March 7, 1947

LIB

Humphrey Mitchell (Minister of Labour)

Liberal

Mr. MITCHELL:

Just a minute; you fellows play both ends against the middle. Would my hon. friend go a step farther and say what the industrial worker paid for food in 1919 and 1920?

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CCF

Frederick Samuel Zaplitny

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

Mr. ZAPLITNY:

Let me go on with what I am saying.

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LIB

Humphrey Mitchell (Minister of Labour)

Liberal

Mr. MITCHELL:

You can't answer that.

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CCF

Frederick Samuel Zaplitny

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

Mr. ZAPLITNY:

to certain things that are going on in this country. I was quite amazed to hear that-the Liberal government had gone socialistic and that apparently the C.C.F. was having some effect on government policy. It does not look that way to me from where I sit, but perhaps the hon. member has a better vantage point. As I look across western Canada, especially from the great lakes west, I find that the very opposite seems to be the case.

If we start in British Columbia or in Manitoba we find that in those provinces it is not the C.C.F. and the Liberals who have formed a coalition, who are now locked in an embrace; it is the Conservatives and the Liberals who have formed a coalition. I am just pointing that out to show that the hon. member was pretty wide of the mark when he attempted to throw the C.C.F. and the Liberals in the same bag, so to speak, and call them all socialists.

We do not object to the Liberals going socialist; we do not object even to the Progressive Conservatives going socialist if they so please, but let us keep the record clear. If we go to other provinces in western Canada, such as Alberta, we find there again that the C.C.F. is the only opposition. On the other side of the house you have the Social Credit group and whatever independents may be there, or a small number of Liberals and Conservatives combined. There you have a situation quite different from what the hon. member tried to imply. In Saskatchewan, for example, there would probably be a coalition of Liberals and Conservatives. One-half of the coalition is missing, but that does not mean that they are not trying to get together, because, according to the Slar-Phoenix:

Regina, March 3 (CP).-A meeting of "representative citizens," including both Liberals and Progressive Conservatives, resolved at a week-end meeting here that "concerted action by all citizens is desirable to supplant the present C.C.F. government by a democratic one," it was announced today.

It goes on to say:

Approximately 40 prominent Reginans met to form an organization with plans to support at the next provincial election, two candidates "who will uphold democratic principles."

"The plan of the new movement is to work with existing political constituency associations in ousting the present C.C.F. government."

That looks a little strange in view of the shadow boxing today between the hon. member for Rosthern (Mr. Tucker) and the hon. member for Lake Centre (Mr. Diefenbaker). Apparently they should go back to Saskatchewan once in a while and see what their boys are doing. At another meeting to draw up a

scheme for a united front against the C.C.F. government, one of the Liberals said, according to the Star-Phoenix:

This is not a meeting of Liberals; it is a meeting of inferiority complexes.

He did not like the idea of the two old parties getting together to do nothing but grumble against the C.C.F. government.

The Progressive Conservative association also had a meeting, and the question which came up there was that of nominating only one candidate in the constituency of Regina at the next election. This question was referred to the executive, with power to act on the matter. Those are wide powers, as the hon. member for Lake Centre would say, to hand over to an executive, to determine whether a Liberal or a Conservative shall be the opposition candidate in Regina. In view of all this, I think a great deal, if not all of what the hon. member said today about a so-called socialist coalition between the Liberals and the C.C.F., can be discounted because it does not stand up to the facts.

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SC

Solon Earl Low

Social Credit

Mr. LOW:

On a question of privilege, Mr. Speaker, I wonder if I might ask the hon. member for Dauphin (Mr. Zaplitny), who has just taken his seat, a question, because he made a statement which I think should be clarified. Did the hon. member say that in *Alberta the only opposition was the C.C.F.?

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CCF

Frederick Samuel Zaplitny

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

Mr. ZAPLITNY:

The statement I made was that the only opposition to the Social Credit government in Alberta was the C.C.F., because all other parties were in practically the same bag.

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SC

Solon Earl Low

Social Credit

Mr. LOW:

I should like to correct that statement for the record. There are only two members of the C.C.F. and, if they are the only opposition, then there is none in Alberta.

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IND

Maurice Bourget

Independent Liberal

Mr. MAURICE BOURGET (Levis):

Mr. Speaker, I wish to avail myself of the opportunity provided by the dbbate on the address to discuss a few points which are of national import at present.

Before doing so, however, I would like to join previous speakers in warmly congratulating the mover (Mr. MacNaught) and the seconder (Mr. Coumoyer) of the address on the splendid manner in which they performed their duties.

(Translation):

A few of the measures advocated in the legislative programme mentioned in the throne speech appeal to me particularly. Representing as I do an urban constituency, peopled mainly by the working classes, I have considered it my duty, during the past seven years which have given me the opportunity of establishing

The Address-Mr. Bourget

closer contact with them, to try to understand them better, to look into their needs and to analyse their claims.

If I have been helpful to them in any way, and if, through that cooperation, we have succeeded in obtaining for them certain privileges, I am most happy indeed. I can state that our workers, and especially those of the Quebec district who are better known to me, are conscientious and honest people-and it is to their credit-who, in their respective fields, want to cooperate with their employers in the development and the progress of Canada, that it may become a still greater country. They understand that they have rights to defend, but they are also aware that they have duties to fulfil. They will only be able to protect those rights by becoming members of the union of their choice, a union in which they will have confidence, and by choosing leaders who will prefer to protect the workers rather than indulge in politics. No party may claim to be the sole defender of the working classes. I would even suggest that some union leaders, while too prone to exalt a political group and to censure the government in power, are neglecting their responsibilities and harming the very people whose interests it is their duty to protect. Consider for example what is happening in the United States at this time. During the November election, the political action committee of the C.I.O. supported the defeated party. We realize today, from the legislation introduced in the American Senate and Congress, that the workers are the sole victims of their leader's blunder. If those bills are passed they will lose many hard-won privileges.

I repeat, Mr. Speaker, that the interests of the working classes must remain above those of any party. Thus, the claims of labour will always be better received and understood by the government, and no doubt, we shall have fewer strikes on our hands. I don't mean by that that union leaders must take the blame for all strikes past and present, but I do mean that conditions might be very much better if they were politically impartial.

At the same time, workers will better live up to their obligations if they feel that their efforts and the interest they take in their jobs receive better recognition. They want to share in the success of the business, but expect appreciation in return. It seems that far too many industrial leaders fail to understand the changes that took place in capital and labour relations, especially in the last war. They have to realize that the worker is no longer to be looked upon as a slave, an underling, to be ordered about at will, but a valued partner worthy of regard

and sympathy. Nothing must be left undone that will improve working conditions and the worker's safety. And when company finances allow, he should be given adequate increases without his having to strike for them. I am sure employers would thus eliminate the . many industrial conflicts that must follow, unless these steps are taken to avoid them.

For example, has there ever been such a depressing condition, so much opposed to the national interest, as the strike that held sway, for a period of three months, at the Noranda mine? Would it not have been feasible to settle this labour dispute at the outset, with a measure of charity, good will and, especially, common sense? Thousands of workers were jobless because the company refused to grant the check-off or optional collection of dues, on which the union insisted. I feel that the company should have complied with the union's demands or, at least, agreed to a vote being taken among the workers.

