VACANCIES

Mr. SPEAKER:: I have the honour to inform the house that I have received communications from several members notifying me that the following vacancies have occurred in the representation, viz:
Of Right Hon. Ian Alistair Mackenzie, member for the electoral district of Vancouver Centre, consequent upon his being summoned to the senate.
Of William Edmund Newton Sinclair, Esquire, member for the electoral district of Ontario, by decease.
I have accordingly issued my warrants to the chief electoral officer to make out new writs of election for the said electoral districts respectively.



COMMONWEALTH AIR TRAINING PLAN


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, at the close of last year I received a letter signed by the high commissioners in Canada for the United Kingdom, Australia and New Zealand, informing me that the governments of their respective countries jointly desired, as a permanent memorial of the British commonwealth air training plan, to present a gift of wrought iron gates for the entrance to the air station at Trenton, Ontario. Attached to the letter was a preliminary sketch of the proposed memorial gates.
An earlier proposal was an avenue of English oak trees terminated at either end by pavilions of native timbers from Australia and New Zealand. In due course the oak trees wTere planted. On reconsideration it was felt that, due to impermanence, wooden pavilions would not be entirely suitable. The governments of the United Kingdom, Australia and New Zealand accordingly decided that wrought iron gates for the entrance to the air station, where they would be in line with the oak trees already growing there, would be a more suitable gift.
It is with warm appreciation of its value and significance that the government of Canada, on behalf of the Canadian people, has accepted this memorial gift. We in Canada, in common with free peoples the world over, will ever remember the contribution to victory which resulted from the British commonwealth air training plan. The young men of the nations of the commonwealth who trained in Canada will long be gratefully remembered. Their residence in our homeland served to strengthen the bonds of kinship which unite the peoples of our respective countries. These beautiful gates will serve not only as a memorial of efforts made in the common cause, but as an enduring symbol of the unity of the peoples of the British commonwealth.



BUSINESS OF THE HOUSE


Mr. JOHN BRACKEN (Leader of the Opposition):: Mr. Speaker, according to the order paper, the debate on the address in reply to the speech from the throne appears at the very end of the proceedings, which means that hon. members will be denied an opportunity to express their views on current problems until some indefinite time in the future. In the press the other day I noticed that the Prime Minister has a new plan for meeting the urgent problem which is before the public today, namely the rising cost of living. In view of the fact that this question is not before us, and since apparently we are to be denied the right to continue immediately the debate on the speech from the throne, I wish to move, seconded by-


James Horace King: Order. May I suggest to the hon. gentleman that he wait until we are through with the routine proceedings.


John Bracken: If you will assure me, Mr. Speaker, that it will not then be too late, that is quite acceptable.


William Lyon Mackenzie King: I had one or two other matters on which I thought the house should have immediate information, and I hoped to have an opportunity of making a statement to the house on what the government proposes with regard to the program for this portion of the session. At this moment, however, I should like to make a
53S
The Ministry

statement with respect to the changes that have taken place in the ministry during the course of the adjournment.



THE MINISTRY


William Lyon Mackenzie King: As hon. members are aware, on January 19 the Minister of Veterans Affairs, the Right Hon. Ian A. Mackenzie, resigned. Mr. Mackenzie was later appointed to the senate. I hold in my hand copies of the letters which were exchanged between Mr. Mackenzie and myself. I could read them to the house, but perhaps hon. members would give their consent to have them appear in Hansard.
(The correspondence follows):
Canada
Minister of Veterans Affairs
Ottawa, January 15, 1918.
My dear Prime Minister:-
At various times during the last two years I brought to your attention medical certificates indicating that my health was somewhat impaired. Although the condition is now greatly improved, I feel it my duty to separate myself, for the time being, at least, from administrative duties.
Therefore, now, before the session resumes, I, with deep regret, submit my resignation from your able administration.
May I take this opportunity of tendering to you. sir, my very deep appreciation for many kindnesses and much encouragement during the time I served with you. and also to ask you to thank my colleagues for unfailing courtesy in our united service to our country.
I am proud to say that the Department of Veterans Affairs, over which I have presided for eight years, is in an excellent state of efficient organization. It has rendered and is rendering noble service to those who served and saved Canada in the dark days.
Yours sincerely,
(Sgd.) Ian A. Mackenzie The Right Honourable W. L. Mackenzie King, Prime Minister of Canada,
Ottawa, Ontario.
Office of the Prime Minister Canada
Ottawa, January 16, 1948.
The Right Hon. Ian Mackenzie, P.C., M.P., Minister of Veterans Affairs,
Ottawa.
My dear Mackenzie:
I have received your letter of yesterday, in which, because of impaired health, you ask to be relieved of your present administrative duties as Minister of Veterans Affairs over which department you have presided since its inception.	_
In the light of the circumstances you mention, I feel I have no alternative but to submit your resignation to the Governor General and to
[Mr. Mackenzie King.)
advise His Excellency's acceptance of it. Before, however, submitting your resignation to His Excellency, may I say how greatly I regret the circumstances which render that step advisable, and how sincerely I trust that freedom from the responsibilities of office will afford just what is required to effect a further restoration of your health and strength.
May I also say how very much I shall miss the close association we have enjoyed over many years in the cabinet, and your helpful co-operation in the work of the administration. I know these feelings will be shared by all our colleagues.
While I realize that freedom from administrative duties will afford opportunity for further improvement in your health. I should be sorry ' if the severance of your relations with the Department of Veterans Affairs were to mean that parliament, at any future time, would lose the benefit of your knowledge and understanding of the problems of Canada's veterans, and of your wide and long experience in public affairs.
To ensure your continued membership in the parliament of Canada, I should, with the consent of our colleagues, be prepared to recommend to His Excellency your immediate appointment to the Senate of Canada, to fill one of the vacancies at present existing in the representation of British Columbia in the upper house.
As appointment to the Senate would involve your giving up your seat in the House of Commons, I should be grateful if, before I speak of the matter in council, you would let me know of your willingness to accept an appointment to the Senate, should the appointment be recommended by the cabinet and approved by His Excellency.
With kindest personal regards,
Yours very sincerely',
(Sgd.) W. h. Mackenzie King.
On the resignation of the Right Hon. Ian Mackenzie, as Minister of Veterans Affairs, the Hon. Milton Gregg, who had been Minister of Fisheries, was appointed to the portfolio of Veterans Affairs. He resigned the portfolio of Fisheries. The Hon. James A. MacKinnon was appointed Minister of Fisheries and resigned as Minister of Trade and Commerce. The Right Hon. Clarence Howe was appointed Minister of Trade and Commerce. Mr. Howe will continue to hold the portfolio of Minister of Reconstruction and Supply, which he has held for some time past. The affairs of the Department of Reconstruction and Supply are being gradually wound up. The work of the Department of National War Services has 'been completed. The department itself having ceased to exist, Hon. James J. McCann's resignation as minister of that department has been accepted.
I desire to table the orders in council with respect to the portfolios I have mentioned. They include the appointment of Mr. Howe as Minister of Trade and Commerce, of Mr. MacKinnon as Minister of Fisheries, and Mr. Gregg as Minister of Veterans Affairs, and

Business of the House
the acceptance of the resignation of Mr. McCann as Minister of National War Services.



INTERNAL ECONOMY COMMISSION


William Lyon Mackenzie King: Mr. Speaker, as the Right Hon. Ian A. Mackenzie was a member of the internal economy commission and is no longer a member of this house, it is necessary that Mr. Mackenzie's place on that commission be filled. I hold in my hand a communication from His Excellency the Governor General, signed by his own hand, with respect to the appointment of the Right Hon. J. L. Usley to replace Mr. Mackenzie on that commission.


James Horace King: I have the honour to inform the house that a message has been received from His Excellency the Governor General, as follows:
Alexander of Tunis.
The Governor General transmits to the House of Commons a certified copy of an approved minute of council amending the composition of the commission appointed to act, with the Speaker of the House of Commons, for the purposes and under the provisions of chapter 145 of the Revised Statutes of Canada, 1927, intituled An Act Respecting the House of Commons. to read as follows: The [Right Honourable James Lorimer Ilsley. Minister of Justice; The Honourable J. A. MacKinnon, Minister of Fisheries; the Right Honourable Louis S. St. Laurent, Secretary of State for External Affairs; the Honourable D. C. Abbott, Minister of Finance.
Government House, Ottawa,
January 26, 1948



STANDING COMMITTEES


William Lyon Mackenzie King: That the name of Mr. Claxton be substituted for that of Mr. Mackenzie on the special committee appointed to prepare and report with all convenient speed lists of members to compose the standing committees of the house under standing order 63.


[Stage Direction]
Motion agreed to.


William Lyon Mackenzie King: Mr. Speaker, may I now
say a word to the house about the business, as the government has thought it can most effectively be carried on at this time.
When the house met in December last the proceedings of the house were governed by the following motion;
That the debate on the address in reply to the speech of His Excellency the Governor General to both houses of parliament be the first order of business on Monday December 8th instant, and that this order be followed by government notices of motion and government orders notwithstanding anything in standing order 15.
That motion was agreed to on December 8. At the time it was agreed .to I stated it was not the government's intention to have the motion stand indefinitely, but that it would remain at least until the end of that part of the session which was being held before Christmas, or if sittings had continued after Christmas it would stand until the old year was out.
No question was asked at the conclusion of sitting on the last day the house sat before the Christmas adjournment as to what business would be proceeded with today. If there had been, it would have been mentioned at the time that we would continue with the debate on the exchange conservation measure, which was before the house at the time. There having been no formal statement in the house to that effect, I asked my secretary at the end of last week to see that the leaders of the different parties were informed that this would be the first order of business today.
The government has had under consideration the very point my hon. friend the leader of the opposition has brought up, namely the question of how long we should postpone further debate on the address. Hon. members well know that the emergency measures, so named, are important measures, and should be proceeded with as soon as possible. However we have felt that hon. members would undoubtedly wish to get under way with the debate on the address, so as not to be deprived of opportunities thus afforded.
We have thought that probably the whole situation could be best met if for two days in the week we were to take up the debate on the address, and for three days we were to discuss the emergency measures. So far as the government is concerned this would have the advantage of allowing the Minister of Finance a little more time for the preparation of further measures he will have to bring on later. Also in .this way the minister would not have to be in the house continuously throughout the week in connection noth the emergency measures. The time given over to debate on the address would permit of his having some opportunity to consider other matters.
Business oj the House

Except to the extent I have just indicated, we have felt that the emergency measures should have precedence over any others. In this connection there will be, of course, later on the transitional powers bill, one similar to the one passed at the last session of palia-ment. It would be in the same form, but not as lengthy. If the orders in council appended to this bill are to be continued in force, that measure of necessity would have to pass before the end of the present fiscal year.
I might say at once that I am quite open to receive comment from hon. members opposite with respect to this suggested program. If there is any real disagreement between us we can consider what other steps might be preferable or advisable. I hope, however, that upon reflection hon. members will see that in the end we shall probably make more progress with these emergency measures and the debate on the address if they are carried on more or less simultaneously during this part of the session.
The proposal, then, w'ould be to proceed in that order, giving priority to government business until the exchange conservation measures and the transitional powers bill are disposed of. The exchange conservation measures would include items numbers 4 and 5 on today's order paper, the tax resolutions already introduced, and the bills to be based upon them. The transitional powers bill, as I have said, will be in a form similar to that of last year, but the schedule will be shorter.
Of course all this is subject to the proposal that we reserve two days each week- and I am suggesting that they be Wednesday and Thursday-for the debate on the address. The government would wish to reserve its right to bring in any special measure or any important measure which might have to be dealt with within a certain time. At this moment I am not aware of anything except one bill that relates to the Farm Improvement Loans Act. This would have to be dealt with before February 15 because of a time limit fixed by the existing legislation.
Motions to set up standing and special committees of the house will be taken up from time to time as circumstances warrant. Once the speech from the throne and the other measures I have mentioned have been disposed of, the government proposes then to proceed with the resolution respecting the Geneva agreements and other government business.
It might help to regularize the discussion were I now to present to the house the motion that I had in mind in regard to

taking two days a week for the debate on the address, and I would therefore move, seconded by the Minister of Justice (Mr. Ilsley):
That the order for the consideration of the motion for an address to His Excellency the Governor General in reply to his speech at the opening of the session be considered on Wednesdays and Thursdays until disposed of and notwithstanding the resolution passed by the house on December 8, 1947.


Mr. GREEN:: What is the plan with regard to private members' days?


William Lyon Mackenzie King: The plan is to allow private members' days to stand until these measures have been considered. We would then consider whether it is advisable to have private members' days then or later on.


Mr. BROOKS:: The Prime Minister has spoken about setting up committees. Is it the intention to set up a veterans affairs committee?


William Lyon Mackenzie King: I think it was mentioned by the former minister of veterans affairs that a veterans committee would be set up. It is the intention of the government that this committee wouldi be much smaller than the one which took up veterans matters in previous sessions.


Alfred Johnson Brooks: Can the Prime Minister give us any idea of the scope of the work that would be done by the committee and the intentions of the government in that connection?


William Lyon Mackenzie King: I would prefer that that question be answered by the Minister of Veterans Affairs (Mr. Gregg) when the resolution is before the house.


John Bracken: The point I was concerned with when I rose to speak was as to when the house would have an opportunity of discussing the question which most of us think is the urgent question before the people of this country, namely, the rapid rise in the cost of living. When I saw that the debate on the address was postponed, and not knowing what the government's policy was going to be, and when we had no indication as to when the parliamentary committee proposed by the Prime Minister a few days ago would be set up, I intended to move the adjournment of the house to discuss the particular matter of the high cost of living. We feel that however important the exchange conservation program of the government may be, however important the transitional powers measure may be. the rise in the cost of living far transcends them in importance.
The Prime Minister has brought forward a motion under which two days out of the

Business of the House
five will be given to a discussion of the speech from the throne, when private members can bring forward their grievances or other suggestions. In so far as that program is concerned I have no objection. I think it is quite reasonable. But I should like to ask the Prime 'Minister when he intends to bring forward the motion to set up a parliamentary committee to deal with price spreads. We feel that that policy is not adequate, that it is simply an effort to shift responsibility from the government to this house and1 to postpone unnecessarily the consideration of high living costs. We know from the experience we have had in connection with the work of previous parliamentary committees just what it will mean. We do not think that plan is adequate.
So far as the general program, aside from the particular issue of the cost of living, is concerned, we on this side will accept the Prime Minister's motion. I should like to ask him to indicate how soon the motion on price spreads will be brought forward. We think it ought to be discussed at the earliest possible time-and we mean early. If we could have such an assurance, then I would not proceed with this motion today. But in view of the importance of this matter, in view of the different lines of attack which different parties are advancing I thing it is in the interests of the public that that one issue should be aired in order that all may understand the situation and the best ways of arriving at a solution.
In conclusion may I say that I accept the Prime Minister's suggested program, namely, two days in the week for the speech from the throne and three days for government business, but I should like his assurance that the motion to set up a committee to deal with the rise in the cost of living will be brought forward early. I suggest that it be almost immediately. I do not think that is an unreasonable request to make of the Prime Minister. If he will accept that, then I would not go forward today with this motion, but otherwise I would feel it necessary to do so.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, during the two weeks session before Christmas the house agreed to defer discussion on the address. We were agreeable because we felt that the increase in the cost of living and the extension of controls was the principal business before the house. We made our position clear at that time. I am disappointed that the Prime Minister has made the suggestion he has. I believe that the mixing up of two or three debates in this house is not good business, either for the
house or for any one of the debates. What we should do is to carry on and complete one debate before we initiate another.
The debate on the address is looked upon by hon. members, particularly those who do not have the chance of speaking as much as some of the rest of us, as an opportunity to air the grievances of their constituents and to discuss general problems affecting domestic and even international relations. I am sorry that the leader of the opposition has agreed to the program suggested by the Prime Minister. From what he said I gathered that the Prime Minister was quite willing to hear suggestions from this side of the house and was not going to press unnecessarily the program placed before the house.
I think I speak for those who sit around me, although I have had no opportunity of discussing the matter with them. I might say that I was not in my office on Saturday and did not know of the telephone call until it was too late to do anything about it. I want to make it quite clear that as far as we are concerned we think we should proceed immediately with the debate on the address, conclude that debate and then go on to the other matters that are before us. We would have agreed gladly to an interruption in the debate on the address in order to set up any committees or to deal with the one farm problem the Prime Minister mentioned, but I certainly think that both the country and the house expect that an opportunity will be given to hon. members to go on with the debate on the address, and, having concluded that, to take up the other matters outlined in the suggested program placed before us by the Prime Minister.
Mr. SOLON E. LOW (Peace River): Mr. Speaker, this group would like to take a similar position to that taken by the leader of the C.C.F. party. We have constantly held that the most important business before this house until it is disposed of is the debate on the address, and we feel that there is a likelihood of considerable useless repetition if one debate is not disposed of before another is initiated. I think further that the Prime Minister could have helped the situation considerably if he had called in the leaders of the parties to discuss what might be an acceptable program for at least the first two weeks after the resumption of the session, and I am hoping that he will yet see fit to do that. Inevitably it would lead to better co-operation, as the experience of past sessions shows.


William Lyon Mackenzie King: Mr. Speaker, it is clear from what the leader of the opposition has said that he and I have had the same thought in our minds; indeed, it is the
Business oj the House

thought of all who have spoken, namely, that it would be the wish of hon. members to have the debate on the address proceeded with fairly soon, if not immediately. I would point out however that there is no limit of time to the debate on the address. If the debate were to be limited to a fe\v days or to a week or two, if hon. gentlemen would be prepared to limit it to a comparatively short time, the government would be quite prepared to give at once the entire right of way to the debate on the address. On the other hand, without any such limitation, the debate on the address, once it starts, might go on for two or three or four weeks. No one can say how long it would last, as past experience shows.
On the other hand we have certain measures that are extremely important. Taxes are being collected under legislation that is before the house, and imports are being restricted. We do not wish as a government to continue doing that unless we have the support of this house, and we want to get that support just as soon as we possibly can or know if it is not to be given. That is the reason why we wish to proceed without any more delay than is possible to having the emergency measures passed by the two houses of parliament if they are to be sanctioned at all.
The leader of the opposition has made a suggestion which I think will help to meet what the leader of the C.C.F. party and the leader of the Social Credit party have in mind. Evidently we all feel that the cost of living is one question that is uppermost in the minds of the people of this country. Certainly it is, and the purpose of the government in proposing a committee of this house to investigate matters pertaining thereto is evidence of the fact that we have felt very strongly that that matter should receive the fullest investigation possible. That 'being so, may I say to my hon. friend that I can see no reason why that committee might not be appointed within a fortnight. If in his opinion that is too long a time, I will make it a week.


John Bracken: That is too long.


William Lyon Mackenzie King: The difficulty in part is in getting the names of the members for the different committees. That may sound strange to hon. members, but I know that from this seat, week after week, in the past I have asked at different times when we were going to get the names of the members of the different committees and I was told that some names were in but others were not, and so on, from day to day. If, within a week is agree-

able to hon. members, I shall bring forward a motion to institute the committee to which I have already made reference in public. Hon. members will thereby be enabled to discuss the question of the high cost of living and of prices very fully on the motion itself. May I point out that on the consideration of the transitional measures bill there will also be opportunity for a very full discussion of prices and cost of living.


Mr. GRAYDON:: Not of the last subject, if you set up the committee first.


William Lyon Mackenzie King: No one is thinking of setting up that committee for the purpose of restricting discussion. It is a committee to help to throw light on that very import-tant question. The government will be governed from that point of view.


Gordon Graydon: We have heard that before.


William Lyon Mackenzie King: I hope in these circumstances, Mr. Speaker, it will be possible for the house to agree on the motion which is before us.


[Stage Direction]
Motion agreed to, on division.


Hon. DOUGLAS ABBOTT (Minister of Finance):: Mr. Speaker, I wish to table a copy of a statement I made an January 23 with reference to salary increases in the civil service, with the appropriate schedules attached thereto.



UNEMPLOYMENT INSURANCE


[Stage Direction]
Mr. DONALD M. FLEMING (Eglinton): May I ask a question of the parliamentary assistant to the Minister of Labour with regard to the return that he has just tabled having to do with amendments to the unemployment insurance regulations? Is there any age limit proposed with respect to the application of the amendments? I have a question before me as to whether a man of seventy-six years of age comes within the scope of the new regulations.
Mr. PAUL E. COTE (Parliamentary Assistant to the Minister of Labour): Mr. Speaker, I think that the amendments to the regulations speak for themselves. So far as I can see there is no reference to any age limit.

Cost oj Living


John Bracken: Mr. Speaker, when I rose a few minutes ago it was for the purpose of endeavouring to have the government bring forward the debate on the cost of living situation in Canada, and to have it dealt with immediately or as early as possible. The Prime Minister has now indicated that the earliest he feels he can bring it forward is in a week or so. My desire was not expressed with the view of having the parliamentary committee set up in a hurry. I do not think that is going to solve this problem. My desire was to have this issue considered by all parties advancing their views and the government stating its position, because I think that is what the Canadian people are waiting for. I suggest, Mr. Speaker, that if that can be done the debate on the speech from the throne will be cut at least in half and the house will save a great deal of time. I think that is the issue that the people, and if I may say so, the members of this house, want to deal with perhaps more than all other issues put together. In view of the situation which confronts us, it will now drag on in the debate on the speech from the throne and will be only one of many other matters to be dealt with. Because of that I feel that I should advance my motion. Therefore, Mr. Speaker, I wish to move, seconded by the hon. member for Muskoka-Ontario (Mr. Mac-donnell) the adjournment of the house under standing order 31, for the purpose of discussing a definite matter of urgent public importance, namely, the sudden and unprecedented rise in the cost of living.


James Horace King: The leader of the opposition has just moved a motion to adjourn the house to discuss a matter of urgent public importance. Hon. members know that it is the practice to move such a motion to give an opportunity to hon. members to ventilate any grievances which they might have. In the debate on the motion put forward by the Prime Minister a few moments ago it was mentioned that hon. members will have an opportunity on Wednesday and Thursday to take part in the debate on the speech from the throne. During that time hon. members will have the opportunity to discuss the question. mentioned by the leader of the opposition, namely, the rising cost of living. Therefore the hon. member will have an opportunity to discuss that matter not tomorrow but the day after tomorrow. Because of that
I do not think we should adjourn the house to discuss a matter which the house will have an opportunity to discuss two days from now, particularly when we have urgent matters before us. Therefore I do not see any urgency in the motion of the leader of the opposition, and I cannot receive it.


