March 13, 1944

NAT

John Ritchie MacNicol

National Government

Mr. J. R. MacNICOL (Davenport):

Mr. Speaker, I can heartily endorse what the hon. member (Mr. Isnor) who has just taken his seat has said about the Canadian banking system. He paid it a well-deserved tribute. Our money is perfectly safe in the hands of the present banks throughout Canada. I endorse also what he said as he resumed his seat, that this proposed bank, if it carries out what I interpret from the bill to be its purpose, will to a large extent act as a competitor of the present banking system.

I am not on the banking and commerce committee, but if I were I would feel grateful to most, I should say all, of the members who have participated in this debate. I do not endorse what all of them have said, but I endorse a great deal, and so far as that which I do not endorse is concerned, if I were a member of the committee it would be like a watch-dog.

Most hon. members who have spoken have proceeded along two or three different lines. Some have made the burden of their remarks the fact, as they say, that the establishment of the bank would result an decentralization. I am afraid very few understand what decentralization would mean in business. For instance, how could you decentralize the steel company in Sydney, Nova Scotia? I do not think it could be done. AVhen big manufacturing concerns are established they take into consideration all the factors-where the raw product comes from, where power is to be obtained, the market, and so on-and then they decide, with all these factors before them, exactly where to set up their business. I do not believe it would be possible to decentralize the Ontario hydro electric commission, because they produce vast quantities of power where a vast volume of water is obtainable. There are perhaps businesses that could be decentralized, but most folks talking about decentralization either have not had much experience in business or do not fully appreciate the ramifications of the term.

I am going to direct most of my remarks to the second section entitled "interpretation", and specifically, indeed almost wholly, to the words "generating or distributing of electricity is carried on". Much has been said in this

Industrial Development Bank

debate about starting business, and I believe that if the bank is properly operated it can serve a purpose in setting business in motion. However, one fundamental that lies at the bottom of any manufacturing business is power; so thait in starting up businesses throughout the country I hope-at any rate I am going to interpret the measure in such a way as to warrant the hope-that this bank will permit, of assistance to provincial governments or to private power companies to enable them to produce power on a large scale. If this is done throughout the country new businesses can be set up, and there should be thousands of them when the war is over, so that those who wish to invest money, including the bank itself, will at least have the fundamental, which is cheap power, to start with.

I a.m glad to say that in Ontario our great hydro electric power commission, of which we in this province are all proud, and to which the province owes in largest measure its great industrial development, is ready to take advantage of any business being offered where power is required.

Most hon. members know that not so long ago, last summer I believe it was, the DeCew falls power plant was opened in the Niagara peninsula. I do not know what would have happened to a great number of businesses had that power plant not been put in operation. If tills bank does not provide for the production of power under this clause, then it will lose much of its possible use from my point of view. I repeat, I do not know what would have happened had it not been for the DeCew power plant.

What has happened recently in northwestern Ontario? An iron mine is to be put in operation. There was a power plant not far from the mine, on a river that had to be diverted. The water had to be allowed to go from its reservoir. I believe the plant was generating 10,000 horse-power. It belonged to the Ontario and Minnesota Pulp and Paper Company, which was a power-producing concern also. Fortunately the Ontario hydro electric commission was able to purchase the immediate power rights of the concern by being able to deliver 10,000 horse-power to the said company by merely installing one more generator on the Nipigon river at Alexander Falls.

I should like to see other provinces placed in the same position. I am one of those who believe that the more business there is in a province, the more manufacturing companies that are set up in that province, the better it will be for all the other provinces.

I cannot for a moment subscribe to the assertion that by advocating, as I do, the production of power in other provinces and

the introduction of more business in those provinces, this will take business away from Ontario. I believe that, on the contrary, it would greatly increase the business activities of Ontario. I want to be in a position, therefore, to help other provinces to get on their feet, as in these two instances I have mentioned'.

The Ontario hydro electric commission at the moment is developing, from its own plants, 1,630,000 horse-power. That is a large volume of power to be developed by a power commission belonging to a province. It buys another 910,000 horse-power. It has, therefore, under its control a total of 2,540,,000 horse-power, so that it is in a position to take advantage of the supply of power to companies wishing to start up if the bank will advance the money. Outside Quebec, what other province is in, that position? Quebec has a great deal of power which is produced cheaply. I should like to see the maritime provinces enabled to deliver [DOT] power in large blocks and cheaply, and if the province of New Brunswick, for example, is not able to do this from its power plant on the St. John river at Grand Falls, I should like to know why it is not. Perhaps this bank might come to the rescue of whoever controls that power plant at Grand Falls by bringing about some agreement with our cousins to the south so that the head waters of the St. John river could be stored in reservoirs to provide a large source of power. If that were done New Brunswick would have more cheap power and on a larger scale, and many industries could be started in that province. So far as the Petitcodiac power potentiality is concerned, I dt>

not know what development could take place there. That is a tidal proposal which has been mentioned for many years. I do not know of any tidal electric power plant of any magnitude anywhere. I believe there is a small one in Nova Scotia, but what I am thinking of is a large plant that could deliver large volumes of power, and if Petitcodiac can be developed, so much the better.

Those who have been observing the advertisements of the Ontario hydro electric commission will know that they are right up to the minute in preparations for delivering vast volumes of cheap power and circulating it throughout the province. They have at present 120,000 users in rural communities, of whom 65,000 are farmers. That places the farmers in a position to enter into many little industries in the rural areas to make material they could sell. Why should not every other province be placed in the same position with regard to cheap power? I con-

Industrial Development Bank

tend they should be. This bank may enable them or their power commissions to get into that position. I hope it will. They will then be in a position to start thousands and thousands of businesses, which they could not start in any other way; because anybody entering into a business wants to know, first, the cost of power; second, where are the raw products; third, where are the markets and fourth, where can the operators be obtained to work the plants, big or small? Ontario is in that position. The Ontario . hydro electric power commission is in a position to deliver any amount of power to thousands of small businesses which I hope will start up as a result, not particularly of the amount of money mentioned in this bill, because I take that only as a start. If 1100,000,000 can be voted this year there is no reason why the bank could not expand and be voted another 8100,000,000 next year, and continue in that way from one year to another. After all, 8100,000.000 will not go very far in thousands of industries. We have to be in a position to have thousands of industries to take care of our great heroes when they come back from overseas.

The Ontario hydro electric power commission has cut down the price of power delivered to the farmers until to-day a farmer can buy 420 kilowatt hours in three months for 810.68. In some of the small communities many people will be able to operate a one-eighth horse-power motor, or a one-quarter horse-power motor, or a one-half horse-power motor and make many things and be monarchs of all they survey. There are dozens of people, with many of whom I am acquainted, who make things and sell many small products to the big stores and others throughout Canada. There is no reason why we should not have thousands of new industries established throughout the country, but we must first have cheap power. Ontario is in a position to increase its power production very rapidly to a very large volume. It could increase it another million. There is a plant about to be established on the Ottawa river, not far from [DOT] here-the name has slipped my mind for the moment-where they are making preparations to produce another 400,000 horse-power. At many other points Ontario is in a position to do that. That is in addition to the proposed development of 1,000.000 horse-power on the St. Lawrence waterways. I hope that is carried through. It will mean that 1,000,000 horse-power in the international section of the St. Lawrence is developed for us and 1.000.000 horse-power for the United States; I am glad to see that the President of the United States is moving in that direction. When that is done everything will be electrified and electricity will come into its own as never before.

