Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, on a question of privilege: I have just been presiding over a meeting of the coordinating committee of the dominion-provincial conference and have left its proceedings in order to make a statement to the house immediately in respect to a very misleading article which appears in the Ottawa morning Journal of to-day. The entire membership of the conference took strong exception to this article and desired that I should make a statement to the House of Commons . on behalf of all who are present at the conference.
The article is entitled: "Cabinet clash complicates conference. No announcements made after second session." It reads:
When the coordinating committee of the dominion-provincial conference reached the end of another session last night with no public announcements from Prime Minister King, it was confirmed by some of those leaving the chamber that two paramount issues seemed to be complicating deliberations.
They were:
1.	Reports confirmed by several provincial premiers of disagreement among Prime Minister King and two of his colleagues;
2.	Determination, not unexpected, of the nine provincial premiers to make not the slightest retreat from their stand on provincial rights.
A little further on in the article it says:
On the point of disagreement among the dominion ministers, it was described by the provincial men as "a clash".
May I say that all provincial premiers and all members of the dominion government who were present at the conference are united in saying that, they know nothing of a clash having taken place between myself and any of my colleagues. As a matter of fact there has been nothing of the kind. I make that statement emphatically. May I add that there has been nothing that I am aware of, and that I think any of the premiers on the coordinating committee are aware of, which has in any way complicated the proceedings that have been, 47696-163J
I am happy to say, going forward so amicably and splendidly since the opening of the conference.
I am authorized to make this statement by the entire group that are to-day discussing these dominion-provincial questions, and discussing them, I think, in an exceptionally able and amicable manner.
Until the committee of the conference concludes its proceedings no statement will be given out. When a statement is given out it is one that will be approved by the entire conference. I hope, therefore, that so far as the public of Canada are concerned they will draw their inferences with respect to the proceedings of the conference from the official statement which may be issued by the conference itself when it has concluded its proceedings.



BANKING AND COMMERCE


[Stage Direction]
Mr. HUGHES CLEAVER (Halton) presented the first report of the standing committee on banking and commerce, and moved that the report be concurred in.
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): Mr. Speaker, before this report is concurred in, I have just a few words to say as a suggestion for the work of the committee. At the time the gifts were made to the United Kingdom there were bonds and other assets held in London as a guarantee, to the extent of a formidable amount-$700,000,000, I think. Some obligations, stocks and bonds, were brought back to Canada, but those that were most profitable were kept over there. Our guarantee was that the British government would not let them out except to return to Canada. There were some railway bonds, Eno's Fruit Salts, et cetera, et cetera, and many other paying propositions, but the most profitable were kept there. At a certain moment, to my great surprise'-
Mr. MACKENZIE:: On a point of order-


Mr. POULIOT:: I ask the minister if he will please sit down, because I am strictly in order.


Ian Alistair Mackenzie: On a point of order, Mr. Speaker, this motion can be moved only with the unanimous consent of the house,

Banking and Commerce
because the report of the committee was received only a few minutes ago. If there is not unanimous consent I propose that consideration of the motion foe left to the proper time.


Jean-François Pouliot: Sir, the minister cannot
say that, because the mover of the motion was the member for Halton. I do not see why I am interrupted. The interruption could have come after I got through. I had the floor, and the minister could rise only on. a point of order to interrupt my speech-


Ian Alistair Mackenzie: The question is not debatable.


Jean-François Pouliot: -and to ask that the discussion be postponed.


Mr. SPEAKER:: I understand1 that the
motion made by the member for Halton (Mr. Cleaver) is withdrawn for the time being. There is therefore nothing before the house for debate.


Jean-François Pouliot: The hon. member did not say he withdrew his motion, and therefore I am still in order and the minister has no right to interfere while I am speaking, because I am in order except on a point of order.


Ian Alistair Mackenzie: I was speaking to a point of order. This motion cannot be put to the house except with unanimous consent. I understand that there are comments, and therefore the motion should foe subject to the ordinary rules of procedure.


Jean-François Pouliot: My contention is that the matter I was stating is more important than-


James Horace King: There is nothing before the house and I would ask the hon. member for Temiscouata to resume his seat.
Motion stands.



PRIVATE BILLS


[Stage Direction]
Bill No. 177, to incorporate Canada Health and Accident Assurance Corporation.-Mr. Breithaupt.
Bill No. 179, for the relief of Samuel Gardner Bradford.-Mr. Whitman.
Bill No. 180, for the relief of Olive May Marks Sanderson.-Mr. Boucher.
Bill No. 181, for the relief of Marie Regina Elaine Arcand Dorval.-Mr. Brown.

Bill No. 182, for the relief of Joan Frances Timms Couture.-Mr. Brown.
Bill No. 183, for the relief of Edith Louise Boutilier Snow.-Mr. Maybank.
Bill No. 184, for the relief of Cyril James Morgan.-Mr. Maybank.
Bill No. 185, for the relief of Joseph Adolphe Aime Berthiaume.-Mr. Maybank.
Bill No. 186, for the relief of Molly Shuster-man Peroher.-Mr. Maybank.

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

Mr. PROBE:: With respect to-
(a)	the military personnel on strength os of September 1, 1945, at Canadian military headquarters (overseas), at National Defence headquarters and at the headquarters of each Canadian military district;
(b)	to the naval personnel on strength as of September 1, 1945, at Canadian naval headquarters (overseas), at National Defence headquarters and at the headquarters of each naval command in Canada;
(c)	to the air force personnel on strength as of September 1, 1945, Canadian air headquarters (overseas), at National Defence headquarters and at the headquarters of each air command in Canada;
1.	What was the total number on strength in each rank of the service?
2.	How many in each of the services for each rank included in (1) above, originated in each of Canada's military districts, ait commands and naval commands?


John Oliver Probe: I was informed by the parliamentary assistant to the Minister of National Defence that there would be considerable difficulty getting the information asked for, and therefore we have agreed to revise the question to change .the date of report from September 1, 1645, to December 1, 1945. Then too the second part of the question will read:
How many in each of the services of field rank (army) or equivalent rank for naval and air services, included in (1) above, originated in each of Canada's military districts, etc.
Otherwise the question remains the same.


Ian Alistair Mackenzie: To be answered as revised.

Questions


WARTIME PRICES AND TRADE BOARD-DIRECTOR OF LICENCES
Mr. BROOKS:: 1.	Who is the preseat director of licences for the wartime prices and trade board?
2.	(a) What are his qualifications for the appointment; (b) is he a naturalized British subject?
3.	Is the present incumbent a veteran of either great wars?
4.	What is the amount of salary paid for this position?


Mr. MAYHEW:: 1.	Frederick W. Kuhns.
2.	(a) Fifty years service with the Metropolitan Life Assurance Company, retiring as agency superintendent for Canada, (b) No; he was born in the United States of America.
3.	No.
4.	Mr. F. W. Kuhns receives an honorarium of $2,000 per annum for his services with the wartime prices and trade board.



FARM IMPROVEMENT LOANS ACT

Mr. REID:: How many loans have been made under the Farm Improvement Loans Act and what are the total amounts loaned (a) by each chartered bank; (b) in each province?


Mr. MAYHEW:: (a) The Royal Bank of
Canada		1,245	$998,570.31
The Canadian Bank of		
Commerce	1,129	836,626.93Bank of Montreal	417	353,385.71Imperial Bank of Canada..	294	270,492.75The Bank of Nova Scotia..	192	162,455.85The Bank of Toronto	197	137,884.83Banque Canadienne Nationale 123	95,828.47The Dominion Bank 	71	54,778.97La Banque Provinciale	du Canada 	1	1,200.003,669	$2,911,223.82(b) Alberta	
1	,335	$1,056,879.42Saskatchewan 	836	698,527.52Maintoba	664	474,559.59Ontario	507	454,365.61Quebec 	136	96,209.75British Columbia ...	110	77,317.83New Brunswick	29	26,437.20Nova Scotia 	35	20,698.40Prince Edward Island.	17	6,228.50
3,669 $2,911,223.S2
The figures in (a) and (b) above are as at October 31, 1945.
MOTOR VEHICLES^-SUBSIDIES


Mr. FRASER:: 1.	Are subsidies being paid under the new government procedure for establishing retail prices on new motor vehicles?
2.	If so, to whom are they paid?
3.	On what date did this new price procedure, come into force?


Mr. MAYHEW:: 1.	No.
2.	Answered by No. 1.
3.	November 19, 1945.



CIVIL SERVICE-SUPERANNUATION

Mr. REID:: 1.	During the past ten years, how many former civil servants with less than ten years service have had refunded superannuation moneys paid by them?
2.	What are their names, in what department were they employed and what amount was paid to each?


Thomas Reid: The information having been, made available to me, I would ask that the question be dropped.
Question dropped.
QUESTIONS PASSED AS ORDERS FOR RETURNS	[DOT]



REHABILITATION PROGRAMME-WOMEN

Mrs. STRUM:: 1.	How many applications for rehabilitation grants have been made in Canada by women of the armed forces?
2.	How many applications have been granted to unmarried women?
3.	How many applications have been refused unmarried women?
4.	How many applications have been granted women who have married members of the armed forces or veterans of this war?
5.	How many applications have been refused women who have married members of the armed forces or veterans of this war?
6.	How many applications for rehabilitation have been granted women members of the services who have married civilians?
7.	How many applications for rehabilitation' have been refused women members of the services who have married civilians?
8.	How many applications for farm land in Saskatchewan have been registered by veterans under the Veterans' Land Act?
Meat Rationing

9. How many granted?	applications	have	been10. How many rejected?	applications	have	been



LEASE OF GUELPH BUILDING FROM JOSEPH WOLFHAN

[Stage Direction]
' Mr. MENARY:
1.	Did the government lease a building in the city of Guelph from Joseph Wolfhan?
2.	If so, what were the terms of the lease?
3.	Was the building used for storage?
4.	If so, what was stored in the building?
5.	Did this building collapse?
6.	If so, were the goods in storage a total loss?
7.	If not, what goods were salvaged?

Mr. POULIOT:: 1.	Who are graduates of Oxford university in (a) the Department of Finance; (b) the Department of External Affairs?
2.	What are the occupation and salary of each one?



MOTIONS FOR PAPERS


Mr. ROSE:: For a copy of .all correspondence passing between.the federal government or any department thereof and the Ontario provincial government, the United Automobile Workers, C.I.O. local 200 and the Ford Motor company, relating to the Ford strike.


Mr. MITCHELL:: Return tabled.



MEAT RATIONING


[Stage Direction]
On the orders of the day:
Mr. JOHN BRACKEN (Leader of the Opposition):: I have a question which I wish to direct to the Prime Minister. In his absence perhaps the acting leader of the government would bring it to his attention to be answered at an early opportunity. Will the Prime Minister, either to-day or at an early sitting, lay on the table of the house copies of any recent exchange of communications that he or the government may have had with the President or the government of the United States on the subject of rationing?

Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): I shall be pleased to direct the question to the attention of the Prime Minister at once, and possibly he may be able to answer it later this day.


William Lyon Mackenzie King: Mr. Speaker, may I have the permission of the house to make a statement with regard to a question asked this morning. I was not in the house this morning when the leader of the opposition asked about a letter I had sent to the President of the United States suggesting the desirability of consultation between our two governments before a final decision was made in the United States on the discontinuance of meat rationing. I was not aware of the considerations which compelled immediate action by the United States authorities, and had prepared a message to the President on the assumption that it might be possible to arrange for further discussion on this very complex and difficult problem.
As I explained in my statement to the house on Friday afternoon, 'there are fundamental differences between the problems of control confronting a' country like the United States which normally exports some five per cent of its meat production and those in a country like Canada where thirty per cent to forty per cent of output finds its way into export markets. Both governments have made commitments to allied and liberated countries where the average level of food consumption is very much lower than on this continent. Both countries are determined to carry out these promises, though methods and arrangements by which they implement them will naturally differ.
Since my suggestion to the President was, in fact, received too late for consideration, and since the position of our own government was made clear to the house at the first opportunity, I do not think there is any purpose in my taking up at this stage with President Truman the question of our making public the actual texts of the messages exchanged.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Humphrey Mitchell: On Monday of this week, in
reply to a question by the hon. member for Winnipeg North (Mr. Stewart), I stated that

Supply-Agriculture
the publishers of two Winnipeg newspapers had
applied to the Manitoba wartime labour relations board for permission to prosecute a union for alleged violation of the wartime labour relations regulations, P.C. 1003. Although this information was conveyed to my department by our Winnipeg office on Friday of last week, I am now advised that no such application has been made to the Manitoba board.

On the order:
House again in committee of supply (the message of His Excellency with estimates, referred)-The Minister of Finance.
Mr. JEAN-FRANCOIS POULIOT (Temiscouata)': Mr. Speaker, before the house goes into supply I rise to a point of order. I have no objection whatever to the house reverting to motions so that the hon. member for Halton (Mr. Cleaver) may move his motion again.


James Horace King: Order. Moved by Mr. Mackenzie, seconded by Mr. Bertrand (Laurier) that I do now leave the chair for the house to resolve itself into committee of supply to consider a certain resolution. Is it the pleasure of the house to adopt the motion?


Some hon. MEMBERS:: Carried.


James Horace King: Carried.


Jean-François Pouliot: I rise again to a question of order; when there is nothing else before the house there is a question of order-


James Horace King: Order. I am sorry, but I put the question before the house and the house answered "Carried"; so I am leaving the chair.
Motion agreed to and the house went into committee of supply, Mr. Macdonald (Brantford City) in the chair.



DEPARTMENT OP AGRICULTURE

[Stage Direction]
Departmental administration, $136,035.
Mr. ROSS (Souris):: I thought the Minister was going to make a statement before this vote carried.


Mr. BRYCE:: Mr. Chairman, I wish to
speak on the first item, because as the committee knows from past experience, I am apt
to get astray. Before I address my remarks to the Minister of Agriculture, as a westerner, I feel very much annoyed at the remarks made last night by the hon. member for Renfrew North (Mr. Warren). He talked about wheat at twenty-five cents a bushel, then later he talked about ten cents a bushel. I did' not think that an hon. member who claims to be a farmer would make a statement of that kind in the House of Commons. I am delighted that the hon. member is in his seat to hear what I have to say. It costs us money to produce wheat on the western prairies. The hon. member also spoke about those large farmers. Well, if he takes a look at me he will see what a small farmer from the western prairies looks like.


Mr. WARREN:: I rise to a point of order. I do not want the hon. member to put words in my mouth. If he is intimating or insinuating that I was recommending those prices, I wish to correct him.


James Arthur Ross: The hon. member said it would be all right; that is all.


William Scottie Bryce: the acre. Does my hon. friend not know that in some places we have to summer-fallow for two years to keep down the weeds?
Since I have come to this house I have never on any occasion raised any barrier between the east and the west, because the problems of the east and' the problems of the west are entirely different. The Minister of Agriculture has perhaps done a good job in trying to satisfy everybody. The member for Renfrew North talked about the Prairie Farm Assistance Act. Does he not know that we pay for that? We pay for it under the most vicious tax in the Dominion of Canada. We pay half a cent on every bushel of grain that is put in the elevators.


Mr. GARDINER:: One per cent.


William Scottie Bryce: One per cent. It is the most vicious tax in the dominion to-day. We say all sorts of hard things about the Minister of Finance, but he always let us take our expenses out first. In this case you have to pay that tax on your gross bushels, the dockage included. Do not forget it.
The hon. member talked about the Prairie Farm Rehabilitation Act and the conversation he had with a young man on the train. Does he not know that that act was made necessary by a mistake of the dominion government which allowed men to' settle on land that should never have been settled? That is costing the dominion something like 52,000,000 ' a year. The hon. gentleman did not mention that, Mr. phairman; and I want to be sure he listens to what I am Stbout to say. The dominion government has spent $60,000,000 in the eastern provinces in two years, paying subsidies on feed and freight and so on. We do not grumble about that; if they are entitled to it and if it is for the good of the Canadian economy we. are all for it. But we do not want to hear these petty grievances; we do not want to hear talk about men who left the1 east. I am one of those who left perhaps the finest country in the world, and I do not need to tell any of you where that was; but I would not give Canada for all Scotland to-day, because I have made my home and raised my family here, and I am going to stay. These young men and women who left Ontario to go west only did what was done by the people of the British isles, Iceland and the European countries, who have made Canada what she is to-day. They are building this country of ours. It may be true that our economy has allowed Ontario to prosper on the fruits of the labour of the western farmer, but that will not go on forever.
fMr. Bryce.]
Then during the course of his remarks the hon. member said that the people were' not thinking, or not thinking right. I believe their thinking is more nearly right to-day than ever before. I do not want to go on like this indefinitely, but I must say I am surprised to find that when the hon. member for Renfrew North is requested by his own constituents to bring a certain resolution before' the House of Commons, it is left to me to do it for him. I am going to read a resolution passed by the live stock association of Eganville. Some time ago I proposed in the house a resolution concerning the establishment of a board of live stock commissioners. Right in my hon. friend's constituency we have people who want the very same thing, but he does not have the courage of his convictions to place their views before the house.


The CHAIRMAN:: Order. That is hardly parliamentary. The hon. member should not make that statement.


William Scottie Bryce: I am only too pleased to withdraw, it, Mr. Chairman, but you cannot keep me from thinking it.


Ralph Melville Warren: I have no objection, Mr. Chairman; let the hon. member go ahead.


William Scottie Bryce: Let me read the resolution passed by the Egamville live stock association:
The following resolution was passed at a meeting of the live stock association of Eganville held August 29, 1945.
A resolution was passed that all packers would only be permitted to buy on the open markets; that is the packing plants that are situated at open markets.
Also that there should be no , other establishments opened up to handle the surplus stock (as a case, the William Davies Company).
That two graders should be appointed for each market.
That the present situation should be gone into thoroughly.
And relief given at once.
That the undersigned are hereby appointed to act on this committee and that a royal investigation be made to go into this matter in detail.
Signed
Jaimes S. Dempsey, M.L.A. Max Berman (Chairman) R. M. Warren, M.P.
Lloyd Leech Gordon McCormick Allan Donohue.
At a meeting of the farmers' livestock association which was held in the town hall in the village of Eganville on the fourteenth day of November, 1945, the following resolution was passed.

Supply-Agriculture
A resolution was passed to bring present resolution to House of Commons through our local member or opposition.
And I think I am in the opposition.


Ralph Melville Warren: If the bon. member will permit a question, in his experience has he never discovered that very often a member of parliament can get better results by working outside the House of Commons?


James Garfield Gardiner: May I ask the hon.
gentleman to read again the section of the resolution with regard to the Davies Company? I think he put in '"no" where it should not be.


William Scottie Bryce: 
James Garfield Gardiner: That report of the conversation. is just as far out as the way my hon. friend read the resolution m the first place. It was just the opposite.


William Scottie Bryce: Oh, well, I am just reading the letter.
The packers' strike was mentioned and Mr. Gardiner said he was satisfied with the protest we sent to the union. The strike should not take place between now and December 15.
I will take just a couple of minutes longer, Mr. Chairman, to ask the minister a question. When he replies I should like him to tell us if anything has been done to protect our cattle market to the south. During the war I refrained from saying very much about it. From speaking to the minister and to other people I know in the government service, I know the position well. The Minister of Reconstruction said the other night that the government policy had been one of protecting export markets. I believe that statement was made in connection with lumber, when it was pointed out that we had sent overseas about forty or fifty per cent of our cut. I am wondering what protection there is, or what arrangements the minister through his department has made for the continuation of those 297,000 head of cattle to the United States in the four quarters, which were a boon to western farmers.
I have given a good deal of thought to the overseas market, and sometimes I wonder if we shall be able to hold it. We see the magnificent progress Denmark is making in retaining her bacon market. Realizing that ws are so far away from the market, we must understand that we shall find it difficult to compete, even if we produce the same grades as they do. My belief is that our bacon is just as good as that of Denmark. The difficulty is that Denmark is prepared to take so much in exchange from Great Britain which we shall not be able to take.
A couple of years ago when Lord Delaware was in the city of Quebec he was asked about our retaining the British market, and his reply was, "Well, what will you take from us?" We have developed great numbers of mechanics. We do not want to buy engines or bicycles from Great Britain. But if we expect them to take our cattle and hogs we must be prepared to buy from them. The Argentine can produce cattle more economically and of just as good quality as we can. It costs the western farmer just as much to ship his beef from Calgary to Montreal as it costs the Argentine farmer to ship to Smithfield, Liverpool, or Glasgow. We are up against a difficult problem.

Supply-A griculture

The Minister of Agriculture has been good enough to give me information concerning experiments carried out before the war, and problems with which the department was confronted. I do not know for certain, but it is my belief that our best, grades should go as good feeders to Great Britain, live, to be put on pasture over there for perhaps six weeks and to be sold as home grown beef. Perhaps in that way we will obtain a more remunerative market than we would by selling dressed beef, because when it reaches the- Smithfield market it will still be chilled t>eef and will not command the home price. I would ask the minister to comment on these points when he answers some other questions which have been asked.
I should like again to draw the minister's attention tt>
the general trend in all government publications and experimental farms toward spreading the belief that the right and proper way to grade cattle is on the rail. That is the problem we shall be up against in the near future. I have always opposed rail grading of hogs, not because it is not the right way to grade hogs, but because it has been definitely in the hands of the packers. However this morning I do not wish to take up the time of the committee in expressing my views in detail. The rail grading of hogs is all right, but the difficulty is that it is so definitely 'in the hands of the - packers. I can see, too, the thin end of the wedge in connection with the rail grading of beef. The arguments in favour of it are good, but I suggest that we shall be met with the same difficulty.
I have tried to have the government consider the formation of a board of live stock commissioners. There are many people in western Canada who do not hold my views; they do not want to socialize everything that I do. But I am offering the government a half-way measure to which everyone would be agreeable. The minister would have eighty per cent of the farmers behind him if he were to set u,p a board of live stock commissioners. If he does not give them that, then they are going to ask for the nationalization of the packing industry; there is -nothing else for it. The farmer will not continue to take the trimming he has had to take in the past.
Speaking of cattle sold on the hoof, I say that what is twelve cents on Monday should be twelve cents on Tuesday. Maybe at the end of the week it is ten cents. There must be a solution of this, and I hope the minister has it. I assure him I believe that a board of live stock commissioners would solve the problem.

In the minister's concluding remarks he said that the establishment of a board would be illegal. I am sure, though, that a man with the minister's ability could make it legal, if he wanted to.


James Garfield Gardiner: I said that somebody had said it was illegal. I did not say it was. I am not a constitutional authority on the law.


William Scottie Bryce: Oh, but I am pretty sure the minister does not apeak without knowing his grounds. He would not leave himself open in that way. I plead with the Minister of Agriculture to consider my suggestion, because if he does not, the whole of western Canada will be asking for the nationalization of the packing industry. If it is not done, then we shall continue to take a trimming in the markets. Under present circumstances we leave a hog at the packer's gate and we never see it again; we just accept the cheque they send us. I see the hon. member for Renfrew North looking at me. He will understand I am not complaining because I am not making money, but rather because we have not the right system to make everyone happy.


Ian Alistair Mackenzie: With the consent of my colleague I should like to make one observation. I wonder if the committee would declare this battle of Bannockburn between the hon. member for Selkirk and the hon. member for Renfrew North a draw, so that we might proceed wtih .the business of the committee.


Mr. QUELCH:: I have one or two questions I should like to ask the minister. We have heard a good deal of discussion about the purchase of horses in western Canada. The minister pointed out that these horses had been purchased first from the drought areas, on account of a shortage of feed. He is well aware, of course, that in certain parts of the west we have suffered crop failures for three years. Apparently the hon. member for Renfrew North does not realize that situation. I must say I was not surprised to hear the type of speech he made last night, because it was typical of practically every speech he has made in the house since coming here. Each session he has driven the broken-down buggy around the house, and has suggested that the farmers of western Canada should be satisfied with the same kind of rig. Apparently the buggy of the hon. member for Brant broke down at the last election.
I was amazed when the hon. member for Renfrew North stated yesterday that he had seen some wonderful crops of wheat in western

Sup-ply-A gricul ture
Canada, and that even if the farmers received only ten cents a bushel they would receive lots of money. Who would get that money? Certainly not the farmers.


Ralph Melville Warren: I said that even at ten cents a bushel for that amount of grain they would have a lot of money-not "lots of money."
Mr. QUEL/CH: I will accept the hon. member's explanation. If they received ten cents per bushel it would mean a lot of money, but who would have received that money? Certainly not the farmers. Surely *the hon. member is not suggesting that a grain grower can produce wheat at ten cents per bushel and have one cent left over.


Ralph Melville Warren: I should like to correct the hon. member.


Victor Quelch: I think the hon. member should correct his speech.


Ralph Melville Warren: If the hon. member will read my speech he will see that in no single instance was I advocating any such prices. I was attempting to denounce .the constant grumbling of western members of parliament that I have listened to for so many years.


Victor Quelch: I would point out that so long as we have members spreading false ideas regarding western Canada, such as the hon. member has spread, then there will be complaints in western Canada. Early in the fall the government advertised throughout western Canada advising the farmers to ship their cattle as early as possible because there would probably be a heavy run on the market in October and November. I think the government were well advised in doing that, especially in those areas where there was a shortage of feed. Unfortunately in many parts of the drought area a serious situation has developed because farmers miscalculated. As the minister knows, winter came on quite early; snow came in October, and farmers had to start feeding in that month whereas they ordinarily would not have to start feeding until the first of the month. As a result of this situation a serious shortage of feed, has developed in those areas. The farmers are finding it difficult, as the government prophesied, to dispose of their cattle at this time.
I should like to ask the minister what their survey shows the situation to be in the drought areas of Alberta and Saskatchewan. I should like to know how great the shortage of feed will be, how. much feed will have to be shipped into those areas, or on the other hand how much stock will have to be shipped out in order to avoid a heavy loss of cattle.
47696-164i
I realize that this situation is dealt with jointly by the provincial and federal governments, but no doubt the minister has a clear picture of the whole situation.


Mr. BLACKMORE:: Before this battle of Bannockburn is ended, I should like to say just a word or two with respect to the whole situation, arising partly from the unwise remarks of the hon. member for Calgary West (Mr. Smith). The other night that gentleman did Alberta and the west a greater disservice than any man coming from western Canada has ever done since I came' to this house in 1935. He conveyed the idea that conditions in the west were far better than they actually are. The hon. member named the finest area in Alberta as an example of one in which men were not broke, but he chose to overlook entirely the area surrounding Medicine Hat, where drought conditions prevail so frequently, and he overlooked entirely the area the hon. member for Acadia represents and many other areas in Alberta where crop failures are almost common. If the hon. member had informed himself better concerning conditions in Alberta and the west generally before rushing into Hansard with a speech which would mislead men like the hon. member for Renfrew North, it would have been much better for everybody from the west.
Incidentally let me point out to the hon. member for Renfrew North-I think he had me in mind as one of the' grumblers-that since I came here I have endeavoured to set forth the true conditions in the west.
There are three things which should be considered before attempting to form a correct estimate of conditions in the west. The first is the freight rate situation. If the hon. member has listened to what has been said by members from the west he will have heard that discussed many times. When the hon. member can explain why in the Dominion of Canada a condition obtains under which a man can put one hundred pounds of barbed wire on the train at Montreal and ship it to Vancouver for seventy-five cents, but when he takes that hundred pounds of wire off at Edmonton he has to pay $1.98, he will be doing something to explain the painful incidence of a situation such as this on the agricultural communities of Manitoba, Saskatche-. wan and Alberta. He will then be in a far better position to be fair in his judgment of the wmst. This adverse freight situation is one of the greatest grievances we have in the west, and no amount of comment, no amount of complaint, no amount.of pleading which western members can bring to bear on the men
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in Ottawa, can cause the slightest deviation from the destructive policy which has obtained in this country for generations.
This is a situation which literally bleeds the farmers of the west to death. Not only do they suffer from the adverse freight rate on freight shipped out to the west; they suffer from an adverse freight rate on freight which they ship to the east. Evidence can be brought to show that through the freight rate structure the provinces of Ontario and Quebec have erected a tariff wall against the products of the secondary industries which are based on agricultural products and are located in western Canada. This is a condition which cries to high heaven, but do you think that all the members from the west pleading about this matter can even phase the men from Ontario and Quebec? Up to the present time it has been utterly impossible even to get ourselves heard at all. There is a situation which the hon. member for Renfrew North, being a public spirited man-I give him credit for that-should give close attention to; certainly before he makes any remark such as he made last night he should carefully weigh these things.
There is another serious matter. The tariff incidence is a scandal. The tariff has been arranged so that it protects the producers of Ontario and Quebec and militates against the producers in every other one of the seven provinces of Canada, both east and west.


Mr. LALONDE:: You did not say anything about the maritimes.