John Bracken: May I be permitted to make one observation, Mr. Speaker? I quite realize that in your capacity as Speaker you have the right to decide in your judgment whether a matter is urgent or not. We recognize that right, and no one desires t.o take * it from you. None the less, some of us disagree with you. I could protest your decision, but I know your decision would then be that we have no right to protest the decision. I could then protest your right to say that we have no right to protest your decision. If that came to a vote the majority sitting to your right would support you. In such circumstances I do not propose to waste the time of the house by going through all these motions. I just wish to observe that as much as we respect you and your judgment, we disagree with you in the position you take.


James Horace King: I believe it is my duty to call the attention of the house to the fact that when the Speaker decides to refuse a motion to adjourn the house to discuss a matter of public importance it is not because the Speaker believes that a matter which an hon. member would like to have discussed in the house is not urgent and is not important. The question that the Speaker has to decide is whether the matter is urgent and important and the house has no other opportunity to discuss it because there is nothing on the order paper to permit the discussion. If hon. members have no other opportunity according to the order paper to discuss the matter, the Speaker may permit a motion to adjourn the house to give hon. members an opportunity to air their grievances, but when on the order paper there is an item in the discussion of which hon. members have the opportunity to air their grievances, the Speaker has no alternative but to refuse to accept the motion to adjourn the house, since it is not urgent.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
John Bracken: May I direct a question to the Prime Minister? He has already indicated that :n a week s time he proposes to move a motion to set up a parliamentary committee
Inquiries oj the Ministry

to consider the question of price spreads. The question I wish to ask is this: once that motion is passed and this matter is before the committee, is the position going to be taken that in the debate on the speech from the throne, or at other times, under the rules hon. members cannot discuss the question of rising prices? If so, then we have only two days in which to discuss the speech from the throne, including this matter. I should like the Prime Minister or the government or the Speaker to assure us that if that matter is referred to a committee hon. members will not be denied their ordinary right to discuss it in this house.


William Lyon Mackenzie King: Mr. Speaker, I have anticipated in a reply I made to the hon. member for Peel (Mr. Graydon), what my hon. friend has just inquired into. I think I said that the committee would be a committee to let in light where information is needed, certainly not a committee to prevent light from coming in. If the wording of the resolution were such that it named a specific matter to be sent to a committee in concrete terms, it might be necessary, as is frequently done, to interpret its terms very strictly. But it is certainly not the intention of the government to seek to prevent anyone from discussing the general question of prices in any way he may wish because of such a motion being on the order paper or carried.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. J. 0. PROBE (Regina City): I have given the Minister of Veterans Affairs notice of the question which I am about to ask, Mr. Speaker, with your permission. Has the Minister of Veterans Affairs been informed that many student veterans find themselves unable to continue their studies because of inadequate finances, and what steps has the minister taken to increase the department's allowance to student veterans?
Hon. MILTON F. GREGG (Minister of Veterans Affairs): The question which the hon. member has asked has not been brought to my attention, but I am aware of the requests of the veteran students. I should like to defer the reply until a later time.
Mr. PROBE:: There is an amplification of the question. There is a second inquiry based upon it, if the minister will consider it at the same time. Is there a loan fund to which worthy student veterans may apply for loans

to finance continuation of their university courses, and on what terms may such loans be secured?


Mr. GREGG:: Yes. There is a loan fund, underwritten by the department, for married veteran students, and the terms are financial need in the opinion of the committee composed of representatives of the Department of Veterans Affairs and of the universities concerned.



VETERANS RESIDENT IN ROSE LAND SUBDIVISION

[Stage Direction]
On the orders of the day:
Mr. DONALD M. FLEMING (Eglinton): May I ask a question of the Minister of Veterans Affairs? Perhaps he is not prepared to answer it now. What are the terms of the ultimatum delivered yesterday to the veterans resident in the Roseland subdivision, under the Veterans Land Act, at Windsor, and what instructions were given to the representatives of the department with reference to the submission of that ultimatum to these veterans?
Hon. MILTON F. GREGG (Minister of Veterans Affairs): I will give an answer to the question tomorrow.
Mr. FLEMING:: Perhaps the minister will be kind enough to bring in at the same time the letter of ultimatum which was sent to these veterans.



GENEVA AGREEMENTS


[Stage Direction]
On the orders of the day:
Mr. E. D. FULTON (Kamloops):: May I ask the Minister of Finance whether the tariff changes covered by schedule V of the Geneva trade agreements are now in effect?


Douglas Charles Abbott: I shall have to take that as a notice and give the answer tomorrow.



QUESTION WITH RESPECT TO REPORT ON PROCEDURE

[Stage Direction]
On the orders of the day:
Gordon Graydon: I
should like to ask the Prime Minister a question by way of repetition of a question I asked in the short part of the session in December. What does the government intend to do with respect to the report on procedure in the House of Commons which was tabled by His Honour the Speaker at the beginning of the session?

Inquiries oj the Ministry


William Lyon Mackenzie King: The government intends
to have the report referred to a special committee of the house for consideration.


Gordon Graydon: I suggest that the government review the suggestion of having the matter go to a special committee, unless that committee is to consist of a very few persons. We shall never get anywhere with the rules of the house if we submit the question again to a committee of any great size such as we had before. There is great urgency about House of Commons procedure, and I suggest that three or four or five members of the house get together and try to work out something practical and have it put into operation experimentally. That would be far better than wasting a whole session trying to come to a conclusion on which no one will agree. I suggest that the Prime Minister give that matter consideration before we go further.



INITIAL PAYMENTS TO PRODUCERS

[Stage Direction]
On the orders of the day:
Mr. E. G. McCULLOUGH (Assiniboia):: The Globe and Mail of January 26 carries an article with this heading:	"Forecast boost in
wheat price of 20 cents a bushel." May I direct a question to the Minister of Trade and Commerce? Is he prepared to make a statement to the house with reference to the question?


Hon. J. A. MacKINNON (Minister of Fisheries):: In the absence of the Minister
of Trade and Commerce I may advise the hon. member that the minister intends bringing down legislation very shortly to enable an increase to be made in the advance or initial payment to be made to producers of wheat. No decision as to the actual amount of that payment has yet been made.



FOREIGN EXCHANGE CONSERVATION


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On the orders of the day :
Major James William Coldwell: I should like to direct a question to the Minister of National Revenue. I have not been able to give notice of it, but it is prompted by a return laid on the table of the house. Were residents of Canada who were absent in the United States when the announcement was made by the Minister of Finance regarding embargoes and so on per-5849-35
mitted to bring back articles that they had bought in good faith in the United States?


Hon. J. J. McCANN (Minister of National Revenue):: Yes.



PROPOSED SITTINGS OF SIX HOURS ON &quot;WEDNESDAY

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On the orders of the day:
Mr. W. A. McMASTER (High Park):: In view of the Prime Minister's statement that two days of each week will be given to the debate in reply to the speech from the throne, will the right hon. gentlemen consider the desirability of the house sitting more than three hours on Wednesday? Some members are not always here on Monday and Friday.


Some hon. MEMBERS:: Oh, oh.


William Alexander McMaster: I suggest that we should sit six hours on Wednesday, even if we have to sit in the morning.


Major James William Coldwell: Some of us are here all the time.


William Alexander McMaster: I think we should
devote sufficient time to discussing the business of parliament, and I would ask the Prime Minister to consider my suggestion.



FOREIGN EXCHANGE CONSERVATION


[Stage Direction]
The house resumed from Wednesday, December 17, consideration of the motion of Mr. Abbott for the second reading of Bill No. 3, respecting emergency measures for the conservation of Canadian foreign exchange resources.
Mr. HARRY R. JACKMAN (Rosedale): The more highly developed a country's economy becomes, the more likely it is that there will be interruptions in the steadiness of that economy, and the question therefore arises whether or not the interruptions that occur are more easily ironed out by the natural working of economic laws or by the interposition of governmental controls. In this connection I am reminded of the statement of an astute professor of Harvard university who once said:
Bight three times out of five: success. Wrong three times out of five: the sheriff.
We do not expect the Minister of Finance or his advisers to be always right in financial matters, but I think it will be conceded by all except the government itself that the decision taken on July 5, 1946, to revalue the
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Foreign Exchange Conservation
Canadian dollar from 90 cents to 100 cents United States was a mistaken decision. It has been termed by some the greatest administrative error in the history of Canada.
It is impossible for the government to be always right in its economic guesses as to the future. It is infinitely sounder to allow as much freedom as possible to the natural working of economic forces. In 1946 the government relied on three different things taking place, none of which happened. In the first place the government thought international trade would expand, and that with the expansion we should have greater convertibility of sterling into dollars. In the second place the government thought that with the doing away of price controls in the United States on July l, prices in that country first of all would go up rapidly and later-and shortly-they would come down. Again they were wrong. In the third place the government thought the greatly expanded imports from the United States into Canada would level off. The fact is that since that time they have continued to increase at an accelerated rate. Still we find that even though the three main reasons, perhaps, on which the government relied, all turned out to be wrong guesses, the government still believes it took the right decision on July 5, 1946. They are very much like the popular version of King Canute endeavouring to withstand the economic tides. It is impossible for this or any other government to withstand the economic tides with which it meets, especially if it guesses wrongly. If ever there was a time for confession and repentance it is now, before the monkey-wrenches which by the bill now before us the government has thrown into the machinery of Canadian business have set in motion a depression from which the recovery may be very painful.
There is no certainty in finance. An operation upon the economic body is much more difficult than one upon the human body. Just as doctors, despite their hundreds of thousands and the millions of dollars spent on medical research, cannot cure us of a common cold, so economic doctors, backed by the supreme power of the state, cannot cure even simple maladjustments in our economy. Occasionally an economist like John Maynard Keynes, who was a great economic diagnostician, comes to the fore; but in his last contribution even he turned toward the natural working of economic forces and away from state-induced reactions. In the human field one body is physically very much like another, but there is only one economic body and that is largely unpredictable because it is governed by the hopes and fears of the peoples of the world. Fortunately the natural workings of these hopes and fears, these

ambitions and cautions, by observation have been reduced to economic laws from which there is no escape so long as human nature remains what it is. Regulations, except where they ease stricter regulations, are hindrances to the production and exchange of goods and services. One regulation breeds another. The present quotas, embargoes and excise taxes all flow from the hurried and disastrous decision made on July 5, 1946, when our dollar was given the same value as the United States dollar. There is no particular reason, Mr. Speaker, why Canadian beavers should sell for the same as American eagles.
Time may not permit me to recount the disastrous effects of the present regulations on some trades, and on employment; but we find that even the Department of Labour, in accounting for the increased unemployment in certain parts of the country, ascribes some of it to the workings of the present exchange regulations. Some businesses have been forced to close. Many of these were newly established importing and distributing firms which had been so hopefully set up by young veterans. Other businesses have been compelled to reduce staffs and further reductions in staff are forthcoming. The pity of it is that no one knows how long these iniquitous regulations and controls will last, and employers know not whether to disband their organizations or to look upon the present calamitous restrictions as temporary and keep their organizations intact. The great buying public have found that the restrictions have resulted in the greatest and fastest increase in the cost of living in our history. For this the Liberal government is solely and directly to blame.
On July 5, 1946, our exchange and price situation with the United States had found a reasonable balance, with a net inflow of United States funds into Canada. Due to an administrative error the $1,500 million of United States reserves which Canada then had now have dwindled to a few hundred million dollars. Had our dollar remained at 90 cents United States, or been allowed to follow its natural course, we would not have been forced to accept a European diet, or forced to accept a state of national beggary; nor would we have caused consternation to many of our business people, bringing grievous hardship to many who were formerly employed and forcing up the cost of living to all.
In order to continue the administrative error and to permit the government, ostrichlike, to claim that it was right on July 5, 1946, we have been forced to go hat in hand to the United States to borrow American dollars, so that we may not further reduce employment and the standard of living of our people. We
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________________Foreign Exchange Conservation
have borrowed $300,000,000 from the United States export-import bank to tide us over the next few months until some fairy godmother, such as the Marshall plan, comes to our rescue. We may hope for the best, but we are leaning on a very uncertain support.
Uet us examine what the asking of this $300,000,000 loan involves. It is well known that Canada endeavoured to raise funds from private American sources, but in the unprejudiced eyes of our American friends we were regarded as a profligate country which had no visible means of repaying any sizeable loan we might make in the United States. It would be interesting to the house to learn how much or how little was offered to our great country by these unprejudiced lenders of American private capital, and for how long the loan was to be and what were the terms. Did our government try the great American insurance companies, and what terms did they offer?
Let us look at Canada's dollar position through the eyes of an unprejudiced outsider. In 1946 we had United States reserves of $1,500 million, largely the result not of trading but of the sale of American investments formerly held by Canadians, and of the dollar proceeds of American investment in Canada. This $1,500 million has been largely frittered aw'ay by our government as a result of its decision of July 5, 1946; and the frittering continued on an increasing scale, until the fatal day could be postponed no longer. When I spoke on this matter in December, three per cent Canadian bonds were selling in Canada at 104. The same bonds were freely traded by the large institutions in New York at 87, a difference of 17 points, which was a fair measure of the value the Americans put on the Canadian dollar at that time; and there has been no significant change since. How could it be apparent to a lender in the United States that Canada could repay any American borrowing? We had made it more difficult for our industries to export to the United States; we had cut our gold mining industry in two, and so far as United States imports were concerned we were living very much like drunken sailors. Canada was denied the private channels of borrowing in the United States and in view of our monthly deficits on exchange account was compelled to turn to a United States government agency, the export-import bank, for a loan of $300 million.
Let us examine what this export-import bank is. It was set up in 1934, and I quote-
To aid in financing and to facilitate exports and imports and the exchange of commodities between the United States or any of its territories, or insular possessions and any foreign country or the agencies or nationals thereof.
5849-35i
Its capital was set at a billion dollars, and its total loans may not exceed $3.5 billions. It makes loans only for specific purposes. They do not give to Canada $300 million to do with what she thinks is in her best interests. She must set forth exactly the purposes and requirements she has in mind, and we can do with the money only that which the bank considers proper. Surely that is an unbecoming position for a great country like Canada to find itself in! The bank makes only those loans which offer a reasonable assurance of repayment. Thus it is prepared to take greater chances than private bankers feel justified in taking with their customers' savings.
May I quote further from the rules governing the export-import bank:
In accordance with the policy laid down by congress the bank does not compete with private capital, but rather supplements and encourages it. The activities of the bank are confined, therefore, to dealing with risks of the type described in this statement, which are either beyond the scope of private capital or which private capital is not prepared to assume without government assistance.
Will anyone say that the Canadian loan is beyond the scope of private capital in the United States?-because for decades the United States market has been even greedy of Canadian loans, our record for repayment and for the handling of our own domestic economy has been so sound. We find today, however, that a loan to Canada from private sources in the United States is apparently beyond the scope of private capital. One other point which is mentioned in the rule governing the bank is that the loan shall be one which private capital would not accept without government assistance. Here not only is there government assistance by way of guarantee, but it is a direct obligation of the Canadian government. Yet there are not private takers for a Canadian loan in the United States, if that loan is repayable in American dollars. It is indeed a sorry plight in which this government has placed the finances and credit of this great country.
Over and over again in the handbook published by the United States government describing the activities of the export-import bank we find it expressly stated that the bank shall not compete with private capital. For example, here is a quotation:
The bank is expressly prohibited from competing with private capital and does not, therefore, extend credits when private credit is available in adequate amounts on reasonable terms.
I think possibly the Minister of Finance, or whoever went down for the government to the United States to endeavour to raise an
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Foreign Exchange Conservation
American loan, found that the amounts offered were most inadequate. I should say that the $300 million loan is inadequate, when we have lost about 81,000 million in American credits *during the last twelve months.
When the application for a loan is made to *the export-import bank there must be shown:
O) Justification for seeking the assistance of the export-import bank, including satisfactory evidence that private credit is not available.
(2)	A statement of external assets of the country in the form of gold and foreign exchange, showing official holdings, separately from private holdings and holdings ot dollars separately from holdings of other currencies.
(3)	Current and prospective rate of gold production.
I am sure we shall have a sorry picture .when we have to reveal that, our gold production being more than cut in two, as a 'direct reflection upon our credit and upon our borrowing power in the United States and elsewhere. Then, further, there must be shown:
\ statement of the international investment position of the country at long-term and sliort-. term, including major commitments, pending or . contemplated, and an estimate of the amounts of interest and amortization due annually over the life of the loan on external fixed-service obligations, together with a statement of priorities, if any, in loan service.
Once upon, a time before this government took unto itself the tampering with exchange, and before eliminating any regard for the natural working of exchange forces, there was in Canada a considerable investment in * American securities. Those investments were sold partly in the early days of the war to help finance our early obligations before the entry of the United States; and that reserve has been very sadly depleted, so that today it is but a fraction of what it once was. Under the rules of the foreign exchange control board there is no possibility of increasing or augmenting that reserve; so should there come a more vital necessity we would have a substantially .smaller amount of American investments privately held in Canada. We have been living on our capital. Here the requirement is that an analysis of the country's ability to repay on the basis of its current and prospective balance of payments must be shown.
I am sure that if I were a lender in the United States and I had in trust certain sums at my disposal, and if I were to take a look at the record of Canada under the present government and were to see how it has frittered away the $1,500 million of United States credits which it had, and note that $1,000 million of it had gone in one year, it would certainly say that that country was

not a fit one to receive a loan, because it had no apparent means of repaying it. That must be obvious to anyone.
A review of the letters and documents with regard to Canada's attempt to borrow in the United States would be most revealing, and the production of these papers will be asked for. In fact it would not be surprising to see the administration of the export-import bank in the United States questioned on the floor of the United States Congress.
I just wish to quote from a letter from the acting manager of the export-import bank to our own Minister of Finance in connection with this $300 million loan. Th. acting manager, Mr. Herbert Gaston says this:
We note that the Canadian government believes that it would be desirable to reduce the commitment of the export-import bank and that it intends in the near future to approach the private capital market in the United States for credit facilities with this end in view.
Of course it must be known to all that the government has already applied to the private market in the United States, and did not receive a satisfactory response. I was amused at the minister's statement when the loan was announced. This report says:
Finance Minister Abbott said it was planned to seek a reduction of the bank's commitment by sale of Canadian securities in this market-
That is the United States market.
-if and when the capacity of the investment market had been determined.
The capacity of the United States investment market for 8300 million or $500 million!
Douglas Charles Abbott: What was that statement taken from?


Mr. JACKMAN:: I did not get the clipping myself but apparently it appeared in the Globe and Mail, as the other side bears a dispatch from the New York Times under date of December 7.


Douglas Charles Abbott: I ask that because I do not recall making any statement in those terms.


Harry Rutherford Jackman: If the minister says that he did not say it, I will retract it. I would like to point out that the capacity of the United States market for any amount that Canada might want is almost limitless. Private corporations like the American Telephone and Telegraph Company can borrow to one billion dollars and oil companies can borrow $300 million or $500 million apparently without any difficulty. I suppose in a month there must be many occasions on which private
54a



194S

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Foreign Exchange Conservation
industry would borrow more than the small requirements of Canada. To quote again the acting manager of the bank:
We note that the Canadian government believes that it would be desirable to reduce the commitment of the export-import bank and that it intends in the near future to approach the private capital market in the United States for credit facilities with this end in view. That this should be done at as early a date as possible is a matter of primary concern to the bank because of its statutory responsibility not to compete with but rather* to encourage and supplement the use of private capital in financing United States foreign trade.
What I suggest is that the manager of the bank knew very well that he was on rather thin ice when he made this loan to Canada because our country would not meet the terms of private capital or would not so put its house in order that it was a fit subject for a loan from private resources in the United States.
Thus we see the path down which the Liberal administration has led the credit of this country. In regard to United States borrowings, we are virtually in the position of a bankrupt country. The revaluation of our dollar to 100 cents United States has brought about this unenviable condition. The drastic restrictions embodied in the legislation now before us are a last-minute attempt to avert national insolvency. Unfortunately they are like insulin; they merely keep the patient alive from day to day and cure nothing. On the other hand, a recognition of its administrative errors by our government and the restoration of our dollar to 90 cents United States-all within the terms of Bretton Woods -and to lower than 90 cents if conditions necessitate it-will bring about a natural correction and set in motion those economic forces which will permanently cure any deficit in our business relations with the United States and cause the least disruption to the business and employment of our people.
We shall not then have a set of slapdash regulations throttling Canadian enterprise slapped on without a moment's thought, regulations in which there have already been a thousand modifications. And now the import regulations on iron and steel machinery and structural steel have been postponed "until further notice". Business must plan not only for tomorrow but for years ahead. Unless we follow a sound currency policy and restore freedom to our businessmen we are heading for a false and unnatural economy and unemployment and depression for our people. The only hope for the prosperity of our people lies in the policy of the Progressive Conservative party.
John Oliver Probe: Mr; Speaker, I wish to speak briefly on Bill No. 3, respecting measures for the conservation of Canadian foreign exchange resources. I should like to refer for a moment to my genial friend, the hon. member for Rosedale (Mr. Jackman). The best rebuttal of. the speech which he commenced last year and ended at 4.30 this afternoon-


Howard Charles Green: That was not his fault.


John Oliver Probe: I am willing to concede that 

wherein he claimed that private enterprise, his enterprise, could rectify the excessive spending of the Canadian government in the United States is to attempt to show the h-on. gentleman the error of his own thinking. During the whole period of time during which we have had trade relations with our neighbour to the south the only time that we had a credit balance, if that is desirable, the only time that we had a surplus of United States dollars was during the period of world war II when the Canadian government adopted some form of planning of our foreign exchange resources.	_
Last December 16 the Minister of Finance (Mr. Abbott) explained this bill by saying that it would be one prong of a three-pronged fork, so -to speak, which his government considered it desirable to use in order to meet Canada's perennial shortage of United States dollars. This the government seeks to do by the bill now before us. The other two were, first a subsidy to be paid to Canada's goldmining industry, and, second, a further huge excise tax of 25 per cent or more to be added to the excise and sales taxes already provided for by our statute books and imposed on a wide variety of consumer goods in Canada.
The minister indicated that except for the very few years of the war we have always bought more United States goods than we have sold in that country. This has always left us short of United States money, the hard cash with which to balance our trade with that country. We got around the shortage of United States money in various ways. We borrowed United States money, and we dug gold from the Canadian mines and buried it in a mine in Kentucky. Then we adopted the practice of using credit balances that we had accumulated by selling more goods to Great Britain and Europe than we bought in return, which balances have until very recently been convertible into hard cash or United States currency, by which we settled our debit balances with the United States.
The Minister of Finance hopes to cure this imbalance with Bill No. 3, which is one-third of his operations. I think it will be

Foreign Exchange Conservation
ineffective, and that not all of his proposed cure is necessary. When to the weaknesses of Bill No. 3 you add the injustice of the 25 per cent excise tax superimposed) on the various sales taxes, and with decontrol now in effect, you are cutting the financial props from under a considerable number of people in this country who rely on appropriate trade and monetary policies for their well-being-the wage earner, the man on fixed income, and so on.
The Minister of Finance has guaranteed an inflationary situation which will take the cost of living several points higher than it is at present. The minister prophesied that this measure would1 be of short-term duration to meet an abnormal situation. But what was abnormal yesterdlay might be considered quite normal tomorrow, and we may have a continuation of the terms of this bill indefinitely.
I think, too, it is childish to argue that if Canada must buy less from the United States to rectify our dollar shortage we must therefore also buy less from Great Britain and other countries of Europe with which we have not now a trading deficit but to which we have been selling considerably more than we have been buying back in return. The minister in effect says that while we wish to continue selling to these countries, nevertheless we must buy still less from them in return. We have always bought less from Britain than we have exported to her. Why restrict our purchases from her still more, as wiil be done under schedule I of Bill 3, which debars imports from Great Britain or any other country equally with imports from the United States, whose currency we lack. How can we stabilize our food sales to the United Kingdom if we shut the dloor on British manufactured goods in return? Sometimes when we read of the secret negotiations that go on from time to time between ambassadors of various countries I wonder whether the Canadian government has made secret trade commitments which will have the effect of reducing our imports from the United Kingdom. If so, to whom have these commitments been made, and why have they been ipadle?
We have not yet approved the Geneva trade agreement. But if we do approve that agreement, its terms permit us to shut off imports from any other country, without any previous consultation, for the remainder of 1948, and even then, if we are hard pressed for the currency of a particular country, it is possible by consultation to correct our exchange position by shutting off imports from the country whose cash we require.

