HONOURS AND DECORATIONS

[Stage Direction]
First report of special committee on honours and decorations.-Mr. Macmillan.

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

[Stage Direction]
Mr. LaCROIX (Quebec-Montmorency):
What is the obstacle which prevents the government from adopting a national Canadian flag?
Mr. MACKENZIE KING:: If by "obstacle" is meant "legal obstacle," there is no obstacle to His Majesty, on the recommendation of

the Canadian government, authorizing the creation of a national Canadian flag. The government would not make such a recommendation without the prior approval of the House of Commons. It is the view of the government that, with war conditions what they are, it would not be justified in asking the House of Commons to debate the matter at the present time.


SASKATCHEWAN SURVET PARTIES
Mr. PERLEY:: 1.	Have any investigation or survey parties been working in the Qu'Appelle river valley and its tributaries east of Lumsden in the province of Saskatchewan since March, 1942?
2.	If so, (a) what is the personnel of each party; (b) what is the purpose of the work or surveying being done; (e) what has been the cost of such surveying parties to date?


Mr. GARDINER:: 1.	Yes.
2.	(a) Engineer, L. D. McMillan; draftsman, E. Nixon; engineer, H. G. Riesen; instru-mentmen, E. 0. Wood, E. Shienfield, T. R. Stuart; rodmen, M. J. Peace, H. F. King, W. M. Huddleston, D. A. Kennett, R. G. Ellis, D. Halliwell, C. Mohr, R. M. McWalters, T. W. Whitworth, A. Rowand, T. S. Farquharson.
(b)	To determine the location and extent of irrigable areas and to locate sites for water storage for the same.
(c)	$2,719.15 (April 1, 1942 to May 31, 1942).


WARTIME PRICES AND TRADE BOARD-VANCOUVER OFFICES
Mr. MacINNIS:: 1.	What is the name of the building, and the street address in which the offices of the wartime prices and trade board is located at Vancouver?
2.	How many square feet of floor space is occupied?
3.	What is the rent per square foot?
4.	Before offices in the said building were taken, did the government investigate the accommodation available in other buildings?
5.	If so, (a) what buildings were considered, and (b) what was the rent per square foot in each instance?
6.	Could other adequate accommodation have been secured at a lower rental?
7.	If so, why was it not taken?


Mr. ILSLEY:: 1.	Marine building, 355 Burrard street.
2.	10,000 square feet.
3.	$1.50 per square foot. Other tenants in this building pay $2 per square foot.
4.	Very exhaustively.

Questions
5.	(a)	(b)
Per sq. ft.
Royal bank building	
$2	00Stock exchange building	
1	60Rogers building	
1	50Hall building	
1	50402 Pender street west	
1	40Pacific building	
1	21Vancouver block	
1	13Merchant's exchange building	1	05Crown building	
1	00Northwest building	
1	00Davis chambers	
0	85Fairfield building	
0	75*Holden building	
0	75 * 1 2 3 4 5 6 7
Without janitor service; 90 cents per sq. ft.
with janitor service.
6.	No.
7.	In most of the buildings listed above there was not sufficient space for our offices. Some second class space was available at lower rental, but it was definitely not suitable for the board's purposes, either as to location, efficient lay-out, services supplied, money spent by the owners of the building to fit the premises up for our requirements, or accessibility.
In the Marine building, the owners spent approximately $10,000 to fit the space up to provide efficient working conditions. Working conditions in the cheap space would have been so bad on account of inefficient lay-out, lighting services, etc., as to have been more expensive in the end than the space taken.


STONEY POINT INDIAN RESERVE-PURCHASE OF LAND FOR MILITARY PURPOSES
Mr. COLD WELL:: 1.	Has land been acquired on the Stoney Point Indian reserve for military purposes by the government?
2. If so, what amount of land has been acquired?
3.	What amount remains to the Indians on this reserve?
4. Under what authority was the land acquired?
5.	Were the Indians consulted in the matter?
6.	If so, was a vote taken?
7.	With what result?
8.	How much per acre was paid for this land?
9.	Was this part of land ceded to this band of Indians under treaty in 1827?
10 Did this treaty expressly reserve to this band of Indians and their posterity for all time to come, the exclusive use of the land.
11.	Was the opinion of the Department of Justice obtained as to the right of the government to supersede as solemn a treaty by order in council?
12.	If so, what was the opinion?


Mr. CRERAR:: 1.	Yes.
2.	Two thousand, two hundred and eleven point two hundred and twenty-five acres (2.211-225).
3.	The Chippewas of the Chenail Ecarte and St. Clair band of Indians to which the Stoney and Kettle Point Indians belonged retained under the surrender of 1827, 12,343 acres. Of this area 5,873 acres were surrendered or disposed of through enfranchisement at various dates and times leaving 6,470 acres. From this amount was taken 2,211-225 acres for military purposes.
4.	Department of National Defence.
5.	Yes.
6.	Yes.
7.	Negative 59 to 13.
8.	$15 per acre plus value of improvements at appraised value. (Land $33,168.75-improvements and moving costs $16,831.25- total, $50,000.)
9.	Yes.
10.	Yes.
11.	Department of Justice expressed opinion that the government had the right to acquire property under War Measures Act.
12.	Answered by No. 11.


NATIONAL FILM BOARD-RENTAL OF CAMERAS FROM EMPLOYEES
Mr. FRASER (Peterborough West):: 1.	Does the national film board make a practice of renting either still or motion picture cameras from employees of the board? ,
2.	If so, what are the names of each employee from whom a camera is or has been rented since March 31, 1941?
3.	What is the total rental which has been paid to each such person since March 31, 1941?
4.	What is the total annual salary received by each such person?
5.	When did each such person purchase the camera which he rents to the board?
6.	When did each such person first rent the camera to the board?


Mr. THORSON:: 1.	No. On four occasions the national film board has employed temporary camera men with cameras for the production of particular films.
2.	The temporary camera men referred to in answer to No. 1 are: Roger Barlow, Leo Seltzer, LeRoy Robbins, Douglas Sinclair.
3.	Total rental paid to temporary camera men referred to in answer to No. 1: Roger Barlow, $222; Leo Seltzer, $117.60 (rental for camera and equipment); LeRoy Robbins, $225 (rental for camera and lights); Douglas Sinclair, $11.
Housing

4.	Total remuneration, for services paid to temporary camera men referred to in answer to No. 1: Roger Barlow, employed with camera September 22 to November 17, 1941. Total fee, $769.06. Leo Seltzer, employed January 20 to February 17, 1942. Fee $333. LeRoy Robbins, salary rate, $260 per month. Douglas Sinclair, salary rate $108 per month.
5.	No information.
6.	Date of first rental of cameras referred to in answer to No. 1: Roger Barlow, September 22, 1941; Leo Seltzer, January 20, 1942; LeRoy Robbins, April 1, 1942; Douglas Sinclair, May 15, 1942.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. FRASER (Peterborough West):: How many of the employees in each different department of the government and each different board are women?


MILITARY SERVICE-FAILURE TO REPORT
Mr. SHAW:: 1.	How many Canadians of military age have been prosecuted under the War Service Act for failure to report for military training or for alternate war service?
2.	What sentence was imposed in each case?
3.	What is the government policy with respect to the handling of those who have served sentences for failure to report, following the release of such persons from jail?


JUDGES ON COMMISSIONS OF INQUIRY
[Stage Direction]
Mr.. CHURCH:
1.	How many judges of the county courts, and what are their names, who have been engaged on provincial and federal commissions, under the federal and provincial public inquiry acts, respectively, and at what cost to the dominion, for any federal inquiries, and details of the cost of each such inquiry?
2.	How many judges of the Supreme Court of Canada, and of the supreme or high courts of the provinces, have acted similarly, and where, and at what cost to the dominion, with a statement of the total cost thereof?
3.	What are their names, and length of absence from the bench, and what has been paid for these special services?
4.	Who looks after their judicial duties while they are absent?

[Stage Direction]
On the orders of the day:
Hon. R. B. HANSON (Leader of the Opposition):: On April 30 the Minister of Finance (Mr. Ilsley) in reply to a question asked by the hon. member for Broadview (Mr. 
Church) stated that he expected to be in a position to make a statement to the house with regard to the housing situation within a week. That is over two months ago. On June I I drew this matter to the attention of the minister, and he stated that he would comply with my request that the statement be expedited as much as possible. Another month has passed, and we have had no statement of government policy on this very important matter. May I urge upon the minister that he make a statement at the earliest possible opportunity.
At the same time I hope he will deal particularly with the difficult local housing situation in Ottawa, to which reference was made during the course of a debate in this house not so long ago, when I made the suggestion that some authority should be set up immediately to study the situation. Will the minister deal particularly with the suggestions which have been made regarding the construction of hostels?
I think this problem must be attended to, and government policy on both the larger matter and the particular matter should be made clear as soon as possible.


Hon. J. L. ILSLEY (Minister of Finance):: Mr. Speaker, as far as I am concerned my responsibility as Minister of Finance is with the national housing administration. A great many requests were received for the continuation of the National Housing Act, and it was suggested that we should vote more money because the amount already voted is just about or quite used up. I think it is just used up at the present time. For many months a great many letters have been coming to me and to the^ other members of the government requesting that the housing act be continued. It was on that matter that I had hoped to be able to make a statement long before this, but I felt that at the time I made a statement I ought to give some indication of what the government's general policy was with regard to housing. It must be remembered that this is not by any means the main part of the housing activities of the government. The main part of those activities at the present time I should say are those carried on by Wartime Housing Limited, under the Minister of Munitions and Supply (Mr. Howe). Those programmes are going ahead in numbers and with great rapidity in various parts of Canada.


Richard Burpee Hanson: And with great expense for what you are getting out of it.


James Lorimer Ilsley: Housing costs money, no matter who does it. I decided a little while ago that before I made any statement on housing

International Wheat Agreement
I would wait until the subcommittee of the war expenditures committee had their report ready, if that did not take too long. If I did not do that I would be in this position, that the members of the committee would think I had disregarded them completely. They have been taking evidence, formulating proposals and giving a great deal of time and conscientious attention to the matter, and I did not want, just on the eve of their report, to make a statement which might be greatly at variance with their recommendations; but whether it was at variance with their report or not, such a statement before they had made their report would make it appear that their duties were entirely useless and not appreciated by the government. I have been in touch from time to time with the chairman of the subcommittee relating to that matter.
I do not know whether they will be in a position to make their report immediately or not; but I hope so, and as soon as they do I will take into account their recommendations. Whether they can be followed or not, I do not know. But then I will make a statement to the house.


Richard Burpee Hanson: What
about the situation in Ottawa?


James Lorimer Ilsley: I was coming to that. The situation in Ottawa is not the responsibility of the Minister of Finance or of the Department of Finance. The situation in Ottawa is that a great many people are urging that further accommodation should be provided for female civil servants, and it was arranged some time ago that that matter would be considered and gone into by another minister, my hon. friend the Secretary of State (Mr. McLarty), under whom the civil service comes.


Hon. N. A. McLARTY (Secretary of State):: Mr. Speaker, might I add that that matter is receiving very active consideration at the present time.


Richard Burpee Hanson: That is just a stock answer. What the people want is some action.


AIRCRAFT PRODUCTION
[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: Mr. Speaker, I regret that the Minister of Munitions and Supply (Mr. Howe) is not in his seat because I wanted to ask a question of him, but with the consent of the house I will ask the question and it will serve as a notice.
There has reached me to-day an order in council, P.C. 5387, passed on the 25th of June, establishing regulations respecting aircraft production which appoint Mr. Ralph P. Bell aircraft controller, and by the regulations enacted thereunder he is given all the powers of a czar. I do not question the power of the government to create this new authority and endow the controller with the very wide powers bestowed upon him. Undoubtedly, that power exists under the provisions of the War Measures Act and of the Munitions and Supply Act. Mr. Bell has been acting as director of aircraft production, and I had thought he was already possessed of almost unlimited power. What circumstances have arisen which make it imperative to create this new authority and to clothe the controller with such wide and unlimited powers? Has any situation arisen which makes this step imperative? If so, what is that situation?


William Lyon Mackenzie King: Stands as a notice.


NEW INTERNATIONAL AGREEMENT-DRAFT CONVENTION ON PRODUCTION AND EXPORT CONTROL AND MINIMUM PRICES
[Stage Direction]
On the orders of the day:
Mr. M. J. COLD WELL (Rosetown-Biggar):: I would1 like to direct a question to the Minister of Trade and Commerce. According to this morning's papers some agreement has been reached with regard to wheat. Can the minister make a statement to the house, since one has already been given to the press?


Hon. J. A. MacKINNON (Minister of Trade and Commerce):: Mr. Speaker, I have nothing to add at the moment to what has been published in the press in connection with finality, for the time being, in the wheat discussions at Washington. It was agreed that an announcement would be made from Washington for all the nations participating in the discussions, and my comment was based on the statement which has been published.


Thomas Miller Bell: Does not the minister think it wiser that any statements of that kind should be made to the house when it is sitting rather than to the press?


James Angus MacKinnon: I take it that the hon. gentleman is referring to the announcement regarding the wheat
agreement?


Thomas Miller Bell: Yes.


James Angus MacKinnon: It was originally arranged that the announce-
Battle of Egypt

ment would be made simultaneously from the various countries concerned, and had it been possible to do this, the announcement on behalf of Canada would have been made in this House of Commons, but it was found that the hours in the different countries did not tally sufficiently closely to make that possible, and it was finally decided that one announcement would be made on behalf of all countries and that it would be made from Washington, where the conference was held.


CANADIAN ARMY
[Stage Direction]
On the orders of the day:
Hon. J. L. RALSTON (Minister of National Defence):: Mr. Speaker, I think I ought to mention to the house an incident which occurred to-day regarding which I feel very deeply, and as to which I should like to give the house such facts as I can.
I deeply regret to inform the house that two cadets of the officers' training centre at Brock-ville are in a very grave condition as a result of an accident which took place in the course of an exercise which the cadets were putting on here this afternoon. Part of the exercise was the crossing of the Rideau canal in battle order. These two cadets could not make the crossing and were rescued with considerable difficulty. When I left the scene only a few minutes ago resuscitation efforts were being continued, but up to that point without success, although all hope had not been abandoned. These two cadets are both noncommissioned officers recently returned from overseas to take their commissions.
Two other cadets were overcome in the crossing. They were taken to the hospital, and the report I have is that their condition is not serious. The names of the cadets are withheld pending receipt by the next of kin of notices which are being sent out in accordance with ihe regular practice.
I may say for the information of the house that two of the three officers in command of the party were officers who had come back from overseas for instructional work, including instructional work in battle drill.
I want to say further-this is information I got when I was on the scene-that all these cadets had been through this practice in water-crossing, only last week, and had practice of this kind as part of their regular training. The adjutant-general has already undertaken a thorough investigation, which will be made to-morrowT.

I am sure that we all join in the deepest sympathy for the next of kin, and I also feel that the cadets of the school should also have our sympathy and interest because they have entered most keenly and enthusiastically on exercises of this kind, which are regarded as a necessary part of the preparation for training in present-day warfare.


BATTLE OF EGYPT
[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Mr. Speaker, the house no doubt will desire to have the latest word with respect to the battle of Egypt. I am not, unfortunately, in a position to give information based on official reports which have been received to-day, but through the courtesy of the Canadian Press I have received the Associated Press report of what was said by Mr. Churchill in the House of Commons to-day. In the course of his remarks Mr. Churchill said:
The battle of Egypt has brought the allies face to face with a disaster in the middle east equalled only by the fall of France, but the issue is not yet decided and "very considerable" reinforcements have reached or are approaching the battlefield.
Mr. Churchill also said:
Military misfortunes of the last fortnight in Cyrenaica and Egypt have completely transformed the situation, not only in that theatre but throughout the Mediterranean.
At any moment we may receive news of grave importance.
The press report states:
Mr. Churchill's sombre portrayal of the war in Africa was relieved only by his statement that "very considerable" reinforcements have reached or "are approaching" the battlefield.
And in indirect quotation:
I do not consider the struggle as in any way decided.
The Prime Minister also stated that the war, he thought, was likely to be a long one.
In that connection I should like to repeat what I said in the house the day after my return from Washington, as follows, as reported at page 3722 of Hansard:
There can be no doubt at all that the situation at the moment is one of the most critical with which the united nations have been faced, one of the most serious that has arisen in the course of the whole war. To get the true perspective one has, however, to recall the very critical situations which have arisen in the past, and to remind oneself that the forces of the united nations have been able to rise superior to any temporary reverse, and that to-day there can be no doubt that the united nations are stronger and better organized than they have been at

The Budget-
-Mr. Fraser (Peterborough)
any time since the war began. . . . My own view is that the present conflict will have more to do with the probable duration of the war than with any question of its ultimate outcome. It may be that as a result of the present conflict the struggle will be much longer than up to the present we have hoped and expected it might be.
One thing is quite certain, that every country that is a member of the united nations will have to put forth its utmost effort in helping to overcome the enemy.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. CHARLES PARENT (Quebec West and South):: Mr. Speaker, I should like to
direct the attention of the house to the fact that the ways and means resolutions have not yet been distributed in French. We have been, asking for copies since the speech was delivered by the Minister of Finance, and we have not been able to get a single copy in French. This is one of the most important documents which should be available to hon. members, and we are entitled to read it in our own language. The question is one of primary importance, and I do not know why we should not have these documents in time, as for Hansard. We are now called upon to rush this budget through at full speed. How can we judge the importance of the budget until we know the items which will be fought out, or amended if it is possible, without having knowledge of the budget in itemized form? I believe this situation should be remedied without delay, and for my part I am not prepared to support the budget until I have read what is in it. Until that time I must be counted as against the budget as a whole. When it comes into committee of ways and means, I reserve my right to discuss the items after I have been able to read them in my own language.


James Lorimer Ilsley: May I ask the hon. gentleman if he is referring to the translation or to the French version of the resolutions which appear as a part of the budget speech, at the end of the budget speech, on June 23, 1942?


Charles Eugène Parent: Exactly.


James Lorimer Ilsley: Well, I assumed that they
would be translated just as the budget speeches are, the next day, or within the next day or two.


Charles Eugène Parent: The budget speech has been translated. We have, however, not been able to get a single copy of the ways and means
resolutions in French. About fifteen hon. members have asked for it from the messengers at the distribution office, and they told us that copies in French were not available.


James Lorimer Ilsley: I will make inquiries. I certainly put the resolution on Hansard, assuming that they would appear in both French and English within a day or two.


Richard Burpee Hanson: The Votes and Proceedings of that day have them, and I think they are translated.


James Lorimer Ilsley: I think they will be in Votes and Proceedings.



THE BUDGET


[Stage Direction]
The house resumed from Wednesday, July 1, consideration of the motion of Hon. J. L. Usley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Gordon Knapman Fraser: Mr. Speaker, during the few years that I have been in this House of Commons I have heard many speeches-some good, some bad, some indifferent. Some speeches demanded this and that from the government; other speeches were very pleading; but the speech delivered by the Minister of Finance (Mr. Ilsley) on June 23, was the most "touching" speech ever delivered-in this house, in fact, ever delivered since confederation. I know that statement of mine will not be contradicted, because that speech and the effects of it will touch not only every taxpayer but everyone in Canada, and the coming generation as well. The taxes therein set out affect "rich man, poor man, beggar man, thief", and I can rightly say that if this rate of taxation continues for a few years there will not be any rich men in this country. To-day many men who are in the higher and the middle brackets have found that, in order to adjust themselves to these new taxes and the new modes of living they involve, they have to draw on their capital, and we can rest assured that if that state of affairs continues for a few years we shall have no rich in this country; there will be a wonderful levelling off process.
This budget has put a tax on practically everything in Canada except the air, and the Minister of Justice (Mr. St. Laurent) has the power to put a ban on that with the defence of Canada regulations.


