RAILWAYS AND SHIPPING-CHANGE IN PERSONNEL

Hon. C. D. HOWE (Minister of Transport) moved:: That the name of Mr. Emmerson be substituted for that of Mr. Hill on the standing committee on railways and shipping, owned, operated and controlled by the government.
That the name of Mr. Jackman be substituted for that of Mr. Diefenbaker on the standing committee on railways and shipping, owned, operated and controlled by the government.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, although the ultimate situation remains obscure, and the present relations between the government of the United Kingdom and the French government at Bordeaux have not yet been clarified, I feel that I should say a few words at this time. Members of the house will have appreciated the feelings of Mr. Churchill when they read his speech delivered in the British house yesterday. Nothing could have brought home more clearly the tragic irony and agony of war, than the grim obligation placed upon the British navy to prevent the French fleet from falling into the hands of Germany and Italy.
Nothing can be gained by a recital of the events which led up to the seizures, the sinkings, and the conflict between ancient allies and friends. The proposals made by the British emissary to the French admiral at Oran would seem at this time and distance to have contained within them an honourable and bloodless solution. Fate decreed otherwise. No one can blame the French admiral and his gallant sailors for loyal obedience to their government, however precarious its powers, however shackled its decisions. Equally, no fair-minded men knowing the attitudes and minds of the German and Italian dictators and their record of promises made, and promises broken, could expect the government of the United Kingdom to imperil the security of the British isles and the dominions by allowing the French fleet to pass into the control of the enemy. Wednesday's action cannot be regarded as directed against France. Rather was it action against ships that already, for all practical purposes, were German and Italian instruments of war.
I am sure that it is the prayer of the people of Canada who owe so much to the memory of France, that the French people will recognize that if the Bordeaux government acted under the compulsion of the conqueror, the British navy acted equally under the compulsion of its great responsibility for the preservation of the liberties of the world. In no country has the calamity of France received more understanding sympathy than in Canada. The plight of the French people and the destitution that has overtaken its millions of refugees have filled us with profound sorrow. It is our faith that although the might of a ruthless machine has for a time, but we believe for a time only, overwhelmed the power of France, nothing can vanquish the soul of that great nation.
Whatever may have happened, or whatever may come to pass, Canadians of all races and classes know in their hearts that there is only one thing that matters to-day in the world of free men; that is the ultimate triumph of the cause of freedom for which Britain and France alike took up arms, and the certain defeat of the evil powers that threaten to enslave the world.



FINGERPRINTING FOR IDENTIFICATION PURPOSES OF REFUGEE CHILDREN SENT TO CANADA

[Stage Direction]
On the orders of the day:
Mr. G. K. FRASER (Peterborough West):: I should like to ask the Minister of Mines and Resources (Mr. Crerar) whether his department has set up the necessary machinery and staff to fingerprint all refugee children for
National Registration

identification purposes so that a record may be kept at all times of these children, and also to avoid any chance of the parents getting the wrong children back after the war is won by the British empire.


Hon. T. A. CRERAR (Minister of Mines and Resources):: The necessary steps are being taken to handle this rather difficult matter in as satisfactory a way as possible.



NATIONAL REGISTRATION


[Stage Direction]
On the orders of the day:
Hon. R. B. HANSON (Leader of the Opposition):: Mr. Speaker, I desire to ask the Prime Minister (Mr. Mackenzie King) some questions which are based upon a report which appeared yesterday in the French language newspaper Le Droit with reference to the mobilization of man-power under the National Resources Mobilization Act. I shall read just one paragraph of the translation:
The following classes of the Canadian army may be mobilized next Monday:
(a)	Young men from twenty to twenty-seven years of age.
(b)	Married men between the same ages.
That is what the Prime Minister may have
said yesterday-and we learned it from a reliable source-at a Liberal caucus, after Mr. Arthur Slaght, Liberal member for Parry Sound, had made a virulent speech in favour of total conscription to enable Canada to do her full part for the defence of England against German invasion. The leader of the government is said to have reassured the members against the likelihood of a nazi attack against Canada in saying that the United States would never tolerate the invasion by a foreign power of any foot of territory of the two Americas.
I do not quite understand the reason for all the laughter, Mr. Speaker.
These are my questions: (1) Has the government determined to call up the two classes mentioned? (2) If so, has the order in council been passed? (3) If so, when will it be laid on the table? (4) Is the Liberal caucus the appropriate place to make such an announcement? (5) If the report is untrue, when will the first steps of mobilization be taken?


William Lyon Mackenzie King: May I see the questions? If I had them before me I could answer them one by one.


Richard Burpee Hanson: I shall hand them to the Prime Minister.


William Lyon Mackenzie King: Question 1: Has the government determined to call up the two classes mentioned? The answer is no. Question 2: If so, has the order in

council been passed? The answer is no. Question 3: If so, when will it be laid on the table? I suppose the answer is, God only knows.


Richard Burpee Hanson: That is probably true from what I hear. God only knows when you will take action.


William Lyon Mackenzie King: Does my hon. friend wish to ask some other questions?


Richard Burpee Hanson: The Prime Minister is treating this as a joke.


William Lyon Mackenzie King: I must say that I am amazed at my hon. friend having read the article which he did because he knows that the proceedings of a caucus are completely secret and are never disclosed to the public. The article which he has read is a fabrication from end to end, and, as I followed it, there is not a scintilla of accuracy in a single line of it. I would think that my hon. friend would have so regarded it the moment he read it.
Question 4: Is the Liberal caucus the appropriate place to make such an announcement? My hon. friend knows very well caucuses are not the place where any announcement of government policy is made. He assumes in his question that an announcement has been made. I state that there was no announcement of any kind. Question 5: If the report is untrue, when will the first steps of mobilization be taken? The answer to that I gave to an hon. gentleman opposite a day or two ago. They will be taken by the Department of National Defence when the department is ready to make its announcement.
I hope that my hon. friend the leader of the opposition will not think that I was trying to treat this matter in any light way. I was simply giving it the kind of treatment which I think it merits.



ARTICLE IN LE DROIT-PRIVILEGE, MR. SLAGHT

Mr. A. G. SLAGHT (Parry Sound):: Mr. Speaker, rising to a question of privilege, may I say that the statement which the hon. leader of the opposition (Mr. Hanson) has quoted, in so far as it refers to me is literally and absolutely a falsehood. May I suggest to the hon. gentleman that the next time his friend who persuaded him to place before this house such a ridiculous and preposterous statement, tries to put his ear to the keyhole of a caucus and then carries tales to hon. gentlemen opposite, he ought to be arrested and thrown out of the house.


Richard Burpee Hanson: Thanks for the lecture.


Mr. W. A. FRASER (Northumberland, Ont.):: That will hold you for a while.

The Ministry



THE MINISTRY


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Mr. Speaker, may I say, having relation to the very grave situation as it is in the world to-day, that the government had rather hoped that at least a part of the debate on the motion which has been before the house throughout this week to go into committee of ways and means on the budget might have been curtailed. The Minister of Finance (Mr. Ralston), as the house knows, has undertaken to assume the duties of Minister of National Defence. Out of courtesy he has remained in the house throughout the week listening to the various speeches that were made in order that, if it were thought necessary, he might reply to certain matters at the conclusion of the debate. Throughout the whole week not only has my hon. colleague been following the debate as I have mentioned but he has also been giving every other hour that he has had free to the work of the Department of National Defence. He has not spared himself for weeks and months past with reference not only to financial matters but also with reference to matters relating to the Department of National Defence. This week he has been giving all the time that he has had outside of this house to very pressing defence matters in cooperation with the Acting Minister of National Defence (Mr. Power).
I was hoping that this afternoon it might be possible for us to have a division on the motion and the amendments, but I understand that the whips have a list of several speakers and that it may not be possible to have a division to-day. In these circumstances I should like to say to the house that if we have not reached a division before six o'clock this evening, I would wish the Minister of Finance to take over without further delay the portfolio of National Defence. I have already asked His Excellency the Governor General if he will receive the Minister of Finance and myself in order that Colonel Ralston may be sworn in as Minister of National Defence and devote his time from now on to the all important work that has to be carried on in that department. If there is anything in the discussions which have arisen or may further arise on the motion to which the Minister of Finance might wish to make a reply at a later stage, I hope the house will permit him to do so when we are in committee at some moment that will be convenient to himself. But I wish to impress 95826-86
on the house that the problems respecting defence demand the immediate and urgent attention of the minister who is to command that department in cooperation with the Minister of National Defence for Air, and I therefore hope that his services in this house as Minister of Finance, with respect to ways and means, may be dispensed with from six o'clock on to-day.


Richard Burpee Hanson: Mr. Speaker, I have every
sympathy with the position to which the right hon. gentleman has referred. I had it in mind last Tuesday when at the conclusion of my remarks I made what for me was perhaps a rather strong appeal along the very lines which the Prime Minister has just indicated. If hon. gentlemen will refer to page 1256 of Hansard, the second column, they will observe what I am referring to. I shall read, not it all, but only this part:
And so, Mr. Speaker, to expedite the business of the country, to expedite particularly our wrar effort, to expedite the minister's plans with respect to the defence of Canada and especially of our Atlantic shore line, I suggest to the house, I suggest to the government and their followers, and I make a special appeal to my friends in the far corner, that we let this budget pass and release the minister to administer his new office of Minister of National Defence. Let the new Minister of Finance, whoever he is to be-
And then I went on to refer to the Minister of National Revenue (Mr. Usley) piloting the financial resolutions through committee, and I made an offer to help. I was prepared then, Mr. Speaker, to see this budget pass that afternoon. I went to see the Minister of Finance before I came into the chamber. I suppose I should tell the whole story; there is nothing secret about it. The Minister of Finance, I believe, was quite relieved, and quite agreeable to the suggestion, but, as I think he was in honour and duty bound, he said he would have to consult his leader. He did so. Nothing occurred. The debate went on; and we did not put up, as far as I can recall, a single speaker that day. Nothing more was said to me, I concluded therefore that the suggestion had been rejected.


William Lyon Mackenzie King: No.


Richard Burpee Hanson: And I think I had a right to draw that conclusion.


William Lyon Mackenzie King: Oh, no.


Richard Burpee Hanson: Well, the suggestion was not accepted-I will put it in that way.


