February 2, 1948

PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

This proposal does not include the question of the wisdom or the lack of wisdom of having wage controls if we are to have other controls. It does not touch the question of the advisability of having controls on the prices of farm products when the costs of what the farmer has to buy are allowed to increase. It does not touch on those matters in this proposal. I think it should. I think the public should have as unprejudiced a view of these matters as possible. Let the arguments for all sides of these issues be put forward. My hon. friends to the left of me have certain arguments; the government has some; we have some. What the people want is the truth, as nearly as it can be arrived at, and the wisest possible policies formulated.

Then the government's proposal-and here again the Prime Minister anticipated my criticism-is that the committee is to examine and report, but it says nothing about making recommendations. In all deference I suggest that most of the committees appointed by this house are not so limited. I suggest that powers ought to be given to the committee to make recommendations. Otherwise what are we to have? We are to have policies brought forward by only one party in this house. The Prime Minister suggests that members of all parties are to be on this committee, then says that it cannot make recommendations, and he suggests that that is an impartial approach to this question. I leave it to the house and to the public to decide whether or not that is a fair statement of the position.

The problem we are dealing with is a serious one. I said it was inflation. This government has been presumed to have anti-inflation policies. I suggest, Mr. Speaker, that it has had more inflationary policies than anti-inflationary ones. What we are interested in now is getting at the actual conditions. I suggest there are a great many facts that we do

not need that committee to get. Let me go over some of them.

On the basis of the cost of living in the years before the war, 1935-39 being taken as 100, the cost of living in Canada as announced in January of this year was 146. I venture to say that it is now over 150. The cost of living in this country went up 2-4 points in one month. It went up 15-4 in eight months. It went up 22-4 points in a year.

The cost of food is an important element in the cost of living. What has happened to that? The figures look high. They are high because at the time of the base period farm prices were relatively low. On the basis of 100 for pre-war days the cost of food announced in January of this year was 178-7. It went up 5-1 points in one month; it went up 27-1 points in eight months and it went up 38-3 in a year. Taking individual items in the cost of food, it is said that in a year the cost of bacon went up 113i per cent, the cost of butter 134 per cent, and the cost of milk 49 per cent. I mention these figures simply as evidence in the analysis of this situation.

There are some very significant facts in connection with that trend. Let me indicate a few of them. The rate of rise in the cost of living is increasing. It is increasing more rapidly in Canada than it is in the United States. It increased more rapidly over there in earlier days, but now it is increasing more rapidly here than it is over there. Since April last their cost of living increased 7-7 per cent; ours increased 15-4 per cent, or twice as much. Theirs increased 17-7 per cent in a year; ours increased 22-4 per cent in a year.

The third significant fact is that the cost of living in Canada bears more heavily on us than the cost of living in the United States bears on United States citizens. Industrial wages in this country are equal to 70-3 per cent of theirs, but the cost of living in this country is 77-7 per cent of theirs. I shall not take time to give the figures in any more detail.

The fourth significant fact is that the official statement of the increase in the cost of living does not reflect the full weight of that cost. The official statement is based on a subsistence level of living, and to all who are above that subsistence level the cost of living today is higher than the official figures show it to be.

The fifth significant fact I want to mention is this. On the basis of the present trend it has been estimated that if it continues at the present rate of increase for three months the cost of living here will equal or surpass the greatest height after the first world war. I

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mention these facts to impress this house and to impress the Canadian people with the seriousness of this problem and to suggest that it will not be solved just by asking a parliamentary body to get at some more facts. We have a great many of the essential facts now. Perhaps a parliamentary body can hunt out someone who is guilty. But the government has not lacked any power to do that up to the present time, as I shall show a 'little later on.

It is important to examine the causes of this condition. The Prime Minister, in a speech in this city a couple of weeks ago, said there might be a lot of mean people around taking advantage of this situation. The Secretary of State for External Affairs (Mr. St. Laurent) and, I think, the Minister of Labour (Mr. Mitchell) suggested there were greedy people around taking advantage of it. Some others said there were profiteers, and others said there were monopolies taking advantage of it.

What is the basic cause of this condition? It is the relationship of purchasing power to supplies. The Canadian government has the power to control the banking' affairs of this country, and it has allowed a policy of credit expansion which has expanded the credit of this country twice as fast as the supply of goods has been increased. Under those circumstances, as I intimated a short time ago, nothing can be expected but that prices will go up; and to the extent that the government did those things it alone is to blame, and no one else. One need not go into the specific figures at this time; that is one thing I hope we may get the officials of the government to come forward and tell us about.

