March 6, 1950

LIB

Gladstone Mansfield Ferrie

Liberal

Mr. Ferrie:

No.

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CCF

William Scottie Bryce

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

Mr. Bryce:

I will debate that with you any time you like.

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LIB

Gladstone Mansfield Ferrie

Liberal

Mr. Ferrie:

You are wrong; I buy every week. I know.

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CCF

William Scottie Bryce

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

Mr. Bryce:

I want to continue, Mr. Speaker. I shall be through in a few moments if I am left alone. I was interrupted when I said the consumer was paying the same price for what we had to buy. I still think I am right, and I am entiled to that view. The new price of 29 cents per pound, f.a.s. has been announced, and the government has promised to pay the packer a subsidy of 3i cents per pound on export Wiltshire sides; so on these prices the farmer takes $9 less for his hog and the packer is taking $4.20 less. I might say here that a 200-pound pig on the hoof makes 150 pounds of pork, which in turn makes 120 pounds of Wiltshire sides. Hon. members can calculate for themselves that at this time the packer has still made $1.80 more of profit per hog than he made before.

Last year we contracted to supply Britain with 195 million pounds at $36 f.a.s. but only supplied 100 million. This year we have a contract for 60 million pounds but our domestic market will take around 900 million pounds, so we have the spoonful setting the price for the tubful. This 60 million pounds sets the price for the 900 million because the export price is cheaper; and remember it takes more to feed a hog this year than last year.

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PC

Lewis Elston Cardiff

Progressive Conservative

Mr. Cardiff:

That is the government's fault again.

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CCF

William Scottie Bryce

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

Mr. Bryce:

In the past by resolution I have asked the government to consider the setting up of a board of livestock commissioners to license and regulate facilities for the handling, grading, selling and processing of livestock, poultry and their products, but up to the present I have had no success. I know the packer is in business to buy as cheap as he

The Address-Mr. Bryce can and sell as dear as he can. He makes no bones about that. He tells you that is what he is in business for. But in the hands of a few firms, it becomes a monopoly which some hon. members call free enterprise, but when it gets to the stage of destroying the prosperity of the farmer it has gone too far.

In closing, Mr. Speaker, may I say I think there should be a government inquiry to look into the methods adopted by the packing houses, with special regard to condemnation insurance, price fluctuations and spreads between producer and consumer prices. Every year we set up new t.b. free areas but our condemnation insurance rates remain the same as they were thirty years ago. Surely the time has come, after all the work that has been done by the Department of Agriculture and supported by livestock organizations and municipalities to clean up t.b., to have this reviewed. The packing industry today is the same powerful monopoly that it was in 1935. Let me quote what they thought about it in 1935. I am quoting from the report of the royal commission on price spreads at page 161:

In recent years, this situation has completely changed. This change has been brougnt about, mainly, by two factors. First, the elimination of the small packing company and the wholesale butcher, either by merger and absorption or by cut-throat competition. Today, as we saw in chapter IV, the meat packing industry has been concentrated in very few hands. Canada Packers, Limited, is the dominating unit with a business greater than the next five packing companies combined. This development has reduced competition to the detriment of the producer. Canada Packers' buyers are to be found on the chief stockyards in Canada, and all are instructed as to price, methods and practices from a single office in Toronto. Swift Canadian Company, with plants at six centres in Canada, has its buyers on the same stockyards, directed from head office at Toronto. Burns, Limited, with plants at Calgary, Vancouver and Edmonton, has its buyers on all western yards, all directed from Calgary. Livestock purchasing is thus concentrated, with a result, as our evidence shows, of lack of price competition among packer-buyers.

There was uncontradicted evidence given to us by a former official of Canada Packers, Limited, that in Toronto it was the usual practice for this firm to arrange with Swifts, before the market opened, as to the prices to be paid for purchases of livestock. Also, the manager of the western stock growers' association, one of the largest ranchers in Alberta, gave evidence that if a packers' buyer gave an offer for cattle on the ranch, it would not be raised by any other packer-buyer either on the ranch or in the stockyards.

