March 10, 1944

ND

Walter Frederick Kuhl

New Democracy

Mr. KUHL:

No, I am sorry-

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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CCF

Angus MacInnis

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

Mr. MacINNIS:

I have not time to argue such silly questions.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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ND

Walter Frederick Kuhl

New Democracy

Mr. KUHL:

You cannot dispute it.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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CCF

Angus MacInnis

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

Mr. MacINNIS:

I dispute it right now, but I have not the time to argue it. Make your own speech when I have finished. I say that if we have the control of the means of production no one can take away from us the fruits of our labour. The purchasing power of individuals as well as the purchasing power of nations are the goods and services that we produce. But if I work for B and he takes one-third of all I produce and gives me the other two-thirds, or if he takes two-thirds and leaves me but one-third, and does that with one hundred thousand people, then B will have more goods and services than he can consume. It may appear an easy way to issue money and buy those things from him. But let me tell you that when you create unrestricted plenty you have destroyed the profit system deader than a door-nail.

Just one other word. I would ask the opponents of socialism, which particular project among all those that have already been socialized would they like to turn back to private enterprise? Would they hand over the Canadian National Railways to the Canadian Pacific Railway? Would they hand over the Ontario hydro electric system to a

private company? Would they hand over in any part of Canada anything that has been brought under public control? They certainly would not. Just to show hon. gentlemen that the trend is in the other direction, let me show what is taking place in a province that certainly is not socialistic, at least not yet, but it is on the way; do not forget it. I have an item here that appeared in the Montreal Gazette of February 26, 1944. It is the report of an interview by the Montreal board of trade with the government of Quebec protesting against its intention to expropriate the Montreal Light, Heat and Power Company. The board of trade statement quotes from the speech from the throne delivered at the opening of the Quebec legislature as follows:

A thorough study of the distribution of electricity has demonstrated that reforms are urgently needed to provide the citizens of this province with electricity upon the favourable conditions offered elsewhere by state-owned enterprises. The setting up of a provincial hydro is the only solution for the problem of lower rates and rural electrification. You will be asked to pass an act for that purpose and the bill will provide, in particular, for the nationalization of the electric system and the distribution system which supplies the metropolis.

Well, are my hon. friends going to call Mr. Godbout a socialist?

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Walter Adam Tucker

Liberal

Mr. TUCKER:

He wants to take steps to prevent the electrical system in Quebec being taxed as it is now by the federal government. It is a private company.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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CCF

Angus MacInnis

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

Mr. MacINNIS:

Yes, it is a private company.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Walter Adam Tucker

Liberal

Mr. TUCKER:

And the Ontario hydro electric is not subject to taxation by the federal government.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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CCF

Angus MacInnis

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

Mr. MacINNIS:

Does my hon. friend say that the Ontario hydro does not contribute as much, without taxation, as the Montreal Light, Heat and Power does with taxation?

It pays the taxes in the lower rates provided.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Walter Adam Tucker

Liberal

Mr. TUCKER:

That benefits Ontario. Mr. Godbout wants to get a similar benefit for the people of Quebec.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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CCF

Angus MacInnis

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

Mr. MacINNIS:

And he can get the benefit only by nationalizing the Montreal Light, Heat and Power Company. That is the very point I want to make, and I am glad that at last it has dawned on my hon. friend. If he wishes to oppose public ownership, that is all right with me, but I would suggest that he

Industrial Development Bank

is on the losing side. However, public ownership in all phases of our industrial life is coming.

At the moment we are discussing the extension of public ownership to another section of our banking system. My hon. friend has given his approval. To-morrow and the to-morrows that are to follow will see more and more of these measures, and they will pass the House of Commons because there is only one alternative to their not passing. We cannot stop progress. We cannot stop expansion. If we try to stop progress we do so at the peril of a social explosion that may do the thing quicker than some of us might like to have it done.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Arthur Graeme Slaght

Liberal

Mr. A. G. SLAGHT (Parry Sound):

Mr. Speaker, this bill and the principles it involves, as well as some of the details, require most minute examination by parliament. In my judgment their discussion involves, and is unalterably intertwined with the consideration which at this session parliament will be called upon to give to three other financial measures, namely the amendment of the Bank Act, the amendment of the Bank of Canada Act and the mutual aid bill, all of which are yet to be introduced.