Last year, at the meetings of the industrial relations committee, this matter of the checkoff was discussed and I cannot recall that a single member was opposed to the acceptance of this union security measure. I was astonished, the other day, to hear the hon. member for Pontiac (Mr. Caouette), whose friends in Quebec endeavour to build a reputation as defenders of the working classes, say that he was opposed to the check-off because this measure, in his opinion, aimed at depriving the workers of their freedom. I ask you, Mr. Speaker, how could this optional collection of dues ever be an obstacle to individual freedom? Are not the workers themselves asking that the deduction be made on their salary? That being so, how can it be said that their freedom is being curtailed? Mr. Speaker, I believe that if my honourable friend realizes how important it is for the workers to organize themselves into a labour union and if he really has their success at heart, he will raise no objection to that form of union security being granted to them. I also think that some good will and cooperation on the part of the company would certainly have had the effect of preventing that disastrous strike.

However, past experience shows that if the protection of both parties is to be ensured and harmonious relations established between them, governments must necessarily intervene and enact appropriate labour legislation.

Last fall, all the labour ministers of this country met in Ottawa. They unanimously agreed to a resolution recommending the enactment of uniform legislative measures for the settlement of disputes between capital and labour. A short time afterward, the dominion

The Address-Mr. Bourget

department of labour submitted to each of the provinces the draft of a national labour code, requesting them to consider it and make whatever convenient suggestions might be necessary under the circumstances. As yet, we do not know what the answers of the provinces will be, but I for one sincerely wish that the ministers concerned may closely scrutinize that ' report before improving the existing legislation; moreover, I feel that they will cooperate with the dominion labour department in the drawing up of a code which would apply throughout the country. The various provinces could themselves enforce such a labour code, which would afford protection to those among them who are so touchy about their autonomy. Uniform legislation of that kind would, in future, do much to redress the wrongs which the workers are now suffering in the province of Quebec, especially in connection with the salaries they receive as compared with those given to workers in other provinces for identical work, because it must not be forgotten that they have to pay the same taxes as their fellow-workers and pay the same prices for the things they need.

It is my belief that the labour ministers from all provinces will generously contribute to that task, so that we may find the required solution which will put an end, if not to all, at least to most of the disputes which might occur in future between capital and labour.

(Text):

Since I am dealing with labour, I believe it is my duty to draw the attention .of the house to a section of our .population which is performing essential services in the economy of our country, even if this section is not great in numbers. I refer to scientists, architects and engineers. Since I am a professional engineer, I may be in a better position than many of our people to understand the role played by the members of these professions before and during the last war, and the great task which they will be called upon to fulfil in the future. But for the information of hon. members and for the public in general, may I quote an extract from an article which appeared in the Institute Journal of December, 1945, and which is entitled, "Scientists in Government Service", by C. R. Twinn:

The British and United States governments have publicly expressed their comprehension of the tremendous importance of science in the modern world. In a white paper dealing with the scientific civil service presented to parliament in September, 1945, by the chancellor of the exchequer appeared the statement:

"The governments are deeply conscious of the contribution made by scientists toward the winning of the war. They are equally conscious of the contribution which science can

make during peace to the efficiency of production. to higher standards of living, to improved health and the means of defence."

In November, 1944 the President of the United States, impressed with the importance of scientific research in the national life and concerned with its continuing future in that country, requested Doctor Vannevar Bush, director of the office of scientific research and development, to make recommendations on a number of points related thereto. Doctor Bush, in reporting to the President in July, 1945, had this to say:

Without scientific progress no amount of achievement in other directions can insure our health, prosperity and security as a nation in the modern world.

Nobody can deny that men who merit such magnificent praise are at least entitled to recognition from their respective governments of the service which they render to society.

The following is an illustration of the way in which many professional men are paid in the civil service and this situation is not peculiar to the federal civil service. I believe it is even worse in the provincial field. In an article that appeared in the November, 1945, issue of the Engineering Journal at page 718, I read the following under the heading, "More About Civil Service Salaries":

For a long time the Engineering Journal has been pounding away at the salary scale paid to members of the profession by the federal civil service. It was very encouraging to see, recently, in the Ottawa Citizen an editorial on the same subject. Under the heading "Why Men Leave Home" the Citizen lays bare the situation in Ottawa all of which will be of more than passing interest to the Department of Finance and the treasury board.

The editorial quotes half a dozen cases that to the casual reader would seem almost too fantastic to be true. Here they are. One of these is a B.Se. of British Columbia and an M.A. of McGill who receives a salary of $3,180 after 19 years' experience. Another is both a B.A. and an M.A. with four years' experience and an $1,800 salary. A third is a graduate of Manitoba with an M.Sc. from Cornell; he has had three years' service and he receives the munificent sum of $1,620 a year. One man with a

B.A. from McGill and an M.A. from Wisconsin and a D.Sc. from-Edinburgh, with fifteen years' experience, draws a salary of $3,180, and there is another with a Ph.D., B.A. and an M.A., who has had six years' experience and receives from His Majesty's loyal government the sum of $2,160.

I have before me recent civil service application notices and I find, for instance, according to one, that the public service of Canada requires architects and engineers, class 1 and class 2, at salaries ranging from 32,100 to 33,120. I might also cite the case of a chemical engineer who holds a diploma from a recognized Canadian university and also the

The Address-Mr. Bourget

degree of Doctor of Chemistry from a European university. He has to his credit twenty-one years' experience and is working for a federal department and earning the enormous salary of $2,860 a year. In view of this, is it surprising that governments are having difficulty in retaining valued employees after they have worked under these unsatisfactory conditions for a few years? Will our governments not realize that they will lose employees whom it will be impossible to replace? Will our governments not realize that such loss will cripple the public services of which we should be so proud. I believe that in some quarters it seems that a sense of proportion has been altogether lost. I hope that, since war-time restrictions are abolished, the Minister of Finance (Mr. Abbott) and the treasury board will do their best to remedy these wrongs.

May I ask fair-minded members of this house, whatever may be their political creed, to support me on this issue. This is not a political issue. I should like the public at large and the federal and provincial governments to recognize that those whom Doctor Samuel Smiles rightly called "the makers of modern civilization" are entitled to a salary commensurate with the great services they are rendering.

(Translation):

Mr. Speaker, another matter of national import which gives rise to serious controversy is that which deals with the dominion-provincial tax agreements. At present, six provinces have accepted them while three have turned [DOT] them down, for the time being, at any rate. They object to these agreements on the ground that acceptance of the proposals would jeopardize their autonomy. Mr. Speaker, we have not yet heard any of the six provincial premiers who accepted the agreements complain that they had sacrificed the slightest particle of autonomy; still, and this I should like to emphasize, these premiers are not all friendly to the present government.

On the other hand, we are still awaiting one argument from the refractory provinces to convince us that those proposals imperil provincial autonomy. Some have endeavoured to prove it, but upon analysis, we find that their arguments can be easily refuted. On February 6 last, speaking on the address, the hon. member for Chicoutimi (Mr. Gagnon) stated:

Is it not true, however, and does history not prove that the dominion government never returned the provincial rights and prerogatives it had taken over although many of them were surrendered only temporarily?

