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

Mr. CAOUETTE:: 1.	Why are Bank of Canada notes, old or new, all dated January 2, 1937?
2.	What is the amount of money and credit in circulation in Canada at present? What is the proportion of currency to bank credit?
3.	On what gold value is the Canadian monetary unit secured at present (a) in Canada; (b) outside of Canada?


Mr. BELZILE:: 1.	The date of January 2, 1937, on the current issue of Bank of Canada notes is the date on which these notes, the form and material of which was approved by the minister in accordance with the provisions of section 24(4) of the Bank of Canada Act, were first put into circulation. This issue succeeded notes of another design issued and dated in 1935, and which were withdrawn from circulation.
2.	(a) As at March 31, 1948, Canadian currency in circulation (excluding currency held as till money by the banks) amounted to $1,098 million and active money supply, including currency, to $3,933 million.
"Active money supply" is the aggregate of the following, excluding deposits of the Canadian government, inactive notice deposits, deposits of chartered banks with Bank of Canada and cheques deposited by payees not yet cleared against the accounts of the drawers:
(1)	Canadian deposits of the chartered banks plus
(2)	Canadian deposits with Bank of Canada plus
(3)	Canadian currency in circulation apart from that held by the banks as till money.
(b)	The ratio of currency in circulation to the total of (1) and (2) above was 38-7 per cent.
3.	(a) and (b) It is not clear what is meant by these questions. However, pursuant to an order in council passed under the Bretton Woods Agreements Act, 1945, the governor in council fixed the par value of the Canadian dollar for the purposes of the agreements at
one United States dollar of the weight and fineness in effect on July 1, 1944. As of that date, the United States dollar had a par value of 15%i grains of gold, A fine.


DEPARTMENT OP AGRICULTURE-EMPLOYEES
Mr. ASHBY:: How many individuals were employed in the federal Department of Agriculture (all branches), on January 1, 1910, 1920, 1930, 1940, 1948?


Mr. GARDINER:: Employees
	Classified
Jan. 1,1912..	.. 718
Jan. 1,1920..	.. 1,125
Jan. 1,1930..	.. 2,079
Jan. 1,1940..	.. 3,458
Jan. 1,1948..	.. 3,984
Prevailing rates No record available No record available No record available 582 1,337
Note: Figures for 1910 are not available; first record available is for the year 1912.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. CAMPBELL:: 1.	Have any babies been exported from Canada during the past five years to foreign countries for adoption there?
2.	If so, how many (by provinces), (a) male; (b) female, and on whose recommendations and to what countries?
3.	Were exit permits issued and by what department?
4.	What supervision is there over babies that have been exported?


DANGEROUS DISEASES
Mr. McKAY:: 1.	What were the number of deaths in Canada during 1947 from (a) diseases of the heart; (b) cancer and malignant tumours; (c) nephritis; (d) diseases peculiar to the first year of life; (e) pneumonia; (f) tuberculosis?
2.	Has the government taken any steps to reduce the number of deaths from heart disease?


WARTIME PRICES AND TRADE BOARD-KINGSTON OFFICES
Mr. KIDD:: 1.	Has the wartime prices and trade board offices in Kingston?
2.	If so, how many persons are now employed there?
3.	Where are these offices located?
Inquiries oj the Ministry

4.	Has the lease expired or when does it expire?
5.	What rent do they pay?
6.	How long have they occupied these premises?
7.	Are any arrangements being made for them to occupy new premises? If so, where and what rent do they intend to pay?



MOTION FOR PAPERS


Mr. CAMPBELL:: For a copy of all correspondence exchanged between any individual or group or provincial government and any minister, department or official of the federal government, during the past two years, having to do with the export of babies to foreign countries.


Mr. GIBSON (Hamilton West):: Mr. Speaker, I suggest that this motion should be passed subject to the usual reservation, that the consent of provinces must be received before filing correspondence.


Mr. SPEAKER:: Carried, subject to the reservation made by the minister.



FARM PRICES


[Stage Direction]
Right Hon. J. G. GARDINER (Minister of Agriculture) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to bring in a measure to provide that section nine of the Agricultural Prices Support Act, 1944, dealing with the powers of the agricultural prices support board, shall be deemed to have continued in force after March 31, 1948, and that it may be continued in force for such further period as the governor in council may fix by proclamation.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That on and after Wednesday, the 26th of May, 1948, and1 all subsequent Wednesdays to the end of the present session, the sittings shall in every respect be under the same rules as provided for other days.


Mr. GORDON GRAYDON (Peel):: I should think that at this stage the house would be ready to accept the Prime Minister's motion to increase the time at our disposal

for the discussion of the business of the house. Can he indicate to the house what legislation the government intends to bring before the house between now and the end of the session? This information would I am sure be helpful to hon. members in that it would enable them to arrange their plans to meet the government's program.


William Lyon Mackenzie King: I shall be glad to bring before the house a statement of legislation which is outstanding. I shall not be here tomorrow, but I should hope that on Wednesday I might be able to give the house a full statement of what remains to be brought forward. There is not a great deal.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Gordon Graydon: Mr. Speaker, as this is an important day in the annals of the British empire, the anniversary of the birthday of a great and beloved sovereign of yesterday, I believe that as a House of Commons we would do well to follow the precedent suggested by the Prime Minister (Mr. Mackenzie King) in former years. I suggest that we pay our tribute and homage to her memory, and our tribute and homage to her great grandson, the reigning monarch of today, by standing and singing God Save the King.
The members rose and sang
God Save the King



THE LATE HON. J. L. RALSTON

[Stage Direction]
On the orders of the day:
Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, before the orders of the day are called I should like to say a few words as president of the Canadian Bar Association about a man who was not only a pillar of the Bar Association, but one of its rarest ornaments.
Canadian lawyers are proud to claim the late Colonel Ralston as one of their very own. They mourn his death and will long cherish the example he has set to his profession in the various avenues of their high calling.
Perhaps I may be permitted to say here in part what I have said elsewhere about Colonel Ralston and his sudden and much lamented death.
Colonel James Layton Ralston died at the end of the day,-a day like all his days, filled with labour. He led a life of labour.

Tribute to the late Hon. J. L. Ralston
Well equipped physically and mentally, he turned to account every ounce of energy that his stout frame and powerful intellect were capable of generating. Few men in our time have successfully engaged in broader fields of endeavour; none has been more unsparing of self.
Ralston was in turn lawyer, soldier and politician.	In each of these callings he
excelled; in each he left enduring marks and abiding friendships; in all, his way was lit by the lamps of a purpose that never wavered, of a courage that never weakened, and of ideals that never dimmed.	Ralston was
primarily and always a lawyer. In early manhood as his first choice he went to the law; to the law he returned from both soldiering and politics. He was admitted to the Nova Scotia bar at the early age of twenty-one, and to the Quebec bar half-way through his career.
His capacious mind and its easy intake, his faithful and well-stored memory, his intellectual curiosity, his gift of orderly and lucid exposition, his endless industry, made of him one of the great Canadian advocates of his generation. He understood the meaning of professional duty in its public no less than in its private aspects. He was alive to the traditions of the Bar. He knew that it has functions of supreme importance to the life of a free country, that its members are called upon to develop and exercise qualities of leadership and guidance which are not exacted from the members of any other profession. He knew that in a democracy where all are subject to the law, and where so much depends upon the interplay of political parties for the enactment of good laws and their fair administration, the lawyer is better qualified than many to make a contribution to public life, and his he made generous, wholesome and vigorous.
He suffered the fortune and the fate of those engaged in the endless adventure of governing men-no more, no less. Ralston understood. He did not complain. He considered it a privilege to have given of his best in field and forum to the public service of his country. When this came to an end he returned to his briefs, not sad and dejected, but lighthearted and joyous. He had done his duty; he had retained his ideals; he had kept his friends.
To live in hearts we leave behind
Is not to die.
William Lyon Mackenzie King: Mr. Speaker, I have naturally, knowing there would be those who, like myself, would wish to make reference to the
late Colonel Ralston, given careful thought to what should be said or done in the house this afternoon regarding the passing of one of the greatest public servants Canada has had.
Part of my duty as leader of the house and Prime Minister is to preserve traditional practice and to be careful in the matter of establishing precedent. I therefore had a careful search made as to what had taken place in parliament in the past, and have been unable to find that at any time, with one exception only, has reference been made by the leaders of the parties to the passing of former members of governments who were not members of the parliament then in session. The only exception, so far as I have been able to ascertain, has been with former prime ministers or leaders of political parties. I considered whether it would be proper for me to depart from the traditional practice today, or rather to set a precedent which it might become embarrassing to follow in some future cases. Before taking my seat this afternoon I had a word with the acting leader of the opposition and mentioned to him that I did not think, for the reasons I have mentioned, that I should depart from what has been the customary practice and thereby establish a new precedent.
However, I am happy indeed that the hon. member for Stanstead (Mr. Hackett) as president of the Canadian Bar Association, has found the best of reasons for drawing the attention of the house to the loss which the legal profession of this country has suffered in the passing of the late Colonel Ralston. May I say that I echo sincerely and deeply all the sentiments that he has expressed. I would say on behalf of the public of Canada that I think Canada has lost one of the finest men of our country in the passing of the late Colonel Ralston.
I knew Colonel Ralston intimately, and a more unselfish and self-sacrificing public servant I have never known. I cannot recall anyone of my acquaintance who seemed to be more industrious, more conscientious or more ready to sacrifice everything for duty, as he saw it, than Colonel Ralston. We had our difference as to what was the most advisable course to be adopted at a particular time, but such differences arise in government and are sometimes inevitable. As far as I am aware, that difference, which was a political difference, did not make a difference in our personal friendship. I continued to retain to the end of his life the strongest affection for Colonel Ralston and the greatest possible admiration for his high character and exceptional abilities. I believe that the great service which he rendered our country in the period of the war
5849-273J
4292	COMMONS
Tribute to the late Hon. J. L. Ralston
years as Minister of National Defence brought *a reaction which was inevitable. I would think that it helped to account for the shortening of his life. But those wrho knew Colonel Ralston will realize with me that he was a man who [DOT]could not spare himself no matter what particular task he might be engaged in. As has been reported in the press, he was apparently following his customary habit of working until half past six or seven o'clock at night before returning from his duties to his evening meal. I would not have been surprised if the evening had found him engaged again on the task he had in hand. Certainly it was so through the years that he was here as Minister of National Defence'. The continual taxing of his energies, and what must frequently have been the overtaxing of his strength undoubtedly contributed to his sudden passing at the age of sixty-six. I feel that our own country is very greatly the loser in the death of one who held so high a place in his profession, who played so important a part in public life, and who took such a great part in the larger task of helping to save the world's freedom when freedom itself was at stake.
I do not think we should ever forget that Colonel Ralston, when the first war came on. gave up his practice to join Canada's armed forces for service overseas, and that his was a heroic part. He served with great distinction through the whole of the first war. When a second war threatened, I remember talking with him very earnestly before w'ar actually broke out. Fearing that something of the kind might happen, I begged of him to come into the ministry forthwith. He told me in his quiet, humble, modest way that he had felt the need of making provision for his family and himself and for that reason did not wish to come back into the government, but that if war came I could call on him in a moment. When war came, I asked him again to come into the government, and he responded instantly. No one could have rendered the country greater service in the time that he was minister of the department of defence than Colonel Ralston. His name will always be greatly honoured in this country, and nowhere more than in this parliament, and by none more than by those who knew him best.


Right Hon. J. L. ILSLEY (Minister of Justice):: Mr. Speaker, as an old personal friend of Colonel Ralston, a fellow Nova Scotian, and also as the honorary head of the Canadian Bar Association, I should like to add a brief and simple tribute to the great man whose death has just occurred.
Colonel Ralston never did a selfish thing in his whole life, and I cannot think of anyone whose death would cause more widespread

sorrow than his. A truly great Canadian has passed away, and his countless friends are shocked and grieving. His whole life was devoid of selfishness and filled with distinction. A brave soldier, a fine lawyer, a wise statesman, he brought honour and glory to Canada throughout his whole illustrious career. His devotion to duty, his intellectual honesty, his frankness and courage, his capacity for self sacrifice, his unfailing manliness in all the activities and relationships of life, were altogether exceptional. His heart was full of human sympathy, his friendships were innumerable, his loyalty to old comrades and friends unshakeable.
To his devoted wife and son I extend my deepest sympathy.


Mr. ANGUS MacINNIS (Vancouver East):: Mr. Speaker, as one who had the privilege of sitting in. this house with Colonel Ralston when he sat on this side, and also when he was a member of the government, I wish to associate myself and the C.C.F. group with the tributes paid to his memory by the member for Stanstead (Mr. Hackett), the Prime Minister (Mr. Mackenzie King), and the Minister of Justice (Mr. Usley).
I shall remember Colonel Ralston best because of the meticulous care with which he answered, or at least attempted to answer, every letter L wrote him during the time he occupied the position of minister of defence. I knew how busy he was, and how many important questions he had to deal with, and I refrained whenever possible from writing him in regard to anything. But as happens with all private members, I had occasion, at times, to put questions to him, and no matter how much trouble the answer involved I always got an answer which was full and complete in every detail. I am sure that that is the way in which he will be remembered by most of the members, at least on this side of the house.


Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, inasmuch as the member for Peace River (Mr. Low) was not a member of parliament while Colonel Ralston was winning the admiration of the whole house by his estimable behaviour in the cabinet during wartime, he has asked me to say a word on behalf of the Social Credit group.
After all the beautiful and noble things that have been said, it seems utterly impossible for me to say anything more, or to say it any better. But an inspiring passage referring to the war comes to my mind at this moment, as put into the mouth of a soldier boy who was called upon to make the supreme sacrifice. The words are, "Now, God be thanked, Who has

Tribute to the late Hon. J. L. Ralston
matched us with His hour." I believe those words are exceedingly appropriate as applied to Colonel Ralston. In his spiritual life, having left this life of storm and stress, he must now be able to say with great satisfaction, "Now, God be thanked, Who has matched us with His hour."
The members of my group join with all other members of the house in deep appreciation of Colonel Ralston's fine life, and in tenderest sympathy and good will toward his bereaved ones.


Mr. J. W. MacNAUGHT (Prince):: Mr. Speaker, I feel that as the member for Prince, the constituency represented in this house from 1939 to 1945 by the late Colonel Ralston, I should add a few words to what has been already said by the other speakers.
I believe that I am voicing the feelings of every one of my constituents and the people of the maritimes in general, regardless of politics, race or creed, when I say that in the passing of the late Colonel Ralston the maritimes have lost one of their most distinguished sons. Colonel Ralston had a tremendous capacity for forming deep and abiding friendships. During the six years he represented . Prince he made many such friendships. I well recall that on a return from a trip to the battlefronts in Italy, Colonel Ralston spent literally hours telephoning the friends and relatives of boys he had met and talked to while overseas. Such genuine acts of courtesy and thoughtfulness on the part of a busy man are not soon forgotten.
On behalf of my constituents and myself, I wish to express deepest sympathy to the family of the late Colonel Ralston.


Gordon Graydon: Mr. Speaker, I rise to associate the Progressive Conservative party, of which I have the honour at the moment to be the acting leader, with the sentiments which have been so eloquently expressed by those who have preceded me.
I felt when I heard the news of Colonel Ralston's death that it was almost like losing a member of one's own family; for through the war years he had endeared himself to all of us who sat with him in parliament and had anything to do with his department. His courtesy, his friendliness, and, as one hon. member has said, his capacity to hold his friends, singled him out and made him one of the very great men with whom we have had the honour to associate. His courage, his brilliance, his almost indefatigable attention to every detail of the duties at hand, and his devotion to that duty, marked him in the hearts, minds and memories of all of us as one of nature's gentlemen. No greater tribute than that can one man pay to another.
On behalf of the party with which I am associated, Mr. Speaker, I join with other hon. members who have spoken, in conveying to the late Colonel Ralston's widow, and to his son, deep and genuine sympathy in this their hour of sorrow and of loss.



PALESTINE


[Stage Direction]
On the orders of the day:
Mr. JOHN T. HACKETT (Stanstead): I should like to ask a question of the government. Will Canada support the United States in its plea to the security council for a declaration that the present situation in Palestine is a threat to the peace, and, in fact, a breach of the peace?
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): Mr. Speaker, I am not prepared at this moment to make a categorical answer to the hon. member's question, because my information is that late Saturday afternoon the security council disposed of both a proposal submitted by the delegate of the United States and one submitted by the delegate of the United Kingdom. Though I have no information as to just what the precedure was, we received an official notification from the secretary general, Mr. Trygve Lie, in a telegram which I think I should read to the house, because, though I have scanned the newspapers carefully, I have not seen its text published. This is the dispatch:
Lake Success, May 22, 1948
Have honour to communicate to your government following resolution adopted by security Council at its 302nd meeting held 22nd May,
"The security council, taking into consideration that previous resolutions of the security council in respect to Palestine have not been complied with and that military operations are taking place in Palestine;
"Calls upon all governments and authorities, without prejudice to the rights, claims or position of the parties concerned, to abstain from any hostile military action in Palestine and to that end to issue a cease-fire order to their military aiid^ para-military forces to become effective within thirty-six hours after midnight, New York standard time, 22nd May, 1948;
"Calls upon the truce commission and upon all parties concerned to give the highest priority to the negotiation and maintenance of a truce in the city of Jerusalem;
"Directs the trade commission established by the security council by its resolution of 23rd April, 1948, to report to the security council on the compliance with the two preceding paragraphs of this resolution;
"Calls upon all parties concerned to facilitate by all means in their power the task of
Inquiries of the Ministry
[Stage Direction]
the united nations mediator appointed in execution of the resolution of the general assembly of 14th May, 1948."
Draw attention in particular to paragraph two of this resolution.
Trygve Lie
It is true that there is a report in the newspapers of this morning under the dateline, "Lake Success, N.Y., May 23," which reads as follows:
The United States appeared ready tonight to renew its fight for a Palestine cease fire order, voted down late Saturday by the united nations security council which instead appealed to Jew's and Arabs to stop fighting.
However, there has been no subsequent proposal, of which my department has any knowledge, of further action since this resolution was adopted.
Hon. members realize that the difference between the resolution adopted and the one submitted is that the one submitted called for a declaration under chapter 7 of the united nations charter, which provides for methods of coercion. Canada is a member of the security council. As such our delegation on the security council is responsible not only to the Canadian people but to all members of the United Nations. All I can say is that the whole matter is being, and will continue to be, considered in the most objective light possible, with a keen and earnest desire to make such moves, and take such measures, as will seem to be both practicable and best fitted to bring about a cessation of the terrible situation which, I will not say, exists, because I do not know at this moment whether this resolution has been complied with, but which has been in existence until very recently in the Holy Land.

[Stage Direction]
On the orders of the day:
Mr. NORMAN JAQUES (Wetaskiwin):: I wish to direct a question to the Secretary of State for External Affairs. According to the C.B.C. news at one o'clock, the Jews have declared that they will shoot all British citizens taken prisoner. The question I should like to ask is this: Has the government any information as to whether that would apply to Canadian citizens, or only to those of Great Britain?
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): The Canadian government has received no information whatsoever of there being any threat by the Jews, as referred to by the hon. member, to shoot British subjects.



RADIO BROADCASTING


[Stage Direction]
On the orders of the day:
Mr. DONALD M. FLEMING (Eglinton): May I ask the Minister of National Revenue whether the Canadian Broadcasting Corporation has purchased a building in Montreal for its offices and other purposes at a price reported to be $750,000?
Hon. J. J. McCANN (Minister of National Revenue):: Mr. Speaker, I have not seen the report, but the statement as given by the hon. member for Eglinton is not according to the facts.


Mr. FLEMING:: Press reports indicate that the Ford hotel building in Montreal has been purchased by the Canadian Broadcasting Corporation.



P.E.I. CAR FERRY INQUIRY AS TO CHANGES IN SCHEDULED CROSSINGS

[Stage Direction]
On the orders of the day:
John Watson MacNaught: I should like to direct a question to the Minister of Transport. Are any changes to be made in the scheduled crossings of the car ferry at Borden and Tormentine?


Hon. LIONEL CHEVRIER (Minister of Transport):: Yes; decision has been reached to institute a late sailing of the Prince Edward Island car ferry from Cape Tormentine at 10.30 p.m., daily except Sunday, from June 27 to September 7, inclusive; also an earlier sailing on Sunday has been decided upon which will leave Borden at 9.10 a.m. and Cape Tormentine at 10.30 a.m., from June 4 to September 5, inclusive.



INQUIRY FOR RETURN


Mr. L. W. SKEY (Trinity):: Mr. Speaker, in the absence of the Minister of Trade and Commerce may I call the attention of the Secretary of State to a question of mine passed as an order for return on Wednesday, April 28, 1948, with regard to North Star aircraft? I do this because I see on the order paper a question by the hon. member for Calgary West (Mr. Smith) which is similar to mine. Now that a month has elapsed since the question was passed as an order for return, may I ask the Secretary of State if I may have an answer to my question at an early day?


Colin William George Gibson: I shall be glad to make inquiries and tiy to expedite the return.

Canada Shipping Act



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. JOHN T. HACKETT (Stanstead): Will the Minister of National Revenue say if it is his intention to bring in the new income tax legislation at this session?
James Joseph McCann: It is the intention of the government that the new income tax act shall be introduced after the budget debate has been finished.


Gordon Graydon: Is it the intention of the government to submit the income tax bill to a special or standing committee of the house for consideration?


James Joseph McCann: The hon. member's question might more properly be answered by the Minister of Finance, since the new income tax legislation comes under his direction. But I do not think I am betraying any confidence in saying to the hon. gentleman that it is my understanding that the bill will be referred to the committee on banking and commerce.


Gordon Graydon: I am glad to hear that, because there are many bona fide farmers who would like to come and give evidence.


James Joseph McCann: You can arrange for that.



VICTORIA DAY-REQUEST FOR HALF HOLIDAY FOR PART OF PAGE STAFF

[Stage Direction]
On the orders of the day:
Mr. L. E. CARDIFF (Huron North):: Mr. Speaker, I wonder if the house would consider a very urgent request. In view of the fact that there is such a scanty attendance in the chamber, and that the boys who are employed as pages feel that the 24th of May is a day they should have off, would it be possible to grant at least a part of the page staff a half holiday?



CANADA SHIPPING ACT AMENDMENTS TO ACT OF 1934

[Stage Direction]
The house resumed from Thursday, May 20, consideration in committee of Bill No. 300, to amend the Canada Shipping Act, 1934- Mr. Chevrier-Mr. Macdonald (Brantford City) in the chair.
The CHAIRMAN:: When the bill was last under consideration the committee was dealing with clause 44. Shall the clause carry?


