July 5, 1944

THE BUDGET

DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


The house resumed from Tuesday, July 4, consideration of the motion of Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the proposed amendment thereto of Mr. Rowe.


LIB

William Ross Macdonald

Liberal

Mr. W. ROSS MACDONALD (Brantford City):

Mr. Speaker, may I at the outset congratulate the Minister of Finance (Mr. Ilsley) upon the conciseness and clarity of his budget address. May I also pay a tribute to him for the manner in which he has directed our country's financial policy. It must indeed be a source of great satisfaction to him to know that other nations have adopted these policies which have prevented a vicious spiral of rising prices, otherwise known as inflation. In past wars this has not always been possible. I would remind the house that during the last great war prices rose sharply. Perhaps I could give a few instances. In 1919 flour sold at $7 a bag; to-day it sells for $3.10. Sugar reached 25 cents a pound in 1919; to-day it is only 8 or 9 cents a pound. Butter sold for 80 cents a pound; to-day you can buy it for 38 cents. Eggs cost $1 a dozen; to-day you can buy them in any store for 43 cents a dozen.

Canadians should indeed be proud. Not only have other countries adopted our fiscal

4522 COMMONS

The Budget-Mr. Macdonald (Brantford)

policies and1 our plans for the rehabilitation of our armed forces; they have marvelled at the great industry of our industrial workers and our farmers who have produced such prodigious quantities of war equipment and food. Over and above all this is the crowning glory which comes to us through the gallant deeds of our soldiers, sailors and airmen. The Right Hon. Peter Fraser, speaking in this house on Friday last, paid great tribute to Canada when he said:

The fact that 800,000 men and women have been enrolled in the forces, and the further fact that 2.000,000 persons are taking part in the industrial war effort of this country, are sufficiently eloquent and convincing testimony as to the whole-hearted way in which Canada has thrown itself, without reserve, into what it knew was a struggle for the existence of all that is decent in the life of mankind.

Canada and her allies among the united nations are by nature peace loving people. We were not prepared for war in 1939, and it has taken us four years to attain maximum production. To-day we are geared to a high tempo in war production. It is only natural therefore that there should be few changes m the budget.

The hon. member for Dufferin-Simcoe (Mr. Rowe), whom I should like to congratulate upon being recently elevated to the important post of financial critic of His Majesty's Loyal Opposition-had very little to say of a critical nature with respect to the budget. In one sentence he objected to the abolition of com

pulsory savings on the ground that it would result in lowered financial returns to the government and might start an inflationary trend. Then, in the very next sentence, on behalf of his party he proposed even greater reductions. If a small reduction would cause an inflationary trend, surely a greater reduction would cause a greater inflationary trend. I have never heard anything more inconsistent and more insincere-and this, I may say, from a party that prides itself on total war.

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NAT

Gordon Graydon (Leader of the Official Opposition)

National Government

Mr. GRAYDON:

I rise to a point of order. I think I heard the hon. member say that the statement of the member for Dufferin-Simcoe was insincere. If he did say that I ask him to withdraw it. I know he would not intend such a reflection.

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LIB

William Ross Macdonald

Liberal

Mr. MACDONALD (Brantford City):

If I said "insincere" I withdraw it, but I did not intend to say it. I believe I used the word "inconsistent".

Let us consider income taxation as it affects those in the lower income brackets. We all feel that we are heavily taxed, but we should not forget that under the proposed budget an unmarried person earning less than 81,100

per year and a married person earning less than 81,600 per year are the lowest taxed persons in the whole civilized world. The proposed changes will affect thousands of girls who are working in factories and as stenographers and clerks in the smaller cities and towns. They will now have deducted just one-half of what was deducted in the past.

A married person with two children making up to $2,000 a year, and a married person without children making up to $1,800 a year, will have only half the deduction that was formerly made. Taxpayers who have not taken allowances for insurance will also find their cheques considerably increased. By the amendment the opposition would abolish certain income taxes, but if you will notice the wording of the amendment you will see that nothing is said as to whether they would abolish compulsory savings.

If the taxpayers are to continue to pay compulsory savings, the amount of reduction in the lower income brackets would be no greater than under the proposed changes in the budget. As I have pointed out, these people are now paying the lowest tax in the world. A single person in Canada earning $800 a year pays less than 87 cents a week, and a married person with two children earning $1,600 pays 51 cents a week. With Canada's income tax for the wage-earner the lowest in the world, does anyone think that a further reduction would raise our prestige with the united nations which may be having greater difficulty in financing than we are? What do you think the boys overseas would say now that the hour of conflict has come for them, now that the hour of battle has arrived when many of them must pay with their lives, if they heard that the people in Canada, who are paying the lowest income tax in the world, were to cease paying taxes altogether? I was impressed by an article in the Brantford Expositor, written by Hal Boyle, Associated Press war columnist, who stated:

The boys overseas have an idea that the people at home still think of the war as a ball game-and that they are enjoying the seventh inning stretch.

