May 25, 1948

PRIVILEGE

REFERENCE TO REPORT IN "GLOBE AND MAIL"

IND

John Lambert Gibson

Independent Liberal

Mr. J. L. GIBSON (Comox-Alberni):

Mr. Speaker, I rise to a question of privilege. In the Globe and Mail of this morning it is stated that I attend Liberal party caucuses. This statement is incorrect, because I attend neither their caucuses nor those of any other party in the house.

Topic:   PRIVILEGE
Subtopic:   REFERENCE TO REPORT IN "GLOBE AND MAIL"
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PC

Gordon Graydon

Progressive Conservative

Mr. GRAYDON:

It is a pardonable error.

Topic:   PRIVILEGE
Subtopic:   REFERENCE TO REPORT IN "GLOBE AND MAIL"
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DEBATES COMMITTEE

LEAVE TO SIT WHILE HOUSE IN SESSION

IND

Jean-François Pouliot

Independent Liberal

Mr. JEAN FRANCOIS POULIOT (Temis-couata):

Mr. Speaker, by leave of the house

I move, seconded by the hon. member for Fort William (Mr. Mclvor):

That the standing committee on debates be empowered to sit while the house is sitting.

Topic:   DEBATES COMMITTEE
Subtopic:   LEAVE TO SIT WHILE HOUSE IN SESSION
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Motion agreed to.


THE KING'S PLATE

WON BY "LAST MARK", OWNED AND BRED IN BRANT COUNTY, ONTARIO


On the orders of the day:


PC

John Alpheus Charlton

Progressive Conservative

Mr. J. A. CHARLTON (Brant):

I should like to direct a question to the Minister of Agriculture (Mr. Gardiner): Is the minister aware of the fact that "Last Mark", owned and bred by James Fair of Cainsville, in Brant county, won the King's Plate yesterday, at Toronto Woodbine Park, bettering the previous record by one and three-fifth seconds?

Topic:   THE KING'S PLATE
Subtopic:   WON BY "LAST MARK", OWNED AND BRED IN BRANT COUNTY, ONTARIO
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PC

Gordon Graydon

Progressive Conservative

Mr. GRAYDON:

We will have another winner on June 7.

Topic:   THE KING'S PLATE
Subtopic:   WON BY "LAST MARK", OWNED AND BRED IN BRANT COUNTY, ONTARIO
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?

An hon. MEMBER:

Also ran.

Topic:   THE KING'S PLATE
Subtopic:   WON BY "LAST MARK", OWNED AND BRED IN BRANT COUNTY, ONTARIO
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THE BUDGET

ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


The house resumed from Monday, May 24, 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.


CCF

Eric Bowness McKay

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

Mr. E. B. McKAY (Weyburn):

Mr. Speaker, the budget brought down by the Minister of Finance (Mr. Abbott) this year was, to say the least, a disappointment to most Canadians. It is a typical big business budget, which makes little or no attempt to meet the great problem of the day, that of the high cost of living. Despite increased living costs the personal income tax exemptions remain unaltered except for a few people over sixty-five years of age who are fortunate enough to have an income.

There has been only the slightest gesture to remove hidden taxes which constitute one of the nation's heaviest burdens. The removal of the eight per cent sales tax on the essentials of life should have been part of the government's program this year to meet the high prices that the consumer is called upon to pay. This tax could have been very well removed from clothing, shoes, furniture, kitchen utensils and dishes without dissolving completely away the huge surplus of three-quarters of a billion dollars which has been declared this year by the minister. But the government has removed the sales tax on only thirty-eight food items- a weak gesture indeed toward meeting the high cost of living.

The acute housing shortage could have been relieved by removing the sales tax on construction materials, plumbing fixtures and electrical fittings. If that were done I am sure there would be more inducement for builders to get on with the much needed housing program. But the government continues to do nothing to reduce construction costs, with the result that our home building program lags dangerously.