Well, Mr. Speaker, if the hon. member will refer to sections 51, 52, 91 and 92 of the British North America Act, he will find that

the dominion government had complete authority to that effect and therefore did not encroach upon the autonomy of the provinces. I shall gladly give him, upon request, the subsections applying to each of the said acts. No, Mr. Speaker, the dominion government has no intention of encroaching upon provincial rights and does not ask that the constitution be modified or amended.

Their only wish is to secure a tax agreement for a definite period of time. My hon. friend and the premier of my province may rest assured that no Quebec Liberal member will ever tolerate any infringement of provincial autonomy. We prize our rights as highly as they do and we are determined to fight for them. We go about it with less fanfare and histrionics, but with greater logic and sincerity. We realize full well that such agreements, while respecting individual rights, will ensure prosperity throughout the nation. It is generally admitted, I think, that prosperity is indivisible. We must, therefore, use every effort to spread it in all provinces. These agreements are designed to provide the provinces with a fixed income to avoid overlapping and inequality of taxation and to protect trade within the country. There is no doubt but that their acceptance would make it possible for the various governments to stabilize their financial position, improve their social legislation and prevent the recurrence of unemployment. I have given my reasons for hoping that the premier of our province will assent to the proposals. I hope that he will stop playing petty politics and if he thinks our rights are being trampled on, let him show us in what respect they are being ignored and let him bluntly refuse to sign an agreement. If, on the other hand, our autonomy is unimpaired, let him come here and take up the matter with the federal government so that we may know once and for all what he does want. No further conference need be held to thresh out the matter. We have had two already, both ending in failure. Besides, by the very principle of provincial autonomy, any province is fully entitled to enter into tax agreements with the dominion without in any way affecting the rights of other provinces. Mr. Speaker, while the Canadian people were disturbed for a time by such appeals to impaired autonomy, they are getting to understand just why certain governments turned down the agreements, and the time is at hand when they will pass harsh judgment on those genuinely responsible for the failure of the conference.

Before closing, I wish to ask the Hon. Minister of Finance (Mr. Abbott), who must now be getting ready for the forthcoming budget, to keep the taxpayers in mind.

The Address-Mr. Bourget

During the war, all Canadians generously accepted the sacrifices necessary in such circumstances, but they all realize today, that they cannot indefinitely assume the present heavy burden of taxes. I believe the time has come to grant important reductions, especially to wage earners and heads of families. It does not seem essential to me that the total cost of the war just ended be paid entirely by the present generation. I feel that future generations should be called upon to pay part of that expenditure, as they may possibly be the first to benefit from the sacrifices made by the present generation in order to ensure a happier future for their descendants.

(Text):

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IND

Georges-Henri Héon

Independent Progressive Conservative

Mr. HEON:

Mr. Speaker, according to a written agreement which will last for the duration of this session, I was paired with my very distinguished friend the hon. member for Joliette-L'Assomption-Montcalm (Mr. La-palme). Had I voted, I would have voted against the subamendment.

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IND

Paul-Edmond Gagnon

Independent

Mr. GAGNON:

Mr. Speaker, I was paired with the hon. member for Lake St. John-Roberval (Mr. Dion). Had I voted, I would have voted against the subamendment.

The Address-Mr. Low

(Text):

Mr. SOLON E. LOW (Peace River): Mr. Speaker, I should like to have just a few minutes to deal with the position this group takes with respect to the amendment proposed by the Progressive Conservative party and to place our position firmly before the members of the house. It is true that this is the second time I have spoken in this debate, but I make no apology for doing that because-the rules of the house forbid me, in the succession which is arranged, to move an amendment. I may wish to do that before I finish my address tonight.

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?

An hon. MEMBER:

Nonsense.

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SC

Solon Earl Low

Social Credit

Mr. LOW:

It cannot be any more nonsensical than my hon. friend looks. There are two aspects of the Conservative amendment which I think require considerable attention before the vote is taken. On the negative side I should like to ask certain questions. Do the Conservatives claim that the government has lost the confidence of the people because, during its regime, centralization has intensified, taxes have increased many times, the national debt has mounted to staggering proportions, and bureaucracy and regimentation have proceeded to lengths that are unbelievable? If so, then we agree.

Do the Conservatives claim that the Liberal government no longer enjoys the confidence -of the people because of the manner in which the government has been introducing socialism while at the same time giving lip service to Liberal principles? If, so, then we quite concur. Do the Conservatives, the movers of the amendment, believe that the flagrant violation of the promises which they made, particularly to the men of the fighting forces in regard to the post-war period, contributed to the loss of confidence in the government? If so, then certainly we agree. Finally, do the Conservatives claim that the government has lost the confidence of the people through its failure to preserve and vitalize true democracy in Canada and because in its neglect it has allowed conditions to develop which encourage the growth of communism and other forms of totalitarianism to the extent that they have become a distinct danger to the security and welfare of Canada? If so, then we agree. These are objectionable policies which the C.C.F. party would intensify in their efforts to introduce the socialist state in Canada.

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CCF

Major James William Coldwell

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

Mr. COLDWELL:

That is your opinion, but it is not correct.

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SC

Solon Earl Low

Social Credit

Mr. LOW:

We shall let the hon. member show that it is not. Those are the negative

aspects of the matter. By implication the amendment before the house suggests that there is some party or there are some alternative policies in which the people do have confidence. I think we must rule out any possibility that the people's confidence rests in any political party. It is my opinion that political party machines have never been quite so much in disrepute as they are at the present time in Canada. Therefore it must be that the Conservatives believe there are policies which would command the confidence of the people. There can be no question that this is the case. So I put it squarely to the Conservatives who are sponsoring the amendment: Do they concur that these policies which they claim that people have confidence in are as follows:

1. That full and unfettered freedom shall be restored to the people of Canada-I mean all the people of Canada, not just some of them.

2. That as one of the means to the restoration of freedom, all unnecessary controls, domination of the individual citizen by a growing state bureaucracy, and the increasing centralization of power by a multitude of regulations, orders in council and restrictive legislation shall be brought to an end.

3. That the present burden of crushing taxation shall be reduced by at least thirty per cent immediately, and within reasonable time by at least sixty per cent.

4. That every Canadian shall, as a right of citizenship, and so long as he assumes his responsibilities as a citizen and cooperates to the full in keeping up Canadian production, be entitled to a social security income, in addition to his earned income, if any, which will render him independent of state charity or economic coercion and will enable him to live in decency and security. I contend, Mr. Speaker, that nothing less than this will confer on him economic freedom; and without economic freedom he can have no freedom in any real sense of the term.

5. That the .paralyzing restrictions on agriculture and industry shall be removed to give full rein to the country's productive efforts, and immediate action be taken to divert the necessary effort and materials so that private enterprise and existing government agencies might together provide an adequate housing programme to meet the national requirements.

6. That farmers and other primary producers, together with manufacturers and merchants, shall be assured a fair return for their services in an expanding market in which consumers will at all times have sufficient purchasing power to buy the available goods and services.

The Address-Mr. Low

7. That there shall be established stability of wage scales and incomes generally, with a downward revision of prices without loss to any individual.

8. That the parliament of Canada shall be made responsible to the will of the Canadian people at all times; and that the necessary constitutional changes shall be made to establish every Canadian in his legitimate rights as a citizen of this great country.

These policies in almost every respect are the opposite of those being pursued by the present government and of those being advocated by the C.C.F. and communist parties. Yet not only do these policies represent what the overwhelming majority of the Canadian people want but, with our vast national resources, they are entirely practicable.

