Mr. Alistair Stewart (Winnipeg North):
Mr. Speaker, foreign policy and that which cannot be divorced from it, namely defence policy, are usually evolved on the basis of calculated risks. That is easy to understand, for one cannot possibly hope to take care of every contingency which may arise. What we therefore hope for is that the calculations are based on the best and soundest judgment.
I share the fear of the hon. member for Lambton-Kent (Mr. MacKenzie) that the United States has made an error in policy with regard to Formosa; and it is right and proper that we should consider that policy here because we are going to be directly affected by it either as a close neighbour and a good friend of the United States or else, of course, at the security council.
I have consistently taken the position that our policy with regard to China should be directed toward keeping that country neutral in either a hot or a cold war. I do not deceive myself by thinking that we can secure an ally in China. But I am not yet convinced in my own mind that China is thoroughly in the grip of the Soviet union. I find it hard to believe that the Chinese people will become a willing tool of the Kremlin. After all, they are members of an ancient and a proud nation. I may be wrong, but I do not think that they will be content to suffer under the yoke of soviet domination. If the policy of the western world then should be directed to keeping China neutral as far as possible, I say again that an error has been made in American policy towards Formosa; for that policy seems to have been tailored with the idea of antagonizing China; and we may be involved.
I think that the United States took one of the biggest gambles in all its history last June when it decided to try to isolate Formosa from the civil war which had been raging on the mainland. Unfortunately, there may have been an element of bluff about this gamble because I doubt very much whether, if the
The Address-Mr. A. Stewart
Peiping regime decided to take Formosa by force, the United States has adequate vessels or troops on hand to repel an invasion. In international affairs it is always a mistake to place yourself in a position where your bluff may be called. .
There is a fear afflicting not only Asians but also many in the western world that the United States, while it is ostensibly defending Formosa, is in reality defending Chiang Kai-shek. There is a fear-and there is a basis for that fear-that there may have been another orientation of policy on the part of the United States. The reason for that we need not enter into here. I think most of us are familiar with the stresses and strains of American politics. We are concerned, however, with the net result.
I was discouraged by the visit of General MacArthur at the beginning of August to Chiang Kai-shek. I think that visit merely added fuel to the flames of fear which already obsessed many Asians about the policies of the west towards them. Not only was the visit misguided but what was even worse-and I do not know whether this was done with or without the consent of the state department-not long afterwards not only was advice given to Chiang Kai-shek from General MacArthur's headquarters but also supplies were sent. We had the extraordinary situation, a few days ago, of General MacArthur-whom I regard at this moment not so much as an American general but as a general in command of the United Nations forces, which include Canadian forces, so he has some responsibility to Canada-trying to make policy in the Far East.
That was a blunder which, of course, the soviets are going to capitalize on to the very limit. The pity is that American blunders in the Far East have been so much worse than their crimes. They have that advantage over the Soviet union. The Soviet's crimes against humanity have been unforgivable. But there is shared by many responsible observers the fear that the United States once again is becoming entangled in Chiang's ambitions; and if that is going to happen, then obviously the United States is going to play the role which the Soviet union desires to see it play.
It is one of the aims of the Soviet union to isolate, as far as possible, the United States from its friends and allies. I am certain that it will not succeed in doing so. Nevertheless, the policy with regard to Formosa has perhaps estranged to some extent the people of India and has certainly made the position of the United Kingdom more than uncomfortable. The United Kingdom has recognized the Peiping regime, and now it
tMr. Stewart (Winnipeg North).]
sees its best friend and benefactor apparently aiding those who are opposed to it. The predicament then in which the British government finds itself is easily recognized. But we know what the policy of the Soviet union is. We know what they would like to have us do, and I do not think any of us is going to be lured into such a position that we shall desert the United States. It is only right, however, that the United States should know clearly and unequivocably what our position is.
Discussing the possibility of a red attack on Formosa, the hon. member for Lambton-Kent this afternoon said that it would complicate matters. That was a notable understatement. I can imagine few contingencies more dreadful, because I think that today the potentialities of the Formosan situation are much more dangerous than those in Korea. I believe that Russia would ask for nothing more than that the United States should be embroiled in a war with the Chinese government. That would suit Russian policy admirably, and unfortunately the Americans seem to be playing the role according to Russian desires.
