April 16, 1946

PC

John Ritchie MacNicol

Progressive Conservative

Mr. MacNICOL:

About twenty per cent.

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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?

An hon. MEMBER:

Forty-two per cent.

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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LIB

Louis-Philippe Picard

Liberal

Mr. PICARD:

If it is forty-two per cent, then I am not very far off. This loan will permit us to maintain a productive economy instead of a curtailment economy. To the people of my province as well as to the people of all Canada I sincerely believe it will mean a market for their agricultural products for a good many years to come. It will help to maintain decent prices for the fruits of their labour. Therefore I cannot do other than support the measure even though there are aspects to it which may not be all that we may hope for. I believe this is a necessity. We cannot afford not to make the loan unless we consider the possibilities that remain open to us. As I said a moment ago, unless we grant the loan we shall have a scarcity era, which means that we can produce only for ourselves and our small market outside Britain, or we must take a chance now on building a different type of external trade in the years after the war by diversifying our clients. If we do that, we might dispose during a few years of all our surpluses and' keep the wheels of industry turning by accepting the trade of certain other countries that are clamouring for our goods to-day and are able to pay for them in a way that would enable us to equilibrate our trade deficit with the United States. Can we take that chance of establishing long-

term contracts with such countries and maintain enough of these markets afterwards to replace the loss of the British market? Although I personally think it would be a much saner position for Canada to put herself in, to have a much more diversified external trade, I cannot authoritatively say that it can be easily done.

Our position at present is such a false one in a way that we should try to enlarge considerably our world markets on long-term contracts or by treaties so as not to be permanently in the ridiculous, I might say unsanitary, condition of depending on one client. Any store depending for its success on one client is doomed to failure because it is at the mercy of that client and' must accept his terms. That is the position we are in now because of our trade policies, which were to a certain extent unavoidable at one time. Had we not had the British market we might not have had the onward advance of our Canadian economy. But is it a sanitary condition to be in permanently? I do not think so. I have not given enough study to the possibilities of our building a peace-time market among a number of clients to share with Britain our surplus production in order that we may not be entirely dependent upon one client, to give a definite opinion on the matter. I imagine, however, that the position can be greatly improved. However, it may be that in normal times many of the countries willing to trade with us now may be self- sufficient in most of our sources of export. England has a population of nearly forty-eight millions and cannot feed probably more than ten millions. We have an outright market there. The fact that we have only one client remains unsanitary. But how can we replace that market? Can we find another market for the products that compose our exports? How can we find any place to replace that market? I think we should endeavour to find new markets. Our department of external trade should endeavour to find new markets. However, I believe it would be dangerous to rely on .that at the moment unless we have financial arrangements or engagements with these countries over a long period to come. It would be unwise to turn down the British loan which is our hope-and I sincerely believe it-of balancing our external trade under the same method as we did before the war.

I am sure that, concurrently with maintaining our British market which calls mainly for food products, we should have a more aggressive trade policy with countries that are apt to maintain their payments to us in goods and services or in notes exchangeable

Loan to United Kingdom

on the United States market. Therefore we should meet the present emergency by the loah and try to correct our false position by extending and diversifying our foreign markets. Our industrial production should compete with that of the United States and the United Kingdom in many countries with Which we have an interest to trade.

Let us not have a back-seat to the United Kingdom and the United States in a search for new markets. We have done enough in the last war to deserve to be given now a share of the world markets in order to be able to maintain employment and production at a high peak, but we must go and search for them.

We are in a favoured position compared with formerly industrialized countries like Germany. Let us make the best of it while we can. Another aspect of the British loan is that it is intended to try to restore Britain to its former position in world trade. There are two sentimental reasons to this question. Probably there are other reasons that may be invoked. There are two sentimental reasons for Canada giving this loan. British solidarity appeals to the sympathy of some people because of the sacrifices made in England during the war. I do not think that is a reason sufficient to warrant the loan. We should think of our own interest. Our own interests are enough to warrant it, but I think this is a reason that can be considered. It does enter into the minds of many who support it. I shall not undertake to describe to the committee the conditions I saw when I was over there. I admit I was greatly impressed by what the British people suffered during the war, the ordeal that they have gone through. I saw something of the destruction that has taken place. I learnt something of the sacrifices they made and are still making. That is certainly in the minds of many Canadians at the moment, as probably it was in the minds of those who had to consider this matter. Regardless of how great that sacrifice may have been, I do not think that would be sufficient reason for us to endanger our own economy; but it is a reason that exists just the same.

There is also the necessity of helping Britain to maintain on the continent of Europe the prestige of a democratic nation. I do not want to enter upon a speech on the necessity of counterbalancing the nefarious influences of totalitarian states; far from it. Yet, if we want to show the people of Europe in a certain way that our system of government is good we must make sure that the one country in Europe with a democratic government which stood throughout the war can yet regain its place in international trade, and can still be of great support and great help 63260-60

to many nations on the continent. Mind you, Mr. Chairman, ninety per cent of the population of Europe are underfed or starving. All these people are subjected to subversive propaganda of one sort or another. The only help they can look for is from Britain, the United States and ourselves. We can help in only a small way, but it is worth while to try because it is my personal belief that you cannot fight the propaganda which is being spread among, those people who have nothing to eat just with nice words and empty hands.