The government has had power to deal with the expansion of credit. We had the figures the other day as to what that amounts to. It has also power to exercise certain controls. The criticism generally has been on the price of foods, although many other things enter into the cost of living. In recent days the chief criticism has been about prices. The government has maintained a type of control on the farm prices of foodstuffs, but it has not maintained controls on the costs of producing those foodstuffs. The result is that the production of certain foods in Canada has gone down. That is directly attributable in a large part to these policies. On December 19 last I read into the record a brief statement showing the effect of these policies on production in Canada; it will be found on page 521 of Hansard of that date. I should like to take a moment to refer to it again. The number of hogs on farms in Canada in 1913 was

4,968,000; in 1946 it had dropped to 1,771,000, or about one-third. In respect of meat, one thing on which controls have been retained, the total dressed and inspected in 1943 was 2,200 million pounds, while1 in 1947 it was only 1,290 million pounds. Cheese production in 1942 was 207,000,000 pounds. That was not a typical year. It was a good year; more was produced that year than in some other years, and a normal figure would be somewhat lower. In 1947, however, cheese production was only 118,000,000 pounds. I think in only one or two major agricultural items has production been maintained. At that time I also referred to the reduction in the acreage of feed grains, which are used for the production of this type of human food.

These are the facts. As to the extent to which government policy is responsible for this condition there may be some differences of opinion. There is no difference of opinion in the minds of the farmers, however. They have lost confidence in the farm price policies of this government, so they have to the extent I have shown, gone out of the production of these things.

What are the consequences of these rapidly rising prices, the condition we call inflation, the condition which in earlier years the government was said to be seeking at all times to prevent, the condition which has now gotten beyond its control? Let me mention some of the immediate effects and then some of the long term effects. One immediate effect is the virtual confiscation of a considerable part of the savings of the people. When a man's dollar is made worth only 50 or 60 cents, or on the basis of the official figures 66 cents, a vast number of people suffer. Another immediate effect is a lessening of the real value of pensions and all other fixed incomes. A third effect is the loss occasioned to all people who, when spending a dollar, find it is worth only 50 or 60 or 66 cents. Their feeling is very easy to comprehend. A fourth effect is a reduction in the standard of health and nutrition. When you have many people barely able to maintain health and nutrition, and perhaps many unable to do so, a reduction in the value of the dollar to 60 or 66 cents will force them far below a decent standard of living. Another effect is the stress and strain of wage disputes, when workers find their money will not buy as much as it once did. Finally there is the rise in production costs of all goods, which again expresses itself in the increasing difficulty of people with low incomes to buy enough to give themselves a reasonable standard of health and of living.

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As to the long term consequences I shall

mention four or five of them. First, confidence in the future is destroyed. Business hesitates to expand.

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LIB

Humphrey Mitchell (Minister of Labour)

Liberal

Mr. MITCHELL:

It has never expanded more quickly.

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

With what consequences? Look at your bank statements today and see the consequences.

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LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. CHEVRIER:

You said there was no expansion.

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

Let my hon. friend come forward with his speech when I am through. The destruction of savings dries up capital needed for expansion. My hon. friend is talking about the expansion of business. He cannot be talking about any expansion since the government's new policies were announced six or eight weeks ago. He must be talking about expansion prior to that time. Business will not expand very quickly under the embargoes and restrictive policies brought forward by this government, policies which the Minister of Finance the other day was forced to admit were the highest form of protectionism this country has ever known. Then there is the fear of a possible depression haunting everyone. There is also, as I hinted a moment ago, the recent decision of the government restricting the importation of goods from the United States; prohibiting, for example, the importation of vegetables into this country in the fall of the year, at a time when the supply cannot be augmented by the farmers of Canada. These are some of the consequences of the condition the government is presumably seeking to remedy.

I want now to refer specifically to the speech delivered by the Prime Minister in this city on January 20. At that time he dealt with what he regarded as the merits of the proposal now before us. I want to refer to two or three of his comments. I am quoting from the Ottawa Citizen of January 21. I understand it is a verbatim report of his remarks. At one point the Prime Minister had this to say:

No doubt, on the part of some, there has been, and continues to be profiteering . . . Mean men, where opportunity presents itself, will seek, at the expense of others, to profit by their own meanness.

Clearly, the task of all right-minded citizens, the task of governments and the task of parliaments is to make this sort of thing impossible, or as nearly so as it can be made.

Yet in addition to the appointment of this committee the government is only asking for

the continuance of powers it already has,

powers under which it has not cured this situation. Then the Prime Minister goes on:

To retain the necessary power to deal with such conduct in the coming fiscal year, we intend, as already announced to ask parliament to continue the wartime prices and trade board in being after March 31.

I answered that a minute ago when I said that the government has had that power right along. Yet it has failed to cure the difficulty. Under its use of these powers the condition has been allowed to develop to the extent I indicated a few minutes ago. Then the Prime Minister goes on to say:

Here I wish to draw attention to something I have all along believed, and asserted. It is that however mean and contemptible individuals may be in their private lives there is nothing they abhor quite so much as the exposure of their meanness in public.

