PRIVILEGE

[Stage Direction]
MR. COLDWELI^-REFERENCE TO REMARKS IN DEBATE ON APRIL 23
Mr. M. J. COLDWELL (Rosetown-Big-gar):: Mr. Speaker, I rise to a question of privilege. I find in Hansard for Friday last, on page 3301, the following exchange:
Mrs. Strum:	Are the insurance companies
the government?
Mr. Gardiner:	No, they are not; but they
have influence in nine provinces.
I was in the house, sir, when this exchange took place. Had I heard the Minister of Agriculture (Mr. Gardiner) say what is recorded in Hansard I would have risen immediately on a question of privilege to deny emphatically the assertion that the insurance companies have influence in all nine provinces. I certainly did not hear the minister make any reference to the provinces on Friday evening. The discussion had to do with federal legislation, and I understood the minister to say, "The insurance companies have influence." Whatever was said on Friday evening, and whatever influence the insurance companies may have in other provinces or with the federal government, I think it is apparent that they have no influence on the Saskatchewan government, as is clear from the kind of legislation enacted in my province.



MR. POULIOT-REFERENCE TO REPORTS IN VANCOUVER &quot;NEWS-HERALD&quot; AND WINNIPEG

[Stage Direction]
"free press"
Mr. JEAN FRANCOIS POULIOT (Temis-couata):: Mr. Speaker, I rise to a question of privilege. I hold in my hand a communist sheet of Vancouver called the Vancouver News-Herald, of April 14. It is surprising how intolerant are some protagonists of human rights. They refer to the hon. member for Macleod (Mr. Hansell), the hon. member for Wetaskiwin (Mr. Jaques) and myself, and they say about myself that I am "another in the house's lunatic fringe." We are called the "three crackpots" and the "three 'nut' M.P.'s to smear such a list of distinction" as
I read, and they say that the effort "backfired as one of the funniest incidents of the session".
That paper has no official representative in the press gallery, sir, but I understand that this was sent by the nigger in the woodpile, the peevish and rancorous bootblack of the demoted right honourable.
But here is something else. I rise to another question of privilege. This time it is the Winnipeg Free Press, whose Ottawa correspondent sent an honest report of what had happened in the house on April 12. The article I am to mention appeared in the Free Press the day after, April 13, the day Hansard came out. On the 14th one of the editors of this paper wrote this sentence:
After reading Mr. Pouliot's speech in the House of Commons-
He could not have read it because he did not have the Hansard in Winnipeg by that time.
-we were almost ready to join the Montreal Star in its current crusade to protect liberty by abridging it.
That is what the Winnipeg Free Press has done. It goes on:
For if the Quebec member is right, this country is indeed "rotten wth communism", and not only this country but this newspaper.
That newspaper may be, but I never said the country was; I never used that expression. I protest strongly against these pharisees, these hypocrites, men without any sincerity who are ready to protect Tim Buck and all the subversive elements in the country but always have insults for those who abide by the law.


Mr. SPEAKER:: I would ask the hon. member to state his question of privilege, if he has one, as briefly as possible.


Jean-François Pouliot: Yes, Mr. Speaker. It goes on:
Mr. Pouliot, in his list of communists or communist dupes-
I did not use the expression "communist dupes", although the names of those who appear on the list are dupes. I say it now but I did not say it then. It was not "my" list, but the list that was sent by the Civil Liberties League to the members of parliament who were on the human rights committee. Therefore I say that the editorial staff of the Winnipeg Free Press are rotten, malfeasant, and hypocrites.
3352
Inquiries oj the Ministry



COMMITTEES OF THE HOUSE


[Stage Direction]
Fourth report of the special committee on veterans affairs.-Mr. Mutch.
PRICES-CHANGE [N PERSONNEL
Hon. LIONEL CHEVRIER (Minister of Transport) moved:: That the name of Mr. Kuhl be substituted for that of Mr. Johnston on the special committee on prices.
That the name of Mr. Beaudoin be substituted for that of Mr. Cleaver on the special committee on prices.


[Stage Direction]
Motion agreed to.
.	"CANADA"

[Stage Direction]
Mr. BONA ARSENAULT (Bonaventure) moved for leave to introduce Bill No. 213, respecting Canada.
Mr. KNOWLES:: Explain.


Mr. ARSENAULT:: The purpose of this bill is that whenever in any act of the parliament of Canada, or in any order of the governor in council, or in any regulation passed pursuant thereto, the expression "Dominion of Canada" is used, there shall be substituted therefor the expression "Canada"; and whenever the expression "dominion" is used there shall be substituted therefor the expression "Canada" or "Canadian" as the case may be.
One of the many reasons for this bill is that since Canada has become a sovereign state the word "dominion" as applied to Canada has entirely lost its original meaning.
Motion agreed to and bill read the first time.



PRIVATE BILL


[Stage Direction]
Mr. D. F. BROWN (Essex West) moved the first reading of Bill No. 210 (from the senate) respecting Canadian Slovak Benefit Society.
Motion agreed to and bill read the first time. PUBLIC BUILDINGS

[Stage Direction]
On the orders of the day:
Mr. RONALD MOORE (Churchill):: I should like to direct a question to the Postmaster General, notice of which has already

been sent. Have the postal authorities purchased a site for the construction of either a federal building or a post office in Flin Flon, Manitoba? If the answer is no, do they intend to purchase such a site in the near future?


Hon. ERNEST BERTRAND (Postmaster General):: To the first question the answer is no, and to the second the answer is yes.



INCOME TAX

[Stage Direction]
FARMERS-ASSETS	AND LIABILITIES,	1946-

[Stage Direction]
On the orders of the day:
Mr. G. S. WHITE (Hastings-Peterborough):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue. A short time ago the minister announced in the house that it would not be necessary for farmers to complete the net worth statement with respect to the 1947 income tax returns. My question is in regard to the return for 1946. Farmers have received forms for 1946 together with a statement of assets and liabilities, which in many respects is similar to the 1947 net worth statement. Is it necessary for the farmers to file a statement of assets and liabilities along with their return for 1946?


Hon. J. J. McCANN (Minister of National Revenue):: Mr. Speaker, while in most cases it may not be necessary, it is very desirable; and in cases where it is specially asked for it is necessary.


Mr. GRAYDON:: Does the government intend to provide a bookkeeper for the farmer?


George Stanley White: May I ask a supplementary question? If the farmer receives a letter from the income tax department with the forms, and there is included the statement of assets and liabilities, is it to be taken that he must fill out the statement of assets and liabilities?


James Joseph McCann: If he is making his return on a cash basis it would not be necessary unless asked for. If it is on an accrual basis the statement of assets and liabilities would be necessary.


Mr. ROSS (Souris):: I should like to ask a further question of the minister. On the T-l prairie farmers 1947 form in the upper left-hand corner on page 1 the following appears:
This return must be filed on or before 30th April, 1948 (whether or not any tax is payable) in order to claim the privilege of averaging income over a three-year period. See guide, page 8.

Inquiries of the Ministry
Is it necessary for the fanner to file a return whether or not he is liable for tax? There is a good deal of confusion in the country over that very point.
Mr. MeCANN: It is very desirable that they should file that form whether they are
taxable or not, because of the fact that if they want to go on the three-year average basis the filed form for that particular year would be very important and necessary.


George Stanley White: Did I understand the Minister of National Revenue to say that it was necessary for a farmer to file a return whether or not he was taxable?
Mr. MeCANN: I said it was very desirable that he should, particularly if he wanted to go on the three-year average basis.


George Stanley White: Then it is quite clear that if a person is not taxable there is no legal obligation on his part to file a return?
Mr. MeCANN: Quite true.


Mr. CASSELMAN:: I thought the minister had just said that it does apply if a request has been made by the department for a return.
Mr. MeCANN: No, it does not apply. I read the sections the other day. If he is taxable he puts in a form; whether he is taxable or not, if he is requested to put in a form he must do so.


Gordon Graydon: They have all been
requested.
Mr. MeCANN: I pointed out that it was to his advantage whether he was taxable or not, if he wanted to go on the average basis. Otherwise he could not come along two or three years afterward and put in a form for a previous year.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Mr. P. C. BLACK (Cumberland):: I should like to ask the Prime Minister if he would inform the house what representations were made to the government yesterday by the premiers of the seven provinces, and what replies were made by the government. If the government is not able today to inform the house as to their response to these representations, when may we expect a statement?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I would
prefer to have the premiers who made their 5849-213J
representations yesterday state what these representations were. At the time of the conference I made it quite clear that any of the premiers who had appeared before the government would be at liberty to make public anywhere at any time the representations which they had made to the government. These representations were not presented in the form of a memorial or a written communication. I would not, for that reason, among others, wish myself to state what the repres-sentations were. So far as the government is concerned, I gave the assurance in the presence of practically all of my colleagues that the government would take into consideration the representations that had been made. They would have to be, as I have just said, from what we heard orally, and what we have been able on request to secure since that time, in written form.



COARSE GRAINS


[Stage Direction]
On the orders of the day:
Mr. P. E. WRIGHT (Melfort):: In the absence of the Minister of Trade and Commerce I should like to direct a question to the Minister of Agriculture. When does the government intend to make an adjustment payment on coarse grains marketed by farmers between August 1, 1947 and the removal of the ceiling prices on coarse grains last fall?


Right Hon. J. G. GARDINER (Minister of Agriculture):: That is not a matter which will be finally dealt with by the Department of Agriculture; it will be finally dealt with by the Department of Trade and Commerce. The present position is that only about half of the companies have made their payments and the government is not yet in possession of information as to what the others intend to do. Therefore the matter cannot be considered until they have that information in their hands.



SUPPLY' FREIGHT RATES-INCREASES ORDERED BY TRANSPORT BOARD-AMENDMENT, MR. COLDWELL

[Stage Direction]
The house resumed from Thursday, April 22, consideration of the motion of Mr. Abbott for committee of supply, and the amendment thereto of Mr. Coldwell.
["Tonight it will be agriculture from nine o'clock on, will it?\nMr. ST. LAURENT: We propose to introduce the other departments mentioned, and have them stand. Then we shall call agriculture, to proceed at nine o'clock.\nItem stands.\nDEPARTMENT OF TRADE AND COMMERCE Departmental administration, $272,600.\nItem stands."]
Mr. A. M. NICHOLSON (Mackenzie):: Mr.. Speaker, first I should like to express my thanks to the Minister of Agriculture (Mr. Gardiner) for helping to carry over this debate
Freight Rates

until the provincial premiers had had an opportunity of being heard in Ottawa. I hope that before the debate closes the Minister of Transport (Mr. Chevrier) will supplement the statement made by the Prime Minister (Mr. Mackenzie King) and hold out more hope to the people of Canada than that contained in the Prime Minister's statement.
In this morning's Globe and Mail there is a story from Ottawa, written by Warren Baldwin, to the effect that while in Ottawa the premiers recommended that a royal commission be appointed to investigate the whole question and that pending the royal commission's report the additional rates now in effect be suspended. The royal commission plan involves an investigation of the financial position of both railways, study of the Canadian National capitalization, study of the whole freight rates structure and a reexamination of the evidence and judgment of the board of transport commissioners allowing the present increase.
Also on the front page of the Globe and Mail is a story in connection with the seven cents increase for railroad employees being the board's limit. Some criticism has been made of members of this group for urging that no increase in freight rates be granted while representations are being made for increases in wages. In view of the fact that no increase has been granted to railroad employees for a long time-and the increase in the cost of living has affected these employees as it has all citizens

I do not see that there is any argument about it. The railway employees are entitled to an increase in order to cope with rising costs. In my opinion the Canadian Pacific is in position to pay the increased wages asked for, and the taxpayers of Canada should be prepared if necessary to make it possible for the Canadian National Railways to pay the increased wages.
When I was speaking the other evening I mentioned that again and again throughout the judgment of the board of transport commissioners we read that rates may be increased, may be adjusted, and so on. I expressed the fear that in some parts of Canada where there are already excessively high rates the full 21 per cent increase would be authorized, while in other parts of Canada, where the rates are not so high, no increase would be put into effect. I now have information to support my fears.
For example, the producers at Edenwold have had their rates on eggs increased by 57 per cent whereas the producers in the Ottawa area have no increase in the minimum [Hr. Nicholson.]
rate. I have received a copy of a letter written by the Western Canada Produce Association to the Express Traffic Association in Montreal outlining their position. They point out that for at least fifteen years public and private organizations have encouraged the farmers to improve their breeding stock and to deliver their eggs to market more quickly. The railways have received greatly increased revenues from the shipment of eggs.
It is noted that the producers in the west are being faced with a serious increase. They give a list of seventeen points in Saskatchewan, such as Caron, Mortlach, Chaplin and so on, at varying distances from Moose Jaw, the mileages ranging all the way from 16-2 to 137-1. I find that the freight rate for a thirty dozen crate of eggs is increased 57-1 per cent for the lowest point and 114-2 per cent for the highest, with an average of 85-7 per cent. For the shipment of smaller crates of twelve and fifteen dozen, the lowest increase is 28-6 per cent, the average is 35-7 per cent and the highest 42-8 per cent.
I submit that it is difficult to build a united Canada when there is such discrimination as is shown against these seventeen points in Saskatchewan. They have had these drastic increases while points in the Ottawa valley continue to pay the old rates.
On a number of occasions I have expressed the opinion in this parliament that as Canada has a large investment in the Hudson Bay railroad and the harbour facilities and elevator at Churchill, it is in the interests of Canadians that this line have a fair break. According to my information this particular railroad does not come within the jurisdiction of the board of transport commissioners and no application was made to have the rates on this line increased. No authorization has actually been given for an increase, but the fact is that freight rates have been increased.
From Regina to Churchill is a distance of 843 miles. The old rate was $2.36 per hundred as compared with the new rate of $2.86. That is broken down as follows: for the 510 miles on the government-owned line south of Churchill the old rate was $1.43, while the rate on the Canadian National line was 96 cents for a distance of 333 miles. On the new basis the rate on the portion on the Hudson Bay railway is being increased from $1.43 to $1.73, and on the Canadian National portion from 93 cents to $1.13. I do not think there is any argument to be advanced with regard to the increase on the portion from Regina to The Pas, but I do not think there is any justification for the increase of rates on the portion from The Pas to Churchill. As I said, this portion of the railway was not covered in the

Freight Rates
application, and no one has any jurisdiction to decide that there should be this increase.
I want to point out that these increases will wipe out any advantage there might have been for Manitoba or Alberta in using the Churchill facilities. It is true that for Saskatchewan it will still be to our advantage to use the Churchill route during the summer months. From Regina to Churchill the first-class rate on the Churchill route will be $2.86 a hundred pounds as compared with $3.93 via Montreal, lake and rail. From Winnipeg to Churchill the rate is $3.60 as compared with $2.83 to Montreal, lake and rail; from Edmonton to Churchill, the rate will be $3.58; whereas from Edmonton to Vancouver the rate will be $3.01. It will still be cheaper to ship from Edmonton to Churchill than from Edmonton to Montreal, but it will be much cheaper to ship from Edmonton to Vancouver.
In view of the special concessions which have been given to Halifax, Montreal and Vancouver, I think it is not unreasonable to ask during this trial period that the government refrain from making it impossible to give this route a fair chance.
In connection with incoming goods, china-ware, for example, the mileage from Regina to Churchill is 845, and the rate is $1.97. From Regina to Montreal the mileage is 1,707, and the rate is only $2.98. From Regina to Halifax the mileage is 2,367, and to Saint John 2,131; the rate is $3.19. If Regina were to enjoy a rail freight rate comparable with the rate to Montreal, Halifax, or Saint John, our importers would be paying the $1.14 rate instead of $1.97. Therefore, Mr. Speaker, I want to urge that, before this debate closes the minister assure parliament that he will review this illegal imposition of increased freight rates on the Hudson Bay railway, which is wholly owned by Canada, does not come under the jurisdiction of the board of transport commissioners, and therefore was not up for consideration when the hearings were being held.
As I mentioned before, the Saskatchewan government prepared a great deal of evidence. I think it cannot be disputed that most fair-minded men would agree that no action should have been taken by the government until this case had been studied and the necessary adjustments made. On page 105 of the compilation of the Saskatchewan government's argument before the board is found the following submission:
The province of Saskatchewan submits that, under such circumstances the railway deficit thus hypothetically assumed should, in the national interest and in order that further regional injustices may be avoided, be financed through a national subsidy rather than by an increase in freight rates. It is further submitted that in
the first instance the national subsidy should take the form of a conditional loan. If a railway crisis exists or develops it may be only temporary in nature. A conditional loan, repayable when the situation becomes normal, and with strict supervision during its currency, would seem to meet the circumstances in a reasonable way.
In supporting the Saskatchewan argument, Mr. M. A. MacPherson, the government counsel, made a careful analysis of the financial position of the Canadian Pacific Railway. He argued that the activities of the railway in land, in the Consolidated Mining and Smelting Company of Canada, in hotels and steamships, should be taken into account in deciding whether the railway was facing bankruptcy or not. Mr. MacPherson asked Mr. Walker, one of the vice-presidents, the following questions regarding Consolidated Mining and Smelting, a subsidiary of the C.P.R., and received the following answers:
Q. I put it to you that the book value of that stock today is $32,000,000? A. You may or may not be right. I would not contradict you.
Q. I put it to you that the market value of that stock today is $148,000,000? A. You may or may not be right again. I would not contradict you, because I do not know.
Q. If I am right, the book value is $32,000, 000 and the market value is $148,000,000, but you are only carrying it in your annual report as an asset of $8,412,000? A. Well, again the accountants will have to justify that.
Q. The return speaks for itself, Mr. Walker?
Then as to the whole financial position, Mr. Walker said, in reply to the following questions:
Q. So we now have you saying that your credit is impaired, yet your funded debt has been cut down from $228,000,000 to $83,000,000 in six years, your reserves have been built up from $91,000,000 to $350,000,000, you are paying less for your money than you have ever paid in the history'of the company, and you are rid of all your high interest-bearing securities; this is right?
A. I will have to answer the questions in pieces. I am afraid, because it is many-barrelled.
Later:	A. That is largely a matter of bookkeeping. the transfer of items from one side of the ledger to the other,-
And so on and so forth. The argument all the way through, I think, convinces most people that the Canadian Pacific even a year ago, when their financial statements were being examined, were in a strong position. But since that time we have had the report of the 1947 operations, and it is clear that there was no justification for the pessimistic view the C.P.R. took. The company were able to pay all the increased costs they have had in connection with their operations. They were able to pay their income taxes to the federal government. They were able to have available for distribution to their shareholders something over
Freight Rates

$16,000,000. Really the company are asking for this increase of 21 per cent so that they will be able to build up a much larger surplus.
In view of the fact that the people in all parts of Canada will be affected by this legislation, I think the representations made by the provincial premiers were not unreasonable. They asked that a royal commission be appointed and that in the meantime we wipe out the 21 per cent increase that has been authorized. If the Canadian National and the Canadian Pacific cannot meet their legitimate commitments, I am sure that members in all parts of this house will be prepared to vote necessary subsidies at the proper time.
Before concluding I should like to remind the house that we have had a most unusual procedure in connection with this whole question. Although months were spent in studying the matter, the findings of the board of transport commissioners were not brought down until March 30, 1948. Most hon. members at that time were away from Ottawa visiting their constituencies. I was on my way back when I read of the finding. At the earliest opportunity-on April 5-parliament had this matter brought before it by the hon. member for Rosetown-Biggar (Mr. Coldwell). Again on April 7, when it was clear that the government was not prepared to delay in one detail, the present amendment was placed before parliament.
I should like to remind the house that section 330 of the Railway Act sets out certain regulations which must be observed when these tariffs are up for revision. Subsection 2 of that section reads:
Upon any such tariff being filed and approved by the board the company shall publish the same, with a notice of such approval in such form as the board directs, in at least two consecutive weekly issues of the Canada Gazette.
I should like the minister to tell the house whether these new tariffs were published for two weeks.


Lionel Chevrier: If I may interrupt the hon. gentleman, I would say the section does not apply to the order issued by the board.


Major James William Coldwell: Why not? It is statutory.


Lionel Chevrier: Because the order of the board is not only a standard freight rates specification as set out in section 330. If it is, as my hon. friend states, then the order of the board is illegal and the shipper would not have to pay the rates. Let it be tested in the courts; but the counsel of the board of transport commissioners informed me that this section has not been violated.


Alexander Malcolm Nicholson: Again I think I shall have to ask some of my legal friends to come to my assistance, because I do not believe any board has authority to set aside acts of parliament. I shall be surprised if some of the larger shippers do not do as the minister suggests.


Lionel Chevrier: They have not set aside any act of parliament, or any section. The section is there, and it has not been contravened.