William Lyon Mackenzie King: May I say to my hon. friend -that I am sure there has been a very serious misunderstanding if that is the view which he has had. When my

The Ministry

hon. friend the Minister of Finance (Mr. Ralston) asked me about the matter, the leader of the opposition (Mr. Hanson) had mentioned in connection with the shortening of the debate that he would make his speech immediately, and the point I understood to be the one raised was, whether it would be quite proper for the leader of the opposition to make his speech immediately, having in view exactly what he has suggested, namely that it would serve to shorten the debate if he as leader of the opposition had spoken. I said certainly, by all means; and my hon. friend made his speech. My hon. friend made the suggestion, and I gladly accepted it. May I say that in rising to speak I had intended to draw attention to what my hon. friend said last Tuesday and to express a word of appreciation that he had seen the necessity of the Minister of Finance getting quickly over to the Department of National Defence and had sought to accommodate the government in that way. What my hon. friend has said just now as to our not having appreciated to the full his willingness to cooperate comes as a complete surprise to me.


Richard Burpee Hanson: I suppose I am very stupid and very dense. Apparently I am at times, and it is hinted that I was, early in the afternoon, although I am not yet convinced. But certainly I never understood that the government accepted my proposal, and I do not recall that the Prime Minister said to me what he says he did. If he says he did, I accept his statement.


William Lyon Mackenzie King: It was said
here, when all three were together.


Richard Burpee Hanson: I went
over to ask if a decision had been reached. The Minister of Finance said that he did not have his glasses and could not read the note I had sent him previously. My hon. friend said something about a reconstruction of the cabinet, and I said, "That does not have to dovetail into this." Let us get the whole story. I went back to my seat expecting that there would be some response from the government. So far as I know I never got any.
I agree entirely with the principle involved. I think it is a crime that the hon. gentleman should have to sit glued to that seat and listen to some of the speeches, at all events, which have been delivered. I should like to point out, as I am reminded, that a Liberal member immediately followed me, and the debate, I assumed, was to go on.


Mr. RALSTON:: May I say a word?


Mr. POWER:: Where are the hon. gentleman's glasses?


An hon. MEMBER:: What are we doing
now but killing time?


James Layton Ralston: My hon. friend did come over to me and ask if a decision had been made. I spoke to my leader at the time, and I said it was all right. I was astonished when my hon. friend at the conclusion of his speech asked me if I had any statement to make. I promptly rose in my place and made the statement that so far as the government was concerned we were quite prepared to give full opportunity for the discussion of any question which might arise on the resolution to go into committee of ways and means, if hon. members saw fit to confine themselves in connection with the debate. With regard to the hon. member for St. Antoine-Westmount (Mr. Abbott) who spoke immediately after my hon. friend, I myself went over to see one of his friends on the other side of the house to ask him if he would go on, because he was very anxious to do so. I saw that there was no intention, on the part at least of that particular friend of my hon. friend, not to go on with the debate, but that he did not want to go on that day. The result was that the hon. member for St. Antoine-Westmount continued the debate. But I did expect that sooner or later, and probably sooner than later, the debate would end, with the assurance I had given. It has dragged on. I do not think it was anybody's fault, but I do not want my hon. friend to say that there was no response to his suggestion, because the response was made not only by me privately but, as Hansard will show, on the floor of the house.
May I add that I appreciate very much indeed what my hon. friend has said, and I appreciated the suggestion he made at the time. I would be perfectly willing to stay here, as it is my duty to do, but the time has come when my leader has been good enough to intimate, and perhaps the house will agree, that it is more important for me to be elsewhere. That is why the procedure which my leader has indicated will be adopted.


Richard Burpee Hanson: I guess
we had our wires crossed.


Right Hon. ERNEST LAPOINTE (Quebec East):: I should like to draw attention to the fact that since my hon. friend made that statement there have been twenty-one speeches. Of that number, seven were delivered by hon. members supporting the government. Yesterday, of eleven speakers, two were on this side of the house; and the day before yesterday, of six speakers, two were on this side of the house.

The Ministry


Mr. ROWE:: That does not add much to the subject.


Ernest Lapointe: It shows who killed the time.


William Earl Rowe: It shows that on the first day the government put on the speakers.


Mr. M. J. COLDWELL (Rosetown-Biggar):: May I say as far as this group is concerned that we have no knowledge of any attempted understanding between the government and the leader of the opposition (Mr. Hanson). May I add that on the address in reply to the speech from the throne we did not, because of the request of the government, take the accepted right to debate matters in connection with our own constituencies; but in spite of the fact that the Prime Minister (Mr. Mackenzie King) had said that on the war appropriations bill almost anything might be discussed, when the hon. member for Mackenzie (Mr. Nicholson) rose to discuss some matters in connection with his constituency, he was stopped. When the emergency mobilization bill a short time ago was under discussion we were given to understand that it was vitally necessary that that bill should be passed immediately. The Prime Minister told us he only wished he had the power that night to do certain things. But so far as I know no orders in council have yet been tabled under that particular measure. " One ", someone says. This is the only opportunity remaining for hon. members to bring before parliament constructive ideas and grievances from their constituencies, and it seems to me that that right should not be taken away from the private member.
As far as the Minister of Finance (Mr. Ralston) is concerned, we all agree that he should be attending to the Department of National Defence. But may I say this, that there is no earthly reason why the change should not have been made and the gentleman to be designated the new Minister of Finance should not have been appointed and followed these debates. Indeed, I think that when the budget resolutions are before the house the minister who will have to administer this department should be seated in the chair of the Minister of Finance.
I think the government is making a mistake in attempting to restrict the latitude allowed private members to bring forward matters they wish to discuss. Private members have few opportunities to introduce such matters. After all, private members' days have been taken away, and the opportunity for introducing private bills has virtually disappeared or, at any rate, has been greatly curtailed. On behalf of a number of private members I wish to protest against these rights being taken away even under war conditions. As far 85826-861
as we are concerned, as we said at the outset we are anxious and willing to facilitate the business of the country and to cooperate in bringing the present war to a successful conclusion, but that does not mean that we are committed to support all that the government suggests or to remain silent in our seats when we have something which we feel ought to be said. Therefore I suggest to the Prime Minister .that the proper procedure would be to name the new Minister of Finance and relieve the present minister, thus allowing us to get down to the business of the country in a proper manner.


William Lyon Mackenzie King: That, may I say to my hon. friend, is what I have always intended to do and it will be done at the end of this week; but what I wish to make clear is this, and it was made clear at the outset. The present Minister of Finance (Mr. Ralston) wished, if the occasion seemed to require it, to make a reply on the debate on the main motion to go into committee of ways and means. It was always understood that as soon as that reply had been made my hon. colleague would give up the portfolio of Finance and take over the Department of National Defence and that other changes would follow. I intimated that later I would have something to say about other changes in the government and I have been waiting until the Minister of Finance takes over the Department of National Defence to announce those changes. May I say to the leader of the opposition (Mr. Hanson), when he says that I mumbled something about .the reconstruction of the government-


Richard Burpee Hanson: Did I use the word mumble? I am sorry if I did. I do not think I said mumbled; I said, "mentioned something".


William Lyon Mackenzie King: Mentioned,
then. What I mentioned was exactly in accord with what I am saying at the moment. I said that while it would oblige us if the debate were shortened in the manner in which my hon. friend has suggested, I was not ready at that particular moment to make the statement with respect to the reconstruction of the cabinet-I might have used that phrase in relation to cabinet matters-which I promised would be made at the time the minister would be going to the Department of National Defence. I am ready to make that statement when the minister is transferred. That statement will have now to be made on Monday, The present Minister of Finance will be sworn in this evening as Minister of National Defence and on Monday I will announce who his successor is to be, and make such other statements as to cabinet matters as it may be appropriate to make at the time.
The Budget-Mr. Maybank



THE BUDGET


[Stage Direction]
" The house resumed from Thursday, July 4, consideration of the motion of Hon. J. L. Ralston (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Coldwell, and the amendment to the amendment of Mr. Quelch.
Mr. RALPH MAYBANK (Winnipeg South Centre):: After the remarks just made I am in this position. One generally collects together a few notes for the purpose of making a. speech, but I do not need any notes at all at the present time. They can be thrown [DOT]away. The leader of the opposition (Mr. Hanson) started this fifteen or twenty minute interlude by suggesting that too many speeches were being made. Indeed, I felt from the tone of his voice that he was almost going to use the word "drivel", but he did not do so. I may be wrong about that, but I got the impression that that was his feeling.
One hon. gentleman commented on the rights of private members under circumstances such as those in which we find ourselves to-day. The house knows what my views are on that question. The Prime Minister (Mr. Mackenzie King) and others have indicated their keen desire for a vote on this question this afternoon so as to get it out of the way in order to get on with something else. The opportunity for placing on the record such facts as I desire to put on Hansard will come at *another time. It was not my intention at any time to speak at great length in the house if I could possibly avoid doing so. This afternoon, however, I had thought there were certain facts that ought to be made a matter of record in this chamber. But in view of what has been said; in view of the fact that I thoroughly agree with every bit of it, especially with that part dealing with the need for getting on with the business of parliament and getting this particular question out of the way, and in view of the fact that an opportunity will still be given me to place before the house those facts of which I desire to apprize it, I am not going to proceed any further with my remarks on this occasion. I shall, however, appeal to others to refrain from making further speeches on the motion so that we may pass it immediately. With these observations I resume my seat.

Mr. KARL K. HOMUTH (Waterloo South): It is not my desire to delay the house unduly, nor am I going to take any responsibility for the discussion that has gone on in this debate. We are private members, as the leader of the Cooperative Commonwealth Federation group has said, and as such we have certain responsibilities. I am not sure that the responsibilities of private members at a time like this are not just as great as the responsibilities of cabinet ministers. We at least go home every week-end and come in contact with our electors, meeting people in different walks of life and getting some idea of their reaction to our war effort, so that we obtain a knowledge which cabinet ministers do not get. As one Liberal member said yesterday in this house, speaking to cabinet ministers, it would be a good thing if they could get away from behind their mahogany desks and go and meet the people, because they would then have a much better idea of what the people thought of the government's activities.
There are some phases of this war effort with which I wish to deal. I think they are important. In fact, I regard them as so important that in my opinion the Minister of Finance (Mr. Ralston) should have been in the Department of National Defence as full-fledged minister of that department so that he could have dealt with these matters before. If the government's war effort had been organized as it ought to be, there would be no necessity to-day for such a reorganization of the Department of National Defence.
Before dealing with this very important question I might make some reference to some of the new members of the house, particularly the younger members who have come in. The hon. member for Vancouver North (Mr. Sinclair), who seconded the motion for the adoption of the speech from the throne, came here as a new member with a keen sense of his responsibility. He made a speech in which there was no political bias, no partisanship, but he spoke just as all of us feel in this house, pointing out that we had a big job to do and that it had to be done without any vestige of politics in it.
The hon. member for Matapedia-Matane (Mr. Lapointe), who moved the adoption of the address, the son of the Minister of Justice, made a stirring plea for a closer union of the English and French-speaking people. I think everyone in Canada echoes that plea. If he and young men in other provinces would go out and preach, without any political rancour, that tolerance which is so necessary, it would do much for the upbuilding of a better