I believe we have to give them something; we have to give them confidence, and start them on their way to trade. I think Britain, with the help the United States and Canada are giving, is bound to regain, to at least some extent, the position she occupied before the last war in connection with trade on the continent of Europe.

One argument brought forward by sympathizers with Britain, in favour of the measure, is that it will certainly help Britain to regain her lost supremacy in world trade. Personally I think this is an illusion. Britain gained her industrial supremacy during the eighteenth century, when the invention of the steam engine gave her a chance to use her vast coal resources. Britain thus got an advance as well as an advantage over other nations. With the advent of electrical power and the needs of modern industry for oil, Britain had lost her industrial lead before the first great war. She remained the money market of the world up to the beginning of the second war, but the drain on her financial resources has been such as to change Britain from a creditor to a debtor nation. She came out of the war with a debit balance, we are told, of $13,000 million; not counting the $3,000 million of Canadian aid and the $29,000 million of United States lend-lease. Is it possible that these present advances of $5,000 million can permit her, as we hope, to regain her balance and get on the way to recovery? I sincerely hope so, but without being a prophet of doom I think it will be just a shot in the arm. I may be wrong; I hope I am, but even after having reached that conclusion it is not sufficient to deter me from supporting the bill, because I think we must take the chance that it will have the expected result. That is my first reason for supporting the bill.

In the second place, no matter how wrong I think it is to depend upon one client, I think we must face the facts as they are and must help Britain stabilize the pound sterling in order that we may equilibrate our world trade balances by using, to pay for our excess imports from the United States, the payments received for our excess exports to Britain.

938 COMMONS

Loan to United Kingdom

In the third place I think it is better to lose the yearly interest on our money for five years and then the difference between the borrowing rate and the rate paid by Britain, than to reduce our industrial activities and curtail our production. It is better to have ahead of us what I might call a period of artificial prosperity than, a period of depression; and even if this should prove to be a gift, as some people have said, because of the possibility of Britain's inability to meet her obligations, I think it is better for our economy in the next few years to go ahead with the measure just the same. I repeat, however, that it is high time we considered means to restore to Canada saner methods of external trade than that of the one client system. We should now gain new markets for our industrial production. In the past we have been exporters of raw materials and wheat. During the war we became a highly industrialized country, turning out ships, planes, tanks and heavy equipment. Let us carry our industrial recovery into the peace era and better equilibrate our external trade by seizing new markets for our industrial products. It is imperative that we do so unless we want our industrial and economic fate to be tied indefinitely to that of Britain. Canada is a young nation. She must look ahead for new fields to conquer. Let us not be limited by sentimentalism or a false method of world trade.

I am far from being enthusiastic about burdening the Canadian people with more charges, and I would not consider sentimental reasons only as sufficient to warrant this measure. It is not with pleasure that I see this provision for the cancellation of the British debt to our country, which is estimated in the present bill at $425 million. But if we consider the aim and purpose desirable; if we consider that it is imperative for the benefit of our Canadian economy to see Britain resuming her capacity to trade with the world, and if we consider it desirable to strengthen and support her currency in relation to the United States dollar, then we have no recourse but to cancel the debt, and I think the minister made the point quite clear a moment ago.

In short, I think in our present position we cannot act differently from the United States at the present time, and we must try to help British recovery, not only or not even because she deserves it on account of her contribution to the freedom of the world, but because in our present position a measure of British recovery is an economic necessity for the welfare of our own country.

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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IND

Liguori Lacombe

Independent

Mr. LACOMBE (Translation):

Mr. Chairman with your permission I should like to read one of the numerous protests I have received from our young people against the bill now under consideration:

Val D'Or Junior Board of Trade . April 15, 1946.

Mr. Ligouri Lacombe, M.P.,

Parliament Buildings,

Ottawa, Ont.

Sir,-

We are enclosing herewith copy of a protest which our organization feels bound to submit in good faith, for the public weal and in the best interests of our country.

We hope that it may be possible for you to use it, thereby proving that the young people of this country can still find the time to deal with matters that directly concern them.

Trusting that you will kindly let us know your personal views on the matter, we remain,

Yours truly,

The Val D'Or Junior Board of Trade, By Camille Desehenes,

Secretary

Here is the text of the resolution:

Copy of a resolution unanimously agreed to by the Val D'Or Junior Board of Trade, at its monthly meeting held on April 12:

Whereas the dominion government intends to lend to England a further sum, which in our opinion is enormous;

Whereas this loan will be at a rate of 2 per cent . . .

After 1951.

