March 17, 1937


Hon. CHARLES A. DUNNING (Minister of Finance) moved that the house go into committee of ways and means.


CON

Ernest Edward Perley

Conservative (1867-1942)

Mr. E. E. PERLEY (Qu'Appelle):

Mr. Speaker, I should like to make a few observations, and to direct the attention of the house to chapter 53 of the statutes of 1935. Subsection (a) of section 8 deals with the duties of the wheat board, and provides:

8. It shall be the duty of the board:

(a) to fix a price to be paid to the producers for wheat delivered to the board as by this act provided, subject to the approval of the governor in council;

Section 7, subsection (e), reads as follows:

(e) to pay to producers delivering wheat at the time of delivery or at any time thereafter as may be agreed upon such fixed price per bushel, according to grade or quality or place of delivery, as may be determined by the board with the approval of the governor in council; and to issue to such producers when such wheat is purchased certificates indicating the number of bushels purchased, the grade, quality and the price, which certificate shall entitle producers named therein to share in the equitable distribution of the surplus, if any, of the operations of the board during the crop year, it being the true intent and meaning of this section that each producer shall receive for the same grade and quality of wheat the same price on the Fort William basis. Such certificate shall not be transferable

Order in council P.C. 2202 was passed on the 28th day of August, 1936, a copy of which 'I hold in my hand. It is certified to be a true copy of a minute of a meeting of the committee of the privy council, approved by the deputy of His Excellency the Governor General on the 28th day of August, 1936. The order in council reads:

The committee of the privy council have had before them a report, dated August 27th, 1936 from the acting Minister of Trade and Commerce, stating that under clause A of section 8 of the Canadian Wheat Board Act, 1935, provision is made that it shall be the duty of the Canadian Wheat Board, established under the said act, to fix the price to be paid to the producer of wheat delivered to the board as by the said act provided, subject to the approval of the governor general in council;

That the Canadian Wheat Board established under the said act, has fixed a price of eighty-seven and one-half (871) cents per bushel for wheat graded as No. 1 Northern at Fort William, as a basic price for wheat for the 1936-1937 crop year, effective from August 1, 1936, delivered to the board as provided by the said act, the price of other grades of wheat to be fixed^by the board on the basis of the price for No. 1 Northern wheat delivered at Fort William as aforesaid:

The final paragraph reads:

The minister, therefore, recommends that the recommendation of the Canadian Wheat Board be not approved unconditionally but that approval be given only in the event of the closing market price for wheat dropping below ninety cents per bushel for wheat graded as No. 1 Northern at Fort William, in which event the price of 871 cents per bushel as recommended by the board shall be approved, and this order in council be regarded as approving the same.

That order in council meant the repeal of the act. There is no conditional clause in the act; it contains nothing that states that the price of wheat must drop to a given level before the board shall set a fixed price. That order in council meant the sacrifice of the western producer to the open grain trade, and brought about a loss of several millions of

Wheat Board-Mr. Perley

dollars to the farmers on the 1936 crop alone. It also took away from the producer the second choice of a buyer, which is important.

It is not necessary for me to take up the time of the house to-day in reviewing this question at length. Already this session much has been said in this regard. The other day in his speech on the budget the hon. member for Rosetown-Biggar (Mr. Coldwell) set out very clearly the result, as far as western Canada is concerned, of the passing of this order in council. I had something to say myself as well, and the situation created in the west by this action on the part of the government has been made quite clear. The language used by the Minister of Agriculture (Mr. Gardiner) in his reply on that occasion would indicate that he intends to stand by this order in council. Therefore, without taking further time, I desire to move the following amendment, seconded by the hon. member for Brandon (Mr. Beaubier):

That all the words after "that" in the said motion be omitted and the following substituted therefor:

"this house regrets that the government rendered the Canadian Wheat Board Act, 1935, inoperative in its application to the 1936 wheat crop."

I should like to know if hon. members opposite from western Canada, the hon. member for Saskatchewan (Mr. Young), the hon. member for Moose Jaw (Mr. Ross), the hon. member for Melfort (Mr. McLean), the hon. member for North Battleford (Mr. McIntosh), and others, approve of the action taken by this government in making the 1935 act inoperative last year. If they do, and if this house defeats this amendment, the farmers will know what to expect in the fall of 1937.

