[Stage Direction]
First report of standing committee on Banking and Commerce-Mr. Moore.

Mr. T. A. FONTAINE (St. Hyacinthe-Bagot) moved:: That the first report of the standing committee on miscellaneous private bills, presented to the house on July 2, 1943, be now concurred in.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Bill No. 115, for the relief of John Whitehead Casement.-r-Mr. Emmerson.


[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Leader of the Opposition):: Mr. Speaker, I should like to ask a question of the Minister of Labour. I understand a radio broadcast heard over certain stations at noon to-day carried the

Mobilization Act

news that arrests had been made by the Royal Canadian Mounted Police of certain officials in Toronto under the jurisdiction of the Minister of Labour. I shojild be glad if the minister would make a statement to the house, so that we may be informed of the latest developments in this connection.


Hon. HUMPHREY MITCHELL (Minister of Labour):: Mr. Speaker, prior to receiving notice of the hon. member's question I had a statement prepared with regard to this matter. It is as follows:
I feel that hon. members should be informed that this morning the divisional registrar of the mobilization division with headquarters at Toronto was arrested together with several others not connected with this or any other government department. The prosecution is in the hands of the Department of Justice. I am informed that the charge is laid under section 31 of the mobilization regulations-that is, doing an act likely to nullify or impede the operation of the regulations or aiding and abetting the person committing such an act. One of the inspectors of the mobilization section has been appointed acting registrar.	The investigation has not implicated anyone else in the service.



FARMERS' CREDITORS


[Stage Direction]
On the orders of the day:
Mr. M. J. COLD WELL (Rosetown-Biggar):: Mr. Speaker, I should like to ask a question of the Minister of Justice. When may we expect legislation regarding amendments to the Farmers' Creditors Arrangement Act? We are most anxious, now that the session is drawing to an end, to have these amendments before us.
Hon. L. S. ST. LAURENT (Minister of Justice): I can only repeat the information I gave the house on an earlier occasion. It is intended to bring down legislation as soon as the war appropriation measure, now before the house, is disposed of.
\



INQUIRY RESPECTING QUOTA AND PRICE

[Stage Direction]
On the orders of the day:
Mr. G. S. WHITE (Hastings-Peterborough):: Mr. Speaker, I should like to ask a question of the Minister of Agriculture. On May 17 of this year, when there was a discussion in the house in regard to the cheese quota for this year, and the price to be paid, the minister intimated, as reported at page 2720 of

Hansard, that he might within a period of a few weeks be in a position to make some further announcement with respect to price. A press dispatch from Ottawa, dated July 4, states that on July 1 the cheese in storage is some 15,000,000 pounds less than it was on July 1, 1942. Is the minister in a position now to make some further statement?


Hon. J. G. GARDINER (Minister of Agriculture):: Mr. Speaker, the estimates having to do with the dairy board will be before the committee, I should hope, within the next few minutes. That would be the appropriate time to discuss this matter.



OLD AGE PENSIONS


[Stage Direction]
On the orders of the day:
Mr. S. H. KNOWLES (Winnipeg North Centre):: Mr. Speaker, I should like to ask a question of the Prime Minister or the Minister of Finance. Has the government received a resolution from the Baptist Union of Western Canada, which met in Winnipeg last week, urging the government to "accede to the overwhelming weight of public opinion" -and I quote those words from the resolution-by lowering the pensionable age to sixty-five, and by increasing the amount of the old age pension to $30 per month? If so, what reply has been made by the government?


Some hon. MEMBERS:: Order.



WAR APPROPRIATION BILL


[Stage Direction]
The house resumed from Monday, July 5, consideration in committee of a resolution to grant to his majesty certain sums of money for the carrying out of measures consequent upon the existence of a state of war-Mr. Ilsley -Mr. Bradette in the chair.

[Stage Direction]
Flax fibre administrator - administration, $30,500.
Mr. CASTLEDEN:: How much flax was handled by this administrator, and what are the stocks at present on hand?


James Garfield Gardiner: The hon. member is referring to fibre flax?


George Hugh Castleden: Yes.


James Garfield Gardiner: The only flax on hand is that not processed; they are working at the job all the time. During 1942 there was a fur-

War Appropriation-Agriculture
ther expansion of acreage of some 2,500 acres, and three more mills commenced operations. The expansion of the industry is indicated in the following table:
1939 8 mills
8,300 acres 1,344 tons $837,000
1942 38 mills 47,000 acres 8,730 tons, estimated $3,202,000
During the year sixteen mills operated in Ontario and twenty-two in Quebec.


[Stage Direction]
Item agreed to.
Fertilizers and pesticides administrator- administration, $31,600.
Fertilizers subventions and freight allowances,
Mr. CRUICKSHANK:: I should like to discuss a matter which I have taken up before with the minister. This time I am not in a critical mood, although I may be later in the day. Of the domestic corn produced in our province some eighty-five per cent is recovered in the form of ensilage. As the minister knows, the fertilizer subsidy does not apply to domestic com. The farmers have been asked to increase the production of dairy products and it is felt that this subsidy should apply to this class of corn. I would ask that the minister have his department give consideration to this matter. I understand that some of tne officials of the department in British Co'umbia have agreed with our estimate that we recover that percentage for dairy feed.


James Garfield Gardiner: We should like to give a subsidy on corn, but unfortunately this year we have had to withdraw it from all com. The reason is that we are short of fertilizers and we have to distribute them largely in connection with grass and other grain crops.


[Stage Direction]
Item agreed to.
Seeds administrator-administration, $16,500.
Joint seed programme-1941, $180,000.
Mr. WRIGHT:: Does this item cover vegetable seeds or grain seeds generally?


James Garfield Gardiner: It covers stock seeds, alfalfa seed, red clover seed, oil bearing seed and seeds of that type, not only for Canada but those that are sent to Great Britain.


Percy Ellis Wright: Was there any surplus of alfalfa seed this year for export?


James Garfield Gardiner: There was some for export last year and there will be some for export this year, but the amount will be somewhat limited.


Mr. DIEFENBAKER:: How much was exported last year? If the minister has the figures, I should like to know what percentage came from western grain.


James Garfield Gardiner: A total of 660,000 pounds of western seed was moved east, including approximately 357,000 pounds which was purchased by the board at not more than 33 cents per pound. On this latter quantity the government paid storage and transportation costs to eastern Canada in order that the seed could be distributed under the established ceiling prices.


[Stage Direction]
Item agreed to.
Bacon board-administration, $71,300.
Mr. PERLEY:: How many members are there on this board and how many employees, are there?


James Garfield Gardiner: There are six members of the board, and either four or five employees. I have not the names here at the moment. Then there is an advisory committee.


Ernest Edward Perley: How often does this board meet?


James Garfield Gardiner: The full board meets about onoe a month and sometimes more than that, but the manager, Mr. Pearsall, who is an official of the department, is constantly at work in connection with the activities of the board.


Mr. TUSTIN:: I understand that the bacon board has now become the meat board; has there been any increase in the number of the board?


James Garfield Gardiner: There has not been any increase, and we have not in mind the making of any.


George James Tustin: This morning in the committee we listened to a member of this board, and we were given to understand that the board is buying beef at a lower price during the coming year. Can the minister enlarge upon that statement?


James Garfield Gardiner: As all members know, we are under price control, and so far as beef is concerned there is a selling price established of between 20 and 21 cents a pound for complete carcasses at Toronto. A flat ceiling on beef cuts is established throughout the year, and then from May 27 on to some time in the middle of August there is a floor established which is a quarter-cent below the ceiling. This gradually goes down until in October it is two and one-quarter cents below the ceiling. That is on the cuts of beef, not on the carcass. There is a floor price on the cuts which is a quarter-cent below the ceiling for the period through which we are now passing. This spread goes down to two and a half cents at the period at which the original ceiling prices were set, during September and

War Appropriation-Agriculture
October. Then it starts to rise again until in the spring it is back up to within a quarter of a cent of the ceiling on cuts.
The result is that on live cattle there could be a spread at the widest point of about a cent a pound; that is, it could drop about a cent below the ceiling. We have an understanding that we will buy when cattle get down to that floor. These cattle are bought to take care of. any deficiencies in the country outside of the area where they are bought. After the supply in Canada has been taken care of, we have an undertaking to supply any surplus beef to Britain. That beef must be frozen. If we buy that beef it would have to be put into freezers and frozen and eventually shipped to Britain.


Mr. FAIR:: I think it would be well if the minister made clear to the house now that there is no guaranteed price to the producers, that the guarantee is only to the packer and that the producer is at the mercy of the market.


James Garfield Gardiner: No. If the hon. member follows through what I have just been saying he will note that there cannot be any great spread which will accrue to the packer. We begin to buy beef when it gets down to the floor and see to it that that beef goes into freezers for shipment for Britain.


Percy Ellis Wright: The evidence given before the agriculture committee was that the government buys beefs only from the packer, that the price on the open market could drop as much as five cents a pound and the government would not purchase beef on the market, that they would only purchase from the packers at a given floor. There is no guarantee at all so far as the price on the open market is concerned.


James Garfield Gardiner: There is probably some misunderstanding of the evidence. The board has the power to purchase beef and order it into packing plants and order it processed for the British market. We only buy beef, to be put into packing plants where it can be frozen. There is authority to see that that beef goes into freezers. The practical way of doing it, unless someone is trying to get a greater margin of profit than he is entitled to, would be simply to order the packing plants under certain circumstances to deliver a certain proportion of the purchases into the freezers. If there is any difficulty about it there is sufficient authority under the orders in council to permit of its being handled otherwise.


Mr. BLACKMORE:: What we want to
know is whether that authority is being used. Will the minister tell the committee by what

sort of organization the beef feeders in a given area can sell their beef to a government agent in case they are unable to sell it on the open market at the price they should get?


James Garfield Gardiner: I can assure all members of the committee that if it ever becomes necessary to use the authority we have we shall use it, but as long as we can carry on through the ordinary channels of trade, if that is not to the disadvantage of the producer or the consumer, we shall carry on in that way. But if we ever have reason to exercise our authority we will use it.


John Horne Blackmore: What would constitute such reason?


James Garfield Gardiner: If, for instance, there
were no buyers on a certain market and the price were allowed to go down, we would probably ask somebody to buy.


John Horne Blackmore: Suppose the buyers
were refusing to pay the price they should pay?


James Garfield Gardiner: That would be exactly
the reason why we would take action. We have authority under those conditions to take
action and secure the beef.


John Horne Blackmore: Suppose the farmers
find the prices are too low; to whom can they apply in Alberta, for instance?


James Garfield Gardiner: There are different
ways of doing it. We can buy the cattle and notify the producer to ship them to certain plants to be slaughtered under our direction, or the government can secure them outright and have them sent to the plant. We have the authority to do anything that it is necessary to do, but we are not looking for trouble. If somebody creates trouble we will take action,


John Horne Blackmore: The trouble is that
the Department of Agriculture has overlooked a serious situation. I have a letter here from a stock breeders association that fed 1,000 head last year, and the writer declares that out of approximately 1,000 head of cattle fed by the association not one brought as much as 12 cents, while many sold for 10J and 10{ cents.


James Garfield Gardiner: On what market was
that?


John Horne Blackmore: This is from the
stock breeders association at Cardston. It does not say where they were selling, but they were unable to get government assistance. What I want to know is how they can get government assistance in a case of that kind.

War Appropriation-Agriculture


James Garfield Gardiner: They could wire to the department, or the hon. member could bring his wire to the department and the officials would act if action were warranted.


John Horne Blackmore: I turned over the
wire I received from that organization about June 9 or 10, so that there was every opportunity for the department to take action.


James Garfield Gardiner: That was the same
wire that was referred to on a previous occasion?


John Horne Blackmore: Yes.


James Garfield Gardiner: I think that was acted
on.


John Horne Blackmore: It is an indication
that all was not well, and if the minister had authority to act and did not use it I want to know what can be done in a similar case.


James Garfield Gardiner: All I can say to the
hon. member is that the market has not been going down. It has been rising, and surprising many people by rising over a considerable time. I think the situation can well be left to the kind of cattle dealers I know in the vicinity my hon. friend speaks of, who know the cattle business better than anybody else in Canada. As long as the price is keeping tip or remaining at a dead level on the regular market, I think they can be trusted to sell their cattle at a fair price.


John Horne Blackmore: There are very few
people who know more about cattle than the people who have written me.


James Garfield Gardiner: That is exactly what
I was saying.


John Horne Blackmore: And they were not able to get a price. That indicates that something is wrong.


James Garfield Gardiner: The price was there on the market.


Ernest Edward Perley: Will the minister explain why the market is advancing so rapidly? This morning's Globe and Mail says it has advanced forty cents a hundred. Why is it advancing so rapidly, in view of the announcement that the price will shortly be dropped one cent?


James Garfield Gardiner: It is difficult to understand. Here we have one member telling us that a man cannot sell his cattle at a reasonable price, and another saying that prices are going up forty cents a hundred. There is something wrong somewhere between those two statements.


John Horne Blackmore: Exactly, and we want to have it corrected. There must be something
wrong with the government's machinery. The people selling beef have no recourse in case the price is low.


James Garfield Gardiner: There is something
wrong, I think, with the report. I think that statement came at the end of a certain meeting. I think cattle have been marketed fairly successfully since then. We have had no further complaint that I know of from these people.


Mr. ROSS (Souris):: A return which was brought down the other day showed that the Department of Munitions and Supply was buying beef for the armed forces above the ceiling price. If that department can buy at a price above the ceiling for the armed forces, it will readily be seen what a difficulty that creates. What liaison is there between the Department of Agriculture and the prices board in order to govern that situation?


James Garfield Gardiner: There are two officers of the Department of Agriculture on the board. The manager of the meat board is also a member of the staff of the department. The Department of Munitions and Supply for many weeks now have been paying the ceiling price and not more than the ceiling price for beef.


[Stage Direction]
Item agreed to.
Dairy products board-administration, $14,950.
George Alexander Cruickshank: I should like to say a word on this item, which the minister can pass very quickly if he will answer a question; then we may spend a couple of hours on the next item. I want to know how the subsidy paid on dairy products is arrived at. I have been trying to get this information for the last two weeks in the agriculture committee but so far have not succeeded. I presume it is not within the knowledge of the officials who have been there. How do they arrive at a set price on dairy products such as fluid milk? What is taken into account? Is the tax paid on land taken into account, the value of the land, the amount of wages paid, and other considerations in arriving at these subsidies?


James Garfield Gardiner: Very early in the war the prices of dairy products were quite low. Butter was around 20 cents, cheese around 10 or 12 cents, and milk was about $1.60, but now prices are very much higher than that. The ceiling price on butter is 35 cents and the floor is 32 cents, and there is a subsidy on top of that of eight cents in the summer and ten cents in the winter. On cheese the price is slightly over 20 cents and on milk it runs from $1.85 to $2.50.
With regard to production, costs of course are different in different places, and I can

War Appropriation-Agriculture
only say that we were told by representatives of the dairy industry, very early in the war and again no longer than eighteen months ago, that prices very much lower than the prices being paid now would cover cost of production. In fact, it was suggested that if prices were established very much lower than the prices we have now for the whole war the industry would be well taken care of. We did not establish those prices early in the war and therefore I can see that the dairy people would now be justified in asking for more than actual cost of production in order to balance some of the earnings of the present period against the period when we were under cost of production.
I recite these facts to show that some attention has been given to cost of production. We did attempt to get a price higher than we had been assured earlier in the war would cover cost of production, and we have prices considerably higher than that, believing that the farmers were entitled to more than cost of production because they took less for a time.
So far as recent arrangements are concerned, the dairy industry was consulted and the whole matter was discussed with them, both by the prices board and by representatives of the Department of Agriculture before the present subsidies, which are paid on top of the price, were provided; and we thought at the time we put them on that everyone was satisfied. We found afterwards, however, that there were some who were not entirely satisfied with the arrangement made, though we have considered the arrangement fairly satisfactory and we are abiding by it.


George Alexander Cruickshank: If these agriculture estimates were rushed through as they stand they would form interesting reading for the farmers. I appreciate the explanation the minister has given and I have been told by farm members from Ontario that they are satisfied with these particular prices. In British Columbia, as the minister knows, we are not satisfied. The deputy minister of agriculture, in his evidence, admitted that we had an exceptional situation in that province and that our costs were higher. The department has taken into consideration to a certain extent the question of cost of production. The minister has pointed out that the price of milk varies in different cities. I presume therefore he admits that it costs more to produce in certain areas than in others. This factor has not been taken into account so far as British Columbia is concerned.
I am not satisfied with the minister's answer. I should like to know who advised

that farmers were satisfied with the prices that have been settled. In arriving at the subsidy, did the department assume that there is a difference in the quality of milk used for evaporated milk and in the fluid market respectively? In other words, one farm produces two ten-gallon cans of milk, ten gallons going to the fluid market and ten into the evaporated milk trade, both standard milk. Is there any difference in the quality? We do not think so. I should like to know whether the minister is of the opinion that there is a difference in the quality. When he answers that question I will ask another.


James Garfield Gardiner: Of course, the hon.
member, who is familiar with the dairy farming industry and also with the processing of milk, will understand that there are different conditions across Canada; that is to say, there are different requirements at different places for the delivery of milk. Whole milk is delivered in cities or towns of much smaller size and in certain areas costs have to be higher. They have to be higher in a large city than in smaller places. That accounts for some of the variations between the ceiling that may be placed and the subsidy that is established in some particular community. As regards the prices of processed milk as compared with whole milk, the lower price paid for processed milk is accounted for by the fact that there is a smaller demand for the canned milk in these particular communities than there is for whole milk. Whole milk is delivered, or was delivered before the war started, in some provinces, though not in British Columbia, under the direction of a milk board appointed provincially. That milk board dealt with the situation within the province. Quite often they established proportions of milk to be delivered by different suppliers. A certain percentage was to be delivered as whole milk and that was all that could be distributed as whole milk. The object was to distribute the business over the suppliers, and any milk outside that particular pool was sold at a different price. Much of that milk went into canning factories, into cheese or butter or something else. I do not believe that there was a board at that time in British Columbia, and there is not now; *nevertheless the situation there is governed by the same consideration. There is a demand for a very considerable amount of whole milk in cities the size of Vancouver and Victoria, and that demand itself creates a price for whole milk. I am sure, however, it will be agreed that if the canning plants in British Columbia were to be asked to pay that same price for whole milk they would not be able to compete with canning factories elsewhere;

War Appropriation-Agriculture
and much of this milk is sold not in the local community but in the general market outside. I understand there has been some difficulty in British Columbia because of the two prices paid for milk, one going into the canning plants and the other for use as whole milk.


George Alexander Cruickshank: It is quite true that we are not operating under a board similar to those established in other .provinces. The marketing act, so far, has proved .profitable only to the legal profession. It has been to the privy council half a dozen times. Seventy per cent of our farmers sell their milk in competition with the lower-priced milk .products of Ontario-because the deputy minister has admitted that milk can be produced at lower cost in Ontario and Quebec than in British Columbia-and all of the remaining thirty per cent of the farmers in British Columbia market their .milk on the fluid markets, yet by their very regulations, laid down not by the minister's department but in the holy of holies over here, we are compelled to pay our own farmers the .prices they set for the fluid milk. In other words, we have our own wholesale plant and we are forced to pay to our wholesale .plant the price they set for our producers. Unfortunately, the wartime prices board always consults the minority, and never the majority, when it comes to British Columbia, and so they compel us to pay to the retail trade the price they set for our own producers, which means the price that the minority or independent shipper wants to meet. We cannot see that there is any difference in the quality of milk and there should be no difference in the price.
The minister admitted the other day, indirectly at any rate, that there is a difference in the quality of milk produced. May I point out that the three maritime provinces and British Columbia are the only provinces which are entirely tuberculosis-free areas. I am including the maritime provinces; it is an honour to them. Our milk is therefore of a higher quality. We cannot see how the amount of subsidy is arrived at by the board, which we understand sets the price paid to the farmer, subject to approval by the wartime prices board. I understand the agriculture board sets the amount of the subsidy to be paid.


James Garfield Gardiner: May I correct that at once. All prices are set by the prices board. Our board does not set prices, but the prices board does. That board, however, does discuss the matter of price with our food board. If we are not satisfied with a price when it is set, if we are not satisfied that the price will get the production we want, then we arrange for the subsidy. That goes on in addition to the price.


George Alexander Cruickshank: In other words, they set the ceiling price, and your department arranges whatever subsidy is necessary. I am thinking about our evaporated milk. We did not particularly complain when you left it on in the summer months before. So far as I can understand from any witness down before the agriculture committee, the main reason of the subsidy is the incentive to increase production. So far as the Department of Agriculture is concerned the Fraser valley is admittedly a deficiency area for milk. I shall have quite a bit to say a little later about its being a deficiency area for potatoes. If the milk subsidy is put on for that reason, we think that that spread should go over on evaporated milk. It is admitted by departmental officials, either the deputy minister or one of the senior officials who appeared before us, that the cost of production in our province is a great deal higher than in any other part of Canada. This statement appears in evidence given before one of the committees. I would urge upon the minister that he take into consideration payment on the quality of milk, and bear in mind the cost of production in making recommendation of the subsidy. I say this with all due deference to the statements of his official, and I should like to know from the minister now which official stated that the price was satisfactory to the dairy farmers of Canada, and who recommended him.


James Garfield Gardiner: What I stated was that we held meetings with officials of the dairy organizations across Canada-the Dairy Association of Canada, I think is, the name of it-* and we thought we were satisfying them.


George Alexander Cruickshank: That is different.


James Garfield Gardiner: But I stated that afterwards we found out that some of them were not entirely satisfied, but that we had checked any dissatisfactions which were announced to us, and had satisfied ourselves that the arrangement should remain as it is for this season.
With regard to canned milk and whole milk in British Columbia, we have not been asking for canned milk from British Columbia, and that is one of the difficulties in connection with two or three of these products that are being discussed. I repeat that we have not asked British Columbia to supply us with canned milk. We would very much prefer that British Columbia should entirely take care of the local situation on the western side of Canada with regard to milk. In other words, we are not bidding for the milk of British Columbia. We quite admit that if we were, we would probably have to bid a higher price than we would for milk from some other places. But the supply which we wish

War Appropriation-Agriculture
to send out of Canada we are obtaining at a lesser cost, where the freight rate is yery much lower than if we shipped from British Columbia. I admit that that is not a complete answer. Some consideration should be given to British Columbia because of its location, because of the fact that freights from there are higher, and I think that; some consideration has been given, although perhaps not enough, to that fact.


George Alexander Cruickshank: Did the minister say that we should look after the fluid milk?


James Garfield Gardiner: I said that we would like you to.


George Alexander Cruickshank: I should like that statement explained a little. Are we not looking after it now? I should like to know where you are getting any milk in the province of British Columbia if that province does not produce for its fluid milk market. Surely that is not what the minister meant.


James Garfield Gardiner: I meant just exactly what I said, that we are not anxious to get milk from British Columbia canned; we would very much prefer that British Columbia dispose of their milk as whole milk or butter rather than have it canned, and therefore we are not bidding up the price of canned milk to the price of fluid milk.


