May 20, 1947

SC

Solon Earl Low

Social Credit

Mr. LOW:

Just wasting time yourself.

Topic:   RAILWAY ACT
Subtopic:   PENSION EIGHTS-BREAK IN SERVICE FROM CERTAIN CAUSES
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LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. CHEVRIER:

My hon. friend need have no worries about the time I may waste, because

Railway Act

I think I can conclude the remarks I have to make before the time allotted to private and public bills has expired. I think the house will agree to one thing, namely, that the purpose of the legislation is something which should receive careful consideration. The hon. member for Winnipeg North Centre spoke of the fight the Prime Minister (Mr. Mackenzie King) led many years ago in connection with lost pension rights, and I am sure if the Prime Minister were a private member today he would feel as he felt then. But I do not believe the Prime Minister would have introduced this kind of legislation because, while I have a great deal of sympathy for the railway workers and others who may have lost their pension rights, as my colleague the Minister of Labour (Mr. Mitchell) has just said there are other factors which must be taken into account. That is that if the legislation non' sponsored by the hon. gentleman does not meet the situation, or, in fact, endangers or makes the situation of certain railway workers worse, then we should be very careful to avoid disturbing the present position in regard to pension rights. When I speak I can deal only with those who are employed by the Canadian National Railways. I do not know the position in the Canadian Pacific Railway Company, though I understand that it is very much the same.

The provisions of this bill are sweeping, not only because they have to do with railway workers but also because, as my hon. friend the sponsor admitted, other workers in other spheres of industrial activity may seek the same sort of legislation. I have no quarrel with that, but I say we must be careful about the manner in which we proceed. So before legislation of this kind is enacted, it is a sound principle to ascertain what the position of the law' is and what it has to say in reference to the pension rights of railway workers. If it is found deficient, then let us amend it. If one goes to the source he finds that there are three acts having to do with pension rights of railway workers; and I repeat that I speak only in reference to the Canadian National Railways. First, there is the Intercolonial and Prince Edward Island railway employees' provident fund, which was established in 1907 pursuant to the act bearing that name, later amended in 1913. Then, there is the Grand Trunk railway superannuation and provident fund, which was established pursuant to an act of 1874, and, finally, there is the Canadian National Railways pension fund. If this legislation w'ere enacted without similar changes being made in the legislation governing those funds which, as the Minister of Labour said, have been found actuarially

sound, and which have been approved by the Department of National Revenue, then I do not think such legislation would have much effect. Let me quote rule 16 of the Canadian National Railways pension rules, which covers practically everything my hon. friend asks. That rule reads:

16. The following need not necessarily be considered by the pension committee as a break of continuous employment or continuity of service:

(1) Absence on leave.

(2) Temporary lay off on account of reduction of forces.

(3) Suspension or discharge if followed by reinstatement or reemployment within one year with the approval of the head of the department.

In reaching a conclusion as to whether there has been a break in continuity of service the fact of the employee entering other employment during such absence, whether on leave or from suspension, discharge, or lay off, may be considered by the pension committee.

So with but one exception, that having to do with strikes or lock-outs, the pension plan covered by rule 16 of the Canadian National Railways fund is practically the same as the amendment sought by my hon. friend. Before enacting legislation such as this, therefore, one should be very careful that a plan which has been built up over the years is not upset.

For reasons I shall give in a moment I do not believe this bill should be given second reading, but I do think it should be studied in principle. I believe the principle my hon. friend has enunciated should be given careful consideration, and I make that statement because of the words which are appended at the end of the proviso. Perhaps I should read the whole proviso, which is as follows:

Provided that in the administration of any railway retirement or pension plan, leave of absence, suspension, dismissal followed by reinstatement, a temporary lay-off on account of reduction of staff, or absence due to an industrial dispute, strike or lockout, shall not disqualify any railway employee from any retirement or pension rights or benefits to which he would otherwise be entitled.

That, to my mind, notwithstanding what has been said by the hon. member, immediately raises doubt as to the retroactivity. And I agree fully with the hon. member for Winnipeg South Centre (Mr. Maybank) that there is a doubt that this legislation may not meet the situation my hon. friend has in mind. He did say that he had not in mind retroactivity, but that he had in mind the future only. The fact that he says that does not decide the issue, because a definite meaning is expressed in the words used, which I have just read, namely, "to which he would otherwise be entitled." There is a doubt, and those words might indicate that when an employee is rein-

The Budget-Mr. Beaudry

stated he would be permitted to make retroactive payments into the fund. If this were allowed, then the legislation might well be unconstitutional. Then, it might well become a money bill and is invalid.

Furthermore, I mentioned two pension plans other than that of the Canadian National Railways. I mentioned that of the Intercolonial and Prince Edward Island railways. Those are railways owned by the government of Canada, and the employees of those railways are employees of His Majesty. If that be so, that raises an additional doubt which, added to the doubt as to retroactivity, might immediately make the legislation such that we would have to vote sums of money concerning the men who would be reinstated or who would be taken on after suspension, and so on, as set out in the legislation my hon friend sponsors. And if that is so, there is great doubt about the validity of the measure.

Then, again, there is the additional point about the schemes. I am informed by those who are familiar with the schemes that Bill No. 24 would purport to take away the exercise of certain discretion by the pension board. The pension board of the Canadian National Railways is composed of seven men, three of whom represent labour and four of whom are appointed by the railway company. There are cases where employees have been guilty of offences which would not entitle them upon reinstatement to their service prior to dismissal, but it would be extremely unfair to grant a man who has been dismissed for cause in all cases a greater right than would be granted to an employee who resigns, without any black marks against him, and who would be considered a new employee upon reemployment.

There were a number of other points which struck me as I read this legislation. However I understand my hon. friend wishes to say a word or two in reply, and I shall not speak longer at this time. Let me say this, however, in conclusion, that, so far as the principle of the bill is concerned, in my view it should receive further consideration by a committee of the house.

So far as the legislation itself is concerned, I think there is doubt as to its constitutionality, as to its validity and as to its retroactiveness. Those are points which I think should be settled before second reading of the bill is given by the house. I therefore believe that the principle of the bill should be studied by a committee before whom witnesses, either from the railway or from the brotherhoods, would be called, and from those who have set up and established pension plans.

Since the hon. member placed the bill on the order paper, I have given some thought as to which committee it should be referred to, and if it is the will of the house my suggestion would be that it go to the industrial relations committee which would be more suitable than the committee on railways, canals and telegraph lines. I therefore move:

That this bill be not now read a second time, but that the subject matter thereof be referred to the standing committee on industrial relations.