Richard Burpee Hanson: Even a tax on your wife.
3866	COMMONS
The Budget-Mr. Fraser (Peterborough)


Gordon Knapman Fraser: Yes, even a tax on your wife. And I might say that they do not value wives very highly, because we are only allowed $150 for them.
Through the defence of Canada regulations even the right of free speech is taken from us. To-day the people of Canada are not only taxed to death but restricted in every way, manner and form. With the defence of Canada regulations and the wartime prices and trade board, our people are virtually in straight-jackets. Some know it and some do not, but eventually they will. These wartime prices and trade board regulations are regulating the small business man out of business and are depressing the farmer so that he will be deeper in debt at the end of the war than he was before. In fact, the farmer is really the forgotten man, as I said in my budget speech of 1940. The Minister of Finance has gone very far this time because he has even taken the candy away from the babies and, by taxing' one-cent candy 30 per cent, candy which is the poor child's delight, he is taking away the extra nourishment that some of these children get, nourishment that is needed by them. I know he will find that the health of these children will be affected to a great extent. It will add to the work of the welfare societies and the children's aid societies throughout the country. I was quite pleased last night to hear just before the adjournment the hon. member for Medicine Hat (Mr. Gershaw) speak on nutrition, and I am sure he will agree with me that some children in the poorer families do need the extra nourishment from these one-cent candies. I have here a letter in which the writer says:
A great number of my customers are quite, concerned with the new 30 per cent tax on penny candies. With the increase on bulk candies, packages, chocolate bars, et cetera, it can be immediately added on, but with the penny line it cannot be raised so easily, for if it is made 30 per cent smaller there just won't be any candy left.
He goes on to say:
A young child who has done a few good deeds or helped his mother is very often rewarded with a penny and in 99 cases out of a 100 he goes to his favourite store to spend it on one-cent or some other confection. I am afraid that if he is deprived of this privilege there is nothing else in the world that will drive home in his mind the stern reality of war and its sacrifices, and surely none of us want these young children to have this brought upon them any sooner than it is necessary.
Some people might say that candy should be kept away from children. That is all right in some intances, if they are overloaded with it, but these poor children are not overloaded

with candy as some others are, and they should enjoy the right to have some candy. I think it would be proper for the minister to exempt this one cent candy and leave the tax on the higher priced confectionery, because otherwise the children's health will be affected.
As I listened to the Minister of Finance the other night delivering his budget speech, a story I read in the first book over forty years ago came back to me, the story of King Midas. Everything he touched, even his food, turned to gold. As the Minister of Finance ran his fingers through his golden locks, in the same breath he said that we expect a revenue this year of $1,481,000,000, or $609,000,000 more than last year; that is, more than half a billion dollars more than last year. It seems like a faiiy tale that Canada can raise that amount of money, but the Canadian people are willing and ready to pay it and will pay to the last cent without grumbling or maldng any row about the matter, so long as the government gives them a lead and economizes and stops waste in governmental activities. The people want the government to feel the pinch as much as they do, and it is only fair that they should have this feeling.
Yesterday I received an order for a return in regard to the Toronto Shipbuilding Company Limited, the former Dufferin Shipbuilding Company Limited, and Dufferin Paving and Crushed Stone Limited. The shipbuilding company is renting from the Dufferin company a 25-ton Kochning crane or derrick, a 20-ton crane, a 10-ton crane and two 71-ton cranes. The 25-ton crane is rented at $750 for the first shift per month, plus $375 for the second shift per month, or $1,125 a month. That crane, I believe, could be bought to-day, brand new, for $15,000, so that in a year the government will almost pay for it.


Richard Burpee Hanson: Per day.


Gordon Knapman Fraser: No; that is per month. The 20-ton crane is rented at $935 for the first shift and $470 for the second shift, or $1,405 a month. The 10-ton crane is rented at $565 for the first shift and $285 for the second, or $850 a month. The two 71-ton cranes, which operate on gasoline, are rented at $510 each for the first shift and $255 for the second shift, or $765 a month. The government paying the sum of $4,910 a month to this firm, the Dufferin Construction company, which I understand is run by the Franceschini outfit.
The other evening I was very much surprised to hear the hon. member for Kamloops (Mr. O'Neill) speak of the wonderful work that

The Budget-Mr. Fraser (Peterborough)
the government is doing in turning out tanks and munitions of all kinds. He gave no credit at all to the people of Canada, and it is the Canadian people who are responsible for this production, not the government. The government had to be absolutely pushed into it by the opposition, who gave them the lead. Canada has done wonderful work in production. This dominion has done a good job, and the Minister of Munitions and Supply (Mr. Howe) has also done a good job, but he can do a better job and so can we all. What we want is more production, and right away.
I have a few suggestions to make which I believe are constructive. To-day the Minister of Finance mentioned the National Housing Act, and I wish to refer to it because it is of vital importance at the present time to a great number of municipalities throughout Canada, especially Toronto, Peterborough, St. Catharines and Ottawa. What I am asking for- and I am sure the people in these municipalities are asking for it-is not only that this act be continued but that the government lend up to 90 per cent of the appraised value of all homes of 83,500 or less instead of just 90 per cent on homes of $2,500 as at present.
I have here a resolution which I am sure the Minister of Finance has already received:
City of Peterborough
City Clerk's office.
June 2, 1942.
Mr. G. K. Fraser, M.P.,
Parliament buildings,
Ottawa, Ontario.
Dear Mr. Fraser:-
I beg to advise that the municipal council of the corporation of the city of Peterborough passed the following resolution at its meeting held last evening: -
"That whereas the housing situation in Peterborough is becoming more serious every day;
"And whereas it is the opinion of the council that this condition can be substantially alleviated by the continuation of the dominion housing loan facilities, particularly if a 10 per cent down payment requirement can be established;
Be it therefore resolved that this council petition the government of the Dominion of Canada, asking it to give serious consideration before deciding to suspend the provisions under the Dominion Housing Loan Act and, if possible, to extend the provisions whereby the 10 per cent down payment could be applied to homes of $3,500 and less; and that a copy of this resolution be sent to the Hon. J. L. Ilsley, Minister of Finance, and Mr. G. K. Fraser, M.P."
Yours sincerely,
E. A. Outram,
City Clerk.
I feel, and I know the people feel, that the workingmen of this country should be given a chance to build, to create, to have something to show for their work. Since the government
have lost less than one-half of one per cent on
this national housing plan there is no reason why it should not continue, because these homes are permanent, not temporary, makeshift affairs like those put up by Wartime Housing Limited. These war-time houses are supposed to be torn down within six months after the end of the war, and houses will be needed for these workers and other people to go into.
I was surprised to see in the paper the other day that the government had issued a permit, to the Ontario government evidently, to build a $50,000 home for the quints. That is not a right thing to do at this time. It will mean large upkeep; and if other people cannot afford it, or if the government does not want other people to spend money in that way, there is no reason why this residence should be built.
In regard to compulsory savings in connection with income tax, I am pleased that this has been brought in, but I believe that when the resolutions come before the committee of ways and means there will have to be many changes and clarifications in regard to this provision. I have here a letter from a real estate man, in which he says:
There is a point in the new budget under the compulsory savings plan which permits deductions up to a certain point when principal repayments are made under a registered mortgage. This seems clear enough.
However the budget has not apparently dealt with the payments of principal by purchasers of houses purchased under agreement of sale. This of course also includes those buying houses under the National Housing Act.
I have been to see one of the officials of our local income tax department, and they, too, are in doubt as to the interpretation of this item.
It would seem to me unfair and discriminatory to acknowledge the reduction of principal in the case of a registered mortgage, and to ignore the reduction of principal in the case of a purchase made un'der an agreement of sale. This latter reduction would affect far more workingmen than those reducing principal under a registered mortgage.
Then, under this compulsory savings tax, if a man wants deductions for his mortgage payments, his insurance or anything else, he has first to pay that amount to the government and then put in an application for refund, which may take months. That man would not only have to pay to the government but have to pay perhaps to the loan company also, a double payment. These people cannot afford that. Therefore the government should have some plan whereby cases like that could be checked monthly, so that there would be no hardship on the taxpayer. Take a doctor's account or a hospital bill for an operation; it might come to $200, which might be the full amount that the man is compelled to save by this new tax. When he pays that account and
3868	COMMONS
The Budget[DOT]-Mr. Fraser (Peterborough)
produces that bill, automatically that should be taken off and should be allowed to extend over the full year, so that he would have nothing else to pay to the government. The receipt from the hospital or the doctor should be enough to cover the whole compulsory saving.
In connection with this-and I give this to the Minister of National Revenue (Mr. Gibson) before he leaves the chamber-if the national revenue department would use some common sense and forget the red tape, I know perfectly well that this can be carried out, but you have to forget the red tape and use your brains, and then everything will be perfect.
In regard to insurance premiums, according to the budget they are to be allowed only on insurance already in effect. But what about a young couple getting married now or next week or next year? The young man will feel that he is not doing his duty unless he takes out life insurance to protect his wife and future family. Therefore I believe that insurance policies should be included even if they are taken out after this date. The Minister of Finance could draw up a schedule to take care of this, especially in the case of a small wage-earner, with an income of, say $2,000 and under, or $3,000 and under. Insurance policies of $1,000 or $2,000 that he might be allowed to take out should be included in this plan.
The same thing should be done with regard to victory bond purchases. There are many men and women in factories buying victory bonds by payments out of their wages to the company for which they work. Those payments also should be taken from this, compulsory saving. Otherwise they will have to lose their victory bonds; there is nothing else for it. I have one example of a man who has a salary of $2,000 a year; he pays $22 a month to the insurance company, $20 a month on the principal of a mortgage and, on top of that $40 rent. That makes $82 a month, or $984 a year. In addition to that, he will have to pay this new income tax, $215, of which $108 is compulsory saving. That makes $1,199 a year that this man has to lay out in fixed charges. If the government on top of that says he must pay his compulsory savings to the income tax branch at the end of the year, it will mean $1,307 he will have to lay out, leaving him only $693 to feed and clothe his family and for doctors, education, church, et cetera. That is for a man with a wife and two children. I believe men in that class should have a little better break, perhaps a little lower tax and a little better on the saving. This man would have less than $2 a day to keep his family, to build decent bodies on his children and put clothes on them. It

cannot be done. If he is compelled to pay that amount, it will mean just so much extra work for the welfare societies and the children's aid societies.
This year these welfare societies are going to feel the effect of this tax very severely, because people who up to now have made donations will have to cut down such donations from now on. They will not be able to help it, much as they would like to continue to contribute. So I think the government should make some provisions for these charities. Only this morning I met one gentleman who told me what his income was, what his tax would be, and the amount of his donations to various societies last year. If this year he donates one-quarter of the amount he gave last year, he will have to dip into his capital, which is very small. The same situation applies right across Canada. Every day these societies are doing more work; they are overloaded now. They are doing a great deal of the work of the dependents' allowance boards, and making a good job of it, and with all these war babies their work has been increased tremendously.
Under the compulsory saving provision, these savings are not required to be deducted from the. income of any person over sixty-five years of age, if that income is not in excess of $3,000. I believe that age limit should be reduced to sixty years, for many who reach sixty-five may never live to see sixty-six. For instance, I understand that in many municipalities female schoolteachers are retired at the age of sixty, and I also believe that in many businesses female workers are retired at the same age, so I believe this should be taken into account. In fact, I honestly believe that it will not be more than a few years until the Old Age Pensions Act is readjusted so that every man and woman in Canada over sixty years of age will receive not $20 a month but $40, which will not be charity but rather a refund on account of the taxes they have been paying all their lives.
Some lion. MEMBERS: Hear, hear.


Gordon Knapman Fraser: Do not applaud yet, because I have something to say which may hurt. In Canada the railways issue thousands of passes each year. I do not see why those who travel on passes, other than for business, should not be required to pay the 15 per cent tax on transportation. The wives of members of this house travel on passes. There is no reason why they should not pay the tax. Only yesterday, a railway man said to me, "I ride on this pass, and my wife rides on it, but Mrs. Jones next

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door, whose boy died in Thorold, had to pay a 15 per cent tax on the cost of her ticket, and she even had to borrow the money with which to buy the ticket." I believe that if this tax were collected on passes not used for business purposes, many dollars would be brought into the treasury, and it would act as a check on the number of passes being issued.
I believe we should start right here in the House of Commons, because "what is sauce for the goose is sauce for the gander".
A few weeks ago I heard an announcement over the radio on behalf of some finance company, whose name I have forgotten. It went something like this: "Why worry about your income tax? Why not let us look after it?" I believe the minister should see to it that these finance companies are not permitted to advertise in this way, because they only encourage people to spend their money. There must be a day of reckoning, and when that day comes, the people have to pay through the nose.	_
In conclusion, let me say that on the night of June 23, after the minister had delivered his budget speech, I met him entering the elevator outside this chamber. I said, "It must have taken a great deal of courage to make that speech." I do not know whether or not the minister agreed with me, though he shook his head as though to say he did not; but again I congratulate the minister upon his courage, because I know the people of Canada will congratulate him. The people are willing to pay; but for goodness sake let this government give us the lead in saving.


Mr. G. A. McLEAN (Simcoe East):: Almost all the speeches that have been delivered so far in this debate have dealt with the ways and means of raising money announced by the Minister of Finance (Mr. Ilsley) in his budget speech. I am not going to refer to those ways and means, but I should like to make a few remarks with regard to the expenditure of some of the money that is to be raised by the methods announced by the minister. The great bulk of that money is for war purposes. I am not going to have anything to say about that, but I should like to refer to that very-much smaller portion of the money which is devoted to ordinary government expenditures that go on year after year.
War is a very wasteful business. War organizations are built up under conditions of great urgency. If sometimes the necessity of subordinating every other consideration to that of speed, in order to provide against a threat to our national existence, results in waste, there may be some grounds for excuse in connection with that waste but, no such grounds can be found for lack of the
strictest care in the expenditure of money for ordinary government purposes. On the contrary, the fact that by these very proposals we are taxing people high and low, rich and poor, to a degree that we have never before contemplated; the fact that many of the citizens of our country have been or before the end of the war will be compelled to modify their standard of living very materially in order to meet our taxation demands, makes it imperative that the care which should be exercised at all times by those charged with the responsibility of spending public funds should be intensified fourfold in time of war.
In at least some departments of government I submit that this is not being done.
I am not going to range over the whole field of government expenditure, of course, and I hope that I may not give any grounds for being accused of vague and ineffective generalizations, such as those with which the leader of the opposition (Mr. Hanson) was charged,
I think quite properly, by the Minister of Finance some six weeks ago, when the first supply bill was under discussion. In fact, I shall be painfully specific. I make one submission, and one only, based upon my obesrva-tions during six or seven years in this house.
I submit that there is due; there is past due; and, in fact, there is long past due a drastic curtailment in the cost of government services here in Ottawa. I shall confine myself to still narrower limits; I shall confine myself to only a small branch of the service in Ottawa, namely, the legislation branch.
We are dealing with thousands of millions of dollars and I know I am winning the danger of creating the impression that I am one of those men with a small mind who can deal only with small matters, who cannot see^ the large items, who can see only the petty things. It may be that some hon. members will be impatient and ask: When we are dealing with a budget of hundreds of millions of dollars, why spend time in discussing a comparatively small matter? My answer is that often there is a danger that in looking at the forest one is so blinded that he cannot see the trees. These vast sums of money that are being raised and spent are, in the last analysis, made up of small items. Any attempt to bring about economies will be absolutely futile if we remain up in the clouds, if we deal only with generalities and refuse to come down to earth to discuss the details of the smaller items which inevitably make up the larger totals. As I say, I am limiting myself to a small branch of the government service, but I do not say that what I have to say about this branch is not true in a greater or lesser degree of the
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other larger departments in Ottawa. What I have to say about this branch will occupy all the time I feel free to take.
In connection with this department there is costly and unnecessary duplication and indefensible overstaffing. There is lack of businesslike organization. There exists the vicious practice of nepotism which is so destructive of morale, efficiency and cooperation. There is waste of material, waste of man-power and waste of woman-power. Some of the salaries paid are entirely out of proportion to the qualifications required and the nature of the services rendered. There is lack of supervision and direction which should correct these abuses. I shall give [DOT] a few examples of duplication.
In the basement of this building there is a post office for the House of Commons equipped with a permanent staff. Close to it in the same basement there is another post office for the other house. On this floor there is the House of Commons reading room, staffed with permanent officials and supplied with magazines and newspapers; there is a duplicate for the other house, similarly staffed and equipped. In the basement there is a stationery distribution room for the House of Commons with a full-time staff; there is a duplicate for the other house. In the basement there is an accountant's office for the House of Commons with a full-time staff; there is a duplicate for the other house. If we want to get down to really small things, we find that there is a barber shop in the basement for this house and a duplicate for the other house. These are just a few of the costly and unnecessary duplications that come to my mind. It may be argued that these duplications are unavoidable, but I submit that even if they were unavoidable the cost of the services are unnecessarily expensive and some of the services cannot be justified at all.
Let me give an example in connection with the reading room. The House of Commons reading room is a most convenient luxury, but it is used very little. It is open only while the house is in session and is not open to the public at all. It is used by only a few members. Go into the reading room of the House of Commons and you will find a much larger number of the paid staff of the house there during working hours than you will members of parliament. This is just another evidence of my charge of overstaffing. The salaries paid to the staff amount to $8,780, and the cost of the magazines, periodicals and newspapers is $3,800. This item for the other house amounts to $2,500, which gives a total for the two reading rooms of over $15,000 a year. We have a magnificent parliamentary

library with salaries paid amounting to about $55,000 a year. Can any hon. member defend the retention of the two reading rooms at a cost of $15,000 a year?
I am giving figures to be put on the record, some of which will probably be challenged. I do not guarantee that they are correct for to-day or yesterday or a month ago. It is not easy to keep these figures up to date. It may be said that such and such an officer has retired, that a certain position has not been filled, but my answer will be to turn to the estimates before the house and say that no such reductions are reflected in them.
The post offices are not under the Postmaster General (Mr. Mulock) as they ought to be; they are under the legislation branch. There has been some reduction in this particular service. About a year and a half ago protests were made about the staff of nineteen handling the mail for this house, and the staff was reduced by six. At the present time I believe there are eight permanent employees and five sessional employees, employed at a cost of between $19,000 and $20,000 a year. If these two post offices were amalgamated, put under the Postmaster General and handled in the efficient and economical way that post offices throughout the country are handled, I feel sure that this cost would be cut in two.
As I say, there is the stationery room for the House of Commons and another one for the Senate. Surely that is a stupid idea. The salary list for these two offices amounts to $11,256 a year. This is to pay a staff to handle the requisitioning, storing and distributing of stationery. The cost of stationery for the House of Commons is $35,000 a year; the same item for the Senate is $9,000, making a total, including salaries, of $55,000. This one branch needs looking into most carefully. In the stationery branch of the House of Commons there is an inventory of some $40,000, made up of articles numbering about 1,200. A large number of those articles ought not to be there at all. The waste in. stationery is simply shocking.
I am sure hon. members are familiar with the wasteful attitude of the staff of this house in connection with stationery. This may seem a small item, but it is indicative of an attitude that must be corrected. These wasteful methods would not be tolerated in private business for one day, and they should ' not be tolerated here.
A fruitful source of waste is the lack of modern, businesslike organization in the branches. I realize that as soon as you try to