George Alexander Cruickshank: Surely the minister will admit that any dairy country, even Ontario, must have some place to dispose of its milk. You cannot in any dairy country or any dairy district dispose of all your milk on the fluid market. The minister knows that a certain percentage of it must be put in byproducts-cheese, butter or evaporated milk- and obviously, with your fresh season and then your off season, you cannot sell all your milk in the fluid market in any dairying district. But last year 550,000 cases of evaporated milk were taken from British Columbia. Does anyone think that a dairy district can arrange to provide 550,000 cases of evaporated milk for the British market, which needed it so badly, in one year, and in the next year put all its milk on to the fluid or some other market?


Mr. WARREN:: May I ask a question? It is directed to the hon. member for Fraser Valley.


George Alexander Cruickshank: I do not have to be a witness, but I shall be glad to answer it.


Ralph Melville Warren: My question is this.
Fraser Valley has been represented in this house as one of the most fertile spots in the universe. Can the hon. member enlighten us on this point: why should the cost of pro-

duotion be so much higher in such a productive, fertile spot than in our raviney knolls and sandy hills down in Ontario?


Mr. REID:: We can explain that. It is very easily explained. There are perhaps two
or three reasons. First of all you must bear in mind that in British Columbia, in the lower Fraser valley, land, clearing operations are very expensive. I do not think you can put under cultivation from the virgin forest in the Fraser valley one acre of land under $500 an acre. That is the first cause. Then' we in British Columbia, industrially at least, have been more generous with our workers and have paid them more highly than any other province in Canada. We have led in social legislation, with the result that the costs have gone up. We have areas of very productive land which are kept productive only because they are under a diking system; they are alluvial land, and some of our farmers are paying on this account up to $7.50 per acre. Let anybody take the most highly taxed land in Ontario and ask the farmers there how they would like to pay $7.50 an acre in taxation. These are some of the factors which require that we in British Columbia should get a higher price than other provinces.


Mr. McNEVIN:: I do not desire to enter into any controversy between Ontario farmers and British Columbia farmers, dairy or otherwise. But I understood the hon. member for Fraser Valley to say that the milk in British Columbia is of a higher quality because they are in an accredited area. That, I believe, pertains to the whole province. But I am sure that we in Ontario have a very much higher number of fully accredited herds of dairy cattle than any other part of the dominion. So that I think, taking it by and large, it cannot be established that milk is of a higher quality in one part of Canada than in another.


George Alexander Cruickshank: I have not said that our milk is of a higher quality throughout, but the hon. member has borne out exactly what I said, and if he lives in an accredited area-


Thomas Bruce McNevin: I do.


George Alexander Cruickshank: -he will know that his cattle cost more and are worth more than those in a non-accredited area. That is one of the points which I am glad he brought out. It hurts British Columbia members who are trying to get an increase in the price of their dairy products-and their potatoes, to which I shall refer in a minute-when apparently in some parts of Canada, certainly in

War Appropriation-Agriculture
Ontario, hon. members are satisfied with prices; and I do not think it helps much when they cannot even stay and take it when we show that we are not satisfied with their statements.
I want to revert for a minute to the question of our costs, and repeat what the hon. member for New Westminster said about the diking areas. Not only that, but we have to pay up to 12.50 an acre drainage tax as well. On top of that, we have no industries out there, so that we cannot sell our milk in markets where plants which are subsidized by the government will pay a higher price for milk.


Mr. GILLIS:: I wish to ask the minister if he would elaborate a little further the statement he made a moment ago, that the ceiling price of butter was 35 cents a pound and the floor 32 cents, with a ten-cent and an eight-cent subsidy. I assume that that subsidy goes to the farmer or to the milk producer. What I am interested in is the cost of the butter to the consumer. If your ceiling price is 35 cents a pound I suppose that for eastern Canada that is fixed as per Montreal. I do not know what the cost of butter in eastern Canada is at the present time, but I know that a year ago it was selling for 53 and 55 cents a pound. Now that you have a ceiling of 35 cents, and you are subsidizing the farmer to take up the extra cost to the extent that you have mentioned, why should that butter be retailed to the consumer at 55 and 53 cents a pound? Somebody is crashing the ceiling, or I do not understand the situation.


James Garfield Gardiner: The position is that the ceiling is 35 cents, as I stated. The floor in May is 32 cents, and the floor advances three-eighths of a cent each month; at present it is 32 3/4 cents, and the price of butter at present is around 33 cents or a little higher. The price has been running about 33 cents for some time. What happens is that as soon as the creamery reports to the government that it has paid the eight-cent subsidy on butter fat-not on pounds of butter-to the farmer, the government reimburses it for the amount it pays to the farmer. It is of course clear from that that the money goes to the producer. The wholesale selling price is 35 cents at Montreal and 36 cents in the maritimes. The base figure is on Montreal, and then it is lower in the west and higher in the east. So that the wholesale price of butter in the maritimes ought to be based on that 36 cents-I am not speaking about the retail price.


George James Tustin: Plus the eight cents?


James Garfield Gardiner: No; the eight cents is paid to the farmers.


George James Tustin: But it puts the price of butter up by eight cents?


James Garfield Gardiner: No, not to the man who purchases it from a store. That is the reason for doing this. We pay the farmer a subsidy of eight cents so that the merchant does not have to charge the consumer a higher price. The idea is to keep down the cost of living. We pay to the producer, and that is not supposed to be passed on to the consumer. The producer gets it.


Mr. JOHNSTON (Bow River):: Is there any control over the price at which the retailer must sell it?


James Garfield Gardiner: Yes, and I believe that prosecutions are being lodged regularly where people have broken the ceiling regulations.


Mr. HANSELL:: What protection has the producer of dairy products in respect of grades given by creameries, or by those who buy cream or eggs? Some time ago by government action the price of cream went up. It just happened that at that time I was in a certain section of the country where I received no end of complaints to the effect that the very moment the price went up their grades came down. Of course they blamed the creameries. I tried to get some information, but the information I received in my view was absurd- although it might not have been. I was told that on account of the heavy rains last year the growth of weeds had been prolific, and that the dairy cows had been eating weeds, with the result that the grade of cream came down. The peculiar thing however was that when the price went up the cows were eating weeds in the pasture. About that time I happened to be reading a newspaper in which I came across a small advertisement which read in this way, "Eggs and cream wanted; honest grades; quick return." I will not give the name of the dairy, but the fact that they advertised the giving of honest grades would seem to indicate that somewhere in the picture there may be some dishonest grades. What protection have the producers of dairy products when it comes to grading? They have no way of grading their own cream or eggs. They are at the mercy of those to whom they must sell. Are they sure they will get honest grades?


James Garfield Gardiner: I am surprised to learn that the difficulties described exist in Alberta. The simple explanation is that the inspection of cream is carried on entirely by provincial authorities. They appoint inspectors. There is an inspector who inspects every plant. I believe under the Alberta legislation-and this is not true in some other places-the plant itself indirectly pays the salary of the inspector who does the grading. But I should not think



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that that would result in there being any improper grading. I believe the provincial authorities in all the provinces take very good care to check carefully the grading of cream. I understand the system in Alberta is fairly complete, and if there is anything wrong with the grading in that province then that is the authority to which the hon. member should appeal.


Ernest George Hansell: The minister is assuming that the section of the country I was in was Alberta. I did not say so.


James Garfield Gardiner: Well, all I can say is that it might be better if it were anywhere else in the west.


George Stanley White: The minister mentioned that he would give some information with respect to cheese. Is he prepared to do that now?


James Garfield Gardiner: When the hon. member was speaking a few moments ago he referred to stock figures as of July 1. The figures I had intended to read, but which I shall not read unless the hon. member so desires, were those to the end of May. The stock figures as of July 1 are these: Total stock, based on nine cities across Canada, on July 1, 1942, amounted to 39,695,000 pounds. On July 1, 1943, it is 24,571,000 pounds. Those are the totals of stocks in store. There is about 15,000,000 pounds less in store this year than on July 1 a year ago. I gave figures to the house the other day which indicate that exports are still higher 'this year than they were a year ago, indicating that up to date we are pretty well keeping up in our deliveries to Great Britain, under contract. We have no intention of changing the cheese price this year; we intend to go through the season on that cheese price.


George Stanley White: The figures given by the minister last week, as reported at page 4313 of Hansard, indicate that the production of cheese in the period of January to May, 1943, as compared with the same period in 1942, was down to the extent of fifty per cent, or
52.000.	000 pounds to 26,000,000 pounds. The minister has just stated that cheese in storage amounts to 15,000,000 pounds. When we look at the exports we find that exports for 1943 as compared with those of 1942 are up by only
6.000.	000 pounds. Will the minister explain where the extra quantity of cheese is coming from to fill the quota?


James Garfield Gardiner: Part of it comes from the surplus carried through from last year.


George Stanley White: But, from now on, what is it?


James Garfield Gardiner: I shall come to that in a moment. Part of what is contained in the
extra exports which have gone overseas, up to date, came out of surpluses carried over from last year, and1 we knew about that when we were setting the position for this year. The position we took at the beginning of the season was that we wanted a certain distribution of milk in order to get the result we had undertaken, whether for the home market or for the British market. We took certain action very early in the season, and announced it, in the hope that we would get a certain amount of cheese for the British market, a certain amount of whole milk for our own market, and a certain amount of butter for our own market. The present position is that in the week ending July 3, 1943, as compared with the similar week in 1942, in western Ontario-the region west of Toronto-we had 7,513 boxes inspected, and in 1942 we had 8,575. That is a decrease of 12-4 per cent in western Ontario as compared with the same week in the same area last year. In Ontario east of Toronto the total this year is 40,998 boxes, and last year it amounted to 42,841 boxes, the decrease being only 4-3 per cent. In other words, as I have stated before, this was a backward season in the early weeks. It was suggested that as the season advanced we would gradually overtake our production of last year. In eastern Ontario we have nearly reached our production of last year; in the last week for which we have figures we are down only 4-3 per cent. In Quebec we are down 25-6 per cent, the production being 21,863 boxes for that week as compared with 29,529 boxes a year ago. The total reduction for that week in Ontario and Quebec amounts to 13-5 per cent. The cumulative position at the end of this period last year was 643,000 boxes as compared with 386,000 boxes this year. That is the total production from April 1, the beginning of the cheese year. This year for this period we are down 39-9 per cent. That is about as near as I can come to the position. By taking all the cheese that is coming onto the market and by taking the carry-over from last year, we have been making the exports of which I have spoken.


George Stanley White: The minister has given the
figures up to the first week in July. Does he feel that we are going to be able to meet our quota and still have cheese left for Canada?


James Garfield Gardiner: We have not yet reached our peak. It is impossible to say definitely whether we will reach it, but we are going to come near enough to reaching it to reach the position we expected to reach at the beginning of the season.

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George Stanley White: Is not June usually the
peak?


James Garfield Gardiner: Everyone knows that
we are about a month late this year because of the backward season.


George Stanley White: Did the minister mean a
moment ago that there is not going to be any adjustment in the price of cheese for 1943?


James Garfield Gardiner: I should think the fact that we have come up to what is usually the peak period without making any adjustment would be the answer to that. But I have stated definitely that we are not going to make any change.


Mr. WOOD:: I think the minister or those who are responsible for setting the prices of dairy products in this country should give some consideration to the amount of labour that is put into dairy production. This has been a rather unusual season and I do not expect that the production of dairy products will continue to rise. After all, weather conditions have a considerable bearing upon the production we expect to get from our dairy herds. I do not think the minister is quite within his rights to be so resolute and to say that he does not expect to increase the price. Monetary reward should not always be the consideration, but when we consider that Ontario is going to have only half a crop at best, we must realize that there will be many farmers who will have to buy grain. It is only reasonable to expect that there will be a decrease in dairy production because of that. There are farmers who are well enough off to be able to go out and buy a carload of western grain and thus keep up the production of their herds, but there are many others, and I think they are in the majority, who will not be able to do that. The minister would be wise to keep the present weather conditions in mind. As a practical farmer I do not expect that we shall be able to fulfil our quota of dairy products. Some will have to go without certain things they expect to get if we are to fulfil our agreement with our friends, and I am in favour of doing that. Dairying is an every-day job and it takes a lot of stamina for a man to milk his cows twice a day, seven days a week, three hundred and sixty-five days in the year. We have been somewhat concerned at the number of dairy cattle being sold in the United States. I realize that this is a lucrative market for live stock-
Mr. BLACIvMORE: Will the hon. member tell us why these cattle are going across to the United States?
72537-278i


George Ernest Wood: The United States market is very good at the present time. These people are coming over to Canada and offering extreme prices for dairy cattle, prices not warranted by the ability of the cattle to produce. Many farmers faced with the shortage of labour are selling their surplus cattle, cashing in, as it were. It is a dollars and cents proposition.


John Horne Blackmore: Prices must be much better in the United States.


George Ernest Wood: Another reason is the fact that the dairy farmer or live stock producer in Canada turns out a better product than the man in the United States. They come over here to buy cattle in order to keep up the standards of their herds. With the prices they are willing to pay for cattle the average farmer is tempted to sell. Many men are short of help, and this is a lucrative market. But in my opinion this is one thing that will impair the production of dairy products in this country. With the weather conditions we have had, with the shortage of labour we are faced with, I think the minister should keep in mind the fact that there is likely to be an impairment of production.


James Garfield Gardiner: For the week ending June 24, 1943, there were 516 daily cattle exported to the United States; the exports for the same week in 1942 were 463, a difference of about 53. From January 1 to June 24, 1943, the exports amounted to 19,878 cattle; in the same period in, 1,942 they were 10,341, a difference of 9,537 for the period. However, in spite of the fact that we have exported that number of cattle, we have more cows in Canada to-iday than we have ever had before, four million in round figures. We are shipping cows to the United States in greater numbers to-day than we were before because prices are better. That is all to the good so far as the farmer who is going to sell is concerned. While he is selling cows, there are actually more cows being kept by the whole group of farmers than ever before. I am not going to take individual cases. As has been said many times during this session, there are many farmers of seventy years of age and over who are taking advantage of the higher prices to sell their farms. Some of them are selling their live stock, breeding stock or whatever they may have. Some of this is distributed to other farmers in the community, but some goes across the line. Buyers are continually trying to pick up cows to take to the other side of the line, all of which I think is to the good. This is the one thing that is left to the farmer to sell freely in the United States at a good price. I hope
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that hon. (members are not going to take the [DOT]position that it should not be permitted. So far as I am concerned I am not going to prevent him from doing it. If he can raise cows and calves and sell them in the United States for more money than he can get in Canada, I hope he will keep right on selling them as long as the farmers as a whole keep as many cows as were kept before. That is what they are doing.
The figures on cheese have not given the picture so far as dairying is concerned. We started out in 1936 to try to get our production of cheese up to 200,000,000 pounds in a year. Last year we passed that figure. We did not start that since the war began; we started it the first year I was in the department, in 1936. We advertised for it, we put out a programme and we got up the production even before the war started. Since the war started we have been able to increase it even more, until last year we had double the production of cheese that we had in 1935, or a little more than double. Then when we got our production doubled we were told by the people to whom we were supplying the cheese that they were not at all sure they wanted to take it all. It was not our intention under those conditions to ask the farmer for a large increase in cheese, and we asked him to produce the same amount of cheese as he produced last year. We told the British we would do all we could to get them 150,000,000 pounds. Last year we told them we would do all we could to get them 125,000,000 pounds, and before we got them that amount they suggested we might ease up. We have to consider our own farmers as well as others, even when we are at war. We suggested that this year we would do the best we could do to get them
150,000,000 pounds, but that our butter is selling in Canada at prices such as were indicated a moment ago and that we cannot sell it in competition with anyone else outside of Canada. There was butter landed in Canada within the last few months-landed, but it did not remain here-from New Zealand and Australia, where they are supposed to get good prices for farm products, at 26 cents a pound, while our farmers in Canada are getting for their butter the prices that have been mentioned. We intend to see that our farmers in Canada get that price for their butter, and in doing so we think we are helping the farmer. The greater production of butter this year is putting more money into the pockets of the farmer, and I think the farmer is entitled to it. We intend to carry that policy through as we have it now, with the increased production of butter and whole milk which is bringing a higher price than
IMr. Gardiner.]
it brought before the war. We want the farmer to sell as much whole milk as he can sell in this country, and at present prices he is getting some return.
I agree with the hon. member for Brant that our farmers have to get some attention and consideration. Their wages and costs generally are higher, and in following the policy we are following we are getting more milk out of the cows in Canada than we ever got before, and the farmer is selling more milk than he ever sold before and at a higher average price than has prevailed for a long time. We intend to try to maintain that position, because we realize that the dairy farmer has to put in longer hours and more labour than some of the rest of us who happen to be farmers.


Mr. CARDIFF:: I am: glad that the
Minister of Agriculture is so optimistic, but he would have to be to hold the position he does. I think no other class of people have stepped up to the war effort better than the dairy farmers of this country; that no other class of farmer has had the difficulties which the dairy farmer has had to face. It takes a lot of labour to run a dairy farm and, as hon. members know, labour is so short that the dairy farmer has been up against it for labour. We have come to the point where a lot of dairy farmers in my riding feel they have almost gone to the limit, that they have carried on about as long as they could. Many of them are up in years and they cannot take the hard work that is involved in dairy farming, nor are they entirely satisfied with the treatment they have received. True, they are getting better prices than they ever did before, but they never got enough money before.
There is one place where I think some correction could be made. We have travelling throughout Ontario, and the same perhaps may be said of other provinces, an army of inspectors. A creamery and dairy plant in my own town has five inspectors calling there constantly. Can anyone tell me why five inspectors should call at one plant? I can readily understand that one inspector might call to inspect the electrical equipment, but why five inspectors should call at one plant is more than I can understand. I do not know but that there is some negligence in having so many inspectors going around to these places; because whether you take a quart of cream out of a can or put one in, the test comes out about the same. It is possible, of course, that some of these inspectors are for the Ontario government, but undoubtedly there

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seems to be overlapping in this inspection work, and I think the amount of money that is spent on it could be very well cut, and the producers might then be better satisfied than they are at present.


James Garfield Gardiner: We have only five
inspectors for the whole province of Ontario, and I do not think they would all call at the one plant on the one day. No doubt there is a health inspector for the town and a health inspector for the county, and probably the province has an agriculture inspector. But so far as this department is concerned we have only five inspectors for 'the whole province, so that if any criticism is due it is not coming to this department.


Leslie Gordon Bell: I was glad to hear the minister say that he was not going to interfere with farmers in this important industry getting what they can for their produce under present circumstances. I believe we have to find ways and means of encouraging greater production of dairy products and meat products, particularly in view of the shortages we have been experiencing for the last several months.
I wonder if the committee realizes the extent to which agriculture has been discouraged and to a large extent neglected during this war period. I do not want to raise the question of aluminum again, but I would just point out that we have poured hundreds of millions of dollars into industry while we have done virtually nothing to improve the apparatus which our fanners have to use to produce their products. I am of the opinion that if we had early in the war adopted a system to encourage our farmers to use better machinery, and had helped them to finance it as we have helped industry to finance its machinery, we would not now be facing these shortages and agriculture would be in a very much better position. Agriculture is an unorganized industry, an industry with very little united power, whereas in other industries we are dealing wtih powerful organizations. I think of some of these concerns to which we have been paying, through the price level, hundreds of millions of dollars. Yet if we had suggested that the farmers increase their production, their herds, let us say, by fifty per cent, and make additions to their barns to give them fifty per cent more capacity, and purchase milking machinery because of the shortage of labour, and if we had said that we would fix a price level that would enable them to pay back during the course of the war the cost of all these things, and make a profit too, what an uproar there would have been! But that is
exactly what we have been doing for some of these big corporations, including the Aluminum Company of Canada.
On Sunday I had the opportunity of seeing the wonderful work that is being done by technicians and ordinary working men at Arvida. I admired that work, but we and our allies are paying for all that, and when I heard the hon. member for Brant speaking this afternoon and realized how little we have done to encourage agriculture, I could not refrain from making the contrast in my mind, especially when I think of the shortages we face in food and dairy products. I hope everything will be done to encourage the dairy industry and other branches of agriculture to get new machinery and new equipment to increase their production, because it will all be needed in the future. To-day we are on short commons. Probably in the future, when the war ends, the demand for food will be so great that we shall have to continue rationing unless we can increase our production to a very large degree. I think some ways and means should be found of enabling the agricultural producers to equip themselves better, improve their herds, and get some machinery to meet the present labour shortage on the farms; and I hope that this will be given some consideration by the government and by the house.


James Garfield Gardiner: I do not think that I can let these remarks go by without saying something further. I will be the first to admit that, as was stated, I believe by the hon. member for Huron North, farmers are not getting enough, and probably never did get as much as they should get; and I would also be the last to suggest that farmers are getting as much for their products out of the war as some others are. Probably there is a reason for both those conditions which we do not need to discuss to-day. But when the hon. member for Rosetown-Biggar makes the general statement that hundreds of millions of dollars are going into plants like the Arvida plant as a result of the activities of the government, I think I can also say that hundreds of millions of dollars are going into the pockets of the farming industry to-day, as a result of the activities of the government, though probably not as many hundreds of millions of dollars.


Leslie Gordon Bell: A much larger number of people are involved.


James Garfield Gardiner: Well, I do not know how many are involved.
An hon. MEMBER; I do.

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James Garfield Gardiner: My hon. friend says "I do." But when one speaks of all the industries in Canada-


Mr. MacNICOL:: And all their employees.


Leslie Gordon Bell: I am not thinking of
the employees.


James Garfield Gardiner: -and all the industry of the united nations, I am doubtful, if all those millions cover the cost of getting the materials turned out by plants, as to which of us is dealing with the more people. There is some doubt about that. In any event I do not think I can let the statement go by that the government has been arranging for hundreds of millions of dollars to go into industry, because of the necessity of getting munitions, machines of war, and ships, and that very little or no attention has been paid to agriculture.
One would have to recall that, in the first place, ever since this war began, and before it began, the government has been prepared to take every bushel of wheat which has been delivered to the elevators from western Canada, whether it could be sold or not. Anyone may say that the price is not high enough. I venture to say some of the people in some of the industrial plants will say that the price for their products is not high enough either. But that does not do away with the fact that if the government had not done that, the price would have been a lot lower. We have been taking the wheat and guaranteeing for some time advances of ninety cents a bushel. Before that we were taking wheat at a guaranteed advance of seventy cents.


George Hugh Castleden: The minister means, the quota.