If these are the policies to which the Progressive Conservatives give their support as the alternatives to the policies in which they claim the people have lost confidence, the Social Credit group would like them to make it very clear, by declaration in this house, so that we shall know what to do about the amendment they have proposed. We like as a group to be faced with positive proposals when making our decisions. We are determined to do what is best for Canada, and we do not want to be guilty at any time of political manoeuvring. To the very best of our ability we will do what is best for Canada so far as it is possible for us to see what is best.

I believe, Mr. Speaker, that there is a good deal of merit in the old saying, "I'd rather have the devil I know than the devil I don't know."

In order to clarify the whole situation, I wrish to move an amendment to the Conservative amendment. I move, seconded by the hon. member for Lethbridge (Mr. Blackmore): That all of the w'ords in the amendment following the word "Excellency's" be struck out, and the following be substituted therefor: "Ministers ought to have advised Your Excellency that they would introduce in the present session measures providing for:

A. The return to parliament of complete and effective control of Canada's financial policy.

B. The use of the national credit to meet at least some of the financial requirements for essential services; and, as a guarantee that this country shall not again be subjected to financial depression, to make available to each and all Canadian citizens a proper portion of purchasing power which shall not first pass through the usual channels of industry, this on a basis calculated to maintain a balance between effective purchasing power in the hands of consumers and the aggregate of the prices of goods available for sale.

C. Removing the discouragements to the production, and sale in Canada, of building materials of all kinds; and, the providing of finan-

cial assistance required, so that an all-out housing programme can be initiated to meet the needs of the Canadian people.

D. Redefining and clarifying the constitutional rights and responsibilities of dominion and provincial governments together with the adoption of scientific formulae for allotting to the provinces sufficient revenues to enable them fully to discharge their responsibilities without increasing the tax burden already borne by their people.

It has been widely claimed that the social crediters have turned away from their monetary reform efforts. I suppose this claim arises from the fact that during the war years we did not press so strongly for monetary reform as we did before the war. We did not emphasize this phase of our programme for two main reasons: (a) for patriotic reasons. We were in a war that required the combined efforts of all Canadians to win, and we did not think it desirable at that time to press too strongly for changes while we were engaged in a life and death struggle; (b) but much the more important reason is that the chronic shortages of purchasing power disappear during war time when a big part of our production is being given away free to our enemies or being destroyed in battle. In fact, as the war reached its climax, there developed a situation where we had more money than consumer goods to be bought. Social crediters realized that, and were not such fools as to press for more money to come into existence at that time. The fact that we did not has been misinter-' preted to mean that we have dropped our demands for financial reforms. Nothing is farther from the truth.

Amongst those who make the claim that we have abandoned monetary reform efforts are many who say they have made a careful study of social credit and that their studies have convinced them of its fallacy. I doubt very much that they have made these studies because these same people charge that social credit is merely a monetary reform scheme; in fact many of them say "a fumy money scheme". Let me tell them in no uncertain terms that they have not studied social credit at all or they would know that social credit is a complete philosophy of life, a way of living which concerns itself with every phase of the political and economic welfare of every human being within our borders; if they had made a study of social credit they would know that our financial reform proposals are simply a means to an end. What is that end? Establishment in our country of conditions under which every individual may have an opportunity of developing his own personality to the farthest possible extent of his capacity,

The Address-Mr. Low

together with the fullest freedom to live his life as an individual and not as part of a regimented group.

Every observant Canadian knows that before and during the war years the social credit organization was the spearhead of the movement to save Canada from communism, fascism, or any other totalitarian "ism". We have led constantly in the effort to preserve the right of private enterprise in this country, because we are convinced, as the hon. member for Lethbridge (Mr. Blackmore) so well demonstrated this afternoon, that individuals develop and expand toward perfection best under such a system, private enterprise.

It is common knowledge that social crediters have consistently pressed for lower taxes, reduction of debt, the abolition of restrictive bureaucratic control and the introduction of a Christian democracy in this country. We have never relaxed for one moment in our demands that parliament set out at once to unlock the door to abundant living for every Canadian. Social credit contains the three keys by which these doors can be opened wide. The first of these keys is personal freedom, which is the key to political democracy. We have been the champions of political democracy and of personal freedom. The second of these keys which is involved in the social credit philosophy is financial reform, which is the key to economic democracy. Unless we have economic democracy which carries economic freedom to every citizen, those citizens cannot be said to have freedom in any sense. The third key which is contained within the social credit philosophy is a sane policy of international relations, which is the key to peace. ,

The shooting war is over. Canada should soon be giving full rein to productive effort; in fact we should have been straining much harder these past years to open wide the floodgates of production to meet the dangerous situation which had developed with respect to the possibility of inflation. As we remove the restrictions to full production we shall very soon begin to pile up unsaleable surpluses of goods and services; surpluses not above what che people want and can consume, but so-called surpluses above what the people can pay for with the meagre amount of money in their pockets. Within a few years at the most, unless some basic reforms are made to prevent it, Canada will once more face a condition of unsaleable surpluses and poverty amidst abundance. I say with all gravity, Mr. Speaker, that if that condition is ever allowed to develop again in this country I very much fear that nothing can possibly prevent tragic disturbances and upheavals which might be

the signal for the communist world revolution that is still in the course of active preparation.

Let me say right here that the government has shown some evidence-and I recognize that evidence-of an awakening to the situation. It has introduced some measures designed to bring up internal consumption in Canada, but it has steadfastly refused to get right down to the real causes of periodical depression. The government seems to prefer putting crutches where a surgical operation is needed. In the light of modern knowledge of economics, does it not appear stupid to hon. members, stupid, let us say, to distribute money for family allowances and then turn around and, by hundreds of hidden ways, steal it back by taxation? Who benefits from such a thing?

If one examines into the situation he will find that the beneficiaries are mainly the hordes of bureaucrats who administer these acts of extortion. Has not anybody the gumption to see that if more of the products of his labour is left in the hands of the rightful owner, namely, the citizen who produces them, there would be infinitely less necessity and reason for the people becoming dependent upon a paternal state?

I said that financial reform is the key to economic democracy. The need for financial reform arises from two basic faults or weaknesses in our financial structure. The first is that Canadian governments of the past have allowed a private monopoly to control the issuance of over ninety-five per cent of our money. This monopoly issues money as a debt owing to itself that must be repaid with interest. I do not intend to spend time on this phase of the weakness just now.

The second weakness arises from the method which we use of putting money into circulation, that results in a chronic shortage of purchasing power in the hands of consumers. I should like to say just a word about this one, because it is the one upon which the proposals for reform made by the social credit programme rests.

There is general agreement among economists of the world that purchasing power finds its way into the hands of consumers through the productive process; that is, through the process of making goods, paying salaries and wages, dividends and profits and compensation to the workers in enterprise and in industry. I believe, too, that there is general agreement that if a large-scale productive system is to serve the needs of this century and of the people in these modern times, it must be matched by large-scale consumption. What we need is a nation of good customers, but this cannot be unless we set to work now to remedy the basic faults in our method of

The Address-Mr. Low

distributing purchasing power. Is it true that the productive process itself fails to generate and distribute enough money to enable the consumer to buy back the whole of their produce? I think it is a matter of common observation that the productive effort fails to distribute amongst consumers enough so that these consumers can buy back the products of industry.