I am convinced it will provide hundreds of thousands of jobs. There is nothing like it.

I wish to say a word about our western provinces. I have a very warm feeling for the western provinces. I want to see them get on their feet in the power production field. The province of Manitoba uses at the present time about 395,000 horse-power and has a surplus of 25,700 horse-power. As I said a few moments ago, under the hydro electric power commission Ontario is producing and buying 2,540,000 horse-power. Manitoba has only a small part of what we produce here, but they can have a lot more power in Manitoba. They can produce it cheaply. I hope this bank will be so organized that if the Manitoba hydro power commission wishes to get some of this money to create more cheap power it will be able to get it. In any event, if it does, the bank's money will be safe.

To-day Manitoba has a surplus of about 25,700 horse-power; that is a total of 420,700 horse-power. That surplus would not much more than serve the little plant which was recently started in northwest Ontario. It would supply sufficient power for such iron mines and so forth. If Manitoba were called upon to supply 30,000 horse-power to develop more mines-and they have lots of mineral resources to start with

they would require more power. They have ample opportunity to generate it. There is a splendid falls in the northern part of your province, Mr. Speaker, on the Nelson river. It is called White Mud falls and is down river east of lake Winnipeg where the river drops about thirty-five feet, and where the volume is about

35,000 cubic feet per second. It could be easily harnessed. There would be no difficulty in developing a power plant there. The minimum capacity of that plant would be over 100,000 horse-power. The maximum would be two or three times that. If the level of lake Winnipeg were raised by a dam on the Nelson river it would be still more. If a power plant were established there it would in time open up scores and scores of industries in that part of Manitoba which is overflowing with natural resources. These resources are waiting for cheap power.

If this bank can advance money to the Manitoba power commission under this clause to make more power and cheaper power available, it would be a fine thing for Manitoba, would it not? That province is now proposing to go into the electrification of farms. I hope it does. I have recently read that the government of Manitoba proposes within a period of -I am not sure how long the programme is-

Industrial Development Bank

ten years to electrify 30,000 farms. The Ontario power comission has a programme in mind to spend $6,000,000 for the further extension of power in this province. That will result immediately in orders to the electric equipment companies in Ontario and elsewhere up to the amount of $4,000,000. That will mean a lot of employment in electric manufacturing plants in Ontario, apart from the provision of cheap light and power to farms for grinding their fodder, and it will increase the possibility of enlarging the stock population and so forth. If this bank can do for Manitoba what we have been able to do in Ontario, so much the better for Ontario as well as for Manitoba, because every additional thousand dollars made in Manitoba means more business for Canada from Victoria to Halifax.

I wish to say a word or two about Saskatchewan. This is one province that certainly deserves the help and support of this bank, and I now have in mind what was said by two or three speakers who preceded me about the industrialization of Saskatchewan. There are two or three things that can encourage industrialization in that province. Saskatchewan should be industrialized; but what chance has that fine city of Regina and- that fine city of Moose Jaw to secure their due of industries? If you ask me why, I shall say the lack of water. There are scores of fine industries that would like to start in those cities, but they cannot start because there is no water for industries requiring large quantities of water. They have hardly enough there to supply their domestic needs, quite apart from the vast quantities that are used in many industries. [ shall not take the time of the house to name industries. Perhaps the hon. members know them. But there are many of them. I hope this bank will come forward and help the province of Saskatchewan and help the cities on the plains to get water. If the bank can help provide water for them and at the same time provide power, they will revolutionize the whole centre of that province.

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

Donald Alexander McNiven

Liberal

Mr. McNIVEN:

I wonder if the hon.

member for Davenport would permit me. I appreciate very much everything he has said and done for the province of Saskatchewan, but I must point out to him that over a period of some thirty-five years the city of Regina has never been short of water. We have been short of other things, but not water.

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

John Ritchie MacNicol

National Government

Mr. MacNICOL:

I thank my hon, friend

for his interjection, but all I can tell him is that if he bases his interjection on what I was saying about water for water-requiring industries, then he does not know what he is talking

about. The same applies to Moose Jaw. If anyone says they have enough water in Moose Jaw to take care of a large number of industries that might go in there and require water, he would not know what he was talking about. I am sorry to say that to my hon. friend because before I came down to the Chamber tonight, I read a statement made by one of the great power men in Saskatchewan, intimating this very thing, the lack of wafer in both Regina and1 Moose Jaw-in large quantities, I mean, for manufacturing. Why, Mr. Speaker, what was the hon. gentleman talking about? If he knows the water requirements at Moose Jaw he knows that the total average volume may reach as high as 1,500,000 gallons a day, for a city of 26,000.

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

Donald Alexander McNiven

Liberal

Mr. McNIVEN:

I was speaking of my

own city of Regina.

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

John Ritchie MacNicol

National Government

Mr. MacNICOL:

Let me finish; I can see that the hon. gentleman does not know anything about it, and I am too fond of him to expose him. I do not rise in my place to talk about things on which I am not thoroughly posted, particularly when it comes to water and electricity. I hope that when this bank is organized it will come to the rescue of both those cities and provide water in large quantities, not only for domestic purposes, about which my hon. friend may be talking, but for scores of factories, which require almost as much water as a city requires for domestic use. Saskatchewan can have power; it can get it in large volume in three places, and I hope this bank will rally to the support of the Saskatchewan power commission. Only to-day I had a letter from that commission, and I can tell my hon, friend that the total production in Saskatchewan at the present time is

125,000 horse-power. I am sure he will not rise in his place and say that is what it should be. I should like to see it a million and a quarter horse-power and some day, if I have my way, Saskatchewan will have that much, because it can be produced at many places. It can be produced at Fort a la Corne, on the Saskatchewan river, where I spent a good deal of time surveying, going down to the river over a very steep and difficult way. When I am on a survey I let nothing block me, so that1 when I come back I know what I am talking about. I am not so sure about the power that can be produced on the south branch, near Saskatchewan Landing; I am not sure that the foundations have been found there, though they have been found at Fort a la Corne. If they can be found near Saskatchewan Landing they will have a large volume of hydro-electric power at the northern end of the province, a large volume at the southern

Industrial Development Bank

end, and they can have a good deal of power developed at Estevan. Therefore I do not see why this bank would not rally to the support of whoever produces power at Estevan, where they are getting about 10,000 horse-power private and public to-day but where they should be getting 50,000 horse-power, so that the farmers of Saskatchewan could have electric power also. Only 140 farmers in that whole province receive electricity from the power commission to-day. Of course many farmers have Delco plants, but no Delco plant can produce power as cheaply as hydro-electric power can be produced.

