[Stage Direction]
The house resumed from Monday, March 22, consideration of the motion of Hon. J. L. Ilsley (Minister of Finance), that Air. Speaker do now leave the chair for the house to go
into committee of ways and means, and the amendment thereto of Mr. Blackmore, and the amendment to the amendment of Mr. Coldwell.
Mr. GORDON GRAYDON (Leader of the Opposition):: Mr. Speaker, I should like first of all to deal with some matters which were raised by the Minister of Finance (Mr. Ilsley) in his speech of yesterday. I think I should begin by giving him this word of encouragement, that alt hon. members on this side of the house, and no doubt all in the House of Commons, appreciate to the full the difficulties and the hard work which a minister of finance in a war-time period must necessarily encounter. Though there may be times when he feels that it is a thankless job, he must also realize that the various criticisms which are made from time to time by his majesty's loyal opposition are made with the veiy honest and sincere desire to help him, and to help the war effort.
I have some comment to make on the minister's address of yesterday because I believe he raised certain points which reflected on the Progressive Conservative party. He indicated that some of us on this side have failed to give praise to the government's anti-inflationary programme. We have been accused from time to time of criticizing the government, but we are now being criticized for failing to praise the administration. The minister set up yesterday-I will not say by design, because frankly I do not think it was by design-what actually was a straw man so far as our position in the matter of an anti-inflationary programme is concerned. It looked to me as if he were out with a lantern in the dark trying to find some non-existent issue upon which he could attack. So that all doubt may be dispelled, I say to him and to other hon. members that the Progressive Conservative party stands for adequate and effective control of inflation in Canada. I do not think the minister meant to characterize us as enemies of inflation control in the dominion, but if he did I would point out to him that this party has consistently attempted to play the game with the gov-erment in connection with their anti-inflation programme. One very good example of that may be cited in the fact that we have not brought down or asked this house to consider any amendment to the budget resolutions.
While perhaps I should not mention this, the minister did in his speech make some reference to pressure groups, not in Canada but in a relationship which he attempted to establish in connection with the republic to the south. So far as this party is concerned we have attempted during this session and in
The Budget-Mr. Graydon

other sessions to plead the cause of various sections of Canada, and I do not think the minister would wish to deny us the opportunity to fulfil that bounden duty which is ours. When one speaks of pressure groups, may I take time to say that after all I do not think the farmers of Canada can be called a pressure group; and more than that, I think if they were so regarded, it would be a pressure exerted not for the purpose of gaining an advantage over someone else but rather for the purpose of trying to establish some measure of equality and justice under the present programme.
Upon the shoulders of the government and the wartime prices and trade board falls the burden of responsibility for the administration of the policy which is now in effect. I do not regard it as an incongruous position to take when we seek to find some remedy for the injustices and inequalities which do exist under the present anti-inflation programme. The voices of labour and of agriculture in the House of Commons it seems to me are still, small voices compared to the voices which are raised throughout the country by these various sections themselves. I do not think that this opposition party can be chided for having given any undue leadership to that. But we have tried so far as we could to bring to the floor of the House of Commons and to the Minister of Finance the views of these people, not in the hope of making it more difficult for the minister or for the government, but rather that the government shall not overlook what we think are very often reasonable suggestions made by these groups from time to time.
I do not think that any of us want to offer apologies on the floor of the house for championing the cause of the little man in Canada, whether he be an agriculturist, or one who is in the lower brackets of labour earnings, or a small retailer. No apology is necessary from this party for championing the cause of these men. The minister asked for the cooperation of members of parliament generally in support of his programme. I should like him to understand our position, because it seems to me that some attention and consideration must be given to the various views that are put forward throughout Canada-in order that the anti-inflation programme of the government shall stand; not for the purpose of attempting in some way to weaken it. Because if inflation were coming in Canada-and God forbid that it should ever come; I think that is the stand we must all take in this chamber;

we must give a lead throughout Canada in the fight to prevent it-if inflation does come it will not be by virtue of the fact that the government gives consideration, and full consideration, to the views that are put forward by these various classes of people, but rather because their views were not listened to and an attempt made to find for them a way out of their difficulties. Only by so proceeding will the policy which the government now has in mind be saved.
I do not know whether these figures are correct, but I am reliably informed that some 400,000. men and women have left the farms in Canada since the war began. It seems to me that under the present man-power policy of the government it is almost impossible to rectify the position in which we now find ourselves. All those who come from agricultural districts will be ready to recognize that one of the reasons why men and women have left the farm in such large numbers is, first of all, that they have found greater returns in other lines of endeavour, and, second, that the conditions under which they work in those other lines are more satisfactory and agreeable to them.
Linked up, therefore, with the whole question of the matter of prices for farm commodities is the man-power situation which now exists in the dominion. I say this in all fairness to the government, that not until some semblance of equity exists between those who work on the land and those who work elsewhere shall we solve the whole problem of farm labour and farm man-power.
The government might well have considered the matter of treating agriculture in Canada as a war-time industry. Very little has been done in this regard; there is little indication that the government has it in mind. The inequalities which to some extent have been perpetuated in the present policy are apt if allowed to continue for any great length of time to have the reverse result to that which the Minister of Finance actually wishes to bring about by an anti-inflation programme.
A common-sense adjustment of inequalities will prevent inflation in this dominion. Failure to take into consideration some of these broad facts may offer opportunity for the breaking of the policy and the programme which the government is sponsoring. The government can give justice and equal treatment to these sections of our population without the danger of inflationary tendencies arising in this coun-

The Budget-Mr. Graydon
try. I say to the minister that history will show our attitude with respect to this matter to be of greater assistance to those who would prevent inflation than the adherence by the government to a policy which I believe does not meet with the approval of certain sections of our people and which creates inequalities and injustices. Therefore I say to the minister in all sincerity that he should heed these warnings before it is too late to prevent this country from plunging into a devastating whirl of inflation, which would be one of the greatest disasters that could occur.
No party in this house has any monopoly upon good citizenship or the desire to do the right thing during a critical period like this. Opinions may differ. The Minister of Finance may be right and I may be wrong, but I am giving the minister my views in this regard with the sincere and honest intention of helping him, so that the very programme he is attempting to carry out in Canada may not be harmed and may not fail. I would say also that we do not take a back seat to any party or any group in parliament in our wholehearted support of domestic and foreign policies which will enable us to contribute our all in this struggle.
I should like now to take up another point. In his address on the budget the hon. member for Lambton-West (Mr. Gray) made some reference to the present policy of our party in connection with national compulsory selective service. These were his words on March 12, as reported at page 1207 of Hansard:
... I am bound to say that in their zeal for a new leader, a new name, and a new platform . . .
The hon. member was referring to the Progressive Conservative party.
. . . the man-power issue has become a good deal more cloudy on the opposition side than it was last year, under the leadership of the hon. member.
There he was referring to the hon. member for York-Sunbury (Mr. Hanson). If any clarification of our position is needed, I want to say to the house that when the Progressive Conservative party chose a new leader it had definitely in mind the fact that the Manitoba legislature, under the premiership of Hon. John Bracken, endorsed the brief of the Canadian Legion, being the first legislative body in Canada to do so. In that brief will be found these words:
Immediate, complete and scientific mobilization, organization and utilization of all our resources-spiritual, intellectual, natural, financial, agricultural, industrial, man-power-in such manner that Canada may he geared to produce essential foods and munitions and to wage war to her maximum capacity.
When we chose our leader at Winnipeg his uncompromising stand on this point was well known. Let it not be said that this party is ceasing or has ceased to lay emphasis upon the principle of national compulsory selective service. This was made abundantly clear both at the Winnipeg convention and in our keynote speeches in this house, but in case any doubt remains in the mind of a single hon. member here, at the risk of repeating what has been said already let me read this part of the platform and programme of the Progressive Conservative party:
Recognizing that the world struggle in which Canada is engaged requires a total war effort, we believe in compulsory national selective service, and that all those selected to serve in the armed forces should be available for service wherever required. We believe in the effective total utilization and proper allocation for war, by compulsion where necessary, of all the resources of Canada, including agriculture, industry and finance, as well as man-power, and that our aim should be at all times to bring about so far as human means can achieve it, an equality in sacrifice.
Let me aliso point out to the government and hon. members of this house that this party lays the greatest emphasis upon the winning of this war. Our call for a manpower policy for Canada remains unanswered, and the government is playing with fire in failing to tackle this problem manfully and effectively. It is also significant, I think, that the very first plank in the platform of the Progressive Conservative party adopted at Winnipeg was that plank dealing with the war, while the next plank dealt with the rehabilitation of war veterans. So it will be seen at once that our party attaches great significance to those two matters.
I wish now to refer to the amendment and the amendment to the amendment. Perhaps the only comment on the amendment that may be required at the moment is this. We feel that in a time of war such as this we should as far as possible continue our present system rather than change to something new. Such a change, in essence, of course, is what the amendment actually calls for. As to the amendment to the amendment, I should like to comment perhaps at greater length. The adoption of the Cooperative Commonwealth Federation amendment I am afraid would mean throwing our financial structure into the realm of politics. In our
27ie Budget-Mr. Graydon

opinion socialism would not lead to better conditions for the Canadian people. The duty of the state is to supervise and control where free enterprise abuses its privileges. Where such abuses arise the state must act immediately and effectively to correct them in the interests of the masses of our people. I fear that if the programme suggested in the amendment to the amendment were adopted-and this I believe is the opinion of a large section of our people-the cure might well be worse than the disease. The policy adopted by this party at the Winnipeg convention in this regard was as follows:
. . . we strongly advocate the strengthening of the basic Canadian tradition of individual initiative and individual enterprise and opportunity, and the freeing of economic activities from bureaucratic controls. Government authority, however, should be maintained and exercised wherever necessary to protect primary producers, workers and consumers from exploitation through such abuses as price fixing combines, monopolies and patent cartels. To those ends we believe that government should seek to create conditions under which the maximum volume of employment and the maximum national income may be assured through the initiative and enterprise of the people themselves.
This policy is vastly different from the policy contained in the amendment moved by the Cooperative Commonwealth Federation.
In the debate on the address in reply to the speech from the throne the hon. member for Cape Breton South (Mr. Gillis) made certain statements which I think I should not let go unchallenged. He made this statement on February 19, as reported at page 566 of Hansard:
I was disappointed with the statement made last evening by the new leader of the official opposition-


Mr. COLDWELL:: Which debate is the hon. member reading from?


Gordon Graydon: From the debate in reply to the speech from the throne.


Major James William Coldwell: That is out of older.


Gordon Graydon: Well, I can deal with it much more simply than by reading it. In effect he said that so far as this party is concerned, as a party in the House of Commons, we are not following a sincere and honest course. He accused me of having utilized my very limited abilities as a lawyer to deal with the question of the amendment which had been moved in the house by his party some time earlier. I believe that upon reflection he would not have attacked the sincerity of purpose of this party and1 of myself, and for that reason I shall not be too hard

on him now. But I must caution the Cooperative Commonwealth Federation that parties, as well as people, who live in glass houses should not throw stones. I say that because by the terms of their amendment they have put themselves in the awkward position of following old-fashioned, old-time party practices, practices from which the Progressive Conservative party entirely dissociates itself.
The amendment contains a bouquet for the old people, for the widows and dependents of those on active service; but with the bouquet is tied a couple of socialistic bricks to be thrown into the House of Commons as well. It seems to me that to tie these classes of our people into such an amendment for the purpose of obtaining support of policies actually unpalatable to the people as a whole does not do justice to them. I deprecate that strategy and those tactics. They brand the Cooperative Commonwealth Federation as one of the old-fashioned political parties in Canada. The amendment to the amendment, and the policy and strategy followed by the party moving it, provides the answer as to why those in Canada who are opposed to old-fashioned political beliefs, strategies and purposes, as well as those who are opposed to socialism, are finding a home in the ranks of the Progressive Conservative party.
In voting against the amendment to the amendment I believe it is unnecessary that I should point out that the most vigorous champions of the sections of our people mentioned in the amendment to the amendment, the poor unfortunates for whom something actually should be done, and the improvement of whose condition we have advocated from time to time, has been the party I now lead in the house. We have been their vigorous champions. We shall continue to be so, and in that regard we will not take a back seat to any group sitting to my left. We are proud to be their champions; and in voting against the amendment to the amendment not only do we affirm once more our policy with respect to the betterment of their conditions, but we deprecate their being used as the means to an end, as is happening in this instance.
May I refer to another matter which affects the Minister of Finance. A few days ago, in a statement in the house respecting the forthcoming victory loan, he asked for the cooperation of members of the house. The Progressive Conservative party which I now have the honour to lead in the house feels that the loan should be raised out of the savings

The Budget-Mr. Howe
of the people. Further than that, I tell the minister that the greatest effort should be made to see to it that holdings bought while the campaign is in progress ought not to be merely temporary holdings, but should be held for the duration of the war.
In my opinion borrowing from the banks is a bad practice. I am sure that is a view with which the minister will readily agree. It is a practice which must be curtailed; it must be wiped out. So far as the loan is concerned, everyone in Canada must throw his full weight into the fight, must pull his full share of the burden. I point out to the minister, too, that when he speaks about various matters being raised in the house which might affect the success of the loan, he might give consideration to another point. One of the factors which in some quarters has been detrimental to the success of some loans has been the belief held by many people that there are many examples of waste and inefficiency in the war effort. But may I say this: so far as the Progressive Conservative party is concerned, both in and out of the house, the minister will have every possible help, every kind of assistance. This I offer to him this afternoon. He deserves everything we can give him, and anything we can give him will be unstintingly offered.
I am not so sure that the people of this dominion fully realize the seriousness of the present war situation. I am not sure that the Prime Minister's declarations on this point have been strong enough. It is the duty of the government, the duty of parliament, the duty of the press, to say clearly to the people that we are still not much past the preparatory stage in our war plans and so far as hostilities go. As hon. members may recall, Mr. Churchill said of Casablanca, not that we were at the beginning of the end, but that we were at the end of the beginning. We are still at the end of the beginning. Victory is a long way off. This country, and other countries among the united nations, must still go through the period of blood, tears, toil and sweat. A long hard road remains in front of us. If there is anything that I as leader of His Majesty's Loyal Opposition can do to acquaint the people more fully with that fact, then I feel it is my bounden duty to stand in my place in the house and do so.
Many sacrifices will yet be necessary by all of us. While, from time to time, there may be artificial differences in parliament, those differences are small when compared with the major enterprise in which we are engaged. We must all try to do our part as, in our own light as true Canadians, we see it. We must
view our task not simply as members of any political group, but as true Canadians willing to give our all so that victory may be achieved. The government, the opposition, other groups in the house and all sections of this country are human and we can all be expected to make mistakes. But so long as they are honest mistakes they will be forgiven if our enterprise and war effort are carried on along effective and total lines. We must recognize our responsibilities as members of this House of Commons. When this session of parliament concludes its deliberations this year I should like to think that the Canadian people from one end of Canada to the other will know that we have tried to put first things first and to give our major attention to the business of winning this war. We as members of parliament have the right, we have the obligation and the duty, if I may say so, working as we are in a less dangerous field, to try to emulate the courage and the daring of those who have gone to fight for the preservation of the veiy rights that we are enjoying this afternoon in this chamber.
I would close by saying to the government once more that the Progressive Conservative party is anxious and willing to cooperate in any way possible with the government. We are anxious that we shall pursue, a course which shall be in the best interests of the people of Canada and to follow, so far as we can humanly do so the suggestion made the other day by the Prime Minister of Great Britain when he said, "In this critical period through which we are passing, let us keep our eye on the ball."


Mr. C. D. HOWE (Minister of Munitions and Supply):: Mr. Speaker, I rise to take
part in this debate for the purpose of covering two matters which I think are of immediate interest to the house. One is 'the accelerated depreciation of war plants, and the other is the arrangement between the government and the Aluminum Company of Canada Limited covering the expansion of the aluminum industry and the building of the Shipshaw power development.
I think we all read last evening in the Ottawa Journal an article extracted from the publication PM of New York. This was headed:
U.S. Financed Shipshaw Plant.
In the evening Citizen the heading is:
Canadian Plant is Financed by American Funds.
As a matter of fact this is wholly incorrect. The Shipshaw development was built with
The Budget-Mr. Howe

the corporate funds of the Aluminum Company of Canada Limited. I should like to make that clear. I intend to cover the whole story of the aluminum project before I sit down, but in passing I shall deal with this article, which states further:
The .$68,500,000 given Aluminum Limited by the United States government is an advance against-
Such and such a contract. It goes on to say that should the government decide to cancel the contract, Aluminum Limited will not be accountable for the balance. That is not a correct statement, as the cancellation clause in the agreement is in very different terms. Further on the article states:
The dispatch said the contracts between the Reconstruction Finance Corporation and the Aluminum Limited of Canada provide that the United States pay 15 cents a pound for aluminum destined for its own use, but 17 cents a pound for lend-lease use.
That is wholly erroneous. All the aluminum produced in Canada is sold at the same price to whoever buys it. In other words, the price to Great Britain in Canada is the same as the price to the United States in Canada. The price that Canada pays for aluminum is the same price that Australia pays. I think those are the main facts to which exception must be taken. I mention them in passing, but I intend to refer to them later on.
I read in the Montreal Gazette this morning a report of a statement made yesterday in the Ontario house by Colonel Drew. Colonel Drew said:
Mr. Symington had advised the spending of $100,000,000 of public funds on the Shipshaw development in the Saguenay river in Quebec.
As I said before, there were no public funds spent on the Shipshaw development; the development was paid for by the corporation. I may say, in passing, that I should not like to have Colonel Drew's responsibility for explaining what he did in this great war, as a contribution to the winning of this war. He is a man trained as a soldier. So far as I know, he has not offered his services in any capacity of that kind. He has made it his practice to attack public men who are carrying heavy responsibilities, with no more consideration for the facts than he has given in his statement here. In that regard he has the unenviable record of not having made good any charge he has made.


Gordon Graydon: May I ask the minister
a question?


Clarence Decatur Howe: No, I have the floor.


Gordon Graydon: May I ask just one
question?


Clarence Decatur Howe: No.


Mr. SPEAKER:: Order.


Mr. HANSON (York-Sunbury):: He did offer his services at the beginning of the war. That is an untrue statement and it should be withdrawn.


Clarence Decatur Howe: You may answer at the proper time.


Gordon Graydon: On the point of order, I think the minister should have granted me the courtesy of permitting me to ask for one item of information.


Clarence Decatur Howe: My hon. friend has just made a forty minute speech with no interruptions.


Gordon Graydon: I quite understand that, but I did not make any statement in my speech of a character similar to that made by the minister. The minister has made the statement that Colonel Drew has not offered his services during this war, and my information is that he has.


Clarence Decatur Howe: Perhaps we each have different information.


Richard Burpee Hanson: I do not think you know anjdhing about it. You had better not speak about it.