Alexander Malcolm Nicholson: If I understand the English language, this section clearly states what is to be the procedure when new tariffs are introduced. Subsection 4 says:
Until the provisions of this section have been complied with, no toll shall be charged by the company.
Then section 31 deals with special freight tariffs:
Special freight tariffs shall be filed by the company with the board, and every such tariff shall specify the date of the issue thereof and the date on which it is intended to take effect...
3. When any such special freight tariff advances any toll previously authorized to be charged under this act. the company shall in like manner file and publish such tariff thirty days previously to the date on which such tariff is intended to take effect; provided that where objection to any such tariff is filed with the board, the burden of proof justifying the proposed advances shall be upon the company filing said tariff.
I think that type of legislation is reasonable, Mr. Speaker. These companies are public carriers. They not only serve the people in the Montreal, Ottawa and Toronto area; they serve the people of Lintlaw, Hazel Dell and Arran; and the shippers there are entitled to at least thirty days' notice before the rates are changed. They may wish to move their goods by truck, or to make other arrangements; and I do not think the board of transport commissioners or the government should ask parliament to approve changes made so hastily. The decision was reached on March 30. The matter was brought before parliament on April 5, and though representations were made by members of all parties, including their own, particularly by the hon. member for Fraser Valley (Mr. Cruickshank), the hon. member for New Westminster (Mr. Reid) and the hon. member for Halifax (Mr. Isnor), two days later the minister rose and said the matter had been considered, that no changes were to be made, but that the new rates were to go into effect immediately. I shall be surprised therefore if the government does not change its mind, if some of the

Freight Rates
firms that are able to engage competent legal advisers do not make a test case of this. The result might be embarrassing to the companies involved, and certainly to the government.
I urge upon the hon. member for Fraser Valley, the hon. member for Vancouver North (Mr. Sinclair) and all the other members from British Columbia and the maritimes on the other side of the house to stand up with us and register this last protest at the failure of the government to meet the requests of seven provinces.


Jean-François Pouliot: Mr. Speaker, there may be discrimina-iton in freight rates. It is possible; but I do not see what a royal commission could do better than the transport board. That board is supposed to do its work properly. The other day the minister spoke plainly about it; he said the transport board would have to consider any discrimination that may exist with respect to freight rates. That is pure horse sense, pure common sense; the transport board is supposed to do some work. If that work is not done properly, or if it is not completed, let them start again; then if they cannot do it, let us fire them. That is an honest view of the whole thing.
The transport board should read the speeches that have been made in this house, especially the one by my good friend who preceded me (Mr. Nicholson). The transport board should read what has been said here with respect to discrimination, and they would do much better than any royal commission. If we have a royal commission it will take a year or so, it will cost a million dollars and will do nothing. How is it my friends of the C.C.F. party are always so ready to defend public servants, yet when there is work to be done by a public servant they say, "Let us have a royal commission"? There should be no royal commission unless it be for the investigation of scandals or something of the kind. The purpose of this board is to inform the government. It is not for us to look into matters of discrimination except when they are mentioned to us by our constituents. I had some discriminations in my constituency, and I complained to the board in due course. I do not pretend that the freight rates are perfect; far from it, but I say the transport commission should have taken the trouble to find out what those discriminations were, without being told each time.
Now, sir, this is the time to vote. We have heard a lot about freight rates from every section of the country, and we cannot learn
any more than we have been told already by
hon. members. We are saturated with this discussion about freight rates. It is not that I do not believe they are important; I think they are important, but the issue is not freight rates. The issue is a vote of confidence in the government. If this house has confidence in the government we will have the support of the majority of the house. If the house has no confidence the government will be voted down.
Now that we have reached this stage I should like to express my confidence in the Minister of Transport (Mr. Chevrier) and to tell you, Mr. Speaker, that I hope the vote will be taken very soon. The provincial premiers have the right to make representations, but I do not see why they are suggesting a royal commission. It is an insult to the transport board and to the intelligence of the members of the House of Commons. A judge would know no more than the transport commissioners are supposed to know. If they do their work properly, most of the difficulties will be ironed out and we shall have a satisfactory compromise concerning freight rates. Therefore I rely upon the wisdom of the house to have a vote taken right now, or just as soon as possible.


['Mr. Speaker, there may be discrimina-iton in freight rates. It is possible; but I do not see what a royal commission could do better than the transport board. That board is supposed to do its work properly. The other day the minister spoke plainly about it; he said the transport board would have to consider any discrimination that may exist with respect to freight rates. That is pure horse sense, pure common sense; the transport board is supposed to do some work. If that work is not done properly, or if it is not completed, let them start again; then if they cannot do it, let us fire them. That is an honest view of the whole thing.\nThe transport board should read the speeches that have been made in this house, especially the one by my good friend who preceded me (Mr. Nicholson). The transport board should read what has been said here with respect to discrimination, and they would do much better than any royal commission. If we have a royal commission it will take a year or so, it will cost a million dollars and will do nothing. How is it my friends of the C.C.F. party are always so ready to defend public servants, yet when there is work to be done by a public servant they say, "Let us have a royal commission"? There should be no royal commission unless it be for the investigation of scandals or something of the kind. The purpose of this board is to inform the government. It is not for us to look into matters of discrimination except when they are mentioned to us by our constituents. I had some discriminations in my constituency, and I complained to the board in due course. I do not pretend that the freight rates are perfect; far from it, but I say the transport commission should have taken the trouble to find out what those discriminations were, without being told each time.\nNow, sir, this is the time to vote. We have heard a lot about freight rates from every section of the country, and we cannot learn\nany more than we have been told already by\nhon. members. We are saturated with this discussion about freight rates. It is not that I do not believe they are important; I think they are important, but the issue is not freight rates. The issue is a vote of confidence in the government. If this house has confidence in the government we will have the support of the majority of the house. If the house has no confidence the government will be voted down.\nNow that we have reached this stage I should like to express my confidence in the Minister of Transport (Mr. Chevrier) and to tell you, Mr. Speaker, that I hope the vote will be taken very soon. The provincial premiers have the right to make representations, but I do not see why they are suggesting a royal commission. It is an insult to the transport board and to the intelligence of the members of the House of Commons. A judge would know no more than the transport commissioners are supposed to know. If they do their work properly, most of the difficulties will be ironed out and we shall have a satisfactory compromise concerning freight rates. Therefore I rely upon the wisdom of the house to have a vote taken right now, or just as soon as possible.']
Mr. BONNIER:: Mr. Speaker, I was paired with the hon. member for Bruce (Mr. Robinson) . Had I voted, I would have voted against the amendment.
(Text):


Mr. STUART (Charlotte):: I was paired with the hon. member for Lambton West (Mr. Murphy). Had I voted I would have voted against the amendment,


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


Mr. HERRIDGE:: I was paired with the hon. member for Quebec-Montmorency (Mr. LaCroix). Had I voted I would have voted for the amendment.


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


Mr. BEAUDOIN:: I was paired. Had I
voted I would have voted against the amendment.


James Horace King: Is the house ready for the question?



Stanley Howard Knowles: Before Your Honour leaves the chair there is another matter about which I should like to speak at this time, exercising the ancient right of a private member to air grievances before the house goes into committee of supply. This is indeed the first opportunity that I have had to discuss this matter since it was precipitated by the action of the government in the tabling of certain orders in council by the Minister of Labour (Mr. Mitchell) on April 19. The matter referred to in these orders in council, and about which I wish to speak, is the action of the government in making certain changes by order in council with reference to government annuities.
As everyone knows, the action taken by the government was, in the main, to change the rate of interest on the basis of which the annuity tables are calculated. The rate was changed from four per cent to three per cent. The result of that change, along with other changes made at the same time, is that Canadian government annuities as from April 19, 1948, cost more to Canadians who wish to purchase them. In my view, Mr. Speaker, this action of the government is a blow at social security which is hard to understand at this stage of our national development.

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Despite the differences that might obtain amongst the various parties in this house as to ways and .means of achieving social security, there is general agreement that we should move in that direction. There is also general agreement that a plan of old age security involving contributions by citizens themselves, by employers in certain cases, and by the government is all to the good. Therefore I say it is hard to understand the government, at this stage of our national development, when the people of Canada are calling for better old age security, taking this action which has the effect of striking a blow at one very good plan that has been on our statute book since 1908.
The effect of this decision by the government is best seen when one considers the group plans that are taken out, by arrangement with Canadian government annuities, bj' employers on behalf of their employees. Most people imagine that government annuities are mainly taken by individuals. The fact is that there are more individual contracts than there are group certificates thus far, but the number of individuals included in group contracts has been increasing very rapidly during recent years. As at March 31, 1947, there were in existence 194,623 contracts. Of these, 108,625 were held by individuals by direct arrangement with the annuities branch; S5,99S were held by individuals through the medium of group plans taken out by employers on behalf of their employees.
With reference to the number of individuals in group plans, may I point out that in 1945, 9,313 individuals were enrolled in group plans. In 1946 the number enrolled in group plans was 17,355; in 1947 it was 30,411. In other words, despite the fact that very little publicity was given to .this excellent plan, its use has been greatly increased in recent years, and all the evidence seems to suggest that still greater use was being made of it in recent months, and still greater use was in store as time went on. But the action of the government in reducing the interest rate, or increasing the cost of these annuities, will have not only the effect of discouraging individuals from taking out government annuities but will definitely discourage	employers-companies
and corporations, large or small-from interesting themselves in what is no longer an attractive plan.
When you look at the group arrangement to which I am referring at the moment you realize immediately that it is a three-way contribution plan. The employee makes a contribution; his employer makes a contribution, and thus far the government has been making a contribution. That contribution has been in two parts. On the one hand, the government has paid the administrative cost of the plan, and on the other hand, by computing the value of annuities on a four per cent interest basis, which is a little higher than the normal interest rate on government bonds, the government has in fact been making a cash contribution to the fund itself.
I suggest, Mr. Speaker, that if any member went out on the street and asked any ordinary citizen of Canada what would be the best kind of old age security plan, in most cases the answer would be: Let us have a three-way contribution-contributions from employee, employer and the government. That is what we have had in this very plan. But the effect of the government's action is to take away the contribution that was being made to the scheme by the government. It is true that the government will still pay the cost of administering the plan, and it is also true that it will still pay what is involved in computing the value of the annuity at three per cent; but, after all, that is not paying anything to the annuitants. That is simply paying the going rate of interest on borrowed money.
Not only does it have the effect to which I have just referred of striking a blow at the one kind of plan which everybody supports, but it also sets up discrimination between different employees working for the same firm. I will not mention the name of the company, but the bread man who calls at our home in Winnipeg has told me about his company being in this plan. He has an individual contract within a group plan. His contract, of course, was issued prior to April 19, and therefore he gets the advantages of the old rate; but a new employee of the same bread company who may be delivering bread over on the next street next week will have to have his pension with that company computed on the basis of a new rate; he will have to pay more for the same rate of pension. It is perfectly true that contracts that were in effect prior to April 19 suffer no change, but individual contracts that are written after April 19, or the contracts of employees in groups, where the individual enters even an established plan after April 19, must come under the new rate; and so I point out that discrimination between employees working for the same firm will result from this decision.
There has been considerable reference to this in the newspapers, both before and after the event. Papers like the Toronto Star, for example-I will not take time to read the quotation-have pointed out that by this
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action companies are already being discouraged from going ahead with plans they had in view. I would point out that what this means is not that annuities of this description will be written by the insurance companies; it means that they will not be written at all. What I have said about group plans points up the issue in terms of the over-all picture, because, as I say, the whole country is looking toward a threeway contributory scheme.
It is also true with respect to individuals who have suffered a sad blow in their aim of achieving social security. I think of the large number of self-employed persons, of professional men-even members of parliament- who have no pension scheme which can be carried on on a three-way basis. Prior to April 19 they at least had a chance of entering into a two-way plan that was really worthwhile.
I hold in my hand just about the only piece of advertising that was circulated by the annuities branch prior to April 19. It is an attractive booklet headed, "Canadian government annuities," and below that appears a picture of the parliament building. Then underneath is the caption, "Backed by the whole resources of the dominion." On page 3 there are the following two paragraphs:
If you are a young man or woman this little booklet carries to you a wonderful opportunity to secure comfort and independence in your old age. Read every word of it. Bear in mind that, if you would have an old age free from want or dependence, you must save and invest wisely in your youth.
If you are an older man or woman with limited capital, and your earning days are over, this booklet carries a message of comfort and cheer. It tells how you can invest your capital in a way which will give you a safe, steady and dependable income for the rest of your life-an income guaranteed by the entire Dominion of Canada.
If this was not the last copy of the book that I possess I would tear it up right here, because that is what the government has done with this most attractive plan.
The argument is sometimes advanoed that the change to which I refer had to be made to put the annuities fund in a proper actuarial position. It was said that it was not proper for the government to pay what amounted to four per cent on the money paid in by annuitants when it could borrow money in the open market or on government bonds at three per cent.
I submit that that argument misses the whole point and purpose of Canadian government annuities. This was not something actuarially unsound; it was-and deliberately so-a straight government contribution in the interests of old age security. Everyone knows the way it worked. The payments that were made went

into the consolidated revenue fund, and when an annuity was paid it was paid out of the consolidated' revenue fund. At the present time the amounts being paid in are greatly in excess of the amounts being drawn out; the only separateness about this is in terms of bookkeeping.
Let me remind the house and the government that the purpose of government annuities was set out in the preamble to the original bill, which was passed in 1908-for back in those days bills had preambles to indicate their purpose. This is chapter 5 of the statutes of Canada for 1908, being 7-8 Edward VII. The preamble reads:
Whereas it is in the public interest that habits of thrift be promoted and that the people of Canada be encouraged and aided thereto so that provision may be made for old age; and whereas it is expedient that further facilities be afforded for the attainment of the said objects:	Therefore His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows-
Then follows the act itself.
The purpose was to encourage thrift and the making of provision for old age. Part of the purpose was to provide facilities to make that possible. The providing of facilities did not mean just the employment of a bookkeeper; it meant the providing of the necessary contributions to set up an attractive plan. I hope hon. members will pardon my making a somewhat personal reference, but in studying the origins of this act I confess that I ran across something that interested me in a personal way. I found that the second reading of the bill was moved, the debate thereon took place, the bill was considered in committee and reported all on June 18, 1908. That was the very day on which I was born. Little did I realize when I was howling in my crib that forty years later I would be howling in defence of an act passed in this house that very day.
The bill was piloted through the house by Mr. Fielding, minister of finance in the government of Sir Wilfrid Laurier. This was just a few months before the present Prime Minister (Mr. Mackenzie King) was first elected to the house. Mr. Fielding pointed out at that time that in the bill presented to parliament there was a small element of government subsidy or government assistance. Even in those days there were a few members who hoped that the bill was not going to provide competition for the insurance companies. Mr. Fielding answered that while they were not paying very much by way of subsidy, to the extent that they were paying four per cent on the money invested rather than three per cent, there would be that

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element of government assistance toward achieving the objectives set out in the preamble which I have just read.


Mr. GIBSON (Comox-Alberni):: What was the general rate of interest paid by the government at that time?


Stanley Howard Knowles: I am sorry I cannot
answer that. However, Mr. Fielding said, according to the Hansard I have in my hand, that the government was planning to pay four per cent, and that this would be about one per cent more than they would have to pay for other money. He stated that that one per cent would be an element of government subsidy in addition to the cost of administration. I have no doubt that there have been ups and downs in interest rates in the meantime, but the general picture in the year 1908 was much the same as it is now.


Mr. ISNOR:: There is the same difference today.


Stanley Howard Knowles: It seems to be just about the same.


Gordon Benjamin Isnor: That is, with the change.


Stanley Howard Knowles: The change made on April 19 was from four per cent to three per cent.


Gordon Benjamin Isnor: With the change there would still be just about the same difference as today.


Major James William Coldwell: The same difference as before April 19.


Mr. MITCHELL:: The relative contribution of the state is the same today as when my hon. friend was howling in his crib.


Major James William Coldwell: You have increased the premium by 25 per cent or more.


Stanley Howard Knowles: When the Minister of Labour (Mr. Mitchell) defended this action the other day he referred to the rate that the government paid on Dominion of Canada bonds, namely, three per cent, and said that the effect of this order in council was to put government annuities on a parallel basis with Dominion of Canada bonds. I submit that that argument does not hold at all, that you are dealing with two different things. If this government were selling bonds which could not be redeemed except in small amounts in later years or at death they would not be able to sell them at a three per cent interest rate. That is what you have with an annuity. An annuity is not something with an immediate cash surrender value; it is to make provision for old age and is on an entirely different 5849-214J
basis. As I say, if bonds were on that basis you would not be able to sell them at three per cent.
One other argument which is frequently made is that the rate that was paid involved a subsidy. It is strange how many there are in the house who, whenever a subsidy is offered with which they do not agree, get up and argue against the general principle of paying subsidies at all, and yet in some cases readily agree to a subsidy payment. In this connection may I read a paragraph, commenting on the action of the government-not on the action of the house, Mr. Speaker-from the Toronto Daily Star of April 20? This, I may say, was on the financial page and was written by the financial editor:
Business is very apt today at criticizing government subsidies to the people. The fact remains, however, that business itself is not adverse to soliciting government help in reaching an objective it considers desirable. The subsidy to gold mines is but one of many instances where this principle applies.
Another is the government guarantee of loans made by insurance companies under the National Housing Act. To encourage home construction, a desirable social objective, the government assumes the risk for the entire loan although the insurance companies nevertheless receive a five per cent return on the money they advance.
I contend that those who argue against government annuities on the old basis by saying that they involved a subsidy, are not putting up an effective argument at all. Our economy is full of the paying of subsidies of all kinds, and I suggest there is no worthier objective for the paying of subsidies than that of providing old age security.
It strikes me as strange that this action of the government in reducing the value of government annuities, thus striking a blow at this form of security, should come at a time when so much use was being made of this plan. I have already given some figures with respect to individuals in group plans. May I give a few more figures and show that in recent years this was becoming a very popular arrangement. First of all, may I say that back in 1925 the total number of contracts taken out-now I am giving total figures, both individual and group-was only 486; in 1930 it was 1,257; in 1935, 3,930; in 1940, 9,014; in 1945, 15,796; in 1946, 25,538, and in 1947, 43,585. Those figures, I may say, are in each case for the year ended March 31 of the year indicated. The last figure I was able to get was for the year ended March 31, 1947. I do not know how many were taken out in the year ended March 31, 1948. But it seems strange that just when it is getting popular, just when the people of Canada are realizing
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what a good thing this is, the government strikes the blow it has struck.
May I read a word or two from Mr. Fielding back on the day to which I referred, June 18. 1908, when he said this, as reported at column 10851 of Hansard for that year:
The mere fact that a thing is good in itself does not mean that it will be taken up by the public. Even the best things of life have to be recommended. Although I believe this to be an excellent scheme, founded on sound principles and calculated to do much good. I do not anticipate that the public will rush after it unless somebody takes pains to explain its merits and advantages.
Mr. Fielding went on to indicate that the Post Office Department or perhaps some other branch of the government would do its best along that line, but to me the tragedy is that Mr. Fielding's admonition has not been acted upon. There has not been what could really be called an attempt to sell government annuities to the people of Canada. But despite that fact, its popularity has grown in recent years; and just now when it has become immensely popular the plan is literally scuttled. I know that the minister-


Gordon Benjamin Isnor: Would the hon. member say that was because of public ownership?


Major James William Coldwell: Oh, well-


Stanley Howard Knowles: I am afraid I do not see the connection. I wonder if the hon. member sees the connection between my remarks and what he has asked?


Gordon Benjamin Isnor: Certainly. The fact that there has not been the development of this scheme as compared with insurance under private enterprise clearly shows which is the better.


Stanley Howard Knowles: There has been no
development of a comparable plan under private enterprise at all. That has been the complaint that private enterprise has been making-that this was something they could not match. I know the Minister of Labour does not like the comments that have been made in some newspapers as to the information the insurance companies seem to have had about this change, and the representations they are reported to have made. But it is difficult for the minister to explain away the fact that there were these stories and comments in the newspapers for some days, if not some weeks, before he made the announcement in this house. I have had the experience that I suppose other members have had. A friend of mine who is in the life insurance business told me-as a matter of fact, just a day or two before I asked my question in this house- that he had heard that the rate was being

changed from four to three per cent and that there would be consequent changes in the tables. He had, therefore, taken out an annuity. He is a life insurance salesman with whom 1 have had many arguments from time to time, telling him that he should be taking out a government annuity instead; he was always on the other side of the fence until he learned that the rate was to be changed, whereupon he immediately took out a government annuity.
As I say, many newspapers in the country ran these reports, and they were strangely accurate. The reports indicated that the rate would be reduced from four to three per cent. They indicated it was a change which wras coming soon. I saw one report somewhere which suggested that the matter of annuities was to be transferred from the Minister of Labour to the Minister of National Health and Welfare. If that was correct, it has not happened yet. But I must say, Mr. Speaker, that it is hard to take-to stand up in this house as a member of parliament and ask a question about this matter a few days before the announcement is made, to be brushed off by the kind of smart answer which the Minister of Labour gave me on April 15, as reported at page 2976 of Hansard, and then to discover that the insurance companies apparently knew all the time what was going on. But despite the campaign the insurance companies have carried out through the years against government annuities, the fact of the matter is that even some private-enterprise organizations are disappointed and discouraged by the change that has been made. I will not take up the time to go into it, but I know of many private firms that had counted on developing employee pension plans under this scheme \Vho now realize that it cannot be done.
I wish also to say a word or two about the actual changes in rates that have taken place. I hold in my hand a copy of the new annuity tables. I do not know when it was printed, but the effective date was stamped in afterwards; therefore it must have been ready in advance. I also have a copy of the tables as they stood before, and I intend to make a few comparisons.
For example, under the old plan, an immediate annuity of $100 at age sixty for a male cost $1,163. It now costs $1,355, an increase of 16 per cent. Similarly, an immediate $100 annuity at age sixty for a female used to cost $1,327; it now costs $1,550, also an increase of 16 per cent. An immediate

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annuity, guaranteed for ten years, for a male at age sixty used to cost $1,247; it now costs $1,431, an increase of 15 per cent.


