November 14, 1941

LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

That is right. .

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IND

Alan Webster Neill

Independent

Mr. NEILL:

Speaking of a question which the minister raised, I understood him to say that he, as representing the dominion government, would contemplate a general increase pro rata only provided all, or practically all the provinces were acquiescent. I would point out that when the act was originally made, in 1927, the agreement was offered by the dominion to each province individually, and all were open to accept or reject.

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Yes.

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IND

Alan Webster Neill

Independent

Mr. NEILL:

I believe British Columbia was the first one to act. I believe there was no obligation that there should be even a majority of the provinces. Could the minister not give way to that extent at least? It would hearten some of us who are interested in the matter. If one province were willing to pay the extra amount, could he not make an agreement with them the same as he did

before? It would be almost hopeless to expect unanimous action from the nine provinces, and the government realized that in 1927 and made their offer to any individual province. Any province that was willing to do it could come in and accept the agreement offered by the dominion government. There was no compulsion then to go and get the assurances of nine other people. Could he not allow the same condition to exist now?

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

I do not think the government at this time should embark on that course. I remember exactly what happened after 1927. It became an acute political issue in province after province and elections were run on it. The standing offer of the dominion resulted almost in compulsion on the provinces. That may be all right in time of peace, but I do not think the dominion government could embark on that course now. This is primarily a provincial responsibility, and I think the extent to which I have indicated we are prepared to go is as far as we should go under present circumstances.

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. T. C. DOUGLAS (Weybum):

The Minister of Finance (Mr. Ilsley) and the government are to be commended for having taken cognizance of the requests that have come from all over the country for further assistance to the people in receipt of dependents' allowances and war veterans' pensions. One cannot say of course, without closer study of the matter, just how much this will help, but certainly it will help a great deal, and every member of the house will be glad that this course has been taken. The people across the country will be exceedingly pleased that the minister has made this clear statement and taken the forward step he has.

With reference to old age pensions, I am afraid there will be a great deal of disappointment. It is difficult for me to follow the minister's logic. I am unable to understand why, in view of the fact that the dominion Old Age Pensions Act is an enabling act, it would not have been possible for the dominion government to raise the maximum. No provincial government is compelled to pay up to the full maximum, but by the dominion government raising the maximum to, say $30, each provincial government would then have it in its power, if it chose, to raise that maximum within the province, and the federal government would still be under the obligation of paying only its share, which is 75 per cent. I am inclined to think that the argument that the index commodity figure for 1927 was higher than the figure to-day will not bear much weight with the old age pensioners across Canada, because if there is

The War-Mr. Douglas (Weyburn)

any group of people who have Buffered in Canada as a result of the increased cost of living, it is those people within our economy who have no means of increasing their incomes, people in receipt of pensions, dependents' allowances and so on. For them there has been no cost of living bonus; for them every increase in the cost of living has meant simply a decrease in their standard of living. I hope that this matter is not closed and that the Minister of Finance and the government will give further consideration to the possibility of raising the maximum under the dominion act, leaving it to the provinces to decide whether or not they are in a financial position to raise the maximum in their respective jurisdictions.

Before the committee rose at six o'clock the Prime Minister (Mr. Mackenzie King) suggested that after the Minister of Finance had made his statement it would be in order for members to discuss anything. I am not sure that this is a departure from the procedure followed during the rest of the week; it is pretty much what we have been doing. I should like to take this opportunity to say a few words about the plight of western agriculture in the light of the government's agricultural policy.

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NAT

Percy Chapman Black

National Government

Mr. BLACK (Cumberland):

Would the

hon. member give way and let us have some explanation of old age pensions? I wish to inquire with respect to Nova Scotia and 1 shall be only a minute.

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

I intend to

take only a short time, and it is possible that we may adjourn to-night.

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NAT

Percy Chapman Black

National Government

Mr. BLACK (Cumberland):

The hon.

member is going into a different subject; that is all.

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

Agriculture

has been pretty well left to the tail-end, which seems to be indicative of many things these days. Here in the last few hours of the last night we are likely to be in session we are to have only a few moments to discuss agriculture. It is commonly acknowledged that agriculture has become the forgotten industry in our economy; I should not like to see it become the forgotten subject in this parliament. While I should be glad to give way to the hon. member, I do not want to see the time slip by without an opportunity for the discussion of agriculture.

I am exceedingly disappointed that no statement has been made either by the Minister of Agriculture (Mr. Gardiner) or by the Minister of Trade and Commerce (Mr. MacKinnon). I have waited each day thinking a statement would be made; for to my

mind there is no more important war industry to-day than agriculture. The production of foodstuffs for embattled Britain has now become as important a question as the production of the actual implements of war, and so far we have relegated the discussion of this subject to the background. I must therefore ask for the privilege of saying these few words and requesting the government to make a statement to the house and the country before we adjourn, to indicate its plans with regard to agriculture, and to western agriculture in particular.