The Budget-Mr. Ilomuth
understanding in this country. One unfortunate feature is that whenever we talked about national unity before, it was always coupled in some way with a political campaign. Now is the time when we ought to be developing that national unity as we never developed it before. It is up to the young French-Canadians, and the young men of English, Irish and Scottish birth in the various houses of parliament in this country, to go out and preach that tolerance.
The hon. member for Cape Breton South (Mr. Gillis) has come here and speaks as a voice of labour. He has told us of some difficulties he has had in fighting the battles of labour. Finally his people thought enough of him to send him here to the highest parliament in the land. There may be some hon. members who look upon him, or some of his ideas, as radical. Sometimes I wonder, because many things that we thought quite radical twenty years ago are now regarded as quite conservative. At least he has the opportunity and the ability to place his ideas before this house.
In our own group we have a young man, the hon. member for Lake Centre (Mr. Diefen-baker), who has taken an active part in the politics of his own province and who has come here with a keen sense of his responsibility. In all the speeches he has made in this house he has sought to do something worth while for his people, realizing that the solution of their problems is necessary for the general welfare of Canada. I refer to these four men particularly as illustrating the varied and widespread interests represented in this house, and the responsibilities that rest upon us as members of parliament in trying to find the solution of these problems.
Then we have a large number of new members in this house, in all parts, who saw service in the last war. I believe that the government could well take advantage of the knowledge which they gained in the hard way in the last war, and use that knowledge in the furtherance of our war effort. I have seen a number of new parliaments convened, and I do not know when we ever had a parliament convened with new members who were more seized with their responsibilities than the new members who entered this parliament.
I want now to deal briefly with the budget and our war effort. Day after day since this session opened we have been getting more and more information which proves only too clearly how inadequate our war effort was. Our people were lulled into a sense of security during the election campaign by being told what was done; afterwards we found out that most of what we were told was done was simply contemplated. We find in the last
two or three weeks an effort to upheave industry completely so as to get these things done that we ought to have been doing for many months before. I am sorry that the Minister of Finance has not yet taken over the Department of National Defence. He has a tremendous job on his hands; he has a great deal of house cleaning and reorganization to do, and I am sorry he is not in that department doing it now. When he was designated as Minister of National Defence there was a general feeling of satisfaction throughout' this country. The people believed that they were going to have in that department a man who would do something, but two weeks have gone by and while he has been taking some part, the work that should be done has not yet been done. One of the first things that I suggest he should do is to cut away a lot of the red tape from our war department.
When a nation is at war there are two departments of government that are of the greatest importance, aside from those that deal with economic and internal problems. Those two departments are the Department of National Defence, dealing with the service men, and the Department of Munitions and Supply. To my mind those departments should' be distinct. The Department of National Defence dealing with the service should be composed of men who have one duty to perform, namely the training of men for the army, the air force, the naval service and any other services in connection with our war effort. The Department of Munitions and' Supply should have full control over the requisitioning and purchasing of all supplies needed. The service department should only requisition. At present we have mixed authority, such mixed authority that at times it has caused weeks and weeks of delay in the getting out of supplies, because in the Department of National Defence we have men who draw up the specifications, set out all the details with regard to what they want, and the Department of Munitions and Supply orders accordingly. In so many instances the specifications were not drawn by men who know the best way to get production in industry but were drawn, for example, by the British war office. These specifications were not adaptable to Canadian business. I know many instances of articles being ordered of a type not even made here or in the United1 States. They were typically English articles. Weeks went by, and finally it was found out that it was impossible to procure that type of article here. Then they had to decide that the article made in Canada or the United States would do and the specifications had to be revamped.
The Budget-Mr. Homuth

Now I believe, and I think industry in this country believes, that it has not been taken into the confidence of the government as it should have been. Instead of the department [DOT]saying to industry, we want something of this type; what is the best way to produce it? they said to industry, this is what we want. In many instances industry could not produce it according to that particular type. I know of one instance when the question arose whether a round or a flat shoe-lace should be used for a lacing job on a certain article required by the Department of National Defence. Production was held up for five weeks, until the department decided that a flat shoe-lace would do the job, because there was no such thing as a round-shoe lace made anywhere on this continent.
That will give the house some idea of how delays have been brought about in the Department of National Defence and the Department [DOT]of Munitions and Supply. As I say, many of our orders have been based entirely on English standards. Anyone who has been associated with industry in Canada knows that the English are not very quick to change their methods of manufacturing. After the trade treaty of 1932 was put into effect, a *great many people in this country tried to turn trade to English companies, but the English manufacturers said, "this is what we make. It is good enough for us; it ought to do you." Canadian industry said, "No; this is what we want," and it was often only with very great difficulty that we were able to get English industries to change their systems to make products suitable for the Canadian trade.
I should like to give an instance that will show exactly what the Department of Munitions and Supply has been up against. Throughout this session, as in other sessions, certain hon. members have continuously gibed at industry in this country. During this session a number of hon. members have made the statement that industry went on a sit-down strike. I want to say that never in the-history of Canada has a government received greater cooperation from an industry than this government has had from the textile industry of this dominion. In February of last year, months before the war began, the textile industry said to the government, " There is going to be difficulty in changing over our industry for war purposes. Give us a lead; give us some idea as to what you may need. Let us talk over these matters and begin to organize our industry now." Their plea was without effect; nothing was done. Then in September war broke out and immediately supplies were required for the army. At that time the munitions board was just being created, and there was no authority ,
in any department to give firm orders for anything required from the textile industry. We went to work on the promise that eventually the firm orders would come through, and material worth hundreds of thousands of dollars was processed in the textile mills of this country without orders from the government, which did not come through until the end of October. At the end of that time the price was set, and that price was subject to a downward revision when the government accountants went into the textile mills. The government has kept a very close check on the profits being made by the textile mills, and those mills are quite willing that this should be done.
Again, Mr. Speaker, immediately on the outbreak of war in September I went to the Minister of National Revenue (Mr. Ilsley) and pleaded with him to place an embargo on wool, because the drastic government specifications, based entirely on English specifications, called for the use of cross-bred wools in the manufacture of cloth in Canada, wools that we did not produce here. However, we did have, in the hands of dealers throughout the country, several million pounds of other wool which we had to have for military purposes. Several times during the special session I pleaded with the minister to place an embargo on the export of that wool, but he would not do so. He said he did not think it was in the interests of the trade to do so, and it was not done. As a result, there was exported two and a quarter million pounds of wool, of which we were very badly in need, and the loss of which held up the production of military cloth in some of the mills for several months. At that time I, together with many other hon. members and many business men throughout the country, wrote the government offering my services, stating what I had done, in what business I was engaged and also that it would cost the government nothing. Of course it was impressed on us then, as it has been impressed upon us many times since, that this was a Liberal war, being carried on by the Liberal party, and apparently our suggestions carried no weight.


James Layton Ralston: Will my hon. friend permit a question? Would he mention anyone who expressed that view to him, anyone in authority whom he asked for an opportunity to serve and who told him it was a Liberal war?
Mr. HOMUTH; Before I have finished my speech I will convince the Minister of Finance that it is still a Liberal war.


James Layton Ralston: I am just asking my hon. friend a plain question. He said he was told that this was a Liberal war and that it was being carried on by the Liberal party.

The Budget-Mr. Homuth


Mr. HOMUTH:: I did not. What I said was that I realized then that it was a Liberal war.


James Layton Ralston: No; that is not what was said.


Karl Kenneth Homuth: If I said I was told, then I withdraw the word "told"; nevertheless, as I shall prove conclusively, it still is a Liberal war.


James Layton Ralston: My hon. friend is making that statement.


Karl Kenneth Homuth: And I shall prove it.
In any event, Mr. Speaker, our association continued to function in an endeavour to help the government. Last October we made certain representations to the wool administrator. There was the question of the manufacture of blankets. The specifications said that grey blankets must be supplied. What did it matter to the soldier whether the blanket was grey, brown or blue, as long as it was warm? But it was impossible to convince the men at the Department of National Defence that the specifications should be changed. The material they wanted was not available in this country; the other was, and its use would have meant a substantial saving to the department. Five or six months went by; finally they decided to change their specifications. Last week another large order for blankets, specifying the type we had suggested last October, was given to the mills. This order will require some 1,400,000 pounds of wool, at a saving to the government of some 8 eents a pound, which means a saving, on that order alone, of about S112,000.
These are some of the things in the Department of National Defence which I say to the Minister of Finance must be changed. I believe that all the work of setting up specifications, calling for tenders and buying should be done by the Department of Munitions and Supply. That is one example of the way in which money could be saved.
The minister has continually stressed that we must save United States funds; for that matter, that we must save Canadian funds also, and we must buy very, very carefully. If those in charge would go to industry and say, "This is the type of article we want. How can it be best produced at the lowest possible cost?" industry would be only too glad to cooperate, but industry has not had that opportunity to cooperate. So I suggest to the minister that we should no longer follow the old road that we followed in peace time. In those days it was all right to call for tenders and take months to decide what action should be taken. It is no good in time
of war. This road that we follow in connection with governmental purchases is too full of departmental stop lights. We should be able to take the shortest road to reach our goal, but we have not been doing that in our war effort. We have not been organizing industry in this country as it ought to be organized.
I had thought that the new minister, working in cooperation with the Minister of Munitions and Supply, would give us a complete new set-up of our war effort. I think that is necessary if we expect to get anywhere. Furthermore, I think this government ought to set up a munitions board which would have full power to award contracts. Then it would not 'be necessary to have all these matters passed through departmental channels. The other day I referred to the fact that a number of factories had bid on the making of a certain type of shell, but only one was geared up sufficiently and it received the order. The others could not compete in price because it is necessary to include the cost of tooling in the price bid for a first order. If we had a munitions board it would have the power to say that more could be paid on the initial order. It does not cost any more to tool up for 10,000 than it does for 50,000 or 100,000 or 1,000,000 shells. We would then have twenty-five or thirty industries equipped to go ahead and turn out these shells. We are certainly going to need them.
I am not saying this in any spirit of recrimination. I am saying it because industry itself feels that it is not getting an opportunity to do what it would like to do in connection with our war effort. The minister questioned me as to my statement that this was a Liberal war. Let me say to the Minister of Finance that with regard to contracts which are being awarded from one end of Canada to the other patronage is just as rampant to-day as it has been in peace time. If a man wants to get a job on some of these works he must go to the Liberal organizer or the boss of the Liberal party in that particular riding to get a card. That is a man who puts men to work. Before you can get a job on many of these undertakings, that is what you must do.


An hon. MEMBER:: All of them.


Karl Kenneth Homuth: If that is not a sign that this is still a Liberal war, what more proof does the minister want? That is exactly what is going on in this country to-day.