Clarence Decatur Howe: Now that the storm has subsided I should like to discuss the subject of accelerated depreciation for war plants. I think this is necessary because of an extract which I have read recently from the eleventh report of the war expenditures committee, being the third report of subcommittee No. 1. I shall read this to hon. members, because it expresses the views of that subcommittee. It reads:
The question of excess profits and accelerated depreciation has caused the subcommittee considerable concern. Very substantial profits are being earned, in some instances far in excess of normal profits, and, while the Excess Profits Tax Act should result in no one being allowed to retain any excess profits which have been earned, yet in many instances we found, as a result of rulings which have been given, companies will at the conclusion of the w7ar own valuable physical assets which have been entirely paid for out of money which would otherwise have been payable as excess profits. Steps should be taken now to prevent sale of physical assets and company reorganization during the post-war period to escape taxation, or to provide for the sterilization of physical assets whose cost has been completely written off through permitting very drastic depreciation write-offs as are now in effect with respect to plant and equipment of wartime industry. The subcommittee found that, in regard to industries

The Budget-Mr. Howe
engaged in war production, rulings have been given in most instances permitting plant and machine costs to be written off in three years.
The principle of plant depreciation is not new. It has been common practice since there has been organized business in any country-I am not limiting it because I think every country in the world treats normal depreciation in the same way-that capital invested in business assets is permitted to be recaptured within the useful life of the project. If a man puts up a building, the taxing authorities of his country assess the life of the building. All income tax authorities retain experts for that purpose. The building is given a life of say twenty, twenty-five or thirty years, depending upon its construction, and in each year of the life of that plant, limited in that way, the owner is permitted to write off a certain percentage as recovery of capital, commonly called depreciation. That is standard practice. If a man buys a knitting machine costing 820,000-it is common practice to give the life of a machine ten years-in each of those ten years in which the machine is in use the owner is permitted to write off one-tenth the capital cost of the machine. That is a recovery of capital, which is permitted in all countries under all income tax laws, and is necessary if business is to survive from generation to generation.
If this is common practice and good practice in normal times, it follows that where a plant is built that will be useful only for the war period the same recovery of capital within the useful life of the plant should be permitted. If that were not so, I can hardly believe we would have had any private investment whatever in facilities for war work, the reason being that the additional facilities would not return increased earnings to the proprietor of the plant. His earnings were fixed on the basis of the plant he had upon entering the war, and any additional earnings will be very largely returned to the government as excess profits tax. The result would be that he would have invested his capital and used it during the war period to provide necessary munitions of war, and at the end of the period he would have no further use for the building. In the meantime he would have accumulated liabilities in the way of taxes and maintenance, and he would have his capital locked up in a building for which he has no use. Therefore in Canada we appointed a tribunal called the wartime depreciation board. The purpose of that board was to examine applications for accelerated 72537-93
depreciation, to determine whether in fact the asset that was being created has a value beyond the limitation of the war, to assess the amount of the post-war value, and to fix a period in which the owner of the property is allowed to deduct from his earnings sufficient to recover that part of the capital which is found to be in excess of any post-war value.
We have had several methods of financing expansion of industry to meet war needs. The first we refer to as capital assistance to industry. That is really a misnomer, because while the plant may be of assistance to industry, the plant is in nearly every case owned by the crown in fee. The property on which it stands is owned by the crown; the plant itself is owned by the crown. It may be turned over to private enterprise to operate for the duration of the war, but at the end of the war the property returns to the crown. This type of expansion using public funds covers the item referred to as capital assistance to industry. Government capital used in that way, including crown companies which are owned and operated by the crown, amounts to 8821,000,000. Excluding the crown companies the capital assistance related to private industry amounts to 8642,700,000, and that is divided among 350 private companies.
Accelerated depreciation is applied where a private company invests its own money to expand its plant for a war purpose. In that field, the wartime depreciation board has authorized accelerated depreciation to the extent of 873,000,000, divided, amongst 637 private companies. It will be noted that the amount allowed to be written off as accelerated depreciation is less than ten per cent of the amount of the direct investment by the government in war plants, and that is divided among nearly twice the number of companies that were assisted by direct government grants.
Then we have another form of assistance, accelerated depreciation under the War Exchange Conservation Act. There the total writeoff authorized under that act amounts to 845,836,000, divided among 44 private companies.
In addition, we have two special projects. Both projects were passed on by the wartime depreciation board but owing to the fact that one or two matters of policy were involved which the board thought should get the confirmation of privy council, these two projects were referred to privy council and are the subject of special agreements. These two

The Budget-Mr. Howe

projects amount to $158,000,000, of which $154,500,000 covers accelerated depreciation for the Aluminum Company of Canada.
What has been the effect on the treasury of accelerated depreciation? I think that the assumption in the report of the subcommittee is that the money written off as accelerated depreciation represents a loss to the treasury. That is far from the case. It must be remembered that the assets that have been created produce earnings, earnings not for the private individual or the private firm, but earnings for the tax collector. The earnings from the facilities thus created have far exceeded the write-offs that have been allowed as accelerated depreciation. In other words, if the plants that have been subject to accelerated depreciation had not been built, the treasury would have been poorer than it is under the present system of write-offs. That can be amply demonstrated. In fact, the total is so much in favour of the treasury gaining by this type of-plant expansion that I think no one need examine the situation very far before agreeing with me on that point-. It must be recalled that if the wartime depreciation board decides on too short a useful life for the project, and is too pessimistic about its post-war value, the treasury does not lose on that account. If it has a post-war value, then all the earnings of the company without any deduction for further depreciation are subject to taxation. We have in normal times plants which have been wholly written off under allowable depreciation. These plants are still operating. Perhaps they were given a life of twenty-five years, and they are actually operating after thirty-five years. We are not shocked by that situation. The capital of the plant has been refunded, and usually the fully depreciated position is reflected in lower costs to the public and higher taxes to the government. That will be the position of war plants which have been written off, and for which a peace-time use can be found.
It is suggested in the report that where the cost of the plant has been written off in the war period, the assets created and written off should be sterilized. It seems to me that that is >an extraordinary proposal. Why should that be? At the beginning of the war we called upon every manufacturing plant in the country to take part in the war effort and to expand its facilities in order to do so, and we offered every manufacturer in the country access to the wartime depreciation board to ask for consideration as to accelerated depreciation for the plants so expanded. Surely by sterilizing these plants the industrial life of Canada would be poorer, the chances for full employ-
ment after the war would be lessened, and no useful purpose which I can think of would be served.
The report suggests that steps be taken to prevent the sale of assets. Hon. members will notice that the Minister of Finance (Mr. Ilsley) has included such a provision in the present budget. If a plant is wholly written off and is later sold for value, the government takes the view that representations must have been made to the wartime depreciation board that the plant would have no post-war value. If later it is sold for value, that is a clear indication that the judgment was in error to that extent, and the ruling announced by the finance minister is that, in that event, the sale value of the plant will be returned for taxation in the year in which the special deduction was applied. Thus there can be no capital gain through the sale of assets written off in the war period.
I think that covers my observations on the subject of special depreciation.
I should like now to take a concrete case in which special depreciation has been applied. It is by far the largest and the most difficult case with which the government has had to deal, and a discussion of it at this time may be useful in setting out the facts of the aluminum transaction and in illustrating the application of accelerated depreciation policies to that industry.


Richard Burpee Hanson: Would the
minister make it quite clear, for the purpose of keeping the record straight., just who owns the Shipshaw development? Is it the Aluminum Power Company or the Aluminum Company of Canada?-because there are several companies there.


Clarence Decatur Howe: I may not be accurate, but I believe that the Saguenay power development is owned by the Aluminum Power Company, which in turn is wholly owned by the Aluminum Company of Canada,


Richard Burpee Hanson: Well, what is the Aluminum Power Company? There is such a company. I have here a prospectus of a five per cent preferred stock issue, and they refer to the Aluminum Power.


Clarence Decatur Howe: I cannot say, I am sure.
In discussing the Aluminum Company of Canada I need hardly remind the house that aluminum is the essential material for the building of aeroplanes and aeroplane engines, and that the expansion of the aeroplane industry is definitely limited to available supplies of aluminum. The expansion of the

The Budget-Mr. Howe
aeroplane industry would not have been possible had we not had a corresponding expansion of the aluminum industry.
For ten years prior to the war the Aluminum Company of Canada operated in Canada with a productive capacity of 100,000,000 pounds of aluminum per annum. That capacity had existed for a considerable period before the war. The product took care of the Canadian demands and was exported to many. countries, and the then capacity was ample to supply all markets.
In 1938, in anticipation of increased war demands, the Aluminum Company of Canada increased its capacity to 160,000,000 pounds, and in 1939 a further extension brought the capacity up to 200,000,000 pounds per annum. In other words, in 1938 and 1939 the company doubled its capacity for the manufacture of aluminum. Of course there was no write-off; that was carried out entirely as a private venture.
In 1940 the government of Great Britain came to the Aluminum Company with a proposal for a veiy considerable further expansion, and offered to finance that expansion. The transaction was between the Ministry of Aircraft Production of the United Kingdom and the Aluminum company direct; the government of Canada was not involved in any way. As a result of that negotiation, the British government loaned to the Aluminum company a sum of money which was used to expand the aluminum capacity and which brought it up to 435,000,000 pounds per annum.


Mr. COLD  WELL@: How large was the sum of money?


Clarence Decatur Howe: I cannot say at the moment.


Richard Burpee Hanson: I can tell the hon. member.


Major James William Coldwell: Forty, thirty-nine
millions?


Clarence Decatur Howe: No. It was more than that.
Mr, HANSON (York-Sunbury): It was $55,600,000.


Clarence Decatur Howe: Yes. That is a loan subject to repayment over twenty years.


Major James William Coldwell: Are there certain qualifications with regard to repayment?


Clarence Decatur Howe: There are certain qualifications.


Major James William Coldwell: It need not, under certain circumstances, he repaid?


Clarence Decatur Howe: Well, the government of Canada was not involved in that transaction, either by way of special depreciation or in any 72537-93}
other way. I have not seen the heads of the agreement for some time, although I read them a year ago, and I do not remember their exact terms. But the government of Canada, as I have said, was not involved in any way in the transaction.
At that point the pre-war capacity for production of aluminum in Canada had been expanded 4-35 times. The Aluminum company owns the He Maligne power plant, which when it was built was the largest single power development in North America, and its full output was being used for the manufacture of aluminum. The Aluminum company had also built a plant at Chute a Caron, as the first unit of a larger development in that locality. Before the outbreak of war, the latter power development was surplus to requirements, and its output w-as used to generate steam. That power was quickly applied to the manufacture of aluminum.
The combined developments were quite insufficient to meet the demand, and power was brought in, first from the Shawinigan system, then from the island of Montreal, from the Beauharnois and the Montreal Light, Heat and Power developments; in fact every spare kilowatt which could be found was brought to the Saguenay to make aluminum.
It was obvious that the demands for power for the aircraft industry were by no means at an end. The government of Canada by that time was acting as an agent for purchasing in Canada by other governments, It had received requests from Great Britain for additional quantities of aluminum, from Australia for a considerable quantity of aluminum, and it was known that the United States were pressing the company for aluminum for the United States.
I then approached the Aluminum company to see whether it would be prepared to finish the development of which Chute a Caron was the first stage. The position was that the company had expended $35,000,000 in the small plant at Chute a Caron, which would be a unit in the larger development. An engineering estimate was prepared of the cost of building the complete Shipshaw project based on prewar costs, and cost of additional work was estimated at $39,000,000. This was the cheapest power available for development in the Dominion of Canada. I pressed the company to finish the development. The company quite properly pointed out that to do the work in war time would greatly increase the cost, and to rush it through so that it would be a usable factor in this war would again add to the cost. That that was so is demonstrated by the fact that whereas the engineers' estimates of the
The Budget-Mr. Howe

expenditure based on pre-war cost was $39,000,000, the development will in fact cost well over $65,000,000.


Richard Burpee Hanson: Is that in addition to the $35,000,000 on Chute a Caron?


Clarence Decatur Howe: Yes; that was an old investment. Quite properly the company asked how it could afford to make an investment of that magnitude for what was obviously a temporary load. In normal times the company had always had excess power from its Saguenay plants, and there is every indication that the same situation will return for a time after the war. The company would also have been faced with the building of a huge development to meet a very short and temporary demand, and with carrying the burden of a high cost development through many lean years to come. I think it is obvious to all hon. gentlemen that in the circumstances the company was entitled to use some of the war time earnings from this development to write down the cost of the development in the period when power is needed for war purposes.
Several proposals were discussed. We took into account the extra cost of doing the work in war time, the extra cost involved in cutting in two the time allowed by the engineers for the building of the project, and we arrived at the conclusion that it would be reasonable to write off 60 per cent of the cost of the project from earnings of the company in the war years. In other words, the company would finish, for war purposes, with a huge power plant, rated at over a million horse-power, for the output of which it would have no immediate post-war market, but it would be relieved, for a few years at least, of having to write off depreciation. We give them a breathing spell by depreciating the plant down to 40 per cent of the cost, which after all is not much less than the normal cost of the project in peace time.
That is the story of the Shipshaw development. I say once again that no money from the United States went into that development, unless it was by private borrowing of the corporation. The transaction was between the government of Canada and the Aluminum Company of Canada, and no one other than the two parties mentioned had anything to do with the transaction.


Major James William Coldwell: If I may ask a question, is it not fair to say that by advance payment on future purchases of aluminum the United States is assisting in paying for this plant, as are also other governments?


Clarence Decatur Howe: No. I am coming to that now.


Major James William Coldwell: I have their prospectus before me, and they make that statement.


Clarence Decatur Howe: Do not mix up two separate transactions. I shall be glad if you will let me put this on Hansard, and then I will discuss your question.
While these power negotiations were going on, we were being pressed to produce more aluminum for three other countries. By the middle of 1941 the total demands were for 1,623,500,000 pounds of aluminum, of which about 80 per cent was applied for by the Metals Reserve Corporation of the United States. Of the balance, about three-quarters was applied for by the United Kingdom, and one-quarter by the government of Australia.
You can see the difficulty faced by the Aluminum company at that point. Here was a plant expanded nearly four and a half times from its pre-war size. There were obvious objections to other governments lending money to the company to meet the capital outlay subject to repayment after the war. We have tried to avoid burdens of that kind. What was finally evolved and accepted by the purchasers was that the Aluminum company would sell at the current market price a firm quantity of aluminum to the three countries totalling the figure I have just given. To manufacture that aluminum meant an investment in manufacturing plant and facilities to cost about $117,000,000. The company followed common practice in contracts involving the building of new plant; it asked for an advance payment on that purchase. The advance payment for the share of the United States was $68,500,000. I believe the advance payment for the British share was of the order of $10,000,000 to $12,000,000 and the advance payment from Australia was in the same proportion, I think $3,000,000 or $4,000,000. Exactly the same terms were offered to the three countries involved in the transaction. In addition, arrangements were made to borrow certain funds with interest, from I think the United States and Great Britain. There again the terms were the same, except that I do not think Australia was asked to participate in the loan.
An advance payment was obtained for the metal, and the money received was not capital; it was revenue. The metal could not be produced unless capital for plant expansion could be obtained. How could that money be made available as capital? The only way was for the government of Canada to allow accelerated depreciation on the earnings of that contract until the capital expenditure is fully depreciated. It is rather difficult to appreciate at first glance, but I think if anyone considers that the only money that came

The Budget-Mr. Hoive
in from those contracts was payment for metal, and that all receipts, including the advance payment, would be subject to taxation under the excess profits tax in the year in which the metal was delivered, the necessity for tax adjustment becomes apparent.
I may say it has not been our policy to apply customs and excise taxes to products sold to the United States under the Hyde Park agreement, or sold to Britain for war purposes. Anything we do for Britain in this country is tax free, and we have applied the same principle and policy to the United States. Therefore, entirely aside from the fact that it would have been impossible to finance the contract, on the proceeds of that contract, had we not authorized accelerated depreciation, it is perfectly consistent with our policy towards our allies that war production for their account should receive special consideration in the matter of taxation.


Major James William Coldwell: For what period is the accelerated depreciation granted?


Clarence Decatur Howe: Until the total write-off is completed. I think an amount of five or five and a half cents a pound is applied to write off the capital expenditure as the metal is delivered.


Major James William Coldwell: Any estimate as to time?


Clarence Decatur Howe: No. I suppose it depends on how the metal is delivered.


Richard Burpee Hanson: It. depends on several factors, does it not, including the price of the metal?


Clarence Decatur Howe: No, the price of the metal was fixed. This is an interesting phase. I think most prices have gone up rather than down due to the demands of war, but in the case of aluminum that has been reversed. The first British contract called for a base price of aluminum of twenty cents per pound.


Thomas Vien: Order. The hon. gentleman's time has expired.


Some hon. MEMBERS:: Go on.


Thomas Vien: By unanimous consent.


Clarence Decatur Howe: I shall be very brief; I just want to finish this story. Subsequently the price was reduced to eighteen and a half cents. I may say that the reference in PM to two prices arises from the fact that while the Metals Reserve Corporation was negotiating with the Aluminum company for the purchase of this aluminum, the price in the United States was cut from seventeen and a fraction cents to a flat price of fifteen cents per pound.


Richard Burpee Hanson: They are still making money at that price.


Clarence Decatur Howe: Well, I do not know. The reason both prices were mentioned, I think, was that while the federal reserve bank could dictate the price in the United1 States, the price in Canada was a matter of negotiation with this government. I may say that the price was adjusted by arrangement between the Aluminum company and its customers so that the price in Canada is exactly the same as in the United States, having regard to the relative value of the two currencies. As a matter of fact the base price is fifteen cents per pound in the United States and sixteen cents per pound in Canadian currency.
I want to point out to hon. gentlemen that through these several expansions the original plant capacity has been multiplied almost twelve times. There has been a write-off, and in the dim and distant future the Aluminum company may obtain some benefit from it. If they can step up their sales to more than four and a half times the original capacity, they will begin to reap some reward from the write-off. after the war years, and that is the only way in which the company can benefit. But in the meantime they have taken on some heavy liabilities. School and property taxes on the properties to-day involve an expenditure of over $1,000,000 a year; and instead of a plant that could be operated at something like capacity and easily maintained, they now have a sprawling enterprise, in connection with which the maintenance and upkeep are likely to present a problem for a good many years. So that while there may be some post-war value to the company in this new expansion,
I think one has to be very optimistic to say that it represents a great immediate value. If the company disposes of any part of the plant for value, the money received must be returned to the crown, and assessed for excess profits tax in the year in which the write-off was made.


Mr. HANSON (York-Sunbuiy):: The shares are up to 120, and the preferred shares have reached a premium, so that I would not shed too many tears over it.


Clarence Decatur Howe: I am telling the facts. My hon. friend may assess the value in the market, but I would not care to do so.
I should perhaps mention another development which was going on concurrently; that is the development at Kingston. I have discussed the developments at Arvida; I have discussed the Shipshaw development in terms of power-


Major James William Coldwell: What will be done with any additional power beyond what may be used by the company? Will all the power developed be used by the company itself, or will some be sold?
The Budget-Mr. Howe


Clarence Decatur Howe: Does the hon. member mean in the war period?


Major James William Coldwell: At any time-during the war period, when the development is completed, and after the war. Is there any agreement relating to that?


Clarence Decatur Howe: During the war period the company will use all the power from the development plus other power which it will have to buy from outside sources. What it will do with the power after the war of course I cannot say. The company owns the power, subject to regulation by the Quebec power authorities, and so far as I know there are no restrictions as to its use in the post-war period.
In 1940, the Aluminum company constructed for the account of the United Kingdom a sheet and extrusion mill and a tube mill at Kingston. The government of the United Kingdom paid for the plant, which is rented to the Aluminum Company of Canada on a hire-purchase plan under which the Aluminum company will pay for the plant, with interest, and will acquire it over a twenty-year period. Under this arrangement $6,800,000 was expended, -and, of course, accelerated depreciation was not involved. Since then at its own cost the Aluminum company has enlarged the plant to provide for additional production, involving an expenditure of $1,590,000, which was made subject to accelerated depreciation from the earnings of the plant. Then in 1941 the company constructed for its own account an aluminum forge plant at Kingston, involving an expenditure of $2,695,000 which was made subject to accelerated depreciation. Work is now in progress on a further expansion at Kingston by the Aluminum company, for its own account, to extend the capacity of the forge plant, involving an expenditure of $4,543,000, which will be subject to accelerated depreciation. The total expenditure at Kingston based on the present programme will be about $15,600,000.
To sum up the situation, the Aluminum company since 1937 has spent on aluminum expansion a total of $151,200,000; on the Kingston development $15,600,000, and on power development in the neighbourhood of $70,000,000, or a total of $236,800,000. It has received special depreciation on account of general expansion in the amount of $117,000,000, and on account of the Shipshaw power project of $37,500,000, a total of $154,500,000 or about sixty per cent of its total expenditure.
I should like to point out to those who think that the treasury suffers from an arrangement of that kind that in 1941 the company paid the government nearly $13,000,000 in corporate 
and excess profits taxes. While the tax bill has not yet been made up for 1942, I am led to believe that the payments will be larger for the tax period 1941-42.
In closing I would say this, about the Aluminum Company of Canada, as the result of my experience as agent for this government and other customer governments, I think there has been no company in Canada with a keener sense of its responsibility to the war effort of Canada and its allies than has this company. It has expanded its facilities far beyond, I believe, what can be considered a prudent rate of expansion. It has asked for no favours. It has gone before the tribunals of the country, put its case and accepted the judgment rendered. It has made its deliveries on time. Its plant has been finished on schedule. My department is responsible for the distribution of the output of their plant, and I can say that at the end of last year we were in the happy position that the obligations of the Aluminum company to each of its customers, including Canada, Great Britain, the United States, Australia ,and one or two other countries, had been completely fulfilled. There was a slight surplus which we sent to Australia, as the country farthest away, and perhaps most subject to interruptions of deliveries.
I ask hon. members not to attack this record lightly, solely because of the millions of dollars involved, or because of something they may not like about the past history of the company. I ask you to look at the situation as it has now developed, to view it in the light of the necessity for obtaining adequate quantities of aluminum, and to give credit where credit is due, just as you will offer criticism as you believe criticism may be required.


