Broadview (Mr. Church) this afternoon. He seemed to be somewhat concerned about something going on in this province and I wish to put him and his friends at ease. If I could follow the hon. member for Broadview he said this: "One matter to which I would call the attention of the house is the practice of non-residents coming into the province of Ontario and taking part in provincial elections". Later on he said: "In almost every newspaper I pick up there are reports indicating that some of my hon. friends to the left have been going around Ontario addressing meetings". While quite fairly enough the hon. member expressed the opinion that we had that right, yet he questioned the propriety of our doing so.
I wish to put the hon. member at his ease and say that, so far as my colleagues and I are concerned, we do not go to any meeting

in Ontario or in any other province of which we are not residents to address meetings unless we are specially invited by the people in those vicinities to go and speak to them. I also wish to assure him that on the odd occasion when I have accepted an invitation to address an Ontario audience I have made it quite plain that I had no intention of trying to tell them how to vote.
The hon. member should also remember that when people invite us to go and speak to them they have a right to know and to hear the story of Saskatchewan told by people who know the score; and if the hon. member for Broadview could assure us that certain people and certain interests in the province of Ontario would not go out of their way to distort the efforts our present government puts into solving our problems in the province of Saskatchewan, in all probability he would not be worried about so many of us taking part in speaking to the people.
Furthermore, may I say that if he could assure us that money from Ontario will not be used to try to influence the election in Saskatchewan during this coming month, then we could all feel a little more happy, especially if he could assure us that Trestrail and people of that ilk would not be using money that very often has been made off the industry of the people of Saskatchewan and of western Canada to tell us later on what is good for us, and in such a way that it is frequently obnoxious.
When the Minister of Finance, on the evening of May 18, delivered his budget address, I could not help feeling sorry that so promising a young Liberal minister should be placed in a position of such difficulty by having to present such a typical Tory budget. I must compliment the minister on having done a very good job on a very poor subject. I am quite satisfied that it was as distasteful to him as his budget is to the majority of the people of the country.
But my pity turned to amazement when a man who apparently adheres to the traditional Tory attitude, like the hon. member for Muskoka-Ontario (Mr. Macdonnell). endeavoured to criticize the budget brought down by the present Minister of Finance. I could not help thinking that if the hon. member for Muskoka-Ontario and his colleagues were on the other side of the house, in all probability, with the possible exception of a few minor details, they would have brought down a similar budget. We can be quite certain of the fact that it would not have been any better; in all probability it would have been

The Budget-Mr. Burton
a still more bitter pill for the common people of this country.
As time goes on, a person cannot help noticing that those people who prefix "progressive" to their party label are coming closer and closer to the Tories that are only Liberal in name; in fact, in some provinces of this country they are already in the same camp.


An hon. MEMBER:: What do you mean?


Joseph William Burton: In my own province of Saskatchewan these people are in some places arranging saw-offs among themselves in an attempt to delay the march of progress.


Mr. BLACKMORE:: Do they call themselves "Independents"?


Joseph William Burton: No.


John Horne Blackmore: That is what they do in Alberta.


Mr. KNOWLES:: They call themselves fusion candidates.


An hon. MEMBER:: Confusion candidates.


Joseph William Burton: In some places they do not even go to that extent. One might say they are running on the same ticket. In dual member constituencies they have arrangements whereby one candidate will be a Liberal and the other one a Conservative.


Stanley Howard Knowles: And you cannot tell them apart.


Joseph William Burton: That is just what I was trying to tell the hon. members; more and more is it becoming evident that one has greater difficulty in telling them apart.
When my leader, the hon. member for Rosetown-Biggar (Mr. Coldwell) moved the subamendment for our group and later on was followed by other colleagues from this group, not only did he and they place on the record our want of confidence in the government; the amendment also stated the reasons why and wherefor we considered that the government was doing a poor job. I will not endeavour to retrace all the arguments that have been brought out. I will not endeavour to search out any other defects in the budget. But as all hon. members will know, our case has been made clear and plain, and we have no hesitation in submitting the stand that we have taken to the people of this country.
May I refresh the memory of hon. members. When my leader moved his amendment, it was as follows:
That the said amendment be amended by inserting after the word "government" and before the word "does" in the second line of the amendment, the following words:
. . has failed to relieve the excessive burden of taxation on the low-income groups of the Canadian people:
(a)	By failing to increase the amounts of exemption from income tax from the present levels to $1,250 for single and $2,500 for married persons, and
(b)	By failing to remove or substantially reduce the burden of sales and excise taxes which bear most heavily on those suffering from low income and the present high cost of living.
And further, the government has failed to establish a public investment board to assure the channelling of capital investment into socially desirable projects as a means of maintaining full employment, increasing production and raising the standard of living of the Canadian people, 'and . . ."
I contend, Mr. Speaker, that any progressive-minded member who is desirous of voicing the opinion of the people he has the honour to represent will certainly be obliged in his own mind to support that amendment.


An hon. MEMBER:: That is what you think.


Joseph William Burton: While I could go on and aggravate the Minister of Finance by picking here and picking there at this umbrella budget, as some call it, and point out many other parts that are obnoxious to the people of Canada-in fact, I would say a great many features of the budget were not necessary- yet, what is the use? If by this time we have not convinced enough members on the other side of the house that the people of this country do not approve this budget, then, so far as I am concerned, I am prepared to take the vote and abide by what, the majority decides. But let me say this much to hon. members through you, Mr. Speaker:	the
people of Canada are not satisfied and they will make good use of the opportunities that are presented to them to register their protests.
Before I resume my seat, there are one or two matters that I should like to deal with which are only indirectly connected with the budget. The first, I may say, was referred to by the hon. member for Comox-Alberni (Mr. Gibson) the other day when he was taking part in this debate; and today I believe it was again referred by some other hon. members, including the hon. member for Medicine Hat (Mr. Wylie). The hon. member for Comox-Alberni, as reported at page 4310 of Hansard of May 24, suggested this:
1. Set up a federal highway commission which would designate the highways to be considered as links in the trans-Canada highway system.
Later on he said this:
Mr. Speaker, the creation of such a federal or trans-Canada highway board is a step which I am sure would meet with the approval of every member of this house, as may be confirmed by reference to speeches made by members on ail sides during the past years. The arguments are too numerous and too well known for me to repeat them at this time, but I know that every Canadian looks forward to the day when
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there will be a highway across Canada, from sea to se!a, from Yarmouth in Nova Scotia to Tofino on the west coast of Vancouver island.
I fully concur in that. I would go even further and say this. Our dominion government has let Canada lag at least fifteen to twenty years behind the times in not having provided for such a federal board of highway commissioners. That board, as the hon. member suggests, would endeavour to settle little, petty, local arguments as to whether this highway should run here or there. I would go even further and say that the federal government, even in this budget, should have made provision so that that board could have had the wherewithal to operate and be of assistance to the provinces in having a trans-Canada highway system constructed.
It is all very well for the minister to say, as he did in his budget speech, that this is not a time to branch out into some of these activities. I agree with him in part in that respect. But let me draw to his attention the fact that we have found it to be the case, not only in our farming activities but in our other business activities, that if you do not make use of good times in order to make your plans to revamp and repair your machinery, then, when the rainy day hits you, you will find yourself in a difficult position. That is why during the period often referred to as the hungry thirties, when we had men practically wasting away in relief camps, no such works were undertaken; nothing was ready so that they could start doing useful work. The excuse was that there was no money, whereas we should have had the machinery ready and should have had arrangements made for the materials and the necessary finances. If that had been done we would not. be lagging behind our friends across the border by at least fifteen or twenty years.
As the hon. member for Comox-Alberni says, every Canadian is looking forward to the day when we shall have a trans-Canada highway from sea to sea. In my opinion a board of federal highway commissioners would, in the first place, work with the provincial governments to co-ordinate their activities in that respect, and could arrange material and financial assistance for them as well. They could also decide, for example, whether from Winnipeg on east, through that long stretch of unproductive country, it would be desirable to have a four-lane highway connecting with the central and eastern parts of our country, or whether it would be more desirable to have the highway branch out to cover different parts of that territory. If you look at a map you see that in all probability such a highway system would have to go through Winnipeg, which for more reasons than one is referred

to as the gateway to the west. Practically, speaking, there is no cither way to get to the west except through Winnipeg or by coming close to it. A little further west, however, you can branch ou't, and as you go further west you can go more to the north and still be in settled, productive territory. Here again I contend that we should not be satisfied with just a little ribbon of highway across the plains, which we may call a trans-Canada highway. We should have a system of highways adequate to take care of that great western plains country; and since highway construction in that area would be easy and comparatively cheap, there is no reason why we should not have both a southern route and a northern route.
However, Mr. Speaker, you cannot expect the provinces to do this. It is really a federal job. My own province of Saskatchewan has about thirty-eight per cent of the total surveyed roads of Canada, but at the same time we have only about seven per cent of the total population. How can we be expected to give proper road facilities and services to our own people and, in addition, do the job the federal government should do in providing a trans-Canada highway? So I repeat that even in this budget provision should have been made for such assistance to the provinces. We are endeavouring to do what is possible, but there is a limit to what the provincial governments can do. During the past four years new work undertaken and reconstruction work on highways in our province amounted to 1,680 miles, and this year a tremendous building program is contemplated. During the past four years we have regravelled approximately 4,000 miles of highways, and during the past three years we have tripled the total mileage of hard-surfaced roads in the province. Quite frankly, the total mileage of hard-surfaced roads was very much limited until a few years ago, but at least we have made a start in that connection.
' The other question with which I should like to deal is also of vital interest to the people not only of my constituency but of practically all of western Canada; that is, the Hudson bay route. In the first week of August of last year the Hudson bay route association, in co-operation with the government of Saskatchewan and with the magnificent assistance of the Canadian National Railways, put on an excursion to Churchill. I had been wanting to go to Churchill ever since the road was opened, but something always interfered with my plans. I am happy to say, however, that last August I had an opportunity of making that trip; and I was so delighted with what I saw that if another excursion is held this year I want to