I am glad the Minister of Agriculture (Mr. Gardiner) is in his seat, because I know he has a warm feeling for Saskatchewan. If the time comes when this government decides to aid the western provinces, particularly Saskatchewan, in producing power, I hope they will absorb the cost of the lines required to connect up the present power plants at Moose Jaw, Regina, Prince Albert, Saskatoon, Estevan and Battleford. The production at Regina to-day is 40,000 kilowatt hours; if that is divided by -746, it gives 53,000 horse-power, and that is the maximum for that city. Moose Jaw has about 20,000 kilowatt hours; Saskatoon has about the same. The fine city of Prince Albert, where the hon. member for Lake Centre (Mr. Diefenbaker) resides, has 5,000 horse-power, while Battleford and Estevan each have 3,500 horse-power. All these systems should be connected. To-day in Ontario the hydro electric commission is eliminating costs all the time because it wants to encourage a vast increase in manufacturing in this province. Although the cost of power is low today, before they finish what they are doing it may be a good deal lower, and the other provinces should have the same opportunity.

As far as Alberta is concerned, I hope this bank will lend its assistance to such projects as the irrigation scheme of the Canada Land and Irrigation company. If they could be lent, say $4,000,000-and it need not be given to them in one year, because they might not be able to do all the work in one year-distributed over two or three or four years, we would be doing a great service to eastern Alberta, because that would bring irrigation right up to the suburbs of Medicine Hat. These are some of the things for which I believe this bank could be used. These enterprises cannot get money to-day, and' of course I am not blaming the ordinary banks for that, because they have your money and mine in their vaults and they are not permitted just to hand out large sums here, there and everywhere. That can be done by this proposed bank, however; that is its purpose, to develop busi-100-90J

ness; and if the Canada Land and Irrigation Company could be lent $4,000,000, in the long run it would not cost the country anything; you would get your money back again, and in the meantime you would do a great service. As to British Columbia, they have a great volume of electric power out there, or could have it. There are falls in that province which can be harnessed easily to produce a large quantity of cheap horse-power. If they did that perhaps they would be able to-develop iron mines, just as Ontario is doing at Steep Rock, in the northwestern part of the province.

Here is the way I feel about this bank. I am not arguing as to whether it has or has not value; I am accepting it in good faith that the government's intentions are to give the bank power to assist in the creation of many new industries. If that is one of its purposes my support will not have been in vain . I believe we shall have to do something, because even in the midst of war every other country is preparing for the peace. Even the Japanese are beginning to get ready to capture the markets they have lost. I remember very well what they did in England before the present war began, because I made a careful survey there to find out how they had been able to build up so many thousands of small enterprises all over the country. Outside London at a place call Slough, I think it was called, they had over five hundred new industries; northeast of London they had another five hundred, and southeast of London another five hundred more or less. Then out* side Manchester they built up another great industrial area. How was it done? By insisting that the material exported to the continent under their trade agreements with European countries should have at least fifty per cent British content and by cheapening power. One result was that many small plants had to move from Canada to England. I visited quite a number of those plants myself; many of them began in a very small way, but by the time war broke out some of those little factories had grown to quite a size. One small firm in my own riding, makihg valves, went over there first with a staff of fifteen, but when I saw them they had a staff of about 250. That is what we must do in Canada; we must use all our ingenuity to build business and give men jobs. If we do so, there will not be any depression after the war, and the people of Saskatchewan, Alberta and Manitoba will be in an infinitely better position than they are in to-day if they can get chceap power, and small industry to develop their own products. At the present time they must ship their goods in order to have them pro-

Industrial Development Bank

cessed. Many of those goods could be processed out there, and freight would be saved on the finished products, with the result that they would cost less.

What would be the result? It would be as it should be, namely that articles would be available at much lower cost. I was in business, and the objective at all times was to produce the best materials at the lowest possible price. We tried always to turn out the finest grade of material at the lowest cost. Only in that way was a huge plant built up, a plant growing from only a few men to many hundreds of men. I know of no other way of building a business. Make a good product and make it as cheaply as you can. If we can do that in Canada after the war with the help of this bank and the other financial institutions and our own standard banks- because I will not go back on them; they have given yeoman service all through the years, without loss of money to our people what will be the result? Men will be working everywhere. Women will be working everywhere. Homes will have electric washing machines, electric radios, electric irons, electric this and electric that, and there will be jobs all along the line.

Why should the people not have these appliances? Why should they not have the use of electric equipment? Why should only 140 farmers in Saskatchewan have the advantage of electric power? In Ontario there are

65,000 who have that advantage, and another number of thousands who are about ready to receive this advantage from the hydro electric power commission.

If this bank does anything to supplement the work of the standard banks in the creation of a large number of industries, by assisting wherever necessary in the production of cheap power, it will have done a fine job and will be worthy of the support it is receiving generally throughout the house.

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

Lionel Bertrand

Independent Liberal

Mr. LIONEL BERTRAND (Terrebonne):

Mr. Speaker, I will make only a few remarks concerning this bill. As the representative of a constituency which will have to face many problems after the war, I cannot permit this occasion to go by without stating that I approve the principle of this industrial development bank.

The county of Terrebonne is one of the most industrialized rural counties of the province of Quebec. There are at least twenty very important industries whose products are sold not only in this country, but also on foreign markets. As many factories manufac-,ture for local or national needs. Furthermore,

the plants of Defence Industries Limited, at Bouchard, are located within the limits of my county.

When the war is over, these war factories must be transformed into peace factories. These war plants may be handed over to powerful organizations which will dispose of capital sufficient to assure their transformation. If these companies, however, in order to balance their production, need additional capital, the industrial development bank will be in a position to help them. It is also quite possible that a plant like that at Bouchard, the proportions of which are immense and which has on its property an immense system of roads, railways, aqueducts and sewers, and even a fire protection service, may be granted by sections to a series of small or medium industries which would form, with a common pool of commodities, an altogether ideal manufacturing centre. In such event, the industrial development bank, which will have $100,000,000 at its disposal, will be very useful to give industrial concerns, whether new or previously existing, additional funds for their expansion.

A number of small and medium industries, actually in operation in Canada, will have to face post-war problems. Most of them, the normal production of which was curtailed by the war and its restrictions, will have to reestablish, after the war, a standard of production which was quite upset. Owing to a fairly extended period of slow production; owing to the enormous taxes which they have paid and to overhead costs which are not recovered through adequate revenues; owing also to the fact that they must buy more modern machinery, many firms will be obliged to contract loans extending over rather long periods of time. If the government also favours small concerns, it will be well. In our country, the smaller industry plays a part which one cannot neglect. During the depression, the towns which had small varied industries were in a position to pass through this period with greater ease than those which had but one or two large concerns. This does not mean that we have to neglect the larger firms in their legitimate requirements, but it is befitting that special care be taken of the smaller industries. They are a vital element in our economic life, first, owing to the employment which they afford and, second, owing to the aid they give to general production.