Richard Burpee Hanson: In view
of the fact that the minister's statement and the documents available to everybody indicate that the whole increase and expansion has been financed to the extent of at least sixty per cent, if not more by funds from the various governments, has the government given any consideration to the question of taking over, operating and owning this company?


Clarence Decatur Howe: This government most certainly did not. The manufacture of aluminum is one of the most difficult processes of metallurgy. I think the only company in the world that has made a great success of the operation is the Aluminum company itself.


Richard Burpee Hanson: It is a
war monopoly, and it ought not to be a war monopoly.

The Budget-Mr. Quelch


Clarence Decatur Howe: It is a peace-time industry,
as well as a war industry.


Mr. VICTOR QUELCH (Acadia):: Mr. Speaker, my main criticism of the budget is that while it places the individual on a pay-as-you-go basis, it falls far short of placing the country on a similar basis, nor does it bring about a fairer distribution of the debt claims held against it.
The national debt is rapidly soaring. In 1939, at the beginning of the war, it stood at $3,152,000,000; to-day it is $7,861,000,000. And according to the minister's own estimate, by March of next year the debt will exceed $10,500,000,000. He has emphasized the fact that the national debt is largely held internally, and is therefore a debt unto ourselves. Unfortunately however, by far the greater proportion will be held in the hands of a comparatively few individuals, and therefore it will be necessary to tax all the people to pay tribute to this minority. That situation is being rapidly aggravated by our method of selling bonds. According to an article appearing in the Financial Post of January 16, giving a break-down of the second victory loan, it would appear that 339,000 individual $50 and $100 bonds have already been cashed. To overcome this unfavourable situation I would urge that a greater proportion of the taxation levied against people in the low income brackets should be in the form of compulsory savings, while on the other hand a greater proportion of the money borrowed from the people in the high income brackets should be obtained by taxation. By this means we could establish a fairer distribution of the debt claim held against the nation.
We have a ceiling on wages. We have a ceiling on prices. It is high time that, at least for the duration of the_war, we should have a ceiling on income. In my opinion that ceiling could very well be placed at a figure below $10,000. By that means I think we should at least aim at the principle of the equality of service and sacrifice.
For the next few moments I should like to deal with the two amendments before the house. First may I refer to the amendment moved by this group, as it appears at page 1092 of Hansard:
This house regrets that the government still disregards the possible uses of government-created national money to the end that in so far as taxation and the borrowing of the people's savings fail to meet government expenditures the government might employ national money:
(a)	To relieve the debt situation which threatens the ownership and control of a great many private businesses, factories, farms and other means of production.
(b)	To pay farmers and other primary producers fair prices, thereby stimulating the production of food.	_
(c)	To provide workers with adequate purchasing power.
(d)	To alleviate the distress of the aged and others in needy circumstances.
(e)	To prevent inflation by the subsidizing of industry where costs are uncontrollable, adopting where necessary a more aggressive and consistent rationing policy.
This amendment recognizes that a large percentage of production is required for war purposes, and that therefore it is necessary to curtail the people's spending power, by taxation, and the borrowing of the people's savings. It is advocated in the amendment that to the extent that taxation and the borrowing of savings has failed to meet government expenditures, national money should be used. In this instance the sum involved is $983,000,000. Of this amount, however, $790,000,000 is to be obtained from the chartered banks-or has been obtained, perhaps I should say. Only $193,000,000 has been obtained from the Bank of Canada.
I now turn to page 1106, and refer briefly to a criticism offered by the hon. member for Rosetown-Biggar (Mr. Coldwell), where he states:
But if you are continually siphoning off, *what is the object of continually pouring in something you have to siphon off?
My chief objection to the hon. member's question is that it is likely to leave a totally wrong inference. Many people may jump to the conclusion that the hon. member has become a disciple of Charles Dunning, because time and again when I advocated before the war that national money should be used to put the unemployed to work, invariably that was the reply I got from Mr. Dunning. What is the sense of creating national money if you are going to have to tax it away, he used to ask. The Minister of Finance always told the house that the only money that was available to the government was the money they could tax out of the people's pockets. He refused to use national money, and the result was that we had half a million people unemployed. It would be just as sensible to say: Why pass water through a power plant when you are going to let it out at the other end? You pass water through and you pass money through your system in order that certain essential services may be performed; when it has completed those services, you get rid of it. If to-day the deficiency in revenue was not made up by national money or by an increase in money, what would happen? You would have undeveloped resources and idle men.
The Budget-Mr. Quelch

When, the minister of finance of New Zealand appeared before the committee on post-war reconstruction on May 22,1 asked this question and he made this answer:
Mr. Quelch: Mr. Chairman, I wonder if Mr. Nash would tell us what method of financing is used when taxation and public borrowings fail to meet government expenditures?
Hon. Mr. Nash: Well, the answer is inside a simple statement I made once in introducing the budget. If in connection with the production of the commodities that are necessary for ordinary human welfare the monetary means are not available to link unused resources with unused labour we, as a government, will find the money. We can do that because we are in control of the reserve bank; we can create our own money.
Some people will say that New Zealand is still operating under the capitalistic system, although it has a socialistic application, and that that policy would not be necessary in a socialist state. I want to emphasize the fact that it does not matter what kind of system you have in operation, whether capitalistic or a socialistic state; it will always be necessary from time to time to create new money in order to maintain the fullest development of your resources. May I in proof of that cite what has been happening in Russia, wdiich is a socialist country. I have in my hand a book entitled, "Russia's Economic Front for War and Peace" by Mr. Yugow. I shall refer particularly to the period before the war, because apparently the statistics for the war period are not available. This book is mainly a statistical summary of the economy of Russia.


Mr. GRAHAM:: In what year was the book published?


Victor Quelch: It was published in 1942, but it is impossible to get accurate statistics for the years during the war. They were not being allowed out, but the League of Nations and other organizations figures were available up to 1938, which I think is the last year they were published.
The book emphasizes the fact that prior to 1937 Russia had begun to expand her economy at a tremendous rate, realizing as she did that she had not much time to accomplish what she was trying to accomplish, that is, to prepare to defend herself against both Japan and Germany. Her production had to be expanded very rapidly, and therefore a large percentage of the production of the country had to be taken away from the people in order to accomplish this end. Over twenty-six per cent of the production was appropriated for the purpose of expanding the industrialization of the country.
It is interesting to note the change of opinion which took place in Russia with regard to

money. In the days after the revolution there was a feeling that money was of little importance, and an attempt was made to do away entirely with the money system. The writer gives the viewpoint in Russia with regard to money when he says:
After some hesitation the communist economists have come to admit that money plays the decisive role in the economy of the country.
On page 144 it states:
. The quantity of newly emitted currency continued to grow rapidly.
That was in spite of the fact that very heavy taxation was being maintained. I want to put on the record figures from this book showing the amount of taxation and the amount of new money put out in certain years. In 1928 the total contribution to government, including all taxes and borrowings, amounted to 8-1 billion rubles, while in that year the issue of new money amounted to 2 billion rubles. In 1933 the total appropriations amount to 44-2 billion rubles while the issue of new money amount to 6-8 billion rubles. In 1938 the appropriations amounted to 127-5 billion rubles and the issue of new money to 11*25 billion rubles. While no figures are available for the war years, I -believe we will find that taxation has been increased still further and that the issue of money has been expanded tremendously. Inflation has been prevented.
I quote these figures merely to show that it does not matter what type of economy you have, whether it is capitalistic or socialistic, if you want to maintain the use of your resources at their full capacity you must issue new money continually in addition to your taxation and borrowing of the savings of the people.
The subamendment moved by the Cooperative Commonwealth Federation group reads: That all the words after "that" in the amendment be struck out and the following substituted therefor:
"this house regrets the failure of the government to provide for the nationalization of the banking system so as to make possible the full utilization of the Bank of Canada for the financing of the w-ar;
and further this house regrets the failure of the government to provide for increases in the amounts paid to old age and blind pensioners, or to make adequate provisions for veterans of the last or the present war, or their widows and dependents;
and further this house regrets the extent to which the government has vested the control of the Canadian economy in monopolistic industry and finance."
I am quite in accord with the substance of this amendment, but I regret that the Cooperative Commonwealth Federation found it necessary to rule out our amendment in

The Budget-Mr. Quelch
proposing theirs. It is not easy to vote for an amendment which rules out your own amendment, even though you may be in accord with the substance of that amendment. I want to make it quite clear that I am heartily in accord with everything in this subamendment. I refer to what I said to this house on July 16, 1942, when, speaking on the question of obtaining effective control of our banking system, I said, as reported at page 4307 of Hansard:
I am of the opinion that the only fair and sound way to deal with the -whole question of effective control is to nationalize the chartered banks of Canada.
It might be well to remember that in New Zealand, although the government has been in power for a number of years, they still have not a national banking system. Apparently they have established effective control, but I am of the opinion that in order to have really effective control, in order to know just exactly what are the costs of handling the accounts of the nation, the banking system should be taken over.
At this time I should like to discuss the problem of agriculture, leaving my criticism of the budget until such time as the resolutions are before us.
There are those who say that at a time like this, when the world is on fire, we should not consider the problem of agriculture. But there is nothing to be gained by calling upon the people to make sacrifices greater than are necessary. The people are willing to make every sacrifice that will help the war effort in any way, but unnecessary sacrifices may prove to be a detriment to our efficiency. There is nothing to be gained by imposing unnecessary hardships upon the people. In fact such a procedure is almost criminal, because it may cause disunity in the ranks of labour and is likely to undermine the morale of the people.
I listened with a good deal of interest last week to the speech of the hon. member for Maple Creek (Mr. Evans). I agree with what he said about the improvement of conditions in western Canada resulting from the increase in the price of live stock; nevertheless his speech may give a totally wrong impression of the conditions that really exist in the west. Throughout the west there is a large percentage of farmers who for various reasons have not been able to benefit by the increase in the price of live stock. In some cases this is due to a lack of pasture; in others to insufficient water, and in still others to lack of capital or credit with which to acquire live stock. We must remember that 72537-94
back in 1937, because of the drought, regulations were passed which caused the farmer to reduce his stock to two or three head per family in order that he might be able to acqujre feed from the department, and in large areas practically the entire stock was wiped out except for a few milk cows per family. Since then, unfortunately many of those farmers have not been in a position even to keep any increase in stock. They have had to sell their calves to get the wherewithal to live. Those farmers are not being benefited to any large extent by an increase in the price of live stock. Most people will also admit that the position of the grain grower in Canada as not being an enviable one.
But one of agriculture's greatest handicaps is that even where a farmer has a fair amount of stock he is only in a position to pay the interest on his accumulated debts. He is not, generally speaking, in a position to reduce the amount of his indebtedness. The hon. member for Maple Creek admitted that. If the farmers are not in a position to reduce the amount of their accumulated debt, what will be their position after the war, when there is a general fear that prices may be reduced? We hope they will not be; there is no reason why they should be, but from our experience of the past there is every reason to expect they will be. On the other hand, the farmer who is fortunate enough to be able to make a payment on his principal finds that he now has an additional burden of a tax of from thirty to forty per cent. In other words, the payment of his debt is being increased by thirty to forty per cent due to the income tax. The proviso that losses over the past two years may be offset against current income does not help the farmer who has heavy debts to meet because of losses incurred during the depression years.


Mr. WOOD:: How many farmers in the west are paying income tax?


Victor Quelch: If the hon. member asks that question a year from now, the answer then would give a totally different impression from the answer to-day. The number of farmers in the west paying income tax to-day is small. Why? For the very simple reason that they are in the unenviable position of having a low income. In your returns you are allowed to deduct depreciation on equipment and interest on debt, but as I have already said, the debts of these farmers are so large that they have a very large interest payment to make and that will reduce the amount of income tax they have to pay. Nevertheless they will have to pay that interest in order to obtain the deduction in



The Budget-Mr. Quelch
income tax, and therefore the income they have left will be small.


George Ernest Wood: They will get as a deduction the amount they pay off on their mortgages, so that that will encourage them to pay off their mortgages.


Victor Quelch: The compulsory savings part of the tax is abolished if they make payments on their houses, but I am leaving that out as taxation. There is no deduction in the taxation, because that is compulsory savings. Taxation is taken away for good. If a part of it were to be returned as compulsory savings, there would not be the same objection.


George Ernest Wood: The hon. member is optimistic enough to believe that the farmers are going to be in the income tax class.


Victor Quelch: If the farmer makes an income of over $660 he has to pay income tax.


George Ernest Wood: No.


Victor Quelch: Yes. Under the new regulations, once the farmer gets over $660 he must pay income tax.


Mr. HANSELL:: The hon. member for Brant (Mr. Wood) may not pay it, but the rest of them do.


Victor Quelch: The tragic accumulation of debts in western Canada is the inevitable outcome of federal policy during the past twelve years. In some cases the situation has undoubtedly been aggravated by drought. The situation cannot be blamed upon poor farming, nor can it be blamed upon the farmer's desire to avoid paying his obligations. While such cases may exist, they must be looked upon as the exception rather than the rule.
During the last war, from 1914 to 1919, it is true that generally speaking agriculture was prosperous, and I would especially commend that statement to the Minister of Finance. The Minister of Finance has tried to persuade the farmers of the west that they would not gain by a policy of inflation, but the farmers understand very well what the situation is. The farmers know far better than the minister himself that during a period of inflation they unquestionably do benefit-and I am not speaking in favour of inflation when I say that. But it has been the policy in Canada to try to persuade the farmers that they would lose as a result of inflation. The minister argues that the farmers would be no better off in a period of inflation, because although they would receive higher prices for what they have to sell, they would have to pay higher prices for what
[Mr. Quelch, 1
they have to buy. But the minister leaves out one very important factor. He misses the point that the majority of the farmers in western Canada are very heavily in debt, and the only way in which they will ever be able to pay those debts, unless action be taken to reduce them, is through a period of inflation. For instance, if a farmer has a debt of $1,000 and wheat is 50 cents a bushel, it takes two thousand bushels of wheat to pay off his debt, but if wheat is worth $1 a bushel it takes only one thousand bushels to pay off his debt. The minister leaves that entirely out of his argument.
It is also well to remember that the size of these debts was greatly increased during the years of deflation. The farmers were told then that they would have to accept world market prices for their products, and as a result of the disastrous prices of that period the debts of the farmers increased to a veiy great degree. Now, when the farmers might have a chance to gain, a ceiling is put on prices to prevent them from getting the benefit of higher prices for their products. If a floor had been placed under agricultural prices during the depression years there would be no kick. But why should the farmer be told in years of depression that he must accept world market prices, and then in years of inflation be told that he must take a price below the ceiling?


Mr. ILSLEY:: Because we are at war.


Victor Quelch: Then let us try to equalize the burden. The minister has taken steps to try to equalize the burden on other industries, where subsidies are being paid to make up the difference. We are still a long way off from making up the difference between the prices the farmer receives and what he should receive on a comparative basis with other industries.


James Lorimer Ilsley: Subsidies are being paid.


Victor Quelch: The mortgage companies have started actions for foreclosure in the west. They should be told that there is a war on and that the farmers cannot pay their debts because there is a war on. But the mortgage companies are demanding their pound of flesh. It would be a very good thing if they were told that there is a war on and that they can take no action to foreclose until after the war is over.


Ernest George Hansell: They are the ones who need to know there is a war on.


Victor Quelch: The minister also stated
that inflation would be followed by deflation. But if the period of inflation lasted sufficiently long the farmer would be in a position

The Budget-Mr. Quelch
to reduce his debt and thereby be in a much better position to accept reduced prices. Prices after the last war fell from 1921 to 1924, but with rising prices from 1924 to 1929 agriculture, generally speaking, prospered, in spite of the deflation which the minister saj^s always follows a period of inflation. Agriculture prospered nevertheless, because the farmers had benefited so much during the period of high prices that they were in a better position to withstand the onslaught of the depression years.


Mr. MARTIN:: I do not agree with that.


Victor Quelch: By 192S or 1929 the majority of the farmers of western Canada could look forward to the future with a good deal of assurance, although prices at that time were still below a parity based on 1913-14. In 1928 many farmers were warned by their local bank managers that they should begin to curtail their expenditures. They were warned that they were on the eve of another depression. I know that because I happened to have had that experience. Therefore, apparently, even in 1928, one year before the depression started, the banks knew that a policy of curtailing loans was to be introduced. In 1929 many farmers who had been in the habit of going to the bank and getting a line of credit found, without any warning that line of credit cut off. The same thing applied to industries all over Canada. Consequently unemployment increased; the demand for goods decreased; the prices of primary products fell; and we were confronted with the vicious spiral of deflation. I do not think it is necessary for me to illustrate at any great length the depth to which prices fell in 1932. Wheat fell to nineteen and a half cents a bushel. In the city of Calgary it was selling at a lower price than sawdust. In that year I shipped 200 dressed turkeys, prime birds, which netted me five cents a pound dressed. Oats went down to four cents a bushel; 200-pound dressed hogs fetched five dollars apiece. Was it any wonder that the farmers went heavily into debt during that period? They continually asked that a floor should be placed under prices; but no action was taken, and it is only natural that they should deplore that to-day, when they have a chance to recover some of the losses incurred in those years, a ceiling should be placed on prices to make that impossible.


James Lorimer Ilsley: There was a floor under
wheat.


Victor Quelch: There was no floor under wheat in 1932. It dropped to nineteen and a half cents a bushel. If there was any floor it 72537-94}
must have been a rotten one, because they went through it.


James Lorimer Ilsley: But there was a floor under wheat in 1935.


Victor Quelch: Yes, in 1935 there was,
but that was after five years of low prices. How could any industry produce for five years at less than the cost of production without going into debt unless it had big reserves to fall back upon; and agriculture did not have any reserves.


George Ernest Wood: Some agriculturists weathered the storm. Why not others?


Victor Quelch: Yes. I am always having the example of these men held up to me.


George Ernest Wood: Certainly.


Victor Quelch: You have on one side of the road a farmer who is bankrupt, and on the other side a farmer who is prosperous.


George Ernest Wood: Exactly.


Victor Quelch: What is the difference?


George Ernest Wood: The farmer himself.


Victor Quelch: I would say that in ninety-nine cases out of a hundred it will be found that the prosperous farmer has had access to some other source of income.


George Ernest Wood: Does not the ability of the farmer himself enter into the question of his own prosperity, as it does in industry?