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make the trip again. At this time I should like to extend a hearty invitation to hon. members from Ontario and Quebec and the maritimes, who may have time to spare, to join us on that trip. If they do they will see for themselves that there we have not the white elephant a great many people would like to make it out to be. I can show them that, with the possibilities which now exist, if only we get a fair deal, the road, the port and the route will be an asset not only to the western provinces but to all Canada.
When the excursion train left Regina last August three ministers of the provincial government were on board, and I am happy to say there was also a member of the Alberta government, who, I believe, since has been called to his reward. In that connection I should like to make a suggestion to my hon. friends from Alberta. I noticed that Hon. Mr. Fallow had with him a very nice little movie camera, and I am sure he obtained many fine pictures. Possibly my hon. friends could intercede with the members of his family and make arrangements so that the Hudson bay route association might be able to use the films he took at that time.
Proceeding in a northerly direction the Hudson bay special stopped at Saskatoon, where many others joined the party. From there we went on to Prince Albert, where the citizens and the board of trade gave us a hearty welcome. They realize that even at Prince Albert we are not yet half way up the province. They know the tremendous possibilities for the development of that northern country.
From Prince Albert we went to The Pas, Manitoba, and again we were well received. From The Pas we had a side trip arranged for us which took us to the mining town of Flin Flon, on the border between Manitoba and Saskatchewan. I might add that we were keenly interested in this, and spent several hours in this mining and smelting town. I can assure hon. members that many of our prairie dwellers had a little better idea of the tremendous wealth in that northern section of western Canada.
May I add that in the sight-seeing trip I had the good fortune to be in a motorcar driven by one of the officials of the Hudson Bay Mining and Smelting Company. Answering our questions he told us that, in so far as their experts and surveyors were able to ascertain, not only his children but his grandchildren would have no need to worry about the mineral ore being played out or depleted in their lifetime.
From 1940 to 1945, the war years, when we needed so much the production from our mines, this area milled 12,262,838 tons of ore.
That produced 475,125,604 pounds of copper and 605,116,521 pounds of zinc, as well as some other valuable metals.
We had to return to The Pas to take the Hudson bay route which starts at The Pas and runs in a northeasterly direction. For the information of hon. members, let me say once we were on what is properly known as the Hudson Bay railway, in spite of our having only a freight locomotive of ordinary size drawing our large excursion train, the ride was most comfortable and agreeable. In fact neither the Canadian National nor the Canadian Pacific through northern Ontario is anywhere nearly as comfortable from a riding standpoint as is that stretch of road from The Pas to Churchill.
Between The Pas and Wabowden, the first divisional point outside The Pas, is an area in the neighbourhood of 5,000,000 or 6,000,000 acres of arable land awaiting settlement. In addition to that, there is a tremendous amount of forest products and products from lakes and streams, besides undiscovered and, in some places discovered but undeveloped, mineral resources.
Mr. MaciNICOL: And a fine stand of timber.


Joseph William Burton: Yes, the hon. member is quite correct; there is a fine stand of timber.
I contend that the Hudson Bay railway has the potentialities of making that port a paying proposition, just because of the natural assets in that part of the country.
Furthermore, when we got to Gillam, the next divisional point-and remember, this was in the first week of August-only 150 miles from Churchill, our train stopped for a short time for servicing, during which time the passengers on the excursion train got out to walk along the right of way, and they were picking ripe strawberries. That, in the first week of August!


Thomas John Bentley: No cream?


Joseph William Burton: They were so delicious we could do very nicely without cream or sugar.
We proceeded north from Gillam. In that area are millions of horsepower going to waste because of a lack of development of the waterfalls and rapids which could easily be developed. When we arrived at Churchill almost all of us began to see the sights, which we covered as much as we could from that time until the following evening. Included in our sightseeing was the elevator. Incidentally, let me add that I was informed by some of the superintendents that the Minister of Trade and Commerce (Mr. Howe) was responsible for some of the up-to-date equipment
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installed in that elevator. I was told that at one time, and in the space of four minutes, they can unload four carloads of grain.


Mr. CASE:: The minister was active in private enterprise when he put that in.


Joseph William Burton: I would say that whatever the minister did because of his inventive genius and engineering ability is now given a chance to work for the people as a whole. He does not, like some other hon. members, always follow the line of private enterprise.
We have there an institution which is not a private enterprise, but it is a credit to the Minister of Trade and Commerce and to anyone else who had anything to do with the erecting of the elevator and the building of the railway.
We were invited to visit the airport and army base being operated at that place. Let me say to hon. members who are sometimes worried about our Yankee friends having a few people up at that base that in my view they are unduly alarmed. From what we had an opportunity to see, the men stationed there were being well cared for and were doing a job which must be done if we are to develop that northern country as it should be developed. While it is true that friendly relations might at times become too friendly, at the same time I would repeat that I do not think in this instance we have anything to worry about.
I took a number of snapshots along the line and at Churchill. We have not time to go into all these details, but I might add that, while there, we saw many of the so-called white whales. I mention this now because some time ago a good many people were excited about whale oil. Right there at our back door we have whale oil available, if we only make arrangements to secure it.
The trip back was arranged so that the train covered in daytime almost the same mileage we had covered at night when going up. The result was that we saw about all the territory and the surrounding country so far as it was humanly possible to do on such an excursion.
There was one thing that struck me forcibly on that trip. In the first place, there were very few young people on board. Most of us were either middle-aged or going on to advanced years. But everyone seemed to be determined to see as much as possible in the short time available. With very few exceptions, they were pioneers of the west, and the impression they gave me was that they had at last the opportunity to fulfil the dream of a lifetime by making a trip to their own port of Churchill on Hudson bay. For some of us it was the first opportunity we had of having our feet on

the deck of a boat travelling in deep water, and it reminded me that those of us who travelled in prairie schooners in days gone by never got seasick.
The possibilities of trade between the prairie provinces and the maritimes are immense, and I hope, Mr. Speaker, that we shall continue to develop this route. I am satisfied that if it is given an opportunity to show what it can do, it will be an asset not only to the people of western Canada but to the country as a whole.


Wilfrid Garfield Case: Mr. Speaker, one of the interesting things about the budget debate is the notable travelogues to which we are treated, which give us a better appreciation of the great possibilities of Canada. But I could not understand just why the hon. member for Humboldt (Mr. Burton) referred to this budget as being an umbrella budget. I did hear the Minister of Finance (Mr. Abbott), in presenting the budget, speak of laying something away for a rainy day. But my conception of an umbrella is something that gives you protection from what otherwise might be described as a thorough soaking, and I certainly do not feel that this budget measured up in any respect to that description. It might just as well be a totem pole as an umbrella for any protection it affords to the taxpayers of Canada generally.
I wish to comment briefly on the reference of the hon. member for Humboldt to a national highway. With all due deference to the present plans for beautifying Canada's capital, which, after all, is entitled to consideration because we are a proud people and want to make our capital as attractive as possible within due bounds, I can think of no more fitting memorial to the gallant sons and daughters of Canada than the building of a national highway acroas this country. As we are becoming more conscious of ourselves as a nation, surely we owe it to ourselves to guarantee that we can travel in our own country from coast to coast, without detours into another country and being compelled to declare what we are taking in and bringing out. At the present time many such detours are necessary.
The hon. member also referred to the vast areas beckoning the settler. As I listened to him I could not help wondering how the C.C.F. party would attempt to justify their bitter opposition to immigration, until we had housing and other comforts of life available for our new settlers. If we had attempted to build our future on that theory, Canada would never have been. O.ur forefathers came to this country with no homes to go to or anything else, but they were prepared to address themselves