I appreciate the cooperation given to industry by the chartered banks, but their loans are usually granted only on short terms. The industrial development bank will grant longterm loans, and this will be a new and profit-

1.429

Industrial Development Bank

able accommodation for industry. But the industrial development bank does not take the place of the chartered banks. The latter will also be able to grant loans. This bank simply completes the activities of our banking institutions and does not harm them. The loans which it will grant to concerns offering sound guarantees will be intended to develop industry. When industry is successful there is work, and work ensures the success of the labouring class. A bill which makes $100,000,000 available to help industry to recuperate, to help smaller industry to make better progress after the war period which undoubtedly will have dealt it rough blows, to transform war industries into peace plants and to give financial help to the companies concerned is one which embodies an interesting innovation. I should have liked it to include agriculture also, which lies at the very basis of our general economy. I should have also liked it to include a plan whereby ownership would have been rendered easier for the labourer. It was stated that the government has additional measures in these two domains, and I am quite glad of that. For the moment the question relates to a measure intended to increase the level of production, which also means an assurance to labour. I am in favour of the bill, since its object is to help the labouring classes by securing work for them, and since it also intends to foster private enterprise. Too much will never be done in this respect. Nationalization would be disastrous for the country, and furthermore, for the worker. Private enterprise is the foundation-stone of all true democracy. It is the duty of Canada to sustain it

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

James Arthur Ross

National Government

Mr. J. A. ROSS (Souris):

Mr. Speaker, I desire to offer a few observations on this bill to establish the proposed industrial development bank. May I first refer to the preamble, which says:

Whereas it is desirable to establish an industrial development bank to promote the economic welfare of Canada by increasing the effectiveness of monetary action through ensuring the availability of credit to industrial enterprise which may reasonably be expected to prove successful if a high level of national income and employment is maintained, by supplementing the activities of other lenders and by providing capital assistance to industry with particular consideration to the financing problems of small enterprise.

As I go through the definitions I can find none that defines what may constitute a small enterprise. Nor is there any limit set on individual loans. I wonder if the real thought in setting up this proposed bank may not be to transfer existing government-owned plants to corporations as the war ends. If that is the case, I do not believe that it will meet with the wishes of the great majoritv of the citizens

of Canada. According to the "Canada Year Book" for 1940, in the year 1938 just before the war, in the two provinces of Ontario and Quebec were centred eighty per cent of the industries of the dominion. There was invested in manufacturing industry in these two provinces some $2,096,000,000. We are told that this was due to geography, the proximity of Canada to the United States, and such like reasons. In British Columbia there was 6-8 per cent of the industry of Canada; in Manitoba, 3-9 per cent; in the provinces of New Brunswick, Nova Scotia, Prince Edward Island, Saskatchewan and Alberta, there was less than nine per cent of all the industry of the whole uominion; and the maritime provinces had less than four per cent of the industry of the whole dominion. This situation has been greatly aggravated during these years of war by governmental action.

(And Mrs. Casselman having taken the Chair as Acting Speaker:)

May I be the first, Madame Speaker, to congratulate you on the distinction of being the first lady to occupy the Speaker's chair during the debates of this house.

In Canada we had in 1938 approximately a five billion dollar production, and in 1943 that had risen to approximately ten billion dollars. In other words, our production has been doubled during these war years. These facta should have a great bearing on the livelihood of our people at the present time. Many hundreds of millions of dollars have been advanced during the war to assist great industries. I think that over $1,700,000,000 has been advanced for industrial expansion alone, the very great bulk of it in the two central provinces, and this at a time when small industries have been gradually passing out of existence. It is interesting to note that in 1941, in comparison with 1940, small industries in every part of Canada received a lesser amount of the total business done by the nation as compared with the share of the larger industries. If I might be permitted to use some figures which my colleague the hon. member for Lake Centre (Mr. Diefenbaker) used the other day, in 1940 there were in Manitoba, out of a total number of 1,171 industries, 698 with production to a value of less than $25,000, and 130 with production valued at between S25,000 and $50,000. In Saskatchewan there were 814 industries, of which 592 produced under $25,000, and seventy-eight between $25,000 and $50,000. In Alberta there were 1,068 industries, of which 734 produced under $25,000, and 113 between $25,000 and $50,000. The over-all picture in Canada was that of 25,513 industries in 1940; in the first category there were 15,478, and in the second, 2.951.

Industrial Development Bank

I could quote many other figures along that line to emphasize the great disparity existing between our western and maritime provinces as compared with the industrial growth in the two central provinces. This trend has been going on all through the war years, and in my opinion this bill will not stop it.

The proposed legislation will not be of particular benefit to the small business man, nor will it enable the returned soldier to establish himself in business unless the type of business in which he may engage goes beyond the scope of this bill, which is limited to aiding industrial enterprises, the building of ships and the generating or distribution of electricity. I do not have to point out to members of this house that during these war years -many operators of small businesses have been forced to close down, and I think they should be kept in mind when this bill is being discussed by the banking and commerce committee. The viewpoint of the United States with regard to small businesses and the recommendations that have been made there are, I think, of particular application to Canada. I quote:

The broad back-bone of enterprise, that as production controls are relaxed particular care should be taken to protect the competitive positions of small business as far as practicable within the needs of the war. Cancellations of war contracts can be guided to permit the earliest releasing of small concerns which can convert back to peace-time production; also certain nuisance production controls involving only a limited amount of resources which press heavily on small concerns can be relaxed sooner than broader production controls.

The recommendations in the United States are:

So far as war production is concerned the lending authorities should be restricted to the Smaller War Plants Corporation. For permanent risks which the banks cannot assume, the federal banking system should be given authority to make industrial loans.

The prairie provinces, and to a lesser degree the maritime provinces, have during the past four years been discriminated against or deli-oerately ignored in the development of war industry. There has been a tremendous exodus of people from the western provinces, many of whom I hope will desire to return.

This proposed legislation, if it is to be effective, must be made effective immediately. It must have teeth in it. When I view the situation in the three western provinces and the failure of the government to develop industry there during war time as it should have been, I fear for the future in the postwar period with respect to the use to which moneys will be placed by this corporation.

May I point out that in the three prairie provinces practically all of the flax seed in

Canada is produced, some 17'6 million bushels out of a total production of 17-9 million bushels-practically all from the prairie provinces. Canada's sunflower seed crop is 17'9 million pounds, all of which is produced in the three prairie provinces. The oil cake derived therefrom as a by-product is required by the live stock producers of the prairie provinces both for their dairy cattle and for beef production. The greater part of the flax seed and other oil-producing seeds mu^t now be shipped east for processing, and our producers pay transportation costs both ways, despite the difficult transportation problems which now prevail in this country.

The western provinces have not received consideration in the matter of the development of war plants during these years. In the last two years plants have been established at Hamilton and Toronto for t!he processing of oil seeds. I do not think I need remind hon. members that before anyone can establish a plant a permit must be procured from the federal authorities.

If our Canadian economy is to be built up on a basis of Canadian unity, there must be decentralization of industry. On many occasions I have raised in this chamber the question of grain alcohol and especially its use in these difficult times in the 'manufacture of synthetic rubber. Paul J. Kolochov, a Russian chemist, now chemical expert and technical counsellor to Joseph E. Seagram and Sons, of Louisville, Kentucky, has stated in the last few days that eighty per cent alcohol is now used in motors throughout Brazil. He also states that in this country there are great possibilities for the use of alcohol as a fuel for motors. Canada's most up-to-date synthetic rubber plant, at Sarnia, Ontario, has just been completed at a cost of some S48,000,-000, and here petroleum products are used, despite the scarcity of these same products. Agricultural research will, I am convinced, develop many other possibilities in this line.