Victor Quelch: Certainly. But I noticed during the depression that the concerns which went under first were very often those which were held up as examples of efficiency. Take the great Campbell farms in the United States, which were publicized in the press year after year as the last word in efficient administration. They went bankrupt, because they could not carry on below a certain price. Many farmers could continue only by getting their wives and young children to do work which should not be required of them. But that is not done in industry. You do not see men like Gordon and Flavelle getting their wives to keep books and so on without pay.
In this ten-year period from 1929 to 1939 the returns for agricultural products, with few exceptions, were considerably below costs of production. No attempt was made to maintain a parity price based upon the year 1926, nor was any attempt made to reduce prices of farm machinery to the farmer, in spite of the fact that a committee of this house found that prices of farm machinery were excessive. Furthermore, according to figures presented to the royal commission on dominion-provincial relations by the government of Manitoba, the policy of appreciating the
The Budget-Mr. Quelch

Canadian dollar twenty per cent above the pound sterling, while Australia depreciated its currency twenty-five per cent below the pound sterling, cost the farmers of western Canada from 1931 to 1936 $47,000,000 a year on an average. In addition, according to the same brief, the tariff cost the farmers of western Canada during the same period $32,000,000 a year, making the total cost the farmers should not have had to bear $79,000,000 a year over that six-year period.
Therefore, Mr. Speaker, I assert that it is the responsibility of the federal government to introduce without delay measures to bring about security of tenure to the farmer for the duration of the war and as long afterwards as the present restrictions remain in force, and also an equitable adjustment of all farm debts at a low rate of interest, based upon ability to pay. I think the need of such action is demonstrated by figures quoted in 17. F. C. Information, issue of February, 1943, page one, which states:
The most recent figure available on farm debts in Saskatchewan is $630,000,000 or $21 debt average on the 30,000,000 acres cultivated in this province. It is estimated that the average debt on the higher quality wheat land is $30 per cultivated acre. It should be remembered that much of this land operates the practice of summer-fallowing one-half of the land each year, consequently each crop acre in such circumstances carries a debt responsibility of $60 per acre, requiring $4.20 to satisfy interest obligation.
The present pressure from the various creditor classes is having a detrimental effect on western agriculture. Many farmers are being compelled to sell immature stock; for instance, calves. There should be a law prohibiting the sale of many calves and yearlings which are now sold only because the farmers are compelled to do so in order to meet their obligations. That kind of thing is not helping the war effort. To-day many farmers are disposing of breeding stock which should not be sold, and which they are selling only because they are obliged to do so, either by their creditors or through force of circumstances.
The Minister of Agriculture (Mr. Gardiner) has announced for this year an ambitious programme for agriculture. The minister admits that it will not be easy to put that programme into effect. Many farmers are already working to the limit of their endurance. However, there are many steps which the government could take to ease the burdens of agriculture. First, place the farmer on a par with labour in so far as ceilings are concerned; that is, put these ceilings at the highest level of prices from 1926 to 1940. According to Leonard D. Nesbitt, as quoted at

page 4 of 17. F. C. Information, if this were done prices of grains could be approximately at these levels.
Per bushel
Wheat	 $1.60
Oats	69
Barley	90
Rye	 1.35
Flax	 3.00


George Ernest Wood: Would there not be an increased surplus of commodities we already have?


Victor Quelch: No, because there is a quota delivery.


George Ernest Wood: Who will pay for something he does not want?


Victor Quelch: There is a quota delivery, and farmers will be able to build up in their own granaries a slight reserve beyond the quota to take care of bad years.
Then a floor should be placed under agricultural prices for at least three years after the war. That floor should be based upon parity prices of 1926-29. Before leaving the question of price I should like to refer briefly to a statement made by the Minister of Agriculture. Speaking in this house on February 9, he emphasized the need for building up large reserves to take care of the war-torn countries after the war. He mentioned that grain could probably be more easily stored than any other commodity. Government policy to-day is to take delivery of an amount equal to the year's sales. The quota system has been established, and generally speaking it works well. But the production of that quota must be looked upon as part of the war effort, for it is realized to be desirable to maintain this reserve in order to take care of the war-torn areas after the war. Therefore farmers are entitled to a parity price for that quota as it is delivered, looking upon it as part of the war effort. They are entitled to the same consideration as every other industry operating during the war.
The minister admits that the price received by the farmer to-day for grain is considerably below a parity based upon 1926-29. The minister states that the price of wheat is 54-5 cents below parity. On oats it is 9 cents below; on barley, 11-2 cents below, and on rye, 38-5 cents below. One may well ask why the farmers should be discriminated against in that way. I maintain they are entitled to a ceiling based on the highest price of 1926 to 1940.
But below that ceiling there should be a floor based on parity of 1926-29. The Minister of Agriculture points out that present prices are still far below that floor.

The Budget-Mr. McNevin
The minister attempts to defend that price by saying that the government is short of funds for the purpose of establishing a floor. If that statement is tme it shows that the government have not maintained the policy that they said at the beginning of the war would be maintained. Both the Minister of Finance and the Prime Minister stated' that no financial restriction would be allowed to interfere with the efficiency of our war effort. But whenever you ask any body of people to produce below cost of production you are destroying the efficiency of that organization. It is compelling farmers to sell stock which in the interest of the nation should not be sold.
Apparently the government are afraid that higher prices will cause inflation. If the government are really afraid that an increase in prices to agriculture wmuld cause inflation, I make this suggestion: let the government make up the difference between the present price of grain and the parity price by an issue of war savings certificates to the farmers. The minister says this would cause an increase in debt. However, the government to-day is incurring debt to stabilize other prices. Why should the grain grower be the one exception to that rule? I maintain that the farmers are entitled to be allowed a share in the national war debt. The minister reiterates that it is debt to ourselves. Then I say there should be a fairer distribution of that debt. We must make it possible to-day for the farmer, generally speaking, to buy an equal share of bonds or war savings certificates along with other people.
In order that agriculture may in the future play its full part in this war effort, I hope the government will give greater consideration to a number of the points I have raised to-day.


Mr. BRUCE McNEVIN (Victoria, Ont.):: I should like at the outset of my remarks to offer a few suggestions which in my opinion would facilitate the passing of legislation, the granting of supply and the provision of ways and means in this House of Commons. I am prompted to offer these suggestions by reason of the protracted discussion which has taken place on the address in reply to the speech from the throne and again in the budget debate.
I am not unmindful of the fact that there should be in a country like Canada at least one occasion in each parliamentary session wherein there would be the fullest opportunity to discuss the most extended range of questions, because we are a difficult country to govern, since we have far-flung and widely separated areas where the environment and the industry and the lives of the people differ
greatly from those in other sections of the country. I am also not unmindful of the fact that you cannot take any particular country's parliament or legislative assembly as a pattern and expect to fit it to some other country, because conditions prevailing in each and every country, influence the actions and conduct of the parliaments or legislative assemblies of the different countries.
Looking over the debates on the address in reply in the British House of Commons in the four war sessions, I find the length of time occupied in each year was as follows: In the session of 1939-40, six days; in the session of 1940-41. six days; in the session of 1941-42, eight days and in the session of 1942-43, eleven days. Of course they usually start in the fall, earlier than we do. That completes the record for those four years.
In offering these suggestions I do not wish to make it appear that there should be any infringement upon the rights and privileges of lion, members or any impairment of the ability of our legislative institutions successfully and fully to discharge their duty to the people of Canada, However, I think every hon. member will agree that in the lengthy debate on the address in reply this year and in this budget debate considerable duplication, and repetition have occurred, which do not promote efficiency in any legislative body.
Therefore the first suggestion I have to offer is that we adopt a principle that has long been in use in the British House of Commons. It is usually referred to as allocation of time. I have gone back to the session of 1881 in the British House of Commons, when a resolution was passed granting authority to control, guide or direct the passage of legislation by what they termed the allocation of time. I should like to read from pages 57 and 58 of the journals of the British House of Commons for February 3 and 4. 1881:
Then the main question, so amended, being put-[DOT]
This has to do with the business of the house, under the heading of "urgency."
-resolved, that if upon notice given a motion be made by a minister of the crown that the state of public business is urgent, upon which motion such minister shall declare in his place that any bill, motion or other question then before the house is urgent and that it is of importance to the public interest that the same should be proceeded with without delay, the Speaker shall forthwith put the question, no debate, amendment, or adjournment being allowed; and if, on the voices being given he shall wdthout doubt perceive that the "noes"
The Budget-Mr. McNevin

have it, his decision shall not be challenged, but, if otherwise, a division may be forthwith taken, and if the question be resolved in the affirmative by a majority of not less than three to one, in a house of not less than three hundred members, the powers of the house for the regulation of its business upon the several stages of bills, and upon motions and all other matters, shall be and remain with the Speaker, for the purpose of proceeding with such bill, motion, or other question, until the Speaker shall declare that the state of public business is no longer urgent, or until the house shall so determine, upon a motion which, after notice given, may be made by any member, put without amendment, adjournment, or debate, and decided by a majority.
This is followed by this sentence:
Mr. Gladstone, the first lord of the treasury having declared in his place that the bill for the protection of persons and property (Ireland) now before the house is urgent and that it is of importance to the public interest that the same should be proceeded with without delay; resolved that the state of public business is urgent.
Then they' went on with the bill. Not being a member of the legal profession, I do not intend to enter into an analysis of the technicalities of this question, but I should like to lay down one or two broad principles upon which it might be considered. Before doing so, however, I wish to give a further quotation having regard to a definite bill, taken from the journals of the British house for 1904 at pages 291 and 294, under the heading, "Procedure on the Licensing Bill." I read first from page 291:
That the proceedings in committee and on report of the licensing bill shall be brought to a conclusion in the manner hereinafter mentioned on six allotted days:-
(a)	The proceedings in committee on clause
1	on the first allotted day;
(b)	The proceedings in committee on clauses
2	and 3 on the second allotted day;
(c)	The proceedings in committee on clause 4 on the third allotted day;
(d)	The proceedings in committee on the remaining clauses of the bill, and on any new government clauses, and on schedules and any new government schedules, and any other proceedings necessary to bring the committee stage to a conclusion, on the fourth allotted day;
(e)	The proceedings on report on any new clauses and on amendments to clauses 1, 2, and
3	of that bill, be brought to a conclusion on the fifth allotted day; and
(f)	The proceedings on report be concluded on the sixth allotted day.
After this order comes into operation, any day shall be considered an allotted day for the purposes of this order on which the licensing bill is put down as the first order of the day.
At eleven p.m. on the said allotted days or, if the day is a Friday, at 4.30 p.m., the Chairman or Speaker shall put forthwith the question or questions on any amendment or motion already proposed from the Chair, and shall next proceed successively to put forthwith the 
question on any amendments moved by the government of which notice has been given (but no other amendments), and on every question necessary to dispose of the allotted business to be concluded on the allotted day.
Then, further, on page 294, under the heading "Licensing Bill (first allotted day)":
The house, according to order, resolved itself into a committee on the licensing bill.
I may not be entirely correct in my assumptions, but in my opinion under that resolution there is vested in the Speaker of the British House of Commons the right to allocate certain specific time, a day, part of a day, or a number of days, for the consideration of any specific bill or measure. Further, with regard to the allocation of time, I find the following at pages 348, 349 and 350 of May's Parliamentary Practice:
The temporary provision made by the urgency resolutions of sessions 1881 and 1882 for the consideration of important bills has been mentioned on page 332, and some description must now be given of the arrangements that have been made in subsequent sessions to ensure the completion of various stages of bills and other business. Orders of the house have prescribed the times at which and the proceedings by which the remaining part or the whole of the committee stage, the report stage, the committee and report stages, the report stage and third reading, the committee and report stages and third reading and the second reading and subsequent stages of a bill should be disposed of.
Then, with respect to ways and means I have just a short quotation which I think has also some bearing on the question, from page 883 of the same volume:
As soon as the committee of supply has been appointed and estimates have been presented, the business of supply shall, until disposed of, be the first order of the day on Thursday, unless the house otherwise order on the motion of a minister of the crown, moved at the commencement of public business, to be decided without amendment or debate.
(2)	Not more than twenty days, being days before the fifth of August, shall be allotted for the consideration of the annual estimates for the army, navy, air force, and civil services, including votes on account. The days allotted shall not include any day on which the question has to be put that the Speaker do leave the chair, or any day on which the business of supply does not stand as first order.
(3)	Provided that the days occupied by the consideration of estimates supplementary to those of a previous session or of any vote of credit, or of votes for supplementary or additional estimates presented by the government for war expenditure, or for any new- service not included in the ordinary estimates for the year, shall not be included in the computation of the twenty days aforesaid.
(4)	Provided also that on motion made after notice, to be decided without amendment or debate, additional time, not exceeding three days, may be allotted for the purposes aforesaid, either before or after the 5th of August.

The Budget-Mr. McNevin
(5)	On a day bo allotted, no business other than the business of supply shall be taken before eleven, and no business in committee or proceedings on report of supply shall be taken after eleven, whether a general order exempting business from interruption under the standing order (sittings of the house) is in force or not, unless the house otherwise order on the motion of a minister of the crown, moved at the commencement of public business, to be decided without amendment or debate.
Paragraphs 6, 7, 8, 9 and 10 bear on this point, but I shall not deal further with this aspect of the situation.
Consideration might be given, particularly in war time, to adding a standing order to our standing orders providing for an allocation of time. I wish further to supplement what I have said by referring to the procedure in the South African house of assembly. I find this at page 4, volume 1, of their standing orders:
(11): Mr. Speaker shall report to the house the governor gem1 rat's speech, and there shall be no debate on such report.
The South African parliament is the youngest in the British commonwealth of nations, and I assume they have profited from the mistakes made by senior parliaments.
May I pass on to a few remarks respecting agriculture, particularly from the point of view of its relation to the war. I have before me some production figures for the years 1939, 1940, 1941 and 1942, covering an extended range of agricultural products. The year 1939 represents a time which might be said to be prior to the war, because with the declaration taking place on September 10 it is unlikely that war conditions would materially affect production in that year, and particularly the production of agricultural products. The following sets out production in Canada for the years I have mentioned:
Pounds
Cheese	   125,000,000
Bushels
Oats	 384,000,000
Barley	 103,000,000
Flax	 2,000,000
Dozens
Eggs	 221,000,000
Number
Hogs	 3,705,000
The 1942 wheat crop was one of the best in the history of	Canada, particularly of
western Canada.
Then, I should like to place on record the figures showing our bacon exports to Great Britain. The year 1938-39 was the first year prior to the agreement with the British food ministry becoming effective. If we bear that in mind, the exports of bacon are as follows:
1938-39	1939-40	1940-41	1941-42Pounds	Pounds	Pounds	Pounds175,000,000	331,000,000	425,000,000	600,013,007
The agreement for next year calls for an increase of 75,000,000 pounds.
The point I make in connection with our production record is that it takes a great deal of labour, work and planning to achieve a record of this kind. Let us remember that this has been accomplished despite a decrease to the extent of at least twenty-five per cent in available farm labour. I believe that, when the history of the war is written, a conspicuous place should be given to the wonderful production achievements of farmers in Canada, so that this and future generations in this and
1940	1941	1942Pounds	Pounds	Pounds142,000,000	148,000,000	200,000,000Bushels	Bushels	Bushels380.000,000	305.000.000	651,000,000104.000,000	110,000.000	259.000,0003,000,000	5,000,000	14,000,000Dozens	Dozens	Dozens235,000,000	244,000,000	274,000,000Number	N umber	Number5,457,000	6,225,000	6,250,000
other countries may know what that contribution has been to our war effort.
May I now say a word respecting post-war problems, and I shall turn first to that of employment because it has a bearing on rural problems. I do not believe there is any single item offering greater opportunity for employment than an endeavour to extend electrical services to as many as possible of the rural residents throughout Canada. The construction of transmission lines, and the provision of the necessary metals and equipment would require a great amount of industrial employment. I am sure the house will agree with me when I say there is no class of citizen in Canada more entitled to the benefit of laboursaving devices than farm people generally, and particularly farm women.
We have in Canada at the present time a turbine installation amounting to 9,225,000 horse-power. There is available within reasonable distance of the more densely populated areas of this country an additional three to four million horse-power. It is estimated that the total available power resources at the present time amount to 51,000,000 horse-power,
The Budget-Mr. McNevin

but approximately three-quarters of this is too far away to be of much use. There has been considerable development in order to provide the additional power needed for our war industries, so that I do not think the matter of additional installations in the post-war period will create any problem. The Minister of Munitions and Supply (Mr. Howe) has referred to one of our great industries which uses in the neighbourhood of 2,000,000 horsepower, between a fifth or a sixth of the entire available electrical energy. It is unlikely that after the war we shall be able to find immediate use for the aluminum, the manufacture of which is now consuming such large quantities of power. Therefore large blocks of power will be available for distribution, at least some in the manner I have outlined.
There are other items which might be considered. I was considerably interested in the report made to the British house by Sir William Beveridge and in the report presented to this House of Commons dealing with social reconstruction. In the consideration of our post-war problems there is one thing that should not be overlooked. The economic committee of the League of Nations and the international institute of agriculture, assisted by experts from almost every country in the world, spent several months in an intensive and exhaustive investigation into the causes of the depression. They came to the conclusion that the depression in agricultural prices was at the root of the general problem.
No matter how great a social programme may be constituted in this parliament or in the parliaments of other democratic countries, it cannot be maintained unless we keep foremost in our mind the fact that depressed prices of farm products were at the root of the last depression. Unless international thought is given to preventing these prices from going down to the point reached in the last depression, it will be impossible to maintain our social plans at the point indicated by such legislation. Unless prices of agricultural products are kept up to a reasonable level, the success of such legislation will be impossible.
I have but a few minutes longer, and in the time at my disposal I should like to refer to the one matter which is more important than any of the others coming up for consideration in this house. I refer to the prosecution of the war. The Minister of National Defence (Mr. Ralston) has now enrolled in the Canadian army approximately 450,000 persons. Our first and greatest tribute must go to the loyal and courageous citizens who have volunteered for service in the army in such large numbers. 
Some tribute should also be paid to the minister and to those who have preceded him in that office for the guidance, direction and leadership they have given to the Canadian army.
Approximately 55,000 persons have been enrolled for service under the Department of National Defence for Naval Services. The persons in this service have had more action to date than those men who have enlisted in our army, and, I am sure, are giving a splendid account of themselves on the seven seas. These gallant young men and women should receive the highest tribute, not only from the Canadian people but from this parliament. The present Minister of National Defence for Naval Services (Mr. Macdonald) is the first minister who has served in this capacity, and he also is deserving of commendation for the guidance, direction and leadership he has given as chief of this branch of our Canadian forces.
Just a word about the air force. We have in the Royal Canadian Air Force approximately 200,000 persons who have enlisted for active service anywhere. The same tribute should be paid to these men and women. They represent a highly skilled and highly trained section of our population. The very nature of their work is such as to make this high training almost essential. We owe a debt of gratitude to the personnel of our air force, and this debt is all the greater because to date they have suffered greater casualties than any of the other services. I am not sure as to the naval service, but I believe this is true'as far as the army is concerned. The people of Canada will, I am certain, join with this parliament in paying a tribute to the Minister of National Defence for Air (Mr. Power), who has the responsibility of supervising this most essential branch of our armed forces.
I have just one more thought, namely, in relation to the post-war period when victory is won and our forces return. I think what is uppermost in the minds of most of these young men and young women is this thought: What am I coming back to? So that I think the least we can do is to provide them with what might be termed security. They must be protected from the scourge of unemployment; they must be protected from the ravages of disease; they must be provided with medical services and hospitalization, which latter is already receiving the consideration of the Minister of Pensions and National Health (Mr. Mackenzie) ; and they must also be provided with an opportunity to earn a decent standard of living for themselves, or for themselves and their wives arid families, as the case may be.
At six o'clock the house took recess.

The Budget-Mr, Cmickshank
After Recess
The house resumed at eight o'clock.