John Horne Blackmore: I said all the other provinces, east or west. The situation is just as serious for the maritimes as it is for the west. The maritimes are unable to have their voice heard in the slightest degree. Let me illustrate by giving some figures from memory, although I think my recollection is correct. In one of the thirties, I believe 1931, an investigation was carried on under the direction of the late Hon. Norman McLeod Rogers, who was minister of labour in the federal government from 1935 until he became minister of national defence snd later lost his life. The discoveries of that investigation were to the effect that Alberta paid $19,000,000 per year in enhanced prices arising out of the tariff more than she obtained by way of protection. In the same year Saskatchewan paid $25,000,000 per year more in enhanced prices than she obtained by way of protection through the tariff. At the same time the producers of Ontario received protection to the extent of $51,000,000 a year more than they paid, and th^ producers of the province of Quebec received protection to the extent

of $31,000,000 a year more than they paid. Now this is a situation which I am sure even the hon. member for Renfrew North will recognize as being iniquitous, a situation which should have been taken care of long ago. Has even the slightest attention been given to the matter by the people in charge of the government of Canada? Not the slightest bit; and, generally speaking, when members from the west rise and begin to talk they are accused' of "whining" and all that sort of thing, just, as the hon. member did last night; or, hon. members for Ontario and Quebec just get up and "hulk" out of the house, and, leave the members from the west or the members from the east to talk. The time must come and come very soon when more attention shall be given to equity throughout this country than has been given to it up to the present time.
Another exxceedingly serious matter-it has been referred to by the hon. member for Selkirk-is the matter of the Palliser triangle. Many hon. members in the house at the present time are new here. For their sakes let me point out that in western Canada there is a vast area of country included in what is called the Palliser triangle. This whole area receives from year to year too little moisture to enable the producer there to produce on a basis which will guarantee anything like security of tenure on the land. This situation was pointed out by Palliser many years ago. He said in a report to t-he government of those days that it would be unwise to permit settlement to take place on any extensive scale within the Palliser triangle. Now, the Palliser triangle includes such areas as, for example, the Medicine Hat and Acadia districts andl considerable parts of Saskatchewan and Manitoba. Notwithstanding the advice which was given-and it was sound advice-the dominion government authorities permitted settlers to come in in vast numbers and settle over those areas without knowing what conditions they were running into. In those areas you will find, probably, that one year there will be sufficient rainfall, and you might think you had come to paradise itself. The next year you will perhaps find that the whole country is just a dust-bowl. -Crop failures will go on as long as, say, three years, and then will come a good year, with crops such as the hon. member for Renfrew North saw, and people will say, "surely it must be little short of a paradise1; they are rolling in wealth." But if the hon. member had stayed there three or four years, or had lived in these districts over a period of fifteen years, he would know a good deal more about conditions in the west.

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Coming back to the question of settling this area, the dominion government allowed people to settle all over the region of the Palliser triangle; in, fact, they encouraged them with examples of glowing propaganda, inviting them to come to Canada, and picturing the conditions in the good years, until people settled there by the tens of thousands. What happened? Very soon these people needed, roads, schools, telephones and many other services. All of these cost money. Who had to bear the expense of building the roads, of establishing and maintaining the schools, or erecting the telephone lines? The provincial governments. The dominion government brought people in here and settled them on the land, thus building up an impossible problem for 'the provincial governments, and then backed gracefully out of the picture, and under the inspiration of such men as the hon. member for Renfrew North, whose lack of information regarding the whole situation is colossal, they began immediately to accuse the provinces of poor management; they wondered1 why they went into debt, and all that sort of thing.
That condition still exists. Not only was the settlement of the Palliser triangle a colossal blunder at the time; not only did it constitute an insupportable burden on the shoulders of the provinces of Saskatchewan and Alberta particularly, but other settlement problems resulted from dominion policy. One of these arose out of the plan under which the dominion granted the Canadian Pacific Railway company and the Hudson's Bay company vast stretches of country selected by them wherever they chose to select it. It did not matter a particle whether communities were established alongside the areas selected -by the Hudson's Bay company and the CfP.R. The whole settlement of the country was spread out over a wide area, rendering it necessary to build far more miles of railroad, to erect far more lines of telephones, to establish far more schools for the children: in widely settled areas, and, more recently, far more costly health and dental services. All this has constituted a drain on the provincial authorities of which hon. members from Ontario and Quebec have not remotely dreamed. But these prairie provinces are expected to stand up under the strain, and they are condemned because they falter or stagger under this insupportable burden.	.
Now, when hon. members get up in the house and inform the hon. member for Renfrew North and other members form Ontario and Quebec, in the vain hope that probably some day attention will be paid to their problems and redress will be made, these members
have to Stand under the condemnation of sweeping remarks such as we had to endure here last night. That is a condition which I certainly hope will not be revealed in the house again. Then we have had the hon. member for Calgary West come down and in a short speech convey an absolutely false impression of the whole set-up. Not a word did the hon. member say about the freight rate structure, although he must know it exists. Not a word did he say about the adverse tariff, although he must know it exists. Not a word did he undertake to say about the Palliser triangle and all the evils which have resulted in the west from that situation. He simply left all the people throughout Canada open to the misinterpretation and misinformation which would naturally result from speeches such as the hon. member for Renfrew North gave.
I do not desire to occupy any more of the time of the committee just now, but I felt that I should have been remiss, in my duty to western Canada, remiss in my duty to Ontario and Quebec, which do not desire that there shall be inequity in this country, and remiss in my duty to all other parts of Canada, if I omitted to rise and make clear to some extent the situation which obtains in Canada, as a result of which this condition of inequity has arisen as between the various provinces of this great dominion.


Mr. McKAY:: Mr. Chairman, I do not propose to enter 'this battle, which might be known as another battle of Bannockburn. The hon. member for Selkirk (Mr. Bryce) acquitted himself, I think, very well, and does not need my assistance. But I have a few observations to make, and nobody in this chamber will accuse me of taking very much of the time of the house, because I have made but one speech since I arrived here. Being a new member, I thought probably I was well advised not to say too much at the beginning; I have learned a good deal since I arrived, and, having been a student all my life, I feel satisfied that some of what I have learned was good. .
I want to refer particularly to a remark made by the hon. member for Grey North (Mr. Cake) in his speech yesterday, when he said he deplored the drift of the young people from the farms. I heartily agree with what the hon. member for Grey North stated on that occasion. There is a very serious drift in this country from rural areas to urban centres, and it has been going on for decades. I am particularly concerned about the young folk, and I feel, with him, some apprehension that our whole economy is being gravely disturbed through the number of young people who are
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leaving farm life and are going into urban centres to seek a living. It is not a satisfactory state of affairs, and there must be some definite reason for it.
Away back in 1871, according to the Canada Year Book, 80-42 per cent of our people lived in rural areas and only 19-58 in urban centres. Forty years later, in 1911, 54-58 peT cent lived in rural areas and 45~42 per cent in urban areas. In 1941, the last figures I have been able to obtain, ,we find that situation reversed, and now we have more people living in urban areas than in rural. In rural areas in 1941 there were 45-66 per cent and in urban areas 54-34. Everyone knows that since the war that drift has been definitely accelerated and it is not, as the hon. member suggested, due to the fact that labour conditions are better in the city than on the farms. That is not the whole reason. We know that power machinery on our farms is now lessening the hours of labour. I agree with all those who say that the hours of labour are still too long on the farm. But the fundamental reason, as I see it, is that farming is still on the whole unprofitable andi unattractive. That is borne out by the fact that although we have 450,000 discharged from the armed services, the director of the Department of Veterans Affairs, who is -in charge of the administration of the Veterans' Land Act, te-lls us that the greatest number of applications for farm land they can anticipate by the end of 1946 is 14,276, and by 1946 I suggest the bulk of our overseas personnel will be back home and discharged. That is much less than after the last war. Under the old soldier settlement act we settled 25,000 veterans, but we have not for-gottsn that of those 25,000 soldier settlers, owing largely to the vicissitudes of farm life, 13,000 abandoned their projects. They did not abandon those projects without some reason; they did- so because life on the farm was neither profitable nor attractive. That is the main reason. Farming must be made profitable, and I would commend the minister for anything he has done to set floor prices under farm products, regardless of what they are, whether wheat, butter, or any other farm product. I suggest that -while floor prices are all very well as far as they go, they do not go far enough, for the good reason that as long as farmers have to pay exorbitant prices for clothing, fuel or machinery, it stands to * reason that floor prices will not solve their problems. Floor prices did not solve their problems in 1934, because, of course, they did not exist then under the Conservative administration. According to the report submitted by the Rowell commission, at page 175, the farmer in that year was receiving $18 a head for his

cattle in Saskatchewan, 17 cents a pound for butter, 1(H cents a dozen for eggs, 61^ cents per bushel for wheat. I submit that $1 or S1.25 per bushel for wheat will be inadequate if the farmer still has to pay exorbitant prices as the result of tariffs or freight rates or monopoly control of most of the things he must buy.
Power farming to-day is most common east and west. The farmer owns a tractor, a truck, a combine and a plow. According to .the cartel report submitted in this house recently we know that monopolies exist. We are not talking about something that is not wholly familiar to most of the people of Canada. And the excessive prices that the farmer pays for many of the goods he purchases to-day are not due to labour costs. I have in my hand a report which any member may get by writing to the United States federal trade commissioner. It was issued in AVashington in 1945, so that it is up to date. According to this report a combine was marketed in the city of Minneapolis and sold for $638 retail. In the production of that combine, material costs amounted to $174.27; factory overhead, $93.07; manufacturer's discount, $57.96; manufacturer's margin, $85.77; dealer's discount for cash, $30.50; retail dealer's margin, $122; freight, $28 and labour, $46.43, or 7-3 per cent of the -retail price. That figure is not foreign- to many of us because in 1938 an inquiry was held here and many old members are familiar with some of the facts revealed on- that occasion. An eight-foot binder marketed -in Regina sold for $218, and the labour costs amounted to $22.63 or about 10i per cent.
Now, farm life lags behind city life not only in physical comforts but also in social, health and entertainment facilities, and in order to provide many of those things a satisfactory income is necessary. It is necessary in order to keep these services functioning and to create new ones. Farming can be made more attractive by the electrification of rural areas, because farm life is most laborious, particularly for the farm wife. If she is free to use electric power, if she has washing machines, frigidaire, a heating system, her work can be made much easier. And not only that; life may be made more -attractive for her and for the young people by the addition of lights, radio and all the things that can be provided by electrical power. The electrification inquiry commission- of Manitoba made this statement in 1942:
The electricfication of farm areas merits high priority as a post-war employment programme because it will be more nearly self-supporting *than most other projects which might be considered.

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According to the Canada year book 19-8 per cent of the farms in Canada are electrified. In the United States, a country similar to our own, 38-6 per cent of the farms are electrified. That is double the number in Canada. I submit that in the post-war period the government should establish parity prices for farm products so that farming may be and continue to be profitable, and secondly that farm life be made more attractive by the provision of electrification for rural areas throughout the dominion.


Mr. FERGUSON:: As one who lived for a number of years in western Canada I remember the time when my father owned some sections of land in the Melfort area. From what I hear, my hon. friend has not studied the situation very well. The farmers are enjoying some prosperity out' there. The days of slavery are over in the Dominion of Canada. A man lives where he wants to live. There is no compulsion on any person to move from the east to the west or vice versa. One does not have to move from Ontario and Quebec and live on the prairies. We live in this country where we want to live, because it is the part of the country we like. I resent the aspersions that have been cast by several members of this house on the mental attitude of the easterner toward the westerner. I want to correct that. There is no group of people who are more pleased to see the west prosper than the citizens of Ontario and. Quebec. We all have taken trips, or we should have, to see this great country of ours, and when we go into the various parts of Alberta, Saskatchewan, British Columbia and Manitoba we see progress. There is no group of people more delighted than we are when we see that, because it is our Canada as well as yours. None of us is correct in his assumptions of conditions existing in Ontario, Quebec, Manitoba, Alberta, Saskatchewan or any other province in Canada. We can only be guided by the information we receive.
To hear some members from the east and from the west talk one would think that the United States was a land of milk and honey. I have had the unfortunate experience of travelling through Kansas, Missouri, and different parts of that country, and I have watched cattle standing on the hoof dying for want of proper food and water. I say to western members on all sides of the house that ninety per cent of the eastern people will do everything in their power to make the west prosperous. We do not want to hide behind unnecessary tariffs; we do not request that you people pay high freight rates. We are here as a group of men in parliament to see
that those difficulties are ironed out for the benefit of this country. Unless all provinces prosper, no one province or three provinces can prosper. I do not think it is right that any hon. member should be too emphatic in his statements wfith regard to one province or one section of this country. We are searching for unity. We have the greatest country in the world. Let us pull together and stop this battle of Bannockburn.


Mr. KNIGHT:: May I ask the hon. gentleman a question?


Julian Harcourt Ferguson: Certainly.


Robert Ross (Roy) Knight: Is the hon. gentleman
speaking for his party when be says he is ready to do away with discriminatory freight rates and bring in a reduction of tariff items?


Julian Harcourt Ferguson: I have no right to speak for my party, but I will say this: I cannot understand my worthy leader not advocating that discriminatory freight rates -be dispensed with if it would be for the benefit of Canada. I am sure he would be backed a hundred per cent in dispensing with discriminatory rates. I know I would back him.


Mr. SMITH (Calgary West):: I feel I am compelled to take a moment or so of the committee's time because of something that was said about me by the hon. member for Lethbridge (Mr. Blackmore). I appreciate his kindness in nominating me as having made the most harmful speech to the west in the last ten years, because I know occasionally it is better to have a bad record than no record at all. But in this particular case I did not hold it long. He took it away from ime within forty-eight hours, after I had it for twenty-four. I want to say this because I am sure he would not want the impression to go abroad that intentionally I am doing or saying anything harmful to the agriculturists in our country. He did say, for example, that I failed to mention the situation in the neighbourhood of the city of Medicine Hat. Well, if he will take the trouble to look at Hansard of the day before yesterday-I cannot recall the page at the moment-he will find that I said exactly what he did, that the Palliser triangle should not have been settled. If I did the west harm in saying that, then, of course, my hon. friend is in team harness with me and we are doing a very good heel-and-toe down that road.
He mentioned freight rates, and said that I had failed to mention them. I failed to do so because I did not think it was pertinent to this debate. That is the reason I did not
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do it; but I am going to tell him something about freight rates that probably he does not know.


John Horne Blackmore: I shall be glad to hear it.


Arthur Leroy Smith: You will if you listen, but if you keep shouting you cannot hear it.


John Horne Blackmore: The hon. member's trouble is that he does not listen closely enough.


William Ross Macdonald: Order. Let us not have conversations between members. All remarks must be directed to the Chair.


John Horne Blackmore: I beg your pardon.


William Ross Macdonald: Order.


Arthur Leroy Smith: Yes. I enjoy a tete-a-tete, but I should like to hear what the other fellow is saying. I did not hear it, therefore I shall go on. With respect to freight rates, there is no question that. Alberta stands at the top of the heap. I have no doubt whatever that, freight rates, and our whole structure, require a going over. I think the time has long since come when our whole freight, structure should be based not on what the traffic will bear, but on the cost of doing the job. Hon, members know that they are rapidly coming to that in the United States. In the last couple of years the interstate commerce commission have issued1 new orders based on cost, which is not true of this country. I am going to let the hon. member know something more about freight rates. In Alberta we have a subvention paid to the railways for carrying Alberta coal. The hon. member for Calgary West got this subvention from the' dominion government. Perhaps the hon. menjber did not know that some years ago the hon. member for Calgary West appeared before the board of railway commissioners on behalf of the province of Alberta. The meeting lasted a week and an effort was made by the member for Calgary West to convince the board that the cost of hauling coal from his own area in Lethbridge to North Bay and to the city of Toronto was less than $8. In that I failed, but I am anxious that the hon. member should know that while he has been doing all the talking about these things the member for Calgary West has some little accomplishment to. his credit.


John Horne Blackmore: May I just say a word with respect to that?


William Ross Macdonald: The hon. member for Swift Current.


Mr. BENTLEY:: Mr. Chairman, like one of the previous speakers of our group I have not taken up much of the time of the house, but I wish to speak for a few moments now because I know of no other item under which I may be able to bring to the attention of the committee a. few of the things I am thinking about in connection with the matter under discussion. I am glad the last two speakers came out and made the statements which they did, that they, believe in unity andi that there were many things in the west which could be corrected. I cannot agree with hon. members who have suggested that there should have been no settlement in the Palliser triangle. There was a great deal of splendid land in that section. I will agree that there are some places in the Palliser triangle which should never have been settled. I agree that the responsibility rests on the dominion government of that time for allowing and encouraging settlement to take place there. I agree with the method that is being applied now. in all too minor a way, to correct some of these things through the dominion government in the operation of the Prairie Farm Rehabilitation Act. Some of these things are in the process of being corrected. I wish the house would vote the Minister of Agriculture three or four billion dollars so that he could do it all in one year, but I will not suggest that because it cannot be done. When we come to that item I am going to suggest that certainly more than two million dollars should be granted [DOT] for that work.
I was a little bit concerned the other night when the hon. member for Fort William made the remarks he did about how hard the farmers in his constituency have to work. He did not need to tell us that. All farmers in all constituencies of Canada work hard, and their wives work hard. In this connection I hope the Minister of Finance wall remember that the work done by a farm wife is a contribution to the productive power of this countiy. If the labourer is worthy of her hire, then she should have some compensation in the way of income instead of being classed as a housewife, with no occupation; regarded as more or less an appendage of her husband, while her husband is given a slight reduction in his income tax on that account.


Mr. McIVOR:: I am glad to know there is not a lazy farmer in Canada.


Thomas John Bentley: I should not. like to say there are no lazy farmers in Canada. Judging by the empty seats in this chamber there may even be some lazy members of parliament, but. I would say most farmers who have been

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on the land for a good many years cannot be very lazy or they would not have been able to stay on the land. If some of those going on farms to-day are lazy, they will not remain on the farms very long. I am talking about productive farms,' which make it possible for the railways to earn revenue by hauling freight; which make it possible for the commercial life of this country to be carried on. I am not talking of people who squat on a piece of land and live there with a cow, a pig and a hen and call themselves farmers. Some other method will have to be adopted to take care of them. I am talking about, the farmers who work, whether in my constituency or in that of the hon. member for Fort William. I am not bragging about them because they like to work, but they want a square deal in return.
I am very glad some things have been said in this discussion, because after listening to the hon. member for Fort William and the hon. member for Renfrew North I became rather concerned. When they were speaking, particularly the hon. member for Renfrew North, I began to wonder if that was the consensus of opinion of the citizens of Ontario and Quebec, and I thought if it was, there was only one thing for them to do. I would regret having them do it; but if the people in the east really felt that way, the only thing left would be for them to say to the poor relations in western Canada, "We are tired of you now. We are going to draw a line at the western border of eastern Canada and let you guys paddle your own canoe." We would not like to have that happen, because many of us have relatives and friends down here; our sentiments and emotions are tied up with the older provinces of Canada, and we passionately wrant to have unity in this dominion. But if it is going to be reduced to a purely economic question I can assure you we are quite capable of running our own show in western Canada if that is the way you feel about it. I hope not many hon. members or* citizens of the east feel that way. Certainly we do not.
As proof of the fact that we are prepared to conduct our own affairs, the hon. member for Churchill and the hon. member for Saskatoon City pointed out in a previous discussion in this house that the three prairie provinces would like to control and operate the port of Churchill and the Hudson Bay railway on their own behalf. It is the^ people down east who do not want that to be done. The minute the dominion government says to the western provinces, "Set up your board of management and take it over," they will find us more than willing to accept that responsibility,
because we know it can be operated. We are not impressed by the statement of the Minister of Munitions and Supply that the port of Churchill can operate only for about two months in the year; and when someone said, "Oh, oh," he replied that perhaps it could be operated for three months. We are quite convinced that it can operate for five or six months every year. We are able to read the history of mercantile navigation just as the minister can. Many of our people have visited Churchill, as the minister has, and we of the west are quite prepared to undertake the operation of that port just as soon as the government will give us the privilege of doing so. If they cannot find ways of getting ships into and out of that port with cargoes, we can.
I should like to remind the Minister of Trade and Commerce also that if this situation ever did occur, we would immediately establish contact with the big cooperative societies in the old country, who already have indicated to us that they want a great many of our products and are willing to bring us the things we want, which at present, because of the tariff arrangements of the dominion government, we cannot get through Montreal, Quebec, Saint John or Halifax. In this connection I should like to remind the government that some of our Saskatchewan people visited the old country last winter, less than a year ago. During a visit to our trade commissioner over there he was asked if he had made any effort to establish direct and close contact with the big English and Scottish cooperative wholesale societies, and his reply was, "No. I have been to their offices but I do not know very much about them." Give us the "right to operate Churchill and we will learn all about them, because we will visit them and establish relations.
I suggest to hon. members that if they get tired, as I expect they do, of hearing the representations made by western members, they might just give some indication of wanting to meet us on these grounds, and we shall be tickled to death to shut up. We do not love coming down here bringing our grievances, Mr. Chairman, bu't I always understood parliament was a place where the people from the various sections of the country might lay their grievances before those whom we presume to be broadminded, public-spirited men from all over the dominion, and where some redress for these grievances may be obtained. We want these things.
I should like to remind the hon. member for Renfrew North that the long-time average for the prairie provinces in the matter of grain production, both inside and outside the Pal-liser triangle, is about fifteen bushels to the
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acre. We cannot live for four or five years, waiting for good crops, without eating and without wearing clothes. We have to make the good years carry us through the bad. So that average of about fifteen bushels to the acre is what we consider it is possible to sell from the wheat producing areas of our country. As I painted out some time ago in the house, with an average of 20,000,000 aeres under cultivation that means from 280,000,000 to 300,000,000 bushels of wheat to be sold every year. We do not know what the future is going to bring us; we cannot make any predictions. We cannot even get men in high positions to give us accurate predictions. I have newspaper accounts here of statements made by two very able men closely associated with the production and marketing of wheat; yet if they are correctly reported their statements are completely at variance. The Minister of Agriculture is reported to have stated to the annual general meeting of the Saskatchewan wheat pool delegates in the early part of this month that he did not believe it likely that the price of wheat would drop below $1.25 for the next five years.


James Garfield Gardiner: No, that was not it. Read it. I did not say it was not likely; I said I did not know of anything at present that would bring about a decrease.


Thomas John Bentley: wheat through eastern Canada, down through your Welland canal and your great lakes? Do you not want some of the other things that are done down there? Do you not want the people in- the west to buy your binders, your tractors and so on? Of course you want it. Amdi we want to- stay there. We do not want to see a line drawn in the vicinity of Manitoba between the two parts of the country. We want to be with you; we want to be recognized as part of the Canadian, family. But we want redress for these things which so many people feel are rank discriminations against our industry out there. We want the same protection that you get down here. If I have convinced some one a little bit, I am glad I took up your time; if I have not, I will have to do it again some time.


John Horne Blackmore: I should like to
refer briefly to the remarks of the hon. member for Calgary West. I gathered from what he said that he felt I had said something unfair, that I had hurt- his feelings. I have no desire to be unfair to the hon. member for Calgary West or to any other hon. member. The hon. member for Calgary West certainly did convey an impression which he probably did not intend to convey, and this is quite clearly proved by the speech of the hon. member for Renfrew North. I would suggest to the hon. member for Calgary West that he do not assume that all other hon. members from Alberta who are not Conservatives do mt know what they are talking about. I suggest to him that he deal a little less in insinuations. I suggest also that he inform himself a little bit more before he has quite so much to say.


Mr. BROOKS:: Why not do it yourself?


John Horne Blackmore: I will do that.


Mr. MacNICOL:: Mr. Chairman, I shall be only a moment or two, but I shall not be here to participate any further in the agriculture estimates because I must go to Toronto to-day. I want to help the minister if I can. For many years I too have listened to speeches that have been interpreted as creating conflifct between the east and the west. We do not want any conflict between the east and the west. We are dependent on one another; we cannot get along without one another. For my part I have been trying to redress the just complaints that the western people have made through these late years. They have been complaining because of conditions for which they were not responsible, conditions which we perhaps had not tried sufficiently to help them eliminate.

I am ready to support the minister in any programme he will bring in that will help the west. They are entitled to a programme which will relieve them from the menacing conditions under which they have had to operate. I have a keen recollection of going from Regina down through Weyburn to Estevan, and my heart would have broken, if it had not been strong, when I saw the frightful conditions of the farmers in that locality. They were up against calamity through no fault of their own. They put in their crops and they hoped for a return, but they did not get a return because the country was dried out. We gave them little assistance, and they came down here, and rightly so, to complain. I for one am finding no fault with the complaints they made.
The minister is too humble; he does not ask for enough. I will promise him that I will go right across the province of Ontario, to every town and city, and address boards of trade and chambers of commerce to ask for support for a programme that will bring the relief to the west that they are entitled to. Water should be brought to these dried-out areas. If the minister would suggest a programme to spend $5,000,000 for the building of a dam near Riverhurst to provide water required for all the land between the river and Regina-yes, and right down to Estevan-it would be a worth-while programme, a programme that the whole country should support.
There should be no conflict between the east and the west; there should be an endeavour on the part of the east to help the west get on its feet. A man cannot get on his feet in a dried-out area, but give bis land water and he will get on his feet. He will be able to produce cattle, grain, and everything else with which he can buy the things he needs. That would help your own city, Mr. Chairman, because mention has been made of agricultural implements, and they are made in the city of Brantford. The farmers would be able to buy such implements, but they cannot when they must live on dried-out land. They must have water.
I am going to appeal to the minister to bring in a programme for $100,000,000. That is not much; it is only the price of one battleship, and who worried over the sinking of a battleship during the last war? Nobody worried over that. We built more. Bring in a programme to provide irrigation for the dried-out areas in Alberta and Saskatchewan so that these good farmers-they are good farmers-so that these brave farmers-they

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are brave farmers; if they had not been brave they would not have stayed there-may have a chance to live.
I want to compliment the minister upon the good work he has done, but he would have done much better if he had acted as I suggested and had not been so humble. He should have asked for what he requires. This land should be rehabilitated. The minister has done some fine work. Look at what has been done around Swift Current. This is evidence of what irrigation water will do. The farmers in that area are grateful. I do not want to take any more time, but I did want to say a word to encourage the minister to come out with a giant programme to give those western provinces a chance to Eve.


James Garfield Gardiner: Mr. Chairman, it is just about two minutes to one o'clock and I understand we are to go on again at three. I did intend to make a statement this morning of the kind that was asked for by the hon. member for Souris, but I have been listening to speeches all morning which could more properly have been made on the different items. For example, the speech which has just been made with regard to irrigation i3 one which properly could have been made under prairie farm rehabilitation, for which we are going to vote money.
The programme my hon. friend has mentioned, that of $100,000,000, is the one I have been advocating, behind closed doors and everywhere else. I think if he reads my political speeches in the last campaign he will see that I advocated it every time 1 spoke.


John Ritchie MacNicol: I was too busy getting elected myself.


James Garfield Gardiner: Everything that has
been mentioned in the debate so far, with the possible exception of the quota on the deliveries of wheat, was covered in the two speeches that I delivered on the address. There may be some justification for saying that jye have not taken sufficient time with agriculture during this session, and for that reason I wanted this debate to go on as freely as possible and as far as possible. However, we have been up three times with our estimates and I hesitate to start to make a general statement which will take half an hour or forty minutes and just repeat what I said on the address. I think if hon. members will read what I said then they will find the answers to the questions they have been asking, or to practically all of them. They will not find the answer to the question about the quota on wheat deliveries, because that
is not a matter with which I deal particularly; it is dealt with by the Minister of Trade and Commerce. But I am sure that in order to satisfy the curiosity of anyone who may wish to know, the Minister of Trade and Commerce will not object if I say that it was not a matter of my choice, nor was it the choice of this government, except in the last analysis, that any limitation was put on the delivery of wheat for 1945. The policy which was stated by myself as Minister of Agriculture was that we should control as far as we possibly could the farmers' acreage in wheat from year to year. But the farm organization with which my hon. friend has been working for many years-as a result of that experience he has been able to demonstrate this morning a wide knowledge of the wheat question- put up a policy which we were following until compelled to discontinue. I stated definitely, both in the house and outside the house and in the discussions that took place, that from my experience in western Canada I was sure that no maximum quota placed on wheat could be maintained by any government or by any body trading in wheat if we had a crop failure in half of the west. That is what we have this year; therefore the fourteen-bushel quota had to be taken off. In other words I do not believe in a ceiling quota on wheat at all.


Thomas John Bentley: I want a floor, not a ceiling.


James Garfield Gardiner: I do not believe in a ceiling quota. It is a ceiling quota when you say to a farmer, "You cannot deliver more than fourteen bushels to the acre." That is a ceiling, not a floor. I am not in favour of saying to any farmer in western Canada, after we have compelled him to accept ceiling prices throughout the war, that he is to be limited to any particular ceiling in delivering farm products after the war.


Thomas John Bentley: Neither am I.