And then-

One other thing I have long believed and asserted is that for social evils or anti-social behaviour, publicity is a much more effective remedy than penalty.

What I ask here, and what the Canadian people will wish to ask, is whether this is a publicity show that we are going into, when this committee is set up, or whether it is to be a serious attempt to deal with this matter. Then the Prime Minister goes on to say:

This is the philosophy on which the Industrial Disputes Investigation Act and the Combines Investigation Act were founded.

Well, if the Prime Minister expects wrongdoers to be tracked down only by publicity, I am afraid that there will still be wrongdoing long after this committee gets through with its work.

The Prime Minister continues:

We believe, however, that the mere existence, to say nothing of the work of the committee, will help to slow down the increases-

Not to stop the increases in the cost of living, but to "help to slow down the increase"! Mr. Speaker, if that is the highest hope the government has for the work of this committee, then I am afraid that not only the housewives but the people of Canada generally will be disappointed with what comes out of it. The Prime Minister finished the paragraph with these words:

And in cases where, for example, there has been or Is hoarding or profiteering, to effect a reduction in prices.

I am afraid that statement will not scare many hoarders or many profiteers, if we are to depend upon publicity instead of the enforcement of legal penalties to cure wrongdoing in this country.

What will come out of this committee? We have had parliamentary committees before,

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plenty of them. Let me mention three or four. In 1915 we had a flag committee; it had fourteen sittings. It reported but the government took no action on the report. In 1946 we had an industrial relations committee, set up to deal with the steel strike. It held forty-eight sittings' and reported, but it did nothing to end the strike. In the next year, 1947, the industrial relations committee dealt with the labour relations bill. Nothing was done. The whole matter must be gone over again. In 1946 the committee on Indian affairs met twenty-five times, and in 1947 it met sixty-seven times. There is some mention of legislation in the speech from the throne, but no sign of it yet.

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LIB

Donald Ferguson Brown

Liberal

Mr. BROWN:

Sixty-eight times.

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PC

Gordon Knapman Fraser

Progressive Conservative

Mr. FRASER:

Much worse.

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

Thank you for the correction.

Topic:   APPOINTMENT OF SPECIAL COMMITTEE TO INQUIRE INTO PRICE INCREASES AND MATTERS PERTAINING THERETO
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?

An hon. MEMBER:

You have not accomplished much.

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LIB

Donald Ferguson Brown

Liberal

Mr. BROWN:

Give us a chance and we will.

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

One parliamentary committee, however, did good work and got some action. The veterans affairs committee of 1946 was a notable exception to the others. It was well represented by all parties in the house. It held fifty-eight sittings in that year, and we now have consolidated legislation with respect to veterans affairs.

As I said a minute ago, with respect to the Prime Minister's suggestion that this is to be only a fact-finding committee, the government already has power to find out any facts it has not got at the present time. Let me indicate where these powers are. The National Emergency Transitional Powers Act of 1945 has been extended twice. It is now the law. and will remain so until the end of March of this year. And the government says that the act is to be extended. Under that act emergency regulations were set up with respect to many things, among which are found the following powers with respect to investigations, prosecutions, penalties and so on. I shall read only the beginnings of some of the paragraphs in order to indicate the powers the government now has, and has had for all these years. But apparently they have been of little effect. And if they have been of little effect in the past, how much effect will they have in the future? Section 4 (1) (a) states:

The board shall have power to investigate of its own motion or on complaint, costs, prices, profits and stocks of goods -and materials of any person engaged in the manufacture, importation, exportation, production, storage, transportation, supply or sale of any goods or services.

I need not go on; the paragraph is two or three times as long as that. Then, section 4(1)(f) states:

The board shall have power to fix specific or maximum or minimum prices or specific or maximum or minimum markups at which -any goods or services may be sold or offered for sale by or to any person.

This paragraph, too, is two or three times as long as the part I have read. Then, section 4(1)(g):

The board shall have power to prescribe terms and conditions upon which, and the manner and circumstances in which, any goods or services

may Ibe produced, manufactured, extracted, refined, processed-

And so on.

Coming to the section which deals with prosecutions, penalties, offences and matters of that kind, let me give an indication of the powers which exist. Section 8(1) is as follows:

No person shall sell or offer for sale or supply any goods or services at a price that is higher than is reasonable -and just-

And the section goes on to amplify that. Section 8(2) starts out in this way:

No person shall sell or supply or offer for sale or supply any goods or services at a price that is higher than a maximum or specific price or lower than a minimum or specific price which has been fixed by these regulations.