Topic:   RAILWAY ACT
Subtopic:   PENSION EIGHTS-BREAK IN SERVICE FROM CERTAIN CAUSES
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Amendment agreed to.


LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The hour for public and private bills having expired, the house will now revert to the business in hand before six o'clock.

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THE BUDGET

DEBATE ON ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Muskoka-Ontario), and the amendment to the amendment of Mr. Coldwell.


LIB

Roland Beaudry

Liberal

Mr. ROLAND BEAUDRY (St. James):

Mr. Speaker, may I make some brief comments concerning the budget. If one had any doubts about the merits of the budget now under consideration these would have been dispelled long ago by the type of criticism which has been directed toward it by the various parties of the opposition.

This criticism has added little to the hope, wish or thought, in any quarter, that the country might find a sounder financial document to guide us through the coming year. The budget itself, however, and the minister's introductory speech do give the majority in this house substantial cause to hope and trust that under this government Canadians will be gradually relieved of their tax burden.

I heard with particular interest the minister's reference to the disturbing migratory movement toward the south;. I refer to the introductory part of his budget speech, in which he recognized that a good many Canadians find, each year, that the pastures are greener elsewhere, and in which he expressed the hope that the present budget will tend to make our own pastures more verdant. I concur in his recognition of the fact, and his expressed hope; and I fervently pray that at some near date he may be able to offer Canadians a perspective other than that of taxes, even

The Budget-Mr. Beaudry

decreased taxes, almost from birth to death- not to mention the post mortem cess on what may have been saved from the tax collector.

Far be it from me to berate this government for this state of our affairs. We gathered a lot of impetus in our disregard for a man's right to retain his earnings, during the period 1914-1921-and habit is a hard taskmaster. However we seem to have regained a more proper outlook on the relationship between expenditure and normal revenue; and this, I am sure, should incite Canadians to remain in this country.

May I suggest to the minister that two more strokes of his brush might help to give our pastures a greener tint. One affects almost exclusively the part of Canada for which I sit in this house. I would submit to the Minister of Finance (Mr. Abbott) that his purpose would be achieved in part if he would bend some of his efforts toward obtaining for Canadians of the French language more adequate representation in what constitutes the greener pastures of the civil service- the higher brackets financially and executively. To him and the other members of the cabinet I would point out that the assurance of better things to come in that field would have undoubted influence over my compatriots of the French language in keeping them at home.

The other suggestion is with respect to the country at large. May I suggest to the Minister of Finance that in his future taxation plans he might incorporate some means of telling Canadians that they are not born in this country with the taxation millstone forever around their necks, some means of inciting Canadians to remain at home instead of emigrating at the rate of thousands a year, some means of ensuring that, if from the age of puberty to the age of near senility they must pay tribute to him, there may come a time in their lives when they can prepare to meet their Maker without first filing an income tax return.

Concretely, may I suggest to the Minister of Finance that from the age of fifty-five onwards, Canadians be entitled to a decrease in the current rate of income taxation, a decrease based both on their age and on the amount of income they are fortunate enough to have accumulated or to earn?

May I urge that, beginning with the taxation year in which a Canadian citizen has reached the age of fifty-five, he be given an exemption of five per cent of the taxable amount of his income for each year of age he has reached from and over fifty-five, until the age of sixty-one, inclusively, and that from then on the exemption increase by ten per cent for each year of age? In practice this

would mean that a man of fifty-eight would pay eighty per cent of the tax which his neighbour of forty would pay on a similar revenue, that a man of sixty-two would pay fifty per cent of the tax which he would have paid had he been ten years younger; and it would also mean that a man of sixty-seven would become free from his duties to the country, income-taxationwise.

There may be some objections pertaining to the amount of taxation a rich man of seventy years of age might evade. But there would be no difficulty, I am sure, in setting a limit to the amount of revenue to which this provision should apply, and perhaps I might suggest that the average Canadian would be well protected and would not be discriminated against if the maximum revenue to which this exemption might be applicable were set at $8,000 a year.

The bureau of statistics sets the normal expectancy of death in Canada at 66-29 years for women and 62-95 years for men. In the light of this, it could hardly be thought that, by such an exemption as I advocate, the country would suffer a considerable loss of revenue. But the minister would do what few ministers of finance in any country have found it possible to do; he would instil in the heart of every Canadian the hope that, at some time, they might thumb their nose at his minions. That, of course, might be enough to prolong the life of every citizen by some years.

We are daily legislating toward achieving some measure of state-controlled financial security for old age. Should we not also legislate for those Canadians who would rather provide for that security themselves, with a greater measure of pride and satisfaction- and more economically to the country?

Pension plans and insurance plans are encouraged by the government and exemptions are given on amounts contributed toward them by the tax payer; yet there is generally a toll on their benefits. Would it not be more logical for these exemptions to remain applicable, and to ensure that, if a beneficiary lives long enough to enjoy the fruit of his savings, he shall do so to the fullest measure possible and not only after a division of spoils with the lord1 high collector?

Should not Canada grant that a man has carried his full share of the financial burden of the country when he has contributed to the full extent of his financial resources for forty years, and should there not be a tapering off from then on, so that those fortunate few who have escaped the scythe may also avoid the scalpel of our income amputation revenue department?

The Budget-Mr. P. C. Black

I believe that the minister has figures indicating that the proportion of citizens in this country with revenue bearing incomes for the treasury is somewhat lower than six per cent in the sixty year old category. I am sure that no one in Canada would begrudge that six per cent a slightly richer old age, least of all the Minister of Finance whose physical appearance would lead one to believe that he himself would enjoy the exemption for quite some time.

There are some few in this house who seem to believe that along with our brand new citizenship certificates should go a brand new treasury certificate, valid for $20 a month for life. The minister has it in his power to grant, with the rights of citizenship, another right, that to a tax-free old age and to a modified taxation in later middle age.

I hope that these will soon go hand in hand. This duality of rights would, I believe, instil in Canadians more faith in their future than the pessimistic prophecies of the apostle of a commonwealth or of a credit which has nothing social about it unless perhaps its promised manifestations are used as tokens for parlour games at social gatherings.

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

Percy Chapman Black

Progressive Conservative

Mr. PERCY C BLACK (Cumberland):

I have nothing but good will personally for the Minister of Finance (Mr. Abbott) who brought in this budget. I am not sure, however, that he has not taken something that rightfully belongs to Nova Scotia, because we have had able finance ministers from that province, including his predecessor, the present Minister of Justice (Mr. Ilsley), Hon. James Layton Ralston, the Hon. E. N. Rhodes, Hon. W. S. Fielding, and Sir Charles Tupper.