Both the farmer and labour are disappointed with this year's budget.

Mr. A. R. Mosher, president of the Canadian Congress of Labour, has stated in a press release that income tax exemptions should have been raised to ease the drastic drop in "real income," and that the sales tax should have been abolished on clothing and construction materials. There are also protests, almost without number, from farmers

The Budget-Mr. McKay

and farm organizations regarding the failure of the government to realize the pressing need to meet the high cost of living by drastic cuts in hidden taxes and by an increase in the income tax exemptions. But the government does not appear to be unduly alarmed about these protests; otherwise something surely would be done about them. After its terrible blunder in removing price controls, the least the government could now do is to endeavour to redeem its position by removing taxes which bear most heavily on the consumers, particularly on those in the low income brackets. But the sales tax and the excise tax largely remain. Very little has been done to reduce living costs.

I believe that something may be said for maintaining taxes at a reasonable level in order to retire public debt. Those taxes should be collected from the people who are best able to pay them. Corporations and persons with high incomes are the ones best able to meet those obligations. Had the government retained the excess profits tax, which was removed last year, income tax exemptions could have been increased, all sales taxes abolished.

The burden which the great majority of Canadians bear in high living costs could have been materially lightened had the government brought down a "humanity first" budget, rather than one based on big business practice. It is indeed most difficult to reconcile the present attitude of the government to sales and hidden taxes, in the light of a statement made to this house in 1931, on June 4, by the late Colonel J. L. Ralston, who then protested against the higher sales tax being imposed upon the public by the Conservative government then in power. He stated on that occasion:

Yet as I say the tax has been increased from one per cent to four cent and it is being passed on to and paid by the only people who do pay- the consumers. It is the ordinary, everyday consumers, the men and women who are hard put to make ends meet, men who are out of work, who are now called upon to pay the extra amount in connection with the sales tax.

But the attitude of the government seems to have changed. The excise profits tax has been taken off big corporations, but the sales tax on most consumer goods still remains.

I believe that one of the main evils of Canada's economy, as identified by the Rowell-Sirois report, is the heavy dependence of the government on taxes which take no account of the citizen's ability to pay. The sales and excise taxes are perfect examples of this evil. They bear equally on rich and poor

alike, regardless of their income. Moreover, in hard times they discourage consumption, and hence production. In good times like the present they may not seriously retard the public demand for goods, but they definitely add to the cost of living and add to it inequitably. Sales and excise taxes simply add to the financial burden of every household in the country, and run counter to all the nation's efforts to put taxation on a sound basis.

Everyone hears and knows a lot about income tax but very few realize the import of Canada's hidden tax system. The income tax in 1947-48 placed $659 million in the federal treasury, but this represents only twenty-five per cent of the tax burden that Canadians pay to the federal treasury. The other taxes with the exception of the corporation and excess profits taxes, which realized $591 million during the last year, are much more onerous than the income tax, because they are largely hidden from view. The customs tax last year produced $293 million, excise taxes $464 million, sales taxes $372 million, and succession duties $30 million, and these together with several other taxes produced seventy-five per cent of .all federal revenue from taxes, or three times as much as the personal income tax. The total tax bill for the past financial year was $2,452 million. Based on a Canadian population of some twelve million, this means that for each person in Canada there was a federal tax of $204.33, or on the basis of a family of five a tax of $1,021.65. Of this amount, sales and other regressive taxes account for seventy-five cents of every dollar paid in federal taxes.

Few people realize the variety of these taxes. The federal government taxes building materials, plumbing equipment and manufactured commodities with but few exceptions. Automobiles, pianos, rugs, kitchen utensils, and even children's toys and clothing all carry the eight per cent sales tax.

There is a federal tax on long distance telephone calls, telegrams, railway, bus, air and steamship travel. If a broken clock or watch has to be replaced, you must pay an extra 25 per cent excise tax. The government, however, has seen fit to remove the tax on the lowly alarm clock, for which all early risers are thankful. A smoker who buys a pipe or lighter pays an extra 35 per cent tax over and above the eight per cent sales tax. Fountain pens carry the same tax.

