May 1, 1939

LIB

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

Liberal

Mr. LAPOINTE (Quebec East):

But you will be when, the bills come before the house.

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CCF

Major James William Coldwell

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

Mr. COLDWELL:

When will that be?

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LIB

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

Liberal

Mr. LAPOINTE (Quebec East):

As soon as this debate is over. We are far from trying to prevent discussion, but we are asking that it take place properly and at the proper time. We are not going to have two debates on wheat. As I say, there are on the order paper bills in connection with which the matter can be discussed. Why should not my hon. friend be a little patient, as we all are, and wait until the proper time comes?

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

As custodian of the rules of the house the minister must have had a blind spot in his eye on Friday night when the hon. member for Lake Centre (Mr. Johnston) was allowed to discuss these very matters.

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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order. I do not think those remarks are parliamentary.

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

Then, Mr. Speaker, I will come directly to the budget itself.

One reason that has been advanced as to why there should be a change in our wheat policy is the cost to the treasury of the wheat policy heretofore followed. I might have become excited about that at one time, but after sitting for four years in this house watching all the different groups and classes that seem to make demands on the federal treasury I am not nearly so much worried about it. On page 12 of the appendix to the budget there appears a summary of the expenditures in relation to the total revenue. There we find that the amount allowed for wheat is $25,000,000, which is 4-98 per cent of our total revenue. It may be that our wheat losses will amount to much more than that; during a previous debate the Minister of Agriculture suggested $48,000,000. Personally I am inclined to think it will be less. It will be remembered that in 1935 there were Jeremiahs who were saying that the wheat board operations were going to cost us $60,000,000 or $70,000,000, but subsequent rises in price brought about a much happier situation; and we note that there have been one or two increases in the price of wheat during the past week. So it is possible that the amount will not be as large as $48,000,000, but even allowing that figure it is only 9-6 per cent of the total revenue.

May I point out, Mr. Speaker, that this is considerably less than the $63,000,000 that we propose to spend for national defence, which constitutes 14 per cent of our revenue. It is very much less than the cost of our funded

debt, for which we propose to expend $132,000,000 or 26T5 per cent of our revenue. And that amount of $132,000,000 is just about three times as great as the total cost of the wheat legislation may be. I suggest that any industry which touches the lives of 300,000 farmers and their families, together with all the business people, railway men, professional people and others whose living depends on the production of this commodity, is of very much more importance than the bondholders to whom we pay $132,000,000 annually in interest. There is also the Canadian National Railway deficit of $54,702,000, amounting to 10-9 per cent of our local revenue.

May I remind the house that it was the government's own Minister of Labour (Mr. Rogers), their professional economist, who made the statement that the fiscal policy of Canada costs the people of the west $56,000,000 a year; that they paid this amount more for the goods they bought than they ought to pay, by virtue of the tariff protection enjoyed by certain industries. Any person who lives in western Canada and who sees what we pay for cars, radios, washing machines, cotton goods and so on, will know perfectly well that any little bonus that has been given western agriculture through a fixed price for wheat is a mere bagatelle compared to what we have poured out year after year, patiently bearing the tariff burdens of this country.

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LIB

William Daum Euler (Minister of Trade and Commerce)

Liberal

Mr. EULER:

May I ask the hon. member a question? He referred to the tariff as though it applied only to western Canada. Is it not true that if

and I am not admitting it in all cases-the tariff increases the cost of goods, it increases the cost of those goods to the residents of eastern Canada as well as to the residents of western Canada?

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

That is true; but if the Minister of Trade and Commerce (Mr. Euler) will have a little consultation with the Minister of Labour he will find that the latter gave statistics to show that while on a per capita basis it cost the east just as much as it cost the west, the amount of gain the east received, on a per capita basis, was very much more than the gain received by the west, and that there was a profit of some $83,000,000 for the east.

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LIB

William Daum Euler (Minister of Trade and Commerce)

Liberal

Mr. EULER:

We get tired of that argument.

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

We get a

little tired, too, of being sold down the river on the excuse that we are going to save a few million dollars to the treasury of Canada. And may I tell the minister further that if the Liberal party are going to desert the farmers of western Canada in order to save a

The Budget-Mr. Winkler

few million dollars, by virtue of which they hope to gain support in eastern Canada, they are betraying the people who have long and patiently borne a burden under the present tariff system which is out of all proportion to any small return they may have received

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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order. The hon. mem. ber has exhausted his time.

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

The government have exhausted my time.

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LIB

Howard Waldemar Winkler

Liberal

Mr. H. W. WINKLER (Lisgar):

Mr. Speaker, I am sure my constituents, regardless of political affiliation, would wish me to congratulate the Minister of Finance (Mr. Dunning) in their behalf upon his budget speech, and I do so heartily now. I should like to take a few brief quotations from that speech and around them develop what I have to say. The minister said:

It is therefore only self-interest for all of us to see that everything that can possibly be done is done to improve the economic standing of agriculture.