James Garfield Gardiner: I do not want it on wheat any more than I want it on anything else. But I do not want to be misunderstood on that point. Let me say that I think one of the best policies that ever has been introduced into western Canada was the placing of quotas on deliveries of wheat by saying at' the beginning of the season, "You can deliver only five bushels an acre off each farm." That permits the man twenty miles back from the railway to make his deliveries of wheat early in the season, and not have the elevators plugged full by the men who ' live within a mile or two miles of the elevators. Therefore, as far as the quota
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deliveries are concerned, I hope they will never be discontinued, but I hope also that [DOT] at no time shall we say that we are going to stop the farmer at some particular point, definitely, in delivering his wheat year by year.


Thomas John Bentley: So do I.


James Garfield Gardiner: But that was the policy we were asked to follow-280,000,000 bushejs to be delivered in a year or fourteen bushels to the acre of 20,000,000 acres.


Thomas John Bentley: Not less.


James Garfield Gardiner: No, not more. That was all they guaranteed to take, and it was insisted that there should be no departure from that maximum. That was the policy we were asked to follow by the Saskatchewan wheat pool, by resolution, and in committees and everywhere else.


Mr. WRIGHT:: Does that apply to the deliverable quotas mentioned in the order in council?


James Garfield Gardiner: No; I am trying to tell hon. members that so far as I am concerned in the government, it does not, and it never will. I hope there will not be very many coming from western Canada, who will be advocating a policy of that kind.
I sat here and listened to the discussion on the address. I let it go by because I hesitated at that time to say anything about what is being done in other countries. But we had an amendment to the address on the question of adopting practically the system which they have in the United States, of paying ninety per cent of parity. The system in the United States is based on the idea that no farmer who gets the benefits of that parity price will be able to deliver from more than a certain acreage or more than a certain quantity of his product. If any hon. member will take the trouble to go back and read the discussions on the floor prices he will find that fundamental in those discussions is the statement that we did not say to the farmer during war time, "You just produce a small amount" and then, "We are going to put a ceiling on it"; we said, "You produce all you can in order to feed the people of the world and then we will put a ceiling on it." And what I say is this: having said that during the war, when the war is over we ought to see that a floor is under it no matter how much you produce, and we ought to allow the farmer to deliver, at least for a period of time, at prices which will be such as to permit him to gain back any disadvantages he may have sustained
(Mr. Gardiner.]
because of the policy we followed during war time. That in a few words is my policy on this matter.


Thomas John Bentley: Is that going to be the minister's policy in future?


James Garfield Gardiner: I cannot say that it will always be the policy of the government of Canada.


Thomas John Bentley: That is the important part.


James Garfield Gardiner: You have sufficient confidence in me to say that if I decide that that is the proper agricultural policy for Canada, it will be carried out. So far there may have been some reason for saying that, but I am not at all sure that any policy I propose will always be carried out. But I am saying that the prices act under the legislation which passed this house in the session before the election did carry that idea in it, and it is on the statute books of this country, and if it is administered under myself as Minister of Agriculture in the Department of Agriculture as it is now, .it will be carried out in accordance with those principles, which are the principles hon. members have been advocating from all sides of the house throughout this whole debate. They are laid down there; they are in the legislation. Any floor prices which are set have to be set after full consideration has been taken of the relationship between the price of the farmer's product and the thing he has to buy, both in war time and in the period following the war, which is in general terms a parity relationship. We do not all agree what parity really is, and rather than saying "parity" it was put in general language which means that very thing.
I would ask, if it meets the approval of the committee, that we be permitted to pass item 1, in order that we may discuss these matters item by item, and all these problems can be discussed as we go along.


[Stage Direction]
Item agreed to.
At one o'clock the committee took recess.
The committee resumed at .three o'clock.
Administrative service-
2. Publicity and extension division, $105,229.
William Ross Macdonald: The committee passed item No. 1 this morning and is now about to consider item 2, publicity and extension division. May I point out that the general discussion took place under item 1, so that

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the discussion of the rest of the items must be relevant to the particular item under consideration.


Percy Ellis Wright: I see there is a small increase in the amount available this year. At present it is not necessary to advertise agricultural products very much because there seems to be a ready market for them, but that is not going to obtain always. It has not in the past. Visiting Great Britain last fall I found that Australia and New Zealand are carrying on a much more aggressive advertising and sales policy over there than our department has carried on in the past. If we are to retain our market there, once competition asserts itself again, ,we shall have to carry on a more extensive publicity and advertising campaign in Great Britain.


James Garfield Gardiner: That comes under item 28.


Percy Ellis Wright: This has to do with publicity and extension.


James Garfield Gardiner: It relates to the publications that we put out to inform people with regard to agriculture.


Percy Ellis Wright: That is what I am talking about.


James Garfield Gardiner: The hon. member is discussing advertising, and that comes under 28.


Percy Ellis Wright: I will reserve my remarks, then, until we come to that item. Can the minister give us some details about these publications that are put out, and what has been done in this direction during the past ' year?


James Garfield Gardiner: Perhaps it would be well for me to put on the record in a few sentences exactly what the division covers. The division assumes the responsibility of serving the whole department in maintaining contacts between technical and administrative officers of the various services and the farmers of Canada. This is accomplished through such well-recognized media as printed publications, press releases, radio broadcasts, educational displays at fairs and at exhibitions, lending libraries and lantern slides. The division operates a duplicating service for the whole department, maintains a mailing list, and undertakes the distribution of all market reports, educational literature and administrative information issued. The work of the division is conducted under the heading of administrative and editorial exhibits, press and publicity, and lantern slides service.


Mr. SENN:: This is rather a small vote, although I regard it as one of the most important in all the estimates for agriculture. The publicity and extension division serves as'the connecting link between the farmers of Canada and the Department of Agriculture and its activities. There was a time in the history of Canadian agriculture when it was thought that anyone who was not very much good for anything else could become a successful farmer, but to-day agriculture is on an entirely different basis. It has become a more or less scientific occupation in which a man must be well trained if he hopes to succeed. As a matter of fact, farmers must have to-day a very wide knowledge covering a good many subjects if they wish to be successful. First of all they must know something about soil and soil composition, fertilizers and fertilizer values, grain and fodder crops, fruit and vegetable crops, growth and method of cultivation and so on. They must know something about the various insect pests that attack animals and plants. They must know something about plant diseases and how to combat them. They baust know something about live stock and what constitutes a good animal in any particular breed that they are trying to raise, as well as the conformation and type of animal and the best way in which they can raise good quality animals and produce the best commodities. Not only that, the farmers must know something about marketing and marketing requirements; the type of product needed on the markets, the qualities demanded, and the different types of animals that have to be raised. They must know a year ahead what will be the future demands of these markets.
, My point at the moment is that this publicity and extension division does not seem to be accomplishing all that it might do as a liaison between agriculture generally and the Department of Agriculture. There is not enough publicity. The farmers generally do not know enough about these publications and about what is being done to assist agriculture. Can the minister tell us how the general public is informed of these different bulletins that are put out from time to time? They ought to be of great value. They would convey to the farmers, if the farmers have the time and the opportunity to study them, what is being done in the department. There are a great many ways in which they could help the farmers to benefit by the findings of the department itself.


James Garfield Gardiner: To answer both the hon. member for Melfort (Mr. Wright) and the hon. member for Haldimand (Mr. Senn), I
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might point out that this service has been carried on over a long period of years, ever since we have had a department, and it has naturally been growing from year to year. During the past year, sixty new and revised publications have been added to the number put out, and these include thirteen farmers' bulletins, one household bulletin, three technical bulletins, nine circulars, two acts, orders and regulations, fifteen special war-time production series, seventeen reports and miscellaneous publications. The number sent out was 1.229,182, merely on personal request. That will give an idea of the number of persons receiving these publications. It does not mean, of course, that this is the exact number of persons to whom publications were sent, because some persons might have three or four different requests, but it does show that there is close contact between the farmers throughout the country and those engaged in other businesses who are interested in farming and the department itself.
There are over 592,080 publications mailed in bulk for redistribution. They are sent out to secretaries of counties or municipalities in the west, or farm organizations. Any organization which is in close contact with the farmers and can make this distribution to people who do not personally send in for them, may get them. There are 1,218,894 copies of market reports mailed out on request. That would indicate that there is quite an interest in the marketing report. There are 9,025,863 copies of mimeographed', multigraphed and multilith press releases, news, market information, and so forth, sent out. Therefore it will be noted that there is a considerable distribution, to the public of farm pamphlets and farm information.


Mark Cecil Senn: The information the minister has just given emphasizes the point I was trying to make. Undoubtedly those pamphlets are of great value to agriculture if they are distributed, and if the public know just what they are. The minister has said that some sixty new publications were brought out last year. Frankly I must say-and I keep in close touch with this thing-that I do not. know what those publications are. I may know a few of them. Some kind of advertising plan should be brought into effect which would let 'the farmers know what the publications are. I am pointing this out only because I think it is of real advantage to the farmers to have them. I think they can accomplish a great deal more if farm people generally have a better idea of what they are.


Percy Ellis Wright: I do not know what
cooperation there is between the minister's department and the departments of agriculture in the provinces with regard to the distri-
bution of this information, but I would say that through their county and district representatives the departments of agriculture in the provinces are probably closer to their people than is the dominion Department of Agriculture. If the publications were made available to those representatives, and they were urged to see to it that the publications were distributed, it might tend' to get them into the hands of those who could use them to much greater advantage.


James Garfield Gardiner: There is the utmost cooperation between the provincial departments and the federal department. First, there is a close check to make sure that provincial and federal publications do not overlap any more than is absolutely necessary; if t^e provinces get out a pamphlet on a certain subject we do not put out the same kind of pamphlet on the same subject. After that is done we see that the provinces are supplied with a reasonable number of whatever they find useful. We have a mailing list of all provinces which covers most of the secretary-treasurers of municipalities, farm organizations, and all people who would be naturally interested. Beyond that there are many people who attend a meeting, hear the publication referred to and write in for a copy of it. The long mailing list that I have here is a result of those communications.
The hon. member for Haldimand referred to something which I think I remember his having referred to five or six years ago. He will remember that on one occasion our mailing list was referred to, and it was pointed out that members of parliament >wh,o had passed away some years before were still getting the publications. As. a result of the criticisms made at that time we had the list largely revised, and we are not depending so much upon lists of that kind now as we are upon personal inquiries coming in. From then on we keep them on the list.


Mark Cecil Senn: I do think some better plan should be devised to acquaint the public with 'the publications which are brought out from time to time. Farmers are getting into difficulties at all times. They have their difficulties in regard to production. For instance, science comes under the Department of Agriculture. Scientists are finding out new things all the time, things that are of great interest to the farmers, things that would save the farmer money if he knew about them. I suggest that some real plan should be devised to acquaint agriculture generally throughout Canada with the pamphlets that are being issued.


Mr. STIRLING:: Has the minister considered a short intimation of the publications

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or pamphlets being given to the weekly press of Canada? I do not remember the number of weekly newspapers there are in Canada, but I know in the riding of Yale, which is largely an agricultural riding, there are seven. If a short intimation was given to the weekly press of a new publication on such-and-such a subject it might bring it to the attention of the farmers who might not otherwise learn of it.


James Garfield Gardiner: An announcement goes out every week to the weekly press. Anything new which turns -up is in that.
With further reference to what the hon. member for Haldimand has said, most of the new developments which take place are announced over the radio. It is felt that the farmer gets the announcement more readily in that way, and more farmers get it. It is thought to be more helpful to put it out in that way. But even after it is put out over the radio it is put in publication form and sent weekly to the press.


Mr. HAZEN:: How many publications are issued regularly, monthly or weekly? What are their names? I receive one in my box entitled as I recall it, "Live Stock Review". How many others are there, and what are they called?


James Garfield Gardiner: I think I gave, before the hon. member came in, the total numbers of the publications put out.


Douglas King Hazen: Are there certain ones which are issued every week and every month?


James Garfield Gardiner: Yes. For example, there are 1,218,894 copies of market reports. They are mailed out on request. Those go out regularly. Then there are mimeographed copies. It would not be possible for me to give the list because it is a long one. Nine million of those go out, or have gone out during the last year. Then there are half a million publications mailed in bulk. I think those are the ones that the hon. member has in mind.


Douglas King Hazen: What are they called?


James Garfield Gardiner: Those are publications on the production of dairy products, hogs, live stock generally, vegetables, fruits, and grains. The pamphlets that go out are all of that type.


Mark Cecil Senn: Will the minister give a little more information as to how the facts are ascertained? For instance, I have heard drovers say that the reports which are published in regard to the prices on the live stock markets are not always correct. I suppose there is a regular way in which those prices are
ascertained from day to day and from week to week, but I have heard drovers, and on one occasion farmers as well, say that they are not correct at all.


James Garfield Gardiner: The plan followed1 is
the one which has been followed for many years and which has, I think, proven very satisfactory. A report on the- prices comes out daily; I have it on my desk every morning. I think that is the one which the drovers have in mind when they say, that it is not exactly the prices they get on their market. I am speaking from memory and I may be a little out on the number of markets, but I understand they take nine of the main markets right across Canada, beginning with Vancouver on the west, and they take the average of those prices and give you both the high point and the low point in the market. You also get the average of the sales for the day. One drover may bring live stock on the market and get the top price, or he may bring it on at the low point, so he will say the average price reported is not the price he obtained. But if he goes to a little more trouble and- gets the list of actual sales such as is published in the Free Press-and no doubt in other papers as well, though I am more familiar with this one-he will see the prices at which the sales were made. Any drover or farmer can look up that list and see how many animals sold at such a price, but in a publication such as we put out it is impossible to give the price of every animal and every carload of animals. We just give the average price for the day or week over a considerable area.


[Stage Direction]
Item agreed to.
4.	Contributions to empire bureaux, in the amounts detailed in the estimates, $47,397.
Mr. BLAIR:: Will the minister give an
explanation of this estimate? I notice in the details four headings are given: Farnham House laboratory, imperial agricultural bureaux, imperial bureaux of entomology and imperial bureaux of mycology. Will the minister give an account of the work done in these four laboratories, and tell us wThy these are listed as contributions?


Mr. LOCKHART:: Perhaps while the
minister is answering he will give a genera! review of what the vote covers.


James Garfield Gardiner: I think a general statement in regard to the imperial agricultural bureaux might give the committee the information required. After considering the results which had been obtained through the successful operation of the imperial institute of entomology and the imperial mycological institute, the imperial agricultural research
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conference of 1927 recommended that eight oureaux be established to collect, collate and disseminate information on research in selected branches of agricultural science, and generally to assist research workers in the empire with information on/ their subjects and with introductions to other research workers. These proposals were accepted by empire governments and' since 1928 the following bureaux have been organized, each to deal with a special subject and1 to be located at a recognized institute dealing with that branch of agriculture:
Bureau of soil science, located at Rothamsted experimental station.
Bureau of animal health, located at .the veterinary research laboratory, Weybridge.
Bureau of animal nutrition, located at Rowett research institute, Aberdeen, Scotland.
Bureau of animal genetics, located at the University of Edinburgh, Scotland.
Bureau of plant genetics (crops other -than herbage), located at the pla-n-t breeding institute, Cambridge..
Bureau of plant genetics (herbage crops), located at Aberystwyth, Wales.
Bureau of fruit production, located at East Mailing research station.
Bureau of agricultural parasitology, located at the institute of agricultural parasitology Winches Farm Drive, St. Albans.
Those we-re the eight original bureaux which were organized. Since 1928 two other bureaux have been established: the bureau of dairy science, located at national institute for research in dairying, university of Reading, Shin-field; and the forestry bureau, located at Oxford. Then, operating under the executive council of the imperial agricultural bureaux are the mycologieal institute located at Kew, Surrey and the institute of Entomology, located at the British Museum (natural history). Cromwell Road, London/. The Canadian contribution to the forestry bureau is provided in the estimates of the national research council.


William Gourlay Blair: Why are these listed as contributions, and how is the amount of money to be paid in determined?


James Garfield Gardiner: The amount of money to be contributed each year was decided after the conferences which were held here in 1932. I think the Skelton commission dealt with the matter, and a decision was reached as to [DOT]what should be the amount. Their report was:
We have discussed fully among ourselves how the above sum should be allocated as between the several parts of the empire. After considering the statistics of general trade exports from each part of the empire to other parts of -the empire, the agricultural production of each part
[\Ir. Gardiner.l
of the empire, and the benefits likely to be received, we recommend the adoption of the following scale ...	.
Units of
f'lrm.f tm Vmf.i ntl
United Kingdom and the colonial
empire	
Canada	
Australia	
India	
Union of South Africa	
New Zealand	 [DOT]
Irish Free State _	
Southern Rhodesia	
Newfoundland	
16
12
8
2
Those are the proportions in which the division is made.


William Gourlay Blair: What are the benefits Canada receives?


James Garfield Gardiner: The advantages of the imperial agricultural bureaux to Canada may be summed up under the following two headings:
(a)	Each bureau publishes one or more abstracting journals, a stated number of which are distributed free of charge to contributing countries; that is, all the information gathered by these bureaux is distributed in a publication that is issued. Additional copies are made available at a low cost. The free distribution in Canada has been allocated throughout the dominion to government and university libraries, where they are easily available to research workers. During each year there are published in these journals over 16,000 abstracts of articles by scientific workers in the British empire. The distribution of the findings of these workers through this system of publication represents a service which could not be secured elsewhere; that is the information secured in this general research work is distributed to everyone concerned.
(b)	Special services.


[Stage Direction]
Item agreed to.
Science service-
5.	Science service administration, $26,073.
Mr. TOWNLEY-SMITH: Hon. members will recall that when the agriculture estimates *were first brought down they followed hard on the heels of the national defence estimates. We went cheerfully along and approved estimates totalling $1,998,000,000, and then it was with some dismay that I noticed that our modest expenditures of the year before on agriculture, amounting to some $19,000,000, were proposed to be cut down to some $15,000,000. I was disappointed, because I have

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heard, I have read, and our fathers had declared unto us that agriculture was the backbone of the country.
The CHAIRMAN (Mr. Golding):: Order. We are dealing now with specific items. The general discussion took place on the first item.
Mr. TOWNLEY-SMITH: I was just using that for purposes of comparison, and I wished to make the comparison as odious as possible. If it is a fact that agriculture is still the backbone of the country, then as a farmer and the representative of farmers I wish to pay a tribute to the' scientists who have done so muph for agriculture in this country. This matter has been broached two or three times already, but I should like to take a few minutes to bring the work of these men just a little more clearly to our attention, and! to explain how, as a farmer, I view the advantages we obtain from their efforts.
When I first came out here I settled in the north country. My farm is on the same parallel, Mr. Chairman, as Prince Albert ; and I found the atmosphere very frosty. To my regret I discovered that it was almost impossible to grow wheat because of this frost; and the first time I saw the scientists in action was when they assisted me to grow wheat in a district in which the growing season was not long enough. True, they did not affect the weather; but they got to work and introduced a new' variety of wheat with a shorter growing season. Very quickly there were developed early varieties. Men connected with agriculture will recognize these names:	Reward, Prelude, and Garnet. It
became possible not only to grow wheat in that district, but to grow it 150 miles farther north. That area was opened up as a wheat growing district, and all this was entirely due to the work of the agricultural scientists, and in particular the plant breeders' section.
After a number of years we ran into difficulties w'ith plant diseases. Hon. members - will recall the terrible losses suffered in western Canada through the disease known as rust. There w'as a time when it appeared that the wheat-growing industry out there was finished, because those waving fields of wheat w'hich were so aptly described last night, after attack by this disease became at the end of a few weeks entirely valueless. When an hon. member said that even at ten cents a bushel a farmer would still get a lot of money, he was not quite accurate, because in many 1 instances those wheat fields were never cut.
Because of the disease which had affected them it became necessary to burn the wheat in the fields.
There is an intensely interesting story behind the fight against rust. Plant pathologists got busy. They told us all about the disease-where it came from, how it worked, and what it did to the wheat plant. They described to us its life cycle, explained1 that it used the barberry bush as a host plant, and that until the disease had gone through that host plant it could not do any further damage. Obviously, then, the thing to do was to destroy all host plants, all barberry bushes. An attempt was made to do exactly that, but it was found impracticable. The result was that we returned to the scientists known as plant breeders. They told us that in the nurseries at the experimental farms and at universities varieties of wheat had' been developed that were immune and resistant to rust, and they proceeded to hybridize or cross these resistant varieties with some of our well known wheats. It is a long story; it took a long time, but eventually we got the varieties which we are now using in western Canada, and which are no longer being affected by rust. But we cannot stop there, because it was discovered there were a large number of varieties of rust. Just how many have been discovered up to this time I do not know. My last information was that there were twenty-three. We have wheat which is resistant to all twenty-three varieties. In any day in any year another variety may fee discovered. Since the rust diseases themselves can hybridize, we shall certainly have other varieties of rust which in their turn will attack our resistant plants, with great danger of our running into the same difficulty again, and with a loss of millions upon millions of dollars. So it becomes necessary to keep a staff of these men working constantly, men who will keep their eyes open and the nurseries occupied. Through their work we may be able to keep away from the diseases which attack our plants.
There are other diseases, such as smut and root rot. Within certain limits we have learned how to control smut, although one variety known as loose smut has not yet been controlled chemically. I understand there is a complicated hot water treatment through which grain may be passed, and which will destroy the loose smut, but this treatment is not very practicable. Certainly it cannot be carried out on farms, and the result is /that we are waiting for some further development at the hands of ou-r scientists, in the expecta-
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tion that they will tell us how to control this loose smut, which incidentally is costing us many millions of dollars each year.
Root rot is coming into our fields in western areas, and each year is costing us large sums of money. There is no known absolute control, although scientists are still working on the subject. It is our hope that eventually they will find something to do away with root rot.
Turning for the moment from cereals, we know there are diseases of fruit, such as those mentioned a few days ago by one hon. member. In the aggregate these diseases cost a lot of money. We have diseases of vegetables, including potatoes. In fact, a disease of that kind may attack even the 500 bushels clubs of the hon. member for Fort William. He may find disease among his spuds, in which event he would not have 500 bushels, and probably not even five. I hope the disease will not come near him, but of course there is a possibility that it may. Again our scientists are at work trying to meet the disease. So it goes, all down the line, in live stock as well as in plant life.
One of the. points I wished to make is one which has already been 'made, that our scientists are not receiving much encouragement to stay on their jobs. Their salaries are distressingly low-entirely too low. As a farmer and one who really appreciates what these men are doing and have done, I would plead that their rates of salary be made sufficient to induce them to stay in the country. May I read briefly on this point from the "Agricultural Institute Review" of September, 1945:
First, consider one individual who, in addition to two summers' work has served the division of botany continuously for ten years, after obtaining a Ph.D. degree. It was three years before this person obtained .any classified position, and, even then, was classified as an agricultural assistant, grade II, at a salary of $1,800 a year.
Just $1,800 a year.
Three years later this was reclassified to an agricultural scientist, grade I, with a salary range of $1,800 to $2,160 a year, and there, four years later and at the end of ten years' service it still stands.
That is nut very much money. Other cases are set out which I shall not detail. One to which I would refer, however, is described as follows:
One has been with this laboratory 17 years. During the summers of 1928. 1929 and 1930 he served at a salary rate of $1,320 per year. Then came the lean years and it was not until six years later he once again reached the $1,325 point, having served .at as low a salary as $1,118 in -the meantime. Not until 1938 did he reach $1,800, and since 1940 he has been at the maxi-

mum of his present class at $2,160. Think of that-after 17 years of service! Even when you add to this the $78.12 cost of living bonus which he receives

And here is the point:
-he is getting less than $200 more per year, than is the greenhouse attendant at the same laboratory.
I should like also to read a short paragraph from the thirty-fifth annual report of the Civil Service Commission of Canada, as follows:
The commission regrets that action has not been taken to restore annual increases to those permanent employees who are in receipt of salaries in excess of $3,000 -per annum. Many of these employees have been denied not only annual increases but also, for several years, the right of reclassification, while temporary employees in units which are recognized by the treasury board as "war units'' have been accorded the right of reclassification at all salary levels. Such differentiation results in a dissatisfied service and affects efficiency, and it is the opinion of the commission that the restoration of annual increases to all permanent employees is in the interests of good administration and the efficiency of the service.
The next report for -the year 1944 states:
There is a serious need for immediate adjustment in the compensation for' the professional, scientific and technical services, and the _ commission, after a comprehensive study, is of opinion that action should be taken -at once to improve the situation. Assurance of a reasonable salary attainable within a few years is necessary to retain those remaining in these services, and to attract new personnel for the planning and carrying out of the work of the post-war period. The loses that have been incurred in professional, scientific and technical ranks continue to result in expensive administration and the development of particularly critical situations in -those fields where the service is in direct competition with the commercial and industrial employer.
In the last five or six years some sixty-one scientific men have left the civil service to take better jobs. I had their classifications and salaries in the service and an estimate of what they were receiving in -the positions they took, but I seem to have mislaid it for the time being, so I will just suifimarize. When I had the opportunity of speaking before I made the statement that I -believed after the war the only countries able to stay in business would be those able to produce most economically. The control of disease, particularly plant disease and those affecting cereals, the control of insect pests, the improvement of cultural methods and soil improvement, all cut d-own production costs. Those things are in the hands of our scientists. I-t is quite conceivable that this country might have to quit growing wheat for export if some other country got- just a little ahead of us in scientific research and .'were able to produce better

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wheat and more of it. That is all scientific work. It is much to be hoped that when these things are discovered they will be discovered by the scientists in our own country. I ask the minister to give special consideration to the encouragement of the scientific men who at the present time are engaged in agricultural w<?rk.


James Garfield Gardiner: I would point out that the hon. member stayed quite closely with your ruling, Mr. Chairman, at the beginning and end of wh^t he said. There are some hon. members who may not be fully acquainted with the procedure. The procedure has been to discuss in a general -way all that is under items from 5 to 11 under the first item which covers science service administration. Then we go on to deal with matters having to do with botany and plant pathology, for example, or with animal and poultry pathology under the items so-called. Much of what the hon. member said in the middle of his remarks would come under item 8. Perhaps we could have the general discussion with regard to all these matters on the first item of the group, and then take up the other items such as botany and plant pathology, animal' and poultry pathology, and so on. The salaries paid and the treatment given to men who are doing this work is a proper matter to be dealt with under this item, and I should like to make a few remarks in that connection.
It is admitted, I think by all members of the government and everyone concerned that the civil service of Canada was not well paid in many of its branches prior to the war. During the period of the war there was no opportunity to make a change in the actual payments or in the basis of payment. Now that the war is over certain adjustments are being made.
One of the reasons why we were in a difficult position, particularly in agriculture, prior to the war was that our expenditures down to about 1930, owing largely to conditions which existed in the country during the immediate preceding period, had gone up to something in the neighbourhood of ten or eleven millions for ordinary expenditure^. During the five years immediately following that they dropped back to about eight millions a year, which was the figure at the beginning of 1936 when I took over the department. Then I think they went up again to about eleven millions just prior to the war. During the war they dropped back again to a figure close to that at which they started.
Here are the exact figures. The appropriation for 1938 was $9,383,000; for 1939,
$10,000,000 and for 1940, $13,000,000. We got up to $13,000,000 at that time, but the expenditures were actually $11,816,000. Then we dropped back in 1941, under war conditions, to about $8,600,000. We continued at that figure down to 1943, and then we went up a little in 1944. This year, according to the figures in the estimates, we are asking for a vote of $10,256,250.
I would call attention to the fact that the figure stated by the last speaker at the beginning of his remarks is hardly a fair indication of the difference between the vote this year and the vote last year. The vote last year for the same purposes was $10,569,000, so there is a difference of $313,000. The total figure down below includes specials, and if you will note above you will see that the reduction has almost entirely to do with the wheat acreage reduction. As is known, we were paying out enormous sums of money a few years ago to obtain wheat acreage reductions. The difference there is the difference between $600,000 and $4,265,000. Almost the entire drop is due to the fact that we are not now paying wheat acreage reductions, most of the final payments having been made last year. There is a sum of $600,000 provided to clean up the last payments in 1945. The proper comparison should be between $10,500,000 and $10,256,000. Although it may be a little out of order, in view of the figure given by the hon. member at the beginning of his remarks I thought I should like to give the proper comparison.
Something has been said about the payments for science services. I would remind hon. members that on April 1 of this year the treasury board made a decision to the effect that those, for whom gross injustice had been created through the range of their salaries were to be given consideration on request of the various departments. The Department of Agriculture immediately took advantage of that suggestion, and we have had a very con- * siderable change made in salaries for persons such as those who have been referred to. For example,, the first person mentioned by the hon. member for North Battteford was, as he said, in the salary range $1,800 to $2,160, the last range which, I think, the hon. member quoted. He was on April 1 obtaining the maximum of that range, namely $2,160. Under the new salary range he is in the class from $2,820 to $3,180. In other words, he has an immediate increase of $660 per year and an ultimate increase of $1,020.


Thomas John Bentley: That is effective now, is it?
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James Garfield Gardiner: It is effective so far as he is concerned from April 1. I could go down through the list. There is quite a list here, and all these men are dealt with in that proportion. '


Mark Cecil Senn: Does that take into account the cost of living bonus he was getting before? As I understand, he is not getting that today.