Mr. G. A. CRUICKSHANK (Fraser Valley) :: Mr. Speaker, first of all, I consider it a compliment to myself that Mr. Deputy Speaker has made his first official appearance this evening. I also regard it as a personal compliment that, after I had prepared an excellent speech, expecting to make it last Friday, Mr. Churchill, the great Prime Minister of Great Britain, unfortunately made it on Sunday. So that I am rather embarrassed. I understand also that to-day a certain "other place" is having a meeting in opposition to mine.
We have heard a great many speeches in this debate. Everything under the sun has been discussed, including imaginary battles on the St. Lawrence and isolationism; we have even heard of a tunnel built out of one province-I suppose, for no other reason than that the inhabitants can move into British Columbia any time at all. For that reason I favour it.
I only wish that in some way we could have the privilege which a certain provincial member had, of writing our speeches a few days ahead and handing it to the newspapers, particularly those of our own riding, to be printed in full, and without the mistakes which I may possibly be supposed to make, although I do not intend to make any.
I am more or less on the spot this evening. I have had to follow the leader of the opposition (Mr. Graydon), who, by the way, paid me the honour of visiting my riding. They deliberately sent a young man into the constituency of Fraser Valley as representing their party, because it takes an aggressive and progressive young man to find a Tory remaining in that riding.
I listened with a great deal of pleasure to wha,t in my opinion is the most all-embracing budget ever delivered, and which was presented by the man whom I regard as the most competent Minister of Finance we have ever had. Next to the Minister of Labour (Mr. Mitchell), the Minister of Finance (Mr. Ilsley) has the most difficult problem of any member of the government. I am sorry that the finance minister is not present to hear the compliments I am paying him, but of course I shall see that he gets a copy of my speech to-morrow. Holding, as he does, this most difficult position, he has made an excellent job in his new budget. He has taxed nearly everyone in the dominion, as fairly as any man can place taxation. I am sorry to have to say that in some instances I fear he has lost
sight of the principle of "ability to pay", but we must give him credit for spreading taxes throughout the nation, and restricting to a very large extent the amassing of fortunes through excessive war profits.
I would, however, make a couple of suggestions. I urge the minister to give every consideration to what is known as the Ruml plan. Strange as it may seem, this recommendation is not coming in my riding from what might be called the privileged class. Every labour organization we have in the riding has made that request. I also think that further consideration should be given to any taxation which may be imposed upon cooperatives. I am sorry the minister is not in his seat at the moment. I am one of those, I suppose, who got more or less of a verbal spanking yesterday for saying what was, in the opinion of some, our idea of improvements and mistakes that have been made; although I do not share in all these opinions. Let there be no misunderstanding. I will describe, with the assistance of an able authority, what I think of Donald Gordon, the present leader-I suppose I should call him-of the wartime prices and trade board. I quote from Hansard, at page 1427:
I want to say now that I have never met a man with greater honesty or integrity, with greater moral courage, with greater capacity for straight clear thinking, with greater capacity for hard, nerve-wracking work, with greater capacity for decision or with more unselfish devotion to duty.
I have repeated the words of the Minister of Finance, who thought that some of us had criticized in a personal way Donald Gordon. I would add that I also think he is a very fine gentleman, and I might inform hon. members that there is no man with whom one can spend a more enjoyable evening in a personal way. I watched him come up the corridor to-day at six o'clock and realized that he must have heard that Cruickshank would speak about him to-night.
I wish to make my point clear in connection with criticism of the wartime prices and trade board, because that is what I shall principally speak about to-night. I do not object to the verbal spanking which I assumed I, as representing the Fraser valley, was getting with the rest, but my constituents sent me here to express their views to the best of my ability.
Although I did not agree with everything said by the leader of the opposition in what I thought was an excellent speech, I am in agreement with him when he said that there is nobody in Canada but wants to prevent inflation. He also pointed out-I do not know
The Budget-Mr. Cruickshank


Mr. HOMUTH:: When was that?


George Alexander Cruickshank: I must admit that I cannot conceive of anything capable of holding back the hon. member for Waterloo South (Mr. Homuth); he always comes through.
Just for a moment I wish to refer to the agricultural policy of the Progressive Conservative party. You know, Mr. Speaker, I am beginning to get a little muddled as to the right name of that party, though I always want

The Budget-Mr. Cruickshank
to be courteous and to describe it correctly. The other day, when I read .the newspaper, I did not know whether it should be called the Progressive Conservative party or the progressive "curling party". I should like to quote what St. James street has to say about our policy after the war, and St. James street cannot possibly be taken to represent either the Liberal party or the Cooperative Commonwealth Federation group. This quotation is from a publication called Trend, and I had better give the address as well. I do not know whether this is the home of the famous committee of 200, but the address is 291 St. James street, and this is what it says:
The secondary industries of Canada cannot do the job if the Canadian markets for their products are subject to free competition from the products of Great Britain, the United States . . .
Then a little further on:
If the domestic markets in Canada are to be denied to them, how can they hope to survive after the close of the war?
Then there is another paragraph, which I think is very apropos, following the speech of the financial critic of the Progressive Conservative party:
Is it not high time that those who direct Canadian industries should consider which trade and fiscal policies shall prevail in Canada after the war, and take a lively interest in their preparation and development?
In other words, according to St. James street big business must prepare at once to see to it that our tariffs are raised not against farm produce but rather against that which is necessary in order to produce it, such as farm machinery.
I am sorry the Minister of Finance is not in his seat at the moment, because it is many years since I have been so severely spanked, and I rather enjoyed it. I never got enough of it at school, I am told, though it seemed to me I got plenty. I wish to say to the minister that I resent being told that I cannot criticize the composition of some of these boards. I believe there are fifty-seven lawyers in this House of Commons; and I am willing to sit down now for ten minutes if one of those lawyers will rise in his place and say he would permit a dairy farmer to put a ceiling on the prices they may charge. That is the whole point; that is our whole argument when we insist that a practical agriculturist should set the ceilings on farm prices. Would it be reasonable to have a doctor setting the price of newsprint?


Karl Kenneth Homuth: Your party does not listen to you.


George Alexander Cruickshank: Well, my party already has the advantage of being composed of intelligent men, and I am trying to convert some of the rest of the hon. members. When I was a small boy I was asked why I was Liberal, if it was simply because my father was Liberal. I replied, "Frankly, yes," and any other small boy would say the same thing. But I would add that as soon as I was old enough to think for myself I naturally became a Liberal, because no one who does any thinking would be anything else, under the old two-party system.
I should now like to say a word in connection with the Pacific coast problem, particularly as it concerns British Columbia. Some of our hon. friends in the far comer to my left have advocated that we should not have moved the Japanese from the coast and in fact should move them back. They lose sight of the fact that at the present time Japan controls about one-quarter of the population of the entire world, and twice as many natural resources as the entire United States. Those hon. members must remember that we have not won this war as yet; that according to our own Prime Minister (Mr. Mackenzie King) and the Prime Minister of Great Britain we still have a long, hard battle ahead of us before we defeat Hitler, and then we have to turn round and defeat Japan. Naturally we are not admitting any doubt as to the ultimate result, but we are facing that problem. Nevertheless those people object to moving the Japanese out of British Columbia purely for defence reasons, and want us to take them back. I do not know why they want us to have the Japanese back, unless they think the Japanese should be given the vote in British Columbia, but I want to warn those people that Japan will be a tough nut to crack, and that British Columbia will be a tough nut to crack when the Japanese peace terms are drawn up, as far as bringing back the Japanese is concerned.
I wish to pay my respects to one hon. member from Saskatchewan. I have heard many hon. members from that province say in this house that they must be paid a bonus for not producing wheat. The other evening I listened with a great deal of interest to another hon. member repeating what we have been saying for two years, that when peace comes we cannot have too much wheat on hand. But the most charming speech of all was when another hon. member from Saskatchewan tried to claim that his province leads all others in social legislation. Coming from British Columbia, I could not quite take that. Even my hon. friends of the Cooperative Commonwealth Federation party will admit that British Columbia leads all the provinces in

The Budget-Mr. Cruickshank
social legislation, most of which was brought in when our present Minister of Pensions and National Health (Mr. Mackenzie) was a member of the provincial government, which speaks well for the social security we may get under this federal government. Ours was the first province to have the eight-hour day, and the minimum wage. Ours is the province paying the highest benefits to widows and mothers.
I should like to make it perfectly clear that my riding is absolutely in favour of any policy that will assist in preventing inflation, and we think we have demonstrated that. But we say to the minister, in all seriousness, as was said this afternoon, that in our opinion the best way to avoid upsetting the apple cart as far as inflation is concerned is to see.to it that the farmer is paid a reasonable return for what he produces, and he is not getting that to-day. If you do not want to have a feeling all across Canada which might upset the whole principle, agriculture must be treated better than it is being treated to-day. There is an hon. gentleman who comes from Ontario, and there is no more highly respected or better known member of this House of Commons. His father was born in Canada and is now eighty years of age, and while the hon. member is attending his duties in the House of Commons at Ottawa his father must milk the cows night and morning. In my opinion that is not good enough, and it is because we do not receive proper prices for farm products.
I wish to pay my respects to the Minister of Pensions and National Health, under whose department, I understand, the matter to which I now wish to refer comes. I do not think we can possibly put rehabilitation or reconstruction on an all-cmbracing scale into effect until after the war, and even then we can do so only in conjunction with the allied nations. I do not think it is feasible to do so until the end of the war, no matter what party is in power. This is something which in my opinion must be done internationally. But we may put a scheme of health insurance into effect. If we are sincere in our talk about social security, we will pass the enabling legislation before parliament prorogues or adjourns.
There is one further point to which we must give more attention. There reached me today from the secretary of the Union of British Columbia Municipalities a letter which should have appeal for every hon. member, particularly those from British Columbia. This organization represents eighty-five per cent of the people in that province. The letter deals with the treatment accorded our discharged
men from this war. I understand we give a man $27 to re-outfit himself with clothing, if he has served for six months, and $17 if he has served for less than six months. Those are the figures I have been given. The letter states that the amount is $20. This matter is sei'ious because a letter is enclosed which is being circularized throughout British Columbia. It deals with a matter which I say we must adjust, if we are sincere in our statements about social security. The letter is being circularized by the Salvation Army, one of the finest organizations in the land, either in this war or at the time of the last one. I shall not quote all of the letter, but I say the matter is serious enough for the minister's consideration, especially when it comes from an organization such as the Salvation Army. One paragraph of the circular letter reads:
Also, there is an increasing demand upon us for clothing to outfit discharged soldiers and return them to civilian life. The poor we still have with us, and many destitute families.
That is not a good enough condition, in this present day and age. We have nothing in this parliament to be proud of, and the Liberal government has nothing to be proud of if such a condition does exist; and in view of a letter such as this, coming from such a reputable organization, one must conclude that it does, exist.
I give the Minister of Finance and his board full credit. We know we do not have to pay the prices for boots and shoes that we had to pay after the last war. If I remember correctly, I received $35 to outfit myself when I came back, and my first pair of boots cost me $15, or almost half of the amount I received. Surely it is not the intention of the government to permit a condition to exist under which the Salvation Army or any other organization, must appeal to charity to outfit the men and women who are being discharged from our armed services.
Mr. Speaker, according to the clock I still have three and three-quarter minutes left to me. However, after listening (o the speeches of hon. members I have concluded that one gets tired of listening. Mr. Churchill spoke for only forty-five minutes, and he said more in three minutes than hon. members on this side of the house, including myself, could say in four days. And when I speak for myself I believe I can speak for all hon. members in the house. I have listened to and read their speeches, and I believe I am correct in what I say.
I do wish to impress upon the Department of Finance that any criticism we. may make is not made with the intention of breaking the system of war-time price levels. I

The Budget-Mr. Black (Yukon)
say, as did the leader of the opposition today, that the people in my constituency, as they have in the past, will carry their full share of the next victory loan. We will do what we have done in the past-something which has not been done by part of the rest of Canada-namely, carry more than our share of voluntary enlistments.


Mr. GEORGE BLACK (Yukon):: Mr. Speaker, although it is the duty of an opposition to offer deserved criticism and to make constructive suggestions, it seems to me it is only fair to recall that when in the fall of 1939 Canada declared war we were in no respect prepared for it. We had only a small army, woefully lacking in equipment. Our navy and our air force were negligible. We had no factories producing arms and ammunition, no shipyards building war ships, no factories building war planes.
To-day the picture has changed. We have an army, a navy and an air force. We have a fighting navy and a fighting air force of which we may be proud. They are doing their full share in the battles of the allied nations. Our army, with the exception of those poor fellows who were sent to Hong Kong and Dieppe, has seen no fighting. It is still in training in England, and here at home in Canada. But when the time comes for the Canadian army to go into battle, they can be depended upon to do their duty. We are turning out supplies ample for our own forces, and contributing quantities of armaments and food for our allies. That, in view of our small population, compared with the populations in allied countries, and in view of the limited wealth of the average Canadian, is an accomplishment of which I say we may well be proud.
Mistakes have been made, and doubtless are being made. In a country unprepared, unequipped and untrained for war, that was inevitable. However, little valid excuse can be offered for the unsatisfactory allocation or regimentation of Canada's man-power to cope with war-time needs. We are faced with a shortage of man-power in the lumber woods, in the sawmills and on the farms. We have a shortage of food produced by the farms because those farms have been stripped of man-power, the power they need and must have if they are to produce. Prices of farm products have been kept so low' by the government that farmers are unable to produce the needed foods. There is a shortage of beef and a shortage of butter. Why? Because beef cattle from Canada have been shipped in such quantities to foreign markets. On account of the shortage of farm labour, dairy farmers have been forced to send their milking herds 
to the slaughter houses. One has only to visit the farms in the Fraser Valley, that portion of Canada from which the hon. member for Fraser Valley (Mr. Cruickshank) who just preceded me comes, to learn the plight of the farmers there. There a dairy farmer gets for 100 pounds of Jersey milk, containing 4-07 pounds of butter fat-wonderfully rich milk- the paltry sum of SI.45. The consumer in Vancouver pays thirteen cents a quart for that milk, and for the 100 pounds he will pay $5.72. That represents a spread of S4.27 between the price received by the farmer and the amount paid by the consumer. That is too much. The farmer should get more and the middleman less.
Some hon. members, including some of the ministers, have been prone to boast of Canada's accomplishments in this war, compared with those of the last one. In the first three years of the last war Canada's army had made a fighting record which w7ill never die. Some hon. members and some of the ministers w'ere in that war. They know what they went through and what was accomplished in the field of battle. In this war Canada's army has still to make a record to equal that of the old Canadian expeditionary force. That Canada's army, still in training in England in this third year of the wrar, wTill make its record w'hen the time comes, I have not the slightest doubt.
When comparing Canada's production of war materials in this war with those of the last war the fact that Canada's population has materially increased in the interval, and that Canada's manufacturing industries have materially increased should not be lost sight of. The last great war was Canada's first experience in wrar. It was a new experience, and it was then that wre learned about war. When Canada declared war in 1939 we had the experience of the last war to guide us; we had learned how to go about war and war production. Canada's record in the last war was good, but in this war it is better in some respects and it should be better.
We see on posters and billboards the expression: "We are all in the front line." That was said by our king when speaking to the people of England, and it has been picked up here in Canada far from the front line and used to encourage enlistments and subscriptions to government loans. Let me give a brief description of what Britain had to face in the front line, after the evacuation of Dunkirk. Prime Minister Churchill disclosed that although Germany had thousands of tanks, Britain had fewer than one hundred, all of a type not able to stand up against German anti-tank guns. In July, 1940, Great Britain had only one fully equipped army division.

The Budget-Mr. Blade (Yukon)
In September, 1940, the Royal Air Force had only five fighters in reserve. Figures given in the publication Front Line show that in 1940 and 1941 no fewer than 43,667 civilians were killed in England and 50,387 were hospitalized as a result of air assaults.
In the first of the three large air attacks on London, that of July 16, 1941, 450 nazi bombers killed 1,000 persons and wounded as many more. Three nights later more than a thousand were killed. In the big attack on London on May 10, 1941, a total of 1,436 were killed and 1,792 injured by bombs from 500 hun planes. Attacks began on London in May, 1940. Every night for the first month they raided, and 5,730 were killed and 10,000 wounded. In September, 1940, the destruction of homes in Great Britain amounted to 40,000 to 50,000 weekly. By May, 1941, these figures had grown to 1,151,000 homes destroyed and
375,000	Londoners made homeless. That was being in the front line.
These figures give some idea of the stamina of the British people. They stood up against that alone and fought it out single-handed. None of her allies set up a second front to lessen the attacks on Great Britain. Russia did not come into the war until attacked' by Germany. The United States of America did not fight until attacked by Japan. Fortunately for the British commonwealth of nations those attacks were made, and Britain now has those grand allies, Russia and the United States, fighting by her side against the common enemies, Germany, Italy and Japan.
Recently some members of this house protested against some province or municipality in Canada barring Japanese children from its public schools. Before the war, in some of the schools of Vancouver a white child was a curiosity; the pupils were practically all Japanese. As I see it, that prohibition is just and right. Canada has no moral or other obligation to educate the children of her enemy. Before the war, the small fruit growing industry in the Fraser valley was practically a Japanese monopoly; they had literally frozen out the white man. Now that the Japs are gone, the white men are doing the growing. The fruit is being produced, and the Japs are not missed. We do not need them.	[DOT]
Before this war, the fishing on the coast of British Columbia was also practically a Japanese monopoly. They have been sent away, and white Canadian fishermen are catching the fish and supplying the markets. We can get along without the Japanese fishermen. All of the Japs are our enemies. If they are to be trusted, why have they
been evacuated from the coast areas? They were evacuated because we could not trust them. They were not evacuated for their own safety, they were evacuated for our safety from them. I say: feed them, house them, if necessary clothe them, but watch them and guard them until the time comes to deport them all from the continent of North America.
Speaking in this house as long ago as May 8, 1922, twenty-one years ago, along with other hon. members I advocated the expropriation of Japanese property in Canada at fair prices and their deportation from the country. Then we were not at war with Japan. To-day we are at war with Japan. They have attacked Canada, Australia and the United States. Therefore, I do not say, expropriate; I say, confiscate their property. It is enemy property; confiscate it and send them back whence they and their ancestors came. They are a menace to this country; there is no room for them on this continent.
During the past year we have heard much about the building of the Alaska highway. I have seen some of it built and have travelled over stretches of it. Canadians must not forget that it is being built and will be maintained throughout the war by the United States with United States money. The United States consider transportation through Canada to Alaska of sufficient importance to warrant them in building and financing the project. The Alaska highway is a good job, well done, but it is not a miracle. The route traverses no unexplored country. The builders had unlimited numbers of men, thousands of them, and unlimited quantities of the most up-to-date road building machinery known to man. They had all the money they required, and more. They had priorities on everything, on men and materials. To say that it was a bigger job than the building of the Panama canal is drawing a long bow. In our admiration for that project we should not lose sight of another project, a Canadian project known to comparatively few of the people of this country.
About forty years ago the government of Canada built a road in the Yukon over just such country as the Alaska highway traverses, from White Horse to Dawson. That road, about one-fifth the length of the Alaska highway, was built in one summer with a crew of not more than three hundred men, equipped not with power shovels, bull-dozers and giant graders but with ploughs drawn by horses and men equipped with picks and shovels. And very little money was available. By fall

The Budget-Mr. Black (Yukon)
the road was open for use. It was opened without the fanfare of trumpets, without any severing of ribbons with golden scissors. Like the Alaska highway, it was a good job well done. Until the advent of aeroplane transportation it was the only avenue in and out of the Yukon in the winter time. Thousands of tons of freight have been hauled over it, and thousands of people have made use of 'it. It is still in use.
I have no desire to belittle or make light of the task Qf building the Alaska highway. It is a splendid accomplishment, worthy of our admiration, worthy of the name "Alaska highway". It should not have to bear that disgustingly suggestive name of "Alcan highway". I realize that the word "Alcan" was intended by its inventors to make use of the first two letters in the word "Alaska" and the first three letters in "Canada". I am sure Canadians and, I hope, United States citizens as well dislike that ugly nickname and prefer to call that grand project what it is, a highway to Alaska, the Alaska highway. When the Prime Minister (Mr. Mackenzie King) announced that by agreement between Canada and the United States that road was to be built, knowing that country as I do and what it meant to Canada, I hastened to suggest to the parks branch of the Department of Mines and Resources, to the game commission of British Columbia, and to the government of Yukon, that efficient and prompt measures should be taken for the protection of game along the Canadian section of that highway. I am glad to know and to be able to tell the house that, at the instance of the Minister of Mines and Resources (Mr. Crerar), the government of Canada has created a national park and game reserve in that great area southwest of the Alaska highway. It is an area of 10,130 square miles, a veritable game paradise, a country too precious to be desecrated or destroyed. I compliment the minister and the government upon that wise action. It would be well for the government to continue that good work and to create a similar reserve in the Teslin lake area in Yukon, abounding as it does in game animals, game fish, birds, wonderful scenery and all that goes to make the great outdoors attractive. Care should be taken to protect the timber in both those areas, timber which preserves the moisture in the earth, prevents the drying up of streams and forms a sanctuary for animal and bird life.
In this debate some hon. members have referred to the matter of the old age pension, and the subject is referred to in one of the amendments now under discussion. I have received many communications from old age

pensioners and from their associations complaining as to the terms and the method of administration of the act. At the outset the dominion government and the provincial governments bore the cost of old age pensions equally. Then the federal government assumed payment of seventy-five per cent of the pension, leaving twenty-five per cent to be provided by the provinces, which were also to administer the act. In my opinion, the federal government should pay the whole cost, 100 per cent of the old age pension, and also administer the act, and the pension should be at least one dollar a day. Those who receive pensions should begin to receive it at the age of sixty. At present the full pension is only $20 a month. Who could live on that? And the amount cannot be had until the applicant reaches the age of seventy, reaches the end of the allotted span of life, three score years and ten. In other words, he ought to be dead before he gets the pension.
Further, the period of residence in any part of Canada should count for pension. At present, if an applicant for old age pension has resided for fifteen years in Yukon and then five years in a province of Canada and is qualified for pension, a pension of only $5 a month is granted. That applicant has resided for twenty years in two different parts of Canada, and for more than twenty years perhaps in many other parts of Canada. In Yukon it has not been in the interests of those who might receive the old age pension to invoke the terms of the act. Unfortunate people needing pensions are cared for there at an expense greatly in excess of the old age pension of $20 a month, which is the maximum pension payable. That is all to the good for people remaining in Yukon, but it is most unfair to old people who have lived most of their lives in that part of Canada called Yukon and then moved to a province of Canada in their old age. Their years of residence in Yukon, Canada, are not taken into account, and the time of residence in Canada begins to run only with the date of residence in a province of Canada.
Another unfairness in the administration of the Old Age Pensions Act is that the period of residence in Canada after application made for pension does not* count for pension. For instance, a person having resided for only five years in a part of Canada where the act is operative and being otherwise entitled to pension is given a pension of only $5 a month. Then, if the person continues to live, no matter for how long, in that part of Canada in which the act is operative, the pension is not increased*, whereas if the applicant had

The Budget-Mr. Black (Yukon)
waited until twenty years had elapsed before making application for pension he would get $20 a month.


