September 11, 1939

PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY


Hon. J. L. ILSLEY (Acting Minister of Finance) moved that the house go into committee at the present sitting to consider the following proposed resolution: That sums not exceeding $100,000,000 be granted to His Majesty towards defraying any expenses that may be incurred by or under the authority of the governor in council during the year ending 31st March, 1940, for- (a) the security, defence, peace, order and welfare of Canada; (b) the conduct of naval, military and air operations in or beyond Canada; (c) promoting the continuance of trade, industry and business communications, whether by means of insurance or indemnity against war risk or in any other manner whatsoever; and (d) the carrying out of any measures deemed necessary or advisable by the governor in council in consequence of the existence of a state of war: special warrants to the total amount of $16,454,120 issued on or since 25th August, 1939, under section 25 of The Consolidated Revenue and Audit Act, 1931, to be included in the said sum of $100,000,000; With provision also empowering the governor in council to raise by way of loan under the provisions of The Consolidated Revenue and Audit Act, 1931, such sum or sums of money, not exceeding in the whole the sum of $100,000,000, as may be required for the purpose of defraying the aforesaid expenses, the principal and interest of any such loan to be a charge upon and payable out of the consolidated revenue fund. He said: His Excellency Use Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house. Motion agreed to and the house went into committee, Mr. Sanderson in the chair.


LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

Mr. Chairman, the resolution provides for the granting of SIOO.OOO.OOO to his majesty for certain general purposes in connection with the prosecution of war activities. Perhaps the committee will want not a detailed but rather a general statement of the purposes for which the money is being granted, and the reason for fixing upon the amount of $100,000,000.

The cost of a war effort by Canada does not lend itself to precise calculations in advance. Fortunately, we lack experience as to the costs involved in mobilizing large numbers of men, and the task of fortifying our sea frontiers is, to a great degree, without precedent. Therefore the financial process must take a form permitting financial decisions to be made as need arises, and not by settling now a fixed plan which must be rigidly observed, irrespective of what the necessities may involve.

The Appropriation Act for the current fiscal year provides, in round figures, $65,000,000 for the services which come within the field of the Department of National Defence. As will be recalled, the votes were, to a great extent, for the acquisition of armaments and machines of war. A large number of contracts have been entered into since April 1, and deliveries are being made. But, broadly speaking, the majority of the contracts are still in process of being performed, with the result that approximately $50,000,000 of the regular appropriations remain undisbursed, and that expenditures for armaments in the next few months will be, in the main, for those for which provision is already made.

It is not desirable, and the reason is obvious, that I be too specific in particularizing the nature of the steps which the general staffs of the three defence services recommend should be taken. I trust therefore that the committee will bear with me if my explanation takes the form of broad generalizations.

First, as to the naval service:

The existence of a state of war, as it is now prosecuted on the high seas, demands that all reasonable precautions be taken to safeguard our ports and sea lanes. The Minister of National Defence is of the opinion that this can be achieved through the acquisition of certain classes of craft, by the equipping of other craft with necessary apparatus and by the provision of various forms of protective works on each seaboard. There will be, also, expansions in the service to permit the navy to give the service expected of it at a time such as the present.

Next, as to the militia service:

The permanent force and the non-permanent units of the militia have been placed on active service status and the establishments of the units are being filled out by recruiting activities. Therefore, with respect to the militia, the major costs in the next few months will be for pay and allowances and for clothing, shelter, subsistence and training provided to the men on active service status.

A problem to be faced is that of housing the members of the forces, because the winter season is not far distant. Again, in a country as large as Canada, the question of transport is neither a simple nor an inexpensive one to solve. It is felt that we should make such provision that the Canadian militia activity at the moment could take the form of mobilizing at least forty thousand men for general purposes, plus a further number for special and coast defence purposes. The acquisition of large quantities of materials is also necessary, but immediate disbursements will be mainly on account of those in training.

War Appropriation Bill

Now, as to the requirements of the air force:

The air force's needs pivot on the acquisition of stores, and equipment, mainly aircraft. It is idle to discuss what one might want, because aircraft cannot be acquired by simply placing an order as one does for an automobile. Therefore, while an expenditure in the vicinity of $40,000,000 would bring the air force to full peace time establishment, both in equipment and in personnel, it is not anticipated such an amount will be disbursed in the next few months.

In addition to expenditure on equipment, an immediate expenditure on the training and dispatch of pilots and airmen overseas will be necessary. Enlistments are now taking place, a substantial number of pilots and airmen are already trained or completing their training, and there will be no delay in proceeding with this effective form of cooperation with Great Britain. It is essential that there be ample funds to meet any emergency which may arise in the needs of this service.