And one other, namely section 8(8), commences as follows:

No person shall buy or pay for or offer to buy or pay for -any goods or services at a price which he knows or has reason to believe is higher than is reasonable and just-

And so on. Mr. Speaker, those are powers the government already has, not only with respect to fact finding but with respect to prosecuting any who are guilty. I respectfully suggest that either those powers have not been used, or have not been used effectively. In any event they have been there. Outside the appointment of this committee I think I have referred to all the measures the government has brought forward as a means of tackling this serious problem.

As I have said, the chief criticism has been with respect to food prices. Aside from the government's inflationary policies the chief criticism against it has been as to its management or mismanagement of its decontrol policy. I wish now to mention two or three of those criticisms.

First, when decontrolling nearly everything else the government left price controls on farm prices, and took controls off wages and the cost of producing farm products. They thus decreased production at the very time when this nation and the world needed more food. The -farm price controls were not

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called price controls. They did not have that name, but they were price controls. What were they? They were the freezing of farm prices under the British contracts and the embargoes against selling our products to the . United States. One contract was for wheat which is today being sold at a price just about half the world price. Then this government tried to fasten the prices of other products to the level of wheat prices. In other words, it froze the prices the farmers were to receive and it allowed costs of wages and other things to go up. That is one of the main criticisms made by that section of our people which produces the nation's food.

Another criticism is that the government removed certain subsidies at the worst possible time. It was thus the government brought on increases in prices which disturbed consumers from one end of this country to the other. The first such commodity to which I shall refer is bread. The government policy was to require farmers to sell their wheat for consumption in Canada at $1.55 a bushel. The millers who bought that wheat at that price were given a rebate of 77 or 78 cents a bushel, the net result being that the price of the wheat to the millers was some 78 cents a bushel. With wheat at 78 cents a bushel the price of bread was kept low.

Then what happened? The government, with its policy of having price controls and subsidies, and then determining as a doctrinaire policy to take off subsidies at once without much thought as to the consequences, removed the subsidy on wheat which had kept the price of bread low. It was taki'U off at the worst possible time, taken off a' a time when wheat was selling at the highe-t price in Canadian history.

Let us look frankly at this wheat situation. Wheat is probably the largest and most important single commodity we export. We export two-thirds or more of what we produce. ^4 ? must depend upon foreign nations for a ma

ket. Foreign conditions, outside conditions, determine the price. Sometimes it is 40 con's a bushel and sometimes it is $3.40 a bushel When it is 40 cents a bushel and nothing is done about it, and since other agricultural prices relate themselves to the price of wheat, the farmers of this country go broke. The economy of the country then suffers; business stagnates and unemployment steals in upon us.

In. the wisdom of parliament we decided that that is bad for the country, that is, bad for the farmers and bad for everybody else and we decided to try to avoid it in the future. We said we would not let prices drop that low. We realized that we could not

control conditions outside this country, conditions which determined the prices of wheat and other similar export commodities. So we decided that we had either to try to regulate these wide fluctuations in prices or to leave them alone. Well, parliament decided to regulate them; we decided that we would have floor prices so that wheat and other farm products would never again go down to a 40-cent per bushel level. Just where we would put the floor price was a matter of judgment. We have our opinion as to just where that floor price should be.

The point I wish to make is this. When parliament is willing and when the Canadian people are willing to protect the producers when the price of wheat is low, what answer is there to the demand that the consumers of bread be protected when the price of wheat is high? There is no justification for a negative answer. This government, when it had a subsidy on wheat to keep the price of bread low, took off that subsidy at a time when the price of wheat was practically at the highest point in Canadian history. It was over $3 a bushel.

The average price of bread at that time was low and now it is high. It would have gone higher yet but for one thing. There is still a subsidy on bread in Canada. Who pays it? Does the government pay it? No. the government does not pay it. Do the Canadian people pay it? No, the Canadian people do not pay it. The government of Canada requires the farmers of Canada to pay it. The government of Canada requires the farmers of Canada to sell their wheat for consumption in Canada at $1.55 per bushel when the price outside is over S3 per bushel. My criticism of the government is that in its desire to get rid of all these subsidies, because of its doctrinaire policies in this respect, it did not look at the consequences. The subsidies which kept the price of bread low should not have been taken off at a time when the price of wheat was at its highest peak.

I could deal with milk in the same way. Every party in this house outside the government warned the government that it was a bad time to take off the subsidy on milk. It was taken off at a time when the workers in this country were disturbed with increased living costs. If we are not going to be fair to workers and to consumers, we can be sure that there will continue to be economic and wage disputes in this country. That was not the time to take off the subsidy on milk and every hon. member on this side opposed that policy. But the government, when it got rid of parliament, took off the subsidy.