James Garfield Gardiner: Well, there is no bonus in respect of salaries over $3,000. Of course immediately this man goes over $3,000 he will not have any bonus.


Mark Cecil Senn: But is he going to get the bonus until that time?


James Garfield Gardiner: This is net salary.


Mark Cecil Senn: The $2,160 which he got before was not a net salary at that time; in addition he got the cost of living bonus.


James Garfield Gardiner: Yes, he got a cost of living bonus during part of the war period, from the time cost of living bonuses were put on, and they are still on. He will get the cost of living bonus until he is entitled to a salary of $3,000. Probably the bonus will not be on for very long; however, that is another matter.
Under the division of botany, which has been referred to, there have been thirty-six reclassifications, and there are another twenty-six to be made. I state this in order to indicate that what has been suggested is at present being done.
There is one matter to which I should like to refer for a few moments because of the general nature of the discussion which is going on in connection with these matters. There seems to be a tendency to make comparisons. Some of us in this house have university degrees, and we know what the value of a university degree is. Others have not university degrees; and I doubt very much if there are many hon. members who, having listened to the various hon. members address themselves to the house, can determine just which have university degrees and which have not. Again, people take university degrees for different- reasons. Some take them in order to get a general education and be able to apply that education to any activity in life; others take them for the purpose of getting employment of a kind which does not require them to do manual labour. But I have been associated with government since 1914, and during the greater part of that time have had something to do with hiring civil servants, and I want to say that personally, and in spite of the fact that I have a university degree, I

resent very much seeing, in advertisements which come out from time to time for certain appointments, the intimation that a man must have a university degree in order to apply. I am inclined to think that all too often that qualification is used to eliminate a lot of people from civil service employment, and it is a very simple way of eliminating numbers of people who have good experience and good qualifications. I am not one of those who believe that you can simply say that, a man must have a university degree, or that he should be paid on a certain basis simply because he has a university degree. As a .matter of fact many of those degrees do not have a very close association with what a man is doing.
Eor example, I was listening to a discussion of this question a day or two ago, and one of the arguments put forward wras that a certain man was a plumber, another man had a university degree. I said then, and I am going to say now, that I did mot know which of them put in the most time learning the job he is doing, and I am not prepared to say that the job of the plumber is not just as important, as the jobs of some others. We would find great difficulty in carrying on some of the scientific researches that are spoken of if we did not have any plumbers, no matter how many research men we had. That may be true in many other directions. So I say that sometimes we may over-emphasize the matter of paying one particular group of people at a high rate because of certain academic qualifications they have. I believe that in a democratic country, or indeed in any country, the most important people are the people who work with their hands. They are the people who produce the food and the mineral wealth, and who turn out the manufactured products. They are the most essential. Take these men away from our operations, and it will not make very much difference how many scientists you have. Somebody has to get right down to doing the work. I think I would be safe in saying that at least seventy-five per cent-the proportion is probably low-of the pe9ple of this or any other country which has to be developed as Canada must be developed if we are to maintain the population we are capable of maintaining, must get right down to working with their hands. So I am in agreement with those who have been urging all the way through these estimates that the man who works with his hands-as farmers do-is entitled to just as good pay as anybody else. I am not particularly moved by the argument that a man is entitled to special consideration simply because he has qualifications which he got

largely through the help of the state-for most of our institutions which make it possible for men to get that type of education are sustained from the tax rolls of the people of the country. Because he has had the opportunity of taking advantage of the facilities provided by those educational institutions he is where he is to-day. There are other men who are just as essential, and I think we must see to it that they get their proper return.
I admit all that has been said on behalf of the scientists. I think they are not paid as much as they should be paid. I want them to be paid more, and I am going to see to it that scientists in the Department of Agriculture are treated at least as well as those in any other department of government.
There is a question on the order paper-I am sorry the answer was not down before this discussion took place, because I am sure the hon. member who asked it wanted the answer for the purpose of using the information here -as to how many men in the Department of Agriculture have certain degrees. Well, it is not nearly _ so important to know that as to know how many of those men have-


An hon. MEMBER:: Brains.


James Garfield Gardiner: Well, I would not put it that way; I think the fact that they are working in the agriculture department indicates that. But I would say it is important to know' if the man who has a degree is working in a job in which that degree is of any use to him. I can think of many jobs in the department where the possession of a degree does not necessarily give a man an advantage over one who has had five years' experience doing the work somewhere. On that basis I would say this. I hope that everyone in the department will be properly paid, but coming back to the first point I made, namely that our estimates were up to eleven millions and then went down to eight and then back to eleven and down to eight again, being now over ten millions, I venture to say that during the whole of that period we did not fire many because we had too many. If hon. members will look at the statistics they have been getting they will find that our staffs have been increasing year by year until they are higher to-day than at the time we were spending eleven millions or when we had an estimate of thirteen millions. We did not fire men when it was impossible for them to get jobs in other places; we kept them on. The fact that we had cut our estimates meant that we were paying as much in salaries but could not afford to give them as much money with which to do the job they were doing, and
therefore we could not use their services to the same extent that we had been doing earlier.
Some credit has to be given to governments generally for anting somewhat differently from industry in many instances. We speak of high salaries in industry, or of high wages, but w'e all know what the first thing is that has been done in the past, though I hope it will not be the first thing to be done in the future, when times get tough. The first thing that has been done in the past under those circumstances has been to turn out on the street the fellow who is not needed and allow the state to look after him.
Something was said at the beginning of the discussion about men coming back to the ' farms. The fact is that farmers looked after their own unemployed during the depression period. They kept their sons and daughters at home. There was not all the work to be done that they could have done on the farm. They may have worked hard but they could have been done without as was shown during war time, and one of the reasons why four hundred thousand men and women will not go back to farms lies in a fact, which explains many of these things, that I learned while the discussion was on. There was in New Brunswick a family who had lived in that province .four generations. First there were two people who came and settled on a one hundred acre farm, and now, four generations later, there are 610 people descended from those two. Those who argue that everyone who leaves the farm ought to go back should consider this fact. I should like to know how they would keep 610 people on that farm. That is the process that has been going on from one generation to another. We are living on family-sized farms. Only two people can live on that farm in the next generation, one of the sons of the farmer and one of. his neighbour's daughters. They will raise their family and in the next generation only two can stay on the farm, and so on. As long as the country is divided into family-size farms it is not going to be,possible to send all of each generation back to the farm, whether they have been at war or wherever they may have been. We have to keep that in mind.
We must remember that if we are going to make agriculture successful in the west, or in any other part of the country, we must make use of the scientists and others to find new uses for farm products, to convert them into the things that people need elsewhere; and more than anything else we must persuade the people of eastern Canada and the people of Britain that we want some of the eastern
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industry in the west. I do not know of any better place for the development of industry in Canada than around the foothills of the Rocky mountains and in the country north of Winnipeg where there is power. I do not know of anything better for the development of our water resources, which have been spoken of. So that we need these scientists, both in the department and outside, to help us to develop these things, and I am going to fight to get as high salaries as we can for them, taking into consideration the fact that every other minister is fighting in the same way in his own department.


Mr. FAIR:: I was glad to hear the minister's statement. As I have said on several other occasions, I believe that he and his colleague the Minister of Trade and Commerce are putting up a brave fight for the farmers of Canada-not for the farmers of western Canada but for those of the country as a whole-and I hope they will be successful in pulling the wool from the eyes of their colleagues in the cabinet. We farmers must stick together. I have no degree, but I think that even without a degree a little common- horse sense will take one pretty far, and without horse sense, even if you have a degree, you will not get very far.
It is realized now, as it has been for a long time, even though some people will not admit it, that -the best potential market industry has in the west is the farming population. I have upstairs a letter which I intended to bring down, written to the Western Producer not long ago by a Saskatchewan farmer, showing all the items that have been manufactured in different parts of Canada, mainly in central Canada, and in use on the farms of the west. It goes to show that in practically everything the farmer uses, from the time that the alarm clock rings in the morning to wake him until he has finished separating the milk at night with the Renfrew or some other machine, he is using Ontario-made goods. The -minister is on -the right track, and I hope he will continue along that line and put up the fight he has made in the past.
I was glad- to hear the remarks of the hon. member for North Battleford with regard) to scientists. Scientists are -needed in agriculture as much as if not -more than in any other industry, for various reasons, many of -which the hon. gentleman outlined. I might say that the hon. member -was speaking what he honestly and truly 'believes, -because his son is qualified to act as district agriculturist for the Alberta government in my constituency, and he is doing a good job too. I am satisfied that he was speaking his mind sincerely. There is one variety of wheat which he left out, how-

ever, when he was discussing cereals. It was developed not very far from Ottawa by Ontario -people. One of the Manitoba members described that wheat to me some time ago. He said that it had grown normally and- after fifty or sixty years had reached maturity. Those who were experimenting -with it took it part of the time as a joke-to-day most of us regard it in the same light-and when it came to maturity these people found that-there was nothing in it except chaff. The name of that wheat is Renfrew North.


Mr. NICHOLSON:: I too welcomed the first part of the minister's statement regarding the classification of salaries of scientific personnel in his department. But I think it was most unfortunate that the -minister proceeded to drive a wedge 'between those who work with their hands and those who are scientific workers in- his department. He admitted what many people feared1 during the thirties when he took the point of view that because farm prices were at such very low levels the salaries of scientific workers in the Department of Agriculture should be kept down. If every department of government had carried that out, there would not be any grounds for complaint. But an examination of the Department of Justice or the Department of Finance or any -other department would indicate that judges, for example, were not expected to be kept on an income that would correspond with the income that was going to farmers who were selling eggs at three or four cents a dozen and butter at ten cents a pound. This committee might expect the Minister of Agriculture to insist that personnel in his department should receive remuneration at least comparable with those in other departments of government, and I am sure that has not been the case.
To emphasize the point that I think should be made regarding the contribution which has been made to our life in Canada by the scientific workers, I shall mention two or three names that I picked out at random when the estimates were before the committee a year ago. I asked the minister then how long those particular employees had been with the government. The minister did not have the information, but said offhand, eight or ten years. Here is the name of W. C. Broadfoot. Doctor Broad'foot was one of my - classmates at university. He was one of the best hockey players and an excellent rugby player. I think he might have gone into professional athletics and made a very good living, but he was interested in scientific problems. He went to the university of Minnesota, as I recall it, and secured a doctor's degree there. If I remember correctly

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he graduated in 1923, twenty-two years ago. So far as I know he has devoted his full time during those years to scientific problems. According to the public accounts he is now getting S2.880, which, in my opinion, is entirely inadequate when one considers the training - he had' before entering the department and the contribution he has made since.
Here is R. C. Russell in the same salary classification. Mr. Russell was one of my own instructors when I was at university. I think it is twenty-three or twenty-four years since he was doing post-graduate work; but he was an excellent instructor and taught the members of our class the history of rust. So far as I know he has been working for many years on problems associated with rust; and when hon. members consider what Thatcher wheat or any of the other rust-resistant wheats have meant in dollars and cents to the people of this country, to keep a university graduate with all the experience he has had on a salary of $2,880 compared with some of the salaries we pay to personnel in War Assets Corporation or Munitions and Supply or the wartime prices and trade board is demoralizing to say the least to the highly trained personnel who are doing this kind of work.
I think it would have been much better if the minister had left unsaid the last part of1 his speech, and had concluded by merely saying that so far as he was concerned university graduates in his department are going to have compensation according to their ability, commensurate with the compensation being paid to scientific workers in other parts of government. Could the minister indicate whether these two men I have mentioned in botany and plant pathology, W. C. Broad-foot and R. C. Russell, have been entitled to any increase in salary in the reclassification mentioned?


James Garfield Gardiner: Both of the men who have been mentioned have not yet been classified, but they are in the next group to be classified. The men are being taken in groups through the department and a certain group dealt With at one time and a certain group at another, as is necessary in dealing witli that kind of thing. These two men are under consideration at the present time and will have their salaries adjusted in line with what I stated in regard to the others.
Now, as to the driving of wedges, I do not know of any better wedge-driver with whom I have come in contact since I have been in public life than the member for Mackenzie. Instead of driving wedges I was simply saying that all our people have to be dealt with on the same level in accordance with the work
they are doing. There is no wedge-driving in that. The wedge-driving would be if you got one group out of line with another; and I am suggesting that it is wedge-driving when you take a man who has a university degree and compare him with a man who is a competent plumber or something else, and say merely because the one man has a university degree and the other is a plumber that the man with the university degree should get more. That is the real wedge-driving that I have heard going on for some considerable time.


Alexander Malcolm Nicholson: I did not say anything about a plumber.


James Garfield Gardiner: No, but you said I was driving wedges. I can tell you that you drove more wedges in the few minutes that you were on your feet than I did in the time I was speaking. The situation is that we need all classes of men in a department, and any wedges which my hon. friend attempts to drive by misstating what I said, by saying that back in some other period, we kept salaries down is contrary to the facts. We did not do any such thing. From the time we came into office in 1935 we raised the salaries.


Alexander Malcolm Nicholson: And kept men temporary for years.


James Garfield Gardiner: There have been men on the temporary staff here because of regulations which existed. A man is sometimes called a temporary for twenty years. The fact that he is a temporary does not mean that his pay is less; it means that he is not on the list of those who will get superannuated until he goes on to the permanent staff.
Mr. NICHOLSON; That is keeping wages down.


James Garfield Gardiner: That is a regulation which has been here for a long time. Only a certain percentage of those in each group are raised up to the-


Alexander Malcolm Nicholson: The minister had a very large percentage of the total personnel.


James Garfield Gardiner: Not very many in our department.


Alexander Malcolm Nicholson: There were a few years ago.


James Garfield Gardiner: We have temporaries, of course, who are employed during the summer months at the experimental farms. They are temporaries because of the fact that they work only during part of the year, and their

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wages are regulated partly by what farmers are able to pay in those districts. Those men are doing farm work.


Alexander Malcolm Nicholson: The minister had temporaries in his own office.


James Garfield Gardiner: In our department as there are temporaries in every department. Ours is not any different from any other.


Alexander Malcolm Nicholson: The minister's is the worst.


James Garfield Gardiner: Ours is not the worst. I should like my hon. friend to tell us when we raised the wages of judges. Simply to take two or three departments, name them, and say that one department does this and another department does that, does not help. The civil service commission controls the payments in all departments. Their chief job is to see that the payments for similar work in one department is exactly the same as it is in another. That is not my job at all; that is the job of the civil service commission. They take the men who are scientists in our department and men who are scientists in other departments; they classify them, and they see that men in one classification in my department are paid exactly the same as men in the same classification in another department. If they make a mistake on that, we ask them for a reclassification, and we keep battling away until we get ours on the same standard as they are in any other department. That is the plan followed. Simply to get up and say that in one department they are doing this and in another department they are doing that is only saying that the civil service commission, which was set up by this house, not by any department, is not doing its job as it was intended it should do it, and I am not prepared to say that that is the case. I am prepared to say that it has a big job to . do, and that it may reclassify the employees of the agriculture department now and may not reclassify the employees of the other departments until later. As a matter of fact that is the case. I think I can say that the Department of Agriculture is farther along the way-I am assured that that is true-in the reclassification upwards of salaries than any other department of government as a result of the ruling made on April 1. No longer ago than the day before yesterday I sat in with the representatives of the civil service who are interested in this particular point and discussed with them everything that has been discussed here this afternoon. Most of the illustrations that have been given today were mentioned then, and time after time I was told that the Department of

Agriculture was further advanced than any other department in this matter of reclassification. By that I do not mean anything detrimental to the other departments. The department which applies is selected and gone through with.


Mr. CASTLEDEN:: Agriculture was the worst, was it?


James Garfield Gardiner: It is the best at the moment, and it was never the worst. It has been well toward the top all the way through. So wdien my hon. friend gets up and follows his old custom of mentioning some particular hardship somebody is suffering, and bases an argument on that, I am afraid he will have to pick on some other department than agriculture.


[Stage Direction]
Item agreed to.
Science Service-
9.	Agricultural chemistry, $125,965.
Mr. ZAPLITNY:: Would the minister give us some idea of what is involved in this item? Let us have a little detail on it, please.


James Garfield Gardiner: The division of chemistry is responsible for the investigation of soils, fertilizers, animal nutrition, plant chemistry, and foods. Chemical analyses are made for projects conducted by other divisions of the science and experimental farm services. Analyses are made in connection with the administration of the Meat and Canned Foods Act and the Maple Sugar Industry Act. The central laboratory is situated at Ottawa, and regional laboratories are maintained at the dominion experimental stations at Kentville, Nova Scotia, and Summerland, British Columbia.


[Stage Direction]
Item agreed to.
Science Service-
10.	Entomology, $610,045.
Mr. FRASER:: What is the department
doing in regard to peaches throughout this country? For the last two years we have had worms in our peaches which w'e never had before, to my knowledge, and if this goes on for another year I believe our whole peach crop will be ruined, because there will be no sale for it. This year people bought peaches for $1.25 a basket, peaches which looked perfectly good but when they got home they found they could not put any of them down for the winter.


James Garfield Gardiner: Of course as my hon.
friend knows the method of treating fruit

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trees is principally by spraying them several times a year. This has been a very difficult season to use spray effectively.


Gordon Knapman Fraser: Last year was not.


James Garfield Gardiner: Perhaps that was not
so much the case last year, but these diseases, whether they affect fruit or grain or anything else, start one year and then you find the condition worse each succeeding year, particularly, if weather conditions assist the pest. For example, I think in this house only the other day I heard someone discussing small cherries, and saying this disease had started back in 1932 but it was not until recently that people had begun to realize it might take their whole crop. The same thing happens in connection with peaches and other fruits. We have a station in the Niagara peninsula where we are studying these problems all the time and trying to deal with them. In spite of what we have been doing, however, we were unable to deal satisfactorily with many of the calamities that hit the fruit industry in Ontario and elsewhere this year. I have not been in the Niagara peninsula since that trouble developed, but I have been around Trenton and elsewhere and have gone into the orchards; and I am very much concerned about what the situation is going to be next year.


Gordon Knapman Fraser: Those would be apples,
around Trenton.


James Garfield Gardiner: Yes, but the same
weather conditions that affected the apple trees affected other fruits as well. The warm spell in the early season brought the trees along to a point at which it was dangerous to have them so early in the spring.


Gordon Knapman Fraser: That affected the apples this year, because the bees were not around at the time the blossoms were out.


James Garfield Gardiner: Yes. Then they lost
their leaves. They leafed again, and the second leaves were taken off by a fungus. Then the trees leafed a third time. Anyone driving along the roads of Ontario this fall could notice that- the trees looked black. The leaves were very small; and on going through the orchards it could be seen that on about one-third of the trees the third leaves had died. The question at the moment is whether or not those trees are dead, and probably we will not know definitely until on towards spring. That has hit the fruit industry pretty well all through. I would not like to say that much of what has happened in Ontario this year in regard to peaches or anything else could have been avoided; I think the weather 47696-165J
had a great deal to do with it. Perhaps people trying to market their product in spite of the fact it was of low grade did place upon the market peaches which would have been better withheld, for the sake of the long-range policy of selling peaches from Ontario orchards.
Mr. FRASER. The fruit farmers may have placed those peaches on the market without knowing they had worms in them, because there might be only a pin prick on a peach to indicate the worm inside, and a farmer could not go over every peach and find out if it had worms. As I said before, I have never seen peaches as bad as they have been in the last two years, and I think it must have been something entirely different from what the minister has .said because it is getting worse each year. There is another subject on which I would like some information. How about the budworm? I understand the minister has handed that problem over to one of the other departments.


James Garfield Gardiner: No, I believe we are
keeping control of it.


Gordon Knapman Fraser: I thought some $300,000 or $400,000 had been given to another department to deal with this problem.


James Garfield Gardiner: I think I said at an earlier stage that money was voted to the Department of Reconstruction, but it does not necessarily follow that the money will be spent by that department.


Gordon Knapman Fraser: You handle that?


James Garfield Gardiner: We make application to them for the money when required, and we handle it; it is just a matter of getting the-money from them.
The present spruce budworm' outbreak extends from the eastern boundary of Manitoba to the St. Maurice valley in the province of Quebec. An area of approximately 260,000 square miles is involved. The. same outbreak has spread also during the last year from Canada into the United States, where it covers some 12,000 square miles in the state of New York and a considerable area in the state of Vermont. To all appearances, this outbreak is more than likely to spread into the maritime provinces within the next four or five years. The areas of heaviest infestation in eastern Canada are in the vicinity of lake Nipigon, the Mississagi district, Algonquin Park and an area immediately north of this near lake Abitibi, lake Temiskaming and the Coulonge river watershed. Over some 25,000 square miles practically all the balsam and between 50 and 60 per cent of the white spruce has been completely destroyed. An additional
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area of 45,000 square miles is in immediate danger of total destruction. Approximately 180,000 square miles are now lightly infested.
Intensive studies of the outbreak are in progress in all the affected regions. New developments in connection with spread of the outbreak are being closely followed through the dominion forest insect survey. Studies in control methods have been undertaken by the dominion government and the provincial governments. Three distinct experiments in chemical control by the distribution of D.D.T. from aeroplanes were attempted in 1945. Preliminary tests of the effectiveness of various dosages were made in the early spring in Algonquin park on six 10-acre plots. More elaborate experiments of the same nature, covering an area of approximately 2,000 acres in the Kabonga region of the province of Quebec, have yielded considerable information with regard to the effectiveness of aeroplane spraying. The largest undertaking of this kind consisted in the spraying of some 100,000 acres in the Nipigon district.


James Arthur Ross: What cooperation has taken place between the federal and the provincial departments? Where does the Department of Reconstruction enter the picture? This is a serious matter in several large areas, and great acreages of forests might be completely lost.


James Garfield Gardiner: On September 14, 1945, a coordinating organization known as the forest insect control board was established by order in council under the Department of Reconstruction and Supply. It will be the duty of the board to take all possible steps, both separately and in cooperation with the provinces and forest industry, to control forest insect outbreaks, particularly the spruce bud-worm. I understand that the very best of cooperation is being established between the department here and the provincial departments in carrying this out.


Gordon Knapman Fraser: What effect has D.D.T. had on persons and birds in that district?


James Garfield Gardiner: I understand that there are no serious effects on either human beings or birds.


[Stage Direction]
Item agreed to.
12. Experimental farms service administration,
;$63,205.
Mrs. STRUM:: How many seasonal workers are employed at the experimental farm at Indian Head; for what period are they employed and at what hourly rate? How many hours a day do they work? Will the minis-

ter's answer also apply to the forestry farm? Is any transportation provided between the town of Indian Head and the experimental farm? Is any arrangement made for meals while at work on the farm?


James Garfield Gardiner: I am afraid I cannot give the detail at the moment. Perhaps the item might be allowed to stand.
Item stands.
13. Central experimental farm, $728,935.


Mr. MOORE:: Horticulture is becoming important in western Canada. Where is the expenditure being made in the development of this branch?


James Garfield Gardiner: About S80.000 is being spent in the prairie provinces, most of it at Morden experimental farm.


[Stage Direction]
Item agreed to.
12. Experimental farms service administration, $63,205.
James Garfield Gardiner: To return to item 12; about 15 of the men at Indian Head are employed seasonally, for the summer months, and about twenty the year round. Then, in answer to the question as to the period in which they are employed, it wrould be correct to say that in most cases they are employed for about seven months. The hourly rate of pay is from thirty-two cents an hour plus bonus, to forty-four cents.


Gladys Grace Mae Strum: What does the bonus
amount to?


James Garfield Gardiner: About seven cents an hour. These jrersons are employed for about ten hours a day, and the information is about the saijae for the forestry farm. Replying to the question respecting transportation, I have no information about any transportation provided betwreen Indian Head and the farm. As a matter of fact the farm is just across the road from the town.	[DOT]


Gladys Grace Mae Strum: The forestry farm is not.


James Garfield Gardiner: It is farther out. There is no regular bus service supplied. I imagine one of the farm conveyances would be used to take them in under certain conditions. I believe most employees slay there for the greater part of the time.
Respecting meals, I understand a boarding house is provided on the forestry farm and on the other farm for those who are there continuously. How'ever those who engage in temporary work bring their lunches with them, and have their other meals at home.

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Mark Cecil Senn: I believe this item deals with a most important branch of the Department of Agriculture, one which has been and is doing good work throughout 'Canada. I should, however, like to take a moment or two to make some suggestions respecting experimental farms.
Much has been done by different boards set up to increase production throughout Canada to meet contracts with Great Britain. We are sending large quantities of bacon, beef, cheese, eggs and seeds to the people of Great Britain and Europe, but I am afraid that not enough has been done to see that we retain those markets. The minister may not agree with me in this. I know he has a contract with Great Britain for certain lines of farm products, up to the end of 1946. However, even at this time other countries in Europe from which Great Britain received her supplies in other days are now entering the British market.
I would speak particularly for a moment or two upon our bacon market over there. All hon. members will agree that our shipments of bacon overseas during the war have brought great benefit to the Canadian people in general and our farmers in particular. There are two main things that must be looked after if we are not going to lose our market in England for bacon as we did after the last war. The first., of course, is maintenance of the quality of our bacon. Then we must keep up the continuity of supply. This has been mentioned so often that it is not necessary for me to elaborate on it. If we are to maintain our market we must see that those two things are carried into effect.
I doubt if the reputation of Canadian bacon has been increased very much during the past four or five years. We are sending over to England some sixteen different grades of bacon, and we have been doing this for some time. What we have sent has not always been of the best and it has not always gone over in continuous supply. Denmark was a large producer of bacon and sent considerable quantities to Great Britain in days gone by, and that country is again entering the market. In Denmark they have a system that is far in advance of ours in producing good quality bacon. There is a good deal of government supervision and control over the production of hogs and bacon, particularly bacon that is to go to England. The control over production is rigid; there is control over marketing and over quality; there is control as to what proportion of fat and lean there shall be; there is control over the size of the carcass and the shape of the sides are controlled. As I said before, I do not believe-the reputation of our bacon in England has increased much during the war years.
Moreover. I do not believe the quality of our hogs has improved during the war years. Every select hog produced in this country receives a bonus of $4, and if I am correctly informed the production of select hogs has increased only from thirty-three tp thirty-seven per cent during the war. That is not a Very large increase considering the bonus which is paid. I believe hog producers should take a leaf out of the book of the dairy industry! In the dairy industry they use good sires and dams, and I believe this is done largely in the production of hogs. But in spite of all that has been done, we find that while there may be hogs of good conformation, there are other hogs with some malformation which makes it impossible for them to be brought to maturity. A hog may have a rupture or other malformation.
Then the dairy industry has what is known as a record of performance. An animal may be a good type and of good conformation, but it may not be a good producer. Something should be done to see that we produce hogs of good type and of good conformation which are also good producers. We see in the papers many advertisements about the use of feed. Some people say that you can produce a pound of pork with six pounds of grain; others say you need only five pounds, and some get as low as three and a half pounds. We should have hogs which are not only of good conformation and good type but which make rapid gains in growth. Producers throughout the country are doing a great deal to improve our hogs in every way, but they cannot do everything. They are not always wealthy men, and they cannot afford to weed out hogs which are not the best type or which may have some defect or malformation.
I believe the time has come when our experimental services should set up some kinds of stations to increase these particular qualities in our hogs. At the time of the Winnipeg convention there was inserted in the agricultural platform of the party to which I belong a clause reading as follows:
To set up a swine study superstation with sufficient facilities and personnel for an exhaustive study of measures for the improvement of the Canadian bacon hog and of means to retain after the war our present quota of bacon exports.
That is something which should be done by the experimental farms branch. It will have to be done by some government agency because private interests cannot afford to do
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it. I make that proposition to the minister and to the government because I believe it is a sound one. I believe it would be of real assistance to the hog industry in the Dominion of Canada.
I should like to make another suggestion. This may not meet with the approval of the committee, but I think it is worth while. In Denmark they have breeding stations; the farmer does not raise his own little pigs; they are raised in breeding stations under strict government supervision and control. That may seem visionary at the present time and it mayr be that the farmers of Canada' would prefer to breed their own little pigs, but I would point out that twenty-five years ago there were very few chick hatcheries in the Dominion of Canada. To-day there are very few chicks raised in any other way, because the people producing poultry and eggs buy their chicks from the chick hatcheries which are under inspection and supervision. I believe the time has come at least to make an experiment in that direction.
I believe little pigs could be raised to better advantage in breeding stations which would be under supervision and control and where the conditions would be better for the breeding and selection of pigs. It is said that from twenty-five to thirty per cent of our little pigs perish before they grow up, before they are of any great age. That sort of thing *does not occur any more in the chick hatcheries. The mortality rate of small chicks in chick hatcheries is very small and I think the same results could be obtained if we had breeding stations for hogs. The small pigs would get better care and they would be less liable to disease; they would get a better diet and, if the stations were properly equipped and the personnel properly qualified, it would go a long way to producing a more uniform type of hog throughout the Dominion of Canada. #
There is another reason which I think is just as important. At certain periods of the .year we have large runs of hogs coming on to the market, so much so that it is almost impossible for the abattoirs to handle them. At other seasons of the year there are only small runs coming on to the market and the abattoirs cannot keep busy. If breeding stations were established throughout the *country I believe it would tend to keep a uniform supply of hogs coming on to the market at all seasons of the year. I suggest that the packers themselves would be very well advised to experiment with this thing to see how it would work out, because after all the packers are just as much interested as

the farmers are. We need the packers to process our animals; at the same time the packers need the farmers to raise the animals; and if the packers could, by means of an experimental breeding station, demonstrate that they could raise more and better hogs, and that they could distribute those hogs over the year, it would be a great advantage to the packers as well as to the farmers. I leave these suggestions with the minister because I believe they are worth considering.