[Stage Direction]
Section agreed to.
Sections 45 to 54 inclusive agreed to.
On section 55-Coming into force. Sec. 17.
Mr. SINCLAIR:: This is the place to introduce a new clause, according to Beauchesne, 670 and 671. I need not speak at great length on the amendment I shall now propose to section 406, because I covered that when I spoke on the second reading of the bill. The minister has informed me that there will be a number of special amendments next year to those parts of the Canada Shipping Act relating to the technical end of radiotelegraphy. My amendment is not a technical one, being intended rather to ensure safety, and there is no need for any technical knowledge to understand the meaning of it.
Section 406 of the Canada Shipping Act is the section that stipulates what type of ship shall carry radiotelegraph operators as a safety measure. Subsection 1 satisfactorily covers deep-sea ships and cargo ships. Section 406 (2) is the section referring to coastal steamers plying on the east and west coasts. The intent of the act is a good one. The section states that a ship certified to carry 50 or more persons shall have a radio operator if it makes a voyage of more than 200 nautical miles from place to place. The second subsection states that the bigger ships carrying 250 persons must have an operator if they make voyages of more than 90 miles from place to place, and the third subsection provides that if they carry 500 passengers or more they may go only twenty miles from place to place without such an operator.
When this act was drawn up I am quite sure it was intended to cover the situation I shall describe. Another section of the act to which I call attention shows the great importance which is attached to proper radiotelegraph service at sea. Section 40 gives the minister amazing powers. The hon. member for Stanstead (Mr. Hackett) commented on the wide powers given the minister in case of emergency. He can allow ships to go to sea without a certified captain or deck officers or engineer officers, without steamship inspectors or proper loading; but there is one significant subsection of this clause which provides that while he can do all these things, he cannot allow any leeway in relation to those aspects that concern radiotelegraph installations on ships.
This is not only important as far as the people who drew the act are concerned; it is extremely important to the people of British Columbia. As I pointed out in my earlier remarks, our province has a very heavy coastal steamer traffic north and south. Our coast, while picturesque, is a dangerous and treacherous one to navigate, especially in the winter, when unfortunately we have not only heavy
Canada Shipping Act

rains but dense fog. Moreover, our coast is a very badly lighted one. We have not one quarter of the aids to navigation on the British Columbia coast, in the way of lights, buoys, foghorns and so on, that the Americans have, either on the coast of the United States itself or on the coast of Alaska.
It has been mentioned also by the British Columbia members that we have not a coastguard to help in rescue work on the British Columbia coast as have the Americans. For these reasons the people of British Columbia are anxious that the coastal steamer traffic shall be properly protected by adequate radiotelegraph service.
Unfortunately, while the intent of the act is good, there have been infringements and evasions-not, I am glad to say, by the two major steamship lines, Canadian Pacific Steamships and Canadian National Steamships, but by some of the smaller lines which ply the coast. They have taken advantage of.the fact that in the act the length of journey is defined as "from place to place," and therefore the coastal steamers can make the voyage of 500 miles to Prince Rupert, along all that hazardous coast carrying 400 passengers, and evade -the stipulations of the act by merely calling every 90 miles at some small fishing cannery, logging camp or paper town. Such places could not give to a ship in distress the service which is expected. The reason for limiting the voyages of ships of this type is that if the ship is in distress, aid in the way of salvage tugs, high speed tugs and medical help can be sent to points which the ship had left or towards which it was headed; and above all, that these points should have wireless listening posts at which someone will be listening for distress calls, and to which the coastal steamer could send a call if it is in distress. Such posts are not found in these little logging towns, which are used as "places" under the act. They have none of these facilities. They have no tugs or lifeboats which could go out to give aid. They have no medical aid at hand. Seldom have they a doctor. As they have no listening posts, a ship could be in distress five miles away and nobody in these little towns would be any the wiser.
The people of British Columbia, therefore, have indicated strongly that they think this act should be strengthened. The weakness arises from the words "place to place". It has been suggested that we use the terminology which is used in the United Kingdom with regard to coastal traffic, namely, "terminus to terminus". This, however, might apply to a ship, for example,, going from Vancouver to Alaska, passing two or three points en route which are places from which aid could go out.

Public opinion at home has pretty well decided that "public harbour to public harbour" is a much better definition than "place to place", a public harbour being a place designated under this act, the Canada Shipping Act. Every public harbour has a harbour master, and from these harbours you could expect aid in the way of tugs or lifeboats, and medical aid; and there would be maintained at each of them a listening post.
I should like to refer the minister, if he is at all in doubt as to the opinion in our province, to the feeling expressed last winter in editorials in all the papers after we had a fatal wreck on one of our small coastal steamers. Only last week two papers in British Columbia which consistently support this government, the Vancouver Sun and the Victoria Daily Times, both carried long editorials on the subject, one entitled "Safety on the coast", and the other "Safety at sea".
If the minister wants other proof, I am sure the hon. member for Yukon, who during the fifty years he has been active in the west has probably travelled our British Columbia coast more than any other member in this house, or the hon. member for Vancouver East, or the hon. member for Kootenay East, can support me in this contention.
I do not think that I can say anything further, so I will now move my amendment, which is as follows:
That section 406 2(a) of the Canada Shipping Act be amended by substituting in subparagraphs (i), (ii) and (iii) the phrase from "public harbour to public harbour" w'herever the phrase "place to place" now occurs.


Angus MacInnis: I rise only to support this amendment. I know that greater safety is required than is at present provided by the regulations affecting ships plying on the Pacific coast. I understand that some of the opposition to providing radiotelegraph on the ships, an operator for that purpose, arises out of the small amount of work the person in charge would have to do. I submit that is not a good argument. If it were a good argument, instead of having full-time firemen in our cities, who may be on duty for weeks without being called to a fire, we would have part-time firemen. The need for a radio operator on a ship is when an accident occurs, either to the ship which is so equipped, or to some other ship. It is a question of radiotelegraphy not only from ship to shore but also from ship to ship. The importance that is attributed to radiotelegraphy in the schedule to the safety at sea convention is a good indication of the value attached to it. There are over six pages of regulations. I suggest

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that the amendment proposed by the hon. member for Vancouver North is necessary at this time, and is especially necessary on the rugged coast of British Columbia where we have no coastguard service.


Mr. BLACK (Yukon):: The hon. member for Vancouver North has clearly and completely stated the case for his proposed amendment. The act as it stands now, with the use of the word "place" in the various paragraphs, enables the steamship companies whose ships are not equipped with radiotelegraph to evade the act. They can have a short voyage from place to place, including a number of "places", on a whole long voyage; whereas if the words "public harbour" are substituted for the word "place" they cannot do that. As the hon. member for Vancouver North has said, the largest shipping companies on the west coast are properly equipped. I have been on these ships when they had to call for help. I have been on ships when other ships called them for help. If it had not been for the radiotelegraph, they would not have known that a ship was in trouble, nor could they have made their own needs known to the people on shore or to other ships. I submit to the minister that, in the interests of public safety, the amendment should be adopted.


Mr. GIBSON (Comox-Albemi):: Under the present provisions of the act, a C.P.R. steamer operating on the west of Vancouver island could get by the present provisions without providing a radio operator. If the minister has ever been out to this wild and rugged country, he will realize the urgent necessity of providing for the safety of passengers on runs of that kind. I appreciate the fact that in the near future there will be extensive advances in the field of communication from ship to shore and from ship to ship. But if within the next few years a tragic accident should occur, even although radiotelegraph facilities might not have averted it, I suggest to the minister that he and his department would be in a much happier position, having regard to public opinion, if this amendment were allowed to pass.


Lionel Chevrier: Mr. Chairman, I have looked carefully at the amendment proposed by the hon. member for Vancouver North. While there is some merit in the proposal, I must oppose it, for the following reasons.
It has already been stated by myself during the course of this discussion that the amendments to the Canada Shipping Act were given careful consideration by a special committee
set up in the Department of Transport. It was a committee of experts and heads of various branches having jurisdiction over certain parts of the act. The committee heard representations from various associations, unions and groups across Canada. One of these associations was the commercial telegraphers union, Marconi section. They presented a brief having to do with amendments to the act in connection with radio, radiotelegraphy and the like, and there was no such representation as that which has been brought forward at this time.
There is sitting at the present time in London an international convention known as the convention for the safety of life at sea. That convention is considering amendments to the radio sections of the Canada Shipping Act, as well as to the safety sections of the act. Canada is one of the representative nations at the convention, and in all probability will be a signatory to it. I would hesitate to recommend amendments to the act when I do not know the recommendations to which in all probability Canada will be committed. I believe it is more in accordance with practice, and certainly with custom, to wait until those recommendations have been agreed upon. It may be that they will contain an amendment such as the one now suggested. It may be that there will be a complete revamping of the section. Until I am in possession of those recommendations I would hesitate to accept this amendment.
There is another reason which should be given consideration, and that is that the amendment has the tendency of materially strengthening the act. I presume there could be no complaint about that, other than the fact that there is a group of owners of certain vessels which are not equipped with radio apparatus and equipment; and it might very well be that this would work a hardship upon those people. I believe they have the right to expect that until the recommendations of the convention for the safety of life at sea have been brought in, no changes which would materially affect them, such as the amendment now offered, should be made. For those reasons I feel I should oppose the amendment.


John Ewen Sinclair: With all due deference to the minister, I suggest the answer he has given does not answer the point at all. I do not know why we should wait for the recommendations of an international convention before strengthening our own act so far as the coast of British Columbia is concerned. I have mentioned that the present word "place" would apply to little fishing
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towns such as Lund, Egmont and Alert bay, and this should be sufficient to end the controversy.
To say that some international convention may bring in other regulations is not enough. I admit that some companies might be forced to install radio apparatus; but I should think we ought to consider the hardship which might befall two or three hundred passengers on a ship who may be facing a watery grave, and not the hardship to shipowners. The small cost of installing radiotelegraphy sets on these ships, as is done on Canadian National and Canadian Pacific ships, should not be considered as an obstacle.
For these reasons I suggest we should have a division on this matter.
Mr. MacINNIS' May I say another word before the amendment is voted on. My opinion is that the minister's argument as to why he cannot accept the amendment is so weak that it would have been better left unsaid.


Lionel Chevrier: Somewhat like the hon. member's speech of a moment ago.


Angus MacInnis: No, not at all. In my case, what was required to be said had already been said. But, as has been pointed out by the hon. member for Vancouver North,
I can see no reason why we should wait upon a convention or a conference in London. The minister has said that he does not wish to do anything until that conference makes a decision. But, suppose the conference does not deal with this matter at all so as to safeguard lives on ships plying on the Pacific coast, are we to leave it at that? Are we not going to safeguard life unless a convention somewhere makes a decision?
The minister said that it might put some companies, now operating ships, to some expense.


Lionel Chevrier: I did not use the word "expense".


Angus MacInnis: I cannot understand anything else that would come up but the matter of expense. But has anyone ever heard of a proposal involving expense which employers have not opposed? It was only when laws were made and it became more expensive to disobey the law than to comply with it that we had safety in industry. The same will apply in this situation.


George Black: With all respect to the minister, it does not seem to me that the deliberations of any international convention considering the Canada Shipping Act in any 
way lessens the necessity for the amendment offered by the hon. member for Vancouver North. There is a crying need for this change. To allow ships without radiotelegraph to carry passengers is to court disaster and to endanger the lives of thousands of passengers. This is going on every day and every night along the coast of British Columbia. The danger might be largely done away with if the minister would consent to the amendment and if the committee were to adopt it.
Why should the ships of some companies see fit to carry radiotelepgraph, if it is not necessary? They know it is necessary; I have been on those ships when it has been called into play. They have had to use it, both for their own safety and for the safety of other ships. Why toy with the question because someone in London is going to think it over? Let us now, in committee of the House of Commons, deal with it and thereby lessen the danger to the lives of thousands of people.


Mr. HAZEN:: I am not prepared to support the amendment without knowing more about it. It may 'be that on the Pacific coast some such provision is necessary. Although my knowledge in the matter is not complete, I doubt whether an amendment of this kind is required along the coast of the bay of Fundy, or perhaps in some other parts of the maritime provinces. Until I have more light on that point I am not prepared to support the amendment. I know British Columbia has a long coastline; along the bay of Fundy our coastline is comparatively short. Unless there is some clear definition of the expressions "place to place" and "public harbour" I would not be prepared to support the amendment.


John Ewen Sinclair: Perhaps I can answer that objection. It would not apply to the bay of Fundy at all, because there are certain specific limitations. This section does not refer to every passenger steamer. It refers to a passenger steamer with 50 or more passengers which goes more than 200 miles-and certainly I do not think you can take a journey like that on the bay of Fundy-,or a passenger steamer carrying more than 250 passengers and going more than 90 miles, or finally the large one carrying more than 500 passengers and going more than 20 miles. I think that would be just as desirable in the bay of Fundy and around Nova Scotia as on the British Columbia coast.

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Mr. LANGLOIS:: I am not very well versed in the coastal trade on the Pacific ocean, and therefore I cannot understand the full meaning of the amendment before the committee. Will the minister or the hon. member for Vancouver North tell the committee what class of ships will be affected by this amendment?


Lionel Chevrier: All those mentioned in section 406, subsection 2.


J. G. Léopold Langlois: As I understand the amendment, it substitutes for the word "place" the words "public harbour". I think section 539 of the Canada Shipping Act defeats the purpose of the amendment. Under that section the governor in council may declare to be a public harbour any area covered with water. Section 593 reads:
(1)	The governor in council may, by proclamation,
(a)	declare to be a public harbour any area covered with water within the jurisdiction of the parliament of Canada, and such proclamation shall define the limits of the harbour so proclaimed; and
(b)	extend or restrict the area of any existing public harbour in Canada.
(2)	Upon such proclamation being issued, all statutes, rules and regulations affecting such public harbours shall apply thereto as so extended or restricted.


John Ewen Sinclair: Among the public harbours on the coast are Vancouver, New Westminster, Victoria, Nanaimo, Port Alberni and Prince Rupert. That control is very much in the hands of the crown under this act. Certainly I do not think the minister would declare that little fishing camps and logging camps should be officially designated as public harbours. The coastal traffic in British Columbia is much heavier than anywhere else, because there are no roads along the coast, and this creates a great volume of coastal passenger traffic. The amendment refers only to coastal passenger steamships; it does not refer to deep-sea steamers or deep-sea cargo ships.


Lionel Chevrier: In case there might be a misapprehension as to the number of public harbours on the west coast I should like to have this matter clear on the record. There are some 600 proclaimed public harbours in Canada, the following being on the west coast:
Bamfield Creek Bull Harbour Chemainus Comox Crofton
Gibsons Landing Horseshoe Bay Ladysmith Nanaimo and Departure Bay
Nanoose Ocean Falls Pender Powell River Prince Rupert Quadra Snug Cove Squamish Ucluelet Arm Victoria
I do not want to repeat the reasons I gave a moment ago in objecting to the amendment.
I think I should say that the hon. member for Vancouver North was kind enough to discuss his amendment with me before he brought it down. I in turn discussed it with my officers and they repeated to me what I have already put on the record, namely, that they had given consideration to the brief of the telegraphers' association from the west coast and had reviewed the amendment in the light of what has been said, but their advice to me is that it should not be accepted. I have to give the committee the benefit of that advice.


Mr. STUART (Charlotte):: As this amendment affects boats in the bay of Fundy- although I am not sure at the moment how many will be affected-and the amendment would impose added expense on boatmen in the bay of Fundy, as well as making necessary added inspection by officials of the department, I wonder if it could not stand until tomorrow so that hon. members who are interested could look into it and decide whether they wanted to support it.


Lionel Chevrier: I am in the hands of the committee, but this bill has been up at least four times, and I would like to get it through today if I can. However, if it is the wish of the committee to go on discussing it, I am in the hands of the committee.


Mr. HACKETT:: Let us vote on it. Amendment negatived: Yeas, 24; nays, 35. Section agreed to.


[Stage Direction]
Schedule agreed to.
On the title.
Lionel Chevrier: There are one or two amendments I should like to make, and I think this is the stage at which to make them. I understand that I must have the consent of the committee to make them at this stage, but 1 think they are amendments which will commend themselves to hon. members. This one arises out of the discussion which took place the other evening with regard to sailing ships. The amendment is:
Amend clause 1 of Bill 300 by deleting subclause (9) and substituting therefor the following:
(9) Paragraph eighty-nine of the said section is repealed and the following substituted therefor:
"(89) 'Sailing ship', except for the purposes of the load lines rules, means a ship propelled wholly by sails, and a ship solely employed in fishing not exceeding one hundred and fifty tons gross tonnage, provided with masts, sails and rigging sufficient to allow her to make voyages under sail alone, and that, in addition, is fitted with mechanical means of propulsion other than a steam engine."
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Mr. FOURNIER (Hull):: I move accordingly.


John Ewen Sinclair: This does not cover British Columbia fishing vessels because they are not equipped with masts and rigging and they do not use sails. When the hon. member for Queens-Lunenburg raised the question a week ago with regard to his fishing schooners, I gave him my sympathy, never assuming that this would be so inclusive as to bring in even the fishing boats used on the British Columbia coast. A ship under 150 tons would cover most of our coastal fishing fleet, but to specify that they must have masts and sails would not describe anything but the odd Indian's fishing vessel.


Lionel Chevrier: My information is that the definition includes fishing vessels not only on the east coast but on the west coast, provided that they have sails. That has always been the practice.


John Lambert Gibson: If I may come to the assistance of the hon. member for Vancouver North, practically all our vessels on the Pacific coast have to have a mast for the purposes of loading cargo, and it would only be the part of wisdom for a boat to have a piece of canvas around the place if they happened to drop a propeller or something of that kind. My opinion is that the amendment will meet the case on the Pacific coast as well as in the east.


John Ewen Sinclair: The last phrase of the amendment says that the vessel must be capable of moving under sail. It is all very well to have a small piece of canvas around, but that would not, on the mast of a big seiner, sail it very far.


Lionel Chevrier: That part of the definition is not changed from the one they are now operating under. I will read the original definition of sailing vessels:
"Sailing ship" (except as may be provided under the load lines rules) means a ship propelled wholly by sails, and includes a ship not in excess of one hundred and fifty tons, gross tonnage, provided with masts, sails and rigging sufficient to allow her to make voyages under sail alone, and which, in addition, is provided with mechanical means of propulsion other than a steam engine.
They are operating under that definition now. This change is being made to come to the assistance of people on the east and west coasts, so that they will be exempt from steamship inspection.


John Ewen Sinclair: I am glad to have the assurance that our big boats need only put a piece of canvas on their main cargo boom to qualify as a sailing vessel.


J. G. Léopold Langlois: Under the new definition of sailing ship we are creating a new class of ship, as the minister assured us the other day, following the report of Mr. Justice Cannon. I take it that fishing vessels under 150 tons which are not equipped with sail will also benefit from being in this new class.


Lionel Chevrier: No; we are not creating a new class, but we are exempting fishing vessels from steamship inspection, for the reasons I gave a moment ago. Amending the definition is an entirely different thing from creating a new class.


J. G. Léopold Langlois: I am afraid the minister misunderstood me. Is it not correct that, following Mr. Justice Cannon's report recommending a new class in the future for ships under 150 tons gross tonnage, irrespective of the trade in which they are engaged, fishing boats will be able to benefit from being in this new class created for ships under 150 tons?


Mr. RICHARD (Gloucester):: In what class does a ship come that is smaller than 150 tons and is not equipped with sails but is propelled by mechanical means other than steam?


Lionel Chevrier: It comes in the class provided for ships of less than 150 tons.


J. G. Léopold Langlois: This is the class I had in mind.


Clovis-Thomas Richard: Does it require inspection?


Lionel Chevrier: Not as strict.


Angus MacInnis: Does the amendment just moved by the minister restore the old section as it was?


Lionel Chevrier: For fishing vessels.


Angus MacInnis: For fishing vessels only? Mr. CHEVRIER: Yes.


Angus MacInnis: In reply to the hon. member for Vancouver North I would say that the amendment is in the present act with regard to sailing vessels.


Lionel Chevrier: What I said or intended to say was that the greater part of the definition contained in the amendment was contained in the old one. I was saying that in answer to my hon. friend's contention that there would be a great change so far as masts and sails are concerned.


Angus MacInnis: The hon. member for Comox-Albemi said that all that would be required for a ship to qualify would be to have a mast and a piece of canvas. But I would point out that the amendment moved

Canada Shipping Act
by the minister calls for masts and sails, not a mast and a sail. Consequently the easy optimism of the hon. member for Comox-Alberni is not justified.


John Lambert Gibson: I appreciate at times my hon. friend's analytical mind, but I had not noticed that masts and sails were in the plural. The average ship on the Pacific coast has one mast, and the average seine boat there would not start out to sea just with sails; in that case it would never get there. The idea of a sail is to bring it back home in case of trouble.


Lionel Chevrier: There is nothing to the
point that masts and sails are in the plural, because this refers to a ship employed in fishing.


Andrew Wesley Stuart: Even the seiners fishing offshore, nine out of ten of them, would have what is called a riding sail, for protection.
I have seen many boats come in using only a quilt for a sail. If you have plenty of wind it does not take much to bring you home.


John Ewen Sinclair: This is perpetuating an old description perhaps suitable to the east coast fleet. I do not see why in 1948 the big modern fishing vessels of the British Columbia fleet, powered by diesel engines, should be described as sailing vessels. Why not get a better description of the west coast fishing boats?


Angus MacInnis: What were the arguments for making this change?


Lionel Chevrier: The recommendations of the Cannon commission, which reported on small boats.


Mr. WINTERS:: I wish to thank the minister for reconsidering this matter and bringing in this amendment, which will better serve the fishing fleet in my constituency. My only comment is that the 150 tons gross tonnage might not be large enough at the time to cover larger schooners. If it had been 150 tons registered tonnage, I think it would have served them better. At any rate I think the minister will keep an open mind on this, and if we need the increased tonnage we will seek it at an early day.


Lionel Chevrier: I have another amendment to propose. Perhaps it will be of assistance to the hon. member for Vancouver North.


William Ross Macdonald: Shall we carry the
amendment which is now before the Chair?


[Stage Direction]
Amendment agreed to.
Lionel Chevrier: I should like to add another section to the bill which would read as follow's:
Subsection 9 of section 1 of this act shall come into force on a date to be fixed by proclamation.


John Thomas Hackett: So sailing ships may never sail.


Lionel Chevrier: Will my colleague, the Minister of Public Works, be good enough to move the amendment?


Alphonse Fournier: I so move.


Lionel Chevrier: The object of the amendment is to give those who will be affected by the new definition some time to get ready. After the matter has been under consideration for some time the effective date of the section would be proclaimed.


John Ewen Sinclair: This I suppose is to give the big fishing boats time to buy the small piece of canvas referred to by the hon. member for Comox-Alberni.


John Thomas Hackett: As I understand it, the effect of the amendment is that subsection 9 of section 1 shall not come into effect when the bill itself does.


Lionel Chevrier: That is right.


William Ross Macdonald: Shall the amendment
carry?


J. G. Léopold Langlois: Mr. Chairman, I am not worrying so much about the time which will be given to these ship owners to get their ships in shape according to the new regulations, but I hope the department will not decide to put them into force in the middle of the navigation season. I trust they will wait until the beginning of the season to do that.


Lionel Chevrier: That is the intention.
Amendment agreeed to.


Lionel Chevrier: I still have a further amendment, and this is the last one. It refers to sections 118 and 118A of the act. If the committee will look at page 4, clause 6, they will see that clause 6 of the bill repeals sections 118 and 118A. It is still the intention to repeal sections 118 and 118A and to substitute therefor the following:
118. Every British subject who-
(a) served as as master of a home-trade, inland W'aters or minor waters sailing ship of over ten tons, gross tonnage, fitted with mechanical means of propulsion other than steam engines, before the first day of January, one thousand nine hundred and forty-eight, for a full period of twelve months within the ten years immediately preceding the date of his application for a certificate of service;
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(b)	produces satisfactory evidence of his sobriety, experience, ability and general good conduct on board ship; and
(c)	passes the prescribed examination; shall be entitled, on payment of the prescribed fee, and according to the waters served in, to either a home-trade, inland waters or minor waters certificate of service as master of a steamship of over ten tons, gross tonnage, and not exceeding one hundred and fifty tons, gross tonnage, and not carrying passsengers. Such certificate shall not be valid on tugs.


Alphonse Fournier: I so move.


John Thomas Hackett: Will the minister explain the difference between his amendment and section 6 of the bill?


Lionel Chevrier: The object of this amendment is to provide for those operators of small vessels such as the goelette which my hon. friend had in mind the other day. If the present bill is allowed to go into force, then the operator of a small vessel will have to undergo a severe test, a severe examination to get a certificate, which in all probability he will not be able to do because he has not the facilities. Therefore the proposal, by the amendment, is to give to masters now operating these small boats a certificate, so that they will not be put out of business thereby.