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There is another criticism of subsidy removal to be made. By the government's mismanagement of its decontrol measures which affected agricultural production the farmers lost all confidence in the government's plans. Many curtailed their production, while others went out of certain lines of food production. In this connection I should like to refer to the action of the government in removing price controls and subsidies on coarse grains.

What was the situation? This government, in its wisdom or lack of wisdom, decided to tie itself to certain contracts with Britain. Then in its propaganda to sell that policy across the country it said in effect to live stock producers -I shall refer particularly to poultry producers-"Go into poultry production. We have an assured market and the price of your feed is being controlled. It is low today and this is a good business to get into." I am thinking now more particularly of the poultry producers in British Columbia, in that province with its mild climate they have been most successful in producing poultry. Many small and large farmers went into poultry production or expanded their production on the basis of these assured prices through the British contracts and the expected low prices for their feed.

Then the government came along and took off both the price ceiling and the subsidy and the cost of their feed went up from $10 to $20 a ton. Many of them found it was impossible to carry on, and went out of business; others found it most difficult to continue. My criticism of the government is that they encouraged these people to go into that business. I think the government can rightly be accused of acting under false pretences when they encouraged these efforts and then took off the subsidy. I am not complaining about price ceilings in this case, although there was serious criticism that prices were thus being held down and that we were not getting production. But I do criticize the government for taking off this subsidy at that time.

And' I criticize the government on another ground, namely, that they took off the subsidy in the middle of the marketing season. Those farmers who had sold before the government took it off received a low price for their barley, a little over 80 cents a bushel, while those who sold the next day got 20 cents or 30 cents a bushel more. For administering decontrols in that unfair fashion there can be no defence or excuse for the government- none whatever.

I have said that some of these policies were resulting in a loss of confidence on the part of the farmers. I have indicated what has happened in the way of lessening agricultural

production. Let me now show what is happening to exports under these policies of the government.

Take bacon and hams. In 1944 we exported 692 million pounds, and in the following years 446 million pounds, 286 million, and last year it is estimated, 225 million, or less than one-third of what we exported three years before.

Take cheese. In 1942 we exported 142 million pounds. I do not suggest that that was a normal year; it was one of our best years. The next year we exported 116 million pounds, and in the following years 123 million, 126 million, 95 million, and this year, it is estimated, around 30 million pounds, and cheese is the great export agricultural commodity of eastern Canada, chiefly from Ontario and Quebec.

Take beef. This is another commodity in connection with which the government is

attempting to control prices, but lets cost of production go up, thus tending to drive farmers out of business. In 1945 we exported 184 million pounds, in the following year 123 million pounds, and last year, it is estimated, 25 million pounds.

That is where the government's policies are leading us, Mr. Speaker. But let us look at some other evidence. In the short weeks we spent here before Christmas I asked for a statement from the government of the amounts which it had contracted to deliver to Britain and how much had actually been delivered. The figures will be found in Hansard of December 11, 1947. They show that we delivered only two-thirds of the bacon and ham that the government undertook to deliver. They show that we delivered only one-third of the beef that we had agreed to deliver. They show that we delivered only two-thirds of the canned meat we had agreed to deliver. They show that we delivered only one-fifth of the mutton and lamb that we undertook to deliver. They show that we delivered only one-half the cheese that we undertook to deliver.

Now, Mr. Speaker, these are serious trends in a time when food production is more needed than anything else in the world. To the extent that this government is responsible for these trends it deserves our censure.

I have emphasized the seriousness of this situation and have referred to some of the causes, as well as some of the effects of the government's policies. I want now to ask this question. What happens when price levels rise? Who loses when price levels rise? Inflationary increases hit nearly everyone. They hit at every person who owns a life insurance policy because he gets back dollars of less value than he put in. They hit at every per-

Prices Committee

son who has purchased an annuity. He puts in a dollar worth one hundred cents and gets back a dollar worth only sixty-six cents. They hit at every holder of a war savings bond, because the government give back to the purchasers of these bonds less value than it got from them. Inflation hits every person who has savings deposits in the bank, because the dollar he gets back is worth less than the dollar he puts in. These inflationary rises hit at every shopkeeper who has extended credit to his customers. They hit at every one of the vast number of Canadians who live on a fixed income. These latter are the ones who have carried a heavy burden since the war. Where they have had the same income in number of dollars, where they have had no increases of income, and where each dollar has been reduced in its purchasing power to a half or two-thirds of what it was before, theirs has been an unfair burden.

The government has decidedly and deliberately contributed to this inflation by its credit expansion policies, its inflationary policy, coupled with its restrictive policies on production. The government has eased its own interest burden on its vast debt, but it has done so by virtual confiscation of a substantial part of the savings of the ordinary men and women in Canada. That is one of the prices we are paying for that policy. It has confiscated one-third of the value of the income of eveiy person in Canada living on a fixed income who has had no increase in that income. It has taken that value from him behind his back, and without his realizing irhat was happening. It has done it because it was easier to take it from him in that way when he was not looking than to tax him when he was looking.