. . . while the dominion will have to borrow money at a rate not lower than 3 per cent in order to make that loan;

Whereas the country to which we lend money is itself making loans to other countries at a rate much higher than the one at which we would extend that loan;

Whereas it is recognized that by that loan England in no way undertakes to spend the money in our country;

_ Whereas the exchange is against us every time we borrow funds outside this country;

Whereas that loan is extended under conditions that are very little to the advantage of our country, as is being shown by some newspapers, which have been seriously discussing the matter during the last few days;

Whereas that loan will be" extended at the expense of Canadian taxpayers;

Whereas the country to which we shall make that loan available has already decided to eliminate or considerably reduce the income tax, and to lighten materially the burden which the people in the lower salary brackets have to bear;

Whereas our government meanwhile takes no efficient action with a view to lightening our immediate burden;

AVhereas the young people of this country are the ones who sooner or later will have to bear the burden of all such loans;

Whereas small wage-earners already consider themselves too heavily taxed;

Be it therefore resolved unanimously that our board should ask the authorities of tkis country and the members who will discuss the proposal not to pledge our financial resources unduly in a loan that would mortgage our future far too much.

Loan to United Kingdom

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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An hon. MEMBER:

Thank you.

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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LIB

Édouard-Gabriel Rinfret

Liberal

Mr. RINFRET:

Have they read the bill?

Topic:   LOAN TO UNITED KINGDOM
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IND

Liguori Lacombe

Independent

Mr. LACOMBE:

It is all very well to claim that this loan will increase employment and stimulate industry in Canada. By whom has this statement been substantiated? Experience has taught us that nations, whichever they may be, are interested in one another only in so far as it serves their own interests. Self-interest is the motive behind the actions of individuals and peoples. This state of mind has existed since the beginning of time, and will ever remain the primary motive of any actions. It scorns conventions and statistics. The self-interest of individuals or nations overshadow^ the object of a loan. The purposes of a loan, its very object vanish before the interest of an individual or a nation because nothing will stop them if they think that that loan is going to prove a sound business proposition. .

The principle of a free loan is wrong in itself, and more so when it is combined with an outright gift of $425,000,000 to England. It is a ridiculous policy, an essentially colonial policy. Some may be pleased thereby; it is their right. Self-interest is the motive behind all actions. One seizes an opportunity when it offers. Why worry? Let us help ourselves; it is the people who will foot the bill. Such seems to be the thought which gave rise to this bill, as shown by section 7 of the agreement which reads as follows:

The government of Canada agrees to cancel the amount owing by the government of the United Kingdom to the government of Canada with respect to the British Commonwealth Air Training Plan, which amount the two governments agree is $425,000,000.

Why this agreement? The amount is or is not $425,000,000. This is a further compromise.

In another part of the bill, reference is made to the multilateral trade of the United Kingdom. Why not call a spade a spade? Have we got anything to hide? This multilateral trade of England which we are called upon to boost at the tune of $1,250,000,000 is what I would call financial imperialism. How costly it is for us! Canada is indeed an inexhaustible milch-cow. The British colossus owns one-fifth of the total area of the world. I do not knOw why fatality drags us into every military and financial venture of the United Kingdom. Just take cognizance of this surrender of a so-called sovereign state, as recorded in section 3 of the bill:

For the purpose of carrying out the obligation of the government of Canada under article one of the said agreement, the Minister of Finance, out of unappropriated moneys in the consolidated revenue fund, may, from time to time, prior to the thirty-first day of December, nineteen hundred and fifty-one, pay to or pursuant to the order of the government of the United Kingdom at its request amounts not exceeding in the aggregate one thousand two hundred and fifty million dollars ($1,250,000,000).

And, finally, section 5:

The indebtedness of the government of the United Kingdom to the government of Canada with respect to the British commonwealth air training plan, as agreed upon in article seven of the said agreement, is extinguished and the Minister of Finance may take such action as may be necessary to write off in the public accounts of Canada the indebtedness so extinguished.

If this is not unadulterated colonialism, words must have lost their meaning. What has become of the statute of Westminster, this electioneering hoax? What about our constitutional evolution? By this financial agreement, the government is surrendering Canada in a strait-jacket to the United Kingdom authorities. At one stroke, they mortgage our national economy for over two thousand million dollars, if all the clauses of the agreement are taken into account. They make lavish gifts to the mother country, because they refuse to consider Canada as a major nation. This constitutes a set-back of over a hundred years in the evolution of our prerogatives. Do you not hear the sighs of relief from our contented imperialists and colonials at the realization that this loan will go through? Just imagine Canada, the child, makes its small annual gift to its mother. How unworthy of a sovereign nation all this seems! We must revert to the time before the Union to find a similar surrender of our prerogatives. Never have Lafontaine and Baldwin, Macdonald and Cartier, Laurier or Borden so bound Canada's future or so shamelessly flouted our sovereignty. The foundations laid by those statesmen are now crumbling under the weight of the commitments of a government which, since 1939, has increased the national debt by more than twenty billions. While young men by the thousands go begging for employment, the Government is handling out gifts at their expense. I know of veterans who are homeless and jobless through the very fault of a government which refuses to launch large-scale programmes of public works. Thousands upon thousands of those veterans are vainly seeking jobs worthy of the seerifices they made. But what is the Government doing to help them out? It gives and loans to others the funds required for their civil re-establishment. But, you will say, the United Kingdom will be a customer for our goods. You make me laugh. England will buy where she wishes and,to suit her own convenience. Just read section three of the agreement. She is the one in command here.