If we have made any international commitments, secret or open, to close the Canadian market equally to all nations, regardless of whether they buy from us or not, and regardless of what they buy from us, then in common sense let us relieve ourselves of that obligation to treat all countries alike whether they are customers of ours or not, and let us do it at once.
Schedule I of the bill covers a wide variety of consumer goods, many of which are produced and available in Canada, and their entry to Canada is prohibited from all countries, not from the United States alone. As the Minister of Finance has expressed himself on all occasions as opposed to the continuance of price controls the Canadian consumer is therefore left to the rubber consciences of Canadian industrialists and distributors of the items in schedule I, such as fresh grapes, pears, peas, tomatoes, cocoa, paint, varnish, stoves, sewing machines, typewriters, furniture and so on. At one time I believe that even yeast was on this list, but it has been removed, as have certain types of oils. Evidently the list was carelessly and hurriedly assembled within the Department of Finance. Every item that I have mentioned in schedule I could be imported from Great Britain and countries other than the United States, were it not for the nondiscriminatory policy enunciated by the Minister of Finance on behalf of his government a month ago. And so the minister has left the Canadian public to the sense of price justice, shall we say, of the Canadian distributors of all the articles in schedule I of Bill No. 3.
Why did not the minister impose the most rigorous price controls, and even rationing if necessary, on the articles in schedule I? Why work a hardship on the pocket books of the helpless consumer in order to fill the pocket books of the Canadian risk-taking free-enterprise capitalists, so called? If the Minister of Finance thinks that he can shame the economic vultures by whispering "Naughty, naughty" after each successive price rise, he is an amateur in the business.


Mr. KUHL:: Have you ever been in business for yourself?


John Oliver Probe: Yes, and I have been successful in business too.


Walter Frederick Kuhl: Have you made a profit?


John Oliver Probe: I am a decent citizen, and
so are many businessmen, but those who take advantage of shortages and of the needs of the have-nots under so-called free enterprise, these non-risk-taking vultures-

Foreign Exchange Conservation


Mr. STEPHENSON:: Don't bunch them
all together,


John Oliver Probe: I did not.


Charles Elwood Stephenson: You are trying to
leave that impression-painting all business and industry with the same brush.


John Oliver Probe: If the hon. gentleman will
listen instead of talking, he will perhaps get some information.


Charles Elwood Stephenson: I doubt it.


John Oliver Probe: Profiteering is not known
in his language. You take what you can get from whom you can get it.


Gordon Graydon: You cannot blacken this man that way. I know him too well for that. You cannot paint the hon. member for Durham (Mr. Stephenson) with that brush.


Charles Elwood Stephenson: We know only too
well the propaganda that is spread by the C.C.F. party. They try to paint all industry with the same brush. We hear too much propaganda from that party to blacken everybody in free enterprise.


Some hon. MEMBERS:: Order.


Mr. DEPUTY SPEAKER:: Order. I must ask the hon. member for Durham to take his seat. If the hon. member for Durham has a question to ask or wishes to object, he may do so, but he cannot make a speech at this time.


Charles Elwood Stephenson: The hon. member insinuated that I could be painted as one who takes everything I can get from private business. Mr. Speaker, I deny that, and I ask that 'the statement be withdrawn. It is like a lot of other statements made by members of his party.


John Oliver Probe: I am very happy to withdraw any reference to the hon. member for Durham, who in the very breath in which he asks me to retract something which I had no personal intention to impute to him at all, sticks out a dirty tongue himself. Now, I do not have to take that, either, Mr. Speaker.


Gordon Graydon: You said nothing at all.


John Oliver Probe: You are not concerned in this.


Gordon Graydon: I am, and I am going to be.


Mr. MITCHELL:: Get put in the alley.


Gordon Graydon: I am not going to let an hon. member be blackened while I sit here.


William Ross Macdonald: The hon. member for Regina City has said that he retracts any statement which was offensive to the hon. member for Durham. I think that is satisfactory.


Gordon Graydon: He retracted one and
made another.


Charles Elwood Stephenson: May I say that this is just one of the irresponsible statements made by these people.


Gordon Graydon: It is not much wonder they are receiving communist support now.


John Oliver Probe: Mr. Speaker, the hon. member for Peel has no right to interfere at this stage at all. I tried to tell the other hon. gentleman, through you, that I had no desire and still have none, to apply any innuendoes to him, but I refuse to be the butt of innuendoes from any other so-called hon. member or otherwise in this House of Commons.
I should like to conclude, Mr. Speaker, in my way, and I have no personal aspersions to cast on the hon. member for Peel, who likes to draw the red herring across the trail at every opportunity he gets. He has one purpose in mind, and that is to try to change my trend of thought, and I am silly if I let it bother me.
In schedule II of this bill we are asked to agree to quota restrictions on the goods therein specified. There are some twelve varieties of fruits and vegetables; sixty-five varieties of cotton, wool, silk, linen and synthetic textiles and wearing apparel; twenty varieties of leather and rubber goods; a miscellaneous category of sixteen varieties of sporting goods, and some twenty-two varieties of prepared fruits. I understand that since December 16 when the minister opened the debate in the house on these proposals, there have been some modifications in the quotas of goods listed in schedule II. I have not a list of the modifications, but I presume they have been made public. Schedule III relates to heavy equipment for capital use and components of automobiles and electrical instruments. They are undoubtedly the largest part of our dollar expenditures in the United States, and the goods in this schedule may be imported only by permission of the Minister of Trade and Commerce (Mr. Howe).
The Minister of Trade and Commerce had an excellent record of production in the war years while he was Minister of Munitions and Supply, but his notion of thrift on behalf of the Canadian nation differs sharply from my own. Last year the minister reported in this house the gift of a $20,000,000 aircraft factory

Foreign Exchange Conservation
back to Canadair. At that time it had 7,000 employees, with huge unfilled aircraft orders, and it is now rented to a United States syndicate at a rate requiring one hundred and ten years to realize the Canadian capital included in the expenditures on that plant. I say that that attitude of the present Minister of Trade and Commerce toward the moneys of the Canadian people differs sharply from my own. Under the stress of war he had constructed huge factories which were built on rented land or land that the government bought with the people's money. He did a good job during the war. When the war was over these factories were dismantled; they apparently were of no use. I realize that during the war many fantastic expenditures were made owing to the emergency of fulfilling our battle needs, but a little more care might have been exercised with respect to post-war destruction. During the session before the Christmas adjournment a steel mill at Sault Ste. Marie was reported as in the process of being dismantled because it was obsolete-and this at a time when we in Canada are crying for every form of steel. I understand that the dismantled plant is going down to the United States.
Steep Rock iron ore-and the Minister of Trade and Commerce deserves a great deal of credit in regard to the original exploitation of that ore body in western Ontario-is going in its raw form to the United States. The entire output is going to that country while Sault Ste. Marie closes and dismantles its steel mill.
I am opposed to placing in one man's hands the extreme powers to make or break business or industry, even in the hands of the Minister of Trade and Commerce, without a very extensive blueprint of his intentions with respect to future plans in connection with relating our economy to that of the United States by bringing it in balance. I do not wish to give anyone a mandate to integrate our economy more closely with that of what has been up to now an industrial competitor at Canada's expense.
I object to the bill for other reasons, which I shall put on the record very rapidly. No mention was made as to what is to be done about the dividend payments to United States companies or shareholders from Canadian businesses owned by them. It seemed to me that if the minister was going to save United States dollars he might have suggested-perhaps he has it in mind, but if so he should have informed the house-that the dividends from Canadian industries under United States control were either to be returned to the United States in whole or in part not as cash

for which we need United States dollars but in the goods of Canada; or that their payment was to be placed under a temporary ban until our new Minister of Trade and Commerce balances United States sales to and purchases from Canada.


William Alexander McMaster: That would just reduce our purchases, and not help us. It would be a matter of bookkeeping.


John Oliver Probe: There is another point. I should like to know why there is no restriction on United States films and whether any alternative sources of supply are indicated to meet what is estimated to be an expenditure of some 310,000,000 United States funds annually. I should like to know why there is no prohibition of alcoholic beverages coming from the United States; why the importation of raw furs into this country is still permitted. Certainly they are not a necessity. In the nine months ending September, 1947, we imported to Canada from the United States raw furs valued at 88,816,000. certainly a fairly generous portion of the deficit that we had accumulated during the same period.


Douglas Charles Abbott: We re-export more than we import.


John Oliver Probe: I am not discussing the exports of furs to the United States or to other countries. I am happy, as the minister should be, that we do export, but why import as much as we do?


Douglas Charles Abbott: To re-export.


John Oliver Probe: What is the reason for paying interest on this 8300 million of United States money when we have $500 million of currency still in reserve? Surely the minister is not contemplating that the government's plan to keep our trading position in balance is going to fail? Why then pay additional interest on $300 million just to keep that amount in reserve?
I think we should put a more stringent ban on Canadian travel to the United States. The minister is allowing $150 per person annually to be spent in travel in the United States. I know that all our Canadian citizens will not take advantage of it, but it leaves the door open for a potential expenditure of two billions a year. I agree that this will not all be spent, but I still think the minister might have tightened it up considerably more.
There is the twenty-five per cent excise tax, which is unwarranted for revenue needs, as reported in the press. It is unwarranted for the revenue needs of the minister's exchequer, but more so for the effect it will have of increasing the cost of living. I feel that the

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government should have instituted in the emergency, and should retain as a permanent benefit, an export-import board with adequate producer, consumer, industrial and labour representation. That is democracy, and it is democracy on a regional basis too. Saskatchewan would have something to say about these things as well as other provinces which seem to be top-heavy in the councils of the minister. Such a board should be responsible to parliament for its actions.
I suggest the reinstitution of the wartime prices and trade board, with instructions to roll back prices on consumer goods, and the reinstitution of rationing of scarce articles. There should be heavier sentences on hoarders and profiteers and a 100 per cent excess profits tax on a readjusted basis more equitable to small industry. There should be an embargo on the export of hard-cash dividends from Canada during the emergency, and all travel funds, business or pleasure, should be by special permit of the foreign exchange control board.
I think all Canadian plants that might process primary products should remain in operation and not be dismantled, as the Sault Ste. Marie plant has been, until there is an alternative plant erected and in operation.
It is time that we stood on our own Canadian feet for a change. We are willing to co-operate with other countries, but to make our industrial policy subservient to another country is a position that I feel unable to concur in. Why does not the Minister of Finance or the Minister of Trade and Commerce indicate that he will take positive steps to direct more tourist money into this country? A Trans-Canada highway was promised by the party to my right on the hustings eighteen years ago. During their period in office it was not completed. I do not know whether the Liberals ever promised it, but certainly we have not a Trans-Canada highway. We have no tourist highways in my section of the country such as will induce Americans to come and spend their money over here. They come to Saskatchewan once or twice but they find it a very difficult trip. We cannot finance tourist highways provincially. I suggest that the federal government should put Canadian money to work to bring United States dollars into our country by means of a bold highway program.
I regret very much, Mr. Speaker, the interlude of a moment ago with the hon. gentleman to my right. I think the Conservatives are too often ready to impute motives to speakers because of their indifferent understanding of speech. I do not impute motives to other speakers but I have had to take what seemed 5849-36
to me like pretty dirty cracks. I hope the dignity of the house will be maintained by other speakers who have the floor and not by those of our party alone.


Mr. VICTOR QUELCH (Acadia):: Before dealing with some of the specific measures contained in the bill, I wish to make a few general remarks about conditions that have helped to bring about the present dollar crisis. The present Minister of Trade and Commerce (Mr. Howe), speaking in this house before the Christmas recess, likened the present crisis to that which developed in this country in 1940 when we had a flight of capital from Canada to the United States, and he reminded the house how at that time the Hyde Park agreement was formulated under which we pooled our resources with the United States and large quantities of Canadian exports were paid for with United States dollars for re-export to Europe. In that way we built up our reserves of United States currency.
Ever since the end of the war we in this group have urged from time to time the reimplementing in a modified form of the Hyde Park agreement in order that we might be in a position to balance our payments with the United States, while at the same time providing Europe with the goods that they require. I think it is a sad commentary on world affairs that nations mobilize and pool their resources for common use against an enemy, in order to achieve a common objective, but as soon as the war ends, these nations are no longer prepared to pool their resources in order to establish conditions that are conducive to peace. Nations unite for wholesale destruction; therefore it is absolutely essential that they shall unite in order to repair the damage done during war.
For example, when the capital of a nation which it has taken generations to build up is destroyed almost overnight, does anyone seriously think that nation can or even should be responsible for repairing the damage? I would say it is the joint responsibility of all the countries that participated in the destruction. To suggest that the nation in which the destruction has taken place should repair the damage is to suggest that the standard of living of that country be reduced to so low a level that it may well face anarchy. That is exactly what is happening to many parts of Europe today.
The great tragedy of the post-war years was, I think, the failure of the United States of America to give real leadership. Instead, they cancelled all forms of mutual aid and lend-lease on the day of victory, and from then on made loans conditional upon the signing of certain international agreements heavily

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weighted in their favour, containing, in many cases, conditions which would be disastrous to the countries seeking help. Already we have seen the effect of those agreements upon Britain. As an example, Britain was forced to make sterling convertible after July, 1947; and it was compelled also to agree to a policy of non-discrimination. I think we can also say we are seeing the consequences of the agreements in France today.
Apparently at last the planners, or financial experts, or whatever you like to call them, of the United States are beginning to realize the futility of trying to make the nations of the world subservient to certain international organizations, so that now it would seem the aim is to be to build up two worlds, and the nations willing to play according to the rules laid down by the United States will receive help under the Marshall plan. I believe that plan may be a very good thing, but we in this house do not know enough about it to judge. From time to time we have asked the Secretary of State for External Affairs (Mr. St. Laurent) to explain exactly what the Marshall plan means, what are the conditions and what are the strings attached to it. Last year the minister said there was no plan. Later he admitted that the government had certain information which, however, it was not at liberty to disclose to this house'. So I repeat that we are not in a position to criticize the Marshall plan nor to understand what it may really mean.
The main purpose of this bill is to conserve foreign exchange, chiefly, as far as we are concerned, to conserve United States dollars, and second, to make Canada more self-sufficient. We in this group agree 100 per cent with both these aims, but we do not by any means agree with a number of the provisions contained in the bill. We do not agree that this is the logical way to reach these objectives.
As I understand the present situation in the world, it is this. Current transactions are approximately in balance. That was true for 1947; but we suffered a serious deficiency in our current transactions with the United States, while at the same time having a large favourable balance with the other nations of the world. I believe that, internally, supply is somewhat lagging behind demand in several lines, but we are now informed by the retail trade that already inventories are being built up in many lines. People are having to draw heavily upon their savings, and instalment buying is steadily increasing today, showing that there is not a surplus of purchasing power in the hands of many people in Canada at the

present time, so that there is not the same inflationary pressure on prices today that there was three years ago.
The logical solution to the international situation'-and' I think the minister would agree to this-would appear to be to expand our exports to the United States or to reduce our imports from that country. That is why we find quite a vigorous demand in western Canada for removal of the embargo on the export of agricultural products to the United States. The farmers feel that, since there is a shortage of United States dollars in Canada, the logical thing would be to allow them to export goods to the United States; and of course there is also the other incentive, that prices of agricultural products in the United States are higher than in Canada, and the farmers would like the benefits of that higher market. I understand that the main reason the government do not approve this suggestion is that they consider we would not be in a position to fulfil our commitments to Europe and at the same time have goods available for export to the United States. I would agree that since the need in Europe is so much greater than in the United States, it is only right that we should fulfil our commitments to Europe.
That being the case, it is absolutely essential that we do everything in our power to increase our imports from Britain. They have many lines of goods available for export, goods which are in demand in this country. Shortly before Christmas I noticed a list published in the Journal showing a long line of goods Britain had available for export, goods we need in this country but which were on the prohibited list. That is why I cannot understand the government placing a prohibition against the importation of certain goods from England, when those goods are available for export. I am aware of the excuse given by the Minister of Finance (Mr. Abbott), that, since we have placed prohibitions against imports from the United States, therefore we must impose similar prohibitions against imports from other countries, because it is necessary to live up to the principles embodied in the Geneva trade pact. Yet I say I cannot understand the attitude of the government, because we do not have to take such action under the Geneva trade pact. That pact contains an escape clause in article XIV, which states that when a nation has an unfavourable balance of trade with another nation it may place restrictions upon imports from that nation without at the same time having to place similar restrictions upon imports from other countries with which it

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may have a surplus. That escape clause is in operation today and will continue in operation at least until January 1, 1949, after which date it will continue to be in operation only if the contracting parties agree thereto.
There is no doubt that this escape clause was put in for a definite purpose, and' I say that purpose was to deal with exactly the situation we have in 'Canada today. I want to emphasize the fact that at the present time Europe is needing large supplies of goods from us for which at present they are not able to pay in full. At the same time, however, they have goods available for export, goods that we require; yet in order to adhere to some form of fetish we are placing a prohibition against the importation of those goods. Apparently the Minister of Finance thinks we should not allow those goods into this country because the United States would not like us to do so. He emphasized the fact that the United States is very strong for a policy of non-discrimination. I believe he described it as being almost a fetish with them, though he said he did not like to use that term. But if we feel-and I believe this feeling is prevalent across Canada today-that a nation with an imbalance of trade with a certain nation should have the right to place a prohibition against imports from that nation without having to place similar prohibitions against the imports from other nations with which it may have a favourable balance of trade, then I do not think we should' allow ourselves to be influenced by the likes or dislikes of any other country.
I find it very hard to understand the attitude of some of the officials of the Department of Finance who deal with our international financial agreements. I think we might well investigate to ascertain where the real loyalty of some of these men rests. Does it rest with Wall Street or does it rest with Canada? I am not making that charge in any loose way. We have in the Bretton Woods agreement, the international monetary fund, the Geneva trade pact, certain clauses which are undoubtedly weighted in favour of the United States and detrimental to Canada; yet apparently we feel obliged to agree to them just because the United States is pushing us.
Another point in the government's program which may work an injustice on agriculture is that contained in article XVI, and it has a direct bearing upon this measure. Article XVI may limit or restrict our ability to stabilize agricultural prices in the future. I say "may"; in principle, no penalty is attached. But if the contracting parties object 5849-361
to our taking that action, they may require or ask that we reduce the amount of the subsidy.
Farmers are being asked at the present time to make a considerable sacrifice in the prices they accept, and in return they are given to understand that there will be some form of stabilization of prices in the future. The agricultural prices support board has been set up, which would indicate that such action may be taken. Yet, what has the government done? It has signed an agreement which definitely limits, in principle, its right or ability to stabilize agricultural prices in the future.
Let me at this point say a few words regarding devaluation of the dollar. As the leader of this group stated in his speech, we think the government made a mistake when it placed the dollar at parity; because, no matter how the minister may argue at the present time, he will admit it has always been understood that when a currency is devalued it has a tendency to encourage exports and to discourage imports. That is the general tendency, although it might not actually apply at the present time. However, if it has any influence, either one way or another, it will be to encourage exports and to discourage imports.	.
I noticed that in his speech the leader of the C.C.F. (Mr. Coldwell) says that he supported parity because it reduces the prices of imports. But when he says that, I suggest he is forgetting that trade is a two-way street. When you appreciate a currency you reduce the price of your imports, but you also reduce the price of your exports. Ft is well tQ remember that in Canada over thirty per cent of the people are engaged in agriculture, and that by this policy you may reduce the price of agricultural exports. I cannot see why the farmers of this country should be called upon to subsidize the consumer. There has been altogether too much of that kind of thing, particularly during the war. The farmers have received very little recognition for the sacrifices they made in that connection.
We have only to go back to the thirties to realize how retaining the value of the dollar at a high level penalizes the farmers of this country. In the thirties the Canadian dollar was appreciated about twenty per cent above the pound sterling, while at the same time the currencies of our competitors were depreciated about twenty-five per cent below sterling, with the result that in a time of keen competition Australia, New Zealand and the Argentine had a forty-five cent advantage over us in price.	'*

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It may be argued, and properly so, that that would not be the case today, because the price of agricultural products under the British agreements is in terms of Canadian funds. That is true; but we do not know whether or not it will be the case in future years. Once again we may be selling in terms of the pound sterling or in terms of the United States dollar, in which case the exchange rate on the dollar would have a definite effect upon the price received for agricultural products.
Again, if it is said that this does not affect us at the present time, one must remember that we have already established the dollar at parity under the international monetary fund. That is not just for the present; it is for the future as well, because under that agreement we have the right to change that rate only to the extent of ten per cent, except by consent of the fund; and our competitors will be sitting on that fund and will not be overly anxious to allow a further depreciation, if it is sought for the purpose of getting a higher price for our exports. So that, while it may be argued that establishing the dollar at parity with the fund does not affect us at the present time, nevertheless we are taking action which may have a serious effect upon agricultural prices in the future.
In closing, I wish to comment briefly on the excise tax. I believe this action by the government has been more bitterly resented in Canada than any other measure taken in the government's austerity program. We in this group consider the action was altogether inexcusable, because undoubtedly it is inflationary. I was speaking to one of the advisers in the Department of Finance and he said that the measure is deflationary, or would be, taken over a long term. But the immediate effect is inflationary because it has increased prices by at least twenty-five per cent.
.1 was somewhat amused by what was said by the Minister of Finance with respect to this question, because he virtually contradicted himself; at least to my mind he did, and especially is that so in the article which appears in New Liberty magazine, headed ^'Abbott's Own Story."