Canadian troops during the war paid $1 for 300 cigarettes because they were tax free. In most parts of Canada 300 cigarettes now cost $5.25 which means that $4.25, or 28 cents a package has gone largely into the federal treasury.

The Budget-Mr. McKay

Children who buy chocolate bars are obliged to pay a 30 per cent tax, plus the eight per cent sales tax. The same applies to chewing gum. Soft drinks are subject to a 25 per cent tax, plus one cent per bottle, and there are huge federal taxes on tobacco and liquor which realize millions of dollars. With that I for one have no quarrel, because these are definitely classified as luxuries, and if the government requires taxes-and all governments do-these are commodities that could well stand the tax.

A cheque requires a minimum federal excise stamp of three cents, and one cent postage on a letter is a recently imposed federal tax. Coal, unless imported from Britain, carries 50 cents a ton excise tax, plus eight per cent sales tax, and when you pay your life insurance premium the federal government collects two per cent as tax.

If you furnish your house, the furniture and carpets include eight per cent sales tax; and electrical apparatus, including radios, electric stoves, refrigerators and toasters, are subject to an extra tax of 25 per cent. We must not forget the excise tax on matches, furs, toilet preparations, cameras and a host of other articles; and also the customs taxes which filched $24 per capita from our pockets last year, and have been reflected in the price of consumer goods.

Most Canadians will not quarrel with taxes on luxuries, but any tax on the essentials of life is unjust because it has no relation to ability to pay. Such taxes are the sales and excise taxes, largely hidden from view. These taxes bear most heavily on people with families, and substantially add to the high cost of living.

The manner in which the sales tax is collected gives rise to a further injustice. The eight per cent sales tax is placed on manufactured goods and is based on the manufacturers' selling price. When the wholesaler sells the commodity to the retailer, his markup is calculated on a price which includes the original tax. The same thing happens at the retail level, and therefore the tax actually paid by the consumer is much higher than eight per cent- probably nearer to twelve per cent. This tax should, have been wholly removed from the necessities of life in order to ease the burden of the high cost of living on people with low incomes. In view of the great surplus of $700 million this year, the government should have taken steps to remove the sales tax on essentials of life and on construction materials as well. Such a measure would have been antiinflationary and would have had a far-reaching effect on lowering price levels.

I also fed that the tax on chocolate bars, candy and soft drinks could have been

removed. Children, who are the great consumers of these commodities, ought not to be penalized, especially when the government has found its way clear to remove the amusement tax on night clubs and pari-mutuels. Last year the government removed the excess profits tax. This meant a loss to the treasury of several hundred millions of dollars. This tax ought to be reimposed, and with this increased revenue the, government would then be in a position to increase income tax exemptions to $1,250 for single persons and $2,500 for married persons, as is proposed in the C.C.F. amendment. Such exemptions are justified, if for no other reason than the increased cost of living in the past two years. The present exemptions are inadequate to meet the demands of the high price levels now prevailing.

I suggest further, in the interests of public welfare, that all hospital bills, doctor, dental and funeral expenses ought to be deductible from income tax. For the farmer who is finding it increasingly difficult to make ends meet, breeding herds ought to be recognized as capital assets, or at least a $500 tax exemption allowed on the yearly sale of livestock so that livestock production can be encouraged and maintained. I feel too, that in view of the biggest surplus on record the government could well afford to permit reasonable deductions from income tax for interest and mortgage payments on farms and homes if such mortgages were incurred prior to 1939.

Finally, in order to encourage farm and home ownership, I believe deductions of at least $250 a year should be allowed from income tax on the purchase of a farm or an urban home. I believe the adoption of the recommendations I have just made would do much to relieve the plight of the low income groups, and would improve the well-being of all Canadian citizens. The acceptance of such a program by this government would mark it as progressive, as a government more interested in human welfare than in currying the favour of the big interests.