My colleague the hon. member for Davenport (Mr. MacNicol) spent much time in discussing the .possibilities, not only in his native province of Ontario but throughout Canada, of the development of electrical power. While we realize how great that development has been in Ontario, I do not believe that either in respect of developing or the possibilities of developing power, we of the province of Manitoba on a per capita basis need to take second place even to the great province of Ontario. Manitoba has abundance of electrical power and power possibilities, the cheapest in North America to-day, and adjacent to raw materials. We have always been told in the past that industry must be

Industrial Development Bank

developed close to ('.heap power and raw materials, and assuming that to be true, I would point out that these are just what we have in Manitoba. The organization and development of industry on the prairies, and especially in Manitoba, in pursuance of the aims of this bill, would save a great deal in transportation costs and avoid many of the difficulties we are experiencing to-day, with relief and benefit to Canadian taxpayers in general. Canadian industry should and must be decentralized if we are to make Canada what it is capable of becoming.

I was pleased to hear from the parliamentary assistant to the minister that a little later a bill is to be introduced to provide for an agricultural bank. I am surprised that such a measure has not been presented to the house before the industrial bill, because I do not need to remind anyone of the diificulties which agriculturists have been through of recent years, and which many of them are still experiencing as a result of the controls imposed for the war effort. I believe it will be generally agreed that western fanners have had to pay too high rates of interest, mnning from seven to nine per cent. Because of the difficulties with which they have had to contend they have not been able to pay interest, let alone principal, and have undergone, in many cases, a meagre existence. It is important that when this bank is set up they should have the right to rediscount their present obligations. I trust this bank will receive funds, as do the chartered banks to-day, at approximately one and one-half per cent. Assuming they can do business for another one and one-half or two per cent, it should be possible for many farmers to have their obligations rewritten at a reduced rate, say three and one-half per cent, which I think is the rate provided for in the soldier settlement land scheme. That would mean a great deal to the agricultural producers of this country. The vast majority of them still need funds at a low rate of interest in order to procure farm implements. There is a tremendous backlog in this respect. Farm buildings are in a very bad state of repair. Also, farmers should be able to raise funds at a low rate of interest in order to build up a much better type of live stock than many of them have to-day.

I shall have much more to say on this matter when the measure dealing with agriculture is presented to the house. I trust there will also be a bill for better housing in Canada.

I hope that ex-service men and others will be assisted under this industrial development bank bill, and that it will not be made a means of further centralizing industry. As I have already pointed out, it should not be a

means of turning over present government-owned agencies to private individuals or corporations. To do so will not meet the requirements of this country, and the bill should not be so used.

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

Vincent-Joseph Pottier

Liberal

Mr. V. J. POTTIER (Shelburne-Yarmouth-Clare):

I wish to say a few words, because there is one thing in this bill which above all pleases me and in my opinion meets a growing demand; that is the purpose, expressed in the preamble, to promote industry "by providing capital assistance to industry with particular consideration to the financing problems of small enterprises." Those two words, "small enterprises," are being heard more and more, perhaps too late, but it seems to me that if the struggle is continued it will result in benefiting this type of industry.

We have seen in Canada, unfortunately, of late, perhaps going back a decade or more, a centralization of industry brought about by attempts to freeze out small industry by large industry, also by large industries establishing themselves in the more populated centres. This has had the effect of centralizing industry in two ways. From the provincial point of view we find industry centralizing in the capital cities or the larger populated centres, the pull being in that direction; while from the dominion point of view we find industry being centralized-whether hon. members from the central provinces like it or not-more and more in the two provinces of Quebec and Ontario. At the same time industry has moved from the parts of the country remote from that area. It may be said that we have to expect that sort of thing, that geography comes into the picture, that transportation facilities bring that about, that cheap power is responsible for such a situation. That may be so, but another feature that must be considered is the credit that goes with centralization, the credit that is brought about by large organizations, interlocking directorates, the fact that they can obtain money and credit to develop their own industries. This tends to further centralization and a further enlarging of the big centres, while small industries have not that opportunity.

This is not the first occasion on which I have discussed the difficulties with which we are faced in the maritime provinces. In March and April, 1941, in connection with the shipbuilding industry, I indicated that we could obtain, and in fact had orders for our shipbuilding concerns, or for some of them at any rate, but that the credit was not available to enable them to proceed. Let me refer to some remarks I made on March 10, 1941,

Industrial Development Bank

when I pointed out that we could not build ships because we had not the credit to finance the undertaking. I quote:

It is not a ship beyond their powers of construction of which they do not have the necessary mechanics or material.

The hon. member for York-Sunbury (Mr. Hanson) then observed:

It was beyond their financial capacity.

I replied:

Yes; the financial capacity was lacking.

Then I went on to show that they could not carry out the orders because they did not have the credit or finance. I repeated the same thing again in April in connection with the same industry. I refer to that as one of the developments which have taken place as the years have gone by, whereby orders could be obtained if we had the necessary finances to carry them out. The idea of helping small industries is an excellent one. I trust it will result in the establishment of such industries, because, if it does not, as far as I am concerned this bill will be meaningless; it will be of no assistance.

I hope that in some of the sections of the bill provision will be made for the fishing industry so as to bring that calling within the meaning of the words "industrial enterprise". I trust that when the bill goes before the committee this point will be made quite clear. One of the things I am afraid about' in this bill is that if it does help small industry it will result in the further centralization of such industry in the larger centres. When the bill goes before the committee I hope this point will be given due consideration.

With a view to preventing the centralization of small industries in the two central provinces-because there is danger of that, seeing that our financial institutions to-day are so centralized, their head offices and larger branches being in those provinces-I suggest that if we are not careful this bank will become centralized and further small industries will be taken away from the maritime provinces and the western provinces as well. Therefore, to meet that situation, I suggest that consideration be given to the allotment of certain credits by areas. I believe that should be indicated in one way or another. Besides that, I suggest that administration be by regions and not from central headquarters as by the directors of the Bank of Canada at the present time.

If these points are not very carefully watched; if we do not approach the subject from the angle of regional allotments and regional administration, centralization will continue to the detriment of those areas of

Canada lying on the outskirts of the two large provinces I have mentioned. In order to check that trend, there are certain considerations to be noted. There are energies that can be used to the advantage of the Canadian people. I am not suggesting that in some cases centralization is not necessary for the large industries. There are places for centralization, just as there are places for decentralization where the energy and the qualifications of individual effort can be made use of. That can be taken advantage of by a proper use of the provisions of this bill. If we take care of our small industries; if we encourage individual effort; if we promote small enterprise working in cooperation, in the country districts, with the small farmers, these two types of individual that go to make a healthy country, we shall bring about a new spirit and a new hope, and the people outside the large cities will find a new life and the Dominion of Canada will benefit thereby.