I wish to say something about agriculture, not only in the light of the government's policy but having regard to the recent price fixing regulations under order in council P.C. 8527. As has been said by several of my colleagues, we in this group have never objected to control. In fact, early in this war we suggested that ultimately we should be forced to rationing, and I am still convinced that that is the point at which the government will arrive in the end. We realize that no group of people will suffer more from inflation than the workers and the farmers, and therefore we have never had, and have not now, any objection to price and wage fixing, provided always that prices and wages are fixed on equitable levels so as to give to the workers and farmers a reasonable return for their labour.

The thing that has distressed me most about these regulations is the fact that neither organized agriculture nor organized labour seem to have been consulted. I listened to the Prime Minister making his historic announcement on October 18. I realized that the policy was wide-sweeping; a policy which would affect the economic life of Canada for the duration of the war; a policy that would affect the standard of living of millions of people; and I took it for granted that such a policy would have been considered by the representatives of all the factors concerned in our economy .who would be consulted. I was therefore surprised on Monday, the 20th, to find the Canadian Press carrying statements from Mr. Tom Moore, President of the Trades and Labour Congress of Canada, Mr. Mosher, President of the Canadian Congress of Labour, Mr. Hannham, President of the Canadian Federation of Agriculture and others to the effect that they had not been consulted and were astounded at the drastic nature of these controls. It seems strange that in the bringing down of such a far-reaching measure, representatives of the trade unions, of organized agriculture, of the pools of western Canada-they represent the greatest group of organized farmers in the dominion-representatives of the cooperatives and of the retail

The War-Mr. Douglas (Weybum)

merchants, as well as of those other groups that were affected, had not been called in for consultation in an endeavour to arrive at some basis on which prices and wages would be fixed.

We in this group have always maintained that democracy ought to mean something more than merely counting noses. Democracy ought to mean giving to organized agriculture, to organized labour and to the business men a voice in the councils of the nation and an opportunity to exert their influence in shaping their own destiny. That certainly has been denied in the bringing down of these regulations.

As I have said, our quarrel is not with the principle of control. Our quarrel is as to whether or not the basis upon which this control is exercised is fair and equitable. The dominion bureau of statistics says that the cost of living has risen some 15 per cent. Of course that is based on a great, wide, varied assortment of commodities. But if we take the thirty-eight commodities most commonly bought-for there are hundreds of commodities that the common people never buy- we find that actually the cost of living has gone up more than 25 per cent. It is a well-known fact that in the early period of any inflationary spiral the cost of living always outdistances both wages and farm prices. To select an arbitrary period of twenty-seven days, from September 15 to October 11, and fasten prices at the levels prevalent during that period, is to fasten peasantry on the farming population. It will do the same, of course, for the people I mentioned earlier, people with fixed incomes, people in receipt of pensions and dependents' allowances.

Let us look at what the effect will be on the farming population. According to the Economic Annalist, issued by the Department of Agriculture, using 1926 as the basis of 100, we find that in August, 1941, animal products had reached the index figure of 97-9, and field products, 56 [DOT] 7, making an average figure of 72 T for farm products. That figure, low though it is, is not a fair criterion by which to measure farm income, particularly in western Canada, because in Saskatchewan more than 75 per cent of the farmer's income comes from field1 products and only 25 per cent or less from animal products. Therefore even the figure of 72-1 is high. Compare with that the fact that wholesale prices-and we do buy not at wholesale but at retail prices-in August, 1941, were 91-8, and that the cost of living on the farm, on the basis of 120 in 1926, has reached the figure of 112-3. When we look at that we begin to realize how inadequate is the farm price level compared

with the cost of living and in relation to the retail prices which the farmer must pay.

Last evening the Minister of Finance asked the hon. member for Lake Centre (Mr. Diefenbaker) just what he meant by a parity price. Of course there are many definitions. When some people speak about a parity price they mean a price commensurate with the cost of production. That, of course, can start so much argument that there is not much use talking about it. But certainly in talking about a parity price one would have in mind some year which might be used as a basis, for both farm products and retail products, and then fixing the present price at a level which would bear some relation to the cost of living. On November 6, at page 4155 of Hansard, the minister is reported to have said he was going to give some percentages. He proceeded to take August, 1939, as the basis, and said that oats had gone up 80 per cent, barley 66 per cent, butter 57 per cent, eggs 33 per cent and so on. Of course the minister was careful to say that he was not condoning the price level of 1939. Well he might, because in selecting the period from 1935 to 1939 he was selecting a period during which farm prices reached a very low ebb. As a matter of fact the Sirois commission pointed out that in Saskatchewan during that period the average cash income was $102 per farm per year, or the cash and kind income, $291 per farm per year. Therefore, to choose two distinctly different levels -a farm price level still comparatively low on the index of commodities basis, and twenty points below the cost of living on the farm- and to fasten prices at those respective levels, is to fasten the standard of living of the farming population, particularly of western Canada, far below what is adequate. In the same statement, at the same page, the minister is reported to have said:

. . . retail food prices now bear about their normal relation to other retail prices.

