May 1, 1939

LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

The actual agreements

cannot 'be concluded with the provinces until the relief legislation has received royal assent. Preliminary discussions have taken place with all the provinces, and we expect that in so far as the division of relief costs is concerned, it will be accepted by and made applicable in all the provinces. However, I cannot say that definitely until the agreements have been sent to the provinces for signature.

Topic:   UNEMPLOYMENT
Subtopic:   DISMISSAL OF HEADS OF FAMILIES IN HULL, QUE., EMPLOYED ON FEDERAL-PROVINCIAL PROJECTS
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THE BUDGET

DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


The house resumed from Friday, April 28, consideration of the motion of Hon. Charles A. Dunning (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. Lawson, and the amendment to the amendment of Mr. Coldwell.


CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. T. C. DOUGLAS (Weyburn):

Last

Tuesday's speech of the Minister of Finance (Mr. Dunning) was the fourth budget presentation to which I have listened in this house, but I must say it was the most depressing of them all. An atmosphere of gloom pervaded this chamber as the minister endeavoured to find one alibi after another to explain why this country was faced with such a terrible situation. It is occurring slowly, even to the government, that a policy of mediocre muddling will not prevail in a world condition which demands courageous statesmanship.

A newspaper came to my desk the other day in which there was an article with the heading, "Platitudes for the poor, reduced taxes for the rich." In my opinion this is a summary of the whole budget in a single phrase. By way of illustration I should like to refer to the Hamilton Spectator of April 26, which contains a report of an interview with Mr. Ross McMaster, president of the Steel Company of Canada. Referring to the exemption on capital expenditures, the report said:

Upon announcement of the finance minister's proposal, business commentators immediately cited, as an example of the substantial inducement the measure would provide for participating firms, the reported plans of the Steel Company of Canada to erect a $10,000,000 continuous strip mill here. It was estimated that under the plan, ten per cent of the cost, or $1,000,000 could be applied against the income tax bills of the next three years in which the company has a profit. This, of course, might be nullified by the time limit.

It was reasoned that since the Steel Company of Canada has had profits in most years it would thus be entitled to a reduction of $333,333 in the next three years on its income taxes.

The Steel Company of Canada must have planned the erection of this mill prior to the presentation of the budget. They could not have decided upon it the afternoon on which the minister made his budget speech, and the report from which I have quoted appears in the newspaper of April 26. According to this statement, the Steel Company of Canada are to have an exemption of $1,000,000 in connection with income taxes because they are going to erect a mill which they probably would have erected anyway.

Every hon. member is interested in the budget from his own particular point of view. I am interested particularly in the budget references to wheat and the marketing of wheat. In my opinion the government's tactics this session with reference to wheat legislation have been most unfair. On February 16 the Minister of Agriculture (Mr. Gardiner) announced a new wheat policy. We were then kept waiting between six and seven weeks with no intimation as to the terms of that legislation, having to depend only on semi-official statements which appeared in the press. On April 6 the minister introduced one of his bills and concluded his speech by adjourning the debate. Almost a month has passed since then, ten weeks have gone by since the minister announced his new wheat policy, and yet hon. members of this house have not had an opportunity to deal with the matter. The Minister of Justice (Mr. Lapointe) stands up to-day and talks obout the possibility of prorogation before their majesties come here. Those of us

The Budget-Mr. Douglas (Weyburn)

from western Canada who are primarily interested in the wheat industry have had no opportunity to discuss this proposed legislation. I want to say to the government that the opinion of the members of this group is that the greatest homage we could pay to his majesty would be to look after the king's business, and the king's business is the wellbeing and welfare of the king's subjects. If the government wants to expedite the business of this session-, we ought to be allowed to discuss the wheat situation, and that very quickly.

In order to discuss the budget in relation to wheat, it is necessary to review the wheat legislation of the past few years as it has affected the western farmer. The aim of successive farm movements in western Canada has been to give back to the farmer a larger share of the return received for his wheat, rather than having so much of it go to the speculator and the middleman. During the past fifteen or twenty years there has been a growing demand for a wheat board and a fixed minimum price, the farmers pointing out that since a wheat board was created during the war to keep prices from going too high, they have the right to expect a wheat board at this time to keep prices from going too low.