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correct this you will be confronted with traditional methods and attitudes that will be most difficult to change and correct. _ The very architecture of the buildings is an obstacle, but not an insuperable one.
I am sure members have noticed that there is on the part of a great many civil servants and officials a tendency to make their own office the centre of a distinct organization, with a secretary, a stenographer, a messenger and so on. I do not want to detract from the dignity or the prestige of any civil servant or of any official, but I suggest that that dignity be consistent with modern ideas of efficiency and economy.
Again, let me be quite definite. Let me give an example. One group of the offices of this house, of which there are many-and I will take the offices with whom the members are most familiar, the offices that are closest to this house-consists of that of the Speaker, the Deputy Speaker, the Clerk, the Assistant Clerk and the Sergeant-at-Arms. The functions of these officers are closely related, and any private organization having officers whose functions were similarly related would have their offices together. I doubt very much if in any private organization they would all have separate offices, but even if they did they would be grouped together and would have a common staff. But what have we here? _
I am not suggesting for a moment that this is a condition which is only a present condition; it is a condition which my investigation into the records shows has gone on for thirty or forty years. Let us look at these offices. The staff of these five officers of the house consists or did consist last year or the year before-I do not know what they are at the present moment-of six secretaries, a stenographer, a steward and a messenger. The salary cost to the country was S22,600 a year. This does not include the sessional staff; it does not include assistance from the stenographers of the sessional staff or of the messengers of the sessional staff, who are available to these officers. These are the salaries of the staff which are paid all the year round to people whose duties are confined entirely or almost entirely to the offices of these officers of the house.
I could go on and give other examples in connection with other offices and groups of offices scattered under this roof.
I want to say just a word or two about the sessional staff of stenographers. I have only time to touch on a very few items which come to my mind. We have a staff of sessional stenographers numbering 129. That staff was reduced this year by about thirteen. There is a great lack of supervision and direction of the work of that staff. A great
many of these stenographers, as members know very well, work very hard and efficiently. Some of them do the work of three or four or five members. But I will assert without fear of contradiction that there is extreme unfairness in connection with the distribution of the work. If that work were properly and fairly distributed, we could cut out one-third of these stenographers, with a saving of thousands of dollars to the country, and with a great deal better feeling among members of the staff.
Take the messengers. I do not suggest for one moment that any efficient organization should not have a sufficient number of messengers to facilitate its work; but let me point out that while we are sitting here during the session there are employed on the messenger staff, in temporary or permanent capacities, forty-eight employees and, when the house adjourns, thirty remain on the staff all through the year. The total cost of this messenger service is 864,500 a year. Is it not a fact that either one of two things is true: Either half of these men are sitting down doing nothing but drawing their pay, or else they are engaged in work for which we have no right to ask the public to pay. I think a great many members will say that both these things are true.
I said there was nepotism. In Ontario, if one member of a family is engaged in the service of the province, no other member of that family is permitted to be engaged in the provincial service. I do not suggest for one moment that we should go to anything like that length, but I do say that nepotism is a pernicious system. It is destructive of cooperation; it is destructive of efficiency, and no officer, high or low, should be permitted to have in his office under him a son or daughter or brother or sister. But that is practised here, and it should end and end at once.
I mentioned something about salaries but I cannot take the time to deal with that at any length. When I speak of salaries I do not wish to be misunderstood. I am not one of those who object to high salaries. We have some men in the employ of the government ' who are paid what would be considered high salaries, but in my estimation those men would be cheap if they were paid twice the amount. We have members of the cabinet who, in my opinion, would be cheap if we paid twice what we are paying them. But if members will closely examine the salaries that are paid here in Ottawa and consider the qualifications required and the services rendered, they will find some very grave defects.
I have this further to say about salaries. I am making what may be considered a reckless statement but I am making it deliber-
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ately. There are in our employ under this roof men whose salaries run between $3,000 and $4,000 a year whose work, measured by the performance of similarly qualified men in private industry or commerce, or in any well-ordered municipal office in our towns, spread over the working days of the year, would not amount to two hours' work a day, and some members have said to me that I would be nearer the mark if I said one hour a day. There was a time when there were positions that were called sinecures, and we sort of took them as a necessary evil, but in these days, Mr. Speaker, sinecures should be out, and out for good.
I suggest that in this one comparatively small department of which I am speaking, $150,000 a year would be a very, very conservative estimate of what could be saved if we exercised the same care in the supervision of the work of this branch that any member would exercise in his own private business.
I think the members will recognize that it is not a pleasant task that I have undertaken this afternoon. I do not like making this kind of speech. I am not fond of making speeches at all. I think this is the second speech I have made in six years, but I know from my conversation with a good many members that they feel just as keenly about this as I do. My practice has been, whenever I saw what I thought were abuses, not to air them on the floor, but first to go to the minister concerned, or preferably to the officer or official concerned, and in that practice I have had considerable success. I have followed the same, reasonable, decent procedure for the last two years in connection with this matter, with indifferent success. I am now bringing it to the attention of the house because I want the support of hon. members who feel the way I do; I want the support of hon. members who, perhaps, have not looked into these things as they might, in order to bring about a state of feeling whereby this blot on our government service can be corrected. I am not making an attack on the government, or, particularly, on this parliament.


Richard Burpee Hanson: It is on the system.


George Alexander McLean: As the leader of the opposition (Mr. Hanson) says, it is on the system which has been going on as long as I can find in the records. It is the system I want to see changed. This is not an attack on the administration. Certainly the last thing I would have in mind would be to criticize the Minister of Finance. There are things that should be changed, and to do so will require the support of hon. members 
of all parties. I must say-and I do so in all kindness to my friends of the opposition, from whom I have received nothing but kindness, that the indifference with which they have viewed what has been going on, as their leader said the other day, under their very noses-though he was indefinite-fills me with amazement.
Do not misunderstand me. I do not say that it is not the duty of a government supporter to bring these matters to light. It is. But surely it is a duty of the opposition. What is the opposition for? They know these things have been going on. They were going on when my hon. friends opposite were in power. Some hon. members now in opposition filled cabinet positions, and one, Mr. Speaker, occupied the honourable position which you hold. I have waited for years; I have looked at members of the official opposition, business men who know what efficiency means in business and understand the necessity of it, some of them have sat in this house continuously for twenty years or more, and never once have I heard any one of them attack this waste and these abuses which have been going on for years and years.
I am a great believer in the system of a government and an opposition. But the successful working of that system presupposes an industrious and alert opposition. We have heard a great deal about complacency, lack of leadership. I think we have had complacency deep and slumberous for years, complacency on the part of the opposition in refusing to say a word about these abuses.
I do not want to say anything unkind. I know that the leader of the opposition is filling a difficult position. Perhaps it is rather unfortunate that he does not happen to be the gentleman who, if and when his party comes into power, will place men in cabinet positions, because that would give him a little more disciplinary power; he would be able to issue orders to his followers and put them to work at this, that and the other task which he knows very well should be done and is not being done.
As for my hon. friends further to the left, I have heard them on one or two occasions single out some salary of $15,000 or $20,000 or $30,000 for a very ineffective attack, without giving grounds for it. But we have heard nothing from them on this matter, perhaps because of that magic system by which they are able to pull money out of the blue like rabbits out of a hat; apparently it does not matter much to them what is spent. But my hon. friends of the official opposition do not hold these views; they have not been

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bewitched by the oratory of our hon. friends to the far left. Like myself, they realize that when the government imposes taxation, in the last resort the money is paid for by the sweat of the brow of people high and low throughout the country, or else out of savings which have been earned by the sweat of their brow and have been accumulated by habits of frugality and thrift.
My only motive in speaking to my opposition friends is that I want their support. I want the support of all hon. members, and I believe that nobody will be more pleased to have it than the man who to-day occupies the position of Minister of Finance. I feel the more free to speak as I have done because I have the utmost confidence that in the Minister of Finance we have a man who feels keenly about these matters, perhaps more keenly than any other man in the house, and I do not think for one moment that he will resent the criticisms and suggestions I have made this afternoon. Probably no man in many years has risen so rapidly as he has in the estimation of the people as a man of courage, a man who has his feet on the ground and who is doing a wonderful job in the Department of Finance; and it is in order to help him in the good work he is doing that I am bringing these matters before the house.
I do not want it to be supposed that I am making an attack on the civil service. I am not. I am simply trying to remove what they know much better than I do is an impediment to them in their progress to the highest and best in the profession to which they have given their lives. I want to pay tribute to our civil service. I am never done telling service clubs and others whom I address that the civil service of Canada is second to none. I know the Minister of Finance and other ministers have men of the very highest ability and devotion to duty in their departments. Many of them are working long hours and are not limiting themselves to their ordinary duties, but are giving themselves unstintedly to war work. We have a civil service of which we may be proud. It is no reflection on and no criticism of them that we remove the deadwood that is clogging their progress and sapping the strength of the organization to which they belong. "Dead* wood" is the word. You know the effect of deadwood on an otherwise healthy tree. If some tree like an elm has a branch which dies, it may remain for many years and it does not hurt the tree a bit. But let a branch of a hard maple die; in a very short time it becomes dozy and forms a channel through which rain and frost and heat and insects
and fungi enter the trunk, the heart of that tree; rot sets in at the heart, and the tree becomes weakened and dies. But the careful husbandman, as soon as that branch dies, will cut it off clean and close to the trunk, so that the healing processes of the inner bark will very quickly spread a living layer of clean, fresh wood over that wound, until hardly a scar is left. That is all I am asking to be done with the civil service.
I was discussing a very small branch of the service, namely the legislation branch; but I am not suggesting for a minute that the conditions I have described do not apply to other and much larger departments, such as public works, agriculture, the post office, mines and resources, national revenue, the Department of the Secretary of State and so on, with their hundreds of offices and their thousands upon thousands of employees. I am not going to make any categorical statements regarding them, because I have not here any definite information to substantiate anything I may say. But if we were to go through these departments and examine them as we examined this one, I doubt whether any hon. member would be so optimistic as to think that the conditions I have described here do not obtain in greater or lesser degree throughout these departments.
Now is the time when we ought to correct this situation. While we were paying millions of dollars in unemployment money, it might have been said that the time was not opportune to turn people out of their jobs; but to-day we are building up organizations with thousands of employees, and if there is overstaffing and waste of man-power and woman-power, the natural thing to do is to work these people into these other organizations that are being built up temporarily. Now is the psychological time to do so. As I have said, these things are hard to correct, but I am quite sure that the civil service generally is not of a state of mind different from that of the rest of the people, and by taking steps to bring about this reform now I am sure we would find them responsive and ready to give such cooperation as would be impossible at any other time.
My time is up. I was going to make some suggestions as to how we ought to set about correcting the situation. Corrected it ought to be, and1 corrected without delay. My time will not permit me to make these suggestions, but I will say this. I hope no one thinks I would suggest something that was suggested some years ago, that in order to cut down overstaffing we should employ another large highly paid staff of experts, civil servants, to go through these departments and tell us what
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ought to be done. I throw out this hint, that if there are not among the private members of the house men of business experience, men with a sense of responsibility to the taxpayers in their ridings, men with ability who could be of assistance in this work, then our people have picked the wrong persons to represent them as members of parliament.
Mr. ANGUS MaeINNIS (Vancouver East): We have all listened with interest to the hon. member for Simcoe East (Mr. McLean). He spoke about small things, but in the aggregate they are not unimportant. I do not suppose that any member of this house, particularly if he comes here with a background similar to mine and maybe also that of the hon. member, being brought up in the hard way, taught to turn a copper over two or three times before we decided to spend it, will fail to appreciate what the hon. member has said. Personally I hate to throw away a sheet of paper unless both sides of it have been used. The condition to which the hon. member has referred can be rectified, but it can be rectified only if members are prepared to allow the administration to undertake the work without bringing pressure to bear when some individual is interfered with. This is the first thing that has to be recognized, and in the last analysis improvement in the matters will depend upon the members of the house. The situation here is a tradition that has developed out of the beginnings of our parliamentary institutions, when parliament was considered to be the best club in the country, a place where gentlemen met to talk over the affairs of the nation and not to do anything much in particular, with a staff of servants to wait on them. That day is past. Parliament to-day is a huge administrative establishment, and it should be run on that basis.
In saying a few words on the budget, I wish first, in common with members who have already spoken, to congratulate the Minister of Finance (Mr. Usley) upon his performance of a very difficult task. I hope the minister will not take any criticism I make as indicating a lack of appreciation of the time, the thought or the study he has put into the preparation of the budget. I hope he will not take any criticism I make as a doubting of his sincerity in wishing to deal equitably with all concerned.
This is of necessity a war-time budget. The minister was dealing with Canadian conditions as affected by our war activities. The economic consequences of the war are more keenly realized now than they were in 1940 or 1941. The minister had, therefore, two main tasks before him in preparing his budget: first, to find money to meet the costs of the war, and,

second, to prevent prices from rising by taking money out of the pockets of consumers about as fast as it gets there. Whether we like it or not, this last point has to be recognized, and the importance of it can be realized from the answer to a question in the house on June 17. The question was asked by the hon. member for Antigonish-Guysborough (Mr. Kirk) as to what amount of money was in circulation in Canada as at March 31 for each of the years from 1929 to 1942, both inclusive, and what was the amount of the same, per capita, during each of the above-mentioned periods. This can be found at page 3407 of Hansard. I will not repeat all the figures given. I will give them for two or three years. At March 31, 1929, the amount of money in circulation was a little over $222,000,000, and the per capita amount of circulating media in the hands of the public was $22.21. At the depth of the depression, March 31, 1932, the total amount of circulating media in the hands of the public was a little over $176,000,000, and the per capita amount was $16.77. At March 31, 1939, the total amount of circulating media in the hands of the public was almost $236,000,000, and the per capita amount was $20.85. This was the last pre-war month given in the statement. On March 31, 1942, the total amount of circulating media in the hands of the public was almost $523,000,000, with a per capita circulation of $45.79. During the depression there is no doubt there was a shortage of money in circulation as compared with the goods available. I shall not go into the reasons for that now; they are obvious. The money that has now come into circulation came in because of increased production. War production, that is the production of war goods, is increasing, and the production of consumers' goods is decreasing. In view of this condition, it is the height of folly to suggest that the production of consumers' goods can be increased so as to raise the over-all living standards of the people during the war. Later I will come to a point which I think should be made in this connection.
I believe, however, there is a third task which the minister did not undertake. Possibly it does not come altogether within his department; it may come under a number of departments, but the financial planning for it would have to be done by the Department of Finance. This third task would be planning to utilize the services of everyone in essential production of either war or ordinary consumers' goods, with only luxury production excluded.
There are three points in the budget which I wish to discuss briefly. The first has to do

The Budget-Mr. Maclnnis
with the effect of the increase in the income tax on the lower and middle incomes. This was mentioned by the hon. member for Rose-town-Biggar (Mr. Coldwell) when he spoke on Monday. He pointed out the enormous increase in these taxes over last year, and that the percentage of increase decreases as the .income goes up. I have tables showing how the tax affects an income of $2,400 in a family consisting of a man and wife and two children, also how it affects a married couple with children numbering one to eight. For a married man with a wife and two children and an income of $2,400, the tax as proposed in the present budget, the normal tax, that is at 7 per cent, would be $168, less allowance for two dependents at $56, making $112. The graduated tax on an income of $2,400 less $660 would leave $1,740 to be taxed. The tax on that would be:
First $500 at 30 per cent	 $150 00
Second $500 at 33 per cent	 165 00
Balance $740 at 37 per cent		273 80

Less allowance for the wife.. $150 Allowance for 2 dependents.. 160

 310 00

To which would be added $112 of defence tax, making total tax $390.80 of which the compulsory saving would amount to $195.40, or half the total tax.
The same tax applied with the same deductions as we had last year would make the total tax only $232, with 'compulsory saving of $116.
What I want to point out is that even if the exemptions for dependents had been reduced to $300 in the present budget, a family in this income range would pay $95 more than was paid last year.
If we take an income of $4,000-I am not making any objection to it as it affects single persons or married persons without children or even married persons with one dependent- it will be noted that as the number of children increases, the per capita residue for each dependent becomes less; so that when we reach persons with five children the residue is only $453.60 each, and when we reach eight children it is only $349.96 each.
These tables were prepared very carefully, and if the house does not object I should like to put them on Hansard:



INCOME $4,000

[Stage Direction]
1941	Tax	Residue	Per Capita Residue	Residue less $1,200 allowance for married couple	Per Capita residue for depend- ents$ cts.	S cts.	$ cts.	$ cts.	$ cts.Single	875 00	3,125 00	3,125 00	Married	615 00	3,385 00	1,692 50	Married and 1 dependent	501 00	3,499 00	1,166 33	Married and 2 dependents	402 00	3,598 00	899 50	Married and 3 dependents	308 00	3,692 00	738 40	Married and 4 dependents	219 00	3,781 00	630 17	Married and 5 dependents	145 00	3,855 00	550 70	Married and 6 dependents	71 00	3,929 00	491 12	Married and 7 dependents	42 00	3,958 00	429 77	Married and 8 dependents	28 00	3,972 00	397 20	Com-	1942	Tax	pulsory	Total	Saving	$ cts.	S cts.	$ cts.	Single	1,274 40	320 00	1,594 40	2,505 60	2,505 60	Married	964 40	400 00	1,364 40	2,635 60	1,317 80	Married and 1 dependent	816 40	440 00	1,256 40	2,743 60	921 SO	1,543 60	1,543 60Married and 2 dependents	668 40	480 00	1,148 40	2,851 60	712 90	1,651 60	825 80Married and 3 dependents	520 40	520 00	1,040 40	2,959 00	591 92	1.759 60	586 53Married and 4 dependents	460 20	466 20	932 40	3,007 60	511 27	1,867 60	466 90Married and 5 dependents	412 20	412 20	824 40	3,175 60	453 66	1,975 60	395 12Married and 6 dependents	358 20	358 20	716 40	3,283 00	410 45	2,083 60	347 27Married and 7 dependents	304 20	304 20	608 40	3,391 60	376 84	2,191 60	313 09Married and 8 dependents	250 20	250 20	500 40	3,499 60	349 96	2,299 60	287 58
What I want to point out is that we should not penalize people for raising a family. Walter Nash, in an address made in Ottawa recently, told us of the mothers' allowances
act in New Zealand, which has been in effect I think since the Labour party came into office, although I am not sure of that, and which provides that if the family income falls below
The Budget-Mr. Maclnnis
[Stage Direction]
a certain amount, the state pays directly to the mother a stated amount per child. Mr. Nash said that because of that provision the birth rate in New Zealand had increased by some four points since the time the legislation came into effect.
As I said before, I am not complaining about the effect of the income tax on single persons or married persons without children, or even married persons with one child, but we should be careful not to allow the income tax to reduce family incomes unduly. I have heard statements in the house on occasions that corporations might have to draw on their capital. If the family income is unduly reduced, the family also may be compelled to draw on its capital, and its capital is the health of the family. I should1 like to impress that point upon the minister. There is also the fact that it costs more to keep children at certain ages, particularly when they are fourteen, fifteen and sixteen, when they are going to high school or perhaps to university. Sometimes it becomes very difficult to keep children at school because the parents cannot give them any spending money, which I think members will agree is not a good thing.
There is something else in the budget I should like to bring to the attention of the house. Section 13 of the Income War Tax Act provides for the taxation of the undistributed profits of corporations in the hands of the shareholders or set aside for the shareholders. I do not know whether this section of the act is being applied; my impression is that it is not.
James Lorimer Ilsley: Not very much. I can remember one case in which it was applied, but that is about all.


Mr. MacINNIS:: In any event I believe the minister should take into consideration the freezing of these surpluses as of August 31, 1939, or some other date, and that all increases since that time be taxed as personal income.
I wish to commend the minister for having introduced the principle of deducting the income tax at the source. I believe this will make it much easier for persons with small incomes, who because of necessity live very close to the limit of their incomes, so that at the end of the year there is very little, if anything, set aside to take care of the payment of a lump sum. I would suggest also that some method be found to provide that too many deductions are not made from the pay envelope at the same time. Because of unemployment insurance contributions and other contributions, a great many deductions are made from the pay envelopes of the workers these days. Those who recall the trouble at Arvida last

year will remember that one cause of that trouble was the deductions which were made on a certain date, without the employees having been notified that such deductions were to be made.
In this regard I would suggest to the minister that the pressure and coercion in connection with the buying of war savings certificates should be discontinued, particularly in the case of persons receiving low incomes. In this connection I have in my hand letters which passed between an employer and an employee, which reveal a situation that in my opinion is nothing less than scandalous. We have heard in this house some strong opposition to the conscription of wealth. I am going to read something that will show conscription of wealth with a vengeance; compulsory conscription of wealth, as applied to a wage-earner. First, I have a letter signed by the general manager of the Canadian Western Lumber Company, Limited, Fraser Mills, British Columbia. I imagine this was a form letter sent to all the employees of that company, since the name of the employee and his clock number are typed in, while the rest of the letter is a carbon copy. I am not going to read the1 whole letter; this is the important paragraph:
The minister-
That is, the Minister of Finance.
-has issued instructions to all employers that they must contact each employee personally, and, as far as possible insist on their subscribing to this scheme, but I am quite sure you do not want any undue pressure made in order to have you join in a voluntary way.
Can anyone harmonize "undue pressure" or pressure of any kind with voluntary action? Well, one employee wrote back to say that he was not buying war savings certificates, and later on I will give the house his reason. He was sent another letter, and he replied once more saying that he was not going to buy them. Finally, on April 25, 1942, this letter was addressed to the employee, Mr. T. Hebert, clock No. 1698.
Fraser Mills, B.C.
Dear Sir,
I have for acknowledgment your letter of April 20 in further reference to war savings certificates.
For your information, you are the only employee of this company who is not now buying these certificates.
Seemingly, the "undue pressure" for voluntary participation worked satisfactorily.
We have now received instructions from the president of the company that owing to the Minister of Finance having made it abundantly clear that it is the duty of employers to see that all employees subscribe, we are obliged to see that these instructions are carried out.