Another method adopted by the packers, which has reduced competition on the open market, is the practice of selling tp the wholesale butcher carcasses on the rail, at cost price plus killing charges, and thus removing the wholesale butcher from competition on the public stockyards.

I shall not read further from this report, because my time is drawing to a close. May I say however that they are not improving any.

The Address-Mr. Bryce

Then, only last year, we received the report of the royal commission on prices, from which I shall quote briefly at page 31:

The primary livestock industry and the retail meat trade are very competitive, but the processing industry shows a high degree oi concentration. The three largest packing firms account tor about 60 per cent of thfe total inspected slaughterings in Canada, which would indicate that competition operates within a fairly restricted framework, though there may be considerable rivalry among these firms. These large firms are efficient in their operations and, though realizing small profits per unit of output, earn substantial returns on their investment. The very heavy capital investment required, together with decreasing cost ratio as the scale of the business expands, tends to keep additional competitors from entering the field.

The three largest packing firms indicated that they made a net profit of $4-3 million in the four months following the simultaneous removal of price controls and settlement of the packing-house workers' strike in October, 1947, compared to less than $1 million in the corresponding period the previous year. Firms holding beef and pork in cold storage at the end of 1947, made substantial fortuitous gains as a result of inventory appreciation as market prices advanced with United Kingdom contract prices. Four firms held over two-thirds of total cold storage stocks and it would appear that they made substantial profits on these holdings.

The profits made by these powerful companies who agree to agree among themselves are built up by a continuous squeeze on the producer and consumer.

I shall conclude with one more quotation. This goes to substantiate the argument I used before, and is taken from the Globe and Mail for March 2, 1950. The heading states "Packer Pays One Cent More; Butcher Eight Cents; Eater, Three to Ten Cents"; and the article goes on to say:

Beef prices, which have mounted about one cent per pound during the past two weeks in stockyards, have increased from three to ten cents a pound on the average retail price in the same period. During the same period the wholesale price of beef to the butcher has increased about eight cents a pound.

The rise, reflected to the consumer, ranges from a three-cent raise for short rib roasts to a ten-cent-per-pound raise for porterhouse steaks. These are prices quoted by an independent butcher in an average income and rental district.

More sensational price increases have been marked in- the luxury markets but meat affected is not of the type usually purchased by the average consumer.

Meat price, increases at an average market during the past two weeks are indicated in the table below.

Yester- Three

day Weeks

per ago per

pound pound

cents cents

Hound steak

75 60Sirloin steak 79 72Porterhouse

85 75Wing roast

83 75Short rib

58 55Blade (bone out)

56 52Rump roast

68 65On February 15 good grade light steers were quoted at $21.50 to $22.50 per hundred. Yesterday

they were quoted at $22.50 to $23.50 per hundred.

According to a retail butcher, his wholesale price per carcass has increased from 344 cents per pound to 42J cents per pound, an increase of eight cents.

And the farmer got one cent more!

He said this would entitle him to increase his retail price by thirteen cents a pound to conform with the margin on which he works. However, he said he cannot afford to increase prices by thirteen cents on some grades of beef and has to scale them so buyers of best grade must pay the higher increase.

Price of beef, he said, will vary in the neighbourhood in which the butcher is located. Butchers in high rent areas cannot afford to sell porterhouse at his figure of 85 cents a pound. He estimated in such areas the charge would be between 90 and 95 cents a pound for best grade.

He said there have been no complaints from his customers, but that many began buying cheaper cuts or smaller quantities this past week.

The time has come for producers and consumers to demand an inquiry into the operations of the packing industry, because it affects everyone either directly or indirectly in the Dominion of Canada.