I shall draw this to the attention of the house as a common observation. Periodically in this and in every other country we come into a condition which operates on the same type of financial system, where we have built up unsaleable surpluses of goods, goods which the people want and can use and would use, but they cannot get at them. We saw in the - thirties in this country a condition where the merchants had their shelves loaded full, where people were starving and could not get at these goods because they did not have in their pockets the money with which to buy them. That is a situation which has to be explained if we are ever to get at the root cause of our financial difficulties.

I ask again-and this is a matter of common observation-why was it that for 200 years Britain was able to maintain a favourable balance of trade without any wild deflation? The only answer to that is that in the heyday of her imperialistic efforts Britain did build up a tremendous productive capacity, but she found that she could not distribute the total of what she produced with the money that was generated in her enterprise through the productive effort, and she had to send abroad the surplus above what the people could buy with the money they had in their pockets. She maintained this position for 200 years. There was no wild deflation. Why? Because what they were sending out equalled almost exactly the surplus of the production above the money the people had.

Another matter of common observation is reported by Arthur Dunn, an economist, and a lawyer. I have in my hand a book which he put out, called "Arithmetic or Revolution'. Mr. Dunn is a noted author and lives in the United States. In this book he has made a complete and detailed analysis of the situation as we now face it, with respect to finance in its relation to our economy. I should like to quote briefly from what he has to say on page 35. This follows what I have been trying to say about trade. He says:

The science of buying power, when learned, must be utilized in all mechanized countries if the machine age is to yield its possibilities. It must also be applied in the exchange of products between nations, as well as within nations. For foreign trade is mostly an exchange of products

of one country for those of other countries. As pieces of paper are used to effect exchanges within countries, so are pieces of paper used to effect exchanges between countries. We term the latter bills of exchange and the former money. The difference between them is that money represents products generally whereas bills of exchange represent only the specific products listed in the bills. The people of every country seek to export the excess unconsumed at home. If they knew better how to distribute among themselves the goods they produce, there would be less surplus for export . . .

And therefore less pressure to get goods that embarrass the economy into the channels of world trade. Then at page 34 I quote Mr. Dunn, as follows:

George N. Peek, made for President Roosevelt an analysis of our foreign trade from 1895 to 1935. Mr. Peek shows that from 1896 to 4933 we-

He is speaking of the United States.

-sold to the world goods in the amount of $121 billion (I use round numbers) and had bought $84 billion worth, placing the world in debt to us by over $36 billion. Part of this was paid to us by services (carrying freight and so on), but the balance still owing us up to 1934 was over $22 billion. This sum included war debts for goods shipped by us to our allies, and will undoubtedly never be paid. Also huge amounts due our private citizens are uncertain. So, up to that date, we had actually given away billions of dollars' worth of commodities abroad, for we had received nothing in return except these pieces of paper, that is, promises to pay.

When we analyse Mr. Peek's figures we make an astonishing discovery:

. . . that it is better to produce and give part away than to reduce production. For ,18 years (from July 1, 1896 to June 30, 1914) the amount owing the United States from abroad increased only $1 billion, or an average of $56 million per annum; but from July d, 1914 to July 1, 1929, the increase was over $21 billion or an average of almost $14 billion per annum. From 1930 to 1933 there was no increase at all in the principal of foreign debts. In other words, in the years of our greatest national prosperity we produced enormously and gave away, that is, in the sense that they were not paid for, over 26 times as much as in the years of moderately good times.

What is the answer to that? The whole thing can be summed up in this way, that the productive enterprise in the United States in those years failed to distribute sufficient purchasing power in all forms among the people of that country to enable them to buy back the goods they produced; therefore they were in the position of having to send abroad large quantities of their goods in order to keep the remainder within their own country, and they were determined not to receive in payment for those exports of theirs any imports because, if the imports had been brought back in payment for their exports a situation would have been brought about which would still be

The Address-Mr. Low

embarrassing because of lack of purchasing power among the people. Some figures have been obtained from Washington and I quote from the National Bureau of Economic Research Reports, No. 2, pages 242 to 248:

American industries paid out in ,1918 $45,548,000,000 in wages, salaries, dividends, bonuses, pensions, compensations and consumer purchasing power, and at the same time consumer goods were produced to the value of $60,366,000; in other words, there was an excess of production over purchasing power generated and distributed among the people of approximately $15 billion.

If that is so, one would find in the records of the United States for that year an export surplus for favourable balance of trade of approximately S15 billion, or a combination of favourable balance of trade and increase in the national debt amounting to $15 billion. An examination of the records in the United States will reveal exactly that. Their national debt plus their favourable balance of trade for 1918 amounted to approximately $15 billion. That is evidence that there is not sufficient purchasing power, generated and distributed in the process of producing goods and services in any country, to enable the people to buy back those goods and services.

I call attention for a moment to one or two other works that are available to students who wish to follow the question more closely, and I would exhort hon. members to familiarize themselves with these, because it is important to the future of this great country that we know. I refer now to a little booklet called "Banking and Industry" by A. W. Joseph, B.A., B.Sc., A.I.A., of Birmingham, England. This booklet goes into a logical and forceful discussion of the causes underlying the failure of the productive effort to distribute sufficient purchasing power.

Mr. Joseph outlines three causes in particular. The first arises from the way in which we have to finance the production of capital goods. He calls that one the double circuit, meaning that there are certain costs which have to be recovered from the community of people, the consumers, which costs were never put into circulation. This in itself causes a shortage. No one has yet to my knowledge produced an effective rebuttal of Mr. Joseph's argument.

The second cause, which he discusses and demonstrates clearly, is the matter of public saving, which continues to build up an expanding economy of production with a lag in the distribution of purchasing power, that creates a very bad situation periodically, a situation which people in the past have been in the habit of calling "the business cycle." That is the old laissez-faire term for it. Well, it is time we got away from laissez-83166-74

faire, and established something like a decent organization of the financial structure so that we may prevent these tragic periodical occurrences.

The third cause he deals with is the time lag in the cycles of production. I commend this book to hon. members, and would suggest too, that if they cannot find one handy they go to the banking and commerce committee's report for the session of 1939. It is here in the library. They will find at page 613 the important part of this little pamphlet written by Mr. Joseph, who is a chartered accountant and a student of economics.

I should like at this point, and before I close, to refer hon. members for further evidence regarding the shortage of purchasing power to the American magazine of July, 1946. In an article written by Senator James E. Murray, beginning at page 38-1 have it available for hon. members if they wish to see it-I quote the following:

Congress has enacted-and the President has endorsed-legislation designed to plan for permanent prosperity. Furthermore, any action taken under the law will be taken within the framework of our own free enterprise system and through our existing democratic processes. This new law is a crucial first step toward enduring prosperity, just as the San Francisco charter was a crucial first step toward a world organization for peace. Both need to be implemented.

Then I go over to page 106, where the article continues. I read this part of the act, which is heartening to those of us who understand just what the basic weaknesses are in our financial arrangements:

The congress hereby declares that it is the continuing policy and responsibility of the federal government ... to coordinate and utilize all its plans, functions, and resources for the purpose of creating and maintaining . . . conditions under which there will be afforded useful employment opportunities-

Note that; useful employment opportunities, not useless ones.