[Stage Direction]
Amendment agreed to.
Title agreed to.
John Thomas Hackett: Will the minister say whether any decision has been reached about the line which defines inland waters, and whether or not Ellis Bay, and the other port, the name of which escapes me, were included within the description?


Lionel Chevrier: The matter was discussed the other evening, and the decision arrived at was to leave the definition as it was, namely, that it would be from a point extending from Cap des Rosiers to the west tip of Anticosti island, and then to a point on the north shore, the name of which I have forgotten at the moment. It was thought that if it were extended easterly that would be including too much territory. The extension is already some 100 or 120 miles more than the original definition called for.
Bill reported.
Hon. LIONEL CHEVRIER (Minister of Transport) moved the third reading of the bill.
Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, I wish to discuss sections 11 and 40 of the bill. Incidentally may I say I am grateful to the house for giving me this opportunity. I intend to move an amendment which, if carried, would delete these two sections.

I am going to ask the house to direct its attention for a few moments to the exact purport of these two extraordinary sections. Section 11 is in these terms:
The minister may, if he thinks fit, and upon such conditions, if any, as he thinks proper to impose, exempt any ship from any requirement contained in sections one hundred and thirteen, one hundred and fourteen, one hundred and thirty-two and one hundred and thirty-three, or dispense with the observance of any such requirements in the case of any ship, if he is satisfied that that requirement has been substantially complied with in the case of that ship, or that compliance with the requirement is unnecessary in the circumstances of the ease, and that the action taken or provision made as respects the subject matter of the requirement in the case of the ship is as effective as actual compliance with the requirement.
Section 40 is-


James Horace King: I am sorry to interrupt the hon. member; but on the third reading, as on the second reading, hon. members are not allowed to discuss the clauses of the bill. That should be done in the committee stage.


John Thomas Hackett: But I am offering an amendment to delete those two clauses from the act, and I submit with great deference that that is a competent procedure on the third reading of the bill. I would point out to the house that those two sections are a challenge not only to law and order but to the basic traditions of our political system and to the supremacy of the law and of parliamentary government. In effect, they state that what is now the law ceases to be the law if some individual decrees that it shall not be the law. It is an attack upon the rule of law and it is a perversion of parliamentary' government. It as an echo of the bill that was passed earlier this session, the act respecting the conservation of foreign exchange, when the minister in charge of that bill was given powers that enabled him to legislate for the country at large and to determine that laws in force had ceased to be effective.
In this case there is not even the alleged reason of urgency. We have listened to arguments advanced in support of legislation which has been brought forward in the house resting upon a doctrine of urgency or emergency. That doctrine, for the time being, was seriously challenged the other day by a judgment of a court which held, that, no emergency having been established, the legislation was entirely beyond the competence of parliament to enact.

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Lionel Chevrier: But there is urgency here.


John Thomas Hackett: I challenge that statement. There has been no evidence of urgency and much less of emergency. It has been stated that it would be more convenient if the officers of the department over which the minister presides were permitted to deal rather summarily with situations which heretofore came under the law. I refer now to section 40.
Section 40 says in substance that the seventh part of the Merchant Shipping Act shall not apply whenever the minister, on the recommendation of the chairman of the board of steamship inspection, so decrees.
The board of steamship inspection is a creature of the minister and is in all probability comprised of gentlemen who are in the service of his department. I shall be glad to be corrected on this point if I am in error, because I have not yet been able to ascertain exactly who constitutes this board of steamship inspection, but I have noticed that its members are appointed by order in council, and it is fair to assume that they would in most cases be in complete harmony with the government and in all likelihood under the dominion and instructions of the minister.
Let us look for a moment at the seventh part of the shipping act. It deals with many aspects of shipping, and it deals with those questions which affect humanity most, that is the safety of those who go down to the sea in ships. In fact, the whole seventh part comes under the general heading of "safety". It includes in the act fifty odd pages of the statute and it consists of something like 125 sections-116 sections to be exact.
If this bill becomes law it will mean that that entire seventh part of the Canada Shipping Act will cease to have the effect of law and may be suspended, deleted, changed or otherwise dealt with as the minister sees fit, without notice and without reason.
Among the items which may be dealt with in this summary way are the following: steamship inspection service; safety and inspection certificates; provisions as to safety convention ships not registered in Canada; limited and other voyages; overloading passenger ships; safety precautions; radio equipment; inspection of radiotelegraph apparatus; radio certificates; load lines and loading; special provisions to load line convention ships not registered in Canada; general provisions to loadline convention ships not registered in Canada; loading of timber; changes affecting certificate; safety of ships, passengers and
crew; dangerous goods; ships alleged to be unseaworthy; inspection of ships' tackle; gangways and dock lines; exceptional vessels and exemptions from inspection; fees for inspection; detaining for non-compliance or other causes; discretionary application of safety of load line conventions, sale of ship to realize fines imposed; disposal of penalties and limitations of proceedings; general penalty; special application of this part.
This broad realm of shipping legislation in which, as the result of centuries of experience, these provisions have been embodied, first, in the British act and, subsequently, in our own act, shall cease to have the effect of law and be binding upon the people at large only so long as it meets with the approval of the minister. The minister, in making his statement to the house with regard to section 11, said that a similar provision is found in the British act and he suggested that was the reason to introduce such a measure into the Canada Shipping Act. I draw to his attention that, while the language of the British act does not differ materially from that of the Canadian act, there is this great difference: Whereas in the Canadian act discretion is left with the minister, under the Merchant Shipping Act of the United Kingdom the discretion rests with the board of trade.
I do not think it is necessary at the present time to enter into a lengthy discussion of the origin and function of the board of trade or the part which it plays in England. It is one of those hoary institutions that go back almost to the time King Canute. It is one of those institutions that has grown up in that seafaring country. It is associated in the minds of many with Trinity House, Deptford shipbuilding yards and other like agencies which were the product of initiative, enterprise and experience that sent Englishmen to the seven seas. They were not administered by civil servants or by persons who found themselves in relation to authority in the position that our departmental officials find themselves here. They lived on the banks of the Thames, in that harbour of ten thousand masts, and saw its commerce and trade pulsating day by day. They were of the life, of the essence of that great humanizing and colonizing agency that, through the centuries, made of Britain what she has been and is. To liken the minister- who, with all his grace and charm is but a passing phase on the political scene-to an institution that has been in existence for five, six, or seven hundred years is, I think, to show a lack of sense of proportion.
We pride ourselves on living in a country which acknowledges the rule of law, a country
Canada Shipping Act

in which everyone is subject to the law, and is supposed to know the law and is dealt with as if he knew the law. Yet under these amendments, under sections 11 and 40 of the bill, the law may be changed without notice and without reason at any time.
My hon. and genial friend, the minister of the department, said there is urgency. What urgency is there? This law has been the law since 1934 and it embodies enactments which were the law in Canada for a great many years before that. The laws which are affected by section 11 have to do with the certification of masters, mates and engineers, and the qualifications of men who are operating ships; it is important to the people who ply the trade of sailors and seamen and to the people who journey by sea, that there should be the utmost confidence and reliability at all times in those to whom they confide their lives every time they put out to sea. Yet the minister makes this suggestion. Because, during the war when there was a shortage of men and when there was surge of cargoes which had to be taken across the deep that our fighting forces might be kept effective, hazards had to be taken and life and liberty were in the balance-because these things were done then, the minister suggests that today we should depart from that age-old rule of stability of the law.
We come to section 40, concerning which there is no reason other than the convenience and the desire of a small departmental group to be absolute in their mastery of situations. What right has any man in any department to determine, without notice, how a ship shall be loaded or unloaded? What right has he to say how a passenger ship shall be equipped with lifesaving devices and others?
We talk here about our origin and about the majesty of the law. Not infrequently speakers are inclined to recall how a British sovereign summoned his judges together. If my memory serves me well, it was James I, in 1608-the very year in which Champlain came to the rock of Quebec-who did that. The judges of the court of king's bench of England were summoned one Sunday morning to ascertain if they would do the bidding of the king. They all, with the exception of one rather short, thick-necked, florid individual, bowed their heads and said they would. But one, Coke, who has achieved immortality, said it was not competent for anyone, even the king, to interfere with the courts. He stated a principle which has been accepted wherever institutions such as ours prevail, that is that all men are subject to the law at all times, namely, that

it is not competent to anyone at any time to change or to interfere with the law.
Yet by this bill the house is saying that fifty pages of a statute, upon which thousands of people depend for their safety may be stripped from the statutes; and the penalties which have heretofore attached to those who disregard these humanitarian provisions will cease to be effective.
We talk here frequently about communism and about the encroachments of communism upon our institutions. I suggest that we would do well to turn our eyes inward and look at the depredations going on in this very House of Commons where greater encroachments are being made upon the liberty of the subject and upon the stability of institutions built up through years of civilization than could ever be readily achieved by the activities of any foe from outside. We appear to have forgotten entirely what it cost to make of the law something durable, to make of the law something that applies to all men, something that could not be set aside, something that everybody was bound to respect, the integrity of which, both in its application and in its making, were beyond challenge.
I therefore move, seconded by the hon. member for Saint John-Albert (Mr. Hazen):
That sections 11 and 40 of this bill be deleted.


Lionel Chevrier: Mr. Speaker, the object of the amendment moved by the hon. member for Stanstead (Mr. Hackett) would be to disapprove that which the house has already approved when it passed the two sections to which the hon. member refers, namely sections 133A and 488A. In other words, it would be a backdoor method of striking out sections already approved by the house.
I fail to see why the hon. member should be exercised at this stage about these particular sections. I fail to understand why he has selected these two rather than many others- several others, at least-of a similar nature which were brought in last session. I can think of an amendment to the Railway Act which I brought before the house, which had to do with an order in council arising out of the war emergency and which the house saw fit to approve. I can think of one or two like amendments brought in by the Minister of Labour (Mr. Mitchell), which used practically the same wording as the orders in council passed during the war years.
Why my hon. friend should, because of a high legal principle, select these two sections in the act, is beyond me; because if the

Canada Shipping Act
principle he advocates is a good one, then it was a good one in the other instances to which I have referred.
My hon. friend made light, as he had a perfect right to do, of my explanation of the fact that this section 133A can be found in the Merchant Shipping Act of the United Kingdom. Not only can the section be found in that act, but the exact wording is used, with the exception of the substitution of the expression "board of trade" for the word "minister". I do not know whether my hon. friend is aware of the fact that the board of trade has now become the ministry of transport in the United Kingdom. So that over there the ministry of transport has the same rights and the same privileges as the Minister of Transport in this instance, on the advice of the steamship inspection board, seeks from the house.
Then it is set out that anything done by the minister under this section will be laid on the table of the house. I do not wish to go over the arguments I have already given, but I would say to the hon. member that this matter is urgent. Not only is it urgent in all parts of Canada where the shipping act applies, but particularly in his own province. If his amendments were to carry, there are various groups in the province of Quebec that would be seriously affected.
It has been found that shipowners have experienced extreme difficulty in securing dry-dock facilities for annual steamship inspection, because of the greater number of ships we now have. If these two sections are not allowed to remain in the act, ships would have to be tied up, not for weeks but for months. There could not be annual inspections of hulls, machinery and equipment as required under the Canada Shipping Act. The steamship inspection board can extend that inspection from one year to two years, if it is of the opinion that hulls, machinery and equipment are in seaworthy condition and safe to sail.
There are all sorts of difficulties arising in the manning of ships in connection with certificated officers and engineers. In order to keep ships moving, it is essential that these two sections be allowed to stand as they are. I would refer to some examples which would affect the position in my hon. friend's province.
There have been repeated occasions during the winter months when the Lapointe and the McLean had to go to the assistance of people who were in difficult straits on the north shore. Had it not been for these two sections, the ships could not have gone and could not
have taken the fuel, provisions and mail that these people on the north shore of the province of Quebec were awaiting.
The Magdalen islands have found themselves in similar difficult conditions; but because of these two sections it has been possible to send assistance and relief to the people of those islands, by exempting from part VII of the act certain of the necessary requirements.
I turn now to the province of Ontario where, because of this particular section, especially 488A, the extension of the summer and intermediate seasons to October 31 and December 1 for tankers between Toledo and certain other ports provided for hundreds of thousands of gallons of fuel oil. We know what the position with reference to fuel oil was last winter and what it will probably be again in the coming season. Had it not been for the relaxation of these requirements, fuel oil would have had to come by other than water transportation.
I could point to a number of occasions when paper products were sent to Corner Brook. Had the requirements been put into effect, ships would not have been able to take paper products to that part of Newfoundland. Operations under this amendment would be principally as follows:
1.	Extension of certificates where lack of drydock accommodation prevents inspections being completed.
2.	Acceptance of equipment considered sufficient pending delivery of required equipment on order.
3.	Acceptance of surveys by competent persons considered equivalent to steamship inspections.
4.	Permits for ships for occasional voyages beyond the limits of the inspection certificates.
5.	Permits for ships, recently operating under certificates other than Canadian, to allow continuous service until validity of existing certificates ceases.
6.	Increases in loading capacity of certain ships to carry bulk cargoes, ore, grain, coal and oil, during summer season.
7.	Permits for uncertificated engineers, pending examination for certificates.
I suggest that there is every reason why these two sections should be allowed. I would point to the experience in the United Kingdom where similar sections exist and where, by virtue of the commonwealth agreements, they are bound to respect our regulations as we are bound to respect theirs.
I say, finally, that if this amendment were allowed it would create great hardship to those
Canada Shipping Act

operating under the act, and particularly ships of this country would be tied up and would not be able to move with the dispatch that they should.


Douglas King Hazen: Mr. Speaker, may I speak or is the debate closed? The minister has listed the circumstances under which he has the power to evade or change the law.


Lionel Chevrier: May I just make this interruption? The minister has the power, on the recommendation of the board of steamship inspection.


Douglas King Hazen: He has the power, on recommendation of the board of steamship inspection, to make changes that are not provided for in the act. Everyone in this chamber is sent here by his constituents to make the laws of this land. Surely we are astute and capable enough to draft a bill that would cover all the circumstances the minister has just mentioned. By permitting the minister to change the law under certain circumstances, we are not living up to our constitution or parliamentary practices.
I admit that we have adopted this procedure on many occasions, but I do not think it can be justified on the grounds of convenience. AVhen we come to draft a bill, every effort should be made to put in it the provisions we want and not put in legislative permission to the minister to change the act under certain circumstances.


Lionel Chevrier: It is done in that way in the United Kingdom.


Douglas King Hazen: I do not think that justifies it.


Donald Methuen Fleming: They have a socialist government over there.


Lionel Chevrier: That was 1906.


James Horace King: The amendment moved by Mr. Hackett, seconded by Mr. Hazen, seeks to amend the bill as reported from the committee of the whole. Such an amendment cannot be made on the motion for third reading of a bill. The proper course would be to move that the order for third reading be discharged and the bill referred back to the committee of the whole for reconsideration. I refer the house to Beauchesne, third edition, citations 710 and 711, and May, thirteenth edition, at page 422.
I therefore rule the amendment out of order.


Angus MacInnis: Mr. Speaker, I realized that the amendment was out of order and I was wondering how the debate was being carried on. As the motion for third reading has been reopened by unanimous consent, I think Your Honour should consider not having

third reading now and leave it so that the hon. member for Stanstead (Mr. Hackett) could put his amendment in proper order.


Lionel Chevrier: Mr. Speaker, I am
afraid I shall have to object. I do not think the hon. member for Stanstead can say that he has been treated badly. Third reading was passed and I think it was at my own suggestion that he was given the opportunity to revert back to the order of the day. The hon. gentleman is one of the outstanding lawyers in this country; he is president of the Canadian bar association and I am sure that, after the time he has spent on the amendment, it could not be improved a great deal. I submit with deference that we should proceed.


Angus MacInnis: I do not know just what the hon. member for Stanstead wishes to do about the matter. I understand that a bill cannot have third reading at the same sitting so he can still stop it.
Motion (Mr. Chevrier) agreed to on division, bill read the third time and passed.



THE BUDGET


[Stage Direction]
The house resumed from Friday, May 21, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Mus-koka-Ontario), and the amendment to the amendment of Mr. Coldwell.
John Lambert Gibson: Mr. Speaker, I am rising at the earliest possible time in the budget debate in order to call the attention of the Minister of Finance (Mr. Abbott) and his colleagues in the cabinet to matters which are of great concern to the people of British Columbia in the hope that, before the budget is finally passed, it may be found possible by the federal government to take steps to alleviate the financial problems which confront my province; also, may I say, to dispel the rankling sense of injustice which is felt by my people of British Columbia as the result of being the highest taxed province in the Dominion of Canada.
Of course the house is familiar with the many natural and climatic advantages of British Columbia which are of themselves of tremendous value to our economy. There are many wonderful features which result in our having the highest per capita income in the dominion, but those same features are not wholly economic assets. Equable climate and high wages have been a lure that has drawn tens of thousands of people from the other

The Budget-Mr. J. L. Gibson
provinces to our Pacific slopes. Younger people have gone there in a search for high wages and steady employment, while older people go there to bask in the sun in their declining years.
This rapid increase in our number can, in the long-term view, be considered an economic asset to our province, bringing as it does an increase in capital values of real estate and business concerns; but it will be realized by hon. members that sudden strain has been thrown on our provincial and municipal governments in having to provide schools, hospitals, social and domestic services to this large number of people.
From 1945 until the present these costs have been met from the provincial surplus account which was built up during the war years, when public expenditures were deferred in the interests of Canada's war effort; and I might tell the house that this surplus account of approximately 842,000,000 has now been entirely invested, either in deferred maintenance of our public works or in capital construction costs, which have built additional schools, hospitals, roads and university accommodation. In passing, may I say to hon. members that the University of British Columbia has increased its enrolment from 3,500 before the war to approximately 9,000 at the present time. These figures in themselves will give some idea of the sudden increase in the magnitude of the problems which this transition period has brought to my province.
I know the Minister of Finance may harbour the thought that the provincial authorities might have been wiser to retain part of this surplus as an emergency fund to bolster the revenue account in the event of an emergency, which now in fact has arisen; but may I point out to him that British Columbia is still a great frontier, has always been a country where the terrain enforces large highway and railroad expenditures in order that services may be provided to our scattered pockets of population. Consequently, our bonded indebtedness is now as high as prudence would indicate was desirable; and I am sure, too, that, in view of his own policy of reducing indebtedness out of surplus, the Minister of Finance cannot quarrel with provincial authorities if they are guided by his own example and follow the same course.
I would like, sir, with your permission, to read an editorial from the Vancouver Sun, not that I myself fully endorse the conclusions which are drawn, but because I believe it is in the best interests of Canadian unity that the members of this house should know how Canadians in each section of Canada feel, to be aware of our prejudices and apprehensions, as
well as our great loyalties and strengths. The editorial is headed "Hello Sucker!" and reads:
Texas Guinan had a word for British Columbia. Patrons of her night club used to be smilingly greeted with, "Hello, sucker!" British Columbia qualifies for that salutation from the dominion government on the basis of the price it pays for fiscal co-operation with Ottawa.
The Vancouver Sun has obtained the figures for the seven provinces which rent taxation rights to the dominion. Here they are for the year ending last month:
	Contributes to	
	Federal	Receives in
	Treasury	Return
British Columbia ..	. $144,386,517	$20,289,281Alberta 	. 47,674,232	13,205.173Saskatchewan 	. 33,196.561	13.681,361Manitoba 	. 64,778.961	12,661,301New Brunswick ....	. 23.987,722	7.821.817Nova Scotia 	. 29,087,722	10.033,372Prince Edward Island 2,306,81$	1.635,189


Mr. JOHNSTON:: Has the hon. member the	
percentages?


John Lambert Gibson: It is nice to live in Prince Edward Island. The editorial continues:
A little arithmetic shows what's happening. British Columbia is discovered to be paying 42 per cent of the federal receipts in exchange for 16 per cent of the federal rents. The three prairie provinces contribute $145 million and get back $39 million-while British Columbia contributes as much as all three of them combined and gets a little over half as much.
In fact, Ottawa's collection in British Columbia alone is enough to pay off all the seven proy-inces and still leave Ottawa a meaty profit of $65 million.
The figures explain why British Columbia is levying a sales tax while Ottawa luxuriates in surpluses. They also explain why British Columbia is demanding that Ottawa fulfil some of the vague social welfare promises made in the Green Book.	.
The agreement under which this _ province is being mulcted runs until 1952. British Columbia signed under strong pleas from the dominion government that uniform taxation policies were essential for postwar stability.
That will give the house some idea of what the average man on the street feels in regard to the dominion-provincial taxation agreement that our province entered into. Of course I would not be prepared to endorse fully a statement of that kind, because I quite appreciate there are two sides to every story and I imagine that the Minister of Finance or his parliamentary assistant will be speaking in the debate at a later stage. I would point out to my hon. friends that that editorial was not written by the Globe and Mail but came from the Vancouver Sun, which is very fair and has consistently supported this administration.
I know, sir, that the Minister of Finance can say with truth that these provincial receipts
The Budget-Mr. J. L. Gibson

from the federal government are only part of the complete story. He will point to family allowance payments, freight subsidies, public works expenditures, defence expenditures and a host of other federal spending within the provinces; but the fact remains that many of the residents of the one rich province which entered into the dominion-provincial agreement now feel that it was a sorry day for British Columbia when it agreed to bind itself with the other less wealthy provinces in an agreement with the federal government.
I may be asked, why did British Columbia enter into this arrangement? It must be admitted that there was no coercion used; but there was some very attractive bait held out and it was hoped that such a gesture from one of the so-called three wealthy provinces would set an example of co-operation and good will to Quebec and Ontario that might persuade them to make their contribution to Canadian unity and a more abundant life for all Canadian citizens, regardless of the province in which they happened to reside. I am sure that it was this feeling of good will and desire for higher standards of social services which prompted British Columbia's acceptance of the terms mutually agreed upon, plus the guarantee of minimum annual payments which would act as a floor to our provincial revenues in the event of an economic recession. Economic security seems to be the great goal in Canadian life today; but perhaps there is a valuable lesson to be learned there, by provincial governments as well as by individuals, that static security can be something for which we have to pay too high a price.
From the figures of provincial tax collections and receipts from the federal government, it can readily be seen that my province is making the highest per capita contribution to the federal treasury and receiving the least percentage of return. We receive approximately fifteen per cent back, compared with the next greatest contributor, Manitoba, which receives a return of approximately 20 per cent, down to the lowest-I exclude Prince Edward Island because I realize that there are special considerations affecting it-which is Saskatchewan, which receives a return from the federal treasury of approximately forty-one per cent of what it pays in, plus equal emoluments from other fields of federal expenditures. The situation can be stated perhaps more graphically on the basis of population. British Columbia, with approximately the same population as Saskatchewan, and most certainly with fewer members of parliament than

Saskatchewan, contributes $124 million net to the federal treasury, while Saskatchewan contributes $19,500,000. I cannot refrain from admonishing my C.C.F. friends from Saskatchewan who sit opposite-sometimes I think they are in a happy economic fog-that they should be very careful before they make any attempts to try to eradicate private enterprise from British. Columbia.


Mr. MATTHEWS (Kootenay East):: Where did the fog come from?


John Lambert Gibson: Not from here. The hon. members are trying to eradicate it all the time. If you do you will only be biting the hand that is assisting you, and you will also be attempting to kill the goose that lays the golden egg.


Mr. McKAY:: I never saw one of these geese. What do they look like?


John Lambert Gibson: Come to British Columbia and you will see.


Mr. KNOWLES:: That is the goose the water runs off.