[Stage Direction]
Item agreed to.
IS. Central experimental farm, $728,935.
Mr. CASE:: In looking over the details of the expenditures, one item about which I should like to ask the minister is that of rents, $2,560. What are the rents related, to in connection -with the central experimental farm? Another question which the minister might answer at this time is this: since there must be some revenue from the central experimental farm, where is it shown, or is it shown at all?


James Garfield Gardiner: Three hundred acres of the central experimental farm here are rented from the Caldwell estate. That is the land for which we are paydng rent.


Wilfrid Garfield Case: It comes to $2,560?


James Garfield Gardiner: Yes; that is the total amount.


Wilfrid Garfield Case: Is that on a long-term lease? Would it not be better to buy the land rather than to continue to pay rent? It must be' well improved land if 300 acres are worth that amount of rent.


James Garfield Gardiner: We have had it rented for fifteen years. At the present time it is on an annual rental. I may say there has been discussion as to whether -we would purchase it or whether we would go on renting it. While those discussions have been going on, the land is on a yearly rental.


Wilfrid Garfield Case: The other question was about any revenue coming in from the farm; where is it accounted for, or is it accounted for?


James Garfield Gardiner: The amount which we obtain by way of revenue is found in the auditor general's report. There is a revenue from the farm, but, as will be understood, it is not sufficient to pay the cost of running it.


Gladys Grace Mae Strum: I am sure we were all glad this afternoon to hear that the minister values the work of people who work with their hands, and his remark that the work of the scientist would be greatly hampered without that of the ordinary day labourer. In the
<

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light of the statement he gave us about farm wages ,1 hope he will consider the revision upwards of these wages. There is a great disparity between these scales and the wages paid by the ordinary farmer. I myself live on a farm; we hired a boy this fall for 8100 a month and gave him his board and room. These people wmrk as casual labourers: they have to maintain a home, carry their lunch pail, and perhaps provide their own transportation-we are not sure of that-and they have to provide all that from these very small wages. I an^ sure the minister will agree that all these wages should be revised to bring them into line with the wages paid by farmers who are not supported by the resources of the treasury of this country.


James Arthur Ross: May I ask the hon. member, was it just during the harvest rush that she hired this boy for one month?


Gladys Grace Mae Strum: No. We paid as high as $7 a day for day labour during the harvest, and we pay $100 a month for people like this boy, who are working for seven months in the year.


James Arthur Ross: What about the summer months?


Gladys Grace Mae Strum: 
James Garfield Gardiner: I may say that when I came into the department the hourly pay at Indian Head was, I believe, twenty-eight cents; it now averages forty-two cents including the bonus, so that there has been some increase; and in the present supplementaries which are being considered, and which have not yet reached the house, we are asking for sufficient to make another increase in that payment. That will answer the question whether we think there should be some increase. We rather think there should be.


Gordon Knapman Fraser: How many hours a day do they work?


James Garfield Gardiner: About ten.


Percy Ellis Wright: What specialized projects are being carried on at the experimental farm here in Ottawa, or is any specialized work being done?


James Garfield Gardiner: I have not before me the list of projects that are being carried1 out. If that question were put on the order paper I could get a list of them and have them put on Hansard.


Wilfrid Garfield Case: How many acres are there in the experimental farm?


James Garfield Gardiner: The government-owned land is 869 acres, and we have this rented land which I spoke of a few moments ago. We have about 1,800 acres at South March, which is about twelve miles away from the chief farm; that is being operated-


Wilfrid Garfield Case: Rented?


James Garfield Gardiner: -in cooperation with the department of munitions.


Gordon Knapman Fraser: Is it owned by the
government?


James Garfield Gardiner: Yes, it is owned by the government.


[Stage Direction]
Item agreed to.
lit. Branch farms and stations and illustration stations, $1,531,740.
Thomas John Bentley: A little while ago a question on the order paper was answered, that the dominion experimental services were interested1 in the airport at Swift Current. I am not saying that they wanted to buy it, but they were interested. Does that "interest" mean, if it is carried to its fruition, that that station will be added to the farm at Swift Current for this kind of work?


James Garfield Gardiner: Is the hon. membe, speaking of the Wymark station?


Thomas John Bentley: It does not specify Wymark or St. Aldwyn or Swift Current proper.


James Garfield Gardiner: The Wymark station has been transferred and is being connected up with the experimental farm.


Thomas John Bentley: Are you still interested it the air school?


James Garfield Gardiner: No; I understand not.


Eric Bowness McKay: Will the minister indicate what plan is being followed in the way of rendering assistance to these experimental sub-stations and illustration stations which we have all through the country? I wish the minister would state by way of information what inducement is -being held out to farmers to devote time and study and effort in the operation of these stations; how much supervision there is, if any, and what is the basis followed; what qualifications are required in
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the appointment or selection of farmers for the operation of these stations; if the costs of. the operation of these units are in any way connected with the cost of the main stations; if they are, how they are deduced and in what way they are computed.


James Garfield Gardiner: As regards the illustration stations, which we have around the countiy, w*e pay the farmer a rental of $5 an acre for the acreage which is under supervision. Then we allow him to sell the product. He operates under instructions and supervision, but he sells the product as though he were not and he receives S5 an acre rental in addition. That is constantly under supervision, and my experience is that men go from the department to these stations and have the farmers in from around the district, giving them instructions and telling them what the results of experiments are.


Eric Bowness McKay: Are they confined to the main experimental unit to which they are attached ?


James Garfield Gardiner: The supervisor is
located at the nearest experimental farm and someone goes out under his direction and does the work. It covers pretty well all western Canada.


Eric Bowness McKay: I was anxious to know what method was followed in the appointments. I am not complaining; but what is the method that is followed in appointing farmers for that important work of experimental farming? Are there any special qualifications?


James Garfield Gardiner: Several principles have to be considered in making the selection. The first, of course, is the soil condition. If a farm is selected in a particular soil area it is unnecessary to take another within the same soil area. It is necessary to have it located as nearly in the centre of any particular soil area as possible, and we have to consider whether the farmer himself will put up with it. Some farmers do not want to be bothered with it. Others take an interest in it. We try to find men who are interested in the work. There are many qualifications of that kind. Most of the men are known only to those engaged in that kind of work in the community. We naturally refer to men operating from Indian Head farm, for example, questions as to whether they think the land is suitable or the individual operating the farm under their direction.


Mr. HARKNESS:: There is a decrease in the amount required for the central experimental farm and branch farms. This would suggest that a decrease in the amount of 
experimen'tal work to be done is contemplated. If that is so, what is the reason for cutting down the amount of experimental work?


James Garfield Gardiner: 
Percy Ellis Wright: Has the minister found it difficult to get suitable men to operate illustration stations at present rates of remuneration? These stations serve a very useful purpose in the different communities and I know of one in my own area wdiich the man said he could not operate on the present basis. Does that obtain over a large area, or are these men mostly satisfied with present contracts?


James Garfield Gardiner: We have very little difficulty in securing men who are prepared to take on the work. I do not know whether it is because they feel that they are sufficiently well paid for it or whether it is largely because of the kind of men we have and the kind we are looking for. We are looking for the man who is interested in the work himself, and some of these men wmuld take it on whether they were paid or not, because of the advantage which they personally derive from it. Their neighbours also benefit from that work. We have had no great difficulty in securing men at the present rate. Occasionally a man comes and says, "I don't w*ant to be bothered with it any longer", and I do not know whether it is a matter of wages. I do not know W'hether the man my hon. friend is thinking about is one of these. I know of a case in his community where a man did not want to take on the work because conditions in his family had changed. At one time he had sons and subsequently not so many, and he thought it better to give up the work.


Percy Ellis Wright: I wish to compliment these men on the illustration stations they are conducting. They are doing a good job in the community, and very often their success is due to the personal interest they take in that type of work rather than to any question of remuneration. They indirectly obtain much valuable information that serves them in good stead on their own farms. These men are serving a very useful purpose and the department is to be congratulated on this type of

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work, especially the educational features. Each year there is a field day at the station and the farmers from the district come in and observe what is being done. It is a good opportunity for the distribution of pamphlets and other literature. In that way the work of the experimental farms is carried right through to the man on the land who is doing the work.


Mr. MARSHALL:: It is quite unfair to .make a comparison between the estimates for 1944-45 and those for 1945-46. A true comparison would be between actual expenditures in the previous year with the estimates that are now before us. Unfortunately, we have not been furnished with a copy of the auditor general's report for last year, so that I would ask the minister to' be good enough, on all other items that come before the committee, to give us the actual expenditure in connection with each item in order that we may compare the amount that is asked for this year with the amount that was actually spent last year. In connection with item 14, what amount was actually spent out of the $1,593,276 asked for last year?


James Garfield Gardiner: The experimental farms branch has spent practically all the .money that has been appropriated to it each year. The only reason the auditor general's report has not been distributed is that the printing is not yet completed. The amount unspent out of the total of $1,593,000 was between $30,000 and $40,000. I have not the exact figure.


James Alexander Marshall: Would it be possible for the minister, in connection with all future votes, to give us the actual expenditure that was made up to the end of the fiscal year that ended March 31, 1945? I could not get a copy of the auditor general's report. A copy was filed with the Clerk here, but someone has it; I could not get my hands on it. Would the minister be good enough to give us those figures as he goes from one vote to the next in his department?


James Garfield Gardiner: I do not think there is a record on which I can lay my hands this afternoon. I understand that the votes are not made up in a way that it can be compiled easily. It can be compiled over a period of days and brought down if an order for return were asked for along that line, but I am doubtful that we can produce it here any nearer than what I gave a moment ago. The gentleman who is associated with the different divisions can give what it is within a few thousand dollars. For the benefit of hon. members may I indicate what really 47696-166
happens. We do our best to spend in an effective way the money that is voted. We start out at the beginning of the year with that idea in mind; when we get along to the point where we feel that we probably cannot spend it in the manner in which it was originally voted exactly as it was voted, so far as the regulations permit of it, we go to the treasury board for permission to transfer it from one thing to another, and in that way we spend very close to the amount which is voted in the department each year. The only exceptions were years such as I mentioned a few moments ago when' we got into the war. At that time every effort was made to cut down expenditures all along the line. While we had $13,000,000 voted we spent only $11,000,000. That would happen only in a year of that kind. Ordinarily we spend very close to the amount that is voted, and we usually come along for supplementaries on a considerable number of items. I do not think there has been a year in the ten years since I have been here that I have not asked for supplementary votes to take care of what we need in the way I suggest.


James Alexander Marshall: I quite understand that. I think the gentleman in front of the minister has the information and should be able to give us exactly the amount spent on this programme. I have the auditor general's report for 1944. If we could get the report for the year ended March 31, 1945, we might be able to get the information, but unfortunately that report is not yet available. It is now November and we should have had the report some months ago. Would it be possible for the minister to give us the total amount spent in each branch of his department? Take the production services branch, would it be possible for the minister to tell us at the appropriate time the amount that was actually spent in 'that branch out of the $3,661,684?


James Garfield Gardiner: Yes, I think that amount could be obtained, and before I am in the committee again with my estimates I may be able to get those amounts and bring them down.
Mr. TOWNLEY-SMITH:	Fruit growing
has received a good deal of attention in Saskatchewan in the last few years. With the right kind of encouragement I think the province could be made self-supporting as far as small fruits are concerned. I refer particularly to apples, crab-apples, plums, apricots, and, of course, bush fruit. Would the minister be inclined to consider setting up an experimental station for the testing of fruit trees similar to the one operating at the present

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time at Morden in Manitoba, which is doing such good work? The station should preferably be in the northern part of Saskatchewan.


James Garfield Gardiner: The experimental station at Morden, as I suggested a few moments ago, does, a very considerable part of the work. We are also carrying on work at Indian Head, Swift Current and at Scott; and1 we did carry on work in cooperation with Seager Wheeler in Rosthern for a considerable time. I understand that work is still being carried on there. The hon. member for Melfort may know the location. I think there is an experimental station in his area where some experimental work is being done. I think we are doing work at Beaver lodge, which is farther north up towards the Alberta-British Columbia boundary. I quite agree with what has been said, that we should encourage the growing of small fruits, not only apples and plums, but berries of different kinds. Raspberries produce abundantly in the section of Saskatchewan from which I come and can be produced in many other places.


Mr. McMASTER:: I was interested in knowing how many different branches of experimental farms there were, but I found the answer in a voluminous bluebook. Can the minister tell me why the province of Saskatchewan has eight different branches; British Columbia, six, and the rest of the provinces all together about the same number. I can understand British Columbia's interest because the minister from British Columbia has so far carried most of the estimates; but I wonder whether the Minister of Agriculture, who is an old Ontario boy, would explain why Saskatchewan has so many branches.


Ian Alistair Mackenzie: I want to thank my hon. friend for his kind remarks.


James Garfield Gardiner: The answer as between Saskatchewan and British Columbia is, of course, very easily given. Probably I had better not say this because I may have a long discussion, but I shall take a chance on it. The agricultural areas of British Columbia are limited because of the nature of the province. It is a mohntainous province, and the number of stations required there is not as great as in a province like Saskatchewan where the only industry carried on to any extent is farming.


An hon. MEMBER:: And politics.


James Garfield Gardiner: My hon. friend back here says "politics". Well, even farming is more important there than politics.


An hon. MEMBER:: You do not get your bread and butter in that way.


James Arthur Ross: Some of them get it.


James Garfield Gardiner: Some of the stations we have in Saskatchewan are there largely because of what has been brought out in some of the discussions we have had during the last few days. There has been quite a difference of opinion as to whether or not it is a good place to live in. Personally I prefer to live there to anywhere else in Canada. But one of the reasons why I am interested in living there is that it is a little difficult to make a living, and I rather enjoy a good fight, even against climate.
The experimental stations which we have throughout Saskatchewan are there for the purpose of teaching people how to live in an area which some people think we should not have opened up at all. Personally, I should like to say this with regard to that. We had quite a discussion to-day about the Palliser triangle. There are a million people living there. It is all very well to say that they should never have been taken there, but the city of Regina, the city of Saskatoon and the city of Calgary are within that area, and all the farming areas that are located tributary to it are in that area.


Arthur Leroy Smith: Not Calgary.


James Garfield Gardiner: The hon. member had better examine his maps. I have had to draw a line around that area for the purposes of the Prairie Farms Rehabilitation Act. The reason there is P J'Jt.A. work out there is that it is in the Palliser triangle. If you draw a line from Morden in Manitoba, straight west to Lloydminster; then another line straight from Lloydminster bo the foothills west of Calgary, and then go to the boundary line you have the Palliser triangle inside of that to the south. There are a million people living there, and with all due respect to those who think they should not have been put there I should like to know just where you could put a million people if you took them out of that area. I should like to know where else you could plump them down and have them do any better than they are doing at present if you took them out of that area.
Some people have said they have moved back from the west, and others have said they have moved west. That is because of what we like and do not like in the way of climate and in the way of making our living. Out there we have illustration stations largely because of what was said by one hon. member a few minutes ago, that there was a time when they could not grow wheat in the dis-

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trict in which he lives; but they grow wheat there now because of the activities of some of these people who have been carrying on experiments. In the district in which I live it is not many years ago that they could not grow wheat, though I live just north of the Qu'Appelle valley. They had to grow oats and raise live stock; but to-day they grow wheat almost exclusively. Those conditions were changed not because the weather changed or because the soil changed, but because somebody carried on experiments and discovered wheat that could be produced in a short season. Not only did they carry on experiments; some breeding was done which made it possible to get wheat-which could be used in those areas. The tests are made in regard to that breeding by taking the wheat from the experimental farm to the illustration stations and trying it under those soil conditions. If it will produce in a certain length of time, or if it is free of rust attacks during certain seasons, then we continue to grow that type of wheat there. That is the real reason why the stations, are located at different points all over western Canada, not only in Saskatchewan but throughout Manitoba and Alberta. More of them are in Saskatchewan than in any other province because, as some hon. members opposite have been trying to demonstrate for some days, we think we have more problems than the other provinces.


Mr. STOKES:: Before this item passes, I should like to come back to Ontario for a little while. Would the minister tell us something about the number of illustration stations in Ontario? I am thinking particularly of a newly projected station just west of the town of Trenton, along lake Ontario. I should like to know what kind of work it is going to do, what the staff will be, and so on.


James Garfield Gardiner: It is really a small experimental farm that has been established at Trenton. The staff will not be large; that is the permanent staff, but we will send men there from the central experimental farm here to do a considerable portion of the work. A skeleton staff will be there all the time operating that farm.


George Henry Stokes: What is the nature of the work to be carried out there? Is it to be purely in connection with the apple growing industry, or is it to render a general service?


James Garfield Gardiner: The work is experimenting in the best methods of building and maintaining orchards, treating apple and other fruit trees with spray, and the best methods of producing vegetables in that dis-47696-1661
trict. I was at that farm within the last three months, and was pleased to see the development that has taken place.


George Henry Stokes: We are grateful to see some move made in regard to growing apples.


Mr. BARRETT:: While we are on this item I should like to put in a word for the dominion experimental substation at Delhi. Mr. Stinson, who is in charge there, is doing a very good job in experimental work in connection with tobacco. I know during the war he was handicapped by lack of help; now he would like to make some extensions'-to his plant, so that I just want to draw this-matter to the attention of the department in the hope that he will be given every consideration.


James Garfield Gardiner: I am pleased to have' that statement with regard to the Delhi farm.. I understand that the two men who were' employed there as assistants before the war and who have been overseas are returning to the farm, so that we hope it will operate with greater efficiency in future than has.been possible during the war.


John Bracken: Will the minister state whether any experimental or research work along forestry lines is being carried on under the experimental farms branch?


James Garfield Gardiner: Yes; we have the forestry nursery stations at Indian- Head and Saskatoon, with which I am sure the leader of the opposition is quite familiar. These stations supply forestry plants for all four provinces.


John Bracken: Formerly they were under another department, were they not?


James Garfield Gardiner: I understand that at one time they were under the Department of the Interior, but that was before my time.


John Bracken: I am asking this question because, as I remember the remarks of the Minister of Reconstruction the other day on another matter, he indicated that certain research work along forestry lines was being undertaken by that department. This may not be a matter I should discuss now; I am not particularly anxious to do so, but I want to know when it might be discussed. I am wondering, though, since forestiy work is already being done in one or two other places, why research work in forestry should be placed under still another department. I do not ask that much time be taken on the point now, but perhaps the minister could say a word about it.
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James Garfield Gardiner: I understand that the work, really is to be done under the Department of Mines and Resources, which is the continuation of the old interior department. That work is in connection with natural forests. The work we are doing at the two forestry farms is reproducing trees which will grow well in different localities, and distributing those trees, particularly to farmers. That work is done by the Department of Agriculture, while the other work, related to the natural forests, is carried on by the Department of Mines and Resources. They will get their money for the special work that is to be done during the reconstruction period from the reconstruction vote. We will supply men who will cooperate with them in some of the work, but really the work will be carried on by the Department of Mines and Resources.


John Bracken: Those whom you might call research men, then, would be in the Department of Mines and Resources rather than in the Department of Agriculture?


James Garfield Gardiner: We do the work in connection with breeding plants; we do the research work in connection with diseases of plants and in connection with attacks made "by insects upon plants, through our entomological branch. All that work is done by our research men, but they work in cooperation with the others.


Frederick Samuel Zaplitny: A short time ago the hon. member for Swift Current raised a question I should like to pursue a little; that is, the possibility of using airports that have been declared surplus for experimental stations. As the minister probably knows, at Dauphin we have two very fine airports. It is possible that one may be used for commercial purposes, but at least one will be declared surplus. Has the department taken into consideration the possibility of using these airports that have been declared surplus for experimental stations, or anything of that sort? I might point Out that both the Dauphin airports are built on some of the finest land in Manitoba; they have fine buildings, water supply, electricity, and are close to town. Either one would make a fine experimental station. We have tried to get the Manitoba government interested in starting an agricultural college at one of these airports, but they have decided against it, so that I hope the dominion department will be able to make some use of these facilities.


John Bracken: If I may revert to the answer given by the minister a few minutes ago with respect to research in forestry, I was not aware that his department was doing as

much in the way of research along forestry lines as apparently is being done. Could the minister give the committee a general idea as to why any research is Joeing carried out by the Department of Reconstruction, when the Department of Agriculture apparently has men who can do it?	.


James Garfield Gardiner: I do not like to be too specific in the matter, but I do not think it is the intention of the Department of Reconstruction actually to do any of this work. The principle, as I understand it, is this, that during the war we have been voting considerable sums of money for war purposes. If I wanted any of that money to develop something having to do with the war-possibly the greater production of hogs needed for food-I would have to go to the Minister of Finance who had charge of the fund and ask for a part of that money, through treasury board, to carry on the work. But that work was not carried out by the department which had control of the funds. They examined into the necessity for it, and if they thought it was necessary for the performance of part of the war effort the money would be turned over to the department in question carrying on the activity.
My understanding is that the Department of Reconstruction is going to take similar procedure in respect of a very considerable sum of money which may be voted by the house. Parliament will vote a sum of money. Then, for example, I would say that some irrigation work must be carried on in connection with research. This would be something outside and beyond anything provided by the civil estimates to my department. If I can convince them that the work I have suggested is important enough to make a sum of money available, we would then bring in a supplementary estimate which would propose to spend that money in the Department of Agriculture.
I think it would be also true to say that the Department of Mines and Resources would have to go to the Department of Reconstruction. The Department of Reconstruction would have the final say as to whether that money is to be used in a certain way, rather than by the Department of Agriculture, or somewhere else. But once the money is supplied for the work, our officials and those of the Department of Mines and Resources will carry it out.
For example, in connection with a dam required to promote irrigation, I understand that even after we have persuaded the Department of Reconstruction that we need the money and that the project is a good one,

Supply-Agriculture
it may say, "But you have not the proper engineering skill in your department to do this work." We would then say, "Whom do you recommend as engineer?" Or we might say, "If you have engineers elsewhere who you believe can do this work, who are they?" In this way we would cooperate in getting the work done. The work will be carried out by whatever department or branch has been accustomed to carrying it out in the past. In this instance it would be Mines and Resources, and Agriculture.


John Bracken: I can understand how engineering work might be handled in that way. But with a branch [DOT] of forestry in the Department of Mines and Resources, and with an experimental farms branch in the Department of Agriculture, in which there are experimental and research men, I. cannot understand why another department-a new one-should be undertaking work which already is being done in one or two other departments? At the moment I am not criticizing; I am only seeking to understand why such duplication is necessary.


Frederick Samuel Zaplitny: May I have an answer to the question I asked a minute ago?


James Garfield Gardiner: Up to this time no consideration has been given to using the airport at Dauphin. I do not know whether any consideration will be given to it or not.


[Stage Direction]
Item agreed to.
15. Production service administration, $35,445
James Arthur Ross: In the war appropriation estimates for the Department of Agriculture, as they are shown at page 552 of Hansard, there is a vote for subsidies amounting to $27,111,749 to producers of food products. May I ask about that item at this point?


James Garfield Gardiner: Subsidies are paid to bring about greater production, and to that extent the item could be discussed now.


James Arthur Ross: Would the minister give the committee a breakdown? What amount has been spent under this item on different agricultural products?


John Bracken: Perhaps I might be permitted to interject a brief observation at this point. I notice that, as we are reaching another branch of the work of the department, the minister is changing advisers. I should like to associate myself with those who have complimented the minister and his department upon the type of work which has been
done across Canada in the last thirty or forty or fifty years by the experimental farms branch. Anyone who is familiar with that service particularly in recent years, must realize that it has been a wonderful investment, one which has returned to this country manyfold the expenditures made in connection with it. I commend the whole service from top to bottom, and in this respect would include the minister as well.


Mark Cecil Senn: I believe it is understood that certain subsidies ate given to increase production and others are given to offset the price ceiling. Would the minister make a full statement regarding marketing as well as production?


John Bracken: May I add a word in support of the hon. member for Haldimand. Could we have a general statement which w'ould give the full picture of subsidies administered by the minister's department? When we reach other departments we can get similar statements from them.


James Garfield Gardiner: There is a lengthy list, but I could begin to give it.


James Arthur Ross: I believe the hon. member for Haldimand was referirng to the fact that large items are spent by the Minister of Agriculture and other large items by the Minister of Finance. Is this true?


James Garfield Gardiner: Some subsidies known as consumer subsidies are paid to cut down the cost of living. Then other subsidies are paid for the purpose of getting greater production, and consist in increased payments to producers. I believe that information can be supplied from the figures I have before-me. All are listed together in the information given me, but I believe when going through them they could be separated.


John Bracken: Is there any prepared . document giving that information?


James Garfield Gardiner: The document I have gives it pretty well.


John Bracken: Have we had that document?


James Garfield Gardiner: I doubt if you have,,
but it can be had. I have here the details of estimated expenditures for the fiscal year 1945-46, the one we are now in. For the agricultural food board the sum of $21,334 is-given for administration. That is the amount, already granted. The additional amount required is 840,695, making a total requirement for 1945-46 of $62,029. That is for administration.
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Then follow subsidies on food products. The subsidy on milk for butter, fluid milk and cheese concentrates for 1944 was $4,500,000, and for this year, $4,500,000. The subsidy on milk for 1945:	amount already granted
$22,000,000; amount required, $23,000,000; total, $45,000,000. Subsidy to producers of fruits for jam and canned raspberries: 1945, $200,000 already granted, $400,000 still required, or $600,000 in all. Subsidies to producers of fruits for jam and canned raspberries, 1944, $83,333; and for this year it is $83,333. Subsidy to producers of tomatoes, corn, peas and beans: $200,000 already granted; $2,550,000 required, or a total in all of $2,7';0,000. Subsidy to producers of tomatoes, corn, peas and beans, 1944, $22,916,000. Subsidy to producers of white and yellow eyed beans:	$100,000 already
granted; $1,100,000 additional amount required, making a total of $1,200,000. Subsidy on milk used in the manufacture of lactose, $5,500. The total amount already granted, which includes some grants prior to this year, is $27,111,749. The total amount required to March 31, 1946, is $27,050,000. Total amount required-it says here for 1945-46 but I think that is the total down to the end of 1945-46, according to what I have been reading-is $54,161,749.


John Bracken: Would the Minister of
Agriculture have this information put in form and then place it on Hansard to-morrow the way it is given, because it is a little difficult to follow?


James Garfield Gardiner: I could have a table made up and bring it in when we start the estimates again and ask to have it placed on Hansard. I take it that what is wanted is a total of subsidies paid right through the war period.


John Bracken: Yes.


James Garfield Gardiner: Would the hon. member like that divided into producer subsidies and consumer subsidies?


John Bracken: All subsidies administered by the minister's department.


James Garfield Gardiner: That would be only producer subsidies.


John Bracken: When we come to other -departments we can get the subsidies paid by ilhem and then have the whole picture.


Mr. McCULLOUGH (Assiniboia):: I should like to know if the annual dominion-provincial production conference which was organized some years ago and which is representative of dominion and provincial departments of agriculture and farm organizations is to meet

to make an all-out effort to cooperate in the production of food. I think it is essential that this conference should meet- and that the techniques and cooperation which are provided be continued in the post-war period.


James Garfield Gardiner: The conference is to be held on Monday, Tuesday and Wednesday of next week. This will be the first meeting after the war, and it is our intention to continue to hold them as long as we can secure the cooperation of the provinces and the farm organizations. Therefore I think they will continue right on through the years. We believe they are helpful and serve a good purpose.
I w'ould call the. attention of the leader of the opposition to the fact that a return is to brought down in answer to a question asked by the hon. member for York East (Mr. McGregor) on October 7. The hon. member asked what amount had been paid in subsidies by the government from September 1, 1939, to September 15, 1945, and on what products were subsidies paid during that period and how much on each. This return I think could properly be put on Hansard, although it might be well to bring it up to date. It deals not only with the subsidies we have been dealing with but also with freight subsidies which work into the production of farm products. All kinds of subsidies are given and my hon. friend could very easily take out those that he has in mind.


John Bracken: That seems a good suggestion. If there is any item omitted in that return, perhaps the minister would see that it too is included on Hansard.