Mr. MacNICOL:: That is an annuity of how much?


Stanley Howard Knowles: I am sorry; an annuity of $100 a year in all the cases I am giving. For other amounts you multiply accordingly. An immediate annuity of $100 a year for a female at age sixty used to cost $1,379; it now costs $1,598, an increase of 16 per cent.


Humphrey Mitchell: I think my hon. friend will readily admit that life expectancy has increased, and that has some bearing on the figures he is quoting. Of course he may object to people living longer.


Mr. COLD  WELL@: Oh, you know better than that.


Stanley Howard Knowles: I am glad to see the minister is following me. I have a note about that, and I am coming to it in a few minutes.
Now let me turn to deferred life annuities. First I will take the instance of a male aged thirty purchasing an annuity of $100 to commence at sixty-five guaranteed for ten years. It used to cost $15.06 a year; it now costs $20.50 a year, an increase of 36 per cent. A female aged twenty buying a $100 annuity to commence at age sixty, guaranteed for ten years, used to have to pay $14.37 a year. Now it is $20.64, an increase of 43 per cent. I might go on and give other figures, but they run in these general brackets. In the immediate annuities there is an increase of 15 or 16 per cent, while in the deferred annuities the increase runs from 36 to about 44 per cent.
These rate changes are due in part, as I have said already, to the withdrawal of the contribution by the government to this two or three way scheme, which is what results from the reduction of the rate from four per cent to three per cent. The rate changes result as well from a change in mortality tables, this also being done by order in council. These tables are worked out by actuaries, and the government decided to use a certain table, namely the mortality of annuitants, 1900 to 1920, published by the institute of actuaries in Scotland, known as-well, there is a long list of letters here-with an arbitrary reduction of three years in the age. In other words the government has conformed to the general pattern of the insurance companies, and the fact of the matter is that insurance companies have to set their actuarial rates to include their extra costs and profits, which are not necessary in the case of the government scheme. Therefore the point the minister interjected a moment
ago is also one about which I complain. I do not complain about people living longer, as he says, but I do complain as to the basis upon which the actuarial change has been made.
Not only have there been these changes in rates and tables; there have also been changes in the regulations. For example, one of the outstanding features about government annuities thus far has been the right of purchasers to pay odd amounts and at odd times. I have in my hand my own little pass book-having started to purchase an annuity some time ago so that this contract is not affected by the change-and in it I note that payments of twenty-five cents and upwards will be received from any annuitant. It is well known that under the old plan you could make such payments of odd amounts at any time and at any post office in Canada. Now a change has been made, which is set out in this document; which reads as follows:
New contracts will not permit deposits of odd amounts at odd times. Purchasers will be expected to follow the prescribed schedule of premium payments. Provision will be made for the payment of arrears within reasonable limits, and the prepayment of premiums will be allowed by special arrangement.
I have no doubt there have been abuses of that generous privilege under the old contracts, but it seems to me the attempt to correct abuses has led the government too far the other way, and has turned what was a simple, attractive plan into something that will require the purchaser to meet his payments regularly and will frighten many people away from taking it on lest it become a commitment they might not be able to keep up. The regulation to which I have just referred suggests that the government annuities branch may accept payments in arrears, but under conditions we do not yet know. In other words the whole thing is being hamstrung and changed from an attractive, simple, popular plan into something that just will not appeal to people at all.
Here is where I think my private enterprise friends should listen. This does not mean that annuities of this kind will now be sold by the insurance companies. Everyone knows the insurance companies could not possibly meet these terms. What it means, however, is that this sort of thing will not be done at all, and that we shall have had a set-back in our hopes of developing a reasonable plan for social security.
I am afraid my time is just about up, and I had better come to a conclusion. I have had a great many representations about this matter since the tabling of the order in council on April 19. I have had resolutions
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had earlier. Again, under the present proposal it would appear that anyone who buys will not receive as much for his investment as would have been obtained earlier. That does not seem fair; we all try to get a fair deal.
Suppose one of these gentlemen I refer to is drawing an annuity of $100 a month, or $1,200 a year, which is the maximum; then, if a month or two hence someone else wants to buy an annuity under the amended scheme, he would not be able to get the same return as the person who bought an annuity a short time ago. That does not seem to me to be fair on the part of the government, because everybody should be treated the same way. I have only praise for Canada's government annuity program which has been in operation for quite a long time. It has promoted thrift in Canada and given a feeling of security and safety to those who have invested in it.
I am not conversant with the whole program, but having listened to the hon. member for Winnipeg North Centre, who apparently is conversant with it, I would urge the government to reconsider any proposal which would retard or slow up the purchase of annuities by the average citizen. A government annuity is one thing in which the average humble citizen can invest with a feeling of safety and security. I am not suggesting, of course, that annuities sold by large insurance companies are not safe or secure; I will go so far as to say that they are. But, after all, there is nothing better than an annuity contract with the government, because the whole country stands back of it.


Mr. CLARENCE GILLIS (Cape Breton South):: Mr. Speaker, I know that you
and the members on the other side of the house do not welcome this discussion at this stage, and knowing how anxious the house is to get into supply, at the risk of being unpopular I wish to make a few remarks on this subject.
I think the government are away out in their timing in these things. They are making these changes at the wrong time, and I have in mind freight rates also.


Mr. DEPUTY SPEAKER:: Order. The freight rates question has been considered by the house and a decision has been reached.


Clarence Gillis: I had no intention of discussing freight rates, Your Honour, but certainly the timing on this particular thing is bad. What I mean by that- is this. There has been considerable talk in this country for some time about the danger of isms. There is only one thing that breeds isms, that is, insecurity and poverty, and until you eliminate those

evils there will always be the danger of the things we fear from the other side of the tracks. Secondly, I say the timing is bad because we are still in the process of swinging our economy from war to peace. In the wartime economy the government exercised considerable control and protection over the lives of the people of this country. Both the government and the official opposition have been vying with each other since the swing-over from war to peace as to which are the greatest free enterprisers, and there is pressure from outside on both these parties.


An hon. MEMBER:: How do you know?


Clarence Gillis: I have been living in this country for a little while. What I say is quite apparent, and mind you, the average Joe on the street today recognizes that. They are not being fooled. Many people today will tell you that what is growing up in Canada is a managerial form of society in which the government are managed from the outside to the detriment of the people.
When the government annuity scheme was started away back in 1908 a definite rate of interest was fixed. That is now being changed by making the rate one per cent lower, which is equivalent to stepping up the premium by 25 per cent. Surely if the government was liberal enough in 1908 to lay the basis for an annuity scheme which would be available to the people of this country, it must recognize that the step it is now taking is retrogressive and might well have been initiated by the Conservative party. That just bears out my contention that what has happened in, this country is that the Conservative party has disappeared, and the Liberals have gone Conservative.


James Arthur Ross: You wish they had.


Clarence Gillis: Their actions in the house and in the country demonstrate that. I say the timing of this measure is bad and, along with other steps which the government has taken, it indicates that the government is being pushed from outside. My guess is as good as anyone else's and it is that the old line insurance companies fear the development of government insurance because they cannot compete with it. Saskatchewan in the field of automobile insurance and fire insurance has demonstrated that the government can give better service and better protection at cheaper rates than the old line insurance companies, and the insurance companies want to offset that development.
As the hon. member for Winnipeg North Centre (Mr. Knowles) has pointed out, the

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fear of insecurity is what everyone in this world has been struggling against and suffering from., not just for generations but for centuries. We have now entered a period in the history of this country where provincial governments and industries are trying to evolve some scheme of protection for the average worker. Let me give the minister an illustration that the change he is making shows bad timing so far as the industry I am going to mention is concerned.
The minister knows that the mining industry in this country never had a pension plan, despite the fact that, as far back as 1920, I know of my personal knowledge that we approached the provincial government time after time for a three-way pension echeme, but we did not succeed in selling it to the government. But away back in 1923 and 1924 the company instituted an anaemic scheme of their own. Nevertheless, though it was anaemic, t'he company did something, and they bore the whole load. Only a year ago some 1,500 employees of that mining industry in Nova Scotia who had reached the age of sixty-five were laid off, and because there was no three-way contributory retirement scheme, the company made these employees a grant, which they call a pension, and which ranges all the way from $16 to $70 a month, based on length of service and a percentage of the average earnings for the last ten years. But a miner's last ten years' earnings would be largely from piecework; it would be the lowest period of his earnings. So the pensions are very small.


Mr. SMITH (Calgary West):: May I ask the hon. member if he is in favour of piecework in coal mining?


Clarence Gillis: Whether I am in favour of it or not, it is there.


Arthur Leroy Smith: You are trying to get rid of it, are you not?


Clarence Gillis: Not being actively engaged in that occupation, I let those who are make the decision. Why I hate to see this change made in the government annuity scheme at this time is, among other reasons, the fact that the miners' union and the provincial government have for the last six months been engaged in negotiations to evolve a threeway scheme which will not only protect the miner in the future but also do something for that large group of miners who have been retired' with no adequate pension. Many of these men still have families on their hands and homes to maintain with the income I
have just indicated. This kind of thing, which is a trend away from the three-way pension scheme that protects the average person in the country and gives him an opportunity to participate, is being discouraged. With this measure we are farther back in this field than we were in 1908.
To establish in the industry that I arr talking about the kind of scheme which will protect those who are now out, and those who may come in in the future, will require a contribution from some source of about $12,000,000 to lay a base for a three-way contributory plan. If that is done, if the fear of insecurity, when a person is no longer productive, is removed you remove a lot of the fear of these changes that are talked about which we do not like to see, because insecurity is what drives people toward any kind of solution of the problem where they see themselves on the scrap heap, and are no longer able to produce themselves.
Instead of starting on the road to abandon a very good scheme which covered only a small percentage of the people of this country-it is a very small percentage of the people of the country who can come under the government annuity scheme-we should be trying to improve it.
Let me say this with regard to most industrial workers and, I think, farmers in the country. They are not in a position to carry any kind of insurance with the old line companies. The best they can do is to take a $1,000 policy payable to the beneficiary when they die, and pay on it monthly. When they pass away there is enough left to pay the funeral expenses. They live day by day and pay that kind of insurance, which is the most expensive kind of insurance, against the time when they pass away, so that their families may not go into debt for funeral expenses. That is the only kind of insurance that the average low income person in this country is able to get and pay for with the old line companies.
Rather than do what we are doing now, in effect, stepping up the premium on government annuities by 25 per cent, the Minister of Labour (Mr. Mitchell) should be bringing in a bill making this plan of government annuities still more available to the people of the country, by reducing the premium and by advertising it widely and incorporating in the national government annuity scheme the industrial workers across the country who are trying to get into some kind of three-way contribution scheme with the companies across the country. I am sure you would get co-operation from the industrialists, and I am absolutely certain that you would get it from the industrial workers.
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When you have 100 or 200 schemes operated separately by each industry in the country the administrative costs are terrific. But if it were centralized with the central government with the staff that is now available, with the scheme brought up to date and the administration done from here and the people of the country covered under this scheme, it would cheapen the administration and it would- guarantee the solvency of the fund because the government would be behind it. Proper audits would be made from time to .time and, regardless of whether the old line companies like it or not, it would not be competing with them, because they certainly cannot give this kind of insurance.
I see in this scheme the basis for the expansion of a well developed three-way contributory scheme which would take care of both farmers and industrial workers either individually or co-operatively. I seriously suggest to the minister that he not go ahead with this thing at this time. This is thought about a lot in the country. Over the week end I had a meeting in Hamilton, praising the government, of course.


Stanley Howard Knowles: And passing the ammunition.


Clarence Gillis: I was questioned. After I had got through telling them what a good government we had, half a dozen people rose and asked me why the government should step up the premium rate on these annuities and why they should be making these changes.


Stanley Howard Knowles: What was your answer?


Clarence Gillis: I did not have much time. The answer I gave them briefly was that I thought there was pressure from the old line companies. They want to get the government completely out of the field of insurance and leave it wide open to them. The examples in Saskatchewan are demonstrating that government protection in the fields that they are suitable to handle cannot be competed with by the old line companies. I told them I thought it was a wrong step. I said that I thought we could have confidence in the judgment of most hon. members and, that once this thing is analysed, the orders in council will likely be taken back and re-arranged and the minister perhaps bring them back and centralize the scheme as one that might embrace all of the groups across the country to which I have -referred.


Humphrey Mitchell: If I may say a few words on this question-I should like to stay here all day on this discussion-I wish to say that the hon.

member for Winnipeg North as usual showed the great courtesy of not giving any notice that he was going to raise this question.


Stanley Howard Knowles: Get the riding right, Winnipeg North Centre.


Humphrey Mitchell: Wherever the hon. member comes from. It is a highly technical question and the fundamentals cannot be expressed in simple terms.
My hon. friend said that he was howling in his crib, which he understands. I think it is a fair thing to say that he has been howling ever since in every walk of life in which he has taken part-at least that is my information.
The further point I wish to make is this. The hon. member for Cape Breton South (Mr. Gillis) and the hon. member for Winnipeg North Centre (Mr. Knowles) have said that influence has been brought by the insurance companies on myrself in connection with this change in interest rates on annuities. I want to say without equivocation, Mr. Speaker, that to my knowledge I have never met a representative of an insurance company since I have been in the ministry. That is the kind of smear which will go up and down the country in a way that cannot be answered. One may have his point of view, but I do not think it is necessary to broadcast that kind of thing when I have already said that I have never met any of these people since I have been in the ministry.


Stanley Howard Knowles: How did the insurance companies and the newspapers know of it a week before it was announced?


Humphrey Mitchell: It is an easy thing-


Mr. PROBE:: Just mind readers.


Humphrey Mitchell: There are mind readers. When an industry is being run at a loss it is obvious that any person with any common sense would face up to his responsibilities. By the very nature of things, when you set an investigation in motion, human beings being what they are, leaks sometimes happen. That happens in every country and in every clime and in some political parties.
My hon. friends spoke about the influence of insurance companies. I had to take the long view on this thing to be frank, and I take full responsibility for it. My good friend, the hon. member for Cape Breton South, spoke about insurance and trade unions. Whether we like it or not, we are the product of our experience, and he and I know quite well, probably better than anybody else in this house, at any rate as well as anybody else in this house, that a number of insurance schemes set up by trade unions have been wrecked because they were not on a sound actuarial basis.

Government Annuities
Take my own organization. I remember attending a convention in the city of Detroit as a young man thirty years ago. When we set up a scheme for the payment of funeral benefits I rose and pointed out to the chair, when the matter was up for discussion, that I thought it was unsound because some members of the organization or their heirs would not receive the benefits to which they were entitled.
You cannot have it both ways. My hon. friends of the socialist party have been advocates of low interest rates, and I have no objection to their having that point of view. They are also great believers in subsidies. I said once before in this house that if the payment of subsidies is a sound policy to follow, let us subsidize everything and get it all for nothing.


John Oliver Probe: You believe in selective subsidies.


Humphrey Mitchell: My hon. friend does not believe in anything.


John Oliver Probe: There is no need to be personal about it.


Humphrey Mitchell: The hon. member does not need to be personal either, but when he sticks out his neck he must expect to get it chopped off.
That is the position I was faced with. I know that the believers in public ownership think that the government is the only institution that can run a business at a loss. How do you run it at a loss? You take money from the other fellow to pay for the losses.
That is what has taken place. In order to pay these annuities it was necessary to take money from other people who did not hold government annuities. That was necessary in order to make the thing actuarially sound from the point of view of the person holding an annuity.
Take this House of Commons as an example. We cannot even run a restaurant. You get a S1.50 meal for seventy-five cents, but who pays for it? The people of this Dominion of Canada pay. We cannot even run a barber shop on a sound basis. You get a sixty cent haircut for thirty-five cents.


An hon. MEMBER:: Is that true?


Humphrey Mitchell: Of course it is true and my hon. friend knows it is true.


Mr. JOHNSTON:: That is a debatable point.


Humphrey Mitchell: Let my hon. friend go into any union shop in Toronto and try to get a haircut for thirty-five cents.


Stanley Howard Knowles: The minister has not much hair.


Humphrey Mitchell: I will return that compliment and say that my hon. friend has not much brains. I was raised in a thrifty school. I was raised in a school where we were taught to pay our just debts. If we did not have the money with which to buy a thing, we did not buy it. That is the backbone of the British commonwealth of nations and I hope we shall never get away from it. I hope we shall never go out and kid people that they are getting something for nothing, old age pensions at twenty-one and what have you.


Stanley Howard Knowles: Annuities might save the government part of the cost of old age pensions.


Humphrey Mitchell: I will come to that in a minute. My hon. friend had his day, so he should just listen to me.


Stanley Howard Knowles: You passed the order in council before I had my day.


Humphrey Mitchell: I should like to place on record the amounts which it has been
necessary to transfer in order to maintain reserves and the expenses of administration. The figures are as follows:
At or for the year ending March 31, 1947 March 31, 1946 March 31, 1945 March 31, 1944 March 31, 1943
Amount transferred to maintain reserve $977,069.58 29.3,797.96 257,288.00 32,180.49 497,790.26
Expenses of administration $566,968.04 400,916.51 353,556.72 303,917.28 264,228.67


Mr. LOCKHART:: Is that the annuities administration?


Humphrey Mitchell: Yes. I understand that in private companies the cost of administration is between 12 and 15 per cent, whereas under this scheme the cost is under one per cent. Of course that cost is borne by the government. I wonder what position would have been taken by hon. gentlemen if, durihg the years of high interest, we had moved in the other direction? There is some responsibility on the ministry to see that these plans are administered in as sound a manner as possible. I should like to ask nly socialist friends in Saskatchewan if the cost of their various insurance schemes are paid out of the public treasury. I am referring to the cheap car insurance and other forms of insurance they have been talking about.


Mr. BENTLEY:: The answer is definitely no. It has paid its way all the way and has provided service.
Government Annuities


Humphrey Mitchell: Then what is the difference in the Regina administration carrying on an insurance scheme and the government here in Ottawa carrying on an insurance scheme?


Stanley Howard Knowles: This is not insurance.


Humphrey Mitchell: My hon. friends cannot argue both ways. They cannot stand on a public platform and say that the Social Credit party, the Liberal party and the Conservative party must run their administration at a loss, but in order to satisfy their point of view, that the government of Saskatchewan must run theirs at a profit.


An hon. MEMBER:: Oh, no.


Humphrey Mitchell: Just take your medicine.


Clarence Gillis: You are arguing against
yourself.


Humphrey Mitchell: My hon. friend from the socialist camp said that there were no administration costs paid out of the public treasury; yet he and his friends expect the other political parties to take the position that, because, a thing is state operated, it should be subsidized by the people. I do not think that is logical. It may be logical from the point of view of those who are thinking in reverse all the time.
I do not intend to take up any more time of the house. I think I have proven that it was necessary that this position should be taken. I should like to know what the position of the opposition would be, particularly my hon. friends from Saskatchewan, if this scheme were absolutely bankrupt. They would, by the very nature of things, be comparing it with the projects they have in their own province, and in my judgment justly so.
I have always been a strong advocate of pension plans of every kind and character.
I have been a strong, advocate of contributory unemployment insurance. If the house will permit a personal reference I was one of those who played some part in the establishment of old age pensions in the Dominion of Canada. The hon. member for Cape Breton South also played a part. In our youth, in our simple way we advocated the establishment of a non-contributory scheme of old age pensions such as they had in Great Britain. I have often thought that if I had my life to live over again I would have advocated a scheme on a contributoiy basis where the pension would belong to the individual by right without any contribution from anybody. I believe that is sound common sense.
Notwithstanding the points raised this afternoon by hon. gentlemen, I say without fear of 
contradiction that this is still the cheapest, the safest and the best annuity scheme in the Dominion of Canada.


Charles Edward Johnston: Mr. Speaker, I should like to have a word or two to say. I do not think anyone can accuse me of being a socialist, nor can he accuse me of being a Conservative. In my opinion the one is just about as bad as the other.


An hon. MEMBER:: Where do the commies come in?


Charles Edward Johnston: Of course the Liberals are right along with them. But when speaking about annuities, the minister went on to point out definitely the difference between the way in which the annuities branch is run and the way other departments of government are run. He pointed out that he thought the annuities branch should stand on its own feet. That might be all right, but let us consider the Post Office Department. Does that stand on its own feet? No, it does not, and it never has.


Mr. BLACKMORE:: Or the Canadian
National Railways.


Charles Edward Johnston: In the Post Office
Department all the public service is charged * against the Department of Public Works. The Canadian National Railways has never stood on its own feet. Yet the government does not intend to take a stand here and say that it is going to throw over the Canadian National Railways. It will not even go so far as to write off some of the watered stock. When it comes to the matter of annuities, that is the only type of investment in which the small income earner has a chance to invest. Where else can a man with a salary of $35 a week invest his meagre savings and get four per cent interest? There is not another place unless he wants to invest in government bonds, and those are not now for sale. More than that, he would have received only three per cent on them.
I have discussed this question on other occasions with insurance companies, and one of the things they have always beefed about was the fact that the government was selling annuities which would give a return of four per cent. They said frankly that they did not intend to go out and sell annuities against the government, because they could not get a sufficient return or the return to which they thought they were entitled.
When it comes to the general field of life insurance, the government is not in competition with the life insurance companies, and of course they can go ahead in that field.