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Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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LIB

J. G. Léopold Langlois

Liberal

Mr. LANGLOIS:

It is section two.

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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IND

Liguori Lacombe

Independent

Mr. LACOMBE:

The original document of our constitution is in London. In fact, when the federal government, some years ago, wished to take the Alberta legislation to the supreme court, and had to produce a copy at the court's own request, they had to go to 10 Downing street to make a copy of the original document.

I remember the good constitutional joke of 1926 about Lord Byng's alleged interference. I was then a member of the House of Commons. Memory brings back this tempest in a tea-pot. Elections had to be won. If the constitutional joke had not existed then, it would have been made up. Then came the statute of Westminster, a pretty bubble which has pricked the fancy of many public men since 1931. This mock golden age has started Canada on the way back te colonialism. The government has sanctioned this climb-down by authorizing this new tribute of the colony to the mother country. If there is a vote, I shall oppose this financial agreement by voting against it, as a protest against any infringement of our sovereignty.

During the debate on the address, I explained my stand on this loan of $1,250 millions to England. I would have refrained from taking part in the debate, had not some hon. members, particularly the amazing member for Labelle (Mr. Lalonde), credited me with feelings and designs I have never held. The hon. member should gain neither dignity nor prestige from such unfounded assumptions. I have preceded my hon. friend in the house by a decade. Never have I, directly or indirectly, allowed discussions to sink to the level of race quarrels. When the hon. member, without any reason or justification, launched an attack against nationalist and dissident or independent Liberal members, bn April 12, he made statements he knew to be false. If he is a man of honour, as I still believe him to be, he will withdraw the following words spoken in the house on April 12, 1946. I quote the statement of the hon. member for Labelle-

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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LIB

J. G. Léopold Langlois

Liberal

Mr. LANGLOIS:

Fortunately he is not here.

Topic:   LOAN TO UNITED KINGDOM
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IND

Liguori Lacombe

Independent

Mr. LACOMBE:

-as reported on page 812 of Hansard of April 12, 1946. My hon. friend says that fortunately the party concerned is not here! The absent are always in the wrong.

Mr. LANGLOIS.: You Were not present when he spoke.

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IND

Liguori Lacombe

Independent

Mr. LACOMBE:

I was absent Friday; might is right, but I will not allow myself to be fleeced. I quote the hon. member for Labelle:

I noticed that most of those who are against the proposal-I say most of them, because there are noteworthy exceptions-base their argument on a matter of sentiment and revive, in support of their claims, old race squabbles. The government have announced their intention of lending nearly 250 million dollars to France. Have any protests been voiced by nationalists? Not to my knowledge. They have kept silent because they have no other protests to advance about the loan to England than arguments based on race squabbles. This is clearly evidenced by a letter I have received from a Social Credit supporter, and from which I wish to quoth some significant excerpts:

This is still the hon. member for Labelle speaking.

March 28, 1946.

You will note, Mr. Chairman, that he did not read the whole letter, but only the main extracts.

Mr. Maurice Lalonde, M.P.. for Labelle.

Sir,

I have read the statement you have made about the Social Credit in the province of Quebec. I believe that your are not well informed on this country's economic problems.

Alberta is in favour of the loan to England because the majority in that province is of English descent. Here in the province of Quebec, the people oppose the loan because the majority is French.

J. B. Bureau,

37 St. Bernard Street,

St. Malo, Que.

According to the rules of the house, the hon. member for Labelle (Mr. Lalonde) should produce that letter and table it instead of merely quoting the main passages, in all justice to the writer, to himself and to us. The hon. member went on:

I am giving that for the prime consideration of hon. members across the way.

This individual unknowingly puts in concrete form the opinions of nationalists and dissenting Liberals, whose good faith and intent I respect.

He hugs them the better to smother them.

However, protests always have and always will come from a noisy minority which does not speak for the majority, in my province. The last federal elections have amply proven that the majority of my fellow-citizens can distinguish between constructive Liberal policies and a demagogic and impassioned appeal by a group of Quebec nationalists.

I do not fear to say, Mr. Chairman, that I have always supported constructive policies.

The hon. members for Beauharnois-Laprairie (Mr. Raymond) and Laval-Two Mountains (Mr. Lacombe) remember their experience of June last, when, after having been elected as Liberals for many years by large majorities, they only succeeded in retaining their seats by very small margins.

Loan to United Kingdom

That statement contains two untruths. In the first place I have been elected not by a small margin, but with a majority of 300.

In the second place, I have been elected not as a Liberal candidate, but despite the opposition of the Liberal party.

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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?

Some hon. MEMBERS:

Oh, oh.

An horn. MEMBER: As the leader of the Canadian party.

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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IND

Liguori Lacombe

Independent

Mr. LACOMBE:

The hon. member for

Labelle was himself elected in 1935 despite the opposition of the Libera) party. I remember quite well that the hon. the Minister of Justice, Mr. Lapointe, had then sent a letter to the electors of the constituency of Labelle, asking them to elect Mr. Henri Bourassa as their representative, when the hon. member for Labelle was running against him.