James Layton Ralston: My hon. friend makes that statement and I have no doubt he has
The Budget-Mr. Homuth

the particulars. If he will give them to me, I shall be only too glad to have them looked into at once.


Karl Kenneth Homuth: The matter has been taken up.


James Layton Ralston: It has to do with my colleague, the Minister of Munitions and Supply (Mr. Howe); it is not mine. However, sitting here on behalf of the government, I want to say distinctly that I should like to have any information of that kind my faon. friend may have. There may be some instances like that. I do not know, but I want to tell him that contractors are being told that only one thing goes in connection with these contracts, namely, speed and efficiency. That is what they are told, no matter who they are.


Richard Burpee Hanson: How long is it since that rule was in effect?


James Layton Ralston: So far as I know, it has been in effect right along.


Richard Burpee Hanson: I can tell my hon. friend it has not.


James Layton Ralston: I am telling my hon. friend what I know.


Karl Kenneth Homuth: Right across this country, in order to get a job on certain works a man must go to the local political boss.


James Layton Ralston: I am asking my hon. friend to give me instances and I shall look into them at once.


Karl Kenneth Homuth: Some of them have been given already.


James Layton Ralston: My hon. friend is stating the case in a general way.


Mr. REID:: That is not the case in British Columbia.


Karl Kenneth Homuth: I would not accept a denial such as that.


James Layton Ralston: It is not a denial; I am simply asking for proof of what my hon. friend has said.


Karl Kenneth Homuth: I was not referring to
the Minister of Finance. The fact of the matter is that this must be taking place with the knowledge at least of some of the local members.


James Layton Ralston: My hon. friend has it down now to the local members.


Mr. McIVOR:: That is not true in Fort William.


Karl Kenneth Homuth: The whole trouble is that every time one mentions a matter of this kind and suggests that something should be done, one minister says that that comes under so-and-so's department, while another will say that it comes under another department.


James Layton Ralston: I said that that was a matter for my colleague, the Minister of Munitions and Supply, but that I as a member of the government would welcome any information my hon. friend could give me on that point. I did not attempt to put it off on any other minister; I asked my hon. friend to give me the information.


Karl Kenneth Homuth: Nevertheless I think other ministers of the cabinet ought to give publicity to the fact that no contractor who has obtained a contract from this government has to listen to the local political boss.


James Layton Ralston: I would refer my hon.
friend to a statement which was issued by our late colleague, the former Minister of National Defence, the Hon. Mr. Rogers. He said in the most emphatic words that personal or political representations of any kind would not be tolerated. That was the word he used. That statement was issued from Halifax to Vancouver.


Karl Kenneth Homuth: I received a copy of it, and I thought, when the minister took over the department, that the government would live up to that promise, but they have not done so.


James Layton Ralston: I am still waiting for the evidence.


Karl Kenneth Homuth: The fact of the matter is that this is serious.


James Layton Ralston: Certainly it is serious.


Karl Kenneth Homuth: Letters are coming to
members protesting against this sort of thing. It has been brought to the attention of the government at different times and nothing has been done. It is still going on.


James Layton Ralston: What is going on?


Karl Kenneth Homuth: Let me say this to the minister. A man cannot help feeling that, after all, it is the Liberal party which is carrying on the war, and that it is the Liberal party and Liberal workers that are going to get any profits out of local labour in the various constituencies. This sort of thing is going on and I want to bring it to the attention of the house. It has not been stopped. The late minister made a statement, and as a result of that I think hon. members generally kept from interfering with the department or making appeals on behalf

The Budget-Mr. Homuth
of any one. I have approached the department only to draw its attention to the fact that certain industries in my district could make this, that or the other article and to ask if they would be given an opportunity to tender when those articles were needed. I never once approached the department on behalf of anyone, nor did I attempt to use my influence. I think that was generally the feeling of hon. members. Word should go out from this government that the sort of thing to which I have referred will not be tolerated. Every manufacturer should be told that he himself can hire whatever help he needs. Some are not able to hire their own men; they are advised locally whom they should hire. This creates a most unfair situation.


James Layton Ralston: I am still waiting for the particulars.


Karl Kenneth Homuth: The minister will get
them.


Richard Burpee Hanson: I can give a case. When the Department of National Defence wanted to rent some office space in Fredericton they were told that they must see the Liberal people, who told them to go to a certain gentleman whose name I shall not mention but who is a strong Liberal.


James Layton Ralston: Was he an officer of the
Department of National Defence?


Richard Burpee Hanson: It was a
man in the depot there.


James Layton Ralston: A civilian in the Department of National Defence?


Richard Burpee Hanson: No, he
was a soldier. I can give the minister the name of the party to whom he applied and from whom he rented the space. He was told to go there and to go nowhere else.


James Layton Ralston: I think Liberals generally have the idea that Liberals are pretty well disqualified.


William Earl Rowe: They are under a misapprehension.


Karl Kenneth Homuth: This is developing into a
free-for-all, and my time is nearly up.
There are one or two other matters I should like to mention to the Minister of Finance in connection with the saving of money. We have heard a great deal said about the men who have recently been given high salaried positions in the civil service. I do not know whether these positions are necessary or whether these men are so much better qualified to do the work than somebody else would be at a lower salary, but I say to the minister 95828-87
that it is so easy to waste money on our civil service, and I am afraid that we are building up in this city a top-heavy civil service. It is far easier to acquire civil servants than to dispose of them, as we all know, and I am just wondering whether many of these so-called dollar a year men-I give them every credit for offering their services-are really the practical men that we ought to have doing certain things, men with a practical knowledge of industry.
Reference has also been made to Mr. Brock-ington. I do not know what he does or what his responsibility is, but if it is simply a matter of writing and keeping records I would suggest that surely some outstanding newspaper man might be engaged to do that work, and not necessarily a lawyer. My opinion is that we have too many lawyers running things in this country. I do not say that unkindly; I simply mean that we have not enough practical men. If Mr. Brockington's position is an absolutely necessary one to fill and he is the only man who can do the work, very well; but he gets $9,000 a year plus his per diem allowance. Now, a married man earning $1,400 a year has to pay a national defence tax of $28 a year, and if he has three children he pays only $4 a year. Therefore, it would take 2,240 of them to pay Mr. Brockington's salary out of their contributions by way of the national defence tax, and you do not have to bring into the civil service a great many men at the tremendous salary of $9,000 a year before you will have wiped out that whole classification of $4 taxpayers in this country. These are the things we must watch and guard against because, as I say, it is so easy to get a top-heavy civil service, and if we do not take care the whole thing will crumble and cripple our war effort. Surely if we did away with much of the red tape that exists in the various departments to-day, we could get along with a great many fewer civil servants than we have at the present time.
In conclusion, Mr. Speaker, apparently we are just as much unprepared for peace as we were for war. It is too late to wait until after the war is over to start to prepare for peace, and I make this suggestion. We have the Sirois report, a very important one. I have read some of the commission's recommendations and I can see in them a solution of many of our difficulties. I do not know why the government should not start in right now_not a week from now or a month from now or a year from now-to plan to take care of the problems that are going to arise at the end of the war. Perhaps a committee of this house might be appointed to go into the findings of the Sirois report and see in what way their recommendations could be

The Budget-Mr. Homuth

fitted into the economic life of Canada. We must do it some time, and while of course the war is the most important matter before us at the moment, almost equally important is the task of preparing for the period when the war is over so that there will not be a collapse of our economic system. If we carry out that task, and if the government will put into this war all- the energy which the people expect them to put and will support them in putting into it, there is no doubt what the end will be. But we have a big job ahead, and the private member of this house has a tremendous responsibility. I suggest to the private members of the Liberal party that they go home week-ends and get the opinion of their people on the government's war effort and what they think should be done. In that way they will obtain a clearer impression of public opinion than the ministers themselves, and it is up to the private members of the Liberal party to see to it that every effort that is necessary is put forth in our war effort by the ministers who represent them on the treasury benches.


Mr. G. H. CASTLEDEN (Yorkton):: It is not my intention to take up very much time, but in view of some statements that have been made in this debate with regard to the position of this group in this house I wish to repeat what our leader said this afternoon, that we have simply maintained our right to offer constructive criticism to the administration by offering amendments for the consideration of the house. We have attempted to place before parliament and the people of Canada what we consider better alternatives to the government's policy, alternatives which we believe will make possible a more effective prosecution of the war and the establishment of a better order of society hereafter. It is in that spirit that we have offered amendments to the budget.
A perusal of the budget will bring hoine to everyone a realization of the tremendous burden it is going to place on our economy. We must also realize that it is the natural consequence of the present industrial, economic and political organization of our country.
I find from the "Canada Year Book" that the per capita interest on our national debt was, in 1914, $1.64; in 1918, $5.87, and in 1938, $11.79. I wonder what it is going to be in 1942.
I also find from the Sirois report that about 33 per cent of our national revenue is used to pay the ordinary charges on our debt structure. We must keep constantly in mind that we have not yet paid for the last war. How long can such a condition of affairs continue? However, these are post-war problems.

It is evident to everyone that the present organization of society is doomed, and I believe this budget is one of the knells that mark its passing. It is also evident that we are undergoing tremendously rapid changes. Society, in rapidly increasing tempo, is undergoing a terrific change. The rapidity of that change is well exemplified by what has happened in Europe since parliament opened. We were united with France, and France is now out of the war. Great Britain, with Canada, stands to-day almost without an ally, but we, as the Canadian people, need have no fear what the ultimate outcome will be or as to what the Canadian people will do. The greatest concern of this parliament should be to see to it that the democratic rights of a free people weather the tempest of to-day and what may be immediately ahead of us. Another imperative duty of parliament is to see to it that we rid ourselves of the whole spirit of a profiteering world and establish instead an order of society in which there shall be no place for any institution or organization which has not the interests of humanity as the basis of its being. Our people are naturally peace-loving, loyal and patriotic; and they are industrious wherever the opportunity for industry exists, particularly so if there is a reasonable prospect that they will enjoy the fruits of their labours.
When I first came to this house I looked forward to hearing talks by some of the great reformers on the government side of whom I had heard. I remembered the addresses they had given in favour of social reform and changes in monetary policy. I recalled the views they had advanced when they first came into this chamber. They remained here for days to carry on the fight against reaction; they gave evidence before commissions; but suddenly, after about a year in parliament, they became mute, and they have maintained a most eloquent silence ever since.
In criticism of this budget I should like to make two observations. It has gone further in what I consider to be the right direction than any budget we have ever had. It has touched more deeply the pockets of those who are taking excessive profits, but the fact, evidenced by the figures which were given yesterday, is that it falls far short of what might well have been done. My greatest criticism is that it fails to protect those who are labouring in the lower income brackets. It will necessarily involve an increase in the cost of living for the many people who are on relief, for the many who at this time are hardly able to maintain themselves at even a low standard of living.
The kind of thing which I have in mind is illustrated in a letter I received to-day from