Saskatchewan Federated Co-operatives
In fact I think it is a healthy thing to have the government selling annuities paying four per cent in competition with insurance companies. It is not like taking over a monopoly. I do not think it is comparable with out and out socialism. It is a form of competition. In that way I think there is a good control of private insurance companies, so that they will endeavour to keep their rates down as low as possible.
We hear a great deal about people being encouraged to invest their savings in order to protect them in their old age. I think that is a good thing. The minister himself spoke about contributory old age pensions. How are people to contribute if they have not sufficient income on which to live? Last year when the Minister of Finance (Mr. Abbott) brought his budget down, he told us that over fifty per cent of the people in Canada were living on less than $1,500 a year, if married, and on $750 a year, if single. When you find a condition like that in the country, how do you expect for one moment that these people will be able to get the money to invest in contributory old age pensions or any other compulsory contributory scheme the government may have in mind?
I would not say that the government has had pressure brought to bear on it, or that the minister particularly has had pressure brought to bear upon him from the insurance companies, but I will say this definitely; the insurance companies have been complaining strongly against the government's selling these annuities, thereby allowing room for the small investor to get a four per cent return on his money. I think the minister himself is aware of that fact. That does not necessarily mean to say that they came to him with a written complaint; but I am sure the minister is too smart a man not to know that the insurance companies have been bitterly opposed to the government's selling annuities bearing four per cent interest.
So far as the matter of taking money out of the general revenue is concerned, I think the minister said that on March 31, 1943, approximately half a million dollars was taken out-$497,000, to be exact-and that in March, 1947, $997,000 was taken out. What do we pay each year for family allowances? That money comes out of the general revenue. It comes out of taxation. Will the minister stand up here and say that we should not have family allowances? If he made such a statement as that, I am afraid the Prime Minister (Mr. Mackenzie King) might ask him to take a vacation. If the Minister of Labour (Mr. Mitchell) can logically say he thinks the annuities branch should be put on such a sound financial basis that it should be run with no contribution from the general treasury, then all these other things which I have mentioned-and which the government has sponsored-should be put on exactly the same basis.
I think the time was certainly not opportune for the government to lower this interest rate from four per cent to three per cent. We expect the people of this country to look after themselves in their old age. Almost everyone who has spoken for years past in this house has advocated that procedure. Yet we take away one of the opportunities for people to do that. I want to protest against the government's taking this action at this time. It is most inopportune and it will not work in the best interests of the people of Canada.


PROVISION OF SUPPLIES OF COMMODITIES TO SASKATCHEWAN FEDERATED CO-OPERATIVES LIMITED
Thomas John Bentley: I suppose the house will be impatient, Mr. Speaker, with anyone who rises at this particular time. I do not know that I blame them a great deal, but I want to point out that those of us over here have no other means of voicing our grievances except as the opportunity arises in this way. At times we have been accused of holding up a vote when, as a matter of fact, it was not a question of holding up a vote; it was simply a matter of trying to register our protest in the time at our disposal. We do not make the rules of the house. But we must obey them.
I want to speak principally on another matter this afternoon; but before I do so, I want to advise the house and the Minister of Labour (Mr. Mitchell), through you, Mr. Speaker, that there is a vast difference between this government annuity and the insurance plan and operations carried out by the Saskatchewan government. In the first place, the Saskatchewan government insurance office does not deal in life. It deals in a variety of other things.


Humphrey Mitchell: May I ask the hon. member a question?


Thomas John Bentley: Yes.


Humphrey Mitchell: By the very nature of things, when you insure against fire, does that not include life, indirectly?


Thomas John Bentley: Yes, indirectly. I mean that there is no straight life insurance. The only socially-owned life insurance company in
3372	COMMONS
Saskatchewan Federated Co-operatives __
Saskatchewan is the Co-operative Life Insurance Company, which also has a charter from Ottawa.
However, the point I was about to advise the minister on was this. That insurance company is a crown corporation which operates entirely under its own steam. It pays its own administrative and operating expenses and submits its accounts to the government. Its surplus is disposable, of course, by government decision.


Mr. CASE:: Does it pay provincial taxes?


Thomas John Bentley: Yes, it pays all taxes except municipal taxes; that is a matter which is one of controversy at the present time, and I understand that payments will be made in lieu of them, in agreement with the municipalities.
The matter I wish to introduce this afternoon is opportune now after I have spent these few minutes in the way I have. I am glad to see the Minister of Agriculture (Mr. Gardiner) in his place before I bring it up. It has to do with the matter of the supply of hardware, particularly nails, to one of our big Saskatchewan co-operative associations, namely, the Saskatchewan Federated Co-operatives Limited. This is an institution which has been built up over the years by the same process that governments here and in other places have advised the people to undertake. They have said the same as the Minister of Labour said a while ago, that people should help themselves when they are in extremities. The people of Saskatchewan have in a variety of ways set up organizations by which they hope to help themselves. They do not consider it fair when obstacles are placed in their way that prevent them from helping themselves as they should be permitted to do.
The file of correspondence I have here is between the president of the Saskatchewan Federated Co-operatives Limited, Mr. George Urwin, and the Minister of Trade and Commerce (Mr. Howe), and it also contains letters between the steel controller of Canada, Mr. Fred Ashbaugh, and Mr. C. H. Millard of the united steelworkers of America. The reason that correspondence enters the picture will become apparent as I go along. This co-operative has a membership of around 75,000 people, of whom about 96 per cent are farmers. It is not a corporation in the sense that people have invested money in it for the purpose of making money out of their investment. It is a co-operative in which people have invested money for the purpose of building certain things to serve themselves.
They have done that in this way. They have built 540 retail outlets which service every

populated area in Saskatchewan. Through the affiliation of those 540 retail outlets they have ownership in the central organization, the federated co-operatives limited, through which they operate two coal mines at Drum-heller, a lumber mill at Canoe, British Columbia, an oil refinery at Regina, a flour mill at Outlook and two feed plants, one at Saskatoon and the other at Regina.
As I say, they have done these things to service themselves. They are asking no favours from anybody. They simply want to be able to use their purchasing power in that way, to go into the market and purchase their supplies from manufacturers, or to purchase the raw materials from the suppliers and make them available in consumable form through these outlets. Last year they did a business which would not be considered much in big business circles but which was very satisfactory to them, a business of around $11,500,000; but they are unable to get some supplies, one of the most important of which is nails.
The subject matter of the correspondence I have here is a request to the Minister of Trade and Commerce (a) to make it possible for this organization to buy its portion of the available supply of nails from the present distributors, or (b) to make available 300 tons of steel wire to a firm in Galt which is willing to make these nails for them, provided that it can get the steel wire with which to do so. These are their two requests. The replies are, of course, the same kind the minister has given the hon. member for Peterborough West (Mr. Fraser) when he has asked about nails. The minister has given a short, rather abrupt answer, which in most instances could be described as a brush-off. That is about the tone he takes in his replies to the president of this co-operative institution.
Then the Canadian director of the united steelworkers of America, Mr. C. H. Millard, took up the matter on behalf of the cooperative, with which he had some correspondence. Mr. Millard got in touch with the steel controller in an endeavour to have these necessary supplies made available to the firm which is willing to manufacture the nails, but Mr. Ashbaugh has been no more considerate than the Minister of Trade and Commerce, for the obvious reason that he is under the direction of the minister and therefore, I suppose, can do nothing the minister will not permit him to do. Mr. Millard pointed out that a great deal of our iron ore goes to the United States, and for that reason we should be able to get larger supplies of the finished steel. The minister and the controller replied that the shortage of steel would make it impossible

Saskatchewan Federated Co-operatives
to provide the 300 tons required for the manufacture of these nails.
Just on that point, I remember that back in 1942 a request was made by some people in British Columbia who believed there were deposits of iron ore and coal sufficiently close together to make it possible to put up smelters and manufacture steel products there. At that time they were told that there has always been a surplus of steel in Canada, and as a result they were not given permission to do as they wished. If that permission had been given at that time, perhaps the condition of which I speak today would not have arisen. That permission not having been given, however, we now face this shortage; and I claim it is the responsibility of the government either to make this quantity of raw material available for the manufacture of the nails required by this co-operative institution, or to see that the distributors make available to the cooperative enough nails out of the total going into the retail trade to supply their members.
Of course the minister and others will take the position that this would be interfering with private business; but I claim that when seventy-five thousand people have clearly stated by their membership in this organization that they want to do their retail trading in their own stores, they should not be compelled by some business circumstance to go to another person, who certainly would be a competitor of the co-operative institution, in order to buy their nails. If we believe in free enterprise in this country we should certainly make an effort to see that those who engage in it are able to practise that principle through whatever channels they consider are proper and lawful.
I had hoped that the Minister of Agriculture would give some attention to this matter. As everyone knows, he has risen in this chamber on more than one occasion and said that he and his Liberal party in Saskatchewan and here fathered the co-operatives. As a matter of fact, on one occasion he made the statement, "We built the co-operatives". I take issue with that statement, because it is not correct; but if he believes it to be correct-and he would not have said so if he did not believe it-certainly he should do his utmost to let his brainchild grow. Those of us who come from Saskatchewan find it difficult to realize that the government can be so inconsiderate as to permit a lusty baby in the co-operative family to be denied the food necessary to continue its growth in this country of free enterprise. Someone says the child is now bigger than its father. That is so in Saskatchewan;
whether it is true here remains to be seen. I do not want to make an unpleasant political issue of this, but the government say they believe in free enterprise, that they believe in people helping themselves.


James Garfield Gardiner: We believe in cooperatives.


Thomas John Bentley: The minister repeats that he believes in co-operatives. That is splendid. If the government believe in these three things; if they believe in free enterprise, if they believe people should help themselves by their own free enterprise, and if they believe in co-operatives-which I think the minister will agree are a democratic and sound type of free enterprise-then I say this government should not permit either their own policies or the policies of private business to prevent this enterprise of which I speak from obtaining its share of the available supplies of the goods it requires to satisfy the needs of its membership. The minister could, I think, do a lot to convince the government that that situation could and should be taken care of by his administration.
I do not know that I can give any more convincing arguments than I have given. I have just one further quotation which I think might be brought to the attention of the house. This is from a letter addressed to Mr. Charles Millard from Mr. F. K. Ashbaugh, the steel controller, wherein he says:
In view of the fact that we are not giving assistance in procurement to more than an infinitely small percentage of Canadian industry.. .
This indicates that they are giving some assistance in the matter of procurement. And the very fact that they are doing that indicates to me that it is their duty to make supplies available to this organization about which 1 have spoken today. They have not asked much. They need a great deal more in the hardware line, such things as wire and other metal retail objects. However, they have stated clearly that rather than press the point, to the embarrassment of the country, they will be happy for this year at least to have these 300 tons of steel wire made available to this firm in Galt so that they can manufacture nails. I say the government should proceed immediately to see that this firm gets what it asks, or to see that private industry makes available to the Saskatchewan Federated Co-operatives Limited its share of nails, which will come through the retail trade and which the farmers will buy anyway, because they must have nails to carry out their operations.
3374	COMMONS
Saskatchewan Federated Co-operatives


Mr. R. R. KNIGHT (Saskatoon City):: Mr. Speaker, the hon. member for Swift Current (Mr. Bentley) has put the case so well that I wish only to add my voice to what he has said. It is true that the Saskatchewan Federated Co-operatives Limited has its headquarters in my city and that I have been interested in its growth over a number of years.
This is not the first time that this firm, if I may so describe it, has had its troubles in matters of supply. In 1946 I tried to obtain from the wartime prices and trade board a proper quota on canned milk for this co-operative. I have here a letter which advanced the argument against the distribution of canned milk to this organization. This letter, signed by the hon. member for Victoria, B.C. (Mr. Mayhew), parliamentary assistant to the Minister of Finance, states:
I have taken the matter up with the wartime prices and trade board, and am advised that under their policy of equitable distribution, evaporated milk is one of the items which continues to be classified as in such serious short supply that it may only be distributed to basic period customers in quantities related to their basic period purchases.
The situation in regard to nails is much the same today, and it is with that argument of the ' government, as set forth in the letter I have just read, and which refers to basic period customers, that I find fault.
Let me put to the house a ridiculous case. We will consider two rival business institutions on two corners of a street. One of these loses all its customers to the other, but the government persists in supplying with the goods the one losing its customers, while the other firm which now has the customers can obtain no goods with which to supply them. Perhaps that is going far afield, and may be considered a ridiculous case. But it will at least point up the fact I wish to make clear. Here is an institution which has been growing in membership but which cannot get supplies. The hon. member for Swift Current put the number of shareholders in the organization at 75,000. I have a statement here from the Cooperative Union of Saskatchewan which states:
Allowing for duplication of membership, it is safe to say that some 300,000 Saskatchewan people are members of one or more co-operatives.
This may be considered a startling statement, particularly to some of my hon. friends to my right. However, that is the way in which we are now doing business in Saskatchewan, on a co-operative basis. There are, of course, reasons why we are operating in that way.

But to get back to my argument, I think the basis of distribution should be one of population or customers who buy goods from a firm. If this particular firm can show a membership of 75,000, and potential purchasers numbering 300,000, I say that firm should receive a great deal of consideration when it comes to a matter of supply.
As my hon. friend pointed out, people started these institutions to help themselves. Here is an organization which says, "We have no nails; nails cannot be obtained." The hon. member for Peterborough West (Mr. Fraser) would support me in this. They say, "All right; we have no nails; we will make them." Then they proceed to negotiate to buy unused machinery which will be shipped out to them so that they can make their own nails, if the government will only guarantee a supply of steel from which the nails can be made.
Then the government comes along and says, "No; already all the nails which can be made are being produced. Why should you make nails out there?" I have tried to explode that argument, and I believe I have done so successfully. If the customers are there, then those customers are entitled to their proportion of nails, on any basis of need or equitable distribution.
In connection with canned milk, about which there was discussion a couple of years ago, I have reason to believe that the distribution was not equitable. Is it not ridiculous that a man who buys his groceries at a co-operative store should be permitted to fill his basket or the back of his car-we used to do that, but now a brown parcel will hold the lot of it-and then if he wishes to buy canned milk find that he has to go to some other store to make the purchase? Is that not ridiculous? I believe I have said sufficient, and practically all I had intended to say. I would ask that it be called six o'clock.


Some hon. MEMBERS:: Carried.
Motion (Mr. Abbott) agreed to, and the house went into committee of supply, Mr. Golding in the chair.


DEPARTMENT OF EXTERNAL AFFAIRS
[Stage Direction]
52. Departmental administration, $1,915,866.
Gordon Graydon: When does the minister expect to go on with the debate on external affairs?
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs):	On
Thursday, and Friday, if need be, providing a sufficient opportunity for members who wish to speak on external affairs to be heard.

Supreme Court Act Amendment


Gordon Graydon: I take it that the debate will open at the beginning of the sitting on Thursday.
Mr. ST. LAURENT: At the beginning of the sitting on Thursday, and it will continue on Friday, if need be, to give members who wish to be heard an opportunity to speak.


Stanley Howard Knowles: Tonight it will be agriculture from nine o'clock on, will it?
Mr. ST. LAURENT: We propose to introduce the other departments mentioned, and have them stand. Then we shall call agriculture, to proceed at nine o'clock.
Item stands.
DEPARTMENT OF TRADE AND COMMERCE Departmental administration, $272,600.
Item stands.


[Stage Direction]
J/63. Departmental administration, $690,670.
Item stands.
[Stage Direction]
1. Departmental administration, $234,297.
Mr. ST. LAURENT: Stands, until later this day.
Item stands.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.


James Horace King: I have the honour to inform the house that I have received the following cable from His Majesty the King: London,
The 27th of April, 1948. The Speaker of the House of Commons of Canada,
Ottawa.
The Queen and I thank you and the members of the House of Commons of Canada most sincerely for your congratulations on this twenty-fifth anniversary of our wedding.
On this happy occasion it is particularly pleasing to receive this further expression of the affection and loyalty which you have constantly shown toward us, and we both appreciate greatly the warmth of your address.
George R.



PRIVILEGE


Wilfrid Garfield Case: I rise to a question of privilege, Mr. Speaker, to ask if you could arrange to have a bell installed that will have a little more tone and music in it. The bell which rings on division and calls the member to labour has a very harsh tone. There are so many harsh things sometimes in this chamber that I wish you could secure a bell with music and sweetness of tone.



SUPREME COURT ACT AMENDMENT


[Stage Direction]
Mr. F. E. JAENICKE (Kindersley) moved the second reading of Bill No. 5, to amend the Supreme Court Act.
He said: Mr. Speaker, the bill before the house is exactly the same as Bill No. 154 of the last session of parliament. I moved the second reading of that bill on May 9, 1947, but unfortunately it never came up for disoussion again. In support of last year's bill I asked the house to give it favourable consideration as I believed that the vast majority of the Canadian people are in favour of abolishing appeals to the privy council and setting up our own final and ultimate court of appeal for Canada, because it is the next important and logical step toward Canadian sovereignty. I still believe this to be the case, and I am convinced that the vast majority of the Canadian people are today of the same frame of mind.
I have had an opportunity during the recess, since last July, of discussing this question with many people in all walks of life and of different shades of political affiliation, not only in wrestern Canada but in other parts of Canada, and I feel safe in saying that in presenting the bill for the second time to this house for its favourable consideration and support I have most Canadians with me.
Even among the members of my own profession, particularly in the west, I find a preponderance of opinion that we ought to be sufficiently grown up and emancipated to administer and interpret our own laws, and that our supreme court should be the final court of appeal in our own country.
At the last session I based my argument for support almost entirely on the fact that Canada is now a sovereign nation, and this alone should be sufficient for this house to pass this bill. I again make this plea with all sincerity.
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[Stage Direction]
and at this time I shall go farther and argue that our present position in this matter is incompatible with our status as a member of the British commonwealth of nations and as a member of that larger body, the united nations.
Someone said, improperly I believe, that the privy council, in deciding that Canada possessed the power to abolish appeals to that body, signed its own death warrant as a Canadian court. I cannot look at the matter in that way. The spirit in which this famous judgment was rendered is something entirely different from the spirit of a death warrant. It was rather the spirit of a new life; it was an enthusiastic invitation to Canada to assert its sovereignty and to pass this very bill which is now before us. It was an invitation to enjoy that new sovereign life, which in reality we were capable of possessing since the Statute of Westminster was passed in 1931.
To make my point clear, namely that I can read an invitation into the language of the judgment, listen to some of the passages of the judgment as delivered by Lord Jowitt, the Lord Chancellor:
No other solution is consonant with the status of a self-governing dominion . . .
Later on:
It is not consistent with the political conception -which is embodied in the British commonwealth of nations that one member of that commonwealth should be precluded from setting up, if it so desires, a supreme court of appeal having jurisdiction both ultimate and exclusive of any other member.
Later again:
That natural attribute of a sovereign power (namely the establishment of a general court of appeal) stands unqualified and absolute.
While it would have been improper for that body to suggest action, it seemed to me that the general tenor of the language used implies an invitation to apply immediately the law upon which they had adjudicated, because our present position in still maintaining the right of appeal to the privy council is, in the language of Lord Jowitt, "inconsistent with the political conception which is embodied in the British commonwealth of nations".
Surely I need no better authority than the privy council itself for the argument that our present status as a sovereign member of the British commonwealth demands the action which is proposed in this bill.
Before turning to the other point which concerns our relationship in the united nations, let me deal for a moment with the arguments which might be, and undoubtedly will be, advanced against this measure. There is the contention that it would destroy the preroga-

tive of His Majesty. I think we can dismiss this argument as invalid in view of the long standing and adopted British constitutional conception. It is unthinkable that His Majesty could act without the advice of the privy council, and it has been held on numerous occasions that the privy council is, in fact, an appellate court of law.
In the case of the British Coal Corporation versus The King, 1935, 3 D.L.R., 401, the privy council itself says this:
It is clear that the committee is regarded in the act as a judicial body or court, though all it e.an do is to report or recommend to His Majesty in Council by whom alone the order in council which is made to give effect to the report of the committee is made. But according to constitutional convention it is unknown and unthinkable that His Majesty in Council should not give effect to the report of the judicial committee who are thus in truth an appellate court of law, to which, by the statute of 1833 all appeals within their purview are referred.
It is clear, therefore, that in passing this bill we are not in the slightest degree interfering with any supposedly existing prerogative of His Majesty. We are simply substituting one final ultimate appeal court of our own for another which is not our own, and about the composition, jurisdiction and powers of which we have no voice whatsoever.
In anticipating arguments in opposition to the bill of last session I mentioned, and I disagreed then with the position taken by some people, that the privy council should be retained as the final court of appeal because it would be a neutral or more impartial tribunal to adjudicate upon controversies involving the interpretation of our constitution, the British North America Act. I find that this sort of argument still forms the main source of opposition to a measure such as the one before the house at the moment.
I also find the argument advanced that we might abolish all appeals to the privy council except cases which involve a constitutional question. With that I disagree entirely. In the first place, I would say that such arguments are not very complimentary to Canadian judges who are as good judges as any in the British empire. In the second place, I shall contend that Canadian judges who have lived here all their lives, who are conversant with Canadian life, Canadian habits, and who know Canadian social, economic and industrial conditions are in a much better position to interpret our constitution in the light of ever-changing circumstances in this country of ours. You see, I do not regard our constitution as a dry, inflexible law or statute, and although I will admit that it needs to be changed in some places, I think the framers of this law