The next department which has material additions to its costs is the Royal Canadian Mounted Police. The force has been expanded by a call going out to five hundred former members to report for duty and by engagement of special constables up to a total of 2,500. The pay and allowances for these, and the cost of moving the members of the force to where they will be required, are the major new items of expenditure to be incurred by the force. In all, if the precautionary recommendations are fully implemented, about $3,000,000 may be involved.

The Departments of Public Works and of Transport visualize new activities devolving upon them. In the case of Public Works, these will be in connection with housing for expanded services, particularly those of national defence, while the new costs of the Department of Transport will be mainly with respect to adding to the facilities for ocean shipping, and for landing fields for aircraft. In neither case can the amounts be estimated with exactness, but neither will be for large amounts at any one point. Perhaps $3,000,000 is an outside estimate.

Other departments will need financial assistance for new or expanded services, but, collectively, it is hoped that, in total, these new disbursements may be kept within $1,000,000.

The various departments of the government visualize a possible new outlay of about S125,000,000. It does not necessarily follow that the government will approve all these proposals. Nor, in fairness to all concerned,

[Mr. Ilsley.l

should it be said that the submitted estimates represent the most conservative estimate which might be made; for, as pointed out before, an exact forecast of events into the months to come is not possible. Further, while certain costs can and will come due for payment within the period, many contract orders will remain uncompleted by the end of January and therefore unpaid. Likewise, as already pointed out, deliveries of aircraft are not secured forthwith by simply placing an order. For all of these reasons, and bearing in mind the provision already made by parliament for the public services, this bill has for its purpose that of appropriating $100,000,000, and it is believed that this amount will permit Canada to perform the duties resting on the dominion until further consideration may be given by parliament to our national effort.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
CON

Henry Herbert Stevens

Conservative (1867-1942)

Hon. H. H. STEVENS (Kootenay East):

Mr. Chairman, the procedure at this moment seems somewhat different from that of the special session on the last occasion on which an emergency of this kind arose, but I presume that remarks made now need not be repeated later, at another stage of the proceedings. I should like to address myself briefly and in a very broad and general way to the situation now confronting parliament. By the adoption of the address in reply to the speech from the throne parliament has placed itself clearly on record and has outlined the course that it proposes to take. That course is one of effective cooperation with Great Britain and France in the prosanition of the war. The exact form and defails of that cooperation of course cannot possibly now be disclosed in their entirety. This we recognize fully. As my leader (Mr. Manion) indicated in his remarks the other day, we desire at this time genuinely to cooperate with the government in the discharge of its grave and onerous duties.

I submit that this is not the time for captious criticism or for hypothetical dissertations upon methods or theories of procedure or upon systems of government. In other words, I think we should forget the differences of the past as far as that is possible and genuinely unite and cooperate to face the tragic conditions with which we are confronted at this hour. I wish once again to assure the government, as. my leader has done already, that by constructive cooperation we desire to assist the government in their most difficult task. Perhaps the committee will bear with me while I quote a few words which I recall vividly as being uttered by that great leader of the Liberal party, Sir Wilfrid Laurier, a little over twenty-five years ago. I recall the occasion as if it were yesterday. He stood in his place with that grace and dignity which

War Appropriation Bill

won for him the respect and indeed the veneration of his political friends and political opponents alike. Beloved and respected as he was by those who knew him, I can think of no better sentiment to inspire us in this period through which we are now passing than the words he uttered on that occasion, particularly as they apply to the matter immediately before the house at the moment. Sir Wilfrid said:

Speaking for those who sit around me, speaking for the wide constituencies which we represent in this house, I hasten to say that to all these measures we are prepared to give immediate assent. If in what has been done or in what remains to be done there may be anything which in our judgment should not be done or should be differently done, we raise no question, we take no exception, we offer no criticism, and we shall offer no criticism so long as there is danger at the front.