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SC

Hilliard Harris William Beyerstein

Social Credit

Mr. H. H. W. Beyerstein (Camrose):

Mr. Speaker, looking over the speech from the throne and analysing it from the viewpoint of an Albertan it does not take long to conclude that it contains nothing but matters of a routine nature. There is nothing in the speech from the throne to suggest that the government has any solution for our present problems of dwindling markets, the ever-increasing unemployment or the prevention of another depression.

However, when one considers statements made by a couple of cabinet ministers while they were in Alberta a few weeks ago, one can readily understand why there were no sound proposals in the speech from the throne for the solution of the problems I have just mentioned. It is with these statements made by the Minister of Agriculture (Mr. Gardiner) and the Minister of National Defence (Mr. Claxton) that I wish to deal tonight.

When he was in Edmonton a few weeks ago the Minister of Agriculture said that Alberta had failed to develop her natural resources, that she was sitting on a great store of wealth and doing nothing about it. It takes a lot of nerve to make a statement like that in Alberta, and the people of that province were not slow in making a come-back.

In an editorial in the Edmonton Bulletin of Saturday, February 11, we find this:

Not even the most bigoted critic could maintain that the Alberta government has been backward or maladroit in developing the oil resources of the province.

In most respects Alberta's oil policy is the best in the world. At the very least, that policy gets the oil out of the ground and puts it to useful work-and at the same time sends a nice flow of profits into the public treasury.

As a result of Alberta's industrial policy oil companies from all over the continent have not hesitated to go to that province. They have come into the province by the dozen with their drilling rigs and exploration crews. Leduc has blossomed out into a major field estimated to contain some

250.000. 000 barrels of oil. Then came Red-water, larger than Leduc, with reserves estimated at 500,000,000 barrels. Success continued with Golden Spike, Joseph Lake, Bon Accord, Stettler, Excelsior and Normandville. To answer the minister's statement I do not think I could use any better words than those of John R. White, vice-president of Imperial Oil Limited, who had this to say about the development of Alberta's resources:

What is there that cannot be done with 50,000,000,000 tons of coal, 1,000,000,000 or so barrels of oil,

3.000. 000.000 cubic feet of natural gas and $250 million worth of farm produce every year.

Add in salt beds that underlie most of Saskatchewan, through Alberta to Athabaska. Include the 15 000 square miles of tar sands, 150,000 square miles of' timber and 106,000 horsepower in Alberta's waterfalls alone. .

With basic resources of this sort, it is hardly necessary to count the rarer materials such as potash, bromine and iodine that have been indicated in some of the oil seekers' drill holes. Unnecessary, because what few materials Alberta lacks can be brought from outside, for example, from the metal mines that surround her on all sides.

Visible in the west are the materials for every type of plastic, for virtually all the major industrial chemicals and electro-chemical products. There is, here, the material for rayon, for nylon, synthetic rubber, phenolic and cellulose plastics, carborundum, graphite, cyanamide, acetylene and its host of relatives.

And it follows that if the materials for these basic products are present, there is the possibility of erecting over them all the secondary and tertiary industries that have been based upon them in other parts of the world.

Such are the potentialities of Alberta, the province that 15 years ago could not even pay the interest on its bonds. Such is the picture of the chain of events that well may have been set in motion by the discovery of that Leduc well.

As far as industries are concerned, Alberta has not been lagging behind in that respect either. We have in Alberta approximately 1,400 manufacturing establishments with an estimated production of $300 million yearly. During 1948, thirty-two new industrial enterprises with a capitalization of $31 million located in the province. During 1949, forty-three new industries were founded in Alberta. That indicates splendid progress considering the obstacles that Alberta has had to overcome.

When the present government of Alberta took over, it found the provincial treasury empty and the province with a huge, staggering debt. In addition to that, during the early days' of that government there was wholesale discrimination by the lending institutions

The Address-Mr. Beyerstein against those who had to borrow for production. The freight rate structure has been of no help to our province and still is of no help. I submit that we have been making splendid progress considering the handicaps we have had to overcome during the past fifteen years.