And a little later.

This the government is attempting to do by its . . . intensified efforts to improve the

quality of agricultural products destined for foreign markets.

In that connection I should like to say that the experiment carried on in cooperation with the Toronto packers, which proved conclusively that a uniform quality of Canadian baby beef on the Smithfield market in London could bring half a cent a pound over the heretofore unbeatable prime Scottish beef, must have electrified the producing public of this country as well as others who seek greater opportunity for developing the industry. This young beef stock must be of high quality and it must be uniform. I do not intend to discuss this branch of agriculture at length, but there appears to be great room for expansion in this specialized industry which should appeal to every part of Canada.

After a vigorous campaign of educational work in matters of quality and uniformity, carried on by the Department of Agriculture, government grading of hogs began in 1923. The main objective was the British market, which demands bacon of the highest quality. The bacon hog industry has proved to be one of the most reliable branches of Canadian agriculture ever since that time. In spite of the fact that the banner province for bacon, namely, Ontario, has dropped off in production by about 12 per cent of the 1923 figures, nevertheless it still leads its nearest rival, Alberta, by over 50 per cent. The whole dominion is up 20 per cent in production since 1923. In the figures I am about to

give I have used as a basis of comparison the years 1924 and 1936, because in the years succeeding 1936 the drought in the west rendered a comparison valueless. I should like to compare briefly, province by province, the production in pounds, the percentage of the dominion total, and the percentage of select hogs suitable for export.

In 1924 Alberta produced 632,000 pounds. In 1936 that production increased to 1,030,000 pounds, or an increase of 60 per cent. In 1924 Alberta's percentage of the dominion total was 20-4; by 1936 that percentage had increased to 27-5. The percentage of selects-and this is very important-increased from 2-7 per cent in 1924 to 23 per cent in 1936. In Saskatchewan the production increased from 360,000 pounds in 1924 to 569,000 pounds in 1936. The percentage of the dominion total increased from 11-6 to 15-2, and the percentage of select or export hogs from 3-1 to 17-1. In Manitoba the production had gone from 215,000 up to 267,000, an increase of 20 per cent in that period, and an increase of from 6-9 to 7T of the dominion total. In the percentage of select or export hogs there is an increase from 5-5 to 17[DOT] 7.

In Ontario we find from 1924 to 1936 a decrease in production amounting to 12 per cent had taken place. The decrease was from

1,771,000 to 1,577,000. There was a drop in the dominion total from 57-2 to 42-1, and the percentage of selects, which was very high, had nevertheless increased from 22-4 to 32-8.

In Quebec the type of hog produced has always been very large. The total of 113,000 in 1924 increased 280 per cent to 251,000, or to almost Manitoba's production in 1936. The percentage of the dominion total had increased from 3-6 to 6-7 per cent, and the percentage of selects from 9-8 to 19-2 per cent. I might add the dominion total had increased 20 per cent in that period.

These figures go to show the value of a government policy to promote quality and uniformity, and it may be said there is no indication that the saturation point is in sight.

I should like now to deal with butter. In the realm of butter we are dealing with accomplishments and possibilities, mainly the latter. Statistical sheet No. 17, issued by the Dominion Department of Agriculture, shows some interesting figures. Between 1901 and 1937 the production of butter fat had increased by two and a half times. The percentage of production exported had steadily decreased in that time to about 15 per cent or 20 per cent of the amount exported in earlier years, or in terms of actual amounts to less than one-half the 1901 export output.

The Budget-Mr. Winkler

A great deal has been said about the value of the home market, but when production of butter shows a sudden increase a new situation develops. I should like to read a paragraph from a bulletin issued by the Department of Agriculture describing the butter situation in Canada in February 1939, and compiled from statistics of the Department of Agriculture:

Storage stocks have been higher than usual from early last fall to the present time. Exports have not been sufficient to relieve the excess supply situation. High production and the comparatively small export movement have resulted in large storage stocks accumulations, and reduced butter prices.

One would conclude from this statement that the logical thing to do would be to export butter. However, let us examine the situation and see if this is possible. Before doing so I should like to make a few notations as to actual amounts. This statement is in millions of pounds. By jumping from ten year period to ten year period I will present a picture which otherwise could not be shown.

In 1901 the total production stood at

240.000. 000 pounds, while in 1911 it had increased to 343,000,000 and in 1921 to

345.000. 000 pounds. But in that interval we should note that wheat production had been entered upon to a large degree, and the dairy industry had been temporarily neglected. By 1931, 552,000,000 pounds had been produced, and 'by 1937, the last figure available, 601,000,000 pounds. Those are the figures of total butter production and exports as taken from statistical sheet No. 17.

For many years in Manitoba, Saskatchewan and Alberta provincial governments have placed cream graders at the creameries, the salaries being paid by the creameries. A creamery must pay for butter fat according to grade. Premiums are paid for sweet cream, and every farmer has his ice well where cream can be kept sweet. Recently the practice of compulsory grading has been adopted by New Brunswick, where an educational campaign is being conducted, and it is compulsory to grade every churning.