I am not going to argue the point further, except to give one more quotation. I think hon. members should be made acquainted with what happened on July 1, 1935, when the act was finally drafted and prepared for submission to this house. The last move made by the Liberal members of that committee was a motion proposed by Mr. Ralston and seconded by Mr. Stewart, as follows:

The operations of the board shall not extend beyond the fifteenth day of August, 1936. except for the purpose of sale and realization of assets, collections, payments and generally for the winding up of the affairs and business of the board, unless on or before the first day of July,

1936, the operation of this act be extended by order of the governor in council for one year from the date first mentioned in this section, in which event such operations with the exceptions above mentioned shall terminate on August 15,

1937, unless further extended by parliament.

Parliament is preparing Mr. Speaker, for prorogation in the near future. We should know where hon. members stand with respect

to this important public question, and I say that without further argument of the point parliament to-day should declare itself.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Leader of the Opposition):

Mr. Speaker, the silence of the government with respect to this matter is, I suppose, purely for tactical purposes; therefore I shall proceed to make my observations.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Mr. LAPOINTE (Quebec East):

The matter has already been discussed three times.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I rise to discuss the matter not as it affects the merits of the marketing of wheat. For the purpose of what I have to say I am not concerned whether or not the best that could be done has been done by those charged with the responsibility. I rise to deal with the matter purely as a constitutional issue, and one of far-reaching consequences, involving the usurpation of the powers of parliament by the executive-nothing short of that-and this is the most serious instance of it I know of, so far as I have been able to read the records of parliament.

In 1935 parliament passed a statute known as chapter 53, the Canadian Wheat Board Act, 1935. That act was the outcome of a report made by a committee comprising representatives from all sections of the House of Commons. In the end the act as submitted to parliament ivas as unanimously reported from the committee, of which I happened to be chairman. The act embodied the suggestions made ;by the various members of the committee, with respect to which little or no evidence was taken. I am not concerned with what transpired before that committee, nor at this time am I interested in how or why its conclusions were arrived at. For my purpose it is sufficient to indicate that in the exercise of its powers parliament saw fit to adopt the report in the form of a statute, which is now known as the Canadian Wheat Board Act of 1935.

There was discussion in the house upon the motion for the third reading of the bill; there was wider discussion as it was considered section by section in committee. In particular I direct attention to two or three sections of the bill. Section 7 of the act as it now stands provided for a wheat board, which was to be set up under the provisions of the statute for the purpose of buying, selling and disposing of the crop of 1935-36, or subsequent, crops, and the large accumulated bushelage in the hands of the Canadian producers' association at the head of the lakes and elsewhere, and that section charged the board thus set up with various responsibilities.

Wheat Board-Mr. Bennett

Section 4 made the board a body corporate, with powers to sue and be sued, but section 7 is the one to which I desire to direct careful attention. The board was to undertake:

-the marketing of wheat in interprovincial and export trade and for such purposes shall have all the powers of a corporation and without limitation upon such powers the following:

(a) to receive and take delivery of wheat for marketing as offered by the producers thereof;

(b) to buy and sell wheat: Provided that no wheat shall be purchased by the board except from the producers thereof;

(c) to store and transport wheat.

That and succeeding subsections dealt with conditions which might or might not arise, depending on whether or not to make the act effective it would be necessary to take over the elevators of the country. But before the board could function, obviously it was important that it should have some regulation of price. And so in section 8 of the act we find:

8. It shall be the duty of the board:

(a) to fix a price to be paid to the producers for wheat delivered to the board as by this act provided, subject to the approval of the governor in council;

(b) to sell and dispose of from time to time all wheat which the board may acquire, for such price as it may consider reasonable, with the object of promoting the sale and use of Canadian wheat in world markets.

Those were provisions which dealt with (a) the acquisition of wheat, (b) the disposition of it; and (c) at the price fixed by the board and approved by the governor in council. Those were the conditions first suggested. But owing to the difficulty which, as was at once realized by all, must be experienced in fixing a. price, the government and the members of the committee all agreed that it would be desirable to make provision whereby the farmers or producers of wheat might share in any subsequent increased price which might arise after the price was fixed through conditions which could not be foreseen. If Mr. McFarland was right in the belief that wheat would increase in price, obviously the farmer should share in it. If others were right in the belief that wheat would not increase in price, but might even diminish in price, obviously the country would have to pay because the price had thus been fixed and the producer would have benefited by reason of the fixed price.

