Mr. RODNEY ADAMSON (York West):: Mr. Speaker, I rise on a question of privilege. In the Globe and Mail of May 19 the following words appear, referring to the meeting of the industrial relations committee on May 18:
Mr. Croll gained Progressive Conservative support by reason of that party's recent adoption of union security as a plank in its labour platform.
As a member of that committee I say this report is not in accordance with the facts. The vote on the amendment was one Progressive Conservative for the motion and five Progressive Conservatives against the motion.



LIBRARY OF PARLIAMENT


Hon. COLIN GIBSON (Secretary of State) moved:: That the report of the civil service commission recommending changes in the compensation of the staff of the library of parliament, laid on the table of this house on the 5th of May instant, be referred to the joint committee on the library of parliament.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. LEWIS MENARY (Wellington North):: I should like to address a question to the Minister of Trade and Commerce, of which I have sent him notice. Last spring the Hesky Flax company, in Ontario, distributed flaxseed among the farmers of our district. They gave the flax to the farmers for seed and were glad to get this seed back plus a bonus for the use of the seed. In addition they were to have the privilege of buying the flax. A farmer came in to see me on Saturday-


Mr. SPEAKER:: Order. The hon. member knows that in putting a question he should be brief and to the point. If the question is lengthy I suggest that he put it on the order paper.


Lewis Menary: This farmer was in to
see me on Saturday. He delivered about sixteen tons of flax to this company and he has not been paid the bonus.


James Horace King: Order. I suggest that the hon. member put his question on the order paper.


Lewis Menary: My question is, when will he be paid the bonus on this flax?


James Horace King: Order.


Mr. GRAYDON:: On a point of order,
Mr. Speaker, this hon. member does not take up a great deal of the time of this house-


An hon. MEMBER:: You do.


Gordon Graydon: Well, I shall deal with you myself at the proper time.


Some hon. MEMBERS:: Oh, oh.


James Horace King: Order.


Gordon Graydon: I should like the hon. member to be permitted to put his question, because whether or not these people over here want to treat seriously the problems of the farmers, I believe at least this question should be answered.


James Horace King: The hon. member knows perfectly well that it is against the rules to make a statement when asking a question. The question should be brief and to the point. Two or three times I asked the hon. gentleman to put his question and to be brief. He did not do so. I suggested then, and I still suggest, that he put his question on the order paper.


Gordon Graydon: He did ask the question. I do not think Your Honour heard it.


James Horace King: Orders of the day.


Gordon Graydon: Mr. Speaker, surely the hon. member should have a chance to ask his question. He has already asked it, but I do not think Your Honour heard it.


James Horace King: Hon. members will realize that there is only one Speaker in the house, who is responsible for order.
Inquiries of the Ministry


Gordon Graydon: Mr. Speaker, I desire to ask a question of the Minister of Trade and Commerce. Why has not the bonus to which the hon. member refers been paid?


Right Hon. C. D. HOWE (Minister of Trade and Commerce):: Mr. Speaker, the hon. member said he had given me notice. I have not received that notice, nor have I the faintest idea of what the hon. member is talking about -and I think the hon. member for Peel is in the same position.


Lewis Menary: I sent the notice this morning.



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
Mr. W. CHESTER S. McLURE (Queens): Mr. Speaker, I should like to ask a question of the Postmaster General, in view of the statement he made yesterday. Will all first-class letter mail originating in Prince Edward Island and carried by Maritime Central Airways have the same advantages of airmail transportation as if Trans-Canada Air Lines operated to Prince Edward Island?
Hon. ERNEST BERTRAND (Postmaster General):: In my statement of yesterday I said that in the near future feeder lines would have the same privilege. We are organizing that. It may not be ready for July 1, but we want to extend the same scheme to them.



ONTARIO ELECTION


[Stage Direction]
On the orders of the day:
Mr. DONALD M. FLEMING (Eglinton); Mr. Speaker, I should like to ask a question of the parliamentary assistant to the Minister of Trade and Commerce. In view of the hon. member's interest in the matter, would he explain to the house why last night, by actual count, there were only 197 persons present at a Liberal rally addressed by Mr. Farquhar Oliver?
James Horace King: Order.



VICTORIA DAY


[Stage Direction]
On the orders of the day:
Mrs. GLADYS STRUM (Qu'Appelle):: Mr. Speaker, I should like to ask the Prime Minister whether the house will be sitting on Monday.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Yes. We have frequently sat on Maj' 24; this year, as hon. members ai'e anxious to get through before the end of June, or by the end of that month, I think the general desire would be to sit on Monday.



NATIONAL HOUSING


[Stage Direction]
Right. Hon. C. D. HOWE (Minister of Reconstruction and Supply) moved the third reading of Bill No. 280, to amend the National Housing Act, 1944.
Mr. A. M. NICHOLSON (Mackenzie):: With the co-operation of the house I shall detain hon. members for only a few moments.
Statistics in connection with New Zealand prompt me to bring the figures up to date. Both the hon. member for Brandon (Mr. Matthews) and the parliamentary assistant to the Minister of Reconstruction and Supply (Mr. Mcllraith) referred to housing in New Zealand as compared with Canada. I have checked our statistics and with New Zealand officials here, and I find that in the figures for last year there is a slight discrepancy. The figures given yesterday by the parliamentary assistant indicated that 11,000 units were built in New Zealand last year. I am told the final figure is 12,734, a ratio of seven per thousand, which is slightly higher than the figure for Canada.
I wish however to draw the attention of hon. members to a comparison between the two countries in the field of government assistance in connection with housing over a period of years. In Canada we embarked upon assistance to housing in 1935, in the same year New Zealand elected a Labour government. In Canada since 1935 we have given assistance imder the National Housing Act to 54,459 units; under Wartime Housing to 31,192 units; and then, as to houses built under the* Canadian Farm Loan Act, although only 167 have been officially reported, I am told that for some years records were not kept. Assuming however that there were 50 each year for eighteen years, this would give a total of 900; and under the Farm Improvement Loans Act there were 994. This makes a grand total of 87,545 houses in Canada built as a result of government assistance.


Mr. McILRAITH:: Go ahead and tell about the other government plans.


Alexander Malcolm Nicholson: This is compared with-


George James McIlraith: Mention integrated
housing-Housing Enterprises.

The Budget-Mr. Macdonnell


Alexander Malcolm Nicholson: I have given the figures.


Mr. SINCLAIR:: The figures you wished to give.


Mr. COLDWELL:: These are official figures.


Alexander Malcolm Nicholson: In New Zealand-the hon. member may bring this up if he has additional information-there were 68,453 units, or 38 per thousand as compared with seven units per thousand in Canada.


George James McIlraith: I think perhaps the hon. member did not grasp the purport of my inquiry of a moment ago. What I was seeking to ask him was about the other government plans to which he omitted to make reference. I have in mind such things as integrated housing-Housing Enterprises-emergency shelter, Veterans' Land Act, and so on.


Alexander Malcolm Nicholson: These are in the tables I got this morning from government departments. They coincide with the figures the minister gave the other day. The comparison shows 38 units per thousand of population in New Zealand as compared with seven units per thousand in Canada.
I might mention that state houses in New Zealand have a kitchen, living room, two bedrooms, usually a sun porch or verandah. The house is placed on from one-eighth to one-quarter of an acre. It rents for 25 shillings a week, which at the the present rate of exchange is about $15 a month. In view of the large number of units which have been built in New Zealand I suggest this comparison is most interesting.
The minister checked me up on statistics I gave in connection with incomes in Canada. I said before that I was using the latest information from the bureau of statistics, that of 1942, and I was correct in that statement; apparently that is their latest information. According to those statistics, seventy per cent of Canadian families were getting less than $2,000 a year. I find however that the Minister of National Revenue (Mr. McCann) has compiled information as to incomes up to date and I am therefore pleased to make the necessary corrections. According to the very latest information from the Minister of National Revenue, which relates to the 1946 taxation year, about 68 per cent of Canadian taxpayers are getting less than $2,000 a year. There is this slight correction, therefore-from 70 per cent to 68 per cent.
I wish to conclude by emphasizing again the fact that I am not running Canada down.


Some hon. MEMBERS:: Oh, oh.


Alexander Malcolm Nicholson: I am merely comparing what Canada did during the war years and
what Canada could do if we were getting the leadership from the minister's department that he gave in the field of construction during the war. Canada has set records in the last two or three years in the building of theatres, cocktail bars, bowling alleys, luxury hotels-


John Ewen Sinclair: And factories.


Alexander Malcolm Nicholson: But we certainly are not setting any worthwhile record in the building of houses for our people. We have plenty of luxury hotels, but we have not been able to break any new records in providing houses for the 68 per cent of the people who, according to government statistics, are receiving less than $2,000 a year.
Motion agreed to and bill read the third time and passed.



THE BUDGET


[Stage Direction]
The house resumed from Tuesday, May 18, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Mr. J. M. MACDONNELL (Muskoka-Ontario):: Mr. Speaker, since we adjourned the debate on Tuesday night there has been time for us to learn something of the public reaction to this measure. So far as we have gone I should not think the Minister of Finance has taken much comfort from it. The mildest word I have heard used is "disappointing", and the word "black" has been used almost somewhat freely. The word "vinegar" has also been on people's lips. I shall have something to add to this torrent in my small way.
First of all, I wish to say something about taxation in a general way. It is hard to realize that less than ten years ago, in 1939, when we thought we were paj-ing taxes, we were really paying nothing compared with our present taxes. At that time the per capita tax was $38.76, which for a family of five-let us call it a normal family-would be S194. Of course in those days most of the taxation was in the form of customs and excise which was largely concealed from the ordinary taxpayer so that he was almost unconscious of the fact that it was taxation at all.
In the intervening years the government has invaded our lives deeply. We have to make large payments for interest, and the Minister of Finance takes a large slice of our income for the social services which we have approved. We have made huge additions to our debt because of war, and we have to make
The Budget-Mr. Macdonnell

large expenditures-perhaps not as large as we may have to make-for defence. A large dollop of our income goes for government-owned enterprises. We are in the railway business, the film business and various other businesses and they nearly all cost money.
I think it is very desirable that the taxpayer should have present in his mind exactly what is happening to him and what it costs to support all these outlets. As I said a moment ago, the federal tax in 1939 was $38.76, but the federal tax is now $198. The total tax from the three taxing jurisdictions is $259 per capita, or roughly $1,300 per family of five. I imagine that there is a feeling in some quarters that that is an average figure which does not mean very much to the average man. It is felt that it is paid by the well-to-do, but there never was a greater mistake than that. It is quite true that people with large incomes are being heavily taxed-and that is having an effect, and the effect is bad, on investment capital- but after all they have paid has been collected it represents only a small fraction of the total. To all intents and purposes the average is spread over the rest of the community. The average family may as well face the fact that that is what it is contributing to the national revenue, that that is what it pays.
I suggest that it is worth looking for a moment to see what it gets. First the average family knows what it gets for its municipal tax. It gets street lighting, education, water and all that kind of thing. It is interesting to note that municipal taxes during that period have not gone up; they have remained almost identically where they were, being roughly still $125 for the family of five. There has been an addition of $875 in that period, almost wholly in the form of dominion taxes. I think it is desirable that the people who carry this burden, the people who are trying to look after themselves, should realize just how much they are paying. After all, SI.300 is not chicken feed. I suggest that if every family knew just what was happening they might take a greater interest in what is going on.
This naturally raises the question of economy. I am not going to say a lot of old things about economy. Not long ago the Minister of Finance said in this house-I sympathize with him-that keeping down expenses was quite a job. He also said that he felt he did more for it-this is a free interpretation of his words-than anyone else in this house. That may be so, but after all he is the only one who really has a chance.
It is hard to abandon wartime spending. Spending is a pleasant thing and, as I say,

it is difficult to get away from it. The Minister of Reconstruction and Supply will be glad to have me recall to him what he said in this house in the autumn of 1945 in answer to a question of mine. He said;
I dare say my hon. friend could cut a million dollars from this amount, but a million dollars from the war appropriation bill would not be a very important matter.
It was not a very important matter to him, but in Muskoka-Ontario we think that a million dollars is quite a lot of money. After we have been spending at that rate it is very hard to cut down. I should like to say a word about how the total number in the civil service has grown. I recognize that there are reasons for great growth, but the figures are interesting. In 1939 there were 46,000 civil servants; in 1944 the number had grown to 113,000, and in 1946 to 137,000. The full figure, including those in government corporations, at the peak was 173,000, from which there has been a substantial recession.
It is hard to know whether the post-war economy effort has slackened at all when there are still over 150,000 people in government employ. I suggest that there is always a great deal that could be done if only the Minister of Finance could harden his heart enough. I suggest to him, with every desire to be helpful, and I am sure he knows that that is always my wish, that there is only one way to economize, and that is to give people less money to spend.
It seems to me that if the minister gets involved in arguments with departmental heads about the reasonableness of what they would like to have, he is lost before he begins. If the minister could somehow or other put himself in a frame of mind when he is going over these items of having a deficit, of actually believing that the money is not there; if he could only say to department A or department B, "That is all you can get," I think he would be amazed to see how somehow or other they would get along with the money he would give them.
I heard of a manufacturer who had a pleasant and simple theory that there were two kinds of employees in a business, those who produced and those who did not produce. Among those who did not produce he included the clerical staff. He came into the managership of a new company where he found a clerical staff of about forty. He fired the lot of them. After that he began to take them back gradually one by one, but he took them back only as it was established to his satisfaction that they were really needed. I am not suggesting any such heroic measure to the Minister of Finance, but I am suggesting that there

The Budget-Mr. Macdonnell
is only one way of getting economy; that is, he should not argue with people over what they would like to spend; he should tell the departments what he is going to allow them. After all, the trouble about the minister is that he can come along and put his hands in our pockets. If he were not able to do that I think he would find that people would manage to get along with less.
There is another kind of expenditure that is made, which while not very large in itself, is bad because it creates a most unfortunate impression on the public mind. I refer to the expenditures made for various kinds of commissions. Take for example, the price spreads committee. It is going to cost the country a lot of money. The Minister of Trade and Commerce will say that it is just chicken feed because he does not think a million dollars is any money at all, but when the ordinary taxpayer finds out how much it is costing for lawyers, for accountants, for stenographers and all the various incidentals, he will think it is quite a lot of money.
When we set up bodies of this kind I think it is proper to ask just what they are going to do. It is not fair to take this price spreads committee because it has been such a fiasco. It was beaten before it started. I feel sorry for my friend the Minister of National Health and Welfare (Mr. Martin), who has had to preside over it, because, as I say, from the start he was beaten. If he did not find that prices were extravagantly swollen, he was going to fail; on the other hand, if he found that they were swollen, he would be criticizing government departments, the department of investigation and the department of control, for not keeping them down.
As I say, that kind of commission is undesirable. Compared to other large expenditures it will not be much, but I think it creates an impression in the public mind that we are careless with their money. I do not think parliament should be asked to lend itself to that kind of thing.
I come now to the minister's surplus. The other night he said it was of a nature to gladden the heart of a finance minister. But I do not think it should have gladdened his heart, and I am not sure it did, because in the latter part of his speech he spoke more realistically about it. It rather should have saddened his heart, for this reason:	the surplus was due, first, to the unfortunate rise in prices, which jumped the taxes; second, to the tremendous spate of buying from the United States, which also greatly increased taxes, and third, to bad estimating.
I come now to the minister's taxation proposals. I have referred already to the widespread disappointment. Of course the trouble is that people want to spend their own money. They think they know how to do that better than governments, and they would like to have as much of their own money to spend as possible.
I said that I approved of budgeting for a surplus, and so I do; but the question is how much of a surplus? On that I would like to say a word further.
The reason I believe in budgeting for a surplus is this. From time to time there are bound to be periods of lesser activity during which, when you consider the obligations which the state has now assumed, we shall have to budget for deficits. Therefore if in a time of large income we .do nothing to pay off debt, then the debt is going to go up and up and up, and in the end confidence will be destroyed. Nevertheless it is pertinent and proper to discuss how much the surplus should be. The minister was cagey in discussing this; he played with his cards very close to his chest. The one universal comment made when the minister was through was: Well, no election this year. The reason is obvious. The reason was that the minister did not, like little Jack Horner, put in his thumb and pull out a plum. He was very chary about distributing anything that even looked like a plum, and that gave rise to the thought that the plums were being kept until later. That might be a suspicion of unworthy minds; nevertheless it was widely entertained, and it was what everybody had in mind when they said: No election this year. This may be said: if the hard-pressed taxpayer is being denied relief this year in order that at some later time, with an election pending, little Jack Horner may put in his thumb and pull out a plum, that is wrong, and the taxpayer should resent it, and it should be chanved before this budget passes the house.
Let me look for a moment at the figures. The minister is budgeting in the coming year for a surplus of 1489 million. Last year he budgeted for $190 million, and he explained that that would be reduced by $110 million if the three provinces, that had not come to agreement with the federal government, came in. Let me repeat those figures. Last year he budgeted for $190 million, and tax relief of $160 million. This year he is budgeting for a surplus of $489 million; and he is giving tax relief nominally of $60,000,000, but really it is only $40,000,000 because $20,000,000 of that is in the amusement tax, and that involves merely a change in the burden, so it is really only $40,000,000.
The Budget-Mr. Macdonnell

Let us take this $489 million. Last year the minister's actual surplus was $460 million move than the estimate. He budgeted for $190 million and his actual surplus was $650 million. I am not suggesting that there is going to be any such excess this year. I do not think there will be. Nevertheless I feel confident that the budgeting is done very cautiously. Nobody wants to be caught out in overestimating. I think it is resonable to assume that $489 million might become $500 million or $600 million or more, but I am not going to press the argument. I am going to assume that it is practically, say, $500 million. If the debt reduction were the only thing we had to think about, no one would be more pleased than I to see $500 million used in paying off debt. But that is not the only thing we have to think about. There is the fact in the first place, that living costs have gone up considerably, and it is important to relieve the hard-pressed low-income taxpayers. Secondly, we still need to provide incentive, because we still have a situation in which the government in one way or another has been providing a terrific incentive to industry, and one day that will have to be done by ourselves. Therefore I say it is important to have the incentive. There is a third reason which it is proper to take into consideration, and it is this. We are in danger of being faced with a new tide of wage demands, and if anything can be done to relieve the cost of living in the lower income brackets I think it should be done, and done without delay.
I would like to read a word or two from a broadcast in England the other day by the Right Hon. Oliver Stanley, because i't is relevant to the problem we are discussing now. Speaking of the British budget on April 7 last he said:
We don't quarrel with the need for a substantial surplus, but we do differ from the chancellor as to the way he has got to get it
He had a choice: he could get it by imposing heavy expenditure and still heavier taxation, or he could get it by a substantial reduction in expenditure, with a lower rate of taxes.
Unfortunately he chose the first, and by doing so he stopped himself offering any large tax reductions to encourage incentive and increase production-the other and the better way of fighting inflation.
One further quotation from Mr. Stanley- and this has particular relevance to this budget:
Make no mistake: however necessary such a budget may be in these dangerous times, it does not by itself get us anywhere. The real relief will only come with greater production, and that will only come with greater freedom and greater incentive. Fewer controls and lower taxes: that is what we want to see.