In the first place, of course, the farmer does not receive retail prices for his products; he is paid wholesale prices. The second point is that the disparity, according to the Economic Annalist, is between 91-8 for all commodities and an average of only 72-1 for farm products, a difference of some twenty points between the level of the products the farmer has to sell and the wholesale level of the things he must -buy. When there is added to that the fact that he must pay the retail price, it is evident that the disparity between farm prices and retail prices is even greater than these figures would indicate. Therefore we suggest that there ought to be some fairer basis. To

The War-Mr. Douglas (Weybum)

accept 1939 as a basis is, of course, not satisfactory. The 1926 basis might have been fairer. It is true that if the 1926 basis is accepted, one or two commodities might have to come down in price, but the general average of farm prices would have to rise. Last evening I think my colleague the hon. member for Melfort (Mr. Wright) placed on record some of the index commodity figures for 1926 and 1941; I do not know that he placed them all on record, but in any event I should like to mention these figures:

1926-29 1941

Wheat . $1,417 ? .726Oats . .603 .493Barley . .716 .526Rye . .971 .547Flax . .209 1.55Butcher steers . 9.04 8.79Bacon . 11.61 10.99Cheese . .189 .160Cream . .382 .344Eggs . .482 .394I realize that figures are always a little

tiresome, but I draw them to the attention of the Minister of Finance because I should like to point out that while in the case of cheese the figure is now above the 1926-29 figure, over the average, if we take all the farm commodities usually sold by the farmer we find that the average is much below the 1926-29 figure. On the other hand, the cost of living is now getting quite close to the 1926-29 level.

Let me ask the minister to give some thought to how these regulations will affect those engaged in the growing and marketing of wheat. While some hon. members become very tired of listening to discussions in the house about wheat, may I remind them that wheat is the basic commodity produced in western Canada, and that the great masses of the people in that part of Canada find their standard of living affected either adversely or otherwise, depending upon the price they receive from the sale of their wheat.

What do we find? We find that according to the Searle index, taking the 1913-14 price as the base figure of 100, to-day the farmer is receiving 25 per cent less for his wheat and paying 50 per cent more for the commodities he has to buy. That is far from a happy state of affairs-that he should be getting 25 per cent less for the chief product he has to sell, and pay 50 per cent more for the commodities he must buy in order to live.

If we use the 1913-14 as the basic parity price, using that term as I have already defined it. the parity price for the United States farmer would be about $1.22 a bushel in store, Chicago. Under the AAA programme, the United States is paying to its farmers about $1.16 in store, Chicago, and the open market is paying about $1.19, basis Chicago.

On the same basis of the 1913-14 level a parity price for wheat in western Canada would be about $1.20 a bushel, basis Fort William.

There has been considerable discussion as to how much the farmer is actually receiving for his wheat. There has been a long-range debate between the Minister of Agriculture (Mr. Gardiner) and the president of the Saskatchewan pools as to what the farmer is actually receiving. I do not purpose taking part in that debate just now. But I do wish to point out that when the Minister of Agriculture suggests that the farmer is receiving 90 cents to 51 a bushel for his wheat, the minister arrives at that figure by some very strange methods.

To begin with, he adds to what the farmer gets from the wheat board the amount of money he gets for his wheat acreage reduction bonus. That bonus is paid to him in lieu of not growing wheat. It is paid to him for a piece of land on which he did not grow wheat, a piece of land which he either summer-fallowed or on which he grew coarse grains. You cannot take income from that piece of land and add it to the income from the wheat grown on another piece of land, any more than you can add what the farmer gets from the sale of his live stock.

Again, the minister arrived at his figure by adding in the bonus paid under the Prairie Farm Assistance Act. I believe the minister estimated over the radio, as I remember it, that the amount was about $30,000,000. Of course I never have been able to understand where he got that figure.

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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

The figure is $10,000,000.

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weybum):

Oh, yes; the acreage reduction bonus was $30,000,000.

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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

Yes.

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

I never have been able to understand where the minister got the $30,000,000 for the acreage reduction bonus.

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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

It is over $20,000,000

now.