The Budget-Mr. Maclnnis
Accordingly, this will be your final chance to immediately commence subscribing to the war savings scheme, and if you are not prepared to do so, then we have no alternative but to ask you to resign from our employment.
Very truly yours,
Canadian Western Lumber Company.
That is signed by James R. Murray, assistant manager. I will not read the whole of the letter written by the employee in reply, but it included these words:
The above-mentioned received to-day. In reply I beg to inform you that I intend to carry on as I have been doing, by giving financial assistance in the war efforts as I see fit best. . . .
But as for me to buy war savings certificates, not for a long time to come, because it would be capitalizing on the lives of the boys in the army, including my own boy. . . .
From the tone of your letter above-mentioned, it sounds to me as if Hitler had dictated the letter, at least it's tactics that was used by his storm troopers for nazi propaganda, and I always understood that the war was for the purpose of destroying such principle of interference in the private lives of the citizens of the country. Apparently it is being applied in this country.
Unless I hear from you before five p.m., April 30, 1942, I will punch the clock for the last time, after seventeen years, four months and five days of continuous service. . . .
This man has the courage of his convictions, for he adds:
Please have my pay cheque ready for me at that time.
I wrote this man asking for particulars in regard to his economic condition, his family affairs and so on. He wrote me a fairly complete reply, from which I will read just one paragraph:
In case of the possibility of my reinstatement to my former position, I wish to make this point clear for you in case it might come up in the discussions. As I left the job for the principle of freedom of action, I will go back on the same job when the imposition in dispute is lifted, as I have handled that job for seventeen years, four months and five days. I still can do it again. . . .
You can coerce people who are not much good, people without spirit; but it is the man who will not follow the crowd, the man with some spirit, who has to take the rap. I think coercion in this connection should stop.
I mentioned conscription of wealth, and I should like to say a word or two about that. Until this budget came down, evidently no one knew what conscription of wealth was, but the moment it came down they recognized what they had not known immediately. This budget is not conscription of wealth as we understand that term. I do not think I can do better than to read to the house some paragraphs from a speech made by Sir Richard Acland, an outstanding
Liberal in the British House of Commons. Speaking on the address in reply to the speech from the throne on November 12, 1941, he said:
We are to have a debate on production. I wonder whether in that debate anybody will mention the root cause of the difficulty. The root cause does not lie in ministerial incompetence, or in absenteeism, or in managerial inefficiency, or in the overlapping of departments, or anything of that kind. It lies in the fact that you are trying to get the maximum production of the whole, through the instrumentality of men who must have one eye resting on the post-war capital value of the particular part which they control. I want to keep a sense of proportion. I am not for one moment supporting those exaggerated statements which hold up every shareholder as being a conscious and deliberate saboteur of the war effort for his own individual cash benefit. Of course not. But there is an association of ideas in the minds of those who take for granted that the old system will go on after the war which leads to a conflict of interest altogether too great to be tolerated throughout a long war. It may not matter if there is to be a collapse of Germany in twelve months, but it does matter in a long war.
Let hon. members think of these points. It is in our interest to postpone every postponable repair; it is in the interests of the owners to get every repair done and have it charged up to the excess profits tax. It is in our interest to work the good seams in the coal mines now; it is in the owners' interests to postpone work on the good seams until after the war. It is in our interest to share trade secrets; it is in the owners' interests to preserve them. It is in our interest to concentrate output in every factory on one or few products; it is in their interests to keep the factory flexible by making as many different products as possible. It is in our interest that skilled men should spend part of their time teaching their skill to unskilled men; it is in the owners' interests that skilled men should be kept on direct production all the time. It is in our interest to save paper by cutting down advertising; it is in their interests to spend money which belongs to us-because otherwise it would go in excess profits tax-in advertising things like aeroplane parts.
That is what we consider as conscription of wealth. The government of this country should direct, for the purpose of winning the war, the resources of the country without interference from private owners.
About a week ago when I was absent from the house-I think I have lost two days since the session began, and that was one of them- mention was made of the Japanese evacuation from the coastal area. The only reason why I mention this matter now is that I would have spoken at that time had I been here. Possibly before the session ends, although I am not hoping for it, I may have occasion to differ from and disagree with the Minister of Labour (Mr. Mitchell). Therefore I want to say now that I think his department has handled a most difficult job in an efficient

The Budget-Mr. Maclnnis

manner. The removal of the Japanese is one of the biggest war jobs that any department has had to handle since the war began. We uprooted and removed a population of nearly 25,000 people. Someone referred to it in a letter to me as the "expulsion of the Acadians". The removal of these people began in a strained atmosphere with a population that was almost hysterical, sniping at those carrying out the operation.
The point that should be remembered is that a great many of these people are Canadian citizens no matter what the colour of their skins may be, and they are entitled to the treatment that would be accorded to a Canadian citizen whose skin is white. We should also keep in mind that when the war is over, we shall have to continue to live with these people, as we shall have to continue to live with our enemy nations unless we are going to be continually at war. This is not a British Columbia problem alone. The people of the other provinces should have recognized this as a national problem and been more cooperative. They are coming somewhat .to their senses, and I hope the matter will be adjusted from now on.
I should like to draw attention to the unreasonable lengths the Canadian people have gone in their treatment of Canadian-born persons of Japanese origin. I have in my hand copies of two letters that were given to me by a young Canadian of Japanese origin who had made application for admission to the bar of Nova Scotia, which application was refused. I should like to put these two letters on the record. As I say, he was refused admission to the bar, and then he tried to get into the Canadian army. The military authorities would not tell him either that he was accepted or that they would not take him. His application has been in for months, and I do not know yet whether he has been informed as to acceptance or rejection.


Mr. MacNICOL:: Is he Canadian-born?
Mr. MaeINNIS: Canadian-born. The first letter is signed by Vincent C. MacDonald, dean of the faculty of law, Dalhousie university, and it reads:
To whom it may concern:
This is to certify that according to our records Mr. George T. Tamaki was born in New Westminster, B.C., and was awarded the degree of Bachelor of Arts with honours in economics and political science by the university of British Columbia in 1938. Mr. Tamaki graduated from this university with the degree of Bachelor of Law's in 1941. He led the classes of his first year and also of his third year and in his third year was aw'arded the Sir Joseph Chisholm essay prize.
(Mr. Maclnnis.]
I regard Mr. Tamaki as a very able and industrious student of wide interests, and as a young man of excellent character.
Vincent C. MacDonald,
Dean.
That letter is dated April 10, 1942. The next letter which bears the same date, is from the president of the Nova Scotia barristers' society, and reads:
George Tamaki, Esquire,
Halifax, Nova Scotia.
Dear Mr. Tamaki:
With reference to your application for admission to the bar of Nova Scotia, I wish to advise you that the matter has been very carefully considered at three different meetings of the council of the Nova Scotia barristers' society. Finally, a decision was arrived at yesterday. This decision was that it would be unwise for you to be presented to the court for admission at the present time. And I was, as the one who should present you to the bar of the court, instructed accordingly.
I may say that no member of the council had anything to say against you personally. It is a matter of deep regret that the international situation is such that it should be deemed advisable to reach the decision arrived at by the council.
You will be free to make application again w'hen conditions have changed.
Wh'at has the international situation to do with a loyal Canadian citizen born and educated in Canada-that is, if he is dealing with reasonable people, people who have the least spark of British traditions in their makeup?
I see, Mr. Speaker, that my time is up, and I will close by joining in the sentiment expressed by the leader of this group yesterday in speaking on the anniversary of confederation. The hon. member for Rosetown-Biggar asked the government to take the house and the members into its confidence and let us know, not what it may do, but what its actual plans are. When we know these plans I am satisfied that the members of this house will be willing to cooperate as, in fact, we have cooperated with the government ever since the war began.


Mr. ROY:: Mr. Speaker,-


Mr. ROWE:: Mr. Speaker,-
Mr. LIGUORI LACOMBE (Laval-Two-
Mountains) (Translation): Mr. Speaker, I rise to a point of order. Under section 35 of the standing orders of the house, I request that you give the floor to the hon. member for Gaspe who has just risen for the fourth time to address the house.


Richard Burpee Hanson: Mr. Speaker, on the point of order, does your honour not think...

The Budget-Mr. Rowe


The ACTING SPEAKER (Mr. Fournier, Hull):: I will call on his honour the Speaker to rule on the point of order.


Mr. LACOMBE (Translation):: Mr. Speaker, may I ask that you give a decision on the point of order raised?


@Acting Speaker: (Translation): If I may be permitted to do so, I shall ask the Speaker to take the chair and render his decision.
And Mr. Speaker having taken the chair:


Mr. SPEAKER:: I am informed that there is some misunderstanding with regard to who has the floor. The Acting Speaker has informed me that he saw the hon. member for Dufferin-Simcoe (Mr. Rowe), and therefore, I would ask him to proceed.


William Earl Rowe: Mr. Speaker, the Minister of Finance, (Mr. Ilsley) has presented to parliament a budget more extensive in scope than any other budget that has ever been presented to this house. This is necessitated by the grave and difficult times through which we are passing. I am sure it will bring a realization to the people of this dominion of the magnitude of the task that lies ahead and the gravity of the crisis in which we find ourselves. Reference was made to that by the Prime Minister (Mr. Mackenzie King), and1 indeed every day we receive news of ever-increasing gravity which should make us all ready to shoulder the burdens and sacrifices and obligations involved in this budget. But I do feel, Mr. Speaker, that as the people of Canada accept the tremendous burdens which this budget imposes, they should have full confidence that the vast machinery of government which we are now creating will be our servant instead of our master; for otherwise the morale necessary to achieve victory will not be sustained.
In that event I am sure we can make a total war effort in this country and meet all the obligations which this budget imposes, though sometimes it seems that it will take all the vast resources of this dominion, of the factory, of the farm and every other productive facility, to meet the great challenge that is now ours. It is true that the effort we shall make will not actually consume all this tremendous store of wealth, but this budget and the other necessary measures that will be brought down to provide the money required will encumber the vast resources of this country and place an open-end mortgage upon them, the extent of which can scarcely be appreciated yet, and the maturity of which is indeed unknown. It is not a mortgage
44561-245 J
on any particular government, but a mortgage on the Canadian people, that we must assume. A gigantic task lies before us.
Before dealing briefly with the ways and means proposed in this budget for raising the amount of money required, I feel we must consider the purposes for which we are raising the money, and that is the maintenance of the productive capacity of this dominion. In that connection I wish to refer to one particular phase of production which I think is in jeopardy at the present time, namely, our agricultural production. It is not in any spirit of pleading for a particular class of people, or of emphasizing equality of service and sacrifice, that I say that the farmer in this country has been the one who has been more or less forgotten. It is most essential, viewing the broad picture, that we have a planned economy and that we maintain our productive capacity as a vital necessity for the war.
Some time ago, Mr. Speaker, I advocated in this house that we should establish a food production committee for farm products. It is true that we have many special committees at work now, but I have long felt that we should establish a food production committee, representative of producers from all the different parts of this dominion and of consumers as well, to meet the challenge that is flung to-day at the great basic industry of agriculture. I would again urge upon the government that even at this late day they give careful consideration to the establishment of such a food production committee. No longer can we leave the agricultural economy of this dominion in a haphazard condition. It must be organized for the future and planned now, if we are to meet the requirements of the war and what will follow the war.
I do not believe that we shall cope successfully with this important aspect of our war effort by the hand-to-mouth policy which has been followed thus far. It seems to be a month-to-month policy to face a year-to-year war obligation. We have our own troops to feed; we shall have to send much more food to Britain as the years pass. We have been told to-day that we are facing a long war, and there is not one of us who is now so optimistic as to believe that victory can be won in a short time. We must at once do some long-range planning. We must organize the agricultural economy of this dominion on a basis which will create more certainty and less uncertainty for the producer. If I were to apply the term "equality of sacrifice" to any one class, as working harder than another, I know there is not an hon. member within sound of my voice who knows anything about the farm-
The Budget-Mr. Rowe

ing communities of this dominion, whether i Quebec or Ontario or the west, but will agrf that no class of our people is struggling hardt and enduring more difficulty, so far as securin help is concerned, than the farmers. The>
have to compete against the higher pricer which are offered for labour in manufacturing plants-all essential, it is true, to our effort But I do feel that the government must give careful consideration to the position in which the farmer finds himself to-day. I know many farmers who are paying at least twice as much for hired help as they paid prior to the war.
It is true that the prices of some of the commodities the farmers are selling have risen to some extent. I am not pleading that the farmer should make a lot of money out of the war. Neither is he. He is waiting, he is willing, he is desirous of giving his war service at home, as his boys are giving them overseas. He is not asking for a large profit, but merely for the assurance of some security, for the opportunity-which I submit he has not now -to make both ends meet. It is all very well to say that he should carry on with production from the point of view of patriotism and loyalty. There is not a more loyal and patriotic class of people than those who inhabit the open spaces of this country, and who by the nature of their toil have the time and opportunity to meditate upon the issues involved.
Very little consideration has been given to the position in which the farmers found themselves when this war began. We have seen no sign of a plan to rehabilitate the farmer after the period of low prices so that the needed production may be had when prices are somewhat higher. The farmer has been the victim of periods of deflation, and he is now to be the martyr of a period of inflation. In view of the fact that ceiling prices have been placed on the products he has to sell, without any ceiling on the cost of the labour he has to buy, is it any wonder he feels he is being asked to produce more for less?	.
Some may say that the ceiling is placed higher than the prices of some years ago. To my mind that is only an empty gesture, and is so understood by practically every farmer. He pays one hundred per cent more for his labour; he finds a ceiling price is put on the products he has for sale-and he is singled out in that respect. Not only that, but the ceiling is going lower, and promises to go yet lower and lower, as is the case at the present time with the price of beef.
I am not pleading the cause of the individual farmer who, as probably some have done, put $5,000 into a number of feeder cattle and is now likely to take a real trimming, and

m robably is in a difficult financial position n ith the bank. I say I am not pleading for * idividual cases of this kind, although I know if1 ome who are going to lose half the money they jl iwn, because the farmer to a certain extent a s a gambler. He is a gambler on the weather, if he buys five or six carloads of cattle, and has some pasture to put them on, he hopes that the selling price of his commodity will be more than the price he pays for it. But I am pleading for consideration by the government of the effect on our whole war effort, in respect of our production capacity; because when you fix a ceiling price on beef, and then lower it a cent in July, another cent in August, and a cent and a half in September, someone might figure out for me how a man who bought stocker cattle in March and April and May is going to make any money when he has to sell them in the fall.
I do not know who is advising the government. I know that the wartime prices and trade board, having fixed a ceiling, is reducing it month by month, making it possible for the government to place a ceiling and invite the packers to place the floor. There is no floor placed by the government on the price the farmer will take. I understand that the government contract price for beef to the government has been about 214 cents, but we were warned that after July 13 it will not be more than 191 cents dressed; then it will be reduced to 18J cents; then to 17i cents; then to 161 cents. I know it has been said by no less an authority than the Minister of Finance that there is no fixed price on cattle; there is only a fixed price on beef. But the situation is more ridiculous than that. The government fixes a ceiling for the beef and the packer fixes a floor for the cattle, and there is no reason why he has to pay more than 7 cents, if he can buy them. When they are butchered eventually they will be sold I assume, at 3i cents less than 194.


Mr. GARDINER:: Why say 7 cents when he did pay 13?


William Earl Rowe: Because you have done nothing to prevent him from paying 7 cents if he can buy them at 7 cents. You have made it impossible for him to pay 13 cents, and you have so ordered things now that he must reduce the price to the farmer at least a couple of cents, and if he wants to reduce it more he can do so.
I say again that I am not pleading that the farmer should make more money. I am not even urging in this? instance equality of sacrifice, though I think it would be a fair plea to make. I realize that the situation is grave. I realize what the government are endeavouring to do, but I do not agree with

The Budget-Mr. Rowe
the methods they are employing. I say that they are unfair to the farmer and equally prejudicial to the war effort of this dominion, because no person can tell me-dozens have already told me the reverse-that this will improve agricultural production.


Mr. EVANS:: On what basis would the hon. member set a floor on the price of cattle? '


William Earl Rowe: I would say it was just as fair to set a floor on what the farmer has to sell as to set a ceiling on what the packer has to buy.


An hon. MEMBER:: How would you place
a ceiling on beef?


William Earl Rowe: The ceiling is now set, and the floor could be set as well. It will simply mean that, as regards the man who bought his cattle last spring, he will not buy any next spring, and he will sell cattle that are half-fattened now and take a loss of one cent a pound rather than endure a loss of two and a half cents or more. There will be thousands of pounds of beef that would otherwise have been produced this summer that will not be produced. I am not pleading for a reckless rise in prices. It is true we had a rise in prices in the last great war; but I am wondering, from the point of view of the war effort, whether the setting of a ceiling will help our war production when there will be thousands of starving people in Europe, when our troops will be wanting foodstuffs, and when our own people are doing without beef now in certain parts of the country. Imagine the pass we have come to when our own people are looking for beef and cannot buy it. That is the climax to the lopsided development of agriculture which we have had in this country for a number of years, and now we have this fantastic method that will definitely result in lower production. The people will be discouraged, and why not? The farmers are faced with a great many uncertainties at any time, but this uncertainty is the greatest with which any industry has had to cope. There is not an industry in Canada that has been told, "Your product will go down a cent a pound one month, a cent a pound the next month, and will keep on going down until next winter". High prices were maintained when the farmer was buying; low prices are imposed when he has to sell. The government should give careful consideration to these novel methods in connection with its agricultural policy, instead of looking for advice from men who are not practically engaged in agriculture.
We have eight boards, We have a book full of them. There is not one single practical farmer on any one of these boards;
that is, any farmer who is actually dependent upon agriculture for his living. I am urging upon the government a policy that will meet this situation squarely, because we might as well face the facts, and the outstanding fact is that we are likely to be in this war for a long time. There are thousands of acres of land now lying idle in my own county and thousands lying idle in counties all around. There will be thousands of cattle turned on the market unless the government establishes a floor. The floor will be placed by the buyer at a point away lower than farmer's cost. What is being done now will put a damper on cattle feeding right across the dominion, and not only as regards grass-fed cattle. There will be fewer cattle fed next winter. The same principle applies all the way down the line.
I realize that the purpose is to avoid inflation. Someone will say that we must not allow runaway prices to control our commodities, because that will be the beginning of inflation. Again I urge the government to reconsider the whole matter and to take stock of the farmer's position. His farm was mortgaged when the war began, and he is now paying double and, in some instances, three times the price for his help which he was paying at that time. I know one farmer who is paying $1,000 to his man besides providing a house, a cow and a garden. He knows this is a high price; he knows it is two and a half times what he paid the man before, but he had no alternative except closing his gate. He says, "I cannot make money, but with my boys overseas I feel that I owe it to my country to keep the farm functioning and I cannot do it myself".
Members of this house are receiving letters from men working from four o'clock in the morning until twelve at night, struggling with large dairy herds, ploughing hard and difficult summerfallows, and still they are behind. Indeed, many of them will be unable to get their wheat in because of a shortage of labour. If these men want to continue operating, they have to pay wages commensurate with the competitive prices offered by industry. I have made the statement before, and I repeat it now, that even with the high prices that farmers are now paying for labour, they are not as high as industry can and does pay under present union wage scales. There is not, with present prices, a single farm commodity that would give the farmer a higher return than would represent a reasonable profit on his investment, maintaining the wage scale he has to pay in competition with the market, interest on his investment and a reasonable wage for himself and his wife.
The Budget-Mr. Rowe

The reason for this novel type of policy is that we have not one practical farmer representing agriculture on any of the boards we have in Canada, either agriculture or any other. I maintain that the industry which we have talked about as the backbone of the dominion, the industry that is now depended upon to produce commodities that are, we are told, as important to the country as shells and guns, should be better represented. Hon. gentlemen told the farmers in their campaign of the importance of agriculture to the dominion and urged them to keep on producing. Well, if the farmer belongs to such an important class of citizens, it is passing strange that we cannot find among the hundreds of thousands of them one farmer who is fit, if not to represent some other important branch of our natural resources, at least his own industry. The steel producers have representatives on boards; the pulpwood people have their representatives; the timber men have their representatives, and so have the merchandisers, the drygoods men and the Canada Packers. It is high time that the farmer in Canada got a square deal, and a square deal not only in a period of crisis but normally.


Charles Robert Evans: Is not Mr. Taggart a representative of agriculture?


William Earl Rowe: He is an ex-minister of agriculture, but he is not dependent on farming for his living-no more dependent upon it than the present Minister of Agriculture of Canada.


Charles Robert Evans: He operates a big farm, though.


William Earl Rowe: Yes, but he has not been close to farmer problems in the last many years, as other men have been who have been dependent upon farming and upon farming alone.


James Lorimer Ilsley: There are many farmers
on advisory committees. I will get a list of them.