I have before me a talble described as table II and showing a statement of butter production and grading results for 1938. In that table the following percentages are shown:

Percentage of

total make

Province graded and

scored,1938

Saskatchewan 91-23

Alberta 89-65

New Brunswick 87-71

Manitoba 70-20

British Columbia 39-58

Prince Edward Island 38-00

Ontario 27-27

Nova Scotia 23-00

The average Canadian total was 48-81 per cent of the total creamery butter graded.

May I now refer again to statistical sheet No. 17, which, among other things, shows the percentage of production exported. This table begins with the year 1901 and shows the figures from that year until 1937. It is indicated that in 1901 the percentage of production exported stood at 36-6 per cent. In ten years that percentage had dropped to 22-8 per cent and in the next ten years to 20-3 per cent. In 1931 it had dropped to 7-9 per cent and in 1937 to 7 per cent.

Prizes for butter making went generally to western Canada in recent years, Manitoba winning the championship cup at the Canadian National Exhibition eighteen times in the past twenty-two years. Obviously provinces on a cream grading basis are in a position to enter the export market so far as uniformity of quality is concerned. The situation in most of the other provinces is that butter is manufactured for the home market, for fairly rapid consumption. Cream grading regulations are lax, and for local consumption other factors entering into the making of butter that will keep are not generally considered. Western butter brought east is generally mixed with eastern butter, to improve keeping qualities. High quality butter is produced in Ontario and other eastern provinces, but generally speaking the incentive, at least until now, has -been lacking. Most western as well as some eastern butter is available for export, but generally speaking eastern butter is not.

The room for a government policy of grading such as is practised in four of the provinces is now apparent, especially in view of making export markets available in times such as these. To substantiate my argument I should like to place on record some figures in connection with the exports of butter. From August 31, 1938, to April, 1939, all Canadian exports of butter totalled 166,379 fifty-six pound boxes. Of that total the three western provinces exported 92 per cent, or 153,308 fifty-six pound -boxes; Ontario, 5,410 fifty-six pound boxes, or 3 per cent, and Quebec 4,304 fifty-six pound boxes, or 2 per cent. I suggest these figures indicate the great need of government supervision of cream grading, if export markets are to be acquired.

In the event of wheat prices remaining at a low level over a period of years there will be a rush in the west to get into the dairy industry, and into the raising of hogs and beef cattle. In that event it will be even more important that everything possible be done to extend the foreign demand for these products. Until government graders are placed

339S

The Budget-Mr. Winkler

in. all creameries, the old incentive for the creamery to give No. 1 grading to all big producing customers will not be eliminated. Until in the large producing provinces of Ontario and Quebec the butter produced is put on a uniform export basis, the problem of finding an export market may recur again and again.

I should like now to refer briefly to the situation with respect to wheat, and concerning that great section of western Canada engaged in wheat growing. We are accustomed to speak of the quality of our western wheat, but we must not forget that the quality for which it is famous, namely high gluten content, is not always in its favour. There were times during the 1935-36 crop year when it was not. Generally speaking, this high gluten or protein content makes it valuable for mixing in with wheat from warmer climates, which usually has low protein content and is known as filler wheat. The report of the royal grain inquiry commission states at page 115:

It was stated (evidence p. 736-7) that- "the protein content of individual carlots of Canadian wheat may vary from as low as 8 per cent to over 20 per cent."

In regard to the demand for Canadian wheat, I would quote from page 110 of the report as follows:

There are two counteracting factors influencing the demand for Canadian wheat. On the o.ne hand, the increased use of 'home grown wheats, low in protein, makes an added demand for strong wheat, such as Canadian, to maintain quality. On this point, Dr. J. H. Shollen-berger, who made a special study, reported:

"The quality requirements for foreign wheat in European markets will tend toward higher levels in the future. In other words, the demand for strong-quality wheats will be even more insistent than in the past, with the result that price differences on account of quality will be more marked." ("Wheat requirements in Europe." Technical bulletin No. 535, U.S.D.A., September, 1936, exhibit No. 679.)

Or, as Dr. Geddes phrased it (evidence p. 877): "the one encouraging feature is that with the increased production of weak wheats in Europe the demand will be for high quality wheat and from that standpoint, it is more than ever essential that in Canada our quality must be maintained if we wish to retain our share of the export market or if we wish to secure a larger share."

The commission did not recommend the selection of wheat on a protein content basis, and concluded its opinion in these words, which appear on page 119 of the report:

There will, I believe, be some selection each year and some efforts towards publicizing the extent of protein premiums, if any, should be made. Provided that such premiums are carefully carried back to the producer and further that the practice of selection does not become extensive, I see no reason for suggesting a change in the present official attitude toward selection.

CMr. Winkler.]