Douglas Charles Abbott: 
Douglas Charles Abbott: I know my hon. friend wishes to be fair. I think I said that it would accomplish it if prices were increased sufficiently.


Victor Quelch: That is what the minister did say. But he did go on to say, and I shall read it:
Depreciation, if carried far enough, would certainly stop the drain on U.S. dollars. It would do so mainly by pushing up prices in Canada to such a point that Canadians would be forced to curtail their buying. How far the value of the Canadian dollar would have to drop to affect buying, no one knows, but I am impressed by the fact that a 40 per cent rise in U.S. prices since June 1946 has had no effect whatever on Canadian purchases of U.S. goods.
He says that a 40 per cent rise in United States prices has had no effect, but he expects a 25 per cent excise tax will accomplish it. He cannot have it both ways.


Douglas Charles Abbott: Twenty-five per cent on top of 40 per cent is 65 per cent.


Victor Quelch: The cost of goods in
Canada did not increase by 40 per cent. He was referring to imports from the United States, and not the price of goods in this country. But he expects a 25 per cent excise tax to stop buying where a 40 per cent rise did not. That is where I say he is inconsistent and makes a poor defence of the measure. The only good defence of the excise tax would be if it were considered a deflationary measure. There might be some excuse then, although the gentleman to whom I spoke appeared to think the immediate effect was inflationary.
If the purpose is to stop the buying of certain commodities which it is not in the interests of the country to have bought, then surely the only fair way to do it would be by some form of priority or rationing. But simply to do it by trying to raise prices means that you put the goods beyond the reach of those in the low-income group, and still make goods available to those who have the money to spend.
Furthermore I would say it penalizes the very people who have co-operated with the government. Time and again during the war the government asked the people of the country to stop spending money on things they

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did not absolutely need, including luxuries and other requirements. I think the minister agrees that, generally speaking, the people of Canada co-operated well -with the government. It is now asking those people to continue that co-operation long after the war. Many people who refrained from buying during the war are now faced with the absolute necessity of obtaining such articles as washing machines, sewing machines and electric refrigerators. They have reached the point where they must obtain those articles. They co-operated with the government to the extent of not buying them during the war, and they are now faced with the necessity of paying twenty-five per cent more than they would have had to pay during the war, if they had disregarded the government's advice.
Rising costs are the main concern of the government at the present time, although I must say that it seems more interested in raising prices than in reducing them. We feel that the government is largely to blame and is largely responsible for the increased prices in this country. This Was brought about, first of all, by the elimination of subsidies which we feel should have been maintained at least until prices had levelled off. The government increased prices still further by the imposition of indirect taxation and by what I would term unnecessary prohibitions on imports.
In closing, I would ask the minister to bring down, during this discussion, a table which will show the prices of staple goods and the tax content in those prices. I think such a table would be most illuminating. We would then realize who is largely responsible for the high prices we are paying for many commodities. A similar table was presented to the British House of Commons and, even though they pay large subsidies, it was amazing the proportion of price that was represented by taxation.
Mr. HOWARD C. GREEN (Vancouver South): Mr. Speaker, the title of this bill is the Emergency Exchange Conservation Act and it is described as an act respecting emergency measures for the conservation of Canadian foreign exchange resources. It is the main enactment to put into statutory form what is known across the country as the Abbott austerity program.


Douglas Charles Abbott: I did not christen it that.


Howard Charles Green: Perhaps the minister did not christen it that, but his baby is known by that name at the present time. Another branch of this austerity program is the imposition of heavy excise taxes on certain articles. I would be glad if the minister would correct me if
I make an error in any statement of fact during my remarks this afternoon. Next there are the travel restrictions; then the loan of $300 million from the United States export-import bank, and, finally, the aid given to the. Canadian gold mining industry.
It is my understanding that the purpose of this austerity program is to meet a shortage of United States dollars, Canada having gone behind at an alarming rate during recent months and to the extent of between $900' million and $1,000 million during the calendar year 1947.
As is well known, the policy went into effect' on November 18 of last year by various decrees, so that it has been in effect for over two months. During that period there has been ample opportunity for the members of this house to consider the plan and there has also been time for the people of the country to reach some conclusion as to just what this program is going to do to them. I do not think I am unfair when I say that the austerity program is unpopular, is bewildering and for some Canadians is disastrous. The tragedy is, of course, that the policy is in its present-drastic form solely-I repeat the word "solely'/' -because of the neglect and refusal of the Minister of Finance (Mr. Abbott) and his associates to take steps in time to meet the shortage of United States dollars. Whoever suffers across Canada because of this policy can be sure that he is paying a penalty which should be paid by the ministers who sit opposite and who, during the debate last December, did not seem to be greatly concerned about what this program was doing to the individual Canadian.
As I have said, this bill that we are debating puts the main portion of the austerity program into statutory form. It sets up three main branches of the austerity program. The first is the prohibition of certain imports from all countries. Mark those words, "all countries". There is a proviso that in the case of exceptional hardship the minister may issue a permit for the import of a particular commodity, but I presume that that will apply to a comparatively small number of imports.
The second branch is the placing of certain other goods under quota. That provision is worded in a peculiar way. It may be either a quota on goods from all countries, as in the case of imports which are totally prohibited., or it may be goods from any country or from any class of countries. These two branches of the policy are under the control of the Minister of Finance.	<
Foreign Exchange Conservation



The third main branch provided by the bill ,ia under the minister of reconstruction.
. Mr. ABBOTT: It is trade and commerce now.


Howard Charles Green: He is now Minister of Trade and Commerce (Mr. Howe) and the former Minister of Trade and Commerce (Mr. MacKinnon) is now Minister of Fisheries. I [DOT]do not believe he knows one end of a fish from the other.


James Angus MacKinnon: You may be surprised.


Howard Charles Green: I am convinced that from the point of view of British Columbia that is a very serious matter. The ministry of fisheries is being used as an overnight stop on the way into or out of the cabinet.
* Mr. ABBOTT:	There are no import
restrictions on fish.


Howard Charles Green: That is not a very good way to develop a national policy in connection 'with the great industry of fishing, but getting away from fishing, I come back to this third branch of the program set up by the bill. Certain capital goods, primarily metal goods and manufactures of metal, can be imported only under permit from the minister of reconstruction. Such a permit must be given in each case and it is necessary for goods from any country. In other words, that particular restriction also applies to all countries. In effect it gives the Minister of Trade and Commerce control over all projects of any importance in Canada. In his usual unblushing way, the minister said, as reported on page 388 of Hansard:
' By selecting a number of the key essentials-
In other words, he did not have to select a great number of commodities, just a few key essentials.
-it was ensured that all projects of any significant magnitude would be brought to the department -for review and approval.
In addition he is given power over the imports of moving-picture films, which I believe is a most important import. Very little has been said as yet by the government as to just how far that power is to be used. "With those three branches of the austerity program contained in the bill I think we must consider the heavy excise taxes to which I referred a few minutes ago. They really go along with the other three measures.
That gives you in a very sketchy form, Mr. Speaker, the heart of the bill before us today, and it was interesting to hear the Minister of Reconstruction, now also the

Minister of Trade and Commerce, say in this house last December, at page 386 of Hansard:
If you look back at the debates in parliament in those days-
He was referring to the war days.
-you will find no carping opposition to the efforts of the government to meet a situation which was similar to the one we are contending with now.
Obviously he did not want any opposition to this program. But there are very good reasons why it is not getting unanimous support either here in the house or in the country, and I propose to outline six of the reasons. No doubt there are many others, but to me these six are the most important.
The first is this. The policy applies against imports from all countries, as I have said, both the dollar countries and the sterling countries. It applies to all countries in the world. That is what the government calls a policy of non-discrimination, yet it is perfectly clear that the problem to be met is the shortage of United States dollars, and it is just as clear that that calls for measures against the United States dollar. Whether we like it or not, measures against the United States dollar are required to meet this emergency, and that means discrimination. I suggest to you, Mr. Speaker, that the policy to meet this emergency must of necessity be a policy of discrimination. Yet the government adopts a policy of non-discrimination. We find that quite freely admitted, there is no attempt to conceal it in the short title which I read; and in the description in the bill itself, the government refers to foreign exchange resources, there is no reference to United States dollars, the bill is to cover all exchange. Further, the total prohibition applies to goods of all countries, and the Minister of Finance, in making his speech on the bill, actually went so far as to say that because he had to have a non-discriminatory policy some goods were not prohibited which might otherwise have been, the reason being that the government did not want to be too hard on the sterling countries. That will be found at page 332 of Hansard, where the minister said:
Since the principle of non-discrimination involved application of the prohibitions to all countries, the list naturally does not include items which are of considerable importance to countries to which we have been extending credits.


Douglas Charles Abbott: In other words we selected the prohibited items as carefully as possible.


Howard Charles Green: You could have prohibited further goods from the United States if you had been dealing only with United States goods.

Foreign Exchange Conservation
Then there is the quota applicable to all countries, although there is a sly loophole in connection with that quota. Under the order in council now in effect there are what are called scheduled and non-scheduled countries, and different treatment is given to these two groups, also the quota is based on the years before the war, the purpose apparently being to ease the situation with regard to imports from Great Britain.
Finally, capital goods, as I have said, can come in only under permit from all countries. Why, I ask the minstry, is that provision directed against the members of the British commonwealth and against the nations to which we have lent money, all of which are anxious to send us their goods? The answer to that question contains my second objection to this program. It is this. Obviously this non-discriminatory policy was either dictated from Washington or designed to curry favour at Washington. The Minister of Finance said, at page 332 of Hansard:
Knowing their views and subscribing to the same principle ourselves, it was only reasonable that we should make a special effort to avoid direct discriminatory practices.


Douglas Charles Abbott: That is a pretty fair statement.


Howard Charles Green: He said the same thing with regard to the prohibition of goods from countries not in the dollar area. Those remarks will be found at page 95 of Hansard:
The Minister of Reconstruction, now also the Minister of Trade and Commerce, said that Canadian production was now to be tailored to fit United States production, his words will be found at page 389 of Hansard; and the excise taxes were placed on goods manufactured solely from Canadian products, the reason being given that that helps the United States to hold her market for these goods in Canada.
Mr. -ABBOTT: That was not the only reason.


Howard Charles Green: That statement was made by the Minister of Finance and will be found at page 336 of Hansard, where he said:
But by imposing these excise taxes we are doing something to protect the legitimate longer-range interests of these businesses.


Douglas Charles Abbott: My hon. friend wanted me to correct him where he was wrong. If he will go on and read the other part of my remarks he will see that there was an additional reason, that the primary reason was to reduce the consumption of Canadian goods having a significant United States dollar import content.


Howard Charles Green: One of the reasons was to stop the consumption of goods produced in Canada containing parts brought in from the United. States, but the other reason he gave was the one I have mentioned, to hold the market for United States goods; and I am complaining, Mr. Speaker, because that provision was made in respect of goods manufactured in Canada which contain solely Canadian materials.


Douglas Charles Abbott: I said this was not put in as a protectionist measure, and it is not.


Howard Charles Green: It is a lot worse than that. It is a measure to protect the interests of the United States, not the interests of Canada. This policy shows an amazing subservience to the United States. One would think Canada was a subject country. No Canadian government since confederation has ever gone so far toward taking orders from the government of another country.


Douglas Charles Abbott: That is rubbish. We take no orders from anyone.


Howard Charles Green: The policy is worse than
rubbish. It is a terribly tragic policy.


Douglas Charles Abbott: When my hon. friend says that we are taking orders from another country, he is talking rubbish.


Howard Charles Green: The minister can. make his speech in his own good time. I am making my speech now.


Douglas Charles Abbott: But my hon. friend1 asked me to correct him when he made an inaccurate statement of facts.


Howard Charles Green: Contrast the attitude taken by this government with the attitude taken by Mr. Bennett when, as prime minister of this country, he negotiated the empire trade treaties here in Ottawa. There was none of this kowtowing and cringing to another country. Canada took her place at the conference table with the other nations of the commonwealth beside her and debated trade questions man-to-man fashion. There was none of this business of Canada fawning on the United States. There was none of that sort of thing in 1932.
Canadians are a very proud people, and rightly so. I would remind the Minister of Finance and other hon. members of the part that Canadians played in the two great world wars. There was not a Canadian in uniform in either of those wars who did not consider he was just as good as or a little better than the man from any other country. I repeat: we are a very proud people. Now we are being

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humiliated by our own government. Canada will never become a great world power on policies of this kind. That is my second reason for saying that this program does not have the support of the Canadian people.
A third reason for the non-support is that the policy endangers our trade with the nondollar countries of the world. This trade is very important even at the present time when they are struggling to get back on their feet.
I hold in my hand a publication entitled " Foreign Trade," put out by the Department of Trade and Commerce; the issue of December 6, 1947. From it I find that during the first nine months of 1947 Canadian exports to the United States were valued at $732,979,000; while our exports to empire countries were higher, being valued at $845,518,000. The Minister of Reconstruction and Supply, now Minister of Trade and Commerce, and presumably soon to be Minister of Mines and Resources as well, made a statement on January 22 in which he is quoted to the effect that for the whole of 1947, 37 per cent of our exports went to the United States, 27 per cent to the United Kingdom and 15 per cent to other empire and commonwealth countries, showing that for the full year exports to the British countries exceeded exports to the United States. It is only natural that that should be so because Canada and the United States produce largely the same products, and there will always be competition between us. For example, on the Pacific coast our lumber has to compete with lumber from Washington and Oregon. Our apples have to compete with apples from these two American states. On the prairies our grain products have to compete with the grain products of the United States prairie states; Ontario and Quebec manufactured products must compete with those of the industrial eastern states, and in the maritime provinces our fishery products compete with the same type of products from the New England states; whereas in Great Britain, in Australia, and in other members of the commonwealth and France the products for sale are not the same type of products that we produce ourselves, and there is naturally greater scope for trade. Yet actually, in spite of the importance of this non-dollar trade, the Minister of Finance wants exports diverted to the United States. I quote from page 329 of Hansard, the speech that the minister made on December 16, in which he said:
Considerable further expansion in our United States dollar exports can be achieved by diverting exports away from other countries and by reducing Canadian consumption.
In other words, he appears to be deliberately breaking down trade with these non-dollar nations. I submit it is obvious to every hon.

member that if there is to be any diversion in our export trade it should be the other way, away from the dollar countries to the nondollar countries, thereby cutting down our reliance on United States goods. Yet no stress whatever has been placed by any minister of this government on buying elsewhere than in the United States. One would have thought this was a great-


Douglas Charles Abbott: I did, in my speech.


Howard Charles Green: The minister did not say much about that.


Douglas Charles Abbott: Look up the speech.


Howard Charles Green: One would have thought the situation would give us a grand chance to get goods elsewhere. Instead of that, we find Canada now trying to break into the United States market with manufactured goods; and, believe me, that is a tough proposition, as every hon. member should know.
The minister of half the portfolios made a statement to that effect yesterday in Toronto, I believe, in which he emphasized the need for Canada getting our manufactured products into the United States market. The Secretary of State for External Affairs (Mr. St. Laurent), who has been out on a leadership campaign emphasized the same thing in Winnipeg. This is the heading we find:
U.S. Need Held Exports Goal
St. Laurent urges increased production of required goods.
Winnipeg, Jan. 23. Increased production of commodities which have a market in the United States was urged here tonight by Rt. Hon. Louis St. Laurent as a measure to increase Canada's dollar receipts.
I am doubtful whether a policy of that type can be made successful. We have heard that the government is relying on the Marshall plan. The Marshall plan is not going to help Canada to get her products into the United States. The very best that the Marshall plan can do is to buy Canadian products with United States money to send to Europe. That will not be of any help in getting our products into the United States market.
The Minister of Finance said something about getting a further treaty with the United States. He is going to ask the Americans to cut their tariff beyond the provisions of the Geneva treaty so that we can get more of our products into the United States. I hold in my hand a press dispatch of January 11 which appeared in the Herald Tribune, and which reads as follows:
U.S. is claimed cool to tariff cut tries.
New York, Jan. 11. The Herald Tribune said today in a financial page story that the United States state department had showed only

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"polite" interest in efforts by the Canadian government to initiate new trade agreements with the United States.	.
The newspaper said that it was learned in New York that there appears little likelihood that Canadian proposals to open conversations looking to further reductions of trade barriers will advance beyond the study stage by state department officials.
On the same day the Minister of Finance was asked what he thought about the press dispatch, and the heading for his reply was: "Ottawa is hopeful."


Douglas Charles Abbott: That is not what I said.


Howard Charles Green: The article reads:
Ottawa is "Hopeful"
Ottawa, Jan. 11. Finance Minister Abbott said tonight the Canadian government was "hopeful" for new trade agreements with the United States, and already had made known its attitude to Washington.
Well, I think before Canada gets very much further along the road we should be going we shall have to have a government that is a good deal more than hopeful about some of these questions.
Another reason the policy is not one that has the support of the Canadian people is the uncertainty, uncertainty in so many aspects. First of all, there is uncertainty as to how long this policy is to be in effect. The government brings in a drastic policy affecting the lives of thousands of Canadian people, and one minister, the minister of half the portfolios, said:
My experience tells me that if we will make the building up of United States dollar exports a national objective, we should be able to balance our trade in a matter of months, and on a high level, rather than on a restricted level.
This quotation is taken from the minister's radio adress of November 20 of last year. More recently the Minister of Finance comes along and on January 9 we get this from him. From New York the minister is reported as having said as follows:
Abbott sees no end near for dominion's austerity.
Canada's Finance Minister Douglas Abbott sees no end to "austerity" in the near future. He said today it depends on results achieved this winter.


Douglas Charles Abbott: That is right. I did not use the phrase "no end".


Howard Charles Green: If there had been a set period of time Canadian businessmen would have known exactly what to face.
Then take the treatment handed' out to the automobile dealers, just as an illustration. The Minister of Finance said in his radio address on November 17 with regard to the total prohibition of automobiles:
We are also, at the outset, prohibiting temporarily the importation of all motor vehicles,
but we intend in the near future to replace this complete prohibition with a restrictive quota system.
In the meantime these dealers have been cut off from the United States production and from the British. Two months have gone by-


Douglas Charles Abbott: They got a lot in before the change was made.


Howard Charles Green: Two months have gone by and the government is still fooling around and has not decided on the quota. This means in effect that these dealers are being run out of business, in addition to which, of course, they have had a terrific excise tax imposed on their product.
Then take the terms of the bill itself. Provision is made in the bill for drastic changes.
I will not go into the sections, but we find extremely wide powers to switch products from one schedule to the other.


Douglas Charles Abbott: Always relaxing them.


Howard Charles Green: The excise taxes have been changed half a dozen times already since the policy was announced.
Another reason for uncertainty is the demand made on Canadian manufacturers to produce goods for the United States market. The ministers say to the Canadian producer, "Go out and produce goods for the United States market". Take the man who has been producing articles for the Canadian or the British market. He does not know what to produce for the United States market, and the ministers do not know either. They are just hoping. It all adds up to uncertainty, and that uncertainty arises largely from the fact that the ministry brought in a program without knowing what they intended to do. Their program was half-baked. It was never properly thought out before it was announced.


An hon. MEMBER:: Not even half-baked.


Howard Charles Green: Perhaps quarter-baked.


Gordon Graydon: Not baked at all.


Howard Charles Green: The fifth reason why the policy has not won support is that the small man is kicked around unmercifully. I know that in my own city of Vancouver many a businessman cannot make a living because of this program. These men are receiving letters from the officials of the department concerned telling them to be good Canadians; that is what they are getting out on the coast. The small businessman cannot afford to come to Ottawa. He cannot take the time or pay the money to come here, and if he did come he could not get the situation remedied anyway.
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There should be officials in British Columbia able to make on-the-spot decisions in these cases, and the same provision should be made for the maritime provinces and the prairies.
Then take the quotas. First of all, there was a delay in establishing many of the quotas, which made things frightfully difficult for the businessmen concerned1; further, the quotas were set on the basis of business done for the year preceding June 30, 1947, which meant that people who had only started up in business during that period were out of luck. A large number of these men were veterans, young men coming back from the fighting forces, and they were just getting started in business. These men find that because quotas are based on that period they are not able to get sufficient goods to carry on. That is very unfair.
Another way in which the small man is kicked around is in punitive taxation, these heavy excise taxes. I do not need to give examples, but I would mention electrical appliances. It always seems to me that this Minister of Finance lives in the horse-and-buggy days; whenever his budget comes down, whenever there is anyone to be soaked, the first one to get it is the man dealing in electrical appliances, or the young veteran and his wife who want to buy such appliances in order to set up housekeeping. Alw'ays you find electrical appliances being included in any of these heavy taxation measures.
The final example of the kicking around of the small man was what happened at the United States border when this policy was put into effect. South of Vancouver, people who had left Canada a day or two before, without knowing at all that this plan was to come in, made purchases not exceeding $100, as they were perfectly at liberty to do; when they got back to the boundary on November 18 they were told by officials of the government, "You have to go back with these goods. Take them back to the store or give them away or throw them away. You cannot bring them across the border." That is the way the thing was handled at that point, and it even went to the length of sealing the dining car on the Great Northern railway running from Seattle to Vancouver. That is inexcusable in any country not run by a dictatorship.
I say that the rights of the small Canadian have been trampled underfoot in this program.
My final reason for non-support of the program is the dictatorial powers given the minister-and I am looking right at the minister who has half of the portfolios. We find him given wide powers. It does not say what minister is to administer the bill. They

can be switched. One minister can handle one commodity and the other something else, just as the government sees fit. This minister to whom I refer I have seen, in my period in the house, dictator of national harbours, then dictator of radio, dictator of aviation, of atomic energy and of the maritime commission; heading the Department of Reconstruction, with over-riding powers over all other departments of government, and now trade and commerce, which means the wheat business in Canada and our external trade. Further, we find a press dispatch of January 24 carrying the headline:
Broadening of Howe powers on mines, resources, trade, reported next Ottawa move.
This is quite apart from the personality of the minister concerned. He may be the best minister in the whole world-


Some hon. MEMBERS:: Hear, hear.