The budget is for the 1947-48 period. It is for the third post-war year. We as Canadians are proud of our achievements during the war and our favoured position in comparison with other countries of the world. It is well that we have a high national income, and we must maintain it in order to meet the cost of government. But it is becoming painfully evident to every housewife in the low and moderate income groups that much of the increased income the minister talks about is swallowed up in the increased cost of articles that go into the family budget.

The ordinary expenses of the government increased $200 million in 1946-47. The budget for the current year shows a further increase in costs of seventeen departments of government, with the supplementary estimates still to be provided for. The government appears to love to tax for its own fast increasing expenditures and also for provincial governments which would like some fields of this taxation for their own purposes.

83166-209i

Many will be pleased that there has been a reduction in the income tax, and it could not be otherwise with war expenditures no longer necessary. Relief goes to those in the higher tax bracket. They have been severely taxed and few will begrudge them the relief this budget brings, but there is no relief for those in the lower and middle brackets. Their indirect taxes are not reduced by a penny. Their direct tax relief is cancelled out by higher costs. Already living costs have increased this calendar year in an amount greater than tax reductions to be enjoyed by half the income taxpayers of Canada. Business, moreover, has been greatly disappointed that there have not been cancellations or reductions in taxation imposed on business during the war. The Halifax Chronicle sized this up in a heading: "Business gets little out of budget- except lecture".

The Minister of Finance reports the national income in the last fiscal year to be $11,100 million. It is a matter of interest to all Canadians to know where this originates. About three-quarters, or $8 billion, is credited to the central provinces of Ontario and Quebec. The three premiers of the prairie provinces in recent signed statements claimed that the agricultural income for Manitoba last year was $250 million; for Saskatchewan $388 million and, for Alberta, $432 million, or a total of SI,070 million. Nova Scotia is reported by the bureau of statistics as having had $34,700,000. We are told that British Columbia is rolling in wealth and prosperity. Its population increased from 817,861 in the 1941 census to 1,020.000 in 1946, according to the ration book and other returns, and this is, to a considerable extent, a drain on us in eastern Canada. It is already planning on three additional members after the next census, and these will probably be at the expense of Nova Scotia.

It is recognized that the maritime provinces are not sharing in the prosperity of other parts of Canada. Coming from Nova Scotia, I take pride in the development of Canada as a whole, but my first duty is to the mari-times which need all the help they can get, and I appeal to parliament for more than "sympathetic consideration". Nova Scotia has a great history. There would have been no Canada without it. Responsible government started there, as did free schools. Confederation had its beginning in Nova Scotia. We have done our part in peace and war. Nova Scotia has great resources in farms, mines, fish, lumber, industry and tourist attraction. The tourist branch at Ottawa has only thirty on its staff for all Canada, while the film board has over six hundred. Unfortunately most of our production has been in the raw unfinished

The Budget-Mr. P. C. Black

form, exported to provide the least employment to our home people. We have raised and educated our population and a large portion have gone to build up other parts of Canada. They have been leaders in banking, in industry, in the professions, in education and in statesmanship. Many Nova Scotians now feel that we have too much statesmanship for others and not enough looking after our own interests.

It is recognized that we have not prospered in confederation as have other parts of the country. The government and many of the public men in office at Ottawa seem to take it for granted that this has to be our lot. If we had been told at confederation that we were to be "unprivileged", the "have not" province, the "poor relation", terms we now hear so often, there would have been no confederation, and we would have made our own way as part of the British empire. Although I still believe in Canada, I also earnestly believe that we in Nova Scotia who have contributed so much over the years deserve better treatment within the Canadian nation.

This government and their party have been given support by the people of Nova Scotia rarely equalled in any country, and our people are now more and more convinced that we have had too much politics and we have not had fair treatment. They recognize that we have some disabilities and they must be overcome so that we may share in Canadian prosperity. That many men outside the mari-times are now of this opinion was recently illustrated when the hon. member for Davenport (Mr. MacNicol) came whole-heartedly to the support of our cause. I am pleased that to some extent I was instrumental in inducing him to come to the maritime provinces last summer. This great Canadian geographer, industrialist and parliamentarian, who has criss-crossed and covered Canada many times in his travels, has taken up the cudgels in our behalf. From his wide, embracing store of knowledge of the nation, he proclaims us to be the forgotten part of Canada. I appeal to every public man and businessman, irrespective of their politics, to come to our rescue and to aid us in our plight.

I have heard several other hon. members ask privately "why do we stand for things as they are?" My answer is, too much politics.

I do not like to repeat and enumerate our disabilities and grievances, but continued neglect makes repetition necessary. Hon. members have been told again and again about war contracts. From July 14, 1939, to December 31, 1916, the maritime provinces received $380,500,000, while Quebec had $5,223,600,000 and Ontario $5,436,700,000, a comparison of $10,660,300,000 to our $380,500,000 in the maritimes.

In shipbuilding contracts the government now passes us by. When all yards have to be worked to capacity we had some contracts. Now when the government can pick and choose, Halifax and Pictou are not on their list.

The government had many crown companies operating during the war. On page 35, dealing with the budget, the capital assets of the crown companies still operating are listed at $85,755,000. Not one dollar of capital expenditure included in this amount was made in either Nova Scotia or the maritimes. There are also large expenditures, which I shall not refer to in detail, at Chalk river, running to $27 million. The trading company known as the Canadian Commercial Corporation has large contracts for $300,872,575 for all Canada, but only $2,151,351 had application to Nova Scotia. This has to do with price stabilization and export credits.

There never has been and never could be a like opportunity to establish industries in Nova Scotia with peacetime potentialities as during the war and the years since. However, this appears to have been farthest from the thoughts of those entrusted with the spending of the billions of dollars of war moneys.

There were large expenditures for military camps and airfields, but these have all been wrecked and made useless for peacetime industry and development, thus giving rise to the impression that, in their origin, the benefit of contractors was a greater consideration than the future well-being of the people in these localities. Debert, now a wreck, was the scene of approximately a $14 million expenditure. Contractors benefited from $4 million expended at Windsor; Cornwallis, about $10 million; Shelburne, over $4 million; the Exhibition grounds, Halifax, $1 million ; Maitland, $3 million; and Point Edward, Cape Breton Island, $3 million; with like expenditures totalling in all more than $50 million there has been practically nothing to assist the permanent building up of our province and the providing of peacetime employment. One peacetime establishment, the naval college, was transferred to Royal Roads in British Columbia. I had an opportunity of visiting Royal Roads and I regret exceedingly that the college was taken from Nova Scotia although it now has a magnificent site.