Some features of this measure have caused me grave concern. I do not propose to discuss them to-night, but rise simply to say that when the bill is before the committee on banking and commerce, of which I am a member, I shall desire then to bring about the fullest discussion of those principles and details which, as the bill now stands, cause me concern. Therefore, having made that clear, so that there may be no misunderstanding as to my being a party to sending this measure forward, with second reading, to that committee, I shall have no further observations to make at the present time.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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NAT

Gordon Graydon (Leader of the Official Opposition)

National Government

Mr. GORDON GRAYDON (Leader of the Opposition):

Mr. Speaker, I have a few observations to make in connection with the second reading of the bill to establish the industrial development bank. Perhaps what I have to say will make some small contribution in connection with the discussion surrounding the establishment of this institution. So far as the bank is concerned, and the proposal to set it up, I believe we .might as well first discuss the question of the government's position prior to the outbreak of war.

As has been described not only in this, but in other debates, with the failure of enterprise to function fully, the consequent lowering of national income coupled1 with a lowered degree of employment actually created a situation which governments in the past failed, I believe,

to meet. The solution then proposed was one only experimental in character. It was experimental because situations had not developed before to serve as illustrations which would help governments in solving the problem. Instead of reaching down to the root of the problem, that of maintaining a high level of national income and that measure of full employment so necessary for national prosperity, we adopted experimentally a different scheme altogether, namely that of putting people on relief and on the dole, or of attempting artificially to raise our level of employment by a scheme of public works and undertakings.

When war broke out, the whole picture was changed. As some hon. members have pointed out, and quite properly so, with the change of conditions from a peace-time to a war-time economy we found that with a great national objective in mind our nation was able within a short time to raise and to keep on raising our national income. That has been so to a point where we find it has now reached almost nine billions of dollars, and where with some very few exceptions we have attained a position of a high scale of employment. I must say, however, that in reaching a high scale of employment we must not forget that some

700,000 of our men and women are in uniform and are now outside the employment stream, so far as this nation is concerned. But when the war is over, it seems to me that if we expect to go forward and take our place among the nations of the world we cannot return to a system of public works of a palliative nature, nor shall or can this nation survive if it returns to a system of dole or relief. Those are issues which I believe are in the minds of Canadians generally.

There never was a time when there was a more vigorous determination that this nation shall have an expanding economy at the close of the war. What we have been able to master in the war-time period we must be able to master in the period of peace as well Having that definitely in mind, I think this particular measure to establish an industrial development bank, feeble perhaps as the attempt is, is commendable. I am not going to try to-night to justify all the provisions of the bill which is before us. I have heard, as the house has heard, many powerful criticisms of the bill; nevertheless, we have to make some change in connection with our economy for the peace-time period and the period of transition.

I submit, therefore, that it is the bounden duty of hon. members to support the principle of the bill at least for the purpose of having it referred to the banking and commerce committee so that a close scrutiny of the whole

Industrial Development Bank

problem may be made there with the help of the evidence that will be called. Moreover, as regards the industrial development bank, however necessary it may be to strengthen its provisions, I think it may be said that if the principle of the bill 'is to be opposed, then we as an opposition and as members of the house generally, if we say to the government in a war-time period that we do not like the provisions of the bill, have the responsibility of indicating some alternatives to the measure. That is the patriotic, the proper view to take of the bill.