John Lambert Gibson: I know the Minister of Finance will be quick to point out that certain actions by the federal government have caused to a degree British Columbia's high income; that our foreign loans have made possible the high levels of profit and employment in our basic industries, and, to a degree, I believe this point to be well taken. He will admit, I know, that exports from every other province have been benefited to a lesser or greater degree, as has British Columbia, by the same methods; but I would ask him carefully to study this vital point: most of our wealth in British Columbia is coming from our extractive industries; in other words, we are using up our capital assets at a time of high federal taxation, and we cannot retain enough of this wealth under our present deal to pay the cost of opening up our remaining frontiers to development, the building of vital roads and railway lines and other public works which will make our reserves of timber, coal, minerals and agricultural land accessible at an economic level of cost to enable us to compete on world markets, which we inevitably must do.
The majority of the members of this house come from the two great central provinces, and they would be less than human if they did not at times become impatient with us members from the maritimes, and the western provinces who come here to this national forum at Ottawa and speak of the handicaps under which we labour. We speak of freight rate inequalities and discriminations; we ask

The Budget-Mr. J. L. Gibson
for lower tariffs on manufactured goods; we ask for co-operation from these two provincial governments that have chosen to remain outside the co-operative brotherhood of the dominion-provincial agreements, and they are perhaps tempted to think we are never satisfied.
To you from the two great manufacturing provinces, I would say: We do not begrudge you the necessary tariffs to enable your people to keep busy supplying us primary producers with the manufactured goods we require; only this, do not forget that our products must be sold in the competitive markets of the world; our pulp and paper, our lumber, our wheat, fish and apples, these you do not consume in adequate quantities to keep our economies solvent; you must co-operate with us economically if we are to continue to protect you behind tariff walls. There is no need for me to point out to you that in British Columbia, as in the maritimes and indeed in all the provinces which are at present cooperating with the dominion government, our natural and cheapest sources of supply for all manufactured goods is in the United States, and indeed that, too, is the natural market for most of the products which we produce.
Under the present financial arrangements with the federal government, all would be well, Mr. Speaker, if the people of British Columbia were paying the same rates of tax as the less wealthy provinces; but in order to care for our increase in expenditures, due, as I pointed out earlier, to the great increase in population, it has been necessary to place an additional tax burden on the British Columbia residents, namely a three per cent retail sales tax. As hon. members will realize, such a tax is extremely repugnant to any taxpayer anywhere; but especially is it so in British Columbia where, as I have pointed out, our per capita tax is the highest in the dominion. Another unfortunate feature of such a sales tax is that it inevitably increases our cost of production and, to that extent, impairs our competitive position in the export markets of the world upon which we must, in a large measure, depend for our livelihood.
I know the Minister of Finance will reply that perhaps the British Columbia government has gone ahead too rapidly in the field of social security measures. In reply to this, and by way of explanation, I will quote from the speech of Premier Byron Johnson, given in the British Columbia legislature on March 5 of this year. Mr. Johnson said:
At the time the Green Book proposals were presented to us, it was estimated by the dominion government that we would have a total of 16,670 old age pensioners on our lists by 1948. I find, however, that in October of
last year there were 17,768 persons in receipt of old age pensions and that now, the beginning of 1948, there are on our rolls 21,305 recipients. This figure is expected to rise to nearly 25,000 before the end of the year.
Or, as you will note, Mr. Speaker, fifty per cent over the estimate presented to them at the time the Green Book was brought out by the federal authorities. I continue with Mr. Johnson's remarks:
Since, due to climatic conditions, the bulk of internal emigration is toward the Pacific coast, British Columbia is placed in the position of making financial concessions through a tax agreement to what has been termed "less fortunate provinces," while at the same time being compelled to assume a very great share of the social service load of other provinces because of the emigration of their people to the coast... In short, 20 per cent of the new old age pension cases assumed during the last five months of 1947 were not really British Columbia cases in the true sense.
There has been a similar rapid rise in the number of persons receiving social allowances; that is, persons who are classified as unemployables. During the years from 1943 to 1945, inclusive, the increase was approximately 1,000 cases a year; but in 1946-47 the case-load rose by 2,000, and during the present fiscal year it is expected to rise by nearly 2,000 more . . .
In short, the cost of these three pensions alone has risen from $4,100,000 in 1945-46 to an estimated $8,900,000 in 1948-49, or by more than 100 per cent.
The inequality that exists between provinces with respect to social services can best he illustrated when it is pointed out that, despite British Columbia's rise in population, the per capita cost of these services has risen from $1.60 in 1944-45 to $2.07 in 1946-47. This is in contrast to Saskatchewan, where the per capita cost has risen merely from 56 cents to 76 cents.
I think they must all drift out to British Columbia when they reach the age where they qualify for social allowances. I continue:
Finally, in reviewing all social services, including both health and welfare, it was found that costs had risen from $9,300,000 in 1945-46 to an estimated $19,346,000 for 1948-49, or an increase of approximately $10,000,000 or more than 100 per cent.
I do not think that anyone would suggest that curtailment of expenditures should take place in our social services. It seemed to me, therefore, that if the dominion government, by virtue of our withdrawal from the income, corporation, and succession duty tax fields could collect $139,-
958,000	from this province during the fiscal year ended March 31st, 1947, and pay back to the province approximately $23,000,000, or only i6 per cent of what they collected, it was reasonable to expect that the social security proposals of the Green Book should be implemented, if only partially.
These, Mr. Speaker, are the views of the Liberal Premier of British Columbia. I am sure that the Minister of Finance, if he were in his seat at the moment, and the parliamentary assistant to the minister who comes
The Budget-Mr. J. L. Gibson

from British Columbia, would both say that our premier is a man of unimpeachable integrity and sound business judgment.


Charles Edward Johnston: They will be the last to do anything.


John Lambert Gibson: I think the hon. member is getting a bit worked up. There is no point in merely urging complaints without offering some solution; and I shall try to keep my suggestions for budget revisions to orthodox practices, which I am sure are the only kind that our present Minister of Finance will accept, in any event. Let us first examine the 1947-48 surplus as reported by the Minister of Finance last Tuesday. He said it amounted to $650 million which, as he said, was a figure to gladden the heart of any minister of finance. In my view that was a very modest statement.
I am sure that Canadians generally will take encouragement from the fact that our heavy tax payments were not entirely dissipated by federal expenditure, but let me express my own personal views in regard to this surplus.
First of all, it was approximately $500 million more than was estimated by himself in conjunction with his financial advisers and experts, and this huge surplus does not, in my opinion, prove that they were bad guessers. It resulted almost entirely from the processes of inflation and merely reflects the fallacious over-confidence of the government that they would be able to control inflation in Canada.
Their inability to control inflation in Canada to the degree which they expected resulted in high costs, higher wages, higher provincial expenditures and provincial deficits, but in the case of the federal government the net result was a $500 million increase in the expected surplus.
This surplus, by no stretch of anyone's imagination or conscience, can be assumed to be solely the property of the dominion government; surely the provincial governments should have a little consideration shown them. I admit that when we retire federal debt w'e are repaying debts which every citizen in Canada owes; but surely when the senior government has a surplus and there is personal and municipal and provincial hardship because of conditions which created that surplus, then I submit that the guilty conscience of the finance minister should have spurred him to display "a humble and contrite heart" in consulting the provinces as to how a part of this huge and unexpected surplus could be used to mitigate the burden of more junior taxing authorities.
Despite what I have said regarding the apparent inequalities of British Columbia's

tax payments, I appreciate the fact that the minister must treat all provinces, rich and poor, on the same basis, and I would not ask him to do otherwise.
This is what I suggest that he do immediately :
1.	Set up a federal highway commission which would designate the highways to be considered as links in the trans-Canada highway system.
2.	Pay in cash to the provinces twenty-five per cent of the capital and maintenance cost which they have spent on these highways during the past ten years.
3.	Offer to contribute twenty-five per cent to the capital and maintenance costs of any such designated new highways if undertaken at any time, with the further proviso that such commission have authority to contribute up to 50 per cent of the capital costs of such federal highway construction, if undertaken at the instance of the federal government when surplus labour and material are available.
4.	Make money available to provincial governments at cost of 2J per cent for construction costs of schools and hospitals, interest only to be deducted from the provincial grants for a transitional period of ten years, after that time amortization to start over a period of the next forty years.
5.	An agreement with the provinces to be entered into which will guarantee a minimum return of twenty per cent of corporate and personal income tax collections in that province.
Mr. Speaker, the creation of such a federal or trans-Canada highway board is a step which I am sure would meet with the approval of every member of this house, as may be confirmed by reference to speeches made by members on all sides during the past years. The arguments are too numerous and too well known for me to repeat them at this time, but I know that every Canadian looks forward to the day when there will be a highway across Canada, from sea to sea, from Yarmouth in Nova Scotia to Tofino on the west coast of Vancouver island.
I advance these proposals to the federal government in the hope that they will give them serious study and consideration. Some means must be found to assist and guide our junior governments. It is idle to talk of 1941 provincial tax collections as a valid basis for discussion ; since that date, great changes have taken place in productivity, population, and capital investment as between the various provinces and, moreover, we no longer are speaking of the same dollar. It used to mean 100 cents; its purchasing power in labour and materials is now only sixty cents.

The Budget-Mr. Thatcher
In closing. Mr. Speaker, may I express the hope that this government will immediately re-examine the position of the provinces; and I am confident that, with tolerance, sympathy and understanding on both sides, a fair and reasonable compromise can be arrived at.


Mr. W. ROSS THATCHER (Moose Jaw):: Mr. Speaker, first of all I should like to compliment the hon. member for Comox-Alberni (Mr. Gibson) on the speech he has just delivered. It was one of the best I have heard him give. I hope, of course, he will vote in the manner he spoke. If he does, I am sure he will vote against the budget which is before us today.
Despite what most members of the house probably think about the budget before us today, I am sure all will agree that last Tuesday evening, the Minister of Finance (Mr, Abbott) delivered a comprehensive and lucid statement. It is almost certain, I think, that this budget will reach a new high as an unpopular measure, and in view of that fact the minister is to be complimented on having had the personal courage to proceed with it as he did.
Having prefaced my remarks with that comment, I must say that in my opinion this budget is unnecessarily harsh. Seldom in recent years have the Canadian people waited for a budget with such eagerness, but I am sure that never in recent years have they been disappointed so thoroughly and completely.
In a nutshell, what does this budget report and what does it propose? It reports, in the first place, a surplus which is larger than all the surpluses which we have had, put together, since confederation. It reports, in the second place, that the recent year was as prosperous economically as we have ever had. Yet, despite these facts, the minister has the audacity to come to parliament, and suggest that next year Canadian taxpayers shall be given no relief of any consequence.
This group cannot concur with that recommendation. We believe that the rising cost of living has made it imperative that taxpayers, particularly those in the lower categories, shall be given tax relief at this time. If parliament refuses to grant this concession within the next few days, I think unnecessary hardships are bound to result.
I find the figures on the revenue side of the budget most revealing. Hon. members who heard the budget speech last year will remember that the minister said, as reported at page 2610 of Hansard:
Behind us are the huge and difficult budgets of the war years.
"Behind us"; and yet during the recent fiscal year the minister collected in taxes from the Canadian people $2,630 million. During the last year of the war the government's tax revenues were only $2,374 million. In other words, in the past year Canadians were taxed more heavily by $256 million than in the last year of the war. I find it hard it reconcile that fact with the promise the minister gave last year that the huge budgets of the war years were behind us. The burden of taxation can be realized when we compare it with our taxes in 1938, the last year of peace. In that year our taxes were $516 million, or only one-fifth of their present level.


An hon. MEMBER:: What about income?


Wilbert Ross Thatcher: I am talking about taxes. During the war years Canadians willingly paid high taxes and made many sacrifices. But the war has been over three years. I do not think it was ever contemplated that huge governmental taxes should roll forward indefinitely into the years of peace. Every member of parliament should realize that the people of Canada are aroused over the fact that parliament has not seen fit to give them some decrease in taxation at this time.
The expenditure side of the ledger is also disconcerting when you look at the budget. The minister reports little progress in reducing the cost of government. Last year the total expenditure amounted to $2,124 million, and in his budget speech the minister said, as reported at page 4057 of Hansard:
We have striven to bring expenditures down and to keep them down.
Yet in the next breath he forecast, for the coming year, general expenditures amounting to $51,000,000 more than last year. Furthermore, he forecast that there would be additional expenditures to be announced later in the year. At a time when approximately twenty per cent of the national income is going into federal taxation, many Canadians are wondering whether the government is doing all that is possible to curtail its ordinary expenditures.
The minister informed the house that this year we shall have a surplus of $727 million. While we are on these surpluses, it is interesting to remember that last session the minister forecast a surplus of only $190 million. In other words, in his calculations he apparently made an error of $537 million. If he has made the same error this year, we shall have a surplus of over one billion dollars in the coming fiscal period.


Mr. MAY  HEW@: He listened to your gloomy
forecasts of last year.
The Budget-Mr. Thatcher


Wilbert Ross Thatcher: I must say that I agree with the principle of budgeting for a surplus in times of prosperity, with certain qualifications. On the other hand I want to say that this surplus has not been achieved by economies; rather it has been achieved, in large part, by imposing vicious indirect sales and excise taxes; by refusing the taxpayer any relief from excessive personal income tax; by failing to carry out an adequate system of social services; and by refusing to go ahead with such projects as were mentioned by the hon. member for Comox-Alberni, namely a trans-Canada highway, irrigation works in the west and things like that. I am sure this budget will go down in history as a monument to government neglect. I think the minister should not be too proud of the surplus he is showing us today.
However, after he achieved the surplus, most Canadians thought they would be given some tax relief, and I think justifiably so. Yet the tax relief which the minister is proposing for 1&18-49 is almost negligible. Suppose we look at the tax relief for a moment. First of all, the minister announced he is going to remove the sales tax on certain foodstuffs. That is a trifling concession, although it is welcome.


Mr. MAYHEW:: On all foodstuffs.


Wilbert Ross Thatcher: No.


Robert Wellington Mayhew: On what has it not been taken off?


Wilbert Ross Thatcher: It has not been taken off pickles and certain other things. It has not been completely removed. However, whatever those concessions were, we welcome them although, as I say, they are trifling.


Robert Wellington Mayhew: Yes, I believe the tax still remains on pickles.


Wilbert Ross Thatcher: The great tragedy of the matter is that without ceilings, it is doubtful whether these savings will be passed on to the consumer. It seems quite probable that the food dealers will absorb a good part of them. I do not think this sales tax cut on food will mean a great deal to the ordinary taxpayer.
Then let us look at the amusement tax, the next tax which the minister is taking off. Surely it is a strange policy which would deny tax relief to the wage earner in the low brackets and at the same time would remove the tax on gambling, night clubs and parimutuels.


John Ewen Sinclair: He was asked for that.


Wilbert Ross Thatcher: It could be, but I doubt it. Even if this policy was a wise one, in

almost every case the provincial government has moved into that field. Premier Drew announced next day that he was moving in.


John Ewen Sinclair: What about Premier
Douglas?


Wilbert Ross Thatcher: He has not moved in.


John Ewen Sinclair: He is slow.


Wilbert Ross Thatcher: Not at all, but probably British Columbia has imposed the tax. I suggest that this tax on amusements will not be passed on to the consumer in most cases, so that it means very little to him.
The minister announced cuts in the British tariff on rayons and and cotton piece goods. Let me say that this concession is most welcome. But once again, without price ceilings, I do not think these concessions will reach the consumer. I am much afraid they will be absorbed by the dealers in those commodities, whether they be wholesalers, retailers or agents.
The minister announced that he was going to reduce the succession duty tax. Henceforth, when anyone dies, his estate will not be taxed if it is not one of $50,000 or over. Formerly it was taxed if it was $5,000 or over. It seems strange to me that a man must die in order to get tax relief from the Liberal government, but apparently that is the case.
The minister announced a few other trifling concessions. He said he was taking the tax off vinegar, silver ware and alarm clocks. The hon. member for Saskatoon City (Mr. Knight) received a letter about this alarm clock concession, and I should like to read a quotation from it, which is as follows:
Someone should send Mr. Abbott an alarm clock at the reduced rate in order to wake him up to the needs of the people.
That sums up the matter quite well. In other words, I suggest that the tax concessions the minister has made in this budget are trifling. They do not mean much to the average taxpayer. With regard to personal income tax, the only concession the minister made was to people sixty-five years of age and over; he gave them an increased exemption of $500. But the great majority of taxpayer's were given absolutely no relief whatever. Indeed, instead of relief, today they are forced to pay stiffer penalties if they should happen to be late in filing their income tax forms. With the ever increasing cost of living, the income tax has almost reached the point of confiscation. The real income of many citizens has been cut so much by inflation that some families cannot afford to buy milk, cannot afford to buy-


John Ewen Sinclair: Butter.

The Budget-Mr. Thatcher


Wilbert Ross Thatcher: Yes, that is a good illustration; or oleomargarine or other essential foodstuffs. Refusal on the part of the government to give to people in this category tax relief at this time can only be characterized as heartless. The government's treatment of the small wage earner is to be deplored all the more when we remember that, at the first of the year, they took off the excess profits tax, and they took it off at a time when corporation profits were higher, probably, than they have ever been in our history.


John Ewen Sinclair: They are paying taxes.


Wilbert Ross Thatcher: They are not paying excess profits taxes.


John Ewen Sinclair: What about Moose Jaw Hardware?


An hon. MEMBER:: They are not making profits.


Wilbert Ross Thatcher: By refusing relief at this time, the government is riding roughshod over the wishes of ninety-nine per cent of the adult population of this country.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Wilbert Ross Thatcher: Mr. Speaker, in view of the scarcity of their numbers in the chamber, I am afraid I am going to have a little trouble in convincing many Liberals tonight. However, when the house rose at six o'clock I was discussing the failure of the government to give tax relief in this budget to the people of Canada, at a time when the government has shown an overwhelming surplus of $727 million.
I had stated that in my opinion this budget is unnecessarily harsh. It has given little or no tax relief to Canadians at a time when the cost of living has rendered such relief imperative. I suggested, moreover, that in refusing this relief the government is riding roughshod over the wishes of about ninety-nine per cent of the adult population.
I suggest now that for a few moments we should look at the reasons the minister gave in his budget speech for refusing tax relief.
His first reason was the need to pay off some of the national debt. To a degree I can go along with that policy. In times of prosperity it is only sensible that some of the debt we accumulated during war years should be paid off. But I believe there is a point of balance between desirable debt reduction and the public's ability to pay it. The minister
does not seem to have found that balance. It is one thing to skim off surplus excess earnings and quite another thing to impoverish large parts of the population in the process of skimming. I suggest that the minister could have given reasonable tax relief, at least in the lower brackets, without seriously impairing his debt reduction program.
The second reason the minister gave for refusing tax relief had to do with defence. I quote from page 4063 of Hansard where he says:
We face today very great uncertainties in international affairs ... A substantial surplus will help to keep our powder dry.
The minister implied that Canada has certain military responsibilities which she must look after, in a democratic world. On the surface that reason looks fairly plausible. But I find, as I read the page a little farther down, that the minister this year is budgeting $20,000,000 less for defence expenditures than he did last year. I find it hard to understand this fact, if the peril to Canada is as alarming as he says it is. It strikes me that he is not suiting his actions to his words.
The minister stated, in the third place, that high taxes were necessary to combat inflation. Once again I quote from his speech, as it appears in Hansard:
We should deliberately budget, as a matter of policy, for substantial surpluses in times like these. Only that way can we hold inflationary forces in check.
I ask the house to note that. I think the minister knows that statement is not correct. The suggestion that high taxation is the most effective way of controlling inflation is worn out. High taxation in the past few years has not prevented prices from going up; nor will high taxes in the future prevent inflation from continuing. It contributes to the inflationary spiral, instead of taking away from it and stopping it.
Surely the minister would not suggest to the house that a policy of giving a little tax relief to small wage earners might start an orgy of buying. The government's taxation policy, instead of stopping inflation, is adding to it. Such taxes as the sales tax and the excise tax contribute directly to the high cost of living. If the government is really sincere in its desire to fight inflation at this time I suggest that it set an example by removing some of these indirect taxes.
Then it seems to me that the minister is being inconsistent when, on the one hand, he makes the claim that taxes cannot be reduced because it would place extra purchasing power in the hands of the taxpayers, thereby raising the cost of living, but on the other hand-
The Budget-Mr. Thatcher

just a little later in his budget-tells us he is going to give an extra year's compulsory savings back to Canadians who paid them originally. That will release about $80,000,000 extra purchasing power the minister did not have to release.
The minister cannot have it both ways. If it is possible to risk redistributing $80,000,000 in that manner, then surely there could have been a reduction in taxes.
I suggest to the house, that inflation could have been controlled much more effectively and much more equitably by price control, than it has been by high taxation. At page 4057 of Hansard, the minister made this statement:
It would have been more comfortable had we been able to return to a free price system under general conditions of stability, balanced production and abundant imports.
Of course it would. That is precisely what this party has been trying to point out for two years, both in parliament and out of parliament. Then the minister went on to say that he could not keep controls because, "fate did not afford us that opportunity."
Well, that statement is hardly correct. It was not fate which took off controls prematurely; it was the Liberal party. Today we are seeing the folly of that action. Canadian citizens are paying heavily for the error in judgment which the Liberal party made.
The other day the hon. member for Mus-koka-Ontario (Mr. Macdonnell) described the prices committee as a fiasco. From the view point of the Progressive Conservative party, perhaps it is a fiasco. Certainly I do not think their members have been anxious to make it a success. Certainly the findings of the prices committee-


Donald Methuen Fleming: Mr. Speaker, the hon. member has cast a reflection upon the Progressive Conservative members of the prices committee, saying that he did not believe they wanted to make a success of the committee. That is a reflection, and I ask the hon. member to withdraw it.


Stanley Howard Knowles: It is a fair statement.


Wilbert Ross Thatcher: I said it did not seem to me they were trying to make it a success.


Donald Methuen Fleming: I still object.


Wilbert Ross Thatcher: I shall withdraw it; I meant to say it did not seem that way to me. Certainly the findings of the committee have been harmful to the political philosophy in which the Progressive Conservative party believes. Perhaps in that regard it has been a fiasco.

When the prices committee was originally set up, the C.C.F. group argued that this was not the way to solve Canada's inflation problem. We are still of the same opinion. We believe that only the reimposition of price controls can cope with the inflation problem; and I think that contention has been borne out by the facts.
Last year the Minister of Finance (Mr. Abbott.)1 told us in debate that prices would stabilize around an index of 146. The index has climbed steadily, until today it is 151, and it is still going up.
However, once the prices committee was set up, members of this group have tried to make it useful. Our members attended regularly. Personally I believe the committee has done some valuable work. I believe by this time it has discovered, beyond any reasonable doubt, the main reason for the ever-rising cost of living. Because of the devastation of the war, and because of the abnormal conditions arising from the war, the demand for most goods has been far in excess of the supply. Under these circumstances regular competition is not functioning to keep prices down.
In the committee, one witness after another has freely admitted taking advantage of shortages to make the largest possible profits. That is natural under the present economic set-up. In the committee I asked one witness after another to suggest some voluntary way in which we could bring prices down. Not one witness has, to my knowledge, given us any idea of how this could be done voluntarily.


Mr. BOUCHER:: On a point of order, I do not think the hon. member is allowed to discuss the evidence given before a committee.


James Horace King: I was going to call that to the hon. member's attention. I do not believe that he is permitted to discuss the evidence before a committee. It has been agreed that hon. members may discuss the general situation with respect to prices, but they should not discuss what is going on in the committee.


Wilbert Ross Thatcher: Before you insist upon that ruling, Mr. Speaker, I wonder if I might make several comments?


George Russell Boucher: Just stick to the rules of
the house.