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and its sponsors, the fathers of confederation, did very well, and when they built this constitution I think they had the future in mind.
I said once before in this parliament, and I should like to emphasize again, that the fathers of confederation were out to create a unified nation. Canadian unity is, in my opinion, the cornerstone of the British North America Act, and it is in that light that its various provisions should be interpreted. I think we can safely leave that interpretation to Canadian judges. There is no question that, as time passes, conditions will arise through the natural progress which we are bound to make, which will require the interpretation of the British North America Act in the light of the emergence of such new conditions, which conditions will be bound to be subject to dispute as to where the jurisdiction rests to legislate with respect to such new circumstances. I believe that such disputes will in future be decided more or less upon the basis of the recent privy council decision in respect of the Canada Temperance Act case, which says that parliament has jurisdiction, under the peace, order and good government clause, on any subject that, by its inherent nature, is of national importance. I have an idea that future constitutional disputes will revolve about that question, and I believe that Canadian judges will be in a better position to adjudicate upon such a point, namely, as to what is a subject which, by its inherent nature, is of national importance, and what, on the other hand, is a matter of merely provincial or local concern.
These judges, as Canadians, will have been part and parcel of this national progress. They will understand better the causes of changing conditions, and for these reasons I maintain that Canadian judges are in a better position than the learned law lords of the privy council in interpreting the Canadian constitution as a flexible, progressive statute, which, as Lord Sanke.v once said, "was a live tree capable of growth and expansion within its natural limits."
The only hon. member who was able to take part in the debate last year was the hon. member for Broadview (Mr. Church), who opposed the passing of the measure in no uncertain terms, basing his argument mainly, as I understood him, upon the supposition that the privy council has been the great defender of the rights of minorities of this country, and likewise that the provinces were not favourable to this bill because the privy council was the guardian of provincial rights. I think it is, to say the least, incongruous to argue in this manner, because the judges of
our supreme court come from different provinces and they understand, better than anyone, provincial rights or the rights of minorities.
I have not taken any census of the numerous decisions rendered by the privy council upon constitutional questions since confederation. but I venture to say that the decisions rendered against the provinces and favourable to the dominion are more numerous than decisions rendered the other way. In any event, however, the argument is invalid. If you say that the privy council has been the guardian of provincial rights you suggest that that body has favoured the provinces as against the dominion, and that sounds to me rather like a reflection on them, which is certainly unjustified. Our courts of law bestow no favours.
As to the privy council being a great defender of the rights of minorities, I may say that the records of the decisions of the privy council with regard to minority rights would certainly not bear out that this is a fact. If you refer to that most excellent book of Doctor Maurice Olliver on "Problems of Canadian Sovereignty", you will see the leading cases on minority rights cited, which appear to be proof of the fact that most cases show that the people who claimed certain rights as minorities were told by the privy council that they did not have any such rights.
I have also heard it argued of late that we should retain the appeals to the privy council because the decisions may form a. valuable part of our jurisprudence based upon English common law. That, of course, would not be true if applied to the civil law of the province of Quebec. But even if we did abolish appeals to the privy council, any judgments which they might render in the future would still be valuable, as in our courts we look with great respect upon the judgments of British courts, although these judgments may not be binding in our courts. Therefore I maintain that there is no argument on that score either.
I mentioned in my opening remarks a few moments ago that I maintained as a second point that the retention of the privy council as a Canadian court of appeal was inconsistent with our status as a member of the united nations. The charter of the united nations on membership qualifications states that we must be able and willing under our own laws to enforce and carry out the obligations which we undertake when we become a member of that great organization. I maintain that, by retaining the privy council as the final court of appeal, we offend against that qualification, because it would not be a court of our own
[Stage Direction]
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making which might have the final word with respect to our obligations as a member of the united nations.
For instance, there is the act which we passed last year, being chapter 69, to provide for privileges and immunities in respect of the united nations and related international organizations. That ant contains as a schedule the convention on the privileges and immunities of the united nations. It is quite possible that there might be some legal controversy as to the interpretation of the act or of the convention which forms part of it. As a matter of fact, article 1 states:
The united nations shall possess juridical personality. It shall have the capacity:
(a)	to contract;
(b)	to acquire and dispose of immovable and movable property;
(c)	to institute legal proceedings.
It has that authority to institute legal proceedings within our jurisdiction; that is, within Canada. Section 34 of the convention which is ratified and adopted by chapter 69 of the 1947 statutes reads as follows:
It is understood that, when an instrument of accession is deposited on behalf of any member, the member will be in a position under its own law to give effect to the terms of this convention.
I emphasize the language used in that article, namely, "under its own laws." Our judicial system is established by law, but that system includes the highest court of appeal, which is not constituted under our own laws. Therefore I would argue that we offend against the convention adopted by this statute because we are not in a position under our own laws to give effect to the terms of the convention.
The sections of the statute just quoted and the articles of the convention itself suggest that there may be legal proceedings for their enforcement, instituted even by the united nations itself. All of this might be subject to appeal to the privy council, and we might find ourselves in what I believe would be an embarrassing position if the privy council, a court which is not our own, should tell us what our duties and obligations were in connection with a relationship into which we had entered as a sovereign state.
Then there is chapter 46 of the statutes of 1947, the United Nations Act. This act provides that if the security council decides upon a measure, including the interruption of economic relations, the governor in council may make orders and regulations enabling such measures to be effectively applied. The act means that if the security council requires us

to do so we have to apply economic sanctions or any other sanction short of war against an offending member of the united nations. If we pass regulations in respect thereof I can imagine litigation arising from such regulations, such as the numerous prosecutions which occurred under the War Measures Act. I can imagine a possible appeal to the privy council and that body telling Canada, a sovereign nation of the united nations, what our duties are with respect to the obligations we have entered into.
Apart from' our status as a member of the united nations, there is our general relationship as a sovereign state to the other nations of the world. For instance, take the case of the Polish art treasures about which there might be a lawsuit which would command headlines on the front pages of the daily press. However innocent and well meant were the actions of the dominion and Quebec governments in this mix-up, they might very easily become an important feature in such a lawsuit. Imagine the possibility of the privy council having to adjudicate upon that matter in the light of the acts of the dominion or the province concerned!
I think it is intolerable to contemplate that Canada as a sovereign state, wThich it is in fact whether we like it or not, should submit in a case such as this to the judgment of a court which is not our own. To me the retention of the privy council as the final court of appeal is incompatible with our membership as a sovereign state in the united nations. I commend this bill to the favourable consideration of the house.
(Translation):
Mr. MAXIME RAYMOND (Beauharnois-Laprairie):: Mr. Speaker, since the time
reserved for public bills is very limited, my remarks will be rather brief.
The bill proposes to abolish appeals to the judicial committee of the privy council.
Since the enactment of the Statute of Westminster by the imperial parliament, on December 11, 1931, which recognized Canada's sovereignty this matter has been discussed at the sessions of 1937, 1938 and particularly that of 1939, when the then Minister of Justice. Mr. Ernest Lapointe, unreservedly approved a similar bill introduced by the hon. member for St. Lawrence-St. James, Mr. Cahan.
However, passage of the bill was delayed until such time as the government could obtain the opinion of the Supreme Court of Canada and of the privy council regarding the power of parliament to legislate in that matter.
Since it was decided by the supreme court, in 1940, and by the privy council, in January 1947, that the dominion parliament had the

Supreme Court Act Amendment
power to abolish appeals to the judicial committee of the privy council, we have reason to wonder why the government did not introduce, in 1947, a bill implementing those decisions. I hope that the Secretary of State for External Affairs, who asserted that he favoured the abolition of those appeals, when he was chairman of the Canadian Bar Association, will facilitate the passage of this bill which may otherwise meet with the same fate as the one introduced last year by the hon. member for Kindersley (Mr. Jaenicke).
We have every reason for acting without delay. First, our present position is incompatible with our status of sovereign nation. Canada is a free and sovereign country and is recognized as such by other nations. Canada is a member of the United Nations Organization, based on the principle of the equal sovereignty of all its members, and even holds a seat in the security council. Yet, for the administration of justice, one of the most important functions in a really free and autonomous country, Canada depends on a foreign court which operates outside our borders.
Under such circumstances, what is meant by equal status and full autonomy? What is understood by the Statute of Westminster? Our prestige among nations is at stake unless we eliminate as soon as possible this ancient vestige of our colonial status which hinders our judicial autonomy and fosters among us an inferiority complex.
In so far as Canadian courts feel bound by decisions of the privy council which, in effect, are akin to enactments, this state of ihings interferes with our legislative autonomy.
In his book on Responsible Government in the Colonies, Keith says at page 1102:
It is idle to deny that the taking of appeals to the privy council is a mark of inferior status and partial servility . . . The maintenance of the present position is just and proper so long as the dominions desire to remain dependencies.
Moreover, it is insulting to our judicial body and humiliating to the entire Canadian population to maintain this right of appeal. It implies that we have not among us people sufficiently enlightened, sufficiently intelligent, to interpret our laws and statutes and that we must ask a foreign court for an ultimate decision in matters at issue. We are able to enact our laws but unable to interpret them.
Would anyone claim, for instance, that in a matter of civil law, a foreign judge with little or no knowledge of our Quebec civil code would be more likely to safeguard the interests of the
citizen than our own judges with their lifelong experience? Here also one may not forget that their lord justices seeing no difference between the Quebec civil code and the common law, as they have often stated, have been too prone to abide by the precedents of the English courts.
Some claim that the privy council is the guardian of minority rights. In the light of experience, far from being so, this claim is but a myth as was stated by the Right Hon. Mr. Lapointe. Were this not sufficient, I could remind hon. members of the judgments rendered in the cases of the school laws of New Brunswick, in 1871, of Manitoba (Barrett v. Winnipeg) in 1892, of the Ontario Regulation No. XVII, and in the case Despatie-Tremblay. Without any exception, the judgments of their lordships were against the claims of the minority. Moreover, the privy council is more a political than a judicial body. As was stated in this house by Mr. Cahan, in 1937:
Many of its active members are at the same time members of a legislative division of the British parliament. The Lord Chief Justice is a member of the government of the United Kingdom and no report of the judicial committee can be binding unless approved by an order of the British privy council.
This accounts for certain decisions such as that which, in 1927, granted Newfoundland a portion of Labrador peninsula which until then had been part of the province of Quebec.
Moreover, such appeals to the privy council wreak an injustice upon people of slender means, because they are too costly. After all, it is within the reach only of great corporations and wealthy people. Let the hon. members imagine the costs of taking a case to London, and the predicament of the Canadian citizen of limited means who faces the threat of an appeal to the privy council, after winning his case in a Canadian court. Unable to meet the costs of such an appeal, he agrees to some more or less advantageous settlement, which means that powerful companies have used the outside tribunal as an instrument of intimidation.
What of the multiplicity of appeal jurisdictions whose very numbers increase judicial costs and hamper the administration of justice? In our judicial system, there are three appeal courts, including the privy council, whereas two appeal jurisdictions within Canada, namely the Court of King's Bench and the Supreme Court of Canada, are amply sufficient. As far as I know, that number is not exceeded in other countries.

Supreme Court Act Amendment
As an example of the delay caused by this third appeal to the privy council, there is the Despatie-Tremblay case, first heard in the province of Quebec Superior Court on June 26, 1911, then carried to the privy council where it was first heard in 1914 and finally settled on February 11, 1921, after a second hearing, that is ten years after the decision in the first instance.
I remember a saying of a former justice of the Court- of King's Bench, Sir Horace Archambault:
Justice which is not expeditious is not justice.
Let us therefore put an end to these injustices and rid ourselves of this last vestige of colonialism.
We are concerned today with abolishing appeals to the privy council, but I believe it would be proper to complete this legislation by regulating the working of the Supreme Court.
In any case involving civil law or civil procedure, the decision of the provincial court of appeals should be final, and the right of appeal to the Supreme Court abolished. Alternatively, it should be decided that the cases from Quebec should be heard by five judges, including three from Quebec, and the cases from the other provinces by at least three judges from such other provinces.
In constitutional cases a special court could be set up. including the judges from the Supreme Court and the chief justice from every province.
But let us begin by abolishing appeals to the privy council.
(Text):


Mr. JEAN LESAGE (Montmagny-L'Islet):: I wish to congratulate the hon. member for Kindersley (Mr. Jaenicke), Mr. Speaker, on having introduced again this year a bill to abolish appeals to the privy council. He said tonight that this was the next logical step in the establishment of Canada's sovereignty.
I am in perfect agreement not only with what he said on that point but generally with all the reasons he gave, both tonight and last year, in favour of the abolition of the right of appeal to the privy council.
( Translation):
May I also congratulate the hon. member for Beauharnois-Laprairie (Mr. Raymond) for his truly Canadian stand on this subject? After his speech, there can be no doubt in our minds about his genuine Canadian spirit. Once more I commend him for it.

Several reasons have been brought forward in the two speeches which I have just mentioned, as well as in others made on previous occasions, for tne elimination of appeals to the privy council. Outstanding remarks have been made especially by the Right Hon. Mr. Lapointe and by the hon. Mr. Cahan. The argument presented by Mr. Maurice Ollivier, in his book, is consistent, perfectly established and most convincing. While thus reminding the hon. members of outstanding contributions on the subject, I do not intend' to repeat tonight in my own words all arguments previously adduced.
As was stated last year by the hon. member for Kindersley (Mr. Jaenicke), the right of our Canadian parliament to do away with appeals to the privy council has been definitely established by the privy council itself. All we have now to discuss is the advisability' of a bill such as this.
Before dealing with this matter, I should like as briefly as possible to call the attention of the house to the following point. Bill No. 5 would do away with all appeals to the privy council and even with the appeals to the royal prerogative, commonly known as appeals to the throne. Therefore, no Canadian citizen would have the right to appeal to the King in the case of certain grievances for which no remedy may be sought from other jurisdictions.
Though I would not wish to give a final opinion on this matter, I am inclined to believe that on this score serious objection could be had to the bill as now drafted It is not inconceivable that serious trouble might arise from the final decision of a court due to gross injustices which would be without remedy after the elimination of these appeals to the throne. Of course, this objectionable feature does not challenge the principle of the bill but it might properly be the subject matter of an amendment in committee. I wonder if it would not be better to amend the bill so as to allow appeals to the Governor General who would act on the advice given to him by the Supreme Court after having heard all parties concerned, except of course in cases already dealt with by that court. I am not in a position to express a definite opinion on the matter, but no doubt that many hon. members have had enough experience in legal matters and are conversant enough with those questions to put forth useful and interesting opinions.

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I repeat, however, that there is not the slightest doubt in my mind about the principle of the bill, which I entirely approve.
The judicial committee of the privy council was empowered by chapters 3 and 4, William IV, to hear any appeal from His Majesty's colonies. Previously, the appeals from the colonies were heard by His Majesty in council. The said committee was established to hear appeals from the colonies, but not appeals from judgments brought down in England and Scotland.
After the hearing, the judicial committee of the privy council submits a report to the King, stating the 'easons which have motivated the lords' decision, advising His Majesty to give effect to their recommendation. The report is then referred to the King in council for the United Kingdom, and not for Canada, and is approved. An order in council is then passed, quoting the report verbatim. The decision then becomes the King's judgment.
From the above, it should be remembered that the judgments of the privy council are, in fact, only judgments of the King and his council for the United Kingdom-that is of the British government-judgments which are rendered upon the recommendation of the lords, who are members of the judicial committee of the privy council. In its very essence, this court is of a colonial order. That, to my mind, is the main reason why Canada can no longer allow decisions of our courts to be appealed to the privy council.


Mr. DECHENE:: Hear, hear!


Jean Lesage: Canada being a sovereign nation, it is inconceivable that within our borders, no court should be able to settle our lawsuits conclusively. Since we are free to sign any treaty we choose, since we rank third in the world among trading powers, take part in all international assemblies, decide between war and peace, Canada can surely no longer tolerate seeing another country settle our lawsuits.


Some hon. MEMBERS:: Hear, hear!


Jean Lesage: Personally, I admit quite frankly that I will not believe there are still people in Canada whose colonial-mindedness comes before patriotism and national pride.


Mr. LAPOINTE:: Hear, hear!


Jean Lesage: If we are proud of our Canadian status, if we are proud of our nationhood. if we are proud of our country, the least we can do, the first step we can take is to have our own courts render conclusive decisions.
I said, Mr. Speaker, that the privy council was a political court. In fact, it is political not only in its composition, but in the judgments it has brought down. Members of the judicial committee are active politicians, which is contrary to our conception of the judicial body in Canada. In our country, we never see a judge on a political platform; he never takes part in political debates, and is not allowed to. Here, a judge is not only deprived of membership in the House of Commons or the Senate, but also of the right to vote. We have adopted as a principle that Canadian judges should be entirely free from politics and from political influence.


Jean-François Pouliot: Hear, hear!


Jean Lesage: In Canada, writes Mr. Maurice Ollivier in his work "Problems of Canadian Sovereignty", page 255, "the separation of judicial and legislative powers advocated by de Montesquieu is complete". We take all necessary precautionary measures to safeguard the independence of our judges.
Some members of the judicial committee of the privy council are also members of the House of Lords.


Jean-François Pouliot: Shame! Shame!


Jean Lesage: They take part in political
campaigns, supporting their party's candidate in the election. Being human, even though they are British lords, they are subject to political influence and considerations.
Although in Canada, and again I point this out, we do everything to ensure the complete division of powers and the absolute independence of our judges, we still submit our disputes, in a last appeal, to those same persons whom we would never ask to preside over our courts in Canada. The record of the judgments brought down by that court proves that in several cases, and the most important at that, the decisions were only in the nature of political expediencies. May I be permitted to quote the words spoken in this house by Mr. Thorson, during the debate on the Hon. Mr. Cahan's bill (Ollivier, page 246): "The Privy-Council has proved itself to be a court not of law but of political expediency".
Those who contend that the judges of our supreme court are not sufficiently independent and do not have the required legal experience to render final decisions which are fair, are

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insulting our judicial body, as was pointed out a moment ago by the hon. members for Kindersley and for Beauharnois-Laprairie (Mr. Raymond). Those who venture to hold this view should not forget that in so doing they are undermining the very foundation of our democratic way of life. Indeed, in these troubled times, one of the cornerstones of our nation's faith in democracy is its confidence in our courts and judges. Yet, I go so far as to say that those who object to the elimination of appeals to the privy council are undermining democracy in the country. Its opponents are divided into two classes. I need not insist on the opinions of the imperialist die-hards since this group is fast disappearing in Canada and amounts to so little that it is not worth mentioning.


Bona Arsenault: Hear, hear!


Jean Lesage: 
Some hon. MEMBERS:: Hear, hear!


Jean Lesage: Therefore we are bound to infer that the argument submitted by the provincialists to the eSect that the upholding of appeals to the privy council guarantees the respect of provincial and minority rights is not based on historical facts.


Some hon. MEMBERS:: Hear, hear!


Jean Lesage: Some very well-meaning people may, I imagine, have certain apprehensions with regard to constitutional difficulties between the central government and the provinces being finally decided by the Supreme Court of Canada, whose judges, sitting at Ottawa, are appointed and paid by the federal government.
It has been suggested, especially by the hon. member for Beauharnois-Laprairie, that constitutional cases between the federal government and the provinces be heard both by the justices of the supreme court and by the chief justices of the various provinces, in the capacity of ad hoc supreme court justices. That can surely be considered as a means, not of ensuring justice because I believe it is ensured by the integrity of our supreme court judges, but perhaps of reaching a compromise likely to dissipate the apprehensions entertained in that respect. On the other hand, before we endorse the bill introduced by the hon. member for Kindersley, I think we should not wait until the suggestion I have just mentioned or some other proposal along the same lines, is carried out. To my mind it is so urgent for a sovereign nation like Canada to remove the colonial humiliation implied by the existence of the right of appeal to the privy council that the passing of this bill should not be further delayed.
Besides, that fear which I consider unjustified arises from anomalous situations connected with the fact that our constitution is a statute of another parliament, which was passed when Canada was a colony. In some respects, the British North America Act is certainly inconsistent with the present sovereign status of this country.
As the hon. member for Bellechasse (Mr. Picard) stated in this house, in 1946, we shall face endless constitutional problems as long as we are devoid of a Canadian constitution enacted by the Canadian people as Canadian statutes.


Some hon. MEMBERS:: Hear, hear!


Jean Lesage: In conclusion, Mr. Speaker, it would obviously not be expedient at this time to discuss the means whereby agreement could be reached between the central government and all the provinces, and between the whole population and its various sections, on the provisions of a Canadian constitution. I believe, however, that the problems relating to appeals to the privy council and those encountered in the matter of redistribution, unquestionably show that, if we are to maintain our sovereignty, we must find a definite solution. I realize that it involves no small task since a constitution could be drafted only through an assembly or a national constituent convention. Although the task is long, arduous, and difficult, I am confident that Canadian patriotism is now sufficiently developed. I am convinced that Canadians everywhere have enough love of country and pride in their country to seek all the prerogatives of full sovereignty.


Some hon. MEMBERS:: Hear, hear!
(Text):
On motion of Mr. Church the debate was adjourned.


Louis-René Beaudoin: The hour for public bills having expired, the house will revert to the business which was interrupted at six o'clock.

The house in committee of supply, Mr Golding in the chair.