Although we have heard much about the Canso bridge or causeway, and Premier MacMillan did announce before the last election that the Minister of Reconstruction and Supply (Mr. Howe) had approved this construction, nothing has been done except a survey which was made under pressure. The

The Budget-Mr. P. C. Black

Jacques Cartier bridge at Montreal was built at a capital expenditure of $19 million and five per cent bonds issued. Deficits have accumulated totalling $6,822,000, all guaranteed or paid by the federal government. The St. Lawrence bridge cost $23 million plus deficits, but no such expenditures in Nova Scotia at Canso or Halifax harbour!

The Chignecto canal has been before this house repeatedly, and it has been projected ever since the Acadians first came to Nova Scotia. It is warranted both as a commercial and as a defence undertaking, and it would have been built long years ago except for the fact that our part of Canada has been in the "have not" class.

Central Canada has had $243,752,399.78 expended on canals, and there have been accumulated deficits of $114,130,209.81, or a total of $357,882,609.59. There is an additional expenditure of $275 million projected on the St. Lawrence canal. We in Nova Scotia have a canal, the small St. Peters canal, started in 1854, suspended in 1856, resumed in 1865, finished in 1867-all before confederation; also a small canal for fishing boats in Guys-borough. But the Chignecto canal, a construction which would enhance the entire economy of the maritimes, has been put off from the days when the Indians and early settlers used this crossing.

We contributed to the construction of the Canadian Pacific railway, but we were never permitted to have it enter Nova Scotia. We also contributed to the Grand Trunk Pacific costing hundreds of millions of dollars, and all we got was the election cry, "Listen to the whistle of the Hong Kong train." The Sydney-Pictou-Moncton railway waits with other Nova Scotia projects for rebuilding. It now runs up and down, in and out and round about, so that at modern railway speed everyone that rides it would be a "humpty dumpty."

There has been the possibility of cheap tidal power plants at Petitcodiac, Chignecto and

other places, providing large blocks of still cheaper secondary power, but they have remained only mirages.

The Minas basin ferry service was in operation for more than forty years between Kingsport, Parrsboro and Wolfville. The government of Nova Scotia had the motor ferry boat Kipawo built and operated from 1928 under subsidies. It was required for war purposes, and traffic was then compelled to go 150 miles during the shortage of gasoline and rubber. Our people willingly put up with this during the war, but naturally they expected the service to be restored at its conclusion. However, this boat the Kipawo, was sold in Newfoundland by War Assets Corporation for about its cost price-$26,000- and no boat, among the hundreds built and leased by the government, was made available for the resumption of this service, although local parties had agreed to undertake its operation.

I have received repeated representations from the boards of trade and others, the last being as follows under date of May 3 of this year:

A report of the Valley board of trade, held in Kentville, Wednesday evening, was given by W. C. Mosher, who stated that efforts are being made to restore the ferry service between Parrsboro, Wolfville and Kingsport, although the railway is not interested in the project, the matter is being taken up.

Money for everything but not for this service, which was a matter of pride to the people of the localities served but now a further proof of decadence. I may say that the $26,000 realized from the sale of this boat will now go into the surplus funds to swell the $352 million reported by the Minister of Finance as a surplus.

I obtained a list from the war expenditures committee of some of the ships acquired by the government during the war, and money or costs did not appear to be a factor. There are sixty-three ships in this list, and I am going to give the costs on some of them:

Cost repairs and rents while

Ship's name-Length-Name owner under R.C.N.

Fifer yacht, 104 feet, Empire Stevedoring Co., Vancouver $ 29,958 41Andre Dupre yacht, 125 feet, Marine Industry

31,008 21Rayon D'Or, trawler, 140 feet, Maritime Fisheries, Quebec 41,347 78H.C. 60 yacht, 97 feet, Eastern Motorship Co., Halifax_ 27,213 68Norsal, fishing vessel, 128 feet, Powell River Co., Vancouver ($15,048.00 per year) Total ; 14,835 02G. V. 14 gate vessel, 135 feet, Marine Industries

52,225 33H. C.P. yacht, 53 feet, Fulford ($1.00 rental)

484 57

Cost of

reconditioning for return to owners or cash settlement $ 17,985 98

9,010 73 103,361 51 10,049 25

16,500 00 24,906 44 22,448 52

Reported to war expenditures committee. Sixty-three vessels in all, yachts, tugs, fishing vessels,

trawlers, motor launches, gate vessels, motor vessels, et cetera.. Some vessels were chartered at $1.00 per year, plus repairs while in operation, overhaul costs before being returned to owners.

The Budget-Mr. P. C. Black

Our people are supposed to be pleased when they learn that private owners, in addition to the return of their boats, were awarded costs of repairs in excess of their original value. No ferry boat! No post-war industries for us! Sugar refinery closed! Rolling mills and airplane factories and other plants closed! The plate mill made into scrap! Not so in central Canada.

To show how we fared in Nova Scotia in comparison with central Canada, I am going to quote a few sentences from the proceedings of the committee on war expenditures on May 30. 1946. at page 527:

Mr. Cote, M.P. (Verdun): ... it is my duty towards the corporation (war assets) and the Department of Reconstruction and Supply to tell you, Mr. Chairman, that the people of Verdun and the outskirts of Montreal generally, will derive a great benefit from the setting up of this multiple-tenancy occupancy of that building in Verdun ... In Verdun there was no industry before . . . Close to forty industries are now operating, not all full time yet, but most of them will be before long, and they will provide employment to around four thousand people . . . I think the members will agree with me . . . that the corporation and the Department of Reconstruction and Supply deserve credit for what has been done there.

Mr. Black (Cumberland): Before Mr. Berry

answ-ers, it seems that it is in the Montreal and Toronto areas where they are to reap the benefit of the application of this policy, where new industries are being established. I was wondering if by some happy circumstance that policy could be extended to our province, more particularly to Amherst, where there are a number of large buildings . . . they have as fine a record in the building of planes as . . . any other place in Canada.

There is the subject of government assistance for our marsh lands in Nova Scotia and New Brunswick. There was never in the history of this parliament a better case made out for a special project, and it does not need further argument from me.