In this connection, however, attention must be directed to paragraph (e) of section 7. This is what the board was directed to pay:

(e) to pay to producers delivering wheat at the time of delivery or at any time thereafter as may be agreed upon such fixed price per bushel, according to grade or quality or place of delivery, as may be determined by the board

with the approval of the governor in council; and to issue to such producers when such wheat is purchased certificates indicating the number of bushels purchased, the grade, quality and the price, which certificates shall entitle producers named therein to share in the equitable distribution of the surplus, if any, of the operations of the board during the crop year, it being the true intent and meaning of this section that each producer shall receive for the same grade and quality of wheat the same price on the Fort William basis. Such certificate shall not be transferable, and a statement to that effect shall be printed on the face thereof.

The sections which I have read indicate clearly the principles embodied in the measure adopted, by parliament which became chapter 53 of the statutes of Canada for 1035.

When the bill was finally before parliament on July 4, 1935. we spent much time discussing it in detail. True, it was suggested in committee that a provision should be inserted in the bill whereby the measure would lapse on a given date, and that its life might be extended beyond that date by the governor in council. That suggestion came from representatives in the committee of hon. members opposite. I took the view that it was not desirable that legislation of this kind should ever have its life determined by order in council, and at that time we successfully contended in the house that the measure should continue in force until rescinded or repealed by parliament.

Bear in mind the importance of that provision. Conditions were changing from day to day and month to month; what might be an emergency to-day might not be an emergency to-morrow, or new emergent conditions might arise. So we provided that chapter 53 should remain upon the statute books of Canada until such time as it was repealed by parliament. Parliament has not repealed that statute; it has not been repealed to this day. Of course, that principle is embodied in all legislation, namely, the right of parliament to repeal it unless the life of the measure is determined by the measure itself or by other legislation. Therefore, this legislation was of the type or character that continues in full force, validity, and effect until such time as it is repealed by appropriate action'of this parliament. In order that there may be no doubt as to what was the real intention of parliament, I should like to quote from pages 4270 and 4271 of Hansard of 1935. At that time I clearly indicated what were the purposes of the measure. After stating that there were two principles involved, I said:

The first was the price to the producer to be fixed by the board with the approval of the governor in council. In other words, the government of the day must approve of the action taken by the board, ascertain the factors that

Wheat Board-Mr. Bennett

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB-PRO

Joseph Thorarinn Thorson

Liberal Progressive

Mr. THORSON:

Was it not rather gone by the rising price of wheat?

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The board stated that they would buy all the wheat that was offered at 87i cents. The government said: "No, we recommend

that that recommendation be not approved unconditionally," and the conditions imposed made the position such that the board did not buy a single bushel of wheat and the farmer had no chance to avail himself of that second market. Had he done so, he might or he might not have shared in the increased price; that is not the point I am now discussing. What I am discussing is the usurpation of power by the executive, the arrogating to the governor in council of a power which belonged only to this parliament, and about which in days gone by, when there was a distinct delegation of powers to the governor in council to take such action, my friends used to talk so vigorously. Hour after hour they used to declaim against the exercise of this power by an executive which was authorized to exercise it because the power had been delegated to it by parliament under the relief act. Now, without delegation, without authority, without a semblance of authorization, they see fit to exercise through their function as governor in council the power entrusted under the constitution to this parliament-parliament having made no provision for the governor in council to exercise such power in any way. Against that unconstitutional use of power I am now protesting- against that violation of the terms of the statute itself, which not only had the effect of making it inoperative so far as the producers of wheat were concerned, but more, set at naught this parliament, treated us as being without authority, and usurped the exercise of a power which under our constitution rests only with parliament-the authority not only of the commons and the senate but of the crown itself. The real issue is whether hon. members are prepared to stand in their places and say that they approve of the executive making a statute inoperative when there is no power or authority so to do.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

John Gordon Ross

Liberal

Mr. J. G. ROSS (Moose Jaw):

Mr. Speaker, I have just listened to the leader of the opposition (Mr. Bennett), and I do not blame him at all for taking the position he has taken. Anyone whose record with regard to wheat in this country resembles that of the right hon. gentleman had better find refuge in a legal technicality of some kind, if there is any; that at least is true in western Canada, which is greatly interested in this question. The hon. member for Qu'Appelle (Mr. Perley) raised this question, I am sure, not merely to precipitate a legal discussion

about it, but to attempt to prejudice the minds of some of the farmers in the west with regard to the policy of this government in the handling of wheat during the past year.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CON

Ernest Edward Perley

Conservative (1867-1942)

Mr. PERLEY (Qu'Appelle):