In the light of that I venture to suggest to the Minister of Finance that there are certain things he could do and do now. I suggest that there should be a contribution to the cost of living by an increase in the exemptions for people in the low income brackets. Just in case anyone wishes to know if I have a figure in mind, I say no; but I have had an inquiry made and I think I am in a position to reach the conclusion that a substantial measure of relief could be given to those in the low income brackets at a cost to the treasury of not more than 25 per cent of this figure of $500 million, which I have taken as the likely surplus.
There is one other thing I want to suggest, and I think it is of very great importance. I am sure everyone will agree, even those who do not share the view that private enterprise is the solution to our economic problems, that the lifeblood of private enterprise is that new and small businesses should constantly be coming into the picture and be encouraged to become bigger. Those of us who believe in freedom, and are just as strong as anyone else in disliking monopoly, believe that that is the way to do it. Therefore I suggest that the minister might take into consideration the giving of some relief to small enterprises-and I mean small enterprises of any kind. Someone asked me if that would include a farmer, and I said yes- anyone who incorporates his business and therefore comes within the four corners of the corporation tax act. I suggest to the minister, and again I am not going to give a figure, that it might be desirable, in cases where income is reinvested in the business, where there is no question of anyone taking it out, but where income is really invested and becomes the means of further employment and further production, there should be an amount at the bottom which is free of tax, and an amount above that where the tax might be five per cent, another amount where it might be ten per cent, and another where it might be fifteen per cent, the full tax to become payable at a comparatively modest amount. I repeat that I think such a measure would be of great benefit; and while I am not attempting to estimate its cost, I would think its cost at the present time would be very little indeed.
So far we have been considering what you might call the dividing up of the cake that we have. We have a certain amount. How are we to divide it up? I want to turn to a larger area-far more important in one way, because our whole welfare is bound up in government policy here. After all, whether we like it or not, government is in our affairs, government

The Budget-Mr. Macdonnell
is influencing us at every turn, and it becomes of tremendous importance whether they make right decisions or wrong ones-because they are making decisions, and big decisions, all the time.
Having said this, I turn to the question of trade. There is no need to waste the time of the house one second to say how vital trade is to all of us. On December 9 the Prime Min-itser began a debate on the Geneva trade agreements. By an unhappy chance, Mr. Speaker, these agreements were announced almost on the day, perhaps on the very day, that we also had announced the spate of embargoes, permits, quotas and all these other things which the Minister of Finance denounced the other day, quite sincerely I am sure, but which unfortunately have been forced upon us. In other words, the government found itself in the position of opening the door to trade with one hand and banging it shut with the other.
It would appear as if in this case the Prime Minister's instinct for timing had failed. The other da}' the Prime Minister was kind enough to give some advice-he gave it in a kindly way, as the Minister of Labour would say-to my leader. I am now going to read what the Prime Minister was kind enough to say the other day. He said, as reported at page 3939 of Hansard:
I give my hon. friend a word of counsel. It is always wise to try to anticipate all possibilities before they arise. In so doing you do not find yourself unnecessarily embarrassed when the important moment comes.
I am inclined to think that the Prime Minister would regard what happened last autumn as an exception, perhaps one of the very few exceptions, to his successful following of his own advice. I will say to the Prime Minister that if he was embarrassed when he made that speech on the Geneva agreements, I did not see any sign of it. I regret that he made a first-class political speech, not the kind of speech I hoped he would make. I hoped he might have taken the trade agreements out of politics, but he did not; he put them right in.
In opening the debate the Prime Minister said, as reported at page 100 of Hansard:
I should like to say that it is a source of particular satisfaction to me that the present agreement should be so completely in line with what has been the policy of the Liberal party in Canada from the days of Sir Wilfrid Laurier down to the present time,-
I was sorry to note that apparently Alexander Mackenzie and Edward Blake no longer enter into the picture. I hope that does not mean that Sir Wilfrid Laurier himself will
ever be forgotten. At any rate that is what the Prime Minister said. He went on to add:
-and that it should be my privilege to present it to our parliament. The Liberal party has always been in the van in the struggle for greater freedom of trade.
Further on he said:
The party has always acted on the belief that prosperity is inevitably associated with extensive and general international commerce.
It is interesting, in the light of that, to look at the Liberal budget of 1930, which, I think I am correct in saying, gave the tariff its biggest single hoist since 1878; and of course we all remember the steel pipe duties in the autumn of 1945, when unfortunately the Prime Minister himself was away. So far as we can judge there was a bit of mutiny across the gangway at that time. At any rate we know this, that the increases in the duties were abandoned. Whether it was by reason of the master's voice from Winnipeg is really not a question we need pursue further.
These jarring notes of 1930 and 1945 are mild compared with what has been done since. We all remember the exchange conservation bill. A moment ago I referred to the spate of exclusions, quotas, permits and all these special powers given to the minister, to whom I must not refer in any way that he will not like.
The Prime Minister did not take part in the debate on the exclusion and conservation bill. I imagine the Prime Minister was embarrassed-at any rate too much embarrassed to take part in that debate. I imagine he realized the truth of the words of the negro gentleman who said: "Massa, dem two things don't paralyse."
I now want to come to the remedial measures, which were quite highly advertised last autumn. They do not seem to be working very well. The imports in January and February of this year stood at $287 million, which I understand is a record. There is an interesting circumstance there. Capital goods are coming in freely. Apparently the only people who have actually suffered are housewives, and people who, like the hon. member for Rosedale (Mr. Jackman), like lettuce and other innocent things of that kind. They have suffered, but capital goods are coming in. No doubt the minister, as I shall point out later, committed himself to an extravagant and unwise policy of special depreciation.
According to the minister, last autumn we were going to correct our difficulties largely by increasing our export of manufactured goods to the United States. I should like

The Budget-Mr. Macdonnell
Hoffman, European administrator, signed with other members of the national advisory council, a report sent to congress that the United States will require countries getting ERP aid to work out devaluation with the 46-nation world monetary fund.
I was interested to find in the most recent Economist that even the International Monetary Fund apparently is seriously considering the situation, that it has its eyes and its mind by no means closed.
I have been talking about what I regard as a distortion of our economy in our external economic relations. I now wish to talk briefly about what I regard as a distortion at home. Before the end of the war, in the spring of 1945, the government issued a white paper designed to deal with conditions after the war, when it was expected there would be some unemployment; and at the time I think the precaution was reasonable. If the unemployment had in fact come I should think the measures proposed would have had much to commend them. But what I complain about, and what I think has been little short of a tragedy, is that we continued to use those measures long after it was perfectly clear that we should have done exactly the opposite. Signs of the boom really appeared in 1946, and the methods outlined in 1945 should have been altered then, and altered quickly. Instead, the government continued to use them and even accelerated them. What we needed was a sedative; what we got was a strong tonic. What do I mean by that? I mean that the government did two things. It powerfully stimulated plant expansion by what I think were extravagant inducements in the way of depreciation, and it also continued to pursue an easy money policy, which was the other method of encouragement.
Now I want to say a word about this double depreciation. Let us understand exactly what it means. It means that companies are offered special inducements to go ahead and expand their plants as rapidly as possible. In this case they were allowed to deduct especially large amounts of money when that money was reinvested in the business, and so escape taxation on it. The plant expansion under way through the use of this double depreciation is estimated in a government report to cost $1,400 million. That is a terrific amount to impose on the economy of our country. According to this report, a survey of some four thousand companies, 2,241 of them in operation in 1939 and 1,971 coming into operation since, shows that these companies, when alterations are completed, will have a manufacturing capacity of -SS * 5 billion, as against $1-8 billion in 1939. In other words the excess

over 1939 is 377 per cent. The comparable figure in the United States is 50 per cent. That is, proportionately we have gone seven and a half times as fast as the United States.
I mentioned the other evening that the Minister of Reconstruction and Supply said: "Well, what's the matter with that?"-or words to that effect. The answer is this. If we can find markets for all these things; if we can sell all these goods and our producers of natural products can also sell all their goods, so that we will have the home market and the foreign market, that will be fine. But whether or not that is likely to happen remains to be seen. The other evening I used a simple illustration. I hope I am wrong-this is one time I would like to be wrong and see the minister right; but I used the example of a farmer straining himself and using all his resources to build a huge barn, which incidentally may turn out to be more than he needs, and at the same time neglecting to provide his family with the necessities of life.
The immediate result of this development is that an inordinate amount of our resources is turned toward this plant expansion, which means far less for the production of consumer goods, which in turn means this has been a most potent influence in the rising prices of consumer goods. AVe have been providing the money but we have not been providing the goods; and even those of us who do not profess to be economists know that this is a simple reason for high prices.
I sometimes fear that Canadian businessmen are taking this matter much too lightly. I think they are being led astray by what has been going on abroad. I have heard Canadian businessmen say, "Markets are illimitable; we we can sell anything we make". But this buying spree abroad is not going on for ever. As European nations become able to look after themselves there will be less need to buy from us. In the meantime I say again that at the very time our relations with the United States are so difficult, and when we really have not improved our position at all in spite of our restrictions, we are denying our manufacturers the advantage they had before July 1946 in selling in the United States. AVe have taken away a ten per cent advantage they formerly enjoyed.
When I refer to exchange, however, to me a convincing argument and one that outweighs all others is the appeal to realism. AVhen you find things happening between people who are trading with each other freely, that comes as close to realism as you can get. To me it is not real for us here in Canada to sit in an ivory tower saying our dollar is worth one

The Budget-Mr. Macdonnell
hundred American cents when actually it is being traded in the United States at between 92 and 93 cents. We too much resemble King Canute.
In passing, and coming back to this question of the export of manufactured goods, I want to say that if we can build these hundreds and in fact thousands of factories, and if they can all export their goods, it will be splendid; but we must remember that if we try to export to the point where we are not able to buy enough to provide our producers with their natural markets, the first people to feel the effects will be the manufacturers, because the home market after all is their best market.
I want to say a word about the investment aspect. How did we provide all this money in 1947? It was not by savings. Personal savings amounted to only S768 million in 1947 as against SI,676 million in 1944. The gap was filled largely by the realization of $750 million of our American exchange; in other words we were living off our fat. The amount was realized and paid to the banks, and became available; indirectly it appeared in effect in the large increase in bank loans. The second thing was the government surplus of last year.
I am going to say a word about savings, though one is almost self-conscious in talking about savings these days. Many people think that is a silly old-fashioned thing only talked about by people who are still living in the nineteenth century. My own belief is that there is great danger in the view which is so widely held that wealth consists in pieces of paper. If only we could think of it in terms of goods I believe we would be much more sensible. If we would also remember that at the present time we are living largely on savings, as I say both government realizations and the savings of private individuals who are spending more than they are saving, as a whole, we would appreciate how important it is. I wish I could make people believe that I think common sense in government one day will prove to be the same common sense that has to apply to individuals; that governments cannot by any legerdemain produce money over the long period, any more than individuals can. If we believe the government can do that, and if we go on believing that there is some secret way by which money can be created, then I say we are just piling up difficulties which one day will recoil upon our own heads. In the long run we have to provide personal savings for investment, just as we have done in the past.
I have dealt with foreign trade, Mr. Speaker, and with what I regard as the distortion of our economy at home. I have said something about the post-war inflation and the post-war boom. I have spoken about the artificial stimulus to our economy, and I want to say one thing more. I want to say a word about the manipulation of the bond market. Prices in the bond market are no longer made, as they always have been made in the past, by hundreds or thousands of individuals buying and selling. They are made by a few men sitting in a room here in Ottawa. How is that done? It is done by the support given the bond market through the Bank of Canada. The evils of this sort of thing have become apparent within the last few months. In January last, on account of an altered attitude on the part of the bank, the price of bonds fell from 104J to lOlf. Later, I think about the beginning of February, the price fell again from 101J to 100L This, of course, was without warning to the business community; it had to be. One can well imagine the embarrassment of executors, trustees and others who had been holding these bonds and since have had to sell them. Incidentally, if the government itself has suffered any loss in its transactions through its various boards, I would be interested to know where it gets the authority for the appropriation to pay such losses. That is another matter, however, which we can take up later.
The technique of course is the use of government funds through certain bodies which have been created. There is the unemployment insurance fund, and there is a fund called the security investment fund, in which the financial community has been much interested for a long time. It was a rather mysterious fund until very recently, but I noticed the other night, if I remember correctly, that the Minister of Finance spoke about it frankly. I may be partly responsible for that, because recently I asked a question about it. I asked what the authority for this fund was, and I was referred to two statutes. Well, when you are refereed to two statutes, even a man who knows as little law as I do, knows that the authority is pretty hard to find. You have to spell it out. It is not clear and distinct and inescapable. When I got those two statutes I took counsel from someone who is a real lawyer-not just a reformed lawyer like myself-and asked him what he thought about those two statutes. He told me you could not spell any authority out of them at all. So I am leaving that question. We can find out all about it later. Meantime in six months that fund has spent $300 million of your money and mine in buying bonds in the market, and the fund has in fact now about $600 million.
The Budget-Mr. Macdonnell

I say, in that connection as in others, that we shall one day return to reality. We shall one day decide to question the judgment of two or three people sitting in an office; for however able they may be, however conscientious or however high-minded, they have not omniscience or supreme wisdom. Against them is the judgment of hundreds of thousands of quiet people who just buy and sell from day to day, matching their judgment against each other. They are going to find that that is the way prices are made, not by this superhuman wisdom.
It is interesting to note what has been going on in England, where there is a socialist government. Of course they have there this new revelation. At any rate Doctor Dalton believed it, and I should like to bring to the attention of the house briefly what happened in England, what the London Economist has described as an unwholesome and unpleasant precedent.
Doctor Dalton was a former chancellor of the exchequer. He undertook to support a certain security there, with disastrous results. The London Economist says this:
A corner has been lifted this week (May 8) of the thick curtain which has shrouded last year's official activities in the gilt-edge market. In the past, the technique of governmental accounting has generally sufficed ... to hide most departmental activities from the public gaze, but operations so large as Doctor Dalton's were bound to peep out through the screen sooner or later.
I commend that to the Minister of Finance. I think some of his operations are beginning to peep out, too. The London Economist continues:
In the pre-budget phase last autumn "Daltons"-
The securities, not as a compliment, were called by Dalton's name.
-rose by some ten points, only to collapse after their sponsor disappeared from the scene.
It will be noted that these securities were called "Daltons." I hope the Minister of Finance will never be memorialized in the same way. However, their sponsor disappeared from the scene. I hope this will be taken as a warning by those who may have any disposition to imitate the good Doctor Dalton. He undertook to impose his will on the bond market, just as our financial authorities are doing today. In the end what he succeeded in doing was to destroy confidence in the particular security he was supporting, so that the security fell disastrously in value.
In a world, Mr. Speaker, which is racked with conflict between those who believe in

freedom and those who, whether they realize it or not, believe in control, I think even at the risk of iteration it is necessary to express what we at least feel in the matter. I do this especially as I shall be followed by the hon. member for Rosetown-Biggar (Mr. Coldwell), and I shall be surprised if he does not use words which we have heard before-the words "exploiting" and "law of the jungle." I am Dot suggesting that what I am going to say now is ill directed against the hon. member for Rosetown-Biggar, because I sometimes have hopes for the hon. member -just as hon. members opposite have had hopes of him in the past. But I do think these things should be said.
First of all, those of us who have the belief that it is not through an extension of public ownership that social security and prosperity will come should not flatter ourselves that it is by any means a belief which is held universally. There are many people who think they have it but who by their actions occasionally show that they have not got it. For instance I cannot quite believe that the thirty-eight per cent of the people who, according to a Gallup poll in February, said they wished to work for the government, would regard themselves as socialists. Nevertheless to me it is disturbing to find that this poll, taken in February, showed that thirty-eight per cent of those who were questioned said they would rather work for the government than for private business.
What does that mean? Obviously it does not mean that I am criticizing any civil servants. We have some of the finest people in the civil service. But I believe an intelligent civil servant would be the first to say that this is a terribly dangerous situation to have abroad. So far as I have been able to discover, in all governments, municipal, provincial and federal, we have about six per cent of the people gainfully employed-that is not six per cent of the whole population, but of people in employment. Here we have about thirty-eight per cent of the people saying they would rather work for the government. What does that mean? I suggest it indicates a deep and disturbing psychological condition. It means that people have taken up the instinct for security, that they want freedom from responsibility, that they want work-yes, work, honest work, decent work, but a limited amount of it, so that they may have plenty of leisure. It is an abandonment of the spirit of adventure, of the driving energy and initiative which, as most of us think, have brought us where we are. I say that unless we stem

The Budget-Mr. Macdonnell
the tide we have no hope of going steadily forward to improve our present economic position.
What do I mean by that? Well, I can illustrate it best by telling of a little conversation I had the other day with a man in my riding-or what I hope is going to be my riding, because it was in Parry Sound. This man is a general merchant, a man of great energy, one of the people who make democracy tick in that area. He said to me, "I work fifteen hours a day. But if the government took over my business and made me the manager of it, I would not work fifteen hours a day. I would work eight hours a day five days a week, and I would ask for two or three assistants". What am I saying? Well, I am not saying, of course, that people should be asked to work fifteen hours a day; of course not. But I am saying that the reason why free enterprise is alble to achieve what it does is that a considerable number of people are putting into their work every last ounce of energy they have. If it takes fifteen hours, they will put it in.
I suggest there is all the difference in the world between honest and conscientious performance on the one hand, and on the other the performance of a man with drive and energy who is not content unless he does his absolute best. I do not think there would be any doubt in this matter if people would only think clearly. I suggest that is part of our trouble, part of the difference between us and the people to our left-although I must say sometimes I think there is not very much difference. In fact I would quote something said by the hon. member for Rosetown-Biggar, and I am pleased to quote it. I think I like quot-ting it better than he likes hearing it. He said one day-and I like to remind him of it -"I am not opposed to private enterprise, but if they take the profits, they must take the risks". I said to him, and I say again: I do not change a word of that. But there is all the difference in the world between that and some of the other things the hon. member says.
To come back to clear thinking-


Some hon. MEMBERS:: Oh, oh.


James MacKerras Macdonnell: The digression that I made from clear thinking was a small one; I was just quoting the hon. member.
When reading the life of Mr. Justice Brandeis of the United States Supreme Court I ran across a quotation I should like to give to the house. Mr. Justice Brandeis was a lawyer; he was a queer lawyer because he 5849-270
actually made money. He was a great public servant. No one ever doubted that. He was a liberal-a human liberal, not a political liberal. Mr. Justice Brandeis served the state and the man on the street as very few people have. He said something which I think we might all remember. He said:
Justice is truth in action, and if we want justice we must first find out what is the truth.
I think in plain words that means that unless we have intellectual honesty the thing will not work.
I want now to refer to what I think are some of the misconceptions which are plaguing us at the present time and which again I feel would disappear if we had clear thinking.
First of all there is the misconception of what I call the split personality, that we can be economically bound and politically free. I do feel that should be abandoned once and for all. What does the phrase "democratic socialism" mean? If it is not the equivalent to "free controls", then I do not know what it is. When we look at Italy, Germany and Russia, we realize that we should not be deceived by words. We should note what has happened there. Let us not be deceived by the words "nazism", "fascism", "communism"; it is all state socialism. That is in fact what they are.


Major James William Coldwell: What about the Scandinavian countries?


James MacKerras Macdonnell: You can bring them up if you like. As I understand it, they are not socialist in the sense that the countries to which these other names are given are. I am sure that there cannot be any over-all economic control without political control. They are finding that out even in England. As far as labour is concerned, in view of the blight of the three despotisms in Europe I never can understand why labour has any doubt. A United States professor puts it in these words when he says:
There is no place for collective bargaining or the right to strike, or for effective occupational organization in the socialist state, and every intelligent socialist, whatever his public utterances, knows as much.
There is the second misconception that those who believe in freedom, that those who do not want the state to be Father Christmas are lacking in social conscience. It even seems sometimes that to be socially-minded you must refuse to think clearly; you must use catch phrases, and most of all you must try to create the impression that what one man
The Budget-Mr. Macdonnell

has is taken from another. If a man happens to have more than another man, it is assumed that he has taken it from him.
Mr. MaeINNIS: It usually is so.


James MacKerras Macdonnell: I should like to refer to what I regard as the classic example, the case of Edison. Edison became rich, but I suggest that Edison created hundreds or thousands of times as much wealth for others as he did for himself. Furthermore, in a greater or lesser degree that is true of every successful enterprise. Churchill put it very well when he said that the people we ought to complain about are not the people who succeed but the people who fail.
The third misconception that is sedulously put forth-I wish every sensible and intelligent man could reach an agreement on this- is that somehow or other profit is wrong and ignoble. I should like to read a quotation from a man who at the present time is a labour peer. He is a well-known leftist in England; in fact some people would call him a socialist. A. D. Lindsay is a well-known writer on politics and economics. I have forgotten his title; it is hard to trace them when they become lords. He said;
If we consider profit in itself it does not seem clear why a man working for an assured salary is doing right, while a man working for an uncertain profit is doing wrong. As long as there is an element of uncertainty in the supplying of demand, there must be a profit.
As I have said, in some of his moods the hon. member for Rosetown-Biggar appears to agree with that.
Another thing I should like to say is that profit comes away down on the list. First of all there are wages, then there are taxes, then there is upkeep of your plant, then there is depreciation. If there is anything else, then there is profit. Profit can be obtained only when everyone else is paid. Even at that stage the tax collector, the genial Minister of Finance, comes along and has his crack at it. If there are profits they are well taxed.
I think we should remember that the financial statement of a business is a profit and loss account. There is nobody to hold your hand; nobody to weep a tear for you, if there are losses. You just go broke; that is all there is to it.
I should like to remind hon. gentlemen that even the socialist government in England, which has done so much to try to alter all this, has had to go back to providing an incentive. Let me read from a white paper which says:
We must remove the idea of spinning out production in order to avoid unemployment, or of restricting output in order to safeguard earnings.

It may be that in the back of their minds was the thought that it was capitalist America which had come to the rescue of good old England and all the other countries concerned.
There is one last thing on this point that I want to say, and you will be glad, sir, it is the last. An attempt is made in this country from time to time to stir up class feelings, the sort of thing which has bedevilled some of the European countries. Even England, which we all admire and love so much, has suffered from social disabilities. Was it not Disraeli who said that there were two races in England? It was a fact not so long ago that the slum boy of thirteen years was five inches shorter than the boy who attended public school. That is on the way to being wiped out, and it should be. In England an end is coming to these social disabilities and inhibitions. But here we have not had that. How could it be so in a country where 99-9 per cent of us go to school together? We all speak the same way. There is no barrier to ability.
Mr. MaeINNIS; How many go to univeristy together?
Mr. MACDONNELL (Muskoka-Ontario); Every man who has ability.
Mr. MaeINNIS: No.


Some hon. MEMBERS:: Yes.