Mr. JOHN R. MacNICOL (Davenport): Mr. Speaker, the hon. member who has just taken his seat began his remarks, as did others who preceded him, by saying the budget was so disappointing that the people with whom he has come in contact were greatly depressed. I am not going to take up any time talking about a matter that has caused so much depression among the people. I am going to try to do something that will lift the hearts of the people of Canada, particularly of those who live in the maritime provinces.

The Budget-Mr. MacNicol

I have a resolution on the order paper, in the discussion of which I would have said much of what I intend to say now had I had the opportunity of speaking on it. Since I shall not have that opportunity I think it is only right that I should withdraw the resolution. Therefore, with your consent, sir, and with the consent of the house, I ask that the resolution standing in my name be removed from the order paper.

I am going to base my remarks on a Canadian Press dispatch dated April 19 appearing under the heading "Survey of mari-times shows prosperity low". In the course of this article the statement is made that the per capita income in the maritimes is only from 63 to 78 per cent of the average throughout Canada. This is indeed very low, and I will try to present a program to change that from low to high. The maritimes are the forgotten part of Canada. They have endured great depression, greater than should have been their lot.

Hon. members who were on the rehabilitation committee in 1943 and who listened to the debates, and hon. members who read the minutes of that committee, were impressed by the great opportunities there are throughout Canada if we Canadians would only review the resources of the country as we should and make some effort to develop them. The committee members themselves carefully surveyed the minutes and made a number of recommendations, perhaps a dozen. Those dozen recommendations I will reduce to five, but the five will contain the meat of the dozen.

The first recommendation was that maritime capacity to produce electric current should be greatly increased and at the same time rural electrification should be expanded. The second was that maritime primary and secondary industries should be greatly expanded. The third was that the maritime marshlands should be reclaimed. The fourth was that bottlenecks obstructing maritime trade, such as lack of a bridge across the strait of Canso and lack of a canal across Chignecto isthmus, should be overcome. Lastly, it was recommended that maritime agriculture should be given the benefits now extended to western farmers under the Prairie Farm Rehabilitation Act. I am not going to discuss all these recommendations; I will take the first two.

I began to make inquiries in the maritime provinces which I visited three times for the purpose of ascertaining what holds back expansion of industry in that part of Canada, and the obstacles the committee thought should be removed in order to make for the expansion of maritime economy. The results of these inquiries I propose to give to the house.

At the outset I suggest that lack of expansion in the maritime provinces as compared with the rest of Canada is largely due to the lack of cheap electric power. That statement is supported by the Saint John reconstruction committee in their brief, which states clearly that in the first place expansion in the production of electricity is necessary to the expansion of industry, and secondly that a surplus of electricity is coincident with and precedent to industrial expansion.

After making an exhaustive survey I am convinced that if they had cheap electricity, with their splendid resources, they would expand much more rapidly than they have done.

One might ask how they compare with the central provinces in the production of electricity.

Electricity itself comes from several sources, or can be produced from several sources: first, water or hydro power; second, coal; third, oil; and fourth, gas. It is not my intention to deal with the last two, but only with the first and second, namely, hydro power, and power produced by coal.

It might be asked how the maritime provinces compare with the central provinces in capacity to produce power from water. Well, the two central provinces are happily situated. They have magnificent rivers, with a firm and substantial flow; when they make dams on the rivers they have a considerable height of water in the penstocks at the power houses from which they are able to develop a large quantity of cheap power, and their own advancement has been largely the result of cheap power.