I shall never forget the tense moments when those words were uttered. I am conscious at this time that conditions at the front are extremely serious. I do not know that this is the time to say much along that line, but I cannot forbear from making one brief reference. Why has Hitler attacked Poland? Here was a little country already in possession of a non-aggression pact with Germany. Poland had no desire or intention of interfering with the affairs of others. It was a country brought once again to life-it is an ancient nation-by the unanimous opinion, other than perhaps that of the Germans, of those who attended the peace conference. Why should Germany want to violate its nonaggression pact? Poland had resisted any contact with the soviet government because it could not sanction the attitude of the soviet authorities. It was a country which was largely agricultural and which sowed its crops under, shall I say, the shadow of religious shrines. Believing as they did very deeply in the efficacy of the Christian religion, it seems to me that there is only one answer to this question-the antipathy and bitterness which existed against the manner of life of these people, against their beliefs, their ideas and their religious conceptions. There seems to be no other reason, which could be offered. As far as Danzig was concerned, the Germans had it. They were in the majority and they were directing its affairs. It is true that Danzig was under the control of a commission of the League of Nations, but the Germans were in as full physical control as they possibly can be at any time in the future. This thought has pressed itself upon my mind. I cannot for the life of me get away from the idea that we here in Canada, just as were the Poles, are faced with the necessity of defending the things which we hold dear, whether they be religious or social or economic.

Turning more directly to the resolution before us, I give utterance again to the sentiments expressed in 1914 by Sir Wilfrid Laurier. To the measures proposed by the government, to the suggestions contained in this resolution, we take no exception and we offer no criticism at this time. We desire to give to the government a perfectly free hand. We desire to offer constructive cooperation in the serious task they have before them. I trust that it will not be considered out of order should any hon. member, whether he sits on the other side of the house or on this, deem it necessary or desirable or advisable during this session, or during the months to come at future sessions, to offer suggestions to the government. Indeed, the other day the Prime Minister (Mr. Mackenzie King) invited such suggestions. Anything that I shall say to-day is not by way of criticism, but merely by way of suggestion. I know I am expressing the views of my leader and of my colleagues generally when I say that we have no desire to criticize or to prolong the discussion.

The resolution does two things. First, it authorizes the government to make considerable expenditures for certain things that they deem to be necessary and essential for the defence of Canada and the prosecution of that degree of cooperation which we have already sanctioned. Of course it is quite useless, indeed not desirable, to ask for details of these matters now, and we shall not do so. We simply say to the government that we will gladly cooperate, and grant the request for this sanction and trust the government, in fact suggest to the government, that they exercise every reasonable care to see to it that nothing other than the first duty to the country at this time, namely, the public safety, shall be the motive directing them in the expenditure of these funds.

I have one suggestion to make regarding the last paragraph of the resolution, which authorizes the government to raise by way of loan the sum of $100,000,000. In the first place, this loan should be raised at a low rate of interest-a very low rate indeed. I am confident from remarks that have been made to me by responsible financial men that it is possible at this time to raise the funds at a low rate of interest, and I am assured that if the government will ask for the funds it requires on a very low interest basis they will meet with a generous response from the public as well as from financial institutions throughout the country.

Another thought that occurs to me is this. Sometimes when a loan is issued there is a provision that no sums above the amount asked for will be accepted. I suggest to the

Mrar Appropriation Bill

minister (Mr. Ilsley) and through him to the Minister of Finance (Mr. Ralston), not in any dogmatic way, that they should accept any amount that is offered, but that they should very carefully consider accepting as much as may be offered. That is my opinion. In other words, leave the loan open, so that if it is oversubscribed the full amount subscribed may be accepted; because I am convinced that the country will need all the financial resources it is able to make available.

The government is asking for $100,000,000, which is to include $16,000,000 already expended, thus reducing the amount made available by the loan to about $84,000,000. Obviously it is not my duty to suggest to the government that that is not enough; but I do express this private opinion, that more may be needed in the next few months. Parliament may not meet until January or February; we do not know, and I personally would not object if the amount to be raised were made larger, because $84,000,000 is only some $30,000,000 more than was asked for in 1914, when circumstances were vastly different from those of to-day. It must be remembered that mechanization, which is the keynote of all present military and naval forces, is very expensive. The government have the right, of course, under governor general's warrants, to supplement the sum now proposed to be raised, if it proves to be insufficient. But it is likely that subscriptions can be obtained at a lower rate of interest now than will be possible later on, and I suggest that that point be kept in mind.

Another suggestion I would make to the minister and the government is this: Do not overlook the gold resources of Canada. It has been demonstrated in the last few years that Canada is capable of producing a tremendous quantity of gold. Not so many years ago when someone suggested that Canada's gold production might reach $100,000,000 he was laughed at, but during the last few years we have produced gold to a value of over $150,000,000, taking into account its increased value; and I think production during the current year will exceed that figure. That is a very substantial amount, and there is no reason why we should not make a maximum use of our gold production in Canada by adding to our reserves and utilizing the advantages which accrue from that method of financing. We often talk about the gold reserve as something so sacred that it must not be touched, a reserve in excess of our minimum requirements which may be used in times of stress or necessity. That is something we should keep in mind. These are times of stress and necessity, and while I would not for one moment

suggest that we should lower the standard of reserves which has been set up, I do think we should add to those reserves from our production, instead of simply shipping the gold out of the country as an export commodity. We should exercise our rights under the law and in accordance with the practice, and use those reserves to the limit to which we are capable of using them.