The government has been pleaded with by the ministers of agriculture of Nova Scotia and New Brunswick and others to announce its permanent policy, and to get work under way this year while the weather is favourable. The federal Minister of Agriculture (Mr. Gardiner) made his budget speech but made no reference to this.

All the members from Nova Scotia have had a recent letter from Hon. Mr. Mackenzie, Minister of Agriculture of Nova Scotia, dated May 6, asking for action. I quote a few sentences from his annual report to the provincial legislature, Department of Agriculture, page 150. I am not quoting from his letter, although I have it here:

Repairs to dykes and aboiteaux on Nova Scotia marsh lands have been carried on for some years past on an emergency basis, pending

the approval of a more comprehensive policy providing for a long-term constructive programme that will eventually restore these fertile dyke-lands to their normal productive capacity.

In former times when these marshes were at the peak of production they contributed much wealth to the adjoining and neighbouring upland farms which in most cases were too small in acreage to successfully carry on without the hay, pasture, and grain produced on the dyke-lands. If Nova Scotia is to expand farm production, these marsh lands must be rehabilitated, for it is in these areas that the majority of our productive and potentially productive farms are located . . . Nova Scotia must have more crop land and as these dyke-lands are fertile and productive and when properly drained and protected from tides compare favourably with the best prairie soils, the rehabilitation is simply a matter of conserving an important and necessary natural resource.

Both federal and provincial authorities have now accepted the principle that the rehabilitation of the marsh lands is of national importance and that the undertaking should be organized on a permanent basis.

There is very much more I could say, Mr. Speaker, I have in my hand a report called "Fifty Years of Progress on Dominion Experimental Farms". At the front is a picture of the federal Minister of Agriculture, and it is quite proper that it should be there. I was interested in seeing his report on the experimental farm at Nappan in my constituency. I am going to read just a few lines from that, at page 103:

The dyke-land of this farm forms a part of one of the largest tracts of dyke-land on the continent. . . These vast dyke-lands will ever remain a tribute to the work of the French, for it was they who first won them from the tides of Fundy.

I say with a little shame, that no such tribute could be paid to the men who are carrying the responsibility for rehabilitating these lands at the present time. The provincial governments of Nova Scotia and New Brunswick are prepared to do their part. The property owners are prepared to do their part, but it is impossible for them to do so without the assistance of the minister and the government at Ottawa. The minister last year laid down a general policy the undertaking involving quite an expenditure. He has approved repeatedly, but the difficulty is that no action is taken. There is nothing being done, and the people who are interested in farming down there are becoming more and more discouraged.

The operation of the coalfields, a great national industry in Nova Scotia, was under the control of the federal government during the war, but this has been far from satisfactory. The government has paid out large subsidies for the production of coal, for

The Budget-Mr. P. C. Black

which Nova Scotia should be grateful, but the government's policies have not given good results. Experienced miners were encouraged to enlist and men with no experience were sent to the coalfields throughout the war while heavy income taxes discouraged overtime work. We should be producing 8,000,000 tons of coal a year, worth $50,000,000, but there has been continuous dissatisfaction among the miners, and the industry has been in the worst position in more than twenty years. I want to thank the Minister of Labour (Mr. Mitchell) on behalf of all Nova Scotia for his efforts in settling this long-drawn-out and very unnecessary strike.

While I am not taken into consultation very often, I feel that the members from Nova Scotia should forget partisanship and work together. There is much I could say with [DOT]egard to the subject of dominion-provincial igreements as it applies to Nova Scotia. I set out my views in a radio address on February 18, in which I stated, "From a money standpoint it is now difficult for Nova Scotia to refuse the last offer of subsidy payments and our provincial taxpayers would suffer by a refusal." I am, however, against the trend of centralization and dictation emanating from Ottawa.

I read with interest Premier Macdonald's address before the Halifax junior board of trade and his commendation of the efforts of the Nova Scotia government in the depression years to keep the province solvent. I am especially interested in that because I was a member of the government of Nova Scotia at that time. We were then administering affairs in Nova Scotia with a revenue around $8,000,000, while $22,000,000 is now expended. We needed additional revenue, but we did not impose a provincial income tax in Nova Scotia and it has never been imposed. But what has been the result? When the federal government took over the entire income tax they increased taxation more in Nova Scotia than in any other province-from nothing to the highest level. Other provinces had only the income tax increased that they had already imposed. Nova Scotia got no credit for its thrift or for imposing higher taxes than other provinces on gasoline, car licences and other things. Nova Scotia financed its own requirements and issued its own bonds during the depression years. It met all its obligations and kept all its municipalities solvent. The four western provinces were largely financed by the federal government during the depression period by federal treasury bills as follows: Total treasury bill debt:

Manitoba $24,734,451.82

Saskatchewan.. 80,441,852.44

Alberta 26,212,000.00

British Columbia 34,112,249.99

Total $165,500,554.25

When the federal government entered into separate agreements with the four western provinces, they made settlements of these treasury bills, which were still owing by these provinces, the total being dealt with as follows:

To be cancelled $55,456)164.06

To be repaid (out of proceeds of natural resources settlement) 15,987,500.00

To be refunded (without interest) 49,729,979.99

To be refunded (with interest over a period of 30 years at 2-58 which liquidates the principal as well) 44,326,910.19

We in the east were not consulted when this settlement was made. The four western provinces are rolling in wealth and national income in comparison with the maritimes, but no comparable treatment is accorded to us. Our people got first information through the boastings of the western premiers in the press.

Nova Scotia met the impact of the depression as best it could, and many municipalities, including Cumberland, never went on relief. The province did not pay for shelter or rent and property holders made heavy contributions, all of which saved the federal government large sums. Nova Scotia still has a funded debt of $25,389,000 of 41 per cent bonds and $15,185,000 of 5 per cent bonds, making a total of $40,574,000 carried from the depression years. If Nova Scotia had the same consideration as the four western provinces

this debt would be settled by:

Cancelling $13,592,000

Allowance for natural resources

Nova Scotia helped pay for __________ 3,918.000

By refunding without interest . .. 12,189,000

By having paid off in 30 yearly instalments at 2f per cent interest and principal 10,875,000

In previous sessions I have referred to the unfairness of the federal tax on electricity. The tax is on the cost to users of electricity generated by private enterprise and my county of Cumberland pays about $150,000 a year, while Montreal and other places served by government generated electricity and low cost financing escape paying such taxes. Heavy corporation taxes increase our costs on privately generated electric energy, but not on government hydro electricity. The tax is on the cost to users, not on the kilowatts, so that users

The Budget-Mr. P. C. Black

from the smaller and less efficient plants pay the heavy taxes. Nova Scotia built 218-5 miles of rural electrification last year, subsidized and encouraged its construction in an effort to bring modern conveniences to rural communities; and the federal government makes no contribution, assumes no responsibility, but lays on heavy electric taxes under the guise of war. Nova Scotia has a programme to build 500 miles of rural electrification next year and the following years, and Ottawa will gather in more taxes from us.