This demand culminated in the wheat board act of 1935 which was introduced by the government of the Right Hon. R. B. Bennett. In its original form that act called for the complete elimination of the speculator and the marketing of all wheat through a government board which would pay a fixed minimum price and issue participation certificates to give the farmer the right to share in any further return that might accrue from the sale of his wheat. The opposition to that wheat board bill came from the Liberal party. One has only to read the prolonged debate, led by Hon. J. L. Ralston, which continued through the hot weeks of July and into August, 1935, to realize the extent of the opposition which the Liberal party offered to the compulsory features of that bill. It was the insistence of the Liberal opposition of that day which brought about a compromise whereby a clause was inserted to put the speculator back into the wheat marketing picture. The wheat board act finally passed in its amended form, and a board was set up headed by Mr. John I. McFarland.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

On a point of order,

Mr. Speaker, as I understand it the hon. member is discussing legislation now on the order paper, and I submit he is out of order in so doing at this time.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

On the point of order, may I say that I am not discussing

legislation that is now before us. I am reviewing the wheat legislation of the last ten years and showing how it has affected the people of western Canada. On Friday evening the hon. member for Lake Centre (Mr. Johnston) discussed not only the general wheat legislation but the particular bills that are now on *the order paper, and there was no objection at that time from the Minister of Agriculture, who was in his seat.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

That does not make my hon. friend in order.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I would ask the hon. member to confine his remarks to general topics arising out of the budget. More latitude is allowed in the budget debate than in any other, and therefore I think the hon. member is in order, provided he does not refer to debates previously carried on this session.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

Thank you very much, Mr. Speaker.

The Wheat Board Act finally passed in its amended form and a wheat board was set up headed by John I. McFarland, and with it an advisory committee on which the wheat producers themselves had representation. The price of wheat was set at 874 cents for No. 1 northern at Fort William, and the wheat board proceeded to take delivery of wheat.

Then followed the general election of 1935, in which the Liberal speakers in western Canada professed themselves to be heartily in favour of maintaining the wheat board and a fixed minimum price. The present Prime Minister (Mr. Mackenzie King), speaking at Brandon, went so far as to state that the wheat board was the brain-child of the Liberal party. I do not know of any Liberal member in this house to-day who was elected on a platform of opposition to the wheat board or a fixed minimum price. If such a member exists, I hope he will stand up and say so in the course of this debate.

Then followed the Assiniboia by-election in January, 1936, at which the present Minister of Agriculture was seeking election to this house. The Cooperative Commonwealth Federation contested that election, because they were convinced that the present Minister of Agriculture was opposed to the wheat board act, a fixed minimum price, and producers' control of marketing. We claimed during that election that if the Minister of Agriculture were elected he would sabotage the wheat board and betray the farmers of western Canada; and I stand before this house to-day and declare that the charges we then made have been more than vindicated by the events that have since taken place.

Just look at the record of the present government with reference to the crop years

3390 COMMONS

The Budget-Mr. Douglas (Weyburn)

which followed their election. The first thing they did was to discharge the wheat board under Mr. McFarland, as well as the advisory committee, and in place of Mr. McFarland they appointed a new member of the board, Mr. J. R. Murray, a former secretary of the Winnipeg grain exchange, and a man most persistent in his campaign against the original wheat board bill. It is worthy of note that the government did not appoint a new advisory committee on which the producers might have representation, and ever since that time the farmers have had no voice whatsoever in the marketing of their wheat.

In the two crop years, 1936-37 and 1937-38, this government nullified the whole intent and purpose of the wheat board act. By order in council the government usurped power to which it had absolutely no right, namely, to declare that as long as the price of wheat stood above ninety cents the farmers could not deliver wheat to the wheat board. The results speak for themselves. During 1936 and 1937 thousands of farmers sold their wheat in the fall at a price between ninety cents and one dollar a bushel, and subsequently the price rose as high as 11.43 a bushel. Had they been allowed to sell to the wheat board they would have derived through their participation certificates some benefit from this increase in price.

In the crop year 1938-39 the price dropped and the government once more found it necessary to utilize the services of the wheat board. The price, however, was set at eighty cents a bushel for No. 1 northern at Fort William, which was exactly 74 cents less than the farmer had received when the wheat board was in operation before in 1935. In the meantime the Turgeon commission, which had been at work since 1936, made its report, and on the basis of that report the Minister of Agriculture made a speech in the House ofCommons on February 16, 1939, which isreported at page 1037 of Hansard. I shall not take time to quote it at length. He

pointed out that the government proposed a new wheat policy based on the recommendations of the Turgeon commission, which he listed as three:

First, that the government should remain out of the grain trade and our wheat should be marketed by means of the futures market

system.