Richard Burpee Hanson: He would be dead then.


George Black: He would have
reached the age of three score years and ten.
In all fairness I think the pension should be increased by SI a month for each year until the maximum is reached, and the maximum should not be less than $30 a month.
We read of all sorts of plans and schemes to make this old world a utopia after the war, a land of freedom from fear and freedom from want. Freedom from fear and freedom from want could be given immediately to thousands of unfortunate old people in this Dominion of Canada if this government is in earnest in wishing to bring about freedom from fear and freedom from want. A simple amendment to the Old Age Pensions Act introduced into this house at this session and put through, as I am sure it would be unanimously, would ensure to these old people freedom from fear and freedom from want. I would draw up a bill and introduce it into the house myself if that were possible, but under the rules of the house it would have to be introduced by a minister of the crown as a government measure. A private member could not introduce it. But I say to the government and to every one of the ministers that if they are serious in wanting to bring about freedom from fear and freedom from want to thousands of old people in this country, amend the pension act at this session. It could be very easily done, and I know the whole house would support it.
As I have said before in this house on a number of occasions, both at this session and at the previous session, the wage situation in Yukon is most unsatisfactory, due again to regulations passed by this government and administered by these regulatory boards and commissions.
This government has put a ceiling on wages that Canadian employers may pay and that their employees may receive. Foreign employers operating in Yukon are allowed to disregard that Canadian law, and they pay their employees working in Yukon much higher *wages than Canadian workmen receive, working side by side with them. The government of Canada has prohibited Canadian workmen in Yukon from earning those higher wages that foreign workmen receive in Yukon. I have said and repeat that in fairness to Canadian workmen, either the foreign employers should be compelled to comply with
Canadian laws while in Canada, or Canadian employers and employees should be allowed to pay and to receive as high wages as those paid and received in Yukon by foreign employers and employees.
To revert to the building of the Alaska highway, Yukon and the Atlin mining district of British Columbia are faced with a serious transportation problem. The operation of the railway from Skagway on the coast of Alaska to White Horse, the head of navigation on Yukon river, has been taken over under lease by the United States army. The operation of a mountain railway in the north in winter is no simple matter, and to be successful it must be handled by men trained in railway operation. Evidently the army men on that job have not been men with experience in operating railways, with the result that there has been and is a serious congestion of freight at Skagway. Thousands of tons of freight for the interior are piled on the docks at Skagway. Boats lie idle in the harbour waiting to discharge cargo for which there is no space on the docks. The population of Yukon has been unable to get supplies, as have also the people of the important mining camp of Atlin in British Columbia. Atlin being in the constituency of the hon. member for Skeena (Mr. Hanson), the hon. member will bear me out in that. He has been appealed to as I have. Protests have been of no avail. Civilians were promised four carloads of goods a day over the railwTay. In forty-nine days they received only four cars. Perishables imported in plenty of time to have been delivered by Christmas were left on the docks in Skagway to freeze and were delivered only late in January, ruined and unfit for use. Not only i3 the civilian population of Yukon suffering, but the Department of Transport for Canada has had the same experience. If some corrective action is not taken by those in authority in the United States and in Canada the present hopeless mess will by spring be infinitely worse.
The season of navigation on Yukon river is for only about four and a half months. The great bulk of that delayed freight will have to be handled by river boats, but with the tie-up on the railway-an unnecessary tie-up- the boats will be waiting at the docks for freight, and the summer will be gone.
When Brigadier-General J. A. O'Connor, officer commanding northwest service command of the United States army of occupation in southern Yukon, came to Ottawa last month to present to the Prime Minister one blade of the golden scissors used to cut the ribbon at the official opening of the Alaska highway, I had the pleasure of meeting him, which

The Budget-Mr. Black (Yukon)
opportunity I owe to the hospitality of the Minister of Pensions and National Health (Mr. Mackenzie).
I discussed with General O'Connor and his staff the transportation situation brought about by the operation of the railway by the United States army. He frankly agreed that conditions had been unsatisfactory and promised that action would be taken to bring about improvement.
Since then, a conference has been held between Canadians and Americans at Edmonton, and it is to be hoped some progress will result.
It is in fact an appalling situation that needs immediate remedy. I appeal to the government of Canada and, through it, to the government of the United States to take action without delay, action to bring order out of chaos, action in the common cause.
An international committee has now been set up to study economic conditions in Alaska, northern British Columbia and Yukon.
The Alaska highway will open up new country. I am informed that already properly equipped prospecting parties are planning to explore areas served by the highway.
I do not expect to see any marked increase in agriculture in. Yukon. Field and garden crops grow wonderfully well, but owing tc the remote situation, the long haul to city markets, it has not been practical to grow more than enough for local consumption.
Mining has been and, as I see it, will always be Yukon's lifeblood. The magnitude of known deposits of gold, silver, lead and zinc ensure long life to the production of those minerals.
Last fall the dominion government's geological survey party, headed by Dr. Hugh Bostock of Ottawa, uncovered several outcroppings of scheelite and tungsten ore. Development work by those who staked the prospect uncovered a twelve-foot vein running high in tungsten values. Further work on that and other veins should result in at least one producing mine.
Geologists pronounce the Mayo mining district of Yukon as highly mineralized and recommend it as a likely field to prospectors.
Just to show what effect the advent of the United States army and American people and the building of United States projects in Canada is having on some people, I might mention that recently I saw that some visionary-I hope I have used the correct description-in the legislature of British Columbia, regretting that Yukon had escaped annexation by British Columbia, proposed the creation

of an international state of America comprising all the area north of the 64th parallel of latitude in British Columbia, with Yukon and Alaska thrown in.
As a Canadian I hope such a sell-out will never be considered by Canada. Speaking for Yukon, I am confident its people want Yukon to remain Canadian.
Mrs. DO RISE W. NIELSEN (North Battle-ford) : The budget debate has been before the house now for many' days, and the range and variety of the discussion have been wide. I believe that the people of Canada, generally speaking, have accepted this war-time budget as a part of their responsibility, and I think that acceptance is an expression of their desire to see a speedy offensive taken. The whole world has been waiting for the great offensive of the allied powers, and the ordinary people of this country are willing to deny themselves greatly in the hope that that great offensive will come soon. The longer it is left, it is becoming more apparent, the more we shall be playing into the hands of the enemy, whose greatest desire from the beginning has been to isolate, to weaken and then to destroy the united nations one by one. Any leaving of the great offensive now will be just a continuation of appeasement and will most assuredly help Hitler rather than help us. If, as time goes on this spring, a concerted offensive of the united nations is not taken, there will, I believe, be widespread disappoint nent among the people of this country.
Listening to this debate, I have been able to agree with points of view expressed by hon. members on both sides. Since, however, I am in the fortunate position of being an independent member, without party ties upon me, I find that I am most concerned and intend, in this debate, to speak mostly about the budget in its relation to my own people.
To my constituents and, no doubt, to many Canadians all over the country, the astronomical figures given by the Minister of Finance (Mr. Ilsley) mean very little. The figures of Canada's income, her assets and her spending are so enormous as to be almost incomprehensible to the majority of people. From my part of the country the figures of income and of income tax returns will not be astronomical by any means. But without doubt there has been a slight rise in income among our farming people; very small, however, if it is compared with the rise in income in the industrial areas of the country. Especially when one considers the rise of income compared with rising costs of living, the excess of income is very small. I believe more of my people than ever before will be

The Budget-Mrs. Nielsen
paying income tax this year, but there will still be many hundreds of them who do not yet come within the income tax brackets.
In the northwest corner of Saskatchewan, in my part of the country, there is no city of any size. We have a number of fair-sized farms in the southern area, in quite long settled farming districts. Further north are the small farms, the rehabilitation areas and the homestead districts. All through that country there are business men, storekeepers and so on in the little towns and villages. Then we have the professional people, the teachers and doctors; and last, but of course not least, the government inspectors!
I am unfortunately unable to give exact numbers, for figures are not available, but without doubt hundreds of families have left my part of the country, families who, feeling that their contribution on the farms was not worth while owing to the fact that the farms were small and their resources also small, have moved either to the coast of British Columbia or to eastern Canada and there have taken part in industrial work.
Speaking generally, I should like to emphasize the difficulty in the computation of income tax on the farm. Farming people are subjected to sudden losses. They never know from one year to another what their returns will be. They have to contend with the weather, insect pests, sudden losses through disease of stock. All these things make it particularly difficult for a farmer to have what might be called an average income or to know from year to year what his income will be. In the submission made this year to the Prime Minister (Mr. Mackenzie King) by the Canadian federation of agriculture there was a section upon income tax which I should like to quote. It said:
As the provisions of the income tax have been widened, so as to make many farmers subject to it, many difficulties have been disclosed in applying the income tax equitably to farm income. We must commend the action of the government in setting up a special committee for the study of specific problems involved and feel that the work our representatives have been able to accomplish with that committee will prove to be of very considerable benefit. Continuing attention of administrative officials will be required to these agricultural problems. One fundamental principle requires legislation-
This is what I wish to emphasize:
the need for averaging agricultural income over a period of years for income tax purposes, which principle is quite essential to any fair application of the income tax because of the variability of farm income. We are aware that the act was amended at the last session of parliament to provide for setting off a loss incurred in 1942 against 1943 income. We recommend that the act be amended to make
that provision applicable to losses in 1941 as applicable to 1942, and establishing the general principle of averaging farm income over a period of more than two years.
I strongly support and urge other hon. members to support the principle embodied in that presentation. I believe that many of our farm people, when they realize that this government is willing to wait over a period of maybe some years for the balance of the 1942 income tax from those in the higher income brackets, will feel that the government could wait for a year or two also for an average computation of their income.
I believe also that more attention could be given to the question of the amount of depreciation allowed the farmers, not just for one year or even two. I believe all western members will support me in saying that western farmers have had to put up with the depreciation of a decade without receiving any real recognition of it.
There is another aspect of depreciation which I want particularly to bring before the house, namely, the question of human depreciation. This year we are asked for tremendous increases in food production, which will require on the part of our farm people almost superhuman effort. On most farms there are some machines, human machines, which have received absolutely no consideration. The machine to which I refer is commonly called by the farmers " the missus." Lack of hired help has in thousands of instances resulted in the farm wife having to take over and step into the breach left by the hired man and the casual help being called either into the armed forces or into industry.
Let me try to give some idea of what it has meant in the way of extra work for farm women this winter. It has meant that they have had to rise an hour or two earlier in the morning, getting up by lamplight, dressing in thick coats, socks, overshoes and mitts to go out into the darkness to milk the cows, then hurry back to the house to get breakfast for the children who go to school, afterwards bundling up again in all their clothing to go out looking after the poultry and feeding the calves and hogs. In addition they have their routine work to do which is usually much heavier than that of their city sisters. Baking and churning have to be looked after. In many instances their husbands have to be away during the day, perhaps cutting wood or doing other things that have to be done on the farm. This means that the women have to do all the chores. They have to get out in the afternoon again as the wintry day draws in to look after young stock, maybe chase the
The Budget-Mrs. Nielsen

stock because it so often happens that when the woman is left alone, the stock will get out of the stockyard into feed stacks. There is water to be brought from the well, often pulled by hand, without a pump, milking and separating, feeding the calves, and bedding the animals for the night. During the spring work when the man has to be out on the land the woman has to do all these things. Besides that, she will often have to get out on the tractor or drive the horses, and maybe act as midwife to the old sow. All these things come in the day's work.
During the last ten years farm women have received very little consideration. There has been so little to go around when it comes to sending off an order to the mail order house, that it was the children who had the clothing so that they could go to school, the husband who had warm clothing, too, and a new ploughshare, or maybe a new harness. All these things come before the needs of the mother of the family.
I suggest that when the farmer comes to fill out his income tax form he should do one of two things. First of all, if the farm wife is doing the work formerly done by a hired man, her husband should put down in the income tax form a claim for wages, quite substantial wages, for his wife.


Major James William Coldwell: And pay her the wages.


Mrs. NIELSEN:: Or, alternately, he should put down a substantial claim for depreciation of the very best piece of farm machinery a farmer has, a good wife.
It is the same with the farmer's daughters, they also are going without many things which they should have. Many of these girls have given up the last year or two of high school to stay at home and help on the farm. We have heard about the "forgotten man", but I want to bring to your attention, Mr. Speaker, the forgotten women of this country, the farm women, wives and daughters. Many of these girls would like to join the auxiliary forces, get in uniform, but they are forgoing these things and staying home on the farm and [DOT] getting absolutely nothing for it. Mention was made of this fact in the same brief from which I just quoted:
Due recognition is also required for the work of members of the farm family in producing farm income.
I am the only farm woman in this house. Were I to give to-night my whole forty minutes to the question of farm women, I still could not do them justice; I could not make clear the great debt which the people of the United Nations owe to the farm women

of Canada for carrying on. Listening this afternoon to the speech of the Minister of Munitions and Supply (Mr. Howe), I could not help noticing the difference between the assistance given to the large corporations of this country and that given to our farm people. Our farm people are most willing to pay their fair share-I wish to underline the word "fair". Taxation; yes, they are willing to accept taxation; they are not trying to dodge anything. They do want to know that they are contributing their share toward the winning of the war. But another matter that worries them is how they are to live not only through the war period but in the years to come after.
It is generally acknowledged, I think, that for at least a few years after the war is over we shall be needing supplies of food, breeding stock, seed and things of that kind which the farmers will be able to supply to the people of Europe. But that period will not last for so very long, and what then? What hopes or what knowledge of security have our farm people to go on, or what have they been given by way of definite assurance by this government? I would refer to one more section of the submission by the Canadian federation of agriculture, which I should like to impress upon hon. members. It is under the sub-heading, "Price Ceilings", and reads:
As pointed out to your government in our submission last year when the government decided to embark upon a price ceiling policy in Canada, it so happened that the base period which was selected was one in which agriculture was at a disadvantage, and the ceilings for some of our principal agricultural products were far too low. Some substantial price adjustments have been made, but agriculture has had to struggle with increased costs which have to a considerable extent offset the benefits of these adjustments. As we stated in our submission to the government last year, "'Canadian agriculture can contribute its full share to the national war effort only when prices of agricultural products bear a fair relation to the prices of industrial products the farmer lias to buy." We therefore reaffirm our position with respect to parity prices as expressed in last year's submission.
Our farming people are concerned with these things; they have to be, because they have known a struggle for existence during the last decade. I have no hesitation in saying that they fear the future. They fear the future if we should lose the war, yes; but still even if we win the war our farming people fear the future, unfortunately. The people of my own particular area are aware of the fact that they cannot look upon the future with any hope if agriculture continues on the same basis as in the past. The people of Saskatchewan are hoping that they, and particularly the boys who return, may have something

The Budget-Mrs. Nielsen
other than agriculture to which to turn. During these days we hear a great deal about the Alaska highway, of the new' vistas which it opens, the new enterprises which are being started, the prospective new cities which are to be built, all in northern Alberta and British Columbia. Unfortunately we do not hear anything about northern Saskatchewan. Only the other day I looked through the report issued by the government of Saskatchewan as to the natural resources of that province, and there I found very little mention of any new developments, though there was a ready acknowledgment of the very rich ore deposits of northern Saskatchewan. Some time ago, in fact in November, 1941, I came across a copy of the Canadian Mining Reporter published in the city of Toronto, containing a front page article with regard to big oil developments in our province. I should like to quote a portion of it:
The many farmers of the province of Saskatchewan who have suffered through the lean years of depression, drought and the other plagues of agricultural life, as well as the merchants, traders, and others for whom agriculture is the basic means of life are filled with new hope and high expectation to-day. The news first given in the columns of the Canadian ilintng Reporter in our last issue that the Bobjo mining interests have secured a reservation of between four and five thousand square miles and are now busily engaged in the search for oil in Saskatchewan has had electric effect, if one may judge by the follow-ups of our story appearing in Canadian daily papers. This story of Bobjo s far-seeing enterprise is not the most encouraging that might have been told. The fact that Imperial Oil Limited has been granted a reservation of one million acres by the Saskatchewan provincial government is of even greater significance, remembering the outstanding character of that company, its long and wide experience and its mastery of every scientific method in seeking oil.
In my opinion it was a most dastardly thing that the province of Saskatchewan should give a million acres of land to Imperial
Oil.	How much more in the interest of our people would it have been for the dominion government to supply the provincial government with funds so that the natural resources of that province might be retained for the benefit of its own people. While this article was published in November, 1941, even now in 1943 we hear little or nothing about the development of oil in northern Saskatchewan; yet had this been carried on as a national enterprise, we might now be producing oil there. How do we know when Imperial Oil will be ready to commence operations? In the meantime that vast resource, which should be used in the interests of the people of Saskatchewan, lies undeveloped.
The people of my province must find new uses for agricultural products, too. Chemurgy
must find new uses for farm products; industries must be opened up. Vast works programmes should be developed for Saskatchewan boys who will return when the war is over. We do not want any more reestablishment schemes up in that part of the country; we have tried them, and the people have no use for them. In addition to employing men as miners, men would be required as builders, construction workers, railway construction workers, and road builders. For some nine years now we have had the beginning of a railway through the Pierceland area to link up with that part of Saskatchewan and the city of Saskatoon with Edmonton, but that road runs to nowhere; it is unfinished. It is time developments of this kind were undertaken to link up the farming district of the north with the developments which will take place in Alberta and British Columbia. Think of what those developments could mean to the people of my part of Saskatchewan. Our farmers would be able to supply the miners and workers in that area with meat, eggs, butter, milk, fresh vegetables and so on-at parity prices, it must be remembered-and there would be markets for all the various products of the mixed farming area. The city of North Battleford itself, which does not happen to be within my own riding but which is the natural centre of that area, could very well have had this year a government-owned and operated abattoir and packing plant to take care of the vast numbers of cattle and hogs which are coming down from the north and many of which must now be diverted right through to Winnipeg, which means a loss to our farm population through shrinkage and in other ways.
After all, these people are making a great contribution. They will continue to make a great contribution, but they would like some security. The small town business men and storekeepers are also concerned, not only with the present but with the future. I have been receiving letters from numbers of them, pointing out the difference between the treatment accorded the small retailer in Britain and that meted out in this country, pointing out that the small retailer and the consumer in our widespread country areas are threatened today, and the need for their protection. I am in agreement with that, and I would urge the Minister of Finance (Mr. Ilsley) to see that the regulations of the wartime prices and trade board ensure that stores in these small towns and villages throughout western Canada receive their share of goods according to population needs, and not merely as the operation of commercial competition allows. There is a great need for the protection of the small
The Budget-Mrs. Nieben


Mr. COLD  WELL@: And no Easter bonnet?