They are

already prejudiced.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

John Gordon Ross

Liberal

Mr. ROSS (Moose Jaw):

With regard to the wheat question we have heard a good deal in this house, and it was discussed in committee last year, but I do not think the whole subject has yet been covered. The other day, on the budget debate, the hon. member for Rosetown-Biggar (Mr. Coldwell) mentioned the stand taken by some hon. members while in western Canada. My hon. friend from Qu'Appelle wishes to know-and he mentioned my own name-where we stand on this question. That, of course, is the reason for his amendment. This question is not going to be debated simply on a legal technicality raised by the leader of the opposition but on a wider ground. In the first place we had better go back and find out what was said by the members of this party, or by some of them at any rate, in western Canada at the time this matter was discussed with the electors, and when they put us here on the basis of what we discussed with them. Perhaps I had better give my own idea as I expressed it then. Let me tell the house what I had to say and what I am willing to stand by inside or outside the house at any time. I claim that a large part of the trouble in connection with wheat in Canada was brought about by the refusal of my right hon. friend and his party, while they were in power, to trade with other peoples of the world. Their policy backed up wheat in the dominion until as a government they had to take action in regard to it. They even went so far as to negotiate with other nations in the restriction of world acreage, curtailing the production of wheat. On the platform in western Canada I told the people that if any such action were ever taken by a government in Canada it would mean that the equity of the people of western Canada would be gone, and I still stand by that.

One of the troubles during the regime of my right hon. friend was the fact that exchange rates between Canada and other parts of the world became so wide that these exchange rates alone decreased the price of wheat in Canada by fifty per cent or more. My right hon friend tried devious methods while he headed the government-

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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?

Mr BENNETT:

The word "devious," I am afraid, the hon. member must withdraw.

Wheat Board-Mr. Ross

(Moose Jaw)

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

John Gordon Ross

Liberal

Mr. ROSS (Moose Jaw):

Well, various or different methods. He tried different methods in order to help out the situation which he himself had largely created. He tried, for instance, a bonus to the wheat grower of western Canada, and the effect of that bonus of five cents a bushel was this, that the more wheat the farmers grew the less bonus they needed, the more bonus they got the less money they needed, and the more money they needed the less bonus they got. In other words, the principle was: Give to those that have and give nothing to those that need.

In the election campaign, speaking as a Liberal in western Canada, I stated that if we were returned to power we would endeavour as rapidly as possible to open up trade routes in order that wheat might again be sold as it had been during the past Liberal regime. We were asked at that time whether the Liberal party would continue the wheat board and we said that of necessity we should have to continue the board until such time as the wheat held by that board was sold and business got back to more normal proportions in Canada and the farmer could get a reasonable price for his wheat. We said then that the policy of the Liberal party would be to sell wheat, not to hold it back; that it would be to sell it and if necessary take a loss upon the wheat that was held by the board at that time, but that the supluses must be got out of the way because they were largely responsible for the lower prices that we were receiving at that time. We also said on that occasion that we would endeavour to advertise and merchandise the products of the farmer in Canada and that we would endeavour in every way to increase the use of Canadian wheat in the world.

Last session when some of the estimates were under consideration I mentioned something in regard to the advertising and merchandising of farm products. Unfortunately for those engaged in agriculture, it is perhaps the one industry that is from twenty to twenty-five years behind the times in the sale of its products. For every other industry in the last twenty-five years has gone a long way towards advertising and merchandising the things which it produces. 'In agriculture we have endeavoured to produce better products but we have done little in the way of advertising to place those products to advantage before the different peoples of the world. In the election campaign we said that we would endeavour to merchandise and advertise our products and at the same time try to increase the use of Canadian wheat. The new board that was appointed by this

government, as one of its first acts, sent a man to Great Britain to try to get the millers there to use a greater amount of Canadian wheat in their mix for flour, and they have been extremely successful in having that done. We were told at the last session, when the wheat board started to sell wheat, that it was a fire sale, that our wheat was practically being given away. We maintained at that time that if that surplus of wheat were sold prices would rise and the grain farmer would be again in a position to make a living, to secure a profit out of the production of wheat. Prices have risen; they seem to be rising all the time.