James Garfield Gardiner: No, we were prepared to take every bushel delivered to the elevators with that advance, and sell it to the best advantage we could for the farmer, and eventually give him the benefit of anything we got in addition. Until the last two years this applied to all the wheat. In the last two years it has applied on a quota, but we expect eventually to take it all. We were prepared to do it, and we have been doing it, but the fact is that it has taken hundreds of millions of dollars out of the treasury of Canada to do that job. Whether it is getting enough into the pockets of the farmers is another question, but in answer to the statement that we are providing hundreds of millions of dollars to get munitions and other supplies, is the fact that we are making this provision for the farmer. I think I can say without fear of contradiction that there would not have been an advance from ten- cents a
pound to over twenty cents a pound on cheese if the government had not been prepared ever since the war started to take delivery of every surplus pound of cheese and see that it was properly handled and delivered to Britain. Probably I can say the same thing with regard to pork products.
I know my friends can say, "If you had left the American boundary open you could have sent it all over there at even a higher price." Well, gentlemen in this house who were talking about rationing and about shortages know what that would have meant. Of course in war time, with the great country to the south not in the war until the winter of 1941, and with this country in the war, our products could have gone to the United States, and what would we have been doing in this country? With a nation of 130,000,000 living alongside of us who were in the war, and with their production up very high because of the demands which were made upon them for supplies, and with prices rising there, all the farm products of this country would have gone to the United States, and we would not only have been attempting to produce, as we are to-day, to supply Britain and other countries, but we would have been in other difficulties in addition to those we are in now. In order to safeguard against that, the government, right from the beginning, when we were paying from three to five cents a pound more for hogs than was paid in the United States, took all the hogs in spite of the fact that we could not deliver them all in the first year to Great Britain. In the second year of the war we took them, and we continued to do so all that year, before the United States price began to interfere with the shipment of hogs from this country to Great Britain. Then when it did, we began to pay the United States price and kept our prices up to theirs until the fall of the year, and in the fall of that year a price ceiling was established, which has taken care of the situation from that time. We went to Britain and made an agreement with her, and when the price was higher than she thought she should pay, we added 15 shillings last year to the then price, and this year we added 25 shillings, and for the future we are proposing to pay even a larger proportion than that. To leave out of consideration altogether, w'hat the government has done to help the farmer, is not, I think, being altogether fair in discussing the situation as it exists. Again I come back to the position that anyone can get up and say, "Yes, you first closed the United States boundary." In war time, boundaries are closed everywhere. There is a gentleman in the senate who meets me in the hall once in a while and says, "There are only

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two of us left." The first time he said that I asked him, "What do you mean?" He said, "Only two free traders."


George Alexander Cruickshank: Make it three.


James Garfield Gardiner: I can say this: if we
had our way we would be free traders.


Leslie Gordon Bell: I was going to ask, who was tlie other besides the senator?


James Garfield Gardiner: He was including me in that.


Mr. ROSS (Moose Jaw):: And me.


James Garfield Gardiner: But in war time there
is no such thing as free trade. When Britain drew her navy across the oceans she said, "In self-preservation we must see that goods are not carried into Europe. There cannot be any free trade." When Hitler sent his armies out he said, "Not only can there be no free trade, but I am going to take all I want." There cannot be any free trade in the world while that condition prevails. So that we in this country, with our small population as compared with the large populations elsewhere, had to safeguard our position. But even before we had to do that, we paid our own farmers more for some products than they could have obtained even in the United States; and I say to my hon. friends that if they will do what I have done-I have the figures on my desk here, as a matter of fact- and will take the prices as they prevail in the United States and all the costs of getting our products into the United States, it will surprise them to see how close our prices are to those of our neighbours to the south, taking these matters into consideration.
For example, wheat at Winnipeg is from SI to $1.02 a bushel. There is a 42 cent duty on it going into the United States, and if you add that amount to the Winnipeg price you will find that it is not very far from the United States price any day that the market operates. If one considers also freight and exchange, it will be found that in respect of all our products we are very much closer to the United States returns, when our production subsidies are added on top of our price, than most hon. members seem to think we are.
Under these circumstances I just want to emphasize that the government has not forgotten the farmer. We have been doing, I think, as much for the farmer-and I have been in some of the other countries-as most of the nations with which we are allied, and very much more than those against whom we are fighting.


John Horne Blackmore: In my opinion these
cows which are going into the United States
should be purchased by the dominion government and distributed in Canada. Whatever device is necessary in order to do that, the government should adopt. You will see a time when we shall be short of dairy products in this country; then it will be too bad, and too late.
I believe that the price we are paying for milk and dairy products generally is too low. We can make all the fine beautiful theories and apologies we desire to make-Liberals are quite strong on that-but the simple fact remains that the price is not high enough at the present time to justify young men going into the farming business and building themselves up. A good deal remains to be done. When the appropriate time comes I intend to discuss the matter of wool. I will not discuss it now.


James Garfield Gardiner: That will come under
special products.


John Horne Blackmore: When the government says that it is being fair to the farmers of this country the government is just completely wrong.


Ernest Edward Perley: I want to make a brief
plea for Saskatchewan. I should like to see the dairy products board pay a little more attention to that province by assisting them in the matter of producing dairy products. This afternoon's discussion has covered quite a wide field; just recently it extended to the grain business.
Mr. MaoNICOL: And free trade.


Ernest Edward Perley: We have also had a little
display of competition between the provinces. We heard from British Columbia, and the Ontario members have come to the rescue of their province with respect to the cost of production, particularly of dairy products.
The minister gave some interesting figures with respect to the number of cows in Canada and the price of butter and fluid milk. Also he pointed out that in the production of dairy products long hours and a good deal of labour are required. He made an interesting statement with regard to the number of cows in Canada. Perhaps he will give us the number of dairy cows in Saskatchewan. The statement is interesting when we recall that in 1936 he passed an order whereby the dairy farmers in Saskatchewan had to dispose of their cows, retaining not more than four apart from actual dairy herds. Hon. members will recall that there was a good deal of criticism of that action, because it dealt a severe blow to the dairy industry in that province, and it took the farmers there a little while to get back to the number of cows they had prior to

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that order. It had to do with the necessary relief to farmers in connection with feed and other considerations in that province. I wish the minister would give us a little more information along that line.
With reference to certain remarks made by hon. members representing constituencies in British Columbia and Ontario, I have here a table showing the number of man-power hours required to produce various articles of food that are produced on the farms-butter, cheese, pork, beef, milk and so on-in comparison with similar production in other provinces. Here I want to put in a word for Saskatchewan, because I said that I hoped the dairy board would give some attention to that province. This table shows that it requires, to produce sufficient fluid milk to provide for the needs of one person for a year, 120 manpower hours, which is less than the number required in any other province. I have similar tables for other products, wheat, pork, beef, cheese, butter and so on. Saskatchewan shows up pretty well, and is becoming a diversified farming province. I simply wanted to make this statement to show that Saskatchewan holds a favourable position in regard to the number of man-power hours required to produce a sufficiency of food for one person for a year in any line produced on the farms.


Thomas Reid: Who made that compilation?


Ernest Edward Perley: I prepared the table myself.


Some hon. MEMBERS:: Oh, oh.


Ernest Edward Perley: You need not laugh. In my office I have a table which I have taken from the records of the bureau of statistics in Canada and the national research council in the United States. I put the two together and I can produce a comparative table if 'hon. members would like to have it on the record.


Percy Ellis Wright: The Minister of Agriculture said that the government had paid hundreds of millions of dollars in subsidies to Canadian agriculture since the war started.


James Garfield Gardiner: Do not put words into my mouth. I did not say subsidies. I said that the government provided hundreds of millions to take care of certain farm products, just as it does with regard to other products.


Leslie Gordon Bell: Most of it you got back.


James Garfield Gardiner: That is true in everything. I noticed that a speech which was made outside the house contained the statement that fifteen per cent of the profit did not come back. If eighty-five per cent of the profit went back, and much of the capital, that is a different matter from representing that every dollar paid remains with the industry.


Percy Ellis Wright: There has not been that amount of money spent to date in agriculture in Canada, in the way of subsidies, during war time. As a matter of fact, I do not think there has been $100,000,000.


James Garfield Gardiner: In acreage payment and subsidies there has been much more than $100,000,000 over the period, or pretty close to $100,000,000 in one year.


Percy Ellis Wright: One hundred million in acreage bonuses and subsidies?


James Garfield Gardiner: Yes.


Percy Ellis Wright: Would the minister put the figures on the record to show what has actually been paid?


James Garfield Gardiner: I will when we get into the wheat acreage reduction under my other estimates. I will give all the figures.


Percy Ellis Wright: The minister also said that he was one of the few free traders left in the house. How does he explain the government's policy-


James Garfield Gardiner: I did not say that either. I said that another gentleman so designated me when we met in the hall.


Percy Ellis Wright: The minister has a nice way of taking credit to himself for what others say. How does he explain the policy , by which the government the other day took the war exchange tax off vegetables coming into the country but did not take it off implements which the producers in Canada require to produce these commodities?


James Garfield Gardiner: If you look at your
potato speech you will know why.


Percy Ellis Wright: To be fair, they should at least have taken the 10 per cent war exchange tax off the implements of production that farmers need in order to produce goods of the kind which the government are allowing to come into the country. Since the war started the farmers have been paying approximately 28i per cent in exchange and tariff on the regular line of implements they use, and on some implements as high as 46J per cent. In view of these facts I do not know how the minister can say that he as a member of the present government believes in free trade.


The CHAIRMAN:: Perhaps I may be
allowed to intervene here. I rather think it would be the feeling of the committee that hon. members should keep within the limits of the item under discussion. The present discussion seems to me to be irrelevant to the item, which has to do with dairy products.

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James Arthur Ross: Occasionally the minister and his supporters take credit for all the money that has been spent to assist agriculture, but I suggest that if we had the figures since the beginning of the war it would be found that they do not amount to over 8 per cent of what industry has received. I will not labour that point. There seems to be a controversy as to who comes from the best dairy province. I come from Manitoba, a province which for seventeen successive years carried off prizes for the best creamery butter produced in that period. As regards the question of creamery inspectors, I am not clear whether this is entirely within provincial jurisdiction or whether there is some liaison between the province and the federal Department of Agriculture. At certain seasons of the year these inspectors are rather lax. Whose responsibility is that?


James Garfield Gardiner: Cream inspection is all provincial. We have butter graders and people who inspect products going out of the province, but the inspection of cream is all done by provincial men.


George Ernest Wood: I will try to keep within the confines of the item, but seeing that there has been some latitude in the discussion I should like to place on the record certain facts I have discovered in a return that was tabled on June 16 by the Department of Finance in response to a motion of the hon. member for Megantic-Frontenac (Mr. Lafontaine). The return shows the numbers and the amounts of repayments made by farmers in each province who obtained loans from the Canadian farm loan board during the years from 1938 to 1942 inclusive. After all, perhaps the measuring stick of prosperity of agriculture may be determined to a large extent by the ability of the farmers to retire their indebtedness. I would point out that possibly the provinces that produced dairy products have enjoyed a little greater prosperity through the difficult times than other provinces that do not produce these commodities. As the hon. member for Rosetown-Biggar made a plea for the farmer, he will probably be interested in an analysis which I have made of that return. I should like the hon. member for Huron North also to follow closely the observations I shall make as a result of some Ripleyizing I have done of the return in question. It gives the number of payments made by the farmers in the various provinces in the years indicated and the amount of money that has been paid out, and I have averaged it and discovered that in Ontario, for every dollar paid on the farm loan in 1938, the farmer had been able to pay $1.73 in 1943.


George Alexander Cruickshank: At the expense of the rest of Canada.


George Ernest Wood: That was to the end of March. No, it is not at the expense of the rest of Canada. I am speaking of the ability of farmers to retire their indebtedness, and Ontario has made the best record in spite of the fact that we are not supposed to be farmers in that province.


James Arthur Ross: That record is attributable to the fact that you have an industrial market at your door.


George Ernest Wood: That may have some bearing on it, but in answer to the hon. member for Souris I suggest that we analyse the figures for Manitoba. Manitoba is not as far from industrial markets as Saskatchewan. For every dollar his province paid in 1938, only 69 cents was paid in 1943. And there is Saskatchewan.


James Arthur Ross: The boys are all in the army in Manitoba.


George Ernest Wood: They were not in 1938. Then it goes on-


Mr. QUELCH:: Are those payments made with respect to dairy produce?


George Ernest Wood: No; these are total payments made to the federal farm loan organization upon mortgages. These are repayments on the loan.


Victor Quelch: What has that to do with this item?


George Ernest Wood: I am carrying out the argument offered by the Minister of Agriculture that the contribution this government has made to agriculture, by way of subsidies and encouragement to agriculture, has been substantial, and that we are getting results, as indicated by the ability of farmers m the various provinces to retire their indebtedness. Is there any other better measuring stick to substantiate the argument offered by the minister than the ability of farmers to .pay off the mortgages? I think that is one of the best measuring sticks possible.


James Arthur Ross: The hon. member should take that up with the Minister of Finance. Let the Minister of Agriculture get his statement there.


George Ernest Wood: The hon. member for Souris is one hon. member who is most talkative about getting some advantage for the farmer. I say you cannot divorce financing from farming, when measuring the prosperity of agriculture.
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James Arthur Ross: I do not see any hope of getting any help from the hon. member's speech.


George Ernest Wood: I insist upon, placing this
record on Hansard, for the benefit of the hon. member for Souris.


Victor Quelch: Mr. Chairman, are we discussing farm indebtedness or dairy production? I understand a bill will be introduced later, and that it will deal with the matter of farm indebtedness.


Joseph-Arthur Bradette: I believe the point is well taken. I must confess I have allowed considerable latitude, but I think the time has arrived when we should confine ourselves to the item.


Charles Edward Johnston: Mr. Chairman, are you going to allow the discussion to continue?


George Ernest Wood: I shall try to comply with the ruling, and I shall complete my observations as soon as possible. What I have said is, I believe, the conclusion which must be drawn in connection with the matter of the prosperity of the farmers in Canada.


Leslie Gordon Bell: What is the hon. member's figure for Saskatchewan?


George Ernest Wood: I am glad the hon. member for Rosetown-Biggar is interested. In spite of the difficulty that province has had with the drouth condition it has a creditable record. For every dollar paid on farm loan in 1938, they have paid S1.08 in 1943. On top of that, four times as many loans are being paid in 1943 as in 1938.


Leslie Gordon Bell: But let us not forget that 1938 followed the worst year we ever had.


George Ernest Wood: I agree with that. That condition was reflected over a period of years. For every dollar Alberta paid in 1938 they have paid only 84 cents in 1943.
In conclusion, there seems to be something -and I do not know whether it is coincidental or not-which might be said with respect to Alberta and Manitoba. I have noticed that they are the only two provinces which have not been able to measure up, in the repayment of their mortgages, with the other provinces. It will be noticed that they are the only two provinces unfortunate enough not to have an honest-to-goodness Liberal government. Perhaps that has had something to do with their position.


Gordon Graydon: Did the hon. member use the word "fortunate"?


George Ernest Wood: I said that those two provinces were unfortunate enough not to have Liberal governments, and that their condition may be on account of that fact.


Gordon Graydon: My hon. friend has a good sense of humour, and I am sure when he made that statement he was exercising it.


James Arthur Ross: The Prime Minister will maintain, probably, that they should not have five cents' worth of assistance.


George Ernest Wood: I have been interrupted considerably in placing this analysis before the committee. This is a most interesting return, so far as the position of agriculture is concerned. The only thing I can say is that the leader of the hon. member for Souris, who is nowr running at large, had the administration of that province for about twenty years, and yet they do not seem to have had the same degree of prosperity as farmers in some other parts of Canada.


James Arthur Ross: Manitoba has had the best administration in Canada in the last few years.


Mrs. NIELSEN:: The Minister of Agriculture is probably aware that for a considerable length of time in northwest Saskatchewan our farmers have been getting together to discuss ' those various matters which would permit their going ahead and making the greatest possible contribution to the war effort. In the last year, over a hundred farm production gatherings were held in that area. As a result of the discussions we have found out some interesting facts. Roughly speaking, we have in the area of North Battleford about 10,000 farmers. Those people agree that if they could have only one more milch cow on each farm they would be able to produce 2,000,000 more pounds of butter each year. That indicates what can be done on a small scale, by many farmers who are not big producers. They have had very little assistance.
These discussions have brought out the fact that the majority of our farming people are unable to expand, and for two reasons. First of all, those who have fair-sized herds are afraid to increase because they lack a guarantee as to future price. Then, the smaller farmers have not derived any great benefit from the bonuses. They may have only fifteen or twenty acres decrease from wheat, and therefore the amount they would get from the bonus would be very small. They still have a little wheat, which they are unable to sell. Many of those farmers have one or two young cattle or young

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heifers. However, week after week they are being forced to sell their cattle before they are finished. We have estimated that if each farmer could keep the cattle he has, we could produce ab'out 20,000,000 more pounds of beef from that area alone.
I know our farmers are supporting the provincial government's scheme with respect to farm committees. I was wondering, however, if the Minister of Agriculture would tell us whether it would be possible to initiate a scheme whereby some assistance could be given to the smaller farmers to allow them to keep their stock, if they lack at the present time that little bit of cash necessary to carry on farm production. If this assistance were given, instead of having to slaughter their young cattle our farmers would be encouraged to keep them. Then, has the question of future prices been discussed by the government?


Lewis Elston Cardiff: Has the quota of milking machines been raised in 1943 over the 1942 figure?


James Garfield Gardiner: I understand the quota has been raised, but I am not in a position to say by how much. There is provision made for milking machines, and a further provision for obtaining transformers to step down electrical power, so that farmers can have more opportunity to operate milking machines. Both these things have been done to the greatest possible extent.


[Stage Direction]
Item agreed to.
Special products board - administration, $49,459.
George Alexander Cruickshank: Unfortunately I
could not be here last night because I had to meet a train. But it is clear that we have teamwork in British Columbia, because the hon. member for New Westminster spoke for me. Some statements were made in connection with the dehydration of potatoes which were not strictly in accordance with the facts. I should like to have the record straight in that connection.
Among other statements was one that for some reason or another we cannot get an order for our plant in British Columbia. At this point I should like to know if that plant is not bona fides, or if the owner is not bona fides. We should like to be told that and we think we are entitled to be told that. This plant was passed by one of the officials. It was passed by Mr. Atkinson, an employee of the federal Department of Agriculture, a man who is employed for that very purpose. Then, we are told the plant is not capable
of handling this job. In fact, we were told last night that we could not produce in the Fraser valley and in the constituency of New Westminster potatoes equal to those found in other parts of the world. Well, I am not going to boast; I am going to tell the straight facts. The constituencies of both Fraser Valley and New Westminster produce potatoes better than any others on the north American continent.
We have been told that the plant in British Columbia cannot get a contract. Two excuses have been given to us. We are told that it must be capable of producing, and that it must pass the requirements. We admit it is only right that it should meet those requirements. I repeat that the plant has been inspected by Mr. Atkinson, and that it has been passed by him. The second excuse is that we must guarantee that we shall not be a deficiency area. May I point out that neither the experts in the federal Department of Agriculture, nor those in any other department, can tell whether or not we shall have a deficiency area. Just this afternoon the .minister said that owing to exceptional weather we shall have one of the heaviest hay crops ever known in Ontario. I wonder how much hay could have been harvested yesterday or the day before, in that kind of weather. What a ridiculous statement to make-that they could guarantee that there would be a surplus crop! I repeat that no department in any part or province of Canada can guarantee that we shall have a surplus in any crop such as potatoes.
I do not believe I could bring a better witness as to the truth of that statement than the Minister of Agriculture himself, one of the most competent men in agriculture on the north American continent. I do not know what better evidence I can produce to prove that the officials of his own department do not know what they are talking about when they say that they can definitely state whether or not we shall have sufficient potatoes. I quote this from Hansard at page 4372.
Mr. Gardiner: There is considerable difficulty in determining very long in advance whether there will be a shortage.
A little lower down on the page, referring to victory gardens, he is reported to have said:
If they have been responding to the appeals we have been making, it is very difficult for anyone to estimate how many potatoes we shall have this fall.
That is the Minister of Agriculture speaking, who also tells us that the only reason this plant cannot get an order to handle surplus potatoes is that we cannot guarantee that we shall have a surplus.


James Garfield Gardiner: I gave three reasons.
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George Alexander Cruickshank: I should like to put this letter on the record. It is under date of Ottawa, June 7, and two paragraphs read as follows-


James Garfield Gardiner: I gave three reasons last night.


George Alexander Cruickshank: This was sent to me after I had been trying month after month to get a plant in British Columbia to handle our surplus potatoes. I quote:
1.	That the plant is properly and completely equipped with the necessary machinery for preprocessing and dehydrating in order to do the job;
2.	That the agricultural supplies board could be assured by competent provincial authority that the dehydration of whatever quantity of potatoes might be decided upon in the Fraser valley will not in any way short the domestic market in the coast area, a point in which the foods administration of the wartime prices and trade board is vitally interested.
That is signed by the Minister of Agriculture. Those are the principal reasons we cannot get it. Is it the desire of the government to create little Balkan states within Canada? Last year one organization produced some 14,153-25 tons of potatoes, and Mr. Langdon, the district horticulturist, estimates that we shall have from thirteen to fifteeen thousand tons more this year. Then the authority on potatoes and other farm crops, Mr. Donald Gordon, comes out to British Columbia and is reported to have said, among other things, that the farmer would produce whether it pays or not. At a time when there was no shortage of potatoes this wartime prices and trade board, which was not advised by any practical agriculturist, placed a ceiling on the different grades of potatoes. Prices were set at a point which will ruin this organization which is owned and controlled by the farmers and which was originally set up by the federal and provincial governments to be operated under the provincial department of agriculture. I ask you, Mr. Chairman, to note that at no time did this organization refuse to market potatoes to the armed forces or to anyone else. At no time did they advise their producers not to do that. But this price board cut the ceiling price some thirteen dollars and expected us to go on selling. Then they said we were a deficiency area, that we could not produce the potatoes. This at a time when hundreds of tons of potatoes were rotting annually. The minister said last night that he was not interested-I do not mean that he wanted to see food wasted-in so far as dehydration was concerned in what had been lost last year or a few years ago. Here is what was advised by the experts 
we have over here. The minister is reported at page 4369 of Hansard as follows:

not five years ago or six years ago, or even last year-but that there would be sufficient potatoes this year to warrant the board's going in there and buying potatoes to be dehydrated for shipment out, when there may have to be potatoes shipped in to feed the people in that area.
How many hundreds of tons of potatoes have been shipped into Ontario this year, and yet there are two plants in Ontario? According to the evidence given in the agriculture committee, they brought in potatoes and yet have given contracts for 250 tons of potatoes from New Brunswick to be dehydrated. Here is something else that interests me, and I think the people of British Columbia will also be interested. The minister is reported at page 4369 of Hansard as follows:
If that can be proved satisfactorily, then there is no reason why a contract should not be given. That matter, I believe, has been referred to the wartime prices and trade board-
The wartime prices and trade board were to say whether we can produce enough potatoes in British Columbia or anywhere else; the wartime prices and trade board which is to tell us everything about agriculture. I continue:
-and I presume they had evidence before making the statement-that while it is true that British Columbia has been exporting potatoes, that very much larger quantities are imported from points outside the province. Considerable quantities move from interior points, such as Ashcroft and Kamloops. The wartime prices and trade board state it is their opinion that a dehydration programme at the coast would accentuate this movement which, under wartime conditions, would not appear to be justified.
Kamloops and Ashcroft are not in my district, but I do not think there is any district on the north American continent, and I say this with due deference to the 'maritimes, which is more famous for its potatoes. I am sure that the minister's officials might know that. These points are only 150 to 200 miles from Vancouver, and yet it is proposed to set up little Balkan states so that potatoes cannot move into Vancouver or Victoria. I quote again:
That is their decision on the information they have, up to the moment. They point out that there are so many potatoes being used there that there is some question as to whether we should dehydrate potatoes in British Columbia.
That is the decision of the board whose head has said "that farmers will produce whether they make any money or not," Unfortunately that is true because the farmer has been foolish enough in the past to do just that. We are told that we must not

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send potatoes from Ashcroft or Kamloops to Vancouver if we want a contract to dehydrate our surplus potatoes which have been rotting on the ground. I wonder if the wartime prices and trade board, which apparently has had so much to do with this matter that it has been afraid to appear before the agriculture committee, will give a guarantee to the farmers and the people of Canada that surplus potatoes will not rot in these days of want if we do not get this order.
I hold no brief for this particular company. To the best of my knowledge the owner is a prominent political opponent of mine; but I do object to discrimination being shown, not only to this plant but to the farmers in my province and in my riding, in refusing an order for dehydration on two grounds. The first was that the plant must be up to standard. I am willing to accept that, but it has been passed, so we are informed by their own engineers and we have the report. The second point is that somebody is to say whether we shall have a lot of rain. When you go out ten miles from Ottawa, as I did last Sunday, you can see potatoes with four inches of water over them. Can anyone tell whether you will have a surplus? I want a more definite reason from the minister.
I disagree entirely with him that the Fraser valley and New Westminster are deficiency areas. I disagree with him, or with his officials, when it is said that our potatoes are not up to quality. I think the people of British Columbia are entitled to know why a contract to dehydrate potatoes or other vegetables has not been given. It is obvious that the department has no fear that we are not going to have potatoes, but it is anxious to repeat its actions of past years, as was referred to by the hon. member for New Westminster, and permit southern potatoes to come in just when ours are beginning to come on the market. Not only that, but the department adds insult to injury by reducing the price of potatoes, as it did last week, when our own are just coming on the market. The ceiling price of new potatoes is restricted to that of old potatoes. Is there a farmer, even in Ontario, where apparently they are satisfied with farm prices, who will tell you that you can produce new potatoes in June at the cost of old potatoes? I am sorry I was not here last night. I was in the chamber most of the day and heard a lot of nonsense, and then I had to go and do some business. I should like the minister to tell me why this plant cannot be given a contract. Is it because the plant is not satisfactory? Is the man who owns it not reliable? Incidentally it is the
only dehydrating plant in the Dominion of Canada that has not had one dollar toward the purchase of machinery or anything else.