I join with the hon. member for Royal (Mr. Brooks) in his protest against Ottawa's treatment of Nova Scotia and New Brunswick with respect to the marketing of birch affected by "dieback". This affects hundreds of millions of feet of hardwood in these provinces. I resent the insinuation of the Minister of Reconstruction and Supply (Mr. Howe) that lumbermen of the maritime provinces cannot be trusted. We have a well established lands and forests department in Nova Scotia, now presided over by Hon. J. H. MacQuarrie, who stated in Halifax on May 10:

People at Ottawa do not know what they are doing. Ottawa was to blame for the fact that Nova Scotia lumbermen could not market birch affected by dieback, wood that would be useless in five years or less . . . We have not ceased one iota in our efforts and we will continue our efforts until we do get relief for the people of Nova Scotia. They (Ottawa) do not seem to have the faintest knowledge of the situation.

This is one more proof that Nova Scotia's interests get little consideration at Ottawa today. Surely the requests of the department in Nova Scotia should be accepted.

I have not told the whole story, but private members from all parts of Canada should join forces with the hon. member from Davenport, so that we in Nova Scotia will not be "the forgotten part of Canada."

I do not want hon. members to think, even if we have not had fair treatment and even if we have not prospered as we should, that we have not great resources and great production, shipped away, it is true, mostly in the rough and unrefined form when industry should be based upon it at home. This was well pointed out by the hon. member for Colchester-Hants (Mr. Stanfield) in his splendid speech in this debate when he said:

Many Canadians who have never been to the maritimes seem to have the idea that maritimers are only heweTS of wood and drawers of water. This certainly is a mistaken idea. The maritimes are a beautiful country and the maritimers are the highest type of Canadian citizens.

Nova Scotia must indeed have great wealth as well as great thrift, or it would not have the capacity to purchase the long list of articles and commodities from central Canada

totalling many millions of dollars every year with a minimum of reciprocation. The heads of industry and bankers marvel at our purchases of motor cars, trucks, tires, batteries, farm machinery, cement, electric motors, tobacco, sugar, flour, radios, medicines, tools, jewellery and a hundred and one articles, and still we are able to educate our boys and girls so that they may be enticed away from home to take places at the top all over Canada. We are now told that there is to be a big increase in freight rates on our purchases and sales. We in the maritimes threw in our lot with Quebec and Ontario and, if they are to supply us with our necessities such as motor cars, trucks, cement, farm machinery, electric motors and such articles, I think we have the right to have them delivered to us freight paid at the lowest factory prices.

For better or for worse, we are part of Canada which has a proud place in the world today. Our people are more and more coming to the opinion that we have not had a fair deal. We in Nova Scotia want our proper place as an integral part of this great and expanding country.

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SC

Walter Frederick Kuhl

Social Credit

Mr. W. F. KUHL (Jasper-Edson):

Mr. Speaker, consideration of a national budget raises the question of fundamental principles which govern in the national economy. To say that we cannot achieve national greatness unless we lay down and pursue sound long-range objectives and sound fundamental principles is to make an assertion which is selfevident. The point at issue, however, is what constitutes sound long-range objectives and sound fundamental principles. Each political party represented in this house considers that the fundamental principles and objectives to which it subscribes are sound, even though they are at variance with those of other parties. These principles therefore cannot all be right and neither can they all be wrong; and I doubt very much that it will ever be determined in this house which of these principles are sound and which are not. The political party atmosphere will not permit such to be done. "My party; right or wrong, my party," remains the dominant attitude of all political parties in this house. The most that can be hoped for is that the discussion and debate upon these issues in parliament will enable the electors to draw their own conclusions and determine their own course of action, and in the few moments at my disposal I wish to make my small contribution to that end.

So confused are the issues today that it is necessary that we define more carefully than ever before each and every term we use. There

The Budget-Mr. Kuhl

can be no intelligent discussion of any subject until we first define our terms. As simple as they are, such terms as "democracy," "freedom," "security" and so on, today mean different things to different people. That is equally true of many other terms we use such as "capitalism," "free enterprise", "private enterprise," "full employment," "socialism," "communism", and so forth. Such confusion is abroad today that we find totalitarianism masquerading under the cloak of democracy, slavery being represented as freedom and anti-Christianity being propagated under the sacred name of Christianity. How imperative therefore that we have a clear conception of what is involved in the terms which we use. I should like to use my time on this occasion to indicate my conception of some of the terms to which I have referred.

I wish, first of all, to indicate what conditions I think must prevail before our society can be characterized as a genuine democracy. As to definitions, I prefer the one given by Major C. H. Douglas, the founder of social credit principles, when he said that democracy is government in accordance with the will of the people. This means that in a genuine democracy the ^people should be able to get the results they want from the management of their affairs.

Accepting this as a general definition of democracy, I think it is fair to say that systems which have been designated as democratic have failed dismally to produce results in accordance with the will of the people. Even in countries where the outward forms of democracy have been most successfully established, the people have obtained very few of the results they wanted. On the contrary they have had insecurity, poverty, want and war meted out to them, and have seen individual freedom diminishing at an alarming rate. Instead of government in accordance with the will of the people, we have had government contrary to the will of the people.

The people of Canada are not getting from their present government the results which they desire. The people of Canada are willing and able to produce the things required for a standard of living very much higher than what they are at present enjoying. The standard of living which the people are entitled to enjoy should be limited only by their willingness to produce and their capacity to consume. At the present level of prices that should certainly represent an income of at least $4,000 a year, tax free, for every family of four. And as industry gets back to capacity production on a peacetime basis a substantial improvement on that amount should be possible.

I say, sir, that the people of Canada are willing and able to produce goods and services necessary to sustain and improve such a standard of living. But they can neither raise production completely to those levels, nor can they bring about the complete distribution of that production unless their efforts are accompanied by certain actions which the government must take, actions which the people themselves cannot take and which must therefore be undertaken by the government on their behalf.