There are those who will say that there was virtue in that policy. But whatever virtue there may have been in it, I have pointed out some of the consequences of it, and the government must accept the ill consequences of policies of that kind if it is going to accept credit for the favourable consequences.

Now what should have been done? It is not the responsibility of the opposition, Mr. Speaker, to tell the government what should be done. Under our system it is the duty of the opposition to point out the weaknesses of the policies brought forward. Whether it does or does not advance policies of its own is a matter for its own judgment. But I wish to tell the government some of the things that should not have been done, and I propose to do that now.

The government should not have created so much paper money. By doing so it increased all prices and lowered the value of all money. The government should not have piled up so much debt to the banks. The government should not have removed the subsidy on bread when wheat was at the highest point in Canadian history. It should not have removed the subsidy on milk when the workers of this country were already greatly concerned over living costs in relation to their wages. It should not have removed the subsidies on coarse grains when it was encouraging the production of livestock and poultry products based on the control of the prices of feeds necessary to their production. The government should not have prevented the importation of vegetables from the United States at the beginning of the winter, knowing as it should have known that it would create a scarcity which farmers could not make good in this country in wintertime.

You ask what should now be done. Let me indicate three or four things that should be done. The government should keep out of any more inflationary policies which only make the situation worse. The government should set in motion policies that will produce more food, and not less. The government should prevent profiteering, if there is any, and it has the power now to search it out and apply the remedy. The government should do something else. The rising cost of living is supposed to be what is scaring us all. The government can put into effect one policy which will lower the price of everything which the people have to buy. It can lower prices by lowering the hidden taxes which increase from twenty to forty per cent everything that every consumer buys. The government can do one other thing; it can accept the responsibilities that go with government. It can use the legislation it now has to search out wrongdoers and to prosecute them. These are things the government can do.

I had intended amplifying one other point, namely, the effect of the hidden taxes on the cost of everything that people buy in this country. I will not take time to do that on this occasion, but let me say this. These hidden taxes, the sales tax among them, provide this eovemment with almost half its revenue, more than a thousand million dollars a year. What are the indirect taxes bringing in?-the hidden taxes, the regressive taxes, the sales tax, the excise taxes on amusements, manufactures, transportation and communication, the stamp taxes, the excise duties and customs duties and licences. These taxes totalled in the last fiscal year more than a thousand million dollars-

Prices Committee

$1,013 million-or nearly half the revenue of this government. This huge sum is taken in the form of hidden taxes without the people knowing it. That is what makes them popular with the government. These are taxes on production, and more than anything else they increase'the cost of everything the people buy.

To show you the burden of these taxes, let me give two or three comparisons. As I say, the sum of $1,013 million is taken in the form of these hidden taxes. The total value of the whole production of agriculture in the same period was only $1,240 million. To use another comparison, $1,013 million from these hidden taxes is twice as much as the net taxable income of some 32,000 incorporated businesses in this country after their income and excess profits taxes are paid. They receive $500 million and the government takes over $1,000 million in indirect taxes. These indirect and hidden taxes come to nearly twice a? much as all individual incomes in excess of $3,000 a year.

If all individual incomes over $3,000 were confiscated, it would come to $600 million, or 40 per cent less than the government takes in these indirect taxes.

As to the suggestion that somebody is mean, that somebody is greedy, that there are profiteers around, let me say, Mr. Speaker, that in so far as the cost of living is concerned the government, in these indirect taxes, is meaner and greedier than anybody else in this country of ours.

Let me briefly summarize what I said a moment ago. First, the government should quit making the situation worse. It should discontinue its inflationary policies if it expects to halt or reduce the rising prices. Secondly, the government should get off the taxpayers back and make it possible for him to buy needed food. It is today taking 400 per cent more in taxes than it did in any year prior to the war. Thirdly, it should get off the farmer's back and encourage him to produce more food. More production is what is needed -not the restriction of production. Increasing the supply of goods will cure this condition, and lessening it will only make it worse. In the fourth place, the government should get off the consumer's back by reducing the indirect taxes which he pays on the price of everything he buys. This, it has been roughly calculated, amounts to from 20 to 40 per cent of the cost of everything the housewives and the consumer generally buy in this country.

One other thing. Instead of creating a cloud of suspicion of the innocent and the guilty alike in this country, the government should accept its responsibility as a government and use the powers it already has to find out those among us who are guilty,

instead of leaving suspicion on all alike. And then it should use its powers to prosecute anyone whom it finds guilty.