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

Clarence Gillis

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

Mr. CLARENCE GILLIS (Cape Breton South):

I have listened patiently for several

days to this discussion. I had no desire to take part in it, and had someone else expressed my opinion I would not now be taking up the time of the house. However, I regard the measure which is at present before the house as one of the most important that will be discussed at this session. I realize that this bill, when it has been thoroughly discussed in this house, will go to the banking and commerce committee, and after carefully listening to the debate that has taken place so far I believe that the one man who in my opinion understands banking and the functions of money- I refer to the hon. member for Vancouver-Burrard (Mr. McGeer)-sounded a timely word of warning to the members of the house with regard to the job that this bank has to do and the shortcomings of the bill in its present form,

I will endeavour to provoke the thoughts of the banking and commerce committee along lines other than those I have heard- discussed so far. A good deal of time has been taken up on this bill in criticism of what this group stands for, and so forth and so on. That has no relation to the particular measure, but I would say that when our hon. friends all around us hurl the kind of stuff that has been thrown over here during the last several days, it is a complete indication of the fact that they fail to recognize the seriousness and the responsibility of parliament in the present situation. It does not make very much difference what this small group thinks or advocates. We are here with a programme given to us by the membership of our organization

Industrial Development Bank

across Canada. They make that programme, and that programme reflects their thinking whether we like it or not. That is the road they desire us to travel, and the criticism that comes across the floor of the house does not apply to us. That criticism is being made against those who draft the programme. Hon. members should keep that in mind. That programme reflects the thinking of the Canadian people who are interested in this movement at the present time, and they make up a large body across Canada. Calling us names because we happen to represent those people will not change the situation one iota. Organized society is moving forward all the time. No organization in this house can have a static programme. The programme must be subject to change as changes are brought about in the economic structure. What someone in this organization said ten years ago or five years ago, does not make any difference today. If we have a democratic order of society, then it must be so arranged as to move forward in accordance with the thinking of the people and the developments of society itself. I am not going to waste any more time on that because it does not bother me. It merely demonstrates the fact that someone is not thinking when he wastes the time of the house on that kind of discussion.

I said I considered this bill perhaps one of the most important measures to come before the house. I do so for this reason, that it is, in my opinion, the first step that the government has taken in this field of social change as it pertains to the future. All our other measures have been merely along the lines we have been following for many years.

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

Paul Joseph James Martin (Parliamentary Assistant to the Minister of Labour)

Liberal

Mr. MARTIN:

What about unemployment insurance?

Topic:   INDUSTRIAL DEVELOPMENT BANK
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CCF

Clarence Gillis

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

Mr. GILLIS:

Well, it is about fifty years

late in Canada, but-

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

Paul Joseph James Martin (Parliamentary Assistant to the Minister of Labour)

Liberal

Mr. MARTIN:

You said the first.

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

Clarence Gillis

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

Mr. GILLIS:

-it is a feeble step in the right direction.

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

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

Feeble is right.

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

Clarence Gillis

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

Mr. GILLIS:

I am not unmindful of the fact that practically every organization that has appeared before the reconstruction committee, which has been sitting for two years, has wound up its discussion on its post-war programme with one statement, namely, that this programme is contingent upon the government of Canada making available the necessary finances to cany it through. This is the first step that the government has taken with respect to the formation of some central organization that will have the authority to make funds available.

I am rather sceptical of the job that this particular bank is going to be able to do. To start with, the amount of money available will not do more than scratch the surface in a post-war programme. Second, I am afraid that the setting up of the industrial development bank in Ottawa with that amount of money appropriated, instead of being designed to do the job that has to be done in Canada in the post-war period, is merely a prop to a system that has already broken down. That is my opinion. While the chartered banks have the business of the large solidly organized and well financed industries of this country within their sphere, in the field of experiment where risk has to be taken the small industrial bank will be used to handle anything in the post-war period.

The banks and industries of this dominion are, in my opinion, one organization. They have interlocking directorates. Many of the large industries must requisition for their machinery to-day through the banks. When you talk about the chartered banks and the established industries you are talking about the one economic organization. They are practically all controlled by the same group. We must not forget that all our large well-established industries to-day were small struggling industries not many years ago. We did not have centralized banking in Canada many years ago. As was pointed out by the senior member for Halifax (Mr. Isnor), our centralized banks of to-day were small provincial banks years ago. They were functioning within their own spheres; but with the development of the merger idea where it is more economic to have the administration of a certain industry under one head, the octopus grew. The small industries in the various provinces were brought together, and finally there was centralized control in the two central provinces. Along with that was built up the necessary power to operate them. Therefore I do not place much stock in all this talk about establishing industry east and west. I know it is badly needed in my own province. The maritime provinces have been merely the overseers of the poor for the last thirty years, as far as industry is concerned. Where there is a large concentration of power, there you will have your industry under the present scheme of things, and that is in these two central provinces.

As I visualize the function of this bank, this is what is going to happen. The war is over and there are certain development risks to be taken in post-war reconstruction. A small amount of money will be made available to develop post-war products across Canada.

Industrial Development Bank

It cannot be very large. The money will be made available from this small central bank, sectionally. Small industries will be permitted to develop until the risk is gone and there is a market for the commodity. When there is no longer any risk, under the present legislation, both provincial and federal, the big fellow who has control of the field will reach out and take it under his arm. That has been the history. This bank is not going to change it, because it is not making a fundamental change in the system. The province of Nova Scotia is a very good example of it.

In 1940, I put figures on the record to show the number of banks we had in our province. I do not want to repeat the figures. I also enumerated the small industries that we had. The province was standing on its own feet bath financially and industrially, but it all came into the central provinces because of the development of the system and the centralization of power into fewer and fewer hands. This bank is not going to change that. As small industries develop they will gradually find their way into this central organization. I visualize no changes.

I should like to call to the attention of the members of the house the fact that at the present time the Canadian people have an equity in Canadian industry to the extent of $800,000,000 in the form of plant, equipment, barracks and so forth. The people have not much control over it. A small committee, called the War Assets Corporation, has been selected and given the right to dispose of those assets. We have very little say in it. We are now definitely in the field of government ownership of industry. I think the Minister of Munitions and Supply (Mr. Howh) has gone a long way on that road. We must not forget that because we have a considerable investment in the industries of this country; whether it is to be protected or not in the interests of the people of Canada I am not prepared to say at the moment, but it is something we are going to watch very, very carefully.

I visualize no progress in the future in the kind of bank that we now propose to set up.

I see no redress for the people. I wish to point this out definitely, because after a lot of thinking about it during my lifetime I became convinced of it. I am convinced that the cycle of the scheme of things as they are now has definitely turned. What we see at the present time is a dying system going out the hard way. I am convinced that the peoples of the world want a reorganized society to distribute the products of industry to the people on the basis of need. I am honestly convinced of that. I am also convinced 'that

a certain transition must take place in order to bring about that result in a logical and democratic way. I do not think that transition will be made from the top. I do not visualize a time in the future when the state will be supreme in this country, nor do I believe the organization of state banks is the answer to the extension of a democratic order of society. If we are to make that transition it must come about through the people themselves, and in any new scheme of things that, we may develop we should fully utilize the people and make them a part of it.

I should like to remind the house that the field of finance is not something new to the Canadian people. Some ten years ago, out of their neeeds, the people of Nova Scotia began to study this question; and from coast to coast in Canada to-day thousands of people are engaged in a movement which aims at establishing the credit of the people in the various communities across the country through the medium of that credit union movement. Thousands of people in study groups in my province have gone very carefully into these questions of finance and credit during the last ten years. There is a complete circle of credit unions through that province, and every province has them to-day. Instead of setting up a bank for the purpose of developing industrial and other projects in the post-war period, a state-controlled bank with power concentrated here in Ottawa, we should fully utilize the cooperative movement in Canada generally, and particularly the credit union movement that is in this field of credit and finance exclusively. We should be thinking of a central cooperative long-term loan and mortgage bank, set up in Ottawa, with the various credit unions across Canada making up the service organizations in the field. In addition, there are available a few million dollars which n6w stand as the surplus which has grown up in that movement, which is not permitted under present legislation to extend its activities into the field of long-term and mortgage credit. If we established something on the basis I have suggested, giving the credit unions across this country the right to go out and sell bonds, as is proposed under this bill, it would enable all the people to become shareholders in that bank. The credit unions would be enabled to become individual shareholders and directors of that central cooperative bank; and in the scheme of things to come, when small industries and community projects are under consideration, they could be developed by the people themselves, so that when they came into operation they would be owned and operated by the people, while any profits accruing would go

Industrial Development Bank

back to the people through the medium of their own organization. That is the incentive necessary to build a new Canada.