William Earl Rowe: Yes. I have a list of them, but they are not trusted on the main committee. ^ They are on advisory committees, and their advice is not listened to. I could point to a thousand who are on advisory committees; you will meet them in the country later. The farmers are up in arms because of the novel policies that are carried out by men who are merely theorists without practical experience.


James Lorimer Ilsley: No representative of any
industry is on the wartime prices and trade board. They are all civil servants. They are not representing any industry.


William Earl Rowe: What about your dollar-ayear men? I have no objection to the dollar-a-year men. There are some excellent men-


Mr. LACROIX (Beauce):: You should
have objection to dollar-a-year men.


William Earl Rowe: My hon. friend perhaps has had
some experience with some of them which I have not had; but I believe, despite what the hon. member for Beauce (Mr. Lacroix) says, that there are some able men who are giving their service to the country. Perhaps there are some who are not as good as might be desired. But I do not believe that these boards are any better off, so far as agriculture is concerned, for having civil servants on them. I do not know that a civil servant who has been receiving from $6,000 to $8,000 a year, while farmers have had mortgages on their farms in the last ten years, is as well qualified to meet the problem of production at the present time, as the man who is going through the sweat and toil of actual experience, without help, and who has had to put up with these difficult years. From the point of view of our war production it is high time the government listened to the men who know what it costs to produce a bushel of wheat or a pound of butter rather than say haphazardly when beef goes a little high, "we will put a price on it." Butter is now fixed at 35 cents a pound-


James Garfield Gardiner: It is not fixed at that; that is the ceiling.


William Earl Rowe: Yes, and it can go as low as it likes.


James Garfield Gardiner: There is a floor under it too.


An hon. MEMBER:: Now the minister is going to bonus it.


James Garfield Gardiner: No, I am not going to bonus it.


Richard Burpee Hanson: He was against bonuses in 1935.


James Garfield Gardiner: There is a war on now.
I was against a lot of things.


Richard Burpee Hanson: The minister had a political war on then.


James Garfield Gardiner: My political wars have been about as successful as yours.


Richard Burpee Hanson: Probably more so.


William Earl Rowe: I do not intend to pursue the issue further. I warn the government, if they do not want the most important branch of our production to go down in

The Budget-Mr. Rowe
dismal failure, to beware of fixing prices, while the farmer has rising costs which, by the very nature of the industry, the government cannot fix. I am not asking the government to fix the hired man's wages when he can get more money at the factory, but while the farmer has that uncertainty, do not impose on him another uncertainty which will cripple his ability to produce what is so essential to victory and equally important in peace.
The minister has a difficult task. Probably the most painful thing a minister has to do is to impose more taxes. I realize that the government must give some consideration with regard to taxing enterprises to the limit of what they can stand, or even "killing the goose that lays the golden egg". I am alarmed at the amount that is being spent for ordinary services, despite the war requirements. It is necessary that the nation be assured that the money is spent honestly. I am not charging that it is not, but the next thing to dishonest spending is reckless and extravagant spending for civilian purposes and services that we could do without at this time.
I give this suggestion to the minister in all sincerity as a solution of the problem of avoiding diminishing returns, namely that in the taxation of industry there might be some exemption made for post-war rehabilitation, research and so forth, so that they can be ready to give employment to the thousands of returned men after the war. Such action would go a long way to warn enabling industry to equip itself to compete in post-war markets and provide openings for our returned men, many of whom will be skilled mechanics.
I compliment the minister upon the compulsory savings feature. I mentioned it in the house some time ago. He did not think as much of it when I mentioned it as I did when he put it into effect. But I give the minister a further suggestion. I urge him to give further consideration to the exemption of life insurance premiums. I compliment him upon exempting the premiums of those who are of more mature years, but I urge and plead that he give consideration to the young men getting married now. In these days of uncertainty, surely if you, Mr. Speaker, and I are entitled to exemption, what about the boy who has not a home to live in, who cannot find one even if he could afford to pay for it, especially in Ottawa, and who takes to himself a wife? He has to pay all the income tax we have to pay and, if he wants to put 83,000 on his life in order to give his wife a little security, he does
not get the same privilege as those who have carried insurance for years. I do not think we should be exempted if the same privilege is not extended to him. I think upon further consideration the minister will include that.
I realize that he might be afraid of people taking out large policies, but that could be overcome by regulation, limiting the amount or limiting it to men of a certain age.


James Lorimer Ilsley: Does the hon. gentleman think there would be any objection on the score that the government would be giving a tremendous impetus to the life insurance business by such a measure as he suggests?


Richard Burpee Hanson: That is not the point.


James Lorimer Ilsley: That would be the result.


William Earl Rowe: I understand the minister perhaps being alarmed or feeling that he was doing almost a favour to the life insurance companies. But what sounder way is there for a man to save? What better security and what better provision can a man make in case anything should happen to him? Succession duties bring most of it back to the treasury anyway. It makes a liquid asset when a man dies, so that the estate does not have to sacrifice assets on account of market fluctuations, and I believe that any slight advantage it gives to the life insurance companies is not hurtful because if we strengthen the insurance companies of this dominion, we strengthen the economic and financial fabric of the dominion.
I am not speaking for any insurance company;
I have paid them more than they have paid me so far, fortunately. But if the government is going to restrict rigidly the income of individuals by taxation, it should go a long way also to encourage thrift among our people, and I do not know any way that it can better encourage thrift than by that process.
I also urge the minister to consider exempting, to the extent of the compulsory saving tax, war savings certificates that may be purchased during the year. I have had some experience with the sale of war savings certificates, and I know the minister knows, without admitting it, that thousands upon thousands of war savings certificate holders are selling them rapidly at the present time.


Richard Burpee Hanson: Is that true?


William Earl Rowe: Yes, and they are going to sell them. I do not criticize the minister for not including it-


James Lorimer Ilsley: The hon. member does not mean selling them?
The Budget-Mr. Rowe


William Earl Rowe: Yes, selling them; thousands are selling them and refusing to buy more.


James Lorimer Ilsley: They are not transferable.


Richard Burpee Hanson: The hon. member means cashing them in.


James Lorimer Ilsley: Redeeming them.


William Earl Rowe: They have to cash them in. I urge the minister to give consideration to exempting war savings certificates. I think the result would be almost the same to the treasury. Deduction could be made at the source as now, thus avoiding a tremendous amount of additional detail work. The compulsory savings are repayable two years after the cessation of hostilities, whereas war savings certificates are redeemable after seven and a half years. The adoption of this suggestion would encourage people to buy even beyond the amount they now buy, and leave it as a Voluntary operation.
I leave that thought with the minister. He may have the matter well in hand, but I would also suggest that in maintaining a balanced economy it is essential that every effort be made to place new bond issues outside the banks. In the first place it is an essential check on inflation, and in the second place the responsibility now on the banks is tremendous and will become greater as the war progresses. To meet this requirement, consideration should be given to issuing, in the future, securities that will be more attractive to non-banking lenders and less attractive to banks. I think that could be arranged. The minister might also give consideration to issuing registered bonds, nonnegotiable for a period of time, to which commercial banks would be forbidden to subscribe or to hold for a stated period. These bonds could be kept on sale continuously, like war savings certificates, and subscriptions applied for could be fully allotted at all times. I am not going to enlarge on these suggestions; I'had not intended to speak at this length. I believe, however, that an issue of this kind would check further expansion of bank deposits and would be particularly attractive to insurance companies and other investors outside the banks. I believe borrowing from bank credits as an alternative comes close to outright inflation, and as such is a hazardous course to follow unless it is considered absolutely necessary. Borrowing from the banks does not reflect itself in direct sacrifices by the people, with the result that huge expenditures are made without an actual realization by the people of the seriousness of the situation.
In conclusion, Mr. Speaker, let me say that I am not at all discouraged or pessimistic

about this country being able to meet the obligations placed upon it by the minister. We are going to win this war. Our national determination, together with our great resources, will enable us to carry forward our war^ effort if only we have full equality of sacrifice and opportunity for service. In that regard I again urge the government to be careful to see that the agricultural producers of this country are given a square deal, not only in fairness to these people themselves, but for the more important consideration of the victory that is ahead.


Joseph Sasseville Roy: Mr. Speaker, I should like to thank you for the decision you rendered a short time ago, ruling that I should be allowed to speak at this time. I want to congratulate the Minister of Finance (Mr. Ilsley) upon his presentation of the budget. One can well imagine the tremendous amount of work that had to be performed in carrying out his thankless task, which is to provide the money required by the government.
It is not my intention to undertake a survey of the budget. In that regard I feel as a man might who had reached the foot of the highest mountain in the Rockies. He would not feel like trying to put that mountain on his shoulders, to carry it to some place where the surface was more level. This matter is too important for me to try to cover everything, but I should like to add a few remarks to what has been said by those who have already spoken. I think the leader of the opposition (Mr. Hanson) made an admirable speech, in which he brought out some of the weak points of this taxation scheme. In the course of his remarks he touched upon the income tax as it affects married people with children, and dealt with its effect upon those with more than three dependents. I shall not repeat all his arguments, Mr. Speaker, since I understand it is your desire that we should not speak at great length, but anyone looking over the speech of the hon. gentleman can see how he dealt with these measures of taxation. He had this to say, as reported at page 3793 of Hansard, with regard to large families:
People cannot afford to have children. If Canada is to be a great nation in the future she must have greater population, and the most satisfactory wav to achieve an increase in population is to encourage the raising of children steeped in Canadian tradition rather than through immigration of persons steeped in the traditions of other lands.
Surely that is a good principle. Moreover,
I should like to point out that it is from these large families, which are ordinarily found in Quebec, where they have ten, twelve and fifteen children, we find as many as five or six brothers in the army. I could name, offhand, several

The Budget-Mr. Roy
families who have contributed several sons: the Guertins, the Lemieuxs, the Chenels, the Fourniers, the Reeders, the Pattersons and the Keaneys. So we realize the importance to the nation of large families such as these; and I do not think there is any fairness in taxing the father of ten or twelve children to within a few hundred dollars of the amount we tax a single man. I believe the government should look into this taxation scheme and see if greater fairness could not be achieved in connection with those of our people who are heads of large families, and who constitute more than one-half of our population, and the most important capital of a nation.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Joseph Sasseville Roy: Mr. Speaker, when the house rose at six o'clock I was about to make a few comments on the speeches of the hon. member for Rosetown-Biggar (Mr. Coldwell) and the hon. member for Lethbridge (Mr. Blackmore). However, since I have agreed with the hon. member for Laprairie (Mr. Raymond) to .be as short as possible, I shall defer my remarks for the time being. Those speeches were truly Canadian and should prove an inspiration to the population of Canada. I should like to refer also to the speeches made yesterday, the 75th anniversary of confederation, by the leaders of the different groups. I think those speeches should also prove an inspiration to the whole of Canada and I hope they will do some good. I had intended to make a few remarks about the inequalities of the sugar rationing system, but I may have an opportunity to make them on the resolution stage. The importance of the budget has been stressed by the leader of the opposition pretty well in this phrase. The leader of the opposition generally speaks quite well when he gets away from the conscription of men for overseas. He said this, as reported at page 3789 of Hansard:
Just imagine a total budget expenditure of almost four billions of dollars for this little nation of less than twelve million souls-more than $333 for every man, woman and child in Canada! What a task to raise by various means, this vast sum of money!
This matter has been so well stressed that it does not call for any comment from me. I wonder if there is going to be anything left out of these vast sums to provide for the equipment and the defence of our two coasts which are threatened by invasion? Half of it is destined for England, and a considerable
proportion of the rest is to be used to equip, maintain and increase our armed forces overseas with volunteers and conscripts as well. There will not remain much for the defence of Canada, and to take care of the most imperious need in our national economy. I shall probably have further opportunity to discuss the defence of Canada on the committee stage of Bill No. 80.
I should like to say a few words in connection with the important problem of supplying oil for our own needs and the needs of our allies. I refer hon. members to the speech made yesterday by the hon. member for Athabaska (Mr. Dechene). He demonstrated our need for oil and the importance of the government discovering new sources. Although I have great esteem for the Minister of Munitions and Supply (Mr. Howe); I appreciate the great task he is doing, but I do not agree with him when he answered, as he did on June 8, a question put by me and also one put by the leader of the Social Credit group about the necessity of securing some oil. His answer was that the government had no tools or would not be doing any drilling to discover oil.
There is no reason why the government should not make an effort to discover new sources of oil. The supply of oil will have a bearing upon the survival of the allies. I think everyone will admit that oil is the most important factor in victory. The government had no tools to build ships and tanks or to make guns and many other articles, but government companies were formed and the same thing could be done here. It would appear that the allies are about to lose their last sources of oil in Iraq and Iran, so it is about time that something should be done. In 1941 Mr. Cottrelle, the oil controller, is reported by the newspapers to have said that there would not be one cent of government money spent in prospecting for oil as long as he was in that position. Where does that gentleman get his authority to control this house and the government? I do not think we should listen to him. We should take immediate steps to provide new sources of oil. For this reason, I move, seconded by the hon. member for Laval-Two Mountains (Mr. Lacombe):
That all the words after the word "that" in the motion be ueleted and the following words substituted therefor:
"It is expedient that proper measures be taken in order to secure new sources of oil from all possibilities offered by petroleum areas that Canada may have."
Mr. MAXIME RAYMOND (Beauharnois-
Laprairie) (Translation): Mr. Speaker, the hon. Secretary of State (Mr. McLarty) recalled last

The Budget-Mr. Raymond

Monday that the figures quoted by the Prime Minister (Mr. Mackenzie King), the ministers of the various defence departments and the Minister of Munitions and Supply (Mr. Howe), established that our country, taking into account the size of its population, was furnishing a greater effort in this war than any other of the united nations. That is a statement we should do well to ponder when the Canadian people are being asked to make new sacrifices totally out of proportion with their means. Indeed the new budget calls for such an increase in taxation that a large number of families will be unable to meet their obligations; and if we compare it to the budgets of other allied countries, we must conclude that our war effort is increasing in a much greater degree than any other.
I demonstrated to the house last year, not without scandalizing a certain few, that the fiscal demands made on the Canadian taxpayer by the war were greater than those made on the English taxpayer. At the risk of scandalizing the same few, I now intend to show that the present budget further augments the Canadian taxpayer's burden to an extent not yet reached by the English taxpayer.
The hon. member for Joliette-L'Assomption-Montcalm (Mr. Ferland) quoted certain figures showing that the single man is more heavily burdened in England than in this country, but to arrive at such a conclusion he had to deduct from the Canadian tax the amount representing the minimum savings requirement, a deduction he omitted in the case of the English tax. The parallel he drew is thus fundamentally wrong and proves nothing. The figures I shall quote include those released by the Chancellor of the Exchequer, Sir Kingsley Wood, in his budget address of April 14 last and in the accompanying white book, as well as those furnished to the house by the Minister of Finance (Mr. Ilsley) on June 23.
In order to determine the extent of the fiscal demands made upon us by the war both in England and in Canada, let us first examine the situation that obtained in the fiscal year which preceded the conflict, noting the sum total of the taxes levied in both countries in the year 1938-39 and comparing them with those of the following periods. I wish to place on Hansard, if I may be permitted to do so, a comparative table of national or federal taxes for the years 1938-39, 1939-40, 1940-41, 1941-42 and 1942-43,



TABLE OF NATIONAL OR FEDERAL TAXES

[Stage Direction]
BRITAIN (in millions of .€)	NATURE OF TAX	C A N A D A (in millions of $)	(1938- 1939)	(1939- 1940)	(1940- 1941)	(1941- 1942)	(1942- 1943)	(1938- 1939)	(1939- 1940)	(1940- 1941)	(1941- 1942)	(1942- 1943)226	262	305	3781	Customs	79	104	131	142	135114	138	224	325/	Excise	51	61	89	112	21	17	14	14	15	Stamps and other excise taxes	40	29	41	116	123-	-	-	-	Exchange	_	62	101	95399	460	600	845	991	Income tax (national defence tax	142	134	248	510	768for Canada and surtax for Britain	included).	22	27	96	270	425	Excess profits tax (British national	-	_	24	135	440defence tax included).	Included in Excise tax	Sales tax	122	137	181	236	21836	34	38	38	38	Motor vehicle duties	Collectec	by the provinces	77	78	80	91	90	Succession duties (in Canada the	_	7	15major part of these duties are	collected by the provinces).	4	1	1	1	1	Miscellaneous	2	2	2	2	16899	1,017	1,358	1,962	2,365	Totai	436	467	778	1,361	1,945
Please note that this table refers solely to Canadian federal taxes and the British national taxes, the only ones related to the war effort, although we have in Canada various provincial taxes which have no counterpart in Britain.
The table shows that British taxes have climbed from £899 million in 1938-39 to £1,962 million in 1941-42, an increase of 
118 per cent, while Canadian taxes have risen from S436 million in 1938-39 to 81,361 million in 1941-42, which represents an increase of 212 per cent. Now a comparison between the tax revenue estimated for the current year, 1942-43, and that of 1941-42, the last fiscal year, shows that the increase in fiscal charges for Britain is 20 per cent, while for Canada it

The Budget-Mr. Raymond
stands at 43 per cent. With the consent of the house, I shall place on Hansard another table showing the gradual increase in taxes both in Britain and Canada, in the form of index figures based on taxes paid in 1938-39.
Index of Gradual Increases in Fiscal Charges Britain Canada
1938-39	 100 100
1939-	40	
113	1071940-	41	
151	1781941-	42	
218	3121942-	43	
263	446
The comparative increase of budget expenditures charged to the taxpayer also shows a higher rate of progression in Canada than in Britain.
We often hear that income taxes are steeper in Britain than in Canada, but it must be kept in mind that such taxes are Britain's main source of revenue, while there are in this country a great number of additional fiscal charges unknown in Britain.
Now a glance at the table I have placed on record shows that the income tax in Britain is at present only two and a half times what it was before the war, while in Canada it stands at five and a half times the pre-war figures.
With the permission of the house, I shall place on record another table showing the amount of income tax payable in Britain and in Canada during 1942.