In regard to the statements made by myself, for one, in western Canada, after the action of the government last fall or summer, I was in Ottawa when the announcement was made of its policy. When I arrived in western Canada, mass meetings were being called by certain people, as former speakers have said, for the purpose of criticizing the action of the government. I was asked to speak at one or two of these meetings, and I agreed to do so. I stated that we had quite a problem in the drought area of western Canada, and that first of all we had to look after those who for several years had been badly hit, to see that they got through, that they got a proper amount for relief, for seed and for feed, before we asked the dominion government to go further in expending money on the people who had a considerable amount of wheat to sell. Besides, I said that a price such as they were asking the government to fix for wheat would be entirely unfair to those who had produced little or no wheat. At that time wheat was about 94 or 95 cents a bushel, which was the lowest it went during the season. The thought then was that because the government had taken this action wheat would immediately drop below 90 cents; that was the story told throughout the west at that time. They were asking the government to set the price at $1.12 to $1.15 per bushel Fort William as a minimum. In other words a man in the northern end of my constituency who had thirty bushels of wheat to the acre would be given $6 per acre over the market price, while a man in the southern end who had little or no wheat, perhaps one or two bushels to the acre, would be given 40 cents per acre. Surely that was an unfair proposition. I set that out to the fanners of that country, and I said: "You are asking that a board be continued indefinitely in Canada-what for? First of all you had a cooperative elevator company, which you formed not for the purpose of having a cooperative elevator company but to

lg72 COMMONS

Wheat Board-Mr. Ross (Moose Jaw)

try to get a better price for your wheat. You then had a board, during and just after the war, and although you may think that that board got you a better price for your wheat, it did not; on the contrary it held the price of your wheat down. Farmers in western Canada during and after the war would have had a higher price for their wheat if it had not been for the wheat board of that time. Wheat sold at as high as $4 a bushel on the Liverpool market just after the war, during the term of the former wheat board. After that you formed a wheat pool, not for the purpose of having a wheat pool but for the purpose of getting more per bushel for the wheat."

Then my right hon. friend and his party came into power, and they were willing to do almost anything to get a better price for wheat. Stabilization operations were undertaken, in an attempt to get a better price, but they were not successful. Finally the new wheat board was formed, and as a result of its action a better price was realized for the farmers, and has been ever since. I said to the farmers at those meetings that as a farmer and as a representative in the House of Commons I did not think, -nor do I think now, that they have a right to a minimum set price for wheat. There was a reason for it when the government had gone into the grain business and mixed the business of the farmer all up so that he could not get a reasonable price. But the wheat farmer in the west- and I said this to the wheat farmers, as I am saying it here-has no more right to a minimum fixed price than the farmer who grows oats, barley, rye or flax, or than has the man in this part of the country who produces butter, cheese, cattle or hogs, or the man in the maritimes who produces fish or lumber. And by the same token those engaged in the manufacturing industries have no right to a bonus from this government. The other day I spoke against a subvention on coal. Why? Because it is identically the same in principle as a subvention on wheat. After all, Mr. Speaker, we cannot put every industry in this country on the dole. One of Canada's troubles is that for years we have had too many industries on the dole. In this highly industrialized area of central Canada the government have not given to the manufacturer so much per article produced, as they might have given the farmer so much per bushel on wheat, but they have given the manufacturer the right, by indirect methods, to tax the people of this country through higher prices for the things they have to buy.

The greatest amount of relief, the greatest dole that has ever been paid in all Canada, has been paid to central Canada through the tariff taxation imposed for its benefit by the government of this country. We in western Canada do not want any dole; we never did want any-

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

James Houston Spence

Liberal

Mr. SPENCE:

You are taking a lot of it.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

John Gordon Ross

Liberal

Mr. ROSS (Moose Jaw):

No, we are not. There was a national emergency in western Canada as bad as or worse than the floods in the United States, and it continued without interruption for five or six years. Money was spent to keep those people in that part of the country until they could get back on their feet and produce again the millions of dollars that in the past have flowed to your industries in this part of Canada. Those people never were on relief; they were working just as hard throughout the dry period as they had- been before, in many cases, harder. This government did the proper thing all the way through in endeavouring to hold those people there to produce not only for their own benefit but for the benefit of the rest of Canada as well. When my hon. friends mention the amount of money expended on the national emergency in western Canada they had better stop and check up the continual drain on the treasury for the many services that are rendered to the people of Canada as a whole, and they will find that in comparison with the rest of this country western Canada gets a very small proportion of what is drained out of the treasury. One of these days, if necessary, I am going to endeavour to obtain those figures and place them on Hansard so that everyone may know exactly what is the drain on this country, not to the prairie provinces or the maritime provinces but to the little old provinces of Ontario and Quebec, which are supposed' to be so self-sustaining. Those are the provinces that have been criticizing the expenditures made in western Canada. They had better check up and find out what they receive from this dominion before they criticize us unduly.