Wilbert Ross Thatcher: In the first place, I would state that the hon. member for Mus-koka-Ontario mentioned prices the other day. In the second place, the Minister of Finance has stated that high taxation is the way to

The Budget-Mr. Thatcher
control inflation. My argument is that price controls would be a more effective way. In the third place, when the prices committee was set up, the Prime Minister (Mr. Mackenzie King) said, if I understood him correctly, that debate in the house on the subject would not be precluded.
I have not very much more to say about the matter, but I should like to put my opinion on record. I believe it is a better way of controlling inflation than the budget of the Minister of Finance. If that is satisfactory,
I shall proceed; if I am out of order, I shall stop.
When the committee was set up, the Prime Minister suggested that the glare of unfavourable publicity would probably bring down prices. I think the proceedings have shown that that hope is futile. The committee has found why prices are up and, if the government will give the committee teeth, I think we can get prices down.


George Russell Boucher: Is all this in order?


James Horace King: I ask the hon. gentleman again not to discuss what has gone on in the prices committee.


Wilbert Ross Thatcher: Thank you. I will not mention the discussions again. The Minister of Finance has told us repeatedly that our economy is tied up with the economy of the United States. During the last month costs and prices in that country have gone up to a higher level than ever before. The federal reserve board is predicting that inflationary pressure in the United States will be greater in the last six months of this year than it was in the first six months. That is caused by the huge European recovery program together with a tremendous $14,000 million expenditure for military affairs which the United States are making.
So serious has the situation become in the United States, that the President's economic advisory committee recently recommended price controls, as the only effective way to stop run-away inflation in that country. Here in Canada the situation is similar, and it seems to me the government is being very stubborn when it refuses to recognize that fact. No one likes controls. When the supply of merchandise and produce can catch up with the demand, by all means get rid of controls; but until that time let us be sensible. Let the government admit they erred; let them, even at this late moment, have the courage .to correct their error. Let us stop this steady rise in the cost of living.
The fourth reason the minister gave for keeping taxation high was to conserve United States dollars, and that suggestion struck me
5849-274J
as the weakest argument of all. Surely the export-import controls which parliament set up a few months ago should be able to do this effectively. On page 4063 of Hansard the minister states:
We must build up an export surplus-we must try to export more or import less, or both.
Despite that statement, despite the fact that the minister says he needs United States dollars very badly, in his budget he overlooks the' huge amount of United States dollars which are available, if the embargo on Canadian cattle and other agricultural products entering the United States is lifted. This would be a lucrative source of United States exchange, some people estimating it at $100,000,000. If we need United States dollars so badly, why is the-minister neglecting that source? The minister is always talking about a free economy. It seems strange to me that all controls have been taken off except those which affect the farmer.
For these reasons this group cannot agree with the minister in his contention that the taxpayer should not be given any relief at this time. Along with the hon. member for Mus-koka-Ontario, I must say I am wondering whether tax relief is being held over until next year for partly political reasons. Certainly, if substantial tax reductions were given a year from now they could be translated more effectively into political advantage. I suggest that this budget is not a human budget; I think it could be better described as a Tory budget.


Mr. CASTLEDEN:: Next year's budget.


Wilbert Ross Thatcher: There is only one other matter I should like to deal with. I am sorry the hon. member for Muskoka-Ontario is not in his seat at the moment. On page 4249 of Hansard the hon. member for Muskoka-Ontario implied that democratic socialism-in Canada the C.C.F. party-is similar to nazism, fascism and communism. The hon. member is a man whom I personally admire very much, and I regret that he should have made a suggestion of that kind, because I realize he knows it is not correct. As every hon. member in this house knows, the C.C.F. party has refused time and again to co-operate in any way with communism or with any other ism.


George Russell Boucher: Or with anybody else.


Wilbert Ross Thatcher: I wish to say to the hon. member for Muskoka-Ontario that I consider our party as being more democratic than his. I think it was beneath the dignity of the hon. member to try intentionally to smear the C.C.F. party.
I should like to close with a few words in French which possibly my hon. friends to the right will not be able to understand.
The Budget-Mr. Thatcher

(Translation):
Mr. Speaker, I would like to end my speech tonight with a few words on a very important matter and, as my remarks are meant particularly for the Canadians of French extraction, I shall speak in French.
There are some people in Canada-there are even some in this House of Commons, such as the hon. member for Muskoka-Ontario (Mr. Macdonnell)-who still confuse the C.C.F. party with the communists.


George Hugh Castleden: Hear, hear!


Wilbert Ross Thatcher: In view of the international situation, I would like to state as clearly as possible the position of our party as far as communism is concerned.


Gordon Graydon: The communists are with you.


Wilbert Ross Thatcher: The hon. member is wrong there. I wish to stress the fact that there are fundamental differences between democratic socialism and communism, in so far as their respective ideologies, objects and methods are concerned.
To begin with, we of the C.C.F. party believe first and foremost in democracy and individual freedom. If we cannot attain our ends through the polls we shall not gain them at all.


George Hugh Castleden: Hear, hear!


Wilbert Ross Thatcher: The communists believe that the end justifies the means. They adopted totalitarianism; regimented the individual and destroyed personal freedom. We unreservedly denounce any party which advocates the use of force. Such methods are abhorred by the C.C.F.


George Hugh Castleden: Hear, hear.


Wilbert Ross Thatcher: The second difference, and that, I believe, applies to many of us, is that we, democratic socialists, fundamentally believe in the laws and teachings of the Christian church while on the other hand, communists have placed materialism above religion.
In the third place, communists in Canada are teaching a philosophy which advocates loyalty to a foreign state first of all, and loyalty to Canada afterwards. The members of the C.C.F. party can no more endorse such a principle than can the members of other political parties in this house.
In the fourth place, the communist party advocates complete state ownership. The C.C.F., on the contrary, believes that only some parts of our economy should be socialized, such as natural resources, industrial and other monopolies.

Discussing the budget last year in the legislature of my province, Premier T. C. Douglas spoke as follows:
I have inquired into the communist party and studied Earl Marx. Knowing their philosophy, I feel it is false and I believe it is wrong from the economic, moral and sociological standpoints.
Last January 22, Mr. M. J. Coldwell, the leader of our group, speaking over the C.B.C. network, said:
There is a fundamental difference between the methods and philosophy of the C.C.F. and those advocated by communists; we have always opposed every form of dictatorship; we loathe communist methods.
I believe, firmly indeed, that in this country, the C.C.F. will be in the vanguard of any struggle against totalitarian communism.


George Hugh Castleden: Hear, hear!


Wilbert Ross Thatcher: At the same time, it is not enough to behave as Premier Duplessis, Premier Drew and others have done in various parts of Canada, that is, to label everything progressive as communist. Such a policy, more surely than anything else, will beget communism.
(Text):
Mr. DONALD M. FLEMING (Eglinton): Mr. Speaker, the house is engaged in the discussion of a travesty of a budget. The esteemed leader of the Progressive Conservative party has properly described it as the worst budget since confederation, and we of the Progressive Conservative party are one in denouncing this budget as a shockingly harsh imposition on the Canadian people.
A year ago the Minister of Finance (Mr. Abbott) boasted of his budget surplus, but the budget surplus he reported to the house last Tuesday evening is apparently proving something of an embarrassment to him. Whence did this surplus come? In the first place, it is the product of very bad budgeting. It represents an all-time high in inaccurate budgeting. What was forecast a year ago as a budget surplus of $190 million, now appears as a surplus of $670 million, or a cash surplus of $1,181 million. Yes, one way it is three and a half times what was forecast, and the other way it is six times as much as was forecast. It is impossible, therefore, for any member of this house to approach the present budget and its forecasts with any measure of confidence in the size of budget surplus that has been forecast by the Minister of Finance.

The Budget-Mr. Fleming
Where did this budget surplus come from? What is the source of it? The source is the very same source from which the government always obtains its money. It has no magic source of money. The source from which the government gets its money is the pockets of the people, and in this case, what we find is that a surplus has been created because the government dipped far more deeply into the pockets of the people than there was any need for their doing. And now the Minister of Finance says: I am going to budget for a further surplus, a surplus of $489 million. If his forecast is no more accurate than that of a year ago we may expect a year hence that he will be announcing a budget surplus anywhere from one and a half to two billion dollars, if the same ratio of inaccuracy is maintained.
The taxpayer deserves a break, not the beating that this government is giving to him. The reductions are so trifling as to be insignificant in relation to the size of the tax load that is being maintained on the back of the taxpayer, and they are trifling in relation to the needs of the taxpayer. Never has there been a stronger case than today for tax reductions; but the Minister of Finance, apart from insignificant little reductions, haB slammed shut the door in the face of the taxpayer who has asked and rightly expected some substantial reduction in the load of taxation.
The authors of this budget have shown they do not know anything about the problems of those who are called upon to pay these shockingly heavy imposts. They just do not know, for they could not possibly justify these tax proposals if they did. It will, I am sure, shock every member of this house to find the Minister of Finance saying, as he did on May 18, at page 4057 of Hansard:
There will never be a better time to reduce the burden of our national debt. We can do it now without hardship.
I say, Mr. Speaker, he cannot do it on this scale without hardship. He has been pursuing this policy in recent years, not without hardship, but at the expense of hardship on the Canadian people. There is hardship now on the part of hundreds of thousands of Canadians in trying to make both ends meet; but apparently the Minister of Finance and the members of the government are so far removed from the experience of the rank and file of the Canadian peple in meeting their family budgetary problems, that they just do not know anything about the problems these families are experiencing in trying to make both ends meet.
This weight of taxation, not suddenly imposed, but continued year after year after year, from war into peace, and now after three years of peace carried into the fourth year of peace, represents confiscation. It can no longer be called taxation; it is now confiscation. In the case of a great many Canadians it represents today a capital levy, because there are many families in Canada living on a small income who simply cannot meet the high cost of living and the burden of taxation without having to borrow on their insurance policies and try to get by in that way. These continued imposts represent a capital levy in the case of these people. But the government apparently does not know anything about the plight of the people who are living today on a small income. It does not seem to realize what the vaulting cost of living means to these people, the wage earners and those who are living on a low, fixed salary.
Yes, Mr. Speaker, this budget is likely to defeat one of the purposes which the minister professed in introducing it. It is likely to lead to more labour unrest. It cannot fail to evoke, on the part of many sections of labour, demands for increased wages in order that they may meet this double load of the high cost of living and high taxation, and to the extent that it may give rise to labour unrest it will set back production and give a further fillip to inflation.
There is the further factor to which this government is both deaf and blind. It is the fact that the people want tax reductions. Who is supreme in this country, Mr. Speaker? Is it the government, this group of nineteen men, or is it the people of Canada, the people who are paying the shot? Those of us who are perhaps a little old-fashioned in our views thought the people wrere supposed to be supreme; and one might have hoped, if that were true, that the views of the people in demanding relief from this load of taxation might have been heard and that the government might have given some heed to this clamour for relief from the load of taxation. But apparently it is not to be so with this government. This is a different kind of government. With this government in office, it seems that the people are not supreme. The government fancies itself supreme and, no matter what the people may think, no matter what they may rightly and justly expect and demand, this government is nevertheless saying to them: No, you shall have no reductions.
I happened to be in Washington during the Easter recess, on the day on which congress overrode the President's veto of its tax reduction bill. That was a victory of the people. That was a victory of public opinion over the
_________The Budget-Mr. Fleming

executive branch of government, and I say to you, Mr. Speaker, that it is high time we in this country had a victory of public opinion over the dictates of the executive branch of government here. Our system of government is not like that which obtains in the United States. Apparently the only way that the people of Canada can have an opportunity of asserting public opinion, when this government is too deaf to hear or too blind to read the signs of the times, is by recourse to the ballot; therefore this party has in its amendment challenged this government to carry this issue to the people in a general election. This is a government that has been far too long in office now for the good of Canada.


Colin William George Gibson: What have you to offer in its place?


Donald Methuen Fleming: A government that will be just 100 per cent improvement over the ramshackle, dying government at present on the treasury benches will take its place.
This budget also raises searching questions as to the fundamental and underlying purpose of taxes. The theory, recognized from the beginning of responsible government until the present time, until the era of this government, has been that taxes were an impost upon the people to meet the legitimate expenses of government. But, apparently we have to recast our thinking entirely in the light of this budget, because it bears no relationship whatsoever to the needs of meeting legitimate expenses of government. This house will not cavil about meeting those expenses, but it will cavil about being asked to levy upon the Canadian people such an additional amount as bears no relationship whatever to the legitimate expenses of government or to the needs of retirement of the national debt in due time.
Yes, back of , this budget is a fetish, which apparently has seized hold of this government, that somehow it is its duty to prevent the people of Canada from using their own money. Whose money is it, Mr. Speaker, that the people of Canada are toiling to earn? The government thinks this money is its own and it has first call on it, and the poor wage earners may take what is left. The people of 'Canada, I affirm, do not need the paternalistic Intrusion of this government into their affairs to help them manage their own finances in their own family budgets. They do not need this government to step in to try to prevent them from using their own money, whether by way of satisfying their own obligations or saving or spending their money.
The Minister of Finance has assumed, all the way through his budget speech, that the money would be used entirely by the people of 
Canada, whatever would be saved to them in reduction of taxes, by running out and spending it at once. He does not know the Canadian people, and neither does any member of the government who supports this budget on that basis. The Canadian people know best what to do with their own affairs and what to do with their own earnings, and if there is any undue disposition on the part of any to spend today it is probably due in no small measure to the way this government has discouraged their saving money and being thrifty.
Yes, this budget has all the earmarks of paternalism; it has all the earmarks of robbery when one considers the proper sphere of taxation in meeting the legitimate expenditures of government.
Some lion. MEMBERS: Order.


James Horace King: I would suggest to the hon. member that he modify his language.


Donald Methuen Fleming: Mr. Speaker, the government says in effect to the taxpayers: It is a good thing for you that we are taking your money from you-


James Horace King: Order. I cannot permit any hon. member to use the word "robbery", and to suggest that the government robs the people. I would ask the hon. member to withdraw that.


Donald Methuen Fleming: Certainly I will withdraw the word, Mr. Speaker, if you say so. I have heard it used in the house before, but I will certainly withdraw it if you say so and I will substitute' for it, "the absolutely unjustified and unconstitutional imposition".
Indeed, it is the kind of budget that is the product of the brain trust. It is not taxation; it is not a budget to be measured in terms of taxation. It has no relationship to taxation needs. You can think of this, Mr. Speaker, only in terms of confiscation; and it springs out of a desire to foist upon Canada a scheme of managed economy. This budget is intended to be a weapon in foisting a managed economy upon Canada.
It is not new to find the government pursuing the path of managed economy. Here is a member of the government on the C.B.C. network last August 6 speaking on behalf of the Liberal party:
My guess is that any future government in Canada, whatever its political complexion, will resort to some type of economic planning.
These are the words of Senator Robertson, the government leader in the senate. In this budget, Mr. Speaker, you see some of the fruits of that mentality on the part of the

The Budget-Mr. Fleming
government, a mentality that believes in the managed economy. Here is an expression that the Minister of Finance has used, which I suggest has some significance. At page 4063 of Hansard, he is reported as saying:
This government and this parliament must accept a considerable measure of responsibility for influencing and, indeed, directing economic trends in so far as that can be done within the framework of our political and economic principles.
Further on, he refers to the government as:
Those charged with responsibility of directing the affairs of the nation as a whole.
No one will have any objection to the efficient management of the affairs of the Dominion of Canada within the proper sphere of government; but where we take issue, and complete issue, with this budget is that it intrudes into the affairs of the people; it intrudes into their private affairs, and seeks to set the government up in the management of these private affairs. I ask the minister to listen to his own words as recorded at page 4056 of Hansard:
Neither this government nor this parliament has either the political mandate or the constitutional power to maintain indefinitely in peacetime a strait-jacket of controls over prices, production and distribution. Our whole economy has been organized to operate on a price basis by private incentives and pi'ivate initiatives, not by centralized direction. I believe that the great majority of Canadians want it to work that way, want it to work by free and open competition and not by government direction on the one hand nor on the other hand by direction of the irresponsible power of monopolies, artels and other organized groups.
Theoe are good words, Mr. Speaker. I just wish that the minister would apply them to this bare-faced attempt to further the schemes of those who believe in the managed economy. This government has no mandate from the people of Canada to impose a system of managed economy upon this country.
It is just impossible to conceive that any government would bring in so bad and so harsh a budget unless it had some card up its sleeve; and therefore we are left to think that the card is to be played in 1949 with some reductions then, on which the government will seek to make a grandstand show on the eve of a general election. Well, they insult the intelligence and the memory of the people of Canada if they think they are going to live down the recollection of this woeful budget so soon. Yes, retribution will await this government whenever it dares to submit itself to the Canadian people.
This budget is an irresponsible budget. It has been born in the same kind of mind as conceived, first, those dictatorial import
restrictions last fall, and, second, taxation by radio, that gross invasion of the constitutional privileges of Canadians. It is the same mentality at work. There has been no reform since November 17, 1947. This country and this government are in the grip of those who believe in the managed economy. I for one do not believe in the managed economy. One reason I do not believe in it is that there is not enough intelligence in any man's mind, or in the mind of any small group of men to manage the whole of the Canadian economy. In the second place, Mr. Speaker, it is far too dangerous to be risked, because any mistake made, where you have a system of managed economy, is on so vast a scale that the results are bound to be catastrophic. We are not without experience in Canada of the colossal scale on which the effects of the blunders of the managed economy theorists are likely to make themselves felt. We have had a sample of it in this country since the great blunder in the middle of 1946 and the constant flight of United States dollars from Canada ever since, a flight and a policy which almost brought this country to economic ruin in 1947.
Let me examine ever so briefly some of the reasons put forward by the Minister of Finance. He has trotted out the bogey of inflation and has suggested that this budget is likely in some way to assist in deterring the inflationary processes now at work. We have inflation now. This kind of taxation has not restrained the processes of inflation. The minister has the idea, and I submit to you, Mr. Speaker, it is a fundamental fallacy in his whole approach to the problem, that if he helps to boost prices higher by adding more taxes he will help to restrain the inflationary process.
The suggestion is so utterly foolish on the face of it that it amazes one that it should be put forward by a minister in this house. The minister had a great opportunity, the opportunity of a lifetime, to reduce taxation and make a substantial contribution to the reduction in the cost of living. Yes, he could have done much to mitigate the present rigours of inflation which are bearing so heavily upon persons of small means and small fixed incomes in Canada. If the removal of the sales tax on prepared foods was sound, then, Mr. Speaker, why would it not be sound to extend that removal to a great many other commodities which enter into the cost of living of the Canadian family?
The minister has sought to continue, yes, and has justified the continued imposition of these hidden consumer taxes which bear
The Budget-Mr. Fleming

relatively so much more heavily on the man of small means, because they are consumer taxes. These taxes levied at the source, on the manufacturer, go on pyramiding as they pass from one hand to another, until the sales tax, starting at eight per cent in the hands of the manufacturer, is invariably about fifteen per cent when the consumer pays the price of the goods over the counter. In addition to that, you have all the excise taxes that go on heaping burden upon burden on the ultimate consumer with every hand through which they travel.
What about economy? If only we could have some evidence on the part of the government that it believes in economy and is making an honest, frank effort to approach the problem with a view to effecting reasonable economies in the operation of government; not to do away with essential services, but to grapple with the problem of eliminating unnecessary expenditures of government! A government which has the belief that it is contributing to the restraint of the processes of inflation by boosting prices through the inclusion of high taxes in them, is certainly not the kind of government that has the ghost of a chance of doing anything to effect necessary economies in the cost of government.
By entertaining such a belief, the government has disabled itself before it even starts. There is no use in expecting economy from this government when it has started already with the idea that it is restraining inflation by heaping taxation on top of the high prices of commodities today.
_ We believe that within reasonable limits the idea of putting aside a surplus when times are good, and reducing the debt when times are good, is sound, but not when you find it on the scale practised here. What would the individual do? An individual who has some idea of his responsibility puts aside some money for the rainy day. But have we any assurance that this government, simply because it is soaking the taxpayer today far beyond its own needs, will give any benefit to the taxpayer when times are not so good? Should a recession come, is there any assurance that there will be a reduction in taxation?
There is no such assurance. As a matter of fact, when that time comes we may find pressures at work in the other direction. If it is the kind of government that we have today-which heaven forbid!-the government would say: Well, we have increased expenditures now to meet additional costs; therefore we must keep up the taxes to meet the cost. And the government will just go on, in those 
days as it is doing now, by its taxation policies, penalizing thrift and hard work.
There is no guarantee here that the sacrifices made today will be passed on should a recession in business conditions come. And it is not as though this burden of taxation were newly laid upon us. The Canadian people have been carrying it for years, and carrying it in the hope that sometime this burden would be lifted and they would see the daylight. Last year the government paid off five per cent of the net national debt, and it is budgeting now to pay an additional four per cent of that debt. It is going much too fast in that direction.
This managed economy idea is of the essence of socialism. The socialists believe in the managed economy. They believe that government, simply because it is government, can manage the affairs of the people, can manage the economy of the country, including the affairs of families throughout Canada, the budgets of Canadian homes, better than the Canadian people can manage these things themselves.
You find that same thought inherent in the amendment to the amendment moved by the hon. member for Rosetown-Biggar (Mr. Coldwell), because, after dealing with the question of increasing exemptions in income tax and reducing the burden of the sales tax, he adds this in his amendment:
And further, the government has failed to establish a public investment board to assure the channelling of capital investment into socially desirable projects as a means of maintaining full employment, increasing production and raising the standard of living of the Canadian people.
Everyone in this house, I think, believes in full employment, increasing production and raising the standard of living, but I hope we do not believe in the method that is proposed here by usurping in favour of the government the right to say how money shall be invested in Canada. What is the capacity of government for directing investment of money?
This is a further example of the centralization of power that is inherent in the socialist creed in this country; and it is for reasons of that kind that, no matter how members of the C.C.F. may dislike communist support, the communists can see themselves so closely identified with the C.C.F. I have not said that the C.C.F. see themselves identified with the communists. Many members of the C.C.F. in this house have disavowed communist support; but the fact is that communist support is still forthcoming, and in the present election in Ontario we have Tim Buck, No. 1 communist in Canada,

The Budget-Mr. Fleming
calling upon communists throughout Ontario to back the C.C.F. candidates in every riding where there is no communist candidate.


Mr. KNIGHT:: May I ask the hon. member a question? Has he any assurance that the communists will vote C.C.F.?