Nevertheless, it is apparent that as a general rule strong protein content is desirable, and Canadian wheat is generally bought on that basis. It may be stated that there is no quick test for protein content, that is something that can be determined only by chemical analysis. The criteria upon which wheat is generally graded are weight per bushel, colour and appearance. The general absence of unfavourable factors has been regarded as a fair average indication of protein content. But it is far from being accurately so. I would refer to the recent contest at the international grain and hay show where only twenty points were given out of one hundred for factors formerly considered in judging. I should like to quote from a bulletin issued by that show:

For the first time in history of the international hay and grain show a special contest in wheat was held in which principal consideration was given to commercial value as indicated by experimental milling and baking tests, and related quality factors.

In that contest four Canadians not living in the area in which international prize winning wheat is usually grown were the winners. These men were Howard Wright of Airdrie, Alberta; A. Ripley, Indian Head, Saskatchewan; J. Rugg, Elstow, Saskatchewan, and R. P. Robbins, Shaunavon, Saskatchewan. For these reasons I would submit that the commercial value of wheat should be the basis of quality tests. With this in mind I should like to quote portions of a submission made to the commission by Doctor W. F. Geddes, formerly chief chemist with the board of grain commissioners. I think I can save time by quoting rather than attempting to give a synopsis. Under the heading, "The protein content of hard red spring wheat originating in different districts in western Canada," he said:

It is widely recognized that the protein content of wheat is influenced principally by the environmental conditions (soil and climate) under which it is grown. The strongest or highest protein wheats of commerce are grown on black or brown soils (high in nitrogen) where high temperatures and the absence of excessive moisture during the post-floral period hasten maturation of the grain. Abundant soil moisture and cool weather delay ripening and reduce the protein content. Thus the very climatic conditions which result in low yields bring about an increase in protein content; high protein wheat is almost invariably produced where there is danger of drought, and therefore the world's supply of such wheat tends to fluctuate more widely from year to year than its supply of soft wheat.

Under the same heading, on page 4 of the same report, the following appears:

In Canadian milling practice an effort is made to maintain a protein level of between 13-5 to 14-5 per cent _ in the wheat mix, whereas in Great Britain, for example, the

The Budget-Mr. Winkler

protein content of tile wheat mix seldom exceeds 12-0 per cent. The weak domestic wheats of England, Scotland. France and Germany usually contain from 8 to 10 per cent protein, Australian export wheat from 9 to 10 per cent, and Argentine wheat from 11 to 15 per cent. Canadian export wheat is purchased abroad primarily for its strength-imparting properties, and it is obvious from the data presented that some Canadian wheats are inferior in strength to Australian and Argentine and little or no better than English and continental wheats.

And on page 6:

An examination of the protein survey maps (appendix "A") shows that wheat grown in the black and brown prairie soils in the southern and central districts of Manitoba, Saskatchewan and Alberta is invariably higher in protein content than that grown in the park and wooded belts of the north where the soil comprises the forest grey and park forest transition types, coupled with higher soil moisture and cooler weather. Over a period of years, very good general agreement has 'been noted between the zonal sequence of the soil belts and protein content of wheat but the general protein level and the protein zones for any one year are greatly influenced by prevailing climatic conditions.

Then on page 9 under the heading, "Protein content and quality wheat inspected in the various inspection offices," the following appears: |

Summarizing, these results confirm similar investigations conducted in previous years, which (have revealed that there are variations in the major quality characteristics of corresponding grades in different years and that, in general, wheat of the highest test weight per bushel but of lower protein content and baking strength passes through inspection offices which feed the Pacific ports, the differences being greater for grades No. 3 northern and lower.

On page 13, under the title, "Variability in protein content and quality within grade," the following appears:

It is evident that that a considerable number of cargoes falling appreciably below the average for the respective grade and port has been shipped each year and there is no doubt that the blending value of such cargoes was below' that which we might legitimately expect. The lowest values are generally for cargoes ex Vancouver and the situation was particularly bad in grade No. 3 northern in 1936-37. This is ascribed largely to the preponderance of northern grown wheat in this grade ex Vancouver and has received unfavourable comment from English consulting chemists, statements appearing in their mimeographed reports to millers to the effect that some cargoes could only be considered good fillers.

Under the heading, "The effect of wheat selection on the protein content of shipments abroad," the following appears:

It is quite generally believed by overseas millers that the "cream of the Canadian crop is skimmed" before it reaches seaboard ports and Canadian producers have expressed the view that the average strength of Canadian wheat available for export is lowered by selec-71492-214

tion of high protein wheat, thereby decreasing the price received. It is therefore of interest and importance to determine, if possible, the extent to which any selection by Canadian and United States milling interests influences the general protein level of shipments abroad.

Doctor Geddes. formerly chief chemist of the board of grain commissioners, located in Winnipeg, made this statement not as an advocate but as a scientist, and I think that eventually what he has in mind will prevail.