-including self employment-

That is, the right to turn in leisure time to things you have wanted to do for so long but have not been able to do.

-for those willing, able, and seeking work, and to promote maximum employment, production, and purchasing power.

Then he says:

That, in a mouthful, is the goal. You will note, in the last clause, that congress recognized it is futile to expect everyone to have jobs unless our industries have a full supply of orders and. unless all our people have enough money in their pockets to buy all the goods our farms and factories can produce.

I say it is most heartening to realize that some thinking men are coming to see and

The Address-Mr. Low

understand the basic faults in our system of finance. That is heartening, because I believe they will now begin to turn to the remedies, and those remedies ought to be quite obvious to hon. members.

I should like to refer to just one other authority on this point. Professor C. E. Ayers, head of the economies department of the university of Texas, recently published a book which he entitled, "The Divine Right of Capital." In that book he makes an incontrovertible case for what he calls one of the great discoveries of this century. The discovery to which he refers is that the total productive effort in any country operating under the financial system used by Canada, Great Britain, the United States, and in fact most countries of the world, fails to distribute to consumers enough purchasing power to enable them to buy back the goods and services they have produced. This serious defect is the same one discovered and exposed by Major Douglas twenty-six years ago. Professor Ayers does not take credit for discovering the basic fault. He claims that discovering the truth of the chronic shortage defect is what constitutes the greatness of the discovery in these modern times. While one cannot totally agree, perhaps, with the remedies suggested by this professor, at the same time he has correctly divined and has built up an incontrovertible argument for the shortage of purchasing power generated in the productive effort.

I do not wish to weary the house with any further discussion along this line. In closing, let me simply say this. Surely our observations, our common sense, and the words of great economists of this day who have gone into it, ought to be enough to cause us, as the custodians of the safety and security of the Canadian people, to get down to work and discover for ourselves exactly what the defects are that we face in our great process of distributing the tremendous production which the hon. member for Lethbridge (Mr. Blackmore) showed was possible in this country. If we are to prevent recurring depressions it is necessary that we apply remedies. What those remedies should be I am going to leave for my colleagues, who may follow me in the discussion of this amendment, to deal with. Suffice it to say that it cannot be questioned that the reasons have now been established for the fault or weakness in our financial structure. The sooner we get at remedying that fault, the sooner we get on the right track toward the life abundant, the better we are going to be.

I have just one word in conclusion. I hope the speakers from the Progressive Conservative ranks who will follow will make clear their

answers to the questions I have asked, because the position taken by this group on their amendment will be largely guided by what is said, the declarations made, and the vote taken on our own amendment.

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PC

Wilfrid Garfield Case

Progressive Conservative

Mr. W. GARFIELD CASE (Grey North):

Mr. Speaker, I do not feel I should presume to accept the invitation of the leader of the Social Credit party (Mr. Low) and speak for the Progressive Conservatives in any sense of the word. It will be my endeavour to make my own views clear on what I consider to be the pressing problems facing the Dominion of Canada. As many hon. members know, not so long ago I was in perhaps the same position as the hon. member for Quebec South (Mr. Power), who has been quoted as saying he was a Liberal looking for a party. I am sort of ahead of him, because I have found a party. I must say I have been very happy and contented and my association has been extremely congenial. Yet you may notice that I am sitting about as far to the right of my leader as it is possible to sit. I suppose that is in order that escape might be possible and easy.

What I should like to discuss tonight has something to do with the various levels of government. I do not want to introduce or discuss any new system. We hear so much about the new things that might be done, but I should like to discuss a formula which I believe would make the present system work; and I think that is all we need. I have in mind now the municipal governments throughout Canada. As hon. members may know, I have a background of municipal experience, having served my municipality in various capacities, including that of mayor. That brings to mind the problems faced by men charged with the responsibility of administering our affairs, at any level whatever. In that sense I am not going to be too critical. I would rather seek to appreciate, if I could, how those problems might be solved, and offer criticism of a constructive nature.

I might say, however, after listening to the hon. member for Dauphin (Mr. Zaplitny) and his fear of the removal of controls that, so far as I am concerned, one who expresses the opinion that he is fearful of the removal of controls has lost entirely confidence in his fellow man. I cannot imagine that any great degree of chaos would result in Canada if controls were removed. There are always two-parties to a bargain, and surely the great mass of the people can be given credit for using some degree of judgment, and that they would not let prices run rampant. I can understand, of course, that in the matter of rentals there

The Address-Mr. Case

would have to be some controls, since there is not sufficient accommodation to go around. But the attempt to control many of these commodities results in the setting up of black markets, and means whereby people can short-circuit normal procedure, whereby they will pay prices beyond the ceilings. When they do that they are breaking the law; and when people break one law, it creates disrespect for other laws.

As one who believes in free enterprise, it is my view that the government has been overcautious in its desire to serve the Canadian people by instituting wartime housing and housing enterprises, and by creating priorities whereby those people have the advantage in what otherwise might have been a free market. I believe that, had private enterprise been given an opportunity, not only would it have built better houses, but it would have built more of them, built them in a satisfactory manner and in locations which might have been selected by those who were likely to occupy them.

However I do know that in my own municipality, where we were hard-pressed to find suitable accommodation, we welcomed what the government sought to do. I suppose it is easy enough for me to stand here tonight and be critical of something that has already taken place. In my experience in public life I have never sought to impute improper motives to my fellow man. I prefer to feel that he is acting in good faith. I might even pay some compliments to the C.C.F. socialists, even though I detest the means they seek to employ to attain their end.

My concern today, more than anything else, is the plight of the municipality. From coast to coast in Canada these municipalities are the creatures of the provincial legislatures. They are governed by certain fixed statutes. They must raise their revenues from real property; that is their tax base. All the time, the people residing in these municipalities are demanding expansion of services, services which must be paid for by the real property owners.

There is more than one way to bring about state socialism or even communism in Canada. One method commonly employed is that followed by the C.C.F. socialists when they stand on a public platform and advocate state control and state ownership, or even when they include those principles in an amendment, as they did in their amendment to the amendment to the address in reply.

But the other and more subtle method is to increase the burden of taxation to a point where the ownership of real property ceases to become attractive, and the property owner, the real backbone of the country, will throw 83166-74J

in the sponge and ask himself why he should seek to carry on when he is being asked to carry the burden for the whole community.

Canada has long prided herself on being a nation of homes. Her real objective should be that of a nation of home-owners; because I believe that when a man has a stake in his community, or owns property, he is not one who will be easily persuaded to follow socialism, or any other ism which has been tried and has resulted only in regimentation and the loss of personal freedom and liberty.

In support of my reference to the municipalities, I should like to refer to something which His Worship Mayor Lewis is reported to have said while addressing a public meeting in Ottawa. The Ottawa Journal of February 20, 1947, reports His Worship the Mayor in this way:

There are no spare beds in the hospitals; there are no spare places for persons suffering mental illness. We are keeping people in our county gaol because there is no room for them in the proper mental institutions. Our reformatories are filled and our gaols are filled. There is no place left in all Canada for incurables and for the aged.