I find great difficulty, members of the government are finding great difficulty, and members to my left are finding great difficulty in subscribing to many of the provisions of the bill; but fortunately the government has undertaken to have it referred to the standing committee on banking and commerce. There, I hope, many of the principles involved in the bill, many of its provisions, will be gone into thoroughly so that the bill may emerge from the committee much stronger and more powerful than it appears to be on second reading.

I say to the government and to the parliamentary assistant who is piloting this piece of legislation, that one of the things that disturb me a little in connection with the bill is the idea of too much duplication of banking arrangements and banking facilities in Canada. Frankly, I realize that perhaps the chartered banks of the country are not able to loan on long terms; nevertheless, as regards our intermediary credit, and as far as long-term credit is concerned, for the purposes which the bill contemplates, it seems to me that this suggestion at least may be offered. I do not, like some of our hon. friends in various parts of the house, pose as a financial expert. I speak strictly as a layman.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Ian Alistair Mackenzie (Minister of Pensions and National Health)

Liberal

*Mr. MACKENZIE (Vancouver Centre):

Hear, hear.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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NAT

Gordon Graydon (Leader of the Official Opposition)

National Government

Mr. GRAYDON:

If the minister of pensions is going to take part in the debate I hope that he will be modest enough to acknowledge himself also a layman in this matter, though I have heard him in previous sessions when he has posed as a little better than that.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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LIB

Ian Alistair Mackenzie (Minister of Pensions and National Health)

Liberal

Mr. MACKENZIE (Vancouver Centre):

Oh, no.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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NAT

Gordon Graydon (Leader of the Official Opposition)

National Government

Mr. GRAYDON:

With respect to the

credit situation, I Would like the banking and commerce' committee to consider the possibility if it can be done, of utilizing the banking institutions we have from the point of view of government guarantees under arrangements similar to those in connection with the National Housing Act and the home improvement legislation, on a widening and more comprehensive scale. That may not be feasible; perhaps it is not the proper solution; but at least I suggest that before we embark upon a wholesale scheme of duplication we should give this point careful consideration. We see the possibility of the establishment of branches all over. Canada, and before costly duplication is undertaken we should consider carefully whether, by way of government guarantees or in some other way, a plan for utilizing the facilities now available might not be properly and practicably worked out in the interests of greater credit.

I support the bill as far as its principle is concerned, in the meantime. The banking and commerce committee will have an opportunity of dealing with such matters as I have suggested, with respect to full employment, maximum production and a high level of national income. Where private enterprise, or free enterprise if you will, fails to provide that full employment, that expanding production and high national income, then in our opinion the state must underwrite this nation's prosperity; and in so far as the bill tends to that end we are in support of the principle. It is unthinkable that we should reach the transition period from war to peace, and then the period of peace itself, without having some agency that will be able to pump into our financial, industrial and economic structure new life so that the stream may go on when unemployment will no longer be known.

There are people who say that this is a bad-debt bank. Well, I would not be at all surprised if there were many bad debts as far as this bank is concerned; but while, in my opinion, bad debts must be kept to the very minimum and care must be exercised in connection with the whole lending structure of the bank, I suggest that bad debts are not nearly as. important a consideration to the nation as keeping our people all at work at good wages and under proper working conditions. We have gone a long way in our progressive thought along the whole economic front.

In connection with the various matters that have been brought before the house to-night and throughout the course of the debate, we have heard ft good deal about monetary reform, and in connection with all .those questions that have to do with banking and money there have come proposals from various quarters in the house. This nation has done an excellent job in demonstrating that we can reach a position of maximum production. The problem in this country to-day is not

138S

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. KNOWLES:

I believe there are one or two others who would like to speak, and I understand the parliamentary assistant to the Minister of Finance wishes an opportunity to close the debate. Therefore I move the adjournment of the debate.

Motion agreed to and debate adjourned.

On motion of Mr. Mackenzie (Vancouver Centre) the house adjourned at 10.55 p.m.

Wartime Wages Control

Monday, March 13, 1944

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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March 10, 1944