It does look like if all the energy being used in fighting the battle of the income tax could be expended on the battle of the Anzio beachhead, Rome would fall in short order.

If I know Canadians, Mr. Speaker, they would resent any further reductions in income tax at the present time. I am confident that they will cheerfully pay the present taxes, which are the lowest amongst the united nations, and are practically nothing when compared with what the boys overseas are paying.

The Budget-Mr. Macdonald (Brentford)

The financial critic of the opposition did not confine himself to finance, but had to advise on military affairs also. He complained about the use or non-use which was being made of our so-called home army. At the outset of his remarks I expected a bold forthright statement of policy on this question, but in that wavering, vacillating, typically Tory fashion he talked all around the subject and said nothing definite. But after all, how can anyone expect anything definite from him, when he gets different leads from different leaders and no lead .at all from one leader? Charles McTague said that the home defence army should all go overseas immediately, while John Bracken, according to a certain section of the press, mumbled a nervous approval, which he has never since confirmed; and during all this time the house leader of the one-time mighty Tory party sits in this house in an uncomfortable silence. I have read and reread the amendment, and the only conclusion that anyone can come to is that the Conservative party would disband the home defence army and send them back to civilian life to pick off all the good civilian jobs before the boys return from overseas, and that is one thing that I will oppose with all my strength. As long as there are good civilian jobs let us retain as many of them as we can for the boys to get when they come home. That is the very least we can do.

I may be asked what I would do with the home army. I would hold them in reserve for reinforcements. They are highly trained and they are an efficient body of men. If our soldiers who recently stormed the shores of Normandy and have now started on their long and arduous trek to Berlin must have reinforcements, these men should and will be sent. Some say that reinforcements will never be needed. I hope they are right, but do not be too sure about it. This war is not yet won. Germany is still a resourceful and a formidable foe. The end may come soon, but we must not take too much for granted.

Suppose it does cost $150,000,000 a year to maintain the home defence force. Is it not far better to spend that large sum of money and win the day than to disband this force and lose everything? Let us not forget that for four years we spent many times $150,000.000 a year to prepare our soldiers to fight in Sicily, in Italy and in France, and if the day comes when the men of the home army should be sent overseas, no one will begrude the cost of their training. If we take the advice of the official opposition in this house and disband this force, and should there not be reinforcements when they are needed, then Canadians for generations to come will hang

their heads in shame. No, Mr. Speaker, this force must not be disbanded. It must be held in reserve to fill the gaps when reinforcements are called for.

While I am referring to the armed forces there are two questions I should like to mention which I trust are not entirely irrelevant to the budget. The first one is with respect to the allowance paid to mothers of men who are serving overseas. At the present time as the house is aware, a dependent mother receives $25 per month, together with $20 assigned pay from her son. She is also allowed to earn $40 from work which she might do. But imagine, Mr. Speaker, an invalid mother trying to live on the magnificent sum of $45 a month. On the other hand, a wife receives $35 a month, together with cost of living bonus, together with a minimum assignment of pay of $23 a month, and an allowance for each child. Personally I could never see why mothers are discriminated against. I understand it is stated that there is a different legal responsibility. I took the time to look over the statutes of the various provinces, and I find that in six of the provinces, Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia, there are statutes which require a son to support his parents. Section 166 of the Quebec civil code has this wording:

Children are bound to maintain their father, mother or other ascendants who are in want.

In the other provinces I have mentioned the acts are known as the Parents' Maintenance Act, and these statutes state that a son or daughter shall be liable for his or her dependent parents.

I would also draw the attention of the house to section 242 of the criminal code, which makes a man criminally liable if through neglect a parent's health is or is likely to be permanently impaired. So that there is little if any difference legally between the obligation on the part of a son to maintain his mother and the obligation of a husband to maintain his wife. Accordingly I trust that the allowances to mothers and wives will be equalized.