It is my suggestion that if you could plan your industrial set-up on this basis and keep it free from interference on the part of the large monopolies that now exist, in twenty-five years you would have a basis of comparison between private enterprise, operated for profit, and government-owned industry owned and operated by the people themselves in the fields where the actual work is performed, with control of their own finances. Then you would be able to see definitely which organization should guide Canada's destinies in the future. There is no need to tear things down or to quarrel among ourselves. We have had seventy-five years under the one system, and it has failed both in time of peace and in time of war, because the government had to take it over in war time in order to properly organize it so that we might make our maximum contribution. The test can be made in that way. Many times we wonder at the contribution Russia has made, but the answer is very simple. There are no employers or employees in Russia; the people work for themselves, and the entire country is the corporation for which they work. That is the incentive which made them fight as they did at Stalingrad, and that is the incentive we must build up in Canada, not as it was done in Russia but as I am trying to describe it now. The transition should be made through the medium of the machinery that we are setting up now; we have tried the other method and it will not work. To-day in Canada we have thousands of people who have studied finance the hard way; if I had time to put on record the funds now available through these credit unions I think it would be enlightening to most hon. members.

There is no other way in which it can be done; there is no other way in which society can be kept democratic, because we have definitely departed from the scheme of things as they were, and the development to-day is toward centralization, state control and ultimately the road to dictatorship. That is the accusation which is hurled across the chamber at us, but I want to tell you, Mr. Speaker, that not a group in this house is more alive to that particular development than the group in this corner, nor do I think anyone in Canada will fight harder against that kind of setup. That is the trend to-day, whether or not we realize it, and there is' only one way to offset it. When this bill goes to the banking and commerce committee, instead of any hurried decision on the matter I hope they will study the proposal I am now making in regard to the utilization of the Canadian 100-91J

people through the medium of their own financial organizations, which they have built up over a period of years to give themselves some say in the future scheme of things with respect to the reconstruction of Canada. It is worth trying, I am not afraid of that test; I know what the answer will be twenty-five years after it is made. Unless we realize that the test must be made in this way I am very much afraid of what is coming in the future. We kid ourselves about the international situation and all that kind of stuff. Anyone who follows the international situation at all carefully is fully aware of the fact that in the aftermath of this war we shall have our most serious struggles; and unless we are alive to the situation and utilize the brains of the people of this country in the reconstruction that must be carried on, in order that the people may have a large stake in it. we are not going to have a very nice time after the war is over.

I am not going to occupy any more of the time of the house, except to suggest that I see absolutely no hope in the proposal now under consideration. I recommend to the banking and commerce committee that instead of the bank now proposed, which is merely a palliative or a prop for something already fallen down, they consider the possibility of establishing a central long-term loan and mortgage bank for the cooperative movement in Canada, using as service organizations in the field the credit unions already established throughout the country. To raise the capital required it is only necessary to give that movement the same privilege the government is now giving this bank, the privilege of issuing bonds in denominations of $10 and $100. It will give all of us a chance to become part of that set-up. It will give the credit unions a chance to put their surplus into that bank. It will give those unions a medium through which they can become part of that board of directors. In my opinion, in the maritime provinces the only industry that will ever be developed is the industry developed by that kind of organization. There will never be any subsidiary industry in the maritimes under the set-up now proposed. The trend is just the reverse. They are closing things down already, in that part of the country. The Trenton plant, into which we put half a million dollars a few years ago, has already closed down. The Ferguson Brothers yards at Pictou have been pulled up and transferred to Montreal.

That is the present trend of things in the maritime provinces. But I am reasonably sure that if that cooperative movement in Nova Scotia had some assistance, and had the help of some legislation, it would develop industry.

Industrial Development Bank

I should like to say this, too, that whether we get assistance or not, we are going to do that in the aftermath of the war. The people of that province are going to develop their own industry and subsidiary industry after this war is over, and they will do it through the medium of that cooperative movement. It may be made much easier; it may be made national. Thousands of people have studied the matter in the last ten years-because it is not new; it is well grounded and ably led. This government could now utilize that organization across the country and give the people a stake in the aftermath of the war. That is something to work for, instead of having them watch the stock market, and wondering where they will be next week.

I strongly urge that the banking and commerce committee consider this proposal. I shall have more to say' when the bill is considered section by section.

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

Frederick Davis Shaw

Social Credit

Mr. F. D. SHAW (Red Deer):

Mr. Speaker, before bill No. 7, to incorporate the industrial development bank, is given second reading and referred to the committee on banking and commerce, for amendment and clarification, I wish to make a few observations. Part of what I shall say will have to do with the possibilities of the bank, with, as some suggest, its impossibilities, with its provisions, and again, as some suggest, with respect to its lack of provisions.

When the parliamentary assistant to the Minister of Finance introduced the bill on March 2 he said it was a part of the government's programme for maintaining a high level of employment, and also for the maintenance of a high level of national income. He said further that it is in the national interest to ensure that such additional financing as may be necessary and desirable will be available to industrial enterprise. I concur wholly in the remarks of the hon. member for Lethbridge (Mr. Blackmore), when he asserted a few days ago that it is of necessity imperative that we secure more information relative to the suggestion that the loans will be made where necessary and where desirable. A great deal will depend upon who determine the necessity and the desirability, and their method of arriving at conclusions.

Then the parliamentary assistant said that a purpose of the bank, further, would be that of filling the gap in our financial structure, and to ensure that adequate financing is forthcoming for desirable projects. For these reasons the government proposes to establish this bank. Here again I concur heartily in the remarks of the hon. member for Acadia (Mr. Quelch), who asserted that until such time as the necessary revision is made in The

Bank Act it will be virtually impossible to ascertain the extent of the gap that may exist in the period of reconstruction following the war.

I regret intensely that our amendment to defer consideration of this measure until the banking and commerce committee has given consideration to the Bank Act was rejected by the house. Undoubtedly the purpose of introducing the measure to establish the industrial development bank arose as a consequence of the government's realization that probably a million and a half to two milliop people in Canada are vitally concerned and worried not a little about the possibilities of employment, proper income and related matters following the war. It has been said time and again in the house in recent weeks that we have approximately 1,200,000 employees in Canada who hold jobs which, in a sense, could be said to have been created by the government. They are jobs which did not exist prior to the war, and which may not exist following the cessation of hostilities. We know that approximately half a million employees in Canada are engaged in war enterprises 6uch as shipbuilding, the manufacturing of aircraft and the like. It has been said that a certain number of them will be required in those industries after the war, and with that statement I agree. But it could hardly be said with any degree of certainty that more than ten per cent of those now employed in those industries will be employed in them during the period following the war.