I know from long experience in industry that the province of Ontario-and the same is true of the province of Quebec-owes its great industrial expansion to its capacity to produce cheap hydro power. In the maritimes they are not similarly situated. I do not know whether the time will ever come, but until someone proposes a method of developing power in the tidal estuaries, the maritimes have only one real hydro-electric power, namely that on the Saint John river at Grand Falls; and that is greatly handicapped by the lack of reservoir capacity. The reservoir capacity behind it is small, and the result is that while perhaps today, when the spring freshets are running down the river, they can produce 60,000 horsepower, in July or August it will be down to 30,000^

You cannot expand industry on such hydro development. But the maritimes have what Ontario and Quebec have not, namely, very large resources of coal, and today we can produce electric power just as cheaply from coal as from hydro power. There are those

The Budget-Mr. MacNicol

who will not believe that; nevertheless it is true. The Ontario hydro commission itself gives evidence of that, because at this moment it is building or planning to build a gigantic

150,000 horsepower plant in the vicinity of Windsor, Ontario. I have discussed the subject with their engineers, and they say that with proper coal and the latest modern high-pressure high-temperature boilers, using pulverized coal and turbo-generators, they can produce electricity as cheaply from coal as from water.

The maritime provinces have very large resources of coal, and I am sure that those resources can be their salvation in the production of power if the program I shall announce is carried into effect. And from that on, with cheap power and a surplus of power which they can easily have, they would invite industry in. I shall mention some examples of the industries I have in mind.

For quite a few years after my first travels in the maritime provinces I was convinced that unless they had cheap electric power there could not be much greater progress for them than that which they have so far attained. But being convinced that by means of their coal they can have cheap electric power, and a large surplus of it, I am equally convinced that the maritimes, if they receive the support they should receive, the support which I am going to suggest they should receive, will get on their way towards industrial expansion.

At least ten years ago, when this idea first presented itself to me, I began making surveys. At that time the whole of central and southern England was being revolutionized through the production of electricity. In England they had no hydro power of any consequence, and so they began to develop the power they require by production of electricity from coal. When I was in England making the first initial survey in relation to the production of electric power from coal, I found many new electric plants, with the most modern type of boilers. They were high-pressure high-temperature boilers, using pulverized coal which is blown in just like oil. I have seen a great many installations using pulverized coal, and you could not tell it from oil when you looked into the furnace. They had turbo-generators. With this equipment the whole industry of electric power production has been revolutionized, with the result that in every city in southern England-around London and for fifty miles out of London-you will find thousands of new industrial plants. The same thing applies to Manchester, Birmingham, Oldham, Leeds, 5849-276

and a score of other cities I visited to inquire into their production of cheap electricity.

All their power plants are connected together by what is called a grid system, and through their connections with the power plants of the country, they have 5,500 miles of main line. grid. Today over in England their development staggers everyone who happens to have the privilege of seeing it. That power system does not cover the whole of England, and it is not the only one, but it is rapidly expanding. It is using 26,000,000 tons of British coal yearly. If we can expand maritime electricity production from maritime coal, it would at once provide a fairly good permanent home market for their coal and would take up a great deal of slack.

Following my return from England I pursued that study extensively and have been doing so for quite a number of years now. In the course of it I have visited a large number of electric power plants. Some of them were smart, modern power plants, of the new type which is called an outside-built plant. They were delivering electricity at a low price per kilowatt, as I will show later. I am satisfied that if we can assist-and that is what I intend to propose-the maritime provinces to equip themselves so that they can have an abundance of cheap electricity, they will be on their way much more rapidly than we dream of. There is no reason whatever why they should not expand like every other part of Canada, or of the United States, England or elsewhere, that has cheap power. There is no reason under the sun why they should not expand or why their industrial fabric should not expand. I am convinced that it will.