DEPARTMENT OF AGRICULTURE

[Stage Direction]
1. Departmental administration, $234,297.
James Arthur Ross: Mr. Chairman, may I first of all make some references to these estimates for the Department of Agriculture. We have read and heard about many reports in which the Department of Finance has boasted of a surplus of well over $750 million in the past fiscal year. Bearing that fact in mind, I note that, while the estimates for the fiscal year 1947-48 amounted to $63,185,158.37, the amount for the fiscal year 1948-49 is only $41,822,602, showing a decrease, in the present year, of $21,362,556.37. That is an enlightening comparison in view of the greatest surplus in history about which the government as a whole
Supply-Agriculture

are boasting. I think there is too heavy a decrease in the estimated expenditures for the Department of Agriculture for the coming year. I know that many of us are asking for decreases in governmental expenditure, but I do not think that under present conditions there should be a decrease in this department. Our present per capita expenditure on Canadian agriculture is very much less than that of the United States. In the United States last year their expenditure on agriculture was, I understand, $1,247 million. Our population is approximately one-twelfth of theirs, and to be on the same footing we should be spending well over $100 million on agriculture this year.
As has often been pointed out, our own Canadian government has placed an embargo against beef cattle going to the United States. That was imposed in 1942 and still exists, and the beef producers of the west and their association are very much concerned lest they lose that natural market of theirs in the future. They have recently briefed the Prime Minister about it, also the Minister of Agriculture, the Minister of Trade and Commerce and the Minister of Finance.
This government has also placed embargoes against other agricultural products entering the United States. When you think of those embargoes and then consider that, according to the press, a statement was issued by the Minister of Agriculture the other day that we now have 48 per cent more meat in storage in this country today than we had a year ago-


James Garfield Gardiner: I know the hon. member would not want to leave on the record a statement which is not correct. I am not criticizing him for putting it on, because the statement did come over the radio on Sunday morning that we had 48 per cent more meat in storage than we had a year ago. I immediately got in touch with those who put the statement on and it did not go out over the radio again or appear in the press. The report was inaccurate.


James Arthur Ross: I am glad to hear that. Can the minister tell us what the correct figure is?


James Garfield Gardiner: I can get the exact figures but it was not anything like that. The 48 per cent increase was the amount of bacon hogs which were delivered in January of this year as compared with January of a year ago.


James Arthur Ross: Can the minister say Where the radio and the press got their information?


James Garfield Gardiner: No. It was just a wrong
impression that a reporter got from a statement which was made.


James Arthur Ross: I am glad to have the minister's correction, because the statement received publicity all across Canada. On the other hand I believe there is a lot of meat in storage and we should be glad to have the exact figures on that.
With respect to feed grain, I understand that there is a much greater quantity on hand today than there has been for many years. I understand from a report that there is a surplus of 10,000,000 bushels of barley. The minister will correct me if the report was inaccurate.


James Garfield Gardiner: I think the statement was made on the radio that there was a surplus of 10.000,000 bushels of barley that was to be sold outside Canada, but the actual statement which the reporter said he made was that there were 5,000,000 bushels of barley and 5,000,000 bushels of oats, the two making 10,000,000 bushels, which was likely to be exported.


James Arthur Ross: I am glad to have that correction. We should like to have the exact figures, because I understand that there is a surplus of feed in Canada at this time as well as of meat. There is consternation among the coarse grain producers in western Canada, especially those who marketed their grain between August 1 last fall and the date of lifting the ceiling. The minister has said on several occasions that an adjustment would be made, but it is now seven months since the ceiling was taken off and many producers who sold their grain during that period are anxious to know when the adjustment will be made. It seems to me that they ought to be told, because at present confusion exists. There was a federal-provincial conference last fall and a plan was issued for the guidance of the farmers this year; nevertheless considerable confusion exists among western farmers as to what they should plant at this season of the year.
A question that is uppermost in my mind and in the minds of many people who have spoken to me is, what prospect have Canadian producers of marketing agricultural products this year through the Marshall plan? I believe that plan has been approved by the United States authorities, and I would assume that our Canadian authorities have been negotiating with United States officials. If no agreement has actually been signed as yet, perhaps the minister could give us some idea of what our agricul-

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tural producers might reasonably expect to market through the Marshall plan. This information would be very useful to those who are about to proceed with their planting operations at this time of year.
If the minister would make a fairly full statement at this time I think it would tend to shorten the debate and save a lot of questions, and certainly it would facilitate the passage of his estimates.


Robert Ross (Roy) Knight: Would it be possible for the minister and his assistants to move nearer the agricultural centre of gravity in this house?


James Garfield Gardiner: I shall be glad to do so.


Percy Ellis Wright: Now that we have the Minister of Agriculture among the farmers, we can get down to business. I agree with the hon. member for Souris that it certainly needs a little bit of explaining why there should be such a large decrease in the estimated expenditures for agriculture for the coming year. The decrease would seem to indicate that the government are satisfied that we have as efficient agricultural production as it is possible to have in this country, and that we have also a growing agricultural production in Canada. Neither is the case, if we take the government's own publications as our authority. For instance, 28 per cent of the farms in Canada today are subsistence farms.
The definition which I am using of a subsistence farm is one that produces less for sale than is consumed on the farm itself. There is a tremendous variation between different parts of Canada in the number of subsistence farms. Alberta has the lowest percentage, with 15 per cent; Saskatchewan, 16 per cent; Prince Edward Island, 40 per cent, and New Brunswick, 51 per cent. Anyone who has visited Prince Edward Island knows that province has a soil which is as productive as that of any other province in the dominion. Yet 40 per cent of the farms, to use the definition that I have given, are on a subsistence level. The 28 per cent of the farms of Canada that are on a subsistence level produced less than 10 per cent of the total marketed' agricultural production of Canada; while 10 per cent of the most productive farms in the country produced over 30 per cent of the marketed agricultural produce of Canada. This indicates that there is need of a great deal of extension work, both in the federal Department of Agriculture and in the provincial departments of agriculture. There should not be such a variation 5849-215i
in the production capacities of our farms as is indicated by these figures.
Probably we have a greater investment in agriculture in Canada than we have in any other industry. I believe that the investment in agriculture in this country should be protected in every possible way. We protect our investment in other great industries. Take our railways. When they show a deficit we are prepared to give them a 21 per cent increase in freight rates to protect their investment. Take our packing industry. The evidence given before a committee of the house would indicate that the capital invested in our packing industry is amply protected in Canada. The figures given there show that an investment of $2,500,000 made by Canada Packers when that company was formed some twenty years ago has today grown into some $86,000,000 without the investment of another cent by the company.
They paid off all their indebtedness in various forms, such as bonds which they had to issue during the early years of the amalgamation of the companies which went into Canada Packers. They built up millions of dollars of reserves in their reserve accounts. If the agricultural industry which has supplied most of the capital for this increase in the investment in these various industries, in our railways, in our packing industries, is not protected as it should be, then the drop in the expenditures indicated in the estimates for this year cannot be justified.
We should have certain objectives for our agricultural industry in this country. The first objective should, as I say, be to produce efficiently for optimum nutrition for all our people, and to produce all the possible raw materials for industry that industry might need from agriculture. Second, to establish for all workers in agriculture a standard of living comparable with that provided in the better organized urban industries, especially in relation to housing, educational opportunities and facilities in health and general culture. Third, to produce, over and1 above domestic needs, the maximum amount of agricultural commodities for export. If we had an agricultural policy in Canada which would meet these three requirements, then we would be much better off in the agricultural industry than we are today.
Let us see how we are meeting these three requirements: first, to produce efficiently the food necessary for nutrition in this country and to supply the export markets. We find strangely today that in agriculture, with some
100,000	young people returning from the
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armed forces and entering that industry, our production is decreasing. I hold in my hand a current review of agricultural conditions in Canada for February, 1948. This indicates that inspected slaughterings of cattle during 1947 amounted to 1-3 million head, a decline of 22 per cent from 1946. There was a 30 per cent decline in western Canada and a 10 per cent drop in eastern Canada.
Take hogs. During 1947, 4,765,000 hogs were marketed in Canada, a slight increase over
4,465,000	marketed in 1946. However, in western Canada there was a 12 per cent decline, while in eastern Canada there was a 20 per cent increase.
I want to say something with regard to the policy of the government which has, during the last three years, practically wiped out the hog industry in western Canada. If there is one place where hogs can be produced efficiently and at the lowest cost it is in western Canada, where the grain for feeding is grown; yet we find that the policy of the government since almost the beginning of the war has been such as to re-direct the production of hogs in Canada from the west to the east. I have no objection to the increasing of hog production in eastern Canada to the maximum amount necessary to make good use of all the byproducts of the dairy industry that can be fed efficiently in eastern Canada. But when we pay the subsidy on coarse grains that we are paying in shipping these grains from western Canada to eastern Canada, and these grains are used for the production of hogs in eastern Canada, then I do not see why the government should continue that policy. That policy is all right so long as these grains are used to increase the dairy industry in eastern Canada. Probably the dairy industry needs that subsidy. But when we find large quantities of this grain being used for the production of hogs in eastern Canada and, on the other hand, the production of hogs in western Canada declining where, by all measures of efficiency, the production should be increasing, then I think it is a wrong policy. The government should re-direct this policy.
We want to see some diversification in western Canada in the agricultural industry, and it seems to me that the production of hogs and poultry are two particular agricultural products which we can increase in that area of Canada, and produce more efficiently than they can be produced in any other part of the dominion.
Let us take a look at dairy products. Milk production in 1947 recovered from the decline of 1946. The production in 1947 of 17-2 billion pounds shows an increase of 1-6 per

cent, but on the other hand we have a decline of 19-4 per cent in the production of cheese, and a somewhat similar decline in the production of certain other dairy products. I am convinced that, through the Department of Agriculture, we should have some program which will increase our production of agricultural products in Canada.
My second requirement was to establish for all workers in agriculture a standard of living comparable with that provided in the better organized urban industries, especially in relation to housing, educational opportunities and facilities in health and general culture. What is the picture in Canada with regard to facilities which we have on our farms? I hold in my hand the figures which were prepared by the Ontario government, "A Conspectus of the Province of Ontario", prepared by the Ontario bureau of statistics and the research section of the department of the provincial treasurer. This paints a pretty dark picture of the conditions that we find on farms in Canada today. Even in Ontario, which is probably the best agricultural province, the one in which they have the most facilities-


Mr. BOUCHER:: The best province all round.


Percy Ellis Wright: I do not agree with that, although, due to its particular situation close to the large manufacturing centres, the agricultural industry in this province is in a more favourable position than that in any other part of the dominion. I think it will be agreed that even in good old Ontario conditions are not just as good as they might be.
For instance, over 50,000 Ontario farmers have no automobiles. We do better than that in western Canada. Over 160,000 Ontario farmers have no motor trucks, and over 140,000 have no tractors. Over 145,000 farm, homes in Ontario have no means of refrigeration and over 160,000 farm homes in Ontario have no vacuum cleaners. Over 60,000 homes in Ontario have no radios and over 125,000 farm homes have no running water. Over 85,000 farm homes in Ontario have no telephones and over
130,000	are still heated by stoves, not having furnaces. Over 160,000 Ontario farm homes still have outside toilets and over 160,000 farm homes have no bath or shower equipment.


An hon. MEMBER:: What are you reading from.


Percy Ellis Wright: It is a "Conspectus of the Province of Ontario," prepared by the Ontario bureau of statistics and the research section of the department of the provincial treasurer. This table gives the percentages for 1941 in all provinces.

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George Russell Boucher: You do not realize that this is 1948.


Percy Ellis Wright: I do not think many of these facilities would be put in Ontario farm homes during the war, especially if you were doing your part in the war effort. I would ask the permission of the committee to place on the record the figures for all the provinces. I admit that Ontario is the best even with its needs.


Mr. HARRIS (Danforth):: On a point of order, this request is antiquated and is out of date; it is not a legal request because the table is dated 1941 and this is the year of grace 1948. Even though Ontario had the best record in 1941, it would have a better record in 1948. Why clutter up the record with 1941 figures?


The DEPUTY CHAIRMAN:: Unless the hon. member has unanimous consent, it would not be permissible to put the table on the record. Has the hon. member leave?


Some hon. MEMBERS:: No.


Percy Ellis Wright: Then I shall simply have to give the figures for the other provinces. I know the Minister of Agriculture is anxious to get his estimates through but it will be quite easy to put the figures for the other provinces on the record. In Prince Edward Island 29 per cent of farm homes and buildings need external repairs. Only nine per cent of the homes have inside running water and only six per cent have electric lighting. Only 10 per cent are heated by furnaces and only 12 per cent have either mechanical or ice refrigeration. Fifty-four per cent of the homes have radios, 18 per cent have telephones but only two per cent have vacuum cleaners. Only 30 per cent of the farmers have automobiles.
In Saskatchewan 47 per cent of the farm homes and buildings need repairs. It will be realized that this is before the C.C.F. government came into pow'er in Saskatchewan. Only one per cent of the homes have running water, while only five per cent have electric lighting. Only 12 per cent have furnace heating and only six per cent have mechanical or ice refrigeration. Seventy-two per cent of the homes have radios, while 33 per cent have telephones. Only one per cent have vacuum cleaners and 46 per cent have automobiles.


George Russell Boucher: But they have a C.C.F. government and they would not want anything more!


Stanley Howard Knowles: Ontario will see the light some day.


Percy Ellis Wright: If the people in Ontario had percentages as low as that they probably would be wise enough to get a C.C.F. government to improve conditions here.
In Quebec 40 per cent of the farm homes need repairs and only 25 per cent have running water. Only 24 per cent have electric lighting and only 10 per cent have furnace heating. Only 14 per cent have refrigeration, while 36 per cent have radios. Sixteen per cent of the homes have telephones but only one per cent have vacuum cleaners. Sixteen per cent have automobiles.
I think these figures are sufficient to indicate the position of the farming industry today. Apparently my hon. friends in the Conservative party are not much interested in conditions on our farms today. They seem to be more interested when we are dealing with the packing industry. We do not have as many interjections when we are talking along those lines as we have when we are talking about the facilities in the farm homes of Canada. When you are referring to any other financial interest in Canada you do not have the interruptions you have when you talk about the position of agriculture. If my hon. friends would get up and defend agriculture they would be doing more good, instead of interrupting as they are.


Gordon Graydon: Come down to our
province and see.


Mrs. STRUM:: How many Tory members are there in Saskatchewan?


Gordon Graydon: How many C.C.F. members are there in Ontario?


William Henry Golding: I must ask hon. members to permit the hon. member to make his speech.


Gordon Graydon: Just playing politics.


Percy Ellis Wright: The hon. member for Peel talks about playing politics, but I do not know of any other hon. member in this house who does that more consistently than he.


James Arthur Ross: Or more successfully.


Percy Ellis Wright: I am not playing politics; I am just stating the position of agriculture in this country today.


James Arthur Ross: Seven years ago.


Percy Ellis Wright: The sooner we recognize that position the sooner we shall get legislation in this house that will be favourable toward agriculture and give agriculture in this country the position which it should have as the first industry and one of the most important in the country.


Gordon Graydon: That will not get one
vote for Mr. Jolliffe in Ontario.


Percy Ellis Wright: At least the hon. member might come into the chamber to make his
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interjections, and on this first item in agriculture he might attempt to do something for the farmer in Peel county which he represents. I admit that that is one of the best agricultural counties in Ontario.
If the agricultural industry in Canada were given an equal opportunity with other industries, I believe we should find that they would make a maximum contribution toward the welfare of this country, not only in raising our nutritional standards but in supplying more foods for export to other countries which need them at the present time.
The position in the world today with respect to food is serious. It is so serious that, because of discontent caused by malnutrition, we find growing throughout the world communism and a great many other things which we do not like and which we should like to see stopped. One of the best ways in which we can stop the growth of communism or any other ism is by the abundant production of food and the proper distribution of it throughout the world. I think the objective of agriculture in this country should be: first, the supplying of the nutritional needs of our own country, and then the production of the maximum amount of food for export to those countries which today need that food.


Mr. FAIR:: It would appear that the question of agriculture is a little bit distasteful to some of the members of the house tonight; but I do not know of any group who can enjoy the products of the farm better than some of those who have been butting in on the speaker who has just taken his seat. While I am one who enjoys his eats just about as well as anybody else, I think the question of agriculture is of sufficient importance that we should give it the consideration to which it is entitled, and should give it its proper place in the Canadian economy.
I feel that agriculture, as it has been in the past and as it is now, will continue in the future to be the basic industry of Canada. In the past, agriculture has not had its proper share of the national income. The farmers on the land and those working for them have had a poorer standard of living than has any other occupational group in Canada that I can think of. I know that from personal experience, because I have been farming for more than thirty years and should know a little bit about it. I think also that every other profession in Canada is dependent, either directly or indirectly, upon agriculture. For that reason, I consider that all of us, whether we live on a farm, in a town or in a city, should give agriculture the attention to which it is entitled.

I am sorry to see that the Minister of Agriculture has agreed to have the estimates for his department cut by about one-third this year. There is perhaps some excuse for it. Perhaps the autocratic treasury board would not allow him any more money. But I feel that he and we should protest against the cut in the estimates.
While many people today consider that agriculture is really prosperous, I could give an entirely different picture. If those people to whom I have referred took the trouble to investigate the real position of agriculture today, they would find that it is not nearly as prosperous as some people would lead us to believe. While the farmers have today reduced their debt much below what it was at the time war broke out, I am quite satisfied that if the farmers were to put their buildings and their machinery in as good shape as those things were in 1939, there would not be so much money for paying off debts as some people imagine. The farmers of this country have not been able, during the past seven or eight years, to buy the machinery they require. For that reason they have been compelled to produce with dilapidated machinery such as tractors and other implements. Their buildings have gone down in condition, and it will take many thousands of dollars to bring them up to the state of repair at which they were at the time war broke out.
Again I feel that while we have accepted, and are still accepting, prices below those to which we are entitled, we have not yet done anything in fact about stabilizing the agricultural industry in the years to come. That is one of the main things about which we should be concerned at the present time. Again, while the price of butter has gone up a little bit, and there is a battle on by some people who apparently are interested in the production and sale of margarine in Canada, I feel that butter is not selling at a higher price than that at which it should be selling. But because, during the depression years and during the early years of the war, butter sold at a low price, many people believe that it should continue to be sold at that low price, even although the wages of all the workers in Canada and the incomes of other people as well have increased considerably during the past seven or eight years.
I do not intend to say much more in this connection, but I consider that we should all work toward a policy of stabilization which will give agriculture the place to which it is entitled in Canada; because, if we have not a successful agriculture, we cannot have

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success in other parts of Canada. We were told in 1938 that agriculture in the prairie provinces absorbed 69 per cent of the farm implements that were manufactured in central Canada. If we are to be able in the future to purchase our share of the farm implements and other things that are manufactured in central Canada, then we must see to it, whether we live on the land or not, that we are given an agricultural policy which will guarantee prosperity on the farms in all parts of Canada.


James Garfield Gardiner: One representative from each of the three groups opposite has spoken with regard to the estimates, and probably I should deal with the general criticisms that are made before we go farther. It has been pointed out that there has been a decrease in the estimates, in the figures as shown. The summary is on page 7 of the main estimates. The ordinary expenditures of the department are in round figures, $18,600,000 this year. They were $17,000,000 last year. So that under ordinary expenditures there is an increase of $1,579,000. Then, on the specials, there is $8,865,000 this year and there was $15,433,000 last year, or a decrease of $6,567,000. Then, under demobilization and reconversion there is $14,298,000 this year and there was $30,672,000 last year, or a decrease of $16,374,000. The figures show a total for 1948-49 of $41,810,000 as compared with $63,173,000 last year, or a decrease, as has been indicated, of $21,362,000.
While it is true that there has been a considerable decrease, it will be noted that there is not a decrease in the items that were voted prior to the war. There is a marked increase in the ordinary expenditures under agriculture, and the specials are of such a nature as to indicate that this is not unexpected. They are all noted in the items that are voted. There is a reduction of $7,773,000. The first item is to authorize and provide for the payment of subsidies on oats and barley used to feed livestock; and since those subsidies have been removed and are now part of the price of the grain, that figure is down by $6,000,000. Next is prairie farm rehabilitation and water storage, which is down $1. Then comes the amount required to recoup the agricultural prices support account to cover the net operating loss of the agricultural prices support board, $171,053. That, of course, was an amount taken out last year in order to cover certain items for which we could not secure the money elsewhere. The next item is to authorize and provide for the payment of subsidies on oats and barley used as feed for livestock under vote 715, $1,600,000; and to provide for a grant to the Federated Women's Institute of Canada, $2,000. It will be noted that $7,600,000 out of the $7,773,000 is
in connection with reduced subsidies on feed grain, so that no further explanation is required to indicate the reason for the reduction.
Then, under demobilization and reconversion there is an item covering the appropriation not required for 1948-49, $6,035,625. This is made up as follows. Under the Agricultural Prices Support Act, the agricultural board, $2,030,000; agricultural supplies board, $42,700; to encourage the production of essential supplies, $102,250; food administrator, including freight assistance on western feed grains, $21,000,000 voted for 1947-48, less $18,000,000 only required for 1947-48, leaving a balance of $3,036,875 not required. Then there is the vote for the fertilizers and pesticides administrator, including subsidies on lime and bulk purchasing of fertilizer chemicals, $618,300, and for the seeds administrator, $205,000. It will be noted that the greater part of the reduction is $3,036,000 on freights paid on western grain; but as a matter of fact, since these estimates were prepared, I have announced that we will continue the freight payments for- the year 1948-49, which will mean that, instead of a reduction, the sum of $16,000,000 will have to be added to this item.
That pretty well takes care of the reduction we have been talking about. Some $16,000,000 additional will be required in order to continue to pay the freight, since in these estimates we have provision for the payment of freight only until August 1 next, an amount of about $7,000,000. We shall require over $23,000,000, however, to pay the freight from Fort William east on an amount of grain similar to what was shipped last year, though we estimate that the amount of grain will be greater this year, the chief reason for the increase being the 21 per cent freight rate increase. Therefore we anticipate that the total this year will be $23,000,000 instead of the $18,000,000 last year. I should have said, of course, that we pay the freight not only from Fort William east but also on grain moving west from Calgary and Edmonton to British Columbia. So that our estimates for this year will not be very much below the figures of last year.
I believe that is sufficient to indicate that there is very little difference, and where any difference does exist it is entirely a matter of doing away with some of the expenditures we were making during the war, but which are not now considered necessary. In saying that, I might emphasize that this is quite a different picture from that of some thirteen years ago. Then the expenditures on agriculture had been gradually reduced until they were at a very low level, and from that time up to the present
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they have greatly increased. I remember attending a meeting in the city of Toronto after I had been minister for one or two years. One of the daily newspapers devoted a whole page to an attack upon myself, in which they asked me to explain at a public meeting why I should have spent $20,000,000 in the Department of Agriculture. Tonight I am being criticized, by some of the same people who were criticizing an expenditure of $20,000,000, for spending only something over $40,000,000 this year.