Before closing I should like to give a resume of the figures supplied by the Dominion Bureau of Statistics for the daily c.i.f. prices of wheat in Liverpool, in Canadian currency, and at prevailing rates of exchange, from February 1931 to date. I have synopsized these figures first by months and then by years, and I shall give merely the synopsis in order to bear out, as I think the figures do amply bear out, what Doctor Geddes stated in his submission. For that reason I give them to the house.

For the year 1931 Canadian No. 2 northern, Atlantic, which is the export grade of wheat, averaged 11-4 cents over the best Argentine wheat, and 6 cents over the best Australian. These averages, by the way, are my own calculations from the figures supplied by the Dominion Bureau of Statistics. I regret that they are not weighted averages, but they are averages and I think present a fairly accurate picture.

In the year 1932 Canadian No. 2 northern, Atlantic, was 5-3 cents over the best Argentine grade and 3 cents over the best Australian, in 1933 Canadian was 12-6 cents over Argentine and 3 cents over Australian; in 1934 Canadian was 23-2 cents over Argentine and 12-3 cents over Australian; in 1935 Canadian was 20-05 cents over Argentine and 12-75 cents over Australian; in 1937 Canadian was 15-6 cents over Argentine (for five months) and 13-4 cents over Australian (for eleven months).

The average for these six years showed Canadian wheat 14-7 cents over the best grade of Argentine and 8-4 cents over the best grade of Australian wheat.

For the year 1936 there are no quotations from February to August inclusive on Argentine wheat, and again none in November. WThen Argentine wheat came on the market in December it was about 27J cents under Canadian northern No. 2. In that year quotations in January are for Argentine second grade. That basis gives an average of 5-8 cents for Canadian over the Argentine price in that year, and 4 cents under the Australian price.

In 1938, except for the month of December, no Canadian No. 2 wheat quotations are avail-

**VIS*D EDITION

The Budget-Mr. Winkler

able, and for the months June to November inclusive there are quotations only on second grade Argentine. In other words, for ten months No. 3 Canadian grain quotations, and for six months second grade Argentine quotations, are given. On this basis the Canadian average is 9-5 cents over Argentine and 14-3 cents over Australian.

I think these figures fully substantiate the statements made by Doctor Geddes to the board of grain commissioners, and my conclusion is that sooner or later-I trust it will be soon

this government will see fit to appoint a commission or a board of western producers to investigate fully the field of the protein content of wheat, and also do something in the matter of regional or other arrangements along the lines suggested by Doctor Geddes. I know that will require a great deal of consideration, but I am sure there are many western agriculturists who would gladly serve on such a board free of cost to the dominion, and consider it an honour to do so. I know I would myself. I have mentioned a few departments in which I think there is vast room for agricultural improvement, and in placing these suggestions before the minister I am confident that they will be given consideration.

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CON

Alonzo Bowen Hyndman

Conservative (1867-1942)

Mr. A. B. HYNDMAN (Carleton):

Mr. Speaker, in continuing the debate on the budget I assure you that, so far as wheat is concerned, you will not have to rule on any points of order.

In my opinion there are three burning questions before the people of Canada today: (1) taxation; (2) the manner in which this government is spending the taxpayers' money; and (3) the condition of agriculture. I go back to the first budget of the Minister of Finance (Mr. Dunning) in 1936, and quote from page 2383 of Hansard, where he said:

Nevertheless I believe that no country can o on indefinitely with heavily unbalanced udgets and continue to maintain either the confidence of investors or the basis upon which her economy can function healthily and vigorously. We have now reached the stage where delay should no longer be tolerated. We must make an immediate approach to a balanced budget and we must be able to show that complete equilibrium can be reached within a reasonable time.

The next year, 1937, in his budget speech the Minister of Finance said:

I believe I can fairly say that since 1929 no New Year has dawned with brighter promise for Canada. I shall be greatly disappointed if, by this time next year, Canada has not moved substantially further along the road of economic recovery. ...

I hoped that it would be possible to reduce the deficit to $50,000,000 for 1937-38 and to

wipe it out altogether the following year. It now seems probable that this objective will be within our powers of accomplishment.

That was only two years ago, in 1937. In 1938 the Minister of Finance in his budget speech said:

If we can judge by the experience of previous years, the departments will be able to effect considerable savings in their appropriations, and these savings, judging from experience, should be more than sufficient to offset _ any additional expenditures that may be authorized.

Then we had the budget speech of this year, in. which the Minister of Finance said:

Nevertheless, no nation can go on indefinitely with a budget heavily unbalanced without sooner or later providing a real, not an imagined, basis for fear as to the soundness of the country's financial position.

On January 9 of this year a great Canadian in the person of Sir Edward Beatty, speaking before the Ontario Property Owners' Association, had this to say:

As long as debt is incurred by anyone or any institution for the purpose of building or purchasing plant or equipment which produces a profit, the larger the debt the better. The moment that debt begins to grow, not for this reason, but to cover annual losses, then the larger the debt the worse. I hope that your association will pass not one, but a series of resolutions, protesting against the waste of public funds, wherever that waste occurs; that you will vote against the duplication of public services; the waste of money on relief-except where the need is actual, the neglect, in the public affairs, of the ordinary rules of prudence which you apply in your own affairs.