Does my hon. friend want me to remind him that his leader, the right hon. the Prime Minister (Mr. Mackenzie King) did not barely escape defeat, but actually suffered it in his own constituency of Prince Albert. The hon. member for Labelle always renders such valuable services to his party and the government that he places the right hon. the Prime Minister in an exceedingly awjkward and humiliating position.

For my part, I oppose this loan and this financial agreement, because our economic condition forbids us such generosity. I shall not repeat all the arguments I expounded to the house in opposing this loan in the debate on the address. However, certain hon. members, only a very few indeed, feeling as the representative from Labelle, have for too long a time tortured our texts, misrepresented1 the facts and our true attitude in this house. It is about time that things be put to right.

Only his boldness allows my hon. friend to compare the loan granted to France at 3 per cent interest to the .interest-free loan offered England. I certainly commend the loan to France, amounting to slightly more than two hundred million dollars. I would likewise have supported a 1,250 million dollar loan to England had the government only demanded a reasonable rate of interest. Let us at least keep the sense of proportions and the proper appreciation of facts. We want to see all countries that have been weakened by the war recover from that disaster. However, we are strongly opposed to bleeding the Canadian taxpayer white so as to allow England or any other country, for that matter, to lower taxes at a time when our fellow-citizens are carrying on under a heavy burden of taxes of every kind.

(Text):

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CCF

Angus MacInnis

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

Mr. MacINNIS:

I hesitate to take part in this debate, but I have been so appalled at the lack of understanding of world affairs on the part of some who have opposed this loan that I thought I should say something.

We should approach consideration of this loan having in mind what happened to ourselves and others during the years of the war, the purposes for which the war was fought, and how we are to achieve those purposes. In my opinion, this loan is a step in achieving the purposes for which we fought the war. I am not supporting the loan because Britain is the borrower. I have favoured and have given my support to the various loans and credits which have been made by this government during the past few years. I am not supporting the loan on the ground that we have a moral obligation to help the people of Britain. I am supporting it, as I have said, because I believe that it is a part of the process of building the new world for which we fought the war.

We were together in the war. I have heard it stated in this house that we were in the war to help Britain. I have always objected to that because I felt that the war was Canada's war as well as Britain's. Canada had as much at stake as Britain had. Fascism was as much a danger to Canada as it was to Britain. Consequently we were in the war because the factors associated with the war were such that we could not be true to ourselves and keep out of it.

The Minister of Finance pointed out, I believe this afternoon, that Britain came out of this war much poorer than she went into it. I have before me the monthly letter of the Canadian Bank of Commerce for February, and I note there the statement that Britain lost about $30,000 million of her national wealth during the war. As the minister said, Canada has come out of the war richer than she went into it; at least our real and potential capacity for the production of wealth is somewhat greater than it was when the war began. This is not only indicated but proven by our war production. So that I think we should be glad that we have this opportunity of helping an ally and of restoring peace in the world. If the loan did not have any other purpose than that, even if we felt that the amount could never be repaid, if it can accomplish something for the building of a peaceful world the loan is worth while.

It seems to me that those who oppose the loan must fundamentally oppose it for at least two or three reasons: First, that Britain does not need it, that she is what might be

Loan to United Kingdom

called panhandling in asking for the loan at all. I do not think anybody in his senses would believe that.

A second reason may be that they believe that Britain can survive and continue to play the part in world affairs that she is playing to-day without any economic or financial assistance from us. I do not think she can.

There may be another reason. The opponents of the loan may consider that it does not matter whether Britain can survive as a great power or not. I am convinced that no greater calamity could befall this world to-day than that Britain should fall from the position she now holds. In my opinion, she holds a key position, and if she is not able to maintain that position the possibility of an enduring world peace is, by that very fact, so much the less. It is because I feel that for Great Britain not to be able to hold the position she is now in would be a loss to Canada as well as to the world that I am in favour of this loan. I favour it not only because it is a good business proposition; I am quite willing to leave that part of it to the Minister of Finance; I favour it because it is as much our duty to help to build the peace as it was our duty to help to fight the war. In my opinion, that is the way in which we must approach this bill.

I was amazed to hear, I think it was on Thursday last, the hon. member for Richelieu-Vercheres say that Canada could go it alone.

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PC

John Ritchie MacNicol

Progressive Conservative

Mr. MacNICOL:

He would not understand a thing like that.

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CCF

Angus MacInnis

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

Mr. MacINNIS:

I believe I met the hon. member for the first time in 1928. I had known him by repute a long time before that; and I have always heard him spoken of as an astute politician. I know that the word "politician" sometimes has an unsavoury connotation, but as one politician to another I do not mean anything sinister when I use it. The hon. member, however, did make this statement:

I am not afraid of the future of my country, even if my country is left alone. Even if my country is left between the sterling bloc and the United States I have enough confidence in Canada to feel that Canada is capable of coming through her difficulties and achieving a prominent place among the important nations of the world, even though she is not assisted by the one side or the other.