Another thought that might be expressed at this time, and I offer it largely, if I may so, to encourage the government to follow the path of reasonableness and caution, is this. We hear a lot of talk about the conscription of wealth, but I have not yet heard anyone define in specific terms what he means by the conscription of wealth. The term is used very loosely; I submit there are as many definitions of "conscription of wealth" as there are people who use the phrase. I very much prefer the term "mobilization of wealth." If the conscription of wealth means, for instance, the nationalization of industry, I warn the government against any such step; it would mean national confusion and chaos, and, I believe, collapse, if we were to attempt to change from the present organization of our industrial and financial life to a system of nationalization or government operation of industry. I suggest to the government, therefore, that they approach this question with great care.

But I do hold very strongly-and I gathered from the Prime Minister's utterances the other day that he has some such view in mind- for the coordinating of the wealth resources of the economic structure of Canada in a united effort to prosecute this war; in other words, for the mobilization of the industrial, financial and other resources of Canada for the common purpose. With that I am agreed, and I think it is the objective we should have in mind. In this mobilization, particularly of industrial resources, I suggest that the government keep in mind the splendid compilation of information made by the census bureau of Canada regarding the industrial life of this country. I do not think it is used either by the scholastic fraternity in their economic instruction in the universities, or by financial or industrial men in Canada, or even by the government, to the extent to which it might be. The government should make full use of this compilation of information-which is completely analysed and tabulated by a competent staff of experts who understand their business thoroughly-and of the census bureau and the trained staff in its industrial branch.

I should like to utter a word of encouragement to all as to the attitude of the people

War Appropriation Bill

of this country. I shall give only two or three illustrations which have come to my attention. We hear a great deal about profiteering and the dangers of profiteering, and with all that I agree. We should be extremely careful about profiteering, but on the other hand let us realize the goodwill and the good faith of the people. Only a comparatively small number of the people of this country would selfishly and in a spirit of greed seek to profit from the war. On the other hand, hundreds of thousands of industrialists, merchants, business men and financiers are just as anxious to serve the country without profit as any who can be found in other walks of life. The other day in Ottawa a group of business men met, representing the whole clothing industry. They have offered voluntarily, without any suggestion or influence on the part of the government or any other group, to stabilize wages, to arrange an equitable distribution of orders-that is, to do away with pulling for orders, with one seeking to get an advantage over another, or using political or other influences to get orders-and to place all the resources of the industry at the service of the government virtually at cost, that is, the cost of operation together with overhead. This is a generous offer. It is made by the industry as a group. I suggest that we do everything we possibly can to encourage an attitude of this kind; and I suggest to the government that through the agencies they have set up the same idea might be passed on to other industries. Under our economic system there is the possibility of controlling an industry from within, whereas when we seek to control it from without we often experience difficulty and disappointment. In any case I point to that offer of the clothing industry as one that should be commended.

I received also an offer from the Masters' and Mates' guild, a splendid class of men whom I believe we all honour-men connected with coastwise and deep sea fishing. This communication is from the Pacific coast, but I have no doubt that it will apply also to the other coast. They suggest-as do the marine engineers, another splendid body of men-that they will place their whole guild as a body at the service of the government. Conscription vanishes into thin air when you have suggestions of this kind. I repeat, they suggest they will place the whole body of their membership without reserve at the disposal of the government, and they offer to cooperate with the government in allocating the work that their members are best suited to perform. This is a fine offer, a splendid example which may be and I think will be followed, if it is made known, by many other unions, groups and guilds throughout the country. I say again

that I think public notice of these things ought to be taken and some encouragement and commendation given in regard to them.

I indicated when I rose that my purpose was to be brief and not to delay business. I have offered these few remarks to indicate a course which we as a parliament and also as private members may usefully promote, and also to demonstrate to the government that we wish to render them reasonable cooperation and assistance, to be constructive in our criticisms, and, as far as we possibly can, to make the pathway as smooth as it can be made for them.