Dorise Winifred Nielsen: No, and no Easter bonnet, either, because that type of person does not exist out there.


Mr. J. ALPHEE POIRIER (Bonaven-ture) (Translation):: Mr. Speaker, I have
no hesitation in stating that I intend voting with the government at the end of the budget debate. This budget, it is true, will mean an enormous burden for the Canadian taxpayers to shoulder, but

The Budget-Mr. Poirier
it will be borne for the most part, as it should be, by the richer citizens and let it be said to the credit of the government and of the Minister of Finance (Mr. Ilsley), that the working clas9, the agricultural class and the small taxpayer generally are in a position to pay the taxes which are being asked of them in order that we may win this war and that they ask nothing better than to contribute to this country's war effort providing their income is reasonable. Let us take the farmer group, for instance. The farmers in the province of Quebec generally are satisfied with the prices for farm products w'hich have been set by the wartime prices and trade board. Certain improvements might be possible, to be sure, as in the case of hog prices. Farmers claim they cannot raise hogs for sale at $17.50 per 100 pounds. A little good-will on the part of the board could easily remedy this situation. The price should be fixed at $22.50 to $23 per 100 pounds.
The price for butter at 35 cents on an average for the past twelve months is satisfactory, particularly if we add the summer bonus of 6 cents per pound and the winter bonus of 10 cents per pound of fat, which is paid by the federal government. I believe farmers in the province of Quebec find these prices quite satisfactory.
Another price which is reasonable is that of eggs, which has stood in my district at 25 to 45 cents per dozen since last August.
The same holds true of all other farm products. When I state that a price is reasonable, I mean a price which leaves a profit to the farmer and entails no undue hardship for the consumer. A fair balance must be struck and such is what is being achieved in most cases by the wartime prices and trade board.
Let us now examine what farmers and workingmen are paying for the principal foodstuffs they buy and compare with the prices which existed in 1917-18.
The hon. member for Laval-Two Mountains (Mr. Lacombe) stated in the house the other day that a price of $4 per 100 pounds is being paid for flour. This ini no way corresponds with prices recently published by the Federated Cooperative Society of Montreal. Bread flour is quoted per 100 pounds as follows: cooperative flour, first quality, $2.40; federated flour (choice bread patent), $2.15; nutrition flour (85 per cent whole wheat), $2.15.
Any farmer can buy directly from the Federated Cooperative. As you see, Mr. Speaker, some of those who criticize the government take advantage of your good faith and that of this house.
Let us remember that in 1917-18 flour was paid as high as $9 per 100 pounds and sugar up to $28 per 100 pounds. The retail price of sugar to-day, after three and a half years of war, is 8i cents a pound.
As for wheat and wheat products and feeds generally, I am of the opinion that, contrary to what the hon. member for Laval-Two Mountains has claimed, that prices are also very satisfactory.
On September 17 last the Federated Cooperative was offering wheat No. 5 in bulk at $1.28 per 100 pounds to Quebec and eastern Canada farmers and we know that the Canadian government pays freight charges from west to east on bran, shorts, middlings as well as on barley and oats.
Ground wheat sells to farmers for $2.10 per 100 pounds, ground barley for $2 per 100 pounds; plain dairy feed for $2.15 per 100 pounds; early chick mash, $2.95 per 100 pounds; growing chick mash, $2.60 per 100 pounds and laying mash, $2.60 per 100 pounds.
In most cases, these prices are even lower than pre-war prices and I feel that they are reasonable when compared with those which the farmer is getting for his products.
I have a suggestion to offer to the Department of Finance. In my constituency of Bonaventure, as in many rural constituencies of the province of Quebec, a large number of farmers' sons and of fishermen work in the bush during the winter, which is the slack season. The majority of these young men do not earn $750 in a year and therefore are not subject to income tax. However, in all cases, the tax is deducted at the source. I know that the government has announced in the newspapers that the tax thus collected will be refunded upon presentation of a claim, but when the individuals concerned ask for claim forms they get no answer, or else they are told that the forms are not yet printed. The government should have claim forms sent to all rural post offices and advertise that fact in the newspapers and through the radio.
May I be allowed to make a few more observations with special reference to the county of Bonaventure which I represent in this house?
During the present war my constituency has supplied approximately 2,500 men through voluntary enlistment to the three branches of our armed forces. Moreover, district No. 5 has called at least 1,000 draftees for military service in Bonaventure county, and we have nearly 1,000 men in the reserve army. This latter group of men is commanded by a hero of the great war, Colonel Dupuis, and is being trained in a very scientific and modern
The Budget-Mr. Poirier

manner. They are becoming more proficient in handling rifles and machine guns. You will see. Mr. Speaker, that they will defend Gaspesia if it is ever attacked. Bonaventure county has thus sent to date nearly 4,500 men to the three services of the Canadian armed forces out of a population of 42,000. I believe that about 40 per cent of the callable men in my county, who are 19 to 45 years old, have answered the call to arms. We have made this war contribution wholeheartedly and with a generosity that is not to be found everywhere.
We have given more than our share and I would call the attention of the authorities to the fact that it would be dangerous to ask much more of us in the circumstances.
I would point out to the Minister of Labour (Mr. Mitchell), who is in charge of the mobilization of recruits, that notwithstanding the facts which I have referred to and in spite of the instructions recently sent to the registrars of military district No. 5 by the deputy minister, Mr. MacNamara, they are still calling the farmers' and the fishermen's sons in Bonaventure county.
As I have said the sons of farmers and fishermen who are left are absolutely needed for farming and fishing, and, if a greater number of our boys are called for military service the national life of our section would be endangered. I beg of the minister to put a stop to the ill-advised zeal of the district No. 5 registrar who, living 500 miles away from Gaspesia, is not aware of the conditions which exist in our primary industries. We must absolutely keep the remaining farmers' and fishermen's sons if we are to harvest from our farms and our fisheries, and from our forests what our country expects of us. The registrar of district No. 5 should not ask so much of Bonaventure and Gaspe counties and a little .more of the other sections of his district.
Mr. Speaker, once again I say to the house: Bonaventure and Gaspe counties generally are not treated under the confederation pact as they should be. In this war, as in the great war, our boys were the first to enlist voluntarily in the Canadian forces; 300 young men from Gaspesia have either shed their blood at Hong Kong or are prisoners of war in that distant stronghold. Nevertheless, during the last fifty years, our excess population had to seek other skies to earn its living.
Notwithstanding a substantial natural increase, our population has been practically stationary for over fifty years, because our means of communication are inadequate, because our natural resources, our mines, our fisheries and our agriculture are not thoroughly

developed; we lack capital. I take this opportunity to invite Canadian or foreign investors alike to come and invest money in the Gaspe-sian area; they will find there people that are both hard-working and law-abiding.
As a first remedy for present conditions, I would ask the government to show more interest in our railway; one might hardly believe it, but our trains in Gaspesia are still rolling, in 1943, on 55-lb. rails. The road-bed needs ballast to withstand heavy war-time traffic, which could raise a much more urgent problem should the Gaspe region be subjected to enemy attack, and that is quite possible. I urge the Minister of Transport (Mr. Michaud) who, represents the neighbouring constituency of Restigouche, to give sympathetic consideration to this problem. After all, Mr. Speaker, I am not asking for any favour; our Gaspesian railroad is one of the very few sections of the Canadian National Railways that show profits each year, in spite of its poor condition; therefore it would be a paying proposition for the government.
As a second remedy to our abnormal situation, I would ask the Minister of Mines and Resources (Mr. Crerar) to have the Gaspesian subsoil seriously explored. We have oil fields as well as zinc and lead ores, and so forth. So far, researches have been entrusted to the Imperial Oil and the Standard Oil, who have the best possible reasons at the present time for leaving those Gaspesian oil-fields undeveloped ; of course, they have not struck oil nor will they do so as long as they see no benefit to be derived from it. I suggest that the Minister of Mines and Resources, in Ottawa, should have thorough surveys made and should take an interest in the development of the Bustejd mine and the Federal mine in Bonaventure county, and also in the development of oil fields of Gaspe county. This has often been asked for by my hon. friend, the member for Gaspe (Mr. Roy).
As a third remedy, I ask the Department of Fisheries to continue and increase the assistance granted these many years for the establishment of fishermen's cooperatives. Cooperatives wall be, essential to the Gaspesian fisheries after the war. If cooperatives survive, our fisheries will prosper. If cooperatives fail, our fisheries will gradually disappear. I suggest that the government double its $8,000 subsidy to the St. Anne social service toward setting up fishermen's cooperatives.
I also ask the Minister of Fisheries to provide for the production of herring oil and fishmeal. Huge quantities of herring oil are now required for war purposes. If only given the opportunity to market their product, Gaspe coast

The Budget-Mr. Poirier
fishermen can catch vast quantities of herring. The Nadeau Laboratories, of Montreal, which already have plants in the Gaspe peninsula for the extraction of cod liver oil, are prepared, with government assistance, to take up the extraction of herring oil. To this day, the Canadian government has not spent a single penny on war industries in my county. I feel we should have a small share of the huge sums that are being lavished on other districts.
Finally, as a fourth and last remedy, I suggest, with regard to farming, that the government cooperate more and more with the Quebec department of agriculture and colonization with a view to facilitating the establishment of farmers' sons in the Gaspesian areas of settlement. We hear about post-war immigration. I object and will steadfastly object to any immigration policy unless and until jobs have been provided for all Canadians and until all our returned men are established on the land or in industry.
' Our soldiers who are farmers' sons must be settled on farms after the war and this requires the full cooperation of the dominion and provincial governments. The federal government must assume a large share of the financing of this project. Why should it not do so instead of paying for the settlement of immigrants?
Befrn-e closing, Mr. Speaker, I should like to quote a few paragraphs of the remarkable speech delivered last February 25 in the Quebec provincial house by the Hon. Adelard Godbout, premier of my province. All who heard him on that occasion, Mr. Speaker, are agreed that he had never before reached loftier peaks of eloquence. I am proud, Mr. Speaker, of the premier of my province and it is my belief that, in these critical times, he faithfully represents the feelings of the average and enlightened section of the French-Canadian element. I believe furthermore that the Right Hon. Ernest Lapointe was well inspired in leaving him the mantle of leadership and that he is in all respects worthy of the great Liberal leaders who have governed Canada and the province of Quebec for nearly half a century. Here then are Mr. Godbout's closing words:
When we have formed an educated, cultured and strong youth, we shall be secure against many crises, adds the Premier. A deep understanding of public and social needs is essential to this end. We must strive for unity in the province and in Canada. We must not work under the delusion that we have all rights and no duties. We are called to live with the other provinces. Had God been an out-and-out racist we should still be Gentiles. Let us maintain our rights with tolerance and moderation. For the French Canadian I claim equal rights and I promise that, on national questions, my province will march side by side with the rest. We wish to cooperate with Ottawa for our own salvation and for no other reason.
During the present conflict, the Premier stated he would not utter a single word that might incite racial hatred in Canada. During this most critical period of our history, it is the duty of every good Canadian to remain silent at times. While our workers labour in the factories, while our farmers draw the maximum production from their lands, while our soldiers fight for us on the battlefields, no one has the right, for petty political purposes, to utter any statements that might lead others to consider French Canadians as cowards. French Canadians contribute to the war effort to a greater extent than any other nation, in view of the special circumstances in which they find themselves and in spite of the attacks levelled at them.
I am proud of my own people's war effort. It is for my fellow-citizens that I am fighting in public life.
Canada, stated the Hon. Mr. Godbout, is an autonomous country, but with a mixed population. If we were to tell French Canadians that they have rights without duties, and that they must live isolated from the rest of the population, we would simply be leading them to their doom. As long as I shall be Premier, the province of Quebec will grant equal rights to everyone of its citizens, this is my pledge. My government wishes that the weakest may enjoy a larger share of protection and happiness. We -want to be given as an example to the other provinces and to the whole world. But never shall we exert an influence in this world if we are to remain poor and that is why we want to form a young generation better educated and more patriotic. Then French Canadians wrill have nothing to fear from anyone.
My country is not Quebec alone, but Canada concluded the Premier. And as a field of endeavour for my sons I want not only Canada but the whole of America and that is why I have taken in this war the position to which I adhere to-day and to which I shall adhere still more firmly until victory is achieved.
These words, Mr. Speaker, might as well have fallen from the lips of Laurier instead of from those of Mr. Godbout. If to-day French Canada's war effort is realized by those around us, it is due, and it will be due especially when this war is over, to the Hon. Mr. Godbout, to Cardinal Villeneuve, and to those representatives of my province who in this house, where I have the privilege to speak, follow such leaders.
Mr. Speaker, with your permission I am pleased to congratulate the hon. lady member for Edmonton East (Mrs. Casselman) upon the gracious speech that she delivered the other day in French in this house. Our English-speaking fellow members cannot imagine how deeply we French Canadians feel those attentions from the majority just because we are the minority in this house. I wish to thank very much the hon. lady member and also to assure her that her name is now in all French-Canadian hearts.
Before I resume my seat, I am pleased to quote the opinion on our Prime Minister (Mr. REVISED EDITION
The Budget-Mr. Poirier

Mackenzie King) held by a newcomer to Canada, a man who came to Ottawa last January to represent the London Times, Mr. A. Inglis. In a long dispatch sent to his journal on February 10, he concluded in the following terms regarding our Prime Minister:
In spite of political acerbities arising from deep-rooted domestic and sectional problems, Canadian political thought is imbued with a spirited nationalism. The country is now well established as a distinct, self-contained constitutional entity, which found its fullest expression in Canada's independent declaration of war; and while British and French interests frequently run counter to one auother, geographical, historical, racial and economic factors have resulted in a synthesis that can only be described as Canadian.
It is his enunciation of this Canadianism that gives the Prime Minister, Mr. Mackenzie King, his dominating position in current Canadian politics. Long associated with Sir Wilfrid Laurier, he has taken to heart that statesman's dictum that the greatest task which a Canadian party leader can assume is to prevent a widening of the fissures between French and British Canada. The adherence to nationalism inherent in this belief enabled Mr. Mackenzie King to bring a united Canada into the war; and although domestic issues, particularly the plebiscite on conscription for overseas service, have disturbed that unity, they have not destroyed it. Canadians as a whole strongly endorse the policy of giving the fullest aid to the common cause and French Canadians, having agreed to conscription for home defence, are ready enough to defend their homeland, although they have their own ideas about the merits of conscription for overseas service. . . .
More might have been done by the government in power to convince the French Canadians of the need for conscription, but less would have been achieved in maintaining national unity had some one other than Mr. Mackenzie King' been Prime Minister when the conscription issue arose. Canadian politics rage round the Prime Minister with a vehemence which his public record scarcely deserves; for among his colleagues and opponents few are endowed with a political flair equal to his, and none possesses his qualities as a parliamentarian. The fact that he rather than his government is chosen as the target for political criticism only gives emphasis to the commanding position which he holds. . . .
His political shrewdness, his patient, prudent, and persistent efforts to harmonize racial differences, and his long service to his country in office, have certainly ripened his political attributes into a matured if unspectacular statesmanship, which has contributed notably to the allied cause, both in the home field and in the international arena. . . .
In the war against Hitlerism Mr. Churchill and Mr. Koosevelt have fired the imagination of the world by their genius as war leaders. Mr. Mackenzie_ King's leadership assumes a different form in response to a different problem. His leadership reflects an infinite capacity for taking pains to ensure that Canada will contribute in the fullest measure to the enemy's defeat and will play her distinctive part in designing a new world order.

Mr. EMMANUEL d'ANJOU (Rimouski): Mr. Speaker, the budget that is now before us is undoubtedly the most colossal and extravagant that has ever been brought down in the Canadian parliament. Obviously, a fit of imperialistic frenzy has seized the minds of the leaders of this administration. Such a state of mind, which is in keeping with our thoughtless and boundless participation in the present war, is verging upon hysterics. The country is being blindly but surely led to a most disastrous ruin. Our participation in the war, which we were told would be on a moderate scale, has become total and gives absolutely no consideration to the material and human resources of our nation.
Canada, with a population of 11,500,000, cannot afford to bear much longer the crushing burden laid on its shoulders by an antinational policy and the orgy of expenditure which we have witnessed especially since the election of March 26, 1940. To bankrupt the country is the order of the day for the out and out exponents of imperialism and the vultures of high finance. On the other hand, the greedy war profiteers loudly demand conscription in order to increase their scandalous profits and to further their shameful speculations. Such is their idea of patriotism and their way of serving Canada. They are little concerned with the blood being shed on the battlefields, provided they can under the guise of patriotism and devotion to the country, succeed in building up huge fortunes and gorge themselves while thousands of young Canadians are being killed in action for the defence of our so-called democracy. A great Canadian statesman said one day: "Patriotism is the last refuge of scoundrels". If I might paraphrase that statement, I should say that nowadays patriotism is the last refuge of shameless war profiteers.
In preparing his budget, the honourable the Minister of Finance (Mr. Ilsley) could have shown more concern for the plight of large families and lightened their tax burden. His duty was to afford them tax relief rather than crush them with new taxes. Large families are the greatest asset of- any nation and the surest factor of race survival. If certain European countries had understood that truth and especially if they had put it into practice, they would not at this time find themselves in the terrible situation where a low birth-rate has placed them. The figures of the 1941 census clearly show that large families are to be found especially in the province of Quebec. That province is therefore more affected than all the others by the budget now under discussion.