Howard Charles Green: It seems to me that the
government thinks he is the only minister in Canada who is any good at all. This trend is very dangerous and is caused by the failure of the cabinet to deal with problems as they arise; the situation will go from bad to worse; the only way to remedy it is to defeat the government, and that is what the Canadian people will do at the next election. The smiles across the way look pretty sickly.
In the meantime, the Canadian people have this Abbott austerity program firmly fastened on their necks in a last minute endeavour by the government to get out of a bad situation into which the nation was allowed to drift; by a government which paid no heed to the warnings that were given and ignored every danger signal.
The ministers have been trying to get by through following a policy of doing nothing, as they have done on so many occassions before. One other good example was the way they tried to get by on the reinforcement question in 1944; this same tribe that we have sitting opposite us today. They have failed utterly to give leadership, and without leadership, Mr. Speaker, Canada or any other nation is bound to founder.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. F. S. ZAPLITNY (Dauphin):: Mr. Speaker, on November 17 of last year the Minister of Finance (Mr. Abbott) made an important statement over the radio, following a statement by the Prime Minister (Mr. JANUARY 26, 1948
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Mackenzie King) setting the provisions, the hopes and the aspirations of the Geneva trade agreement. Those who listened to the two broadcasts that evening were momentarily confused because of their contradictory nature, and now it appears that for a great many this confusion has become complete chaos. Since that date we have been waiting to see in statutory form what the government had in mind in the way of restrictions on imports in their effort to conserve their reserves of United States currency. It is now January 26, and we have before us Bill No. 3. Anyone who attempts to make head or tail of this bill, especially since every day when you pick up your newspaper you find that some detail of government policy is being changed, gets the impression that he is trying to follow a bewildering charade of some sort. There does not seem to be any sense of reality to it. At a time when this country and the world have been made conscious of the need for free trade, or at least freer trade than we have had so far, suddenly we are faced with restrictions and prohibitions on imports from the United States, so all-embracing that the government has found it necessary to change its policy several times since the announcement was made.
The point with which I am most concerned tonight is the effect this bill will have on the people of western Canada, if it becomes legislation, though I am not unmindful of the effect it will have on the whole population of Canada. For example, if you examine the position of the farmers of the west you will find that this is just one more of the many crippling pieces of legislation, put into effect by this government, which have hit the farmers. I should like to quote briefly from the Winnipeg Free Press of January 6, 1948. I could quote from other newspapers, but I have chosen the Free Press because it is not notoriously anti-government, and perhaps its opinion will be taken as authentic. In discussing the effect of these prohibitions and restrictions on western agriculture, that newspaper had this to say in an editorial:
The prairie farmer is shut out of the prosperous United States market. His income is limited by law. But there is no limit on the prices he must pay for any goods he buys and the events now under way assure that these prices will go up.
The events referred to are the restrictions and prohibitions. Then the editorial goes on:
Prices generally are moving up, of course, all over North America but there is now a new and special reason for their rise in Canada. With United States supplies of many articles cut off or reduced by import restrictions, a new, lush, preserve of protection has been carved out for Canadian industry.
Then, to top it off, the editorial goes on:
In the past the west was penalized indirectly by high tariffs and discriminatory freight rates. Now a penalty is added in the form of a limit of income, while, at the same time prices are going up, aided in their ascent by a new protection.
I noticed today that the Minister of Finance objected when one of the speakers described this legislation as a new form of protection, and said it was not meant to be protection. Perhaps it was not, but we can judge only by the effect it will have, whatever the intentions; and to my mind it is the most rabid type of protectionism we have ever had in this country. Even the most Tory of the governments we have had in the past never produced legislation which was half as protectionist as this will be if it ever comes into effect. What does it do? It shuts out imports of manufactured articles from the United States, covering practically the whole gamut of commodities used by the people of Canada. At the same time there is a shortage in Canada, so that Canadian industries are given not only a free hand to sell their products but also an artificial shortage on top of the actual Shortage that exists, and in this way they are given an undue advantage over the consumer.
In that regard we find that the farmers of western Canada, who have to sell their wheat under the British agreement and who are denied the export markets of the United States for their cattle and other livestock products, are placed in the position that their markets are restricted, their income is restricted, but the things they have to buy are protected so that they will have to pay any price Canadian industry wants to charge. I believe restrictions and prohibitions such as these, when not accompanied by a system of price control, are most unfair and discriminatory, particularly against western agriculture.
We find also that, while the government have been talking of doing something about the high cost of living and about bringing down prices, under this program designed to conserve United States dollars they have placed an excise tax of up to twenty-five per cent on certain articles. The result is, of course, that if a person must buy those articles he must pay that extra fifteen or twenty-five per cent, as the case may be, and the cost of living is shoved up that much higher. It would be understandable if the government were to tell the people of Canada that more money must be raised by means of an excise tax in order to pay for greater social services,

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or some other government expenditure which would be for the benefit of all the people. Then those buying such goods would know the tax would be devoted to a useful purpose. But the Minister of Finance told the people of Canada on November 17 that the excise tax was not being imposed for the purpose of raising money but for the purpose of discouraging purchases. I want to say to the minister in all sincerity that those in the low-income groups-and he knows they comprise a very large majority of the people of Canada -are already prohibited from buying goods which are priced too high for their budget. The addition of an extra twenty-five per cent to that price will only have the effect of making it still harder for those people to get the necessities of life, while those who have plenty of money will not be discouraged in the least because they will have the wherewithal to buy.


Douglas Charles Abbott: But the tax is not imposed on necessities.


Frederick Samuel Zaplitny: The minister says the tax is not imposed on necessities. Well, we could get into quite a discussion as to what is and what is not a necessity, but let me point to one example. Let us take automobiles. The minister may not think an automobile is a necessity. He may have the advantage of living in a city, where he can jump on a streetcar and reach his destination in a few minutes. But there are a great many people in western Canada, where we have wide open spaces, and where we have to cover long distances; and there are thousands of people in this country who make their living by driving cars. So that it is pretty hard to say which things are necessities and which are not. The minister may say that liquor is a necessity; I notice it is not on the prohibited list. So it is clear that we have a difference of opinion.


Douglas Charles Abbott: People are still spending a lot of money on liquor.


Frederick Samuel Zaplitny: I have no doubt that all hon. members, day after day, are receiving letters from various business concerns, including retailers and other groups, about goods which they consider are certainly not luxuries, but are necessities.
For instance, let us consider sporting goods. Canada is one of the most sport-conscious nations of the world, and we consider certain types of sporting goods, such as skis, skates, baseball bats, footballs and other sporting equipment, not as luxuries, but as one of the most important types of commodities for the improvement of the health and opportunity of the young people of Canada. I would not

classify them as a luxury; they are a necessity. Yet we have an excise tax which discourages the young people of Canada from taking the full advantage of sporting life which should be available to them.
Then, I would refer to fresh fruits and vegetables, another class of commodities upon which restrictions have been placed. I do not believe even the minister will argue that fruits and vegetables are a luxury. People know that without them our diet cannot be kept in proper balance, and that in the end it may cost us more money through doctor bills if we try to economize in the use of these essential foods.
I hold in my hand letters similar to those which I have no doubt have been received by other hon. members, containing petitions from retail merchants and other people across Canada, in which they seek the .removal of these restrictions on the importation of fruits and vegetables. For example, I have before me a letter which was written by the Retail Merchants' Association of Canada, with head office in Winnipeg. The letter points out that for some reason or an other Winnipeg has been picked as a victim of these restrictions on fruits and vegetables. They say they have been discriminated against, perhaps more than any other city in Canada.
With this in mind they have addressed a letter to the hon. member for Rosetown-Biggar (Mr. Coldwell). I refer to it only because the hon. member has already exhausted his right to speak in the debate. Otherwise undoubtedly he would have brought it up himself. They have this to say:
*Residents in the province of Manitoba have been particularly hard hit by the embargo on produce and our association has been receiving complaints from all sources-jobbers, wholesalers, retailers and consumers. Even our local growers approve imports, realizing that our growing season and storage facilities are inadequate to supply green vegetables in sufficient quantities to meet the demand throughout the winter months.
The city of Winnipeg health department has endorsed the general protest and, in order to provide the consumers' viewpoint, we attach letters which have been signed by customers of local stores. These letters are being received daily from Winnipeg and rural districts and are representative of the opinion of Manitoba residents as a whole.
They attach a list of about 400 names in which they petition as follows, as set out in a telegram on January 19, 1948, addressed to the Minister of Finance:
At a meeting with Canada-wide representation of national foods officers of the retail merchants' association of Canada held here today the following resolution was adopted for submission to you: "Whereas the domestic supply of cabbage, lettuce, spinach and celery is ex-

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hausted in most parts of Canada and whereas these essential health foods are available for importation at reasonable prices be it resolved that the government be urged to provide for their immediate importation in order to protect the health of the nation as well as reducing the cost of living thereby."
This is signed by the retail merchants' association of Canada. This is only one example of the pleas being sent to the government to use some common sense in the restrictions and prohibitions imposed upon the people of Canada.
I should like now to refer to another phase of this legislation to which reference has already been made by two hon. members, and particularly by the hon. member for Acadia (Mr. Quelch), who made a most excellent case on this particular point. I refer to the application of the so-called non-discrimination clause as agreed to in the Geneva pact. I should like at this time to quote something to which reference was made by the hon. member for Acadia, and that is article XIV, section 6 (a) of the general agreement. It states:
That the provisions of the agreement relating to non-discrimination shall not come into force in respect of import restrictions applied by any contracting party ... in order to safeguard its external financial position and balance of payments, until January 1, 1949; provided that this period may, with the concurrence of the contracting parties, be extended for such further periods as they may specify in respect of any contracting party whose supply of convertible currency is inadequate . . .
What do we find? We find that apparently because the United States wishes to have the non-discrimination clause strictly observed, in spite of the fact that the agreement itself does not impose that obligation upon the Canadian government, that government has, as well as restricting goods from the United States to conserve our dollar position, placed the same restrictions on other imports from other countries. It places us in a ridiculous position because we have shipped to other countries much more than we have been able to get back in return, by way of goods. We have shipped these goods to European countries, including Great Britain. This means that they owe us a great deal of money which they can pay only by shipping goods to us.
At the same time we owe goods to the United States. So what do we do? Instead of accepting goods from European countries and exporting more to the United States, thus balancing our false position, we restrict importation from all countries and, by some magic, expect that that will solve our dollar problem.
I have a list here which shows what we could have imported from countries other than the United States. However, we have failed to take advantage of article XIV, section 6(a)
of the general agreement, which permits us to do so. For example, I would mention fresh grapes from the Argentine and Chile; fresh pears from Australia, the Argentine and Chile; green peas from Mexico, and fresh tomatoes from the Bahamas and Mexico.


Douglas Charles Abbott: All for United States dollars though.


Frederick Samuel Zaplitny: Cocoa and chocolate
powder from the United Kingdom; paints and varnishes from the United Kingdom, Norway and France.


Douglas Charles Abbott: They are under quota.


Frederick Samuel Zaplitny: Stoves, sewing machines, typewriters .and furniture from the United Kingdom.


Douglas Charles Abbott: You cannot get them.


Frederick Samuel Zaplitny: Onions from Chile and Egypt; textiles, leather, cutlery, clocks and watches from the United Kingdom.


Douglas Charles Abbott: Every yard of textiles that they will send us can be brought in. There is no restriction upon the importation of textiles.


Frederick Samuel Zaplitny: If the minister is going to argue both sides of the case, he is welcome to do so; and perhaps he can do so. But on the one hand he is trying to tell us that these goods are restricted so that they cannot come in, while on the other he is telling us that they are coming in to the full extent possible. Well, if they are coming in to the full extent why place a restriction on them? If there is no desire to restrict importations from these countries, why include them in this bill? Apparently there is no answer to that.
If we examine the bill carefully and all the events leading up to it we must come to the conclusion that it is an attempt-and not the first one-by the government, to tie us up completely with the economy of the United States. It is putting the economy of Canada into a strait-jacket and, as was so well said by the hon. member for Vancouver South (Mr. Green), it places Canada in a subservient position vis-a-vis the United States. I see no reason for that.
Of course the minister and his supporters, his apologists, will say that we cannot afford to offend the United States, that we must kowtow to the United States because we cannot obtain oil and other necessities elsewhere. We should not always be carrying our hat in our hands when we go bargaining. We should not forget that the United States obtains some of her essentials in Canada, one example being paper. If the United States were not able to obtain pulp and paper from

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Canada more than half of their journals and newspapers would have to cease publication. An hon. member here mentions nickel, and asbestos is another example. There are many basic products which the United States must obtain in Canada. I am not saying that we want to make a bad neighbour of ourself because that is not necessary. We should have some self-respect. We should not bow our necks to the United States even before they ask us to do so.
There is another feature of this proposed legislation which is quite objectionable. It places in the hands of several ministers complete power to make decisions and to discriminate according to their judgment, good or bad as it may be, with regard to quotas and restrictions. I believe that is one of the most objectionable things about the bill. Not only are the ministers given a blank cheque to do as they like, but the jurisdiction of this bill is scattered among several departments. The average person will have to be a sort of Philadelphia lawyer to figure out which department he should go to.
I have an advertisement in my hand-I do not know the date of it but it is quite recent- signed by the Minister of Finance and headed, "Answering your questions about import control." I believe this appeared in most of the newspapers. It goes on to tell the people of Canada where they should go to-that is a rather good phrase-in order to find out where to get a permit, how much the quota will be and so on. It says that if you are an importer and wish to import goods subject to quota, if you wish information about your quota, you are to go to such-and-such a department. There are a lot of "ifs" about it, which is characteristic of the legislation of this government.
The first one tells you to go to the Department of National Revenue. The next one tells you to go to the Department of Finance. Then reference is made to the Department of Reconstruction and Supply. I suppose, since the reshuffle, it will be the Department of Trade and Commerce, which is not mentioned here. A new advertisement will have to be published pretty soon; this one is out of date already. Then further on, if you please, we find it involves the Department of National Health and Welfare. Can you imagine that department having anything to do with trade and commerce? However, there it is.
Of course the minister will say that this is unavoidable because these things involve these different departments and you cannot place them all under the one minister. I agree with him to that extent because they do concern these different departments. It appears to me

that there is only one sensible course to take under these circumstances and that is to set up an import-export board to co-ordinate all these departments which are affected by this legislation. It is hopeless to expect the people of Canada to understand all the intricacies, all the maze and webwork of red tape involved in visits to these various departments and the getting in touch with different officials. This country is too large and complex to be governed entirely from Ottawa.
The government should set up an export-import board which would be non-partisan in nature and be able to give everybody fair treatment. It could co-ordinate the ramifications of this measure as they affect various departments of government. Then the people of this country would have one central agency to which they could go to make application or to get information and so on.
One can imagine the complete state of confusion we would have had during the war if the wartime prices and trade board had been scattered among six, seven or ten different departments. Any person having any problem to bring up would have had to run around from one official to another. But we had just the one board which made decisions and consulted the various departments as they were affected. Surely if that were a sensible way of doing that job it would be a sensible way of doing this one.
More than that, if it were done in that way it would be possible for the government to plan a certain amount of our future trade. Regardless of what political point of view we may have, I think it is inescapable that a certain amount of planning must be done in the future so far as trade is concerned. I do not care whether one possesses the point of view of a free enterpriser, or a private enterpriser as they call themselves; I do not care whether one believes in private or public enterprise, it is unavoidable that there will have to be a certain amount of planning and direction in the future in connection with trade. That will be necessary because so many countries in the world are working on that basis. If we are to trade with them we shall have to work on that basis too.
If we had an export-import board it would be able to do some intelligent planning so far as our trade is concerned. As the situation is now, we find that private industry-I am not saying this in any derogatory way-is substituting its own type of planning for the kind of planning that national governments should be doing. In other words, in effect they are saying to the governments of the world, "If you will not plan your trade for the welfare of the general public, then, we shall plan our trade

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for our own benefit and you will have to take the consequences." I am not saying that just because I want to; the evidence is there. If you turn to the McGregor report on international cartels you will find this on page 20:
Canadian Industries Limited is restricted by its parent companies. I.C.I. and Dupont to operation in Canada and "is not to engage in any export trade even when it is in a favourable position to do so through tariff preference and other causes."
Note it is the I.C.I. and Dupont who are giving the orders to Canadian Industries Limited, it is not the Department of Trade and Commerce or the Department of Finance. No department of government apparently has as much power and direction over the trade of Canadian Industries Limited as have Dupont and I.C.I. How are we to plan intelligently in connection with trade in this country when someone in another country has control over a subsidiary in this country? Another example is to be found on page 25 of the same report where he deals with the production and manufacture and distribution of matches. He says:
The policy was decided by the cartel members outside Canada that Canadian production should be sold only in Canada while they refrained from exporting matches to Canada.
Note that it says it is decided by the cartel members outside Canada that Canadian production should be confined to Canada. There you have an almost unbelievable situation, private industry outside the borders of this country dictating to industries in this country as to what they may export and where. We are asked to approve a bill which is supposed to be a measure to conserve our foreign exchange position. What is the use of our passing legislation and giving ourselves the illusion of being masters of the situation when, as a matter of fact, industries outside this country which are not subject to our laws are in a position to dictate who shall export and what they shall export. In the conclusion of his report the commissioner says:
However, the volume of our trade may be limited by the cartel so that expansion of Canadian industries may be slower than it would be if exports were made without restriction. The conditions imposed by the cartel agreement may run counter to Canadian trade policy-
That is straight from the shoulder. We may make our own trade policy and pass legislation, but international cartels not subject to our laws can make rules which run counter to our legislation, and they can get away with it. The commissioner goes on:
-but if our exporters are to secure the advantages they see in the agreement they will be forced to follow the policy adopted by members of the cartel rather than Canadian government trade policy.
He concludes by saying:
It is dangerous to have such power of discrimination subject only to the discretion of private interests.
I agree with him wholeheartedly. It is extremely dangerous. As a matter of fact it makes us look ridiculous to pass laws giving the illusion to the Canadian people that we are in charge of the situation when, as a matter of fact, our export and import policies, our whole trade policy, is dictated from beyond the boundaries of this country.
The Minister of Reconstruction and Supply (Mr. Howe) told us in his speech last December that it was the policy and function of his department to expand Canadian industry and increase production, as his contribution toward solving the United States dollar short-, age. But if he will examine the statement of the commissioner which I have just quoted he will begin to realize that his best laid plans may go completely astray because somebody outside Canada who does not hold two or half a dozen portfolios but does control a few billion dollars may make decisions opposed to his.
I believe that the people of Canada will agree with the Minister of Reconstruction and other members who have spoken of increased Canadian production and greater industrial expansion as the long-range solution of our exchange problem with the United States. There is no easy way out of it. We must produce more in our own country and import less from the United States if we are ever to get out of the debt of that country. That is clear. But I cannot go along with the Minister of Reconstruction and Trade and Commerce, and a few other things, when he tells us that his means of expanding industry and increasing production in this country is by encouraging private industry here to go into certain fields of production. A limited amount may be achieved in that way, but in the long run the government will come to realize, as many people in this country do now, that if we are to have any appreciable expansion of industry in Canada the bulk of it must take place in western Canada.
I am not opposed to industry in eastern Canada, but in the east industry has been expanding for some time and it has not solved our problem. In western Canada we have great possibilities and very little has been done to take advantage of them. There are various reasons for that. Private capital is not disposed to take risks on the expansion of industry in western Canada. While some of our provincial governments in the west, notably those of Saskatchewan and Alberta, have been doing a little on their own hook to get new
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industries started, they have found themselves restricted by jurisdictional powers and by lack of financial resources. I think it is clear that if we are to have any large-scale development of industry in western Canada the initiative will have to be taken by the federal government. I do not know of any better investment that the federal government could now make than to invest in western Canada a few million or a few hundred million dollars, if necessary, to get new industries going to produce so many of the products that we now have to import from the United States. Some small experiments have been made. One is the factory in Portage la Prairie which is processing flax fibre, and other examples could be given. But when you look at the whole picture across the three prairie provinces you will see that the surface has not yet been scratched in comparison with the possibilities of industrial development in those three provinces. That is the long-range solution, and the government of this country should make full use of public investment in those fields where private enterprise has not yet taken advantage of the possibilities.
I realize, of course, that this is contrary to the views and policy of the Minister of Finance (Mr. Abbott) who, as it happens, just one year ago in addressing the Toronto board of trade said in effect that, so far as he was concerned, the government would) enter into the picture only to fill the gaps in employment and would dio nothing more by way of public investment. I hope that the rest of the cabinet do not share that same narrow point of view.


Douglas Charles Abbott: Better read the speech,
hadn't you? That does not sound a very accurate paraphrase to me.


Frederick Samuel Zaplitny: If the minister prefers I will quote what he said.


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


Frederick Samuel Zaplitny: I am quoting from Hansard of May 15, 1947, which contains a quotation from the minister's address to the Toronto board of trade on January 27 last. He said:
We believe that government should create conditions, a climate

The climate appears to me to have been wet and windy so far.
We believe that government should create conditions, a climate, if I may use that term, within which initiative can be exercised and enterprise flourish. To create such conditions, we believe it should be made possible, through reduction and simplification of taxes and in other ways, for private enterprise to operate

boldly and courageously, and, in doing so, provide most of the employment; and that government should, by direct action, fill the gap m employment-when, but only when, there is a gap to fill that would not otherwise be filled.
That is what I said, andl if I did not paraphrase the minister to his liking he can take his own exact words. He laid down there the principle that the government would go into public investment only to fill gaps in employment. That is not a very inspiring picture in a country where only a few years ago we were promised a new social order, and not a very inspiring outlook for industrial expansion and increased production in this country if the federal government will not take any responsibility for carrying out their own program to help out in this dollar shortage. But they are not willing to do anything about it; instead, they are going to ask private industry to do it. Well, private industry has been in control of the situation up to now. Apparently they failed to close that gap.


James Horace King: Order. I am sorry to interrupt -the hon. gentleman, but he has exhausted his time.


Frederick Samuel Zaplitny: I did not realize it.


Mr. PARK MANROSS (London):: Mr. Speaker, I did not know that I would be taking part in this debate so soon after the house met; consequently I am not too well prepared. As a matter of fact it is so sudden that I am very anxious to hear what I am going to say. I know the former minister of veterans affairs would not get that. When the Prime Minister (Mr. Mackenzie King) last November brought forward agreements worked out by toiling experts after several months work we felt that in this plan called the .Geneva trade agreements there were signs of better days ahead through more trade. The first reaction of Canadians, as I found it, was not to find fault with these Geneva agreements but more or less to wait and see, to try it. One sort of formed this opinion as the voice came through on the radio from London, England, and we had a half hour of encouragement, sort of happiness and bliss after the Prime Minister spoke, and those who forgot to shut the radio off heard the voice of the Minister of Finance (Mr. Abbott) coming through. You know at home you can shut him off; maybe you cannot do so here. But I did not do it. We listened to him. Some of the newspapers headlined this thing as "Abbott's austerity program." Later in the house the minister said he did not like the word "austerity". Probably he thought it was

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smart to borrow it 'because he thought it was becoming fashionable. Later he was sorry he used it.
However, in addition to prohibiting the importation of certain articles, which was a sensible course to pursue to save United States dollars-it takes Canadian dollars to buy them; I found that out-he imposed a twenty-five per cent- excise tax on a multitude of articles recommended by, we will say, theoretical economists or economists, to stop sales of these articles; hence to cut production and perhaps thereby cause unemployment which, of course, would absorb purchasing power, although it is a bad way to do so.
This afternoon I thought this debate was a pretty important thing. I thought all the Liberals would be here waiting to hear and to see. At one time we had fifteen on the opposite benches. At the low it got down to eight. At the real low the Minister of Reconstruction and Supply, Trade and Commerce (Mr. Howe) and what have you. was absent.