The amendment which I propose, seconded by the hon. member for Waterloo South (Mr. Homuth), is as follows:

That the said resolution he amended:

1 By inserting after subparagraph (c), Ime 7 thereof the following: "And in particular to examine and report upon:

(d) the effect of present government policies in lessening Canadian agricultural production;

(e) the advisability of continuing the present controls on prices of farm products when there are no controls over farmers' costs ot productl0(f) the advisability of reverting to payments of subsidies on essential commodities of consumption;

At the moment I am taking no position on that matter. We do not favour the widespread use of subsidies, but on certain basic commodities which are subject to wide fluctuations under certain conditions, we can support

them. .

(g) spreads between prices received by producers and prices paid by consumers.

2. By adding at the end thereof the following

Cla"That as well as reporting its findings the committee shall from time to time make recommendations to the House of Commons, as in the opinion of the committee may be considered necessary to secure as far as possible lair and iust returns to producers, employees and employers and fair and just practices m marketing and distribution that will safeguard the^in-nf consumers as well as of producers.

In conclusion let me say this final word. There is >no use in this parliament talking about restoring ceilings over wages. That project will end in talk no matter where the talk is coming from. There is no use in talking about a reversion to an ironclad system of wartime controls. The government has no intention whatever of imposing them. The primary purpose of wartime controls was to drive people out of civilian production, out of the production of unneeded goods.

The basic trouble about the government's present policies is that it is unable to make a choice between wartime and peacetime economies. It has one foot still planted in the psychology of world war II. Its other foot gropes hesitantly and fearfully into the problems of reconstruction and peace. We must, have more forthright and courageous policies. In the long run the government does more harm to consumers by driving farmers out of production than it helps consumers by placing the whole weight of such price policy as it has on the shoulders of one producing group. The government's first watch word should be "More not less production, especially farm production". The

Topic:   APPOINTMENT OF SPECIAL COMMITTEE TO INQUIRE INTO PRICE INCREASES AND MATTERS PERTAINING THERETO
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FEBllUARY 2, 1948


Prices Committee government's first concern for the consumer should be to lighten his tax burden, especially the hidden taxes. Some subsidies under certain circumstances can be justified, but they should not be made a burden on one producer group only, and they should not be extended as a doctrinaire policy to all commodities. We will support any honest effort to protect the consumers from exploitation. That is the purpose of the last paragraph of my amendment respecting recommendations by the proposed committee to this house.


CCF

Major James William Coldwell

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

Mr. M. J. COLDWELL (Rosetown-Biggar):

I think we can all agree on one thing, Mr. Speaker, and that is that the increase in the cost of living over recent months presents this house with the gravest situation that has faced our country since the war ended. At the outset I wish to say that we are of the opinion that, in the present crisis in Canada, the people demand not the establishment of a parliamentary committee but rather some effective steps to meet the situation. That is the position which we take and that is the position which we have taken. Right from the end of the war we have said to the house and to the country that we believe that beneficial controls and subsidies should have been continued in the interest of the great masses of the Canadian people. The government saw fit to remove both the controls and the subsidies. I listened to the leader of the opposition (Mr. Bracken) cover a great deal of ground this afternoon, and with much of what he said I could certainly find myself in agreement.

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An hon. MEMBER:

Wait a minute.

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CCF

Major James William Coldwell

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

Mr. COLDWELL:

Yet when I look back over the speeches that the leader of the opposition and his friends have made in the house during the past two years, demanding the removal of controls and subsidies, and when I look at the program of the party which has been published, I wonder how it is so easy to move from one political foot to another. So this afternoon I want to place before the house as briefly and as clearly as possible the position that we take in this matter.

This afternoon the Prime Minister (Mr. Mackenzie King) said that the appointment of the committee was one of a number of measures that the government proposed to take in order to meet the present price situation. I think the house is entitled to know at this time what those measures are and when they are to be put into effect, and to know nob only when the people of Canada are to see a halt in the rising cost of living but when steps are to be taken-and effective

steps-to roll the cost of living back. Lately we have seen some feeble steps taken. The price of butter has been stabilized at a price which I think is beyond the reach of many people in the low-income groups. Prices of meat and other commodities have risen to a point where the average family man, with four or five children, paying rents which are controlled-and they have always been relatively high in this country-is finding it not only difficult to make ends meet but almost impossible to provide his family with those protective foods to which a family is entitled and which a family needs in a climate such as the one in which we live, with temperatures such as those we have experienced in this city over the past couple of weeks.

The placing of ceilings on such commodities as butter and meat I think clearly involves the consideration of subsidies. The prices of the products that one group in the community produces, namely the farmers, cannot be controlled while at the same time other controls are removed and prices are allowed to run wild. In my opinion, the farmers have a legitimate criticism of the policy of the government in that the things which have entered into the cost of raising their produce have been allowed to rise in price while from time to time the prices which they have obtained for their produce have been controlled and stabilized.