James MacKerras Macdonnell: 1 know something about that. I will tell the world that any able man who wants to do it can get to university.
This brings me to opportunity. We in this party nail opportunity to the mast. We seek to help people to help themselves and among other things to provide their own security on a contributory basis.
Mr. Speaker, nature and our forebears provided us with a goodly heritage. By our own efforts and sacrifices we have added to it. Our progress to this present has depended on the free play of the human spirit in all departments of life including the economic. Some point to the war as a time when we made progress through control. It is true that during the war we needed controls in order to concentrate our efforts, but to the discerning eye it was clear that the achievements during the war depended on the same qualities of energy and initiative which capitalism had displayed in peace time.
The great bulk of the people in this country believe that these same qualities are needed to carry us on from here.
People are sensible. They know we cannot get rid of all controls tomorrow, perhaps ever, but they want to have them reduced as much as possible. However, governments will have

The Budget-Mr. Coldwell
to play a part beyond what they used to do, and electors should bear this in mind when they are considering the worth of governments which they elect, and in considering the present budget they will have to ask whether it is what it is because the government wishes to keep the plums for some future time.
This budget I think may fairly be described as a doctrinaire budget, a budget that has taken very little consideration of the man on the street. Take, for instance, the small relief in the sales tax. It is ironical to think of the sales tax being taken off when many people have still to pay an extra twenty-five per cent excise tax on their goods. In considering this budget the ordinary citizen may very well consider what happens-and it is bound to happen, human nature being what it is-when governments stay in power year after year after year. Even the best of them develop a kind of bland arrogance. They come to think, not necessarily that they are perfect, but at least that they are indispensable. They come to have what a famous statesman called in other circumstances a tranquil consciousness of effortless superiority, and this gives them the feeling that they can manage other people's affairs much better than the people can manage them themselves. I suggest, Mr. Speaker, that it is.very unlikely that the government in that frame of mind will be able to divest themselves of these powers as fast as they should. They will try to do so but they will find it difficult. It is in any event for the electors to judge whether the government have that openness of mind and that sensitiveness to public opinion which the solution of these problems demands. The widespread criticism of the budget makes me feel that the public at the present time may be exercising their judgment and that no matter how many election plums may be saved up by the government to offer them at election time, they may weigh this government in the balance and find them wanting.
I move, Mr. Speaker, seconded by the hon. member for Souris (Mr. Ross):
That all the words after "that" to the end of the question be struck out and that the following be substituted therefor:
"this house is of the opinion that the government does not possess the confidence of the country."


Major James William Coldwell: Mr. Speaker, I think we have had a delightful dissertation from the hon. member for Mus-koka-Ontario (Mr. Macdonnell) which we have all enjoyed. I do not propose to follow his example and to take up the time which I wish to devote to the budget by replying to 5849-270*
some of his remarks or to returning in kind some of the criticisms that one could make of the party to which he belongs. But I am going to say this to him with regard to the hope that he expressed regarding myself, that there is an old proverb which says that "hope deferred maketh the heart sick." I would remind him also that the definition of "fascism" and "nazism" is this: It is capitalism in an advanced state of decay. My hon. friends of the Progressive Conservative party should take that very much to heart, because I have noticed that there is considerable decay in the party to my left-to my right, I mean.


Mr. MacNICOL:: You were right the first lime.


Major James William Coldwell: We sometimes think of the party to the left as somewhat of a conservative party too.
May I also say this to my hon. friend, that the objection is not to profit in the sense that he defined it this afternoon but rather to profit when it becomes the motive of production and replaces human need as the motive for producing the goods that humanity requires.
I think we can all agree that the budget is a disappointing document, though the minister delivered his speech well. It gives little or no relief to the people who need it most. That, I think, is the main criticism which can be made of the budget which was brought down on Tuesday evening.
It is sound policy to budget for a surplus in time of prosperity, but that does not excuse the government from its obligation to assist those whom its policies of removing beneficial controls and subsidies have seriously affected. The gap between prices and income has become wider as the months have passed, and it is obvious that the fifty per cent or so of our population who do not earn enough money to pay income tax have had to reduce their already meagre expenditures on food and clothing and, where possible, on housing also. The reductions in food expenditure which are taking place will in time seriously affect both the health and the morale of those who are compelled to economize in that manner.
I wish to draw the attention of the house to the report of the Family Service Bureau at Hamilton, Ontario, which points out that most families had to spend from 24 to 39 per cent of their income, or amounts ranging from $24 to $45 a month, for food in 1939, and they must now spend from 40 to 80 per cent of their income, or from $50 to more than $100 a month, for the same standard of food in quality and quantity.
The Budget-Mr. Coldwell


Mr. ABBOTT:: I expressed that opinion this year. That is a quotation from this year's budget speech.


Major James William Coldwell: I read both speeches; I thought I got it from last year's budget speech.


Douglas Charles Abbott: That was from this year's.


Major James William Coldwell: In his budget speech last year, at page 2558 of Hansard, the present minister justified his retention of the excess profits tax to the end of 1947, and he justified it by stating that profits had not yet returned to normal levels, and that if they had we should repeal the tax forthwith. He then said:
Profits before tax still are running at abnormally high levels.
But they were running at more abnormally high levels than the minister was estimating at that time. His estimate last year of corporate profits and other investment income was $42,000,000 less than the more accurate estimate he gave in the appendix to the budget speech this year. Even so, the preliminary 1947 figures show that corporate profits before taxes for 1947 were some $400 million, or 28-1 per cent higher than in 1946, and that net profits after taxes were 35-4 per cent higher.
The Budget-Mr. Coldwell

Lest these figures should be disputed, I wish to put on the record again table 7, in the appendix to the 1948 budget, page 4112 of Hansard, which gives us the corporation profits from 1939 to 1947. It is a very short table and I should like to have the permission of the house to put it on Hansard.


Douglas Charles Abbott: Is that a repetition from the white paper?


Major James William Coldwell: Yes, taken out of the appendix.


Mr. GIBSON (Comox-Alberni):: Put the wage figures in too.


Major James William Coldwell: Somebody else will do that.


Mr. DEPUTY SPEAKER:: Has the lion.
member the consent of the house to put the table on Hansardt


Some hon. MEMBERS:: Yes.


Major James William Coldwell: I will hand the table to
Hansard:
Table 7
Corporation Profits
Prelim.
	1939	1944	1946	1947
Corporate profits	(Millions of dollars)			
				
before taxes		598	1,221	1.421	1,821
Deduct corpor-				
ate taxes....	-112	-603	-670	-804
Corporate profits				
after taxes		486	618	751	1,017
Deduct divi-				
(lends paid out 		-287	-284	-340	-408
Undistributed cor-				
porate profits....	199	334	411	609
A further analysis of the table indicates the percentage increase of profits for 1947 over 1939, working it out in percentages, as follows: corporate profits before taxes, 204-5 per cent; corporate profits after taxes, 109-2 per cent; dividends, 42-2 per cent; and undistributed profits, 206 per cent.
May I say to my hon. friend who interjected a remark with regard to wages, that one of my colleagues will put them on the record. I may tell him, however, that real wages in the past year, in consequence of the increase in the cost of living, have dropped in terms of purchasing power, while corporation profits have increased in the same period.


John Lambert Gibson: It is the same dollar.


Mr. CASTLEDEN:: But they do not use it to buy bread.


Major James William Coldwell: This criticism I have made justifies the criticisms we made last year of the removal of the excess profits tax which, had it been retained, would have had an effect on the ability of the government either to decrease taxation on those least able to bear it, or, on the other hand, to have embarked upon a more substantial health and social security program for the Canadian people, while at the same time securing quite a substantial budgetary surplus, though perhaps not as high as the estimate at the moment.
The minister recognizes the dangers inherent in the high level of capital expenditure on new construction. He blames it, together with the high level of domestic consumption and exports, for the undue strain on our economy, and I wish to say something about this matter particularly.
Many years ago, the Liberal party, like the C.C.F., proposed the control of investments, and the minister's speech indicated that capital construction, that is, investment in plant, equipment, inventories and such housing as was undertaken, absorbed twenty-one per cent of the gross national product during 1947 as against fifteen per cent in 1946, six per cent in 1944 and, going back a few years, sixteen per cent in 1939. It may be remarked, I think that fluctuations in capital construction are mainly responsible for the ups and downs of the business cycle and for the consequent booms and depressions.
I recognize that many expenditures for new plant, equipment, machinery and so on had been deferred during ten long years of depression and six years of war. Consequently there is now a rush by everyone to replace worn-out machines, to buy equipment, and so on, all at once. What is happening is that construction, which should ordinarily spread over a period of sixteen years, is being squeezed into a very few short years. Everyone is building factories, new theatres, new bowling alleys, new breweries and replacing worn-out machines all at once. The danger is, as the minister saw himself, and indicated in his budget speech, that by and by we shall reach the saturation point, and when we do so, then activity will drop sharply and the effects of such a drop will be extremely widespread throughout the whole of the Canadian economy.
The minister recognizes this danger, and that is evident in his statement that this government has, of course, been deliberately restricting its own expenditures on construction and

The Budget-Mr. Coldwell
equipment during the last few years because of its desire to keep excessive national expenditure within bounds, and to divert wherever possible the construction of useful projects until the time when private expenditures will be lower and additional government work will help to maintain employment and income.
The theory is that the government should allow private construction to take its own course, the government being ready to fill the gap left by private enterprise when that gap occurs. I will say this to the minister. In my opinion, this is a decided improvement over the old laissez-faire attitude, but it is still a questionable procedure in terms of actual effectiveness.
The C.C.F. believes that the government should exercise some control not only over government investment but over private investment as well. May I remind the minister that a few years ago that was also the policy advocated by the Liberal party. The effect which government construction spending can have is, I believe, too small in the ordinary course of events to save the country from a major unemployment crisis which will follow unusually high capital construction in this period in which we are living. In our opinion, and we would urge it upon the government, the government should take positive steps, so that private investment spending in some respects should be deferred to later periods and priority given to such desirable and necessary projects as low-rental housing which the house has been discussing for several days this week, during which I hope the government felt rather uncomfortable about the results achieved so far. Such a policy would not only relieve the desperate housing shortage but have long-range effects in relieving the inflationary pressures which are responsible for steadily climbing prices.
What I mean is this. The public control of investment should not only be quantitative, which is to a minor extent what is happening now, but be qualitative as well. Construction contracts for hotels and clubs in Canada last year totalled $14,750,000, but for apartments in which people were going to live they amounted to only $12,070,000.
This, of course, is only one of a number of examples that could be cited. Then, too, we believe the government should exercise some influence on the location of desirable industries. The distressed areas of England and Wales and Scotland, for example, are becoming the sites of great, new and important industries. In the same way some construction expenditure could be diverted to the distressed areas of Canada; and we have those distressed
areas. As the hon. member for Cape Breton South (Mr. Gillis) so frequently reminds the house, we have them in the maritime provinces; and to my mind this is what might be called a socially desirable project of the very first order.
In the same circumstances what would a C.C.F. government do? It would establish a national investment board which would exercise control over investments, so that they could be spread over a number of years and diverted into channels where they would be most effective, and establish priority for the most important types of construction, as, for example, housing. Because we believe this, I want to move an amendment to the amendment, seconded by the hon. member for Vancouver East (Mr. Maclnnis), in these words:
That the said amendment be amended by inserting after the word' "government" and before the word "does" in the second line of the amendment, the following words:
". . . has failed to relieve the excessive burden of taxation on the low-income groups of the Canadian people:
(a)	By failing to increase the amounts of exemption from income tax from the present levels to $1,259 for single and $2,500 for married persons, and
(b)	By failing to remove or substantially reduce the burden of sales and excise taxes which bear most heavily on those suffering from low income and the present high cost of living.
And further, the government has failed to establish a public investment board to assure the channelling of capital investment into socially desirable projects as a means of maintaining full employment, increasing production and raising the standard of living of the Canadian people.
Having moved that amendment, I think it is interesting to note that the government accepts the inevitably of depression and deliberately budgets for it. The C.C.F. believes our budget should be designed to prevent depression and to maintain the highest possible level of employment and income. Of course we shall be reminded that one attempt has been made by the government to slow down construction expenditure. How? By raising interest rates, through the withdrawal by the Bank of Canada of market support for our national bonds. But in his speech the minister said, as reported at page 4058 of Hansard:
This increase in interest rates at this time is not expected to have any great effect in restraining the high level of capital expenditure . . .
Then he went on to say:
... I do not believe that any reasonable increase in interest rates would act as a serious brake upon business expenditures under the circumstances of today, nor would it serve effectively to persuade consumers to spend less and save more of their income.
The Budget-Mr. Coldwell

If that is the opinion of the minister I would ask why the government took action to raise interest rates.
The hon. member for Muskoka-Ontario discussed double depreciation. I was interested to hear him criticize double depreciation because, as far as I can recollect, these large amounts of depreciation of all kinds that have been permitted to corporations and companies, including powerful oil and mining companies, have been supported wholeheartedly by members of the party for which the hon. member for Muskoka-Ontario speaks. If I may give an example of the misdirection of investment I would refer the minister and the house to table 8, at page 8 of the appendix to the budget. There it is shown that, while new residential construction in 1947 increased by 37-9 per cent over 1946, other new construction increased by 59-3 per cent; new machinery and equipment, by 60-9 per cent, and investment in inventories, that is goods held for future sale, by 101-6 per cent. Housing, which I repeat should have first priority, is last in that table submitted by the minister.
My time is running out. Unlike that of the hon. member for Muskoka-Ontario, it is not unlimited, and I do not propose to impose upon the house. Other features of the budget, however, deserve some comment. It is proposed to give further exemption of 8500 to persons over sixty-five years of age. It is difficult to understand the logic of that exemption, though we welcome it because it will benefit a few people who need more income in their declining years. But we must not forget that most of the people of Canada over the age of sixty-five will receive no benefit whatever. Indeed, forty per cent of those seventy years of age and over are today in receipt of old age pensions, indicating that their incomes are not even $750, let alone $1,500. Their incomes are less than .$600 a year. To my mind a better plan to help people of sixty-five or seventy would have been to abolish the means test, increase old age pensions to $50 a month, and at least to begin to lower the age to sixty-five, on the plan suggested in the dominion proposals to the provinces. We should not forget that the increase of $500 in the exemption will be reflected most in the highest brackets, because it will raise it at the bottom and relieve these people to that extent. So that not the needy but the more comfortably situated will reap the greatest benefit.
It is questionable whether people over sixty-five years of age need a further exemption

of $500 as much as younger people, when they are building homes, establishing businesses and raising families. Indeed, the action of the government merely strengthens our demand for an increase in the income tax exemptions by at least $500 for single persons and $1,000 for married couples, as I have indicated. If we wish to introduce new and worthwhile features into our income tax allowances we might well consider a variation of the plan adopted, I think in 1945, in the United Kingdom, under which a man working on the land may receive a further exemption of $1,000 a year if he invests that amount in improvement to his farm. The thought behind that is not unlike the thought the hon. member for Muskoka-Ontario had this afternoon, except that he used it in a rather different manner than I am going to use it at the moment.
We might, for example, give an exemption to a farmer, a home-owner or a builder, that is, one who is going to inhabit the home when it is built, to the extent of an exemption of $1,000 a year, or less, up to a maximum of, we will say $10,000, spread over a period of ten or fifteen years. What we are failing to do, under present circumstances, is to encourage our people to become the owners of personal property upon which they and their families should depend for their sustenance or for the making of a good and proper home.
No party in this country, no party in the House of Commons believes more thoroughly in the right to own and enjoy personal property than the party with which I am associated. As a matter of fact, our main criticism of the present economic system is that it denies to a majority of our people the right to own homes, personal property which they and their families can enjoy. That is the main principle; that is the reason this great capitalist system under which we live has created what is sometimes called a proletariat. It is the reason for what the hon. member for Muskoka-Ontario condemned and which I condemn equalty; it is the reason in many parts of the world for class warfare and class struggle, namely, the economic system which has denied to the individual the right to own the land or property upon which the happiness and sustenance of himself and his family depend.
Those of us who know the history of the rise of the industrial system, the history of the rise of capitalism from 1750, on, in Great Britain, know it was the story of the constant expropriation of the workers of Great Britain from the right to the common land and other

The Budget-Mr. Low
facilities which had been theirs for centuries after they had delivered themselves from the feudal system in vogue previously.
So we believe that the attempt should be made to distribute such property more widely; and that is one of the aims of the movement we represent in the house.


Mr. KUHL:: What about private business?


Mr. COLD  WELL@: Private business? Where it does not exploit the people, where it treats labour properly, and endeavours to serve the community as a whole, it requires no intervention. But when it reaches the stage of exploitation and monopoly, which private business has reached to a very large degree in our country, then it is time for the representatives of the people to take a hand.
I was going to say that even the increased penalty for failure to file income tax returns in time, suggested by the minister in his budget speech, will fall more heavily upon the farming community than upon any other group. Farmers, as we know, have great difficulty in filling out their income tax returns in time, especially as in our case those returns have to be filed in April; and the filing of income tax returns coincides with the busy seeding season of the farmers.
I believe I have exhausted the time at my disposal. May I conclude by saying this, that it was, I think, appropriate that the government should remove the tax of sixty cents a gallon on vinegar. It will at least remind the Canadian people of a budget that is thoroughly sour.
Mr. SOLON E. LOW (Peace River): Mr. Speaker, it has been indeed a delightful experience to listen to the two splendid speeches we have heard this afternoon, particularly in relation to a budget which has been variously described as an umbrella budget, a vinegar budget, an alarm clock budget. I am sure the Minister of Finance (Mr. Abbott) did not have to provide the people of Canada with alarm clocks to waken them to the fact that his budget is a dreary document, without a ray of sunshine, and entirely lacking in faith and optimism.
Upon his very good presentation of what I thought was a very bad case, I offer to the minister my congratulations. I think a good deal of my hon. friend. I have been very fond of him ever since I came to the house and learned to know him. I am sorry, therefore, that I cannot go any further in my congratulations today.
As I listened the other night to the presentation of the government's financial pro-5849-271
gram for the ensuing year, it became perfectly clear that the minister was unfolding before us what one might expect from mentalities geared to traditions of scarcity.
The successive budgets presented to parliament since confederation, and more particularly those of the past twenty-five years, have all conformed to a single general pattern. Each has been simply another link added to the ball and chain which the years of financial misrule have forged about the feet of the Canadian people. This budget could not have been better calculated to hold the citizens of this country fettered in their struggle for happiness, limited in their exercise of normal freedom, and frustrated in their just claim to reasonable material security.
The budget now before us is no exception to that general rule. It is another ball-and-chain budget. Over the years the weight of the ball has become heavier, the links of the chain bigger and tougher. And the minister had better begin to notice that the protests and groans of the Canadian people are becoming louder and much more insistent.
The minister at this time could have brought financial proposals before parliament that would have cut the chains loose, once and for all, so that neither ball nor chain could ever again shackle the Canadian economy. But in his fear of full production he missed the chance and muffed the ball.
I suppose it is a foregone conclusion that a majority of the members of this parliament, each elected by the voters of his constituency and responsible to them, will accept the minister's budget; will commit this parliament to its adoption. No budget presented by any government has ever been materially altered, much less defeated, in the history of our parliament. That very tradition serves to bind the ball and chain more firmly on to our people and their economy.
I have just wondered if, in this fourth session of Canada's twentieth parliament, faced with some realization of the extent to which the monstrous ball and chain bind us down, a majority of the members of this house would show courage to ignore that tradition; and with a consciousness of their responsibilities to their electors transcending all party considerations, accept proposals counter to some of those in the budget, but designed to help the Canadian people to realize that happy condition wherein they might be unfettered in their pursuit of happiness and not frustrated in their struggle for reasonable material security. With the minister's budget before them, how else could the average run of Canadian feel than frustrated and the
The Budget-Mr. Low

average Canadian businessman than discouraged? The general attitude is, I think, admirably summed up by Walter D. Jones, president of the Canadian chamber of commerce, in these words:
The government's financial policy seems to be based on the questionable assumption that money in its own hands will be spent wisely and well, but money, in the hands of a citizen or a businessman must be heavily taxed for fear of its becoming a danger to the national economy. Experience shows no justification for such an assumption.
Indeed, when the finance minister states in the face of the largest surplus in the country's history that he must put still more money away for a rainy day, he must surely know- that it is equally important that tax rates, even in good times, should not be confiscatory to the point of preventing the thrifty taxpayer himself from saving money for a rainy day.
I close the quotation at that point. I say that is my sentiment exactly. Most Canadians are becoming wiser with regard to finance and taxes than the minister appears to give them credit for. For instance, they know it is sheer nonsense for the federal government to pretend that it is putting away money for a rainy day. If the minister had declared that he was putting into storage material things like not easily perishable foodstuffs, defence materials and such like out of present production against the day when these things might be short, then it would have made sense, but if the government puts away a whole shipload of money, when the rainy day comes the real comfort to both government and people would be the production of labour and machines, and not the money.
The Minister of Finance at any time can get all the money this country needs to distribute both current and accumulated production without having to save that money from one year to the next. But not so with the individual, not so with the businessman. Moreover, if the government is in real earnest about debt reduction I suggest that there is a far more effective way of considering it than by practising highway robbery on the producers of wealth in this country. This I shall refer to very soon.
Right now I think is the time to revive the hope of our people and the faith that their productive efforts and thrift will be rewarded by a government that is determined to provide them with ample opportunity for the abundant life, liberty and the pursuit of happiness. To achieve these ends, I submit counter-proposals to some of those that have been submitted to this house by the minister. I propose that a national monetary authority be set up at once, responsible to parliament and vested with powers in the name of the

people of Canada to enable the following physically possible results to become financially possible.
First, I propose, as an initial step in a comprehensive debt-retirement program, that Canada's national debt be forthwith reduced by $3,500 million to $4,000 million. This to be done under a procedure wherein the monetary authority shall call upon the chartered banks to deliver to the Bank of Canada the Dominion of Canada securities which they hold up to that value, each bank to be credited on the books of the Bank of Canada with an amount equal to the face value of the securities delivered by it as an asset to balance the liabilities of the said bank to its depositors. The national monetary authority will then so regulate the use of this credit as to enable the chartered banks to meet their liabilities to their depositors in an orderly fashion and in a manner to maintain the stability of the national economy. This initial move will save to the people of Canada not less than $100 million annually in interest.
Second, I accept the provisions for expenditure as submitted by the minister in his estimates. These may be revised as discussion in the committee of supply may indicate as desirable. But in addition, I propose provision for expenditures as follows:
(A)	Cancellation of the existing reduction in family allowances for each child after the fourth. This to be the first step toward an ultimate increase of fifty per cent in all family allowances as soon as Canada's production has reached an optimum level and conditions of foreign aid and world trade make it possible. I estimate that this provision will require an additional $15,000,000.
(B)	1 Immediate provision for old age pensions of $50 a month at seventy years without a means test, this to be the first in a series of steps to be taken toward the objective of a $50 pension at age sixty. Succeeding steps to be taken also as Canadian production expands toward its optimum level and when international trade and foreign recovery assistance problems yield to successful solution. I estimate that this provision will require an additional $169,000,000 from the federal government.
(C)	Pensions, for needy widows of sixty years and over, and payments to all disabled adults not otherwise provided for by government allowances, no matter what the cause of disability, if any, at age eighteen years. I think this will require approximately $20,000,000.