The Budget-Mr. Castleden
Yorkton. The writer reports that it is already clear that drought conditions in that area will reduce his crop to only forty per cent of normal. He tells me that implement companies are now repossessing implements, and adds that farmers are so short of cash that they are unable to meet the government's request for a greater war effort. Here are people struggling to do the best they can in the face of the difficulties which confront them, without hope of any return on their capital, with scarcely any expectation of receiving any of the fruits of their labour; and yet their only regret is that they cannot subscribe more funds to Canada's war effort.
To every Canadian who is willing to work there should be made available an opportunity to work. We of this group attach great importance to achieving security for those who are willing to work. When that opportunity does not exist, how can we hope to build up a great nation?
I know that western Canada was looking to this budget for some ray of hope. I fear it has found none. The only thing our people are told is that the cost of operating their farms will go up from ten to maybe twenty per cent. They hoped that some minimum price would be set for their principal commodity. Nothing of the kind has happened. They hoped that there might be an announcement of an interim payment for the wheat they delivered last year. There is no hope for them along that line. They have been looking for some assurance that agricultural assistance would be continuous and properly and adequately distributed. Again, there is no hope in that direction. I do not know what the policy of this government is with regard to agriculture, but if it is their intention to let agriculture in western Canada go, in heaven's name and in the name of common decency and humanity let them tell the people now and help them to get out. Fiddling away with relief and compelling these people to struggle along like slaves in the southern cotton fields does not make them a great people. To keep them under the lash of relief is an insult to God, to man and to the British flag.
I urge these four proposals upon the government.
First, restore the wheat board act of 1935 in its original effective form, so that it will act, as it was originally intended, as a buffer between the chaotic state of the European market and costs of production in the west.
Second, maintain some form of farm assistance legislation to take care of needy people in the event of a further calamity.
Third, let the government use the powers granted to it by the War Measures Acts. Virtually these are now the constitution of
Canada, and through those powers let the people be told that there will be no further foreclosures, and that implement companies will be no longer allowed to take from these people the machinery of production without which they face nothing but the direst need.
Fourth, may I suggest that as a nation we are dependent upon world markets for our supply of wool for clothing; yet we have in the west this industry which under proper leadership could be usefully developed and protected. When I looked up the statistics I found that about six per cent of the farmers of Saskatchewan have sheep on their farms. More would be raised if the enterprise were profitable. Why cannot we build up in Canada a wool industry? Large areas of the west are better suited to the raising of sheep than the production of wheat. There would be found a source of seasonal income: the sale of wool in the spring would be a life-saver to many of our people. There would be a source from which they would obtain wool for clothing to protect them properly from the rigours of the climate. Why should that industry not be protected? If it were, this would save Canada, in relief costs alone, millions of dollars.
There is another matter which seems to me to be of vital importance, and it constitutes one of the reasons for which I rose at this time, because no other opportunity will be available to make this plea. It is my contention that the greatest natural resource, in this country of great natural resources, is the ability and the brains of its youth. Unfortunately, like our other resources, they are largely wasted. The lack of compulsory education for large numbers of the people marks Canada as a benighted nation.
A rapidly changing world requires rapid changes in the reorganization of our society. Technical education has become essential in an economy which has changed from manufacture by hand to manufacture by machine, and I urge upon this government, even at this time of crisis, that they earmark, say one-tenth of one per cent of the money receivable under this budget to establish throughout Canada a system of federal scholarships. In this respect Canada is away behind the rest of the world. In New Zealand, I believe 70 per cent of the students in the universities are there because they got government assistance in the form of scholarships. I know of no other great country in the world which falls so far behind in this field as does Canada. This is a federal responsibility, a national responsibility. It is the development of the brains and ability of our youth that we need. In the way of technical training, I suggest that supplies of interest-free money should be made
The Budget-Mr. Castleden

available to every district in Canada where it is needed, to set up and equip technical schools to train our youth. Many of them may not be particularly well adapted to academic training, but they could undergo technical training. What a difference it would have made to our war effort if we had had technically trained men and women! Canada is far behind, and I hope that some day soon the government will take this matter into consideration. The people of Canada want it and they will support it.
There is another group of people who have been forgotten. If you want to take up the cause of humanity you can find cause in any province, but one class who are forgotten are the fishermen both in the maritimes and in British Columbia, as I understand from some hon. members who spoke the other day. About
40,000	fishermen make their living out of this industry in the maritimes. The Sirois report, at page 51 of appendix 3, states that there is a lack of statistical information, and decennial figures on this industry. I notice, however, from table IIIC in that book that in 1926 the income from the fishing industry in Nova Scotia was 6-83 millions; in 1932 it had fallen to 2-02 millions, and in 1936 it had barely recovered to 3-66 millions.


An hon. MEMBER:: What was it last
year?


George Hugh Castleden: The figures are not
given in the Sirois report and I have not been able to obtain them, but I do know from other reports of investigations made, by the St. Francis Xavier institute, that many fishermen have an annual income of only from $200 to $600 per family. They have their gear in the water and often storms carry away 40 per cent of their equipment. This budget means an increase in the cost of such equipment. What sort of standard of living will those people have? How does it compare with the standard of those fortunate shareholders in the thirty-three companies we heard of yesterday, who, as a whole, will enjoy a return of about 14 per cent on the capital invested? Surely in such times as these it is our duty to make it possible for these people to have a decent standard of living. Poverty and want should be unknown in Canada. You cannot develop a great people in slums and amidst poverty. That is where subversive activities and crime begin. People are inherently good.
Someone the other day told us about cooperation, and the relationship between industry and humanity. I have often wanted to read such a book. A few more months here and I shall be able to write one, a book

about what industry does to humanity. It seems to me that humanity is forgotten. Read the price spreads commission's report and you will find someone saying, "Well, our fact.ory was not built to the glory of God."
What we need more than anything else is planned internal economy. Now is the time to get together and study what is likely to happen after this war is over. We may not be sure of many things but of one thing we can be certain, and that is that the world will never be the same. The whole set-up, the whole organization of society throughout the world, the whole method of production will change. In the chaos resulting from the disorganization Canada can make a tremendous contribution in aid of humanity. Already we find famine, disease and death, the by-products of war, stalking Europe. We can say with certainty that millions of people who are living there will suffer a terrible death from famine. That must follow naturally the chaos that now exists in Europe. Why cannot Canada accept responsibility as one of the humane nations of the world? We should be preparing vast stores of products of field, forest and sea. These industries should be organized. There should not be a farm in Canada not producing to the utmost capacity, not one factory that is not working day and night.
The responsibility that rests on the shoulders of the Canadian people to-day is greater than any of us realize at this time, and, Mr. Speaker, the Canadian people are sick of the inertia shown in Ottawa. In one of the cities in my constituency the young men drill twice a week in their civilian clothes, taking physical exercise in order to get into condition so that, if and when things are organized, they will be ready to don the uniform and play their part in protecting democracy. The Canadian people are begging to be allowed to play their part.
Let us hear no more talk of scarcity in Canada. There should be no such thing. What is stopping us? I do not know of anything other than the present organization of society and of industry-interlocking directorates holding financial companies and corporations which maintain their control over the industrial life of the country, over its natural resources, over the production and distribution of goods; and until that is broken there will be poverty in Canada. Canada is faced with a tremendous responsibility as well as with the greatest opportunity that ever presented itself to a democratic people, and the fate of Canada if not of the British empire rests upon the shoulders of the present administration.

The Budget-Mr. MacNicol


Mr. J. R. MacNICOL (Davenport):: At least I can claim some credit for trying to assist in having this debate curtailed by yielding last Tuesday to my leader who, I thought, made an excellent and earnest suggestion with a view to winding up the debate. It is not my intention to speak for more than a few minutes, seeing that the desire is to have the vote taken before six o'clock.
In my remarks on Friday last I intimated at the outset that I did not intend in any way to discuss the financial proposals of the budget, nor do I intend to do so now. I did say, however, that I should like to offer two proposals to the government. One of these I shall elaborate at greater length than I did on Friday night. In my judgment the time has come for the government to establish a national iron policy so that an ample supply of iron will be produced in Canada for the manufacture of steel munitions, planes, tanks, guns, bombs, shells and steel for ships. I felt that if the government did undertake such a policy, in the working of it out some new-found money would find its way into the treasury. That I will explain as I go along.
As far as taxes are concerned, the people of Canada will gladly pay any taxes that are required. They will grit their teeth and pull in their belts to the sixth notch, one for each of the nazi columns and one for good measure. But they do want action; the country wants the government to get on with the war. One might ask whether Isaiah the prophet foresaw these late times when he wrote the seventeenth verse in his fifty-fourth chapter, that "No weapon that is formed against thee shall prosper." I hope that I shall not be deemed sacrilegious if I paraphrase and modernize that, by saying that to-day there is only one nation in this world that is ready to shed and is at present shedding its blood and giving its treasure for what Isaiah meant when he wrote those words, namely, that no weapon that is formed against God's church could prosper. I say that no weapon that is formed to-day against the British empire will defeat it. I would say that still more firmly if I felt that this country was in a position-and it can soon get into a position-to produce the iron requirements that will later be wrought into steel to overwhelm Germany with planes and tanks, bombs and shells, and guns and ships. If we do our part in getting this country into shape so that it can produce the necessary iron to make these munitions-and that is the only matter I am going to speak about-then we certainly shall win the war, that is if we back
up the efforts of our men, with the spirit in the heroic words that the Right Hon. Winston Churchill spoke recently to encourage us:
Let us therefore brace ourselves to our duty, and so bear ourselves that if the British commonwealth and empire last for a thousand years men will still say, This was their finest hour.
With that spirit in our men, no weapon that is formed against the British empire shall prosper.
We 'have in our country all of the major natural resources, metallic and non-metallic, sufficient to swamp Germany all along the line in any avenue in which we have to fight. We have nickel, more than any nation in the world, more than all the nations of the world put together, and nickel is essential to toughen and harden steel. We have asbestos for lining the compartments of the tanks in which the soldiers are housed. We have lead, mica, zinc, copper, all of which are required for munitions and electrical equipment; we have iron, we have gold the basis of money; we have coal and electricity, and the oil required to propel tanks and planes. All these we have in abundance. All we have to do is to put them together to make the munitions required to win the war.
I said that we have the world's supply of nickel. In 1938 we produced 1,100,000 tons, while all the rest of the world combined produced only 115,000 tons. I hope that from now to the end of this war the government will prevent the export of nickel to any potential enemy as well as any enemy. Without nickel they cannot make steel that will stand up. We control practically all the nickel in the world, and I hope that after the war no potential enemy will ever receive a pound of Canadian nickel. It is tragic to think of Germany receiving the nickel they did receive from this country during the past few years, without which they could not have built a tank that would stand anything.
We also have most of the world's supply of asbestos. Two important natural resources that we have not are rubber and bauxite, but we obtain them from other British dominions that have a large supply. I believe the British empire controls the world's supply of rubber; and of bauxite, the basis of alumina from which aluminum is made, the British empire controls about half the world's supply.
I think I ought to say a word as to what we did in processing these materials. In 1938 we manufactured the following quantities: Nickel, 1,100,000 tons; asbestos, 400,000 tons; and the rest of the world, only 200,000 tons. Of lead, from which bullets are made, we
The Budget-Mr. MacNicol