Second, that the grain exchange should be placed under proper supervision.

Third, that encouragement be given to the creation of cooperative marketing associations or pools.

He concluded by saying:

We cannot agree that there is likely to be permanency to any system of marketing farm products which is based upon price fixing. We

prefer to embark upon a policy which will lead to costs of production and standards of product which will invite a paying market for all our farm products.

It should be remembered that the Turgeon commission had one group of suggestions to be applied in case of "normal" conditions, and another set to be applied in the case of "abnormal" conditions. At page 187 of his report Mr. Justice Turgeon described normal conditions as follows:

Open markets in the United Kingdom, a fair relationship between world supply and import demand, and no danger clouds on the immediate horizon.

And referring to normal conditions, the commissioner said, at page 189:

The government should remain out of the grain trade and our wheat should be marketed by means of the futures market system (under proper supervision), and encouragement given to the creation of cooperative marketing associations, or pools.

When he came to deal with abnormal conditions the commissioner said, at page 194 of his report:

I have expressed my opinion upon the question of the method that should be pursued under normal conditions; and in the interest of the wheat producers, as well as in that of the country as a whole, the return of such conditions is eagerly hoped for, but upon the facts before me to-day, I must say that such return is not immediately in sight. I think that there are several factors in the present situation which cannot be ignored and which call for special action.

After summing up the wheat situation he said, on the same page:

For all these reasons (and notwithstanding the adverse considerations to which I have referred in relation to government boards) I do not feel that I can suggest the immediate dissolution of the Canadian wheat board. There is a strong possibility that conditions may develop which will require a measure of assistance in the marketing of the coming crop, and I do not know, of course, how long these conditions may continue after the final chapter of this report is written. In the meantime I can think of nothing better to suggest than that the board be maintained to meet any situation which may arise.

The government, therefore, cannot use the Turgeon report as a cloak to enable them to destroy the wheat board and lower the fixed minimum price. Their wheat policy must stand on its own feet and they, and they alone, are answerable to the farmers of western Canada.

The next thing to recall, in this review of wheat legislation, was the presentation to the house this session of an amendment to the wheat board act fixing an initial price of sixty cents per bushel. I shall deal with that later when the bill is before the house. Personally I am at a loss to understand the statement which the Minister of Agriculture made in a

The Budget-Mr. Douglas (Weybum)

broadcast from Regina at Easter, which appeared verbatim in the Regina Leader-Post of April 11, and in which he is reported as having said:

There is no mention of a 60 cents fixed price in any of the legislation now before the House of Commons.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

Hear, hear.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

The minister may split hairs and say there is a difference between a fixed price and an initial price, but the fact of the matter is that his statement was both inaccurate and misleading. If the legislation proposed by the Minister of Trade and Commerce (Mr. Euler) is passed, the farmers delivering their wheat to the wheat board will be paid sixty cents a bushel for No. 1 northern at Fort William, which, if the bureau of statistics figures for last year are any indication, will mean thirty-seven cents a bushel at the elevator for an average grade, because the average price paid to the farmer at the elevator last year, when the fixed price was eighty cents, was 57i cents.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

Mr. Speaker, I am sure that the hon. member does not want to misrepresent me at the same time as he is accusing me of misrepresentation to others. He is now suggesting that a 60 cent advance to the farmer would result in something other than is intimated simply because the average price of all wheat last year wrns 57 cents. The set advance in the legislation is based on No. 1 northern wheat. The average was very much higher than 57 cents for the average of No. 1 northern.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

I made it very clear in what I said, and I do not think it differs at all from what the minister has said. Last year, according to the bureau of statistics, the average price of the average grade, not No. 1 northern, at the elevator, was, to the farmer, 57 cents a bushel and I say that on that basis 37 cents would be the average price at the elevator, on that legislation.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

No, 40 cents, even on that price.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weybum):

No, 37 cents. In the speech which the minister made, as reported at page 2623 of Hansard, in introducing the legislation he said-

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

On a point of order, the hon. member is clearly discussing now a bill which is definitely on the order paper and before the house. I draw your honour's attention to the fact-

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

That bill has already been discussed-

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

-that he is discussing a bill which is before the house for discussion and upon which debate can occur in due course.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The hon. member will, if possible, avoid anticipating discussion on a matter the consideration of which is appointed for a certain day in the near future. He may talk generally on the subject matter with which he is now dealing.

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink

May 1, 1939