James Garfield Gardiner: I think the part of the return which I have is an answer to those matters which concern agriculture, and it covers other subsidies which we have not discussed to-day.


Percy Ellis Wright: I hold in my hand the proposals of the government of Canada to the dominion-provincial conference, and on page 9 I find the following:
To eliminate war-time subsidies related to the stabilization policy when inflationary pressures begin to ease.
What, if any, agricultural products would come under that clause? There must be some subsidies being paid by the Department of Agriculture which would come under that classification.


James Garfield Gardiner: There will come a time. I do not know just how soon or how late, when we will transfer from the policy we have been following during the war to the policy provided under the legislation to establish floor prices which we passed at the last

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regular session. Under that the Department of Agriculture is provided with $200,000,000 to be used as a circulating fund to do during the transitional period following the war what we were doing under the War Measures Act during the war, that is, to carry on in principle the same kind of thing. When the time comes to discontinue the payment of subsidies under the war measure, then the board that has to do with the other measure will come into operation. Whatever conditions will have to be met, I anticipate, if it is necessary to use that fund, we will use it. The plan under which it will work is one of two ways. Either we will say to the people who are new in the business, whether cooperatives or persons in private business, "Go ahead and market the products," and if it is marketed at a price which is as high as or higher than we consider a reasonable floor, it will not be necessary to use any of the $200,000,000 by way of assistance. But if it is necessary to market the product at a lower return than that, then we will say to these parties, "Go ahead and market the product at whatever y.ou can get for it and you will be paid the difference between what you get and the floor price. In other words, you can proceed to pay the farmer the floor price and any difference between that and what you actually get for it will be refunded out of this fund." That is a subsidy, but it will not continue under the plan which has been followed during war1 time; it will be continued under the floor prices measure. Does that answer the question?


Percy Ellis Wright: It does not answ* as to the specific products which will come under it.


James Garfield Gardiner: I should have said that the $200,000,000 is provided for all products excepting grain.


Percy Ellis Wright: Does that include barley, oats, flax or rye, or just wheat?


James Garfield Gardiner: No; it leaves all the grain to the wheat board. The board which is set up for handling farm products under what we have come to call the floor prices measure has $200,000,000 for everything but grain. At the time the bill was discussed the government announced as a policy that similar provision of funds will be made to the wheat board when the time comes that that provision is required; a similar provision will be made to supply funds to the wheat board to do the same thing in relation to grain. In other words, the $200,000,000 is to operate outside of grain. It can be understood that \ye have had experiences in the past when it would have required perhaps the whole
$200,000,000 to handle grain. That was not considered a sufficient sum to take grain in, and it was provided at the time as part of the government's policy that if it became necessary, in order to maintain the proper floor level of grain, sufficient funds with which to do it would be made available to the wheat board.


Percy Ellis Wright: Can we take it from the minister's remarks that it will be the policy of the government to see that, either under present subsidies or the floor price legislation, the prices of agricultural products are maintained at present levels as long as production costs remain at their levels as of the present time?


James Garfield Gardiner: I would not want to say definitely that on every single farm product that would necessarily carry through, but I would say that that is the general principle underlying the policy. There may be some products-I am not prepared to say at the moment-to which we gave special consideration during war time because we required production for a special purpose during the war and may not require it for the same purpose during peace time, for instance, some of the oils which we required and of which we promoted the production because they could not be obtained at that time from the East Indies; it may not be advisable, all things considered, to try to persuade farmers to produce such products during peace time.


Percy Ellis Wright: In that connection, if that is the policy of the government I cannot understand what has taken place with respect to the production of bacon in this country. The minister through the policies he has instituted has certainly caused the production of bacon to decrease greatly. He gave his policy in the house not very long ago, when he stated that as far as the production of bacon in western Canada was concerned, and I quote his words as reported in Hansard of September 24, at page 498:
This simply means that a farmer in the west must make a decision, and must have an argument with himself as to whether it pays best to feed barley or to sell it, and that is exactly the position in which we wanted him.
It seems to me that the production of hogs and bacon is an important part of our economy. It is something in which there is and has been a profit. It is an article which is needed. Yet the minister, through various types of legislation and the control of the price of grain, has reduced the profit on the production of that product, especially in western Canada, to a point where it is uneconomic at the present time. I have come from
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tvhat I believe is the largest hog-producing district in Saskatchewan. More hogs have been raised in the Carrot river valley than anywhere else in Saskatchewan and, probably,, in the three western provinces, but a serious situation exists there at the present time. From observation I am sure there has been a reduction of production there of at least forty per cent; as yet the trend has not been stopped, and I am just wondering what steps, if any, the minister is taking to arrest that decline or to get people back to the production in western Canada of this important product.
I believe, given natural conditions, there is no other place in the world where pork can be produced cheaper than in western Canada. We grow the grain, and the hogs are raised on the farms where the grain is grown, so that the only freight which has to be paid, is the freight on the finished' product. But the policy which the government has adopted, of making it practically uneconomic to produce hogs there, is certainly creating a situation which I think should be remedied.


James Garfield Gardiner: I wish to take just a moment or two, 'since it is six o'clock. The present position is that there is a reduction of fifteen per cent in the production of meat in Canada this year as compared with last year.


Percy Ellis Wright: I was referring to hogs.


James Garfield Gardiner: Grain is needed for one purpose just as much as for the other. If you are going to finish beef you finish it largely with grain-.	1


Percy Ellis Wright: May I just point out to the minister-


James Garfield Gardiner: I ask the hon. member to wait a moment if he wants a reply; if not,
I will sit down. The real reduction in meat in Canada is fifteen per cent, and it is to a large extent the same farmers who feed hogs who also feed cattle. Some farmers feed hogs and do not. feed' cattle; seme feed cattle and do not feed hogs; but, generally speaking, the hogs and cattle are both fed on the family-sized farms across Canada; they are not fed on the bigger ranches. About ten per cent only of the beef is fed there; the great proportion is fed on the small farms. The general situation is that you cannot have at this time more hogs in Canada than you have now. My hon. friends keep getting up and saying that the government has some policy which has resulted in there being fewer hogs. The government has not anything of the kind, and the government policy with regard to it has had very little to do with the matter, either when we had a big increase

or a considerable drop. I can remember when the opposition, sitting where they are now although there were not so many of them, used to tell us that we were taking credit for what providence had done. I [DOT] said at that time that I would much rather be with providence than against it. While we do not take all the credit for increasing the production, may I point out that if our hon. friends thought increased production should1 follow the good weather of 1942, they should, in accordance with that same idea, agree that when the production of grain is not so great, we cannot have as high a production of live stock. Let me put on the record the figures for the carryover of oats at the end of the year. From 1935 to 1939 the average carryover was 35,000,000 bushels at the end of the crop year. The average from 1940 to 1944 was 85,000,000 bushels. Even after we had fed greater, numbers of live stock we still had a carryover of 85,000.000 bushels. For the year 1944-45, ended July last, the carryover was 98,000,000 bushels, after we had fed more live stock and exported grain. For 1945-46 we estimate that it will be 46,000,000 bushels, and for 1946-47 it is estimated that it will be 25.000,000 bushels. Our production of live stock goes up and down with the production of grain, and the production of grain goes up and down with the weather, as everyone knows who has been on a farm; particularly is that so where grain growing is the main activity.
With regard to barley, the situation is much the same. The carryover at the end of the year, for the period from 1935 to 1939, was 9,000,000 bushels; from 1940 to 1944 it was
33.000.	000 bushels; for 1944-45 it was 29,000,000 bushels; and for 1945-46 it is estimated at
15.000.	000 bushels. It is estimated that we may have an increase in barley because of the increased acreage in 1946-47.
The policy of the government has been to study these figures, to encourage the production of feed grain and to estimate what is going to happen on the basis of grain production. When hon. members in the early part of the war were getting up cohtinually and saying that next year we would have a decrease in production we kept continually saying, "No; we are not." The only reason wp had for that statement was that our statisticians were able to assure us that there was such a condition prevailing on the land across Canada that we would have an increased production of feed grain, and as we had an increased production of feed grain the farmers would feed more live stock. In order to make sure that we would have enough we paid $4 an acre to take land out of wheat and put it into feed

The Budget-Mr. Irvine
grain and summer fallow for the purpose of increasing grain production. , That was our policy and we got wheat acreage down from
28,000,000 acres to 17,000,000 acres and summer fallow acreage up by 6,000,000 acres, while oats and barley acreage was up. In 1942 we produced twice as much feed grain as in any other year.
I am quite prepared to agree with hon. members who point out that at that time the weather had a lot to do with the matter, but the weather has had a lot) to do with cutting down production since. Hon. members have been telling us for three years that we have had a drought on the boundary line between Saskatchewan and Alberta.


Mr. BURTON:: You did not raise hogs there.


James Garfield Gardiner: We raised hogs there in -1942-43. My hon. friend was sitting in the 'legislature when the money was voted to take hogs into that part of the country, and a great part of our increased production came from that dried-out area as well as from other areas where there was an increase. With the drought of 1943 some of these men went out of hogs. With the drought of 1944 more . went out of hogs, and with the drought of this year still more have gone out of hogs. Live stock is still there, with the result that one member asked me this afternoon how we would provide feed for the live stock in view of the fact that with the early coming of winter live stock cannot be fed in that section of the country at present.
The problem has always been one, first, for the provincial governments, add when they have not enough grain in their own province to move into dried-out areas within their own boundary lines they have come to us and asked us to provide grain out of some other province. We have cooperated with the governments in the freezing of grain in those areas, and it is the freezing of grain in those areas to complete the feeding of hogs that has made it possible for the farmers to produce the numbers coming from there now. The method of freezing grain there was simply to tell the farmers to sell that grain for feeding hogs instead of selling it to- make beer. We said, "You will get the same -price for grain to feed hogs as you would have got for grain for brewing purposes." Because we did that we are getting higher production than otherwise. I wish to repeat that much of the reduction is due to the fact that we have not had very favourable weather in- the last two or three, years. Our grain production is down.


Joseph William Burton: The minister will recall
that on different occasions 'in this house I pointed out that from a sow that went over the butcher's block you would not raise a litter of pigs.


James Garfield Gardiner: That is quite true; no
sow that goes over the butcher's block will raise a litter of pigs. But my hon. friend knows, as I know, that a contented sow feeds much more easily than one which is not contented, and there are many sows that go over the block which were not intended to raise litters of pigs. One cannot take statistics with regard- to sows that go over the block and base conclusions upon it. The basis of feeding all live stock is grain, and the policy which the government intends to lay before the provinces next Monday is the policy of the war years of producing more feed grain in order that we may get more hogs and cattle. Without more feed grain we cannot finish even the hogs and cattle we now have.
Progress reported.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



THE BUDGET


[Stage Direction]
The house resumed from Tuesday, November 27, consideration of the motion of Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Maedonnell (Muskoka-Ontario), and on the amendment to the amendment of Mr. Coldwell.
Mr. WILLIAM IRVINE (Cariboo):: Mr. Speaker, when eleven o'clock came last night I was just about to sum up what I had been trying to say in the budget debate. I had advanced certain principles which I thought should be embodied in a national budget that would be adequate to meet the economic conditions of our time. In my concluding remarks I wish to advance the idea that the time has come when the Canadian people will have to make a great decision, and that decision will be the matter of deciding the framework within which we intend to develop democracy.
Last night I tried to show that it is not possible to develop a true democracy within the framework of capitalism or so-called free
The Budget-Mr. Irvine

enterprise. The profit motive itself is entirely undemocratic. The relationships which the conflicts in the industrial field produce between the employer and the employee are undemocratic. The relationship which exists to-day between the great monopolies and the farming industry is undemocratic. The profit motive is undemocratic because it cannot be universalized. You can universalize the ballot to every person of a certain age; that is democratic. You cannot universalize profit because it is not possible for everyone to make profit. It is only possible for a privileged few to make profits, and they must be made at the expense of the great majority of the people. Therefore the relationships which the present system leaves amongst people is entirely democratic.
These are some of the things to which we must give a great deal more attention than we have hitherto been accustomed to do. I suggest that the great democratic ideal which this country held throughout the years of war should be the objective in time of peace. It is true that in the war years our democratic ideals were more or less negative. We were in a struggle to retain that measure of democracy which we had achieved, and that itself was worth fighting for, but it was negative. The time has come for us to make a positive effort to build a true and real democracy in this country. With regard to the budget in that respect I would suggest to the minister that the budget should be prepared for at least a five-year period instead of from year to year, thus giving the government an opportunity to carry out its own policy. As I understand it, this policy is to entrust the affairs of the nation to private enterprise, and when private enterprise breaks down, as everybody believes it will break down, then the government is going to enter into fairly extensive public expenditures to take up the slack which will result from failures of private enterprise. If that is to be done, and if we are to be protected from the swings from booms to slumps, then a five-year period would be the better basis of a budget, and would leave the government a better opportunity to protect itself and to protect the country from the failures of private enterprise.
I wish to make just one more observation in relation to War Assets Corporation and the surplus goods in their hands. In particular, I desire to make a remark about the surplus goods which could be used for educational purposes. Such goods have already been paid for by the Canadian people. I deplore the idea of passing these goods into the hands of the manufacturers, and then having them 
sell them again* to the Canadian public. All goods which can be used in public institutions, such as our educational institutions, should be given to these schools and colleges absolutely free. The same idea applies to medical institutions, hospitals, and so forth, and also to materials which were used in dramatics. They could be distributed also to communities to be used in the interests of art and for the recreation of the general public.
Then we have a great demand from farmers and communities for equipment which is now being declared surplus. For instance, the people of Dawson Creek want to purchase a road-grader from the R.C.A.F. I have not been able to have that done for them. The government refuses to consider their application; the chances are that the road-graders there will be sent in to the control of War Assets Corporation, shipped out of the country, and sold for a song to the big interests, and these people will never have a chance to purchase it at all. This may not have much to do with the budget, but I suggest to the government that they give consideration to what I have said in that regard.


Victor Quelch: Mr. Speaker, I had not intended to say anything on the budget, and even now I rise merely to make a few comments in order to clarify the stand of this group on the two amendments which are before the house.
As the house is well aware, only two amendments may be moved on the budget. Therefore we in this group find ourselves at this time in the position of being unable to move an amendment. Consequently we have to take a definite stand on the amendments that are now before the house. First of all, I wish to refer to the amendment moved by the C.C.F.
I should like to refer to page 2565 of Hansard and quote what the hon. member for Rose-town-Biggar (Mr. Coldwell) had to say with reference to the amendment moved by the Conservative party. I quote as follows:
... I am going to move an amendment; for although we of the C.C.F. could vote for the words of the amendment, we cannot vote for what we believe to be the substance of the speech which introduced it or what lies behind the words of the amendment.
No doubt the leader of the C.C.F. party was perfectly justified in taking that attitude; but since he has done so in reference to the Conservative amendment. I am sure he will not object to the members of this group applying the same sort of reasoning to his own amendment. If w*e take the C.C.F. amendment and apply to it that kind of reasoning,
I want to ask the house just exactly what we have. I am satisfied that if you asked every

The Budget-Mr. Quelch
hon. member to say exactly what the C.C.F. amendment means, under that sort of reasoning, probably you would get as many different answers as there are members. I would not hesitate to say that this amendment not only denotes but connotes complete socialization of industry in progressive stages. I should like to read the first part of the amendment; that is the only part to which I intend to refer. It is found on page 2566 of Hansard'.
That the amendment be amended by adding to paragraph (a) the -words, "which require the use of our national credit in terms of public need . . ."
I should like to pause there for a moment, because it is interesting to note these words. We in this group have often used that expression in reference to certain national affairs; and invariably in the past when we used that phrase the C.C.F., when moving an amendment, have moved to strike out those *words and substitute in their place "nationalization of the chartered banks." So that it is quite interesting at this time to note that they no longer advocate nationalization of the chartered banks but rather advocate the use of the national credit.


Mr. COLDWELL:: Yes, we do advocate the nationalization of the banks, as a means of using the national credit.


Victor Quelch: In the past they have not been satisfied to leave it at that but found it necessary to put in their amendments the words "nationalization of the chartered banks." In this case they have not found it necessary to do so.


Major James William Coldwell: You cannot move the same thing twice in one session.


Victor Quelch: That has not been moved this session.


Major James William Coldwell: Yes, it has. .


Victor Quelch: I now proceed with the amendment:
". . . to make possible a large-scale investment programme, the public reconversion of war industries for peace-time needs, the public development of new industries, of scientific research and of our natural resources."
You will note, Mr. Speaker, in the amendment the word "public"; "the public reconversion of war industries for peace-time needs, the public development of new industries, of scientific research and of our natural resources," so that I think everyone will agree that this amendment at least must mean that war industries changed over to the production of peace-time goods will be nationalized or socialized or publicly owned or however you
like to put it, and also that this will apply to all new industries, scientific research and natural resources. That is the conclusion to which one would come on merely reading the amendment; but if we apply to it the reasoning of the hon. member for Rosetown-Biggar and read between the lines, then I say we get a totally different interpretation. I think the best place to go for an interpretation of what it really means is to the annual convention of the party held in Montreal last fall. I hold in my hand a quotation from the Montreal Gazette dated November 30, 1944. There in a reference to consideration of what was apparently an election manifesto, and I quote:
The original section submitted to the convention and which drew opposition from delegates Harold Winch, C.C.F. house leader in the British Columbia legislature, and convention chairman Colin Cameron, of Courtenay, B.C., urged:
"The socialization and democratic control, under' either public or cooperative ownership, of key industries which are monopolistic in operation, in order to free the Canadian economy from the domination and restrictive practices of monopoly control and to make possible national planning for maximum production."
Mr. Lewis said he did not take second place to Mr. Winch and Mr. Cameron in advocating ultimate complete socialism, but that "at the present time I am concerned with winning an election."
"We are now a strong political force in Canada," he said, "and we are on the eye of winning power. We must think in responsible terms as if we were in power."
A motion by Mr. K. Han, a C.C.F. candidate in West York, to have the section,replaced by a section of the Regina manifesto was defeated by an overwhelming majority of the delegates after he stated that Mr. Lewis wanted "power at any cost," and that the present motion had been drafted for the sake of political expediency.


Major James William Coldwell: I rise to a question of privilege. As the leader of the C.C.F., I wish to say that this report was denied as inaccurate. No such thing was said by Mr. Lewis at that convention.


Victor Quelch: Well, Mr. Speaker, it is very strange but these days practically every time a report is quoted in the press the C.C.F. deny it.


Mr. GILLIS:: Why go to the Tory press for your authority?


Victor Quelch: I have in my room a
similar quotation from a newspaper which certainly does not belong to the Tory press.


Clarence Gillis: We will give you some
official documents if you wish information.


Victor Quelch: I will give you another quotation instead, then; but before leaving that one I wish to say that personally I do not for a moment doubt that it is correct. They may want to put a different interpre-
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tation on what has been said, but I think the meat of the thing is there, that they did not think it wise to advocate at this time complete socialization; they wanted to soft-pedal things just before the election. I can honestly say that to-day I do not know what the C.C.F. stands for.


An hon. MEMBER:: Who does?


Victor Quelch: Let me give an example. A few years ago in my constituency quite a movement was on foot to try to get cooperation between the C.C.F. and other progressive forces. I suggested that the C.C.F. stood only for the socialization of monopolistic institutions.


James Horace King: Order. I should like to remind hon. gentlemen that when an hon. member has the floor no interruption may take place without his consent.


Victor Quelch: Since there was quite a bit of noise in the chamber perhaps I had better repeat what I just said. I was saying that in mj' constituency a few years ago. there was a good deal of interest in regard to the possibilities of cooperation between progressive groups. Speaking at a meeting, I stated that as far as the C.C.F. were concerned they only believed in the socialization of monopolistic institutions. A C.C.F. supporter in the back of the hall got up and demanded that I withdraw that statement. He said it was an absolute misinterpretation of the C.C.F. stand, that they stood for absolute socialization of all industry. You find that attitude in many places, especially in the west, even if that is not the attitude in the east. But where there is smoke there is fire, and I suppose there must be some reason for this dispatch from the Montreal convention. I should not think the press entirely imagined it; there must have been some, reason for making a statement of that kind.
However, Mr. Speaker, let us go to western Canada. I should like to go to Calgary instead of Montreal because. I think Calgary is a more progressive city; and perhaps the C.C.F. will be more satisfied with this quotation. It is dated November 11, 1943, and appeared in the Calgary Herald, referring to a speech made there by Mr. Winch. I am not going to quote the whole speech; I wish to quote only that part relative as to whether or not the C.C.F. stands for full socialism, or pink socialism or red socialism or whatever it may be. So that I am going to quote only
fMr. Quelch.]
that part; I am not going to quote the rest of it; I am sure the C.C.F. would take great exception to it:
Mr. Winch declared that if and when his party assumes power at Ottawa it will institute socialism immediately.
That seems pretty definite and I do not think it has ever been denied. So again I say that if we use the reasoning toward the C.C.F. amendment as suggested by the leader of the C.C.F. party in connection with the Progressive Conservative amendment, then we are bound to come to the conclusion that this amendment means the socialization of all industry in Canada-maybe not to-morrow, maybe gradually and in stages, so much this year and so much next year. But I think most hon. members will agree the last general election showed clearly that the people of Canada were turning thumbs down on socialism at this time: If there is any doubt about that so far as some parts of Canada are concerned, certainly there can be no doubt as far as Alberta is concerned. The people of that province have turned thumbs down doubly in so. far as the C.C.F. programme is concerned, first at the provincial election and then at the federal one.
I should like to say a few words about the amendment offered by the Progressive Conservative party, and I shall do as was suggested by the leader of the C.C.F., namely, follow the same line of reasoning as they followed. But before leaving the C.C.F. amendment, I might add that in view of the fact that it definitely does stand for the complete socialization of industry, this group will be voting against it.
So far as the Progressive Conservative amendment is concerned, I would turn to page 1302 of Hansard and read the amendment as it appears on that page:
The house regrets:
(a)	That no effective plan has been proposed to ensure full production and employment;
(b)	That no satisfactory policy has been advanced for the elimination of extravagant governmental expenditures.
Just exactly what is the stand of the Progressive Conservative party, so far as governmental expenditures are concerned? If we would turn to page 1296 of Hansard we would get a pretty' good idea where they stand in this regard. This is what we find:
So far as expenditure is concerned we must make up our minds, based on the best estimate we can make of the national income, how much of this income can be safely taken by the state; and having made up our minds on this, we must then make a heroic effort to keep our expenditure within that amount.
That is to say, we must first of all decide upon the amount of money we can obtain

The Budget-Mr. Thatcher
from the people by taxation, and then curtail our expenditures down to the amount of money we obtain. In other words, it is a proposal that we return to the pre-war financial policy of the Liberal government, and attempt to balance the budget. It is the same old policy of belt-tightening that we had in the thirties.
This group has always taken a definite stand against that kind of policy, and therefore we will find it necessary to vote against the Progressive Conservative amendment.
Since the government apparently proposes to continue its policy in regard to debt finance we will also be voting against the main motion. So that we^will be voting against all three-the two amendments and the main motion before the house.
If we had been in a position to move an amendment, all we would have found it necessary to do would be to strike out the word "public" from the two places in which it occurs in the amendment offered by the C.C.F. party.
I refer to the word "public" where it appears before the words "reconversion" and "development". But the C.C.F. party inserted that word for a definite reason, namely, so that we might possibly be embarrassed in voting against the remainder of the amendment to the amendment.


Major James William Coldwell: We put it there because we believe in it.


Clarence Gillis: That is our policy.


Victor Quelch: The group to which I belong believes in a pay-as-you-go policy. That is the stand we have taken consistently ever since we came here in 1935. Our stand has always been that to the extent that taxation fails to meet government expenditures, national money should be utilized1. In this way the people of Canada may be given the highest standard of living of which the country is capable, without increasing our public debt.
During the war it will be remembered that. no financial restrictions were allowed to impede our war effort. Unfortunately, however, already there are signs which show that our standard of living in the future is to be governed by certain artificial monetary limitations. That is why we are opposing the main motion before the house.


Mr. W. ROSS THATCHER (Moose Jaw):: Mr. Speaker, it is now almost three months since I first entered this chamber as member for the federal constituency of Moose Jaw. The current budget materially affects the wellbeing of my constituents and the people of Saskatchewan generally. Therefore, before it is passed I should like to make a few observations.
Speaking in parliament last September 20 the hon. member for Inverness-Richmond (Mr. McGarry) made a plea with which I am entirely in accord. Addressing the government he said:
Do not forget that you cannot have absolute peace in Canada while there is one section which is discriminated against.
I would suggest that the Minister of Finance (Mr. Ilsley) has apparently overlooked that admonition in the preparation of his budget. Once again, it seems to me, my province is a forgotten unit. In the past, one federal government after another has overlooked the vital needs of Saskatchewan. The present administration, unless it alters some of its major policies, will perpetuate serious economic injustices.	,
To-day, despite what the hon. member for Renfrew North (Mr. Warren) said last evening, there is a high degree of resentment in western Canada over the fact that westerners have not yet been given economic equality with the people of central Canada. They are in fact being discriminated against in an economic way. If their grievances are not rectified, then sooner or later I believe the harmony of confederation may be disrupted.
The economic problems of the maritime provinces are similar to those we have on the prairies. I listened with interest some weeks ago to the hon. member for Queens (Mr. McLure) voice some of those grievances. Perhaps if all hon. members from the west and all from the maritimes, regardless of party affiliation, could get together for a few days we might be able to persuade the the administration that we are serious when we say that there is something wrong in our respective sections, and that we would like something to be done about those wrongs.
The first grievance in Saskatchewan for forty years has been the Canadian tariff structure. In times of depression and prosperity alike, the dead-weight of the tariff has borne more heavily upon my province, the one least able to bear it. than on any other province in Canada. Citizens of Saskatchewan, indeed citizens of Canada generally are indignant when they compare the prices of many articles in the United States with the prices of the same articles in Canada.
For years the government have been committed to a policy of freer trade. They have taken numerous steps in that direction. Yet the hard fact remains that the people of Western Canada are still paying exorbitant prices for hundreds of articles which they obtain from the United States.
In order to illustrate that point, with the permission of the house I should like to table
The Budget-Mr. Thatcher

a .record of the tariff on ten articles as taken from the customs tariff and amendments of January 20, 1944. May I do that, Mr. Speaker?


James Horace King: Has the hon. gentleman
unanimous consent?


Some hon. MEMBERS:: Agreed.


Wilbert Ross Thatcher: The table is as follows:

Trade
Agree-
General ment
555 Clothing, wearing apparel et cetera made from wool or similar animal fibres..	40	32J
568 Knitted garments, knitted
underwear, knitted goods	45	35611a	Boots, shoes, slippers....	40	30438a	Automobiles and trucks....	27J	17J
618b Rubber tires - all kinds
vehicles	
35	25415b	Washing machines	
35	25445d	Radios	
30	..415a	Electric refrigerators ... 40	25431b Tools, such as wrenches, screw drivers, chisels, vises,hammers, et cetera .	35	27i427c Machinery for dairying purposes	
35	15
I happen to be in the hardware business. On August 24 of this year, my company purchased some wrenches for farm use from a firm in Chicago, Illinois* The original cost in Chicago of those wrenches was $60.75. In order to bring that merchandise into Moose Jaw the following charges had to be paid: duty, war exchange tax, sales tax, brokerage charges, and the difference on Canadian money. Those charges totalled $40.06. or 66-5 per cent of the original cost. Hon. members can see how adversely our cost of living is affected by the tariff.
We resent the tariff because it is purely and simply a form of taxation imposed by certain interests, for the most part in central Canada, on the rest of the people. It gives those interests the power to tax others to such a degree that, in many cases, of every dollar spent by a maritimer or a westerner, twenty-five cents is a direct tribute to the industrialist of central Canada.
For years our people have been compelled to purchase their necessities for the most part in a high-cost protected market. They have had no alternative. The tariff, has virtually bonused the industry' of central Canada.
Westerners compare such bonusing with the treatment which agriculture, their chief industry, has received. During the W'orld depression when prices of farm products dropped to unbelievably low levels, our farmers for the most part were forced to accept those competitive world prices. With the outbreak of war, when food became scarcer prices began
[Mr. Thaletur.l
to go up. It looked as though at long last they might reach a reasonable level. However. before they were allowed to reach that level, in most cases they were frozen by the administration. In other words, the western farmer for almost all his products has been and still is denied competitive world prices. When world markets were low for the most part he was given no aid. Yet now. w'hen world markets are high, he is actually prevented by government policy from taking advantage of those high prices.
In order to save time I should like to place another .table on Hansard. This is a release by the Department of Agriculture covering competitive prices at St. Paul, Minnesota, and Winnipeg, Manitoba.


James Horace King: I would direct the attention of the hon. member to the fact that the privilege of placing material on the record is granted by the unanimous consent of the house and usually to members of the government. This practice has never been recommended in this house'in the past. Of course, if the hon. gentleman has the unanimous consent of the house I will grant the privilege, but if he has not I cannot.


Some hon. MEMBERS:: Read it.