Returning from that survey in England, I travelled across tire United States where there were these modern power plants using coal. I discussed the matter with the engineers to ascertain the cost of production of electricity in a coal-fired plant as compared with water, and I found it satisfactory. I am going to set out to show that in the modem coal-fired power plant, burning powdered coal-which, as hon. members know, is blown into the furnace -and with turbo-generators, electricity can be produced on the basis of one kilowatt hour per pound of coal used, 13,000 B.T.U.'s and up. The maritimes are well supplied with coal. In a few minutes I will produce evidence of that. But to continue with my reference to the survey which I made in connection with the cost of producing electric power from coal: everywhere I found that it ranged from possibly 0-9, perhaps 0-92, 11 or 1T2 pounds of coal per kilowatt hour to as low as 0'9 pounds of coal per kilowatt hour. That is cheap electricity. We cannot do any better anywhere.

The Budget-Mr. MacNicol

With electricity that cheap, I am sure the maritimes would go ahead rapidly.

There is nothing that gives me so much heartache as to see what is happening in the maritimes. It is staggering to read daily in the press of the large numbers of fine young men and young women, the flower of the maritime provinces, moving away, many of them to the United States, many to the central part, of Canada. Of course we are glad to have them here, but the majority of them should have the opportunity to earn a livelihood in their own provinces and to build up their own part of the country. If we cannot build up those provinces, it will be just too bad for the influence of the maritimes in the central part of Canada.

Continuing the investigation, I found that there was a great power plant-and it is only one of the many that I visited-at Michigan City, on the way to Chicago. If you go by the Toronto trains-I suppose by C.P.R.-you will pass that gigantic plant at Michigan City, with its many smokestacks. It has a capacity of 100,000 kilowatt hours of power. It powers the whole of southwestern Michigan and the whole of northwestern Indiana. The engineers will tell you that the power is produced there, on the average, on the basis of one kilowatt hour per pound of coal. That is mighty cheap power.

Some years ago those interested in the subject made a series of investigations which were referred to as the steam-station-power-costs investigation. Many were made. In the fourth investigation along that line, according to one of the editors of the Electrical World, a prominent electrical magazine, the average found was 0-92 pounds of coal per kilowatt hour. If therefore I base my argument for the maritime provinces on the basis of one kilowatt hour produced from one pound of coal, I am doing it on good authority.

As I said earlier, I am backed up by what the hydro are planning in their new plant at Windsor. They would not do it if they did not know they could do it on that basis. So I will say again, and I do not believe it can be repeated too often, that the salvation of industrial expansion in the maritimes-and it must be greatly expanded in order to keep its own folks at home and give them jobs- is the using of maritime coal to produce electricity. There is any amount of coal there, and the Lord has situated it conveniently. There are four main areas of coal. The largest and most important one of course is on Cape Breton island. According to our own bluebooks they have approximately two billion tons of No. 1 coal rated at 13,200

B.T.U.'s, which is a high B.T.U. capacity. Today they produce a little over four million tons of coal. They told me down there that if labour conditions were what they should be, or what they think they should be, or what the hon. member for Cape Breton South (Mr. Gillis) thinks they should be, and if they had better equipment in the mines, they could produce much more coal. I believe they can. If labour conditions were satisfactory and they had efficient machinery for taking the coal out of the mines there is no reason why they should not produce more coal. If they could produce six or seven million tons of coal, that would be a great advance in the maritime economy, because after all coal is their greatest source of revenue.

The next centre is the Westville, New Glasgow and Stellarton area, where I believe they produce about 500,000 tons a year. That coal is 12,500 B.T.U.'s, still a very high grade. The next area is in the riding of the hon. member for Cumberland (Mr. Black), at the Springhill mines, where they produce 600,000 tons a year. I have been there and looked over the plant carefully. That is a very high grade coal, up to 13,600 B.T.U.'s. Close at hand are the Joggins mines where they produce about 250,000 tons a year of 12,000 B.T.U. coal.