I offer, as the late Sir Wilfrid Laurier said, no criticism of this method of financing. In whatever respect it may be different from what we might think would be best, we do not interject objections at this time. We simply suggest that the greatest care be taken as to the manner in which these large sums-not only those now proposed but others which undoubtedly will follow-will be used and expended, and urge that they be expended solely and wholly with regard to the public interest, the prosecution of this great war, the defence of Canada, and our cooperation with the motherland. These are extremely critical times, and we cannot take too seriously the duties which rest upon us at this hour.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
CCF

James Shaver Woodsworth

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

Mr. J. S. WOODSWORTH (Winnipeg North Centre):

It is not the purpose of our party in any way to obstruct or delay business. The other day my colleague from Rosetown-Biggar (Mr. Coldwell) read into the records of this house the policy in a general way which our party has decided upon. It is quite obvious that certain of the provisions included in this resolution are not in harmony with that policy, and we shall reserve our right to offer criticism on those matters when the bill is before the house. However, in order that there shall be no unnecessary delay, we do not propose to say anything now at the resolution stage.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
LIB

Liguori Lacombe

Liberal

Mr. LIGUORI LACOMBE (Laval-Two Mountains) (Translation):

Mr. Chairman, I desire on this occasion to reiterate my opposition, clearly expressed on Saturday last, to any participation by Canada in foreign wars. I particularly protest against paragraph (b) of the resolution which reads as follows:

(b) the conduct of naval, military and air operations in or beyond Canada.

I take this opportunity to call the attention of the house to an article published in the Montreal Gazette concerning the last sitting of the house, that of Saturday last. The Gazette said:

When the amendment of Liguori Lacombe (Laval-Two Mountains) was called in the house

War Appropriation Bill

last night by the Speaker there was a roar of "Nay" and a weak reply of "Yea." The sponsors of this amendment (three insurgents spoke for it) did not even demand a vote.

Mr. Chairman, I assert that, contrary to this newspaper's report, my colleague the hon. member for Quebec-Montmoreney (Mr. Lacroix) and myself rose in our places, thereby clearly indicating our desire to have the hon. members of the house record their vote. But, being alone with the hon. member for Quebec-Montmorency to ask for a recorded vote, Mr. Speaker declared the amendment defeated, inasmuch as according to the rules of the house a vote must be demanded by at least five members.

I make this statement, Mr. Chairman, in order to set out the actual facts.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
SC

Archibald Hugh Mitchell

Social Credit

Mr. A. H. MITCHELL (Medicine Hat):

We appreciate some of the difficulties confronting the government at this time, and we have no wish to embarrass the government or to impede in any way the passage of this measure. It must be passed: Canada is at war. But there are certain principles which are just as vital to Canada as the passing of this bill, and they must be enunciated. This hundred million dollars which the resolution calls for is only pin-money compared to the sums which parliament will be required to vote before this war is over. Now is the time to enunciate and if possible ensure acceptance of the principles on which this money and subsequent amounts will be expended during the war.

The New Democracy group has laid down the principle in Canada and in this house that when Canada is at war the whole of Canada is at war. You cannot conscript men and have industry and finance volunteer. You cannot conscript finance and industry and have men volunteer. This is a sound principle ; it is an elementary principle of good business which it would seem imperative for this parliament to accept. If we choose not to do so now, circumstances will eventually compel us to do so. I sound this solemn note of warning to the government, that we cannot afford not to begin right. The experience of the last war, if it taught us anything, taught us that. Why is it that we refuse to learn? Must we in this crisis repeat the initial blunders and wastage of resources and man power that took place in the last war? If we must, then let us decide to do it frankly and openly; let us not pretend that we are not doing it. But if we would learn from the experience of the last war, then let us face the matter frankly and clearly now, and admit that the answer lies in national service-not national service of men alone, of finance alone or of industry alone; anything

less than national service of all three together as Canadians would be a supreme demonstration of inefficiency.

The government have declared against universal conscription; the Conservative opposition have officially declared themselves as against universal conscription; the Cooperative Commonwealth Federation have declared against universal conscription. This means that these parties are allied on a principle which means suicide for Canada. The grossest kind of discrimination and wastage in human life and material resources will follow unless those responsible achieve maximum efficiency throughout the whole length and breadth of our national economy, not merely in any specific part of it. This means universal conscription for national service. And only on the basis of universal conscription can this country do its duty to itself, to the empire and to the cause of civilization and Christianity, now at stake.

It has been suggested that universal conscription will promote disunity ini Canada. We hold the contrary view. We believe that when the need for maximum national service is made clear to Canadians it will have overwhelming approval from them without distinction of class or race or creed, because it is right and just and sound. We stand for Canadian unity, but we stand for unity upon the principle of supreme national effort.