The Budget-Mr. Low
(D)	Provision for a sum for the bringing up of war veterans allowances from $30 to $50 a month for single persons and from $60 to $85 a month for married persons and to increase 100 per cent disability pensions to $100 a month. This will require an additional $10,000,000.
(E)	Provision for the encouragement, by subsidy or otherwise, of the increased production of primary products whose importation into this country from the United States has caused such a shortage of United States dollars. The objective must be to make Canada in the shortest possible time as self-sufficient as is possible in such things as sugar, coal and steel. For this purpose I would set aside $75,000,000.
These five proposals for additional expenditures total $289,000,000. They could be provided for entirely out of the surplus which the minister has estimated. The extent to which that surplus was intended for debt reduction becomes of very little consequence since I have already provided for the reduction of debt to the extent of $3,500 million to $4,000 million, with a consequent saving in interest of $100,000,000 to $120,000,000 a year.
On the revenue side I propose that the sales tax be abolished. The minister estimates an income of $395 million, in round figures, from this source; hence reduction in revenue if this proposal were adopted would be $395 million. Abolition of the sales tax must be accompanied by measures to ensure that the benefits are passed on to consumers in lower prices. One such measure is suggested later when I deal with corporation income tax. Since this tax, like all hidden or indirect taxes, has the effect of pyramiding costs, it can be reasonably expected that the cost of living would soon show a much greater reduction than eight per cent as a result of its abolition.
I propose the cancellation of the recently imposed excise tax of twenty-five per cent, and that it be replaced by import restrictions as long as it is necessary to take unusual measures to safeguard our dollar reserves.
In the income tax field, Social Crediters have consistently pressed for raising of exemptions to $3,000 and $2,000. As the first move in this direction, I propose that exemptions be raised this year to $1,500 for single persons and to $2,400 for married persons, and that that portion of incomes in excess of $3,000 be taxed for the coming year on a basis beginning at forty per cent, with a rising scale, so that the loss of revenue from this source should not exceed $300 million.
Corporate income tax requires considerable adjustment if proper incentives to all-out production are to be provided, and if we are to
5849-271J
ensure the passing on to consumers of benefits resulting from sales tax abolition. Therefore I propose exemption from corporate income tax on a basis that would represent ten per cent return on capital, this figure to be arrived at by a procedure similar to that used by the board of referees, formerly set up and used by the Minister of Finance; this exemption to be conditional upon the corporation furnishing satisfactory evidence that savings in cost resulting from sales tax abolition have been passed on to consumers. Moreover, I propose that corporate incomes in excess of the ten per cent just outlined, but not exceeding twenty per cent, be taxed sixty per cent; and all corporate profits over twenty per cent on capital invested be taxed at the rate of eighty per cent. I estimate that on this basis the yield in taxes would be about the same as that estimated by the minister on the basis of forty per cent of all corporate income, as provided in the budget before the house. I might say, in passing, that it would reveal a more healthy state of affairs if there were hardly any revenue on this basis. It would mean that corporations would have succeeded in so organizing their affairs that, after dealing fairly and equitably with their employees and customers, they had managed to arrived at a just and satisfactory profit, and no more. In such an event, what I set out hereafter will take care of the eventuality of loss of revenue on this count, should we experience that happy outcome. I should just say here, that ten per cent profit is not excessive. A ten per cent book profit generally permits but a five per cent distribution, the balance usually being plowed back for capital purposes.
All these proposals represent a decrease in revenue amounting to $695 million, without allowance for possible reduction in income as a result of the corporate income tax changes suggested. Then, when we add the proposed additional expenditures of $289 million, we find in my proposals a total upset in the minister's budget calculations of some $984 million.
I recommend that this amount of $984 million be provided for as follows:
(a)	by using from the estimated surplus- $484 million.
(b)	by saving in interest charges through the debt reduction which I outlined at the beginning-$100 million.
(c)	by estimated increases in revenue from remaining sources of taxation, over and above calculations by the minister, which are bound to result from increased buoyancy in the national economy-$100 million.
(d)	by use of national credit through the Bank of Canada-$300 million.
<260
The Budget-Mr. Low

Hon. members are at once in a position, it seems to me, to appraise the extent to which my proposals will bring about a large measure of those results which the people desire, and which the manpower and resources of this great nation can unquestionably achieve. They implement some of the possibilities of the true economic situation, and start us on the road to peaceful prosperity for every Canadian. Because they are based on true economic principles, they can bring to Canadians a great degree of security and an ever-increasing measure of freedom. So long as they can be implemented, there can be no argument against them, except perhaps that they do not go far enough in the constructive and progressive set-up of which they form but the first steps.
In giving them consideration, hon. members will naturally require an answer to the question : Will their adoption mean aggravated inflation? The limited time at my disposal prevents me from developing the answer to that question at this time. One of my colleagues who will follow' in this debate will deal with this question fully. Just let me say in passing that the adoption of my budget proposals need not, and very likely will not, aggravate inflationary tendencies already present. I propose that any threat of aggravated inflation be effectively dealt with, whether under my proposals or under the budget the minister has brought before us. I do not like inflation any more than anyone else. It can be controlled, and I say that inherent in the proposals I have made are the controlling factors against inflation.
Surely hon. members can visualize, in the exercise of a single thought, the transformation which the adoption of these proposals will bring to our problems of production. Consider the incentive which industrial management will find in a realization that profits to the extent of ten per cent will not be subject to confiscation in any degree. To this extent, at least, the industrial producer becomes a free agent, unmolested by all the annoyances and costs of bureaucratic interference.
Consider for a moment the new incentive to the married workman who earns $2,400 or less, and who knows his pay envelope will come to him intact and unmolested by the high-handed exactions of a toll of "deducts". He will be conscious that his weekly pay envelope will secure for him and his family something more on a par with his productive effort, because of the removal of those ugly hidden taxes that breed high prices and constitute a burden on those in the lower income brackets out of all proportion to any added service the government may render as a result of the proceeds of their collection.

I am convinced that the removal of the sales tax and special excise tax, aided by the increased production that is bound to result from the improved incentive, can in a short time lower the cost of living index from its all-time high of 152 to less than 130, and in longer time to normal.
Consider the new spirit and the will-to-do that would come from a sure knowledge that, as effective productive effort increases the volume of goods and services available, children will be provided for through increased family allowances, on a basis that means a substantial contribution to what it takes these days to meet the essential material needs of a child; the aged, disabled and widowed will be cared for in comfort and in some degree of decent living. It does not require prophetic vision to see ahead, my proposals drying up the cesspools of hardship and discontent in which communism thrives. It needs no exaggerated imagination to see ahead a new atmosphere for constructive, friendly relations between labour and management, such as to ensure the production of wanted goods and services at an ever-increasing pace.
Inflation will not follow the adoption of our proposals. They have in them what can be used to curb the excessive forces that bring on inflation. Above all, they have in them the spur necessary to induce greater and greater production of wanted goods and services. Moreover, Mr. Speaker, that item of $75,000,000 to encourage increased production of such items as sugar beets, coal and steel represents the most effective possible attack on the threat to the Canadian economy from an unwarranted dependence on products from the United States and other dollar countries which has resulted in the austerity program now in effect in Canada.
You have before you my proposals for a bountiful budget as opposed to the baleful ball-and-chain effort of my hon. friend the Minister of Finance. In my proposals, adjustments may be needed in matters of detail and in connection with accidental circumstances which I have not considered. I have not at my disposal for research and preparation the minister's bevy of personnel. I often feel that he w'ould be a whole lot better off without his, or most of them. Too many of them are steeped in the mentality of scarcity' of the London School of Economics, where for now almost a century journeymen economists have learned to forge the ball and chain. But the framework is there. I have not been able and shall not be in the time at my disposal to present full arguments and supporting statements, but others will follow from this corner
The Budget-Mr. Low

of the house who will present those supporting statements. I submit that, contrasted with the succession of ball-and-chain budgets placed before this parliament in the past, our proposals represent the transition from a long, dark night to the dawn of a new day whose span, by the way, can be just what we make it. Our proposals at least begin to place the proper value on our human resources, the greatest resource that we have in Canada, and a resource which we very often overlook and fail to develop.
I think most hon. members will recognize that the proposals I have made are designed to implement what was contained in the amendment which my colleague, the hon. member for Red Deer (Mr. Shaw), twice submitted in the throne speech debate. These amendments called for the application of Social Credit principles which our group have been expounding in this parliament over the past thirteen years. The things I have suggested were also involved in the amendment which I submitted to the throne address last year, which amendment included these words:
The use of the national credit to meet at least some of the financial requirements for essential services, and as a guarantee that this country would not again be subjected to financial depression, to make available to each and all Canadian citizens a proper portion of purchasing power which shall not first pass through the usual channels of industry.
When I moved that amendment in 1947, the leader of the opposition (Mr. Bracken) gave support to that portion of my amendment just quoted, with certain limitations. But the limitations did not exclude anything that was involved in my amendment of a year ago, or indeed anything in my present proposals. I quote the opposition leader's exact words on that occasion as taken from Hansard:
To the extent that such a fiscal policy has been or may be used for the support of definite public services such as old age pensions, family allowances, floor prices and so on, services that are regarded as being essential to the public good, to that degree I support it.
Mr. Speaker, those words of the hon. leader of the opposition exactly fit the proposals I have made today, because I have called for the use of the national credit for family allowances, old age pensions, floor prices, and so on. Such use of the national credit to the amount of $300 million means that purchasing power to that extent would circulate amongst the people without creating a debt at its source and without accumulating an interest burden throughout its whole life. It
need never be cancelled out of existence until that day when production falls short of the purchasing power available in this country.
I visualize for the national monetary authority, which it is proposed to set up, a role ever-increasing in importance. Its main function would be to implement the financial policy laid down for it by this parliament, a policy designed to keep always in the hands of all the people sufficient effective purchasing power to balance the total prices of the goods and services available for sale-no more and no less. Let me emphasize here that in it would be no element of that bureaucratic control which, till now, has been increasing its grip on this nation. Moreover,
I have no idea for the present or the future that the chartered banks shall in any way be interfered with in the excellent accounting job they are doing and the skilled judgment they are exercising in the financing of production. I simply advocate that the sovereign title to the creation of money be vested in the people whose inalienable possession it must be, and must remain. There is very little-wrong with the present method of financing: production, but there is everything wrong: with the financing of consumption, which seems to be nobody's job these days.
At the same time, I should like to assure hon. members that in the proposals I have made this afternoon the depositors in chartered banks of this country will not be interfered with in any way in the control of their own deposits. They shall continue to control them and to use them as they so desire.
With reference to this inalienable right of the people to exercise effective control of currency and credit, I find myself in complete agreement with the cogent pronouncement of the Prime Minister (Mr. Mackenzie King) which he made in a radio address just before he came into power in 1935, repeated and printed in a pamphlet calculated to help bring him to power, but on which he has been strangely silent ever since. I quote:
Let me repeat what I said in parliament: once a nation parts with the control of its currency and credit, it matters not who makes the nation's laws. Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of parliament, and democracy, is idle and futile.
I am sure the Prime Minister agrees withi that statement even today. I am glad that he is in his seat, and I am glad to see him: nodding his head in assent to what I have-said. In the light of that and of what I have said this afternoon, knowing the hearts of a good many of the Liberal members, I
Supply-Agriculture

think I should expect substantial support for my proposals from the Liberal side of the house, including the Prime Minister. I realize, sir, that the rules of this house prevent me from formally submitting my proposals for a vote in this debate. Not more than two amendments can be submitted on the budget, but it does seem to me that the people of this nation are entitled to know the extent to which their representatives are prepared to support or to reject the proposals I have made. It should not be by the application of house rules that this nation is governed, although I recognize that rules are necessary in carrying on the nation's business in this parliament. I suggest that if the majority of the members of this parliament desire during this session to give effect to our proposed financial changes, it is entirely within their power to do so. If the majority of the members want to do these things, I feel sure that the minister who has submitted this budget, and of whom I am very fond, as I have already said, could be prevailed upon to insert the necessary changes which would give effect to the things I have proposed.
Let me say this. I am convinced that if the minister will do just that, if he will revise his budget along these lines, I am satisfied that it will receive support in the house unparalleled in the history of this parliament. I cannot resist the temptation to say that his political fortunes, and the fortunes of those associated with him, would be enhanced to a degree that will never be achieved at any national convention such as is proposed for next August.
In closing, Mr. Speaker, may I say that in the name of my constituents, yes, in the name of every citizen of this country, I call upon this parliament to rise up now and cast off the ball and chain and consign them forever to oblivion.
On motion of Mr. Gibson (Comox-Albemi) the debate was adjourned.

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



DEPARTMENT OP AGRICULTURE

The DEPUTY CHAIRMAN:: When the committee rose last we were dealing with departmental administration.


[Stage Direction]
Item agreed to.

Science service-
5. Science service administration, $168,374.
Alexander Malcolm Nicholson: On quite a number of occasions I have urged more adequate compensation for the science personnel of the Department of Agriculture. It is unfortunate that Canadian scales of salaries have not been brought to higher levels. Unfortunately a great many who are employed by the Minister of Agriculture remain in Canada at considerable sacrifice. One of my college classmates had a Ph.D. He spent fifteen years in Canada in the government service and reached a maximum of $3,200, and finally he left, after taking on family responsibilities, and got a job with a commercial concern starting at $6,000, and soon had an increase to $7,200. Can the minister make a statement to indicate what progress is being made in getting increases for the members of the science services of his department?


Right Hon. J. G. GARDINER (Minister of Agriculture):: At page S7 of the main estimates, giving the details, it is pretty well indicated what has been happening in the service. The salary of the director of agricultural science service has been increased from $7,200 to $8,000; the salary of the assistant director, from $3,960 to $4,140; agricultural scientist, grade 8, a new one, at $4,860. The principal clerk's salary is up by $90 and clerk grade 4 and the other clerks have also been given increases.
I presume what the hon. member had in mind is the scientists working in the different branches of the department whose salaries have been under review for some time. I can only repeat what I said last year, that we were in advance of any of the other departments in having a review made of salaries and having increases provided for under the general survey that was being made of salaries throughout the service. It is still correct to say that we are far in advance of any other department of government in the matter of salaries.


Alexander Malcolm Nicholson: The common complaint has been that adjustments always start at the top with substantial increases and there are increases for people at the very bottom, but there is a large group in between who so far have not had adequate relief from the cost of living. Can the minister indicate what the prospects are in the immediate future for the large bulk in the middle-income groups who so far have not had increases? How soon can they expect satisfactory adjustments?


James Garfield Gardiner: I think, Mr. Chairman, you had better call it six o'clock, and at nine o'clock I shall have all the details.

Bell Telephone Company


Mr. ROSS (Souris):: Shall we go on with these estimates this evening?


James Garfield Gardiner: Yes, when consideration of private bills comes to an end.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
The house in committee on Bill No. 8, respecting the Bell Telephone Company of Canada-Mr. Rinfret-Mr. Golding in the chair.
On section 1-Power to increase capital.
John Ritchie MacNicol: Mr. Chairman, I shall be brief. When the hon. member sponsoring this bill introduced it on February 27, if I had been in possession of the information I now have, which was given when the bill was being considered in committee, perhaps I would have changed my mind in some respects. When I rose to speak at that time, what I had in mind was to obtain for Ontario, if possible, the assurance that was given to British Columbia on May 2, 1947, in connection with a similar bill, by the hon. member for New Westminster in reply to a question asked by my deskmate, the hon. member for Vancouver South. Let me read what was said. The hon. member for Vancouver South said:
I think it is essential that some protection should be given to telephone users of British Columbia. I understand that the hon. member has been authorized to give assurance to the effect that the company has no present intention of applying for an increase of rates and will not make any such application unless compelled to do so by extensive changes in conditions.
The hon. member for New Westminster replied:
That is my definite understanding.
That is what I had in mind when I spoke on February 27 last; I wanted some assurance in connection with the present bill. This matter was considered by the committee on railways, canals and telegraph lines on May 11. One of the witnesses was Mr. N. A. Munnoch, K.C., vice-president and general counsel for the company. Referring to the amount of money which was to be spent, the hon. member for The Battlefords asked:
Can you make that expenditure and hold your present toll rate at the present figure?
That was a very pertinent question, and in reply Mr. Munnoch said:
It is impossible to say what will happen to telephone rates, but I can say that at the present time the company has filed no application with the railway board for an increase in rates-
Then he added:
-and has made no preparation for filing such an application.
If that assurance had been given by the sponsor of the bill I for one, at any rate, might have taken a different position, though I am glad I took the position I did at that time. Then Mr. Munnoch went further and said:
We have carried on through the war period and by reason of economies and technological improvements in telephony we have been able to maintain our present rate structure since it was established in 1926.
They did that all through the depression and all through the war, and I was convinced that they must have exercised very good management, particularly, in order to have $13,000,000 left from the $75,000,000 by which they were authorized to increase their capital on the last occasion. So I must confess I am convinced that the Bell Telephone Company when it issues this stock will spend the money judiciously. I also have in mind the reply by the vice-president and general counsel, which to me is a little stronger than if the statement had been made by the hon. member for Outremont, and which is equal to the statement made by the hon. member for New Westminster when the British Columbia telephone bill was under consideration. All these factors induce me to refrain from further opposition to the bill, and I propose to vote for it.
Just before resuming my seat, I wish to compliment my hon. friends to the left on the stand they took. Along with others and myself in this party, including the hon. member for Broadview, the hon. member for High Park and the hon. member for Vancouver South, they did what they thought was their duty. I am never afraid to do what I think is my duty. I am under obligation to no living man, as far as I know. I have no stock in the Bell Telephone Company, and further I can say this, which I have not said before. When I came to this house I divested myself of any stock I had in any concern or company with which I had anything to do that I thought might ever come to this house for a favour or for support. I wanted to be in the position that I was under no obligation to anyone who might come here. What I have
Bell Telephone Company

said or done has been from my heart. It may have been wrong as far as my head is concerned, but it has come from my heart and I believe it has been right. So I compliment my hon. friends to the left, because in my opinion they were rather meanly treated by reason of the epithets and phrases which were hurled at them and which they did not deserve. They did what they thought was their duty, and I share with them the assurance I quoted given by the general counsel and vice-president of the Bell Telephone Company. That is what I was after. As you well know, Mr. Chairman, in my riding are perhaps twenty thousand, more or less, Bell Telephone users. In the main they are humble people, and I was anxious that they should not be asked to pay more than the $3.45 a month they are now paying. I accept the assurance of the vice-president of the company in that regard.
In conclusion, may I ask the hon. member for Outremont to communicate to the company that I for one would strongly recommend that they do what they did on the last occasion, at the instance of the hon. member for Broadview. No man I know in public life has done more for his constituents than that hon. gentleman. On the last occasion he fought a hard battle against all sorts of cruel opposition, for which he received no thanks whatever, to obtain a flat rate not only for Toronto but for the people living all around and about it. I would suggest to the hon. member for Outremont that an effort be made to get that flat rate for an area within five miles of the hon. member's own city, the city of Toronto and other large cities. It seems to me that it is not fair to ask suburban residents just outside cities to pay rates that are higher than those which we pay in the cities.
Further, I wish to express my appreciation of what has been done by the hon. member for High Park. I have always found him a fearless fighter. I would say the same for the hon. member for Vancouver South, and I pay my tribute to them for the part they have played in bringing about the assurance given re rates.
I fully realize that if, in time, for one cause or another the company has to have a higher rate, it will maj<e its application to the railway board. I am satisfied with the assurance that was given to the hon. member for Vancouver South on May 2, 1947, and as above referred to re this bill.