Then he went on to say:

During the war years all eyes were focussed across the ocean, but the time had come to concentrate on affairs at home which were in a serious state. We should not lose sight of our local problems which are more serious and more complicated than appear on the surface. One of the main problems was making ends meet, giving to the people the services they demanded, and yet keeping taxation within reason. By existing laws the city was required to raise each year an amount of money needed to cover its expenditures, and it could not spend more than it could raise. Civic services were increasing rapidly in cost while ways of raising money were decreasing. This was true not only of Ottawa but of every municipality in North America.

I have known His Worship Mayor Lewis for a great many years. For some five years he was president of the Canadian federation of mayors and municipalities. To my knowledge, he has been secretary of the Ontario mayors and reeves association since its inception. So I had an opportunity during two years, while I was president of that organization, to learn to appreciate this man as an outstanding municipal authority. Let me quote some figures relative to the city of Ottawa, so that hon. members may know how great this problem really is.

According to the Ottawa Journal of February 20, 1947, reporting the mayor's speech:

The fire department of Ottawa in 1917 spent $130,700; in 1946 it spent $489,607. Social services in 1917 cost this city $13,029, while in 4946 they cost $70,865. In 1917 playgrounds cost $3,000, and in 1946 $135,031

The Address-Mr. Case

Then, we come to snow clearance. I know something about that problem. Trains have been travelling late these days. As a matter of fact a lady told me the other day that she boarded a train in one of our northern towns, carrying a child in her arms. When they started out she did not have to pay any fare for the child; but before she reached her destination, a distance of about a hundred miles, they charged her half fare.

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LIB

James Sinclair

Liberal

Mr. SINCLAIR (Vancouver North):

Joke, that is.

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PC

Wilfrid Garfield Case

Progressive Conservative

Mr. CASE:

I continue to quote from the Ottawa Journal:

In 1917 snow removal cost $24,000; in 1946 it cost $337,595. The children's aid society cost $1,400 in 1917; in 1946 it cost $179,000. Hospitals cost $41,000 in 1917; in 1946 they cost $108,000.

Hon. members will note by the morning paper, the Globe and Mail of March 7, that Mayor Saunders is seeking to have the provincial government pass enabling legislation to permit them to levy an amusement tax which the mayor of Toronto hopes will raise $1,000,000 in revenue.

Realizing that there is no chance to expand the municipal tax base, I am going to suggest a method that might be employed and which I believe would help this country immeasurably and would guarantee plenty of employment for many long years to come. We know how the cost of education has increased. I think it is commendable that the province of Ontario has assumed fifty per cent of the cost of education. However this has been done at a time when salai'ies of teachers are being raised of necessity and therefore the municipal taxpayer has not benefited greatly, although he has not had to pay out what would be a substantial amount.

I have always taken the view that a dollar which is not earned has no value. I believe the only money that has any value is the money that is earned. What I intend to propose is a method which could be used to give effect to that which already exists. July 1, 1938, was an important date in Canadian history. If we were to make comparisons I think it would be about as important as the beginning of confederation in 1867, because it was on that day that we obtained complete control of the Bank of Canada which gave us control over the issuance of currency and domestic credit.

Let me make a comparison. Back in the olden days a dollar had some relation to gold backing and bonds were redeemable in gold. That put the bondholders in a position where they could question the ability of a country to

IMr. Case.]

pay off in gold. That was evident at the time of the bankers' crash in the United States in 1932. Since that time there has been no gold clause in our bonds and there have not been the same fluctuations in value. A stability of value is maintained because the people have confidence in the resources of the country, even though they had no confidence in the volume of gold.

What I propose is a new charter for Canada, a means whereby we can employ the credit of the nation to assist the municipalities. It may mean rewriting the constitution, but surely we are capable of coping with the things we have to deal with. As I said, a dollar that is not earned has no value. We pay $35 an ounce for gold, which just about represents the cost of production. Sub-marginal mines cannot make ends meet even at $35 an ounce. The real value of gold is in the neighbourhood of the cost of production.

If, then, we apply that same rule to other physical assets we could employ labour to create durable capital goods and durable capital construction, and I would include those things that are bearing so heavily upon the municipalities today. I would reserve to them and to all levels of government complete autonomy and legal title to property, but I suggest that public buildings of a non-revenue or non-profit making type should be built and financed with currency issued through the Bank of Canada. Every dollar would be a dollar earned because it would employ labour in the construction of buildings of a durable nature. We would be creating an asset for every dollar we spent and we would not create any more public debt.

You may say, "Where are we going to get off at?" Someone may ask whether there will be overbuilding. I am going to suggest that the public buildings constructed should be schools and educational institutions of all kinds. With proper education a child becomes an asset to the nation. I suggest, further, that hospitals should be built. That is the closest I would come to what might be considered revenue producing buildings. Certainly very few hospitals are profit producing. Surely the care of the sick should be a charge upon the nation's resources and not necessarily a charge upon the municipality or any one part of the nation. We need hospitals; we need schools from coast to coast, and1 we need other educational institutions. We need mental hospitals, because our present hospitals are a disgrace to organized society. These unfortunate people, victims of circumstances over which they have no control, are overcrowded in these hospitals.

The Address-Mr. Case

This burden is too great for the municipal taxpayer, because there is no method by which that tax base can be expanded. The real property owner can bear no more than he is bearing at the present time. The same principle could be applied to the federal or national field and harbours, national highways, canals and certain types of cargo vessels for the merchant marine could be built. After all, we are an exporting nation and means must be found whereby we can carry our goods to the furthermost parts of the world.

A moment ago I asked a question whether there would be overbuilding or overexpansion, and I am going to suggest means whereby that could be kept in check. I said that I would preserve complete autonomy to all levels of government. Once these buildings are built and equipped with heating and sanitation facilities, I would suggest that the municipality be charged with the responsibility of furnishing them with movable furniture and staffing and maintaining them. There would then be no advantage in a municipality seeking to overbuild, since there would still be continuing charges upon the local taxpayer.

In the matter of social services I would recommend that these be paid for by the federal authorities. Old age pensions, mother's allowances, unemployment insurance on a contributory basis and family allowances should all be a charge upon the federal taxpayer, as at present. I am not advocating lowering the age for old age pensions. I am always fearful of anything which tends to discourage work. I think a man's initiative and ambition should be encouraged, but as far as I am concerned that is a matter for the taxpayer to decide. If he would like to step up the old age pension to $50 a month at age seventy without a means test, then there may be some justification for it. Since the bill will have to be paid by the taxpayer it would become a revolving fund, and since everyone would be entitled to it much of it would come back into the treasury immediately in the form of taxes.

I would also be in favour, not necessarily of lowering the old age pension age, but of instituting a disability pension for anyone twenty-one years of age or over who was incapacitated from providing for himself. Such a pension should be strictly on a means test, and it would not start in at anything like $50 a month. The idea of a disability pension is sound, but it is remarkable what handicapped people can do for themselves when they have an incentive. I have been reading reports recently of cases of handicapped men who have taken employment and given more satisfactory service than those who were not

physically handicapped. Such a pension could be granted on a sliding scale, so that the maximum amount would be received by the disabled at the time it was probably needed most.