This measure must be passed. It is the best that has been offered to us; we can do no better, now that Canada is in the war, than hasten its passing, and we in this corner shall certainly not block it. But the principles which I have enunciated are eternal and they must prevail.

Right Hon, W. L. MACKENZIE KING (Prime Minister): May I ask the hon. member who has just taken his seat (Mr. Mitchell) one question, partly for my own guidance, but equally for the guidance of hon. members generally? I notice in speaking this afternoon he has referred to himself as a member of the New Democracy group. He has not referred to the Social Credit group which has been sitting in the seats that he and his colleagues are now occupying. I notice also that the leader of the Social Credit group, speaking in the house on September 8, used this expression:

This Social Credit group, now in Canada identified with New Democracy, has committed itself to the unqualified support of Britain and her allies.

The leader of the Social Credit group has spoken of an identification with the New Democracy. Would my hon. friend inform the house whether the Social Credit group still exists as such, or whether it has changed into

War Appropriation Bill

a New Democracy group, and by which of the two designations we should address its leader and members when speaking in this house?

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
SC

Archibald Hugh Mitchell

Social Credit

Mr. MITCHELL:

I appreciate the point of the Prime Minister; it might serve perhaps to change the subject a little, -but I can clear his mind at once by saying that the hon. member for Lethbridge (Mr. Blackmore), the leader of the Social Credit group in this house, used the correct term. The Social Credit group is an entity. It exists, and it exists very completely, and is associated with and is part of a tremendous wave of public opinion which is growing in this country, known as New Democracy. Is that clear?

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

That does not quite answer my point. What I wished to know is, when I address the leader of the group of which my hon. friend is a member, or any other member of it, am I to refer to him as a member of the Social Credit group or as a member of the New Democracy?

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
SC

Archibald Hugh Mitchell

Social Credit

Mr. MITCHELL:

The right hon. gentleman may take his choice. We are the Social Credit group of the New Democracy.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

I should like to ask my hon. friend a question, with no desire to enter into a political discussion. That is farthest from my mind. But the hon. member who has just taken his seat (Mr. Mitchell) and his leader in the house came out, as they said, for universal conscription-that is of men, materials, industry and capital; I suppose I may go as far as I like. I have in my hand a telegram received a few days ago from Louis Dugal, president of la ligue du credit social de la province de Quebec. It is in French; I have translated it into English, and the committee will perhaps permit me to read it in French and then I will translate it into English. It is addressed to myself, and it says:

L'executif provincial de la ligue du credit social de la province de Quebec, reuni a Montreal en assemblee speciale, reitere son opposition irreductible a toute participation du Canada aux guerres exterieures, tel que resolu au eongres general tenu le 18 juin a Quebec.

This is the translation-

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
LIB

Joseph Enoil Michaud (Minister of Fisheries)

Liberal

Mr. MICHAUD:

We do not need a translation.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

Well, some of us do.

The provincial executive of the Social Credit League of the Province of Quebec, gathered at Montreal in a special meeting, reiterates its unyielding opposition to any participation of Canada in exterior wars, as resolved at the general congress held on June 18 at Quebec.

The Social Credit League of the Province of Quebec

Louis Dugal,

87134-7 President.

I should like to ask my hon. friend, for which of these policies does the Social Credit party stand?

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
SC

Archibald Hugh Mitchell

Social Credit

Mr. MITCHELL:

The leader of the opposition has read a communication which came, as it states, from the head or the executive of a provincial organization. It ill behooves me to interject a note of reproof into the deliberations of this committee. But I should like to know exactly what that communication has to do with the subject of the vote of $100,000,000 with which we are now dealing. I should also like to know what the question asked by the Prime Minister has to do with it, and why these matters are interjected into this debate at this time.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
?

Some hon. MEMBERS:

Politics.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

I may answer

my hon. friend so far as I am concerned. I was simply asking for guidance in order that we might use the proper designation in addressing hon. members in his corner of the house.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
CON

James Earl Lawson

Conservative (1867-1942)

Hon. J. EARL LAWSON (York South):

I have no desire at this time to enter into a discussion with my hon. friend from Medicine Hat (Mr. Mitchell) as to the nationalization of capital or industry. So far as I am concerned I can cover the whole ground by saying that in my opinion the nationalization which he proposes would not bring about the maximum national efficiency which is so much desired.