James Garfield Gardiner: All I can do is to give the same answer I gave last night. I notice the hon. member for New Westminster is not in the chamber, but I should like to apologize to him for having said last night that I did not use the word "vegetables". When I read Hansard I found I had used it once.


George Alexander Cruickshank: The hon. member spoke on my behalf, so that I will accept the apology on his behalf.


James Garfield Gardiner: I am one who perhaps is not enough of a botanist to be able to distinguish between vegetables and potatoes. The answer which I gave last night covered three points. What I said was that if the Haney plant can be fully and properly equipped for the dehydration of potatoes and manufacture a product which will meet the board's specifications, and if the wartime prices and trade board will approve the production of additional dehydrated potatoes in British Columbia, the special products board could give any plant a contract for a small quantity of dehydrated potatoes in 1943, possibly 200 tons.
The reason why we state a small quantity is that the plants which are operating are producing all that we have required up to the moment. This question has been under discussion for some time, and I think I explained to the hon. member for Fraser Valley before this discussion even started in this house that we were considering giving this plant a contract for a limited amount, provisional upon their having the necessary equipment to produce the product, and provisional, too, upon the prices board agreeing to the contract being given. It is true that the decision would depend upon whether they are satisfied that there are sufficient potatoes in the Fraser valley to take care of the demands in the valley, but I doubt whether anyone has used the argument that anyone has been able to determine up to date whether that would be the case or not. I venture to say that even plants which are now producing dehydrated potatoes, if they could get more for their fresh potatoes, would not bother to dehydrate them. I gave one other reason last night, namely, that we were getting potatoes at thirty-three cents a pound in Alberta, at thirty-two cents at other points, and that British Columbia was suggesting thirty-five * cents. Of course we were hoping that we could get the product at the same price as
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elsewhere but that was not a condition in the statement I have made. The statement is that if they can produce a plant properly equipped and if we can get the consent of the wartime prices and trade board, which would be dependent on whether there are sufficient potatoes to take care of the demands in the valley, there will be no doubt about a contract being given for the limited amount stated here. I cannot see that we can do any more than that.


George Alexander Cruickshank: I thank the minister. I am not quarrelling with his department or with the assistance we have been given in the past and are receiving to-day and will no doubt receive in the future, but the only approach to the prices board that a member has who represents a farming district is through the minister. I might just as well bump my head against the Queen Victoria monument out here as talk to the prices board. In the first place, in my opinion they do not know anything about *whether or not there will be enough potatoes. As to price, the order of the prices board last year gave Alberta and British Columbia interior farmers a higher ceiling price by S4 a ton on Canada No. 1 potatoes and $8 a ton on Canada No. 2 potatoes in the Vancouver market than that received by coast growers for the same grades. Yet it is suggested that we must receive thirty-two cents or lower. As I have said, I have no other approach to the wartime prices and trade board nor has any other private member of this house than through the minister.


James Garfield Gardiner: I should have said that we have already written to the owners of the plant asking if they can give us information on which we can base a decision on the question of equipment. We are hoping for a reply from them and will then communicate with the hon. member.


George Alexander Cruickshank: I accept that, because when the minister undertakes to do anything he completes it, but I cannot say that for the wartime prices and trade board.


Robert Fair: I believe, Mr. Chairman, that we can discuss wool on this item. I would ask the minister to tell us why the price of wool is at its present figure. I expect to be told immediately that provision has been made for a four cent increase in the price by way of subsidy, provided the wool is put into a certain condition, and provided that the province will pay one-half of the subsidy. Wool was one of the first commodities to be brought under control at the outbreak of war, and so far as I know the price of wool is the same now as it was before the war. I do not think

that is fair to the wool growers. They seem to be unable to help themselves, and I would suggest that the government, either the Department of Agriculture or the Department of Finance, under which the wartime prices and trade board comes, do something to increase the price of wool at the present time.


John Horne Blackmore: I am wondering if the minister really wants wool production in Canada increased.


James Garfield Gardiner: A year ago we embarked on the definite policy of trying to increase the sheep population in Canada in order to increase our wool production. We have had some success in that, although I have not the figures with me at the moment as to the extent to wffiich the sheep population has been increased. But it has increased, and we are still carrying out that policy. Hon. members know that the day war was declared, even before that, Britain had secured the whole wool supply of all parts of the empire, and Canada along with other parts of the empire came into that arrangement. We had an undertaking to take our deliveries from that set-up, the same as all other peoples who were cooperating with Britain in the war. That condition still exists. We made that undertaking with Britain in the first year of the war when it was not possible otherwise, to get wool to make uniforms for the troops or for any other purpose. This is now the fourth year of the war, and that arrangement still exists. The position at the beginning of this year was that we had all the .wool in Canada we needed, whether or not we got an increase in our own production; that is, we had all the wool we needed if we carried out that agreement. We cannot hope to produce anything like what we require ; we have to depend on the pool for part of our requirements, but we do not require to get any more wool for our purposes in Canada beyond the deliveries under the agreement. In spite of that, we did go ahead to subsidize the production of wool if the provinces would pay half the cost of the subsidy. I think nearly all the provinces are paying half the subsidy now; I am certain Alberta pays.
Coming back to the question whether we could do better if we sold our wool elsewhere, the last time I looked up the figures, which was only a few weeks ago, they showed that we could not obtain, as much by shipping to the United States as we could obtain in our own market. The United States is the only other market available, and our farmers are getting a better return by selling in their own market.

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John Horne Blackmore: How is that?


James Garfield Gardiner: In the first place, there is a duty on wool going into the United States, and other costs in getting the wool there. Those who figured out the position figured out a comparative price for me because I was interested in finding out just what the position of the Canadian farmer is as compared with the farmer in the United States, and the position of the Canadian farmer in comparison with what his position would be if he shipped to the United States market. I found that as. far as wool is concerned our farmers are in a better position than they would be in if the wool were being marketed in the United States when all the costs of getting it there are taken into account. Those are the facts, and I would suggest that we are doing fairly well. We do not think we are doing all that the sheep people might expect or all that they might be entitled to, but we are doing all that we have thought it was advisable to do under existing circumstances.


Robert Fair: The minister says that we are doing as well now as if we had access to the United States market, but what I am trying to find out is what the Canadian farmer could ge't in dollars and cents as compared with the United States farmer. According to the press, the farmer in Montana has been receiving from 37J to 55 cents a pound for "wool, which is a much higher price than we are getting here, and in addition the United States dollar will buy much more than our Canadian dollar. So that there is really no comparison between the prices obtained by the farmer in Canada and those obtained by the farmer in the United States.


James Garfield Gardiner: I had forgotten to mention one point. The price is very much higher now than it whs before the war. The price before the war w-as, I think, about 16 cents; it is now around 30 cents, with a subsidy of 4 cents. The price in the United States for the same grade of wmol is about 54i cents; but when one takes all the charges and the duty and everything else into consideration, the return to the Canadian farmer, with the subsidy, is slightly better than the return he would have if he sold his wool in the United States.


Mr. MacKENZIE (Lambton-Kent):: What is the United States duty on wool?


James Garfield Gardiner: I have forgotten what it is, but it was all figured in the price.


Robert Fair: I was trying to get at the number of cents a pound received by the farmer here
and by the farmer in the United States. If I remember correctly, the price of wool last year was 30 cents a pound. At the present time, with the extra 4 cents, it will be 34 cents a pound. The price in the United States is much higher. The fact that our price is 34 cents a pound this year compared with 16 cents before the war will not convince us that two wrongs can make a right, because before the war the price of wool, as of several other farm products, was far below the cost of production or what it should have been.


James Garfield Gardiner: I am not going to try to put my figuring against my hon. friend's figures. I got the best statistician in the department to figure for me, and he came back with the statement that one could not get as much here for the same quality of wool in the United States as is being paid, in the conditions prevailing here, by shipping it to the markets there. The market here gives a better return. I have the figures in my office, I do not happen to have them on my desk, but I can produce them.


Robert Fair: My point is that I should like to have the market price in Canada raised to the price in the United States market, because it is only after taking into consideration the freight charges and the duty that the comparison which the minister makes can be made.


John Horne Blackmore: What is the date of the order in council passed in the spring, under which a bonus was to be given to the farmers?


James Garfield Gardiner: It is a quality bonus; it is paid on only a certain quality of wool.


John Horne Blackmore: It was passed on March 29, was it not?


James Garfield Gardiner: About then. It was around that time.


John Horne Blackmore: Does the minister contend that, when an order in council is passed on the 29th of March to give farmers a bonus for high quality wool, particularly clean wool, he is giving the farmer anything like a chance to prepare clean wool?


James Garfield Gardiner: I would say in reply
to that that I was probably affected a little at the time the date was set, by some criticisms which were made in this house previously. The Minister of Trade and Commerce made an announcement on the floor of the house with regard to wheat, and a number of hon. members rose and criticized him for having made it alleging that the farmers had not a chance to present their representations. A farm delegation notified me that they were
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coming here about wool, and I waited before we made the decision and put the order in council through until I heard what they had to say. They came here at that time of the year and asked for it, and I presume it was of some benefit to them or they would not have asked for it.


John Horne Blackmore: Certainly it was not
giving the farmers any chance at all to qualify for the bonus. That is perfectly clear. I wonder if the committee could know when Doctor Barton's letter was sent out to the various provinces telling them of this new arrangement?


James Garfield Gardiner: Right after that, but
whether the letter got there or not, it was announced in this house right at the time, and I think it was pretty well known.


John Horne Blackmore: In other words, the
provinces would not get word until along in April, would they?


James Garfield Gardiner: It would be in April.


John Horne Blackmore: Which made it completely impossible for the people who had not been particularly preparing that clean wool to qualify for the bonus. In other words, the bonus was offered and taken away at the same time.


[Stage Direction]
Item agreed to.
To provide for the purchase of butter in order to maintain the price established by the wartime prices and .trade board and to pay necessary storage, insurance and freight charges thereon, $1,500,000.
Percy Ellis Wright: Would the minister make
a statement on the amount of butter that has been purchased by the board, the dates of the purchases, and the import position in Canada with regard to butter last year and this year?


James Garfield Gardiner: I would have to speak
from memory in giving a figure, but the amount of butter which was purchased was somewhere between three and four million pounds. The amount represented by this item would indicate about what was necessary in order to carry through the transaction.
The position is this, that when butter goes down to a certain price we undertake to purchase it. There was about a week, between the going out of the old season and the coming in of the new, when we found ourselves obligated to take butter off the market because the price had dropped below the floor. We took the butter off the market and we still have it.


Mr. BOUCHER:: How much butter is on hand in Canada, and how does the amount compare with other years? I believe the general feeling in my community is that the butter situation is a very difficult one for the farmers. All the evidence I have is that there are large stocks of butter on hand in spite of rationing, and the farmer who makes his own butter is breaking the law if he makes more than the limit the law allows him. I have had many constituents come in to see me claiming that though they have butter on hand they cannot sell it; they have made it but there is no market for it; they are not supposed to have it. There is a danger of farmers running short of butter who could make it for themselves and their neighbours. I submit that, if there is anything like the required amount of butter in storage, and the consumer could use more, it is a great detriment to the farmer to ration butter, because it prohibits the farmer from selling his own products. I feel that if many of us in this chamber were prohibited from carrying on our own businesses the way in which the farmer is prevented from making his livelihood in his own way and selling his own products, we should look at this question in a vastly different way from the way many of us do.


James Garfield Gardiner: The amount in storage in July was 26,000,000 pounds; one year ago it was 14,000,000 pounds; so that there are now 12,000,000 pounds more butter in storage than there was on the first of July a year ago.
"With regard to the other question, as I stated a few moments ago, the floor price at the beginning of this year was thirty-two cents. It goes up three-eighths of a cent each month, and is now 32% cents. The government is obligated to buy all butter when the price goes down to the floor. We have not bought any since the beginning of this dairy year, which indicates that the price has never been down to the floor. So that although it is said that the farmer has not been able to sell, the fact is that he has been able to sell all his butter at a price higher than the floor, and then he gets the subsidy on top of the price. The price has been around thirty-three cents, always a little above the floor. It is added to by the subsidy of eight cents a pound on butter fat, which has been in force ever since the beginning of the period.
The other question, whether we should stop rationing, is a question of policy, of course, upon which I cannot make any comment at the moment other than to say that we are still rationing.

War Appropriation-Agriculture


George Russell Boucher: Surely the minister appreciates that the rationing restrictions affecting the sale of butter have an all-important bearing on the salability and the price received by the producer. It is much the same as the market for rhubarb around the city [DOT] of Ottawa this year. You could get twenty-five cents a bushel if you could sell it at all, but you could not sell it.


James Garfield Gardiner: It could not make much difference. They are buying butter for sale next winter. The price is set as it is, going up three-eighths of a cent each month, because that will pay the carrying charges on the butter, and the man who buys in May or June has to have his three-eighths of a cent each month to carry it until January of next year, when he is going to sell it, so that the price of butter could not be much higher if the ceiling price is to be thirty-five cents. He is getting all there is in it if he is to carry it and still have the thirty-five cents. We have taken care of that condition by providing a subsidy of eight cents in the summer and ten cents in the winter, and this puts up the return to the farmer, as against twenty-six cents at which butter was laid down in this country a short time ago.


George Russell Boucher: But the rationing policy means that he cannot even sell on the local market without coupons - which makes it impossible for him to do so.


James Garfield Gardiner: He gets exactly the same price. He can sell it at that.


George Russell Boucher: But he cannot sell it.


James Garfield Gardiner: If there is anyone who has been unable to sell his butter at 32% cents, the government will buy it. You can tell him that.


George Russell Boucher: If the minister will tell us how much butter has spoiled in storage, and how many complaints he has received from local warehousemen about the butter they have on hand which they cannot dispose of at an economic price, he will complete the picture, but until he does so his argument will not seem true to me.


James Garfield Gardiner: The butter broker or merchant has never done anything else at any other time. He cannot carry on business in any other way. We produce most of our butter in the summer months, and we consume in the winter months twice as much as we produce. Anyone engaged in the butter business has to buy his surplus in the summer and carry it until the winter. We take care
of that by raising the price three-eighths of a cent each month. He can buy in May or June ' or July and get his carrying charges under this system. In previous years, it is true, he might buy at twenty cents and sell at thirty-five cents and make an enormous profit. He cannot do that during war time, but he can buy it and get all his costs guaranteed and carry it through to the winter months. Men in the butter business are bound to be storing at present. They do not want to sell it; they are carrying it to the winter months to sell it then at the ceiling and make the cost of storage.


George Russell Boucher: That is exactly the point. That is a benefit to the man who handles butter. It is no asset to the man who produces butter. I realize that it is not the minister's department that makes the regulations, but I took this matter up about a month ago. A farmer in my community manufactured in the spring approximately sixty pounds of butter for the use of his family before sending any of his product to the dairy. After rationing came in, the farmers realized that they were breaking the law by holding so much of their own home-made butter for their own use, and they reported the situation to the ration officer, surrendering their coupons. They asked what they should do with the butter and the answer was to sell it. They tried to sell it, but they could not get the coupons for it, except for one or two pounds, from this man here and there. It was simply impossible for them to sell the butter. They went back to the office and asked what they were to do and the officer there simply threw up his hands and said, "I cannot tell you, but you have to get rid of it." That is the situation, and surely that must have a detrimental effect on the production of butter in the country, especially when we are rationed to the limit, cutting down home consumption of butter materially. The matter is very serious. It is one of the elements that cause trouble and discontent, and it is very hard on our farmers. Perhaps the minister can tell us something about spoiled butter.


James Garfield Gardiner: There must be a misunderstanding somewhere. I do not know of any regulation that prevents a farmer from producing dairy butter and keeping it in his cellar, and if there were, there is a stabilization corporation which has undertaken to buy from them and pay a price for it. That has been known for months. When the stabilization corporation went out to look for all this dairy butter they could find only 7,000 pounds in all Canada for sale. In other words, I find it difficult to follow the story my hon. friend is telling.
War Appropriation-Agriculture


George Russell Boucher: Nevertheless it is an actual fact. The regulations stipulate that no one may keep on hand more butter than the ration authorities permit, and sixty pounds is more than these people could keep, with the size of their family. It is all very well to say that they can dispose of their dairy butter, but no dealer will buy butter made by a farmer when he can buy creamery butter made by the dairies, and the farmers cannot market the product.


Mr. CHURCH:: When the rationing of butter was announced last year there was a very wide division of public opinion as to whether it would be a success, or whether it was necessary, in view of the complex nature of the proposal. It was contended that there was no scarcity of butter and therefore no need to ration the commodity. I argued that rationing should be under the control of the Department of Agriculture, under the minister himself, and there was a great deal of discussion in the newspapers, among consumers' leagues, bodies in the retail business and other organizations in the country with regard to the desirability or the necessity or the usefulness of such a proposal in an agricultural country like Canada, which has a vast agriculture dominion organization for this industry, and another one under provincial direction. I contended at the time that it was absolutely useless for us to hand over to the wartime prices and trade board a technical matter of this sort, because many of the people comprising the board have no practical experience either in agriculture or in business, wholesale or retail, or in the production and marketing of butter, and other food commodities. During the past year we have spent S65,000,000 in a subsidy programme, and this programme will be costing this fiscal year from $90,000,000 to 8100,000,000. There was a great deal of blowing about the success of rationing in Canada as compared with the United States, but people seem to forget that in the United States there is a population of well over 100,000,000 people, whereas we have but a small population. Moreover, they have more complex problems than we have, owing to greater population and area and greater variety of trade and production.
I should like to find out from the minister what coordination there is with the control board in the direction of this whole rationing scheme. I repeat, it and also beef rationing, should have been left under the present minister, in the Department of Agriculture. That was the opinion I expressed a year ago and I am still of that opinion. It should have been left to a responsible minister of

the crown. Had that been done matters would have been far different. It would have been far better than leaving it with some college professor who knows no more about butter than what he consumes himself. The policy was all wrong. I should like either the Minister of Agriculture or any other cabinet minister to tell this committee why there should be any scarcity of such an important food commodity as butter, and so much faulty distribution. Rationing of butter has not been a success; at any rate, it has not been the success that it should have been. It has cost us a great deal of money with a huge organization, and there has been a lot of waste and useless duplication. Ration books are issued, and before they are used new books are brought out. I should like to have a statement from the minister. I have looked into this question a great deal, both during the recess of parliament and since, and I suggest to the minister that if he has time, when the house gets through with its business, he should look up the June number of the monthly booklet of the National City Bank of New York city and see what that publication has to say with regard to the effectiveness of subsidies in the United States. Let me quote a few passages from this booklet under the heading, "Subsidies conditioned on economics."
Canadian subsidies are tied directly with regulation of profit margins on the particular product. They are designed to cover only a part of the increase in costs, and are conditioned upon adoption of various economies in production, importation and distribution.
It gives reasons why there should be a limit to rationing many of these commodities. I think the time has come when we should have a statement from the government in connection with the whole matter.


James Garfield Gardiner: I am interested in the opinions of the hon. member with regard to the last matter he spoke of, but he will realize that it is impossible for me to discuss that point. It is a matter of policy which has been decided, and the prices board is under the Minister of Finance.
On the other question as to this particular arrangement, with regard to the purchase of butter, that is not arranged by the prices board. The Department of Agriculture sets a floor price, and the department protects that floor by purchasing butter when butter goes down to the floor, so that 81,500,000 is provided with which to buy butter when it goes to the floor, to prevent its going further. That is an arrangement which is made entirely in the Department of Agriculture to protect the

War Appropriation-Agriculture
farmer against an unusual drop in butter prices. The extent to which it can drop with the widest margin is 3 cents, but at the present time it is 2} cents, until we have to step in and purchase.


Percy Ellis Wright: I asked a question with regard to the amounts purchased by this board last year and the dates of purchase.


James Garfield Gardiner: I gave that figure.


Percy Ellis Wright: The minister did not give the dates purchased. Did he give figures with regard to imports of butter?


James Garfield Gardiner: It was the last week before this present year came in, the week beginning May 1. It was in the month of April, and our year in connection with dairy products comes in on May 1. These regulations would apply to May 1.
In reply to the hon. member for Broadview, I may say that this policy was announced prior to the 1st of May, to cover the whole year from May 1, 1943, to May 1, 1944. This money is to carry out that policy.