I fear, Mr. Speaker, that the present government does not realize the danger of these successive annual deficits. In 1938-1939 they had a total revenue of 8501,677,000 and a deficit of over $55,000,000. We have heard a lot of criticism of the late government, the so-called Bennett administration, but in 1931 when they were in office and the depression was at its worst they took out of the pockets of the taxpayers of this country only $357,720,435. True enough, they had a deficit of $83,000,000 odd. But this government, in what they call good times, have had $115,774,587 more than had the Conservative government in 1931 to spend on the people.

During the last ten years we have been running in deficits. Last year we were told by the Minister of Finance that he thought he could balance the budget this year, but what did we find? We found another deficit, amounting to $55,666,000, and he estimates that next year it will touch possibly $100,000,000. I wonder whether the government and hon. members in general realize that during the past thirty years the debt of the dominion has increased eleven times. I wonder if this house realizes that the debts of the various provinces have multiplied as

The Budget-Mr. Hyndman

follows: Prince Edward Island, eight times; Nova Scotia, seven times; New Brunswick, seven times; Quebec, four and a half times; Manitoba, three times; Saskatchewan, five times; Alberta, four and a half times; British Columbia, eight times, and this good old banner province of Ontario, no less than fifty times. During the last twenty years the municipal debt has increased nearly three times. The dominion government is paying more than one-third of its taxation income in interest charges on the national debt. In 1938 the Canadian people paid in interest charges alone $137,400,000, a per capita charge of S12.36. Where is it going to end? Taxation is going up. The tax rate in the finance minister's own township has increased in ten years by nine mills; in my own township it has increased six mills; in Ottawa in the last ten years it has increased 7-65 mills. In the township in which the Minister of Finance resides the tax rate was raised 13-10 mills last year. Our debt is twice our income. It has been growing at the rate of $272,000,000 a year, and now equals $743.49 per capita, as against $385 in the United States. For the dominion government's borrowing of two and a half billion dollars in the last sixteen years we have practically no corresponding assets.

This is a summary of the condition of debt in this country. The Minister of Finance and the government may say, well, what complaint are you making? My complaint is against the way in which this government is spending the taxpayers' money, and I want to give a few examples right in this city which represent, in my opinion, as unwise a spending of money as any government could undertake. I should like to take the Minister of Finance or any member of the cabinet to the front of these parliament buildings and ask him to look at what is going on down around the memorial. I have watched it all summer long. You come in one week, and there is an excavation; you come in next week and it is filled in; two weeks after that things are just about as they were; and that has been going on- all summer long. We have a memorial there which is costing over $1,300,000. I fully appreciate and recognize the services made by the sixty thousand soldiers who are buried over in Flanders' fields, but if those soldiers were to come back to-day and look at the memorial in Connaught Square, and realize that $1,300,000 was being spent on it, -while the sons and daughters whom they left as babies when they went over to fight in France are walking the streets of Ottawa, hungry, barefoot and without jobs, they would not give the government much credit for the

71492-214J

erection of that stone memorial. No wonder the seulptrr has depicted the soldiers going through the arch with their heads hanging down, as though perplexed at what is going on. Perhaps they are dizzy at the way the traffic is handled around that square.

Then I should like to take the Minister of Justice (Mr. Lapointe) to the front of this building and ask him to cast his eyes towards the supreme court building. Why, in these hard times, w-ith so many people hungry, so many men out of work, should the government spend $3,360,000 on a building to house seven judges, when, as I understand it, the supreme court meets only about ten times a year? They might well have spent less money on that supreme court building. I know the Minister of Labour (Mr. Rogers) will say, " But look at the number of men employed." Well, the average number of workmen employed on the erection of that building has been only one hundred; the highest number employed at any time was one hundred and sixty. Is it necessary for us to spend $3,360,000 of the taxpayers' money to employ one hundred men?

Also we are erecting a new post office here. I should like to take the -Minister of Agriculture (Mr. Gardiner) to the experimental farm and show him the new driveway which was built over there. I measured it, and I find it is a little over a mile long. It was built through the choicest piece of ground -which one could use for such a purpose; no excavation was necessary; it is a black top highway, and it is costing the taxpayers of this country $159,784-for a mile of driveway. I have been told by contractors, and I know it to be a fact, that the highways built through Ontario cost around $20,000 a mile, and those double highways which they are building up in western Ontario cost less than $100,000 per mile. To spend over $159,000 on a mile of driveway through a farm is the kind of thing that makes the taxpayers of this country sick and tired. Again, take the St. Patrick-Cummings bridge driveway; one could throw a stone the length of it; it is less than a quarter of a mile long, yet it cost $33,742.