What shall we do with the present mammoth debt of this nation? I should like to see this nation debt-free. I suppose someone may suggest that I am proposing to take a short-cut. But it is a natural objective to want to be debt-free, and that applies to a nation as well as to the individual. But constantly in all my years of experience I have seen the public debt piled upon debt until now the national debt has reached mammoth proportions. The shadow of socialism lengthens and the dark clouds of communism hang over us. The way to dissipate them is by giving the people that which they are seeking. I do not think we need fear communism or socialism provided that we can satisfy the Canadian people that we recognize our responsibilities. I do not believe that it is necessary to keep on piling up the national debt. We made a great discovery when we found that the nation-and the same thing may be said of practically all nations-now has the right to regulate its own credit and currency. I am not critical of the financing methods employed by the government during the war, because then there was a vast expansion of credit and a limited amount of consumer goods available, and we could not afford to have such a huge volume of spending power constantly pressing against the limited production; we would not have been able to hold price ceilings at all. In war time it would certainly seem proper that the government should borrow from the people and take away from the market some of the purchasing power. That also has the advantage of accumulating savings for the individual to be used for future expenditure. Furthermore, after the terrible conflict through which we have just passed, I think it is only fitting that posterity should make some contribution for the right to their freedom which has been won in that war. But, as the bonds mature, I think they should be retired by some method, perhaps such as I suggest for a public building programme. If it were possible to separate capital from current expenditure, certainly the capital cost should be retired. But of course we must keep faith with the bondholders. Nothing drastic should be done in seeking to remove this mountain of national debt, but no one could reasonably argue that he has a perpetual claim on the resources of this nation. Are we to develop into a nation of coupon-clippers? Rather should we not get back to where capital will be seeking investment instead of investment seeking capital.

The Address-Mr. Case

Today industry needs capital and the farmers need capital, but we are constantly driving them to do business through sources which formerly they did not have to employ and we are denying them the advantages which they would otherwise enjoy.

It has been said that we should use tariffs as an instrument to promote trade, and with that I agree. We cannot afford to let Canada become the dumping ground for any other part of the world. But surely our trade commissioners can seek to bargain for us in other lands to which we can ship our goods and where Canada's name may become even better known than it now is. We must encourage increased production. Statisticians today would have us believe that there has not been in six thousand years overproduction throughout the world. In the dark lean years which most of us recollect only too well, while we had an abundance of foodstuffs, there were millions of people in dire need and thousands starving in other parts of the world, and so it would seem that the challenge to us is to discover some means whereby we can distribute the fruits of the earth to the farthermost corners of the globe. As a producing nation, we can indeed afford to do everything we possibly can to stimulate production and increase trade.

A word on immigration. I do not doubt for one moment that people in distant lands have heard of this great country of ours and would be only too pleased to come here if they felt they would not be burdened down with taxation, and1 thousands of our own would return to their native land. But, as it is today, taxation has become a threat to our democratic way of life. In glancing over the estimates the other day, I found that this government have not yet applied the yardstick of economy to its expenditures but rather are on a spending spree, in a full-out effort to create the impression that they are the leaders of the nation and that the provinces will have to fall in line. I am always concerned when it comes to the relations of the dominion government with the provincial governments. Many people have no doubt been frightened by the thought of multiple or dual taxation. But for the life of me I cannot see how the same amount of money will not have to be raised for the needs of the nation, whether it is raised by the dominion government or by the provinces, or by them both together. The great danger is that in granting subsidies you are giving the provincial governments money to spend which they were not responsible to their own people for raising. The theory laid down by Sir Wilfrid Laurier is sound, that it is not good practice for one administrative

body to spend money that it is not responsible for raising. It seems to me that we may be embarking on a rather dangerous practice. There may be a great deal more money spent in the provinces than they would otherwise spend if they had to tax their people to obtain it.

I appeal to the house, to the leaders of public policy, to give consideration to the plan I have sought to outline in a limited and sketchy way. I believe it has merit. I am not as ruthless as a socialist labour leader in Britain who said, "work or starve." The opportunity to work will be here and, since working means living, the incentive to work will certainly be there. I am not in favour of dividends being passed out indiscriminately to take from our people the desire to work. I do not know how those who are working steadfastly and earning money upon which the government depends for its taxes are to meet this situation, considering that we have approximately a debt of S17 billion on which we have to raise $480 million a year to pay interest alone. The costs of government are great; the costs of administration are greater still. That is the place where I believe we can exercise a degree of economy. This government can well afford to go carefully over their departments and find out how much they are overstaffed. I know the tendency is to find work for all for whom it is possible to find work. If one may judge by the number of vacancies which have been advertised, copies of which advertisements come to my desk, it would seem that there is still plenty of room in the civil service for others to be employed.

It would appear that this nation will bear the heavy cost of social services, soldiers' pensions and things which we are definitely obligated to provide. The soldiers who fought and won and guaranteed to us this freedom will now have to bear their share of the terrific tax burden. Therefore I again offer the suggestion by which we can make our real natural resources work for us. A tree in the forest has no value of itself. It is an asset in the form of a tree, but it is of no more value to Canada than the crown jewels unless it is processed, which means labour applied to it to turn it to useful articles or to use it in the construction industry where we shall have an asset to show for it.

What about the future of gold? I would say that the future of gold would be more secure than ever before. I believe we should seek to do everything we can to encourage our gold mines, particularly our sub-marginal ones, to take this precious metal from the rocks and build up a strong gold reserve with which we could adjust international balances, because

The Prime Minister

gold is a durable article. It does not take a great deal of space. It is said that a 14-inch gold cube weighs a ton and is worth over a million dollars. Therefore it is a very handy medium which can be employed to balance exchange.

I am not critical, but there is something I should like to mention. I believe we made a fatal error in putting our exchange on a par with United States dollars. I often wonder where the pressure came from, because we enjoyed a preferred position. Citizens of the United States who came here found that their dollar was worth SI .19, while the Canadian dollar was worth only ninety cents in their country. Just consider the constant drain which is taking place at the present time; our reserves of United States dollars are constantly shrinking. If wTe compare wheat at SI a bushel with an ounce of gold at $38.50 we find that an ounce of gold will purchase 38^ bushels of wheat. With gold at $35 an ounce it would purchase only 35 bushels of wheat. Hon. members can therefore understand the advantage we had compared with our United States neighbours in the export of grain, which we grow for export.

Since Macdonald and Laurier-and with all due respect to the present Prime Minister (Mr. Mackenzie King)-we have never had a man who has earned his place in history by introducing a great national policy. The government has been carried on, on the administrative level. We have had social services and other things as a result of the pressure of public opinion, but where is the great national policy of those who pioneered and gave stability and a democratic form to the government of this country? You cannot build prosperity on the wreck of humanity, and our much-vaunted freedom is nothing but an empty farce if our people do not enjoy some sense of economic security. It is up to this level of government to provide the leadership, to write a new charter, to rewrite the constitution, to invite all our people to join in a cooperative effort to make this a land of promise.

Three or four years ago, during the dark days of the war, I heard the Prime Minister refer to a new heaven and a new earth. We who are in public office today are the ones who are charged with the responsibility of making Canada that land of promise, a land of which all1 Canadians can be justly proud.

On motion of Mr. Gauthier (Portneuf) the debate was adjourned.

On motion of Mr. Mackenzie the house adjourned at 10.50 p.m.

Monday, March 10, 1947

Topic:   GOVERNOR GENERAL'S SPEECH
Subtopic:   CONTINUATION OF DEBATE ON ADDRESS IN REPLY
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March 7, 1947