The present government has not taken such steps and has not legislated in such a manner as to permit the people to produce to the limit of their desire to consume, and which will permit them to consume to the extent of that production. The present government is not governing in accordance with the will of the people of this country.

The question therefore arises: how can a government be compelled to govern in accordance with the will of the people? Before this question can properly be answered, another matter of fundamental importance must be determined, and that is the real purpose and function of parliament. Parliament today has departed a very great distance from its real purpose and function. I consider that Major Douglas has stated the purpose of parliamentary institutions as well as anyone has. In a speech at Buxton on June 9, 1934, he made the following statement:

Instead of electing representatives to inform hankers and industrialists (who understand the technique of their jobs perfectly) how to do them, and to pass a multitude of laws which, while providing unnecessary jobs for large numbers of people who could be better employed still further impede industry, the business of democracy is to elect representatives who will insist upon results and will if necessary pillory the actual individuals who are responsible either for the attainment of results or their non-attainment.

It is not a bit of use asking democracies to decide upon matters of technique; and it is quite certain, as has already been demonstrated, that if you throw a plan to a democracy it will be torn to shreds.

It is not the business of the parliamentary machine to reform, for instance, the financial system. It is the business of the parliamentary machine to transmit the desires of the people for results out of the financial system, and to transmit to the people the names of individuals who are responsible for the financial system, so that by the exercise of the right of eminent domain, which has undoubtedly been established as vested in the representatives of the people, they may if necessary take steps to remove those responsible for impeding the will of the people. If it is pleaded in extenuation that those in charge of any particular function of the state, such as finance, do not know how to produce the results desired, then it is the business of parliament to provide them with all the advice available. But if they will neither take action within a

The Budget-Mr. Kuhl

reasonable period of time and will not accept advice if provided, then it is the business of the representatives of the people to remove them, whether they are alleged to be operating under a system of private enterprise or as public departments.

In the fewest possible words Major Douglas contends that the chief duty of a member of parliament consists in seeing that the people get the results which they want from the management of their affairs, and not in suggesting the methods by which those results can be obtained.

In another part of his Buxton speech, Major Douglas makes the following comment upon the situation into which parliament has drifted as a consequence of concerning itself about methods instead of results:

We elect parliamentary representatives at the present time to pass laws of a highly technical nature, not to ensure that certain results are achieved. As a result of this, not merely in this country but everywhere in the world, as far as my observation takes me, we are witnessing a set of second-rate experts in the seats of government ineffectively endeavouring to give technical direction to a set of first-rate experts who are actually carrying on the functions by which society lives.

I agree whole-heartedly with these statements and I suggest it is imperative that Canadians take steps immediately to rehabilitate democracy in Canada in accordance with the principles suggested by Major Douglas. It is not the duty of members of parliament to pose as experts on methods. It is quite in order for a member of parliament to be an expert on methods, but it is not his function as a representative of the people. It is his business to see that the people get the results which they want. And if he is not an expert himself, it is his duty to see that experts are hired to devise methods by which results can be obtained.

Therefore, on behalf of the electors of Jasper-Edson, whose spokesman I am privileged to be, I demand that the government, and in particular the Minister of Finance (Mr. Abbott) see that methods are devised which will permit the electors of Jasper-Edson, along with the rest of the people of Canada, to produce to the limit of their desire to consume, and which will permit them to buy to the extent of that production, without in any way interfering with their individual and personal freedom.

If the experts at present employed are either unable or unwilling to produce the results desired within a reasonable period of time, then the government should dismiss them and replace them with individuals who can and will produce results. I quite realize, however, that the voice of one member of parliatMr. Kuhl.]

ment, or of even a dozen, is not sufficient to compel the government to take action along these lines. Were a majority of members from both sides of the house to do so, I am satisfied that it would not be long before such results would be forthcoming. The reasons that a majority of members in this house will not rise and make such demands of the government are twofold: party politics and lack of organization on the part of the people, such that they can insist upon obedience to their *will. The political party system makes it very difficult for the people to exercise their democratic privileges and assume their personal responsibilities, even if they are so inclined. The political party system cannot properly serve democracy. Once every four or five years, the people are given an opportunity to vote simultaneously for a candidate and a party platform. The people as a whole have no voice in deciding the contents of these platforms. They are prepared by a small minority group with an eye to vote-catching. Often the platform deals for the most part with methods, concerning which neither the drafters of the platform nor the general public are qualified to form a wise judgment. Nothing could be more confusing. Elections find the voter wondering whether to vote for a candidate, a platform or a political party.

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PC

Arthur Leroy Smith

Progressive Conservative

Mr. SMITH (Calgary West):

How did you get elected?

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Walter Frederick Kuhl

Social Credit

Mr. KUHL:

I grant that I was elected on a political party basis, but I am trying to indicate in what way it can be improved.

During the election campaign, each party viciously attacks the platforms and the candidates of the other parties. The people being unorganized become the victims of high-pressure propaganda in which extravagant promises, abuse, deceit and even intimidation are used to trick them into voting power-seekers into office.

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PC

Arthur Leroy Smith

Progressive Conservative

Mr. SMITH (Calgary West):

I spoke

against you in your constituency and we lost our deposit, but I think you will agree with me that I never said one word in criticism of you. Will you not admit that?

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Walter Frederick Kuhl

Social Credit

Mr. KUHL:

I appreciate that very much. That was mutual.

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Ernest George Hansell

Social Credit

Mr. HANSELL:

It would not have made much difference anyway.

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Walter Frederick Kuhl

Social Credit

Mr. KUHL:

After the election, the successful candidates cannot be controlled by the electorate. They vote themselves their own indemnities and submit to the dictates of a few party "bosses" who are the party organization between elections. The policies which

The Budget-Mr. Kuhl

have been implemented under party government are certainly not in accordance with the will of the people.

Political parties need a considerable amount of money to maintain their organizations and their propaganda. Those who provide the party funds expect favours for their support. Having paid the piper, they can compel the party "bosses" to play any tune they desire. The results are exactly *what may be expected under the circumstances. The history of political parties has been an unsavory record of graft, patronage, and political corruption.

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PC

Arthur Leroy Smith

Progressive Conservative

Mr. SMITH (Calgary West):

You are not talking about Alberta now, are you?

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Walter Frederick Kuhl

Social Credit

Mr. KUHL:

I grant that so long as there are political parties, no matter what name they assume, they are subject to the same abuses, although we hope that we have a cleaner record in our party than has been the case with some of the older parties.