A few moments ago the leader of the opposition mentioned the removal of the subsidy on coarse grains and the return-although he did not say so, this was involved-of these grains to the speculative market. I shall not go over that ground because I do not believe that my former arguments need to be repeated. What I intend to say is what I have said on previous occasions in this house. I believe that was one of the worst steps taken by this government since the war ended. It has had a disastrous effect on the morale of the farming community, and it will have a disastrous effect -as is indicated by the figures placed on the record a few minutes ago by the leader of the opposition-on the production of pork, beef, poultry, and dairy products. That, as I say, will be reflected in a shortage of these foods which are necessary to the health not only of our own people but of the people of the world.

I disagree with the Prime Minister when he says that what the people of Canada want is an investigation. They do not want an investigation. I do not think the members of the house require an investigation. What the people of this country require is a policy to prevent this inflationary rise in the cost of living. I say to the Prime Minister that if he really wants to know what the

Prices Committee

people of Canada want, he has an opportunity to find out. Today in Canada three constituencies are vacant, and they are representative constituencies. There is the constituency of Yale in British Columbia, which is largely a rural riding; there is the constituency of Ontario, in which is situated the manufacturing centre of Oshawa; and there is the constituency of Vancouver Centre, which is, in many respects, a typical business area in a great port and distributing city. Under our British parliamentary system the time-honoured method of finding out between elections what the people of a country think, is the holding of by-elections as quickly as possible after death or retirement makes them possible. In the two years which have just passed the British people have been involved, I think, in some thirty-six by-elections. Each one of those by-elections has been looked upon as a test of what the people thought of the policies of the government in power. The government have lost one of the seats which they formerly held, but the people of Britain have had that opportunity of allowing representative constituencies to speak for the whole population.

I disagree with the Prime Minister when he says the people of Canada desire an investigation. I am certain they desire action, and there is a way to find out. We have three representative, typical constituencies, rural and industrial. Why not open those seats and call the by-elections in order that the people of Canada may express themselves in that way? I believe the Prime Minister knows, as I am sure the government know, that unless they can change this situation they will lose all three by-elections. I say the government is afraid to face the country at this time. I do not like to issue any sort of challenge; but I suggest that if the government really want to find out what the people are thinking they should use the vehicle at hand and follow the tradition we hear so much about in this house, the great tradition of a democratic parliament, of our democratic way of life. Here is an opportunity for the government to practise one of those democratic methods which it preaches, to find out what the people of Canada think, by giving the people of those three constituencies an opportunity to vote upon this question at this time. I can assure the Prime Minister that as far as we are concerned we are prepared to make this the issue and stand or fall by it. I do not know what my hon. friends to the right will do.

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PC

Howard Charles Green

Progressive Conservative

Mr. GREEN:

We are going to win the three by-elections.

Mr. COLDWELL; I do not know what their policy is; but whether they win them with the kind of indefinite policy that has been placed before this house, or whether the government wins them, or whether we win them, that is not the material thing. The material thing is that the people of Canada, through those three representative constituencies, will have had an opportunity to express themselves on this issue, and that is the democratic procedure which I urge the government to follow.

This afternoon the Prime Minister said what I think I heard the Minister of Fisheries say a couple of weeks ago in a radio address.

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Some hon. MEMBERS:

Which one?

Topic:   FEBllUARY 2, 1948
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CCF

Major James William Coldwell

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

Mr. COLDWELL:

I mean the former

Minister of Fisheries (Mr. Gregg). He said we had been very fortunate that the cost of living had been pretty well held in this country. I am not sure of his words, but the impression I got was that he thought it had been held here better than anywhere else, and this afternoon the Prime Minister said very much the same thing. I have the Labour Gazette for the month of December last; and if hon. gentlemen will look at the government's own publication they will find that the figures gathered from other lands tell a very different story. On page 1885 of the record hon. gentlemen will see the increase in the cost of living in the various countries since the war ended. I may be asked why I take the period since the war ended. I do so because we all started at that point into a post-war, peaceful world; and this afternoon the Prime Minister said the cost of living in this country had risen less since the war ended than in other countries.

Let us take a look at some of these figures; and) I may say the percentage increase has been accurately worked out. In Canada in 1945 the cost of living index, on the basis of the pre-war base period, was 119-5. In October 1947 it was 139-4. The difference between 1945 and 1947 was 19-9, which gives us a percentage increase of 17 per cent; that is on the 119-5, of course. In the United Kingdom, taking 1945 as 100, the index for 1947 was 101, the difference therefore being one point.

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LIB

February 2, 1948