That, I maintain, is not quite the position to-day. I maintain that there are only two countries in the world to-day that perhaps can stand alone. One is the United States and the other is the U.S.S.R., and God forbid that we should come to the day when either

of these nations will say that they are going to "go it alone." That is the reason why we should support everything that will help to restore the economy of the world and keep the world as a whole so that we can carry on as one world.

We could, I suppose, impoverish ourselves as a country by being over-generous in giving away our wealth, but here again I am not afraid of that as long as the present Minister of Finance is head of that department. I doubt, however, if there is any danger whatsoever there. Great Britain will buy from us with this loan goods and services, or perhaps primarily goods. These will come out of the soil, out of the forests, out of the mines, out of the waters of our country, and out of the labour of our people. If we are careful, if we know how to conserve these things, we can, with the exception of our mineral wealth, restore to the soil and the sea the wealth we take out, and the country can be kept productive. That is the way nature operates. But if we lose this opportunity that we now have to help to build an orderly world it may be a long time before we have that opportunity again.

Let us not try to live in the past; let us not even attempt to return to the years before 1939. The world has altogether changed in the last six years. We are living in a new world in which, I am quite satisfied very few natiofis can stand alone. Let us support this loan. As has been said, it is a good business proposition; but it is also an opportunity for Canada and Canadians to give of our riches, which were maintained intact when other nations suffered grievously, and which were, moreover, enhanced. Let us do that, and we can do it without impoverishing our country but, instead, greatly benefit ourselves and help others on to a better world.

(Translation) :

Mr. MARQUIS.: The question before the committee gives rise to different opinions. I wish to say at once that several hon. members do agree on some facts and reasons brought forward in the House. The difference is mainly one of conclusions. I do not in the least agree with the hon. member for Laval Two * Mountains (Mr. Lacombe) who claims that the stand taken by more than two hundred members is ridiculous because they do. not happen to think as he does. As far as I am concerned, I respect his opinion and that of those who spoke on this measure. This matter is sufficiently controversial to allow expression of various opinions. Like earnest, sincere and enlightened men. we must come to a conclusion, after serious consideration.

Loan to United, Kingdom

If I rise to-night to take part in this debate, it is because I would consider myself remiss in my duty if I refrained from expressing my views on so vital an issue. Certain reasons have been brought forward against this loan. For my part. I must admit, at the outset, that I have not been, at first, favourably impressed. However impressions always proceed from feelings. I have had to look into every aspect of the problem and to trace information back to its source. If I come to the conclusion that I must approve this loan, it is because, in all conscience, I believe it in the best interest of the Canadian nation and not of the British Empire; it is because after laying aside my personal feelings and having considered only the immediate and remote future of my country I deemed it proper to endorse this measure.

It is as useless to stir up passions against the loan in any part of our province as it is to appeal to prejudice in. other parts of the country in its favour. We must judge it on its merits.

I wish to commend all the speakers who have discussed the matter from an objective point of view, and all newspapermen who have dealt with it as a business. proposition based on figures, whether they approved of it or not.

It seems to me that we should consider this important problem in the light of the extraordinary conditions of the1 post-war period. We should not view it from a provincial angle or from the standpoint of a close economy, but in relation to existing world conditions. There is no use repeating, Mr. Chairman, that 'part of Europe, and part of the Orient now lie destroyed and in ruins; that millions of soldiers and civilians have fallen victims of murderous gunfire; there is no point in recalling that the natural resources of those countries were damaged as were also their lands, their oil wells, their coal mines which cannot now be put into production because all such property has been utterly destroyed by repeated bombardments. Need we mention too that these countries'- production and economy have been completely disrupted? Need we add that business is at a standstill ?

More than ever, we are now living in "one world" and when part of the world trade is paralysed, the effects of this stoppage are bound to be felt here indirectly; we are bound to feel them ourselves and our business will feel the consequences. Am I wrong in thinking so? I don't believe I am. Such is the opinion of many enlightened economists and such the teachings of past experience.

Fortunately, under such conditions, our *country is perhaps in a better position than

others. Our farms and factories are producing mightily. Production has increased and we have good reasons to think that, in the current year, it will remain at a very high level. Agriculture has taken a special impetus. Canada is to-day the storehouse of part of this famished world, the storehouse of part of devastated countries. It was ordained by the Almighty that Canada, which escaped bombings and destruction should occupy a strategic position in the western hemisphere, so that she could help in the recovery of overseas countries. I am considering that matter from that sole standpoint, and that is the only position that we Canadians can take.

Our objective is to maintain our production, to ensure continuous employment in this country and to guarantee to our farmers a substantial income as well as a high standard from the moral, religious, physical and economic standpoints. That is our objective; therein lies our ideal.

If we remain confined within our own borders, if we Tefuse to trade with other nations, I sincerely fear that Canada, instead of forging ahead will undergo a decline and that the countless efforts we put forth during the recent war will be of no avail whatever.

Mr. Chairman, should we not ask ourselves whether in refusing to support an agreement like this which was first concluded between the United States and the United Kingdom, if by refusing to ratify that agreement, we would not jeopardize our commercial and economic relations with our powerful neighbour. We are now facing a risk involving some 30 million dollars per year for five years and approximately 10 million dollars yearly for fifty additional years. But if we were deprived of economic relations with our neighbours, the United States, we would stand to lose much more than 30 millions for five years and ten millions for the remaining years; indeed we might be affected in our economic relations to the extent of billions within a few years.