George Hugh Castleden: Where is this butter stored at the present time?


James Garfield Gardiner: There are nine different cities across Canada in which it is stored. It is in storage right across the country.


George Hugh Castleden: What companies?


James Garfield Gardiner: It would be in cold storage plants in those cities.	M


George Hugh Castleden: Not government cold storage plants?


James Garfield Gardiner: No.


George Russell Boucher: Has the minister any particulars as to the amount of spoiled butter, unfit for human consumption in Canada, and has he further information as to what butter, if any, has been sold for other than consumption purposes?


James Garfield Gardiner: We have no information as to any spoiled creamery butter in Canada. We have no knowledge of any such thing.


Percy Ellis Wright: Has the minister figures with regard to imports of butter?


James Garfield Gardiner: They are very small. There was the butter I referred to a while ago which was landed in Canada but which we are shipping out again, if it is not all shipped now.


George Russell Boucher: The minister has no particulars about the spoilt butter. Has he any information about dairy butter?


James Garfield Gardiner: None.


Robert Fair: There is another question about the subsidy on butter. I understand no subsidy is paid on dairy butter, but there is a subsidy on that delivered to the creameries.


James Garfield Gardiner: The subsidy is paid on butter fat, not on butter, either creamery or dairy. There is a subsidy paid on any butter fat delivered to the creamery.


Robert Fair: There seems to be a good deal of dissension about the subsidy, because there is discrimination against those who are not located close enough to the creamery to deliver butter fat.


James Garfield Gardiner: I gave an answer a moment ago which was to the effect that we have set up prices by which the government is prepared to abide, for dairy butter, where there is any difficulty about it. But we have not been able to find much of it anywhere in Canada.


Robert Fair: Will the government purchase dairy butter from the farmers?


James Garfield Gardiner: There would be a price paid which the government guarantees.


Robert Fair: A price which will not compare with the creamery price.


James Garfield Gardiner: It will not be as high as the creamery price.


Clarence Gillis: Has the minister any figures as to the percentage of butter now in storage which was imported last year?


James Garfield Gardiner: The total amount of butter imported in 1942 was 592,000 pounds. That is, of course, just butter which comes across the boundary line at different points, or at least the greater part of it. I cannot tell how much of that is in storage to-day. I imagine it is practically all eaten.


George Russell Boucher: Where was that butter shipped to?


James Garfield Gardiner: The butter I mentioned earlier was shipped to Halifax.


George Russell Boucher: The minister says that the butter imported was almost all from the United States.


James Garfield Gardiner: I cannot tell the point to which butter was shipped.


George Russell Boucher: The minister cannot say where it was imported from.


James Garfield Gardiner: It was received at points all the way along the boundary; it would come over at different points.


[Stage Direction]
Item agreed to.
At six o'clock the committee took recess.
4402	COMMONS
War Appropriation-Finance-Prices Board
After Recess
The committee resumed at eight o'clock.

[Stage Direction]
Wartime prices and trade board-administration, $14,300,000.
Mr. LALONDE:: Mr. Chairman, in time
of war it is often, necessary to set up commissions so that the government may share the responsibilities of administration. We are now discussing the administration of one of these commissions, namely, the wartime prices and trade board, which operates under the authority of the Minister of Finance (Mr. Ilsley). I do not intend to delay the committee unduly, but I should like to refer to a special case, the characteristics of which almost constitute a question of privilege in connection with myself. That being so, I feel I am entitled to discuss the matter with the minister. I do not bear any grudge against anyone, either against the minister or any of the parties involved in this case, but I want to clear up my position, as a member of this house and as a public man who, I believe, has had a rather good public and private reputation.
The wartime prices and trade board established in Mont Laurier, the principal town in my riding, an office which is in charge of a representative appointed in the usual way by the civil service commission in cooperation with the wartime prices and trade board officials. This man is Mr. Alphonse Forget. During the summer of 1942 I received many complaints about the handling of tire sale permits. It was alleged that this representative was using the privileges attached to his office to divert all tire sale permits to a certain garage in Mont Laurier. I made a personal investigation, and I thought it was my duty to put the results of this investigation before the proper authorities. This I did at the beginning of December, 1942.
At the end of November the investigator who had been appointed to this office, a Mr. Pellerin, was suddenly dismissed without any apparent reason. While I was in Montreal I received a call from this man, one of the outstanding citizens of Mont Laurier, and he complained about the brutality with which he had been dismissed by the mimic dictator who is in charge of the wartime prices and trade board operations in Montreal, a Mr. Robitaille. Mr. Pellerin came to Montreal, and we had an. interview with Mr. Robitaille when we were told that the investigator had been dismissed because he had taken out of the office at Mont Laurier, with the com-
[Mr. Gardiner. 1
plicity of the hon. member for Labelle, certain records and other confidential papers which were being used in my office. Needless to say, I deny emphatically this accusation, and I state from my place in this house that I never constituted this investigator my political agent in my riding, and that I never, either directly or indirectly, asked him to communicate to me any of the particulars pertaining to this office. I put the matter before the wartime prices and trade board, represented by Mr. Robitaille. Later, on February 7, 1943, I received a letter from Mr. Pellerin giving all the particulars of this incident. With your permission, Mr. Chairman, I shall read this letter because it states the case much better than I could. It is in French and reads:
(Translation)
Mr. Maurice Lalonde, M.P.,
House of Commons,
Ottawa, Ont.
Dear Mr. Lalonde,
It will be three months on the 14th instant since I have been suspended, by telegram, from my duties as investigator for the prices board at the Mont Laurier office, and three months on the 28th, since I have been definitely discharged by Mr. L. C. Robitaille, although his letter did not reach me until December 2, 1942. I need not tell you that time hangs heavy on my hands.
As I have often told you, I shall always claim that I have been treated unfairly; that is why I asked you to take up my case and attempt, if possible, to have me reinstated by the competent authorities.
I renew my request to you and point out the succession of events as they really happened.
All through last summer, 1942, I received complaints from various Mont Laurier garage operators who claimed that the permits for the sale of tires, issued by Mr. J. A. Forget, local representative at Mont Laurier, were mostly in the name of the Laurin garage to the exclusion of other tire distributors of the district, i have often called Mr. Forget's attention to these complaints and in every case he answered that those who complained wrere nothing but jealous cry-babies.
Seeing that the complaints continued to come in and that, besides, I had had personal knowledge

I emphasize this phrase "personal knowledge."
-of a couple of infractions to the commission's orders on the part of Mr. Forget, I decided, while I was still in office, to find out whether there was any truth to the complaints received.
On November 12, while at my office, I asked the secretary, Miss L. Lamarche, to hand me the files relating to tire permits, which she did very willingly and without any comment. I then took a few notes, a copy of -which is in your possession. Under _ the circumstances, I thought I was perfectly justified in going over the files and taking notes, since serious charges had been made which I did not choose to submit to my superiors without further investigation. Moreover, I have never shown these

War Appropriation-Finance-Prices Board
notes to anyone, not even to yourself, until the 2nd day of December, date on which I was discharged, and asked you to take up my ease.
However, on the afternoon of November 14, I received a telegram from Mr. Robitaille, suspending me from my duties.
As I had no inkling of the reasons for such a sudden action, I went to Montreal, on Sunday, November 15, and, on the next day, I saw Mr. Robitaille in his office.
It is then that I learnt from him that I was charged first, with being the political agent of the member of parliament for Labelle; second, with having secreted some files from the office and having taken them to your place on a certain afternoon, when we are supposed to have looked them over together; third, with having used a certain amount of pressure on Miss Lamarche or having attempted to intimidate her in some way in order to obtain the files relating to tire permits.
Needless to say that I have offered Mr. Robitaille a positive and energetic denial of these three charges; I even offered to swear an immediate written denial if he wished to call a superior court commissioner into his office. However, Mr. Robitaille did not comply with this request. I was the more at ease in denying these charges for the fact you were accused of being mixed up in this affair and that I was perfectly satisfied that you were in a position to support my statement.
S. Pellerin.
Mr. Speaker, may I be allowed to add this:
(Text) If there were grave accusations against this man it was the duty of the district representative of the wartime prices and trade board in Montreal immediately to have a thorough investigation made to determine whether they were true or not. I offered Mr. Robitaille to file my own personal sworn affidavit, but he refused. My personal belief is that this Robitaille has gone too fast in this matter; I repeat again from my place in this house that all the accusations that I cited a few moments ago are false from one end to the other, and I ask the Minister of Finance to order a serious investigation by competent officers before whom, if necessary, I will appear and clear up the matter once and for all.
But, Mr. Chairman, there was another reason. There was a nigger in the woodpile.
Mr. GRAYDON; Just one?


Maurice Lalonde: Just one, and I think that is enough in the circumstances. This investigator was in the way of the manager. I understand that the specific charge which has been made against this representative that he was centralizing the tire sales permits in one garage has been investigated many -times. I can say immediately that I was not at all satisfied with the investigations carried on by the investigator of the wartime prices and trade board, because my own personal belief is that they did not go to the bottom of the matter.
Consequently I took the matter up with the Royal Canadian Mounted Police who made an investigation and filed a report, but since as I am just a member of the house elected by the people of my district, I was not allowed to see that report. I can say, however-I think the minister is in possession of the report-that the Royal Canadian Mounted Police reported that the charge was well founded, that this garage man had his tires sales business increased by nearly 100 per cent and that the other garage man in the same locality dropped around seventy-five per cent. I cannot accept the explanations given by the officials of the wartime prices and trade board, explanations which are not satisfactory to any intelligent man who knows human nature. This specific charge has been found by the mounted police to be well founded and I really wonder why this man still occupies his position as representative of the wartime prices and trade board in my town.
One may say that the phenomenal increase of tire sales in one garage may be explained by the fact that this man has carried on a certain kind of propaganda or advertising, but I have before me a sworn affidavit by one of those people who complained about the matter in which this sale of tire permits was handled. This affidavit has been sent to the proper authorities, and it represents the real meaning of the gossip that one can hear around my district. It is because this man remains in his position, because the situation has not been straightened out, that one now hears around my district that the member is interested in the racket. I cannot stand for that, Mr. Chairman, and that is why I am on my feet to protest and say to the people of my riding and to this committee that that is false, that I am not interested either directly or indirectly in any kind of tire sales business in Mont Laurier, even if my tenant sells gas or tires or any kind of auto accessories.
This affidavit is also in French, but it throws a true light on the real situation that exists now in Mont Laurier. It reads:
(Translation) I, the undersigned, Alderic Desloges, merchant, of Mont Laurier, having duly taken the oath on the Holy Gospel, state as follows:
1.	At the -beginning of October, 1942, I made an application for tires at the garage of Mr. Gaston Forget;
2.	My application was delivered by myself in the office of the wartime prices and trade board, at Mr. A. Forget's, to himself, on the same day.
3.	About three weeks later, I went to see Mr. Forget in order to ascertain why I had not received the tires. He answered: "I cannot account for that." He then advised me to go
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War Appropriation-Finance-Prices Board
to the garage of Mr. Yvan Laurin, and in fact he accompanied me there. After we had reached the garage he prepared a new application, which was left on the counter at the garage. Mr. Alphonse Forget then told me that everything was O.K. and that I would obtain the tires.
4.	About two weeks later, as a result of the application made at Mr. Laurin's, I obtained two 7.00 x 16 tires.
In witness whereof I have set my hand-
(Text) For the benefit of those who do not understand French, the affidavit I have just read1 is to the effect that this man has been directed by the representative of the office in Mont Laurier to buy his tires at a certain garage. Well, if this is to continue, I am asking myself if our people will have great confidence in this organization, and if I speak to-night on the matter I do not do so on political grounds, because the parties of whom I have spoken to-night are Liberals in good standing. If I protest against the treatment inflicted on Mr. Pellerin and on myself by this dictator, Robitaille of Montreal, it is because I believe, and I believe to-night as strongly as ever before, that the public interest is at stake, and I want in all sincerity that this board be honestly administered in my district. The board in some other fields has done a good job, and I am glad to congratulate the hon. Minister of Finance upon that.
But this very special case is one of those that I cannot let pass without protesting as strongly as I can. This centralization of tire sales permits in just one garage man, and the conclusion of the report of the mounted police, together with the evidence I have filed before, is sufficient, I humbly submit, to justify the minister in taking this matter under his control; and in spite of certain advice that has been given by certain officials of the wartime prices and trade board, I say that the minister should dismiss immediately this representative from his position and place any other man there; I am entirely disinterested in who it may be, provided he is honest and capable.
There is also one accusation against this manager that has not yet been cleared up, and I think, although I am not quite sure of it, that the hon. minister has it on file. This representative is accused of having bought an inner tube without a permit from a certain garage man in Mont Laurier and having sold it to another party at the same price after having paid for it out of his own pocket. The evidence shown in this other charge is such as left me under the impression that this man, if he had done that, would have done something more, and that he does not deserve the position he now occupies.
I put these facts before the committee. I hope that the Minister of Finance will take

the necessary steps to remedy the situation. I again emphasize at this point that if I intervene in this matter, it is not on political grounds. I know the wartime prices and trade board has probably received instructions not to play politics, and I agree with that. If politics is to enter into the administration of these boards, we would rather cancel all these schemes and let the matter go. But if I had been interested in a political sense, I would not have put before the wartime prices and trade board any charge against my political friends. If I have done so, it is because it is a question of honour for me and for my family, because in my district gossip begins to circulate to the effect that "this man seems not to have the confidence of the people; yet being always in this position, it might be that the members may be interested in the racket." I emphatically deny that it is so, and my last remark is that I wonder how a man can stay in public life without clearing up this matter.


Hon. J. L. ILSLEY (Minister of Finance):: This is a troublesome matter, this question of the fitness of Mr. J. L. Alphonse Forget to discharge the duties of representative of the wartime prices and trade board at Mont Laurier. The hon. member for Labelle is strongly of opinion that Mr. Forget is not a suitable representative of the board, and has asked for his dismissal, or, in the alternative, his transfer.
I have discussed this matter on two or three occasions with the hon. member for Labelle, and I have put a large amount of time on the case myself to see whether an investigation would reveal the existence of facts which would warrant the dismissal or transfer of this man.
With regard to the statement of the hon. member for Labelle that he was not privy to any examination of the files by Mr. Pellerin, who was dismissed, I believe at the instance of Mr. Robitaille, I of course accept without hesitation the hon. member's statement in that regard. It is, however, true that Mr. Pellerin examined the files and made certain copies, for purposes of his own, presumably, in the absence of Mr. Forget, who was in charge of the office; and Mr. Pellerin, if I understand the facts correctly, had not the authority to do so, his position not being such that he had the right to do that in the absence of his superior. At any rate the dismissal took place at the instance, I believe -the hon. member for Labelle will correct me if I am wrong-of the representative for the province of Quebec, Mr. Robitaille of Montreal.

War Appropriation-Finance-Prices Board
The crux of the charge or charges against Mr. Forget, because, after all, that is what I as minister am concerned with, is whether he was guilty of favouritism toward one of the garages. While the police investigation is confidential, I think it would do no harm for me to say that the member of the Royal Canadian Mounted Police who investigated the matter was of the opinion that there had been favouritism. On the other hand, a study of his report indicates that that opinion was a conclusion to which he came, and was not necessarily the conclusion to which everybody might come. It was in all respects an opinion, but it was based, I think entirely, upon the large proportion of sales in the district made by a certain garage known as the Garage Laurin, and I should add, upon the fact that sales of tires by that garage increased during 1942 and that sales of tires by the other garages in the town decreased during 1942.


Maurice Lalonde: Would the minister give the figures, if they are not confidential?


James Lorimer Ilsley: I think I can give the figures. I have not them in tabular form; I have a memorandum of my own, but I would have to go all through the police report, and it would take quite a long time. They would all lead to this conclusion, that there was a sharp increase in the sales of tires by the garage which was alleged to be favoured, and a sharp decrease in the sales of tires by the other five garages in the town.


Maurice Lalonde: If the minister will permit me, could he later on place those figures on the record?


James Lorimer Ilsley: I have sent for another file, and I think I may have them.


Maurice Lalonde: Later on, maybe tomorrow?


James Lorimer Ilsley: Yes; I can get those. The investigator-I think he was the first investigator sent by the Montreal office to investigate the situation there-in his report to Mr. Robitaille on November 27, 1942, points out some fairly significant facts, facts which I think are a little difficult to answer. I will read this report:
Montreal, November 27, 1942. Mr. L. C. Robitaille,
Prices and Supply Representative,
Room 703, Aldred Building,
Montreal, Quebec.
Dear Sir,
A check-up of tire rationing in Mont Laurier reveals that 80 per cent of the applications made for tires or tubes were made by dealers in Mont Laurier. The balance-20 per cent-was made by dealers in the district outside of the town.
30 per cent of those applications were made by Garage Laurin.
17	per cent of those applications were made by Jean Brisebois.
10 per cent of those applications were made by Garage Vanchestein.
18	per cent of those applications were made by Garage Gaston Forget.
10 per cent of those applications were made by Grenier Frere.
10 per cent of those applications were made by W. Grenier.
Of the total applications made at Garage Laurin, 29 per cent were refused.
That is very important. If the percentage of refusals had been negligible for the garage which was alleged to be favoured, a much better case would be made, but it was not so.
At Brisebois, 19 per cent were refused.
At Vanchestein, 27J per cent were refused.
At Forget, 39J per cent were refused.
At Grenier Frere, 39 per cent were refused.
At W. Grenier, 53J per cent were refused.
As suggested, every tire dealer was asked if he could specify one case where one of his applications has been refused and that the applicant had obtained a permit by making his application through another dealer. Not one could be named although it -was rumoured. In the office, was one case of an application for tire and tube pending investigation as to the necessity of a new tube. In the meantime, a second application for a tire only came from another dealer for the same applicant. The latter one was granted and first one cancelled.
More details on separate reports for each dealer are given.
A report made by Mr. Pellerin on May 18, showing a deficit of 43 tubes in W. Grenier's place and never produced, is also attached.
Also found in Mr. Pellerin's desk were a few gas reports. These were turned in to Mr. L. Leroux for his inspection.
Yours truly,
E. Alphonse Lalonde.


Maurice Lalonde: "Forget".


James Lorimer Ilsley: No; this is Lalonde, who, I assume, is Robitaille's investigator. That was the report of the investigator to Mr. Robitaille, made on November 27, 1942. Now, there has been investigation after investigation in this case; not only the police investigation, but repeated investigations, some of them taking a great many days, and involving interviews with large numbers of persons in the district. These reports have been studied, and the representative for the province of Quebec, Mr. Robitaille, stands very strongly by Forget. He states that as a result of the investigations Forget is in the clear, that there is nothing whatever which will justify his dismissal; and a review of the report by the wartime prices and trade board here, by the secretary and the general counsel and I think, perhaps, in a somewhat rapid manner by the chairman of the board, leads
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War Appropriation-Finance-Prices Board
to the same conclusion, that there is not sufficient proof of anything against Forget which would warrant his dismissal. It must be remembered that there are a number of small incidents. The one mentioned to-night is perhaps the most serious of those minor incidents. It is that Forget himself, to oblige somebody, bought an inner tube for $2.74 or S2.76 and turned it over to his friend or acquaintance for that $2.76 without any permit being issued. Now, Forget has an explanation of that transaction which may or may not be creditable to him. It is that he was trying out the garage man to see whether he would sell without a permit.


Maurice Lalonde: He was an agent provocateur.


James Lorimer Ilsley: And he did not pursue the matter any farther because it was a small one.


Gordon Graydon: He was satisfying his curiosity.


James Lorimer Ilsley: The transaction was a small one for which to dismiss an official, and in the opinion of the board it would be going a little too far. I have gone over the file, and the only accusation in substance against the man was one of favouritism, which certainly is strongly denied by all the board investigators who have gone into the matter. They say it can be readily explained on other grounds, and the explanation is that this garage had a good deal of what is called fleet business, and from the nature of its business it sold in the summer of 1942 a larger number of tires than the others.
The hon. member for Labelle feels strongly about this case. This man was appointed by the civil service commission. He is a civil servant, and he is entitled to retain his position unless he is proved to have been derelict in the discharge of his duties. Much as I should like to oblige a member of parliament, I do not think the hon. member for Labelle expects me to do so in a matter of this kind; and I must say that be never has, because he has recognized the fact that unless I had before me something that would justify the dismissal of this man I could not institute proceedings leading to his dismissal simply because the hon. member for Labelle feels that he ought to be dismissed and that he is not fit for the position.


Gordon Graydon: During the course of the debate to-night some suggestion has been made about a recommendation either for the dismissal or for the transfer of this man. Who made that suggestion?
IMr. Ilaley,]


James Lorimer Ilsley: The suggestion with regard to his transfer was made on this basis. It was felt that the evidence did not justify dismissal, and certainly the trouble that has been caused in the community by persons taking one side or the other of this argument-and there are many who take the other side, for I have a petition signed by sixty-ffive residents of Mont Laurier urging that the man be not transferred-would seem to suggest that, the community being so divided, the man's usefulness is greatly impaired so far as that particular town is concerned, and that even if there were no clear evidence against him a transfer would be the sensible way of dealing with the matter.


Gordon Graydon: It occurs to me that if the man is not competent; if he is not a proper person to fill the position which he now holds, it is clearly the duty of the department to dismiss him. If, on the other hand, he is fulfilling his duties in a competent, capable manner, and without any real cause for dismissal, then of course he should not be dismissed. You cannot have it both ways.


James Lorimer Ilsley: But it may still be the sensible thing to transfer him.


Gordon Graydon: That would be a matter of policy on the part of the department; nevertheless the department must take a more unequivocal position with reference to the question than simply saying to the man, "You are competent and capable, but we are going to get rid of you." That is what the hon. member apparently had in mind. I suggest that the department must make up its mind whether the man is capable and competent, there being nothing in particular against him so far as the department is concerned. If so, he should be retained; if that is not the case, he must be dismissed. The question of transfer is certainly at best a compromising of a rather peculiar situation.


James Lorimer Ilsley: The board is strongly of the opinion that the man is competent and should be retained where he is.


Maurice Lalonde: I thank the minister for the explanation he has given. May I point out that the civil service commission, in view of the reports of the Royal Canadian Mounted Police, has refused to renew the man's certificate. He was hired on a yearly basis. At any rate, the certificate, if it has not been cancelled, was not renewed by the end of March of this year. I am not quite sure whether he receives his pay, but I can say that the treasury board is fully aware of the facts. In view of the opinion of the civil

War Appropriation-Finance-Prices Board
service commission I am not alone in believing that this man is incompetent and should be dismissed.


Gordon Graydon: Did my hon. friend not suggest that he should be transferred?


Maurice Lalonde: I made the suggestion to the proper authorities, because the matter has created a certain amount of uneasiness in my district with reference to the wartime prices and trade board, and everyone feels that we must go through this garage in order to have better tire sales bargains.


Gordon Graydon: The hon. member is not being kind to the next one who is asked to take the man.