The other matter to which I would refer is the clothing allowance which is given to a soldier when he is discharged. At the present time he is given $65 for that purpose. I am bound to say that I do not think he can clothe himself properly on that amount. How the amount was arrived at I do not know. Recently I visited a number of stores and obtained the prices of clothing. Here are the average prices: Hat, $5.00; cap, S1.75; two shirts, $4.00; B.V.D's, $3.00; socks, $2.25; shoes, $8.00; suit, $35.00; extra working trousers, $7.00 and overcoat, $35.00. amounting in all to $101.00. I have not included a spring

4524 COMMONS

The Budget-Mr. Macdonald (Brantford)

overcoat, overalls, handkerchiefs, et cetera. From these figures I think the house will realize that a man cannot possibly clothe himself on 165. He may possibly get by in the summer, but in the winter, when he has to have an overcoat and other clothing, he cannot buy them unless he receives from $100 to $125. Again I would ask the government to consider raising the clothing allowance, before the snow flies, in any event.

Now, Mr. Speaker, may I revert once again to the budget? There is but one tariff change, and by that change farm implements are placed on the free list. I am somewhat disappointed that not one member of this house who has taken part in this debate so far has concerned himself with the effect that this reduction may have on the workers in these implement factories. Every speaker has either approved the change or has remained silent. I therefore must take it that all parties agree on this tariff change.

Topic:   THE BUDGET
Subtopic:   DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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?

Some hon. MEMBERS:

Hear, hear.

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LIB

William Ross Macdonald

Liberal

Mr. MACDONALD (Brantford City):

Therefore it remains for me alone to plead within this chamber that some consideration be given to the men who toil in these plants. One of the foremost policies of the Liberal party is consideration for the men who work in factories, and as long as I have breath in my lungs I shall fight in the interests of these working men.

The tariff has always been a lively controversial issue. The Liberal party, true to its pledge, year in and year out when it has been in power has consistently reduced the tariff.

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NAT

Gordon Graydon (Leader of the Official Opposition)

National Government

Mr. GRAYDON:

It said it would.

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LIB

William Ross Macdonald

Liberal

Mr. MACDONALD (Brantford City):

I repeat that it has consistently year in and 3rear out, when in power, reduced the tariff.

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NAT

Gordon Graydon (Leader of the Official Opposition)

National Government

Mr. GRAYDON:

I said, it said it would.

Topic:   THE BUDGET
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LIB

William Ross Macdonald

Liberal

Mr. MACDONALD (Brantford City):

In fact the Liberal party in its reduction of tariffs has stood against the forces of the world, and its policy has been vindicated by events; the tariff policy of the Prime Minister of this county (Mr. Mackenzie King) is now that of the leaders of the united nations. Every statesman of the united nations has pledged himself to remove tariff barriers. I am in complete accord with that aim. It is not the reduction in the tariff of which I complain but rather the manner or the method by which it was done. The united nations have virtually agreed to reduce tariffs by a multilateral agreement. The farm implement tariff was taken off through no agreement whatsoever with any country; it is the only tariff item affected; and it is for that reason I

[Mr. \V. T?. MawlonnldJ

protest. There is discrimination. It is said that this will not affect industry. It may not affect the industry at the present time, but what about the future? Who can tell what the effect will be when there is no shortage of supplies and when all farm implement companies can get all the material that is necessary to turn out these implements?

With the consent of all hon. members there is no doubt that this tariff change will be put into effect. All I can do is to plead with hon. members to see what effect this tariff change will have on the working men in these factories. I ask their sympathetic consideration for these men.

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LIB

George Alexander Cruickshank

Liberal

Mr. CRUICKSHANK:

Get them to move west.

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LIB

William Ross Macdonald

Liberal

Mr. MACDONALD (Brantford City):

I am rather concerned that my hon. friend! from British Columbia has no more consideration for these workers.

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LIB

George Alexander Cruickshank

Liberal

Mr. CRUICKSHANK:

What about the

farmers?

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LIB

William Ross Macdonald

Liberal

Mr. MACDONALD (Brantford City):

He above all others should have consideration for these workers, many of whom served in the last war, as he did,-

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LIB

George Alexander Cruickshank

Liberal

Mr. CRUICKSHANK:

Did not the farmers serve too?

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LIB

William Ross Macdonald

Liberal

Mr. MACDONALD (Brantford City):

-and many of whom are working long hours in this war. It is not a question of setting the worker against the farmer, as some people would do; we must consider Canada as a whole. Nobody wants to injure the farmer.

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LIB

Thomas Vien (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The hon. gentleman who is speaking must not be interrupted.

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LIB

William Ross Macdonald

Liberal

Mr. MACDONALD (Brantford City):

I was saying, Mr. Speaker, that I would not now delay the house further on this question, but when the resolution is before the house I shall have something to say as to the effect of this reduction both on the farmers and on the workers.

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July 5, 1944