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to the task of hewing homes for themselves out of the forest and suffering hardships and privation in laying the foundations upon which future generations have continued to build up this country. Theirs was not an easy task in any sense of the word.
I often think of that when I hear my C.C.F. friends criticizing the Premier of Ontario for his plan to bring into this province 7,000 immigrants a year, but apparently Ontario must now take a back seat to Alberta which has indicated a desire to secure 400,000 immigrants from the British isles in the next ten years. I agree with the. Minister of Agriculture (Mr. Gardiner) that every effort must be made to bring these people to where the food is to be consumed rather than to assume that we can constantly be shipping the food to them in other countries.
I think I should say, Mr. Speaker, that the Minister of Finance has proved himself to be at least courageous, because a few nights ago he presented to the house and the people of Canada a budget which certainly is not popular in any part of Canada that I have had the opportunity to visit. Nor can I think it is very acceptable to the Liberal party, regardless of the fine effort made this afternoon by the Minister of Justice (Mr. Ilsley), a former minister of finance, in seeking to defend the position taken by the present Minister of Finance.
But to prove, Mr. Speaker, that this government have no sound formula of budgeting for expenditures and receipts, in the three years I have been here they have always been hundreds of millions of dollars out in their anticipated receipts. The last budget brought down by the Minister of Finance was only about S700 million out. Two years ago, when the present Minister of Justice was minister of finance he was prepared to budget for a deficit. How times have changed! Now the Minister of Justice, when we are seeking to bail ourselves out of a difficult situation, recommends and endorses the present proposals of the Minister of Finance to budget for a substantial surplus. Just how much they know about what they are doing is hard to understand. For instance, I was amazed to hear the Minister of Justice say this afternoon that, by raising the succession duties exemption from $5,000 to $50,000, he had been astounded to discover that it would mean a loss of only $5,000,000 in revenue. After years and years in the portfolio of minister of finance, he was amazed to make that discovery! But a mere $5,000,000 meant something to people some time ago.
I can think back to 1932 in the province of Saskatchewan when the then provincial
treasurer, Mr. Murdock MacPherson, carried on the affairs of that province with $12,000,000; and while Saskatchewan has many advantages today by way of social services, and such things as they are now seeking to tell the electors about, nevertheless last year it raised and spent more than $57,000,000. That is quite a far cry from $12,000,000. I suppose, so long as the people are getting some benefit from it, we must accept it.
However I am one of those who is not in any sense disappointed with the budget. I heard the stories on the street that there was likely to be a surplus of $750 million, and so on. I knew then that we were standing on rather thin ice. I knew that if the Minister of Finance was consistent, he could not lower taxation. I doubted whether he would be consistent, because there has been a lot of turning about on rather short notice in this House of Commons, but when he indicated to the House of Commons that his purpose in putting on the 25 per cent excise tax was to drain off purchasing power I knew that he could not be consistent and return anything to the people of Canada in the wTay of lessening taxation; otherwise he would be defeating the tax he had imposed by radio on November 17 last. Therefore I think we have just about what we might have expected.
I want to make this observation. I think it is a sad commentary, and it must mean a great deal to the Canadian people to know that we now have arrived at the place where, by interference and regulation, the government imply that they are no longer prepared to trust the Canadian people; that they must regulate their very lives; that they must draw off their purchasing power; in other words, that they must stem the trend toward inflation in this country. It seems to me so foolish to take the stand that we can regulate or beat inflation by draining off purchasing power. If the government had been anxious to serve a useful purpose, to play fair with the Canadian people, they would have reinstated, or so far as I am concerned they should never have abolished it, compulsory savings, if that was necessary, because then there would have been something laid by for a rainy day.
I am one of those who have come through the ranks of municipal government. We discovered long ago that if a municipality were allowed to budget for substantial surpluses the natural tendency would be to find some place to spend that money. That is the general trend when you allow governments to build up huge surpluses; and with an election in the offing next year, or possibly before that- although I doubt whether they would dare face the Canadian people on a budget such as that
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brought down in this house recently-it could be possible that a great many favours might be provided by the huge surplus indicated.
Of course, if the Minister of Justice was correct in suggesting that this surplus might be continued for a number of years, I suppose from a purely economic point of view, there might be some justification for the attitude he was taking. I have at least been consistent in this regard. Even last year I urged the government to give evidence of faith in our country by budgeting for a deficit, because I felt that it would indicate to all and sundry that we had faith in our people and in our productive capacity. The productive capacity of Canada is positively immense; but as long as we hamstring the people with intolerable taxation we shall have this degree of labour unrest, we shall have this sense of confusion and lack of direction which is evident at the present time on all sides by our businessmen, and we are more apt to have a higher degree of inflation than we would have if we were to build up our productive capacity. In other words, up to the present time the people have been living in expectation of something they have not received.
One can understand that with the cost of living increasing, with taxation at an all-time high, with a huge surplus, which the government boast is the greatest on record, and yet no evidence of tax relief, it has a deadening and sickening effect on the whole Canadian economy; because, after all is said and done, it is all right to boast of surpluses; it is all right for the Minister of Justice to be critical, but by the very motion that has been made by the financial critic of this party we say that we have no confidence in this administration, and therefore we certainly have no confidence and trust that the surplus the government are seeking to fake from the Canadian people without any sense of direction will be spent wisely. Therefore, Mr. Speaker, nothing would have done more to stimulate production at the present time than to have cut straight across our taxation barriers and to have taken this country out of its present dilemma.
All through the budget address, and again this afternoon in the speech of the Minister of Justice, I heard many references to the United States of America. I have nothing but the greatest admiration for our great neighbour to the south, but I do not think our Canadian people should be poured into a mould and held in a strait-jacket just to satisfy some foolish whim we might have with respect to the United States economy.

For instance, this afternoon the Minister of Justice said, in effect-and I am not going to quote him exactly-if we had kept our dollar at par that we would be going into debt to a foreign country. Let us see how well the present administration have succeeded in that regard. I want to remind you, Mr. Speaker, and this House of Commons, it was not very long ago that, for the first time in history, Canada borrowed $300 million from a foreign power. This is the firkt time we have ever been in debt to a foreign government. If the government feel that their present policy is succeeding, I for one fail to recognize it.
The minister spoke of United States citizens who bought our bonds as a good investment. Certainly they bought those bonds with a $1.10 dollar. They bought those bonds on speculation that the Canadian dollar would return to par, and they sold those bonds back on the Canadian market in such numbers when the dollar was at par that the Bank of Canada was forced to lower the bids on Canadian bonds. That was what the Canadian investor had to pay for our regard for the United States economy.
What we want, Mr. Speaker, is an honest dollar. That is my plea tonight. The moment you build an artificial structure under your money you are affecting the whole basis of your economy. I think I have had sufficient experience to be able to labour that point if I cared to do so, because it is not a question of where you are going to nail this dollar. We had a tremendous trading advantage, a trading advantage in the markets of the world. So long as the United States dollar was accepted as the standard of value, all the markets of the world lay open to us. It is all right to say that we would have bought less from Great Britain or that the British exporter would not have had the same access to our markets. I fail to see that, if the United States dollar remained at the standard value of $1.10.
In other words, the greatest advantage any nation possesses is the right to regulate its currency in relation to its trading advantages in the world's markets. I suppose that is one reason why the top-heavy influence at Bretton Woods and the international bank determined that no country could depreciate its currency by more than ten per cent without the consent of the bank; but Canada was in a very strategic position. We had a ninety cent dollar to go into the bank with, which by the same token would provide us with the right of devaluing that dollar still further. In other words, we could not have an eighty-one cent dollar.

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It does not have the same effect on the home market. Just imagine what the Minister of Justice said this afternoon-that they levelled the Canadian dollar because of the tendency toward inflation in the United States. He said that our Canadian importers were buying larger quantities in that market because they feared inflation, and right on the very eve of the time they feared inflation most he said to Canadian importers, "Here is another ten cents on your dollar; go and buy more and more." So why would they not drain off more United States dollars? The government bonused the purchase of goods in the United States by adding that ten cents on. The proof of the pudding is in the eating, and we have discovered that by our interference with the true level of our dollar, by our interference with the desire to have an honest dollar, we have interfered with our whole internal economy. There was no cry from the gold mines or the basic producers before we levelled the dollar. Now that we have levelled the dollar, we have to have a group of bureaucrats going up and down the country checking the books of the gold producers to find out how much gold they have produced in a certain basic period in order that they may be entitled to the bonus which the government says is in store for them.
Last but by no means least-I tried to copy this as carefully as I can, and I believe I have it verbatim-the Minister of Justice said: "But it would be undesirable, I feel sure, having in mind public opinion in the United States, to have a situation arise such as this: that the people in the United States should be keeping their taxes up to the high levels they have now attained, and that Canada, not contributing toward European recovery by way of credits, should seize the opportunity to push her taxes down and cash in on the situation in such a way that we would inevitably be severely criticized and penalized by others."
I do not think there ever was a time in history when the United States had to lean upon the philanthropic attitude of the Dominion of Canada. Generally speaking, they have been able Jo forge ahead for themselves-as a matter of fact, a little too much so-and it is a sad' commentary that our government was so much concerned about the economy of the United States, who today are looking for markets for their goods and trying to have someone drain off their -dollars in order that they might return as purchasing power. It is, I say, a sad commentary that we should be so much concerned that we would feel that we were [DOT]taking advantage of them by pushing our
taxes down. It is a most unfortunate fact, but all Canada is to be penalized because the United States dollar or the United States tax rate is not lower.
The minister forgets, although he made some comparisons, that income taxes are much lower federally in the United States than in Canada. He was inclined to confuse the issue by introducing a note with respect to state taxes. There are other things he overlooks: for instance, the fact that a motorcar of the same manufacture costs from $600 to $900 less in the United States than it does in Canada. We are paying a very fine price for our tie-in with the United States economy.
I certainly wish to do everything in a co-operative sense so that we may carry on together; nevertheless this country offers a great challenge to everyone, and when the minister seeks to fix our Canadian dollar at par with the United States, I resent very much his interference with the natural flow of trade and the placing of a 25 per cent embargo or restriction or excise tax on the Canadian dollar in the home market because, he says in effect, our dollar is worth 100 cents in the United States market. After all, this is a mere joke because our Canadian dollar is discounted at as high as fifteen per cent in a neighbouring city like Buffalo. He says that our Canadian dollar will be held at par in the United States markets, but by the same token he says it is worth only seventy-five cents in the home market in Canada.
I say to the government:	If that is your
idea of providing an incentive for Canadian producers; if that is your idea of providing more take-home pay for the worker in industry; if that is your idea of giving our farmers a break, then it will be written in history that it is the best formula you had to offer. But I think our people are entitled to a better break than that, particularly our farmers; and I plead on their behalf, because I like to feel that I am their spokesman in this House of Commons in so far as I represent them in my riding. I plead that they be given a larger exemption in respect of income tax than is generally provided for other citizens.
You may say that this is difficult to work out, but the Minister of Justice put ideas into my head. He said that huge surpluses did not go to cabinet ministers. I never thought they did, but he suggested it. Well, they have provided $500 more in the way of exemption for those of sixty-five years of age and over, and it does seem to me that a larger exemption for farmers can be justified,
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because the farmer and his family all contribute to the welfare of their enterprise, no matter how small the individual share may be. I can remember as a boy seven years of age working on the farm, when I first learned to milk and to help to look after dairy cows. No matter how small the individual's share may be, they all play their part; and I think the government would be making a fine contribution, something that would be greatly appreciated by our farmers, if they fixed the exemption for farmers at a higher level than that accorded other classes, having regard to this one example I have given, where all the members of the family contribute to the family income.
Another thing I should like to see dealt with is this. I would make sure that this disability with respect to married women was removed. Only this government could think of a scheme like that, whereby they treat married women in a different class from other citizens. They say in effect, "You as a married man will have an exemption of $1,500. but if your wife has an income of over $250 you will deduct from your normal exemption the excess she has over $250."
That, too, has a restraining effect on the contribution married women could make, particularly in hospitals and in other fields of endeavour, and it is unfair. I do not think any married man would object to paying his tax on the basis of a single man if his wife had a taxable income, and no one other than this government could think of a deal of that kind whereby they charge a man a luxury tax for having a wife who has an income.
Another thing I am greatly concerned about is this. There is in effect, on the statutes of the country, a law which provides that every person must accept the family allowance. In making that statement some time ago, the Minister of Justice, then minister of finance, said it was not compulsory. It is not compulsory, but if you do not take it they will say you have taken it anyway. How will you get out from under? I do not think it is fair, and I suggest that there should be a certain level, say $3,000 or something like that, beyond which one would not be required to accept the family allowance unless he cared to do so.
The family allowance is something I have been inclined to criticize, not so much the benefits provided as the administration of it. I still feel that it was wrong in the first instance. I feel that the dominion government should have passed enabling legislation, so that any provinces which wanted to take advantage of the family allowances could have passed the necessary legislation to bring themselves within its influence. The administration then would