Mr. KNIGHT:: Mr. Chairman, this group is opposed to this section of the bill, and to the bill of which this is a section. We base

our opposition chiefly upon the opinion held generally by ourselves and at least by some members in all parts of the house, that the increase in capitalization asked for by the company is too high.
The company is asking that its capitalization be increased from the present amount of $150,000,000 to $500,000,000. We believe that is too large an amount of capitalization for the company to ask at any one time. We believe, too, that a company with a capitalization of that sort, and particularly a transportation company-because, in a way, it is a transportation company-by its very nature would become a virtual monopoly. We believe that if it is to become a monopoly it should be a monopoly owned by the people of this country.
We could have a telephone company operated on a co-operative basis, in which event the profit would go back to the users of the telephone, or we could have a publicly owned company, in which case those dividends would go to all the people of the provinces in which the company performs its operations.
In this instance the profits of the company do not go to the users of the telephone as such. They go to those fortunate people who in early days invested their money in this venture. We have no great fault to find with that, under present circumstances. But we do recognize that the assets of this great company have been built up by the users of those public facilities. They have created those assets, but they are in the position of not owning any of them.
Dealing again with our view that the increase in capitalization is too great, let me say that this, like other companies, is one which has to come to parliament from time to time to obtain increases in its capitalization. I shall have a word or two to say about that later.
This group delayed the bill in its early stages, but only until two conditions were fulfilled. We held it up, first, until it had been established that there had been good and sufficient time for hon. members to say practically everything which could be said in respect of the bill, and time in which all information available could be obtained. In the second place, we held up the bill until we discovered that in the house a majority of members-and I believe this to be true-were in favour of an increased capitalization for this company.
When those two conditions had been fulfilled we withdrew our opposition and allowed the bill to go to the appropriate committee. I was a member of that committee and, if I had

Bell Telephone Company
the time and were in the mood, I might be somewhat critical of committees of that sort. We had a genial and good-natured chairman- perhaps that was part of the difficulty. I would say in passing that it is unfortunate for a small minority on a committee when the greater number on the committee are in favour of rushing legislation through. On at least twTo occasions I was on my feet in an effort to move an amendment to the section we are now discussing, but I was informed that it had been carried long ago. My voice was not heard among the vociferous chorus of "carried, carried, carried", from all sides, which reminded me collectively of the individual voice of the former minister of veterans affairs.


George Hugh Castleden: In his more robust days.


Robert Ross (Roy) Knight: In the committee we met the officers of the company. May I pay tribute to them by saying that they were fair.
I found some fault with them in that they would not make certain prophecies which I tried to persuade them to make. However, I believe they did produce the facts, to our satisfaction. We would like to persuade those officers to be content with a little less capitalization than is called for in this section.
After having examined the witnesses as best we could, we did not alter our conviction that the capitalization asked for is still too high. And we are also alarmed by the other point brought out by the hon. member for Davenport, namely, that we are likely to be faced with a rise in telephone rates charged by the company.
In its final analysis the money asked for in this section is needed for a tremendous expansion of the company in the matter of giving new service. That means practically the installation of new telephones and the setting up of machinery to service those telephones. This great amount of money could be defined, roughly, as the number of new units necessary multiplied by the cost of the telephone unit.
Before taking my seat, I shall have further comment to make on that aspect of the matter *-the same comment I made in committee. I learned from questioning the officials that the company estimates that at the present time the cost of installing a telephone unit at present prices is $550. One member of the committee seemed confused on this; he appeared to think the cost of the mouthpiece was the main factor. I believe my information goes farther than that.
Might I point out that that figure of $550 is an all-time high. I asked the officials for corresponding prices of installations and the cost of a telephone unit in times when prices were not so high. I believe the official mentioned the period between 1932 and 1937 and gave the figure of $230. which may or may not have been the lowest figure in that period. The officials did not know. I want to make the point that the amount asked for is predicated upon the price per unit remaining as it is now or going higher. I do not think the company is justified in the assumption that the price will stay as it is or go up during the next five or six years.
I would remind hon. gentlemen that prices have been known to go down before, and drastically. If prices were to go back to the $230 figure the company would then have a much higher capitalization than it needed and would find itself in possession of vast sums of money which for the moment were not needed for the expansion of the company.
I shall here refer to the minutes of proceedings of the standing committee on railways, canals and telegraph lines, where I am reported on page 44 as follows:
Mr. Knight:	The position is this: if your
cost goes down to $230 within the next year or so, you will find yourselves, in terms of what you are asking for, in the position of having twice the amount you need, predicated on present costs?
Mr. Johnston:	I think we can agree with
that.
This company must come to parliament once in a while, and I think that is a healthy condition. I believe I used the expression that they must come for an occasional medical check-up. If my argument is sound and prices go down it will mean that this company will not have to come to parliament for an increase in its capitalization for perhaps twice as long a period. That is one reason why we think the amount asked for is too great, and we hope that the company and this committee will be satisfied with a lesser amount. I think that to decrease the amount asked for would be to the advantage of all the people of Canada, and so I move, seconded by the hon. member for Kindersley (Mr. Jaenicke):
That subsection 1 of section 1 of an act respecting the Bell Telephone Company of Canada be amended by striking out the word "five" as it appears in line 26 of the said section and substituting therefor the word "three."


Mr. JAENICKE:: Mr. Chairman, I should like to say a few words in connection with the amendment which has been moved by my colleague. This company is seeking a substantial increase in its capitalization, and I submit that a company which is admittedly a monopoly should satisfy this committee that it needs that amount of capital. The onus of proof is on the company to show that it needs an expansion of $350,000,000 in its capital.
Bell Telephone Company

I contend that the amount for which the company asks is excessive, and I base my argument entirely upon the brief presented by the company and upon the evidence given before the committee on railways, canals and telegraph lines.
According to the brief and according to the evidence, the company expended $104,495,000 between August 1, 1945, and the end of March, 1948, in order to instal 329,000 additional telephones, an increase of 32 per cent. This means that in a little over two and half years the company expended in capital funds $317.60 for each telephone installed. This sum represents the cost of the following capital equipment: right of way, land and buildings, central office equipment, station equipment, exchange lines, toll lines and general equipment.
The company stated in its brief and its officers said in their evidence that it requires this capital expansion in order to instal during the next five years an additional 455,000 telephones. According to the experience of the company in the last two and a half years, which I submit is a recent period, the cost of each telephone to be installed is S317.60. On that experience the capital expenditure required in the next five years for 455,000 telephones would be $144,508,000. When the officer of the company who seemed to be giving evidence on technical matters was questioned on this he said that $317.60 was too low, that it would be around $500, and later on he increased the amount to $550. According to the answers he gave to me, I suggest that this was a pure estimate, which seems to me to be too high in the light of the company's recent experience which showed that a telephone cost $317.60.
Even assuming the cost to be $500, during the next five years the company would expend $227,500,000 in order to instal 455.000 telephones, not the $350,000,000 it is asking for. It was stated in the brief of the company that it still has $13,000,000 of treasury stock from the $150,000,000 which is authorized at the present time. Deducting that amount from the $227,500,000 shows that the company would need only $214,500,000 of capital during the next five years in order to make the proposed1 expansion.
According to the evidence and according to the brief, it is indicated that not all the money which the company will require will be raised through the issue of capital stock. The evidence and the brief show that a substantial portion of it, about one-half, is expected to be obtained, and I quote:
. . . through borrowings and other available resources of the company such as depreciation credits which will be used and invested in the plant to be constructed.

Therefore, according to that plan, the company would need to raise by sale of shares only one-half of the $214,500,000. namely, $107,250,000.
It would seem to me that an increase in capital of $150 million would amply meet the needs of the company for the next five years. I suggest, Mr. Chairman, that the company has not discharged the burden of proof that it needs this $500 million; that is to say, an extra $350 million, and I think we would be remiss in our duty if we were to grant an increase of $350 million on such flimsy evidence as we had in the committee.


Mr. CHURCH:: I wish to speak for five or six minutes on this bill respecting the Bell Telephone Company of Canada. I wanted to speak before the amendment was moved. I wish to point out that I am not a socialist in the ordinary sense. Four or five years ago when the Postmaster General's estimates were up I urged that we should follow the practice in England where the telephone is a branch of the Post Office Department, because our rates were very high. In my opinion a residence telephone should not cost more than $15 or $20 and a business telephone in the neighbourhood of $45.
We had an investigation of railway, express, and telephone companies conducted by the Drayton-Acworth commission some years ago. Sir Henry Drayton was the chairman, Mr. Acworth was a British engineer, and the other member of the commission was Mr. A. H. Smith, president of the New York Central. What did they report? They reported that any application for an increase in capitalization should first be reported on by the board of railway commissioners, now the board of transport commissioners. I believe that such a report should have been obtained in this case, and that is my first objection to this bill.
The stock of this company is quoted today at 162J. If the company gets the increase in capitalization I believe that the stock will immediately go to about 200. The company cannot pay dividends of eight per cent on that high capitalization, without an immediate rate increase. I am opposed to over-capitalization of these companies. We had the same arguments presented when the cheap light and power movement started in Ontario, and there were the same attacks on public men, but cheap light and power was a boon not only to the urban centres but also to the rural communities in this province.
Over-capitalization immediately means an increase in rates, and if this increase goes through, telephone service will cost three times as much as it should. The telephone is a pub-

Bell Telephone Company
lie utility. I have no mandate from the people I represent to vote for this increase and create a monopoly. Monopolies are flourishing like a green bay tree in this country at the present time, and there is no one to stop them. Monopolies started about the time of Queen Elizabeth. She gave the sole right to trade in certain commodities to a few people, and that principle has been extended in modem times, so that many groups of persons and corporations enjoying a monopoly have the power to enhance prices in conformity with their own purposes.
It is for the railway commission to find out whether there is need for competition in the telephone field. I say yes. and competition should be welcomed by the people of our province. Are we getting telephone service at cost now? No. The people in Britain do, through the British post office department.
In Cochrane the cost of power went to $60 per horsepower.


William Henry Golding: I would ask the hon. member to confine his remarks to clause 1 and the amendment before the committee.


Thomas Langton Church: This bill is all about telephones, Mr. Chairman, and I want to show the cause and effect of no regulation of these companies.


William Henry Golding: There is an amendment before the chair that subsection 1 of section 1 be amended by striking out the word "five" which appears in line 20 and substituting therefor the word "three."


Thomas Langton Church: I am going to support the amendment, Mr. Chairman. I have no mandate from the people of the province of Ontario or from my constituents to continue a monopoly of half a billion dollars. There is practically no regulation of this company. Why did it go to another place with this bill, where the fee is only $200 as compared with $500 in this chamber? I do not know whether the house understands that. The Bell Telephone company is a good company, well conducted, and I would like to see it get all the capital it needs to meet its capital requirements for the next ten or twenty years, but I think an increase in the capitalization of 100 per cent, bringing it to $300 million, would be ample for many years to come.
It took almost a motion in the house to try to get a stenographic report of the proceedings in the other place with respect to this bill. I am not blaming the company or the mover of the bill for that, because I think the mover of the bill wanted us to have the report Why should we not know all the ins and outs of this
application? If we had had a stenographic report of the proceedings in the other place it would have saved five or six nights of discussion in this house.
I do not believe that we should support this bill and create a monopoly by raising the capitalization to half a billion dollars. One clause of the bill gives the board of transport commissioners jurisdiction to say what tne amount shall be, but you have to be a shareholder before you can get the board to deal with that matter.
In the mother country they are having the very same discussions. The party which is called Conservative over there wanted to refer allegations about monopolies to an independent commission. We have a regulatory commission in this country, but they do not regulate. In Great Britain they rejected the United States idea of controlling monopolies by charging them with "restraint of trade" under the provisions of their anti-trust legislation, which can be enforced in the law courts. In the United States they have the interstate commerce commission over there and it is a very long and expensive proceeding. The result is these monopolies, cartels and things are international. They have entered this country, as hon. members know.
As I see it, it is the function and duty of the board of transport commissioners to find out the facts about this particular company. Do they need half a billion dollars, or will an increase of $300 million or $150 million tide them over for the next ten or fifteen years? I say yes, I believe it will. I suggest that the board of transport commissioners should find out the following facts about this particular company. If it is a monopoly, is it harmful, and why? If it is, what should be done about it? In dealing with this application I believe that the House of Commons would like the board of transport commissioners to consider that fact. Second, it is satisfactory up to half a billion dollars, or would $300 million do for ten or fifteen years? If not, what improvements or suggestions would the board of transport commissioners demand of this company? Is the telephone a monopoly? Will it have to pay dividends on half a billion dollars, or on $300 million? I believe they should find out these things in connection with this particular bill. If this bill is harmful, if it is harmful to give half a billion dollars to this company, what steps should the board of transport commissioners take to remedy the situation? They should find out whether a monopoly exists in the province. If it does, is it harmful to the public of our province and to the province of Quebec? These are a few
Bell Telephone Company

things that I think the board of transport commissioners should examine and find out.
They talk about 100,000 customers wanting telephones. Who is to blame for it? If I did not have a telephone and could not get one I could apply to the board of transport commissioners, and they would immediately, of their own volition, send an inspector around and have a proper inspection made of the application. The public do not even know that, but it could be done. I wish to say this. I stand firm on the ground that the state exists for the individual, not the individual for the state; that state interference with the full liberty of the subject is an evil thing per se, the encroachments of which should be most searchingly scrutinized and resisted ; that no government department, except where it enjoys a monopoly, can conduct a business at a profit; that the prosperity of the nation rests on the enterprise and ability of individuals in free association to conduct their affairs with a minimum of regulation and interference; that capital and labour are partners and not enemies, indispensable to one another; that bureaucracy is the enemy of them both and will ruin them morally and financially if they do not restrict its inordinate increase; and, finally, that what I seek is the welfare of the whole community, and no sectional or class advantage.
I believe that is the doctrine which would be acceptable to the people. I appreciate the fact that this company and its officers may have given good satisfaction. I believe they are asking over-capitalization in regard to a utility which belongs to our province.
I have always been in favour of the public ownership of the telephone. I proposed that many years ago in connection with post office.
I called attention to what the post office in Britain was doing as compared with our post office, which has not made any improvements since confederation except in regard to the mail and all that kind of thing.


William Henry Golding: Order.


Thomas Langton Church: I believe the time has come-


William Henry Golding: This has nothing to do with the post office.


Thomas Langton Church: That is correct. I was just pointing out that I tried to get the post office to take this over years ago. I think that is about all I wish to say. I want to say one thing about television. The government has not laid down any policy-


William Henry Golding: Order, rifr. Church.]


Thomas Langton Church: That is included in clause 5 of the bill.


William Henry Golding: Order. We are dealing with the amendment.


Thomas Langton Church: I am opposed to the policy of giving-


William Henry Golding: Order. We are dealing with clause 1 of the bill. What is before the committee is an amendment.


Thomas Langton Church: That is about all I have to say on this amendment. I am opposed to the giving of any monopoly for the reasons I have given. I believe a monopoly exists, and we have no mandate from the people to increase that monopoly. The people would have taken action in 1945 to prevent us going as far as the bill provides.
Amendment negatived; yeas, 24, nays, 47.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Par value of shares may be changed from $100 to $25.
Mr. IRVINE:: I desire to move, seconded by the hon. member for Swift Current:
That section 3 be deleted and that section 4 become section 3.
I do not think it is necessary for me to spend any time saying what I am moving this amendment for. I have already objected to this bill, and in particular I have tried to explain to the committee the viciousness of this kind of legislation. All I want now is that the committee should be asked to vote on this amendment.


William Henry Golding: Order. I want to point out to the hon. member that it is not necessary to move that a section be deleted. If the section does not carry it is out, anyway. No amendment is required to delete a section. You may vote against the section.


William Irvine: By moving the amendment, Mr. Chairman, I have given point to what I wanted to say. You are perfectly right, of course, in saying that all we have to do is to defeat the section. This gives me the opportunity of asking the committee to defeat this section.


William Henry Golding: Shall section 3 carry?


Some hon. MEMBERS:: No.


William Irvine: Before you put the question-

Private Bills


Some hon. MEMBERS:: It is put.
Section agreed to: yeas, 47; nays, 23.
On section 4-Transmission by will or intestacy.


William Henry Golding: Shall clause
4 carry?


Frank Eric Jaenicke: I have no amendment to offer, but in such sections a provision is usually made that succession duties be paid before the shares are transferred.


Mr. HACKETT:: That is the law.


Frank Eric Jaenicke: But we are passing a
special act that they shall be transferred upon submission of letters of probate.


Mr. RINFRET:: It does not override the general law.


[Stage Direction]
Section agreed to.
Sections 5 and 6 agreed to.
William Henry Golding: Shall the preamble carry?


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: On division. Preamble agreed to on division.


William Henry Golding: Shall the title carry?


Some hon. MEMBERS:: Carried.


[Stage Direction]
Title agreed to.
William Henry Golding: Shall I report the bill?


Some hon. MEMBERS:: Carried.
Bill reported.



RUTHENIAN CATHOLIC MISSION

[Stage Direction]
The house in committee on Bill No. 50. respecting the Ruthenian Catholic Mission of the Order of Saint Basil the Great in Canada -Mr. Hlynka-Mr. Golding in the chair.
On section 1-Name change.
William Henry Golding: Shall the
section carry?


[Stage Direction]
Section agreed to.
William Henry Golding: Shall I report the bill?


Some hon. MEMBERS:: Carried.
Bill reported.



CANADIAN VETERINARY MEDICAL ASSOCIATION

[Stage Direction]
The house in committee on Bill No. 150, to incorporate the Canadian Veterinary Medical Association-Mr. Charlton-Mr. Golding in the chair.
On section 1-Incorporation.
William Henry Golding: Shall section
1 carry?


[Stage Direction]
Section agreed to.
Sections 2 to 9 inclusive agreed to.
William Henry Golding: Shall I report
the bill?


Some hon. MEMBERS:: Carried.
Bill reported.



CANADIAN ASSOCIATION OF OPTOMETRISTS

[Stage Direction]
The house in committtee on Bill No. 174, to incorporate the Canadian Association of Optometrists-Mr. Cote (Verdun)-Mr. Golding in the chair.
On section 1-Incorporation.
William Henry Golding: Shall the section carry?


[Stage Direction]
Section agreed to.	.
Sections 2 to 14 inclusive agreed to.
William Henry Golding: Shall I report
the bill?


Some hon. MEMBERS:: Carried.
Bill reported.



CANADIAN MARCONI COMPANY

[Stage Direction]
The house in committee on Bill No. 205, respecting Canadian Marconi Company-Mr. Whitman-Mr. Golding in the chair.
On section 1-Power to sell or dispose of assets, etc.
William Henry Golding: Shall section
1 cany?


Some hon. MEMBERS:: Explain.


Some hon. MEMBERS:: Carried.


[Stage Direction]
Section agreed to.
William Henry Golding: Shall the
preamble carry?


Some hon. MEMBERS:: Carried.


[Stage Direction]
Preamble agreed to.
William Henry Golding: Shall the
title carry?


Some hon. MEMBERS:: Carried.


[Stage Direction]
Title agreed to.
William Henry Golding: Shall I report
the bill? .


Some hon. MEMBERS:: Carried.
Bill reported.
Private Bilh



NATIONAL INSURANCE COMPANY

[Stage Direction]
The house in committee on Bill No. 151, to incorporate the National Insurance Company-Mr. Rinfret-Mr. Golding in the chair.
On section 1-Incorporation.
William Henry Golding: Shall the section carry?


Some hon. MEMBERS:: No.


Mr. BENTLEY:: What about order No. 26 and order No. 27?


Mr. ROSS (St. Paul's):: As has been said, Mr. Chairman, this question of having a National Insurance Company incorporated by this bill is a matter to be carefully considered. I do not think it is right at all. There is one National Insurance Company in Canada now. It is all very well to say that there will b.e no confusion, but suppose something did happen to this new company which is being incorporated and it did not get on very well; that would reflect immediately upon the National Insurance Company we have now. It may be said that one is insurance and the other assurance. I suggest to the hon. member who is piloting the bill through that if there were included in the name the word "accident" or the word "general" it might be different. There is a General Insurance Company of England, for instance. I do not think it is right for a foreign company to come into Canada and take the name here proposed.


Thomas John Bentley: On a point of order, Mr. Chairman, why did you jump from No. 25 to No. 84 on the order paper, instead of dealing with No. 26 and No. 27?


William Henry Golding: Some of these bills are second readings and these are in committee. The hour for private bills having expired, I will now report to the Speaker.