Douglas Charles Abbott: There are only fifteen Tories here now.


Park Manross: That is pretty good for me. There are only thirteen from western Ontario; therefore we must have two from Toronto.
In any event, it looked to me as though the Liberal members were ready to acquiesce in anything that the government introduced, willing to acquiesce in any kind of power so long as they stay in power. That is only my own observation.
If the minister did not like this word "austerity" which he said he did not like, in view of all these taxes, this curtailment of production, this curtailment of purchasing power and the increased cost of living, perhaps I can give the program a true label. I was often busy in my day devising labels for merchandise.


An hon. MEMBER:: How should we label the hon. member?


Park Manross: I will not give the hon.
member his true label but I am labelling the program. I would label i.t for the newspapers, "Abbott's anti-prosperity program" instead of "Abbott's austerity program".
It looks to me as if there were two weddings being attended by the government at the same time. One was the glamorous, beautiful and much publicized royal wedding, and the other was I would say a shot-gun wedding between the United States economists and the Canadian finance officials at which vows were taken that we would put a twenty-five per cent excise tax on the goods we manufactured in Canada which were similar to the goods manufactured in the United States and which we prohibited. Why? To kill the Canadian market for these goods of Canadian manufacturers, to kill the production, if you like, pro tern, until the taxes were removed and these markets would be opened. Naturally this is the result being obtained, as people who have the money to buy these items that are subject to the twenty-five per cent tax are not buying them too profusely, and, of course, the veteran and the working man cannot afford to buy them at these government inflated prices. Officials say, "Oh, well, the tax is neither here nor there. We* hope we do not collect much money from this tax. It will show that the people of Canada are co-operating by not purchasing." At the same time you can see they are co-operating, by reducing their standard of living or by living on relief and unemployment insurance, because their jobs have been destroyed. The way this tax was imposed showed plainly that the imposer was being led up an unknown and untrodden alley by theoretical economists.
I had better stop there and explain my personal interpretation of a theoretical economist. To my way of thinking there are two types of economists. If a man, no matter how small, has opened up a shop on Monday morning, sweeps it out, runs it all week selling goods, handles help and deliveries, pays his bills, pays his payroll on Saturday, takes home the bacon to mama and gives a dollar to church on Sunday, he is a practical economist. He has learned the only practical way. On the other hand, most of those who get jobs as economists handling the biggest business in the world, which is government business, learn it from books in school. I went to school, believe it or not, and the answers were in the back of the book, that so we always knew whether we were right or not before we sent in our problem, if we had an extra book. Those who get jobs as economists look in the back of the book. There is no answer there and they are lost. They dream; they crystal-gaze and they try untried theories. I do not suppose the increasing cost of living and unemployment ever entered their heads. They are too interested in what they are doing. Economists! Surely if this idea had ever entered their heads, the idea of taxing everything would have been thrown into the ashcan. Why, the government already had reported a surplus of $573 million in eight months, and by April 1 they boast they will have the largest surplus any government ever had in Canadian history. I wonder if there is anything symbolic about the date,
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April 1? It is April fool's day, you know. It may be taxpayers' day. It may be the day on which they will see the light.
If this upsetting program continues to run, not work-it cannot work-the way it is now, Canada will not only have the largest surplus for years by next April, but have the largest number of unemployed people. This bill, this program, inaugurated without legislation behind the backs of parliament, slipped over on the Canadian public a la hoodwink style after the Prime Minister's royal wedding glow, not only adds to the cost of living but adds to this surplus. So that by April 1 of next year probably SoO for every man, woman and child in Canada will have been taken. In other words, there would have been left in circulation $50 for every man, woman and child in Canada for cost of living purposes.
Now the government has indicated in the last few weeks that it may proceed against profiteers. My hon. friends on the left have recommended it and it is in the statute books. I think they should, but who is the biggest profiteer in Canada when they take S50 from every man, woman and child in the country? When they are making this investigation they had better investigate the government which has put on these taxes. Shame on the government. They should have left them off. They should have removed indirect taxes which pyramid and affect every article figured in the cost of living index. If a manufacturer charges $108 and you include the sales tax, the distributor has to add twenty per cent, or, in other words, it is $129.60 when it leaves him, and so on.
The hidden tax is pyramided and affects the cost of living. It shows that these officials of the government had no idea where they were going or what they were doing, and events since have shown that they did not know what they were doing. First, the tax is taken off kitchen ranges. It should never have been put on. What is the first thing you need when you go into a house? You have to cook. Then commercial refrigerators, which is probably right. The government is so highly departmentalized that one minister does not know what another is doing. The Department of Agriculture has spent thousands of dollars to promote the saving of food through the preservation of foods by fast freezing, or freezing. The Department of Finance, on the other hand, was taking this machinery off the market so that farmers who had a surplus or people with gardens who had a surplus could not obtain fast freezers to save their foods.
One by one the taxes are being changed. The other day I noticed a bulletin containing items taken off the tax list, and the first thing I

noticed was commercial drink mixers. Now it will be cheaper to buy one of these than to hire a bartender. And, of course, to suit the ministers and some of the playboys, golf balls and clubs are taken off. But what is the second thing the veteran needs when he moves into a house after he has got his stove? An electric refrigerator. But there is twenty-five per cent on that.
The minister in the last debate said that an electric refrigerator was not really essential. I imagine he has one, though I do not suppose he needs one. If he put his food on the front porch it would freeze from the cold glances of people passing by. The Department of Health is a great department and I am glad I met them. Their Dr. Pett and nutrition and other pets have been going around the country at great cost to the taxpayer telling you how to refrigerate your baby's milk and how to save your leftovers. You can save $8.16 worth of food a month if you have an electric refrigerator. Of course, food is not a problem. The world is full of food. Who said that? At today's prices, the saving would be probably $10 or $15.
One lecturer said, "Save your calories- count 'em". As a matter of fact, he proved tc me that a banana split had more calories than a split banana. I did not get it. The second essential in a young veteran's home is an electric refrigerator, still subject to a twenty-five per cent tax-for what? To curry down this Canadian market, to destroy Canadian desire, to kill this Canadian purchasing power until the United States manufacturer can ship them in. There is no other reason. The government do not need money. They admit that, unless there is another election coming. I do not know.
Then they took the tax off pianos. I guess the minister likes jazz because he did not take the tax off organs. He does not like organ melodies, just hotcha. Why take it off pianos and not organs. There is less United States content in an organ than in a piano and I can prove it. In my riding we have two organ manufacturers and one piano manufacturer and I have compared the records. I find that there is a smaller percentage of United States content in an organ than in a piano. I am not speaking of pipe organs for churches. You have removed the tax from those; it should not have been put on. I am speaking about organs for cultural purposes, symphony orchestras and so on. Why take the tax off pianos and not off organs? I do not know whether the minister took the tax off bagpipes. I do not think they come under musical instruments.


Mr. MacNICOL:: You are wrong there.

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Park Manross: The hon. member says I am wrong. I have to be convinced. Then take some of the quota items. They are rather silly. I was looking up glassware, tumblers to drink water out of-I hope. A quota has been set for tumblers, decorated, from forty to fifty per cent of the basic period. You can import these tumblers or glasses with horses or birds or cherries or roosters or girls on them, but you cannot import a plain tumbler without the gals on. That is prohibited. They are taboo. You have to have the gals on. Probably that is because the minister is young and has a lot of ideas.
Speaking of the minister who has charge of the permits-not the kind of permits you were talking about, because that is provincial, but permits and quotas-the minister was not here this afternoon, though he came in for a few minutes tonight and disappeared. He does not think' this is important. He will have 100 per cent powers, and socialistic powers I may say.
I know that if we were a board of directors running a company we would perhaps feel safe in giving the present minister certain powers But suppose he turns socialist, like his colleague, and gets sent to the senate. Who is going to take his place? Well, previously in this debate the minister said-and these are his words, not mine-"Probably Canada's businessmen would prefer to deal with a known devil like me than with an unknown devil." But if anything happened and he left the job, who would be the unknown devil? Would it be some smart-aleck bureaucrat, or some legal man with a theoretical mind,-someone who knew nothing about business? We cannot tell. The ministry has the power; it does not matter who the man is. It is different in a company; you hire a man because he can do a certain thing. The way they move these ministers around you cannot tell who it might be. It might be myself; they have not offered me the job yet, but I am available.
Who can be judge of all things? What man in any party can be that? I do not think anyone can. Not long ago I visited the office where these permits are issued. They do not know what they are doing yet; they say, You fellows have not passed the regulations, so we cannot print our forms." They have them all pasted up with stickers, and if you change one you have to change the sticker, the fellow in London has not as yet even a blank on which to write. Do you know what they told me at that office? They said they might have 50,000 applications for import permits in ten days. I was told-and I am taking the man at his word-that it would take a thousand people to handle those permits. Can anyone say that you can go into a huddle, produce a bunch of unemployed people, or people you draw from industry or from the legal or any other profession, herd them into a building, and expect them to know the essentiality of the thing you want to import? Could you expect them to pass judgment on what you want? Then I asked, "Who decides?" His reply was, "We decide." I asked if there was any appeal and his answer was, "No appeal. We decide."
Who are these smart people? I have been in business for twenty-five years, and I know I could not find a thousand people that quickly. I have fifty now, and there are only two or three smarter than I am. Who gets a permit and who does not? Well, you know there is an old saying in England, "He who has, gits." Perhaps that is it. Probably it will be the man best known to the person who has to decide; or it will be the firm that has the best approach or the best contact, or the firm that can put up the best brief or tell the best sales story. Little Joe Doaks up the alley, a hard-working businessman but no salesman, who cannot make a speech, who is shy when he gets to his feet-as I am-and who gets nervous, will not get a permit because he cannot put it over. I do not think they can find anyone who can be a judge of all things.
Let me give an instance in regard to these prohibited articles. I have all the respect for the minister who is to be in charge of this program. I think he did a grand job during the war. I do not question his ability as a businessman, but if he is right sixty per cent of the time he is better than most lawyers, because they only win fifty per cent of their cases. But let me give this instance. The minister, having supplied these thousands and thousands of houses that he dreams up in this chamber, has these regulations. What can you do in connection with housing? If you need soil pipe in order to get the roof on you can import it from the United States. You get the roof on and1 you get your first loan from the mortgage company, or the Central Mortgage Corporation. Then you have to have gyproc or plaster and get the walls up all round. What do you need next? According to the contractors, the next thing you must put in is the bathtub. That must go in so that the builder can finish up above it and around it. You cannot import bathtubs, and there are not enough available in Canada. They are banned absolutely; there are no permits issued. You can import carloads of vitreous china; you can import pedestal basins, fancy medicine cabinets, vitreous toilets and

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all that sort of thing, but you cannot import bathtubs. That is the next item you need, but you cannot get it.
Incidentally, stoves are also banned. Of course many hon. members may say perhaps they should be, that we have a number of stove manufacturers in Canada who are doing a grand jo'b, and all credit to them. But one of their association tells me they cannot produce more than sixty per cent of the stoves that will be needed for new homes in the next two years. However, stoves are banned, so that people will have to eat hay or raw food.; they cannot cook.
I am sorry I did not hear the speech of the Minister of Trade andi Commerce (Mr. Howe) in Toronto today. I understand that, in connection with automobiles imported complete by dealers who have set up organizations in the last few years to buy cars made in the United States, they will be allowed a dollar figure of from $200 to $285 in United States exchange for every car they imported last year. They will be allowed this amount per car, regardless of the fact that they may bring in cheaper cars if they can get them. In other words, for every car a dealer imported during the basic period he will be allowed this amount of United States exchange. That is a pretty tough thing for a lot of these new dealers. In the first place, the franchise is automatically confiscated; and a franchise for any good car, in a good centre, is worth a good deal of money. His investment in his plant and showroom is very much depreciated, and of course, as a result of these two things, his bank credit is wiped out. Then, on automobiles made in Canada I understand they are going to give the manufacturers about $300 per car in United States exchange, to spend as they like. Further, I understand that the textile quotas are set at 32 per cent for the basic year ending in June, 1947, which is the average for the period from 1935 to 1939.
The trouble with all this program is that people in business do not know where they stand. They are frustrated. They cannot plan; they cannot design, and you cannot get firms from the United States to come over here. You cannot get risk capital. I talked to the head of a very large firm just outside Detroit, and incidentally I had influenced that firm to come to London instead of Peterborough, so that I am glad the hon. member for Peterborough (Mr. Fraser) is not here. I used to work with that gentleman years ago, and now he is financial director of one of the largest companies in that area. He decided he wanted [Mr. Manross.l
to open a plant in Canada, and as a matter of fact had already leased some property. But after his people had got in touch with our government he said the future was too uncertain. His whole excuse to me was, "You people change your minds so quickly we would not know whether we would be set for a year or two years." Incidentally, the twenty-five per cent excise tax was removed from one of their major products, and he could manufacture that if he could get a certain quota. He would employ from 250 to 300 people and would use 80,000 square feet of floor space, but there he is stymied. Now he says, "I think we will just wait and see."
That is a bad thing for Canada. You talk about monopolies or cartels; certainly this company does not belong to any such thing. That man worked with me about ten years ago, and he belongs to no cartel. He just built up something there; he has made some money; he has bank credit, and he said to me, " I do not care if we do not make money in Canada for seven or eight years. I do not care if we do not make a cent. We have a world-wide reputation. We are the largest builders of this product." I will not tell you what it is, because you would all be after this industry for your towns. He said, " We are the largest makers in the world of this article, and we make oil burners. If we did not make money for seven or eight years we would be quite happy. We would have an industry in Canada all ready to go. But we are stymied by this program." It would seem that I have driven the Minister of Finance out of the chamber; that is when a penny beats a dollar.
The two ministers are in a great predicament; they are having a pretty hard time of it It is not funny; they are in trouble. We can co-operate to help them out of their trouble- well, perhaps not to help " them," because I would not go that far. But I would go so far as to help Canada; and if we can help Canada and the Canadian economy, then we should do so.
These two ministers are the chief objects, the chief targets; I refer to the Minister of Finance (Mr. Abbott) and the Minister of Trade and Commerce (Mr. Howe). Those are the two departments which will have to shoulder the burden of getting us out of the woods. One hears it said that the farther you run into the woods, the closer you are to being out. But it might be a big wood-and it is a hard wood, if you know what I mean. And that would not be funny, even if the other minister's name were Costello. A few of you got that one.
They will have to be magicians if they are to get us out of this in the few months mentioned in the optimistic forecasts of the

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Minister of Trade and Commerce. As a matter of fact, they will have to be like Wood and Stone.
Have you heard the story about Wood and Stone? Well, Wood and Stone went down to the street corner. A pretty girl went past; Wood turned to Stone; Stone turned to Wood -and they both turned to rubber. It may be theory or magic or humbug-and I think it is the latter.
I am opposed to a policy of this kind, because it cannot be done as suggested. The government is fumbling along by orders in council. It has the audacity to come to the house and ask us to approve its mistakes so that it can appease the Canadian public with the statement, "Parliament has approved." The Canadian people are fed up; wait and see.


Mr. A. W. STUART (Charlotte):: Mr. Speaker, I have listened to the debate this afternoon as I listened to it before the Christmas recess. The impression has been left that hon. members on this side of the house do not wish to take part in it. However, for a short time I should like to place before the house something of the history in connection with the devaluation of the Canadian dollar.
This afternoon Tory members have talked about the way in which the situation has been handled in the last few months. When criticisms are made by hon. members of the C.C.F. or Social Credit groups I feel that they are entitled to take the stand they may wish to take. This afternoon I have listened for some members in the Progressive Conservative party to tell us how a similar situation was handled when they were in power. That is something for which one would naturally listen. I was expecting that they would tell us how they handled a similar situation when they were in power.
I consider myself still a young man. Living on the border, I have seen a good deal of manipulation of United States and Canadian dollars. I believe it was in 1946 that I placed on record a brief history of the manner in which the United States dollar was handled at the time of the first great war, and this evening I should like to repeat part of what I said on that occasion, so that hon. members who were not here at that time may know the way in which business was then carried1 on.
In those days I was a comparatively young man and, as usual, was selling in the United States two-thirds of what I produced. When I received a cheque from a United States canner I would go to a Canadian bank. Then, as I said in the house before, if there were a few fish scales in my hair, or a little hayseed
around my neck I might perhaps get ben pel cent; but if I had a friend who knew the banker better than I did, he might get twenty per cent. There are hon. members on the other side of the house who can recall those conditions as well as I do.
When this war broke out in 1939 the government of the day decided that the exchange situation would be handled differently. During those days I could go to a bank and demand ten per cent for my United States dollar, just as could the Prime Minister (Mr. Mackenzie King) or any other hon. member who happens to sit on the opposite side of the house. All of us got ten per cent for our United States dollar.
Today the hon. member for Vancouver South (Mr. Green) said that if the Canadian dollar were devalued today the exporters of this country would reap the benefit of it. I have one little story to tell in that connection.
Mr. GREEN; On a point of order, I did not make any such statement. Indeed I did not deal with that subject at all. The hon. member must be confused.


Andrew Wesley Stuart: This afternoon in his speech I understood the hon. member to say that if there were a premium on the United States dollar the Canadian exporter would receive the benefit of it.


Howard Charles Green: No; the hon. member is referring to the wrong person.


Andrew Wesley Stuart: That statement was made, at any rate, and I wish to explain it briefly. From 1930 to 1935 I was still an exporter in Charlotte. As usual under a Tory regime, the Canadian dollar was devalued. It went as low as from twenty to twenty-four per cent. At that time we were selling what we produced for about one-fifth of the amount we are getting today.
Then what happened? What I should like to know is: Have we any guarantee that the exporter would derive any benefit from that premium, if it did exist? United States can-ners from the state of Maine came across to the county in which I live. They exchanged their United States money for Canadian dollars and deposited it in Canadian banks. If I sold goods in the United States I was paid in Canadian dollars. Have we any guarantee today that if there were a premium on United States money the exporters of this country would derive the benefit from it?
In those days the county of Charlotte was represented by a Conservative, a very fine man( whom I know well. This matter was brought to his attention; it was a condition which existed for two or three years. The

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American brought his United States cash to Canada and exchanged it for Canadian dollars, paying exporters in Canada in Canadian money. The same condition could exist today.
The hon. member for Vancouver South spoke about pushing the little man around. If he can think of any situation where the little man was pushed around any more than he was in those days, then I should like to have him explain it. I should like to hear some Progressive Conservative member in the house tell us how a similar situation was handled by his party.
The hon. member for Vancouver South also told us today about the manner in which trade pacts were made when the late Viscount Bennett was prime minister. I shall not argue with the hon. member; but I believe that the agreement with which this country has become connected within the last few months will be the greatest in Canadian history. After careful study I believe any hon. member would understand why it is the greatest trade agreement since confederation.
Another statement made was in connection with the diversion of Canadian trade to the United States. I believe if we are honest, and if we are familiar with the facts, we must all agree that the shortage of Canadian dollars was brought about to a great extent by the fact that we have shipped goods from this country overseas when they were needed overseas, goods which could have been sold in the United States for United States dollars.
As to the customs regulations, I think all will agree that these are the same regulations as have been in force for years and years. The only difference-and this is the complaint on the border where I live-is that in the last few months they have been enforced more rigidly. I agree that anyone living on the border will resent these regulations, but we hope that in the near future they will be changed.
I note that last week the press stated that the Canadian dollar was discounted in New York at less than eight per cent. If I remember correctly, when these regulations went into effect the discount was between twelve and thirteen per cent. Surely we must agree that they have brought about a change which is most beneficial to this country. I shall say no more about this matter, but I should like to hear one member of the opposition fell the members of this house whether his government handled a similar situation in any better way than this situation has been handled by the government in power at the present time.