I do not share the fear of many that Russia is at this moment prepared on its own part for active aggression. Russia does not need to indulge in aggression so long as it can get others to do its fighting for it, as in Korea, as might conceivably happen in a moment of tragedy if war were to result between the United States and China, as might happen if non-government members in Indo-China staged a revolt, as might happen today in Greece if the Bulgars carried even further their sporadic raids across into Grecian territory, as might happen today in Germany where in the east there are many Germans only too willing to play the part of Russian puppets and perhaps attack the west. In that case, if we were to defend all those danger spots by going to war, we should find ourselves so weakened and so enfeebled, while the Soviet union itself remained strong and powerful, that the fate of the western world would be precarious. For that reason, if for none other, I welcome the fact that Formosa is going to be presented to the United Nations, and that the United Nations will decide as to what shall be done there.
I agree completely with my leader, the hon. member for Rosetown-Biggar (Mr. Coldwell), when he suggests that one of the best things which could be done would be the ejection from Formosa of Chiang Kai-shek. I need not dwell at all upon the demerits of that late ruler of China. The hon. member for Lamb-ton-Kent (Mr. MacKenzie) did an admirable job on them this afternoon; but I am certain
that much tension would be relieved if Chiang Kai-shek could be removed from Formosa, and certainly tension will be relieved when the matter comes before the United Nations, and when the United States accepts the advice of that body.
The situation as regards Korea of course is obviously different. There can be no question in the minds of any of us as to the cor-rectitude and the rectitude of the action which the United Nations is now taking. Here was a clear case of aggression, and it was one which if collective security had reality had to be stopped. The United Nations working together have set up police action to stop it; and while today the news seems a little brighter than it has in the past few weeks, nevertheless I do not think we should take too much comfort from it, for I suspect that the operations there will last many long and weary months.
As has been pointed out by other speakers, we made blunders in Korea, blunders which have cost us dearly, as we have made blunders in other Asian areas. We supported the forces of reaction. We supported exiles whom their countrymen had almost forgotten. We supported collaborators of the Japanese; and although our motives were good, the political effect was serious.
The Japanese owned altogether some 80 per cent of the wealth of the island when they were thrown out. In North Korea, the industrial area of the country, the Russians took over the plants, took over the factories, organized and unionized the workers, and gave them the hope that so many Asians today are looking for, namely, the hope of a better living. In South Korea, unfortunately, those who eventually got control of the land were the very collaborators who had worked with the Japanese; and as history shows, those who possess the wealth of a nation very rapidly become its rulers. In that case, then, we need not be unduly surprised if the troops of South Korea have not shown the same enthusiasm as have the troops of North Korea in recent battles.
We know what we are fighting against. There can be no question, no shadow of a doubt about that. We are fighting against soviet aggression, soviet imperialism. What is perhaps more important, I wonder how many people know what we are fighting for. Few of the Asian people know what the western world is fighting for in Korea. They have been given the Russian side of the story. Mr. Malik, while he was chairman of the security council, directed all his speeches to Asia. He did a far better job on propaganda in many ways than we did.
The Address-Mr. A. Stewart
I refer to the remarks of my leader the other day when he told us that he had listened to those broadcasts over the Mutual Broadcasting Company between alleged experts on this side of the water and reporters in Japan. I heard two of them; and on each occasion Mr. J. B. McGeachy from Toronto was the Canadian member of the board. Each time he asked this question: "What are we fighting for?" and each time he got no answer, or something which was completely and utterly unsatisfactory. I assume that we are not fighting of necessity to put Syngman Rhee back where he was. I assume we are not fighting to put the collaborators back in the position of power which they occupied. I hope we are fighting for the freedom of the people of Korea and, if possible, for a united Korea, for the chance of Koreans to live their lives and to decide on their own form of government, and to live in freedom and with some security. I think that is the aim of the United Nations. If it is the aim it has not yet been sufficiently publicized throughout Asia.
In his speech the other day the Secretary of State for External Affairs (Mr. Pearsoij) used these profoundly true words, as reported at page 90 of Hansard of August 31:
Military strength is absolutely necessary, of course, but it must be supplemented by imaginative economic and social programs if the march of communism as a social and economic doctrine is to be halted.