Wilbert Ross Thatcher: This table shows the comparative prices as of September 1, 1945, as compiled by the Department of Agriculture market information service. It shows live stock prices, low and high, for St. Paul and Winnipeg. The table is as follows:
Steers, choice Good, steers .. Heifers, choice Good, heifers . Cows, good ...
St. Paul Bow High $16 50-$17 50
14	25- 16 50
15	50- 17 00 13 25- 15 50 10- 75- 13 25
Winnipeg Low High $12 00-$12 00
10	50- 11 25
11	00- 11 50 9 50- 10 50 7 50- 8 25
I think that will be sufficient to establish -what I am trying to point, out. This report shows that United States live stock prices are as much as forty-five per cent higher than similar Canadian prices. Western farmers are indignant over the government's continued refusal to allow them to take advantage of this higher market.
It is the same story with wheat. Hon, members will remember what happened on the floor of this house not very many weeks ago. The government suddenly announced one afternoon that the export price of wheat, No. 1 northern, basis Fort William, would have a ceiling of SI.55 from that time forward. The world price of wheat is approximately S2 and there is every indication that it may go higher, which means that every

The Budget-Mr. Thatcher
time a farmer in western Canada sells a bushel of wheat he is penalized approximately forty-five cents in hard cash.
We in Saskatchewan resent this policy. We feel that the government is playing Santa Claus with our money without our consent. If the national interest; if the interest of Canada as a -whole, demands that wheat be sold to the people of Europe at forty-five cents less than world market prices, then the people of Canada as a whole should finance that difference and not the farmers of the 'west who can least afford to, and who have had no say in the making of the gift. The crux of the issue is this: While the industry of central Canada has been highly protected for years, virtually bonused by the tariff, the chief industry in my province, agriculture, not only has received no protection, but has actually been penalized by government action. We can neither buy our necessities in the United States markets, where we can purchase them cheaper, nor can we sell our agricultural products in the United States, where we could obtain much more. I suggest that that is scarcely economic justice; rather it seems' to me to be economic discrimination.
I strongly criticize the current budget for its treatment of the tariff question. It has failed completely to alleviate the present hardships caused, by the tariff. Indeed originally,, it actually attempted to increase them. Higher tariffs were put on several items. The fact that public pressure later caused the government to withdraw those increases does not alter its original intention. The government did not withdraw the tariff on diesel engines. I understand that that tariff was put on by order in council, without any discussion by the tariff board, and certainly without any discussion in this house. In view of the professed trade policy of the government, westerners find it hard to understand its actions.
In countless public utterances, both in and out of parliament, the Prime Minister (Mr. Mackenzie King) and numerous of his cabinet ministers have declared their intention of working toward freer trade and lower tariffs. Permit me to quote some of their statements. Our Prime Minister is reported in Maclean's magazine of February 1, 1945, as having stated:
The Liberal party stands for the removal of harriers to trade, and is opposed to the principle of protection, which is really a levy on consumers in Canada as well as on all export industries for the benefit of protected industries
What the government favours is the progressive removal, in association with other nations, of tariff and other restrictive devices for protecting particular industries.
The Minister of National Health and Welfare (Mr. Claxton) is reported as having said at a foreign trade convention in New York on October 26, 1943:
I find myself more and more attached to the approach of a ceiling on tariffs, no ceiling on trade, a ceiling on all trade restrictions.
The Minister of Reconstruction (Mr. Howe), in a white paper of the government on reconstruction, tabled in>
this house last April, stated, among other things:
Nor is the contraction of Canadian imports any part of the government's employment policy.
In short the government has been committed by numerous statements of cabinet ministers to the rejection of a high tariff policy. Yet in the current budget there is no attempt to translate these lofty words into concrete facts. The same government which has been preaching free trade for many years; the same government which only three years ago signed a document with the United States subscribing to the policy of lowering tariff barriers, now, in its first budget, actually attempted to raise the tariff in several instances.
The protective tariff has developed in central Canada a large industrial empire, but I would suggest that in doing so it has often proved harmful to the other provinces.
For many years protectionists have used the argument that the tariff was needed to protect "baby industries" while they are making a beginning. We feel that it is about time the "baby industries" grew up and stood on their feet to meet outside competition.
In years past speakers from all major parties, representing the western constituencies, have spoken in favour of lower tariffs-and I include in that category the Prime Minister and the ministers of agriculture. The people in the outlying parts of the country cannot and will not continue to bonus eastern industry at such heavy cost. Tariff reduction is a matter of national urgency. Let the government take action while there is yet time.
Perhaps the second major grievance of my province is the inequitable railway rate structure. In 1937, according to a submission of the Saskatchewan government to the Sirois commission, local railway rates in the west ranged from forty-six to seventy per cent higher than in central Canada. They have not materially altered since that time. From the beginning of settlement this high cost of transport has hindered the development of the prairies, and if it is not soon lowered it will plague the post-war planners. Permit me to illustrate this point with some figure?.
The freight rate for 100 pounds of lumber moving from Megantic, Quebec, to Ingersoll, Ontario, a distance of 596 miles, is 24 cents;
The Budget-Mr. Thatcher

yet the freight rate on 100 pounds of lumber moving from Golden, British Columbia, to my own city of Moose Jaw, Saskatchewan, also a distance of 596 miles, is 40J cents. In like manner the freight rate on 100 pounds of canned goods from Hamilton, Ontario, to a point in New Brunswick 800 miles away is 61-i cents; yet the freight rate from Fort William to Moose Jaw, a distance of 818 miles, on 100 pounds of canned goods is $1.04. The average rate on butter per 100 pounds in carloads from stations in Ontario and Quebec to Montreal is about 60 cents; yet butter from Moose Jaw, to reach the Toronto and Montreal market in carloads, must pay $2.05 per 100 pounds. These differences are not isolated cases. Hundreds more could be easily quoted. They are typical of the freight situation as it exists to-day in Canada.
Besides such' inequalities in the general rate structureJ there are certain special discriminations which have long caused heart-burnings in the western provinces. One of these is the "water-compelled" rates from eastern Canada to points on the British Columbia coast, caused by the competition of ships going through the Panama canal.
These "water-compelled" rates often mean that it costs more to ship goods from eastern Canada to many points on the prairies than it does to ship them from the east to points on the Pacific coast. As was pointed out this morning by the hon. member for Lethbridge (Mr. Blackmore), the cost of sending 100 poupds of barbed wire from Montreal to Calgary is $1.98; yet the cost of sending 100 pounds of barbed wire from Montreal to Vancouver is only 95 cents, even though the latter is a thousand mile longer trip.


John Horne Blackmore: It should be 75 cents.


Wilbert Ross Thatcher: I believe it was changed some weeks ago, and it is now 95 cents. Similarly, the cost of sending 100 pounds of paint from Montreal to Calgary is $1.98; yet the cost of sending 100 pounds of paint from Montreal to Vancouver is only $1.50. The prairie provinces are obliged to pay higher freight charges in order that the railways may give British Columbia coastal points rates competitive with water transport. I am not saying that the rates to British Columbia are too low; we think they are the right ones; but we also think points on the prairies should have the advantage of the same rates.
The government should take action to prevent the railroads from charging higher rates to intermediate inland points than they charge to coastal points. Such a ruling, I might say, has existed in the United States

since 1914, and the result is reflected in a much more equitable distribution of industry throughout the western states.
Confederation originally, I believe, was meant to be an association of provinces equal in every respect. Confederation in fact has given the provinces political equality, but I do not believe that so far it has given us economic equality, and I suggest that the railway rate structure of this country is a glaring example of that failure. We in Saskatchewan are forced to pay higher freight rates than other parts of the country. Our standard of living is adversely affected in proportion to the difference. In addition, the higher freight rates are one of the chief reasons for Saskatchewan's lack of industrial growth. New industries are handicapped from the beginning, in meeting eastern competition, by the excessive rates. The Canadian railway rate structure makes extremely difficult industrial development except in one section of the country, a strip of territory lying between Montreal and Windsor. If confederation is to mean true economic equality for Saskatchewan, freight rates in the west must come down to the level of those in central Canada. Piecemeal adjustments will not suffice.
The people of Saskatchewan will also be disappointed that the administration has not seen fit to embark on any major irrigation projects at the present time. Year after year, great quantites of good water go to Hudson bay, from the prairies. Just a few million dollars spent putting it on our rich lands would pay dividends many times over.
The three factors which I have briefly touched upon-high tariffs, high freight rates, and lack of irrigation-have all contributed to make Saskatchewan a province almost without industries.
In 1942, a war year, in the whole province only 9,800 persons were engaged in manufacturing. Compare this with the number of persons employed in manufacturing industries in some of the other provinces.
Ontario	   540,000
Quebec	 400,000
British Columbia	 90,000
Manitoba	 37,000
In 1939, only 1-81 per cent of all Canadian industrial production took place in my province. Our whole economy has been tied to the production of wheat, and the income of the province is subject to the vagaries of weather, and to the violent fluctuations of world prices.
Saskatchewan will probably always remain primarily agricultural, and yet the establishment and development of secondary industries would go a long way toward stabilizing our economy. The major problem facing this

The Budget-Mr. Hamel
country to-day is the provision of jobs for hundreds of thousands of returning servicemen. Saskatchewan wants to play her part in providing some of these jobs; yet in order to do so she must have a large growth of her industrial capacity.
The Saskatchewan government has realized that fact and has taken some steps to remedy the situation. It has built a woollen mill in Moose Jaw, a shoe factory in Regina, and a brick plant at Estevan, as well as several fish filleting plants. But these industries, while they are certainly a step in the right direction, are only a start. If Saskatchewan is to have any substantial industrial growth, the basic factors which work against that development must be removed.
No one in this house can blame the people of the west for seeking relief from these twin burdens of the tariff and high freight rates. This is not a western problem alone; it is a Canadian problem. History has always shown, I believe, that when the west is prosperous the rest of Canada is prosperous. If this government by its policies sentences the prairies to remain tied to a strictly wheat economy, I suggest that all the people of this nation face another economic tragedy.
I appeal to the federal government: first, to establish parity between the Canadian and the United States dollar; sepond, to take -action to bring freight rates prevailing in the western provinces down to the level of Ontario rates; third, to begin large scale irrigation programmes in western Canada as part of post-war rehabilitation plans; fourth, to bring about drastic tariff reforms.
To-day, as never before, every nation appears to be standing at the cross-roads. Trade rivalries are already chilling the friendships that existed between allied nations during the war. The world to-day is crying for leadership, and as one of the world's foremost trading nations Canada, I suggest, is well equipped to give that leadership. Tariff changes cannot be brought about if each nation waits for the other to make the first move. I believe that the federal government should immediately, or as soon as possible, make proposals to the United States and to all the nations of the British commonwealth to slash drastically trade barriers between their respective countries. If such proposals were successful other nations could later be included. Canada should give leadership in promoting freer trade. If these steps are taken by the administration I am sure that at long last the west will receive economic justice, and, moreover that the people of Canada will emerge a more united nation. I am sure also that if such steps are taken this country will be a better place in which to live.


Mr. JOSEPH IRENEE HAMEL (St. Maurice-Lafleehe) (Translation):: Mr. Speaker, on the occasion of the budget debate, I should like to make a few remarks upon some problems which, to my mind, are important. I shall cover three points: 1. The present taxation system. 2. Unemployment. 3. The army.
1.	As regards the present taxation system, may I say that the Income Tax Act, as it now stands, provides that an employer must deduct at the source 95 per cent of the income tax payable by his employee. The tax is calculated not on the income for the whole year, but on what was earned during a given pay period, that is one week, two weeks or one month, according to. the method of payment followed by the employer.
In my humble opinion such a system entails two very serious points of discrimination:
(a) While in theory the employer retains but 95 per cent of the tax payable by his employee, it is found in practice that by the end of the year he has retained much more than what the employee actually owed. It is easy to understand how this can. happen.
An employee may earn S40 for one week, while drawing only S20 the following week, and losing a full week's salary afterwards. It might be argued that a readjustment is made at the end of the year. I say that statistics show that no such readjustment takes place.
During 1943-44 the government had to refund in 930,471 cases taxes that had wrongly been deducted at the source. In 1944-45 they had to make 1,041,264 refunds. The income tax is already so high and weighs heavily enough on the men in the lower salary brackets that no one should go as far as deducting more than they have to pay. When a legislation harms but a small number of people, it can be said that it is a necessary evil and that it is in the public interest, but when the harm is done to more than one million people, it behooves the government to rectify such a system. It should be noted that the huge number of 1,041,264 includes but the refunds which have actually been made by the income tax collector, but the number of justified applications submitted by ratepayers perhaps reaches two million, although no official figures are available.
Without vouching for its accuracy, I venture to suggest this figure which is based on the many complaints I have received from taxpayers in my constituency of Saint-Mau-rice-Lafleche.
Ob) The second unfair feature of the present system concerns all taxpayers since it entails heavy and useless expense on the part of the treasury. The figures speak for themselves. Last year, the government refunded over one million dollars. This means that the income
The Budget-Mr. Hamel

tax collector received over one million letters, that a corresponding number of files were brought out and checked, that over one million cheques were printed and as many envelopes addressed or at least sealed.
Supposing that one man spends half an hour on each case, this means that the government must occupy 300 employees at refunding amounts collected in excess. By taking SI,800 as the average annual salary of such an employee. I find that these refunds cost the treasury anywhere from 8500,000 to $600,000 a year. These figures, Mr. Speaker, are no indication of the trouble or expense to which the taxpayer has been put nor of the various calls he may have had to make, nor do they give any idea of the hardship inflicted on small wage earners by this unfair deduction which is refunded only two or three years later.
Mr. Speaker, among the various ways of improving on this situation, I shall insist on the following:
1.	Forsake the method of deduction at the source, as far as the small wage earner is concerned.
2.	Allow him at the beginning of the year to draw up an estimate of his earnings and to authorize his employer to deduct the amount he thinks will be expected of him, letting him make any required adjustment at the end of the year.
3.	Collect only 50 per cent instead of deducting 95 per cent at the source.
To my mind these three somewhat radical methods would greatly help in removing the rank injustice actually inflicted on small wage earners.
Now I should like to say a word in regard to unemployment which threatens our country and more particularly my own constituency. Two war plants have closed down, one at La Tuque, almost a year ago, and the other at Shawinigan. The workers of Shawimgan, Grand'Mere and La Tuque are greatly affected by this shut-down. If those plants cannot be used by large industries, I suggest that they be turned over to the municipal corporations which, in cooperation with the chambers of commerce, will find some means of using them in the interests of small industries. Action along those lines has already been taken at Granby and in the wonderful town of Grand-Mere and the results were conclusive.
However, as unemployment is a -basic economic problem among other problems which are perhaps just as fundamental, I do not propose to discuss it further to-night.
Finally, Mr. Speaker, I wish to say a word in regard to demobilization and deserters.

The war in Europe has ended over six months ago and the war with Japan almost four months ago, and a large number of young men are still held in military camps where they are wasting their time. Eight out of ten service men whom I have met have stated that they do absolutely nothing useful in the army.
A large number have requested their discharge but they were told that they did not have enough points. I suggest that this policy be dropped and that the request of all those young men who apply for their discharge be granted immediately. I say, Mr. Speaker, all those who request their discharge, for I would not advocate a policy which would throw into, the streets hundreds of thousands of men who to-morrow might swell the ranks of the unemployed.
But when a soldier wishes to be demobilized and take his chances on life and the future, we have no right to deprive him of that opportunity. I would also add that the present reestablishment policy is unfair to the returned man who has complied1 with the legislation of his country. In my humble opinion, the problem of reestablishment is the same for all, no matter where they may have served. With the exception of those who have been wounded or have laid down their lives, and for whom I would be satisfied with asking for more generous allowances, the sane and fair basis for computing the reestablishment grants should be mainly the length of service. The financial losses of our soldiers are not determined by the place where they have served but by the length of their stay in the army. Whether I have mounted guard on the water front at Vancouver or on the shores of England, after four years of absence, I would naturally have lost my pre-war business; the loss of salary due to my leaving a job would be the same no matter what theatre of war I nlay have been sent to. The financial losses being similar, the reestablishment grants should be identical.
I now conclude, Mr. Speaker. In the course of the present session the case of the deserters has been mentioned time and again. Answers to various questions seem to indicate that the greatest number of them are to be found in the province of Quebec. This fact is no surprise to me, on the contrary, I wonder why there have not been more of them. Mr. Speaker, if the ordinary criminal is entitled to claim for his defence justifying excuses and extenuating circumstances, I hope that the same right will no.t be denied these young people who, in most cases, are merely the victims of mistakes made by certain public

The Budget-Mr. Hamel
men and, I might say, more especially by the party in power. I shall not undertake to remind the house of the various political movements launched in Quebec from 1919 to the present time. I shall be content to point out that from 1919 to 1939 the Liberal party have shown a tremendous zeal in promoting, in our province, a current of thought opposed to militarism and participation. Even in 1938, the French-Canadian members of the Liberal cabinet promised the electors of Lot-biniere and another Montreal constituency. St. Henri, I believe, that our country would abstain completely from any participation in a foreign war. And I say without fear of contradiction, that the advantage secured by the Liberal party over their Conservative opponents, in .Quebec, is almost solely due to this stand against participation. I must also state that at that time, the military policy of the C.C.F. party was the same.
The hon. member for Rosetown-Biggar (Mr. Coldwell) stated:
In the event of war, Canada's maximum contribution would be supplying of foodstuffs and material and under no circumstances would conscription be instituted to provide an expeditionary force overseas.
Even in the 1940 election, after Canada had declared war. it was claimed that participation would be kept on a voluntary basis.
I wish to quote a statement made by the leader of the Conservative party, who at that time was the Hon. Mr. Manion. I take this quotation from the March 5, 1940 issue of Le Devoir. Here is what the Hon. Mr. Manion had to say during that election campaign, on article 3 of his platform:
To my mind, conscription has failed in the last war because it resulted in the mobilization of 10,000 men only out of a total of_ over half a million and it caused disunion in this country.
For the above-mentioned reason, that is because conscription is not necessary in this war and because it is the duty of a public man to maintain our national unity, as I have stated on other occasions, I am entirely opposed to conscription. I made that clear on March 30 last, that is a year ago, in the House of Commons, and in the press, even before Mr. Mackenzie King and Mr. Lapointe had made their statements against conscription.	_
I have publicly expressed that view in this election campaign long before my arrival in the province of Quebec . . .
Canada has voluntarily entered this war as a sovereign nation and will voluntarily continue the struggle . . .
The formidable battle which the liberal party has always waged against a compulsory system of enrolment has brought about a change of heart among the Conservatives in parliament and elsewhere in the country.	.
It is up to the people to decide whether they will place their trust in these last-minute ( converts . . .
The Right Hon. Mr. Lapointe was claiming that he had turned the Conservatives against conscription.
... or & those who have always advocated the same policy and opposed a compulsory system of enrolment.
I solemnly declared in the House of Commons that not only would I refuse to be a member of a government that might enact conscription, but that I would oppose any government that tried to pass such a piece of legislation. I am still of the same mind and have expressed a similar opinion all over Canada.
Mr. Speaker, those words uttered by the various political leaders were spread by all the speakers of the various political parties, and they were quoted by the newspapers in all provinces. Eventually conscription was imposed.
In conclusion, Mr. Speaker, I do not hesitate to say in view of those facts that those young men who have been reluctant to report and even those who have deserted were the victims of a mistake. There might be differences of opinion as to whether the mistake occurred at the time it was promised that conscription would'not be resorted to or when this promise was broken. But I believe that it will be recognized that a mistake has been made. And due to this mistake, some young men are now serving sentences of several months' detention and their wives and children are suffering hardships. The provincial or municipal authorities may be compelled to provide for a large number of those families in distress.
Accordingly, Mr. Speaker, I deem it my duty to ask the government to grant, as soon as' possible, an amnesty to all deserters to enable them to make a fresh start.


Mr. ISNOR:: I was paired with the horr.
member for Colchester-Hants (Mr. Stanfield). Had I voted I would have voted against the amendment to the amendment.


Mr. BRUCE:: I was paired with the hon.
member for York-Sunibury (Mr. Bridges). Had I voted I would have voted against the amendment to the amendment.


Mr. FULTON:: I was paired with the hon. member for Mon-tmag-ny-L'Islet (Mr. Lesage). Had I voted I would have voted against the amendment, to the amendment.


George Henry Stokes: I was paired with the hon.
member for Chambly-Rouville (Mr. Pinard). Had I voted I would have voted against the amendment to the amendment.


Mr. BLACK (Cumberland):: I was paired
with the junior hon. member for Halifax (Mr. Macdonald). Had I voted I would have voted against the amendment to the amendment.


William Scottie Bryce: I was paired with the* hon.
member for Portage la Prairie (Mr. Leader). Had I voted I would have voted for the amendment to the amendment.


Mr. DANIEL:: I was paired with the hon.
member for Parry Sound (Mr. McDonald). Had I voted I would have voted against the amendment to the amendment.


Jean-François Pouliot: I was paired with the
hon. member for Edmonton East (Mr. Ashby) Had I voted I would have voted against the amendment to the amendment.


Mr. HERRIDGE:: I was paired with the
hon. member for Vancouver North (Mr. Sinclair). Had I voted I would have voted for the amendment to the amendment.


Mr. MacNAUGHT:: I was paired with the hon. member for Elgin (Mr. Coyle). Had I voted I would- have voted against the amendment to the amendment.

The Budget-Division


William Lyon Mackenzie King: I was paired with the leader of the opposition (Mr. Bracken).- Had I not been paired I would have voted against the amendment.


Mr. LITTLE:: I was paired with the hon. member for Lambton West (Mr. Murphy). Had I voted, I would have voted against the amendment.


Gordon Benjamin Isnor: I was paired with he hon. member for Colchester-Hants (Mr. Stanfield). Had I voted I would have voted against the amendment.


Mr. GARIEPY:: I was paired with the hon. member for Vietoria-Carleton (Mr. Hatfield). Had I voted I would have voted against the amendment.


Jean-François Pouliot: I was paired with the hon. member for Edmonton East (Mr. Ashby). Had I not been paired I would have voted against the amendment.


John Watson MacNaught: I was paired with the hon. member for Elgin (Mr. Coyle). Had I voted, I would have voted against the amendment.	,


Mr. HEALY:: I was paired with the hon. member for Brant (Mr. Charlton). Had I voted, I would have voted against the amendment.

Income War Tax


Arthur Leroy Smith: I was paired with the Minister of Trade and Commerce (Mr. MacKinnon). Had I voted, I would have voted for the amendment.


James Arthur Ross: I was paired with the Minister of Agriculture (Mr. Gardiner). Had I voted, I would have voted for the amendment.


Herbert Alexander Bruce: I was paired with the hon. member for York-Sunbury (Mr. Bridges). Had I voted, I would have voted for the amendment.


Kenneth Roy Daniel: I was paired with the hon. member for Parry Sound (Mr. McDonald). Had I voted, I would have voted for the amendment.


George Henry Stokes: I was paired with the hon. member for Chambly-Rctuville (Mr. Pinard). Had I voted, I would have voted for the amendment.	,


Edmund Davie Fulton: I was paired with the hon. member for Montmagny-L'Islet (Mr. Lesage). Had I voted, I wTould have voted for the amendment.


Percy Chapman Black: I was paired with the junior hon. member for Halifax (.Mr. Macdonald). Had I voted, I would have voted for the amendment.
Main motion (Mr. Ilsley) agreed to on division.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Macdonald (Brantford City) in the chair.

[Stage Direction]
Resolved that it is expedient to amend the Income War Tax Act, and to provide
1. That for 1945 and subsequent taxation years the capital element in contractual annuities be exempt from tax.
Mr. JACKMAN:: May I congratulate the minister and the government on the fact that at last they have seen the wisdom and the equity of separating the capital element from the income element in annuity payments. I should like also to tender my thanks to the commission that sat on taxation of annuities and family corporations. Mr. William C. Ives, retired Chief Justice of the Supreme Court of Alberta; Doctor D. A. MacGibbon of Winnipeg, and Mr. M. W. Mackenzie, formerly of Montreal and now Deputy Minister of Trade and Commerce, constituted that commission, and I believe they did an excellent job on the question of annuities and family corporations.

The situation is one that should have been taken up years ago. The injustice under it cried for relief for many years, but the minister and the Department of National Revenue felt that they were so burdened with work that they could not find a satisfactory solution and at last they arrived at the happy thought of appointing a royal commission on *the subject. AH I have to say is that a royal commission could as easily have been appointed many years previously and much less injustice would have been done many of our citizens.
Under the same caption comes resolution 2 which I will not discuss just now, but will the minister clarify the situation in regard to government annuities? At the present time government annuities taken out before a certain date are free from income tax on both capital and the income element.
Some years ago the government prevented holders of contracts that called for less than the maximum amount of $1,200 a year from increasing the amount to $1,200, which was their understanding of their right prior to that time. I believe that now, if the holder of a contract that calls for SI,200 at some future date wishes, not to enlarge his contract- because he already has a maximum-but to mature the contract at an earlier date, and he was given the understanding by the government agent-'Whether of the 'Department of Labour or of the Department of Finance is not of great concern-he could mature the contract at an earlier date and have it tax free. I see nothing in the report of the Ives commission or in the bare bones of the resolution which would throw any light on that matter and I would ask the minister to clarify it if he can.


Hon. J. L. ILSLEY (Minister of Finance):: That is a technical question for me to answer without a little notice. I shall just have, to read the question and try to answer it later.
I do not know that I need to say anything more about it now. I think that it is the best way to deal with it.


Harry Rutherford Jackman: All I can say is that the Department of National Revenue in its arbitrary manner, which perhaps it cannot help unless it gets greater clarification of the law which this house passes, rules one way at one time, and subsequently on the' same set of circumstances rules another way. Nobody knows where he stands on this matter, and before the budget resolutions are through I hope that the minister, with the assistance of his experts and his colleague, will be able to give a ruling to the people who are interested in this matter.

Income War Tax


William Ross Macdonald: Shall resolution 1
carry?


Harry Rutherford Jackman: No; stand.


James Lorimer Ilsley: Has the hon. gentleman's
question anything at all to do with the resolution,? Is it not a separate matter entirely on which he wants information?


Harry Rutherford Jackman: No, most definitely not.
If the minister would read the resolution he would see that it states:
That for 1945 and subsequent taxation years the capital element in contractual annuities be exempt from tax.


James Lorimer Ilsley: Yes.	.


Harry Rutherford Jackman: What I wish to know is
whether or not those government annuities, which are cognate to this resolution-they arc contractual annuities-will be free of tax as to both elements of capital and income. I refer to those taken out before a certain date, as the government advertised.


William Ross Macdonald: I understand that resolution. 1 carries, and that the minister will make a further statement on the resolution at a later sitting of the committee.


Wilfrid Garfield Case: Before resolution 1 carries I
should like to know by what formula they determine the capital element in contractual annuities which will be exempt from taxation. If there is no change at all, how is the capital element determined? What index is used to determine the capital element in a contractual annuity?


James Lorimer Ilsley: That is, of course, a difficult question. This is what hon. gentlemen were advocating for years. I do not know that they realized the difficulties of separating capital from interest. I can assure the committee that I have learned quite a lot about the question in the last few months. The definition of the capital element in an annuity' will be dealt with when we are on the bill. I can deal with the way in which the capital element is defined as distinct from the interest element in the annuity when the bill is before the house.
Now, with regard to the question asked by the hon. member for Rosedale, he asked whether annuities which have been advertised-as being-exempt are to be wholly exempt. Is that the question? The exemption of annuities is covered by law and that law has not changed.


Harry Rutherford Jackman: Surely the minister is not suggesting that dominion government annuities which are entirely tax free up to $1,200 are to be taxed as to interest element?


James Lorimer Ilsley: I did not say that. I want
to get the hon. gentleman's question clear. Is it that annuities which have been advertised as entirely free from income tax are to be free? Is that not the question? Whether they are free of income tax as to both capital and interest depends upon the exemption in the law, which has not changed at, all and is not being changed by this.


Harry Rutherford Jackman: This whole matter, of
dominion government- annuities is one, which,
I may say, I was quite shocked about when the minister virtually broke the word of the dominion government in regard to them. The matter needs clarification at the present time. The annuities are sold by the Department of Labou'r, and certain representations were always made in connection with them. One was that if you took out an annuity for no matter how small the amount you could always enlarge it up to S1.200, which was the maximum, to look after your old age. The government realized that some of those contracts were improvident, particularly when taxes became very high, and they said that even though it may have been represented to you that you could enlarge it, you could not enlarge it for any more than you actually stipulated for at the time. That was the first breaking of the government's word.


Major James William Coldwell: Is that correct?


James Lorimer Ilsley: That is entirely incorrect.