In the province of New Brunswick they have only one coal area, at Minto, where they have in reserve approximately 100 ^million tons of

12,000 B.T.U. coal. All maritime coal is conveniently situated on the mainland for transportation. In Prince Edward Island they have no coal, but they have one splendid harbour. They have more than one harbour, of course, but at Charlottetown, represented by the hon. member for Queens (Mr. McLure), they have an outstanding harbour. In that harbour they have a power plant; and perhaps I had better begin there and then go back around the rest of the maritimes. They have at Charlottetown a fairly modern power plant located on the harbour. Ships can come right up to the dock and unload, and with a simple method of taking the coal from the ships to the power plant they would have to all intents and purposes a dockside plant which would be as good as the best. Today that plant produces something around 8,000 to 10.000 kilowatt hours. They are modernizing that plant, and by next year or the year after I believe they will be producing 15,000 kilowatt hours. That is a reasonable capacity for the island, at present.

On the land side the largest power plant is at Minto, where they produce 23,460 kilowatt hours. That is large for the maritimes, but small in comparison with the hydro plants up

The Budget-Mr. MacNicol

this way, and also small in comparison with the big plant which is to be erected at Windsor, Ontario, to burn coal. Then at Maccan, Nova Scotia, they have a really smart little plant, which I went to see a couple of times. It is much like the electrical plants I went to see in the United States, and it is now producing about 17,500 kilowatt hours. I was glad to learn that they are increasing the size of the plant to double the production, and that within a short time they will be producing

35,000 kilowatt hours. I hope to live to see the day when that production will be doubled again, in view of what I may say later as to the possibilities of expansion. They also have a fine power plant at Halifax, and two splendid plants on Cape Breton island.

I am going to suggest, Mr. Speaker, that the great lack in the maritimes has been a firm extra supply of cheap electric power. That is why they have not expanded. It is not the fault of the present power plants. I have nothing but the best to say about the maritime power plants I have mentioned, but I want to see their capacity doubled. I am convinced that another 25,000 kilowatt hour plant at Halifax would give that city the opportunity to expand to which it is rightly entitled. Another 25,000 kilowatt hour plant on Cape Breton island would permit that thrifty part of Nova Scotia to expand. Nothing will induce expansion of industry like extra power. As I said at the beginning, that is how Ontario has expanded; we have always had the power.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCANN:

We do not have it now.

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

John Ritchie MacNicol

Progressive Conservative

Mr. MacNICOL:

We will have it within another year, when the hydro-electric power commission will turn into the wires an additional million and a half horsepower from the gigantic dams being built up the Ottawa river. In addition, in two years time we will have available the big power plant to be constructed at Windsor. Therefore if we do not have the power now we soon will have it. The hydroelectric power commission is a concrete example of the result of the production of a vast number of kilowatt hours of cheap electricity distributed throughout the province of Ontario. No one knows better than the Ontario hydro-electric power commission that the expansion in this province has resulted from an abundance of cheap electricity; and this is also well understood in Quebec.

I believe I had come to the suggested new power plant for Cape Breton island. I should like to see another 25,000 horsepower plant in the New Glasgow-Westville-Stellarton area. They are almost up to capacity now, and one big new plant would meet their additional needs at the moment and leave a surplus for 5849-276J

expansion. I also believe both the Minto area and the Saint John area in New Brunswick should have new power plants of not less than

25,000 horsepower capacity. There should be a new plant at Moncton, another at Bathurst, perhaps one at Campbellton in the north, and one down in the southwestern portion of New Brunswick. While I am at it, I believe I left out the southwestern portion of Nova Scotia, which generation after generation, has been more or less standing still, largely because of lack of power. A plant should be erected there. As Nova Scotia has the coal; why should it not have the power?

Now I come back to Prince Edward Island. I mentioned the power plant at Charlottetown. There is another small plant at Summerside with a capacity of about 1,500 kilowatt hours. A plant of 25,000 horsepower capacity at Charlottetown would permit the distribution of power throughout the island, and I am sure production would expand like nobody's business. I have been from one end of the Mand to the other. The power situation at Charlottetown is fairly good at the moment, but there is not much for the rest of the island. They must be given a chance to expand and develop their own resources, to produce in their home plants; and nothing will bring about that result better than an abundance of cheap electricity. I urge as strongly as possible, that these suggestions be adopted, because I am convinced that only by some such program can the maritime provinces expand. Their primary and secondary industries can be greatly enlarged, and that is essential if they are to expand economically so that their people may have something to do at home.