Maurice Lalonde: The minister has stated the explanation given by the wartime prices and trade board for the increase in these tire sales from, I believe, $7,000 to nearly S14.000, within a few months in just one small locality.


James Lorimer Ilsley: In one year.


Maurice Lalonde: In one year. The board states that this garage is the largest dealer in accessories and the customers are fleet operators. I know personally this is not true. That is simply an explanation to 'cover this man, and so long as the proper authorities have not decided to remedy the situation, either by dismissing the man or by transferring him, public opinion in my district will not be satisfied.


Stanley Howard Knowles: As I understand it, the
work of the wartime prices and trade board relates to two main functions, and I should like to say a few words about each of these functions. On the one hand, it is concerned with keeping prices down as far as possible, and, on the other, it is concerned with the supply of goods to the people of this country. In connection with the work of keeping down the cost-of-living index, I think hon. members of this house will agree with the spirit of what the minister said the other night when he spoke of the achievement of the board in that field during the course of this war, compared with what happened during the course of the last war. I say that quite definitely, because I shall be making some remarks with reference to figures that might suggest that that we do not appreciate what has been done. I do not wish to detract from that appreciation; nevertheless I think I should express the view which is commonly held by housewives, and by the husbands who provide the money for them to buy things with, that the cost-of-living index figures provided by the bureau of statistics, and referred to so 72537-279
frequently by the wartime prices and trade board, do not seem to be borne out by
experience.
The other evening the minister gave certain
figures which will be found at page 4254 of Hansard. I wish to refer to figures that have been given by the bureau of statistics, and perhaps if I use those that appear on page 70 of the report of the wartime prices and trade board it will be just as satisfactory. The reason I take the figures from the report rather than the figure the minister gave is that he gave just the final average, whereas the figures on page 70 of the report of the board give the final average, and also how it is made up, among several different lines of goods. In the third column of this report we are told that in the eighteen months from November, 1941, to March, 1943, the rise in the cost of living has been only -9 per cent. If I might compare that with the figure the minister gave the other night as reported at page 4254 of Hansard, I would point out that at that time he said there was a rise of 1-5 per cent in the period of eighteen months ending May 1 of this year. The minister will note that the figures in the table on page 70 break that down, and indicate that in the matter of foods, for one example, the increase in the period of sixteen months was 2-3 per cent.
I have in my hand a portion of the Winnipeg Free Press of June 9, which contains an article headed "City tests show 48-cent rise in Winnipeg's cost of living." May I add that this report arose out of an investigation made by the public welfare committee of the Winnipeg city council. The concern of that committee is with the standard of living of people on relief. In other words, their concern is not with a high or even an average standard of living, but with that of people under their jurisdiction. The paragraph I would read is as follows:
Cost of living in Winnipeg has risen 48 cents a month per person, buying tests recently conducted by the city public welfare department reveal. Test purchases in ten stores were made on March 23-
That is in the present year.
-and it was found that the average cost of a week's groceries for a family of five was $7.78. The same tests made June 1 disclosed that the average cost of a week's groceries for a family of five has risen to $8.38, an increase of 60 cents, or 7-71 per cent.


James Lorimer Ilsley: During what period?


Stanley Howard Knowles: That increase of 7-71 per cent is in the period of ten weeks between March 23, 1943, and June 1, 1943. I do not wish to make any rash statements about the figures given by the dominion bureau of

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statistics, but I think the minister knows of the statements which are made throughout the country about those figures. There is a feeling that while the wartime prices and trade board have done a good job, as I have already said, compared with the experience of the last war, still people know by their experience and by methods of dead reckoning that the cost of living has gone up more than these figures indicate.
In connection with the ways in which the cost of living can go up, there are a few comments I should like to make. In the first place, owing to the fact that some lines of goods are off the market, it actually becomes necessary for people, in order to feed themselves at all, to buy in many instances a better quality of food than they would buy in normal times. People who normally look for bargains and are prepared to take second or third grades in order to balance their budgets, find that those second or third grades are not available. In many instances they are forced to buy better quality goods, with the result that the amount they have to spend increases.
On the other hand, in connection with some goods, such as clothing, the general feeling is that there has been a certain amount of deterioration in quality. While I realize, from an answer given some time ago at my request by the dominion bureau of statistics, that manufacturers are asked to take into consideration deterioration in quality, still the general feeling of people with whom I have talked is that in the matter of clothes people are not getting the same value for their money they were getting before the war. The result is that clothes have to be bought more often, and this fact reflects itself in an increase in the cost of living under war-time conditions.


James Lorimer Ilsley: What did the hon. member say was the reason why people are buying better food?


Stanley Howard Knowles: I said that in many instances families which in normal times might in some lines buy second or third quality now find in war time that second and third grades are not available.


James Lorimer Ilsley: Why not?


Stanley Howard Knowles: I do not know why not. Does the minister?


James Lorimer Ilsley: Is it not because the very considerably improved income of the people causes them to buy better grades? Is that not, honestly, the truth? I think it is common knowledge that it is.


Stanley Howard Knowles: My view is that the better food some people are eating to-day is not

purchased by them because they want to spend that greater amount of money on it. It is purchased because the better quality is the only line of food available to them.


James Lorimer Ilsley: Where is the rest of it?


Stanley Howard Knowles: I do not know, but it is not available. Another item I think the minister would have to take into consideration is the increase in taxation, part of which has actually gone into subsidizing prices and. in other words, really should be considered in computing the increase in the cost of living. I understand the dominion bureau of statistics feels it includes all the taxes it should in the cost of living index when it includes indirect taxes which show up in the prices people pay for food. But the bureau of statistics apparently does not take into consideration any of the direct taxes paid by the people of Canada. Yet those taxes have increased tremendously, and add to the cost of living. As I have said, part of the money paid in taxes is used-and I shall deal with that specifically in a moment-to subsidize prices. Part of what we pay in taxes is actually part of the price which we pay for some of our food.
Another factor which I think should be considered is that averages are very deceiving. It is one thing to find what the average cost of living is on certain quantities of goods across the country, and it is another thing to find a family which is at that precise average point. Conditions vary in different parts of the country, and they also vary considerably according to the income of the family. The dominion bureau of statistics can establish quantities of necessary commodities which it takes into consideration in making up its cost of living index, but whether or not the relative quantities of those various goods are bought depends upon the family income. Those in the lower income brackets do not buy the same proportion of all the various kinds of goods included in the list of things which make up the index. There are certain basic things they have to buy first, and so far as they are concerned if those basic things go up in price, then their cost of living index may have risen to a greater extent than is reflected in the average published by the dominion bureau of statistics.
One might ask why we are concerned with the figure the bureau of statistics publishes, and why we bring it to the attention of the wartime prices and trade board. The answer, of course, is quite clear; namely, that the cost of living bonus is paid-when it is paid-in proportion to the increase in the cost of living. Of course the wartime prices and trade

War Appropriation-Finance-Prices Board
board watches the cost of living index closely, because that index indicates whether the board is doing its job, so far as the control of prices is concerned. I think there would be a good deal more satisfaction and perhaps a greater appreciation of the work of the board if the whole question of the determination of the cost of living index were gone into anew, in the light of war-time conditions, and in the light of some of the factors which I have suggested, and some other factors which no doubt other hon. members will suggest later on. This ought to be done to see if it is not possible to arrive at a figure which will more nearly approximate the experience of our people. I say again that that rise of only 2-3 per cent in the price of food in eighteen months hardly tallies with the experience of the housewives of Canada.
I have given as one piece of evidence on the other side the article in the Winnipeg Free Press, which is an account of a report made by an established committee in Winnipeg, and which shows that there was an increase of 7-71 per cent in the period of ten weeks ending June 1, 1943. When I started I said that I should like to make a few comments on the other side of the board's activities, namely, that of seeing to it that necessary goods are made available to our people. Here again I agree in spirit with the statement made by the minister the other night when he expressed satisfaction with the work the board has been doing in this connection. If all we have to suffer on this continent while this war is on is a few privations through not being able to get our chosen foods, that is not a very large price to pay and there should be no complaint so far as adults are concerned. I am going to take a moment or two, however, to speak on behalf of one group of citizens, our children and infants.
It seems to me that the board ought to do something to try to improve the situation with respect to the younger members of our community. We do not know how long the war will last, and what our children receive in their younger years may have a bearing upon their health throughout their whole lives. A great deal of progress has been made in recent years in the field of nutrition. We know the things that are necessary in order to build health, and yet some of the things necessary for infants and young children are most difficult to get at the present time. One item is the little tins of fruits which are prepared for children and which an adult would not eat unless he were ill. Then there is the good old stand-by, prunes, and there is also 72537-2791
canned milk. The minister made some comments about this the other night and pointed out that we have actually increased our production of canned milk. Despite that, shortages seem to be turning up. Corn syrup has become very important to babies, and then there are such things as oranges and other fruits.
I would suggest that some of these items be rationed. I know the minister said the other night that while it is realized that theoretically rationing is the most perfect method of distributing food, it is something to be avoided if possible. But despite all the difficulties that would be encountered, I think we should be concerned about the health of our future generation. The ration books indicate the age of the holders. Children under a certain age receive no coupons for tea and coffee, and I suggest that in reverse fashion it ought to be possible to make some of the things I have mentioned available only to our younger citizens. These items which are seldom found on the shelves of our stores should be made available on a ration basis. I know that a great many young mothers, and fathers too, are worried because they cannot get corn syrup, prunes and other articles of food required by small children.
I would refer also to fruits, such as oranges. Perhaps it might not be feasible to ration oranges, but I would suggest that the whole matter of subsidies should be handled with a view to making these commodities available to the younger section of our community. In this connection I would say that I have read with great interest certain parts of the report of the wartime prices and trade board. One section which I have studied quite closely is that dealing with the functions of the commodity prices stabilization corporation. It seems to me that too much of the initiative lies with the companies which are interested in obtaining subsidies and which make application to the corporation. I feel that the initiative should lie with the board. The board, after consultation with health and nutrition experts, should have a picture of what our children ought to have in the way of food. It should start first with the group to which I have referred and should take the initiative in granting subsidies in such a way as to make these things available to those who need them.


James Lorimer Ilsley: The hon. gentleman referred to a check in the rise in the cost of living made in Winnipeg and stated that the results of this survey indicated an increase in the cost of foods or groceries of 7-71 per cent between March 23 and June 1, 1943. From this he
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War Appropriation-Finance-Prices Board
argues that the rise of 2-3 points indicated by the bureau of statistics for the sixteen months ending March, 1943, must be incorrect.


Stanley Howard Knowles: I was quite conscious of the fact that the periods were not the same. I had not the figures for the latter period and this was the best I could do. If it is true that there has been a rise of only 2-3 points in sixteen months, then I know that a rise of 7-71 points in ten weeks would have made the minister very much concerned and he would have done something about it. That much difference in the rate of rise would have been quite serious.


James Lorimer Ilsley: I am not in position to express any views as to the validity of the Winnipeg survey. I do not know anything about it, nor do I know what foods they considered.


Stanley Howard Knowles: I can quote further from the article. It reads:
Foods tested were: bread, eggs (or one pound of liver), cheese, potatoes, root vegetables, cabbage, three tins of tomatoes, dried vegetables, dried or fresh fruit, rolled oats or cracked wheat, rice, tapioca (or barley), macaroni, flour, sugar, molasses, jam (or honey), salt pork or peanut butter, tea or coffee or cocoa, soap, salt, pepper, meat, shortening, butter or fish, milk.
When the tests were made June 1, the following increases were noted as against prices of March 23:	cabbage, increased from 15 to 44
cents; eggs, 34 to 38 cents; potatoes, 59 to 57 cents; root vegetables, 41 to 56 cents; dried or fresh fruit, 34 to 42 cents.
I would remind the minister that this survey was conducted by the public welfare committee which was considering whether they should increase the amount of the grant made to families on relief. In other words, they were thinking of that standard of living.


James Lorimer Ilsley: Does the hon. gentleman know anything about the weighting given to the various foods?


Stanley Howard Knowles: An attempt was made to find out the increase in the actual cost of living for a family of five on public welfare. As the minister knows, a committee of this kind would have had experience over a great many years with keeping down to a minimum the quantities of food necessary to keep a family alive.


James Lorimer Ilsley: As I say, I am not in position to argue one way or another about the validity of the survey or whether the correct weighting was given or the correct methods applied. That may or may not have been done.


Stanley Howard Knowles: I understand the same quantities were taken both times.


James Lorimer Ilsley: Oh, yes; otherwise the comparison would be entirely useless. The position of the wartime prices and trade board with regard to the cost-of-living index is that it is an index compiled by another department of government, the bureau of statistics. It is said to be an excellent test of the real cost of living, but I suppose no index is perfect. I suppose opinions would differ as to the accuracy with which any index really indicates the cost of living, but compared with the indices in any country I know of I would express the opinion that the Canadian index is at least as good as any of them. It is true it may be said that in certain periods the index does not measure the true increase in the cost of living, such as in a very recent period when the cost of fruits and vegetables has gone up rapidly. The hon. member mentioned, for instance, an increase in cabbages from fifteen to forty-four cents. These would be imported fruits and vegetables, and there is no doubt there has been a great increase in prices in the United States. But these are not in the cost-of-living index. There are certain reasons why seasonal articles such as fruits and vegetables are deemed improper for inclusion in a cost-of-living index. There are certain vegetables in the cost-of-living index, but the great bulk of them are not there, and that causes some persons to complain of the cost-of-living index. The only fresh fruits and vegetables in the index are oranges, potatoes and onions. I understand that consideration is being given to ways and means of overcoming the technical difficulties of incorporating other items in the index. The chief technical difficulties are wide seasonal variations in prices, many fresh fruits and vegetables being on the market for only a few months of the year, wide variations in quality, and lack of standard units of sale. I am not in a position here to express any technical opinion as to the cost-of-living index except to say that it is generally regarded as a good index; the weighting is good and there is a wide but not too wide variety of articles included. Of course one of the most important items in the cost-of-living index is not food at all; it is rent. That bulks very large in the cost of living.


Stanley Howard Knowles: That is the reason I
took the table on page 70 of the report rather than the minister's figure which appears on Hansard, and made a comparison between the report in the Free Press and the actual increase for foods as set out in the report.


James Lorimer Ilsley: One of my officials points
out that twenty-nine cents out of the sixty

War Appropriation-Finance-Prices Board
cents increase was for cabbages alone. There might be some answer to what I have said about cabbages; I do not know. It is a very difficult matter, one for statisticians to work out. There were tremendous increases in certain fruits and vegetables in that very period. That may be the reason for that apparently large increase, but certainly I would not regard that as prima facie evidence that the cost-of-living index is not a true index.


Stanley Howard Knowles: Before the minister deals with the other phase, may I say that the functions of the dominion bureau of statistics, including the cost-of-living index, date back, I take it, a good many years. It seems to me that with the emergence of the war and, in particular, this new function, namely, the control of prices by a board such as the wartime prices and trade board, it is certainly a debatable point whether the old basis of working out the cost-of-living index should be used. It was with that in mind that earlier this year I asked a question on the order paper which appears at page 2929 of Hansard. My question was:
Has the dominion bureau of statistics, since the outbreak of the present war, made any revisions in the method of determining the cost of living index?
The reply is quite lengthy, but I give this sentence from it:
No change in method has occurred since August, 1940. although two revisions in the index budget have been made.
My point is that what is required is not just revisions in the index budget, but an examination of the whole method in the light of this new economic phenomenon, namely, the attempt of the wartime prices and trade board to control prices. I appreciate the validity of the minister's argument. He speaks of the independence of the bureau of statistics from the wartime prices and trade board, and in one sense that is good, but it is also true that the wartime prices and trade board has an interest in the cost of living index because it indicates whether the work of the board is effective. My feeling is that these figures do not give the wartime prices and trade board a clear picture of its work. While its work is good; while it has achieved wonderful results in keeping the cost of living down, in my opinion it is not true to say that it has kept it down to an increase of only 2-3 per cent, with respect to food, in the period of the board's operation.


James Lorimer Ilsley: The hon. gentleman has made certain suggestions in the interests of children and infants. That gives me an opportunity of
pointing out something that has been done along those lines. We have subsidized all consumers in the purchase of milk. We have reduced the price of milk two cents a quart to all buyers in Canada. That certainly would be along the lines suggested by the hon. gentleman. He also mentioned oranges and orange juice. Similarly we selected oranges for subsidy. That is also along the lines suggested by the hon. gentleman.


Stanley Howard Knowles: To what extent was that done? Perhaps the minister would prefer to give the information when we come to the item.


James Lorimer Ilsley: Yes; I will get the figures. The board has also energetically sponsored the production of cod-liver oil in this country. It has taken great pains to assure an adequate supply of cod-liver oil.
With regard to tinned baby foods, I do not know just what they would be, but there are tinned baby foods, and the use of tin for these foods has been authorized to 100 per cent of its use in 1941. Of course the amount in glass containers, and so on, that can be manufactured is unlimited.


Stanley Howard Knowles: There would appear to be no shortage of tin in this connection; if the minister goes into any store in town he will find that there are certain infant foods of which there is an unlimited supply in tins. Spinach is one of them-Popeye must have had some influence there. But you simply cannot buy any children's tinned fruits in Ottawa anywhere, and it is practically the same in any other city. You cannot buy tinned peaches, tinned pears, tinned apricots- any fruit in tins.


James Lorimer Ilsley: It is certainly not correct to say that there is an unlimited supply of tin.


Stanley Howard Knowles: I thought the minister said that.


James Lorimer Ilsley: No; I said that baby foods in tins could be manufactured to the extent of 100 per cent of the 1941 pack. The hon. gentleman was saying that the board should have some regard for the welfare of children, and I gave as an instance tinned baby foods. A very fine case can be made for what the board has done in that regard. I do not take any credit for it myself-


Stanley Howard Knowles: But it is only-


James Lorimer Ilsley: Just a moment. The hon. gentleman does not give me a chance to get going at all. I was not quite clear as to what his suggestions were as to rationing, but I fathered that he thought certain articles not
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now rationed should be rationed. All I can say about that is that rationing presents such tremendous difficulties that if it can be avoided in almost anything it ought to be.


Stanley Howard Knowles: Might I say a word further. I appreciate what the board has done in the matter of tin, but I tried to point out that there is only a limited variety of goods available in tins. They happen to be all in the vegetable line. There are no fruits in tins. I imagine sugar has something to do with that. My point is that the boards should see to it that those things which are necessary-they can get the advice of nutrition experts-should, if possible, be produced and rationed among those with children of certain ages.
In connection with rationing I would suggest that it 'be done with prunes, with canned milk and with corn syrup. I happen to know that in some cities attempts have been made at voluntary rationing of syrup at the stores, at the suggestion of the local doctors. There are difficulties involved, but to me the importance is such that the difficulties are not insurmountable.


Thomas Reid: The matters which I have to bring before the minister to-night have to do with the recent beef orders and pork orders, and are raised on behalf of the British Columbia independent meat packers, who charge discrimination, and that the advice given to the wartime prices and trade board by and on behalf of eastern packers is to the disadvantage of the British Columbia independent meat packers, and so discriminates, generally speaking, against British Columbia.
The British Columbia independent meat packers have five members, whose offices and stores for business are in Vancouver. They made personal representation to me during the time I was at home at Easter. The names of the five are: The Pacific Meat Company Limited, Fletchers Limited, the Associated Packers Limited, H. Brown and Sons Limited, and the Alberta Meat Company.
The original beef order, they claim, divided Canada into fifteen different zones for marketing purposes and put a beef ceiling in each one of these zones. The beef order, however, did not take into full account the cost of shipping cattle from the prairie provinces to British Columbia.
Ontario and Quebec, generally speaking, do not bring any live cattle from the prairies for slaughtering on account of the long haul and the cost. These are bought by the packing companies, slaughtered in the provinces and then shipped east as beef.
[Mr. Ilsley.J
On February 6 a regulation was put into effect assisting beef shipments to eastern markets, completely ignoring the fact that British Columbia could not import live .cattle at the price differential set by the beef order.
There is only one cent a pound differential between Alberta and Vancouver price ceilings, which is not sufficient to cover the freight charges, handling charges and shrinkage. This one cent differential allows Alberta packers to pay more for their live stock than British Columbia packers can and so keep within the price ceilings.
Eastern concerns were allowed $1.35 per 100 pounds as a subsidy on dressed beef. This makes it possible for them to draw cattle from the Alberta market, kill these cattle at their Alberta plants in Alberta, and ship their beef east with the assistance of the government subsidy. The effect of this was to raise the cost of cattle in Alberta and Saskatchewan by retaining a strong demand on the Alberta market, but it has caused the independent meat packers of British Columbia to import and kill cattle at a loss or go out of business entirely.
British Columbia meat packers should be allowed $1.30 per hundredweight to equalize the cost and the selling price.
Every price order on hides or tallow or any other by-product is based on the supposition that the market for all these products is in eastern Canada. The ceiling price on these, generally speaking, are Toronto prices less the freight to western producers.
Under the order setting the prices for hides, tallow or by-products, hides are sold under two designations, namely, large and small packer hides. Large packer hides are priced at 25 cents per hundredweight more than small packer hides. Eastern officials and their advisers have classified the Canada Packers plant in Vancouver, who by the way have their head offices in the east, as a large packer, and the independent meat packers such as the Pacific Meat company are classified as small packers.
It should be noted in regard to this that the Canada Packers plant in Vancouver are killing about 1,000 head of cattle per month, for which they receive 25 cents per hundredweight more for the hides than the independent Pacific Meat company with no eastern head office but who kill approximately 1,500 head of cattle a month. Yet this independent meat company, classified as a small packer, are killing more than the company designated as a large packer, and to the advantage of the large company.
With regard to tallow, the price of tallow throughout the United States was set at a

War Appropriation-Finance-Prices Board
nation-wide price, the same at any point of production. Canadian price ceilings were established with a 75-cent per hundredweight price differential between eastern and western points. All tallow is not processed in the east. Why should there be any difference in price?
With regard to pork and bacon products, here is the history. The history of the orders of the wartime prices and trade board and the bacon board as they affected British Columbia meat packers started in 1941. The packers at that date were allowed to kill for their domestic trade only the number of hogs slaughtered in 1940. The order was changed in July, 1941, when they were allowed to kill only 75 per cent of what they did in 1940. Then in November, 1942, this amount was again reduced to about 50 per cent of the number killed in 1940. There was a reason for this, because the number of hogs taken away from domestic slaughterings were added to the exports to the United Kingdom. No complaints were made regarding this, for it was realized that exports to Britain were very necessary, although it should be noted that the hogs taken away from the domestic market were handled by an eastern plant with a guaranteed profit. On two occasions the government has raised the price of export bacon, and this has brought about corresponding increases in the live hog market since 1941.
It has been urged that there should have been also a corresponding rise in domestic pork prices, but this is a matter which I am not arguing at the present time. I think, however, it should be stated that Mr. Peterson, director of live stock and poultry products, wrote to the independent meat packers in October last and told them that ceiling prices of domestic pork products are not out of line with current hog prices, admitting there may be exceptions in certain sections of Canada, including the Vancouver area, but that it was their intention to make some certain necessary adjustments. Although the price to the producer has advanced over $2 per hundredweight, the adjustments promised by Mr. Peterson have not yet been put into effect.
There are on the average 110,000 hogs marketed in Canada per week; of these, about
90.000	are handled by a handful of exporting firms who actually operate on these on a guaranteed government profit. This leaves about
20.000	hogs per week for slaughtering, and these 20,000 are divided among all the packers and pork processors throughout Canada, including the three exporting firms, who handle the 90,000.
On April 1 of this year order No. 247 regarding pork products was issued, and it is claimed
by the independent meat packers that this latest order is another attempt to put the Canadian packer industry into the hands of large eastern concerns. The features of this order, it is claimed, are discriminatory.
First of all, as regards the price set, the very basis for the pork order set-up is on pork carcases. Montreal and Toronto are allowed SI .50 spread between the cost price and the sales price, but the price differential allowed in Vancouver is only forty cents. Pork product number one of the pork order No. 247 carcase, with the head on, has a selling price in either Montreal or Toronto of nineteen cents or $19 per hundredweight, with a cost of seventeen cents delivered plus a shrinkage of * fifty cents from the hot to cold weight, making a total cost of $17.50 per hundredweight. That allows a spread of $1.50 per hundredweight. Vancouver has a selling price of eighteen cents or $18 per hundredweight, which is $1 per hundredweight less than the eastern price, and since the total latest cost in Vancouver is $17.60, it leaves a differential of only 40 cents per hundredweight compared with the $1.50 allowed the eastern packers. It is obvious by this that western conditions or interests were not kept in mind when the regulations were made.
Another matter. The price set-up of the pork cuts when the hog is broken down between east and west bears the same ratio to one another as do the carcases. Whilst it is relatively unimportant, it should be noted nevertheless that the cuts of pork must now be all put out according to the eastern style, a style which is quite different from what we have in British Columbia and from what we in British Columbia are and have been accustomed to, and bears out, I believe, the contention that British Columbia and the west were not at all consulted when these regulations were drawn up.
The claim is made by the independent meat packers that eastern concerns are being subsidized, that eastern concerns have the privileges on all by-products, and that eastern concerns have been allotted practically all hog slaughterings, leaving British Columbia with only 1,800 out of approximately 110,000 hogs which are slaughtered per week. Further than that they have been granted $1.50 per hundredweight spread in Toronto and Montreal to British Columbia; forty cents per hundredweight spread with an added disadvantage in British Columbia of being only allowed a meagre supply of hogs.
One further matter complained of is that in the prices set by the board for blood meal, British Columbia has been left out. In the
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light of the statements and accusations made by the British Columbia Meat Packers, I am of the opinion that the matter is so serious that a complete investigation should be made. I realize, in bringing the matter to the minister's attention now, that he is perhaps not in a position at the moment to give me a definite answer to all the charges made by the independent meat packers of British Columbia, but I trust he has taken serious note of the charges made, because they claim they will go out of business and that then the three large companies, Swift's, Burns and Canada Packers will be in entire control.