An hon. MEMBER:: It is not nine yet. Some hon. MEMBERS: Yes.
Progress reported.
The Deputy Chairman having reported to Mr. Speaker:


James Horace King: Mr. Golding, from committee of the whole, reports that they have considered certain private bills and directed him to report the same and ask leave to sit again, and to report progress on Bill No. 151. When shall the report be received?


Some hon. MEMBERS:: Now.


James Horace King: When shall the said bills be read the third time?
[The Deputy Chairman.]


Major James William Coldwell: What bill is this?


James Horace King: I will call one bill at a time.


Major James William Coldwell: Name it.


James Horace King: Mr. Rinfret moves, seconded by Mr. Brown, that Bill No. 8, intituled "An act respecting the Bell Telephone Company of Canada", be read the third time. When shall the said bill be read the third time?


Major James William Coldwell: Next sitting of the house.


James Horace King: There is no amendment. Adopted.


Major James William Coldwell: No, next sitting.


Édouard-Gabriel Rinfret: Now.


James Horace King: I must call attention to the fact that the practice is that when there is not an amendment the bill is usually read the third time at the same sitting. Is it the pleasure of the house to adopt the motion?


Some hon. MEMBERS:: No.


Major James William Coldwell: Mr. Speaker, I submit-


James Horace King: Bill No. 8 will be read the third time at the next sitting of the house. Bill No. 205. When shall the said bill be read the third time?


Mr. MacINNIS:: I call attention to the fact that the hour for private bills has expired. It is after nine o'clock.


James Horace King: It is the practice to ask the house to proceed with third reading even after nine o'clock. It is the privilege of the house to say "next sitting".


Angus MacInnis: The house has already said "next sitting".


James Horace King: When shall the said bill be read the third time?


Major James William Coldwell: Next sitting of the house.


James Horace King: Bill No. 50, respecting the Ruthenian Catholic Mission of the Order of Saint Basil the Great in Canada. When shall the said bill be read the third time?


Some hon. MEMBERS:: Next sitting.


James Horace King: Mr. Hlynka moves that the bill be read the third time. Is it the pleasure of the house to adopt the motion?


Some hon. MEMBERS:: Carried.


James Horace King: Mr. Hlynka moves that the said bill be passed and that the title be

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as on the order paper. Is it the pleasure of the house to adopt the motion?


Some hon. MEMBERS:: Carried.


James Horace King: Adopte. Carried.
Motion agreed to and bill read the third time.


James Horace King: Bill No. 150, to incorporate the Canadian Veterinary Medical Association. When shall the said bill be read the third time?


Some hon. MEMBERS:: Carried.
Motion agreed to and bill read the third time.


James Horace King: Mr. Charlton moves that the said bill do now pass and that the title be as on the order paper.


Mr. CRUICKSHANK:: On a point of order, Mr. Speaker, am I to understand that in connection with margarine, for example, you can take public bills after nine o'clock?


[Stage Direction]
Motion agreed to.
James Horace King: Bill No. 174, to incorporate the Canadian Association of Optometrists. When shall the said bill be read the third time?
Some hon. MEMBERS : Carried.
Motion agreed to and bill read the third time and passed.


James Horace King: The hour for public and private bills having expired, the house will revert to the business under consideration prior to six o'clock.

The house in committee of supply, Mr. Macdonald (Brantford City) in the chair.



DEPARTMENT OF AGRICULTURE

[Stage Direction]
Science service-
5. Science service administration, $168,374.
James Garfield Gardiner: Before the dinner recess the hon. member for Mackenzie was asking some questions with regard to the professional classes, particularly the scientists, in the Department of Agriculture. I presume the hon. member had in mind the science services all the way through the department rather than just those in the science branch itself. I should like to make a general statement as to the position, and then, if there are any questions to be asked with regard to the experimental farms or otherwise, they can be dealt with as we come to the particular items.
The general salary adjustments for the Department of .Agriculture have been completed. Individual cases which could not be handled in the general revision, and some anomalies arising out of the revision, are now being adjusted as individual cases. In the professional classes the increases varied from $300 to $600 per annum, depending upon revisions which had been made during the previous two years. In other words, we started making these revisions in 1945. In some cases revisions had been made previously and in other cases they had not, so that there is a variation between S300 and $600, depending upon whether revisions had been made on a prior occasion.
During the time the general revision has been in progress the reclassification of individuals who have assumed increased responsibilities has continued, and consequently many employees have had their salaries increased by from $480 to $900 over the 1945 levels, by a combination of the general revision and a specific reclassification. Practically all the professional employees of the department have now benefited, and individual cases are being dealt with as I indicated a few moments ago.


[Stage Direction]
Item agreed to.
Science service-
9. Agricultural chemistry, $312,525.
Mr. McCUAIG:: Might I ask just what agricultural chemistry covers?


James Garfield Gardiner: This particular item
covers general service for all the divisions of the department, and specific cases having to do with soil surveys.


[Stage Direction]
Item agreed to.
Science service-
11. Forest entomology, $887,693.
Mr. CHARLTON:: I see the amount of this vote has been reduced by 881,000. I have looked over the estimates of the Department of Mines and Resources, however, and I should like to know if it would be correct to assume that some of the work which has been carried on by the forest entomology division has now-been taken over by the mines and resources forestry branch?


James Garfield Gardiner: The decrease results from the fact that further funds are not required for the construction of the plant at Sault Ste. Marie. The vote last year exceeded the amount required.


Mr. HAZEN:: I wonder if under this item the minister is in a position to say what is happening to the pine trees of this country Many of them appear to be turning brown. Does his department have anything to do with that?
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James Garfield Gardiner: The main difficulty is a disease known as white pine blister rust, which has been affecting the trees. A study is being made in an attempt to combat it.


Douglas King Hazen: Will the trees die in time if the condition is not remedied?


James Garfield Gardiner: Yes, it will kill the trees eventually. I am not in a position to say just how long it will take, because the period varies in different places and under different conditions. If the ravages are not halted, it will kill the trees eventually.


Douglas King Hazen: Has it increased very much in the last year or two in this part of the dominion?


James Garfield Gardiner: I am informed that there has been no marked increase, that it has been moving along at about the same rate for a considerable period of time.


Douglas King Hazen: Are any steps being taken to control it?


James Garfield Gardiner: No specific way of controlling or stopping it has been developed, though continuous study and attempts to control it are being carried on.


Lewis Menary: The spruce trees in my district are going in the same way. Would it be the same disease?


James Garfield Gardiner: The difficulty there is the spruce budworm, and an attempt is being made to control that with parasites which destroy the insect.


[Stage Direction]
Item agreed to.
Experimental farms service-
IS. Experimental farms service administration, $100,475.
Alexander Malcolm Nicholson: Would the minister allow either item 13, 14 or 15 to stand. The hon. member for Qu'Appelle had some problems to bring up, and one of the items might be allowed to stand for half an hour or so.


James Garfield Gardiner: I brought in the director of the division on purpose to take these items tonight, but if it is important I could let one item stand when we reach it.


Alexander Malcolm Nicholson: If the minister would agree to that I would appreciate it very much.


John Alpheus Charlton: I should like to ask what has been done to control the blue mould which is now affecting tobacco plants in southern and western Ontario.


James Garfield Gardiner: We have already passed that item, under plant pathology.


John Alpheus Charlton: I thought it would come under the experimental farms.


James Garfield Gardiner: Downy mildew or blue mould on tobacco was observed in southwestern Ontario in 1943. This was the first record for Canada. It was absent in 1944, but recurred in epidemic proportions in 1945. Thorough and quick action in getting the growers to treat their seed beds with P.D.B.- I shall not attempt to pronounce the name for which those initials stand-saved the crop. There is strong circumstantial evidence that the spores and fungus were wind-borne across lake Erie from tobacco beds or fields farther south. That is the information available.


John Alpheus Charlton: Is P.D.B. a cure for the disease if the soil is treated?


James Garfield Gardiner: Yes, I understand it is.


John Alpheus Charlton: An absolute cure?


James Garfield Gardiner: Provided that it is used
at the proper time and efficiently applied, it is a complete cure.


John Alpheus Charlton: Has that information been conveyed to the tobacco growers? Apparently many of them are not using it.


James Garfield Gardiner: The information has been conveyed to them, and it has been used widely. I do not know whether everyone is using it.


Robert Ross (Roy) Knight: What is the present function of the experimental farm at Saskatoon? What particular branch of experiments is it carrying out? I understand that in the past it has been used largely in the development of young trees to be sent out to farmers in the vicinity.


James Garfield Gardiner: The chief activities in connection with experimental work at Saskatoon are carried on at the university. The farm there is a provincial farm. We have a forestry farm.


Robert Ross (Roy) Knight: I was referring to the forestry farm.


James Garfield Gardiner: But there is some work being carried on at the agricultural college in connection with crops other than forestry crops. All the forage crop work is done at that plant, and the soils work.


Robert Ross (Roy) Knight: I was wondering to what extent the forestry farm was justifying its name. To what extent are young trees grown there? Are they sent out to different farms in the district? As a matter of fact I should like to say a word for that forestry farm, because I

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believe it is worth aJll that is being spent on it, simply through the amount of pleasure given to people who go out there to visit. On Sunday afternoons great numbers of people find it a place for pleasant recreation. I would pay tribute to the manner in which the flowerbeds and the like are kept. I was wondering, however, to what extent young trees are being developed and sent out into northern Saskatchewan.


James Garfield Gardiner: They are going out from there at the rate of about a couple of million a year. Deciduous trees are produced at Saskatoon and coniferous trees, in so far as they are produced, are produced at Indian Head. The trees are distributed from both those farms throughout all western Canada, as a matter of fact, wherever they are required. They are going out in the numbers I indicated a moment ago.


Mr. ZAPLITNY:: The minister will recall that sometime ago the board of trade of Dauphin made certain representations to his department in connection with an experimental farm which they thought would be most desirable in the Dauphin area. If I remember the correspondence correctly, the reply was that at this time it was not thought advisable to establish an experimental farm in that area.
Last year, I believe it was, when the estimates of the minister were up for consideration, the minister made a statement to the effect that in his opinion it would be a desirable project in that part of Manitoba. I would draw to his attention that we have no experimental farm in that large agricultural section of the province, and I would hope that the minister has not closed the door on the idea that perhaps in the future he would consider setting up an experimental farm at Dauphin or in that district.


James Garfield Gardiner: There is no experimental farm there, and there is no provision in these estimates for putting one there. I am not in a position to say that we are likely to do so in the near future. However, some fine work is being done there by Mr. Parker. I was up there last summer and visited the experimental plots he is operating, and I believe it is among the best work being done in western Canada. I believe he is strongly of the opinion that good service could be rendered there by an experimental station somewhat larger than that which is there now. However, no provision is made for that in these estimates, to enlarge upon what is being done.


[Stage Direction]
Item agreed to.
Experimental farms service-
11,. Central experimental farm, $1,354,441.
James Arthur Ross: What is the reason for this increase? Would the minister tell the committee what has been done in the development of a rust-resistant barley?


James Garfield Gardiner: The question which was asked just before the dinner recess, and which I answered just after the committee resumed this evening, gives the reason for a considerable portion of this increase. Many of the scientific and professional men spoken of are associated with the central experimental farm. A very considerable part of this increase is due to an increase in wages and salaries. Some of it, too, is due to studies being made, such as that just mentioned. Barley studies are being carried on here and also at Brandon and Winnipeg.


James Arthur Ross: What are the types which are standing up best and which are recommended as rust-resistant? Are they malting types?


James Garfield Gardiner: I am not in a position to give the names at the present time; but there is one malting variety and one good feed variety, both of which have been successfully developed. They are about ready for distribution.


John Alpheus Charlton: I understood the minister to say most of this increase was due to increased salaries. I find, however, that that accounts for only $57,000.


James Garfield Gardiner: I said a very considerable part of it.


John Alpheus Charlton: That is only a small part of $177,000. I think the minister will find that the rest of it was taken up in the acquisition of buildings and structures. Where is that being done?


James Garfield Gardiner: I find that $46,000 of it is on land; then there is the figure just given with regard to wages, and the remainder is for equipment.	-


Mr. CARDIFF:: Has there been an increase in staff?


James Garfield Gardiner: The information will be found at page 93 of the estimates. According to the details on page 93, the number at the central experimental farm was 118 last year, whereas next year it will be 113, being down five.


John Alpheus Charlton: Where was this land bought?


James Garfield Gardiner: The land has not been bought; we have to get the money before we can buy it.

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John Alpheus Charlton: Where is it intended to buy the land?


James Garfield Gardiner: Right alongside the
central farm.


Alexander Malcolm Nicholson: I am sure all hon. members are glad that this item is being increased. I feel that Canadians generally are proud of the work which has been done by the director of the experimental farms service and the personnel under his supervision. This applies to the work done both in Canada and in the international field. Could the minister make some statement with regard to the progress being made in connection with the artificial insemination of horses?


James Garfield Gardiner: There has been very little success experienced in connection with that. Experiments have been carried on at Brandon and here but without any great success.


Alexander Malcolm Nicholson: What progress has been made in connection with Garry oats?


James Garfield Gardiner: It is being multiplied rapidly and there has been considerable distribution both east and west.


John Alpheus Charlton: Is that not one of the varieties susceptible to this supposedly new disease of root rot? What has been done at the experimental farms to develop an oat resistant to that disease?


James Garfield Gardiner: It is resistant to both leaf rust and stem rust, but there is nothing to indicate that it is particularly susceptible to root rot or any disease of that kind.


John Alpheus Charlton: It has been stated all across Canada that Garry was one of the varieties susceptible to this disease, and there should be some information from the experimental farms about this.


James Garfield Gardiner: The gentleman who is responsible for the experimental farms has the opposite opinion and that is the only opinion I can give.


Mr. QUELCH:: What supplies of Saunders wheat will be available in the near future?
I understand that red bobs wheat has been graded down to No. 3. As the minister knows, red bobs is grown largely in Alberta and it has been suggested that Saunders wheat will largely take its place.


James Garfield Gardiner: It is being multiplied rapidly and distribution is being made in the northwestern section from Scott and Beaver-lodge and Lacombe.


Victor Quelch: It stands up very well?


James Garfield Gardiner: Yes.


Mr. FAIR:: What is the reason for red bobs being dropped in grade from 1 to 3?


James Garfield Gardiner: As hon. members know, wheats along with other cereals are sown on plots over a considerable part of western Canada and examined from year to year. This work is carried on under Doctor Newman. As a result of these experiments, it was found that red bobs wheat was not up to the general mark that has been made by Marquis wheat, and it has finally been displaced by Saunders, which is a good quality.


Victor Quelch: Would it be possible to delay the time when red bobs is to be declared No. 3 until ample supplies of Saunders are available? I understand that it is to be graded 3 next year. Would it be possible to put it off until 1950? There will not be sufficient supplies of Saunders wheat available until 1950.


James Garfield Gardiner: That is not something that we can control. Grading is done under the board of grain commissioners which operates under the Department of Trade and Commerce. There is a special committee which meets every year and advises with regard to that matter. It would be better to bring the matter up on the estimates of the Minister of Trade and Commerce.


Alexander Malcolm Nicholson: I understand that some experimental work has been done in connection with the use of hay balers. Can the minister indicate what success if any has been achieved in the use of hay balers during the ordinary haying season in different parts of Canada?


James Garfield Gardiner: Hay balers have always been used generally right across Canada and I do not know that anything special has been discovered recently with regard to them. It is simply a matter of having the hay in proper condition when it is baled. If it is baled under proper conditions the bales will stand up quite well, but if there is any dampness in it they will not stand up. I do not know that there is anything new with regard to balers.


Duncan John McCuaig: What development has taken place in connection with winter wheat varieties, and I am referring to western Canada particularly?


James Garfield Gardiner: There has been winter wheat grown in Alberta and some on the western side of Saskatchewan. From information we have here there are varieties which are not yet named but which give some promise. They are not ready for distribution and there is nothing more I can say about them

Supply-Agriculture
at the moment. As is generally known, these are put through severe tests before any effort is made to multiply them and put them out, and those tests are still being made.


Duncan John McCuaig: I understand that yobo has been grown for the last two years and that there is quite an acreage up in the southwest corner. Will that be the name of the new variety?


James Garfield Gardiner: I do not know which variety they are using there, but I assume it is the variety that has 'been used generally through southern Alberta for some time.


Alexander Malcolm Nicholson: Could the minister state what experimental work has been done in the production of vegetable oils? I see the hon. member for Fraser Valley is behind the curtains. I believe success has been experienced around Moose Jaw in growing rapeseed.


James Garfield Gardiner: The seed most generally used for oil purposes in Saskatchewan and the west is rapeseed. Some work was done with sunflowers but sunflo'wers worked out more successfully in sections of Manitoba than in any other parts of the west. Then there are soya beans which do very well in the southwestern part of Ontario. We have not yet been able to develop a soya bean which will produce in the shorter seasons of the areas east and west of that. One great difficulty with the soya bean is frost, which in the spring affects the plant itself, and in the fall affects the oil-bearing qualities of the bean. So it is necessary to develop a different variety of soya bean from any we have yet, to make it possible to produce it successfully across Canada. There is one seed from which oil has been taken over a long period of time, and that is flaxseed, which is grown all over western Canada and in eastern Canada too.


John Alpheus Charlton: I am sorry if I am dwelling too long on root rot. The minister has just said that Garry oats was not susceptible to this rot. Vicland and Beacon were two varieties that were particularly subject to this disease last year. We have had reports from officials on the seriousness of this disease and on the steps taken to protect farmers across the country against it. Work is also being done on a new variety which it is hoped would be resistant to this disease. I should like to get some information on that.


James Garfield Gardiner: There are three commonly recognized root rot diseases, the common root rot, browning root rot, and take-all. The common root rot pathogens may attack the plant at all stages of growth, causing seedling blight, leaf spotting, head blight
and kernel smudge. The losses from these diseases are extensive during certain years in the prairie provinces, but their occurrence and the extent of their damage are so dependent on environmental conditions that it varies considerably.
To secure more accurate information on the effect of common root rot on the yield of wheat, samples were taken from selected fields in the different soil zones of Manitoba in 1939-41. The average loss was 7-5 per cent in 1939, 16-6 per cent in 1940 and 12-1 per cent in 1941; the greatest loss occurred in the southwestern part of the province.
In a similar study conducted in Saskatchewan in 194 M3, a disease rating was calculated for each field. The mean disease rating was 9-9 per cent in 1941, 6-0 per cent in 1942 and 9-4 per cent in 1943. Although the figures for Saskatchewan are not directly comparable with those for Manitoba, they indicate a seasonal fluctuation in the amount of disease, which is believed due to variations in soil, temperature and moisture.


John Alpheus Charlton: That deals mainly with wheat in the western provinces.


James Garfield Gardiner: It was dealing with everything affected by root rot. If my hon. friend has some information I should like him to give it to the committee.


John Alpheus Charlton: I have heard a variety of reports and I do not know which is correct.


James Garfield Gardiner: I have given all the information we have, but if my hon. friend has any other information we shall be glad to get it.


John Alpheus Charlton: Could the minister not get the information?


James Garfield Gardiner: I am not sure that the information exists. If my hon. friend will put his information on the record I shall have it looked into and see whether it is correct.


John Alpheus Charlton: It is not my position to do that.


James Garfield Gardiner: My position is not to give information which does not exist. The information which is in this book is all the information we have, and I cannot give any more.


John Alpheus Charlton: I am sorry to have to refute that statement. There is other information available and I have seen it.
Mr. CRUICKSHANIv: May I direct a question to the minister following what the hon. member for Mackenzie has said? My understanding is that it has not yet been
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found profitable to grow soya beans and other oil-producing plants in the province of British Columbia due to our high cost of land and high taxes. Am I not correct in that? I do not think it has been found profitable to produce soya beans at any experimental farm in British Columbia. Is that not a fact? I think that is a fair question.


James Garfield Gardiner: The answer I gave a few moments ago covered soils in other parts of the country. We have not yet been able to develop a soya bean which can be produced successfully in any part of Canada except the southwestern part of Ontario. I am not saying that we may not be able to develop a soya bean which can be produced profitably in other sections. In the early days we had some difficulties in connection with Red Fife wheat, which would freeze in the fall. We must find a variety of soya bean which will mature in a shorter season than any we have now. I do not know that would be true of British Columbia, but there are some conditions there which make it impossible to grow soya beans of a quality successful for oil production.


John Ewen Sinclair: What little knowledge I have of farming is derived from the publications of the minister's department. Is it true that the growing of rapeseed and sunflower seed has been an exceedingly lucrative source of income to farmers on the prairies?


James Garfield Gardiner: During some of the war years the growing of sunflowers, while I would not say it was very lucrative, paid its way very well, but most of those who went into the growing of sunflowers in Saskatchewan have gone out of it.


John Ewen Sinclair: I believe many people have left Saskatchewan.


James Garfield Gardiner: They have two reasons for that. Rapeseed has done very well in Saskatchewan and is still doing very well, but of course the government has been and still is paying a guaranteed price on rapeseed. I am not sure we have established as a fact that rapeseed can be grown in Canada in competition with, say, the Argentine or some other country. But we are doing all right with it.