have been provided through the present social service set-ups within the provincial governments, through that of the old age pension and the mothers allowance. But no. We have now a unitary system and it is bad for this country. Dual administration would have been much better; because I am not too sure but that the time may come when those who are probably a little more radical than even the Liberal's may bid for votes on an increase in family allowances, and hon. members can see just how dangerous it may be. So I feel that there is room for adjustment there. I would certainly plead with the government to give consideration to that particular phase of our economy.
In closing, may I say I feel that the government should give immediate consideration to the references made by the hon. member for Humboldt to our vast resources. Certainly we have there an opportunity to provide something by way of leadership for our people, to encourage them to roll back our great frontiers and to benefit by the rich resources of the nation. Those resources can be turned to good account by providing our people with the services and other securities they are looking for.
Recently some of us, while guests of the board of trade of the city of Toronto, were privileged to visit Sunnybrook military hospital. That is a remarkable institution. There are miles of corridors. It covers acres of ground, and I understand that it will cost, when completed, between $7,500,000 and $9,000,000.


Mr. FOURNIER (Hull):: How much?


Wilfrid Garfield Case: Between $7,500,000 and $9,000,000, I understand. But it will provide a haven for over 900 veterans. It is a marvellous institution and certainly is a tribute to those who conceived the idea of it and those who brought it into being. It was one of the highlights of our trip. When I think of what can be done for the benefit of mankind just with money, I certainly would urge this government to do everything in their power to encourage the development of our vast resources, in order that they may be processed and exploited for the benefit of mankind. I am one of those who believe that we have a perfect right to exploit our natural resources for this day and generation, provided that we replace the replaceable resources so that those who are yet to come may enjoy some of the same advantages that we enjoy. But I believe that this government could give greater leadership and could inspire our people to greater heights.
When I think of the reference made by the Minister of Finance in his budget speech to building up a surplus because of the unfor-

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tunate international situation which might lead to greater requirements for armed services, I think that is just about the poorest excuse for a surplus I ever heard of in my life; because we could not budget for enough, in anticipation of what might be before us, to maintain an army in the field for thirty days, if war ever breaks again; and God help us if it does. It will certainly be a war of survival, and it will take more than the present finance minister's budgets and surpluses and everything else to save mankind. The thing is to bring to our people some degree of relief at the present moment, and to budget so that they will throw off the shackles of burdensome taxation, exercise their God-given freedom, enjoy some degree of enthusiasm and develop their ambitions to provide this country with the productive capacity of which I know it is fully capable.


Mr. F. S. ZAPLITNY (Dauphin):: With very much of what the hon. member for Grey North (Mr. Case) has just said, Mr. Speaker, I find myself in agreement. It is unfortunate that we do not hear more speeches of that character from my hon. friends to the right, and I shall have something to say about that a little later on.
One thing apparently that the public as a whole is agreed upon is this. There is general disappointment with the budget of 1948. Some of the newspapers have called it the "vinegar" budget, perhaps owing to the removal of the tax on spirits which go into vinegar. Others have called it the "black" budget. But it has been generally agreed that this budget has not been a satisfactory one so far as the people of Canada are concerned. What the reasons are for that I will not at this time enumerate, because they have been mentioned by others. We might perhaps look behind the scenes a bit and find out from where the Minister of Finance (Mr. Abbott) has been receiving advice in connection with fiscal policy. I have in my hand an exceTpt from a newsletter which is called the Letter Review, published by the Review Company of Fort Erie North, Ontario. It is dated February 9, 1948. This is a leaflet which comes through the mail to all members of the house and which, to my mind, is one of the most reactionary pieces of literature I ever saw. This is the advice which was handed out, and I quote it because it happens to coincide closely with the attitude of the finance minister:
Inflationary pressure, as it affects the price of the necessities of life, does not arise from excessive purchasing power on the part of the few, buit from excessive purchasing power in the hands of the masses.
So says this Letter Review. Then it goes on:
A government which proposes to use fiscal machinery for the relief of inflationary pressures has to start out by imposing unpopular taxation where it will hurt most, not by silly attempts to tax where it will hurt least.
The import of that, of course, is that the finance minister is being advised to tax the masses of the people, as they describe them, who have, in the opinion of the Letter Review, too much money to spend. Of course the figures given in this house yesterday evening by the hon. member for Winnipeg North Centre (Mr. Knowles) completely disprove that premise, because he proved in figures that the large majority of the people of this country do not have too much money to spend. It appears to me that the Minister of Finance has accepted that advice and has been using the fiscal policy of this country to extract still more money from the people in the lower income brackets rather than going for it where the money actually is. I should like to quote, too, an opinion as to the condition of affairs in this country by a person who. I think, will be accepted by the members of the Liberal party as somewhat of an authority on Liberal policy. I refer to Hon. Stuart Garson, Premier of Manitoba. This appears in a publication entitled The Canadian Liberal, and published under date of "Spring, 1948." I suppose it is a quarterly publication, and this is the most recent issue. In that journal Premier Garson has this to say about Canada:
. . . Canada today
(1)	has no national social security program;
(2)	has no national public investment program . . .
(4)	still has overlapping old age pensions administration;
(5)	still has overlapping three-way responsibility for relief, which in the depression of the 1930's was disastrous to the municipalities and the provinces;
(6)	still faces a complete lack of co-ordination in the efforts of ten different governments to combat any future depression communicated from the outside world.
Then this significant paragraph appears further on:
The enemies of our democracy could not devise an argument against it more persuasive than the conditions of governmental confusion and frustration in this country in the 1930's. Today free society is under sa'-age attack. Whv should we, by our inertia, reduce its defences?
Those words by the Premier of Manitoba are as strong as need be used to point out that again the government is following a policy of drift and laissez faire, and is making no plans whatever for the future. For this reason the members of the party with which
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I am associated decided to move an amendment. We now have before the house the amendment moved by the official opposition, which says in short that the government no longer has the confidence of the country. We * felt that was inadequate, because it is quite obvious that sitting in the opposition we would not have much confidence in the government ourselves, but we wanted to set out why we feel the government has not the confidence of the people as a whole.
So our amendment sets out what I think are constructive proposals, which may be summarized in these words. We suggest: first, that the government take action to raise the exemption levels for taxation purposes to $1,250 for single persons and $2,500 for married persons; second, that they remove or substantially reduce indirect or hidden taxes such as the sales tax and the excise tax, about which I shall have more to say later; third, that they launch a program of public investment designed to expand industry, particularly in western Canada, and channel investment into socially desirable fields such as the building of homes; fourth, that they balance and stabilize the Canadian economy by controlling prices of consumer goods and reducing the cost of production for Canadian agriculture. I believe those four proposals summarize what the people of Canada are today asking the government to do.
I need not take up more time in discussing the budget itself, because what I have already said and what has been said by the members of this group constitute our criticism of and also our alternatives to the budget proposals. The remainder of the time at my disposal I should like to devote to a reply to some of the statements which have been made by some members of the Progressive Conservative party, particularly the hon. member for Eglin-ton (Mr. Fleming), who spoke on May 24. I do this, not because I wish to approach this discussion in a spirit of political phlebotomy, but because the members of the Progressive Conservative party have gone out of their way within the last three or four days to criticize rather severely the C.C.F. and, I think more or less unfairly, to attack the C.C.F. party as being connected with some subversive forces in this country, or something of that sort. They have made statements which in my opinion must be answered; otherwise the country may get the impression that the statements are correct. What I have to say will be said in a kindly fashion, because I have many good friends to my right whom personally I like very much; but because I disagree with the opinions they have expressed and because I wish to correct their statements,

it will be necessary for me to refer to what they have said; and I hope they will take it in the spirit in which it is given.
The hon. member for Eglinton began by saying that the government is falling into line with the socialist philosophy, as he called it, of the managed economy. I shall quote directly from his speech, to be sure I do not misrepresent what he said. At page 4320 of Hansard he used these words:
This managed economy idea is of the essence of socialism. The socialists believe in the managed economy.
Let us have a word on this question of managed economy. You know the trouble with a great many slogans and catchwords is that when they go out, well trimmed up, they may sound quite evil and sinister, when actually they may be very innocent. In its essence, what is a managed economy? Surely even the hon. member for Eglinton would not get up in this house and argue for a mismanaged economy or one that is not managed at all. He would admit that management is necessary in the affairs of the country in much the same way that management is necessary in the affairs of our daily life. What he appears to object to, if I understand him correctly, is the government having any hand in managing the over-all affairs of the nation. Rather, it appears to me, he would favour allowing the so-called forces of free enterprise, supply and demand and so on, to act by themselves in a sort of vacuum, with checks and balances supplying the answer.
I suppose that is a perfectly sincere view, and he is entitled to it; but let me refer him to a statement I find in an interesting little book entitled "John Bracken Says", which was published in 1944, just before the election. The leader of the opposition, at that time not yet a member of this house, was discussing agriculture. It is quite true he did not use the words "managed economy", but this is what he did say; and before I read it I want to say that I agree with him. At page 132 he said:
What do I mean when I speak of guaranteeing the farmer against income fluctuation? I mean simply this: that the farmers, as a producing section of our population, shall receive their proportionate share of the national income of the country-a small income should the nation's income be small, and a proportionate share if it be large-a proportionate share, based on the number of people working on farms. That includes farm operators and farm workers.
How would anyone go about giving the farmers a proportionate share of the national income in an unmanaged economy? Surely, if the hon. member were going to carry out