You may ask how all this has come about. Well, everywhere I went I asked engineers, "What would you recommend that the federal government do?" and I am going to tell you what these engineers suggested. Probably there will be other suggestions, some perhaps better than these; but the first one given me was that the federal government should advance one-third of the cost of that power program in the maritimes and one-third of the cost of rural electrification. That is what we did here in Ontario. We paid one-third of the cost for protection against floods on the Grand river, which amounted to a large sum of money. It is a suggestion which might be worth considering. In the case of the maritimes, the government could do what they are doing in the western provinces. I shall refer to that in another debate.

Next, they could make an outright capital grant as is done in western Canada in connection with conservation of water and re-

434;

The Budget-Mr. MacNicol

clamation programs. In western Canada outright capital grants are made under P.F.R.A. for the building of dams and dug-outs, and the same thing could be done in the maritimes.

Next, the federal government could lend money to build new power plants or to modernize or make additions to present large plants, including interlocking provincial grid transmission systems, at a rate of two per cent, repayable in forty years. Which one of these plans would be the most attractive to maritimers, I do not know.

Next, pay a subsidy of one mill per kilowatt hour for ten years for power produced and sold, or its equivalent, $1.25 a ton on maritime coal used in the production of electricity and its distribution throughout the maritime provinces.

There is a program that will bring results. I do not look upon it as being a mere matter of cost, because the federal government would reap a return in the form of sales and income taxes, and after a while in the form of succession duties, a hundred times more than what they would put into it. Aside from that, it is imperative that we do something to assist the maritime provinces. The Canadian Press dispatch which I quoted earlier refers to the average income in the maritimes as compared with elsewhere. Stop to think what it would mean if we could bring the average income in the maritimes up to the average income in Ontario.

I do not want anyone to think that in talking about the maritimes I am not talking for Davenport riding, Ontario. If such a program were carried out, Davenport riding, which I have the honour to represent, and Toronto and Ontario and Quebec would profit. As I said a few moments ago, one of the immediate results of the new power plant at Maccan was the building of a new salt plant at Amherst. This is a very fine plant employing 100 or perhaps more men and women. It is well worth going to see.

When I went through it I examined the machinery to see where it came from. I found that some of the machinery came from the fine city of Brantford. I found that the radiators were from the plant in Toronto in which I worked for many years. The evaporators had had been made in Owen Sound, in the riding of the hon. member for Grey North (Mr. Case). Other machinery had been made in Hamilton, and much of the electrical equipment came from Sherbrooke, Quebec. This shows that that new salt plant brought business to Ontario and Quebec.

I do not know of any better way by which I can help my riding. I never talk about my riding, because I want to see the country opened up. I know that, as the country is opened up, the factories in my riding will get something to do. Just recently an announcement was made that another new plant is to be erected in Amherst by the Bendix Corporation at a cost of S9,000,000, to employ 750 people. I say without fear of successful contradiction that if cheap power is made available in the maritimes, along with proper means of transmission throughout the length and breadth of the provinces, those provinces will expand as they have not expanded since confederation.

If anyone else can tell me of any other plan that will put the maritime provinces on their feet I should like to hear it. I know that Ontario and Quebec have expanded greatly because of their cheap power. I spend my time in travelling and I try to do what I can to help Canada. I know that as the west expands, as the maritimes expand, they will order materials from Ontario and Quebec. We will get our part of it. We should all go along together. One part of the country cannot be prosperous with other parts not prosperous.

I have done my best on this occasion to present a program which, on the basis of many years of travel and survey in England, the United States and Canada I am convinced will bring about the economic rebuilding of the maritime provinces on a scale never dreamed possible.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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May 25, 1948