Mr. JUTRAS:: Is the minister in a position to report on the progress that has been made in the last two years in establishing an illustration station in the immediate vicinity of the Red river valley south of Winnipeg? There is an experimental station not far off

at Morden, but the soil in the immediate vicinity of the Red river is of quite a different type from that at Morden, and I think an illustration station on the eastern side would go a long way toward transplanting there the benefits that have been obtained at the Morden experimental station. Is the minister in a position to make a statement on that?


James Garfield Gardiner: Mr. Chairman, before leaving the little discussion which we had a few moments ago, and for the benefit of newspaper editors who are writing editorials across Canada rather regularly, I should just like to say that at no time have I ever said, and at no time have I ever been reported as having said, as far as I have seen the press, that oleomargarine is not a good food. As a matter of fact, so far as I know it is just as good a food, from the point of view of food value, as butter. I want to say that because I have read editorials almost daily in which I am quoted as having said something contrary to that. What I always have said is that we do not allow either oleomargarine or butter into this country. Butter comes into this country only under permit, and is presumed to be excluded from every other country, excepting Australia and New Zealand, under a tariff which makes it impossible for it to get in. It has been fourteen cents a pound up to the first of January, and it is twelve cents a pound now. We allow butter to come in under permit only from New Zealand and Australia. I may say that condition was established when my hon. friends on the other side were the government. Since 1931 we have let butter come into this country only under permit. Therefore both butter and oleomargarine are excluded from Canada excepting under very extreme conditions, when butter is allowed in from Australia and New Zealand.


Lewis Elston Cardiff: That must have been good legislation.


James Garfield Gardiner: Well, it was good enough legislation to have been kept on by all governments for some considerable time.


Lewis Elston Cardiff: Congratulations.


James Garfield Gardiner: But that does not say that New Zealand butter is not just as good as Canadian butter, or that Australian butter is not just as good as Canadian butter, and it does not say that oleomargarine is not just as good as any of them. What I am saying is that we do not allow either butter or oleomargarine into this country to compete with our butter. These are facts which one does not need to explain any further.

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George Alexander Cruickshank: On a point of order, because I am so often called to order myself, may I ask the minister what his remarks have to do with the item under discussion?


James Garfield Gardiner: It has exactly just as much to do with it as my hon. friend's question of a few moments ago.
The answer to the question asked a few moments ago in regard to the experimental station in the vicinity of Morden is to this effect, that we have been making soil surveys in order to locate the type of soil which is thought to be necessary to carry out the experiments that we desire to make. It is thought that we have located a suitable place for an experimental station, and when it is established it will be for the purpose of experiments in connection with cereals and forage crops.


George Alexander Cruickshank: I should like to ask a question in that connection. In the riding I happen to have the privilege of representing we produce 85 per cent of the small fruits produced in British Columbia, and British Columbia produces approximately 50 per cent of the small fruits produced in Canada. I refer to raspberries and strawberries. We have had an application in for some time for a small experimental station in the central part of the Fraser valley, which would concern itself particularly with diseases affecting raspberries and strawberries. What steps are contemplated or will be taken in that connection? We have an experimental farm in the riding, but it is primarily interested in dairying and stock production. It has very little connection with small fruits. The soil is not similar to that where most of the small fruits are produced. We have asked for an experimental or illustration station in the central part of the valley-we are not particular where-where 50 per cent of the small fruits of Canada are produced. What steps are being taken in that connection?


James Garfield Gardiner: I understand that at Mission there is a station operating in connection with berries. Then, there is, of course, the Agassiz farm. The work at Mission is being carried on under the direction of the officials from the Agassiz farm; but if I interpret the hon. member's question correctly he has an idea that there should be another station established somewhere in the vicinity of the area where the airport is.


George Alexander Cruickshank: Somewhere near
where the berries are produced.


James Garfield Gardiner: Some consideration has been given to that. I am not in a position
to make any definite statement as to what will be done there, but consideration is being given to the matter.


George Alexander Cruickshank: I want to make it clear that I am not in a critical mood on this matter, but the experimental station or the illustration station, I believe they call it, is at Hatzic. It is on a private individual's farm, where apparently, through the Department of Agriculture, we make certain arrangements for the production of small fruits. This is a very large industry. For instance, last year one co-operative alone shipped $1,500,000 worth of small fruits to Britain. It is no small industry which can ship $1,500,000 worth of raspberries and strawberries to Britain alone.
What we are asking for is an illustration station, or if you prefer to call it an experimental farm or station, somewhere in the central part of the valley. We particularly want it in the area where the berries are grown, because if you are to control the diseases, and find out the different varieties of berries that we can produce, the station should obviously be where the soil is capable of producing the maximum crops. We are not asking for a large experimental farm; we are asking for an experimental station. The potato growers of British Columbia asked for the same thing. We in the upper part of the valley are quite agreeable that that station should be placed in the riding of the hon. member for New Westminster, because that is where most of the potatoes of the province of British Columbia are grown. At least, they are grown in the lower part of the province.
We are having a great deal of difficulty with disease, particularly among our raspberries. We realize now that because the British markets ate cut off we must either cut our cost of production or increase our production under nominal costs or find other markets for other varieties. One way that could be brought about is by establishing what we call an illustration station somewhere in the vicinity of where the maximum production takes place. I would strongly urge upon the minister that consideration be given to establishing one. It would entail very small cost because, as I said before, one co-operative alone shipped $1,500,000 worth of small fruits to Great Britain. That is no small amount, and it is only part of our production.


James Garfield Gardiner: I might answer this question before we go on to something else. I was in Vancouver the day before yesterday, and the berry growers, to whom reference has been made, interviewed me there with regard to this matter and other matters having to do with the marketing of their berry crops. All I can
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say to the hon. member is that we realize that there is a necessity for carrying on experimental work there on a larger scale than we are now carrying it on. Consideration will be given to the representations which he has made.


Mr. SHAW:: It is my understanding that two experimental stations were to be established in Alberta to operate in conjunction with the Lacombe experimental farm. I also understand that these stations were to give special consideration to the study of the wooded grey soils found in the foothill territories of Alberta. Have these two stations been established? If so, where?


James Garfield Gardiner: I understand that there are stations established between Lacombe and the mountain area. I am not able to give the exact location of them. At these two stations they are proceeding to make a study of the soils.


Mr. McLURE:: Under this item I should like to ask the minister whether the experimental fur farm at Summerside comes under this vote, or under some other? If it does, I should like to have some information with regard to the progress of that farm and the amount of stock there.


James Garfield Gardiner: It does come under this vote, yes.


Winfield Chester Scott McLure: May I have some information with regard to the cost of this farm? What is it doing? There is no report on it.


James Garfield Gardiner: The work is educational, carried on in connection with nutrition and genetics in different types of foxes.


John Ewen Sinclair: In view of the observations of the hon. member for Fraser Valley about being in order, I think I shall be in order in asking the minister whether any thought has been given to establishing an experimental farm or illustration station to study the development of oil crops in this country, having regard to the great public interest in certain phases of that matter. Having got into order, I wish to thank him for the clear statement he made on the butter and margarine situation, in which he said that margarine was by no means an inferior food, and he gave reasons why he was opposed to the introduction of foreign butter or margarine. I see he is much in favour of the manufacture of butter within the country, so that I am sure the committee would be interested to know what his attitude is to the manufacture of margarine in Canada.


James Garfield Gardiner: I do not think this is the item under which that should be considered. The desire is to have this item stand, and go on.


Mr. BARRETT:: It has been suggested to me that it would be of benefit to some of the tobacco growers if a short course were given in the grading of tobacco. It is an intricate process. There are thirty odd grades and subgrades of tobacco, and, when buyers go into the field to buy, some of the farmers and growers are more or less at a disadvantage because they are not thoroughly familiar with the different grades. As I say, it has been suggested that a short course of a week or two would be beneficial. Has the department had any suggestions of that kind, or would it be possible for the substation at Delhi to carry out that work?


James Garfield Gardiner: I understand that there is an arrangement between the companies concerned and the government whereby the department gives assistance to schools which are conducted by the companies, and assistance is also given by the companies. At any rate they have representation in similar schools in connection with production, these being conducted by governmental authorities. In other words, there is a co-operative arrangement to assist graders of tobacco, but I presume what the hon. member advocates is a government school apart from those.


Theobald Butler Barrett: I was not suggesting that instruction be given to the graders, but that the growers themselves should be instructed so that they may be familiar with their own grades of tobacco when the company graders come.


James Garfield Gardiner: I understand that the province puts on short courses which the producers attend, but we have no part in those.
I suppose that would be extension work from Guelph college.


Theobald Butler Barrett: I did not know there was any.


Mr. MATTHEWS (Kootenay East):: Arising out of the answer given to the hon. member for Fraser Valley, I should like to know whether the illustration station spoken of as likely to be established in the Fraser valley will be expected to deal with the whole province of British Columbia. Will it take care of the needs of the Okanagan valley and the Creston valley area, for instance?


James Garfield Gardiner: We have twenty illustration stations in British Columbia, and in the Okanagan we have the Summerland farm, which is perhaps the most advanced experi-

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mental farm we have in Canada dealing with fruits. The station I speak of would be only one out of twenty-one if it were established as another station. We have twenty others spread over the province.


Mr. HLYNKA:: Does the department
make grants to illustration stations owned by private farmers? There are several in my constituency and it has become difficult for these individual farmers to keep up these orchards or illustration stations. If they were given some assistance I think these stations would serve a useful and beneficial purpose in the communities concerned.


James Garfield Gardiner: We have a great many stations of the type referred to where we go on to the farms of fairly successful farmers or men who do not raise objection to people going on their land, being themselves prepared to explain the experiments to those interested. We rent from fifteen acres of land up from these men, and for a small rental they agree to take instruction from our officials as to how to proceed with the plots and with the work done there. They also agree to allow the public to go on the land and see the experimental work which is being done, and in return for that they have the right to sell the crop when it matures and dispose of it for their own good. That is carried on across Canada and there are many of these farms in western Canada.


Anthony Hlynka: No direct grants are given?


James Garfield Gardiner: A rental is given; that is all.


Mr. McIVOR:: I think I should say a word with reference to our experimental farm station about twelve miles southwest of Fort William. If all the work the government does, and the money it spends, bring as good results as those obtained on that station, there is no doubt about the future of the government's policy. The experiments in grains and grasses, fruits and vegetables of different types, fertilizer, and all the diseases that attack fruits and vegetables, are excellent. As the minister has said, people are allowed to go on t'he farm, and there is a big field day. The experiment superintendent is a man who knows his work, and with it he is most courteous and kind.


[Stage Direction]
Item agreed to.
William Ross Macdonald: Item 15 stands. Production service-
16. Production service administration, $46,089.


Mr. LENNARD:: I wish to refer to a matter which perhaps does not come directly under this vote, though it might as well. I refer to
the bulletins put out by the department. They are fine bulletins and I know they are in great demand, but in the past several months I have found that many of them are out of print, owing, I presume, to that demand. Is any provision made for augmenting the supply or increasing the production for the coming months? I feel that it is a service which should be extended.


James Garfield Gardiner: They are being replenished just as quickly as that can be done. We agree there is some lack of them at the moment, but we are attempting to bring them up to date.


[Stage Direction]
Item agreed to.
Production service-Health of animals-
17. Administration of Animal Contagious Diseases Act, and Meat and Canned Foods Act, $2,611,508.
Lewis Elston Cardiff: There is an increase of
8238,909 in this item, and I see it is mainly. accounted for by salaries. I think the county of Huron is fourth in line for a tested area. If this increase does not mean we are to get any more service than we have had in the past, our people will be disappointed. I do not object to these men getting better salaries, but certainly we need better service. Could the minister tell us whether this increase will mean better service, or if it is just an increase in salaries?


James Garfield Gardiner: As has been indicated, this increase is largely accounted for by salaries, which will not mean additional staff; but a considerable portion will go to increased staff, and to the extent that this is so, the service will be increased. This year we are taking third year students at the veterinary college at Guelph and sending them out to do much of the work that has to be done under this item. Of course that will involve not only a good deal in the way of payments but also a good deal in the way of expenses.


Lewis Elston Cardiff: Will that by any chance speed up the service that we were to get in connection with tested areas?


James Garfield Gardiner: Yes, that is exactly why it is being done. The idea is to speed up the inspection work being done in connection with T.B. and other work of that kind.


Lewis Elston Cardiff: If that is the case could the minister give us any idea when our area will be tested? I think we are fourth in line.


James Garfield Gardiner: We are hoping to get at it this year.


Lewis Menary: A farmer in my district has a purebred Hereford herd, and he has lost three of his cattle. Sometimes they break
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out in a sweat; they gradually get thinner and thinner until they die. Would the minister have any idea what the disease might be?


James Garfield Gardiner: I do not think it would be possible even to make a guess. The proper thing, of course, would be to get the nearest veterinary, either one of our men or someone else, to examine these cattle. I should think it important that they are examined.


Lewis Menary: Last fall they very kindly sent two men from Ottawa, but they could not tell what the disease was. More recently I have been after them to send another man, but they advised me to get in touch with the experimental farm at Guelph. We have had men from there, too.


Alexander Malcolm Nicholson: Could the minister indicate whether any action is being taken with a view to training a larger number of veterinary 'surgeons? I understand that there is quite a shortage all across Canada, that not enough are graduating to fill the government service. I believe the governments of Nova Scotia and Saskatchewan-and Manitoba, too, I am informed-are making special grants to students, and I believe the federal government should participate in some such program to train veterinary surgeons, so that it may be possible to meet the problems which are being brought to the department.


James Garfield Gardiner: Some 130 will graduate next year. I believe there were about thirty-eight last year; there will be about forty this year, and about 130 or 140 next year. That will give some idea of the increased numbers. Probably that is partly due to the fact that quite a number of men who came back from overseas went to the veterinary college at Guelph and are being trained for that work.
During an earlier stage of the discussion- I have forgotten what we were considering at the time-I made the statement that we were 120 short in our own staff, and I want to get that on Hansard correctly now. When I read my remarks on the previous occasion I found that the 120 had become one or two; probably that has something to do with shorthand, but the statement should have been that we were 120 short in our own staff. And of course there is a great shortage throughout the country, so that we are encouraging these men to go into that work. One way of giving encouragement is to employ them as third-year students to go out and do work. This year we are sending out 114 students from Guelph and another group of about fifteen from Quebec. That is being done to give these men assistance during the summer so that they may continue

their college courses in the winter, and at the same time gain a great deal of experience in the work they will be required to do later on.


Mr. WINTERS:: Last year when this item was before the committee I brought to the attention of the minister the difficulty under which farmers in my constituency are operating because of the lack of veterinarians and the T.B. testing. At that time the minister was good enough to tell me the situation and that he would take my representations into careful consideration. Is he now in a position to say what progress has been made and what we may look forward to in the matter of help in the constituency of Queens-Lunenburg?


James Garfield Gardiner: It does not appear that we shall have enough men to get down to that area this year, certainly not in the early part of the season. The position which has developed since the matter was brought up last year is I think, pretty well illustrated by the figures I have given and by our undertaking to students to put them in the field in their third year. That is an encouragement, of course, to some who would find it difficult to get through without that work. It also increases the staffs we have available to carry on the work. The 130 or so who are going out this year will be of great help in strengthening the staffs we have out through the country and making it possible for us to get the work done much more quickly. I am sorry we shall not have sufficient'to get down to the hon. member's constituency this year, but we shall be there just as soon as possible.


Robert Henry Winters: Could the minister indicate approximately when he might expect his men to reach that constituency?


James Garfield Gardiner: Next year for sure, I am told.


Mr. BLAIR:: I am interested in this item
because we have had an outbreak of virulent T.B. in my constituency. On this item I have usually spoken of Bang's Disease, or contagious abortion, and that problem still exists. But in the district surrounding my home we have something really worse. One of the finest herds in the district has gone down completely on a T.B. test; and it was an accredited herd. Within the year that herd has been negative. It has always been negative; it has never had any trouble with T.B. This year on a test the whole herd went down, including even this year's calves. Several other herds in the neighbourhood have gone down in the same way. Apparently the infection, whatever it is or wherever it is coming from, is of a most virulent type. Although admittedly men have

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been up there and have furnished every assistance they could, apparently they are at a loss to find the cause of the infection.
So far as the manager of the herd is concerned, let me say that the man who owns the herd, and his son, are men who are well trained in the raising of purebred stock. As I said, this is one of the finest herds in the country, a herd which has been responsible for the producing of a Canadian champion.
I went out to see this herd, and what I saw was really pitiful. The owner led me around and said "There is the reserve champion of last year's winter fair." He showed me some heifers. They have not been able to find the cause of infection, and they are doing testing there now.
I was present the other morning when the report on another fine purebred herd was read, and ten purebred cows had gone down. I do not think any ruling has yet been made as to the cause of infection. Let us consider the condition of the first purebred herd. This man's young cattle were sent away to pasture 'last year on the day they were tested. They were negative at that time. They were brought in early in November, and every one of those had gone down in this year's test.
This would seem to me to be an unusual case, and there must be an unusual cause for the infection in that area. I have tried to find the cause of infection, and I am led to believe that it has occurred either through an interchange of feed bags-and that is a common procedure at the present time on these farms-or it has occurred by the feeding of bone meal. There does not seem to be any other reason for it.
This year's calves by this purebred herd went down. It might be that the cause of infection of the calves was due to feeding, but they have been fed pasteurized skim milk. This is a serious question, because not only am I interested in the matter since it affects these purebred herds in my district which are going down, but I am interested as a physician in the cause of a contagious disease. I say that because bovine tuberculosis is so readily transferable to human beings, particularly to children. In children it cripples, incapacitates and destroys. I would say that a fair percentage of tuberculosis in children is due to bovine tuberculosis.
The other day, Friday last, the Prime Minister brought in a resolution telling what the government intended to do by way of grants for the cure of tuberculosis. But if we are not going to start on this thing at the bottom, and if this is not going to be cleared up, there is no use in talking about the 5849-272
eradication of tuberculosis in human beings. We know the pitiful effects on children who catch the disease, and the crippled joints from which they suffer.
In that district we have a very fine agricultural representative. He has been giving every encouragement to young farmers there by way of calf clubs, and all that sort of thing. I have tried to take interest in these matters. But it is hard to tell those young fellows to raise good stock or to go into the raising of purebred stock when they know that they may be wiped out at any time on account of a disease like this.
I am appealing to the minister for additional help by way of men in that area, so that we may have more than the ordinary T.B. test. In the ordinary T.B. test a few animals in a herd may go down here and there, throughout the area. But this is wiping out herds. We are proud of some of our herds there. These men who have other good herds coming up for tests simply feel that they are sitting on a bomb, knowing that the work of a lifetime may be wiped out.
I am still of the opinion that this is no ordinary disease, because it possesses a virulence which has not been exhibited in any T.B. area before, and I say the department should do experimental work to find the cause of that trouble.
As I said earlier, I believe the matter of feeding bone meal to these animals has had a great deal to do with it, either that or the exchange of feed bags. Above all, I would say to the minister that the farmers should be given an educational program as to how the disease could be avoided. I met the veterinary for that area at one of these herds the other morning, and we were absolutely at a loss to know what the cause of the infection could be.


James Garfield Gardiner: The case referred to is a special one. As the hon. member has said, our men have been checking up and doing the best they can to determine the cause. As a matter of fact, we have taken such particular care with it that the director, himself, has been out there and has gone over those herds. Not only that, but he has personally checked the work done by those who have been attempting to determine whether it is ordinary bovine tuberculosis. He is satisfied that it is. It may be a particularly virulent type, but they are satisfied that that is what it is.
Then, as for being able to establish definitely where it has originated* let me say they have not been successful in that up to
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the present time. However, it is being treated as a very special case, and the men are right on the work of trying to determine the cause ond how to overcome similar happenings in that area or elsewhere. Beyond that, however, they have not been able to go, up to the present time.


William Gourlay Blair: The department has furnished every aid and facility, so far as that is concerned. But I should like to ask the minister if they have considered the possibility of its having originated in this interchange of feed bags, or if they have made investigation into the bone meal products these farmers are feeding?


James Garfield Gardiner: They have fairly well satisfied themselves that the disease has not been brought in either through the bone meal or the sacks. As a matter of fact they are inclined to believe it has been brought in by animals which have been brought in from areas which are not inspected. Up to the present time they have not been able to prove that definitely, but that is their opinion.


William Gourlay Blair: In the first herd which went down, one of the finest in the country, there has been no interchange of cattle, so far as that is concerned. And even this year's calves have gone down. We investigated the other morning the possibility of the disease being conveyed to them by skim milk; but the farmers have been feeding pasteurized milk. They have had no new stock in there. This man breeds his own, and has not been buying any; unless the disease was taken in there by drovers; and it would hardly seem possible that a drover using a truck could bring in a disease of that virulence.