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this promise and make it good to the Canadian farmers he would need to have some control over the affairs of the country, not only over the agricultural economy but over all the other things that enter into production on the farms. Then he continues, using that awful word "plan", and says:
The plan will, at the beginning, be applied to the more important farm products, and will be extended as rapidly as possible to cover the whole field of production in agriculture and other food products, including fish.
As I said before, I agree with the leader of the opposition that the agricultural population of the country is entitled to its fair proportion of the national income; but I do not see how anyone assuming power in this country could make good on that promise unless he were to assume a certain amount of control over the national economy. If the leader of the opposition ever did come to power I am sure one of the first things he would have to do in order to carry out this promise would be to repudiate the philosophy of the hon. member for Eglinton and those who agree with him.
I shall refer to that question again later on, but now I want to come to another matter. The hon. member for Eglinton and some other speakers to my right have been having a real field day talking about socialism, communism and matters of that kind, and have made quite an attempt to link up the communist party with the C.C.F., using, if you please, as an authority some statements by Tim Buck. It seems strange that they would use him as an authority when it suits their purpose, but will not believe him at any other time. I want to refer them to something, and I do so because it is so easy to make statements and attacks of this kind. Just because Tim Buck happened to say that in his opinion the communists should vote for a certain party, ipso jacto the hon. member for Eglinton takes that to be the gospel. I would not be so sure. I have here a clipping which dates back to about 1942, and which appeared in the Winnipeg Free Press. It reports a meeting at Massey Hall, at which the leader of the communist party, Tim Buck, was present-this was at the time the communist party was banned'-* and the then premier of Ontario, Mr. Hepburn. Then, if you please, the third member on the platform with Mr. Buck was-well, let me quote from the clipping:
In addition to the premier and Mr. Buck, speakers included Leopold Macaulay, conservative member of the Ontario legislature for York South.
Incidentally the purpose of the meeting was to urge that the ban on the communist party
be lifted. Does this mean that Mr. Hepburn and Mr. Macaulay are communists?


Mr. ADAMSON:: What date was that?


Frederick Samuel Zaplitny: It was 1942. Nor does it mean that the communist party was going to vote for these gentlemen at the next election, or vote for them in any other election, just because they happened to be on the same platform that night, I would not say so. They were there because they all agreed on something. Incidentally the C.C.F. did not have a man on the platform, apparently, while the other two parties had. But to attack the C.C.F. for things which are much more innocent than that is, in my view, unfair, and taking advantage of catchwords and slogans which do not add to any party's reputation.
While I am on the subject, I should like to refer to the answer made in the Windsor Star by Mr. Cameron, who made an extensive study and wrote articles on this question of communism, and the cure for communism. He said this:
There is no cure for communism because communism is not a disease; it is a symptom. It is an expression of the vast unrest that permeates all the people of the world not excepting our own, as the result of the moral, spiritual and economic breakdown of bourgeois capitalism.
That might give us something to think about. Instead of going around accusing each other of communism, I think we should go to work to erect a new structure to replace the breakdown of capitalism, go about it seriously, and be willing to co-operate with each other.
Hon. members of the Progressive Conservative party should realize that when they attack socialism and when they attack the system which now exists in Great Britain, New Zealand, Australia and some of the Scandinavian countries they are not doing any good to the world, that indeed they are doing it immeasurable harm. In all these areas the people have got together, and in a democratic way have elected governments which, in their opinion, are applying a correct policy. It is not adding to the good will of the world, or to the good will in any democratic country when people go out and attack a political system just because they happen to be in disagreement with it; and then link it up with communism or with any other old thing in order to smear it and blacken its name. I do not think it is good either for democracy, for progress or for any of the things which hon. members in this house profess to support.
I should like to quote briefly from some authorities who deal with this question of socialism and whom I would much rather
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accept than the spokesmen of the Progressive Conservative party, or anyone who believes the way they do.
For example, the late Archbishop of York, William Temple, said this:
The vast system of beliefs, practices and policies which may roughly be called western civilization . . . was admirably adapted to the production of wealth and power. But its motives were non-Christian, self-interest, competition, the struggle of rival forces. If it is to be a blessing, not a blight, its motives must be transformed.
There was a man who was not afraid of progress, who was not afraid to call a spade a spade. He saw the structure of the capitalist society going in the wrong direction, and said that its motives should be transformed- which is exactly what the C.C.F. is advocating.
Then we have the Papal Encyclical of 1931, in which Pope Pius XI said this:
You assuredly know and lament the ultimate consequences of this individualistic spirit in economic affairs. Free competition is dead; economic dictatorship has taken its place. Unbridled ambition for domination has taken its place. Unbridled ambition for domination has succeeded the desire for gain; the whole economic life has become hard, cruel and relentless in a ghastly measure.
It is rightly contended that certain forms of property must be reserved to the state since they carry with them an opportunity for domination too great to be left to private individuals without injury to the community at large.
I say again that here we have an expression of opinion from a disinterested party, one who is not interested in politics as such but who advises perhaps the largest single unit of faith on earth, that the system which we term capitalism, because of the results it has produced must be changed in certain respects, and he goes so far even, as to suggest certain fundamental changes. Surely we are not so small in this parliament as to oppose progress just because someone calls it socialism.
I wish it were possible for us to drop all the old slogans and all the old names, because I am sure we would be surprised at how much common ground we would find among ourselves. Hon. members of the Progressive Conservative party, such as the hon. member for Davenport (Mr. MacNicol) and the hon. member for Broadview (Mr. Church) have risen in the house and advocated public ownership of public utilities such as telephone systems. Other members of the same party, perhaps in a disguised form, perhaps in a form which they themselves did not recognize, have advocated socialism in the house. In spite of the arguments they used against the Canadian wheat board, when the question
TMr. Zaplitny.]
was put to the house they voted for it. This is another method of doing something collectively which cannot be done individually. In other words, the whole membership of the House of Commons has been going toward what might be described as a socialistic system-and I hesitate to use the word because it antagonizes some hon. members. But actually what we are working toward is a system of co-operation. We are replacing the system of competition and rivalry and cutthroat business practice by a system of co-operation and doing collectively what cannot be done individually.
Call it what you like. We of the C.C.F. call it democratic socialism, and we are attacked for it. Other hon. members must realize they are advocating the same thing, only they have not attached the same name to it.
I come to a quotation from the Roman
Catholic hierarchy of Saskatchewan in 1934 which states:
It is abundantly clear why the church, condemns and abhors the abuses of the materialistic capitalism of our industrial age with its consequent unemployment for the masses and huge fortunes for the few. These evils are so well known that we are saved the trouble of listing them here. Suffice it to say that materialistic capitalism is so un-Christian in its philosophy and evi'l consequence that it must give way to a reconstructed social order based on Christian principles.
What language could be stronger than that? Again it comes from a source which does not take sides politically, but it is sincerely advising its people to be bold enough and to have the spirit of the pioneer to go out into new systems to see if they cannot improve their conditions.
Finally, from the United Church report of 1939 we find this as part of the report of the social service committee of that church:
We are driven to the conclusion that the only thing that will solve our present day social and economic problems will be the absolute Christian socialization of the means of production and distribution of all the necessities of life
There again we find the word "socialization" used. Immediately someone will say, "they mean that the government should take everything over and that everything should be state-owned". Of course it does not mean that. Socialization of the means of production and distribution does not necessarily involve state ownership, nor does it even necessarily involve public ownership in its various forms. But it means that the methods of production and distribution shall serve the ends of society as a- whole. That is why the word "socialization"

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is used. It means the socialization of the motive for which things are done. Instead of things being done for profit, the future motive should be to serve the public, the community, society as a whole.
With these authorities before us, surely no one in the house or elsewhere would seriously attack socialism. Whether they agree or do not agree with the methods which the C.C.F. would use to bring about a spirit of co-operation and good will, surely they cannot disagree that these principles are supported by the greatest spiritual and moral authorities on earth.
I go on to another term which has been bandied around, and that is paternalism. The hon. member for Lanark (Mr. Blair) and the hon. member for Eglinton (Mr. Fleming) said they were opposed to paternalism creeping into the affairs of this country. What is paternalism? The dictionary meaning of it is, anything done in a fatherly way. I do not know why anyone should object strenuously if the government wants to be a father, provided that it does not use the rod too often.
But for the Progressive Conservative party to object to paternalism would be funny if it were not so tragic. We know the history of the tariff structure in this country. We know it was a Conservative prime minister back in 1878 who started the first real tariff wall in this country which exists today, and which governments since then have continued in some modified form. In 1855 in this country we had reciprocity with the United States, which was ended in 1866 because of certain things done by Sir Alexander Galt in 1859. In 1878 Sir John A. Macdonald came out with what is called the national policy. In his opinion it was necessary to set up a tariff structure to prevent manufactured goods from coming into this country so that our own manufacturing industries could get a start.
That system has been extended in different forms. One government would bring the tariff down a little and another would raise it a little bit. Under the Bennett administration we had the highest tariff structure ever in this country. If that is not paternalism I should like to know what is.
How many members of the Progressive Conservative party would say they would favour the removal of all tariffs so far as Canada is concerned? The silence, Mr. Speaker, speaks for itself. There is not one. They are all in favour of paternalism when it comes to the protection of industry, and perhaps they have something there. But why should they attack the government or the C.C.F. because we wish to do something for the other people in this country? There again a term is used without much thought being given to its meaning.
I want to come a little closer and grapple with the question of the sales tax. The hon. member for Eglinton worked himself into quite a lather over the sales tax. He called it a plunder and other words which I do not wish to use because they were not well received by the Chair. What is the record? Why should the hon. member get so excited about it? The record is here. In 1930 the sales tax stood at one per cent. The Bennett administration came into power and in 1931 raised the sales tax to four per cent, and in 1932, to six per cent. In 1935 the Liberal administration came back and raised the sales tax to eight per cent in 1936. There is the history of the sales tax, pure and simple, for everyone to read.