Despite the urgent desire to dispose with dispatch of matters before the house I should like to pause for a moment particularly on this, the first resolution to come before the house which in the ordinary course of events would have been introduced by the Minister of Finance, to express my extreme regret that illness necessitated the retirement of Hon. Mr. Dunning. It was a privilege and a pleasure to be associated with him in this House of Commons, even as an opponent.

I have no desire to express any criticism of the government to-day. I entirely agree with the sentiment expressed by my leader the other day, and by the hon. member for Kootenay East (Mr. Stevens) to-day. I realize that at this time the government has a grave and heavy responsibility, and that no matter what divergent views we may have held in the past with respect to domestic problems, it is most important that there should go forth to the people of this country, and for that matter to the peoples of the world, the knowledge that we stand as a united nation for the survival of democracy and the upholding of

War Appropriation Bill

the principles of justice and right within, and in association with, the British empire. At some future time, as matters develop, the necessity for criticism may arise, but at the moment I desire merely to offer the government one or two suggestions, first in connection with the borrowing of the 8100,000,000, and second in connection with the expenditure of it, which suggestions I trust may be helpful in attaining the maximum results from our united efforts.

The first thought that occurs to me was mentioned this afternoon by my colleague from Kootenay East, namely the cost of borrowing this 8100,000,000. The interest rate upon that amount, to the extent that it is not raised by special taxation during this year, will constitute a burden upon the taxpayers of Canada for many years to come. I think it is most fortunate for the government that at this time, by reason of the operation of the law of supply and demand together with other factors which enter into the matter, interest rates are, I imagine, at their lowest point in our history. These low interest rates are applicable both to short term and to long term money, but I am thoroughly convinced that this condition will not long continue. The advent of war, the increasing purchase of supplies and many other factors, in my opinion will cause that interest rate to rise continually until, if it is left uncontrolled, in the not too far distant future we shall be back to a demand for a rate of five and five and a half per cent on government bonds, as happened during the last war.

I believe public sentiment to-day will not approve of the payment of such rates of interest. I believe the sentiment of the people demands, and rightly so, that the rate paid for the use of domestic capital in time of war for the necessary services of the countiy shall never be greater than and only commensurate with the recompense received by those who serve in the combatant forces.

We heard some discussion to-day with respect to the nationalization of industry. I am sure it requires no statement of mine to make hon. members of this house realize that I should never advocate the nationalization of industry or of capital. But I do suggest very seriously to the government that, having regard to what I have said as to the likelihood of a rising interest rate, the government should contemplate right now such measures as may be necessary in the future to restrict borrowed domestic capital to a return on the basis I have outlined, a return commensurate with that received by those in the combatant forces, in order that there may be equality of service for all citizens of this country.

With that in view I suggest to the government now that they contemplate measures and act immediately to prohibit, except under licence through the central bank and the commercial banks, the exportation of domestic capital from Canada, and that regulations be prescribed by the government so that only that domestic capital may be exported which is for purposes beneficial to the national interest or at least not detrimental to the future requirements of the country.

There are two methods of borrowing; the one is by short term financing, treasury bills and so on; the other is by the issue of bonds, long term securities. If at this time the government finances this 8100,000,000 by means of treasury bills, unquestionably it will obtain a lower rate of interest than it would if it financed by means of long term bonds. But I doubt if, ever again in Canada-certainly not during the period of this war upon which we have embarked-the government will be able to borrow money on long term securities at rates lower than those existing to-day. Therefore I say to the government that in my opinion-and I am not going to suggest that my opinion must be taken alone-though you may place a lesser burden on the people in the first year if you borrow on short term treasury bills during that period, in the long run you will place upon the people of this country a greater burden if you adopt that procedure. Therefore I urge the government to consult with the personnel of the central bank, and others for whose opinions the government may have high regard, in order to ascertain, and having ascertained it to follow, their advice as to borrowing the amount required, either 8100,000,000 or a larger amount, on long term securities at this time; so that if ini the future there should be complaint that for purposes of its own- I shall not now enumerate them, because I want to keep away entirely from political discussion the government was borrowing on short term treasury bills, any action taken in that regard would have behind it the best informed opinion in the country as to the cheapest possible method of financing the borrowings we now have to make.

I wish to make only one suggestion with respect to the expenditure of the money. To my mind, to conclude that we are participating in a war of short duration would be the height of folly. I think we must prepare for long and extended participation. If it be short, then so much the better. Our experience in the last war taught us, among other things, that citizens of Canada served in either a combatant or a non-combatant capacity who would have been eminently qualified to

War Appropriation Bill

render a much better and greater service to Canada had they been serving in some other capacity. At the present time we have little accurate knowledge as to the individual capacities, abilities and attainments of our people. With a view to meeting that situation I suggest that the government spend some of this money, which under the wide terms of this resolution they have power to do, in proceeding at once with a national registration of all the people in Canada, with a view to ascertaining accurately the capacities of our citizens and their respective records of attainment.