Some lion. MEMBERS: Hear, hear!

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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LIB

Eugène Marquis

Liberal

Mr. MARQUIS:

We are told that the interest rate has been set at 2 per cent, while it could have been set at 3 per cent. I quite realize, like all the other hon. members, that this interest rate has not been set by Canada. This rate was arrived at by the two nations who concluded the first agreement, which provided that in the event that we refused the same interest rate no agreement could be entered into. Is it necessary to add that the United States has agreed to make that loan even though they were not very interested in the agreement? They agreed to make that loan and they have accepted that interest rate

Loan to United Kingdom

believing that it was the only way to re-establishing international trade. I would not be prepared to accept the responsibility of sabotaging the agreement concluded between the governments of the United States and of Great Britain, and thus cause an economic upheaval which might be much more detrimental to us than the agreement now under consideration.

I must say, Mr. Chairman, that I have for Great Britain and the United Kingdom that sympathy which we feel for another country with which we deal on an equal footing, and nothing more. I do not agree with the hon. member for Macleod (Mr. Hansell) when he claims that this agreement is practically valueless but that morally we must assume this obligation; but I agree with the government when they say that it is a matter of national interest, a purely Canadian matter. I may be mistaken, but I take the facts as I see them; however I respect the views of others and I ask those who rise to speak in this house to respect the views of all hon. members, especially when those views are based on sound reasons.

It has been stated over and over again that the British market is our most important outlet. We have made heavy sacrifices to develop this market and it is the only large outlet which will be able to absorb our surplus production of the next few years.

I understand quite well that France and other countries need some of our products. I feel that we must ship some of our products to other countries but that we cannot and must not send them solely to those other countries. In fact, within a few years, France will be producing enough foodstuffs to be selfsufficient in that respect. The same may be said of Belgium. Then, Mr. Chairman, what will happen to us, in Canada, if we have no export markets for our surplus goods?

During the transition period, we must create good outlets in other countries if we are to distribute ou'r surplus production to the four corners of the earth. But, for the present, we must not drop the substance for the shadow, because a bird in the hand is better than two in the bush.

The United Kingdom can feed but a quarter of its population; and it is from Canada that that country buys the greatest quantities of foodstuffs and which will always find a steady market there.

Were France to enjoy the same advantages, as the beneficiary of this loan rather than the United Kingdom, I wonder if the same arguments would, prevail in certain quarters.

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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BPC

René Hamel

Bloc populaire canadien

Mr. HAMEL:

Surely.

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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LIB

Eugène Marquis

Liberal

Mr. MARQUIS:

To draw a fair and just conclusion, it is our duty to consider the problem as if France were involved rather than the United Kingdom. Such is my attitude Mr. Chairman, and I think it is logical.

This year, we shall export to the United Kingdom $764,000,000 worth of goods, while our exports to other sterling countries will amount to $255,000,000. A moment ago, I heard the hon. member for Laval-Deux-Montagnes (Mr. Lacombe) say: "But we are going to pay $30,000,000 this year". Maybe so, and then, maybe not. I shall come to that later on. I must say, however, that if all fhis costs us $30,000,000 this year and if we vote to send one billion dollars worth of goods to the United Kingdom and the other sterling countries, we must take into account the profit to be made on that billion. We shall make a profit of at least $300,000,000 and the farmer will be the chief beneficiary, because that revenue will be produced by his work; consequently, his profits will be a net. If he does not sell his goods, he will lose them. I understand that, between a payment of $30,000,000 we shall have to make and the profit of $300,000,000 that will accrue to. us, there is a surplus of $270,000,000 which callg for thought and the realization that the stakes are worth going after.

I also support this measure because I believe we must endeavour to maintain our exports at a high level and develop our international trade. We are now going through the most difficult period. War has swept over the world, leaving a trail of destruction, woe and ruins everywhere. Canada is a prosperous country, having a good income, a thriving agricultural set-up, factories to be converted from a wartime to a peacetime footing. Our country needs trade expansion, and it has the duty of contributing to the re-establishment of this hemisphere's economic life and the right to work for the restoration of Christianity and freedom in the world. If we get a billion dollars, if, through our sales of goods we put this amount in circulation to encourage production in our factories-we shall be promoting employment and fighting unemployment, at the same time. We will help to keep our young men on the farm and to set up veterans in the same calling so as to further the development of agriculture.

As I represent a farming community, to my mind the agricultural viewpoint matters more than any other. We must remember that agriculture is the cornerstone of our national economy. Nowadays, farmers enjoy profitable prices which accounts for an almost 50 per cent increase in farm production and

Loan to United Kingdom

they must therefore find outlets for the marketing of their goods. Many are now welcoming back from overseas their sons who will contribute to the expansion of our national heritage in the field of agriculture. Thus, in spite of the apparent drawbacks apparently involved in the plan, I believe that in the final analysis, setting aside any electioneering prejudices and considering the interest of our country, we are in duty bound to approve the bill now before the house.