The Alberta Industrial Corporation was set up by the provincial government and has granted loans amounting to $2,700,000 to new industries starting in the province. In addition, the treasury branch serves a wide clientele of farmers, businessmen and plain citizens. This organization has made loans from time to time totalling over $10 million. I would point out also that the interest rates in Alberta are the lowest in Canada. In order to illustrate how Alberta helps to promote industry I should like to read from an article which appeared in Saturday Night of February 14, 1950, entitled, "Alberta Oil Sparks Growth of Industrial Economy." This article indicates how the Alberta government is ready to help even small manufacturers. It reads:

A middle-aged farmer at Radway, in northern Alberta, noticed that farmers often had to make a long trip into town, for the sole purpose of getting the blacksmith to sharpen the blades of their disc ploughs-a job which took only a few minutes, but one which most farmers lacked the equipment and skill to do themselves. So he designed a simple device operated from the power take-off on a farm tractor, by which discs could be sharpened on built-in emery wheels without any danger of doing the job wrong. The sharpener was small in size, and could be made to sell profitably at $15.

On a trial order from the provincial marketing board, a young blacksmith's helper at High River, Alberta, built 100 of the sharpeners. The board had the experts from the research council look them over, and when they gave the machine a technical O.K., passed it on to the department of agriculture to adjudge its usefulness to the farmer.

As a final aid, the board helped to arrange for the demonstration of the new device at rural fairs and other places where large farm groups could be reached. In the words of Oberholtzer, "Sales after that were remarkable."

This sort of assistance, of course, takes money- and lots of it. Fortunately for its program, money is one thing the Alberta government has lots of these days. Certainly, on a per capita basis, it is the richest provincial government in Canada.

I quote that to indicate that Alberta is not only interested in the larger industries; they will do everything possible to assist smaller industries. They will do anything to get them going. When the Minister of Agriculture (Mr. Gardiner) comes to Alberta and says that we are not doing anything to develop our resources, we in turn would like to ask him what is being done to develop Alberta's water powers. The Minister of Agriculture has said that that province has the highest hydro potential of any province in Canada. We would also like to ask him what is being done to get the most from our

The Address-Mr. Beyerstein coal which the minister has indicated constitutes fifteen per cent of the world's total supply. We would like to ask him: Where is our national coal policy?

Another statement attributed to the Minister of Agriculture as having been made in Calgary appeared in the Calgary Herald of February 1. It is interesting to note from that statement that apparently he has lost some of the pep he usually demonstrates. Speaking of agriculture the article refers to what the minister had to say, as follows:

He predicted that 1950 would be a satisfactory year for Canadian farmers, "although we cannot bank on its being as good as last year, which was a peak year." He said some levelling off was to be expected. The minister felt that markets would be available for Canadian wheat produced in 1950, although he commented that no dofinite picture could be obtained until the crop was in. However, the expected "plenty" of markets would be open at at least the floor price of $1.40 a bushel.

If you will notice the wording of this statement you will see it is quite different from the statements made prior to the last federal election. There are such words in it as "satisfactory", "cannot bank on its being as good as last year", "some levelling off was to be expected". The minister felt that markets "would be available". He also used the words "no definite picture", although he expected "plenty of markets". These statements show that the minister is not as sure of himself as he was about a year ago.

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SC

William Duncan McKay Wylie

Social Credit

Mr. Wylie:

They were made after the election.

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Hilliard Harris William Beyerstein

Social Credit

Mr. Beyerstein:

So much for the statements of the Minister of Agriculture. I should like to pass on now for a few moments to a statement which was made by the Minister of National Defence (Mr. Claxton), and quote from the Edmonton Bulletin. The heading of the article is:

Claxton Asks Harper Help

It reads as follows:

"Get behind Harper and help him when the time comes and then we'll have a new provincial government", Hon. Brooke Claxton, Minister of National Defence, told Edmonton and district Liberals at a Liberal luncheon in Corona hotel yesterday. Support of provincial Liberal leader J. Harper Prowse, M.L.A., as strong as that given Alberta Liberals in the federal election would result in a return of the Liberal party to the "sphere of influence" in Alberta politics, the minister said.