manufactured 300,000 tons. Of mica we manufactured only 1,000 tons, but mica being a very light substance, 1,000 tons is a vast quantity. We manufactured 200,000 tons of zinc, a very important war metal, and 300,000 tons of copper, without which modern war could not be fought. Of gold we produced
4,500,000	fine ounces; of coal, 15,000,000 tons, and that should be doubled. I shall not take time now to elaborate a national coal policy, but we should have such a policy; if we had Canada would not be importing 15,000,000 tons of coal while producing only 15,000,000 Ions at home. We develop 8,000,000 horsepower of electricity and could produce many millions more, I believe we have in this country undeveloped not less than 50,000,000 horse-power. We produced 7,000,000 barrels of oil, and I often ask myself why some effort is not made to pipe the oil from Alberta to the Pacific. They have any amount of oil in Alberta, and are not producing it because they lack a market.


James Layton Ralston: Let me say at that point that what we are endeavouring to do is to find out what the productive capacity of the Alberta oil fields is and whether the deposits would justify the building of such a pipe line. It is a matter that has had intense study for a year, not just something under consideration.


John Ritchie MacNicol: I am glad to hear the minister say that, and I hope, when the *studies are completed, an effort will be made to produce more oil in Alberta and get it to the water where it can be transported in ships.
Of rubber we manufactured in Canada last year some forty thousand tons, most of which came from other parts of the British empire.
In this review of what we have produced in Canada I deliberately left out iron, because I am one of those who are sorry that this *country is not developing its vast iron resources. Some of those iron resources I know require to be either sintered or roasted to make the ore suitable for smelting, but we have not less than a billion tons in sight in this country, yet in 1938 Canada did not produce one ton. Every ton used in the country was imported. How can we win this war without iron to make the steel for ships, bombs, shells and so forth. It was, I believe, in 1937 I made a special trip to Germany to study there many of their activities under their department of industry, one of which wras their iron policy, and I firmly believe that this country also should have a department of industry, but time will not permit me to elaborate on that. I found them importing ten million tons of iron a year. They had some nineteen thousand men engaged under the department of industry in exploring and

recovering all the iron possible from refuse dumps, old and supposedly defunct mines, and other sources of iron in Germany, laying up a supply against the time that they foresaw, namely the present war, when they anticipated that their sources of supply in Norway and Spain might be cut off. If the United States prevented the export of iron ore to this dominion; if the transportation of iron ore from Newfoundland was interfered with, we would have no way of prosecuting the war. So I maintain that this country should initiate a national policy of iron production as promptly as possible.
Before going to Germany I made a thorough survey of all the mines in Canada that might be used for the production of iron. Perhaps some hon. members will remember that in 1937 or 1938 I suggested that something be done to encourage the production of iron ore in northern Ontario. At that time I urged, as I urge again, that a bonus be given on each ton of merchantable iron produced from our ore. At that time this government refused to have any part of that idea, but to its credit the Ontario government accepted the challenge and passed legislation providing a bonus of SI a ton, which was later increased to $2 a ton, for merchantable iron produced in Ontario. I maintain that we could establish a national policy of iron production in Canada that would be a revenue producer instead of costing the country anything.
I am happy to say that the Ontario government has had splendid results from its initial efforts to create such a policy in this province. I was glad to hear recently that the New Helen mines in the Algoma district which were opened in 1939 are now producing 1,500 tons of iron a day which, after sintering and smelting, amounts to 750 tons of finished, merchantable iron a day. But we must increase that very greatly. I can see no reason why this government, if it made a real effort to provide the necessary iron required by the country to make munitions, could not within a short time increase the production of iron ore in Canada to 10,000,000 tons a year. What would that cost? Ten million tons a year delivered at the blast furnaces at Sault Ste. Marie, Port Colborne or Hamilton, at $5 a ton, would be worth $50,000,000; but when turned into steel it would be worth $300,000,000. In other words, by the development of 10,000,000 tons of raw iron ore finished into steel, we would add to the national wealth of this country not less than $250,000,000 a year.
The Ontario government has granted a bonus of $2 a ton. If that bonus were increased to $3 a ton, and each government shared half, it would cost each government

The Budget-Mr. Kuhl
$1.50 a ton; it would give such an incentive to the New Helen mines in Algoma that instead of producing 1,500 tons of ore a day, they might produce 10,000 tons a day. It would also bring to production the Moose Mountain iron mines as well as the Steep Rock mines, which latter I believe are located in the constituency of the hon. member for Fort William (Mr. Mclvor). I am told that the iron ore produced at Steep Rock is the same quality of hematite iron produced in Minnesota from the Mesaba range. The iron produced at the New Helen mines, after sintering, possesses 53-4 per cent of iron and 3 per cent of manganese, a very good grade of iron. That is the sort of thing we require in this country.
Such a policy as I have suggested might also result in the construction of three more blast furnaces, which would be all to the good. If one furnace were built on the St. Lawrence river between Kingston and Cornwall, it could use Nova Scotia coal. If a blast furnace were built in Toronto, it could use Nova Scotia coal also. I believe the blast furnace at Ojibway, near Windsor, which is not now in operation, would have to use coal from the nearby western states, but in a national policy of iron production I can see jobs for not less than 50,000 men and an annual increase of $250,000,000 in the national wealth of this dominion.
That, Mr. Speaker, is worth while going after. If this government would split a bonus of $3 a ton of merchantable iron with the Ontario government, it would mean that the provincial government would save fifty cents a ton on its present bonus while this government would be out only $1.50 which, on 10,000,000 tons of ore reduced to 5,000,000 tons of merchantable iron, would amount to only $7,500,000. But by the production of 5,000,000 tons of iron made into steel the government would obtain $65,000,000 in taxes, which would mean about $57,500,000 in new money for the treasury.
I see I am near the end of the period of time I intended to speak, so I shall conclude by again appealing to the government to establish a national iron policy for Canada with the objective of producing sufficient iron in this country to be turned into steel with which to manufacture clouds of planes, thousands of tanks, thousands of guns and millions of shells and bombs. With that quantity of material we can force Germany into submission. I believe it was the Prophet Daniel who said:
. . . iron breaketh in pieces and subdueth all things. . . .
So let the government bring in a national iron policy, which will provide a great many new jobs, bring new money to the treasury, add to the national wealth, and assist the British empire in subduing Hitler.


Mr. W. F. KUHL (Jasper-Edson):: Mr. Speaker, no group in this house is more anxious to deal expeditiously with the legislation brought before us than the group with which I am associated. Personaly, however, I fail to see any reason for haste at this time. As my leader said on a previous occasion, at that time, as is the situation at present, the government possessed all the power it needed to do anything .that might be thought desirable. It has authority to raise almost $1,500,000,000; it has authority to deal with industry and with almost every other aspect of our national life. Consequently I fail to see any real reason for haste. However, I do not intend to occupy very much of the time of the house this afternoon.
I should like to say a few words on the subject of ways and means of raising money with which to finance Canada's war effort as well as to meet domestic problems. In war time the word we hear used most frequently is undoubtedly the word "sacrifice". I believe that what the people of Canada have accepted at the hands of the government which has been charged with the responsibility of carrying on .the affairs of this country for the last ten years is proof positive that the Canadian people are willing to bear almost any burden and accept almost any sacrifice. Members of the house, particularly members of the Liberal and Conservative parties, have stated repeatedly that the people of Canada are glad and willing to bear the added tax burdens which have been imposed by this budget. I quite agree with that in so far as the tax burdens are essential and necessary. There are no people more willing and ready to make necessary sacrifices than the Canadian people. But I am persuaded that most if not all of the sacrifices which the Canadian public are called upon to make by this budget are absolutely unnecessary.
There are two reasons why the people are accepting these tax burdens without saying a great deal about them. In the first place I believe that they have been misled into the belief that these taxes are a necessary evil. Through the process of time we have educated our people .to believe a host of things with regard to money, taxation and debt which are positively false and untrue. I feel sure that if the people were aware of the true facts in connection with money, debt and taxation, they would not acquiesce as readily as they
The Budget-Mr. Kuhl

seem to do. Furthermore, the people are silent over these impositions because they fear that if they express any resentment they will be charged with being pro-nazi or anti-British. Consequently, most of them say nothing with regard to these increased tax burdens.
As I have stated, I am quite prepared, and I am sure all are quite prepared, to support any legislation which calls for necessary sacrifices, but I cannot be persuaded that the sacrifices asked of our people, particularly the small wage-earners, are essential at this time. If the people at home could be persuaded that the eating of three square meals a day would deny the soldiers at the front what they required, then there would be no complaint against making a sacrifice along those lines. If our continued consumption of normal amounts of food, clothing and other materials meant that our soldiers would have to go without or would be denied in some way, then I know everyone would submit to a lower standard of living. But most people know that is not the case. Time and again members of this house, particularly of the Conservative party, have risen in their places and bemoaned the fact that we have no market for our fruits, our vegetables, our dairy products, et cetera. It surely must be apparent to all that we have the physical materials sufficient to take care, not only of our soldiers and all those on active service, but of all our people at home. If we were actually short of food, clothing, shelter and other materials, then there would be a reason for asking the people to curtail their needs still more. But statistics and simple observation indicate that even in war time the people of Canada should have a decent standard of living.
A high standard of living is possible in this country even though we are involved in a war. No one will deny that we have sufficient to provide a high standard of living for all our citizens and still take care of our war requirements. We still have idle labour and idle resources. So long as those two conditions obtain, according to my conception of logic and common sense there is no reason for poverty or distress or reduced incomes in Canada. As the Minister of Finance (Mr. Ralston) indicated, the only limit to carrying on our war effort and taking care of our domestic requirements is the amount of materials which exist in this country. So long as we have sufficient there is absolutely no reason why a high standard of living should not be maintained for all.
I see absolutely no reason for taxation for purposes of revenue. That may sound fantastic, but that is my belief. For years we have been taught to believe certain falsehoods with regard to taxation, money and debt. I see no