James Garfield Gardiner: It goes back farther than that.


Frederick Samuel Zaplitny: Yes, I could start at zero instead of one per cent.


James Garfield Gardiner: You could have started at six per cent earlier than the year you first mentioned.


Frederick Samuel Zaplitny: It was raised to six per cent by the Conservative administration, or by 600 per cent as compared with 1930. Hon. members of the Progressive Conservative party may say they were not responsible for that, and they would be correct. But the hon. member for Rosedale (Mr. Jackman), speaking in this house on July 9, 1946, had this to say of the sales tax:
Very few of our people today know there is already a sales tax imposed at the wholesale level. Such a tax does not discourage the worker from working, and there is fairness in a tax policy based on the .principle that the more one spends, the more one pays.
I do not agree with him there. He went on:
There is nothing obligatory about paying a tax if one does not purchase.
It appears that the Progressive Conservatives have found a new solution for dodging the sales tax-stop buying. If you do not buy you do not pay the sales tax. But most of us are accustomed to eating and doing things of that sort.
I come now to another statement which I think is quite illuminating. The hon. member for Eglinton talked about social security. I agree with him that we have need of a comprehensive program of social security in this country. The hon. member for Dufferin-Simcoe (Mr. Rowe), speaking in this house in 1946, said at page 1751 of Hansard of that year:
Leading economists tell us we shall have to increase our national income ... by fifty per cent if we are to maintain these new types of fantastic Liberal policies.
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Apparently he was not satisfied with what we were doing because these social services cost too much. I remember vividly the present leader of the opposition rising in his place not very long ago and saying that billion dollar spending must stop. If we were to stop billion dollar spending there would be precious little left for social security. But while attacking the C.C.F., the Progressive Conservatives have forgotten their own record.
I come to something else which will be really interesting to the Progressive Conservative party. I have already pointed out certain contradictions in what they have suggested, but perhaps the crowning one is in what they have done rather in what they have said. In 1942 that party chose a new leader, and only that party could have chosen for its leader a man whom they had described only a few years before as a complete failure.


Mr. GIBSON (Comox-Alberni):: I thought he was from Manitoba?


Frederick Samuel Zaplitny: That is right. That is why he left Manitoba, to take the leadership of the Progressive Conservative party. Here is a document which is probably the only one of its kind in captivity. It starts out with a bold headline, "The Bracken Government Has Failed The Farmer!" It goes on to say:
The Conservative party has always claimed that under Mr. Bracken the farmer was getting a raw deal, but never expected Air. Bracken would admit it.
And further:
Fourteen years ago Air. Bracken and his party were elected on the promise to aid agriculture and reduce the cost of government.
Fourteen years later Air. Bracken, who has always claimed to be the friend of the farmer, admits that agriculture has not had a square deal; and admits he cannot reduce the cost of government.
It goes on:
What can you expect from Air. Bracken who in fourteen years has failed-[DOT]
Failed to do what? Failed:
To reduce the burden of your municipal taxes and municipal debt.
To reduce the interest burden on the provincial debt.
To reduce the cost of government.
That awful phrase again!
To provide hydro-electrical services to rural Manitoba 'at low- cost.
To ensure a fixed price for your wheat.
This is the first time I have heard criticism of a provincial premier for having failed to ensure a fixed price-a fixed price, of all things -by a party which does not believe in a managed economy! It goes on:
The Bracken government has penalized the wage earner and all people with small incomes.

He was then described as "Two per cent Bracken". It goes on:
The two per cent wage tax must be abolished. Cost of government must be reduced.
By whom was this published? It was published by the Conservative Association of Manitoba. Here was a glaring case of a party, after having completely destroyed the reputation of a man whom it had described as a complete failure to agriculture and the wage earners, then, with that characteristic contradiction of terms which they always use, electing him as leader of their party.


Mr. MUTCH:: Will the hon. gentleman tell
us the date of that?


Frederick Samuel Zaplitny: My hon. friend reminds me that it was not the Progressive Conservatives at that time. They have become progressive since then.


Leslie Alexander Mutch: What is the date of it?


Frederick Samuel Zaplitny: As a matter of fact, there is no date on the document. It might have been published yesterday, but I wish to be fair-


Mr. SINCLAIR:: They are still saying the same thing.


Frederick Samuel Zaplitny: I wish to be fair. There is no date on the document, but I know when it was published, because there happened to be a provincial election in Manitoba at that time. It was in 1936.


Leslie Alexander Mutch: Is that from the manifesto of 1936?


Frederick Samuel Zaplitny: Yes.


John Ewen Sinclair: It may still be the manifesto of 1948.


Frederick Samuel Zaplitny: On the back of this
document is the Conservative platform; on the front is this attack on the premier of Manitoba of that day.


Leslie Alexander Mutch: They still feel the same way in Manitoba.


John Ewen Sinclair: The Manitoba Tories still feel the same way.


Frederick Samuel Zaplitny: The reason I am putting these things on the record is, as I said earlier, not that I wish to engage in any carping criticism, or any battle of words with the Conservatives-


Mr. SKEY:: Never.


Frederick Samuel Zaplitny: I wish to point out that they have been making certain statements about the C.C.F. in the last few days; as a matter of fact, in the last few years. They

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have made it their theme song in this debate, and it is necessary to examine the background of a party, so that one may assess whether he can attach any importance to what they say at any time, because if Mr. Bracken was a failure in Manitoba-


John Ewen Sinclair: If!


Frederick Samuel Zaplitny: in the opinion of the
Conservative party, then they made the greatest mistake of their lives when they appointed him as their leader.


John Ewen Sinclair: He was the best they could get.


Frederick Samuel Zaplitny: If he was not a failure in Manitoba, then the Conservative party at that time were not telling the truth. Therefore, from whichever way you take it, it becomes clear that no one can attach very much importance or credence to what the Progressive Conservative party say in that respect at least.


Leslie Alexander Mutch: What makes you think they do?
'Mr. SKEY: I do not think they attach any importance to the remarks of the hon. member.


Frederick Samuel Zaplitny: Of course that is your own privilege, but I have given hon. members to my right every opportunity to deny it if they want to, and to repudiate it if it is not true, and not one of them has said it is not true. I give them the opportunity now, if they wish to rise and repudiate the statement that Mr. Bracken was a failure. They do not do so.


John Ewen Sinclair: The whole party is silent.


Lawrence Wilton Skey: Mr. Bracken is not here at the moment.


Frederick Samuel Zaplitny: I want to make it clear, Mr. Speaker, that I am not attacking the leader of the opposition (Mr. Bracken). As a matter of fact, I have not said one word which could be construed as attacking him.


John Ewen Sinclair: Quite right.


Frederick Samuel Zaplitny: This document put out by the Conservative Association of Manitoba attacked him. As I said, the reason I am putting this on the record is that the people who read the debates of the House of Commons and who read the press may be able properly to assess the amount of credence and weight that can be given to the statements of the Progressive Conservative party, which first abuses a man, destroys him, and then elects him as leader of their own party.
I now want to refer to another matter-


Mr. PROBE:: Here they come in.


James Arthur Ross: Repeat it; we have missed it.


Frederick Samuel Zaplitny: What I am going to say now will be a little more pleasant to the ears of my hon. friends to the right-


James Arthur Ross: We just consider where it comes from.


Frederick Samuel Zaplitny: -but it may not be quite so pleasant to my hon. friends across the way. We have been getting a lot of information recently. This is an article which appeared in a journal and was written by Mr. Tom Horabin, who was for eleven years the chief Liberal whip in the British House of Commons. I wish to quote from this to show what it will be necessary for the people of Canada to believe in, if they wish progress, regardless of whether they call themselves Liberals or Progressives or anything else, people who believe in taking the steps which will consolidate the gains we have made in our social services, extend them and also find some new social motive for production and distribution.
As most hon. members know, Mr. Horabin left the Liberal party and joined the Labour party, and he explains it in this way:
My decision to leave the Liberal party, and subsequently join the Labour party was not easy; I was naturally reluctant to sever association with old political friends, but I was faced, as every Liberal is faced today, by a moral issue which cannot be evaded.
I wish to commend that to my Liberal friends across the way, particularly the private members. Then Mr. Horabin goes on to say:
Throughout this parliament the Labour government and the Labour party have shown their determination to preserve the essential freedoms, of speech, press, and association. At the same time they have shown their determination to add to these another essential freedom, which the Tories don't like, economic freedom for every man, woman and child in the country- and in this the Labour government is succeeding.
It is heartening to hear words of that type coming from a Liberal member of the British House of Commons.


John Ewen Sinclair: An apostate.