I am not opposed to the beautification of the city of Ottawa. On the contrary I believe that the capital city should be beautified. But in the name of high heaven let us use a little common sense in this business, and not throw away money foolishly. It is all very well for the Minister of Finance to criticize business in this country and to say that if business men do not buck up and do their share we, the government, will have to go on

The Budget-Mr. Hyndman

spending money. But I think we are setting them a very bad example. If any company had such a board of directors as we have sitting over yonder, those directors would be fired. The taxpayers are paying a terrific amount of money for the management of this country and they are getting sick and tired of it. Go to Montreal and look at the hole which the Canadian National is filling in there-$12,000,000 absolutely wasted.

People on relief, men and women, are looking for jobs and cannot get them; yet this government increases the salaries of highly paid men in the public service. We find increases amounting to $175,000. Here is a man drawing $6,000 and he is increased to $8,000, an increase of $2,000. I have here a list of the increases and these are some of them: $480; $675; $540; $600; $1,500. These are some of the increases which this government has given. Thousands upon thousands of men and women in Canada are trying to support their families on less than half of some of the increases which the government has accorded its employees. They may say that these increases are statutory. I do not care whether they are statutory or not; I say this is no time for the government to hand out such increases.

Look at the commissions the government appointed last year, and look at the supplementary estimates-$122,000,000 to be spent. Why, Mr. Speaker, I never knew that we had to have so many bridges, wharves, post offices and armouries and so much dredging to be done in Canada. Preelection, I am told. Well, I am not sure whether that is the explanation or whether hon. gentlemen opposite are trying to bridge over the differences between the provincial governments and the dominion government.

I would make a few suggestions to the government. In the first place I suggest a little more rigid economy in the spending of public money. They ought to spend the taxpayers' money more wisely. Instead of spending money on memorials and supreme court buildings, driveways through parks and farms, they should spend it on revenue-producing undertakings. For example, there is reforestation. If the Minister of Labour were here he would say, "We are going to spend a million dollars on that.'' Yes, a million dollars on reforestation and three millions on a supreme court building. I should like to see the trans-Canada highway completed from coast to coast. In this morning's press we read that Germany is demanding of Poland a highway across that country. I submit that something of the sort is needed here, a highway

from coast to coast, not necessarily for tourists but as a defence measure. I should like to see hydro-electric power developed all over the rural areas. 1 know it is a provincial matter, but surely there can be a little cooperation. Some of the money that is foolishly spent by the dominion government could be used to help in the development of hydroelectric power so that every rural .home would have electric lights. If that were done we would get somewhere.

In my opinion the federal government should assume the total cost of relief. I think they ought to set up training camps such as there are in Sweden for single unemployed. The morals of the young people of Canada are being undermined, their health is being destroyed, and they are becoming discouraged. It is all very well for a Liberal member to describe our young people as "yaps" and "spineless," but eighty-five or ninety per cent of the unemployed in this country, young boys of twenty and twenty-one, are anything but yaps. They are not spineless. If there were a war to-morrow these same young men would be called upon to go and fight. I say, give them a chance.

In regard to reforestation, I have here an interesting provincial government pamphlet. If this government spent $56,000 in the reforestation of 1.000 acres, it is estimated on reliable authority that in sixty years that forest would be worth $444,000. Would not that be worth while?

Coming now to the condition of agriculture, I do not hesitate to say that the Minister of Agriculture and the members of the cabinet all fail to realize the plight of Canadian farmers to-day. I know that they are trying to help the farmers in some ways, but they do not fully realize the condition of agriculture in Canada. Agriculture is the basic industry of the country. Germany lost the last war simply because the farmers there could not produce the necessary foodstuffs. And see what Japan is doing to-day; she is trying to expand and to get more agricultural territory. Fifty per cent of our Canadian farmers are bankrupt to-day. and seventy-five per cent of our farms are mortgaged. No encouragement is given to the farmers to stay on the land-none whatever. The Minister of Finance realizes this to some extent, for in his budget speech he says:

It is therefore, only self-interest for all of us to see that everything that can possibly be done is done to improve the economic standing of agriculture. Only thus can all industries in all sections of Canada achieve the maximum of prosperity. Only thus can we preserve and strengthen national unity.

The Budget-Mr. Hyndman

Eighty per cent of the farmers of Canada have not bought a new suit of clothes in the last eight years. I have here a picture of a group of young farmers taken during the Christmas holidays at the agricultural college at Guelph, Ontario. Here are 700 young farmers taking a short course. I ask hon. members, not in any partisan spirit but in all sincerity, what- is the outlook for these young men? They see their fathers wallowing in debt, working from five in the morning until eight at night for less than a dollar a day and getting nowhere. Is it any wonder that the rural population is gradually becoming an urban population? Improve the condition of agriculture and you will keep these young people on the farms.