Political parties divide the people into conflicting camps-each striving to win their support to vote them into office and each attempting to discredit the other parties. Under such a system no representative, however sincere, can possibly serve the interests of the people effectively. The party system makes this impossible. "Every kingdom divided against itself is brought to desolation", and if one may judge by the results of the political party system in every country, it has all but succeeded in achieving this. There is no reason or need for the people of Canada to be divided into a number of conflicting political camps, because all people want substantially the same results from the management of their affairs.

All people want and must have adequate food, clothing and shelter, even though their individual tastes in this respect may vary considerably.

All people want security in old age or when they suffer loss of income through illness, unemployment or other causes

All people want the personal and individual freedom to worship God according to the dictates of conscience; to choose or refuse to do whatever they wish, provided that in so doing they do not interfere with the same right of every other individual; to acquire by their honest efforts their fair share of the desirable things of life, such as education, property, luxuries and so forth.

The only difference of opinion which exists is regarding the methods by which these results can be obtained. However the people, as the supreme authority, should not be concerned with methods.

The concern which the people should have is for an organization through which they 83166-2104

can secure obedience to their will. Workers in industry, farmers and others, have found it necessary to organize as unions in order to gain the objective they want. Because the principle underlying trade union movements is right, they have had a measure of success in securing better working conditions and wages. Political and economic systems can be made to function in the best interests of the people, if they will organize for that purpose, just as trade unions organize for a more limited purpose.

It is gratifying to me to observe that such an organization has already commenced in Canada and that it is growing daily. The movement and the organization to which I refer is the Union of Electors. This movement is something new in the political life of Canada, but it is already far beyond the stage of infancy. Its greatest strength is at the moment in the province of Quebec, which is evident from the attention which the hon. members from the province of Quebec are paying to the hon. member for Pontiac (Mr. Caouette), who was elected to this parliament, not as a member of a political party, but because of the assurance which he gave the electors of Pontiac that- he would at all times demand the results which they desired.

The Union of Electors is not a political party. It is a union of the voters who are organized to get the results desired in common by all the people, irrespective of race, religion or party affiliation.

The objectives of the Union of Electors are:

1. To state the results wanted from the management of the affairs of the country in all spheres affecting the lives of the people.

2. To control the elected representatives of the people at all times, and through them, all the people's governing bodies, local, provincial and national.

3. To insist on and enforce obedience to the will of the people on all matters of policy.

It is only through such an organization of the electors that Canada or any other country can experience government in accordance with the will of the people. I am indeed glad, therefore, to see such an organization of the people developing in Canada, and I intend to do everything I can to encourage it and assist it until it encompasses the majority of Canadians from Vancouver to Halifax.

In my remarks thus far, Mr. Speaker, I have indicated some of the circumstances which I think must prevail in our society before it can be characterized as a genuine democracy. I have suggested that the duty of members of parliament in a democracy

The Budget-Mr. Kuhl

proper should be confined to securing results rather than devising and debating methods. I realize, however, that we shall not alter our course without a period of transition. Until the people are organized to demand otherwise, parliament will continue to discuss methods rather than results. Before concluding, therefore, I intend to contravene the principles which I have just enunciated, by making a few remarks concerning methods.

Judged from the point of view of orthodox budgets, this budget is no doubt as good a budget as any orthodox economist could draw up. My general criticism is that an orthodox budget does not reveal the true facts about the national economy. In a substantial measure, this budget falsifies and conceals the real economic facts and conditions of this country. I deplore this situation and, on behalf of the people who sent me here, I protest against it.

I say that this budget falsifies and conceals the real economic condition of the nation because it deals only with money which the government extracts from the taxpayers and indicates no relationship between the money in the hands of the people and the goods and services which they are expected to buy.

The question at the root of the whole situation is one of the monetization of real wealth. In the highly industrialized and power-mechanized system of production of today, a barter system of exchange is obviously impossible. The only means whereby the people can draw from the pool of national production is through the monetization of that pool of production. Money must be created and must be put into circulation before goods can be either produced or distributed. In a modem economy this is done largely through loans to industry created and lent by the chartered banks. The orthodox economist assumes that this means is sufficient to enable the people to buy back their production. He believes that the total money in the hands of the people is always equal to the total of the prices of goods which they are expected to buy. He believes that production and income are one and the same thing. Because he believes this, he concludes that if part of the national production is to be diverted to public services of various kinds, the only method of doing so is to take from the people in taxes an amount of money sufficient to divert to public service whatever part of the national production is required. Such a conclusion would be sound if the premise upon which it is based were sound. I contend, sir, that the premise is most unsound, and therefore any conclusion based upon it must also be unsound.

In normal times when there is not an abnormal expansion of capital goods, as during a war, and immediately following a war. income does not keep pace with production. Money income is always less than the price value of production. This premise is not conceded by orthodox economists, but it is nevertheless borne out by the facts of industry. Because money income is never equal to national production in normal times, I say it is unnecessary and unsound for a government, with control over the nation's money, to go into debt or to levy taxes in order to divert part of the national production to public services.

In normal times a country suffers from a lack of purchasing power as compared with its producing power. There is an actual physical shortage of money in the hands of all the people collectively as compared with the total prices of goods. An increasing proportion of our national production remains unmonetized. This unmonetized portion of national production has been partly monetized in the past by government borrowings of newly created bank money which is paid out for public works, bonuses, subsidies and for other governmental purposes. This does not balance the economy, however, for this money is charged to the national debt to be collected through taxes. But it is mathematically impossible for the people to buy the total of national production and pay these taxes as well. The most popular misconception as to why the poor are poor is that the rich are rich. Many imagine that their incomes are low because the incomes of others are too high. The implied remedy is, therefore, to tax the rich. I am not suggesting that the rich ought not to be taxed, but I do assert that it is impossible to distribute the whole of national production by taxing the money from the rich and giving it to the poor.

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SC

Ernest George Hansell

Social Credit

Mr. HANSELL:

That is the socialist idea.

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Walter Frederick Kuhl

Social Credit

Mr. KUHL:

Orthodox economists, including the Minister of Finance (Mr. Abbott) do not say that the poor are poor because the rich are rich, but the government's financial policy implies that such is their belief. In the debate upon the subsidy question, the Minister of Labour (Mr. Mitchell) asserted that all subsidies have come out of taxation and must necessarily do so. Such a statement certainly leaves the implication that the only method of helping the poorer is to tax the richer. I take issue with the Minister of Labour when he says that subsidies have come out of taxation.

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May 20, 1947