Harry Rutherford Jackman: The Department of
Labour did not do so, but the Department of Finance did. and you must look upon the action not only of Labour but of Finance before you find out where you are going to stand, because if the Department of Labour sells them with that understanding, namely, that the income from those annuities will be free of tax and then the law is changed by the Department of Finance, then, of course, you have two departments of the same organization working at cross-purposes, and if one will not assume the' responsibility for the other we have certainly come to a very sorry state of affairs.
, Mr. ILSLEY: The hon. gentleman says that I have broken the woid of the Dominion of Canada. I deny that.	.	[DOT]


Harry Rutherford Jackman: The minister admitted it before.
Income War Tax


James Lorimer Ilsley: I deny it most emphatically, and with a very great deal of resentment. The condition with regard to annuities was this. They were free of taxes up until June, 1940. There was no undertaking that they would always be tax free. On the other hand, what we did say was this: we recognized that if a person had parted with his money and paid for an annuity thinking that it would be tax free-


Harry Rutherford Jackman: Why did he think so?


Gordon Knapman Fraser: A government agency said so.


James Lorimer Ilsley: Just wait until I finish. We recognized that if he parted with his money and paid for an annuity we should say that the annuity which he bought' with the money he had parted with up to that time should be tax free; that we carried through. But there are all kinds of people all over the country who paid a dollar and bought an annuity, which gave them the option to increase it up to $1,200, and they just sat back, waiting until a more convenient time would come, or it would be more opportune for them to put some more money into that annuity and get it. Now there was no promise whatever by the government on the statute books, none whatever-


Harry Rutherford Jackman: Not on the statute books.


James Lorimer Ilsley: Just let the hon. gentleman contain himself in peace until I finish. There was no promise on the statute books to say that the annuity that they bought with money which they advanced later, after annuities became taxable, would be tax free. The hon. gentleman seems to think that some salesman of the Department of Labour may have gone out and said-


Harry Rutherford Jackman: I do not think; I know.


James Lorimer Ilsley: -"you put up five dollars and get an option on an annuity; annuities are tax free at the present time, and so if you will put your S5 in, then in five or ten years' time you can put some more money in and you will get an annuity that is tax free." If the tax law changes in the meantime that is not breaking the word of^ anybody; that is not breaking the word of the dominion government.


Harry Rutherford Jackman: I was trained in business. In business it is considered breaking one's word if one does not live up to one's contract. All the minister has said shows how

improvident the contract was. On the other hand the government did allow people to pay in $5 or $50 and obtain a piece of paper. The understanding given, not by a casual salesman but as a regular policy, I suppose in thousands of cases across the country, was that you could take out an annuity for as little as you liked and always enlarge it up to $1,200, the maximum amount allowed, whenever you could afford to do so. That was not merely always understood; that is what they were told. It is true it is not in the statute, nor is it on this piece of paper you get evidencing your contract; but it was most definitely understood by the Department of Labour and proclaimed by their agents, who, I say, are agents of the government. The government cannot deny what one department does and at the same time take advantage of it on the other hand. There is no doubt that many people who felt they had a right have had that right taken away from them. I forgive the government, if you like, for having committed that moral breach of contract, which people certainly consider it to have been. What I am asking is, where do people stand to-day with this change that is to be made in the tax law? In the report of the Ives commission the page or two dealing with government annuities does not cover the point specifically, as to whether the government will continue to live up to its contract, as I put it. Surely there is a contract between the government and the holders of these annuities taken out before a certain date, that such annuities will be tax free. I am asking whether or not the government intends to live up to the well understood provisions of the government annuity legislation.


James Lorimer Ilsley: I always understood that was covered by the law, and it is for the hon. gentleman to interpret the law as much as it is for me t.o give him an interpretation here.


Harry Rutherford Jackman: What section of the act
is that?


James Lorimer Ilsley: Just a moment. The hon. gentleman has been very free to-night in hurling accusations against the government of having broken its word, and I am not going to let him slip off on this other tack without talking to him just a little bit more. I have never heard in this house such a slim case for such a serious accusation as the hon. member has made to-night. He started by saying that we gave a promise that if persons bought annuity contracts they could enlarge or increase them, and that then we refused to go through with it.

Income War Tax


Harry Rutherford Jackman: That is right.


James Lorimer Ilsley: , That is not correct; there is not a shadow of foundation for that statement.


Harry Rutherford Jackman: That the agents of the government approached people and sold them government annuities telling them that at any time in the future they could enlarge them to SI,200 and. receive all the benefits they received under their $10 contract.
Mi*. ILSLEY: Now my hon. friend is adding words. What he said before was that we went back upon our promise to permit persons fo increase their contracts.


Harry Rutherford Jackman: That is enlarging it.


Some hon. MEMBERS:: No, he did not.


James Lorimer Ilsley: I will leave it to the hon. member for Rosetown-Biggar, for it was at that point he made an interjection.


Major James William Coldwell: I interjected the
question, was that correct?


James Lorimer Ilsley: The hon. member for Rosetown-Biggar was shocked; he asked if that was correct, and I said that there was absolutely no truth in it. The hon. member for Rosedale did not mean to say it, but he said it. What he did mean was that some agent said, "If you buy these annuities, they are tax free and you need not pay for them in full. You can pay as little as $5 or $1, if you like, and years from now you can put in some more money and that also will be tax free." In the meantime we changed the law, so that these annuities will be taxable; but where is the equity? The man has not parted with a cent. He has not denied himself the opportunity of making an alternative investment by putting his money into this annuity. Under the law as it stood at that time he could increase his annuity holding, and it would be tax free; that was his right, if he cared to exercise it. He leaves that; he does not exercise that option, because that is all it was, until after the law has been changed. Then the annuity he takes out after the change in the law is taxable. So that he has no equity at all, and under such conditions I am most surprised that the hon. member should talk about the government of Canada breaking its word.	.


Harry Rutherford Jackman: Not only that, but I think if I go. back three or four years, before this became a heated issue, I could find where the minister admitted it; certainly I have always carried that impression in my mind, 47696-167
and I will see if I cannot check it. I do not say for a moment that the individual has been greatly prejudiced.


James Lorimer Ilsley: I should say not.


Harry Rutherford Jackman: That is, not as far as anything he had himself is concerned; but he thought he had this right because the agent told him he had. Let me tell the committee exactly what happened. An agent came to an individual and said, "You can take out a government annuity, which is fax free. Put in $100, if you like." The man said, "Well, I will take one out for $100, until I am ready to enlarge it." He might just as easily have said, "I will take one for $1,200, the maximum, and here is my $100 for this year." It all depended on whether the man stipulated $1,200 or whether he said $100, thinking he always'had the right to enlarge it. Subsequently the government takes away the option to enlarge it on the same favourable terms. There is no doubt that many people who have these contracts have felt the effect of this change, as I have explained it to the minister. All I can say to him again is that while he may not like the strength of my assertion that I consider it to have been a breach of contract, no business organization that valued its name would allow its agents to make statements over a period of years, on the strength of which people purchased these annuity contracts, and then change the terms of the option.


James Lorimer Ilsley: No business company .has the right to . impose taxation. Their agents do not go around promising that their employer will never impose any taxation, or never change the taxation laws; and I am doubtful whether any agents of ours ever did that.


Julian Harcourt Ferguson: Certainly in connection with annuities sold by the government over a period of years the sellers of the annuities have definitely left the impression with their clients, the people of Canada, that if they participated to a degree in an annuity, the maximum they could purchase would be $1,200. There is no doubt about that. If the minister has had any discussions on annuities over the last few years, that must have been one of the salient features brought to his attention at that time. People believed it was a sort of savings account which definitely was not taxable. That was a great feature of the annuity, and that impression was left in the minds of the people.
The hon. member for Rosedale is simply saying this. When the heads of substantial corporations are confronted with a similar

264S
Income War Tax

situation, where there is the shadow of a doubt in favour of the customer, they first convince themselves of the facts of the case. That is common practice among the larger corporations on the north American continent and in other parts of the world. Then, when those facts have been substantiated and it is shown that their representatives have created an impression that has been acted upon by those purchasing a commodity, they do everything in their power to keep their good name and live up to the understanding. If the government find it necessary to pass a new law, I do not think they are in any different position from that of a private corporation. They cannot say, "We must forget all the implications that were left when these gratuities were sold, because there is a new law which governs everything and implications do not amount to anything; good will on behalf of the government does not amount to anything. We are entirely different from any other corporation that wants to stay in business." If that is the attitude of this government the result will be the same; they will last just as long as any corporation lasts that does not live up to the word of its representatives.


William Alexander McMaster: I should like to ask the minister if there is any particular significance in the word "contractual." After all, an annuity is an annuity. Is a contractual annuity something different? I believe that in the old income tax act there were certain annuities in connection with which some differentiation was made for taxation purposes.


James Lorimer Ilsley: There are other than contractual annuities. The annuities dealt with in the next resolution, annuities received under the provisions of a will or trust, are different.


William Alexander McMaster: I do not think that is a real annuity.


James Lorimer Ilsley: Yes, it is.


William Alexander McMaster: Is there any annuity that is exempted from this, and that is not covered by contractual? If so, what are they?


James Lorimer Ilsley: Any annual payment is an annuity. In my own mind the two classes of annuities-and I think these are the only two classes of any importance-are the annuities one buys, or contractual annuities, and annuities payable under a will or a trust document. You do not buy them. They are not contractual annuities. There may be other forms of annuities besides those, but I cannot think of them.


Wilfrid Garfield Case: Before we pass this resolution I consider it important that we should discuss pretty well the capital element in annuities. 
I look upon annuities as one of the greatest sources of economic security a government can provide for its citizens. Any advantages they enjoy indeed react finally to the benefit of the nation, inasmuch as those people are not likely to become charges upon the public or the taxpayers.
I recognize, of course, that there are many forms- of annuities, and I recognize, too, what the minister has said that it may be difficult to arrive at. But in determining its course in connection with this resolution the government must have had the advantage of studying the report of certain officers and authorities, and also the benefit of having' seen the report of the royal commission.
There are annuities for certain definite and specific terms of years-ten, fifteen or twenty years. There are annuities which provide for specific periods, and' for life. There are annuities which provide for life only.
I have listened to discussion with respect to what the hon. member for Rosedale has had to say. That is to say, I have had something to do with men who mighk make promises, or lead customers to believe certain things in good faith at the time. In the main, ff this commission's report results in annuities being put on a sound actuarial basis, it will be a great advantage to the nation; because annuities have been sold in the past which were not really actuarily sound, and many wealthy people have gained advantage from buying them. By doing so, they have escaped a certain element of taxation. But unless the contract itself states specifically that they are exempt from taxation, I do not think, myself, that the government should be charged with a breach of contract.
I know that if one were to purchase with $5 or $10 an option to purchase or to increase the annuity to $1,200 a year, particularly at the rates at which they were one time sold, he would have a terrific advantage. But now that we have arrived at this stage there should be some clause written into an annuities contract so that a purchaser of an annuity will have that degree of security, and know exactly where he is at.
I can understand where someone might plan to retire, and consider that $100 a month would be sufficient to meet his retirement requirements. Then at a later date, because the law might change, and that annuity becomes subject to taxation at a greater rate, of course the amount he has provided for his advanced years might be inadequate. Therefore, rather than be too critical* of what has taken place in the past-and we might possibly be somewhat critical-I am more inclined to approach this problem from what

Income War Tax
it provides now. I think the minister should be able to tell us what factor to use in determining the capital element in contractual annuities, because, after all, annuities are more or less amortized. There is an element of interest, and one must know on what basis the interest is computed so as to return the capital sum, in relation to the number of years the annuitant is expected to live. This should not be a difficult task, whether there is a sliding scaje of guaranteed annuities for a certain specific term of years, or a sliding scale to provide for a life annuity, or annuities .that guarantee a capital return, and so on.
Therefore I feel that whatever we do now should be done with the thought that we will restore a measure of confidence to those people who might anticipate purchasing annuities. I believe that the more people who buy annuities, the better it will be for this country. As I have already said, they will never be charges on the national, in any sense of the word, but will have laid by out of their best earning years sufficient funds properly amortized to provide for the remainder of their lives. That is what I think should be clarified now-what we propose to do in the future. That is to say, shall we write into an annuity a particular amount that is subject to taxation, or otherwise, so that the purchaser of an annuity henceforth will know exactly what he has in his possession, and what its capital value will be.


Major James William Coldwell: To a degree I find myself in sympathy, with the remarks made by the hon. member for Grey North. I think government annuities could be covered on a different basis from some other savings effected and investments made. I believe it is an inducement to a young man or a young woman to begin saving early in life to take care of old age, and it is very often the means of relieving a community of a liability which that community would have to assume.
If we take the figures advanced by life insurance companies we find that a very large percentage of our people who reach the age of sixty-five years are dependent upon relatives, friends, or charity, and I think government annuities should be widely advertised and should have behind them the best possible salesmanship. The government should offer every inducement to young people to begin annuities early in life. That, I believe, is what the hon. -member for Grey 'North had in mind.
So far as the annuity in question is concerned, I know that last year my own daughter bought a government annuity. She was informed when she bought this annuity which 47696-1674
was payable in -later years at $50 a month, that if she felt at some time she could increase it to $1,200 a year, such would be permitted under the contract she -was signing. That, I understand, is the situation.


James Lorimer Ilsley: Yes.


Major James William Coldwell: That was why I offered my interjection when the hon. -member for Rosedale was speaking: "Is that correct?" I had a hand in getting my daughter started on this particular annuity.


Harry Rutherford Jackman: You can increase it.


Major James William Coldwell: Yes, right up to $100.


Harry Rutherford Jackman: You can increase it on the same terms as you have taken the original contract. What I am complaining about is that you cannot increase the old contract, because of the change in the income tax law. The old portion of the contract originally bought is tax free, while the new portion is not tax free. If the minister will look at section 5 of the Income War Tax Act, and particularly paragraph (k), he will see evidence of the great trouble the government went to cancel all those contractual rights in this connection.


Major James William Coldwell: I understand that quite well. But let us look at the two cases. You have one young person who buys an annuity, and who decides to put in, we will say $10 a month for a number of years regularly. But it seems to me that the hon. -member for Rosedale is arguing from an entirely different point of view. Someone at some period decides, "Well, I can put in $5 now, and get a favourable contract payable at 50, at the end of the number of years hence I can then put in a lump sum on the basis of the contract I made ten or twelve years ago."
Mr. JACKMAiN: That is right.
Mr. COLDWELL,: Let us take, for example, an insurance policy. I know, from experience, when I bought an insurance policy and contracted to pay a given amount each year for a number of years that I have had the experience in trying to buy a similar policy- and not because of age, but because of a' variation in the policy itself a few years later 

of finding a very different sort of policy presented to me. I think that was overlooked in the remarks of my hon. friend.
I do not want to enter into any argument between the hon. member for Rosedale and the minister; that is their argument and I am not going to inject myself into it because I sometimes find that a person who does that finds himself in difficulty The more favour-
Income War Tax

able the conditions for the purchase of annuities are made, the more encouragement That is given to people, particularly young people, to take an annuity early in life, the better it will be for our society. Second, the money paid for government annuities becomes available to the dominion. Although different in the contractual sense, it is in the same category as'an investment in victory bonds. There may be two entirely different contracts but ultimately they have the same effect: the government gets the use of a certain sum of money. When that is spread over a long period of time it seems to me it is a valuable thing.
If the persons who buy these annuities realize that they are helping themselves, that they are assisting the country and that they have behind those annuities something which no corporation can possibly give them, that is, all the assets of the Dominion of Canada and the guarantee of this nation that at a certain period of time the annuity will bring them in a certain benefit, they will probably buy more annuities. I should like to see the government go into this a little more strongly. I know it was years before I knew anything about government annuities. I only wish I had known about them twenty-five or thirty years ago. If I had I would not have sunk my money in insurance; I would have 'bought an annuity which would have given me a better and safer return than any insurance policy could give. I should like to see the government give every inducement, including exemptions where payments are made over a period of years and with certain regularity.	-


Harry Rutherford Jackman: I should like to try to bring this matter to a head. First, may I say to the hon. member for Rosetown-Biggar that his daughter's annuity, which would have been wholly taxable under the old' law when she began to benefit will, when, the present section goes through, be taxable only as to the income element in it and not as to the capital element. She is going to have a better annuity than she had prior to the passing of this amendment. When he can ' check on it I should like the minister to tell us the effect of this change in the income tax act on the government annuities outstanding at the present time. The only tax-free feature they have is contained in the income tax act and you must read your contract and the income tax act to know where you stand. As he says, no one can forecast what the income tax law will be. I suggest that the Department of Labour should not sell them on that

basis, unless the Department of Finance is willing to adhere to the representations of the Department of Labour.
In connection with annuities taken out since the deadline date of June 25, 1940, what is the situation in regard to the capital element and the income element as far as income taxation is concerned? What concerns me chiefly are annuities taken out before the 1940 deadline. They are supposed to be, and always have been tax free under the income tax act, both as to the income element and as to the capital element. Does that remain so?


James Lorimer Ilsley: Yes.


Harry Rutherford Jackman: Then, as to annuities
taken out before 1940 which have not been fully paid for but which have in them the-maximum amount of $1,200, could such an annuity be matured immediately and what is the situation in regard to annuity payments under them? Will they be taxable, taxable in part or entirely tax free?


Major James William Coldwell: I do not wish to be misunderstood. I think these should be tax free up to $1,200, as the hon. member suggests..


William Alexander McMaster: If the capital element is not taxed nobody need worry about taxation, because the capital element is the greater part of the annuity. You do not need to worry about income tax on the income element of an annuity.


Wilfrid Garfield Case: It would be the larger element in the early years, but in later years the income element becomes quite a feature.


William Alexander McMaster: I wish to congratulate the hon. member for Rosetown-Biggar. I had occasion to congratulate his colleague, the hon. member for Cape Breton South, about building a house, and now I want to congratulate the hon. member upon his foresight. I have listened to some of the resolutions introduced by hip party to pay at forty or fifty years old age pensions amounting to $60 a month, but he cannot be very optimistic or he would not be interested in annuities.


Major James William Coldwell: I contend that there should be no means test for an old age pension, and I think young people should be encouraged to build up a further addition which would be free of taxes.


William Alexander McMaster: I am congratulating the hon. member for Rosetown-Biggar, because I think both he and the hon. member for Cape Breton South have expressed their real feel-

Income War Tax
ings. I think they really believe in individual incentive and they are not altogether optimistic about their other ideas.


Mr. COLD WELL:: We want to restore individual incentive.


Gordon Knapman Fraser: The minister did not answer the question asked by the hon.' member for Rosedale about annuities taken out before June, 1940. Are they exempt from taxation at the present time?


James Lorimer Ilsley: They continue to be exempt.


Gordon Knapman Fraser: Up to $1,200, or is there any limit?


James Lorimer Ilsley: Oh, yes, there is.


Gordon Knapman Fraser: They continue to be exempt?


James Lorimer Ilsley: Yes.


Mr. COCKERAM:: Some of these are being paid on an anuual basis and payments will continue to be made for years to come. Would such annuities be free of income tax?


James Lorimer Ilsley: If the contract was entered into before June, 1940, the annuity is free of income tax.
Mr. JACJxMAN: That is how simple it seems to the individual.


James Lorimer Ilsley: That is, an annuity that
was purchased then.


Alan Cockeram: I do not mean an annuity that has been purchased outright; I mean one which is being paid for on the instalment plan over a period of years and where the benefits will not accrue to the purchaser for possibly ten, fifteen or twenty years. When such an annuity is paid up, will the money they receive be free from income tax?


James Lorimer Ilsley: The point is all covered by section 5 (k) of the Income War Tax Act, and hon. gentlemen should read that. What is exempt from income tax is the income , arising from any annuity contract entered into prior to the 25th day of June, 1940, to the ' extent provided by section 3 of chapter 24 of the statutes of 1930 and section 6 of chapter 43 of the statutes of 1932. That is the limitation of amount of annuity, $1,2.00, I believe; provided that such exemption shall not extend to that portion of the income which exceeds the amount of the annuity actually specified in the contract before the 25th day of June, 1940, where such excess amount arises by reason of any option or contractual right to enlarge the annuity income by the payment of additional sums or premiums unless such additional sums or premiums have actually been paid before the said date.


Alan Cockeram: That is what I was getting at, that these payments will be paid over a period of years, and I wish to know whether or not at the completion of the contract these annuities will be free of income tax. The official should know that, but I do not think it is clear in the resolution.


Harry Rutherford Jackman: I think they are.


James Lorimer Ilsley: It is perfectly clear from this. What makes me nervous is that I cannot follow the questions which are being asked. If I say "yes" or "no", here I am on record and it is quoted against me later if I have misapprehended a question. But just take that section 5 (k)-,


Harry Rutherford Jackman: It is going to stand; it is not going to be changed?


James Lorimer Ilsley: Oh, yes, that is not being changed.


Harry Rutherford Jackman: What I want to know, under this new section, is this. The hon. member for York South simply, raised the question, if he had a contract before 1940 and continues to pay his annual instalments, will the annuity payments under the contract be free of tax when he starts getting them, say in 1955 or 1960? The question I put carries the point oue step farther. The individual who holds such a contract, paying on the instalment plan, thinks he has a contractual right, not to enlarge it, because he already has $1,200, but to mature the revenue. The department has ruled one way and then the other; a certain group of people have acted on those rulings, and they are in a hiatus and do not know where they stand. That .cannot be denied. I have run across several such cases in my own business. I wish to know if a person, having purchased prior to 1940 and made his -payments year by year, and now being in a position to pay up the contract in its entirety so that he gets the $1,200 maturing immediately, will have that $1,200 free of tax under the provisions of section 5 (k), or is he to be subject to unknown departmental rulings which waver from day to day?
Mr.-ILSLEY: I do not know.


Harry Rutherford Jackman: Surely that is a reasonable question. I wish to know what the section means. This, whole question of annuities has been a troublesome one, and when you get, a section cf this kind, and you cannot get anything definite from the law of the land what are subject to departmental rulings, you do not know where you stand. I wish to kniow what the minister actually believes this section 5(k) to mean. It talks about your not being able to enlarge. If you mature tb"
Income War Tax

contract you have the right to pay up; there is no doubt about that. If you mature it immediately, what is to be the effect of the contract with regard to income tax?


James Lorimer Ilsley: Has the hon. gentleman any
particular case or cases in mind; because he has referred to income tax rulings?


Harry Rutherford Jackman: I do not wish to be
personal but I have many cases in mind.


James Lorimer Ilsley: If the hon. gentleman will
state one case I will get a ruling on it from the Department of National Revenue. But I cannot give a ruling on. these hypotheses.


Harry Rutherford Jackman: The law should be clear
or we should change it, so that we shall know these- things.


James Lorimer Ilsley: I wish to point out that we are not talking on the point here at all. The resolution is talking about freeing the capital element in. taxable annuities from income tax, and the hon. gentleman is trying to get from me a ruling with regard to annuities which are not subject to income tax.


Harry Rutherford Jackman: That is just it; I should like to know if they are- not subject to income tax. There is no question- about it-; you pay your money and- get your annuity, but they are subject- in part to income tax under a ruling of the deputy commissioner of taxation.


James Lorimer Ilsley: The hen. gentleman had
better give me the case and the parties involved and I will take^it up with the deputy minister and get his ruling. That is the way to get at this thing, not in abstract or general terms from me pn>
the floor of the house.


Harry Rutherford Jackman: I object to the minister
making that statement. This section 1 talks about the capital element in contractual annuities being exempt from tax. It is a "bare-bones"- resolution. How do we know what it will be when the bill comes diown? Is section 5 (k) to be amended? I wish to kn-ow how the contractual annuities as set forth there, which include dominion government annuities, are to be dealt with.	,


William Ross Macdonald: Does resolution 1 carry?


Harry Rutherford Jackman: No; stand.


William Ross Macdonald: -Carried?


Harry Rutherford Jackman: Stand.


Major James William Coldwell: Could the hon. member for Rosedale, without mentioning names-he does not want to be personal-put a hypothetical case and let- the item stand- until
fMr. Jackman.]
we get the ruling on that hypothetical case? I think th-e point he makes, as I understand it, is one- in which, all hon. members may be interested, and it would be well to give it to the house rather than to an- individual- member of the house, because the question may arise, particularly after this discussion, and many hon. members may have to answer it. I think it would be well if the- hon. member would give a hypothetical case, leaving out the names, have- the item stand, and leit the minister have his colleague of the Department of National Revenue bring down a statement on it. Apparently we shall argue all- evening unless something of that sort is done.
Resolution stands.
2. That for 1945 and subsequent taxation years annual or periodic payments received under the provisions of a will or -trust be considered taxable income to the extent only that they are paid or deemed to be paid out of the income of the estate or trust.


Alan Cockeram: I should like to ask the minister a question which, I think, comes back to the other section; it is this. A great many people have life insurance, and in order to protect their families they give them annuities from those policies. I would take it that under this section they would not get the benefit of calling that an annuity, but I should like to know.


James Lorimer Ilsley: These will be contractual annuities. An annuity bought under an insurance contract is a contractual annuity and therefore only the interest element in it is taxable.


Alan Cockeram: I do not think it is very clear in this section.


Wilfrid Garfield Case: Even if it is arranged by the assured, the minister is saying now that that is a contractual annuity, if he makes provision with the insurance company to pay the proceeds of his insurance to beneficiaries for a period of years?


James Lorimer Ilsley: Yes.


Wilfrid Garfield Case: Can he make that provision in his will?


Alan Cockeram: Not under this:


James Lorimer Ilsley: Can he dispose of his insurance moneys by his will-is that the question?


Wilfrid Garfield Case: And enjoy the benefits of the taxation provision?


James Lorimer Ilsley: It does not make any difference. It is either a contractual annuity or it is not. If it is a contractual annuity it is cov-

Income War Tax
ered by resolution 1, and if it is an annuity under a will or a trust it is covered by resolution 2. The treatment may be different to some extent, but at least the transaction is covered by one or other of the two resolutions.
Mr. CASE; In other words, the department make no differentiation. In Ontario, for purposes of the succession duty, a person may provide, so long as he arranges matters with the insurance company, during his lifetime incomes for his beneficiaries up to $200 a month which are free from succession duty. That part of his-estate is set aside to provide for these annuities and is exempt entirely from taxation, but it must be done during the person's lifetime.


William Ross Macdonald: Order. The hon. member is referring to succession duties; we are dealing with income tax.


Wilfrid Garfield Case: I am using that as an illustration. There is a difference and that is why I introduced the will element. The department here says that it is a contractual obligation or contractual annuity if it is provided for in his will, and yet that does not become effective during his lifetime, whereas if he made provision before it would.


Douglas King Hazen: If he provides in his will to make these payments to his wife or daughter as the case may be, the policy must be payable to his estate. It is payable to his estate and by will he directs disposal in such and such a way.
Mr. ILSLEY; I should say that in that case, if the lump sum is payable to the estate of the insured, he disposes of that by will in such a way as to give an annuity to his wife and that is certainly an annuity that comes into existence under a. will.


[Stage Direction]
Resolution agreed to.
3. That the income of all approved superannuation or pension funds or plans in 1946 and subsequent taxation years be exempt from tax in the hands of the trustees.
William Alexander McMaster: May I direct the minister's attention to a section in the income tax Act which is unfair and which could be remedied in this resolution. No base is allowed in computing income where the income of an estate is kept in hand for a certain number of years. Suppose an estate earns only $500. That is kept in the estate for eight or ten years and the child comes of age, and in that case there is a tax of thirty-nine per cent; that is, thirty per cent graduated and nine per cent normal, which makes it worse. Instead of seven per cent it is nine per cent. It is unfair that thirty-nine per cent should be taken of an estate where the income is only $500 or S600. It is hardly worth while investing the money; it might as well be left in the bank because there is such a large amount taken out.
Mr. ILSLEY; The hon. gentleman is making representations with regard to section 11 of the Income War Tax Act which relates to taxation of income from estates and trusts, and he is submitting that there should be an exemption of $660 or something like that.


William Alexander McMaster: Is it section 11?


James Lorimer Ilsley: Not of the resolution, but section 11 of the Income War Tax Act relating to income accumulating in trust.
Mr. McMASTER; That is it, yes, subsection 2.
Mr. ILSLEY; The point the hon. gentleman makes is that there should be an exemption as if it were an individual who was being taxed.


William Alexander McMaster: Yes.


James Lorimer Ilsley: Is not the idea an exemption to provide some minimum source of income for an individual?


William Alexander McMaster: That ' is possibly the case. They cannot take everything in taxes, I suppose, but the fact is that it is necessarily only a small estate that will be affected. The larger estates will not feel it in the same way. Suppose it is a small estate with an income of $300. That S300 will pay a tax of thirty-nine per cent and that does not seem fair.


James Lorimer Ilsley: It is merely taxing the income of a trust. It is accumulating in trust for the benefit of unascertained persons or persons with contingent interests, and there is no good case for exemption.


William Alexander McMaster: The department, I
believe, has ruled that anyone is an unascertained person if you cannot be sure who will get it. If you say that a certain person will receive it at the age of twenty-one, if you cannot be sure that that person will get it he is unascertained.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order. '
Bretton Woods Agreements
[Stage Direction]
Thursday, November 29, 1945.