Then we know, too, that in our mining industry, and in certain plants, such as chemical plants, production has increased by from four to ten times its normal extent because of war conditions, and also it is known that employment in those industries has increased in this time of war to the same degree. No matter what our programme may be after the war with respect to the mining industry or the chemical industry, it is hardly possible that the total number who are now employed in those industries will continue to be so employed after the war. It is also true that we have about 800,000 of our young people in the services. A good deal of faith has been placed in the measure enacted by parliament a year or so ago guaranteeing that under certain circumstances many persons who left employment to join the services will be guaranteed that their jobs will be waiting for them when the war is over. I suggest, however, that we should not at any time lose sight of the fact that many of those jobs which were

Industrial Development Bank

quite desirable prior to the outbreak of war may not be nearly as desirable when the war is over.

I may give as an illustration this fact, that hundreds, perhaps thousands, of the service personnel who were engaged in certain occupations where the salaries were comparatively low have now assumed the responsibilities of married life. Some of them now have two or three children. Jobs which paid $80 or $90 a month, and which, as I say, were satisfactory under the circumstances that prevailed when they joined the forces, will be entirely unsatisfactory when the war is over.

We see industries closing in certain parts of the country. The hon. member for Cape Breton South (Mr. Gillis) referred to the situation developing in Nova Scotia. In my own province of Alberta I know .that much of the work in connection with the Alaska highway project in the north has come to an end and that many Canadians who were employed on that project are without employment. While a certain number of them have been absorbed into other industries, a great many of them have not. We are also informed that many of the aerodromes throughout the country are to be closed. In my own constituency there are two. We have an elementary flying training school, with approximately 240 civilian employees, a great many of them older men, men who will not be absorbed into other industries even during war time because of their age.

I think it is because of these things that the government has decided to take this one step at least at the present time, if for no other purpose than to allay the fears of many of our people. Speaking in this house the other day, the leader of the opposition (Mr. Graydon) said, as reported at page 1387 of Hansard:

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.

I hope the leader of the opposition does not assume that merely because we are so bold, if I may put it in that way, as to speak on a measure of this kind we are presuming to be financial experts. Speaking of that same thing, may I say that since I entered public life I have come in contact with a great many so-called experts and authorities, especially professing authorities and self-styled experts in the field of finance, production, distribution and allied subjects, and I have come to this conclusion, that so much contradictory advice and so many conflicting opinions have been given with respect to matters of finance, reconstruction, employment and unemployment, that success would seem to lie in a candid

examination of the facts by men who are not piofessing to be experts, by men who are not hampered by certain preconceived theories. When it comes to a matter of this kind I think the best possible work we can perform is to devote our attention to it as laymen, not professing to be experts at all.

The bill is designed, we are told, to assist industry. Naturally one who comes from the west cannot but consider his own part of Canada in the light of secondary industry. I have at times come to the conclusion that secondary industry in western Canada, an

I know it has often been said that in Alberta' we lack iron deposits. I realize that thus far we have not been successful in locating iron deposits in the province; I am not going to say that they are not there. But the proximity and extent of our power resources would indicate to me that it would be just as sensible to ship iron ore out to Alberta to be manufactured, as it would be to ship our power to the source of the iron ore.

Industrial Development Bank

Before secondary industry can hope to thrive in western Canada, certain injustices must be removed. I think first of freight rates. In the city of Red Deer in my constituency we have a condensery, a very successful enterprise. I know that in 1938, the latest figure I have, canned milk shipped from Red Deer to Vancouver, a distance of approximately 800 miles, was shipped ait a freight rate of ninety-eight cents per hundredweight, while canned milk was shipped from Tillsomburg, Ontario, to Vancouver at a freight rate of seventy-five cents per hundredweight. In other words, the condensery at Red Deer was endeavouring .to compete with an industry in Ontario for the Vancouver market and paying a freight rate of twenty-three cents per hundredweight more than its Ontario competitor whose canned milk had to travel three times the distance.

Again, at Taber, in southern Alberta, we have a vegetable canning factory. That area, a good deal of which is under irrigation, is ideal for the growth of vegetables. Canned vegetables shipped out of Taber to the Vancouver market, a distance of 800 miles, were subject to a freight rate of SI.16 per hundredweight, while canned vegetables shipped from points as far east as Montreal to Vancouver, a distance of 2,877 miles, enjoyed a freight rate of seventy-five cents per hundredweight. There was a difference of forty-one cents in favour of the shipper from Montreal, 2,077 miles further away from the Vancouver rngrket. Conditions of that kind, Mr. Speaker, must of necessity be given consideration and rectified.

There are other forces at work militating against the establishment of secondary industries in Alberta. The figures I have are not entirely up to date. I think we can consider them as applicable to the year 1938, and while there may be a difference at the present time we may well expect, if there are no changes, that we shall go back to those conditions following the war. Live cattle shipped at that time from Alberta to eastern Canada were shipped at the rate of $1.14 per hundredweight. If we had butchered our cattle there and had shipped the fresh meats the cost would have been $1.88, or we would have laboured under the penalty of an amount equal to 68 per cent. Let us go on. If we had shipped at that time four hundred boxes of Alberta butter from Edmonton to Toronto it would have cost us $762.82; that is less, of course, the icing charges. On the same weight of Ontario condensed milk, which of course is another dairy product, from Aylmer, Ontario, to Edmonton, a little longer distance, they would pay only $467.46, or a difference of approximately $300.

That creates an extremely difficult situation for us who are engaged in the dairy industry in Alberta.

Then let us take lard and lard substitutes. Shipped from eastern Canada to a point in British Columbia, the rate at that time was one dollar per hundredweight, but from Alberta to British Columbia, a distance 2,000 miles less, the rate was 9S cents per hundredweight- practically the same rate, with a difference of

2,000 miles. '

I am going to refer to just one or two others. I shall not read the whole list. On hides and edible tallow from Vancouver to eastern Canada the rate is $1.25 per hundredweight, but from Alberta-say Calgary or Edmonton- approximately 800 miles less, we pay a higher rate, namely $1.50 per hundredweight. What I am trying to point out is this-

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

Thomas Vien (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I would call the attention of the hon. gentleman to the fact that what he is quoting does not seem to have any relevancy to the bill. I should be glad to know just how he associates what he is discussing with the terms of the bill.

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

Frederick Davis Shaw

Social Credit

Mr. SHAW:

I shall be very happy to try

to establish the relevancy. We are discussing assistance which we hope will be granted to secondary industry in Canada. That assistance, since we are not told more definitely, may be granted in various forms. Some of it may go, if the proper thing is done, toward assisting us or subsidizing us, let us say, in connection with our freight rates, or may affect any one of a number of factors which enter into this matter. I trust, sir, that there is relevancy.

One other factor to which I should like to see some serious consideration given, and which finances from this bank may assist materially in meeting^-I can only assume this since the bill is very indefinite-is in connection with the tariff.

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

Some hon. MEMBERS:

Oh, oh.

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

Frederick Davis Shaw

Social Credit

Mr. SHAW:

It may be remote.

Topic:   INDUSTRIAL DEVELOPMENT BANK
Subtopic:   PROVISION OF ADDITIONAL CREDIT FACILITIES FOR FIXED AND WORKING CAPITAL
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March 13, 1944