May I 'be allowed a further remark, Mr. Chairman, in the matter of national income and taxation? We are told in certain quarters: "If you're going to make a loan, how can you cut down taxes?" My reply to this, sir, is that, if national income is reduced fifty per cent, how can taxes be cut down? Unless our national income remains at the present level, namely 8 or 10 billions, and unless we keep on exporting at the rate of about 3 billions a year how can we raise the money required to meet government commitments and reduce the taxpayers' burden? I shall not attempt to argue, paradoxically, that the more we lend, the more we shall borrow, the more we spend, the more we shall cut down taxes. No, it is my belief that, because of peculiarly post-war conditions, because of conditions which com-,pel us to step up industrial production and keep agricultural production at a very high level, we must develop our world trade as much as is practicable to preserve the national prestige so dearly bought during the last war at the price of so much effort and money.

To-day, there is no other solution for expanding our trade and securing a market for our goods. This is one more reason for approving the plan. I do not claim, Mr. Chairman, that we will consolidate our position by perpetually granting money and advances and by launching a loan program reaching into astronomical figures. We are told of our wartime contribution, but the cost of the war is a different matter. I cannot discuss the attitude of those who felt it necessary to take such a part in the last war. The allied nations the world over agreed to put all their strength, their funds and efforts in order to ensure the defeat of nazism and barbarism. Now, all that pertains to the war, all the expenses incurred to conquer the enemy no longer stand for capital; we are left as an aftermath of the war with nothing but a promise of survival and of safeguarding our freedom.

Mr. Chairman, thanks to our past expenditures, we have the right to carry our heads high, to face the world squarely and not to be considered as anything but slaves. I do not think we take into account those former

expenses, which are totally different from the disbursements now proposed. Those expenses resulted from the war. We had to choose between slavery and freedom, between Christianity and atheism. We fought for Christianity, we fought for freedom. The cost was enormous, even fabulous, but it was the burden of war.

And now, Mr. Chairman, we have no other duty, no other aim but to go through life with our debts, our burden, our difficulties. It is our duty to face our responsibilities, as it is our duty to expand our trade, develop our agriculture, ward off unemployment, fight and work to restore our economy in the years ahead. If there are drawbacks to this measure, there are also certain advantages. We, Canadians, cannot avoid the unfortunate and terrible consequences of war. After the trials we went through with the rest of the world, we cannot say that it is all over, that we wish to go on our own and resume our advance towards progress as if we had never had a war. We must carry our share of the burden. Since world economy is completely upset and practically on the rocks, how could we expect to get a share in the benefits that could be derived from it, without contributing sacrifices and money, such is the situation. If I were to take stock of certain facts and opinions expounded by those in a small group around me, I might think that this transaction is bad; but we take the longer view, if we cast a glance on the future of Canada, and particularly the necessity for us, at the present time, of trading with the whole world, no one in this house could believe for a moment that our country may now remain aloof while a powerful nation like the United States has found it impossible to resort to isolationism. To-day, the interdependency of nations is a well-recognized fact.

There is another question we must ask ourselves. Were this measure to be set aside by the house, were we to sabotage the Anglo-American agreement, what would be the result? If the United States who have laboured for a period of two months toward the implementation of a plan for restoring the economy of the western, hemisphere, if the United States thought that we did not want to make an efficient contribution to the reestablishment of the world economy, do you not think that this would not entail for this country the loss of a trade involving an amount ten or twenty times larger than the amount ventured in this measure? The interest of 3 per cent, as an honourable member said a few moments ago, might cost us a sum of about 30 million dollars during five years and 10 million dollars during the fifty addi-

Loan to United, Kingdom

tional years. This represents $3 per capita during five years and 75 cents later on. But this calculation serves only as a basis of my argument, taking for granted that we are going to make up the difference ourselves.

Before I resume my seat, Mr. Chairman, may I make a suggestion which might soothe the conscience of many and also throw a ray of hope and gladden the hearts. If it should be possible for the government to obtain that money from the banking or credit institutions at the rate of interest provided for in the . agreement, I think it would be a splendid arrangement and that such an operation would be welcome by all. I would not think, Mr. Chairman, of opposing the views of people more experienced than I am, who do not share my opinion. The fact is that every one of us is free to express his own point of view. It is impossible for me to discuss every aspect of this question but I have endeavoured to indicate briefly a few points.

After the recent war we must all help in the economic restoration not only of Canada but of the whole world. Canada has waged war in all parts of the world and must trade with all parts of the world. We have invested tremendous amounts of money in war, I am now prepared to support the investment of a much smaller amount to ensure our country's continued freedom and happiness and to safeguard its opportunities and future prosperity.

(Text): f

Sections 1, 2 and 3 inclusive agreed to on division.

On section 4-Continuation of interest-free provision of act of 1942.

Topic:   LOAN TO UNITED KINGDOM
Subtopic:   APPROVAL OF FINANCIAL AGREEMENT SIGNED MARCH 6, 1946
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April 16, 1946