The stand I took in western Canada and the stand I will always take, is that the farmer of western Canada has no right to a set minimum price that has to 'be paid by the government by way of subsidy, 'but that we should endeavour in every way-and the hon. member for Qu'Appelle should help- to see that some of the rest of the people of Canada get off the backs of the wheat growers of western Canada and give them a chance to live.

Wheat Board-Mr. Gardiner

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Hon. J. G. GARDINER (Minister of Agriculture):

Mr. Speaker, I did not expect to find it necessary during this session to rise again to speak on the question of wheat, and it is not my intention to traverse the ground that has been covered in previous debates. But the right hon. leader of the opposition (Mr. Bennett) and the hon. member for Qu'Appelle (Mr. Perley) are justified in expecting some member of the government to make a statement with regard to the government's position in respect to the act that is under discussion at the present time. I say they are justified in expecting that, because of the statements that have been made in western Canada, by the hon. member for Qu'Appelle at least and I think by some other hon. members, with regard to the results of the action taken by the government in relation to the wheat board act of 1935.

The amendment that has been moved to the motion to go into committee of ways and means expresses the position of hon. gentlemen opposite in a few words:

This house regrets that the government rendered the Canadian Wheat Board Act, 1935, inoperative in its application to the 1936 wheat crop.

The whole contention is contained in those words, " inoperative in its application to the 1936 wheat crop." In order to determine whether or not the government has acted contrary to the intention of the house in 1935 I should like to direct attention to what happened in that year. In 1935 the government, which was then under the leadership of the present right hon. leader of the opposition, brought into this house a bill which, if I remember rightly, provided for an initial payment, not a set price but an initial payment on the wheat of the farmers. In the second place I think it provided for compulsory delivery to a wheat board. That is, we were to have compulsory delivery of the farmers' wheat and an initial payment to be made on the wheat, with interim payments as the season progressed and a final payment at the end of the crop year. In other words the bill provided for a compulsory wheat board under the control of the federal government.

During the discussion in this house certain changes were made. I have never known a government, Liberal, Conservative or of any other political stripe, in any parliament anywhere, with a majority such as that possessed by the last government, to bring in a bill based upon such well-defined principles as I have just set out, which, merely on the word of the opposition, finally agreed to the adop-

31111-1X8*

tion of a bill based upon principles entirely different. There is no doubt that this was the result. The wheat board act of 1935 did not provide for an initial payment in the sense provided for in the bill originally introduced in the house. It provided for what was intended to be a reasonable payment for the crop of that year, and, further, that if any losses were sustained as a result of that payment such losses were to be borne by the government of Canada. It provided at the same time that if any profits were made over and above that set price, those profits were to go to the farmers who produced the wheat.

If we examine the discussions that took place in 1935 we find that the reason for this change was twofold. In the first place there was decided opposition in this house, on both sides, to the compulsory principle contained in the original bill, that is, the compelling of all those who produced wheat to deliver that wheat to the board. Then there was also objection, particularly on the part of the then opposition in the house, to putting those who produced wheat in 1935 and succeeding years in a position where the enormous carryover that had been piled up in the previous three or four years would have an effect on the marketing of subsequent crops. For that reason it was maintained that the price that would be possible under the board to be set up ought to be a price that would be considered reasonable for the crop then being produced. In other words, if selling the surplus that had been piled up in previous years resulted in driving the price below that set price, the government would assume the responsibility of paying the difference between the price obtained and the price the government undertook to pay the farmer during that particular year. In taking that position, however, every member of the house, at least every member on the Liberal side if not on other sides, presumed, and made the statement in so many words, that the board would go out and sell the surplus of wheat that had accumulated to the best possible advantage in the circumstances that existed.

With those ideas in mind an act was placed upon the statute books in 1935 known as The Canadian Wheat Board Act, being chapter 53 of the statutes of that year. In this amendment it is contended that the action of the government made the intention of that act inoperative so far as the crop of 1936 was concerned. Let us look at the sections of the 1935 act that have been mentioned by those who sponsor this amendment. In the first place let us look at section 7. In the previous sections provision is made for the setting up

Wheat Board-Mr. Gardiner

of a board of three members, to be appointed by the governor in council. After appointment it is to begin to function. Under section 7 of the act we find:

The board shall undertake the marketing of wheat in interprovincial and export trade and for such purposes shall have all the powers of a corporation and without limitation upon such powers the following:

(a) to receive and take delivery ot wheat for marketing as offered by the producers thereof.