The Budget-Mr. d'Anjou
I urge our Minister of Finance to ponder the disastrous consequences that will follow the imposition of vexatious taxes on large families in this country and especially in the province of Quebec. I trust that after a close study, he will revise his budget so as to grant them a fairer treatment, more appropriate to their income and their capability to pay taxes.
The agricultural class to which we all owe so much from every point of view, should not be subjected to income tax. Its war eSort is already important and costly enough to justify exemption. With the greatest imperturbability, it is being drained of its manpower, when farmers' sons are sent to military training centres, although they have been solemnly promised exemption from military service. This unspeakable behaviour, creates for our good farmers such conditions that a number of them, feeling discouraged, leave the farms to which they are so dearly attached and on which they have worked so hard. There is no eight-hour day for the farmer. Often he labours through fifteen or even twenty hours. Rising with the sun, very often he retires long after it has completed its course. Among all our population, no other class is composed of such indefatigable and steady workers. The farmer therefore deserves, from every point of view, the greatest support and encouragement of the government and of all the hon. members of this house.
Mr. Speaker, I deem it my duty to call the attention of the government and the members or parliament to a question of such importance that our failure to consider it without delay and in such a manner as to settle it with all fairness, might have the most disastrous moral and physical consequences on the future of our country. I refer to the employment of young girls and married and widowed women in industrial plants and especially in war factories. The highest dignitaries of the church, the archbishops and bishops of the whole country, as well as the medical associations, have warned us of the dangerous conditions in which our Canadian women find themselves as a consequence of their employment in war plants. The importance and extent of this evil have roused our patriotic organizations, our agricultural societies, our young people's associations as well as a number of municipal and county corporations. The Prime Minister (Mr. Mackenzie King) and the Minister of Labour (Mr. Mitchell) have been swamped with messages of protest on the part of these various associations and public bodies. In view of this general outcry, it is the moral and imperious duty of the government to institute a thorough inquiry in 72537-95J
this matter by persons whose qualifications are generally recognized and who will be in a position to recommend the best possible means of remedying this deplorable situation. Following such an inquiry the government would be acting in the best national interests by implementing the recommendations submitted to them.
In support of what I have said against the employment of women in war plants, I wish to quote a few excerpts from a most timely article which an outstanding Jesuit, Father Alexandre Dugre has written on that grave problem under the caption "A plea on behalf of Canadian women". I quote:
There is a marriage that will never take place; that of the young lady who has ruined her health working in a munition plant in order to earn some money for the purchase of clothes with a view to getting married. After six months of slow poisoning, she is debilitated, sallow-complexioned, exhausted, underweight, incurable, and she has not one cent for medical treatment. She has been an habitual visitor at hospital dispensaries; her suitor no longer sees her, offended by her new manners that are too vulgar and the parish priest has heeded her despairing cry which she would direct at all Canadian women for the charitable purpose of warning them.
And further on;
Gullible girls will no longer believe the deceitful propaganda of newspapers who show smiling, well-dressed, elegant young ladies among shells, at work benches or tending greasy machines. Why, they dirty their faces like men, and it is uglier because least expected; that is not a proper environment for them. The gullible ones will learn that salaries are higher in Ontario than here for the same working hours and the same kind of labour; that the most dangerous work is done in Quebec; that the selective service which claims to offer a variety of jobs scarcely offers to our Freneh-Canadian women anything but munition work, reserving for others the good office work at a high salary; that if the services of women are always needed, it is because the number of women workers who leave their jobs brings up quite a problem; a plant must replace on an average 1,200 women every month, and there is a reason for that; that what has ruined the 'health of another woman in six weeks or six months will also ruin yours if you enter the grinding mill-
And further on:
To work at night, in .violation of the law, during eleven hours and a half, in draughty rooms, to go from overheated places to damp and cold halls, to handle powder which gives off noxious fumes and explodes unexpectedly, to carry heavy burdens which cause a fall of the stomach, to breath dust, the odour of rubber, of tobacco, of powder, of mercury, of banana oil paint, of chemicals that are a frequent cause of burns, that is all in the day's work. As regards explosions, fatal or otherwise, all are bound, under oath, to say absolutely nothing about them. As regards normal or shameful diseases, they are accounted for by the fact that certain prostitutes, shown to be positive,

The Budget-Mr. d'Anjou
and on the verge of being jailed, leave their slums and enter the shops where they continue to ply their trade, contaminating men as well as the conversations and the atmosphere.
And, further on:
Woman is neither the slave nor the queen of machinery; she is the queen of the home, the educator, the present or future governess of what is best and noblest in this world, of that for which we fight: the human brood.
And, to conclude:
If women must work, let it never be more than forty-eight hours a week, never at night when feasible, and let us organize the control and if need be, the isolation of germ carriers. Let us first employ the men, never the mothers, and ensure the physical and moral health of everyone. We could not be more accommodating.
In this war where we count so little, we put up with inconveniences, rationing and sacrifices. We supply the money, we give our sons, our blood. But we shall not sacrifice our women: it would mean setting ourselves back twenty centuries. That Hitler may be broken, some better means must be found than breaking up our homes by adding to the long roll of martyrs in the shops.
The eloquent argument of Reverend Father Dugre, on behalf of the Canadian woman, would surely deserve to be recorded in full.
Once more, I hope the government will realize the importance of this matter and act accordingly. Time presses and we must act without delay or hesitation.
Mr. Speaker, on behalf of the youth of my constituency, my province and the whole country, I urge in all possible earnestness, that the government grant an amnesty to all those who, for one reason or another, have failed to report for military training. Most of them meant no harm, but were rather ignorant of the law and the consequences of their neglect. I see no reason why the present government should be less generous, less magnanimous than the Union government of 1918.
At that time, I had the honour of representing Rimouski constituency in this house. Then, as now, the chase for defaulters was on as it is at present in my constituency. The Rimouski gaol was filled to capacity with so-called defaulters, who, for the greater part, were farmers' sons. On a visit I made to them, I promised to* have them freed. At the very beginning of the 1918 session, I insistently urged the government to free those unhappy victims of the heinous conscription act of 1917. I am proud, Mr. Speaker, to be able to state that I won my case. Indeed, one week later, the iron gates of the gaol at Rimouski were thrown wide open and all these young martyrs, these innocent victims of an infamous law, recovered their liberty and could breathe the air of freedom.

I hope, therefore, that the government will be generous and will grant an amnesty to all the young defaulters in my constituency and in the whole country.
During this debate, Mr. Speaker, many hon. members opposite, not immediately to your left, but rather in front of me, when our participation in the war was under discussion, never missed an opportunity of making comparisons and of saying that the province of Quebec was not doing its duty in this war. Mr. Speaker, I maintain that the contrary is true. In Rimouski county there is a military training centre where 1,300 young men are being trained at present. Most of them are farmers' sons who would be more useful on their father's farm putting in the crops, but they have answered the call willingly and they are undergoing military training like the others. The province of Quebec has no lesson to take from anybody. Its sons, particularly those who spring from the race of which I am proud, are neither cowards nor poltroons. During the last -war, two of my electors won the Victoria Cross on the field of action, the highest decoration which can be deserved by a soldier fighting for England: Jean Brillant and Joseph Keable, two gallant fighters, two heroes from Rimouski county. Again I say, Mr. Speaker, that the people of my constituency are neither cowards nor poltroons. The electors of the constituency of Rimouski are anxious to do their duty, but of their own free will, according to the promise made to them during the 1940 electoral campaign. They do not want compulsion; they do not want conscription. They want to act as free citizens and defend their country when the time comes, but not under compulsion nor especially by methods well known to everyone.
I deem it my duty, Mr. Speaker, to register a protest and to defend the province of Quebec against the attacks which are continually made against her in this house by those who contend that she does not do her duty. French Canadians from Rimouski, as well as from anywhere else in the province of Quebec, have not only freely provided soldiers for the defence of both Canada and Great Britain, but they have consistently taken an interest in war work, namely, in the Red Cross; in short, in every form of assistance they have been asked to give to those who are now fighting our battle. Therefore, I hope that certain hon. members-whether they come from the great province of Ontario or from other parts of Canada-who cannot say a word without criticizing the province of Quebec will pay

The Budget-Mr. Pouliot
heed to my words. As for me, I shall never tolerate anyone in this house to hurl abuse at and insult the province of Quebec and claim that it is not doing her share in the present war.
I have	but	a few more words	to	say,Mr. Speaker. I believe that, as always, I have frankly and fearlessly expressed my views to the house. I quite realize that my statements this evening may not please all the hon.	members	who are listening	to	me,nor those	who	are	smiling. Be it as	it	may,
I am here to do my duty and I mean to do it in all circumstances.
I was sent here to represent the county of Rimouski	as	a Liberal on the	one
condition that my party keep its pledges and promises. I therefore took the solemn engagement, before my electors, to denounce my own party in the house and occasionally to vote against it should it fail to keep the pledges it made to the country during the 1940 elections. And I have kept my word.
Mr. Speaker, I have not changed and I state this whether some of my hon. friends around me like to hear it or not. I do not mind. I am here as representative of Rimouski constituency to do my duty. I shall speak as I please, it is my own1 business and I care not what opinion others may have of me. Laugh who may, I do not mind. I am here to protect the interests of Rimouski constituency and I shall continue to fulfil that duty.
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): Mr. Deputy Speaker, I wish to tender you my most sincere congratulations on your appointment to the high position you now occupy. You have long been a member of this house, and you are quite popular among your colleagues. Allow me to use your mother tongue in stating, after many other fellow-members, the great esteem in which your colleagues hold you. For a time we entertained some fears about the choice that would be made by the government in the appointment of a deputy speaker. We have been reassured when we heard that the government had decided to appoint you. I have confidence in your uprightness, in your integrity, in your thorough knowledge of the rules of this house and especially in the courage with which you will enforce respect for the fine British parliamentary tradition that was completely overlooked for many years by your immediate predecessor in the discharge of the duties of your position. I tender you my best wishes. I congratulate you aps.in and I assure you that you enjoy
the confidence, the esteem and the consideration of your colleagues and that you can also rely on their cooperation.
This is a very important debate, Mr. Speaker, on the question that has been raised by my hon. friend the leader of the Cooperative Commonwealth Federation who is also the hon. member for Rosetown-Biggar (Mr. Coldwell). I remember the days in 1933 when I asked his group a large number of questions, most of which have not been answered. I do not question his sincerity. I believe he is just as sincere as was his predecessor as leader of that group, the late lamented Mr. Woods-worth, who is remembered by all as a faithful, devoted member of this house. I could say the same of the hon. gentleman who moved the subamendment, and of each of my colleagues in this house.
This subamendment consists of four paragraphs. The first is rather preliminary, but here is the policy of the Cooperative Commonwealth Federation group as enunciated in this subamendment:
. . . this house regrets the failure of the government to provide for the nationalization of the banking system so as to make possible the full utilization of the Bank of Canada for the financing of the war.
That is the first plank in their programme. Here is the second one:
and further this house regrets the failure of the government to provide for increases in the amounts paid to old age and blind pensioners, or to make adequate provisions for veterans of the last or the present war, or their widows and dependents.
With this I would agree to a certain extent. We are all willing to do what we can for those who suffer the calamity of being blind. We have every sympathy for the veterans who fought for this country in any war, whether on this or another continent; I make no exception in that regard. But in my opinion the law should be more elastic. It is within my knowledge that some people do not benefit from the provisions of the Old Age Pensions Act just because those in charge of that legislation think of the letter rather than of the spirit of the law. There are some people who are not totally blind, but who are blind in one eye and can hardly see with the other. If they can distinguish between light and darkness with one eye, they are not considered blind by the bureaucrats of the old age pension board. This is, of course, absurd. Such people should enjoy the benefits of that legislation.
The war veterans should be well looked after, but they should be looked after according to their experience and disposition to work.
The Budget-Mr. Pouliot

The dominion service has suffered to a large extent because a preference has been given indiscriminately to all veterans. So long as a man was a veteran, he was supposed to be qualified for nearly all jobs. This is absurd. I do not say that the state has no responsibility for those who return from war. They deserve the consideration and support of the state to a very large extent, but I do not see what service we are rendering a veteran, or what service we are rendering the state, by giving a man a job for which he is not qualified.
The third paragraph of the subamendment reads:
: ' l ,a"d further this house regrets the extent to which the government has vested the control 01 the Canadian economy in monopolistic industry and fananee.
I have something else to say with regard to the second wish expressed in that resolution. While it mentions the blind and the veterans, there is no mention at all of those who are at present unemployed and who receive no contribution from t-he unemployment insurance commission. This is absurd. We are told that everyone must help to accomplish a total war effort. I know many people who are willing to give every effort, but they have no opportunity to do so. It is hard for them to get work, and there are some of them who have no work to do. They receive no contribution from the state. They do not need any contribution, and they are not asking for it. They are in good health, and they are willing to work, provided they are given an opportunity to do so.
If we examine the subamendment carefully we must put together the first and third paragraphs, because evidently there is some connection between the full utilization of the Bank of Canada for the financing of the war, and the extent to which the government has vested control of the Canadian economy in monopolistic industry and finance. I remember the day when I suggested that the party should have a programme. I remember the day, too, when it was done, although I had no responsibility for the way in which it was done. At that time there was a suggestion for a Bank of Canada. Why? Because in other countries they had state banks. They have one in England-the old lady of Threadneedle street. In France they have *the Banque de France, controlled by the famous and notorious two hundred families. And in the United States-well, everyone knows about the banking system over there. There are national banks in many other coun-

tries, and we were told to ape what was done in those countries by making their system our own. The funny part about it is that Mr. Bennett stole the programme from the Liberal party and was responsible for the establishing of the Bank of Canada.
He got a governor, who was to have the humble salary of S30,000 a year, a man who was even greater because he recommended that the humble labourer should tighten his belt. This man, getting a salary of $30,000 a year, was to tell the humble labourer to tighten his belt. We laughed at him, and he never said it again. That man was R. B. Bennett's choice.
But that is not the reason why I am against the Bank of Canada. I was against it before the programme was stolen by Bennett. A good citizen wrote me from the place where James A. Robb was bom, and asked me why I said the other day that from 1924 until 1930 I supported my party because it supported my electors. The reason is obvious. Hon. members will remember that there was an election at the time, and they will also remember the platform of the Liberal party: "Vote for the Liberal party; it is reducing national debt and taxation." Therefore, in supporting such a party my constituents were paying less taxes, and the burden of the national debt was getting lower and lower.
I gave my support with joy, until the turn came, with the accession of Mr. Bennett to power. Then the Bank of Canada was established, and the Liberal party complained of the fact that Mr. Bennett had stolen one of the most valuable planks in its programme. The first thing done by the party, after Bennett left office, was to build a monument for the Bank of Canada, a very expensive building. Before that the Bank of Canada was in the Victoria building at the comer of O'Connor and Wellington streets. Afterwards it was moved to the sumptuous building it now occupies.
After that I was sorry to see the reserve that was kept in the east block, the building in which are the offices of the Prime Minister (Mr. Mackenzie King) and the Minister of Finance (Mr. Ilsley), and in which the council room is located, transferred from the vaults of that building to those in the new Bank of Canada building. I can see gold only at a distance. It was put in well screwed-down boxes, but I saw that each truck was accompanied by a detachment of the Royal Canadian Mounted Police. This backing of Canadian dollars was transferred to the Bank of Canada from a place where it was under the direct guard of the Minister of Finance. And, sir,

The Budget-Mr. Pouliot
I always thought when a guarantee to pay was given, such guarantee of payment was in the hands of the same person. But now, incredibly, it is the Bank of Canada which issues bank notes, and the guarantee is not at all in the hands of that bank. It is in the hands of an altogether different organization, namely, the foreign exchange control board. The guarantee is given by the Bank of Canada, but the reserve is in the hands of the foreign exchange control board. I speak from memory; perhaps something has been changed, because things are changed without knowledge of the members. However, I have been told that is the way in which it was done.
I read with care the speech on March 9 of the hon. member for Rosetown-Biggar, in which he said it was the belief of his party that the whole financial system should be a national system. I believe the same thing. But I remember, too, that on the coast, at Mont St. Michel in France there is a medieval monastery famous for its gothic architecture. Many visitors go there, but when they cross at low tide, the road is quite narrow, and they must not leave it or they will fall in the mud and be buried. That is how I understand things are at the present time. When we are in the wrong, should we proceed further, or should we come back to the right way and then continue?
My policy in matters of finance is that of Jim Robb. He never had a university education. He was a mill owner, a man who grew up under the shadow of Sir Wilfrid Laurier. He was a tr-ue friend of Sir Wilfrid Laurier. He had an unusual gift, that of common sense in business. I recommend to all members the reading of one of the most famous reports made by a parliamentary committee of this house. I think this committee sat in 1928, and Jim Robb was a member. It made a thorough study of the monetary and banking system. This report should be the corner-stone of all discussions and debates on banking. Why? Because the arguments advanced there are good and1 sound, because what was said before that committee was not said by schemers, by cranks, by doctors of every description, but by men of experience who had assumed the responsibility of being faithful guardians of the exchequer of this country.
I am delighted that the Minister of Finance has come into the chamber. He knows the personal regard I have for him because we have been friends since he has been a member of this house. Our relations have always been the most pleasant, and if at times I say
things that may be hard to digest, I do not say them to hurt him. The subamendment is illogical. It states:
. . . and further this house regrets the extent to which the government has vested the control of the Canadian economy in monopolistic industry and finance.
They also want a full utilization of the Bank of Canada. So long as the Bank of Canada is in the hands of those who control it at the present time, it will serve no useful purpose. My humble view is that we should change the heads of the Bank of Canada, rather suppress it and come back to the time when the Minister of Finance was responsible to the house for the financial policy of the government. That is the true British form of government. That was the policy of Fielding, Sir Thomas White and all the other great ministers of finance. I am sure that if the present Minister of Finance were given an opportunity to continue the traditions of Fielding and Sir Thomas AVhite, he would do quite well.
In these days of irresponsibility everyone tries to pass the buck to someone else. The office of the comptroller of the treasury was created in. a moment of bad humour. Mr. Bennett found that he could not stand his own self and he said, "We will do that." He was for centralization, and it was also decided to establish the Bank of Canada. This was also the Liberal policy for a time, but for me the real Liberal policy is the policy of ministerial responsibility. How can a minister say that he is responsible to the House of Commons when I am denied information about the trips of the doorman of the Bank of Canada around the world with R. B. Bennett? The government objected to giving that; the Prime Minister rose to protest against my receiving that information.
How can we do anything about it? What do we know about the number of employees of the Bank of Canada? There is no bridge between parliament and the Bank of Canada. There is no bridge between parliament and the foreign exchange control board. They are mysterious organizations. They may be good or they may be bad, but we do not have the satisfaction of being informed on what is going on behind closed doors. I protest against that as strongly as possible.
My policy is not to give life to new organizations; it is to cut them short. If Graham Towers has nothing else to do, put him on relief and1 give him a taste of that. We should get rid of all these people of the Bank of Canada. Get rid also of the foreign exchange control board, and place the responsibility of carrying out these regulations upon the
The Budget-Mr. Pouliot

shoulders of the Minister of Finance. He may choose whom he likes as his staff, but he will have to inform us about what is going on, and what help he has, and give us their names, functions, salaries, travelling expenses paid and so on.
I do not question the honesty of these people, but the fact is that the only man who has been fired from the Department of Finance was a man who stole some bonds years ago and was put in gaol. That is the only occurrence I know of where anyone has been put out of the service. They are all there, and the number grows larger and larger. Where and when will it come to an end?
Who is the member of parliament who can speak with knowledge of the policies of the Bank of Canada except from what we know by hearsay from the minister himself? Where is the member of the House of Commons who has any intimate knowledge of the working of the Bank of Canada Act and all the other regulations in connection with the bank, which we do not receive half the time? All we have is a meagre report from the Bank of Canada. But what do we know of the regulations of the foreign exchange control board? They were published in two volumes in a shapeless form -fortunately an index was supplied later- but who has ever read them and understood them?
There is another reason why I am against the proposal of my hon. friends. It is because their main policy is that which was advocated by Mr. Woodsworth in years gone by. That is the policy they enunciate now and have been doing in years gone by. They are against profit. I quote the words of the hon. member for Rosetown-Biggar, leader of the Cooperative Commonwealth Federation, as reported at page 1109 of Hansard of March 9. He said:
However, the unfortunate factor is that in normal times the main stimulus to economic activity is not defence of the nation or the good of the community, but the making of profit. To my mind that motive is wrong.
When a man works hard for a few dollars a day, lives within his means and succeeds in saving perhaps a dollar or two each day, and then puts it in a bank or buys insurance with it, that is a profit, and it is a legitimate profit. What is wrong, Mr. Speaker, is for my hon. friends to think of profit as always being an extravagant profit. I know there are extravagant profits; I know there are schemers of every description; I know that very well. But I would not say that is true of the majority of the Canadian people. I believe that the majority of the Canadian people from coast to coast are honest people who can compare
[Mr Pouliot.]
favourably with those of any other nation in the world, and they live on profit.
Moreover, where does taxation come from if not from profit? And if there is no profit where will you get your taxation? That is a question I put in 1933 to the Cooperative Commonwealth Federation. I put it again in 1934, and it has not yet been answered. It cannot be answered very easily. And how will they run their scheme if nobody makes any profit and if no taxes are paid? I wonder if there is any member of the Cooperative Commonwealth Federation, however brilliant he may be, who can answer that question.
And then, with no profit, and therefore no taxation, they are for the Marsh report which will cost two billion dollars a year. Where will they get the money to put it into effect? It is incredible; it is illogical, and that is one reason why I shall be bound to vote against the subamendment.
There is something else. Money is not only a medium. It may be a medium at times. Money is an accessory to a principal transaction which is barter. That is how money or currency, or stones in the stone age, has always been considered since the beginning of the world. A man would bargain a camel for two sheep, and he would pay the difference in stones.


Mr. DEPUTY SPEAKER:: Since the
Minister of Finance (Mr. Ilsley) has an announcement to make, perhaps the hon. member will adjourn the debate.
' On motion of Mr. Pouliot the debate was adjourned.



BUDGET AMENDMENT


James Lorimer Ilsley: Mr. Speaker, I intended to inform the house this afternoon that when the budget resolutions were before us I would move an amendment affecting the rate of postage on postcards, making it three cents instead of two cents.. I think I stated in the budget speech that the rate on postcards would not be affected, but after consultation with the Post Office Department I find that to leave the matter in that position would affect existing and proper differentials, and therefore I propose to make an amendment. The Post Office Department is obliged to make certain preparations, which unfortunately became public before I had an opportunity of informing the house, but I am taking the opportunity of doing so now.


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

Questions
Wednesday, March 24, 1943