Frederick Samuel Zaplitny: I would not want to quote from a statement of a Labour member, because naturally it would be said1 that he would not say anything about any government of which he was a supporter. Mr. Horabin was for eleven years the chief Liberal whip, and he now says these things about the Labour government. Then he goes on to say:
By their policy of full employment, control of the cost of living through food subsidies, social services that ensure adequate allowances when people are too old, or sick or for some other reason cannot work, the Labour govern-
The Budget-Mr. Zaplitny

merit are removing the fear of want for the first time from the lives of the British people.
Every Liberal who wants to carry out liberal principles in the context of the modern world must of necessity vote Labour and fight the Tories to the death.
I am not going to suggest that the Liberals of this country should fight the Tories to the death; we are not going to take our politics that seriously, but I want to impress the Liberals with this, that what is happening over in Great. Britain is the exact reverse of what is happening in this country, because, instead of the true .Liberals, those who are progressive in the best sense of the word, going in the direction that they have to go if they are to carry out Liberal principles, they are in the various provinces across this country joining with the Conservative party to form coalition governments. I want to say this in a friendly way, that that type of policy will prove in the long run disastrous to the Liberal party in this country, because they have come to the stage where they have either to continue along the road of progress or to join a party which, in all its history and in all its beliefs, does not believe in going forward but is a party of the past.


The ACTING SPEAKER (Mr. Golding):: I must remind the hon. member that his time has expired.


John Ewen Sinclair: Will the hon. member permit one question? The hon. member was speaking of a coalition of Tories and Liberals. Bad as that may be, does he think it is quite as bad as the present coalition between the C.C.F. and the communists?


John Oliver Probe: That is a dirty lie.


Mr. CASTLEDEN:: There is no such
coalition, and the hon. member knows it.


William Henry Golding: The hon. member for Bruce has the floor.


Frederick Samuel Zaplitny: Will the hon. member permit me to answer the question?


Mr. A. E. ROBINSON (Bruce):: Mr. Speaker, in rising to take part in the debate on the budget, if it is permissible to call such a thing a budget-


George Hugh Castleden: On a point of privilege, I think a question was directed to the hon. member for Dauphin (Mr. Zaplitny).


William Henry Golding: Order.


George Hugh Castleden: On a point of privilege, a certain accusation was made by the hon. member for Vancouver North (Mr. Sinclair), and the hon. member for Dauphin should be given the opportunity to reply.


James Arthur Ross: There is no point of privilege.


William Henry Golding: I would remind hon. members that the house is not in committee. The hon. member for Bruce has the floor.


Frederick Samuel Zaplitny: Will the hon. member allow me to answer the question?


Andrew Ernest Robinson: I have to go by the chairman's ruling.


John Oliver Probe: The old coalition is at work again.


George Hugh Castleden: There is no such coalition and the hon. member for Vancouver North knows it.


William Henry Golding: Order.


Andrew Ernest Robinson: In rising to speak in this debate on the budget, if it is possible to call it a budget, I shall endeavour to -bring out a few facts and suggestions which I think will be of benefit to the gentleman who brings in the budget the next time. The Minister of Finance (Mr. Abbott) should have stayed as Minister of National Defence, because I am sure that anybody who would venture to bring in a budget to make so many people throughout Canada mad has a great nerve, and at the present time that is what is required of a Minister of Defence for Canada.
I am told that probably I am the last speaker in the debate, but I want it understood that I am not the least. The hon. member for Dauphin (Mr. Zaplitny) referred to some remarks of the hon. member for Eglinton (Mr. Fleming) to the effect that the Liberals were following too much the tactics of the C.C.F. Well, we do not have to look back very far to find that the government have been exercising a lot of control, and, as I understand the tactics of the party to my left, they, too, exercise a lot of control in their own minds.
The only way in which I will attempt to answer the criticism, though I do not know that I should call it criticism, of the last speaker in regard to what he termed the Tory party-it is the Progressive Conservative party -is to say that we are very glad he is finding fault with us. I might also say that, call it democratic socialism, or C.C.F. or whatever you like, they are still after state control. The hon. gentleman who spoke last mentioned the communists. The communists also want state control. The only difference between those two parties is that, being both after

The Budget-Mr. A. E. Robinson
the same goal, they are jealous of each other. I may say, however, that in the provincial election in Ontario which is being held on June 7, Tim Buck and his followers are behind the C.C.F., and any remarks they make are along the line that if a C.C.F. government is elected in Ontario they will be giving them all the power of all their unmoral support which they are allowed to.


Mr. GILLIS:: What has that to do with the
budget?


Andrew Ernest Robinson: Quite a bit, because we have listened to a lot of this stuff about Manitoba in the last few minutes. The last few words I said are more or less incidental, because I do not think this parliament will be bothered for many more years with such speeches as those we have heard in the last half hour.


Clarence Gillis: Or the one we are listening to now.


Andrew Ernest Robinson: Thank you. I have been sent here to represent one of the best counties in Canada.


Mr. McIVOR:: Question.


Andrew Ernest Robinson: That county is Bruce, and I am proud to be here representing it. I should like to give the house a few facts concerning the county. I see an hon. member smiling. He was born there and he knows that anything I say about it will be true. This year Bruce is 100 years old, and we are proud to say that Bruce has sent more pioneers to the four western provinces than has any other county in Canada.
I wish to say, Mr. Speaker, that we shall be holding a two-weeks home-coming in Bruce this year, and in due course all hon. members will receive an invitation to attend.


Mr. GRANT:: The C.C.F. and all?


Andrew Ernest Robinson: All hon. members of the House of Commons.


Thomas Vincent Grant: The C.C.F. too?


Andrew Ernest Robinson: Yes. I may say for the benefit of hon. members from the west that a special train will leave Vancouver on July 15, arriving in Bruce on the opening day of its centennial. According to the last reports, that special train will carry three sections when leaving Winnipeg.
Bruce county has 300 miles of shoreline and most of that takes in what is called the Bruce peninsula. That peninsula has been spoken of before as a model site for a national park, and I see that this year we are budgeting for
$5,000,000 for national parks in Canada. I hope that the good people of that peninsula will see fit to have that district made into a national park and benefit to a certain extent from that $5,000,000.


Mr. HARRIS (Danforth):: And the fishing is good.


Andrew Ernest Robinson: Incidentally, the fishing is very good. The people in that county are looking forward to such a thing, because we have under reforestation over
12,000	acres of the district. We have also in Bruce a lot of good farming land. We are blessed with a good agricultural representative and assistants. Owing to the initiative of these representatives, we have tuberculosis testing in cattle under way, soil testing, warble fly control, barberry extermination, calf vaccination for Bang's disease and, as I have mentioned, reforestation, as well as fifteen calf clubs organized.
You can readily believe from what I have said, Mr. Speaker, that we have a wonderful county; nevertheless in the last seven years, the rural population has declined 3,385. This means that there are many empty houses in Bruce. It means that there is a good deal of land not producing to capacity for lack of help.
I charge this government with being responsible for these conditions. I charge the government with encouraging centralization over the last number of years. I can hardly see how the hon. member for Renfrew North (Mr. Warren) can expect ever to come back as a farmer member elected to the House of Commons in view of the record of the Liberal government so far as its treatment of farmers is concerned. The same applies to the hon. member for Grey-Bruce (Mr. Harris) and the hon. member for Huron-Perth (Mr. Golding).
For the good of Canada, whatever government is in power, it must concentrate on ways and means to encourage decentralization both in population and in power. The government must give greater exemptions in income tax to farmers for the long hours of work which the farmer himself puts in and the work done by his wife and family.
Speaking of exemptions from income tax, I would also suggest that the government consider exemptions up to $3,000 for all men and women up to the age of thirty. This is something new and is worthy of consideration by the Minister of Finance. It is sound not only because I thought of it myself, but the more I think of it the more worthy I think it is of consideration. I repeat that there should be an exemption up to $3,000 for all

The Budget-Mr. A. E. Robinson
men and women up to the age of thirty. By this, all those young people will save money enough to marry and raise families. Today there are couples who are afraid to get married on the small amount they can save. In my opinion the increasing of population by this method would be much more satisfactory than spending large sums on immigration. It would also do away with a lot of the illegitimate baby scandals we read about in different parts of Canada.
I wish to say a few words about the liquor problem we have in Canada. I know all hon. members will agree that the liquor problem is one of the major problems in Canada today, whether we like it or not.


Thomas Vincent Grant: Oh, we like it,


An hon. MEMBER:: We like it too much.


Mr. McCANN:: That is not where the kick is.


Mr. MacNICOL:: The best thing to do is to leave it alone.


Andrew Ernest Robinson: In 1945 the dominion and provincial governments of Canada collected $163,386,017 in liquor taxes. A great deal of this tax was taken out of the poor unfortunate people who drink.


Some hon. MEMBERS:: Oh, oh.


James Joseph McCann: Do not look across here.


Andrew Ernest Robinson: These are my suggestions; first, lower the taxes on all alcoholic beverages.


Thomas Vincent Grant: No.


An hon. MEMBER:: More and better cocktails.


Andrew Ernest Robinson: Second, earmark a good percentage of the taxes collected for temperance education in our schools. Third, lower the alcoholic content of our beer-


Some hon. MEMBERS:: Oh, no.


Andrew Ernest Robinson: -along the line of the United States content.


James Joseph McCann: Four point four; we tried that once.


Mr. MICHAUD:: Nobody will drink it.


Andrew Ernest Robinson: I might say that I had the privilege of spending two months in a camp in Pennsylvania, and the beer content was about two-thirdis of the content in Canada today. But the men who drank that beer got just as much kick out of it, and had a lot more pleasure the next day than is experienced by those who drink beer with the content we have in Canada.


An hon. MEMBER:: They must have weak stomachs.