William Alexander McMaster: Mr. Speaker, I should like to deal with certain phases of the bill before us and call attention to the fact that the government have been very lax in dealing with this matter. They adopted a policy of drift and permitted matters to get into such a position that a real crisis has arisen at the present time. On May 6 of last year I was speaking on the budget and I said, as reported on page 2841 of Hansard:
I have watched with a great deal of concern the operations of the foreign exchange control board. I have felt certain over the past year, as I am today, that the operations of the board will work a great hardship on the people of Canada. It will mean that we shall have to take an immense loss which we would have been saved if the exchange had been allowed to find its own level. It is a sort of system of subsidies which people do not appreciate and which benefits most perhaps those who need it least, and in the long run the loss to the country will be considerable.
Then, referring to the excess of imports from the United States over exports I said:
If that continues, then surely as anything in this world Canada will lose a substantial amount of money by the operations of the foreign exchange control board and this will be another debt to be shouldered by the people of Canada.
The Minister of Finance (Mr. Abbott) and the government must have known that every month since that time the foreign exchange control fund was being greatly depleted. One of the reasons why they were able to carry on as long as they did without public protest was the fact that they kept secret from the people of Canada everything which the people should have known. At that particular time we did not know the condition of the foreign exchange control fund. In fact it was nearly eight months after the facts were available to the foreign exchange control board before they were given to the public. I am certain that if the people of Canada had known during the fall and summer of 1947 the great extent to which these funds were being depleted and wasted there would have been such a public outcry that the government would have been forced to act.
Why did the government not act? Unfortunately they carried on their usual policy of drift, hoping that something would turn up. I do not know what they expected would turn up. They were away at conferences; they were trying to put through the Geneva trade agreements which they said would do wonders, but which at the very moment they signed them they knew they could not carry out. Unfortunately there were by-elections being

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held in Canada at that time, and if ever there were an argument for refusing to allow a by-election to be held during the existence of a parliament, what happened during the late autumn presented it.
By-elections took place in Halifax and in York-Sunbury, and the government completely disregarded the people of Canada by making promises to those constituencies and withholding information the people should have had. We have only to remember the misleading statement sent out by the Minister of Finance as to the supposed surplus: "We had a surplus of $500 million; we had a surplus of $600 million; we were going on to have the greatest surplus ever known." The minister knew that any surplus which might have resulted from the revenues of the country was actually being wiped out through the losses of the foreign exchange control board and also by ignoring payments that were being made by the people of Canada in connection with loans where the money would not come back.
I should like to point out that for the first nine months of the present fiscal year ordinary receipts were only $1,925 million as compared with $1,894 million for the previous year. I wish to point out also that during December the receipts from income tax and excess profits tax were $50,000,000 less than last year. I know the Minister of Finance will say that this is not a true picture because receipts from income tax and excess profits tax vary greatly during the year and that payments on debts and other payments also vary greatly from month to month. I submit that it was only for the purpose of creating false confidence in the people of Canada that those statements of surpluses were made. The result is that the people of Canada have been spending money because they thought there was plenty of money in the country. The history of England shows that even with a great deal of domestic currency in the hands of the people, it does not mean anything. They simply have money to spend foolishly. They spend it at home on something that is no good to them, but they have no money to buy from foreign countries the things that they need.
This thing should never have been allowed to drift to its present condition. Steps should have been taken long ago. The people should have been told the things they are entitled to know. If the people had known that, there would have been such a public outcry, as I have said, that the government would have been bound to act. I remember last year the Minister of Finance-I think he was acting
minister then-said that this government was not run by experts, and then corrected himself by saying that the government was not run by the experts. Both statements are true. I have before me the proceedings of the Senate standing committee on banking and commerce held on August 20 and 21, 1946. Those proceedings were most interesting. I attended them and I can say definitely that, whilst the governor of the Bank of Canada estimated that during the succeeding six years the loss on exchange might be $600 million, he gave that only as an estimate. He gave that as an approximate amount. He went on to say that if there were any loss of confidence in Canada by the United States action must be taken to correct the matter. It was for the government to make the decision to have this foreign exchange control board. I think his blessing was most indefinite. It was the government's responsibility; the government knew what was happening and it did not act at the appropriate time. I should like to quote from page 42 of those proceedings where the minister was asked a question by Senator McGuire, to which he replied:
Hon. Mr. McGuire:	I should like to ask
Mr. Abbott a question. Now that exchange between Canada and the United States has been equalized, what is your intention with regard to Canadian currency, will it remain at par or close to par, or can you say what you would expect it to be?
Hon. Mr. Abbott:	That question, Senator, is
almost impossible for me to answer. Whether Canadian currency will stay at par with American currency or not will depend on so many factors, such as the uncertainty of the price level in United States compared with the price level here, that it is not possible for me to make any prediction. In view of the close relations between the two countries, I would hope that our currencies would stay at par. There is a great psychological advantage in their remaining in that position, but obviously if the Canadian dollar would buy considerably more in Canada than the American dollar would buy in the United States, it would not be possible to continue parity indefinitely; and the reverse would be true.
The Minister of Finance realized what could happen. He knew that he must act when the situation demanded action, and yet for reasons which it is hard for the people to understand he refrained from taking any action while our substance was being wasted every day, moneys which could never be recovered, and which should have been shown in his statement instead of a fictitious budget surplus being shown. I quote further from the evidence:
Hon. Mr. McGuire:	Caused partly no doubt
by direct action by your government?
Foreign Exchange Conservation

Hon. Mr. Abbott:	Well, it is difficult to say
how much governmental action could influence the relative values of the two currencies.
Perhaps that is what he thought all along until matters came to a point where something simply had to be done. He went on:
Some steps which the government might take would help to mitigate influences which would make a sudden increase or decreace, but in the end we cannot lift ourselves by our boot straps, and the government cannot make the Canadian dollar worth more on the exchanges than it really is worth.
That was the opinion of the Minister of Finance. Mr. Towers afterwards took a hand in the inquiry. He was asked this question:
Hon. Mr. White:	Mr. Towers, assuming a
time limit was embodied in this legislation, for instance, two years, and just prior to the expiration of the two-year period a crisis arose whereby our reserves were depleted-I thmk you mentioned the sum of $600,000,000 might be viewed as a dangerous point-
He had suggested that $600 million in two years might be viewed as a dangerous point, whereas we lost $750 .million in ten and a half months. Mr. Towers answered:
Mr. Towers:	I think that is true. My suggestion was that if the situation was particularly difficult at that time there might be some public feeling as to whether or not the controls would be appealed.
I think "appealed" should be "repealed". He went on:
My own thought is that if the circumstances were of the type we have been discussing, the action of parliament would be appropriate to the circumstances; but the public and business generally do not feel always absolutely certain until the thing is "fait accompli." I must add that in my remarks I was not speaking in the capacity of someone who was administering the mechanics of foreign exchange control but was rather thinking of the wider field of public uncertainty, should the thing come up at a time when the situation was particularly difficult.
Mr. Towers said before that committee that our imports from the United States in 1947 might go as high as $1,372 million. Actually we know they went up to $2 billion. Even today we do not know what the government plan to do to meet the situation. Their idea of meeting the situation appears to be to pass a certain bill containing a great many restrictions, all of which can at any time be abrogated or modified, and which will be administered by a minister who can say who shall be allowed to import and who shall not. No minister is in a position to do that intelligently with the knowledge he can get in the time available.
Sweden and Australia have gone about the matter in a very different way. Sweden has

deliberately balanced her exports with her imports so far as the United States dollar is concerned. Australia imported from the United States in the past year $133 million worth of goods and exported to that country $90 million. Australia said: We will balance our trade with the United States.
Why does this government not come before parliament with a definite policy for balancing our trade with the United States instead of going about the matter in this haphazard fashion? The government should be able to stand up and say what they will do and what they will not do. They have the figures before them. We know that in the twelve months ending August 31 last, which is the latest date I have figures for, although one month has since elapsed, we imported $85,000,000 worth of fruits from the United States; we can cut that down. We imported $24,000,000 worth of vegetables; we can cut that down. We imported $24,000,000 worth of nuts. Surely we can say that we will import only so many million dollars worth of nuts, and so on down the list. We imported $12,000,000 worth of coffee, $16,000,000 worth of tea, $13,500,000 worth of alcoholic beverages; $16,000,000 worth of unmanufactured wool and $17,000,000 worth of manufactured wool, $23,000,000 worth of paper. A statesman in Canada has said that we should not be importing this paper from the United States but that it should be manufactured in Canada. I do not think he got a great deal of credit from the Liberal newspapers for making that suggestion but was rather told that it threatened our good relations with the United States. Why should we not take steps to see that our pulp is manufactured in Canada and thereby save this $23,000,000 worth of imports?
We also imported $33,000,000 worth of books and printed matter. $63,000,000 worth of rolling mill products, $105 million worth of farm implements, $190 million worth of machineiy other than farm implements, and $147 million worth of automobiles and parts. I know the government have said that automobiles is one of the imports they are going to shut off, but they should be shut off on a percentage basis, and it should not be left to a minister to say: You can take this car and you can take that car.
We also imported $108 million worth of chemicals and $160 million worth of miscellaneous products. We can make a percentage cut in our imports of all these items. Surely this parliament of Canada, whose authority has been flouted a hundred times by this government, has a right to demand something more definite from -the government than it has disclosed so far as to its plans. The people

Foreign Exchange Conservation
expect us to get it and we shall fight until we receive it.


Mr. G. R. PEARKES (Nanaimo):: Mr. Speaker, amongst the emergency measures for the conservation of Canadian foreign excnange resources are certain prohibitions and restrictions regarding the importation of fresh fruits and vegetables. The effect of these prohibitions has already been seen in a shortage of supply of these essential fruits and vegetables, and the prices of those supplies which are available have already increased.
The first point where pressure is applied by any family which is in difficulties over its budget, in order that it may live within its income, is in cutting down its consumption of the choicest fruits which it purchases. If that is continued over an extended period the result will be that very shortly a vitamin deficiency will be noted and the health of the family will suffer on account of the lack of foodstuffs, particularly vegetables and fruits containing the essential vitamins. It seems to me rather ironic that, after the magnificent war effort which this country produced and the fact that certain fruits were subsidized during that period, being imported1 from the United States in order to maintain the health of the country, we should now be prepared to sacrifice nutrition as a means of balancing our budget.
I suggest that no economy, regardless of how well it may be balanced, can ever be worth the risk of lowering our national health. I suggest that there is a way in which these necessary fruits and vegetables can be made available to the Canadian people, because on the seaboard of British Columbia it is possible during the winter to raise all the vegetables and most of the fruits and berries which are mentioned in this table of prohibitions. For instance, we shall refer to the humble Brussels sprouts. Brussels sprouts grow out of doors the whole winter long on Vancouver island. You can go and pick the Brussels sprouts off their plants and they will provide vitamins which are necessary for the health of the veople. I know that people laugh at Brussels prouts and vitamins. There is an old saying of a greengrocer who was asked whether there were any vitamins in Brussels sprouts. He said', "No, ma'am, we have washed all these off". However, it is an established fact that even the humble Brussels sprouts are healthgiving vegetables. You can go through the whole lot that are included in schedule I and you will find that with a little care they can be produced by the horticulturists on Vancouver island.
When this list was first published a letter was sent out by the provincial department of agriculture urging the horticulturists of the Saanich peninsula to renew their efforts and to produce just this very type of winter vegetables which are now so urgently needed for the maintenance of the health of our people. I attended a meeting of farmers less than three weeks ago, and they were most anxious to meet the request as sent out by the provincial government. But they' asked a simple question, "How long are these prohibitions, restrictions, to be continued, because we shall have to make a considerable outlay if we are to bring under cultivation more of our acreage?"
In many parts of British Columbia the land is heavily wooded. Under the provincial scheme of land clearing, equipment is made available to the farmers, and country which a few years ago had been considered quite impractical to clear is now cleared with comparative rapidity by the use of the heavy machinery which is made available. It is amazing to see how the bull-dozers will go into thick forest country and uproot trees of considerable size, and then in a very few weeks' time than ground can be prepared for the growing of fruit, vegetables and berries, but of course that means a considerable outlay to the farmers themselves. Not only must they invest in a special kind of equipment, but horticulturists who are operating on a large scale no longer depend upon a man with a hoe to cultivate their fields; they have all kinds of power-driven farm equipment for the cultivation of their berry patches and their vegetables. If they can be assured that these prohibitions will be continued for some time they can meet the situation. But they are not prepared to make the outlay of capital which is necessary to clear additional land, to purchase additional equipment, unless they can be assured that by the time that new land is brought into production they will be able to be protected in the way they would be protected now if they had their vegetables to sell.
Also, not only is it a question of clearing land, but many of the fruits can be raised under greenhouse conditions. We are particularly fortunate in British Columbia regarding our greenhouse development, because our climate is more moderate than it is in other parts of Canada, and it is easy to heat these greenhouses to the required temperature and to keep them at a uniform temperature by the use of surplus wood and sawdust.. Sawdust is readily available from our many mills. Therefore it is essential that if the output of British Columbia fruit and vegetables produced in greenhouses is to be stimulated and
Foreign Exchange Conservation

increased, there has to be a certain amount of outlay. I can refer to certain greenhouses on the islands in the gulf of Georgia which, before the last war, were operated by Japanese companies. These Japanese were removed during the war period, and to a very large extent their greenhouses have remained idle. Many of the panes of glass have been broken and the framework is deteriorating. A certain outlay would be necessary in order to bring these greenhouses back into operation;, but they could be brought back into operation very quickly, and they would be brought back if the minister would give some assurance as to the period of time that would be required.
I am not merely speaking from my own personal knowledge, but I know that representations have been made by the provincial government to the minister asking for an indication as to the length of time in which it might be considered practicable for these greenhouse people, the horticulturists, the fruit growers, to increase their production. I hope that before the minister closes this debate he will be able to give some indication that the production of these essential foods may be stimulated in British Columbia. I would ask him, if it is at all practical to make such a statement.
There is one other point to which I wish to refer and I do this in all seriousness, although it is possible that some hon. members may treat it somewhat lightheartedly. Two years ago I suggested in this chamber that in order to encourage the breeding of pure-bred race horses we should establish -a Canadian stud book so that a edit born and bred in this country might race on the tracks of Canada in those races which are specially reserved for Canadian-bred horses without having to register in the New York jockey club stud book. No action has been taken in that regard, although there is some talk that it was rather up to the racing associations of Canada.
I am not exaggerating when I say that in the last two years hundreds of thousands of Canadian dollars have gone in registration fees to the United States in order to register Canadian-born colts in the stud book of the New York jockey club. If it is necessary for us to restrict the number of Canadian dollars going over to the United States and to encourage United States dollars being paid into the Canadian treasury, why not adopt this Canadian stud book and make it essential that an entry fee be paid on all horses racing in Canada, so that if a Canadian colt born on the farms of Canada had to race on Canadian race trades all that would be necessary would be to register it in the

Canadian stud book, and if it were desired to race him on United States tracks, then of course he would have to be registered with the New York jockey club. Conversely, an American-bred colt anxious to race in Canada would have to pay an entry fee in order to race on Canadian tracks. That, I suggest, might be an avenue of exploration which might possibly interest the minister as a source of United States dollars coming into Canada and a means of drying up the stream of Canadian dollars being spent unnecessarily in the United States.


An hon. MEMBER:: He never rode a
horse in his life.


George Randolph Pearkes: I do not know whether
you refer to me but I have ridden more horses than you have ever seen.


An hon. MEMBER:: He meant the
minister.


George Randolph Pearkes: I do not know about
the minister. I believe he was a gunner in the last war.


Douglas Charles Abbott: I am not a racing man
myself.


George Randolph Pearkes: In all seripusness, it is
a proposal which is being advocated very largely by the breeders on the Pacific coast who are anxious that something be done in connection with this industry. Racing is a big business and they are anxious that the breeding of Canadian thoroughbred horses shall be stimulated.
Reference was made to the question of nuts. We grow nuts in British Columbia in exactly the same way as they do in some of the southern states.
May I refer to one other point that has some bearing on this matter, namely the employment of many of the younger men who have come back from the war and are trying to establish themselves in business. The hon. member for London (Mr. Manross) referred to the fact that quotas would be set for the importation of certain equipment according to the quantities which were imported by particular firms some two years ago.
Of course many a young veteran has entered into business since that time and there will be a hardship upon these veterans who have made an effort to re-establish themselves in little private enterprises. There are all kinds of things mentioned in this list and I will not run over them, but one that is rather ridiculous is the prohibition of picture postcards. We have a big tourist industry in British Columbia, and many a small tearoom now

Foreign Exchange Conservation
operated by veterans derives a certain percentage of its revenue from the picture postcards which are sold there, not always views of the particular area, because many of these picture postcards are brought in from the United States.
There is, in this schedule, a whole list of kindred articles referred to, which one might describe as mementos that could be sold by these small industries which cater to the tourist trade. 1 hope that, in connection with this schedule, no regulations will be brought in which will in any way hinder the veteran from re-establishing himself.
In closing, I wish again to ask the minister definitely whether he will be able to give some indication to the growers on Vancouver island pf the length of time that these prohibitions will be kept on.


Mr. A. M. NICHOLSON (Mackenzie):: I hope that the fact- that so many government members have remained silent throughout this important debate does not indicate that the people they represent in parliament are unaffected and undisturbed as a result of government policy. I think the administration is open to severe criticism for having failed to deal with the problem until December.
The minister, in introducing the legislation on December 16, outlined carefully that this problem was developing month by month. At page 326 of Hansard he said:
In the ten months up to October, Canada's imports from the United States have been running at the rate of nearly $2,000 million per annum, an increase of almost fifty per cent as compared with 1946 and four times as much as just before the war. In October, they reached the highest monthly figure on record of $190 million.
When we were here in July it was well known that the situation was developing and that some action should be taken. I am sure hon. members were not greatly impressed by the minister's statement on page 330 of Hansard:
I now come to an explanation of the import restrictions covered by the bill. As the Prime Minister (Mr. Mackenzie King) has emphasized, the government believed it unwise to impose any such restrictions before the Geneva agreements were concluded. At the same time, we could not postpone action until early in the new year when the new session of parliament would normally have met.
I cannot conceive that those who were participating in the formulation of the Geneva agreements could have offered any objection to Canada dealing with this problem last July or August or September; and if we had dealt with it at an earlier day we could have taken action that would have satisfied our 5849-371
people that fairer consideration was being given the matter. I happened to be in Prince Edward Island in November, shortly after the Minister of Finance (Mr. Abbott) made his statement outlining the policy of the government. One of the fur producers of the island drew to my attention one of the publications of their co-operative association which complained about Canada's austerity program permitting the importation of raw furs from Russia, to be paid for with scarce United States dollars. I said, "I think there must be some mistake. I cannot conceive of Canada importing Russian furs and paying for them in United States dollars." On my return to Ottawa, however, I placed a question on the order paper and found that our importations of raw furs were increasing sharply, and that this had continued throughout the period. For the first eight months of 1947 we imported 87,950,000 worth of raw furs from the United States, as compared with $5,190,000 for the first eight months of 1946. For the first eight months of 1939 we imported from the United States raw furs to the value of $2,580,000, and for the first eight months of 1938 our imports amounted to 82,078,000.
While I have this table before me, I might mention that our imports of jewelry were still very high, $1,432,000 in 1947 as compared with 8417,000 in 1939. At the same time our importation of distilled liquors in the first eight months of 1947 amounted to $1,384,000, while in the first eight months of 1946 they, were $665,000, as compared with $49,000 in the first eight months of 1939 and $44,000 in the first eight months of 1938.
Coming back to the importation of furs from Russia, I find in the publication of the bureau of statistics, listing articles imported from each country for the nine months ending September, 1947, that we have been importing from Russia fur skins, raccoon, undressed; fur skins, viscacha, whatever that is, undressed; fur skins, fox, undressed; fur skins, Persian lamb, undressed; fur skins, rabbit; fur skins, squirrel. I think it would be difficult to defend, in the eyes of the Prince Edward Island fur producers who are having difficulty in meeting their obligations, the action of the government still considering it essential to import a luxury product such as raw furs from the United States, to sell in Canada in competition with the furs of our own producers. Nor can I think of any good argument why Canada should delay this long making a decision in connection with the importation of distilled liquors from the United States. Surely with our brewing and distilling capacity in Canada we should be able to produce enough to satisfy the appetite of all reasonable people.
Foreign Exchange Conservation

It seems inexcusable to bar the importation of fresh fruits and vegetables, which have been regarded as a necessity by so many of our people, and continue the importation of raw furs, expensive jewelry and liquors.
While speaking earlier in the session, the minister had some comments to make regarding the point of view expressed by the leader of this group in referring to the discriminatory clauses which prohibited imports from the United Kingdom. The minister pointed out that the articles from the United Kingdom which have been barred do not represent a very large total, but I submit that a principle is involved. When manufacturers in Great Britain are trying so desperately to establish markets in Canada it seems an unkind blow for Canada to bar imports from that country which they were in a position to supply. For example, I find that we do not want any umbrellas ito be imported from the United Kingdom. That is not a very large item on the prairies, it is true, but I am sure my bon. friends from Vancouver and Halifax will consider that umbrellas have some place in our economy; and it seems inexcusable to bar umbrellas from the United Kingdom just because umbrella manufacturers in the United States say, " If you bar them from our country you must bar them from the United Kingdom." According to the report on imports for 1946, the United Kingdom was coming into that field to the extent of some $24,000, as compared with $116,000 from the United States. Then I come to fountain pens. The United Kingdom was commencing to export fountain pens; and I see no reason why we should bar fountain pens from the United Kingdom just because we happen to be short of United States dollars and consider it good policy to bar fountain pens coming from the United States.
Then I come to automobiles. I understand that some of the British automobile manufacturers had made extensive plans with a view to selling automobiles in the Canadian market.


Douglas Charles Abbott: They are allowed in under quota.


Alexander Malcolm Nicholson: In the year ending September, 1946, imports of United Kingdom automobiles to Canada had increased substantially over previous periods. Then the United Kingdom was coming into the Canadian market with sewing machines. I cannot see any good reason why we should bar these machines coming from the United Kingdom just because we want to close our doors to sewing machine manufacturers in the United States.