reason why a government which has the authority and the right to create the medium of exchange should have to levy taxation for purposes of revenue. The people of Canada do their share when they provide the energy, when they ply their hands to the development and processing of raw materials and to the production of primary products. Those who work in our banking institutions have done the necessary work in connection with our financial system when they complete the required bookkeeping and other services. Physically there at all times is a complete balance in our economic system. The only function of a government in connection with money should be to issue what the people require. At the present time that is not being done. Our government does not control our money system. It is not exercising the authority it possesses.
The government should be not only the creator and issuer of coins and paper, but the creator and issuer of all money. At the present time private individuals are permitted to manufacture and issue over ninety per cent of our medium of exchange. They are permitted to issue this according to their own policy. I consider that a capital crime. That right should be exercised by the government and by the government alone, and it should be exercised in accordance with the needs of the people. The Minister of Finance has stated that the only limits which apply are physical, mental and moral. I agree with that. If that is true, then why should there be any debt in Canada? The people collectively provide all the energy necessary to produce and process the materials required for food, clothing and shelter. The people who work in our banking institutions do all the clerking and bookkeeping necessary. All the physical costs are provided at all times as our system is conducted. Why, then, should there be any debt after this work has been performed, because everything has been paid for? The only cost involved in any kind of enterprise is physical materials and human energy, and if that is provided, the bills are paid for. Therefore, why should there be any debt in Canada. I see absolutely no reason for it; it is purely fictitious. That applies to financing the war as well.
We have frequently heard it stated that the last war is not yet paid for. I contend that the last war has been paid for. It was paid for in shot and shell, in human life and in misery and suffering. Canada's part in the last war was paid for on the day that peace was concluded. All the costs were then met, and consequently there should not be any left over now. What do we owe after we have

The Budget-Mr. Kuhl
provided all the real costs? The same thing holds true of our present war effort. Why should there be any debt in the conduct of Canada's part in this war after all the physical requirements have been met? The only reason is that the government is not exercising its most sacred prerogative of creating and issuing the medium of exchange. It has allowed and is still allowing private individuals to exercise the most sacred prerogative which the government can exercise, and consequently the government must borrow from private individuals and place upon the people a perpetual debt equivalent to the principal and compounded interest.
A great deal of fear and alarm has been expressed at times in this house over fifth column activities. I would not for a moment minimize the possible danger from fifth column activities. There is no crime more base or wicked than treachery against the country of one's birth or adoption. But I feel that this budget will be far more disastrous in its consequences to the people of Canada than any so-called fifth column activities. This budget will reach into every home and every pocket-book in the dominion. The saboteur might dislocate a power plant or some other vital point, but his crimes are localized, while this budget will affect every income and every pocket-book in Canada. In my opinion, fifth column activities had been at work in this country long before the war broke out, and as has been already suggested from this comer, when it comes to dealing with saboteurs we ought to deal with the really great saboteurs of this nation's war effort as well as of its peace-time effort.
In conclusion, may I summarize my reasons for opposing this budget. I oppose it because it demands of the common people of Canada absolutely unnecessary and unjustifiable sacrifices.
It will reduce unnecessarily the already too low standard of living of the masses of the people to still lower levels.
It will aggravate rather than improve the already serious problems of farmer producers.
It will decrease rather than increase the home market for our own products.
It will demoralize and weaken our people at a time when their health should be improved and their vitality and vigour be increased.
It will fasten the shackles of debt and interest still more securely upon the people of to-day as well as upon the unborn generations of to-morrow.
It will tighten still more the stranglehold which the financial oligarchy already has upon our nation, and the inevitable consequence
will be the complete destruction of democracy in Canada and the establishment of a complete financial dictatorship.
Finally, the sum total of all these consequences is that this budget will make Canada more vulnerable to an attack from the enemy than any other action that has been taken in this country.
Those are my candid opinions with respect to this budget, and consequently I would term it a national suicide budget. That is a very strong term but I really believe it fits the case. It is tihe type of budget which has brought France to the place where she is to-day, and therefore I can think of no term that more adequately describes this budget.
As a last word I would ask why it is that the government continues to pursue policies such as are involved in this budget which are obviously suicidal. I have asked myself that question many times. When it is so obvious that conditions could hardly be more terrible, why is it that the government continues to pursue such suicidal policies? The only answer I can find is that they choose to take their orders from St. James street or Wall street or Threadneedle street or whatever it is, rather than from the people of Canada. In 1935 the Liberal party was given a mandate to restore to parliament its most sacred prerogative and exercise it in the interest of the people, that of creating and issuing the medium of exchange in accordance with the needs of the people. I contend that that trust has been and is still being betrayed to-day. Canada will never make her most effective contribution to the empire's war effort, nor will she ever be able to defend herself to the mu.mum until the principle of the amendment which my group has moved is adopted, and that principle is:
This house is of the opinion that there should have been no increased tax burden placed upon the consumer until Canada attained maximum production of desired commodities or full employment by issuing, through the Bank of Canada, currency and credit in terms of actual public need.


Mr. W. R. AYLESWORTH (Frontenac-Addington):: Mr. Speaker, in rising to speak in the budget debate, I would remind the house that the city of Kingston is the county town of the county of Frontenac, which comprises part of the riding of Frontenac-Addington, which I have the honour to represent in this house.
The city of Kingston at the present time is not represented in this parliament as the result of the sudden and tragic death of the Hon. Norman McLeod Rogers. Some three weeks ago the people of Kingston and the county of Frontenac, irrespective of their
The Budget-Mr. Aylesworth

political colour, attended a memorial service held in the memorial hall at the city buildings, and paid their respects and tribute to the late Minister of National Defence. The government was represented at the service by the hon. Minister of Pensions and National Health (Mr. Mackenzie), who read a letter from the right hon. the Prime Minister (Mr. Mackenzie King) paying his tribute to his late colleague and friend.
The people of Frontenac-Addington have had the war brought home to them more closely than most rural ridings because Kingston is a military centre. Being at home over the week-ends, particularly since the budget was brought down by the Minister of Finance (Mr. Ralston), I have had an opportunity of speaking with many of my constituents and also with some of the citizens of Kingston whose confidence I enjoy. I feel that I do not overstate the fact when I say, if I might be allowed to speak on behalf of the people of Kingston as well as for my own constituents, that any increase in taxation will be paid cheerfully by the people of Kingston and Frontenac-Addington as their contribution to Canada's effort in buying war materials, equipping her soldiers and giving the best we can to protect those who have enlisted with the Canadian active service force in order to do their share in the protection of Canada and the motherland. All Canadians must face a very difficult task. During the past three years we have not put forth enough energy and action toward getting Canada into a position to defend herself, should the need arise; nor have we been able to do as much as we should have done for Great Britain and France. Our first line of defence was Great Britain and France; now it is Great Britain alone.
The unexpected and disastrous capitulation of France to a force so overwhelming that courage and bravery could not resist, makes us face a reality that challenges us to do our best. As I said, it makes us face a reality, one part of which is that Great Britain looks, and will continue to look, to Canada, to make available not only the food supplies for her army but also those for her civilian population, which demand is greater by far than the resources of Great Britain.
In peace time the lifeblood of Great Britain has been trade. In war time, export of goods from Great Britain is her fourth arm of defence. Great Britain must have money from the sale of her manufactured products, so that she can buy foodstuffs to feed herself, because she cannot possibly produce enough foodstuffs for her own requirements. Each of us must do -his utmost to serve Canada and Great Britain in this war effort.

The biggest problem facing the country to-day is the problem of winning the war. True, that is the problem, but we have been told for years that an army marches on its stomach. Therefore, the problem of producing food is as important as the problem of producing soldiers. Without the farms we cannot have the soldiers, and a government which neglects the farmers in times of peace and war is a government which is betraying the people it has been elected to govern. I maintain that this government has neglected Canada by its actions towards the Canadian farmer and live stock interests. There is nothing in the budget which is of any help to the farmer; the live stock industry is ignored. Farmers and live stock producers of Canada are the most valued assets that this country has and their welfare has been totally neglected by this government. The fact that the British empire trade agreements have been changed is well known; that this has been a distinct loss to the Canadian farmer cannot be denied. The home market which is worth only $32,000,000 to the wheat farmer is worth $273,000,000 to the Canadian dairyman and live stock producer, and this home market was neglected by the trade agreements of this government.
Last year 26,608,040 pounds of dressed pork were imported into Canada from the United States. So far this year we find that 28,500,000 pounds have been imported. The most important fact in this connection is that Canada is facing a critical situation in her hog industry. It is going to be difficult indeed to find a market for our surplus production of pork products. Including the bacon already stored-under instructions from the bacon board-the nearest estimate I can get is that between now and October 31, Canada will have a surplus of 60,000 hogs per week. In other words, between now and October 31 we must find a market not now in sight for an additional 10,000 hogs per week. Only two possible markets exist. One is England. When Denmark was invaded we took it for granted that England would at once require all the bacon Canada could ship. But the English Ministry of Food has stated that they do not require more than 50,000 hogs weekly. This statement has been repeated even since the invasion of Belgium and Holland. The most serious phase of this repeated statement is that, beginning with November, we shall have a surplus, not of 50,000 hogs weekly, but of nearly 100,000 hogs weekly. At this rate, by the end of the year we shall have a surplus of over 220,000 hogs in cold storage, with no market in sight. I submit that these figures should receive careful consideration by the hon. Minister of Agriculture (Mr. Gardiner).