[Stage Direction]
Revenue	Single person	Married, childless	Married with three children	Britain	Canada	Britain	Canada	Britain	Canada$ cts.	$ cts.	$ cts.	$ cts.	$ cts.	$ cts.£ 120 or $ 534	33 37	Nil	Nil	Nil	Nil	Nil300 or 1,335	294 26	301 20	188 01	135 00	Nil	Nil400 or 1,780 .	494 51	484 00	361 01	334 00	101 24	10 00500 or 2,225 .	694 76	702 05	605 76	529 80	231 80	205 80800 or 3*560	1,295 51	1,374 40	1,161 91	1,153 20	828 26	829 201 000 or 4,450	1,696 01	1,845 50	1,562 51	1,606 50	1,228 76	1,282 502 000 or 8 900 .	3,809 76	4,400 00	3,720 76	4,072 00	3,342 51	3,748 005 000 or 22,250	12,626 32	13,361 00	12,492 82	12,806 00	12;159 07	12,542 0010 000 or 44,500	30,537 57	30,618 00	30,404 07	29,728 00	30,070 32	29,404 0050|000 or 222^500	202.140 69	192,514 00	202,007 19	188,914 00	201,673 44	188,590 00
It will be seen that in the case of unmarried persons the income tax, contrary to what was said by the hon. member for Joliette, is higher in Canada than in Britain, except in the case of a small income of S534 and of very large incomes exceeding $200,000.
The same situation obtains as regards married persons without children. Generally speaking, the average income is more heavily taxed in Canada than in England. From $3,500 to $25,000 the Canadian tax is higher. That also applies to married persons with three children.
It should be especially noted that the income tax rate has not been increased in Britain while it has been substantially raised in Canada. According to the Chancellor of the Exchequer, the income tax for 1942-43, computed at last year's rate, would have yielded £915,000,000 while it wall only yield £913,000,000 at the rate set in this year's budget-a decrease of £2,000,000. On the same basis of comparison, tax revenues will be much higher in Canada.
The brief survey I have just made of the British and Canadian budgets clearly shows
44561-246J
that the increase in the tax burden is much greater in Canada than in Britain; that the Canadian taxpayer is much harder hit than the British; that while British taxpayers are called upon by their government to bear a 20 per cent increase in taxation, Canadian taxpayers must bear a 43 per cent increase due to the fact that the balance sheet submitted by the British Chancellor of the Exchequer included, under the head of revenue, an item of one billion dollars as a contribution from the Canadian government, while on the debit side of the Canadian ledger there appears the same item of one billion dollars as a gift to Britain.
As a result of that gift, the income tax rate was not raised in Britain while it is substantially raised in Canada. As far as I am concerned, and I know that I am voicing the feeling of many members of this house who did not want to delay proceedings at this stage, I am not prepared to support a further increase in the all too heavy burden which the Canadian taxpayer has to bear, so that a gift of one billion dollars may be made to an allied nation which is now lending money at interest to other allied countries. And I feel obliged, Mr. Speaker, to voice my disagreement.
The Budget-Mr. Diejenbaker
Mr. J. G. DIEFENBAKER (Lake Centre):: Mr. Speaker, we meet to-night in the greatest crisis that has visited this empire at any time in our history. We are discussing the largest budget which has ever been presented to a Canadian parliament, in order to ensure that Canada's contribution shall be all that it should be in the battle for the survival of freedom.
It is a tremendous budget. I congratulate the minister upon the courage he has shown in introducing this budget, bringing home to the Canadian people the awfulness of the prospect before us unless victory is ours. I congratulate, too, the Canadian people upon the reception they have given to this budget which will mean so much to them.
But this evening I am not going to discuss or to make any recommendations or suggestions in connection with the budget as such. That I shall reserve until the matter comes into the resolution stage. I intend to discuss a trend which is gradually becoming more pronounced as the war goes on and is against the full operation of our parliamentary institutions and all that they stand for in the democratic way of life.
Parliament, has a serious responsibility. This parliament represents the people of Canada; it is the repository and trustee of their hopes of survival. Economic freedom is very important, but important, too, is the matter of our political and personal freedoms, and these things must not be lost sight of during these trying days of war. I have no apologies to offer for speaking on this subject; for this is the only place, the only forum, where one can express one's views, where one can make one's criticisms, where one can advance constructively such ideas as one believes are in the interests of the country as a whole.
To-day, in the British House of Commons, the Prime Minister of Great Britain, referring to the debate which has gone on there during the past two days, said that he was "in favour of freedom of expression" in the commons, and he pointed out that "no other country would use or dare to use such freedom in times of mortal peril" such as those through which we are passing. We hear too often that parliament is not living up to its responsibilities, and I think that we who enjoy the privilege and responsibility of being members have the right to place before the country our views in regard to the necessity of the retention of those rights-rights for which this empire fights-so long as thereby the war effort is not impeded. I believe it will be agreed by all hon. members that the progress of Canada's war effort has been in

large measure due to criticism offered in this house and by the press, resulting in the formation of public opinion.
Churchill to-day received an overwhelming vote of confidence in the British House of Commons. He has always appreciated and welcomed criticism and has often stated that one of the salient differences between the axis nations and countries belonging to the united nations is that the former fear and the latter invite criticism. Parliament is being criticized in the press and throughout the country for failing to appreciate the responsibility which rests upon it. I think in this parliament we have the right to the expression of our ideals, our conceptions of those freedoms for which we fight, so long as we do not thereby impair the war effort or give benefit to the enemy.
To-day the government exercises a greater control over parliament than ever before in the history of this country. It exercises a greater control over the freedom of expression of the press and public men throughout Canada than ever before. But if there is one thing which we as members must demand, it is that criticism shall continue, that criticism shall not be curtailed so long as it is designed to spur on the government to greater effort; and we have the right to demand that in so far as conditions permit, legislation passed in respect of matters particularly domestic shall be passed by parliament and not through the instrumentality of orders in council.
There is a tendency on the part of this government not to give the attention to parliament that it should, and we are approaching a state where parliament need not be called together except for the purpose of voting supply.
In support of my statement that there is a trend away from true parliamentary government, I refer once more, what I have referred to at other times, to the attitude of the government in continuing in ever-increasing measure to govern by order in council, with the result that we in this parliament are denied the opportunity of debate on matters which affect the welfare of the people as a whole.
As an example of this trend, the wartime prices and trade regulations which were introduced by order in council while parliament was sitting. Many difficulties have arisen in connection with the administration of these regulations, all because of the fact that parliament was and is denied the opportunity of debating them. Only to-day the hon. member for Dufferin-Simcoe (Mr. Rowe) drew

The Budget-Mr. Diejenbaker
attention to the effect of arbitrary regulations passed by boards and commissions on the agricultural industry. When one considers that while parliament is in session, orders in council are being passed with ever-accelerated regularity, I think the time has come when we as members of parliament should ask the government to give more consideration to parliament in the passing of legislation.
There is not a lawyer who is able to advise a client as to what the law is in reference to any statute in Canada without looking into the matter of orders in council. When only the other day I asked a question of one of the departments of government as to what orders in council had been passed that affect the statutes under its jurisdiction, the answer was that many of them had been placed in the Canada Gazette, which implies that many have not received publicity in that publication.
Further, as indicating the trend, I would point out that we as members are gradually having our rights curtailed through the denial to us of private members day. I realize the need for action and for immediate action in many matters. I do think, however, that if the rules of parliament which permit forty-minute speeches are found difficult of operation during war time, then there should be a revision of the rules; but the right of private members day should not be denied, and it should be recalled that it was not denied in the last war except, in part, until the last six months.
The denial of the right of those who do not belong to the government to utilize the radio of this country in order to place their points of view before the country is another matter. It is true the situation in this regard may not be as serious to-day as it was a few months ago, but the withdrawal of that restriction came about only in consequence of criticism in parliament. The government, when asked questions, many of which by no stretch of the imagination can be interpreted as being contrary to the public interest, in increasing measure relies upon the excuse that it is not in the public interest to reveal information.' What does that mean? It means that the government can deny members of parliament information upon the basis of which criticism might be levelled against the administration as a whole.
Then there is the further attitude, displayed more particularly recently by the government, of being allergic to fair and constructive criticism. It has seen fit to prosecute various newspapers in Canada under the defence of Canada regulations, and the reason has been the fact that these newspapers have been
criticizing the government in a manner that did not appeal to it. In connection with the investigation into the Hong Kong expedition the attitude of the government in refusing to table the evidence has resulted in preventing discussion in 'parliament, thereby preventing criticism based on the facts as revealed- by the evidence, although I do realize that in time of war it is necessary to exercise discretion and not to permit the publication of evidence that might in any way injure the war effort of the country or be of benefit to the enemy. The position of the Canadian people so far as that report is concerned is that they are denied the opportunity of seeing all pertinent parts of the evidence, while they are permitted to see a part of the evidence that bears out the decision of the commissioner in charge.
A further example might be mentioned in passing. There has been a change in this respect since the present Minister of Justice (Mr. St. Laurent) took office. It is that of men who were interned after having their cases brought before committees set up by the minister, and although no wrong doing was established against them, yet in certain cases the minister refused to carry out the recommendations of the committee. On the other hand in Great Britain, Sir Norman Birkett has stated that the practice is that no man has been interned or proceeded against for merely criticizing the government, for words spoken, but that such proceedings are taken only for overt acts. I realize that in war time censorship is necessary; criticism should not be made which might in any way impair the war effort. That is why the defence of Canada regulations were passed by order in council under the powers contained in the War Measures Act. Those regulations were intended to cover dangerous men and their activities and to permit the government to act quickly without having to have recourse to the ordinary channels of the criminal law. Under the criminal code there is provision for the prosecution of men who endeavour to undermine the country in time of war. There is provision to deal with treasonable offences, and with sedition, which require proof on the part of the prosecution of circumstances from which the wrongful intent of the accused may be deduced. The defence of Canada regulations give to the government of the day, through the Minister of Justice, the power to proceed by way of action against men, however honest their purpose, however patriotic their desires, who say anything that the government does not consider in the public interest; and the only defence they have is the right to prove to the satisfaction of the court that what they have said was said in good faith and merely to
The Budget-Mr. Diejenbaker

criticize or to point out errors or defects in the conduct of the government. I now draw attention to the two pertinent sections in our regulations and compare them with the corresponding sections in England. Section 39A reads:
No person shall-
(a)	act in any manner, spread reports, or make statements or utterances intended or likely to cause disaffection to His Majesty or to interfere with the success of His Majesty's forces or of the forces of any allied or associated powers or to prejudice His Majesty's relations with foreign powers.
(b)	act in any manner, spread reports, or make statements or utterances intended or likely to prejudice the recruiting, training, discipline, or administration of any of His Majesty's forces;
The question of intent does not enter into the matter at all. The mere making of a statement or a criticism, however honest and honourable it may be, permits of the prosecution of the man who makes such statement or criticism. By reason of the fact that it is an extraordinary power to deny to the accused the right to be proceeded against under the criminal code, there is a prerequisite which the prosecution must be able to establish. I quote:
A prosecution for an offence against regulations 39, 39A or 39C of these regulations shall not be instituted except by, or with the consent of, counsel representing the Atorney-General of Canada or of the province: Provided that this paragraph shall not prevent the arrest or the issue, or the execution of a warrant for the arrest, of any person in respect of any such offence, or the remanding, in custody or on bail, of any person charged with such offence.
In other words, the position is this, that any man in this dominion to-day, any man in this parliament, any loyal citizen of this country, can be proceeded against, brought before a court of law and found guilty if the statements that he made are "intended to or likely to" have resulted in a diminution of recruiting. There is not a member of this house or a member of a legislature anywhere in this dominion who voices, inside or outside this house, a criticism, the effect of which might be likely to interfere with recruiting, who might not be convicted under these regulations. It does not require any intent.
Let me call attention to a judgment based on a similar section of the regulations. The reason why I do this is to say to the government that they should never use these regulations unless there is no other means open to them, unless to proceed by way of indictment under the criminal code is not available because of the dangerous nature of the acts committed by the accused. In a judgment of the court of appeal of Ontario in Rex v. Stewart in 1940, a judgment of the chief justice of Ontario concurred in by the other judges,

the judgment indicates that a man with an honest motive, a desire to help, a wish to contribute to the war effort, would be guilty of an offence under this section even though he had no intent or guilty mind, and the chief justice of Ontario said:
(The regulations) were made in the emergency of war then threatened and now in progress. They prohibit, in terms that are absolute, certain acts that may interfere with or prejudice the preparations and efforts made for the successful carrying on of the war, or that may be prejudicial to the safety of the state. It would seem plain that both the subject matter and the purpose of the regulations, as well as the terms in which they are expressed make it necessary to hold that their prohibitions are absolute, and that it is not a defence in a prosecution for their breach to say that what was done was done in ignorance or without intending any harm. The acts prohibited are to be stopped.
That judgment shows that if the Minister of Justice of Canada in his .capacity as Attorney General, or the attorney general of a province, looks into the matter and decides, by reason of what a certain man has said, that he is dangerous, this particular section, far, from being a protection in time of war, can become an instrument of tyranny against those with whom the government disagrees.
They have no such provisions in England. The provisions there are that:
No person shall-(a) endeavour by means of any false statement, false document or false report to influence public opinion ... in a manner likely to be prejudicial to the defence of the realm or the efficient prosecution of the war.
In other words, in England there must be an intent, in that there must be falsity in the statement made by the person accused.
I wonder how many hon. members realize that under the defence of Canada regulations to-day a man might make a statement that was absolutely true and yet be guilty of an offence if in the estimation of the attorney general of the dominion or an attorney general of a province he should be prosecuted if the statement made was "intended to or likely to" impede the war effort. I think the time has come when we as members of parliament should protest against the use of these sections for the prosecution of persons other than those who seek to- undermine the government of the state or the war effort. However high-minded and patriotic the accused or his purpose, he is guilty if certain results flow therefrom or are "likely to".
These are extraordinary sections. They were never intended to be used for the prosecution of political opponents. Their use should be circumscribed within the limits of the section itself. There is not a member of this house, there is not an honourable,

The Budget-Mr. Isnor
patriotic citizen anywhere in Canada who may not be convicted of an offence under these sections if they are used against him and provided the Minister of Justice sees fit to consent to proceedings being taken against him. I say the time has come for hon. members to stand up for their rights and the rights of loyal citizens all over this dominion, and to secure from the government the assurance that these sections will no longer be used against loyal fcitizens of proven patriotism. If we do not do that, the day of freedom of political speech and the independence of patriotic citizens and newspapers throughout Canada in voicing fair criticism in order to improve conditions and to spur on the war effort of this dominion is past. I think we as a parliament should take a decided stand that we will not give approval to possible future political prosecutions, and that stand must be taken now. These sections are necessary in order to assure that our war effort shall not be undermined'; but as members of [DOT] parliament, irrespective of party, it becomes our duty to tell the government now and finally that we will not tolerate their use in order to proceed against members of this house or honourable citizens outside the house whose purposes in making criticism are high-minded and patriotic.
I make no suggestion that these sections are being so used, but I do point out the danger of their being used against political opponents in time of war. I suggest that even the appearance of the government playing politics in matters such as this is dangerous to the unity of the war effort and will of the Canadian people. I further say that political prosecutions-or persecutions if you will-whether of members of parliament or of public men are dangerous to public morale when the public, or a large portion of the public, believe, whether rightly or wrongly, they are being used for that purpose. This is the only place where these things can be asserted; and as members of parliament irrespective of party we should take our stand and say to the government, "So far you may go in the interests of the safety of the state, but in proceeding against citizens of proven honour, patriotism and integrity, if an offence has allegedly been committed, the proceedings should be under the criminal code". Surely parliament is not to be denied the right; surely members of parliament are not to be denied the right, to criticize the possible use of these sections for improper purposes. A government that indicts an honest, patriotic citizen under these sections indicts itself as being fearful of criticism. I ask hon. members in all parts of this house to take
the attitude that has been taken in England since the beginning of the war and now, so well epitomized in the words of the Prime Minister of Great Britain, speaking in the House of Commons on January 22, 1941, when he used these words:
His Majesty's government welcome all the impulse which the House of Commons and press and public opinion of this island can give to us in driving forward our war effort and trying to gain an earlier inch or a more fruitful hour wherever it may be possible. But I have no doubt that the house, in its overwhelming majority, will wish to give its tribute of encouragement, as well as its dose of correction, and will lend its own heave of loyal strength to the forward surges that now have begun.
We meet here in difficult and trying times. If ever there was a time when we should be united in a common purpose, that time is now. If ever there was a time when the provisions of these sections should not be invoked against citizens who are known for their loyalty and devotion to their country, it is now and in the tiying weeks that are to come. I have pointed out the trend. I think as members of parliament we have a right to insist that the trend away from true democratic principles shall end, except where the public interest and the safety of the state demand a departure therefrom.
Mr. GORDON B. ISNOR (Halifax): Mr. Speaker, I fully realize the awkward position in which I find myself, having to follow such a brilliant speaker with the legal training of the hon. member (Mr. Diefenbaker) who has just resumed his seat. I do not propose to try to follow his reasoning; I am going to stay as closely as a business man can to the subject before the house and deal with the budget, and only the budget.
As a background to what I have to say may I give a little of my own history. From 1928 to 1935 I was a member of the Nova Scotia legislature. For five years I sat in the opposition there, facing, among others, the hon. member for Cumberland (Mr. Black) who now sits in this house as a member of the opposition. In 1935 I resigned my seat to become a candidate in the federal general election, and have been here since that time endeavouring to represent the constituency of Halifax, along with my colleague from that city. I well recall that during those seven or eight years, as a business man I was interested in financial matters, and particularly in the budget; and during the whole time I was in the legislature, both as a member of the opposition and while sitting on the government side, I took an active part in the budget debates. They were quite
The Budget-Mr. Isnor

different there from those that are carried on here to-day. As the hon. member for Cumberland will remember, it was a matter of the opposition criticizing the government in power over the amount of the funded debt; pointing out the extravagant expenditures, as all opposition members do, and so on. At the same time I believe I did offer some constructive suggestions, and I believe the government of the day appreciated that fact. I am sure the hon. member for Cumberland would say that in my remarks I always endeavoured to be fair.


Mr. BLACK (Cumberland):: That is quite correct.


Mr. ISNOR:: ordinary storekeeper doing that kind of business were a godsend, and I believe they were a blessing in disguise also to great numbers of people who were subject to high-pressure salesmanship which had been spreading throughout the whole country. The credit regulations whereby purchases made in one month had to be paid for the next month were also beneficial both for the store and its customers. All these regulations have, I believe, made it possible for the businessman or storekeeper to carry on and meet his obligations under this budget.
I was rather surprised at the criticism made by the leader of the Cooperative Commonwealth Federation party (Mr. Coldweil) and by the hon. member for Gaspe (Mr. Roy) in regard to the effects of the change in exemptions for dependents. I shall only touch upon that briefly because the Minister of Finance will deal with it much more fully and clearly than I can; but from what .study I have been able to give it, the wage-earner in the $2,500 income bracket, a married man with one or two children, is in a much better position under the new exemption provisions than he was under the old. Under the old provisions he had an exemption of $400 for each child, which at 15 per cent meant an exemption of $60. That is $20 less than under the present arrangement, which allows a deduction of $80 for each child, and I am not taking into consideration the deduction under the normal or national defence tax which may also be coming to him.
I wish to congratulate either the Minister of Finance or his advisers or the government -it really does not matter to whom the credit is due so long as the plan is a good one and brings the desired results-upon introducing the compulsory savings feature in connection with the income tax. I believe it is an extremely fine plan which will be helpful to both the businessman and the average wage-earner, and I congratulate the minister upon introducing this provision in his comprehensive plan of budgeting.
There was a doubt, I think, in the minds of one or two speakers as to the effect which this compulsory saving might have on savings bank deposits and the purchase of war savings stamps and war savings certificates. Naturally the compulsory saving will be reflected somewhat in these other directions; but whatever effect it might have had upon bank deposits and the purchase of war savings stamps and certificates a year ago, I believe that the benefits to-day will more than outweigh any disadvantages.
I want to say a word about tax deductions at the source. I have had experience in 
dealing with deductions in connection with the national defence tax, and I have also had to make deductions from the pay of employees for the purchase of war savings stamps. This tax deduction feature has, I believe, been welcomed by all classes of our people who have to pay taxes. It is just one more step in the direction of facilitating and systematizing the collection and payment of taxes. Only a few days ago I noticed in the press that a survey had been made and a large number of persons interviewed and asked ' their opinion with regard to this question:	Would you prefer having your
income tax deducted regularly from income at the source? As I looked over the long list of those interviewed, I found that without exception everyone favoured such a plan or scheme. I was particularly impressed with the interview granted by J. W. Berry, general manager of the Guaranty Trust Company of Toronto. Mr. Berry said:
I would prefer to have my income tax deducted regularly at the source. Personnally, I recognize the necessity of providing for income taxes and would welcome an orderly progressive discharge of this obligation.
He goes on:
From the national viewpoint, I think income tax deduction at the source equally preferable in that such a plan would firstly, provide the government with a continuous flow of revenue to be used in its pay-as-you-go plan; secondly, would simplify collection methods and eliminate the possibility of arrears and loss. Thirdly, it would help curb purchasing power which is vitally necessary if living costs are to be controlled and income directed into those channels which provide the sinews of war.
That statement expresses my view in as concise and definite a manner as I could express it were I to spend a week in trying to compress it into a paragraph or two. Mr. Berry in this interview strikes at the root of this whole budget scheme when he remarks, "It would help curb purchasing power which is vitally necessary if living costs are to be controlled"; and that, I think, is a feature which the Minister of Finance had in mind when he introduced this budget plan.
Will this budget prove a success? I believe it will. I believe so for the reasons already outlined, namely, that general employment is up 22 per cent and employment in manufacturing is rip 30 per cent over last year.
I understand that general manufacturing employment has gone up something like 80 per cent since the beginning of the war. Retail sales as I have already indicated, went up 20 per cent last year, and since pre-war days have increased by something like 50 per cent.

The Budget-Mr. Isnor
All-over control by the government of prices and wages, as I have already mentioned, is the third feature of it.
I might mention another important factor which the Minister of Finance brought to our attention when he presented the budget, namely restrictions in connection with travel. He stated1-and I was astonished at the large amount-that in the two years in which the foreign exchange control board has operated, it has saved to the country something like 8100,000,000.


Richard Burpee Hanson: He does not say how much was lost.


Gordon Benjamin Isnor: It is not so much what you lose as what you save that helps you to pay your bills.


James Lorimer Ilsley: There was not much lost by that.


Richard Burpee Hanson: Ten dollars for one saved.


James Lorimer Ilsley: No. no.