I am sure the leader of the opposition is too good a lawyer to argue that any corporation in Canada, because it has the power to buy something, is therefore compelled to buy it. Section 7 provides that the board shall have all the powers of a corporation, and without limitation upon such powers the following: "to receive and take delivery of wheat for marketing as offered by the producers thereof." There is nothing in the act which compels them to take delivery of it. If there were anything in the act compelling them to take delivery of the wheat, it would not be just either to the producers or to the federal government. They have the power to take it, but they are not compelled to do so.

I might just as well argue that because under section 8 the board has the right to sell wheat and continuously through established channels to offer wheat for sale in the markets of the world, therefore the board had to sell wheat every day it was in existence, and must continue to do so. Hon. members know that the intent of the measure, namely to get rid of the surplus which had piled up for years and to put the farmers who were producing new crops in a position where the old wheat could not affect the price for the new crop, could not have been carried out if the position my right hon. friend takes were sound, namely that the wheat board, in all or any circumstances which might exist, at some price which might happen to be set either by themselves alone or by them and the government combined, had to take delivery of the wheat. It would be just as logical to argue that because of another section, at all times they had to have wheat in the market for sale at whatever price happened to prevail.

What did the wheat board do in carrying out the terms of the act? In the first place, on July 29, 1936, the board presented its opinion to the government and, as a matter of fact, set the price of wheat at 87i cents. The producers of Canada delivered wheat under that set price from July 29 down to August 27. On August 27 the opinions of people who produced wheat were very obvious. Thirty-eight million bushels of wheat had

IMr. Gardiner.]

been delivered, but only 600,000 bushels had been delivered to the board. The opinion of the people in western Canada was that if the price was to be set at 87^ cents, then so long as the price was above that figure the overwhelming majority of them did not want to and did not intend to deliver to the board. They intended to deliver some other way.

The argument is offered that because the act says it shall be the duty of the board to "fix the price to be paid to the producers for wheat delivered to the board as by . this act provided, subject to the approval of the governor in council," therefore the governor in council had no right to disapprove. What is the use of a term such as that in a measure, if the government has no right to disapprove?

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I did not say that.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

The words used were "not approved unconditionally;" those were the words to which the objection was taken. The statement was made that the government had no right to disapprove of a price which had been set by the board, or to say that they did not approve of it unconditionally. Well, the statute definitely says that there really is no set price in existence until the government does approve of that particular price.

My right hon. friend would argue that when the government said-if the government did say, and they did not-that the price of 874 cents was too high, then the board had the right to go back and set another price of, say, 75 cents, and bring that to the government. If the government said that was too high, then they had the right to go back to 50 cents-and so on, probably down to one cent per bushel. In other words, Mr. Speaker, we reduce the argument to an absurdity; we attempt to do indirectly under this measure what was intended should have been done under the bill which was thrown out of the house in 1935. Or, there is an attempt to set under this bill a price sufficiently low that there would not be any chance in the world of the government taking a loss on it-in other words, paying an initial price instead of paying what was conceived to be a reasonable price for wheat in that year, and then, starting with that initial price, realizing as a result of having done so that the farmer would not deliver a single bushel of grain to the board.

If that is what my right hon. friend is arguing for; if he is arguing that the government of Canada should have tried to fool the producers in western Canada into believing that they were actually setting a price for wheat, and at the same time were

Wheat Board-Mr. Gardiner

putting them in a position where no wheat would be offered to the board, then I want to say to him that we have not a government in Canada to-day that is playing that kind of polities. Already in Canada there has been too much polities played in connection with wheat. If there is anything that will defeat a wheat board, certainly it is the extent to which wheat has been played with by governments in Canada at a time when they have been pretending to handle wheat in the interests of the producers. Wheat cannot successfully be handled in that way. It can be handled only on principles based upon sound business practice. Hon. members know how difficult it is for any government to handle a product as important as wheat without admitting political consideration in the handling of it.