Donald Methuen Fleming: I do know that the sense of discipline in the communist party is strong, and Tim Buck has told communists throughout Ontario-he said so publicly; there is no secret about it-to vote for the C.C.F. candidates in every riding where there is no communist candidate, and there are only two ridings in the province where there are communist candidates. The matter does not stop there. You will remember the blatant offer that Tim Buck made of support to the C.C.F. throughout Canada when he advocated the election of a C.C.F. government. He calls for a C.C.F. victory:
If we elect a C.C.F. government in. Ottawa, it is quite obvious that the whole perspective for Canada will be changed. Certainly then our road ahead will be through the social democratic regime. . . After we have elected a C.C.F. government and we are faced with the question of how to work further to develop socialist consciousness in the majority of the working class, we can truly say that the party that did this is a Marxist party, the part of socialist Canada.
I was interested to hear the hon. member for Moose Jaw (Mr. Thatoher) in his speech tonight deal with the subject. It is not long ago that Mr. Laski, who was chairman of the executive of the labour party in Great Britain at the time of the last election, and who is regarded as one of the leading mouthpieces of that party there, had some things to say on the subject of the position of the socialist party in Great Britain. If the C.C.F. is such a democratic party, how do they account for the fact that Mr. Laski-and I am using his words-expressed doubt "whether in a period of transition the Labour government"-by that he meant, of course, the socialist government- "could risk overthrow of its measures as the result of a general election"? Does that sound like democracy, saying they are not going to risk a general election if it means that their socialist measures would be put in jeopardy? This same Mr. Laski is the author of a book entitled "Faith, Reason and Civilization". It is a neat little book. I wish to quote from pages 57 and 58 of it, in which Mr. Laski expresses his great admiration for the Russian system. These are his words:
The solemn truth remains that in the Soviet Union more men and women have had more opportunity of self-fulfilment than anywhere else in the world ... it is the only nation which . . . knows without doubt that its people
move to the control of their own destiny . . . If therefore it be accepted that our own time bears a profound resemblance to the era in which Christianity was born, it seems to me that we are entitled to conclude that the regeneration of values which the new faith effected, after no doubt a long and bitter struggle, is more likely to be secured in our own age by the central idea of the Russian revolution than by any alternative principle we are in a position to choose.
That is Mr. Laski in a book published in 1944, judt the year before the last general election in Great Britain. The C.C.F. say that socialism is necessarily democratic. I tell you, Mr. Speaker, that the communists are clear-headed enough to appreciate that if you carry socialism to its logical conclusion, you arrive at communism sooner or later.
My time is passing quickly, but I cannot forbear from reading the observations of Aubrey Jones, who wrote in the National Review in February last what I think was a penetrating analysis of socialism. He says this:
It is true that democratic socialism is not communism; in many respects, however, it is a pale reflection of it and in these non-Christian respects it also contributes to an undermining of spiritual wholesomeness and integrity. Socialism, like communism, holds out a certain extravagance of expectation; things, it is said, will be so much better when once the system is changed. That is a non-Christian trait. For the essence of Christianity is to teach, as far as this mortal sinful world is concerned, a sobriety of expectation and to affirm that great changes are brought about, not by new systems, which in fact always take on the character of old systems, but by a new spirit. That this extravagance of expectation has over a period of years been induced in England is fairly evident; it has become one of the greatest obstacles to national rehabilitation, it prevents the needed psychological adjustment to the changed national status, and through the impatience and irresponsibility to which it gives rise it bodes ill for freedom.
Again, democratic socialism, like communism, indicts a class; evil is not something common to all men, it is the badge of the capitalist; the workers, by contrast, are of superior virtue, but are held down despite themselves. This equally is not a trait of Christian belief. Nor is there anything more calculated to make class divisions permanent than this portrayal of one class as inherently better than another. It is an attitude which the wiser and soberer members among the workers themselves will wish to repudiate. Yet again, democratic socialism, like communism, sees a man's views as determined, not by a sincere quest for truth, but by his economic status. This, too, is no part of Christian belief and is conspiring to make men deaf to all honest preaching. Finally, democratic socialism, like communism, is not inspired by unselfishness; animated in very large part by rancour against the capitalist, against the man who wishes to better himself and his immediate kin, it threatens to push the state far into individual and family privacy.
The Budget-Mr. Fleming

I just wish to comment briefly in passing on one or two items in this budget. In the first place, this budget does not bring relief to the gold industry. At the present time that industry is dying. The subsidy which was provided for in this house a few weeks ago is helping only a few mines. In a large section of the gold mining areas, such as Kirkland Lake and others, there is unemployment on a large scale. This situation is attributable directly to the determination of this government to hold the Canadian dollar at an artificial level and to peg gold at an artificially low price, while the cost of the production of gold increases.
As to the increase in the interest rate on arrears of taxes, I have this to say. It is nothing short of brutally unfair on the part of the government to raise the interest rate on arrears when very often these impositions of interest are attributable directly to delay on the part of the Department of National Revenue in making the assessment. I have here a return brought down in the house recently by the Minister of National Revenue (Mr. McCann) in reply to certain questions I asked. I asked the number of income tax returns not assessed as at December 31, 1947, throughout Canada. The number given in this return is 2,336,879 as of December 31 last. I would ask hon. members to note these figures. For 1943 and prior years there were 44,000-1 am just giving the round figures now-in 1944, 110,000; in 1945, 265,000; and in 1946, 1,905,000. Since that time another two million returns for the year 1947 have been filed. In the majority of cases these people do not know that they are in arrears until the assessment is made, and it is grossly unfair to heap upon them the burden of increased interest charges.
I wish to say quite definitely and, I hope, constructively, in my concluding remarks that the proposals of the Progressive Conservative party as to what this budget ought to have contained-and still ought to contain, if this government is not too stubborn-are the following. We say, first, that the budget ought to bring about a substantial reduction in indirect taxes in order to effect a decrease in the cost of living. Second, the budget should effect at once increases in the exemptions on account of income tax. Third, the whole problem of making budgets in this country should be approached from what we say is the proper point of view, namely, let the people enjoy the fruits of their labour; let them enjoy the incentive that comes from the retention of that which they have earned. That will make for increased production That alone will defeat inflation. Fourth, we

say the time has come when this government should-yes, must-reconvene the dominion-provincial conference. The need of that is apparent on every hand.
On May 14 we heard in the house the announcement of some limited assistance for the provinces, in respect of public health, but there is still no comprehensive system of social security. Nothing of that kind was attempted in those proposals, and we shall not have that until the dominion takes the responsibility for reconvening the dominion-provincial conference. In the second place, there has been no attempt to co-ordinate the public investment plans of the dominion and the provinces. In the third place, the time is ripe for reconvening the dominion-provincial conference because some of the difficulties have been removed in the form of indirect taxes.
Hon. members will recall what an important part was played in 1946 by the objections of the provinces to the continuation of the dominion in the field of indirect taxation and the difficulty that presented to the conference. They will remember the position taken by the Premier of Nova Scotia with respect to those indirect taxes. There were six of them, namely, the gasoline tax, the amusement tax, the pari-mutuel tax, the electricity tax, the security transfer tax and succession duties. The dominion has now withdrawn from four of those fields and has reduced one other of the six.
I say the time has now come when the dominion government must reconvene that conference. Canada requires it. This government need not any longer think it can bring Ontario and Quebec to their knees in a contest of attrition and nerves. I call upon this government to abandon the cold war it 'has declared against the provinces of Quebec and Ontario. Let this government and the governments in all the provinces meet together like Canadians. Let this government measure up to its responsibilities and reconvene that conference. The responsibility rests upon this government.
It is a sample of the high-handed attitude of the government that when the Minister of Finance announced withdrawal from these two fields of indirect taxation, namely the amusement tax and pari-mutuel betting tax-fields which from time immemorial have been possessed by the provinces-he had this to say to the provinces, as reported at page 4068 of Hansard:
May I be permitted here to express the hope that in these cases where the dominion govern-

The Budget-Mr. J. E. Matthews
ment removes taxes of this kind and withdraws from the field, the taxpayers of Canada will receive the benefit of such action and that, so far as possible, provincial taxing authorities will refrain from stepping in.
I suggest to the Minister of Finance that he mind his own affairs in this federal field, and leave the provincial governments to manage theirs.
This is my final word. The policy of the Progressive Conservative party is to work unceasingly for a reduction in the load of taxation, not just a token reduction, but a substantial reduction of taxation. The policy of this government on the other hand is to continue to soak the people. The policy of the C.C.F. is to fasten upon the people of Canada the manacles of a regimented economy. The policy of the Liberal party, as declared through this government, is to surrender to those who espouse the cause of the managed economy. The Progressive Conservative party, Mr. Speaker, believes that the people are entitled and are able to manage their own affairs without paternalistic and officious intrusion into those affairs by an all-powerful Ottawa bureaucracy.
We say to this government: Get your hands out of the pockets of the people 1 Stop this plundering of the taxpayers under the guise of taxation!


Mr. J. E. MATTHEWS (Brandon):: Mr. Speaker, I do not imagine I shall be expected to agree with all the remarks so forcefully made by the hon. member (Mr. Fleming) who has just taken his seat. I must admit I agree with some of what he has said. And I trust, when I have concluded what I have to say, he may also agree with some of the statements I make. I hope that to be so, even though it does not develop into a complete love feast between us.
Contrary to the hon. member's remarks, I have been impressed this year, as indeed I was a year ago, with the able budget speech delivered by the Minister of Finance (Mr. Abbott), and I wish to add my hearty congratulations to the many he has already received. I look back to the night a year ago when the present minister announced a surplus for 1946 of 8374,000,000, and a reduction in our national debt for that year of 8352,000,000.
I well recall the criticism directed against him at that time-first, because there was a surplus at all, and, second, because he had reduced our debt. My own opinion was that when the Minister of Finance at that time estimated a surplus of 8190,000,000 on this year's transactions he would not be far out. I had a lot of confidence in his cool, careful 5849-275J
calculations. But had he a year ago estimated a surplus of, not $190,000,000 but 8670,000,000, my faith in his judgment would have received a severe shock.
I do not propose to follow this debate through all the devious channels it may pursue. To me, one acid test of the year's transactions is that the business of Canada has been kept going under a full head of steam. In some instances taxes have been reduced-not very much; and $670,000,000 has been paid on our national debt.
Critics may talk for months on the smaller questions involved; but again I say that the huge reduction in our debt is the acid test and cannot be controverted. There was the $352,000,000 reduction in 1946 and $647,000,000 in 1947, making about a billion dollars of our national debt paid in two years.
How will that affect our interest payments for the coming year? Well, the interest on a billion dollars at three per cent would be $30,000,000 a year. That $30,000,000 saving each year may appear just chicken feed to some; but it is not so to me. It may be well to keep in mind that for eighty-one years, since confederation, the federal government has had only seventeen surpluses. They were in 1871, i872, 1900, 1903, 1904, 1907, 1912, 1913, 1924 to 1930, 1947 and 1948.
It is safe to assume that the two last-mentioned outdistance all former surpluses combined. We should also not forget that our Minister of Finance has an unbroken record of surpluses, one for every year he has occupied the driver's seat. Not only that, but he estimates another half billion surplus for. 1948; and I say, "More power to him."
To me a nation's business, so far as the finances are concerned, is the business of the individuals who comprise that nation. The taxpayers of Canada are the shareholders of this huge government business. We have a general manager, and he has presented his annual report called the budget speech. The question which interests me most, and which should interest every shareholder-otherwise called taxpayer-is whether or not our general manager, known as the Minister of Finance, and those associated with him, are making a success of their work.
I suggest that a general manager of any business in the world who could show results to his shareholders comparable with those reported by the Minister of Finance in his annual report would be wined and dined as the hero of the company. The shareholders without exception would be proud of him, and their applause would not take the form of a want of confidence motion.
Such a motion means only this, that he should be replaced by some new, untried and

The Budget-Mr. J. E. Matthews
possibly inexperienced amateur. I can assure my good friends that the people of Canada, the shareholders of our nation's business, are not so gullible as to take on any such risk as that. The shareholders will be inclined to ask definitely, who is in mind, anyway, to succeed the Minister of Finance. I wonder how many people in Canada realize that if you take all the railways of Canada and all the chartered banks of Canada and tie them all up together, their combined business as indicated by gross revenue is only one-third of the volume of business transacted by the dominion government. That is to say, the gross revenue of all the railways of Canada is $758 million, and of all the banks of Canada, $229 million, and of the dominion government $2,869 million, or three times greater.
The cost of running this huge business last year, for instance, was $1,985 million; and at that it was $131 million less than the previous year. May I emphasize here a statement made by the Minister of Finance in his budget speech, that a total of $1,214,288,000 of Canada's expenditures is uncontrollable-such items as family allowances, pensions, interest on the public debt, subsidies for provinces, contributions to various government agencies. My criticism is-and I shall be frank about it- that what are called "uncontrollable expenditures" have been permitted to reach proportions far beyond what is reasonable or necessary in this country. These uncontrollable expenditures had better be kept under control. It is the taxpayer's money. He proposes to have a voice as to how that money will be spent. I think in that regard a word to the wise might be sufficient.
I have not much respect for an individual who does not pay his bills, or at least make an effort to do so. I have the deepest sympathy for the man who, because of ill-health or unavoidable losses, cannot discharge his indebtedness. My feelings toward a nation are exactly the same as toward an individual.
I have no hesitation in saying that the minister has a sound idea in reducing our indebtedness each year to the largest possible degree now, when times are good. You may call it cyclical budgeting, if you wish, but I call it plain, common sense. Taxes are never popular, but the real test is not how much taxes you have paid, but how much you have remaining after they are paid.
I shall not take the time to speak of fishing, mining, pulpwood production and many other sources of revenue, but at this time I want to make special reference to agriculture. So far as I am aware, Canada has never had a Minister of Agriculture who has worked so zealously and so persistently in the interests 
of the farmer as has the present Minister of Agriculture (Mr. Gardiner). I say that quite frankly and I do not think anyone will attempt to contradict me. He had the vision to see, and the government had the vision to support him, that a prosperous farm population would contribute immeasurably to the prosperity of Canada as a whole and therefore make this country better able to bear the tremendous financial demands resulting from the war.
To that end he set his course, with the result that, during the years 1939 to 1947 inclusive, there was paid to farmers in Canada in subsidies, bonuses, freight assistance and other similar forms, no less than $528,979,000. That is a lot of money over and above the regular farm income. That amount includes bonus cheques which farmers received on quality cheese amounting to approximately $12,000,000; on fluid and concentrated milk, butter-fats, et cetera, $156,000,000. The premium on hogs amounted to $35,000,000. Then there were other channels, including $87,000,000 which was applied to prairie farm assistance in the form of acreage bonuses resulting from poor crops; there was $25,000,000 for prairie farm rehabilitation to build dams, dug-outs and other conservation works; there was $19,000,000 prairie farm income, including such items as compensation for storing grain on the farm; there was $88,000,000 for wheat acreage reduction, which means just what it says. Then $100,000,000 was applied to feed freight assistance, feed wheat drawbacks, plus over $2,000,000 subsidy to increase Canada's bacon export trade, along with another $1,000,000 as an egg export subsidy.
I suggest that there had to be a lot of cheques issued in Ottawa and cashed by the farmers of Canada to absorb the tremendous amounts I have quoted. Someone will ask whether these huge payments have been justified, but my answer will be that they have been amply justified, away beyond the slightest contradiction. Farmers and non-farmers felt that the cash farm return in 1946 of $1,752,000,000 might not be equalled for many years, it being twice as high as it was in 1939.
But what happened? The returns for 1947 showed an increase of $237,900,000 over 1946, or a total of $1,990,600,000, or close to the two billion mark. In other words, there was an increase of $161,000,000 over Canada's previous peak year of 1944. The 1947 farm income that I have quoted includes an increase over 1946 of $128,000,000 from the sale of grain, seed and hay; and an increase from the sale of livestock from $574,600,000 in 1946 to $590,000,000 in 1947. But it does not include payments made to farmers under the Prairie Farm

The Budget-Mr. J. E. Matthews
Assistance Act, another $11,577,000, this bringing the total farm income last year to the astounding figure of $2,002,000,000. Two billion dollars-we may well wonder, along with the Minister of Agriculture, when and to what extent that record will ever be broken.
It was illuminating, to say the least, to read in a western paper not long ago a letter signed C. Bolton, Knighton, Radnorshipe, England, paying wonderful tribute to Canada's Minister of Agriculture, a9 "a man of vision", something, he said, which was very much lacking in the world today. "He wisely agreed," said Mr. Bolton, "to a wheat price which he knew we could pay, and which over a series of years would undoubtedly pay the farmers, for whom he works so hard, much better than an inflated price and a defaulting creditor." Mr. Bolton goes on to express some comparisons so striking that it would be scarcely ethical to quote them here.
So far as 1948 is concerned, the twenty cents a bushel increase in the initial wheat payment, retroactive for three crops, will put many a farmer away to another good start, meaning, as it does, the distribution of an extra $150,000,000 now being made among western farmers. The return this year also of the refundable portions, the compulsory saving feature, of the 1943 and 1944 income taxes, amounting to $230,000,000, will bring revenue into many homes, besides reducing future interest payments by the government.
As against this, however, there are extra expenditures to be provided for. The new health program is placed at an initial annual expenditure of $30,000,000 a year. The increase in Canada's war pensions will boost that expenditure from $73,000,000 to $91,000,000 per year. This commendable increase will benefit 400,000 Canadian men, women and children, including 153,000 disabled veterans and 17,000 widows.
The increase in old age pensions, pensions for the blind, health and hospitalization allowances and more persons drawing family allowances, will mean another $27,000,000 expenditure for 1948. These expenditures, along with unemployment insurance, war service gratuities, and similar grants, have increased tremendously during the past ten years. For instance, the amount paid in family allowances since its inception is around $700,000,000.
I have quoted sufficient to indicate that the farmers as a whole all across Canada have made a wonderful response in the matter of production. There have been references of late to the butter supply. Some claimed that the farmers, particularly the younger farmers, were letting the country down in dairy production. I did not believe it, at all events so far as Manitoba is concerned. In order to settle the point, I have before me the official report issued by the department of agriculture of Manitoba. From that report I learn that creamery butter manufactured in Manitoba in 1947 amounted to 26,265,141 pounds or an increase of 198,513 pounds over 1946; and dairy butter, 5,963,000 pounds.
The total milk production in Manitoba in 1947 was 1,230,740,429 pounds, or an increase of 11,666,792 pounds over 1946. There were seventy creameries manufacturing butter in Manitoba in 1947, and twenty-three manufacturing cheese. The estimated farm value of butter, creamery and dairy, made in Manitoba last year was $14,534,000, and of cheese, $890,000.
The total farm value of the milk produced in that province was $25,932,000. I mention these figures to show that if there is any slowing down of milk production in Canada, the fault cannot be laid at the door of Manitoba farmers.
In hog production the number of carcasses shipped in 1947 was less than in 1946; the number of live hogs remaining on the farm at the end of 1947 was more.
May I add right here, as a matter of information, that the official report from which I have quoted gives the following estimated average income per farm as follows:
Average
Year	per farm
1941		 $1,550
1942		 2,639
1943		 3,040
1944		 3,444
1945		 2,779
1946		 3,416
1947		 3,597
When speaking on the budget a year ago, I referred, perhaps boastfully, to the success of Manitoba farmers at the Toronto Royal all down the years, and particularly in 1946. Last November, or was it December, they even eclipsed all former records. They exhibited 128 animals and won 135 prizes, including twenty-two firsts, twenty-five seconds, nineteen thirds, sixteen fourths, thirteen fifths, eleven sixths, and the remainder in close proximity. In addition to prizes, they won outstanding awards, namely two grand championships, two reserve grand, one senior, one reserve senior, one junior, five reserve juniors. In 1946, they won eleven awards and ninety-eight prizes; in 1947, twelve awards and 135 prizes. No further comment is necessary regarding the excellence of Manitoba livestock.
This good farming and attention to business has brought commendable results. For instance,

The Budget-Mr. J. E. Matthews
last year the Manitoba farm loans association had only 310 outstanding mortgages, 303 agreements for sale, and 193 farms remaining for settlement, as against 1,162 mortgages, 657 agreements for sale, and 641 farms in 1941. The association's collections last year alone approached the million dollar mark.
The record of the Canadian farm loan board is equally good. Of 1,678 first mortgages and 222 second mortgages, the amount of principal overdue more than six months at the end of 1947 was $65.71, and the amount of interest overdue, not one dollar.
A writer in an American magazine not long ago deplored the unscientific methods of Canadian agriculture. I read the article to the end, expecting to find some explanation as to why Canadian farmers took the first ten places in the world wheat competition at Chicago in 1947. I expected to find some explanation as to wrhy Canadian farmers almost invariably win the grand championships in wheat, barley and oats in American competitions, and as to why the most advanced American farmers grow, though not so successfully, the finer sturdier varieties of wheat, developed by Canadian scientists. I did lot find the explanation.
Speaking of progress made by many western farmers, I want to draw attention to an organization that quietly and without ostentation has been doing very effective work in this country. I refer to the Farm Improvement Loans Act passed in 1944 during the financial administration of the present Minister of Justice (Mr. Ilsley). The act was designed as a short cut to the more speedy financing of improvements on the farm. The loans were actually made through the chartered banks, but with a substantial degree of government endorsation. They were put through at five per cent interest, and during the three years 1945-46-47 approximately forty thousand farmers obtained loans, amounting to thirty-one and a half million dollars, for the purpose of farm and home improvements.
It is interesting to note to what wise and helpful uses these loans were approximately applied.
Thirty thousand loans ($25,000,000) were applied to the purchase of farm implements, notably trucks and tractors.
Four thousand loans (over $4,000,000) were for the construction or repair of farm dwellings, bams and outbuildings.
Twenty-five hundred loans (almost $1,000,000) were for the clearing and breaking of new land, resulting in 123,680 acres heretofore uncultivated having been brought into production. Seventeen hundred and twentyfive loans (over $1,000,000) were applied to the purchase of livestock.
One hundred and forty-nine loans ($86,000) were devoted to fencing and farm drainage.
Better still, although operations were begun only in 1945, nearly half the loans made up to the end of 1947 have already been repaid in full, notwithstanding the fact that loans may be effected for a period up to ten years.
Thus far, not one dollar loss has been experienced, a record which speaks volumes for the wise and efficient administration of the act. The fact also that approximately 40,000 Canadian farm homes have already been made more comfortable, or the farm rendered more productive, as a result of those loans, is ample justification of the recent extension of the act for another three years. I submit that this type of legislation is desirable and constructive and has the added virtue of being in no sense paternalistic.
We may well wonder if, and when, the pendulum may begin to swing the other way; for it would seem improbable that our present successes will continue indefinitely without reverses of some kind. It is assuring, however, to note the efforts toward stabilizing conditions that are being made. For instance, what a hopeful statement was that made by the Minister of Reconstruction and Supply (Mr. Howe) recently when he announced that 4,000 Canadian companies will invest a billion and a half dollars before March 31, 1949, in a reconversion program producing new commodities in Canada. Hon. members will admit that this is facing the situation in the minister's characteristic big way.
Then again, the recent international wheat agreement endorsed by thirty-six importing and exporting nations, after several years' efforts, is an achievement which Canada has long sought.
Many former markets are now non-existent, and have to be replaced. To this end, in formulating international trade agreements- thus expanding in ever-widening circles our business relations with other countries-Canada owes a big debt to the recent Minister of Trade and Commerce, the present Minister of Fisheries (Mr. MacKinnon). I am confident that few people realize how great is the contribution he has made to expanding the trade of this country. For instance, last year's substantial increase in trade was augmented by an increase in our exports to Latin American countries of over 50 per cent, those to Argentina showing an increase of almost 200 per cent; in fact, almost every republic in South and Central America has increased its Canadian buying. Canadian exports also to Australia and New Zealand are reported to have

The Budget-Mr. J. E. Matthews
increased about 80 per cent over 1946. Our exports to Brazil, which used to amount to about five million dollars, grew in 1946 to
824,600,000.
Canada was the second largest source of supply for Britain last year, with an increase of 17 per cent over 1946.
As hon. members are aware, the former Minister of Trade and Commerce made an extensive trip last year and, I think, proved himself a splendid combination of salesman and statesman. No one can estimate what that one trip will mean to the future trade of this country. I desire to quote briefly from an article in the Monetary Times in which the former Minister of Trade and Commerce gives his own impressions.
As head of the Canadian trade mission to South Africa and the Mediterranean area, it was my privilege to share personally in yet another constructive step towards the promotion of Canadian trade. Travelling some 25,000 miles, the mission, made up of prominent Canadian industrialists and government officials, visited eleven different countries for trade discussions, and touched briefly at seven others. Our primary object was a good will visit to Canada's third best customer, the Union of South Africa, which is more fortunate than other sterling countries in that she is able to pay for dollar imports out of her vast gold resources. Everywhere the mission travelled it met with a reception which could leave no doubt with respect to the warm regard in which Canada is held abroad. Officials and businessmen alike were impressed by the fact that we had a genuine interest in trying to assist them in developing a market in Canada for their products, as well as in promoting our own export trade. The good will resulting from the visits made by the mission will be remembered for many years, and I am sure wi11 ^ have a most beneficial effect on Canada's trading relations in the future.
We hear a great deal today about the cost of living. I was interested in an article published on May 3, 1947, by the London Recorder, giving a breakdown of how the average man and woman in England spent each pound of personal expenditure in 1946. I have the list before me, and I have translated the amounts into terms of dollar spending, to make it more readily understandable here. These are the figures for England, out of each dollar of personal expenditure, as I have stated:
cents
Food	
Alcoholic beverages and tobacco
Rent, water	
Fuel, light	
Durable house furnishing	
Other household goods	
Clothing	
Books, newspapers	
Private motoring	
Travel	
Entertainment	
Other goods and services	
Total