James Lorimer Ilsley: I can only say that the interests of the packers of British Columbia have been brought to the attention of the board by way of a brief or briefs containing the representations which the hon. gentleman has just made, and so. far as neglect of their interests is concerned, perhaps I might point out that the meats administrator is not an eastern man. He is Mr. Grisdale, from Alberta; he is not from British Columbia, it is true, but he is not an eastern man. Moreover, since about Easter, Mr. Diamond, the manager of the Pacific Meat company, has been a member of the advisory meat committee and is consulted frequently about the problems that arise. These problems, as hon. members will have noted, are highly technical, and they are being worked out. I will take note of the hon. member's representations.


Thomas Langton Church: I wish for five or six minutes to discuss some of the principles in general of the administration of this particular department under the minister. It is unfortunate that this great question of control and of subsidies should come up ten or twelve days before the close of the session. Yes; I hope to see the session close by the end of next week. It would save a good deal of money to the country, because this parliament can do nothing. Our powers, privileges and functions have been taken away from us by various controls, sub-controls and bureaucrats, so much so that we might as well go home and leave the control of this particular work to the house of Gordon. It used to be that the parliament of Canada consisted of the House of Commons and the Senate; but ;hat is no longer so, because, as I say, all our privileges and functions have been wrested from us by a third house aforesaid, and we have little control over anything. We have practically no say in regard to any of the control policies of the government of the day. The cost of ceilings and subsidies and of administering this control system is 
$65,000,000, which is twice as much as the Tupper government spent in 1896, when they left office, to administer the affairs of the whole dominion at that time. I sympathize with the present Minister of Finance, because he has been bearing the brunt of a great deal of the burden of government. On general principles, I believe the public of Canada will commend the policy of trying to check inflation; but in trying to check inflation a great deal has been done that will have the opposite effect. There have been some excellent things, but the various boards have not adopted any cure, nor have they got rid of the disease; far from it, they are themselves causing inflation by unlimited, amateur price fixing, which is linked with wages.
We never knew how our mode of living was related to the far east until we lost command of the sea in the Pacific. Our entire way of life depended upon foreign products from the far east, such as rubber, gasoline, tea, sugar, coffee and many other imports, and we have had to change our manner of living in consequence of the changes that have been brought about by this war. No doubt the government was prompted to institute these various controls by what happened in the last war when prices went sky-high. But as Mr. Churchill said in the House of Commons on August 8, 1939, the people of Great Britain were obliged to look forward to a vast change in parliamentary government, in their method of government. It might seem a paradox, he said, that a war undertaken in the name of liberty should require as a necessary part of its process the surrender for the time being of so many of their dearly-loved liberties and rights. In the last few days, he said-he spoke, as I have said, in August, 1939-the British House of Commons had been voting dozens of bills handing over to the executive the most dearly-loved traditional liberties of the British people, but he trusted that those liberties would not be abused, that they would not be used for any class or party interest, but that the people would continue to cherish them; and he looked forward to the day, surely and confidently, when all those liberties and rights would be restored to them.
So far as we are concerned, I do not think it was ever intended that the control system, started with a skeleton staff largely made up of civil service staff, should go on expanding day by day until it reached the huge proportions we now see, going up in wage bills from $10,514,000 to $14,300,000 all in one year, just for administration purposes alone. This is a staggering thought for the taxpayer. The

War Appropriation-Finance-Prices Board
minister must provide the necessary money by debt charges or by taking it out of the taxpayer by revenues and income. If this had as its object the winning of the war no one would object; but it can safely be said, so far as seventy per cent of i't is concerned, that it is not for the purpose of winning the war. It simply adds to the burden on the taxpayers of Canada, who have to pay income tax, sales tax and other war levies as well. In the last few days of the last session of parliament I asked what was the cost of this department of the minister, but I did not get a return until late in September. It is not his fault; he is overworked, I admit, and I am not criticizing either him or anyone else. The fact is, however, that we could not tell from day to day, from month to month, the number of people on the payroll of this enormous control system that we had. And if you got certain information to-day it would be changed next week. Now we have $14,000,000 for administration alone. The people are becoming bewildered at the cost of this institution. I asked last year what these ceilings involved, and the officials said, before the Easter recess, that they did not know. Then Mr. Gordon went to Winnipeg, and we were given to understand that the amount was $2,000,000. That information was given during the recess we had over the referendum. The government later, after the Easter recess, said the same thing; then the amount went up in the last fiscal year; and the cost of the Canadian subsidy programme from December 1, 1941, to March 31, 1943, has reached the enormous figure of $65,000,000. That, I repeat, is a staggering thought. If it were necessary to win the war it would be quite justifiable; but, as I say, a great deal of this is not necessary for that purpose.
If the policy of the government is to control all the activities of the people, to administer their affairs for them in every walk of life, from the cradle to the grave in this way, to control every man's business, whether retail or wholesale, indeed, to abolish all private business, private enterprise, thrift, and private ways of conducting business, then I say the people of Canada should know it. Many of the small storekeepers in our cities and towns have been driven out of business by this control system, and we in parliament have lost our control over the administration. We have simply handed over all our powers to an outside body to pass rules and regulations and by-laws and to send people to gaol and inflict upon them fines as high as $5,000. What a system! They would not have anything of this sort at Washington; they threw it out of the front door. Congress and the senate a
week ago simply refused to have anything tc do with it. The people over there are sick and tired of it all. They are willing to put up with a reasonable degree of restriction tc stop inflation, but the control that we have has destroyed all competitive business, both retail and wholesale, until private enterprise has been crippled, and no one any longer can conduct his own business.
What did they do in the mother country? They passed the Pre-War Trade Practices Act in 1942, which had the effect of putting the business man, large or small, back on the basis on which he operated before the war. I submit that the time has come in Canada for us to call a halt to the present tendency and to consider seriously where we are going. We are simply leading to more inflation by the policy we are pursuing. In addition to the personnel of the wartime prices and trade board and all their deputies in Ottawa, there are hordes of workers attached to the board outside, all over Canada a small standing army of busybody officials. Every day we read in the newspapers pages of advertisements announcing additions to this vast dictator system. There is an army of them, several regiments of them from one end of Canada to the other, every one of them making different, divergent announcements at the same time, until the people are bewildered. A morning newspaper in Ottawa has been criticizing them with reference to one commodity. The country is ready to stand some of this sort of thing, but to-day we have nothing but a modern tower of Babel in Canada, with these controls that do not control. Every city and town in the country are subject to the dictates of these controllers, sub-controllers and deputy sub-controllers, constituting one large army of officials. Not only that, but in the administration of the civil service departments we find some of the most able men in the country, who get only a certain amount of salary. Others, in these controls in this department are paid almost any amount, over the head of parliament, without our having anything to do about it. All the comptroller of the treasury does is to find out whether it is an amount paid as a war appropriation, under the war appropriation measure, and then just put his stamp on it. That is what he does, on sums up to $14,000,000. It is a fine system! The auditor general admitted to me in a letter last July, a copy of which I sent to the minister, that he has no control over expenditures made under the war appropriation bill. He has no control at all over that bill. That is under the control of the comptroller of the treasury.

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Anyone must know what will happen later, because I can say this that it will put a lot of men out of work, and that both before the war is over and after the war it will lead to wide unemployment if we do not check some of these unnecessary controls. What control have we over all these contracts which have been made by the board here? We have no control at all. We do not know whether the people are getting value for their money.
At this point I should like to read only a few paragraphs from the review by the National City Bank of New York. This is the June issue, for 1943, which deals with the economic results of Canada's whole ceiling and control system. In this issue it makes reference to a speech by the chairman of the board, Mr. Donald Gordon, delivered at Chicago. At that time Mr. Gordon spoke about subsidies, and the way in which they operated in Canada. I should like the committee to have the benefit of hearing what is set out in this review and, since it is not lengthy, I shall put it on record as follows:
Canadian subsidies are tied directly with regulation of profit margins on the particular product. They are designed to cover only a part of the increase in costs, and are conditioned upon adoption of various economies in production, importation and distribution. A good illustration of combination of subsidies with reduction of operating costs is provided in the case of leather footwear. This is described in an official report of the wartime prices and trade board, dated May 1, 1943, as follows:
"Soon after the maximum prices regulations were introduced it became apparent that the shoe manufacturers could not, until economies were introduced, carry on under the retail price ceiling. An investigation was carried out by the accounting administration and this indicated that approximately 15 per cent of the manufacturers' selling prices would have to be absorbed to enable the industry to carry on without serious difficulty, provided the cost of leather was maintained at prices prevailing during the basic period. It was arranged that 4 per cent would be passed on to the wholesale-retail group, that manufacturers would absorb 4 per cent, and that the commodity prices stabilization corporation would take care of the remainder by paying a temporary subsidy of 7 per cent. A simplification programme was initiated by the board and on July 1, 1942, the rate of subsidy was reduced to 4 per cent. The subsidy is not payable on footwear sold at higher prices than ceiling prices (e.g., sales to the Department of Munitions and Supply, and export), or on felt boots or rubber footwear."
The rate of Canadian subsidies is limited by various formulae and special arrangements. They are paid to low-cost producers at the same rate as to high-cost producers, but are considered income for tax purposes, and thus are recaptured in part when they result in excess profits.
In describing experience with the subsidies, the chairman of the wartime prices and trade board, Mr. Donald Gordon, had this to say in a speech in Chicago in February:
[Mr. Church.)
"We have found, in practice, that it has not been necessary to pay out anything like the sums which some pessimists predicted when it was announced that subsidies would be payable under stipulated conditions. Moreover, we have found that our declared willingness to provide such subsidies has enabled us to enter into negotiations or discussions and to reach agreements between parties providing for a fair sharing of increased costs without actually paying a subsidy at all. We are satisfied that in many cases we could not have even arranged for necessary conversations if a willingness to subsidize in case of proven need had not heen expressed in advance."
The direct cost of the Canadian subsidy programme from December 1, 1941, to March 31, 1943, v'as about $65 millions, of which $34 millions was paid on imported commodities and $31 millions to domestic producers. The cost during the present fiscal j'ear may reach $90 to $100 millions. On a per capita basis, the equivalent cost in this country would be on the order of $1 billion.
Opinions as to the applicability of British and Canadian subsidy systems in the United States must take into consideration differences in conditions in the three countries. The British situation differs from ours in that a far greater percentage of commodities affecting British costs of living are imported and enter the country through relatively few ports, facilitating control by the Ministry of Food. In the United States the bulk of production is domestic; it is shared, even on the processing level, by many thousands of producers. Also problems of subsidies and price fixing in this country are more complex than in Canada, due to greater population and area and greater variety of production and trade.
That is their review. The people of this country are not satisfied when they see some of those who are engaged in this matter of control. For instance, let us consider the clothing industry. Was anyone brought to the control of that industry who knew anything about clothing, or simplified practices in it? Not that I know of. Why, they take a cut off here, a cuff off there, a sleeve off here. And what do men say who have been in the business all their lives? They say that if those controllers had stayed in the business to which they belonged, it would have been far better for the retail and wholesale clothing business. Some hon. members know, because I see some of them are wearing controlled clothing this evening. And that simplified process has been applied to all clothing, even to collars, shirts and ties.
I know something about control of this business. One or two of the controllers I know were not working in the clothing industry at all. All they knew about it was what they had themselves to buy from the retail store. Yet they are put over a great industry. That is a bad policy. In the city of Toronto, if one goes along Danforth avenue, Bloor street, St. Clair avenue or Yonge street and asks

War Appropriation-Finance-Prices Board
any 'business man what he thinks about some of these laborious controls, he will say they are putting him out of business.
That is what we are heading for. I have seen something of the results of some of this inflation. Disaster will meet us in part in the end. Just wait until we see it next year. We are told that there will be $90,000,000 for the next fiscal year. Last year it was only $2,000,000. This year it went up to $60,000,000. Now we find in this review of the National City bank that it is to be $90,000,000 to $100,000,000.
Let us consider the coal industry, for instance. Some of these controllers put on seventy-five cents a ton for delivery charges, without the authority of parliament. That was one ceiling where something could have been done to help the poor retail man who has to deliver the coal. He could have been given that seventy-five cents out of a necessary ceiling, and it would have given him something on which he could exist and help get his retail coal delivered.
* In the United States they had an example of control before the war started, under what was known as the new deal. Not long ago I listened to a senator from Ohio, a former mayor of the city of Cleveland, who addressed a meeting in room 16 in this building. He was a republican, anti-new deal and isolationist. What did they do with the ceiling, pricefixing policy in the United States senate? I read the record of their debates and of congress debates every day, and I find that down there they have abandoned the new deal and this control subsidy system.
I am not asking for the complete abolition of control, but I am asking for some moderate reduction. I believe that in a country of only 10,000,000 or 11,000,000 people, some of this control may have merit. Credit should be given to the minister for much of what he has done to check inflation. But I plead with him now to let us reduce our tax rate, and surely this is one way 'n which it can be reduced. Let the retail man run his own business, and the wholesale man who knows his business run his own business for the remainder of the war with less state control, much of it unnecessary and not a war aid.
We have been at war four years. If during the next year, or during the remainder of this year and the year following we can relieve trade and business of some of these awful burdens and artificial barriers they have been carrying, it will be a blessing for the taxpayer and small business man. When we help the retail or wholesale man we are helping the taxpayer. It is all right to talk about this
72537-280i
subject in an academic way. For instance, references have been made to beef and butter this afternoon and evening. Instead of having somebody who knew something about beef and butter, either a farmer or a drover or a butcher, draw up some regulations with respect to these products, we find a teacher. Well, teachers are all right. We will remember that the Carpenter of Nazareth was a teacher. The average teacher is all right in his profession. But surely he should not start to run the grain business, or set himself up as an expert in the grain or any other business. Surely he is not an authority on retail gents' furnishings or ladies' underwear, nor would he be an authority on some of those other many things mentioned by the hon. member for Temiscouata with regard to some of the controls. Those matters are out of the teacher's sphere.
Let us have a more reasonable and a common-sense system of reasonable, necessary controls. People are getting sick and tired of many of these unnecessary controls. They are sick and tired of some of the bullying practices adopted by the board. We know that some people have been taken into police court, people who never were in courts in their lives before, and those people have had to pay fines, maybe up to $5,000 for some simple, unintentional infraction.
In conclusion, I plead with the minister that he should look into some of these matters, and try to cut down some of the controls by 30 or 40 per cent in the next fiscal year where they are found unnecessary, and so aid business.


John George Diefenbaker: There are just a few matters respecting which I should like to have some information from the minister. I believe in 1943 the retention of the price-ceiling policy and the prevention of further inflation will receive its greatest test. According to the information given recently, in 1943 the income of individuals as such will be some $400,000,000 more than it was in 1942, and there will be from $300,000,000 to $500,000,000 less civilian goods available during the year. All this points to one conclusion. Unless there is the strictest enforcement, aided by the cooperation of the Canadian people as a whole, inflation will progress by leaps and bounds during the present year. So far as the opposition is concerned, its attitude has been one of assistance to the government in preventing inflation. I have pointed out that in order to secure the Canadian people against the danger of inflation there must be cooperation on the part of the people as well as strict enforcement of the law against wrongdoers.
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The committee should have from the minister at this time a detailed statement of the number of investigations that have taken place during the past year into infractions of the regulations of the wartime prices board, as well as the number of prosecutions, province by province, that have taken place, the number of convictions registered, the fines that are being imposed and a general statement showing what is being done against these wrongdoers. Their number is increasing because there is not the enforcement of these regulations that there should be. Loyal and patriotic people accept the rigours of the regulations that are in effect; small business men are finding themselves in a position where they are unable to carry on, and, as times goes on, these conditions will be accelerated. They can be prevented only by strict enforcement.
The people as a whole feel that during the past few months there has not been the strict enforcement of the law that there should have been. As time goes on, there will be a greater incentive to commit offences against wartime prices regulations, and this will increase in proportion to the failure strictly to enforce the regulations in the courts. I should like the minister to furnish the committee with a full statement regarding enforcement to date, so that we may appreciate just what is being done to guard against the grave danger that now faces Canada through an increasing purchasing power and decreasing amounts of civilian goods. The people as a whole are cooperating; the wrongdoers are few in number, but they are increasing, and they will increase unless enforcement is made rigorous and drastic, unless penalties are increased.


James Lorimer Ilsley: I do not know whether I
shall be able to cover all the ground mapped out for me by the hon. gentleman. He has asked for the number of investigations that have been instituted, but I am informed that it would be impossible to give that because there are so many. Investigations of complaints are taking place all the time. Some kind of record is kept, but it would not mean a great deal. A woman may complain that she has been overcharged, and the investigation into the complaint may take only half an hour. To make a list or to give the number of such complaints would not mean very much.
With regard to prosecutions, there have been 3,335 between December 1, 1941, and May 31, 1943. The ratio of convictions was ninety-four per cent. This number includes a certain number of prosecutions in con-
.
nection w7ith gasoline, tires and other matters, for the Department of Munitions and Supply. There were 467 gasoline prosecutions, 263 tire prosecutions and 63 others. I agree with the hon. gentleman that there must be enforcement of these regulations. If there had not been such a high degree of efficiency in the enforcement administration, perhaps our price control would have broken down. The hon. member for York-Sunbury (Mr. Hanson) suggested the other night that most people in the country want to obey the regulations, but there is a minority who do not. If that minority is allowed to infringe the regulations with impunity, they become larger and larger all the time until eventually the whole structure crumbles. Some time ago I tabled the report of the wartime prices and trade board for the period September 3, 1939, to March 31, 1943. A great deal of pain was taken with preparing this report, and on pages 66 and 67 will be found a number of paragraphs on enforcement. It would take too much time to put these on Hansard, but the principles upon which the enforcement administration proceeds are set out in the report much more lucidly than I could set them out.


John George Diefenbaker: Does the minister think the prosecution of 3,300 people in sixteen months represents a serious endeavour to enforce the war-time regulations passed by this board?


James Lorimer Ilsley: It does not seem to me to be an insignificant number of prosecutions. The prosecutions have been increasing month by month, and perhaps I could give some figures
as follows:
October	 317
November	 303
December	   217
January	 332
February	 239
March	 311
April	 445
May	 433
It never occurred to me that 433 prosecutions in a month was a small number. You cannot be prosecuting everybody all the time, and we are prosecuting quite a number.


Mr. MacINNIS:: I wonder how the Minister of Finance knows where he is at. Two speakers in the ranks of the official opposition have spoken within the last half hour or so. One of them upbraided the minister because of the extent of the regulations of the wartime prices and trade board and the way in which people were being interfered with, and then the other one rises in his place and upbraids the min-

War Appropriation-Finance-Prices Board
ister because more people are not prosecuted and because the law is not enforced more rigidly. 1 agree with the point of view expressed by the hon. member for Lake Centre (Mr. Diefenbaker), that there must be a close check-up and control of prices. That is because of the increase in the amount of money in the hands of the buying public and the decrease in the consumers goods that are available.
I think, Mr. Chairman, that we are proceeding here without very much system. I had hoped to follow the hon. member for Winnipeg North Centre and refer to 6ome of the points raised by him, but now other matters have been brought in and I do not know just how we are to proceed.
The minister in his reply to the hon. member for Winnipeg North Centre said that he did not know how much validity there was in the figures he quoted in regard to the increase in the cost of living. I do not know whether the minister knows it, but I am satisfied that there are two or three million housewives in Canada who are doubtful about the validity of the figures that enter into the cost of living index. The minister would have to be more persuasive than he is in this house, though I am not finding fault with him on that score, to convince these women that the actual cost of living is truly represented by the cost of living index.
The minister also questioned whether the hon. member for Winnipeg North Centre gave the proper weight to the various items in the cost of living index. It is difficult to give these items their proper weight. The weight given to them in the cost of living index is an average weight, but it is well known that the lower the income, the greater the proportion of it that must go for the purchase of food, and the increase in the cost of living has been more in foodstuffs than in perhaps any other one item.


James Lorimer Ilsley: Would not the larger proportion of the smaller income go for rent?