Down to the time the present government took office, considerable politics had crept into the matter. As a member of the government from western Canada, where most of the wheat is produced, I for one do not intend to hide behind any decision of any government which would lead the farmers in the west to believe that we were setting a price for wheat which we thought would be a reasonable one, and then say to them at a later time, "Well, you did not deliver it." I could read the observations of no less an authority than the leader of the opposition himself to indicate what that kind of thing might mean to the people of Canada. Possibly I could state the position briefly; I believe he would agree with my statement. I hold in my hand a newspaper report of July 18, 1936. in which it is stated that the right hon. gentleman gave expression to the view that a fairly high price might be set for wheat in 1936. In making the statement he said that to set a price which was comparatively low would probably result in the price of wheat tending towards that particular price. I think he was right in that statement. I would say that for the government of Canada to come out on August 27, 1936, and say that the absolute set price for wheat was 87i cents a bushel, would have tended to lower rather than to raise the price to the farmers in western Canada. If you are going to proceed in the opposite direction and put yourself in a position where you are absolutely certain you are above the market and above where the market is likely to be, every year the board is in existence you are asking the whole dominion to assume a position where, irrespective of what happens, it is going to take a loss. I might illustrate that by repeating one of the figures I gave to this house

the other day. The average price received for wheat down to February 27, the last date for which I had figures when I was speaking, was SI.13 per bushel for this crop. Many of the resolutions which came in suggested that we should set the price at $1.15 per bushel. If that had been done, down to>

February 27 this government would have taken a loss of two cents per bushel on the price at Fort William, leaving out of consideration altogether the charges there would be against the operations of a board of that kind.

Without committing myself or the government or anyone else to a particular position in connection with the principle as to whether or not the wheat board should be continued, I want to repeat that if the wheat board is continued in Canada it should not be a board which submits the people of Canada, through the government, to a position of that kind. I would go into a further discussion of that issue in order to indicate the position I would take with respect to it. were it not for the fact that at the present time a commission is taking evidence upon these questions. That commission will finally give a decision and when that decision is brought down we will have some idea as to what those who have given evidence throughout the length and breadth of Canada think about the different policies that have been applied. We shall then be in a position to arrive at a more logical conclusion as to what should be done in connection with the marketing of the crop.

I do not think it is necessary for me to say more to indicate that the board has been operating all through 1936 in accordance with the spirit of the act of 1935. In acting in accordance with the spirit of the act. I think the board has been more nearly in accordance with the terms of the statute than had they followed the policies of any other organization which functioned since this act was passed by the house. The people of western Canada have not been nearly so much concerned about this matter as some of our hon. friends would try to lead this house to believe. I know the people of western Canada fairly well; I have contested eight elections in the province of Saskatchewan and have yet to lose one, and I think I can gauge fairly well the opinion of the public of western Canada.

When I sat in the house in Saskatchewan I saw many resolutions coming in from farmers' organizations and individual farmers throughout the province. They came in in such numbers on one occasion that I had to get a special secretary in order to answer them. Twelve months later I found that the people of the province did not agree with the terms of

Wheat Board-Mr. Gardiner

those resolutions. They probably agreed when the resolutions were coming in, but with the experience of another twelve months they came to the conclusion that after all those who were acting upon the question were probably right.

It is true that resolutions came into the government .immediately after the action was taken in connection with the recommendation of the board. I would have been more than surprised if none had come in. However, I must say that I was agreeably surprised at the small number. I wonder if the house knows how the audiences were obtained for these meetings which were held all over the province? They advertised the Minister of Finance (Mr. Dunning), and they advertised the then Minister of the Interior (Mr. Crerar).

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Without consulting either of us.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
Permalink
LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

They advertised the Minister of Trade and Commerce (Mr. Euler) and they advertised myself. They advertised the different members whose names have been read to the house. The bills were sent to me afterwards by some of my friends. They had yellow bills three feet long giving the list of speakers and there was not a single individual or organization in the province of Saskatchewan proud enough of those bills to put his or their name upon them. They were just bills which *came from nowhere, run off in somebody's printing establishment, asking the people to meet to discuss this question.

I went into a hotel in a town in my old constituency one night at nine o'clock and they told me I was supposed to be in the town of Cupar. I said, "What am I supposed to be there for?" They told me that carloads of people had gone through to that town to hear me speak. I did not know anything about that meeting. It is true that the hon. member for Melville (Mr. Motherwell) spoke, as well as my successor in the local house, but I was not present for the very good reason that I did not know until nine o'clock that night that there was a meeting, and at that time I was down at the other end of what had been my old constituency.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

You had not been asked.

Topic:   WAYS AND MEANS
Subtopic:   AMENDMENT TO MOTION OF MINISTER OF FINANCE
Sub-subtopic:   CANADIAN WHEAT BOARD ACT
Permalink

March 17, 1937