In Canada, the following table from the bureau of statistics will show, in a manner as nearly as possible comparable with the table in the London Recorder, a breakdown of the average personal expenditure on the different items which go into the consumer's budget in Canada. Both tables are for expenditures in 1946. Out of every dollar of personal expenditure the average person in Canada spent
in 1946:
cents
Food	 27-2
Alcoholic beverages and tobacco	 11-2
Fuel	 3-6
Rent utilities and household operation..	12-6
Durable house furnishing	 3-3
Other household goods	 1-0
Clothing	 14-4
Books, magazines and newspapers	 1-2
Transportation, including street-car, bus, train and aeroplane fares, private
motoring and purchases of gasoline_____	6-9
Automobiles and accessories	 2-4
Recreation, amusements generally, holiday and resort expenses	 2-1
Other goods and services	 14-1
Total	 $1.00
It will surprise many Canadians to learn
from a statement made by the minister that in the United States a single taxpayer with no dependents has exemption up to only $600; and that, while in Canada $800 means an income tax of $5, in the United States it means a tax of $20; also that a married taxpayer with no children has exemption in the United States up to only $1,200. In Canada a $1,600 income means to such a person a tax of $10, but in the United States a tax of $40.
I stand four square in support of the government in having had the will and the courage to impose taxes commensurate with the imperative demands of war. This is no time for our Canadian people to forget the astounding contribution made by this country toward prosecution of the war. And why not? It was our war, and upon the result of that war depended our freedom, with all that word involves. Yes, our war effort was stupendous, and the taxes we are paying today, as a result of that war effort, are, and will continue to be, a definite burden. Yet, in terms of what we have remaining, our contribution is a mere bagatelle when compared with the devastated homes and absolute ruin visited upon our allied nations in Europe.
Furthermore, I am confident it can never be said that Canada scuttled the allied ship with the cessation of hostilities. Our nearest ally should be better versed on that score than any other nation, and it is encouraging, yes, inspiring, to read in some United States papers acknowledgment of Canada's contribution to post-war efforts. At Washington recently the

The Budget-Mr. J. E. Matthews
Tabloid News paid tribute to what our country has done in the way of aid to Europe, stating that Canada's aid in terms of relative population or national income is greater than that of the United States. These are its concluding words:
To the world's need in peace or war, Canada makes a bold and sacrificial contribution, but quietly and without fanfare.
The Portland, Oregon, Journal, in a fairly recent article pointed out that Canada's population is only one-eleventh of the United States, and her national income about one-fifteenth, so that the loans and outright gifts of 81,850 million made by Canada to Europe are the equivalent of a United States loan of 820,350 million in terms of population, or $27,750 million in terms of national income. Surely this is a striking comparison and a friendly tribute from our southern neighbour.
These facts have been widely commented upon by other leading papers in the United States. I could quote from many others did time permit. For instance, the New York World-Telegram, with a daily circulation of almost 400,000, has this to say concerning the facts I have cited:
It is a sturdy and noble people that we have to the north of us. Canadians are a bulwark of democracy and decency. We are indeed fortunate in our neighbours.
Mr. Speaker, I would commend those words from United States papers to some hon. members in this chamber who never lose an opportunity of endeavouring to belittle Canada whether in war or peace.
We sometimes hear it said that all that portion of a taxpayer's income exceeding $25,000 should be confiscated. Well, that would not help very much. A concise analysis appeared in an Ottawa paper not long ago, bearing upon 1946 returns:
The figures showed that the combined incomes of all Canadians getting $25,000 a year or more totalled $113 million. If, therefore, the government were to take away from this group every cent they made, it would still be short about $1,600 million of what it needs in the way of cash in order to administer the country. If put in another way, all the incomes of all our so-called rich, grabbed by Mr. Abbott, wouldn't be enough to pay half of the baby bonus for one year.
The people of Canada may expect to pay taxes, heavy taxes, for many years as a result of the war. So long as those taxes are applied in substantial measure to reduce our national debt, Canadians will take a reasonable view of the situation. But they are going to insist, yes, they are going to demand, and I hope they will, that the taxes which they pay and for which they have worked

so hard are not frittered away in fantastic government expenditures.
Even with the astounding reductions in our national debt made during the past two years by the Minister of Finance, we are still burdened with a debt of enormous proportions. It seems to me that in order to retire that debt we must have millions more people in Canada. We must open our doors more widely than ever before to desirable immigrants from other countries. We have a tremendous extent of country populated by only twelve million people. Europe, including Britain, with an area half the size of Canada, has a population of four hundred million. In other words, were we as densely peopled as Europe, our population would be eight hundred million instead of only twelve million. We have a task before us. We cannot expect to hold indefinitely great stretches of unoccupied lands when there are many million human beings huddled together in other countries, yearning to assist in the development of Canada's rich and, to a large extent, untouched resources. Yes, a largely increased population will be a potent factor in the reduction of our national debt.
As regards taxation, some resentment was engendered among farmers with respect to the new income tax forms prepared for 1947 returns. I believe that to quite an extent, particularly in western Canada, the object, or what I hope was the object, of that new form was misunderstood.
I am glad to endorse the new efforts made by the department to run down tax evaders. Honest taxpayers all across Canada will heartily endorse that action.
I cannot recall having heard at any session so many members lauding their constituencies, and at considerable length, as during the present session. It was all very commendable, all very interesting, and I think we should have more of it.
Therefore, Mr. Speaker, I say all honour to those who have not hesitated to place on the record of this parliament a tribute to the constituencies they represent, and to the efforts of the people.
However, I am in a position to pay a tribute greater still to the people of my constituency, and one not touched upon by other members. We have it on the highest authority that life does not consist of bread alone, and that a good name is to be chosen rather than great riches. Let me say here that I have the honor and the satisfaction of representing the constituency of Brandon in the House of Commons longer, with one exception, than any member since confederation. And in all those years, it has never

The Budget-Mr. H. 0. White
been suggested to me directly or indirectly that I should stoop to any political act of a doubtful nature. That is my tribute to my constituents, and it is one of which I am justly proud.
In conclusion, Mr. Speaker, may I again congratulate the minister and his department on a big task having been carried to a successful conclusion by a big man.


Mr. H. O. WHITE (Middlesex East):: Mr. Speaker, in rising tonight to discuss the budget I must say that, after hearing the Minister of Finance present it the other night,
I more or less came to the conclusion that I would not take part in the debate because there was not much in the budget to inspire an address of any kind. It did not present any incentives to those in labour, industry or farming to increase production, and we as a free-enterprise countiy must offer something besides the rvhip if we are to increase production.
I would point out to my socialist friends to the left that there are no other twelve million people in the world who have produced as much food and sent abroad munitions of war to the same extent as the twelve million Canadians have done.


John Lambert Gibson: That is
right, and under free enterprise too.


Harry Oliver White: I wish to say a word or two about the way in which the budget affects my own constituency, and as it affects my constituency so also will it affect the Canadian people. Taxation is discouraging production. I only need to refer to a couple of items to bring that home to the house. One is reduction in the production of cheese and the other is hogs.
I have in my hand two editorials, one from the Ottawa Journal and the other from the London Free Press, both dealing with food problems. One deals with the statement of Sir John Boyd Orr a few days ago, and the editorial comment of the Ottawa Journal on his statements. The other is a report in the London Free Press on the agricultural institute of Canada meeting in Guelph on June 23 next.
Sir John Boyd Orr points out the vast increase in the population of the world. It is 40,000,000 since Y-E day. James Turner, of the world federation of farmers, has pointed out that in 1951 production of food will be only the same as in 1939; yet by that time there will be more of an increase than the
40,000,000 in the population of the world. And these 40,000,000 did not bring one acre of ground with them on which to produce more food.
I think we as Canadians can produce a good deal more food than we have; but you cannot get the Canadian farmer, or labour or industiy to produce at a loss for long, and therefore I want to point out to the government just how this is affecting a good many people.
Of all the things that are bothering the farmers, labour and small business, income tax is, in my opinion, the worst. I have talked to a good many farmers and they are quite prepared to pay their share of income tax if they owe it. Labour and the salaried worker never get a chance to handle their share because it is taken away from them before they get it, and so they see to it that they only work so long and do not get into the higher income brackets. The result is that they will lay off for a day or two, so that there is a decrease in production all across the board. If some means could be found of reducing the burden of income tax, or if those exemptions in the lower income brackets could be raised, so that people generally could have some relief, they would be able to buy food, and it would be a relief to those producing food. They would have an incentive to produce more, so that the consumer could get it at more reasonable cost.
I was quite interested in this article with reference to Sir John Boyd Orr, because in all the plans that are being made there has been no mention of rewarding the man who produces food. I can say to that organization and to the agricultural institute that until they take into consideration the man who is going to produce the food, and the necessity of rewarding him, they will not get the food and they might as well cease their deliberations. If they think the farmer will work for nothing and board himself they will be disillusioned people.
We did not ask labour during the war to give its services for practically nothing, nor did we ask industry to do so. We rewarded industry and labour and they produced the sinews of war and were enabled to produce them in abundance. We can do the same again as far as food is concerned, but the farmer will not do it for nothing.
The other evening one of our socialist members, the hon. member for Mackenzie (Mr, Nicholson), I believe, was mentioning the need for subsidized housing, and he went so far as to say that we should have subsidized farm housing. I submit that if any group of people are adequately rewarded or paid they can provide their own housing, whether in the city or in the country. But what has happened? Under subsidized housing, the farmer, and every citizen in the land who has paid for
The Budget-Mr. H. 0. White

his own home, or is paying for it, will be asked to provide a home for some improvident person, without thrift or regard for the future, who wants someone to pay for a home for him. That is what subsidized housing means. You and I will pay for someone else's home.


Mr. MARTIN:: That is what the hon. member for Eglinton recommends.


Harry Oliver White: We certainly do not want to do it the C.C.F. way, anyway.


Mr. NICHOLSON:: What about the hon. member for Vancouver-Burrard?


Douglas King Hazen: Every member has a right to express his own opinion.


Harry Oliver White: I will say to the hon. member for Mackenzie that history has shown that any government that paid people for doing nothing has ended in the ash can, bankrupt.


John Lambert Gibson: That is right. Think of the Romans.


Harry Oliver White: Let me say that there are many vacant houses in the country, but people do not want to work at jobs that are necessary where these houses are. These houses are on the farms, and that is a good indication that the man who tills the soil is not being rewarded, in relation to the hours of work he puts in, and the knowledge and ability he must put into -that work. Those people who think food is too dear will find many farms in Middlesex county that can be bought for the price of a house and lot in the city, and they will not be out of a job if they go there. They will have food at cost, but I will not tell them What that cost is. They know it just as well as I do, and they do not want to go there.
We hear quite a bit about stabilization of farm prices, the price of farm products, and that sounds good to a lot of people. But it does not take a great deal of ability to stabilize the prices of farm products below the world price or below parity price, and the recent moves on the part of consumers demanding the admission of oleomargarine into the country are a fair indication that the consumers will not stand for higher prices if the world price should drop below levels which the consuming public can afford to pay. They will not stand for it now and they certainly will not stand for it in the future. I think we are just holding out a hope to the farmers that when things are not so good, the prices of their products will be higher. That is certainly just a dream and nothing else.

The other evening the hon. member for Skeena (Mr. Archibald) speaking on the plight of the farmer, was bemoaning -the fact that the average income of the farmer was less than that of any of the other groups in Canada. But I notice that the hon. member for Skeena and all the other members of his group voted for the wheat bill which gave the farmer less than -the world price. I also notice that they voted for the agricultural bill to put coarse grains under the wheat act. So it seems to me -that they are inconsistent. They talk on the one hand about the fact that the farmer is not getting enough for his produce, and yet they vote the other way when the opportunity arises.
Recently the dominion bureau of statistics provided these figures. The labour income index in Canada in the last -twelve months has risen forty-four points, while the farm income index has receded fourteen points. How do we arrive at that? It is because most of th-e things the farmer has to buy have increased in price -to a greater extent than -the things the farmer has to sell. So we find ourselves in that particular plight at the moment.
What else has the budget done or not done that my constituents do not like? One of them is this. The tax on soft drinks and candies is not removed. Workers and children are usually the buyers of those products. On the other hand, the tax on pari-mutuel betting, which aids a group of people that are not greatly in need of aid, was removed. So I say that the government was unwise in that particular move.
Actually the budget was not brought down last week; it was brought down on November 17 last when a twenty-five per cent increase in excise taxes were placed on many articles that the low income groups have to buy. When that tax was put on, it gave the Minister of Finance (Mr. Abbott) the opportunity to say at this time that he had built up a huge surplus and that he was not increasing taxation in any lines, but was able to reduce taxation in a few. If you can put on a heavy tax five or six months before the budget comes down, and then say you have taken off some here and some there, it may sound good at the moment; but as far as the people back home are concerned, they are still digging down in their pockets and paying to this government in taxes thirty-three cents out of every dollar they receive. So I would say that, as far as my people are concerned they are disappointed.

The Budget-Mr. Blackmore
The only bright part of the budget is the fact that the minister was able to reduce the national debt. I want to point out again-
I have said it before in this house, and I am going to say it again-that we, our children and our children's children will be paying for subsidized food that was supplied to people who were more able to buy it during the war years than they will ever be in the years to come. So when you hear people asking for subsidies, you know they are wanting somebody else to pay for something they want, and that somebody else is you.
I repeat again, Mr. Speaker, that the budget was a dismal disappointment. It was a budget of sixty-five or die. I think the amendment of the Progressive Conservative party was absolutely in order.


John Horne Blackmore: The minister's budget speech, Mr. Speaker, is one more budget speech of despair. It contains no hint of any new order of abundance and freedom such as our Prime Minister (Mr. Mackenzie King) promised us all during the war. We find in it no sign of any brave new world worth fighting for. It is a budget of privation, scarcity and frustration. Why was the budget such a chilling disappointment? It seems to me that the people of Canada ought to know. They realize that in Canada we have a magnificent heritage, with an abundance of resources of almost every kind; a wonderful people, skillful, aggressive, buoyant, able and ready to work. Yet we have to have conditions such as this budget imposes on us. Why is this?
The answer is that this budget is based on an oxcart financial system trying to function in an age of internal combustion engines; in fact in an age of jet propulsion. Small wonder it fails to do the job!
There is but little comfort to be found in the speech of the hon. member for Muskoka-Ontario (Mr. Macdonnell) who, I presume, would be preparing the budget speech if the Conservatives were in power.


Stanley Howard Knowles: The same speech.


John Horne Blackmore: The speech of the frigid, reactionary Conservatives, misnamed progressive, delivered by the hon. member, was even more bleak than that of the Minister of Finance (Mr. Abbott). In the Conservative, the scarcity mentality has run riot. You never find coming from any Conservative since I have been in the house-except one in the years long ago-even the slightest glimmer of a comprehension of what it is all about or how we can get ourselves out of the difficulties in which we have found ourselves. Why they
do not employ some real financial and economic experts and leam from them, I cannot understand.


Stanley Howard Knowles: No expert will work for them.


John Horne Blackmore: They everlastingly
talk about getting to the stars, but they have not the slightest idea of how to get their feet out of the mud on the earth.
The present orthodox financial system simply must be changed. Let that be borne in upon every member of the house and upon every person in the country. Just as long as we persist in keeping the present orthodox financial system, we shall have budget after budget of the type of that which we have just had presented to us.
There will be those who will wonder if there is any evidence to support the statement that I make. I do not wish to bring myself into the limelight particularly, Mr. Speaker, but I hereby issue a challenge to the Minister of Finance and the members of the Liberal and Conservative parties to debate the fundamental principles of finance. I defy any one of them to prove that the Canadian nation has to finance entirely with debt money. I will give them all the time they need to prepare themselves, and when they are ready to come, I will be ready. We are financing this nation, and have been ever since some time in the middle of the first world war, with debt money. The debt money idea is part of the general mentality of scarcity which apparently prevails universally among Liberals and Conservatives throughout the country. The budget at the present time proposes to finance all Canadian activities with debt.
The one bright spot thus far in the budget debate is the Social Credit speech of the hon. member for Peace River (Mr. Low). I do not wish to slight the speech of the hon. member for Rosetown-Biggar (Mr. Coldwell). He merely told what was wrong in some respects with the budget; he did not tell us how the wrong could be made right.
The Social Credit proposals, in brief, were as follows-and I shall make a summary of them so that we shall have them before us. It was proposed that we have a national monetary authority responsible to parliament and vested with power in the name of the people of Canada to enable those things which are physically possible and desirable to be made financially possible. As an initial step in a comprehensive debt retirement program the monetary authority to call upon the chartered banks to surrender to the Bank of Canada three and a half to four billion dollars of pappajo oq 0} spreq qong; *sopi.inoas uoimmop
The Budget-Mr. Blackmore

on the books of the Bank of Canada with the face value of the securities delivered, this credit to be an asset to balance the liabilities of the bank to its depositors.
The national monetary authority so to regulate the use of this credit as to enable the chartered banks to meet the liabilities to their depositors in an orderly fashion, and in a manner to maintain the stability of the national economy.
Third, cancellation of existing reduction in family allowances for each child after the fourth as the first step toward an ultimate increase of fifty per cent in all family allowance, costing $15,000,000.
Immediate old age pensions of $50 at seventy years of age without a means test; the first step toward an objective of $50 at sixty-an additional $169,000,000.
Pensions for needy widows at sixty years of age and over and payments to all disabled adults not otherwise provided for by government allowances, eighteen years of age and over $20,000,000 additional.
Provision for increasing war veterans allowances to $50 and $85 a month for single and married persons respectively, and to increase 100 per cent disability to $100 a month, an additional $10,000,000.
Provision for encouragement by subsidy or otherwise increased production of such things as sugar, coal and Steel to make Canada selfsufficient and to save American dollars- $75,000,000.
Abolition of the salles tax, $395,000,000; accompanied by measures to ensure benefits to consumers.
Cancellation of the recently imposed excise tax of 25 per cent.
Income tax exemptions to be raised to $1,500 and $2,400 as an initial step in ultimate exemptions of $2,000 and $3,000 respectively- $300,000,000.
Ten per cent exemption of corporate profits for income tax purposes conditional upon companies handing over the sales tax abolition benefits to consumers; the rate of tax on profits between ten and twenty per cent on capital to be at 60 per cent; tax on profits over 20 per cent to be at 80 per cent.
The total upset in the present budget would be $984,000,000, to be provided for as follows:
(a)	by using from the estimated surplus $484,000,000.
(b)	by saving in interest charges through the debt reduction, $100,000,000.
(c)	estimated increases in revenue from increased buoyancy, $100,000,000.
(d)	by national credit, $300,000,000.
One item there that might not be easy for the orthodox financial mind to understand is the

last one, the national credit of $300 million. I maintain there is some hope in that budget. The question that will from time to time be raised will be whether or not that budget is sound, whether it will actually work in the Dominion of Canada in the year 1948-49.
It will be argued that Social Credit proposals are unrealistic, unscientific and unsound. It will be contended that Social Credit proposals will cause inflation. I will argue that Social Credit proposals are realistic, scientific and sound; and I contend that Social Credit proposals will not cause inflation in a wisely managed Canada.
Social Credit proposals will not cause inflation in a wisely managed Canada, because Canada has such a tremendous amount of resources of such a wide variety and she has her industry developed to such a high degree that she is completely capable or can be made completely capable of supplying the needs of her people, or goods which she can trade for needs which we cannot supply.
The first question I ask is: What is inflation? Inflation is a rise in prices which results from a scarcity of goods. When I first came to parliament it was impossible to get any Liberal to consent to the truthfulness of that definition. But today the war has forced them all to agree that that is the definition of inflation. It is a rise in prices fundamentally brought about by a shortage of goods.
What are the causes of inflation? The first cause is a shortage of goods in relation to money in circulation. The second is taxation. It is not a real cause of inflation, but it is a cause of a rise in prices which is called inflation in the country today. The third is the increased cost of production, such as the increase in freight rates, the increase in the cost of gasoline and the like. This also is not a real cause of inflation, but it again is the cause of a rise in prices and must be counted in when determining the causes of rise in prices called inflation. The fourth cause is over-capitalization, and the fifth cause is over-exportation.
I do not propose to deal in detail with all of these. I mention them as being the main factors which are contributing to the high cost of goods prevailing in Canada today; such high costs being commonly called inflation and being blamed generally upon the fact that there is too much money in circulation for the goods in the country.
What are the safeguards against inflation- the safeguards which would be used in this Social Credit budget which the hon. member for Peace River proposes? Here are some of them. In the first place, we should stimulate our production. This has been spoken of by scores of members in the house. I think the

The Budget-Mr. Blackmore
country is pretty well agreed as to how we could stimulate our production. Here are some of the proposals which all hon. members speak about rather freely.
First, remove or at least alleviate all incentive destroying factors such as, for example, discouraging taxation, which the hon. member who just took his seat was discussing;
Second, remove uncertainty of markets; Third, remove undependability of prices. These factors are within the control of our generation, if we use the facilities which are at our disposal. And we need not become a socialized state in order to use those powers.
Next, we should carefully plan, in conjunction with the provinces, definitely to make Canada self-sufficient so far as possible. We should make definitely a balanced economy, as is eloquently advocated by Mr. W. H. Moore, who was an honoured member of the house, representing the constituency of Ontario, in his fine book called "Grey Days", published in 1946, a book which I would encourage all hon. members to read.
Again, we should adopt proper protective measures to give confidence to Canadian producers. These measures which are at our disposal, and may be undoubtedly used, and which we see in operation today, are quantitative restrictions; that is, keeping out those goods which we do not want to come in to destroy the market for our own goods. For example, when we are producing tomatoes we do not want outside tomatoes supplying the market.
We can keep them out by quantitative restrictions, so far as we require to do. In addition to quantitative restrictions, we can use subsidies and we can use exchange control. These three measures could exclude outside goods entirely. If the government and the various provincial governments of the country had the courage to say, "We are going to produce in Canada, for example, our own tomatoes; we are announcing to the world we are going to and we are announcing to Canada we are going to; we invite an all-over effort to produce tomatoes; produce them and we will guarantee the Canadian market"-if something similar is done with the various commodities that 'Canada can produce so well, then the producers will rise in great numbers if they are guaranteed interesting prices and an assured market.
There is nothing unreasonable about that proposal. We should impose rationing on goods in short supply and we should grant compensated discounts on goods in plentiful supply. There is nothing new or revolutionary in either one of those proposals; they were
used freely and broadly during the war with great success and could have been used during the peace with equally great success. This last proposal, that of granting compensated discounts on goods in plentiful supply, is a means of price control. It is the price control w'hich the Social Credit organization advocates, being price control by inducement and not by compulsion.
Then we should adopt generally effective and aggressive measures to increase the production of goods essential to Canada's freedom and prosperity, such as the production of our own coal, our own steel, our own oil for fuel, our own gas, our own electricity and the other things which we can produce, including our own sugar.
Any ordinary individual looking at the way in which Canada has managed her household during the last forty-five or fifty years would be struck with absolute astonishment that a group of intelligent people should so mismanage the magnificent asset which is Canada, allowing themselves to go billions and billions of dollars into debt to outside countries for commodities which could be produced in Canada with great success if the people just set about doing it.
I should like to give an example of the injurious effects which taxation has upon production and prices. If production is impaired, if prices are allowed to rise, both bring on inflation. Consequently this example of the injurious effects of taxation will indicate how that sort of thing can work toward inflation. May I read an excerpt from a rather interesting book which has come into my hands entitled, "Lincoln's incentive system," by James F. Lincoln. This man Lincoln is head of one of the greatest companies in the world making the product he makes. His book was published only recently in 1946. What he puts into his book is the results of his own practical experience in his own magnificent company in the United States. This is what he says on page 72:
Only the consumer pays taxes in the final analysis. This statement may need clarification.
Let us take a case in point. We go to a gas station to buy a gallon of gas, for which we pay 20 cents. Of that, six cents is advertised as sales tax. That leaves 14 cents. The company providing the gas pays taxes of over 100 million dollars. Each gallon produced must pay its share of this tax which is about two cents. The railroad transported the gas. It pays another 100 million of taxes. That adds another cent in freight charge. The station that sells it has a tax which adds another cent. All the people who furnish the oil company any and all supplies, labour, or material must add their taxes in their charges, since they can get their money to pay taxes only from their customers. After all the taxes have been taken out, the gas cost