Then there are such items as paint, varnishes, shoe blacking, writing ink and a number of things included in the list of items being manufactured in Great Britain.
I want to support the opinion which has been expressed by various hon. members on this side of the house, that the legislation now before us cannot be interpreted in any other way than as an acceptance by Canada of even greater domination of our economy by the people of the United States, and a further blow to discourage the people of Great Britain in their attempts to rehabilitate their country. During the past few years I have been to the United States on several occasions; and while I must express appreciation of the warm hospitality I have been shown in the eastern, central and western United States, I must confess that everywhere I went I found that a very large number of the people in that country have queer impressions of Canada. They are of the opinion that we are a pretty backward people; that we are dominated by Westminster and that we are taxed heavily to maintain the monarchy in the United Kingdom. A great many are of the opinion that we drew very heavily on the lend-lease program of the United States. I was happy to be able to state everywhere I spoke in that country that, instead of drawing on the generosity of the people of the United States during the war years, we in Canada had a lend-lease program of our own, known as mutual aid, and that in terms of dollars per capita, as part of our contribution to achieve victory, we actually made larger contributions than did the United States through its lend-lease program. So I think the government of Canada should not allow Washington to influence it in this connection. At page 95 of Hansard for December 5, 1947, the minister said:
The United States in particular attaches great importance to the non-discrimination principle. While it possibly could not be called a fetish with them, it is a principle to which great importance it attached. The success of this emergency program and the smooth functioning of our economy depend upon the wholehearted cooperation of our friends to the south.
I cannot accept that view. I cannot think that any reasonable administration in Washington would not face up to our problem, and agree with us that since such a large percentage of our exports go to the United Kingdom, we must be permitted1 to set our own house in order and, certainly during 1948, to impart from the United Kingdom all- those commodities Great Britain is in a position to give us.	_
So far as the position in Great Britain is concerned, I think Canada should do some

Foreign Exchange Conservation
bold and courageous thinking and acting at the present time. I happened to be in Europe twice during the period between the two great wars and travelled with a group of students in 1926, a large percentage of whom were from the United States. In France, Austria, Czechoslovakia-everywhere we went -we experienced bitter reaction to the United States. It was felt that they had used the war years to strengthen their own position, and that many of their wealthy people were going to Europe to buy up art treasurers and other rare commodities at low prices, taking advantage of the situation in which the people of Europe found themselves. It is a great pity that between world war I and world war II the United States failed to realize that the destiny of Europe affected vitally the destiny of the United1 States.
The United States came into world war I at a late stage; but, having entered it, she thereby, I believe, admitted that the outcome of the conflict was of vital concern to her people. Having made the decision, the United States would, I believe, have made a great contribution to civilization if, instead of finishing the war ini such a strong and rich position, she had used some of her reserves to help rehabilitate Europe.
I make the same statement with respect to world war II. If throughout the entire war the United States had sat on the side-lines and said that the conflict was of no consequence to her, we might not be too critical of the fact that they now find themselves in a strong position. But at one stage the United States did feel that the outcome was of vital concern to them and, having made that decision, all the resources of that country as well as those of Canada, the United- Kingdom and France should have been used for the common good, the cause of achieving victory.
The results of the war are still of vital concern to the people on this continent. I am proud of the fact Canada was able to make such a contribution; but I am not so happy when I think that during those war years apart from the men and women who actually joined the services, and the families of those who lost their loved ones, the great majority of Canadian people went through the war enjoying a higher standard of living than ever before in Canadian history. It was just our good fortune that our cities were not bombed and our homes destroyed. We did not have to go out on patrol night after night. Having shared in achieving victory, we should acknowledge the responsibility and see that those who lost their homes are assisted in rebuilding them, also that their industries should be re-established.
I have just received in my mail an interesting little booklet setting out some facts about Great Britain's economic position. I note that it was printed in the United States, and I hope it will have wide distribution and will be read by the people of that country. It points out that Great Britain's steel output of 12,900.000 tons in 1946 was twenty-two per cent above the 1938 figure. The production of trucks in Britain in the first eight months of 1947 was thirty-six per cent above the output in eight months of 1938. In 1947 the output in Britain of sulphuric acid, a key to the chemical industry in general, averaged thirty-three per cent above the 1938 level.
The booklet shows that cotton and woollen textile output is lower than pre-war in Britain, but the output of rayon and nylon yam is seventy-five per cent above pre-war. It states that before the war Britain produced only one-third of her food, but that through mechanization and intense cultivation she now produces one-half of the food consumed by her closely settled population.
If legislation of this kind is passed in Canada it will make it difficult for the people of Great Britain to continue to purchase Canadian agricultural produce. Not only will it affect the farmers on the prairies, the Maritimes and western Canada, but it will vitally affect every citizen in this country. It is a great misfortune that our administration has not brought in legislation which would give Britain a better break under present circumstances.
This same booklet gives some information respecting Britain's wartime losses, and some of the facts herein contained might well be brought to the attention of people in both Canada and the United States. It states that before the war half the cost of Britain's vast imports was covered by income from shipping and overseas investments, and only the remaining half had to be paid for by exports. Britain's shipping and investment losses during the war have thus created a heavy burden.
It states further that more than half of Britain's pre-war merchant shipping was sunk during the war. Even with new building and acquisitions Britain was left at the end of the war with 16,000,000 tons of merchant shipping, as compared with 22,000,000 tons before the war.
This booklet points out that, despite lend-lease, Britain had to sell overseas investments to a value of $4,500 million to help finance her war effort. In addition she acquired new indebtedness during the war amounting to SIX.500 million. This, together with losses of gold and dollar reserves brought her total wartime losses overseas to $17,000 million.
Foreign Exchange Conservation

The booklet points out 'that, in addition to the loss of overseas income because of the war, Britain has had to meet new overseas responsibilities in helping to keep the peace and rebuild the world. British government expenditure abroad in 1946 amounted to $1,200 million, as compared with $64,000,000 in 1938. Britain has contributed more than $3,000 million in relief and rehabilitation abroad since the war. Whereas in 1938 British government expenditure abroad represented only two per cent of the country's total overseas payments, in 1946 it amounted to no less than eighteen per cent.
Then the booklet emphasizes something which is of vital importance to Canada when it points out that to meet the financial strain caused by wartime losses and post-war responsibilities overseas, Britain has to increase her exports to seventy-five per cent over the prewar level. Exports were cut back during the war to thirty per cent of 1938. A sixfold increase over 1945 is therefore needed.
How is Great Britain to be able to reach these objectives with Canada, for whom she is the best customer, treating her as we are treating her? In 1946 Britain received' a credit of $3,750 million from the United States and $1,250 million from Canada to help tide over the interim period of reconstruction-. The United States credit was used up more quickly than was expected, partly because of increased United' States prices, partly because of Britain's high dollar expenditure for Germany, but mainly because of the world's dollar hunger. Since the dollar countries are the main source of supply for so many goods, Britain had to use these dollars for essential purchases-or make them available to other countries-at a much faster rate than originally allowed for.
I think it should be recognized in both Canada and the United1 States that the treating of a starving Europe is a responsibility we cannot shirk. When they have imposed such strict rationing in the United Kingdom I suggest that we cannot behave as we are doing in passing legislation of this type.
In connection with the increased austerity in Great Britain, the booklet points out that almost all food is strictly rationed in Britain, including bread and' potatoes. The meat allowance per person has been cut from twenty-four to twenty cents worth a week; the bacon ration from two ounces to one ounce. The egg ration- is now about one a week. The non-priority milk ration is two pints per person a week.
All clothing is rationed in Britain. If a man buys one suit and an overcoat, he has

enough left of his yearly coupons to buy only two pairs of socks. If a woman buys a coat, a woollen diress, a pair of shoes and two pairs of stockings she will have left enough coupons to buy only one blouse.
I submit that we are unfair to a brave ally to expect that type of austerity program, while Canada delays month -after month to introduce the necessary changes to conserve our dollars and then is unwilling to take the people into its confidence and establish a broad basis for the barring of non-essential goods and the making sure that goods which are imported will be distributed- widely across the country and subjected to strict -price control, so that the Canadian manufacturer whose market is going to be ensured will be unable to take advantage of the short supply and prices not be permitted to skyrocket.
I was interested in hearing the hon. member for Regina City (Mr. Probe) speak this afternoon about the possibilities of the tourist trade in Canada. Some years ago, I made a computation which showed that the pavement put down during the war in our airports and military establishments was sufficient to -have provided an all-weather road from Halifax to Vancouver. I do not believe we could have got across to Victoria and Nanaimo, but we certainly could have crossed the mountains. That achievement was made possible when nearly a million of our men and women were in uniform and) three-quarters of a million in war industries, -at a time when there w-as a great- shortage of materials.
I submit that if between the beginning and end of the war Canada was able to construct, as a project for national defence and world security, runways and pavements to that extent we could -have, between .the end of the war and up to the present, assisted the provinces in building a Trans-Canada highway that would be a real attraction to tourists. When the state of Montana is able to get an annual grant of $7,000,000 or $8,000,000 from the federal government to spend- on its roads I see no reason why the provinces of Canada with their limited fields of taxation should not receive substantial grants from this government, so that as a peacetime measure we could build an all-weather road which would attract tourists to our country and send them from coast to coast in all kinds of weather and on a road that would be a pleasure to every motorist. If the government had embarked- on a project of that sort at the end of the war as a public responsibility I do not think we would have found ourselves in the critical position in which we are today.

Foreign Exchange Conservation
In conclusion, I want to criticize the administration as severely as I can for failing to take action last year when parliament was in session. An announcement should have been made at the middle of the year that the then rate of spending could not continue. We should have cut down travel from this country. There is a complete bar to travel from Great Britain and I see no reason why we should not have cut down our allowances for travel as a temporary measure. A friend of mine went across to the United States for his holidays and he told me he was surprised to find that he and his wife could each get $500 without any question. The hon. member for Regina City pointed out that even the present limitation of $150 for every person in the country amounts to a very large total. If the government had acted last July and taken the people of the country into their confidence I think they would have had wholehearted support in the curtailment of the spending of short United States dollars for non-essentials. The people would have been willing to co-operate fully in carrying out any reasonable program.


Mr. H. W. TIMMINS (Parkdale):: Mr. Speaker, when the Prime Minister (Mr. Mackenzie King) spoke on the air on November 17 last he had a lot to say about the Geneva agreement. He said:
The new agreement contains a firm promise of real reciprocity in tariff reductions. It paves the way for full international co-operation in maintaining high levels of employment and expanding economic activity. It opens up to Canadian exports a larger and more equal access to the markets of the world than they have ever enjoyed. By virtue of these larger export opportunities, it will permit us, as a country, to concentrate our efforts on the production of those things that we best produce or manufacture, and so secure the highest level of real national prosperity.
At the very moment when the goal towards which we have worked over the years is at last coming in sight, we are unfortunately compelled to take a sharp detour over what I fear we shall find to be rough and difficult ground.
Apparently the detour the Prime Minister was talking about at that time was Bill No. 3, which we have before us tonight, respecting emergency measures for the conservation of Canadian foreign exchange resources. My first criticism of the bill is that whatever the government is going to do should have been done long ago. Just before the short session closed, the Minister of Finance (Mr. Abbott) said that the government had expected that this business of shortage of United States dollars would level off. I would point out to the minister and the government that apparently they had their eyes on this matter during
the whole of 1947 but they did not see fit to act until November 17. That was too late because, as the minister tells us, by that time our United States dollars had run out until we had only some $500 million left.
I think a proper criticism that could be levelled at the government is that they let us down with respect to this dollar situation. The government could have explored and developed constructive measures for increasing our supply of United States dollars. If the production of gold should now be promoted in the interests of providing us with gold dollars or United States dollars, then it should have been promoted in the years before. It was only when we got .down to Noveroher 17 of last year that the government showed any intention of developing that industry in the interest of the dollar situation.
Both the Minister of Reconstruction and Supply (Mr. Howe) and the Minister of Finance have told us the effect of our buying so much steel from the United States, that that is one of the products which costs us so much in United States dollars. The fact is that the steel industry in Canada is expanding and we are getting to the point where we are almost self-sufficient. There are unlimited quantities of iron ore in Labrador and northern Quebec. If these resources had 'been developed, we possibly woidd have been saved from the emergency in respect of American dollars that we are faced with at the present time.
Coal is another commodity of which we have a goodly supply in Canada; but, for what reason I do not know, the government has never seen fit to develop our coal resources, and the consequence is that our money is flowing across the border in a continuous stream to purchase our coal requirements. I was in western Canada this fall and talked with the coal dealers in Alberta. They told me they can produce all the coal we need in eastern Canada, that all they want is to be assured of a continuity of markets. While the mines there are small, they are today producing all the coal that is required in western Canada and a considerable part of the coal requirements of eastern Canada. I think it is up to the federal government to do something about this great natural resource. If the mines require a large amount of modern machinery; if the whole plant has to be re-geared to produce coal in the quantities required, it is up to the government to do something along the line of a steady market. I am simply pointing that out, so far as the United States dollar shortage is
Foreign Exchange Conservation

concerned, as one of many ways in which the government could have helped in the year 1947 to relieve the shortage of dollars.
Oil is another commodity of which we must have more than enough in this country to satisfy our needs, but we have not yet. done much to develop that industry. We know we have the oil resources, but so far the government has not paid much attention to their development.
Then there is the question of immigration. It may surprise the house to learn, as I did from a return, that 71,900 .people came in 1946 as immigrants to this country, as compared with a total population increase in the United States of 2,290,000. After all, our economy depends to a great extent on the number of people we have in this country. We are the third largest trading nation in the world and our future is dependent upon, our trade and commerce. Unless we look after immigration as well as conserving United States dollars we are being very short-sighted, as I think the government has been in regard to immigration. A Liberal member of parliament in Great Britain said the other day: "We have 50,000,000 people here and we have living space, employment and homes for only 40,000,000 people. So the logical thing would be for 10,000,000 of these people to find homes for themselves in different parts of the empire. That would be in the interests of themselves and of world economy." I believe that to be so. I believe that in that matter the government has been lax in developing the national economy in the interests of our country.
A poor job in public relations has been done in connection with Bill No. 3. The man on the street and industry in general do not understand it. I do not believe even the government understands it. I can speak with some feeling because I have been around different government departments trying to find out something about this bill. I ran into a very fine intelligent young man handling a certain branch of this work, but he knew just so much about it, and then sent me to another man to discuss matters further with him. From there I was sent to see the deputy minister of customs. But I first decided to go and see the Minister of Reconstruction (Mr. Howe), and he said, "There is nothing to it. You do not have to see the deputy minister of customs." I found out in the end what the manufacturer wanted to know; but if I. a member of parliament, had to go through all that to get the answer to a simple question, how is the ordinary businessman to find out what he wants to know about this bill?
[Air. Timmins.]
I was glad that the hon. member for Vancouver South (Mr. Green) took time this afternoon to tell us something about the implications of this bill. I propose to cover some of the same ground myself.
There is an absolute prohibition in schedule I. None of the articles listed there can be imported at all unless, in the judgment of the minister, the prohibition is causing exceptional hardship. It turns out that a goo'd number of the items that were originally in schedule I have had to be taken out. Apparently the framers of the bill did not know as much about it as they thought they did. I know a firm in the city of Toronto engaged in the produce business which, in consequence of the restrictions imposed by this bill, has had to lay off four trucks and four of its employees. That is not good business to have employees running around looking for jobs as a consequence of government policy. As a matter of fact, I find that the Department of Labour of this government, in a review of 1947 labour conditions in the Dominion and prospects for the future, blamed the world's dollar-saving program with its import restrictions for putting more than a seasonal damper on the labour picture. The department in its review goes on to say:
Indications are this year that the decline in employment is slightly more than seasonal, since uncertainty as to the effect of import restrictions is dampening many employers' demand for labour, particularly in manufacturing industries.
My personal opinion makes little difference, but here we have a publication of the Department of Labour itself which says that this policy is bringing about unemployment to some extent, and we must pay attention to that.
The Minister of Finance (Mr. Abbott) has power of life and death over some of the industries concerned in schedule I. For those who have been engaged in the business of supplying these articles over a period of years these prohibitions are a serious matter. I saw hardwood flooring listed in the schedule at one time. I thought that was a wrong item to be in there, and apparently it was wrong, because not so long ago it was taken out of the schedule.
Schedule II is the quota schedule, and it runs to five pages having to do with textiles. Textiles is an important industry in this country. What is their quota under this schedule? It is cut down to thirty-two per cent of the amount marketed in the basic period. There are, no doubt, many dealing in textiles in this country who have made large commitments, perhaps have had textiles

Foreign Exchange Conservation
designed to a particular order, perhaps had a certain stamp put on them for a certain customer, and now find they cannot fill these orders. Not only that, but the dealer has to tell the manufacturer in the United States that he cannot take the goods. He has broken the contract. First of all, he is liable in law for breaking the contract, but quite apart from that he has broken a connection which it has taken him years to build up. You do not stay in business unless you build up a connection over the years. He is in a position of frustration. He cannot buy the goods that he contracted for a long while ago. He cannot sell to the customer who is waiting for them. The customer is let down and cannot do with the goods what he wanted. But the position is even worse than that. The only other market he has in which to get these textiles is England, and they are not able to supply these goods. They cannot supply them for six months or perhaps for eight months. They do not even know yet whether they can get the goods or not. But if they can get them the price will probably be beyond that which the public in Canada can pay, because we know the cost of living is rising in England as it is here. Over there they have controls, but in spite of the controls the cost of living is rising beyond the control of the government, and we must not make any mistake about that. Further than that, they cannot produce the goods as cheaply in England as we can here; so that when the goods finally arrive here the purchaser has to pay a higher price than he intended to pay in the first place. Therefore he has to sell them to the consumer at a higher price. It does not take much imagination to see that again the cost of living has gone up. That is a concrete example in respect of a concrete industry, an industry that is supposed to be able to carry on at thirty-two per cent of its former level.
In so far as schedule III is concerned it has to do with the permit system. There again we have a minister, now the Minister of Trade andi Commerce, with life and death powers over the industry with respect to whether or not it can import the particular product. The first thing we have is intricate forms. Intricate forms are sent out to anybody who wishes to import into this country from the United States.
With respect to these materials, building stone and iron and steel which are prohibited at the present time, they can only be brought in under permit. I say that the government is in business. The government of Canada is in business today. It is in the business of running the country in a business sense. When you see a lot in a big city on which a building has
been torn down and the owners are prepared *to go ahead to erect a building on it, the plans are out; the contract is let; you find that the Minister of Trade and Commerce, who is also the Minister of Reconstruction and Supply, says, I warn every industrialist; I warn any man who is thinking of putting up a commercial building at the present time not to do anything about it until he sees the department and gets the go-ahead signal in respect of the project.
Industrial construction is at a standstill. In the city of Toronto it is at a standstill. These projects cannot be gone ahead with and there will be unemployment in the industry very shortly. In addition to that, we were told by the present Minister of Trade and Commerce in December that the restrictions in schedule III would go into force on February 1. Again there is more uncertainty. I read in the press that it is not coming into force on February 1 but will be postponed until some later day. Again we have uncertainty; again we find that the government is in business in Canada; it is doing the business of Canada. It is regulating people into bankruptcy. It may interest the house to know that bankruptcies in Canada are on the up-grade. In 1947 there were more bankruptcies than there were the year before.
I could name one or two industrial concerns which are engaged in the business of fabricating iron and1 steel products. If they cannot get the steel and, iron that they need they will certainly go into bankruptcy. The government is taking upon itself a very large load when it proceeds to deal with industry in this way. It may interest the house to know what some other people had to say about a bill such as this. We are objecting to the bill. In fact we are going to vote against it. It will be interesting to hear what the Prime Minister had to say about this sort of bill on April 19, 1934. He said:
When the government believes it is in the interests of its own policies it may pass any order it pleases with regard to the trade of Canada, regardless of the legislation parliament itself has enacted or may enact. Do hon. members (of the Commons) realize that this bill gives to the (cabinet) the power to prohibit absolutely the importation of goods from another country which the government may allege it is in the public interest to prohibit? Do bon. members realize that it gives the government not only the power to prohibit imports, but the power to prohibit exports of goods from this country? This parliament is to part altogether with its right to say what is to be imported or exported. As I have said the effort is to get away from parliament altogether.
I was not in the house in 1946 when the Foreign Exchange Control Act was passed, but I read what the Minister of Finance
Foreign Exchange Conservation

had to say. He said that the regulations of the foreign exchange control board were not passed for the purpose of dealing with a matter such as this, but our law officers have told us that wb could do so; so we have decided to do it, in November, 1947, and all we ask you men of parliament is to come here and be a rubber stamp for us in respect of this resolution, because that is all it amounts to. You brought us here in December and gave us a couple of days to deal with the matter; you have now brought it down again, and we are to have a couple of days to deal with it now and another couple of days probably a little later on. But, after all, you expect us to pass this bill. You have made it law. You have told the people of Canada what they have to do in respect of these matters. It is like trying to make a river run backwards. The government is saying to the United States companies, "we want your branch companies in Canada to do more manufacturing in Canada, to manufacture goods in Canada to sell back in the United States in competition with your own goods over there." It just does not make sense. I have known of a lot of United States concerns which have come to Canada. I must say that their financial record in the last ten or fifteen years has not been very good in dollars and cents. They have not sent very many dollars back to the United States. I do not think for a moment they are going to take their cue from the Minister of Trade and Commerce. I do not think they are going to venture into paths of which they know nothing with the hope that they will make money, and, in addition, compete against their own parent companies in the United States.
I thought the house would be interested to hear of a little article that appeared in the Times-Review of Fort Erie under date of November 27, 1947. It reads as follows:
By now, anyone who has a radio or reads a newspaper knows what the government did. It announced the most ill-conceived, unintelligent plan it has ever devised for the correction of our imbalance of trade with the United States. While still maintaining the fiction that a Canadian dollar is worth an American dollar, the plan involves prohibition on the import of an extensive list of commodities; greater restrictions on the transfer of money across the border; new excise taxes, and whatnot. All of which means the employment of more civil servants, enforcement officers and, above all, bureaucrats. Already the effects of this program have made necessary the reimposiition of price ceilings on most canned fruits and vegetables.
I think that epitomizes in the minds of the people the result of the program. Next we

have a quotation from Saturday Night of December last, which reads:
How long will this government direction of business continue? Mr. Howe suggests it may be only a few months.
Well, we know what "months" means in the language of the minister. It means years, because in the course of questioning in the house in December last he admitted that months did not mean nine or ten or eleven months but might mean years. So we know where we stand in this regard. Go into any department and they will tell you that it means, as a matter of fact, from eighteen months to two years. The quotation continues:
Actually the government will only be getting its controls into working order (if it is lucky) by that time. If the controls are not going well, the tendency then will not be to relinquish them but to intensify them.
Is there anything surer than that?
This has been the experience to date in England. When national socialism has failed to deliver the results hoped for, the procedure has always been to increase the dose.
Not only are we in trouble in respect of this one bill, but the government is in trouble in respect of a good many other things as a result of being in business. The government has been in business in connection with the wheat agreement, and the farmers of Canada are not satisfied with the treatment they have received through government business under the wheat agreement. The government gummed up the coarse grain situation by withdrawing the subsidy. They are in business in respect of coarse grains too. In the matter of the trade agreements with Great Britain they managed to get iprices raised on some commodities, and the result has been that the price to the consumer in Canada is raised also. They are in the business of bacon as well, and the price of bacon has gone up. These measures are all combining to increase the cost of living in Canada and the government must accept its responsibility in that respect.
Furthermore, we are being drawn into the United States orbit year by year. I can remember as an undergraduate at college hearing the late President Taft making an address in Toronto University. He said that somebody had asked him whether he did not think the United States would like to take over and govern Canada. He said, "Speaking for myself as President of the United States, all I want to say is that I have enough trouble of my own". That may have been President Taft's attitude in those days, but

Foreign Exchange Conservation
the situation is developing to the point where we are not going to be a partner of the United States but a poor relative, and very soon too. With 12,500,000 people here and 142,000,000 over there, it will not be very long, unless we do something about immigration, before we are swallowed up. Immigration has much more to do with the economy of Canada than this policy which we have before us tonight.
The procedure that has been adopted in respect of this bill seems to be pretty much a hit-or-miss one. The other day, dealing with the matter, the minister said, "If we do not like one method of dealing with these problems we will find another." That is not the way a businessman runs his business. He is responsible to his board of directors and, after all, we are the board of directors of Canada. Hon. members sitting on the other side and we on this side are all responsible, and now we are dealing with a measure which will turn everything topsy-turvy-everything that we have done up to this time in Canada. The government is asking businessmen to get out of one kind of business and into another. How can it be done? How can the government expect a firm that has accumulated knowledge with regard to one category to deal with something quite different? It is quite impossible.
I say, therefore, that the task of the government, much as we would like it to succeed, is impossible. We are going to be back to the point where they will have to put on more restrictions and controls in order to try to make the thing work. When the former minister of veterans affairs said that he was to a great extent in favour of socialism, he
was, I believe, speaking his mind, and there are many members on the other side who, I believe, are also thinking in terms of socialism, particularly in connection with this measure which they are asking us to put through.
If this is to be foisted on us, particularly schedule III, instead of one man being the Pooh-Bah in the cabinet and in the house, there should be a board something like the national selective service board, with a group of businessmen sitting in with the minister to deal with these matters of discretion.
I sat down in Toronto some weeks ago with a certain man and we went over a certain section in schedule III. I said to him, "What do you make of that?" He replied, "As a matter of fact, I drew that section for the department of customs three or four years ago. I know every single word in that section and I know what it means, but I doubt whether there is a man in the department who knows it as I do." I believe he was speaking the truth. I feel certain that most of the items in this schedule III are better known to businessmen than to any man in the department, and I see no reason why things of this kind should be left to the life and death power of the Minister of Trade and Commerce.
On motion of Mr. Timmins the debate was adjourned.


Douglas Charles Abbott: Tomorrow we shall continue the discussion of the measure we have been considering today.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
5849-38J
[Stage Direction]
Tuesday, January 27, 1948