Percy Ellis Wright: No, it is not the same people.


James Garfield Gardiner: I am not very much concerned about the criticism at either time. The expenditures have been gradually increasing on matters considered essential to agriculture.


James Arthur Ross: Who were the people? Not those who are here tonight.


James Garfield Gardiner: Well, in any event they represent some of the same people; I think most of the Toronto seats are represented over on that side of the house. I have just been handed the exact figures of the expenditures of this department from that time. For 1934-35, the year prior to the time I brought estimates into the house, the expenditures amounted to $7,106,000.


Percy Ellis Wright: Who was in power then?


James Garfield Gardiner: Well, I was not. In the following years the expenditures increased. In 1935-36 the total was $9,637,000. In 1936-37, the first year I had charge of the estimates, the expenditures went up to $13,375,000. The following year they were $33,204,000, and the next year, $22,367,000. In 1939-40, the first year of the war, they were $26,000,000, and since then have been as follows, in round figures:
1940- 41	 $ 21,000,000
1941-	42	
82,800,0001942-	43	
58,000,0001943-	44	
110,000,0001944-	45	
104,000,0001945-	46	
110.000,0001946-	47	
95,000,000
When one compares present expenditures with those in the middle of the war, which, of course, included a great many activities not now being pursued, the present expenditures are comparatively low. But when one compares them with the expenditures in any year prior to the war they are, still quite high; and in addition to the total of $41,000,000 for this year we shall require another $16,000,000 in order to take care of the freight payments I mentioned a moment ago.
(Mr. Gardiner.]


Robert Fair: Then the minister expects that we shall get rid of the snow that blankets the west at the present time?


James Garfield Gardiner: Well, snow does a lot of good sometimes.


Robert Fair: At the right time.


James Garfield Gardiner: And I think the right time is just before seeding. Something has been said with regard to the condition of agriculture. I am not going back over all the figures with regard to the production of cattle, the production of hogs, the production of poultry and eggs, the production of milk and so on. But I would suggest that if one would leave out the war period in making comparisons he would probably have a much sounder basis from which to reason than if he were to continue to compare the production of some particular commodity now with its production during the- war.
For example one of the favourite criticisms which comes from the central part of the opposition is that at one time we paid the farmers to stop producing certain things. We paid them $4 an acre to take land out of wheat and put it into some other product. It is obviously unfair to compare the production of those years in livestock, which was encouraged by the payment of the $4 an acre, with production of livestock in years now, when the war is over, and we have gone back to wheat production, and when there is not that encouragement given to change over from wheat to livestock.
So I say we are on much sounder ground when we compare the results of farming in 1946 and 1947 with the results of farming in the years prior to the war, or at the latest the first two years of the war.


Percy Ellis Wright: Does the minister not think we should diversify our agriculture in western Canada?


James Garfield Gardiner: Yes; and if the hon. member for Melfort would make his comparison as between the present time and the time prior to the period when we were paying farmers to change over from wheat production to livestock production, he would find that the statement he made a few moments ago was quite ridiculous. I refer to his statement that the records would indicate that the government, or even the farmers themselves, have been changing over from the production of hogs to such an extent that the farmers have almost entirely gone out of hog production. That statement is not borne out by' the facts at all. Saskatchewan has not gone out of hog production. Alberta has not gone out of hog production.

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As a matter of fact, as my hon. friend knows, during the years when we were paying western farmers to go out of grain and into livestock the provinces of western Canada produced hogs as they had never produced them before. They were producing far more hogs in the west than anyone ever expected them to produce.
Criticism has been made that we are encouraging the farmers of eastern Canada to feed western grain to hogs. Well, I am not able to follow the two criticisms as being in the interests of agriculture in this country: one to the effect that we should still be doing in western Canada what we did at the peak of the war in order to get hog production up, namely, that we should be paying to have land changed over from the production of cereals to the production of livestock, so as to have mixed farming in western Canada; and then in the next sentence, a criticism of the government for, at another period, as well as at the period in question, giving assistance to eastern farmers to encourage them to feed western grain to livestock.
My hon. friend knows as well as I do that a great many of the farmers in western Canada prefer to produce grain. Not only do they prefer to produce grain, but they think they can make more money producing grain, under ordinary circumstances. And the only one thing that took them out of grain for two or three years during the war was the fact that that grain could not be sold. We were not able to sell wheat in 1941, 1942, 1943 and 1944 except to Great Britain. And we were growing much more wheat than Great Britain could eat. For that reason, and because the farmers had to have money, and because they could not get that money with their grain lying in their own bins or in elevators, we paid them to take their land out of wheat and to put it into feed grain for the purpose of feeding livestock. We told them that they should sell livestock; that they could sell it every day of the week, and get cash for it. So they did that.	.
Surely no one is suggesting that government should be carried on on a basis of that kind during a period of peace, during a period when the whole world requires and wants cereals even to the exclusion of meat in many parts of the world. They prefer to have cereals. And when we have cereals to sell, and have farmers who are producing cereals, and doing it very well, they themselves prefer to sell that grain to farmers in other parts of Canada who are going to feed it to livestock. Anyone who has lived among the farmers of western Canada knows that to be the case.
I remember the leader of the official opposition appearing in Montreal-I believe it was 5849-210
in 1938-and making a speech which appeared in the headlines across Canada, in which he stated words to the effect that this country ought to be, or was actually, divided into two areas, one west of the lakes and one east of the lakes; and that in the best interests of agriculture in this country the western farmers ought to be encouraged to produce more and more grain, while the eastern farmers ought to be encouraged to produce more and more livestock.
There is an element of truth in that. The argument was well received by farmers in both ends of Canada. We on this side of the house have sometimes said similar things; but we have never suggested that we ought to give all the assistance to people at one end of Canada, whether it was the east or the west. We have always argued that we should divide up the assistance. And if at certain times we have given assistance to western farmers to do certain things, at other times it might be in the interest of Canadian farmers that we give assistance in order to direct production into some other line.
But the most important fact in connection with anything done with regard to agriculture is the return the farmer gets. We hear a great deal about the position of agriculture, and how poorly off the farmers are. But I just wish to say that, while the farmers are not in the position, financially, in which I should like to see them right across Canada, nevertheless they will acknowledge that in all parts of Canada they are, on an average, in just a little better position at the present time than they have been at any other time in their history. I am not saying that is as good a position as they ought to be in-I repeat that statement-but they are in a little better .position at present, financially, than they have been at any other time in their history. The figures indicate that.
I am not going to go back many years. In 1941 we had about as high a return from agriculture production, on a cash basis, as we ever had in Canada up to that time. The return in that year was $967,600,000. The highest year we had ever had before that was 1928, with $1,063,000,000. Just in the second year of the war we had almost reached the highest figure we had ever had in Canada in returns from agricultural production. Then the next year we passed that highest figure. In 1942 the amount was $1,155,900,000, and the next year we went up to $1,441,000,000.


An hon. MEMBER:: Is that the gross figure?
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James Garfield Gardiner: Yes. The next year we went up to $1,846,000,000; 1945, $1,704,000,000; 1946, $1,759,000,000 and 1947,- last year-$2,213,900,000.


Percy Ellis Wright: Would the minister indicate what part of that $2,200,000,000 was for payment on other crops than grain in that year?


James Garfield Gardiner: This last year there would be very little, because our bins were empty, or as empty as we can ever get them, at the end of the crop year 1946, so anything that was obtained in the crop year 1947 was obtained largely from production in that year. But there was not only an increase in grain production; there was an increase in livestock production, and an increase as well in prices. The figure of $2,213,000,000 is to be compared with the highest figure that we ever had in the history of agriculture in Canada in the best period before the war, between 1926 and 1929, when the figure was $1,063,000,000.
Someone has said: Are those gross figures? Yes, they are. But I have also the net figures, and the net figures are, of course, of greater importance than gross figures in considering a question of this kind. We hear it constantly said that we are paying more for our implements, more for wages and many other things, and because we are paying more, the gross figures do not mean very much. But when we take the net figures, what is the position? I shall take only a few back along the way and come down to the present as soon as possible.
Back in 1938 the net income of our farmers right across Canada was $387,000,000. Coming down to 1940, it was $529,000,000; in 1941, the same year I began with when covering gross returns, it was $597,000,000; in 1942, $1,104,000,-
000.	It dropped in 1943 to $990,000,000. In 1944 it went up again to $1,226,000,000; 1945, $1,003,000,000;	1946,	$1,267,000,000;	1947,


Mr. ZAPLITNY:: Would the minister give us the figures on the basis of the average per farm operated?


James Garfield Gardiner: I have them here and could search them out, but I had not intended to go that far. I think it would be better to give them to the committee at some other time rather than take the time now.
The figure of $1,267,000,000 for 1946 is the highest net return, and very much the highest, which the farmers have ever had in Canada. The figure of $1,259,000,000 for 1947-that is the present estimate; it is not yet brought to a finality-is almost equal to the 1946 figure. There is very little difference between them. I think that should be conclusive evidence
(Mr. Gardiner.]
that the farmers have been doing a little better in the last three or four years in Canada than they have done at any other time in their history.
Again I repeat that I agree with members who say we ought to do all we can to see that they do better still, but I do not think it is helpful either to agriculture or to Canada to be continually saying agriculture is going down and down rather than going up and up and up, because the facts are the very opposite to those pictured by the members of the C.C.F. when they speak on this question.
I was reading the other day-and on another occasion I shall bring this to the attention of the house if the discussion follows the line which it has up to the moment-a comparison of the figures per farm in the different provinces of Canada which was put out by the Dominion Bureau of Statistics only last week, from which it will be found that some statements which were made with regard to 1941 do not, as hon. members over in the Conservative section of the house were pointing out, apply to 1948. The situation in the different provinces has improved all across Canada, and I should like to say that the statistics indicate that the farmers have made more improvement in the areas which have stayed with livestock. Because of that fact, I agree with the hon. member for Melfort that we should encourage in western Canada, as far as we possibly can, the production of more and more livestock products. I agree with him that we as farmers would make more money in western Canada if we fed all our grain to livestock, but I am not so sure that we would enjoy life any better than we do farming as we are at the present time.
We have a great many farmers, just as we have a great many other people, who are not spending all their time trying to make money, and I cannot understand my hon. friends of the C.C.F., who are against anybody making profits, talking the way they do. They are not supposed to be in favour of people making profits. They speak rather in terms of people enjoying life, having an opportunity of living a fuller and a better life. I am sure there are many of us who belong to other parties who, whether we preach that doctrine or not, act that way in our living. We are not so anxious to make money as to be talking all the time of the fellow who spends all his days and nights thinking of ways of making more money. I do not agree with my hon. friends of the C.C.F. that the profiteers are living the best life in the world. I think some of us who are not spending so much time thinking about making money are getting

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through life, not only with greater happiness to ourselves but with greater benefit to all the people round about us. And so I suggest that when we discuss agriculture we discuss it from the point of view of what the farmer is really getting out of what he is doing on his farm.
I agree that it would be much better if we had more bathrooms and more electric light on the farms.


Percy Ellis Wright: Do you not think we would get more out of life if we had them?


James Garfield Gardiner: Sometimes, yes. When I go out to my farm in the summertime and find the waterworks out of condition, I have to become the chap who works down underground, but when I am in the city I do not do that. Some of our farmers perhaps prefer the system to provide water which they have on their farms, and sometimes the supply of water they get is better than if they had some other system.
The same is true more or less about electricity on the farms. It is the simplest thing in the world to have electricity on a farm in western Canada, and I can never understand why more farmers do not have it? It does not cost half as much to have electricity on the farm in Saskatchewan as it does to own and operate a car; I do not think it costs 25 per cent as much. All you have to do in the part of western Canada in which I live is to pay $150 for a windmill-


An hon. MEMBER:: You have the wind.


James Garfield Gardiner: We have the wind, yes. Pay $150 for the windmill; put a generator on top of it; put a set of batteries in your basement, and you can have just as good lights as you have in this chamber. Not only that, but you can have a pressure tank to pump your water up to the top story, and not only that, you can have lights in all your buildings as well as in your home. But I think some people prefer to drive cars and do some other things rather than have what some of my hon. friends of the C.C.F. think they ought to have. My experience with farmers has been that if you give them an opportunity to do things they will do the things which they themselves think benefit them most.
I have found, during the time I have been administering a department either here or in the west, that a great many people do not take kindly to being told what they ought to do. There are things they can do, and I like to tell them some of the things that can be done, but I do not like to go so far as to say that they ought to give up some one thing on which they are spending their own money in order to invest it in something else. But they can 5849-216J
get the equipment which has been referred to by hon. members tonight much cheaper than most farmers realize in western Canada. We like to talk about irrigation developments; we like to talk about waterpower developments and great expenditures of money. We have got into that habit, but I would not care how close a power line was to my farm, I would not put electricity on to the farm from a power line.


Some hon. MEMBERS:: Oh, oh.


James Garfield Gardiner: I have better equipment without it, and at half the cost.


Percy Ellis Wright: Oh, no.


James Garfield Gardiner: You had better come around and visit me some day and I shall show you.


Percy Ellis Wright: The figures do not show that. I have it on my farm as well, and I know the difference.


Gladys Grace Mae Strum: Is the minister aware that it costs approximately $500 to get a refrigerator which runs on kerosene?


James Garfield Gardiner: I do not run mine on kerosene; I would run mine off this windmill that I am talking about.


Gladys Grace Mae Strum: I have one of those windmills too, but I have not yet found a satisfactory refrigerator arrangement that will work off it. In my part of the country, if you wish refrigeration you have to buy one of these refrigerators the entry of which the Minister of Pinance has prohibited.


James Garfield Gardiner: You can get a 32-volt refrigerator that will operate all right off wind power, and you can get a 110-volt one for that type of plant. You can get a 110-volt refrigerator just the same as you have in Ottawa and operate it.


Gladys Grace Mae Strum: Will the minister admit that every time the motor starts up, the battery has to start on the 110 volts; that every time you turn the switch, you have to start your engine, and you get into a lot of trouble? Then you have to take out your plant and send it away; they fix it, and then it comes back and goes on the blink again.


James Garfield Gardiner: You have a poor plant. I have had one for fifteen years. The one I have at the moment I have had for three years. We have never even had to go up on the windmill. The plant runs all the time without any difficulty. Therefore it will be seen that it is not a bad plant. Farmers who operate them know very well that they do give good service, and particularly in the section of the country in which we live.
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Gladys Grace Mae Strum: I do not find that.


James Garfield Gardiner: Again I would invite you over to my place, since you are not so very far away, and we shall have a look at it.


An hon. MEMBER:: Why not invite all hon. members to come?


Mr. MILLER:: Will the minister permit a question?


James Garfield Gardiner: Yes.


Calvert Charlton Miller: The minister has invited several hon. members to visit his farm. Last week the Toronto board of trade gave us all an invitation. Is he going to invite us all to visit his model farm?


James Garfield Gardiner: My farm is not exactly a model farm, but it apparently is a little better than those which some of my hon. friends in the C.C.F. try to picture as the farms in S'askatchewan. However I should like to leave a little different picture in the minds of hon. members and in other parts of Canada than is usually given by hon. members who sit over in the C.C.F. section.


Percy Ellis Wright: The minister has a different type of income on which to work his farm than have most people in western Canada.


James Garfield Gardiner: My farm will operate on the income that comes from that farm, and so will the farm of my hon. friend, as he knows.


Gladys Grace Mae Strum: I have one question which I should like the minister to answer. Will he not admit that it is much more difficult to get the equipment to run off these power plants which are relatively limited, the 32-volt or the 110-volt, and will he not admit that they are much more expensive and much more difficult to get repairs for than the power cycle?


James Garfield Gardiner: I said a moment ago I did not find them very expensive from the point of view of repairs. In the last fifteen years I have had only one set of equipment. I have had the same washing machine, the same toaster, and so on. I could go through the whole line of equipment.


Percy Ellis Wright: And the same batteries?


James Garfield Gardiner: Well, we get new batteries about every seven years. I have had the same pumping equipment and I have not found it at all expensive, not any more expensive than any other equipment of that kind that is put on a farm.


Gladys Grace Mae Strum: What about the initial purchase price?


James Garfield Gardiner: The initial price of the plant is about $1,400 under present high price

conditions. The 32-volt equipment is higher than the 110-volt, but the 110-volt equipment is exactly the same price, whether you purchase it in Ottawa or on the farm.
Having said these things, I wish to complete my remarks by repeating that I do not think, in discussing these estimates, we are going to help the farmer by trying to make out that our farmers are not better off in Canada today that they were in previous times. I can agree with those who argue that they ought to be still better off, but I do not like to see our country pictured as one in which farmers are getting along so poorly as some people are trying to picture here.


James Arthur Ross: I asked the minister a question or two which he did not deal with; whether he agrees with it or not, can he give us some lead at this time as to what might be done with respect to marketing agricultural production through the Marshall plan, and whether there has been any preliminary discussion that he can tell us about now?


James Garfield Gardiner: I purposely did not say anything about it because the arrangements are not finally concluded. As hon. members know, the Minister of Trade and Commerce is now in Washington discussing that question. My understanding is that even the offices in Washington are not yet equipped to get on with the task of deciding what is to be done in the different areas. The offices are not staffed up to date. Hon. members will probably have noted that the minister met the administrator in the Canadian embassy last night. That is not just an accident. They have not yet their offices established and their staffs set up. I am not going to attempt here tonight to discuss what will be done when they have their full organization set up to deal with it; but I can say this: press reports coming back from Washington this morning appear to indicate that a very liberal provision is likely to be made for handling Canadian food products.


James Arthur Ross: Probably within the next few months?


James Garfield Gardiner: Well, I would think we would not run into any great difficulties within the time that it takes to have the organizations set up.


James Arthur Ross: The other question had to do with oats and barley that were marketed last fall. I do not think there is another item in the estimates on which I could ask this question. The minister might make a statement on that now.

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James Garfield Gardiner: With regard to the oats and barley items, the companies that have already paid something in addition to the price paid prior to October 21 are as follows: the Pioneer Grain Company paid twelve cents on oats and ten cents on barley. In making that announcement they said that was an interim payment. In other words, they suggested that there might be more paid by that company. I do not know whether they would say that today or not. They were the first to announce their decision. The National Grain Company paid 10g cents on oats and 144 cents on barley; the Canadian Consolidated paid 114 cents on oats and 13g cents on barley; the Western Grain Company paid 9f cents on oats and 94 cents on barley; the Federal Grain Company paid 104 cents on oats and 134 cents on barley; the Alberta Pacific Grain paid 104 cents on oats and 134 cents on barley.
None of the wheat pools has yet made payments, and a number of other elevator companies have indicated that they are going to make payments but have not yet made them. The last discussion which I had with any of this group directly was with the Saskatchewan pool. They are probably the largest dealers in oats and barley in western Canada. Their suggestion was that they would not be able to give us final information as to what they would be paying until after they had dealt with their May options. I presume that that is within the next month or so. We do not feel that we should proceed to consider what the government ought to do until we at least know what the three pools will do. They handled about half of the feed grain that was marketed in western Canada. Then, other companies are quite large operators as well. We hope within the next month or six weeks to have full information from these companies-they are paying out their share of it-and then we can determine what the government's share is and have these payments made.