I make these suggestions to the government in the most earnest desire to be helpful. And while I am on my feet may I comment on a point which has been brought to my mind by the recitation of the hon. member for Kootenay East respecting the generous and patriotic offers made by groups of men in Canada who are anxious to serve. For many years we have rewarded meritorious service in the combatant forces. I have no doubt that literally thousands of Canadians are willing to serve in any capacity which may be considered beneficial to the country. I know there are at least hundreds who have great ability, and who may be able to serve and are willing to do so, even if it be at great personal sacrifice to themselves. Although the point I have in mind does not relate immediately to the measure before us, I suggest that the government consider the advisability of establishing in Canada some award of merit or decoration of merit which could be conferred upon those rendering distinguished service to the country in war time, at great personal sacrifice, but who are not actively participating in the combatant forces.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
SC

Victor Quelch

Social Credit

Mr. VICTOR QUELCH (Acadia):

Mr. Chairman, I have no intention at this time of entering into any long or detailed discussion as to methods of procedure, but on behalf of the group to which I belong I wish to protest against certain actions which we believe may lead to chaotic conditions similar to those which existed at the close of the last war.

The hon. member for York South (Mr. Lawson) intimated that we had advocated the nationalization of capital. When he made that statement I believe he must have been confusing us with the Cooperative Commonwealth Federation, because at no time have we advocated the nationalization of capital. On the other hand we have advocated the conscription of, first, finance; second, industry, and third, man power. By conscription we mean a process of effective control and direction.

87134-7}

When a country engages in war it becomes engaged in a life and death struggle, and it therefore becomes essential that it organize on as effective a basis as possible. Otherwise unnecessary loss of life and great hardship are bound to result. That is why the group to which I belong has taken a stand in favour of the conscription of finance, industry and man power. By such means we believe we can avoid the injustices and inequalities whicln existed during the last war. By such means we believe we may develop the resources of.' this nation to their full capacities, so that we may be enabled to make a maximum contribution, without increasing the debt of the nation by a single dollar. In other words we advocate a policy of pay-as-you-go.

Last year before the banking committee Mr. Towers emphasized three ways by which a government could finance, namely, by borrowing, by taxation, and by monetary expansion. The group to which I belong believe we should adopt the last two of those proposals. We believe in utilizing the Bank of Canada so that we may create the necessary financial credits and currency, combined with definite price regulation so as to obviate any serious rise in prices. We would advocate, further, steeply graded income and profits taxes. We maintain, further, that the only possible justification for borrowing is when our need for goods is greater than our ability to produce them. That condition of course requires external borrowing. We see absolutely no justification for internal borrowing.

I realize there will be some who will object strenuously to any increase of taxation on incomes in the higher brackets. To them I would present this argument: In time of war it

becomes necessary to call upon certain people to be willing to sacrifice their lives. It becomes necessary for some people to make that supreme sacrifice. It is necessary for others to suffer mutilation of the body. Is it asking too much to ask people remaining in Canada, in comparative safety, to be willing to sacrifice the major portions of their incomes? Is that asking too much, at a time when we are asking other people to sacrifice their lives? I say we have every right to demand that those who remain in safety be prepared to sacrifice the major portion of their incomes, that they be permitted to retain only that portion which is necessary for the maintenance of a moderate standard of living. We are unalterably opposed to the proposal that we finance our share of the war by the issue of bonds. The government has the right to utilize the Bank of Canada, and I see no possible excuse for paying chartered banks to do that which we can do through our own national bank.

War Appropriation Bill

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
LIB

Maxime Raymond

Liberal

Mr. MAXIME RAYMOND (Beauharnois-La prairie):

Mr. Chairman, as I have already stated my attitude against participation of Canada in the present war I shall not at this time make any additional observations. May I therefore propose an amendment to the resolution before the committee. I move to amend the resolution by striking out in subparagraph (b) the words "or beyond".

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink
LIB

Frederick George Sanderson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

In my opinion the amendment is out of order.

Topic:   WAR APPROPRIATION BILL
Subtopic:   PROVISION FOR GRANTING TO HIS MAJESTY AID FOR NATIONAL DEFENCE AND SECURITY
Permalink

September 11, 1939