Andrew Ernest Robinson: To show that high prices do not curtail drinking, I wish to state that in 1893 when liquor was very cheap, the consumption of absolute alcohol per capita in Canada was 0-499 gallons; in 1945, with our high prices, the consumption was 0-630 gallons. These figures I have given might be larger if they were taken up to date. I may say that less liquor revenue would make all governments more interested in temperance education.
I wish to say just a few words about controls, from which we in Canada have suffered so much-


An hon. MEMBER:: Birth control?


Andrew Ernest Robinson: -and from which we would suffer more if we had1 a C.C.F. government. I know that the C.C.F. group on my left will not agree, because they wish state control of everything, the same as the Labour Progressive or communist party want.


Stanley Howard Knowles: More nonsense.


Andrew Ernest Robinson: Speaking of controls, may I say that from June 1, 1947, to the end of that year, all dairy products were taken out from under control except cheese. During that period, all dairy products except cheese increased in production. Butter alone increased 17,000,000 pounds in that time, compared with production in the same period of the year before. If those controls had not been on dairy products, this house and the senate would not have been debating the margarine bill, and wasting our time in doing so, as we have been doing.
To come back to party politics, I wish to say that in Bruce we have a good active federation of agriculture, and also a few co-operatives. Some people would lead one to believe that both these lean toward the party to the left, the C.C.F., but I think I am safe in saying that in Bruce there is no such calamity hanging over our heads.


An hon. MEMBER:: Safe for another
election.


Andrew Ernest Robinson: the past I am of the opinion that we shall have enough men come forward to the services voluntarily.
I should also like to see Canada enter into an extensive exchange of scholarships with every other nation in the world. I believe we have the machinery for this set-up at the present time under the united nations and through UNESCO, but the idea should be followed up. I know it is not new, but I do not believe it has been pushed as far as it should. It would be one of the greatest influences toward better understanding in the world, and would do more to bring peace than anything else I can think of.


Clarence Gillis: Mr. Speaker, I would be quite willing to see a vote on the C.C.F. amendment tonight but for the fact that, once that amendment is out of the way, there will not be much left to talk about. I should not like to be placed in the position of having to vote on the straight, anaemic amendment moved by the Conservative party. It seemed to me that they did not have much to talk about, or much to propose, or any serious objections to the budget, when they merely presented a motion stating that the people of this country have no confidence in the government. I would not want to spend much time in this house, or stay too long in the vacuum in which I live here in Ottawa, trying to tell anyone that I know very much about what the people of this country are thinking. So I am taking these fifteen minutes tonight for the purpose of drawing attention to the amendment moved by this party, and the amendment moved by the Conservative party.
Whether we like it or not, the budget is a document which required careful preparation. It is a bookkeeping statement presented each year by the government in order to set out the financial picture of the country; and in order to criticize it I think one must have something to suggest in its place. At least one must have certain points that he can suggest to the government should be brought in, and I cannot see my way clear to support an amendment which merely states that the people of this country have no confidence in the present government.


James Arthur Ross: Have you confidence?


Clarence Gillis: I am not saying that, but I say I do not imagine the people of this country have any confidence in the people who proposed the amendment, either. I think that has been pretty clearly demonstrated all over this country. Go to British Columbia, Alberta. Saskatchewan or Nova Scotia; what

has happened there to the Conservative party? It has just disappeared. The remnants have their arms around the neck of the government and are holding themselves up as coalitionists.
A few minutes ago the hon. member for Vancouver North (Mr. Sinclair) threw something at the hon. member for Dauphin (Mr. Zaplitny) just after he sat down, after having referred to the coalitions in force all over Canada today between the Conservatives and the Liberals, who are trying to hang on to the old, worn-out system. The hon. member for Vancouver North rose and asked, "Well, is that any worse than the coalition which exists between the CC.F. and the communist party?" The hon. member for Dauphin was not permitted to reply, but the answer is this. I do not blame the hon. member for Vancouver North for being allergic to the situation out in British Columbia. From what I can gather through the grapevine, he expects to inherit the mess out there. He may have to lead the government there some time; and what a position to place a Liberal in, to sit him on the government benches with the remnants of the Tory party and have, to make a deal with them as to the kind of legislation that should be passed! So that accounts for the suggestion he threw out, which he knows is absolutely incorrect, because in this house the' hon. member for Rosetown-Biggar (Mr. Coldwell) and others have clearly stated the position of the C.C.F. with respect to the communist party.
Now I think we have had enough of that sort of thing.


An hon. MEMBER:: I think so.


Clarence Gillis: I do not blame you fellows for being jittery about that sort of subject, because you are very vulnerable. I would suggest that some of you older members brief the younger ones and tell them not to stick out their necks so often.
I want now to get around to the budget. As I said before, it required a great deal of preparation; and the Minister of Finance (Mr. Abbott) made a very good job of presenting it to the house. He was convinced, I think, that he was right. This afternoon the Minister of Justice (Mr. Ilsley), who had the job of looking after the Department of Finance all through the war, also did a good job. He made an excellent speech, and I am sorry that so far he is the only maritime member to have taken part in this debate. But I should like to say to my hon. friends over here to the extreme right that the Minister of Finance, charged with the responsibility of

The Budget-Mr. Gillis
doing his bookkeeping and keeping the country's financial set-up in balance under the mechanics of the society in which we live, did it in the only way open to him.
This afternoon the Minister of Justice made an excellent speech in support of a continuation of the status quo. He could not make any other kind of speech and be a private enterpriser. But I cannot understand how the hon. member over here in the Tory party who is supposed to be a better private enterpriser than any Liberal, can get up and object to the kind of statement brought down by the Minister of Finance or to the kind of speech made by the Minister of Justice this afternoon. I am giving those hon. gentlemen credit for supporting the mechanics of the society in which they believe; and I am only glad that this gang over here are not over there, because I know the budget would have been much worse. This business of saying, "We believe the people of this country no longer have confidence in the government," and Stopping there shows clearly, as the speeches they have made show clearly, that there is very little in this budget with which they can quarrel. They quibble about it, but there has not been any constructive objection in opposition to it, and the amendment certainly-


An hon. MEMBER:: We are listening to you.


Clarence Gillis: And you will hear something before I have finished. I am only fooling with you yet.


James Arthur Ross: For sure?


Clarence Gillis: And I will have thirty-five minutes of this tomorrow afternoon. The Progressive Conservative party has offered an amendment of only four lines to this 56-page document, an amendment which says that the people of this country have no confidence in the government. I speak tonight because I would not be able to speak on our amendment, had it gone to a vote tonight.
For the benefit of hon. members over here, I am going to read our amendment, because I am reasonably sure that most of them have not read it. And those who did hear it when it was moved by the hon. member for Rosetown-Biggar I am reasonably sure have forgotten it. Let me point this out, that I have heard a good deal of talk today about the low-income group, and that sort of stuff, which is pretty good political capital in this country. But if you will read our amendment, you will find that it says this:
That the said amendment be amended by inserting after the word "government" and before the word "does" in the second line of the 5849-282
amendment, the following words:	". . . has
failed to relieve the excessive burden of taxation on the low-income groups of the Canadian people:
(a)	By failing to increase the amouuts of exemption from income tax from the present levels to $1,250 for single and $2,500 for married persons, and
(b)	By failing to remove or substantially reduce the burden of sales and excise taxes which bear most heavily on those suffering from low income and the present high cost of living.
And further, the government has failed to establish a public investment board to assure the channelling of capital investment into socially desirable projects as a means of maintaining full employment, increasing production and raising the standard of living of the Canadian people, and . .
The hon. member for Muskoka-Ontario (Mr. Macdonnell) and other hon. members over here whom I have heard speak have picked on these very items-not the last one, of course-but on low-income groups, the sales tax and the excise tax. Why did they not include these things in their amendment? Why did they not ask for an amendment to the motion to adopt the budget by writing in specifically the things they believe the government has not done? That is one reason I say the official opposition should withdraw the amendment and get it out of the way. It is that trick of just a nonconfidence motion with nothing behind it- it is so old that it has whiskers on it. There is no solution there. Why not just withdraw it and allow the subamendment to be the main amendment? Then hon. members of the Progressive Conservative party could stand behind the things they have said in the House of Commons-those few of them who have expressed any real opinions in regard to the budget.


An hon. MEMBER:: Get down to business.


Clarence Gillis: That is just a little advice I am giving my hon. friends. Let us try to get some clarification into this thing. Let us realize we are discussing a document that has a lot of meat in it. Let us write clearly into the amendment the things the government should have done and has not done. Then let us stand up here and be counted as to where we stand with respect to those points the government did not introduce.
With respect to relief for low-income groups, I have heard the statement made on several occasions by the Minister of Finance that the income tax in Canada is much lower than in the United States, and he placed on record in that connection a table showing the tax for unmarried persons in the country. That
The Budget-Mr. Gillis

table does not coincide with a table I have. I believe the one I have is reliable, because it comes from the Financial Post of April 17, 1948. This table gives the 1948 rates of taxation for a married man with two children, and gives a comparison of Canadian and United States rates. The table states that in the category I have mentioned the taxpayer in Canada pays $36, while in the same category in the United States he pays no tax. I am referring to the $2,000 bracket. Then, in the $4,000 bracket in Canada there is a tax of $430 and in the United States a tax of only $266. This is for a married man with two children. Then, for the $10,000 group the tax in Canada is $1,930, while in the United States it is $1,361. The same ratio carries right through to $25,000.
So that the argument that taxes are much lower in Canada than in the United States does not hold, if the table set out in this issue of the Financial Post is correct.
On motion of Mr. Gillis the debate was adjourned.



BUSINESS OF THE HOUSE

Stanley Howard Knowles: What is the business for tomorrow?


Douglas Charles Abbott: Continue with the budget debate.


Gordon Graydon: And when we finish?


Douglas Charles Abbott: Supply.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, May 27, 1948