The Budget-Mr. Blackmore
is Jess than four cents, the taxes nearly 16 cents. If the 16 cents Jiad been listed as sales tax we should scream our heads off. Or should we?
And then at page 138 he says:
The present graduated income tax, which excludes the possibility of the able to profit from their ability, will in the same "way that serfdom did eliminate the best efforts of the able in our economy. What is more serious, it will stop the further development of the latent abilities of those on whom -we depend for leadership in our economy. Not only that, it will kill the desire of the rising generation to develop. This, if continued, will wreck our economy if we are to meet the competition of other nations who give freedom of opportunity to their industries and their citizens.
And further on:
I wonder what our reaction to the govern-mental_ taxation would have been if, at the time of the passing of the income tax law, we had been told that this law, with its double taxation of profits and renegotiation, would take from the stockholders in many cases over 99 per cent of every dollar of profit made by the industry.
Perhaps that would be excused by the statement "that can happen only to the rich stockholder who gets too much anyway." How should we have reacted if we had known that a widovr, whose sole income was from 100 shares of stock of the Lincoln Electric Company, was to be taxed 95 per cent on her part of the profit of the company? Out of $12,000 of company profit, the government took $11,400 and left her $600. Still more important, a large part of the $11,400 taken from her by the government would have gone to the consumer in lower prices, had not government grabbed it out of her hand.
That is a rather striking account of the effect of income tax on production and prices in the United States. I would imagine that if a carefully prepared statement were made in Canada it would be just as revealing as that one.
May I give now an example of the relatively simple means which we could adopt to bring about an improvement in the Canadian production of coal. May I quote from an address by Mervyn Brown on a national coal policy at a parliamentary dinner on April 28, 1948. Many hon. members will remember that. He said:
The extensive report made by the Milnes Coal Company of Toronto (one of the largest wholesale and retail coal distributing companies in Canada) should satisfy you as to the quality of this hard coal. This report was endorsed by many other Ontario coal dealers.
I shall read a few lines from this impressive Milnes' report, which has been widely published. I quote:
"I he results of these tests carried out in our own yards and the reports from our customers were remarkable. These reports convince us that this Alberta hard coal is practically smokeless and clean to handle and that it possesses all the burning qualities of high grade

American anthracite ... It is obviously of the greatest importance that large tonnages of this hard coal should be mined and delivered to the coal dealers of Ontario at the earliest possible moment. ... If a well designed plan for distribution is laid down to market a Canadian fuel of this quality at a reasonable price, we are confident that the product will soon command an extensive market throughout Ontario."
. Ladies and gentlemen-this property has continued to lie dormant in face of the fact that during the last 25 years we have sent out of Canada approximately $887,000,000 to purchase foreign anthracite.
And this is only part of the story.
According to consulting coal engineers of high repute-this hard coal can be mined and delivered to Ontario homes at from $12.50 to $13.25 per ton-after yielding a substantial profit. Yet the Ontario householder pays an average of $20 per ton for foreign hard coal of inferior quality. The Alberta hard coal would thus save him over $5 per ton-or $35 each year on seven tons-[DOT] an amount equal to another week's wages for the man in a low income bracket.
If 5,000,000 tons of this hard coal were shipped over our own railways-to the coal-less provinces of Ontario and Quebec-the saving would amount to $25,000,000 annually-an amount equal to four per cent interest on the whole funded debt of Ontario.
Ladies and gentlemen-a deposit of hundreds of millions oft tons of this high-grade hard coal lies dormant in Canada

while we depend upon foreign countries to supply us with this basic necessity of life.
Listen to the concluding paragraphs of a recent report on this Highwood coal property by one of the foremost consulting engineers of the United States:
"I am familiar with all the coal fields of western North America. I know of very large tonnages of low grade coal. But I know of no high grade coal deposit that has the physical characteristics of the Burns deposit.
In conclusion, I wish to emphasize several specific statements about the Burns coal. The quality of this high-grade coal has been amply demonstrated. It stands up well to sizing, handling, _ transportation and weather. It abounds in such thick beds under such apparently shallow cover that it can be strip-mined at low cost. It is the greatest known body of hard coal in -western North America and should command extensive -and profitable markets."
That indicates to what extent we could have developed Canada's natural resources to the end that we would have been supplying our own needs in superabundance. It can be shown conclusively that we are neglecting resources of equally remarkable richness and extent in respect of several other important needs of this nation. Any genuinely intelligent administration that set out- with the deliberate objective of making the Canadian people free and happy and prosperous would use these resources and would adopt the means that w'ould use them. That is just plain common sense. You do not have to have any Social Credit theories to see that that can be done. Social Credit would realize that these resources

The Budget-Mr. Blackmore
ought to be developed and would take the measures that would develop them.
May I quote another statement on this matter of coal. I feel rather strongly about this question; the fact that Canada submits to huge yearly imports of coal is one of the main causes of the dollar shortage about which the Minister of Finance (Mr. Abbott) is so much worried. What I cannot see is why the minister and his predecessors have not gone about some sort of solution of the problem, instead of simply getting up here and telling us about the trouble, while we go into debt and suffer. I quote from a submission to the Right Hon. C. D. Howe, of March 19, 1948, at page 4:
The Highwood hard coal contains an average of about 1,000 more B.T.U.'s or heat units per pound than the average pre-war American anthracite.
Inasmuch as probably 50 per cent of the coal in this extensive coal bearing area lies above valley or water level, competent consulting coal engineers have stated that this hard coal can be strip-mined and tunnel-mined at a very low cost per ton.
This hard coal can be mined-transported- and distributed in Ontario under existing mining costs and net freight rates at a price which will drastically lower home heating bills.
The annual solid fuel requirements of Ontario and Quebec for domestic heating approximate:
Ontario	
6,250,000	tonsQuebec	
2,250,000	tonsTotal	
8,500,000	tons
These total requirements are mainly met by United States coals and imported coke.
Limited tonnages of domestic coke are produced in Canada from American and Nova Scotia coal. A very limited tonnage of solid fuels fs' imported from overseas.
Between 1928 and 1940 Alberta shipped to Ontario an average of about 41,0:00 tons of coal annually, mainly to points in northern and western Ontario.
We submit that this large central Canada solid fuel requirement can be ultimately mainly supplied by the development of the Highwood hard coals in Alberta.
Attached to this general brief is a separate brief referring more specifically to the quantity and quality of coal in the Rio Alto (Burns) properties.
It is undoubtedly your desire that Canadian coal production be vastly increased in the shortest possible time-to conserve and obtain much needed American dollars.
It is undoubtedly your desire that if practicable, the standard of living be raised by drastically lowering home-heating costs.
Again and again, you have warned the people of the grave dangers that lie ahead in continuing to depend upon imports of foreign coal.
It is, we believe, your desire that the development of this Highwood area be carried out by individual initiative and private capital.
Given certain conditions, individual initiative and private capital wait the opportunity to develop the Highwood coal area with vigour and speed.
The essential condition is a firm understanding by one or both of the Canadian railway companies to construct a short spur line to serve the Highwood area.
This spur will be about 50 miles in length.
It should join the Canadian Pacific Calgary-McLeod branch line at Okotoks, Alberta.
This line from Okotoks to Calgary can easily carry another 5,000,000 tons or more of freight annually to the main line of the C.P.R. at Calgary and to the C.N.R. at the same point.
The total cost of this short rail spur line from Okotoks to the Highwood Coal areas should not exceed $1,500,000 inclusive of steel rails.
The grade should be about half of one per cent in favour of the load.
Construction will involve very little rock cutting and no large bridges have to be built.
The spur can be constructed in about four months. If done as a war measure or a greatly needed post-war project, it might be built even more quickly.
Whereas in pre-war periods a large amount of manual labour was required in rail construction, the job can now be accomplished largely by mechanical means, using bull-dozers, et cetera, with a great saving of manpower and capital.
It is strange to hear comment from time to time about the "immense task and cost" of building a fifty-mile rail spur to make the product of this vast coal area available to the people of Canada.
After that information has gone on record, Mr. Speaker, if the people of Ontario and Quebec do not rise in a united demand that their fuel interests shall be looked after by the government in power here, then I must say I stand absolutely amazed at the people of Ontario and Quebec.
I turn now from production, which is the first fundamental essential if we are to avoid inflation. What are the main monetary principles involved in Social Credit proposals? They are, first, a monetary authority which would have charge of all monetary affairs within the dominion. Second, the creation of debt-free money to be spent-not lent- into circulation. This debt-free money to be backed by the goods and services, producing and consuming, of the country. This principle is the centre and core of the whole series of Social Credit proposals. Third, the use of such money to stabilize the price structure. Fourth, the progressive elimination of the debt system of finance.
I said I would undertake to show that these principles are realistic, scientific and sound. As a beginning to keep my promise, may I refer to some men whose authority as financial students it will be hard to question. First I refer to Vincent C. Vickers, who was connected with the Vickers Company in Britain.
These are the things which help to establish the authority of Mr. Vickers. He was an Oxford graduate. Consequently, as an Oxford graduate he got a whole lot of unrealistic
The Budget-Mr. Blackmore

ideas into his head which, when he finally got them out, proved beyond any shadow of doubt that he had discovered the weakness of the orthodox and the virtues of the new. He was deputy lieutenant of the city of London; a director of Vickers Limited for twenty-two years; a director of the Bank of England from 1910 to 1919; president of the Economic Reform Club and Institute, London.
He died in November, 1939. He wrote a book named "Economic Tribulation", and finished it almost on his dying bed. It was first published in 1941 and printed in Great Britain by Stephen Austin and Sons of Hertford. These facts concerning this man indicate that if he, in the circumstances under which he was raised and lived, and considering the society among which he moved, could change his opinion from the orthodox notions of finance to opinions similar to those of Social Credit, there is something or other in the Social Credit proposals that appeal to the mind of a thinker. Vincent C. Vickers advocated at the close of his book (1) a national monetary agency; (2) stabilization of price levels through the use of that agency; (3) debt-free money spent-not lent-into circulation; (4) the abolition of the debt system of finance. See how closely his recommendations follow the Social Credit idea. Here are some quotations from his book, from which hon. members can draw their own conclusions as to whether what I have said is true. At page 74 of "Economic Tribulation" we find:
1.	State control and state issue of currency and credit through a central organization managed and controlled by the state.
2.	Stabilization of the wholesale price level of commodities; that is to say, a fixed and constant internal purchasing power of money; so that a pound will buy tomorrow what it bought yesterday; an honest pound, not a fluctuating pound. And this can be done by so issuing and regulating the volume of available credit and currency that it shall at all times be adequate to permit of the purchasing power of the consumer being equated with the volume of production; not by limiting the purchasing power, but by firstly increasing purchasing power more in proportion to the productive capacity of industry.
4. Any additional supply of money should be issued as a clear asset to the state; so that money will be spent into existence, and not lent into existence.
7. The abolition of the debt system where all credit is created by the banks and hired out at interest to the country.
Mr. Speaker, as regards that stand of Mr. Vincent Vickers, taken after a lifetime of careful study of the economic tribulation in which he found the world, which resulted shortly after his death in the greatest war of all

time, the conclusions of such a man are surely such that they ought to be treated with respect.
May I turn to another eminent authority, whom I think hon. members will find equal difficulty in disregarding. I refer to Professor Paul H. Douglas of the University of Chicago's economics department. This man has written a book called "Controlling Depressions", published in 1935. Any hon. member who has not read that book with great care I would urge to read it with great care because it is of great value. If he reads it he will come away from it a much wiser man than when he approached it. I found it one of the most compelling books I ever read, most instructive and enlightening on every aspect of economics. This is what Professor Paul H. Douglas says, after a well-documented study of the whole field of economics in so far as he could compress it in a book of about 280 pages. This is taken from his conclusion on page 278:
A nationally managed system of currency and credit until such time as an international system may be perfected.
The removal from private banking of the power of creating commercial credit' and the lodging of this function in a socialized agency which will serve as the manufacturer and wholesaler of credit, and with private institutions serving merely as the retailers.
The creation of credit by this socialized agency should follow two main principles: (a) to provide, so far as possible, employment or useful work for those throwm out of their jobs by business depressions, and (b) to stabilize in a rough manner the general price level.
Hon. members will notice that his proposals generally do not conform so completely with the Social Credit concept as the proposals of Vincent Vickers; nevertheless there is a striking resemblance even there. Hon. members will be interested to find that Professor Douglas advocates dividends in certain circumstances.
I refer now to certain examples of debt-free money in history, cases in which debt-free money has been used with unquestionable success. I shall name a few: the Guernsey island experiment which commenced in 1815 and went to 1829, in which great quantities of money, considering the size of the island, were issued, apparently backed by the going-concern activities of the island, and were used in building a market house, paying for debts, building dikes, building schools and so on. No ill results were noticed. This experiment is thoroughly described in a book which hon. members will find in the library, called "An Example of Communal Currency", by J. Theodore Harris, published in 1911.

The Budget-Mr. Blackmore


John Lambert Gibson: Was the money finally redeemed?


John Horne Blackmore: A good deal of it was redeemed through collecting a fee on the market house after it was built, but a great deal of it remained in circulation.
Second, the greenback experiment through which Abraham Lincoln issued over $400 million of greenbacks, backed by goods and services, produced and consumed by the United States in his time, and won the civil war.
Third, Britain's Bradbury experiment, discussed fully in two books which are found in the library by Doctor William A. Shaw: the first, "Currency, Credit and the Exchanges", published in 1926, and the second, "The Theory and Principles of Central Banking", published in 1930. They are very revealing in their instructive consideration of this subject. With these books in the library, I stand amazed that so many hon. members in the house have never given any attention to the important matter of money and what can be done with money in the way of creating a new order, not money that is collected from the people but money that can be created by the state, backed by the goods produced by the state and used by the state by being spent into circulation to improve the general economic well-being of the nation.
Fourth, the $26,000,000 which Canada created during world war I, which was spent into circulation during that war, and which saved the interest that would have been charged on $26,000,000 of debt.
The thing which I have been utterly amazed at is that there was no money created during the recent war by the government, but every single cent of the cost of that war was saddled on the Canadian people as a debt to bear interest for an indefinite period of time. This constitutes one of the public crimes of the administration occupying the seats of government today.


The ACTING SPEAKER (Mr. Golding):: Order. I must remind the hon. member that his time is exhausted.


Some hon. MEMBERS:: He has about three minutes to go.


John Horne Blackmore: Mr. Speaker, I do not wish to burden the house, but may I discuss briefly one or two aspects of the Guernsey island experiment Which everybody finds interesting. There is a great writer on economics with whom everybody is more or less familiar. I refer to Sir Norman Angell. He published a little booklet, called "Your
Money," around 1936. It is an interesting little booklet. There are two statements made in the little volume to which I would direct the attention of hon. members, because they have a bearing on what we have just been discussing, the matter of the Guernsey island experiment. They 'help to show how it was that Guernsey island was able to issue the money *without causing inflation, and the extent to which she could have issued it without causing inflation. Sir Norman Angell says that the amount of money which a nation needs in circulation depends upon the number of exchanges of goods for goods, goods for services, services for goods which need to be effected in the nation; that every one of these exchanges requires money because money is the medium of exchange. Wherever an exchange is required there has to be the medium; therefore there has to be money. That gives us a valuable key to the amount of money which can safely be created in a state. I quote from the little booklet to which I referred. On page 31 the following appears:
Guernsey's method had obvious advantages, and speaking broadly, achieved its objects and was successful.
Again this statement:
It is not "backing" which of itself is the determining factor, but quantity in relation to exchanges needing to be operated.
I quote that because it gives such a useful hint as to the amount of money which can be created safely in a state and used without causing inflation,
I had other things which I thought I would say, Mr. Speaker, but I do not feel it is becoming that I should use the time of the house any further. Therefore I will leave other things to which I wished to refer, particularly quotations from Doctor William A. Shaw in those great books of his, and quotations from other eminent authorities, which I shall probably bring to the attention of the house at some future time.
May I now just lay down a conclusion Which I challenge anyone in this house to question and prove to be untrue. Social Credit proposals are realistic, scientific, and sound, and can be so established from the finest authorities to be found in the world today, as well as from experience; Social Credit proposals will not cause inflation.
I would urge upon hon. members once again, and upon the dominion government as a whole, that there lies hope for security in Canada and an abundance with freedom, only
The Budget-Mr. Boucher

through Social Credit, only through the use of the power which was given to Canada by the British North America Act to create currency and credit in accordance with public need. I commend Social Credit proposals as an alternative to this bleak and forbidding budget which we are now considering throughout Canada, and from which we shall at once commence to suffer.


George Russell Boucher: 
Mr. MacNICOL:: Who wants to die?


George Russell Boucher: Who wants to die in Canada, as my hon. friend says?


Mr. WEIR:: Not under a good government.


George Russell Boucher: The Minister of Finance has been, in his own words, quite generous. In respect of those foodstuffs that were previously subject to the sales tax, he has given relief, and he says he will lose revenue that should go to the treasury to the extent of something like $20,000,000 in the year. There are about 12,000,000 Canadians, and the cancellation of this tax will mean on the average a saving of about $1.60 per person per annum. That is not a very generous gesture in the attempt to bring relief from the high cost of living and the heavy taxation which the people have to bear. It indicates to me that the government has had inculcated in its mind, as a result of wartime psychology, the idea that it must tax the Canadian people in order to keep them thrifty. It must save money for
Canadians because Canadians cannot be allowed to save for themselves. I believe the government has reflected its firm conviction that the Canadian people cannot be thrifty, cannot save for themselves without the assistance of the paternalistic front row in the House of Commons to do their saving for them-a paternalistic government represented in the person of the Minister of Finance.
To me that is an entirely false conception of the very spirit of Canadianism. We in this country are an aggressive people, willing to work, anxious to work, a thrifty people who are eager to put aside something for a rainy day without the government helping us to do so.
I believe that we have experienced in Canada much greater thrift on the part of the average citizen than we have on the part of the government in the matter of expenditures. I believe that if the government, in their budget, had announced where they were going to economize a little more on the reckless expenditures we have had, instead of saying they were going to make it so that people could not spend and could not buy scarce materials, the Canadian people would give a much better reception to the budget that is brought before us.
I think of the people with whom I come in contact daily; that is, the farming people in my community who are producing the goods for export and working eight, ten, twelve and eighteen hours a day to do so; these farmers are assisted by their wives and members of their families, all working on a joint venture for the production of much-needed goods to help out a hungry world. I am amazed when I find the government sending out to them an income tax statement and1 asking them to fill out that income tax form if they want to take advantage of the three-year average in taxation, asking them to fill out a long, white sheet, telling everything they are worth, their total assets; saying in this House of Commons: "You must have it understood that you do not have to do it until we demand you to do it", but continuing to send it out and asking them to do it, and having them believe they must do it; going to them through their representatives and saying: "You have not done so now, so we must do it. Show me your bank account for the last ten years; tell me what you have purchased for the last ten years, what you have given away for the last ten years, what you have built in the last ten years, by what amount you have inci'eased your assets in the last ten years." By such procedure you will undoubtedly arouse the resentment of anybody placed in that position.
The Budget-Mr. Boucher

It is not fair to agriculture, because agriculture will see what the government is doing for other classes of people. Immediately the farmer realizes that double depreciation has been given to industry to increase their plants, their machinery, to enlarge their capacity for production, to increase their manufacturing facilities by their capital investment at a rate, as the hon. member for Muskoka-Ontario (Mr. Maedonnell) pointed out, seven times as great as that of the United States, there is every reason for him to feel dissatisfied with the requirements made upon him with regard to taxation.
Sometimes when I am out in my country and meet my farm constituents, they ask me if any of those in the front row have ever been on a farm; if they would like to come out and help make up their financial statement, their income statement for the last ten years; if they would like to help them calculate their increase in capital investment, their depreciation, their basic earnings, their three-year earnings; how they could decide that, where the daughter has lived for twenty-seven, twenty-eight or thirty years at home on the farm, helped the housewife in the house, driven the horse on the hayfork, driven the hayrake out in the field, raised the poultry to pay for the groceries of the house, raised pigs to pay for the taxes for the year, yet the farmer would not be allowed, as an exemption, her wages because the main work was within the house. Then there is the young fellow under twenty-one years of age, learning his trade of farming, perhaps attending school, going home from school and doing as many of us who have been brought up on the farm have done, taking off his school clothes and getting into his overalls, doing chores until eight or nine o'clock at night, and then going in to do his homework. Those in that position cannot help reflecting on the difference between such and those who are not in pursuit of agriculture.
I think a great picture can be painted -that would impel this government in reason to allow consideration not only to the farmer who works many more hours than seven or eight a day, five or six or seven days a week, and to give more just compensation to individual initiative in the production of much needed goods commensurate with the work done, and the application given in that regard.
The same thing could be said about the smaller business people. When the small businessman or the young man setting up in a small business-be it a garage, a store, a workshop or any artisan trade-can see a big manufacturing company, as has been the case, allowed to increase its capital investment [DOT]with double depreciation, while he is not allowed to do so, you again force that man to believe that this House of Commons is catering to big interests and, irrespective of what are the demands of the present day, is not considering the needs of the smaller man.
Then, when you see within our cities the civil servant, the man who is employed by the government, getting the great promises he did a year or so ago, of a re-examination of civil service salaries, wages, living conditions and classifications; when you see the Gordon report recommend that certain department offices be taken from the operation of the Civil Service Act and the appointments left to the treasury board or to a committee of the cabinet; then, when you find out that, after all that is done, the charwoman in the House of Commons can come to work about 4.30 or 5 o'clock in the morning, trudging here from -her home which may be at some distance, work until about 9.30 in the morning and get a mere $3 or $4 a day, while you find the private secretary to the Prime Minister of Canada receiving a raise in pay per year of $5,000, you will find that there is plenty of reason for discontentment and dissatisfaction, and a demand for a better deal.
It is now eleven o'clock, Mr. Speaker, and I do not intend to proceed with my discussion of this matter tonight. I feel that it is but my duty, however, to point out, as critically as I can, the total lack of a realistic approach to the problems of the day in the budget as announced. I believe that the Canadian people would produce more, would be happier and would in a much greater measure solve our problems of high prices, high taxation and United States dollars if the government showed more confidence in their ability to do so than the budget reflects.
In conclusion, may I say that I believe, if our Canadian farmer were allowed to export his meat products and his farm production to the United States and sell them at the price he could receive for them there, without export restrictions, it would give us more United States dollars than the Minister of Finance is able to tell us that his austerity program has brought in since its inception.
On motion of Mr. McKay, the debate was adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we shall continue the budget debate.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, May 25, 1948