The Budget-Mr. Aylesworth
The government must take the responsibility for any surplus in the hog market, keeping in mind the imports from the United States and the fact that ever since this government came into power members of parliament have urged the farmers to raise more and more hogs. The farmers have raised more hogs, and now they find that they are not getting back the cost of production.
I have here a letter which was sent out by the department and circulated throughout Canada, I presume to all the retail merchants. But I understand that the government is anxious to get through with this bill to-night, so I shall not read that communication at the present time.
The cost of feed for hogs has been higher than the price received for them. There is no profit in raising hogs at the present time. This applies more particularly to eastern Ontario. Then, I ask, what is going to happen if the price drops? When hogs sell at eight cents a pound in normal times the farmer has great difficulty in earning a dollar. These are abnormal times and the producers of hogs are being asked to pay more and more taxes. Everything the hog producer buys to maintain his home and provide for his family will cost him more money; even the food cost for the hog is higher by twenty to thirty per cent than it wTas before the war. The duty of the government, now that they have encouraged the farmer to get into hog production, is to do everything possible to maintain a reasonable price.
The government has been negligent in this regard. Heavy imports of pork from the United States, on a very low price basis during the last year, is now destroying our market. I shall give the price of hogs for the last three years, during which time the U.-S. agreement was in effect:
Per
hundredweight
August	10,	1937	
$10.50August	10,	1938	
9.50August	10,	1939	
8.25
To-day hogs are selling at $7.75 to $8 per hundred-weight.
In 1939 we imported 26,608,040 pounds of pork. I estimate that up to the end of June, 1940, we shall import 28,550,000 pounds of pork. This is double the importation of last year and the government has been slow to do anything. At the present rate, as I said before, Canada will have in cold storage at the end of this year products from 220,000 hogs. While this surplus is piling up and while we are contributing funds to Canada's war effort, I am amazed, Mr. Speaker, to find that we have been, in spite of the above-mentioned figures, using money to buy pork from the United States to feed our soldiers.
Surely the Canadian market should be ours and ours alone. I say to the government, you urged us to get into the hog industry, and now I ask the government, what are you going to do:
1.	To find a market for our surplus production?
2.	To maintain a price that will pay the cost of production?
3.	To secure for us the English market previously held by Denmark?
4.	To stop the importation of cheap middle-west United States undesirable pork?
5.	To reduce the heavy stock of pork products now in cold storage?
I submit that the hog raising industry is as important to the people of Canada, particularly of eastern Ontario, as is the wheat growing industry, and I would urgently request the government to take what steps are necessary to set a fair price for pork products, so that the farmer raising hogs may at least get back his costs.
I trust that in bringing the matter of hog raising and pork production to the attention of the house-it is not necessary to bring it to the attention of the country, for the reason that the farmers already realize the situation- it will be considered, not as destructive but as constructive criticism, in that an understood difficulty which must be faced often may be solved when an unexpected problem creates confusion, distress and, under present circumstances, possibly disaster.
I now come to another phase of agriculture -milk and cream, vegetable oil, garden products.
We are told that the lowest tariff would result in the great United States market being open for our milk and cream. We were happy about that; surely, we thought, 130,000,000 people will buy a great deal of milk and cream. What has been the result? An average of one 8-gallon can of milk a day shipped over, and in May of this year there were four gallons of cream exported, enough for a few family breakfasts.
With regard to vegetable oil, the government allows as much vegetable oil to come into Canada as our total products of milk and cream. We import yearly over 200 million pounds of vegetable oil at five cents and six cents a pound and it replaces our butter and lard. We produce over 200 million pounds of butter a year and could produce much more if there was a market for it. The same thing applies to lard-and through that the hog raising industry suffers.
The vegetable grower also has had to take heavy losses, owing to the lowered tariff and the shorter seasonal preference; every man in the market garden business and the fruit
The Budget-Mr. Hansell

farmer have had to take losses. Canada's importations in one month this year totalled $1,500,000, an increase of $500,000 over the same month of the preeding year. At the present time, with splendid crops throughout Canada, and especially Ontario, the amount of United States produce offered the public is tremendous. Surely, in time of war, when the question of exchange is also involved, some restriction on these imports would be in order. It does seem strange that we can spend $41,000,000 for imported fruits and vegetables at a time when Canadian growers have lost their export market and are called upon to face many other difficulties as a result, of the war, and they feel, and rightly so, that they should have an opportunity of selling their produce on the home market without the competition of imported produce, especially at this time of the year, and when the nation's reserves must be conserved. However, since this is a $180,000,000 industry, I feel that this government should give it every consideration. So, in conclusion, Mr. Speaker, I urge the Prime Minister and the Minister of Agriculture to solve this critical problem.


Mr. E. G. HANSELL (Macleod):: This is about the sixth budget to which I have spoken in my parliamentary experience, and I can assure you, Mr. Speaker, that my speech will be the shortest of any I have given on these budgets. I recall the budget of 1935. It was known as a sound-money budget. We had many problems facing us in those days-problems of unemployment, problems of relief, problems of mental distress; and I recall that the Minister of Finance of that day rose in his place and said that he was going to finance the affairs of the country with sound money and common sense. He thought that sound money and common sense would solve the problems of the day. This is now the sixth budget to which I have listened and it is also a sound money budget.
I told the Minister of Finance in 1935, after he had presented his budget, that if he were to tackle the problem of distribution from the point of view of the new economic order, that if he stood in his place and declared the old order had at last passed away and that through a new economic order he would deliver the 12,000,000 people of Canada from the grim monster of fear and insecurity and bring them to the highest standard of living which our great productive capacity could afford-that if he would do this he would go down in history as one of the greatest emancipationists of our modem age of economic slavery. What happened? That minister had to retire on account of ill health. There is no doubt in my mind that the arduous duties and responsibilities connected with such an office were partly

responsible for his break-down, and in this connection I would say that the present financial system is so ruthless that it would kill its own ministers of finance. Of course, that was five years ago. Finance ministers come and finance ministers go, and now we have another. His 1940 budget is another sound money budget. He, too, has problems to face, not only problems of unemployment and relief but the problem of the great war, and the present budget is going to finance the war just as the previous great war was financed, by means of taxation and borrowings.
Some weeks ago I received, as all members did, a release from the director of public information. There is no date on it. I do not remember when it came, and in fact there is nothing on it that indicates from whence it came. It is printed in red, in large type. There is no indication where the office is or who it comes from, but here is a little paragraph I wish to read:
The Minister of Finance has received a piece of white blotting paper with a $1 bill. On the blotting paper little Peter Wale of Portsmouth, Ontario, had written these appealing words: "I am Peter. I am five years old. I am sending you my dollar to help win the war."
As I read that, it seemed to me that little Peter Wale's name should be recorded somewhere in history, so perhaps the best thing we can do is to put his name on Hansard. This was a noble deed for little Peter. Of course he is only five years old, so we do not expect him to understand much about the money system. Perhaps he has a big brother who is helping to fight the Germans. Perhaps his father is a war veteran. At any rate it was a noble thing for a little boy like that to give his dollar to help win the war.
Now this is part of the government's financial policy. I do not know what the present Minister of Finance (Mr. Ralston) will be chiefly celebrated for in history, but I think we shall be remembered in history as a nation wdth such great potentialities of production and such short-sightedness that when we had to fight the greatest war of all time we had to take the baby's candy money to do it.


Some hon. MEMBERS:: Oh, oh.


Ernest George Hansell: Of course we can expect that sort of response to such a statement, but, sir, it is true.
I wish to refer to just one other matter. The Minister of Finance in introducing his budget made a clever speech. I quote one striking statement, found at page 1011 of Hansard:
For the first time in a thousand years the world has been made to realize that a new "Dark Ages" may not be the figment of a wild imagination.

The Budget-Mr. Senn
In 1934 Major Douglas, who perhaps is recognized as the founder of the movement that we represent, came to Canada. He appeared before the agriculture committee of the then government of Alberta, and I believe that same year he appeared before the banking and commerce committee of this house. On his return to England a banquet was given in his honour, at which banquet he made a speech in which he used these words:
If the present system is not changed by say 1940 civilization will go down into a state only comparable to that of the Dark Ages.
Is it not significant that in Canada's war budget speech of 1940 the Minister of Finance should unknowingly tell the nation that Major Douglas' words were on the verge of becoming a fact? The tragedy is that immediately following such a salutary statement the Minister of Finance presented a so-called "sound money" budget.


Mr. M. C. SENN (Haldimand):: I assure hon. members I am not going to talk very long; in fact, five minutes will be more than sufficient for what I want to say. A question arose this afternoon between the hon. member for Waterloo South (Mr. Homuth) and the Minister of Finance (Mr. Ralston) with regard to patronage in our war effort. I want to give a very clear case, not to embarrass the government or make trouble for any of the ministers; in fact, I acquit the ministers themselves and the government of any attempt in that direction.


James Layton Ralston: It will not embarrass the government in the slightest. I ask for it.


Mark Cecil Senn: There are at present four airports being erected in the county I have the honour to represent. The contractors are different firms, and I am going to refer to only one airport at this time. At the time of the election, lists were prepared, as I am given to understand, of men who were promised jobs when these airports were under construction. In that way I suppose inducement was offered to voters to vote in a particular way. I visited Ottawa shortly afterwards and telephoned a certain official in the air division, and he told me that when labour lists were being prepared it was intended that they should be prepared by the local employment agency of the provincial administration, which was perfectly satisfactory to me. However, that has not been done in this particular case. As a matter of fact, the local president of the Liberal association is the man who from time to time issues recommendations and slips of recommendation for men to be employed at this particular airport.


Charles Gavan Power: Which airport is it?


Mark Cecil Senn: The airport at Dunnville,
Ontario. I took it on myself two or three weeks ago to go to the Minister of Munitions and Supply (Mr. Howe) and state the case to him, and he promised me at that time that he would do what he could to see that this condition was done away with. I have no doubt that he did, but I am sorry to say that it is still going on, and that no man can get a job on that airport, as I am given to understand-


Charles Gavan Power: May I ask if that is under contract?


Mark Cecil Senn: It is under contract to the Dufferin Construction company, I understand. This contractor told men that have gone there time after time that he employs men only on the recommendation of a certain individual in the town of Dunnville. I have in my hand a photostat copy of one of the recommendation slips that are given from time to time. I mention this merely at the request of the minister to show what is going on there. I have had repeated protests from prominent citizens in that district in regard to this matter.


Mr. MACDONALD (Brantford City):: One of your friends got a recommendation.


Mark Cecil Senn: Yes, but he came from outside the county.


William Ross Macdonald: A friend, just the same.


Richard Burpee Hanson: That does not alter the principle.


Mark Cecil Senn: He came from outside the county and was recommended by someone outside the county, and as far as I know he is the only man who could be said to be a friend of mine that is employed there. However, I just want to make that final statement.


Charles Gavan Power: I should like to get all the details and to know who the contractor is.


Mark Cecil Senn: The Dufferin Construction
company is the contractor. This situation is creating a great deal of dissatisfaction in that district, and I think is hindering recruiting. I do not want to see patronage enter into this in any respect whatever. As far as I am concerned, I have never recommended a man to any position at any of these airports, and I hope the minister will see that the situation to which I have referred is ended.


Clarence Decatur Howe: If I may interject a remark, I would just say that that contractor, together with every other contractor, has been notified in writing that speed and efficiency are the only matters in which the government is interested; and that he has a free hand to hire whom he will.
The Budget-Division


Mr. MARSHALL:: I was paired with the
hon. member for Kent, N.B. (Mr. Leger). Had I voted, I would have voted for the amendment to the amendment.


Mr. GRAYDON:: I was paired with the
hon. member for Victoria, Ont. (Mr. McNevin). Had I voted, I would have voted for the amendment.


James Alexander Marshall: I was paired with the
hon. member for Kent, N.B. (Mr. Leger). Had I voted, I would have voted for the amendment.


James Alexander Marshall: I was paired with the hon. member for Kent, (Mr. Leger). Had I voted, I would have voted against the motion.