Herbert Wilfred Herridge: I have a few remarks to make on various items of the agricultural estimates, but on this item I briefly wish to draw to the attention of the minister and the committee one matter that is of serious concern to the fruit industry of British Columbia, and particularly certain fruit growers in my constituency. I refer to the loss of the British preference on apples. Over a period of forty years we have been developing a fruit industry in the district which I have the honour to represent. We happen to have a particularly fine climate that produces a high quality of people and first-class fruit. For thirty years the officials of both the dominion and the provincial departments of agriculture have advised
our people, particularly those in the Kootenays, to plant certain varieties because it was proved that we could grow those possibly to better advantage than anywhere else in Canada. I refer to Cox's Orange Pippin and the Jonathan. The British people have a great liking for the Cox's Orange Pippin, while the poorer districts are fond of the Jonathan because of its medium size, high colour and solid flesh and particular flavour.
A considerable number of orchards were developed on the basis of the recommendations made by the officials of the dominion and provincial departments of agriculture. Unfortunately it is not easy to change one's horticultural habits. Over a matter of years these growers have developed orchards which produce from 1,000 to 10,000 boxes a year of these varieties. This product went largely to the British market under the benefit of the preference. The Canadian people have not to date taken to the Cox's Orange Pippin or to a great extent to the Jonathan. I mention this because it is a serious thing to the fruit industry in British Columbia and particularly to the growers of certain varieties in my district. I should like to quote from a press release on the multilateral trade agreement among seventeen countries which was issued on November 17, 1947. Dealing with the loss of this preference, it states:
Apples. One of Canada's most important contributions to the general agreement on tariffs and trade which has for its purpose the reduction of tariffs, the elimination of tariff preferences and other -trade restrictions is the relinquishing of the apple preference in the United Kingdom. Canadian apples have always enjoyed free entry into the United Kingdom market. Through the Ottawa agreement in 1932 ,a duty of 4s. fid. per hundredweight was imposed on non-empire apples. In -the 1938 trade agreement between the United States and the United Kingdom this duty was reduced to 3s. per hundredweight for the period August 16 to April 1-5. At Geneva, Canada agreed to the elimination of the apple preference during the northern hemisphere marketing season so that now apples from all sources enter the United Kingdom market free of duty from August 16 to April 15 inclusive. During the balance of the year the duty continues at 4s. 6d. per 112 pounds.
Compensation for the apple concession is obtained mainly from the United States but it cannot be matched with any single item among the United States concessions. It is a part of a mutually advantageous agreement between Canada and its neighbour and other contracting parties.
It seems to us that sufficient consideration has not been given to the position in which a considerable number of fruit growers have been placed. It would seem as though their interests had been sacrificed to some other economic interests in this country and the
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United States. On January 20, 21 and 22 of this year the British Columbia Fruit Growers' Association held a convention. This convention was addressed by Mr. A. K. Lloyd, chairman of Tree Fruits Limited, which is our central marketing organization. He had this to say about the imperial preference:
Under the empire trade agreement effected in 1932, we enjoyed a preference of 39 cents per box in relation to non-empire countries. In January, 1939, this was reduced to 26 cents per box.
These preferences benefited the Canadian apple industry in at least two important ways:
1.	It insured an outlet for all of the apples Canada wished to export.
2.	It obtained for Canada a higher price than was being quoted by competing countries, and while not increasing our price to the full extent of the preference, it conservatively produced from 15 cents to 20 cents per box more than would have otherwise been secured.
This empire preference, and the increased prices derived therefrom, can largely be credited with keeping the .apple industry in Canada alive during the thirties.
Under the agreement just concluded at Geneva, these preferential rates have been completely abolished, 60 that if and when there is re-entry in to the United Kingdom, Canada will be in open competition with world apple producers.
The tree fruit growers of British Columbia feel that they have not been properly considered in this matter. As I pointed out before, when a man has spent a lifetime growing certain varieties on the recommendation of dominion and provincial officials, when he has a large investment of labour and capital expended in the growing of certain varieties and then suddenly finds himself practically cut off from a market through the loss of this preference, it seems to me that he has a right to complain about not receiving sufficient consideration.
I should like the minister to explain if [DOT]\e can why our officials agreed to the loss of this preference, because apparently it was done with the consent of the Canadian officials at Geneva without any reference to the tree fruit industry of British Columbia. The industry is entitled to an explanation from the minister.


Calvert Charlton Miller: I have only a few remarks to make, which arise mainly out of the speech made by the minister. I think the minister came pretty close tonight to telling western Canada farmers that he wanted them to stay in the hog business. I think that will be surprising news to many of the farmers in the locality from which I come.
The minister also made some play, and perhaps effectively, upon the fact that hon. members to our left picture the farmers as

being in a state of semi-poverty, or words to that effect. The minister has been guilty, during the last two sessions at least, in overplaying the prosperity of the farmer. I do not .think anyone will deny that in western Canada-and perhaps this is true of all Canada-the farmers are in better shape than they have been for a long time, if not at any time in history. I think in fairness it must be admitted that the farmers had their innings coming to them after what they had gone through in the years preceding the war.
Most of the farmers' prosperity resulted from the war, but by reason of certain policies of the government, which the official opposition have criticized to a great extent they are not nearly as well off as they otherwise would have been. I think it is true to say that the farmers of western Canada have not had an opportunity to build up reserves for the years to come.
Because of a shortage of materials during the war, they were not able to obtain the mechanized equipment or to erect the buildings that they needed. If the farmers had been able to build up the reserves they needed they would have been in a position now to obtain this equipment and erect these buildings. Those reserves would have been possible if they had been allowed to secure the prices they should have got.
I do not agree with the minister when he says that hydro is not a valuable thing for the farmer.


James Garfield Gardiner: I did not say that.


Calvert Charlton Miller: No, you did not say that.


James Garfield Gardiner: I said it was not as valuable on my farm as what I have.


Calvert Charlton Miller: Yes. The minister preferred the windmill. But I suggest that the farmers of Manitoba, at least, would not. And so far as their judgment on that score is concerned, I am afraid, if I had to choose between the minister and the farmers of Portage plains, I would have to take the judgment of the farmers of Portage plains. They are almost fighting to get the hydro into their farms. As the hon. member for Souris reminds me, I think that is true in other parts of the country than Manitoba. I think they are entitled to the hydro, and the sooner they get it, the better off they will be. Their work will be easier and so on.
The minister has said that the farmers have had a greater gross income, and also a greater net income in the last few years than ever before in their history. I am inclined to think he is perhaps right in that, because I am sure the figures he quoted would be official figures

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of some sort. I am also prepared to admit that probably he can produce figures to show that individual farmers are better off. But what is the reason for that? It is that the west, or at least in parts of it, we have had about seven exceptionally good crops which have been raised under pressure during wartime, and there has been the means of disposing of and turning those crops into cash which has boosted the returns beyond what they normally would have been. But even at that, the results are good.
But what other business similarly has not had good results? If the return is compared with that in other businesses, I do not think it will be found that the farmers have shown as great a percentage of gain as have other businesses in western Canada or in other parts of Canada. But even if they have, and even if I am entirely wrong in that argument, let us say this. The farmer today in my part of the country has the greatest capitalization he has ever had in the history of farming. He has invested more money in expensive machinery which he uses only for a short time in a year, which eliminates a good deal of expense for hired help and so on. With a combine and the field tillers and so on he can do more work with less help. His expenses have become less as a result of that. It is therefore only natural to suppose that his net will be much greater than it was ordinarily.
I think it is an important point to consider that, in order to earn the increased net about which the minister has boasted, and quite properly, the farmer's capitalization is today perhaps many times more than it was ten or fifteen years ago. Any business that increases its capitalization would be a poor one indeed if it could not increase its net, particularly when that increased capitalization has the effect of cutting down out-of-pocket expenses such as wages and so on.
I wish the minister would clarify or perhaps even retract the suggestion he makes that western Canadian farmers want to make their money the easy way; because I do not believe that in any shape or form the farmers of western Canada have ever looked for that or ever expected to make money in the easiest possible way. That old saying which perhaps prevails even yet in some parts of of the east, to the effect that the western Canadian farmers grow a big crop of wheat in a few months and then go off to California or Florida, is pretty much a shibboleth. That is a story I have heard ever since I was a boy, but I have not seen many farmers who were able, more than once in their lifetime at least, to go to California and to spend
the winter there. I do not think they would go to Florida when they could go to California if they wanted to. But I do not think that is the situation in the west. I think the western Canadian farmers are willing to produce hogs or cattle, and are willing to work or do anything; but I maintain that they are not willing to produce hogs or cattle if there is no profit in it for them for doing that.


Mr. AYLESWORTH:: There is a certain amount of profit in it.


Calvert Charlton Miller: I am talking about western Canada.


Wilbert Ross Aylesworth: I have not yet seen in my life a western farmer in this house who was satisfied.


Calvert Charlton Miller: That is true. Perhaps the hon. member is right. But there will come a day, if enough of us in parliament continue to stick with the western Canadian farmers, when they will get their rights and when they will be satisfied.


Wilbert Ross Aylesworth: I do not know when that time will ever come. It will be after the hon. member is gone.


Calvert Charlton Miller: What I was saying before I had the helpful interjection from my colleague was that' the farmers of western Canada were prepared to do their job and were not looking for the easy way to do it. Of course they will not do it the hard way if they can find an easier way; but the western Canadian farmers are certainly prepared to work and produce hogs and beef cattle if the Minister of Agriculture and his department can make it profitable for them to do that.


Thomas John Bentley: Mr. Chairman-


James Garfield Gardiner: In reply to the questions
asked-


Thomas John Bentley: Would the minister allow me to ask my question and he can answer them all at once? I do not intend to make a speech.


James Garfield Gardiner: All right.


Thomas John Bentley: A little while ago, before we had these last two speeches, the minister answered a question with regard to the payments on oats and barley that the government might make. In his reply the minister said he did not yet know what all the elevator companies intended to do, so I can understand the government's position in that regard. What I want to know is this. Can the minister tell us now whether the government's policy will be
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to make the payments equal to all the farmers, regardless of what elevator company they delivered to and how much that elevator company itself contributed toward the equalization? One may pay ten cents; another may pay twelve cents, and another may pay less. What does the government propose to do tow'ard equalization?


James Garfield Gardiner: I am not in a position to state what the government will do. Certain members of the government who are on the committee having to do with the matter have discussed it from time to time; but it has not yet been referred to the government; and I doubt that it will be until we have the full information, because it would be a waste of time to be discussing it in the full government until that information is available. I am not in a position to state whether it would be a flat rate to everyone or whether it would be varied to some extent.
A suggestion has been made by the hon. member for Portage la Prairie to the effect that I may have pictured the position of the farmer as being somewhat better than it is. I was careful to say each time I mentioned it that his position was not nearly as good as it ought to be. I think, when one has said that, one has said about all that is necessary to say in order to indicate that he has no idea that the farmers are doing nearly as well as some people who are not farmers think they are doing. I have had some lively arguments recently, some of which have found their way on to the floor of the house, and hon. members opposite have been attempting, in a sort of kindly way, to use the words of my friend the Minister of Labour, to suggest that probably I may have gone too far in suggesting that a large percentage of the farmers in Canada could not pay income taxes and, therefore, should not be required to make out income tax forms. I have said that outside the house and inside the house. That in itself is an indication that I do not think that nearly as large a percentage of farmers are in the income tax brackets as ought to be able to get into them. In other words, the farmers are not doing as well as some of us would like to see them do. Still the statement I made is true, that at present they are doing better than at any other time. I am not taking credit for that to the government, except to the extent that we have attempted to guide the farming community in what they are doing, in order to get returns from those who require the products we are suggesting they should produce.
That brings me to the first point raised by the hon. member for Portage la Prairie, who suggested that from what I said he would take

it that I should like to see the farmers of western Canada producing more hogs at the present time. Well, that is true in a sense, but still I do not feel that at this time I should urge the farmers of western Canada to produce more hogs. The situation in the world is such that at the moment it is easier to market cereals than to market hogs. Someone may think, when I say this, that I am advising the farmers not to produce hogs, but I do not know where you can draw the line as between the two statements. The farmers will have to do that themselves.
I would say the farmer who is properly equipped to produce hogs would be very foolish to get out of that production. The farmer who went into hog production during the war period in a temporary way, without providing himself with all the necessary equipment to carry on that production in a country as cold as ours, is perhaps wise to be out of it at the present time. But I think those of us who have farmed over a period of years have generally found that it is good to take up one line of farming which is suited to the community in which we live and go ahead and produce on that basis through good times and bad. In the long run such a farmer will be better off. So I have not thought it advisable for the department or myself as minister to start advising farmers in different parts of Canada as to what they should do.
What I had in mind in suggesting that the farmer of western Canada prefers to produce grain was just that and no more. I did not intend to say anything beyond that. He does prefer it, and I do not think anyone who lives in the west would question that. He prefers to produce grain; and I quite agree with the hon. member for Portage la Prairie that people who go around talking about western farmers going to California do not know anything about western Canada. Only a very small percentage of the farmers of the west are able even to come and see Ottawa occasionally, let alone go to California; and some of those who are elected to the house do not always tell the correct story with respect to conditions back home.
The farming community out west is much like the farming community anywhere else. I do not think I would be fair to this house or to anyone else if I did not say that farmers, as human beings, are much like any other group of human beings; and I venture to say the majority of the farmers in this house like to make their living in the easiest way possible. When I say that I am not suggesting that the farmers are trying to avoid work, because any farmer who tries to avoid work

Supply-Agriculture
does not remain on the farm very long in this country. Work is the main thing that keeps him there.
Having said this in order to clear up any ideas that may be in the minds of those who heard the hon. member for Portage la Prairie give his impression of what I said earlier, I hope it will not be necessary later on for me to say that I have not been attempting to suggest that the farmer is making great wealth, nor have I tried to suggest that he is not as well off as people in most agricultural areas are at the present time.


Gladys Grace Mae Strum: I believe two or three other things should be said, and I should like to refer to the Economic Annalist, put out by the department under the minister, in relation to farmers' costs. We agree that the gross product, the physical volume, has gone up tremendously, because of rainfall and perhaps because of the Minister of Agriculture. It is pointed out here that a tremendous program was carried on by educational campaigns, plus price increases and subsidy payments, all directed at production; and the sum total of all those efforts was a tremendous increase in the physical volume of goods. Rainfall, price subsidies, the necessity of feeding the world-all these things were factors. But the farmers' costs have gone up tremendously, too. It we take the period 1935 to 1939 as the base, and the index as 100, in February, 19-18. farmers' costs stood at 170-7; so that while he has more money his real income has been reduced to that extent.
Then the farmer still needs many things. According to this report, his buildings need painting; he needs more machinery; his farm home lacks many facilities essential to the well-being of the modern farm family. I agree with the hon. member for Portage la Prairie; I think the minister is placing a wrong interpretation upon what the farmers like. To a farmer a car is not a luxury but part of his working equipment. He depends upon it to get his repairs; he must have it in order to run his business, and it cannot be looked upon in the same way that a car is looked upon in the life of an urban dweller. In the same way a telephone is not a luxury to a farmer; a tractor is not a luxury. The farmer has been forced to put money into these things as part of his equipment. His home also is part of his equipment, but he is not given any exemption in his income tax return on account of it. He can get an allowance with respect to a henhouse or a pigpen, but not with respect to the family home, which is just as much a part of his equipment as anything else he uses in order to remain there and produce.
I doubt whether the program for next year will show the same results as the past year or two, if the minister's own report is correct, because it points out that the size of the net income determines whether or not a farmer remains solvent. The net income in the years between 1941 and 1946 increased from 8250,000,000 to 8625,000,000; but in analysing these figures the report goes on to say that the increase was due in part to price control and subsidy programs. These price control and subsidy programs have been removed as incentives, and it is doubtful whether agriculture will be able or will want to keep up the effort to produce this volume of goods to maintain this level of income.
I do not think it should go out across Canada that the western farmer is crude or callous or does not appreciate the better things of life. As against that we have the fact that the farmer goes tb so much trouble to do the things the minister is suggesting; the fact that he will put a thousand dollars into the erection of a wind charger, and the tremendous difficulty there is in doing that sort of installation yourself. It has been particularly difficult in the last few years. If a contractor is building a block of houses in town he can get twenty bathtubs; he can get all his shingles and nails, because he is in that business; but when a farmer looks for those things he has to pay a great deal more. There is no wholesale price for him; he gets no priority. No one comes along and digs his ditches for him with a ditching machine. He digs them with a pick and shovel. He can do these things, though, if his farm income remains at a sufficiently high and stable level so that it will pay him; and incidentally they increase his production.
When the minister said a few minutes ago -the farmer did not get as much as some people think he gets, he should have said the farmer does not get as much as some people. The farmer is the man who does the hard, physical work to feed the world; and we should not forget that food is the one thing you cannot do without. You can do without a lot of people and a lot of other things, but if you run short of food you begin to die and eventually starvation gets the better of you.
I think we should demand for farmers some sort of civilization which would be complete with educational and health facilities, things that make life comfortable, things which farm families certainly earn and deserve. But we should never apologize for the farmers, and certainly we should never accept less than other people get.
Supply-Agriculture


Frederick Samuel Zaplitny: The discussion thus far on this item has been pretty well an effort to estimate what the farmer has been receiving, or what he should receive in terms of national income. I should like to spend a few moments tonight to set out, perhaps in a somewhat broader form, what I believe we should have for ourselves, as a nation, by way of agriculture.
I believe we should first of all, set out those objectives upon which we can agree, namely the purpose for which agriculture exists. They could be classified under three headings: first, to provide food for the optimum nutrition for all our people, and to produce all possible raw materials for industry; second, to establish for all workers in agriculture, including farm operators and farm labour, a standard of living comparable with that provided in better organized urban industries, especially in relation to housing, educational opportunity and facilities, health and general culture and, third, to produce over and above our maximum needs the maximum amount of agricultural commodities for export.
If we set out those as objectives, to begin with, I think we might even surprise ourselves as to how many other things we could agree on in the House of Commons. I do not know that it does us very much good to thresh over what the farmer received back in 1940 or 1920 or 1947, if we do not make any concrete or comprehensive plan as to what the farmer may be able to receive in 1949 or 1960. I believe that is far more important.
Another factor which seems to come out of this discussion is the interdependence of agriculture generally across this country. It is so easy, as was exhibited here tonight, to get into an east versus west argument about agriculture. I cannot think of anything more futile. East or west in this country, the man who tills the soil and who produces food is attempting to make a living for himself and his family and is contributing to the wealth of the nation. It does not matter very much what type of produce he produces, or what province he happens to live in.
The fact that he is in that industry, and the further fact that that industry is the backbone of the economy of the country should be sufficient for us to treat it as a national industry, for the good of the whole nation.
As an example, in the house on many occasions we have heard about various forms of assistance for agriculture. At one time we talk about the Prairie Farm Assistance Act, and at another time about the Prairie Farm Rehabilitation Act, each of which has to do chiefly with western Canada. At times

members from other parts of Canada get a little tired of providing that sort of assistance, and wonder why it is not given in other parts of Canada.


Mr. LENNARD:: I do not know that we are tired of giving assistance, but we have to sit here so long and hear so much about it that we get pretty tired of hearing it repeated so often. We are more tired of that than of giving the actual assistance.


Mr. IRVINE:: Do something about it, then.


Frederick Samuel Zaplitny: I hope the hon. member will not blame those who are talking about it if there is some measure of repetition. After all, those of us on this side of the house particularly, can only suggest to the government what it should do. The government has to cany it out; and so long as the things we are suggesting have not yet been carried out, to that extent we shall have to keep on urging that it be done.


Frank Exton Lennard: I just wished to point out that we were not-


William Irvine: You have been talking about tariffs for a hundred and fifty years.


Frank Exton Lennard: I will do my own talking; you do not need to put words into my mouth.


Frederick Samuel Zaplitny: I wish to asssure hon. members that, regardless of where they come from, I am not approaching this matter in a partisan spirit; as a matter of fact, I am trying to do the very opposite. I understand what my hon. friend means when he says that sometimes he becomes annoyed at or tired of listening to the long discussions on a subject about which he may not be particularly interested at the moment. But of course that works out both ways. And so long as we are members of the House of Commons, that is one of the penalties we have to pay for being public representatives.
An example of the interdependence of agriculture, both east and west, is the fact that while we in the west do ask taxpayers right across Canada, whether they are farmers or not, to contribute through their taxes to help us in connection with prairie farm assistance, and so on, on the other hand we are quite as cheerfully contributing to our taxes to help pay, for example, for the freight charges on feed grains going into eastern Canada. That is costing the western farmer in his tax bill a certain amount of money. Not only that, but it adds to the annoyance when he sees the feed which he himself has produced going somewhere else to feed somebody else's hogs, when he, the farmer who produced it, has to pay the freight to take it there.

Business of the House
We can understand those small sources of friction or annoyance. But I do not think they are enough to make us talk of an east-west attitude in the house.
There are many other ways in which we are interdependent. The nature of production in different parts of Canada makes us so. There are some things which can be produced on the prairies far more economically and far more conveniently than they can be produced, for example, in Prince Edward Island or New Brunswick. On the other hand, potatoes can be produced in those provinces to better advantage than they can in western Canada.
What is required is not so much a piecemeal argument as to how much the farmer should get for this or that at any given time, as it is a comprehensive program designed to increase over-all production in agriculture throughout this country, through a fiscal policy which will provide an incentive to farmers to produce the goods required, and at the same time give them a certain amount of protection and stability in their prices so that they will know that they will not produce themselves right out of their own market.
We know that not long ago an international wheat agreement was agreed upon, and that it is to be ratified at a future date.
It appears, Mr. Chairman, that I shall not be able to complete my remarks this evening.
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

Arza Clair Casselman: What is the business for tomorrow?


James Garfield Gardiner: For Wednesday the
order of business will be the third reading of Bill No. 203, to amend the Unemployment Insurance Act, 1940; committee of the whole on Bill No. 211, to amend the Royal Canadian Mounted Police Act; second reading of Bill No. 9, to amend the Northwest Territories Act; second reading of Bill No. 11, to amend the Dominion Water Power Act; Bill No. 208, to amend the North Fraser Harbour Commissioners Act, Bill No. 209, to amend the National Parks Act, the resolution of the Postmaster General to amend the Supplemental Payments Act, and supply, Department of Agriculture, if we get that far.


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