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John Horne Blackmore

Social Credit

Mr. Blackmore:

And complete disaster for Alberta.

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SC

Hilliard Harris William Beyerstein

Social Credit

Mr. Beyerstein:

Evidently before the minister made that statement he did not take time to look up the platform on which the Liberals campaigned in the last provincial election. I have here a copy of the Liberal

statement which appeared in the Edmonton Bulletin of August 13, 1948, just prior to the last provincial election. The heading is:

Liberals-$100 million on Roads

The article reads:

We propose to spend $100 million in the next five years for roads. Twenty-five million dollars is to be used for the construction of "market" roads to serve your rural communities. The remainder or $75 million is to be spent to provide permanent allweather main highways which will stand up under all kinds of weather and traffic conditions.

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SC

Solon Earl Low

Social Credit

Mr. Low:

Even the pork barrel.

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SC

Hilliard Harris William Beyerstein

Social Credit

Mr. Beyerstein:

The article continues:

We will spend $5 million each year out of current revenue on rural roads. This is more than twice as much as the present government is spending. And we will keep on spending at least this amount each year until our rural areas are adequately served by decent roads. The kind of road we expect to build on the main highways will be permanent highways -roads which will last for at least thirty years.

Then follows the statement which interests us most. It reads:

We will borrow the money to build them and we will pay for them as we use them over a period of twenty years.

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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

Mortgage the oil industry.

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SC

Hilliard Harris William Beyerstein

Social Credit

Mr. Beyerstein:

The article continues:

The cost per year for interest charges will be $1,500,000. The cost per year to retire principal will be $3,750,000, making a total annual payment of $5,250,000. Out of current revenue we propose to add $500,000 to ensure adequate maintenance, making a total annual cost of $5,750,000, which is $3,250,000 less than the Social Credit is spending without getting us permanent highways.

It is sound business to borrow for capital improvements, such as these highways will be, provided you know how you are going to pay off your debt. We know how we can do that.

With Alberta's rich oil reserves no doubt they could pay off the debt, but what is the sense of borrowing when we can progress on a pay-as-you-go basis and still have the same thing in the long run. I should like to remind the Liberal leader for the province of Alberta that when the present government took over there was a huge debt. At the present time this debt, even after some whittling down over the period of the last few years, amounts to $128 million.

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John Horne Blackmore

Social Credit

Mr. Blackmore:

Most of it Liberal debt.

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SC

Hilliard Harris William Beyerstein

Social Credit

Mr. Beyersiein:

A large portion of that $128 million was incurred by the Liberal government and the balance by the U.F.A. government. In order to gain power in Alberta the Liberals advocated the borrowing of another $100 million, and we have not been able to pay off the debts they contracted in the earlier years of the province.

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William Duncan McKay Wylie

Social Credit

Mr. Wylie:

They do not need to worry. They will never be in power anyway.

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SC

Hilliard Harris William Beyerstein

Social Credit

Mr. Beyerslein:

At the present time, as I said, the debt of Alberta is $128 million, and the annual carrying charges on it are over $5 million. With oil revenue now running at the rate of about $35 million a year, and the boom barely begun, it is obvious that Alberta could be debt free in a comparatively few years, an unprecedented achievement for a government today. Compared with 1935 the contrast is staggering. In a few years we could be debt free, but our Liberal friends are suggesting that we should borrow another $100 million and go further into debt.

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John Horne Blackmore

Social Credit

Mr. Blackmore:

Let them get their dirty hands on Alberta again!

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March 6, 1950