He said: This resolution seeks authority
to introduce a measure which, if enacted by this Parliament, will be entitled The War Appropriation Act No. 1, 1945.
I wish first to say a few words in regard1 to the form of the bill. Apart from the necessary changes in amounts and dates, and with two exceptions to which I shall refer later, the bill is in exactly the same form as that of the main War Appropriation Act passed last year. Its essential features, therefore, are the following:
(1) A grant of authority to expend, subject to allotment by the treasury board, for various enumerated war purposes, the sum of two billion dollars, together with any moneys received as refunds or repayments of advances, loans or expenditures made under the authority of previous war appropriation acts;
(2) Continuation of the grant of certain powers to the government to perform certain functions connected with the war as agent for the government of any allied country, and, in the exercise of these powers, to make certain expenditures or assume certain obligations temporarily; and
(3) The grant of authority to the governor in council to raise, if necessary by borrowing, the moneys required for the purposes of the legislation.
I said a moment ago that there had been two changes made in the form of the bill, as compared with the form of earlier measures of the same kind. The second of these is the addition of a new paragraph (d) to section (2) of the bill which provides that one of the purposes for which the appropriation may be used is the giving of Mutual Aid assistance to other united nations in accordance with the provisions of the War Appropriation (United Nations Mutual Aid) Act 1943 as amended by the War Appropriation (United Nations Mutual Aid) Act 1944. Thus, we are proposing to ask parliament for only one appropriation to cover the whole of the expenditures on Canada's war effort, both direct and indirect, during the next few months. In other words, the two billion dollars which we are requesting will cover not only the expenditures in respect of our own armed forces and other direct war activities, but also the expenditures necessary to carry on the functions of the Mutual Aid board. There has been no change in the functions and powers of that board and there is therefore no necessity for any change in the legislation.
The first of the two changes to which I have referred is a very minor one, but it draws attention to the essential nature of the bill, that is, the fact that it is an interim appropriation only. This change is to be found in the preamble to the bill, which points out that the term of this parliament will have ended on the 17th April next, and that therefore it is expedient to provide funds for the continued prosecution of the war until the new parliament assembles.
I need not emphasize that this parliament is now meeting for its sixth and final session, which must terminate by April 17. It will therefore be a new parliament, newly elected by the people of Canada, which will be responsible for supervising the affairs of this country and shaping Canada's war effort during at least the major part of the new fiscal year. It will be a government, responsible to that new parliament, which should have at least the major responsibility for formulating not only the nature and extent of Canada's continued war effort during that period but also the financial policies and programmes necessary to carry on. that war effort. Therefore it did not seem appropriate that the government at this stage should bring down plans for the new fiscal year as a whole, or do anything that might even appear to commit the next parliament to a precise and definite programme covering the period for which it alone will have jurisdiction. On the contrary, all considerations seemed to point to the desirability of limiting our actions regarding war financial programmes in this parliament to the granting of an appropriation intended only to cover the period up to the time when the next parliament can take over, and further to the desirability of not embarking on any major changes in policy at this time.
Hence the appropriation which is now being requested is an interim appropriation designed to cover our estimated expenditures, during approximately the next five months, for war and Mutual Aid purposes on the basis primarily of the policies and commitments now in effect. This seemed to be the minimum period for which it was reasonably safe to provide. It may, of course, be that the new parliament may assemble before September 1, but if so it will do no harm to have an appropriation that will extend a few weeks beyond its assembling and will therefore give some time for a new interim war appropriation measure to be passed.
Hon. members may be interested to know how we arrived at the figure of two billion dollars. I will now try to throw some light on -this point. Needless to say, any forecast of war expenditures covering any future period
must necessarily be attended by a very considerable margin of error. On repeated occasions in the past I have called attention to the difficulties we have faced in making such forecasts and to the hesitation with which some of them have been advanced. At the present time, however, the difficulties are abnormally great. We now know that victory in Europe is certain, and most of us believe that it is also reasonably near, but no one can tell whether that means one month or three months or six months hence. And certainly it would be a mistake to take too optimistic a view. If we relax or "let down", we may be sure that we shall prolong the war's duration. Even if we assume that the war against Germany will be over by some specified date, it is going to take a considerable time to repatriate our men from overseas and to demobilize them, and there are necessarily still many uncertainties as to the nature and course of the war in the far east and the share which we can most effectively take in bringing it to an end. Providentially, the course of developments in that theatre of war during recent months has outrun the expectations of most of us, and, it would appear at least to a layman that the forces of our allies under General MacArthur are considerably ahead of their schedule. Nevertheless war is dynamic and unpredictable. We have had surprises and disappointments before, and we may have them again in both Europe and Asia. With such factors in mind, we have gone on the general principle that the only safe thing to do was to assume that our direct and indirect war expenditures would keep up during the next five months at approximately the rate at which they have been running during the last five or six months.
That is how we arrived at the figure of two billion dollars. We have simply projected into the next five months the rate of expenditures of the last five or six months, assuming no changes in major policies and no fundamental changes in conditions. As I shall explain later, we are estimating that the books for the fiscal year 1944-45, when they are finally closed, will show our total expenditures for war and Mutual Aid during the year at approximately S4,652 million. Five-twelfths of that sum would be SI,938 million. But, of course, expenditures during the last few months were higher than during the early months of the fiscal year. If we assume that the forecast I have just given for the full year is correct and deduct therefrom the expenditures recorded by the comptroller of the treasury for the first seven months adjusted to correct the effect on the monthly distribution of expenditures of certain temporary
accounting advances, then the expenditures during the last five months of the fiscal year would work out at $2,282 million. Another basis of calculation would be to take five-sixths of the estimated expenditure during the last six months of the last fiscal year; this would give a figure of $2,218 million. However, the two amounts just mentioned are higher than the expenditures are likely to be during the first five months of this fiscal year, because expenditures for the closing months of any fiscal year always include a certain amount of clearing up of outstanding accounts. Under all the circumstances, therefore, it seemed to the government that the appropriate size of the appropriation which should be requested from parliament at this time was two billion dollars. I trust that this will carry the judgment of the house.
As I have already indicated, we have tried to make a forecast of probable aggregate expenditure for war and Mutual Aid purposes during the fiscal year ending March 31, 1945, and have arrived at the figure of $4,652 million. Even though it was estimated at a late date in the fiscal year, that figure may be subject to some adjustment when the books for the year are closed but it is likely to be somewhat too high rather than too low. The chief explanation for any such possible variation is, of course, the difficulty of getting the necessary bills rendered and completing the necessary checking of vouchers and other details. This difficulty is particularly great in the case of purchases from, and activities in, other countries where our troops may be located or from which we may be purchasing supplies. However, I would not expect any variation from the figure given to alter the foregoing general conclusions regarding our requirements for the next five months. I believe it will facilitate the understanding and discussion of our current war programmes if lion, members have before them the breakdown of this estimate of our expenditures during the fiscal year 1944-45. With the permission of the house I shall, therefore, place on Hansard a table showing the estimated total expenditures for war and Mutual Aid purposes during the fiscal year 1944-45, classified by departments and major functions. For comparative purposes the corresponding figures for actual expenditures during the fiscal year 1943-44 are also given in the table, although these are to be found as well, of course, in the public accounts for that year which were tabled on the first day of the session.