Gordon Benjamin Isnor: In times such as these, with heavy war expenditures, heavy taxes naturally follow. No one should complain about them if the money is to be used to win the war. Speaking of my own province, I think I can say we realize that there is a war on. From the very outbreak of war members of the various branches of the service were seen in numbers on our streets. We have watched them come by train and leave by ship for overseas. We see our ships entering and leaving the harbour. I believe that the people of Halifax, and of Nova Scotia in general, realize to a greater extent than other people just what this war means, and that is why I say I believe that in so far as Nova Scotians are concerned, the Minister of Finance need not worry about their taking their part in carrying the load and shouldering their portion of this budget.
I should like to mention my interest in social security. I do not know whether this is the time to do so. I had to face that question; I debated in Halifax whether this is an opportune time to bring in unemployment insurance. I think the main argument which convinced me that now is the time was the fact that there is a large amount of money in circulation, that wage-earners are earning steadily and in large amounts, and that, therefore, this is a good time to set up a reserve to take care of needs which may arise following the close of the war or if we should again be visited, which I hope we never shall, with another period of depression.
For the same reason I would suggest to the minister that he and his government give
serious consideration to the matter of old age pensions. I do not know whether I care to define at this time a particular age to which they should be lowered, but I believe it should be not more than sixty-five years, with a broadening of the provisions to take care of unemployables even at the age of sixty. Throughout the country there is a number of persons, suffering real hardship, who are unemployable. Not being returned soldiers, they do not receive any special consideration. I think that this class, though its numbers may not be great, should receive favourable consideration in this regard, and I hope the minister will take the matter into consideration for action at some future time.
May I also suggest that he should reconsider the amount paid. I believe that $20 a month is too low; and of course everybody does not receive $20; in Nova Scotia, I believe, the average is only $14.86 or $14.87. I think the minister should consider increasing the amount to $30. I know that the provinces, particularly those which have not now recourse to certain sources of revenue which they formerly could tap, may strenuously object to any such increase in so far as their contribution is concerned. For that reason I suggest that the federal government assume 85 per cent of the payment and that the provinces' share be reduced to the remaining 15 per cent. In other words, of a grant of $30, the federal government would contribute $25.50, and a province, $4.50, instead of $5 as at the present time.
I have one other suggestion to make, relating to retirements. In times like these, when young men, or men in certain age brackets, are required for active service and other duties of a strenuous nature, we should retain in the government employ those who are capable of carrying on their duties efficiently instead of permitting them to retire, as under the civil service regulations, at the age of sixty-five. I was particularly surprised the other evening to read in the paper that the Department of National Defence had retired a colonel at fifty-six years of age. I do not wish to give his name. I do not know the reason. I do not know the gentleman. But on general principles it struck me that this was not a time to retire men at the age of fifty-six. Surely the government could find some useful place in another department for any man of that age.
I commend the minister for the action he has taken in exempting all pensions of exservice men both of the last great war and of the present war. That is the proper thing to do and it has been well received. Several members who have already spoken have complimented the government in that regard. I
The Budget-Speaker's Ruling

suggest that he enlarge that a little to include all persons receiving pensions for total disabilities. I have particularly in mind the victims of the Halifax explosion, a large number of whom lost limbs-a leg, an arm, a hand or an eye. I do not think it is fair to tax such a person on the pension he or she receives. That is a special case which deserves special consideration.
I should like to have quoted, in closing, the last paragraph of the minister's speech, but time will not permit my doing so. However, I might call to the attention of the house the words of Mr. G. W. Spinney, chairman of the national war finance committee:
War is never cheap, but surely it is a thousand times cheaper to win than to lose.
If I have been at all convincing to those who have listened to me, whether in the opposition or in other parts of the house, I shall have done my duty if I have induced in them that frame of mind which will incline them, instead of being critical, to cooperate and to make known to the people of Canada the magnificent effort which the Minister of Finance has made in placing before the Canadian public a budget built along such comprehensive lines. I believe that with the cooperation of all it will be carried through to a successful issue. I am reminded of the words of J. Mason Knox:
It is not guns or armament Or the money they can pay,
It's the close cooperation That makes them win the day.
It is not the individual Or the army as a whole,
But the everlastin' teamwork of every bloomin' soul.


Georges Parent: I have been considering the amendment moved by the hon. member for Gaspe (Mr. Roy). The motion before
the house is:
That Mr. Speaker do now leave the chair for the house to resolve itself again into committee of ways and means.
The amendment moved by the hon. member for Gaspe, seconded by the hon. member for Laval-Two Mountains (Mr. Lacombe) is:
That all the words after the word "that" in the motion be deleted and the following words substituted therefor:
"It is expedient that proper measures be taken in order to secure new sources of oil from all possibilities offered by petroleum areas that Canada may have."
Standing order 48 provides:
When a question is under debate no motion is received unless to amend it; to postpone it to a day certain: for the previous question; for reading the orders of the day; for proceeding to another order; to adjourn the debate; or for the adjournment of the house.

Citation 395 of Beauchesne's Parliamentary Rules and Forms reads:
It is an imperative rule that every amendment must be relevant to the question on which the amendment is proposed. Every amendment proposed to be made either to a question or to a proposed amendment should be so framed that if agreed to by the house the question or amendment as amended would be intelligible and consistent with itself.
If the house agrees to the amendment, it denies the right of the government to provide ways and means, or it postpones that period. The amendment is not relevant to the question before the house now, and -there is a further objection to its relevancy. In its form the amendment is a substantive motion. At page 420 Bourinot states:
The ordinary rules of debate are applicable on this occasion-
That is, with regard to an amendment on going into supply.
-for instance, a matter already decided by the house, or of which notice has been given, or which stands upon the orders of the day, cannot be discussed.
The same rule is stated in May, 13th edition, at pages 525-26, and in citation 398 of Beauchesne's Parliamentary Rules and Forms, which states:
An amendment cannot anticipate a notice of motion on the order paper.
I find on perusal of the order paper that, under "notices of motions", there is a motion standing in the name of the hon. member for Athabaska (Mr. Dechene), which reads:
Whereas the largest known supply of gasoline and petroleum products in Canada, perhaps in the world, is procurable from the tar sands of the McMurray, Waterways and Fort McKay areas along the Athabaska and Clearwater rivers, in the constituency of Athabaska, Alberta, some three hundred and fifty miles from the city of Edmonton.
Therefore be it resolved,-That, in the opinion of this house, for the carrying on of our vital war effort, and supplying the needs of our farmers, manufacturers, transportation systems and tourist trade, the government should take into immediate consideration the advisability of assisting, by way of financing or otherwise, greatly increased production in this area of the gasoline and petroleum products so necessary to the people of Canada.
It is true the resolution, on the order paper refers to a particular area, but the discussion of that resolution would, of course, involve the discussion of other oil areas of Canada, and the house would be asked to act accordingly. For the reasons I have given, and on the authorities I have cited, I must rule the amendment out of order.


Mr. ANTHONY HLYNKA (Vegreville):: The 1942-43 budget is only a new edition of

The Budget-Mr. Hlynka
another debt-creating and tax-draining document. The only difference between this budget and those which the government has brought down in the past is that this one is much largeT and heavier. It calls for greater expenditure than did the budgets which have preceded it, but in principle the present budget is framed identically along the same lines that all other budgets were, which were brought in by this government.
I must say that there are three good features about the present budget before the house. In the first place it will authorize the government to raise the necessary amount of money to carry on the war and to take care of all other governmental expenditures. I do not believe there is one hon. member in this house who will not agree with this particular feature of the budget, because we are providing the money necessary to carry on the war.
In the second place, by means of this budget the Minister of Finance will, in my opinion, induce many Canadian people to study the monetary reform economics more than anyone else has done for a long while, with the one exception, the greatest man in this field in Canada. I refer to the Hon. Mr. Aberhart, Premier of Alberta. The minister should be congratulated upon this, even though it was perhaps his intention to guard against this very thing.
In the third place the budget, by its very construction, underlines the faulty principles of the present outlived financial system. It is only six or seven days since this budget was brought down, but I have already been approached by a number of civil servants and a great number of members of this house, who in the past have been deaf to everything this group has said about monetary reform. The civil servant class have in the past been drifting from day to day; all they had to worry about was to adjust themselves to the new party when a new party came into office, but I believe this budget will wake them up. In fact, there is evidence of this already. I believe that many of the thinking and progressive people of Canada will from now on explore every feature of the monetary reform proposals that this group has been placing before the country for the past seven or eight years. I cannot believe' that the people of Canada will accept this budget in the best of spirits, even though I do not doubt their sincere willingness to carry the greatest of burdens in time of peace and much more so in time of war. But it seems to me that the financial institutions are taking advantage of the loyalty of our people. I mean to say that they are taking advantage of this weakest
moment in our entire history, in this the greatest crisis that the British people have ever faced, and through the medium of this budget they are saddling the people of Canada with a debt which, as it is predicted, will rise to the amount of twelve billion dollars before the war is over.
This document should not only be termed "a budget," "an orthodox budget," but it might as well be called a mortgage upon every man, woman and child in Canada for generations to come. I understand that a number of hon. members are anxious to have this debate close to-night. I would not hold up the closing of this debate at any cost if I felt that this budget pjovpjod eip SUM. uuqt ^uiEpodan ssaj ojoav stunt called the plebiscite. The debate on the plebiscite took three or four weeks and, in reality, it simply meant nothing, but this budget proposes to impose upon our people heavy taxes and a debt that they will carry for generations. So it seems to me that a measure of this kind should receive more consideration than it seems to be getting in this house.
One cannot fail to appreciate the efforts of the Minister of Finance to make the old cart, the old money system, keep on working, but I am afraid that his effort will result in bitter fruit for the people of Canada after this war is over. I am of the opinion that had the minister pursued a different course, he had a chance of becoming one of the greatest men in Canadian history. He has the makings of a great man; he has the ability. But at this moment, when this nation and, indeed, the entire British commonwealth of nations are faced with this great crisis in their history, the minister chooses to bring in a budget which places a mortgage upon the nation. He had an opportunity of scrapping this budget and, throwing it in the waste-paper basket; he could have brought in his own budget before this house and he could have told hon. members and the people of Canada that we have come to a point where the life of the nation is more important than all the financial considerations put together. Had he brought down a budget of that sort, I am sure the people of Canada would have supported him, and we would then have been sure to do our part in this crisis in a much better way than we may now be able to do.
I am afraid that it is the old financial system which has placed this nation and the rest of the British Commonwealth of Nations in the position in which we find ourselves to-day; and if we get any set-backs in the future, I believe it will be the fault, not of the people of the British Commonwealth of Nations, but of those who are in control of the financial system and
The Budget-Mr. Hlynka

be raised by loans. There will be raised by loan, $1,850,000,000 this year. This means that there will be imposed upon the people of Canada a mortgage of $1,850,000,000. In other words, as the hon. member who preceded me said, the war expenditure alone will cost the people of Canada $6,300 per minute or $23 per family per week, as compared with $16.80 per family per week last year.
Some hon. members and certainly members of the cabinet will say: "But we cannot possibly change from the present system in the middle of the stream, so we must continue with this borrowing and we will take care of everything when the war is over. After the war we will give the people a new deal." But how can they give the people of Canada a new deal, when they are using the same old deck of marked cards and the same old tricks are being employed? It may be a new deal, but, believe me, the common people of Canada will not be any better off.


Mr. JOHNSTON (Bow River):: The same old deck of cards 1


Mr. HANSELL:: And they are stacked
against us!


Anthony Hlynka: Yes. I should like to be optimistic and feel that this young nation of perhaps as fine a people as one can find anywhere in the world will emerge from this crisis to live comfortably in the future and build up a strong and a powerful nation. It is not merely a matter of getting by, because in the present world we must build a nation that will be powerful enough to compete with other nations, and be able to fight against them for its life. Unless we develop our resources, our aggressiveness, our educational capacities, and unless we are prepared to fight, we cannot possibly survive among the other nations of the world. We must either fight or die. That is the law of life, and we must realize it.
Before the war we could not distribute the goods of which we had an abundance, of which we had more than we ever needed for ourselves, because the financial system did not work, and now these same gentlemen come to us and tell us that they can take care of the money mechanism which controls the very lives of the people of this nation. They tell us they can carry along with the same old system and get us- through. But again I say I should like to feel optimistic about that.
This war should not place any debt burden whatsoever upon the people of Canada. The Prime Minister of Great Britain, Mr. Churchill, has spoken of "blood, sweat and tears," and he has written a book under the same title. He might have added "tiio
[Mr. Hlynka.1
material resources of the country." Beyond the blood, sweat and tears and the material resources of the country which are spent, this war should not cost the people of Canada anything. After the conclusion of the war, Canada should not owe a cent to anybody. This idea of telling the people of Canada, or of any other country for that matter, that they must be subjected to heavy taxation and the heaviest of debts-and we do not mind taxation as much as the debt-in order to pay for the war is all hay-wire. There is no need at all for this debt pyramid. Let me illustrate.
A farmer decides to build a log house for himself. He has all the logs on his own farm. He supplies his own labour. Perhaps he has to sell some of his farm produce in order to buy nails and shingles. Then, with everything necessary to build the log house, he goes ahead and completes it. After he has completed it, there is no reason in the world why he should owe anybody anything, having built it out of his own materials and by his own labour.
Similarly, the Dominion of Canada in this war is using her own natural resources, her own materials and her own labour, and with that she is building aeroplanes, ships and tanks. Yet every year we are going into debt. Why are we going into debt? What are we going into debt for? I should like to know. Of course, if we have to buy a certain amount of needed materials from the United States, we must pay for them, and in that one instance we would be incurring a small debt. But paying even for these things which we buy from the United States we pay with the exchange of goods. It follows, then, that the whole debt structure narrows down to an exchange of goods between the two countries in order that we could get the materials we require. Therefore there is no reason in the world why this government should be mortgaging the people of Canada to-day and the future generations for years to come.


Mr. DEPUTY SPEAKER:: The hon. member's time is up.
Mr. LIGUORI LACOMBE (Laval-Two
Mountains) (Translation): Mr. Speaker, this budget clearly shows that the government is not deepely concerned about the difficulties experienced by our farmers in hiring the help they need. The government gives no indication of the means it intends to take in order to secure for agriculture the labour supply it needs. Agriculture feeds our armies and our civilian population, and it remains our first line of defence. What is the administration doing in order to maintain and stimulate that essential source of supply, that powerful factor so essential to the triumph of our arms? I cannot

The Budget-Mr. Lacombe
find in the entire budget a single resolution providing against the shortage of farm labour. I have searched in vain for such provision. How can we explain such indifference concerning a situation as alarming as the shortage of farm labour? Is the government blindly leading the country to decay, starvation and defeat? When will they open their eyes to the unfortunate lot of our farmers whose production is falling off daily and to such an extent that, in a country like ours, rationing even of farm produ ucts has already become necessary for the army and the civilian population? How often have we not pointed out to the government one of the essential duties they must fulfil, that of maintaining agriculture as our first line of defence? How often have we not urged them to stop calling up for military service young men whose labour is essential on the farm? It was a waste of time. However, no one can charge us with neglecting our duty in that connection.
There is another restriction which could easily have been avoided in Canada. I refer to the rationing of oil and gasoline. Our country's oil resources have scarcely been developed. Governments of every political stripe have shown the same lack of foresight in that respect. Why is it that our oil fields are almost untouched in many areas of the country? Who has prevented the development of such an asset as valuable in peace time as in war? We are reaping to-day the results of the culpable negligence of men whose prime duty was to ensure the development of our raw materials. And now the restrictions placed on oil and gasoline threaten the very life of our industries and our trade. They will soon affect our agriculture as well. The shipment of farm products will be greatly hindered by all those restrictions. Agriculture itself will be placed under a severe handicap. And has any thought been given to our mechanized army? The future is far from reassuring in that respect. Such are the reasons impelling me to vote against this motion.
I shall certainly not vote for this measure which is, on the whole, a challenge to the most elementary principles of political economy. Never in the history of Canada have taxpayers in the lower brackets been so cruelly and so unjustly burdened. Nor does the government give the slightest indication that it intends to prepare the people for this war's terrible aftermath? That is undoubtedly of importance to the administration at the moment. Such, however, is not our opinion, and we are determined to recall the government to reality as often as we deem it necessary. Before concluding my remarks, I shall move an amendment to the motion before the house.
Mr. Speaker, concluding my remarks, I beg to move, seconded by the hon. member for Gaspe (Mr. Roy), the following amendment:
That all the words after the word "that" in the motion be deleted and the following substituted therefor:
"This house is of the opinion that, owing to the difficulties experienced by farmers in securing farm hands, the food production will be decreased as a consequence of the compulsory service to such an extent as to endanger the victory of the nations who are fighting the axis powers."


Mr. T. V. GRANT (Kings):: Mr. Speaker, I do not intend to follow the remarks of the last speaker, the hon. member for Laval-Two Mountains (Mr. Lacombe), because he has no followers, but I should like to put a question to him. The question is, what was the cause of the fall of France? As far as I can find out, the cause of the fall of France was, "too many political parties".
I happen to belong to an ever-increasing majority of the Liberal party; I belong to a group which seldom has a chance to speak in this house. We instinctively feel that we should allow the government to get on with the war. But the tragic part of it is that, if we happen to articulate while some of those with the gift of the gab are talking, we are told that we are not fit to represent the district which sent us here. In fact, the leader of the opposition (Mr. Hanson) himself has been guilty in that regard. But I would point out to him that if he will look up the main estimates, he will find therein that more money is provided for the little constituency of Kings which I represent than for the whole province of New Brunswick.


Richard Burpee Hanson: What an accomplishment 1


Thomas Vincent Grant: I did prepare a speech on the draft address, and I read it over so many times that I got sick looking at it. But I did not have an opportunity of delivering it.
I wish now to congratulate the Minister of Finance (Mr. Usley) upon the manner in which he presented the budget to this house. I think he is a philosopher, because he knows that God gave him a brain which is adequate to overcome all such difficulties as are connected with matters of that kind. In other words, he knows that it is just a case of mind over matter. Personally I feel rather like the poor cripple who once attended a revival meeting. All the people were getting up and telling what the Lord had done for them. Finally it was this poor cripple's turn, and he said, "Well, he may have done a lot for you people, but he darn nigh ruined me."


An hon. MEMBER:: Oh, oh.
The Budget-Mr. Grant


Thomas Vincent Grant: An hon. member in this part of the house suggests that the hon. gentleman laughs like an Indian, and he is right. My hon. friend laughs like Lord Haw-Haw. I agree with the budget in principle, but I do not think the people are taxed quite equitably. For example, take a married man with four of a family in institutions of learning. Three are over twenty-one, and he is exempted only for the one under twenty-one. This family cost that man a great deal of money, but he has no exemption in regard to three of them. Take another family, all under eighteen. Perhaps their parents did not endeavour to send them to school; perhaps they are earning a little money and bringing it into the home; yet that father is exempted for all of them.
I think the timely action of the government in controlling prices, profits and wages was well received by the people, especially the labouring classes. We are told now that the annual revenue from taxation is three times greater than it was before the war, and I believe that the lower and middle classes, although they are taxed three times as much as they were before, are more than three times better off.


Some hon. MEMBERS:: Oh, oh.


Thomas Vincent Grant: Yes, and they are living more prosperously and more comfortably in their homes. We are told that our farmers are being asked1 to produce for patriotic purposes. That is not so. Our farmers are not producing for patriotic reasons alone, because they are receiving as good prices as they ever received at any time between 1920 and 1930. They are sending their sons overseas for patriotic reasons, and that is sufficient.
In the budget, we are told that the Canadian National Railways would have had no deficit this year were it not for the cost of upkeep of the Prince Edward Island terminals and car ferries. I think I could make a suggestion that would relieve the government of the deficit at these terminals, and I am not going to follow the argument used by the leader of the opposition. I do not suggest that we should immediately build a great car ferry costing perhaps $5,000,000, equal to the one that was lost. My suggestion is that when the war is over, the government should continue this taxation for a week or ten days longer and build a tunnel from New Brunswick to Prince Edward Island with the money thus accumulated in those few days. I believe that will be done if we all stick together and see that it is done. The project has already been engineered, and the cost would not be too great. The little province of Prince Edward Island has led the whole of Canada in sending 
her sons to the war. In the navy, the air force and the army she has led. Prince Edward Island has led the whole of Canada in Red Cross work. Prince Edward Island has led the whole of Canada in subscriptions to victory loans. The sons of Prince Edward Island have measured up in the fighting forces; the physically fit are 71-5 per cent, whereas in the rest of Canada they are only 44 per cent physically fit-even including Alberta where the interrupters come from. I think the leader of the opposition will agree with me that the first thing to be done after the war is to build a tunnel from New Brunswick to Prince Edward Island, so that we shall not be hampered for hours daily and people will be able to cross to and from the little island without so much trouble and delay.


Charles Edward Johnston: Win the war first.