James Garfield Gardiner: There is nothing more I can add to what I have said, other than this, that it would not be necessary for the animal to come into the herd that suffered most in the end. It may have come into the district by that method. Then again, these animals have been exhibited over a large area, and it is possible that some of them could have picked up the disease and passed it on to the others.
I may say I had some experience with a herd of cattle, myself, at the end of the first war. I had seventeen in that herd, and sixteen out of the seventeen went down. We just had to get rid of them; that is all. I started with the one that was left, and I have not had one go down since. The one left was a calf. One cannot explain how it happens sometimes. I am quite convinced, so far as my case was concerned, that it happened through a cow I had had on the farm for a long time. She began to get thin, but I did

not have her checked immediately. I had no particular reason for doing it at that time. However, by the time I got around to checking them, every animal in the herd, with the exception of the one calf, went down. These things can happen anywhere if one is not careful, and I have no doubt that something like that happened to that herd.


William Gourlay Blair: The four other herds which went down had not been exhibited at the winter fair and there did not seem to be any contact between the herds. That is why I feel so disturbed that a disease of such virulence has come into the area.


James Garfield Gardiner: We are doing everything we can about it.


Mr. CAMPBELL:: Is the T.B. test compulsory anywhere in Canada?


James Garfield Gardiner: Areas take a vote by counties or municipalities and when there are two-thirds in favour of it, then it is compulsory. Everyone must have his animals checked. As a matter of fact we check and inspect the animals in the whole district. No one is allowed to bring animals into the district until they are inspected, and persons who have animals in the district are not allowed to have those animals come into contact with others if it can be avoided.


Alexander Maxwell (Max) Campbell: I do not think that is good enough. I have had some experience with bovine tuberculosis and, like the hon. member for Lanark, I think we have to go further and have the testing compulsory right across Canada. I think it is wrong to leave it to a vote whether there will be inspection and testing. We had a case in our district and the first we knew of it was when a little baby took sick. We had a hard job getting the baby to the hospital, but I am not going to tell that story.
The baby died and the medical man who had attended the baby diagnosed the case as bovine tuberculosis. He immediately had a veterinary sent out to the farm and the cow that was milking reacted. When we killed the cow she was absolutely rotten. I would have thought that after that had happened everyone in the district would have been conscious of the danger and been willing to have his herd tested, but even the man who had been supplying the milk to the village refused to have his herd tested.
This matter is so dangerous that we should have a law to compel every farmer to have every animal tested periodically. A man may have his herd tested and found to be free but, like the herd the hon. member for Lanark

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spoke of, there may be another herd on the adjoining farm or a little way off. The cattle happen to get in contact with each other or a truck comes in that has been hauling other cattle. There is always the danger of losing the whole herd. In addition, as the hon. member for Lanark said, there is a danger to human beings, especially to children who are so susceptible to this disease. The minister should consider bringing in a measure covering the whole of Canada and making testing compulsory.


James Garfield Gardiner: I should like to put on the record what has been done. The following are the percentages of cattle that have been tested:
Per cent
Prince Edward Island	 100
Nova Scotia	 02
New Brunswick	 100
Quebec	 00
Ontario	 00
Manitoba	 50
Saskatchewan	 40
Alberta	 12
British Columbia	 23
That does not say that any particular area has had everything done for it that it desires to have done. The testing of entire areas was taken on much more readily in the maritime provinces than anywhere else. It is only since I came into the department that Alberta has permitted us to go into the province and check the cattle. You will notice that only twelve per cent of the cattle in Alberta have been covered. That is due to the fact that we have not had sufficient men since that time to do this work. During the thirties, as everyone knows, veterinaries throughout the country were almost starved out of practice because animals were not worth enough to warrant calling a veterinary when they were sick. Many of these men went out of practice and there has been great difficulty of late in finding enough men to cover the areas.
There is no difficulty in getting the money. This is one item in my estimates in connection with which I can get all the money that can be spent each year, provided that. I can get the men to spend it and do the work. We are trying to build up staffs by encouraging men to come in and qualify to do this work. Until a year ago we were probably a little overzealous in insisting that any man who did this work must be specially qualified. We were hesitant about putting anyone on the work who had not passed a special examination. It was not enough that he had been a veterinary thirty years or twenty-five years ago; he had to pass an examination now.
Since about two years ago we have been trying to utilize every available man and we
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have even had students out doing the work.
I do not think we are in position where we could compel people to have their herds tested because we could not test them. There are not enough veterinaries in the country to test them. As is indicated here, there are some sections of the country that have been at this a long time and have had the work done. However, the fact that they have been tested once does not indicate that during all the years they have kept right up to date. The only reason they have not been kept up to date is that we have not enough men.


Alexander Maxwell (Max) Campbell: I am glad to hear the minister say that they are not being so fussy about veterinaries during the past year or two. Would it be possible to organize teams of men who were not veterinaries to work under a veterinary? I have seen cattle tested, and it does not seem to me that it is necessary to have a veterinary do the actual injecting of the virus and make the examination. If a group of men were trained to work with a veterinary I think they could cover the country a lot faster.


James Arthur Ross: I just want to follow up what the hon. member for The Battlefords has said. In the particular district in which I live we have a T.B. free area. You must get a permit to bring in cattle; you must have them tested and all that. As nearly as I can remember, it is twelve years since those municipalities were brought into the T.B. free area and there has not been a re-check since that time. All young stock that have been born have not been checked and there has been no check on whether an animal with a contagious disease is among the herds.
I could cite many cases, such as the one cited by the hon. member for The Battlefords, that occurred when we had the first test. Many families with little children were very much alarmed and in some cases entire herds went down. It seems to me that something must be done. Twelve years is too long a period to let pass without a check. I realize all the difficulties the minister has pointed out. I remember advocating that he organize students in teams under qualified veterinaries. If that will not accomplish the work, then you might have to go further and follow the suggestion of the hon. member for The Battlefords.
This is a serious business because it affects human life. I hope the department will give serious consideration to the development of teams to work under properly qualified veterinaries, not only to take care of new areas but to check the old areas. I know of areas that have applied to become free areas, but they have not been able to be declared free areas because of

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a shortage of help. Certainly these areas which have not been inspected for ten or twelve years should be re-checked, because you cannot tell what may have developed in that time. I want to impress the importance of this on the minister.


Mr. BRYCE:: I was delighted to hear the minister say that they are going to employ extra veterinary surgeons for this work. 1 was also pleased to hear him say that he has no trouble in getting the money to do the job. I am very much interested in the question of re-testing raised by the hon. member for Souris. I happen to live in a T.B. free area. It is not so long ago as twelve years that we had our re-test, because they are always picking out the odd animal that will go down. I have been very much interested in this matter for a number of years, and I quite appreciate the alarm felt by the hon. member for Lanark and the hon. member for The Battlefords, because since I came to this House of Commons I have seen T.B. tested cows go into an area where there were people suffering from T.B. and six months later when the cattle were tested they also were found to have T.B. That is a serious matter. I am delighted that the department is carrying on this work.
* There is another point I would bring to the minister's attention. When he became Minister of Agriculture more areas were coming in than are coming in now. The movement started in the eastern provinces and everybody was more agreeable then to coming in because cattle then were worth S40 to $45 apiece. The same grade of cow brings $200 today. When you go into a municipality and want to sign up the farmers to have this testing done, naturally they say: Well, cattle are a good price today. If the man has a family of small children he may look at the matter differently, but if he looks at it only from the point of view of dollars and cents he says: Thirty-eight dollars does not look very much to me for a cow that will go into the tank; I will leave it until later on. Naturally, under those circumstances, you do not get two-thirds of your people to agree to have the test. I spoke about this matter in the house once before and one hon. member pointed out that you got $96. It is true that you got $96 if your animal was registered and you had papers and all that sort of thing, but I have always been in the class, when milking cows for the city of Winnipeg, of being glad to get a good grade cow.


James Arthur Ross: A registered cow is worth several hundred dollars now.


William Scottie Bryce: I never had money enough to buy anything like that. I want to appeal to

the minister to check up with his officials, because I think $38 compensation is far too little to pay, with the price of cattle what it is today. I assure the minister that I am hopeful that, as long as he is Minister of Agriculture, he will never let prices go back to $40 and $50 for a cow as long as we have the United States market willing to pay a good price for our cows. I think $38 is ridiculous. If you doubled that figure and then went out and asked farmers to sign up I am sure they would agree to have the test made in much greater numbers than they are doing now. In the interests of health alone it should be made compulsory. I am naturally afraid, in this house, of talking about compulsion, because I know what would be said of me if I did. Nevertheless, in the interests of the health of this nation, I do say that this testing should be made compulsory.


James Garfield Gardiner: I just want to say in reply that our experience is in the opposite direction. We have seventy districts in Saskatchewan which have already applied and to which we have not been able to send anybody, and we also have a considerable number waiting in Ontario. If we were anywhere near up to date we would probably have double the present number applying right away.


William Scottie Bryce: I am delighted to hear that.


James Garfield Gardiner: There is no difficulty in getting applications. They are coming in so fast that we are not able to handle them.
The other question is one which has been discussed in the house several times; that is, about compensation going up and down with the price of cattle. There are arguments in favour of that and against it. When cattle were down, for example, to $50 apiece, and sometimes as low as $20 apiece, the argument then was that we Should pay more because of the low price of cattle. I think the argument for that was just as strong as the argument that we should pay more when the animal is worth more. There is an argument both ways, but we found it was wise up to the present to maintain the same level whether prices are high or low.


William Scottie Bryce: You do not get anything if your animal goes into the tank. If your animal is only partly diseased, around the neck, say, or the liver, you get what value is in the meat, but you do not get anything if it goes into the tank.


James Garfield Gardiner: You get whatever value there is in the hide and grease. It may not be much, but you get it.


William Scottie Bryce: That is nothing.

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James Garfield Gardiner: At present it may
amount to quite a bit.


John Alpheus Charlton: On previous occasions I have warned the minister and the department of the seriousness of T.B. and also Bang's disease in cattle, and I want to take this opportunity to reiterate in part what I have said before. I think it all hinges around one thing. I was glad to hear the minister say that he has never been refused any money by the government for this purpose. I think that is all the more reason for stating that the root of the trouble is the low salaries paid to the veterinary surgeons doing this work. I have said that before, and I shall continue to say it until their salaries are in line with those paid to other professions in the department and in the government service. Their salaries are nowhere near in line at present.
I have here a resolution passed at the annual meeting of the Ontario veterinary association, held at Niagara Falls, Ontario, on January 22-23, 1948. It reads:
Copy of resolution unanimously passed at the annual meeting of the Ontario veterinary association held at Niagara Falls, Ontario, on January 22, and 23, 1948.
The Ontario veterinary association now in annual conference at the hotel General Brock, Niagara Falls, Ontario, unanimously endorse the following resolution and respectfully request your sympathetic consideration and action.
Resolved that the salary schedule of veterinarians employed in the federal Department of Agriculture is inadequate for the responsibilities involved and the qualifications required,
The depleted federal service can be restored only by the institution of appropriate and fair salary schedules and will have its reflection on the health status of the Canadian livestock industry as it relates not only to our domestic but export trade.
May we ask your favourable consideration to an upward revision of salaries comparable to that offered members of other professions.
Ontario Veterinary Association,
E. F. Johnston,
President.


James Garfield Gardiner: What was the date of that?


John Alpheus Charlton: It was a resolution passed at their convention on January 22 and 23 of this year. I tvant to be quite fair with the department. Some considerable changes have been made and I congratulate the minister upon them. Apparently these changes have not been sufficient to bring recent graduates, or graduates of previous years, into the service of the department. I want to say a few things to prove that statement. As the minister said earlier this evening, the usual personnel of the health of animals branch is 410. The present staff numbers approximately 290. I may be out one or two; but, as the minister said
previously, they are 120 short of the required number to bring it up to the average. In addition to that, sixty members of the present staff are over sixty years of age.
It has already been said that a large number of areas have asked for this test to be taken.
I have some figures here which are probably about a month and a half old. They may not be quite accurate, but they are approximately correct. I should like to put them on the record. Areas which have been accredited but are now past due on their tests total ninety-six. Areas that are in the process of being tested across Canada-that is, about a month ago-number twenty-seven. Areas accepted for this test but not tested at all number fourteen. Areas due for a test during 1948 number thirty. That makes a total of 126 areas across Canada waiting for the T.B. test. Unless something is done to encourage graduate veterinarians, or graduates of previous years, to come into the service, we shall never get very far ahead with this testing work.
I want to take exception to a statement made by the minister on April 17. I do not know whether it was a mistake of the press or not; I should not like to say, but the minister can correct me if I am wrong. In a statement made by the minister to the Kiwanis club in Ottawa on April 17 of this year, the following appears. I shall quote just part of it:
Mr. Gardiner stressed the need for more "properly qualified veterinarians" in Canada. In Canada there were 904 properly qualified vets and 294 of them worked for the government. Fifty-five of the government employees were more than sixty years of age. At the present time there were 120 vacancies in the Department of Agriculture for vets.
That does not agree with the figures I have of the number of registered veterinarians across Canada. I have the figures for the various provinces, but it is not necessary to give them. The total across Canada as I have them-I may be out a few-is 1,053. I think there are somewhere between that number and 1,100 in Canada.
I want to congratulate the department and the veterinary college of Guelph for getting together and co-operating on taking the third-year students. Part of the third-year course at the veterinary college is to take on this work for two months in the summer. Therefore the third year will be the fourth year now, since the veterinary course will be a five-year course from now on. I may say that the number graduating this year from the veterinary college at Guelph is forty-three. The 1949 class, that is, the boys who will be taken on by the department this year for the
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two-month period, one month in field work on the disease of plants and plant inspection, is 118. The number in the class which will graduate in 1950 is 140, and the number in the class of 1951 is 153. It will be seen by these figures that there will be an increasing number in those years. I should like the minister to answer at a later time, if he can, just how many of this year's students, the forty-three graduating this year, he expects to take on the department this year. I doubt whether there will be very many.
Several orders in council have been passed respecting the salaries of veterinary surgeons. As I said before, some increases have been given. Some of these orders in council have been tabled in the last few days, but until that time they had not been tabled. I wonder why this government passes orders in council and makes them available to everybody but members of parliament. I make that statement and it is true, because I had a difficult time to get the three last orders in council. I knew they had been passed. I had a terrific time in getting hold of them. They had never been tabled, but everybody but members of parliament seemed to be able to get hold of them. I ask the minister why that is, because surely we have the same privileges as an individual in having access to orders in council passed by the government.
An order in council was passed on March 24, P.C. 1/1222, which increased the starting salary of veterinarians from $2,100 to $2,400; but the $2,100 starting salary is still retained in the order in council. If in future years they wish to drop back to $2,100, because there are probably a few more vets in the country, they can drop back to that amount. As I said, the starting salary was raised on March 24 to $2,400, and on a later date it was raised to $2,700. So far as I know, that is the starting salary for veterinarians coming into the service under the grade one classification.
Other orders in council have been passed to increase and reclassify veterinarians, now in the service, for which I wish to congratulate the minister, or whoever was responsible for it. That was done more or less to hold the men who are in the service at the present time. It was very necessary to hold these men, because in the past few years we have had 120 resignations, and if something were not done, there probably would have been more resignations from the branch. But, as I said before, nothing very satisfactory has yet been done. I understand that something is now being considered. Since I have heard nothing definite, I shall be glad if the minister can make it definite tonight that the starting salary

has been increased and that the reclassifications can be made to a greater maximum without examination, just simply a year by year reclassification up to a maximum for the grade four veterinarians, or senior veterinarians.
As was so well said by the hon. member for Lanark, this is not a problem of the health of livestock only; it is a national health problem, and should be treated as such. If what we have to do is to pay more to veterinarians to join the service, then it should be done, because we have been going along for three or four years with a reduced staff. It is of sufficient importance not to be so miserly in the future. It is essential that we do something to rid this country of T.B. I repeat that this is not simply a livestock health problem; it is a national health problem. When you find young children coming down with T.B., and the incidence so great as was stated by the hon. member for Lanark, it should make people jealous of the fact that they want to have their herds tested even from that point of view alone.
I would suggest strongly that the department be given sufficient money to carry on a vigorous advertising campaign to warn farmers of the many dangers confronting them in this fight against T.B. It might be logical for a person, after having an accredited herd for sixteen or eighteen years, possibly to become a little careless. That is understandable. He thinks, having been free so long, that condition will continue without as much care on his part as he has taken in the past. These veterinary surgeons should warn these men of the various dangers, and the department should carry on an instructional campaign, telling the farmers of the various things they must guard against.
As the minister has said, the department does not feel that the exchange of feed bags was so very important a factor in the recent outbreak in Lanark county, nor was the bone meal. They think it was introduced by animals from non-tested areas. That is another point that suggests the importance of getting over all areas in the country and not simply choosing isolated counties here and there. A test is of questionable value, when there is a county that is tested regularly while the county next to it is not. A man across the fence might have cattle on his farm; there might be a stream running from his field into the adjoining pasture, and if his cattle were polluted with tuberculosis, his herd not. having been tested, his neighbour's cattle would become infected.

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It is important to have the larger areas covered, and more consideration should be given to areas adjoining tuberculosis-tested areas. Consideration should be given them above isolated areas, no matter when the application came in, because it is of much greater importance to have adjoining areas tested than it is to have an isolated area tested.
As the hon. member for Lanark pointed out-, the savings of a lifetime might be wiped out overnight by this dread scourge of tuberculosis. The two diseases that call most urgently for attention are tuberculosis and Bang's disease. On various occasions I have mentioned Bang's and it is equally important with tuberculosis. The area-testing for tuberculosis is, however, of great importance, and Bang's will go along with that.
I wish to congratulate those who have taken part in creating the greater co-operation between the veterinary surgeons and the medical profession, because neither the medical men nor the veterinarians independently could possibly handle the situation. There must be complete co-operation. They must travel hand in hand across the country in the fight to get rid of tuberculosis and Bang's disease. I have made various statements before on this question, and I should like to have the minister inform the committee of the number of veterinarians graduating this year. How many is it expected to obtain from the college?


James Garfield Gardiner: I am not in a position to say how many we shall get from the college, probably not more than four or five as far as we know at the moment.
I think I should say something with regard to the salary levels. I would agree with the hon. member for Brant that until recently the salaries have been much too low. The ranges ran from SI,640. As a matter of fact, veterinarians came on at SI,640 and worked up to the level of Sl,800-$2,160, and there was some difficulty in getting beyond that level. The situation is changed today, so that the veterinarian, if he is right out of college, comes on at $2,700. He does not come on at the bottom of that grade, which is $2,400 to $2,700, but at the top of the classification, which is $2,700, and he has to put in only one year to get into the $3,000 class. If he has had one year's experience as a veterinarian outside the department he goes into the $3,000 class, and he gets a yearly advancement until he reaches $3,300, without further examination. From $3,300, however, the increases are promotional and he can go up to $4,800. So that
there has been a considerable increase in the payments now made to veterinarians.


John Thomas Hackett: Can he go to $4,800 without examination?


James Garfield Gardiner: He has to have the usual promotional examination from one classification to another after he gets up to $3,300. It is neither an oral nor a written examination but a rating.


John Thomas Hackett: That is departmental?


James Garfield Gardiner: Yes. It is based on the work he has done. It is a departmental rating confirmed by the commission. That is the position in the matter of salaries. I might say, in answer to the question my hon. friend has asked, that the 904 is the figure given at the Chateau Laurier. That is the official figure of registered veterinarians. In addition to that, there are veterinarians who are qualified, working for the department, and that would bring the figure to between 1,100 and 1,200.


John Alpheus Charlton: I understood the minister to say the figure he gave included 294 working for the department.


James Garfield Gardiner: The 904 is exclusive rather than inclusive.


John Alpheus Charlton: The minister said that the veterinarians could go to $4,800 without examination. That is perfectly true. They can probably do so if they get a reclassification in their grades and are good enough to be chief veterinary inspector, meat inspection, or chief veterinary inspector, animal contagious diseases. There are only two jobs and only two men on those jobs with $4,800. How many men have a chance to get those jobs?


James Garfield Gardiner: The district inspector, grade 2, can go on to $4,800 as well. There are five of these.
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

John Ritchie MacNicol: What is the business on Monday?


Mr. FOURNIER (Hull):: On Monday we should like to complete consideration of Bill 300 to amend the Canada Shipping Act. There are only a few sections left and it will not take long, and then we shall continue with the budget debate.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
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[Stage Direction]
[The following items were passed in committee of supply]:

[Stage Direction]
1.	Departmental administration, $234,297.
2.	Publicity and extension division, $195,013.
3.	Advisory committee on agricultural services, $3,000,
4.	Contributions to empire bureaux, $86,139.
5.	Science service administration, $168,374.
6.	Animal and poultry pathology, $261,264.
7 Bacteriology and dairy research, $87,662.
8.	Botany and plant pathology, $845,983.
9.	Agricultural chemistry, $312,525.
10.	Agricultural entomology, including a payment of $3,560 to the commonwealth biological control laboratory, Belleville, Ontario, for special services, $1,031,667.
11.	Forest entomology, $887,693.
12.	Plant protection, $556,674.
13.	Experimental farms service administration, $100,475.
14.	Central experimental farm, $1,354,441.
16. Production service administration, $46,089.
[Stage Direction]
Monday, May 24, 1948