The wheat bonus is fairly good, but the cheese bonus did not go far enough. Why did not the Minister of Agriculture follow the recommendations of the Ontario cheese board? Some time this winter they made a certain recommendation which in my opinion the minister ought to have adopted. They recommended one cent a pound on all cheese scoring 39 points for quality with a total score of 92 points; 2 cents a pound on all cheese scoring 40 points for quality with a total score of 93 points, and 3 cents a pound on all cheese with a total score of oyer 94 points. Why, there is hardly a cheese factory in this country producing cheese that scores 94.

Now we come to butter; the government is going to purchase butter to give to those on relief. Very good; but from whom are they going to purchase it? Are they going out to the farmers who are now producing butter, and are they going to buy it from them? No, they are going to the packing companies, to the speculators who have large quantities of butter on their hands. I would rather see the Minister of Agriculture say to these speculators, "You fellows stew in your own butter; we will buy from the producers." It is the same with wheat; we have white collar farmers speculating in wheat, who would not know a kernel of wheat from a kernel of corn. Others speculate in butter, who would hardly know how butter is produced. If any products are to be purchased, let the farmer get the benefit.

Oh, we have this government going to do wonderful things. We find that the duty on vinegar is to be increased. What a great help that is going to be to the apple growers of this country; what a wonderful thing for the farmers! Then they have put a one cent

duty on tomatoes. Look at what they did

last year. They took the duty off gopher

poison and harness. That was what they didfor the farmers of Canada. I hold in myhand a newspaper of 1903 containing themarket reports of that date, and I am going to compare the prices shown for that yearwith the prices of to-day: 1903 1939Oats 38 cents 30 cents Wheat 87J 60Barley 461 42Corn 54 53Hay, per ton.. .. $10 00 $8 00Straw, per ton .. 6 00 4 00Potatoes 1 25 1 00Butter 23 22Eggs 20 20Cheese 14 14

But look at the difference when the farmer has to go and buy:

1903 1939

Bran $ 19 00 $ 24 00Shorts 17 50 25 00Middlings 22 00 27 00Flour 2 60 2 60Plough 12 00 22 00Harrow 16 00 23 00Binder 145 00 267 00Mowing machine.. .. 65 00 120 50Hay rake 32 00 56 50Cream separator.. .. 80 00 148 00In 1903 the farmer's taxes were only $40;

to-day they are $140. The price of a farm in 1903 was practically what it is to-day, around $4,000. That is why the farmers cannot get along; they are getting so little for their produce and they have to pay so much.

Then we were told how the tariff affected prices of agricultural implements. In 1929 we had a so-called low tariff; in 1934 we had what was called a high tariff; in 1936 we had a low tariff again, and then in 1938 we had the Minister of Agriculture making a speech in this house in which he said that if the manufacturers of farm implements in this country did not lower their prices, what he was not going to do to them! Let me quote the prices of farm implements in 1929, in 1934, in 1936 and in 1938, after the minister made his speech. In each case it will be seen that under the Conservative party, with a so-called high tariff, prices were reduced; that when the Liberals came back to power prices went up, and that after the minister made his speech they went up again. The figures are as follows:

The Budget-Mr. Hyndman

Wagon

Walking plow

Disc harrow

Spring tooth harrow

6 ft. heavy mower

9 ft. 30 teeth rake

6 ft. binder

Ordinary cultivator

Field cultivator

3 inch shoe sleigh

Scufflers

Manure spreader

Cream separator

Hay loader

Tractor

Thresher machine (22x38) mounted

Hay tedder

Potato digger

That schedule of prices, Mr. Speaker, shows that under the high tariffs of 1934-and I would like the hon. member for Huron North (Mr. Deachman) to listen to this-prices were lower than at any time since 1929. There is a reason for that. When the Conservative party came into power they raised the tariff, but when they did that they went to the manufacturing concerns of this country and said, "Look here, we want you to play ball with us. We will protect your industry and give work to the people of this country, but we do not want you to increase your prices." And they did not.

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LIB

Walter Adam Tucker

Liberal

Mr. TUCKER:

Was there a combine that could do all this?

Topic:   THE BUDGET
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CON

Alonzo Bowen Hyndman

Conservative (1867-1942)

Mr. HYNDMAN:

The Liberal party came into power; they lowered the tariff but they said nothing to the manufacturers, and up went prices.

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

Walter Adam Tucker

Liberal

Mr. TUCKER:

Were those the prices of a small or large company?

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

Alonzo Bowen Hyndman

Conservative (1867-1942)

Mr. HYNDMAN:

That was the price list of the International Harvester Company. Then came the speech of the Minister of Agriculture, to show what he was going to do for the farmers of Canada; and they shot the prices sky high.

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

Harry Raymond Fleming

Liberal

Mr. FLEMING:

Would the hon. gentleman say that there was a combine among the manufacturers, in view of the fact that they raised and lowered their prices together?

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

Alonzo Bowen Hyndman

Conservative (1867-1942)

Mr. HYNDMAN:

Topic:   THE BUDGET
Subtopic:   DEDATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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May 1, 1939