Thomas Vincent Grant: Yes, win the war. But this has been brought up before, and I want to settle it right now. Prince Edward Island is the cradle of confederation, the million-acre garden of Canada. It is a province that could support, instead of 80,000 people, half a million people in comfort.
The leader of the opposition would have made a fine speech on the budget if he had not taken so much trouble in trying to belittle the Prime Minister (Mr. Mackenzie King). When he was speaking I knew, as everyone else knew, that he was not speaking for himself. I do not believe that, when he referred to the two great statesmen who were at the conference at Washington, he was speaking for himself. Members around this part of the house, especially from Quebec, reminded him that there were three great statesmen at that conference, but he would not admit it. He would not say there were three. He was speaking, not for himself, but for Arthur Meighen. The voice was the voice of Jacob, but the hand was the hand of Esau-^-and the hand of Esau was hairy. I would remind the hon. member that the Prime Minister has the confidence of the people as well as of his party. Examples of this will be found in the recent by-elections and in the plebiscite. I would also remind the hon. gentleman that he has not the confidence of his party; he is there because they are not able to elect a man in Canada to put in his place.


Mr. GRAYDON:: The plebiscite had
nothing to do with confidence.


Thomas Vincent Grant: Had it been a "no" vote, the hon. member would have said it was no confidence.

The Budget-Mr. Grant


Richard Burpee Hanson: Have
another glass of water.


Thomas Vincent Grant: The leader of the opposition is here only until another man can be found to take his place; by that time he will not be there, and I do not think it becomes him to try to make out in his speech on the budget that the Prime Minister is hindering the war effort.
The leader of the Cooperative Commonwealth Federation party (Mr. Coldwell) made a very fine speech. He went to a great deal of trouble to tell the house that he had nothing to do with placing the Russian flag on parliament hill. I just thought at the time that "a guilty conscience needs no accuser."


Charles Edward Johnston: Do you object to it?


Thomas Vincent Grant: I object to his, or the C.C.F. party, trying to persuade the people of this country that they are not socialists-[DOT]


Charles Edward Johnston: Do you object to the flag on the hill?


Thomas Vincent Grant: -because that is the policy on which they tried to win the last election.


Charles Edward Johnston: We were at least honest about it.


Thomas Vincent Grant: The leader of the Social Credit party (Mr. Blackmore) is in his seat. He made his annual stump speech on the budget. It is always getting better; he is always adding to it. It reminds me of a plant; there is first the root; then the stem and the branches, and then the dollars for leaves, and the Bradburys for fruit. But the dollars dry up and blow away, and the Bradburys are "canned."
It appears to me that it is not the Conservative members of this house, but a certain element of disgruntled politicians out of office, who are urging the leader of the opposition and his followers to try at all costs to discourage the Prime Minister of this country, to make him lose confidence in himself and the people to lose confidence in him. The slogan is, "Destroy King first and then win the war." It is no laughing matter. The public know it and we know it. They say he had no right to put the country to an expense of 11,500,000 for the plebiscite. Well, I think the people of this country, and even the Conservatives and the other groups on the other side of the house, should be proud to have a prime minister whose word is worth a million and a half dollars. I believe the Prime Minister of Canada would rather be in his grave to-day than break such an important promise to the people of Canada.
Hon. members opposite admit that the Prime Minister was a good peace-time leader, but they say he declared war on Germany and Japan too soon-in too much of a hurry.


Some hon. MEMBERS:: Who said that?


Thomas Vincent Grant: You said it right over there. We have heard it several times, that he was too hasty in declaring war on Germany, Japan and Italy. But in years to come it will be said of the Prime Minister, even by his opponents, as was said of George Washington, that he was "first in war, first in peace, and first in the hearts of his countrymen."
I see the Social Credit party are amusing themselves. I did not have time to reply to the speech made by the hon. member for Vegreville (Mr. Hlynka), but, Mr. Speaker, he put such physical energy and such convulsive effort into his speech that I was reminded of John Hay's description of a steamboat which he once saw stranded on the shoals of one of the great lakes. He said:
She hove and set and hove and set And high her rudder flung;
And every time she hove and set The worser leak she sprung.
The leader of the opposition has spoken of two great statesmen, but when the history of this country comes to be written the names of two other great statesmen will be closely linked in connection with responsible government in Canada. First, I refer to the name of William Lyon Mackenzie, who fought and suffered for responsible government in Canada and afterwards sat in a duly elected parliament ; and second, sir, I refer to his illustrious namesake and grandson, the present Prime Minister of Canada (Mr. Mackenzie King), who has spent the greater part of his life in seeking to maintain and improve responsible government in Canada.
We are told that we should have a national government in Canada, and that then everything will be peaceful and harmonious. What is the state of affairs in Britain to-day, where they have a national government? Are they not every day asking the Prime Minister of England to resign, and offering votes of want of confidence in him? Of course, we all want to win the war, and I believe we shall. But let us not depend upon Providence; let us not depend upon the slogan that England always wins the last battle. In the words of John Bright, as nearly as I can remember, I would say, "Let us not lay all our difficulties at the door of Providence; man must do his part". We must do our part. We must retrace our steps; we must shun the blunders.

The Budget-Speaker's Ruling
and then and not until then we shall see in this country an enduring edifice of victory and peace.


Georges Parent: I have been considering the amendment moved by the hon. member for Laval-Two Mountains (Mr. Lacombe), which was:
That all the words after the word "that" in the motion be deleted and the following substituted therefor:
"This house is of the opinion that, owing to the difficulties experienced by farmers in securing farm hands, the food production will be decreased as a consequence of the compulsory service to such an extent as to endanger the victory of the nations who are fighting the axis powers."
This amendment is on the same lines as the amendment which I have already ruled out of order this evening. It is an amendment which cannot be moved on going into committee of ways and means; it is a substantive motion, and it has no bearing upon or relevancy to the question before the house.
I also think this amendment is subject to the same objection which was taken to the former amendment, namely that the amendment moved by the hon, member is along lines similar to the notice of motion which appears on the order paper in his name, and which reads as follows:
Mr. Lacombe-The following proposed resolution: Whereas agriculture is essential to the upkeep of the armies and the welfare of the civil population.
Therefore be it resolved: That, in the opinion of this house, farmers, farm employees and all persons engaged in industries connected with agriculture or with war industries, should be exempt from military service and that exemption tribunals should be set up in each constituency in the country to investigate each case on its merits.
The same subject matter is contained in that notice of motion, and in accordance with the rules of the house already quoted- Beauchesne, citation No. 398; May, 13th edition, pages S25 and 526, and Bourinot, page 420-I must rule the amendment out of order.


Hon. T. A. CRERAR (Minister of Mines and Resources):: Mr. Speaker, I understand
there is a general feeling that the debate should be concluded this evening, and that we are near the end of it now. I therefore move, seconded by the Minister of Finance (Mr. Usley):
That the house do not adjourn at 11 o'clock p.m. this day.


Richard Burpee Hanson: I shall
be glad to support that motion, Mr. Speaker.


Ernest George Hansell: I believe this motion is debatable, and I wish to say
[Mr. Grant.l
just one word. I am one of those who have given up their place on the list of speakers, in order to save time. I have done so with the understanding -that we shall have the widest latitude in discussion when we are in committee.


[Stage Direction]
Motion agreed to.
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): I intend to be very brief, Mr. Speaker. I am sure every hon. member will join in applause when I say that the mantle of Ulysses Grant has evidently fallen upon the shoulders of his namesake who has just spoken in this debate.
This is a budget so considerable in scope, sir, that it deserves close study, and it is impossible to say in a few words all we have to say in a debate such as this. Everyone realizes that with the country at war we have to assume obligations that are out of the ordinary; but when we are told that we must bear sacrifices it should be understood that the sacrifices which are made or are to be made must always be useful to the community. It was said again and again during and after the last war that one-third of the moneys voted for that war was stolen, one-third was wasted and only one-third was spent for real war purposes. At that time there were detailed estimates and public accounts. At the present time there are no detailed estimates, and the public accounts give very little information. I complained about this situation last year and was promised that there would be an improvement. There was none. I was told by the leader of the opposition (Mr. Hanson) that the limit below which the details were not given was $35,000. Later this statement was corrected by the Minister of Finance (Mr. Usley), who said that items of less than $25,000 were not appearing in the public accounts.	*
This is an abnormal situation, and the war is not an excuse for it. Even if no one reads the public accounts from the first line to the last, they provide security for the state in that the figures are given to the public, and everyone has an opportunity to learn what is being done with regard to the spending of public money. Recently I read an article which appeared in the Monetary Times of May 30 of this year, the title of which might be taken as the text of the few remarks I have to make:
When Deceit is a Virtue
The art of camouflage flourishes during war time until it becomes exotic trickery, flinging

The Budget-Mr. Pouliot
the cloak of invisibility over once visible objects. It is as ancient as war itself and just as difficult.
We live in times when things are not called by their own names. It seems there has been a shake-up of the dictionary, and it is most difficult for any one of us to know exactly what is going on behind the curtain. Members of parliament are not consulted; their advice is not sought before policies of great importance are drafted and submitted to this house. We have the feeling of doing nothing, while we are willing to do our very best to help the government; and those who are substituted for us are men without contact with the people, men whose heads are filled with theories that may bring this country to disaster. I remember that the day after the Prime Minister (Mr. Mackenzie King) announced that this country was to make a gift to Great Britain of a thousand million dollars, a dispatch appeared in either the morning or the afternoon newspapers to the effect that the news had been received very coldly in Great Britain. It was only after this that the newspapers published the cablegram which was sent by Mr. Churchill.
That is not all, sir. It is the poor who have to pay to the rich. This was the policy enunciated by Mr. Bennett, who thought those who should be taxed were not the rich but the poor, in order to make them realize the importance of raising public money and of taxation in government business.
That gift of one billion dollars is an absurdity. There is no precedent for it. I have no objection to helping Great Britain, but why do we not have a recognition of that gift? It would have put Great Britain to no embarrassment, and it would have given us an opportunity to discuss peace with Great Britain and the other countries on business terms. I should like to quote from the great English financial weekly, The Economist, of April 25, 1942. A report from their Ottawa correspondent, dated March 19, reads:
At the present rate of British procurement in Canada, this sum will last for something less than twelve months. An extension of the gift policy can be foreseen when the amount is exhausted, unless in the meantime an arrangement by which pooling of production surpluses of the united nations is then in operation. Conceivably, the Canadian surplus might then be pooled and drawn on by the United Kingdom and other allies under terms not yet executed. Other heavy customers of Canadian war materials at present are Egypt, India and Australia in the sterling area and Russia and China outside it. The new Canadian proposal is designed to avoid the growth of an unmanageable war debt between Canada and Britain. Logically it should apply to other allies who share access to Canadian war output. There is
a growing sentiment at Ottawa that an allied pooling arrangement should be effected speedily. Negotiations with Washington and London are leading to some such arrangement.
It is a yearly instalment, and we shall have to expect more of that absurd policy. It is suggested that it should be extended to other countries. Have we the means to do that? My answer is "no." What was the purpose of doing it? It was to redeem securities held in Great Britain. I should like to remind the house of what the Minister of Finance (Mr. Ilsley) said on March 20, 1941, as reported on pages 1868 and 1869 of Hansard. He said:
My hon. friend-
That was myself.
-refers to Sir Edward Peacock and to the mission on which he is engaged in the United States. There has been no suggestion that his mission will be extended to Canada, nor have I any expectation that it will be so extended.
In the Montreal Gazette of June 25 I noted that the great financier, Sir Edward Peacock, was here along with Sir Arthur Salter; that both were at the Ritz Carlton in Montreal. A number of questions asked by me were answered in return No. 290 of May 23. The question I asked was:
Did Sir Edward Peacock come to Canada on or about June 25, 1941? If so, did the Honourable Minister of Finance meet him? If not, was he met by other members of the cabinet?
The Minister of National Defence (Mr. Ralston) reported no information. The Minister of Munitions and Supply (Mr. Howe) reported that Sir Edward Peacock was met by the minister himself. I would not be surprised if the Minister of Munitions and Supply met Sir Edward Peacock when he was in the United States and when he was doing some business with him regarding the amalgamation of the railways.
James Lorimer Ilsley: I am authorized by my colleague, the Minister of Munitions and Supply, who is not present, to say that he had no discussion with Sir Edward Peacock on any occasion with regard to the amalgamation of the railways or the repatriation of the Canadian Pacific Railway stock.


Mr. POULIOT:: The answer is given by Mr. Sheils, the deputy. I asked:
Did Sir Edward Peacock come to Canada on or about June 25, 1941?
And the department answered "yes". My next question was:
If so, did the Honourable Minister of Finance meet him?
The answer given was:
To be answered elsewhere.
The Budget-Mr. Pouliot

The next question was:
If not, was he met by other members of the cabinet ?
The answer given was:
Yes, by the Minister of Munitions and Supply.
Did Sir Edward Peacock come to Canada just to meet the Minister of Munitions and Supply and say, "how do you do?", and hear him say in reply "how do you do?" When I asked if Sir Edward Peacock would come here, the Minister of Finance (Mr. Ilsley) told me that he did not believe he would, and yet we have the statement that the Minister of Munitions and Supply met him. That statement is more authoritative than hearsay evidence from the Minister of Finance. The Minister of Finance cannot speak from his own personal knowledge because he was not in Ottawa at the time.


James Lorimer Ilsley: That is correct.


Jean-François Pouliot: There was a reply from the Department of Transport that they had no information regarding the visit in question. There is also a memorandum dated May 5 and addressed to Miss Breen, which reads:
Referred for the desired information, please, so far as questions 3 and 4.
That is signed by A. J. Maingot, for the deputy minister. Then there is a note to Mr. Maingot which reads:
The minister did not meet Sir Edward Peacock on or about June 25, 1941.
That is signed by L. Breen. Why was the Minister of National Defence appointed Acting Minister of Finance? How is it that the Minister of National Defence has enough spare time to be Acting Minister of Finance in times like these?


James Lorimer Ilsley: The Minister of National Defence is always the Acting Minister of Finance in the absence of the Minister of Finance and has been since he was Minister of Finance. He is always the Acting Minister of Finance when he is here.
' Mr. POULIOT: It is worse than I thought.


James Lorimer Ilsley: That is a long standing arrangement.


Jean-François Pouliot: It is absurd. The Minister of Finance should look after the Department of Finance and, if he is absent, he should have an acting minister who is not as busy as the Minister of National Defence. The Department of National Defence is the most important department in this war, and I do not see how the Minister of National Defence has the spare time to look after the Department of Finance, the wartime prices and trade
[Mr. Pouliot.l
board, and all the other things that come under the finance department. There is something else I should like to ask the minister. If he likes he may answer me after I am through, or he can take a note of it. How is it that the Minister of National Defence was appointed Acting Minister of Finance precisely at the time when Sir Edward Peacock was in Montreal?


James Lorimer Ilsley: He was appointed as soon as I became Minister of Finance; he has always been the Acting Minister of Finance in my absence, and was long before Sir Edward Peacock came to Montreal. It was in the summer of 1940.


Jean-François Pouliot: three and a half years and so knew their value, but because amongst these Canadian divisions- and this also applies to other divisions overseas where there are wider spaces-there are people with more novel conceptions of warfare.
Lord Mottistone said he had made the suggestion to a Canadian officer with a distinguished record, who had replied, "that just suits me".
He was introducing a motion in the upper house asking the government to take prompt action to increase the offensive power and equipment of the citizens of Britain. Equipment had been greatly increased, he declared, but the method of meeting an invasion needed more consideration.
This was said by Lord Mottistone. What did Herbert Morrison say in London? It is reported in the morning press of July 1. I have a Quebec paper in my hand, I do not have an English clipping; but this is what Mr. Morrison stated:
He declared that if a second front is opened it will be the Canadian troops who will constitute the spearhead of the allied armies that are to invade Europe.
The word "spearhead" is just the expression which was used by General Crerar a month and a half ago. .
I was very sorry to read in the press yesterday and to-day what the Prime Minister said in the house. It was a hint that the time for action in Europe was closer for the forces of Canada. Plenty of water has been running under the mill from July 3, 1940 to July 1, 1942. Now we see the effect of the propaganda which has been made by paid agents with this government and other influential people to induce them to forget that Canada is their country, and to put to shame Canadians who desire to stress the necessity of defending this country. We have the lesson of all other countries in the world, and I find it most illogical that the nearer the danger is to us the more men are sent overseas. What was the solemn promise which was made to the British government by the Minister of National Defence in the first winter of the war? He never told this house. I asked him once, and he did not answer me; he just mentioned a promise, without telling what it was, at a meeting which was held in the committee room, after the adjournment of one of the sessions, and at which were present the two hon. members for Ottawa. But we as members of the House of Commons had no details about it. At that time the number of recruits that were to be called up was only one-half of the number that we have now. Therefore I wonder whether a second promise has not been made by some member of the government to send all our men overseas and to keep nobody here to defend this country or to operate war industry. Can you expect, sir, men coming-out of the Lady Grey hospital here in Ottawa, 
sufferers from tuberculosis, or from the Lake Edward sanatorium in the province of Quebec, to act as brakemen or firemen on the railways? Railways are a war industry. That was admitted by the Minister of National Defence himself in the railways and shipping committee. Therefore, sir, that work should be done by men who are fit, and this is the more necessary because of the tremendous amount of traffic that we have now. What about the other industries in which we need able-bodied men to do work which is to help the army as well as the civilian population? But this, sir, does not count. You cannot put men who suffer from tuberculosis, men over the military age, men unfit for military service, in these very responsible positions. And this is the idea of sacrifice ! One day I said that the "Isaac" atmosphere of sacrifice was all wrong; and the reporter put "Isis", but that is not what I said. We should not consider these matters from the sentimental point of view. Everything should be reasoned precisely in war time. Military science is just the application of common sense to the realities of life.
What I fear, is not what is done openly but what is under camouflage, what is hidden because one is afraid of telling "the truth, the whole truth and nothing but the truth" to the Canadian people, who deserve to hear nothing than that.	[DOT]
I regret that I am very miserable in the house since I have lost a very dear friend, one who was most unselfish, who was a friend of every hon. member and the sanest adviser the Prime Minister ever had. At times I did not agree with him on certain matters, but it was possible to discuss things with him, although I did not abuse the privilege. He was a big brother to me, and he was the right hand of the Prime Minister. I know the Prime Minister feels his loss very deeply. He will remember also that during the Christmas season when he went to Washington to meet Mr. Churchill as well as President Roosevelt, I sent him a telegram of good wishes, and I added to it, "Please, sir, when you get to Washington do not forget the memory of Ernest Lapointe, who was your best friend as well as mine." There is a saying to the effect that the dead go fast, but in my view, sir, if Mr. Lapointe had been alive, there are many difficulties which we would not now have to face.
There is another thing that I want to say. At home I have a picture of the first cabinet of Sir Wilfrid Laurier, taken in the council room, and on the wall there is a painting representing Our Lord among the doctors of law in the temple. I wonder if that painting

The Budget-Division
is still there or if it has been removed. At any rate, it was an inspiration for the ministers of the day to have a reminder of Christian ideals while they were discussing national problems. I hope that if the picture is not there, the idea which it portrays has not been forgotten, and that in all the policies that are to be submitted to this house the first consideration will be, not of any other country, but of Canada first. I have never said this so loud, but it is time now to come down to earth. What is the difference between a statesman and a politician? A statesman is such a great man that his head is above the clouds and he does not see what happens on the earth; a politician is a smaller man, with his head under the clouds, who sees what is going on. I suggest to the ministers that they be not influenced by the flattery of interested men who want jobs, contracts or favours. Let them not forget that quotation from the scriptures that "the wounds of those who love are better than the kisses of those who hate".
Mr. ST. LAURENT: As a matter of privilege, Mr. Speaker, I wish to state for the information of the hon. member for Temiscouata (Mr. Pouliot) that I was for a few months a member of the board of directors of the bank of Montreal; that I resigned therefrom when I became a member of this government; that I never at any time discussed any matter, relating directly or indirectly to amalgamation of the Canadian railways, with anyone connected with the bank of Montreal, nor did I at any time hear any matter, relating directly or indirectly to any such amalgamation, discussed by any person connected in any way with the bank of Montreal.


Jean-François Pouliot: I would not have said it if the minister had not smiled when I was speaking seriously.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Vien in the chair.
Progress reported.
On motion of Mr. Mackenzie King the house adjourned at 11.50 p.m.
[Stage Direction]
Privilege-Mr. Ralston
[Stage Direction]
Friday, July 3, 1942