Angus MacInnis: No; I do not think so, because if the income is very small, housing conditions are the first to suffer, if the family can find a cheaper place to move to. The important thing for the poor family is to ensure themselves enough food to at least keep away the pangs of hunger.
Then there is the point that fresh vegetables do not appear in the cost of living index. That is, I think, owing to the fact that the items that go into the cost of living index have not been changed for a number of years, not since 1913, I believe. There might have been revisions-


James Lorimer Ilsley: It was all overhauled in 1940.


Angus MacInnis: The overhauling was not so very extensive.
The minister also said that fresh vegetables were on the market for only a few weeks of the year. I know the minister is busy and has not the time to look into shop windows or go into stores to do any buying, but it is a fact that fresh vegetables to-day are a part of the family diet of everyone who can afford to buy them.


James Lorimer Ilsley: I said that imported fresh vegetables are on the market only at certain seasons of the year.


Angus MacInnis: Quite true, but some imported fresh vegetables are on the market for the larger part of the year. Head lettuce, for instance, from California is on the market in Vancouver for at least nine or ten months of the year, and so are quite a number of other vegetables. The Minister of Pensions and National Health takes considerable time to advertise correct diet charts and that sort of thing; but what is the use of wasting time and money in preparing correct diet charts telling people what to eat to have good health, and then to have a cost of living index which does not include these articles for healthy living, and to have wage rates which do not allow people to buy the things essential to keep them in good health. These are some of the matters to which the wartime prices and trade board, the Department of Labour and the Department of Trade and Commerce, under which the bureau of statistics functions, should give. consideration.
I do not care what the cost of living index says, because I know this: every woman who does the buying for her family knows that the cost of living is increasing continually, far more than is indicated by the cost of living index. I do not know how that increase can be stopped. I think it could have been stopped at the beginning if there had been posted up in each store a list of the prices of the main articles purchased. The housewife could then compare the price she was paying with the price on the list. Otherwise there is no proper check on prices, because no one can keep these prices in their heads all the time and know whether they paid less last week than they paid this week. They do know, however, that their pay cheques do not go as far this month as they did, say, two months ago. I bring these matters to the attention of the minister and point out to him and the government-because I do not know to what extent it comes under the minister's own department-that the cost of living as it bears
4420	COMMONS
ft'or Appropriation-Finance-Prices Board
on the low wage workers of this country is coming to the stage where there will be an explosion if something is not done about it.


Thomas Reid: There is another matter I wish to bring to the minister's attention. I have already brought it to the attention of his parliamentary assistant, but as with many other matters brought to the attention of the minister and his assistant, it goes to the department; the department gives an answer which the minister or his assistant brings back, and that is that. But we want something more sometimes than a stereotyped answer.
A standard price of 15i cents a pound has been set for honey all over Canada. It seems strange that some articles have a blanket price applicable from the Atlantic to the Pacific, while other articles, beef for instance, have price zones, and other articles, eggs, butter and pork, have different prices. But when it comes to honey there is one price, 15% cents a pound all over Canada. The honey producers of British Columbia had been receiving up until the war at least twenty cents a pound for all the honey produced in that province. I am not trying to get into an argument over why people prefer local honey to the imported article, but such is the case. It is the same with turkeys brought into British Columbia from Alberta and the prairie provinces. They are sold on the market at a lower price than turkeys and chickens raised in British Columbia because people prefer the local grown. We in British Columbia think we have a fine honey. The price which has been set, 15^ cents a pound, is 4% cents a pound below what the honey producers of British Columbia have been receiving for the last twenty years. I can say that of my own knowledge, because at one time I was in the honey business myself and kept upwards of 100 hives, so that I know what I am talking about. We sold our local honey around twenty cents a pound. I appeal to the minister; I say that we cannot produce honey there at 15i cents a pound. No one was kicking at the price of twenty cents. But the price was made 15% cents, and then to aggravate the situation we find that an inferior grade of honey is coming in from Mexico and is allowed to be sold at from thirty to thirty-five cents a pound. Naturally the local beekeeper wonders why his local good product is held down to the ceiling price of 15^ cents a pound, when in other years he got at least twenty cents for it, and honey from Mexico of an inferior grade is allowed to come in in large quantities-I understand it is coming in by the barrel-and is being sold at from thirty to thirty-five cents a pound.


John Ritchie MacNicol: What is the reason?
IMr. Maclnnis.]


Thomas Reid: I am trying to get the reason and I cannot find it. That is why I am raising the question in the house to-night, because when I brought the matter to the attention of the minister's parliamentary assistant I got a kind of answer, but my question was not answered fully. That aspect of it was not touched on. Now they are talking about changing a little the price of the pasteurized honey as against the unpasteurized. But I ask the minister why, when there was no injustice being done to the people of British Columbia, and no one was kicking, they should reduce the price to conform with the price of honey in eastern Canada. In Ontario the price was not, I believe, above 15i cents, because in years past quantities of honey came from Ontario at a much lower figure than that, as contrasted with the price of the local product. But when people want a local product and will pay for it, and it cannot be produced out there to sell at 15^ cents, I ask the minister to have the matter looked into further in the light of the representations I am making.


James Lorimer Ilsley: I certainly will. I find it quite startling to be informed that the ceiling price is so much below the pre-war price. I do not know what the explanation is.


Thomas Reid: I should like to have it.


James Lorimer Ilsley: I will look that up.


Thomas Reid: Just one other question. Could the minister explain why canned salmon is one of the articles which is reckoned in the cost of living index. I am glad that it is, but I wonder why it has been chosen as one of the articles in this index, because it is not generally used. I believe that, generally speaking, there is more fresh fish used in Canada than there has been used of canned salmon.


Mr. FRASER (Peterborough West):: There will not be two tins per family released this year-only 2,000,000 in all.


Thomas Reid: I wish the minister would explain why canned salmon is included, because last year very little wras sold1 in Canada; most of it went to Great Britain.


James Lorimer Ilsley: The only thing I can do is to make inquiry of my colleague the Minister of Trade and Commerce. I have to repeat that the cost of living index is a product of the bureau of statistics; it is not a wartime prices and trade board index. It may be that an article not very widely used is an index

War Appropriation-Finance-Prices Board
of the cost of articles which are more generally used. That occurs to me as possible, but I do not know whether that is the answer.


John George Diefenbaker: I wish to continue and to ask a few questions in regard to the matter of enforcement, which I think is of very great importance. The minister, when I asked the question a while ago, took the attitude that 3,300 prosecutions represented a not inconsiderable number of prosecutions for a period of fifteen or sixteen months. While the statistics which I intend to read at the moment are not very helpful and are not altogether comparable, the fact remains that in 1940, which is the last year for which information is available, there were convictions in Canada, for indictable offences, of 46,723, and for non-indictable offences, 456,109, or a total of approximately one-half million convictions during the year. Looking over the section of the report of the wartime prices and trade board to which the minister made reference, I find that there are 500 persons engaged in enforcement and investigational duties at regional offices throughout the dominion. Five hundred enforcement officers, in a period of approximately fifteen months, enforcing regulations that permeate through every sphere of life and have many ramifications, and a total of only 3,300 prosecutions, indicate, I submit, that there is not that serious enforcement of the regulations which there should be, having regard to the substantial increase in the cost of living which is taking place all over this country. As I read this section with respect to enforcement I find that, while there are the number of enforcement officers that I refer to, the major part of the responsibility of policing the price ceiling has been placed upon the women of Canada, so it states. Then it goes on to point out, at page 66, the method) whereby enforcement of the regulations is carried into effect, and it states that after an investigation has taken place-
A report is then made to the regional enforcement counsel, and if it appears that an offence may have been committed, the report is forwarded to the enforcement administration at Ottawa.
There are regional enforcement counsel in various districts in the dominion, and after the investigation takes place by the investigating officer, a report is made to the regional counsel. He in turn reports to the board itself at Ottawa. The report then states:
Prosecutions are undertaken only after a review of the case at Ottawa and only on authorization by the board; they are conducted in the regular courts by counsel appointed by the Minister of Justice.
I have not the exact figures at the moment, but some time ago I asked what was the total amount of fines levied in Canada up to approximately the 1st of March, if I remember rightly, and fines amounted to about $120,000, and counsel fees to over $50,000. In the enforcement of this legislation, $120,000 of fines imposed in a period of approximately, at that time, twelve or thirteen months, does not indicate the enforcement that there should be of these regulations. All of us admit the desirability of enforcing them; for, if infractions take place, as the minister points out, unless prosecutions take place and sure and swift punishment follows the commission of serious infractions, the whole basis will fall down on which the price ceiling is being built in so far as those people are concerned who are prepared to break the law and who have no regard to the necessities that the war demands.
I therefore wish to ask the minister, how many reports were received by the enforcement administration at Ottawa during the period he mentioned a while ago and, of the reports received, in how many cases did prosecutions take place? We have the latter information, but it does not indicate the degree to which enforcement is being made, unless we have a record showing the number of cases where the regional counsel have reported to the central board the necessity of prosecution taking place.
I want further information. So far as prices of food are concerned, on every hand one hears complaints. Prices are going up; prices far beyond those indicated by the index in so far as the increase is concerned are being charged. People have forgotten what prices were in September and October, 1941; they have no references as to them. They want to get the food; they want to get supplies, clothing and the like, and with the diminished supplies they are prepared to pay over and above what the price ceiling will permit, in order to secure possession of he goods. That is the one thing which these regulations are intended to prevent-to prevent the person who has surplus money from securing goods, such as clothing, food, that he would not be able to secure unless he paid a bonus to the vendor.
Therefore I wish, further, the minister to give this information; of the number of prosecutions which have taken place, how many related to prices, how many to rentals, how many to hoarding and1 rationing offences? The minister has a break-down for them; for as of the 31st of March, in this report a statement was given which indicated that up to
4422	COMMONS
War Appropriation-Finance-Prices Board
March, 1943, of the 1,679 prosecutions which were undertaken from July, 1942, 547 only related to prices, 730 to rentals, and 253 to hoarding and rationing offences. My experience has been that in so far as the rental regulations are concerned, enforcement has been reasonably strict, but in so far as food and clothing prices are concerned and infractions of the regulations with regard to them, there has not been a strict and sure enforcement.
While the comparison which I mentioned at the beginning-the number of offences, nonindictable and indictable, during the year 1940 -does not strictly show the position, it does indicate that, if a half million people were committing offences in Canada during the year 1940, many of them merely against statutes such as the offences against the war-time regulations would be, 3,300 prosecutions do not indicate that the enforcement officers are doing their duty. It says that the housewives of Canada are to be the policewomen, in the main, to enforce the law. I have already pointed out the weaknesses of that suggestion, with the number of investigators that there are, the number of officials that have been appointed to administer these regulations, my submission is that they should be engaged in the work of investigation. You cannot do it thoroughly, I realize; if you did, you would have a tremendous army of inspectors. But they can do at least this much, that when serious infractions are found, the penalties imposed shall not be the weak pusillanimous penalties that have been imposed up to the present time.
Let me give the record in that connection. At page 67 of the report we find the maximum penalty of $5,000 or two years' imprisonment or both. A penalty such as that is no deterrent to the wrongdoer when he knows that it will not be imposed. Let me quote from the report:
In the introductory stages of the price ceiling programme the courts were inclined to give light sentences for offences against the board's regulations. This tendency has not disappeared and fines still remain substantially lower than those levied for comparable offences in Great Britain. Sentences for most offences have been fines of less than $50, although recently a number of fines ranged from $100 to $1,000 for each offence. Several terms of imprisonment have been imposed for offences relating to rationing of rubber tires and gasoline.
My point is this: Laws unenforced bring the whole administration of the act into disrepute. Laws such as these regulations of the wartime prices and trade board, which are designed to increase Canada's war effort and to provide for the safety of us all, should be enforced by penalties that will act as a deterrent to potential wrongdoers. Penalties such 
as those one hears of imposed from day to day -$5, $10, $15 and costs-do not act as a deterrent to the type of wrongdoer that the wartime prices and trade board has to deal with, the type of person who in a time of war, for personal gain, endeavours to take advantage of the common peril of the nation.


James Lorimer Ilsley: The hon. gentleman asked me for a break-down of the prosecutions. Of the 3,335 prosecutions from December 1, 1941, to May 31, 1943, 894 were for infractions of the price regulations; 952 rentals, 465 rationing, 225 for "other" w-artime prices and trade board regulations.


John George Diefenbaker: What was the last?


James Lorimer Ilsley: There were 225 other wartime prices and trade board regulations, 467 gasoline, 263 tires, 63 other, Department of Munitions and Supply, regulations. Then there were six other cases. These figures will add to 3,335. The hon. member asked for information as to the number of reports received from regional enforcement counsel. I have not that information here, but I will give it to the hon. member to-morrow.
With regard to the size of the fines, that is a matter over which, as the hon. member knows, the board has no control. It is a matter for the courts. I find, on looking over the list of fines imposed in the month of May, which is the latest month for which I have a report, that some were $500, some $250, some $200, some $100, some $50, some $25, some $15, some $10, some $5 and an odd one of $1.


Gordon Graydon: Many of $1?


James Lorimer Ilsley: No; I had to look through several pages to find that one. It is a matter of judgment for the court as to what the fine should be. The court has the right to impose a fine up to $5,000. There were three fines of $500 each on one man for hoarding-


John George Diefenbaker: In Saskatchewan?


James Lorimer Ilsley: Yes. I recommend to the Department of Justice-


Ernest Edward Perley: What was he hoarding?


Gordon Graydon: Wheat?


James Lorimer Ilsley: Food and so on. I recommended that there be a remission, but I do not know what the Department of Justice did in the matter. I thought it was too much.


Gordon Graydon: Did you ever ask them to jack up the dollar fines?


James Lorimer Ilsley: As a matter of fact, I did not know there were any until to-night. They are for small offences. There is a wide variety of offences for which people are fined.

War Appropriation-Finance-Prices Boar A


John George Diefenbaker: In connection with enforcements, has consideration been given to the fixing of a minimum fine? As the situation is to-day, if a man in a district is brought before the local justice of the peace, naturally, things being what they are, the penalty will be a nominal one. Consideration should be given to the imposition of a minimum penalty, because the situation to-day is, in spite of the references that have been made to fines of $500, $200 and $100, that in the main the penalties are so small as not to amount to a deterrent to the wrongdoers.
There is another matter I would mention. We appoint outstanding counsel in all parts of Canada as regional enforcement counsel. The appointee in Saskatchewan is an outstanding lawyer who has given his services at a fee not in keeping with his abilities. He knows the local conditions. Why should his recommendation not be sufficient for a prosecution? Why should it be necessary for all cases from Saskatchewan, Alberta and Manitoba, and so on, after passing through the hands of the regional counsel, following investigation by trained investigators, be sent to Ottawa to be reconsidered? What is the purpose of that? In no other phase of prosecution is that course followed, except in so far as prosecutions under the Inland Revenue Act are concerned. Why is it necessary to get the consent of the authorities in Ottawa when the counsel in the province, the investigating officers, have noted infractions and have recommended that prosecution take place? Why should there be another board in Ottawa to determine whether the regional counsel in the province and the investigator have sufficient evidence upon which proceedings should take place? That in itself defeats one of the aims of criminal justice, namely, that punishment shall follow swiftly on the commission of the offence. Delays occur; witnesses disappear; conditions change by the time the prosecution is proceeded with, and where justice should be done it is not done. I should like the minister to explain the reason' for that precaution so far as this legislation is concerned.
Mr. 1LSLEY: The legal reason is that the order in council requires it; but the question I suppose really is, why does the order in council require it? I do not know that I have ever given much thought to that question, but it strikes me as being appropriate in some way or another. It may be that I am influenced by the traditional view. In the transaction of government business it has always been the custom that before a prosecution is instituted there must be authority from the appropriate governmental department headquarters in Ottawa.


John George Diefenbaker: But you already have a regional counsel.


James Lorimer Ilsley: Yes, I know. But it is a serious thing to lay a charge against a man, and it is a question as to how much checking there should be. The hon. gentleman was not in the house the other night when the hon. member for New Westminster gave two . cases of prosecutions which he thought should never have been instituted. Those prosecutions were presumably reported to Ottawa by the regional enforcement counsel and were authorized from Ottawa, and it sounded to me as if one at least of them should not have been instituted. It was a .prosecution against an old age pensioner for some infraction of the price regulations, and it sounded to me as though whoever had authorized it had made a mistake. The hon. member may say that the board is just as likely to make a mistake as an enforcement counsel. But at least there is less likelihood of two making a mistake than there is of one making a mistake. That is, I presume, the reason why, generally speaking, we are cautious before instituting prosecutions. Somebody other than a local man has to pass upon it. The principles upon which prosecutions are instituted might become different in different provinces, depending upon the view enforcement counsel took. The hon. member may say that wherever there is a violation or wherever there is any infraction of the law, a prosecution should be undertaken. He may say that. Well, I do not think that would be the right thing to say. If he does not say it, then there must be a certain amount of discretion in the officials as to the class of the case or kind of case in which they will institute prosecutions. That is, the enforcement counsel must have sense enough to say, "Oh, that is a minor thing; it is really an insignificant case where a man has made a mistake. A warning is sufficient." If it were left to enforcement counsel throughout the country to exercise that discretion, it might not be uniformly or consistently exercised; and for that reason it probably is desirable to make it necessary to have authorization from the board at Ottawa.


John George Diefenbaker: Then what good purpose do these regional enforcement counsel fulfil? What is the purpose of paying them as much as $4,000 a year, if their recommendations mean nothing? There are local enforcement officials who investigate the infraction of the regulations. Why, then, have regional counsel? They have no position to fill, unless they are to enforce the law within their own province.
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H'ar Appropriation-Finance-Prices Board
Furthermore, I point out that these enforcement counsel draw salaries of $4,000 a year or more. Yet, when a prosecution takes place, they have nothing to do with it. The Department of Justice appoints counsel in the various cities and towns to attend to the various prosecutions, appointing them ad hoc for the prosecutions in question. If these ' regional counsel are not men who can exercise discretion, then they have nothing whatever to do, other than to supervise the enforcement of the law. If so, why have them at all, when they have no authority?


James Lorimer Ilsley: The enforcement counsel are really the head of investigational staffs. The investigators report to the enforcement counsel, and I presume that the enforcement counsel weed out certain reports, and say, "Do not bother with this one", or "We cannot get anywhere with that", and use their legal knowledge in so doing. They would recommend against a prosecution if it were apparent to them that there was no proof available, and they would realize, too, that they are dealing with laymen. Perhaps I am drawing on my imagination when I set out what they would do, but I believe I am correct. I think they would be discharging a useful function in so doing, because otherwise we would have all kind of reports coming in from 500 or 600 investigators, direct to Ottawa. I believe there would be a great advantage in having them gathered up, put into proper shape and winnowed out by these enforcement counsel.


Gordon Graydon: I should like to ask one or two questions with respect to the situation in Ottawa. Some reference has been made to the various steps taken and. the various machinery existing for enforcement in connection with infraction of the wartime prices and trade board regulations in outlying centres and in the various provinces.
Would the minister give me some information as to what, if any, cases connected with infractions of the wartime prices and trade board regulations, during the period which has passed since the setting up of the board, have been referred to the Department of Justice in Ottawa? If so, how many of these cases have been prosecuted, after having been referred to Ottawa?
Then, to complete the picture set up by the hon. member for Lake Centre would the minister tell us how many of these cases, after having been referred to the Department of Justice, were then referred back to the wartime prices and trade board for further evidence, and how many were refused on the second submission to the Department of Justice, when the matter of prosecution was considered?

As I understand it, this raises an important question. The minister should explain to the committee whether or not the enforcement branch of the wartime prices and trade board has ever asked for its own final authority in connection with prosecutions arising from infractions of the wartime prices and trade board regulation. As the matter stands now, if my information is correct, final authority does not rest with the enforcement section of the board, but rather with the Department of Justice. What actually happens now is that the final authority rests with the Department of Justice. Not only have we regional counsel, and not only have we reference to the enforcement branch of the wartime prices and trade board, but the final authority does rest with the Department of Justice.
If that is so, I would ask the minister whether that has been working out, and whether it has been found to be a satisfactory solution to the matter of law enforcement. I would ask if it is not the minister's opinion that in so far as the enforcement section of the wartime prices and trade board is concerned, at least in certain cases there should be some final authority resting in their hands. I would ask for this information, because I believe it goes to the root of the peculiar position in which the enforcement branch actually finds itself at the present time.


James Lorimer Ilsley: I will get the information, but I shall be very much surprised if I do not find that the correct answer is that the wartime prices and trade board has the final authority to authorize prosecutions and does not refer these matters to the Department of Justice at all.


Gordon Graydon: I have asked for the number of cases.


James Lorimer Ilsley: I will find that out. They apply to the Minister of Justice to appoint counsel to conduct prosecutions. But, by law, the right to make a decision as to whether a prosecution shall be authorized or not rests with the wartime prices and trade board.


Gordon Graydon: And not with the Department of Justice?


James Lorimer Ilsley: I am fairly sure that is correct, but I shall obtain definite information on the point.


Gordon Graydon: Perhaps the minister does not wish to commit himself. I am inclined to think he will find a different answer.


James Lorimer Ilsley: I do not think so.


John Horne Blackmore: Does the minister think the fines have not been severe enough? Is it his impression that the law has been enforced properly?

Privilege-Mr. Lacombe


James Lorimer Ilsley: I should not like to express an opinion on the point. I shall discuss the matter with Mr. McGregor, the enforcement administrator, and after having done so, I can make a more intelligent reply.
Mr. BLACKM0RE: I am inclined to think the hon. member for Lake Centre overemphasized this matter. I do not believe that members of parliament should urge that the minister apply fines more severe than are now being applied. If the law is being kept, that is sufficient.


Gordon Graydon: If the law is being kept, we do not need to worry about the fines.


James Lorimer Ilsley: That is the point. The test of the efficacy of the law is not the size of the fines. A perfect condition would be where no prosecutions would be necessary. One might find a situation where the control was perfect, and where there would be no prosecutions whatever.


John George Diefenbaker: Does the minister
think we have arrived at that stage?


James Lorimer Ilsley: No, I do not think so. I
know there are certain, infractions of price regulations; there is no doubt about that. There are a tremendous number of prosecutions, and I believe the number is increasing.


George Alexander Cruickshank: Not if it applies to farmers.


John Horne Blackmore: It is my impression
that, considering the almost bewildering complexity of the regulations under the control of the wartime prices and trade board, the infractions of the law are surprisingly few.


James Lorimer Ilsley: The rentals regulations are
pretty well observed, and the number of prosecutions there is on the down grade.


James Arthur Ross: In that connection,
would any prosecution be instituted without authority from the central board in respect of rental cases?


James Lorimer Ilsley: No.


James Arthur Ross: None whatever?


James Lorimer Ilsley: No; there must be approval from Ottawa.


James Arthur Ross: I have a very peculiar case I should like to bring to the minister's attention to-morrow.
Item stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, July 7, 1943