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

Six million

acres have been taken out of wheat production. How the minister can get 6,000,000 acres up to $30,000,000, I do not know. But the minister will probably explain that. The point at issue is that whatever the farmer got for acreage reduction bonus cannot be added to what he got for his wheat on totally different land. Also the bonus he gets under the Prairie Farm Assistance Act is the bonus which was paid with respect to land on which little or no wheat was grown. It is not paid to the man who had

4436 COMMONS

The War-Mr. Douglas (Weyburn)

over twelve bushels to the acre. It cannot be added to the price of his wheat, because he does not get any.

The minister has confused a depressed area with a distressed industry. The man who grew fifteen or twenty-five bushels to the acre does not get this bonus. How can the bonus be added to the price he is receiving for his wheat? There is a bonus which may properly be added to the wheat income, and that is the so-called supplementary bonus of 75 cents an acre for half a man's cultivated acreage up to two hundred acres. That can properly be added to the farmers' wheat income because, as I understand it, it is a subsidy paid by the government in lieu of the fact that the government is going to peg the maximum price of wheat on the open market at 77-3 cents.

The estimate this year is that the average return per acre will be 13-1 bushels. For the average farmer, half of whose acreage is in wheat, that works out a little better than . five cents per bushel. That means that a little better than five cents per bushel is being added to the price he is receiving for his wheat. That certainly leaves the farmer a long way from 90 cents to $1 a bushel.

I will say this much for the Minister of Agriculture: There is the possibility that if the government applied all sales of wheat to this year's crop the proceeds of the participation certificates might bring that figure up. But so far no action has been taken along that line. The only thing we can be sure of is an advance of 70 cents plus five cents and a fraction, which the farmer will receive under the present bonus plan.

The Minister of Agriculture has repeatedly stated over the air and in the house that the government's agriculture policy envisages a minimum agricultural income for western Canada of some $325,000,000. I never have been able to find out just how the minister arrived at that particular figure, or where he got it. The latest available figures issued by the government show that the agricultural income for the prairie provinces last year was $410,222,000. If the agricultural income for the prairie provinces is to be set in the neighbourhood of $325,000,000 this year, and having in mind the fact that $325,000,000 this year will buy much less than $325,000,000 would have bought last year, then it is quite apparent that the income of the prairie farmer will decline almost $100,000,000 this year. .

This situation is serious because, as I said when I began the discussion on this matter, the whole economy of the prairie provinces has been tied up with wheat. After all, that has been the main commodity we have produced, or are capable of producing. When we reduce

the income of the prairie farmer we reduce his purchasing power, and the effect of reducing his purchasing power is being felt to-day in every town, village and hamlet between the Rocky mountains and the great lakes.

The campaign carried on by the pools in western Canada asked the government for four things. The government was asked, first, to fix the price at $1 per bushel basis Fort William; second, to freeze the surplus as a war emergency; third, to apply all sales of wheat to this year's crop and, fourth, to declare 1941 to be an emergency year under section 3 of the Prairie Farm Assistance Act. I think western members who support the government and western members on this side will agree with me when I say that great sections of people on the prairies were unanimous in support of this policy. I know that at some meetings I attended in my constituency I found business men, professional men, labouring men as well as farmers supporting this policy. They realized that the decline in the purchasing power of the wheat farmer was having an adverse effect upon the whole economy of western Canada. I hope the Minister of Agriculture will not think that that campaign which was carried on in western Canada during the last few months was a partisan campaign.

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?

An hon. MEMBER:

Pretty much.

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

That was not my experience although it may have been my hon. friend's. In the meeting held in the city where I live both the chairman and the secretary were, to the best of my knowledge, supporters of the present government. Large numbers of those who were active in the campaign were supporters of the present government. A great many of the Liberal members of the Saskatchewan legislature indicated their support of that policy. That did not mean that they were breaking with the Liberal party; it simply showed that they realized that the feeling in western Canada was that, irrespective of a man's party politics, something had to be done to give the wheat producer a more reasonable return for his product and enable him to keep his purchasing power up to a level that would prevent western Canada from going into bankruptcy.

In the last three months I have been over practically all the province of Saskatchewan, and I have never seen as many auction sale bills hung up in the general stores and post offices as I have seen in the last few months. We are faced with a possible wholesale exodus. People are going to-the coast or coming to eastern Canada. According to the press, the mayor of Windsor has circulated the towns

The War-Mr. Douglas (Weyburn)

and municipalities of western Canada urging the people not to come east in such numbers looking for employment.

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LIB

George Ernest Wood

Liberal

Mr. WOOD:

Could the hon. member give us any idea as to what the stock put up for sale brought? Was it a reasonable price?

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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

I think in some instances fairly good values were obtained. In the part of the country in which I live that was the situation.

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November 14, 1941