That is true. This is not the first time he has uttered such words, nor is it the first time that I have, but unfortunately while he states that is the policy of his government, I have yet to find out what the government proposes to do or what it has done to implement that lofty aspiration. I heard only a faint echo of the applause which he received and I see only his words in Hansard. The time has come to put into practice these things which he says should be done.
A few days ago the British Labour party published a document whicjh eventually may become official, in the sense that it may become British governmental policy. It was a world plan for mutual aid, with the intention of attacking poverty throughout the world no matter where it exists. The hope is that all free peoples will contribute to this plan in an attempt to raise the standards of living all over the globe, and by this most practical and concrete way combat communism. I still believe that bread and butter are more inimical to communism than guns ever will be. The purpose of this fund, plan, call it what you like, is to take the place of Marshall aid when it stops. Its purpose is to help those in the underprivileged areas to have roads built, bridges built, factories
176 HOUSE OF
The Address-Mr, A. Stewart built and equipped and staffed with competent workmen; to irrigate lands so that crops may be raised, so that in turn the people might be fed. There is something in which I think we could play a noble and magnanimous part.
I refer again to a remark, a suggestion given by the hon. member for Rosetown-Biggar to this house last year; and it is one which perhaps might save us yet from a sea of troubles. It was to this effect: that the Canadian government should enter into negotiations with the United Kingdom government to find out what that country needed from us in the way of foodstuffs and vital raw materials. Payments would be made in sterling. The first effect would be to guarantee our primary producers on the prairies and on the farms everywhere, in the logging camps and our fisherman also that there would be some market for the commodities which they produce or were able to sell on that market. Secondly, it would conserve the United Kingdom dollars which they still need. Thirdly, the sterling balances in London would not be frozen there as a debt of the United Kingdom to Canada, but they would be converted in turn into aid given to those underprivileged areas.
If we were to follow a policy such as that we would, I feel, kill several birds with one stone, and still carry out the policy which the Secretary of State for External Affairs (Mr. Pearson) desires to see carried out, as I am sure do many of the rest of us. It will be argued, and has been argued, although not with much vehemence now, that our program is costly. The Minister of National Defence (Mr. Claxton) told us the other night that taxes would have to be raised in Canada, and I think none of us have any illusions about the matter. Taxes will have to be raised, and taxes must be raised. But they have got to be raised with justice and equity.
The situation today among vast numbers of the working people is that the unseen tax of inflation is taking from them so much that if they are otherwise taxed directly by the government they will fall substantially below the standard of living which we should like to see in Canada. The government openly and willingly, under its own policy, has decided that this inflationary spiral shall be permitted to continue. Today, I believe, the index has reached almost 170. Inflation is taxing the incomes of the primary producers and the workers in this country without mercy.
If taxation is to be raised, as it must be, then I hope it wiP not be indirect taxation.
I hope it will be direct, so that we shall know what we are paying. I hope, too, that it
will not be levied upon the poorer-paid members of our community. But if, perchance, owing to the nature of the financial provisions which we must make, they must accept some share of it, then I think it would be wrong to tax them in the sense of their paying income tax. If they have to pay anything, then it should be done as it was done during the war, by way of compulsory savings. It would not be right to penalize the poorer members of our society any more than they are already being penalized.
There will be of course additional taxation on corporations. This year is going to be probably the best year, so far as profits are concerned, that Canadian corporations have ever experienced. They may even, I hope, be asked to pay excess profits taxes-and I hope they will be heavy. I say that because I see no reason why corporations, or others for that matter, should be allowed to make excess profits out of a national emergency. If there is an excess profits tax it will have to be based upon a certain period. That period might be 1940-1944, because I do not think corporations should be allowed to make any more out of this emergency that they did during the war.
I have spoken about inflation; and there are dangers associated with inflation, especially when we are trying to bring all our people together in an attempt to achieve a national aim. One of the dangers of the inflationary spiral is the renewed set of demands on the part of organized labour for higher wages. Who is there who will blame labour when they see how prices are going up all around them?
It is not unnatural for the Canadian worker to compare his income with that of his coworker on the other side of the boundary line, in the United States. I have been in the United States several times in the last two or three years. Each time I go I take the opportunity to go into the stores and the groceterias to see how prices are over there. By and large, with certain exceptions, the prices which the American workingman has to pay for those commodities he requires to live are lower than the prices his Canadian counterpart has to pay. Yet there is quite a disparity in the wages earned by the two groups.
In this connection I turn to the figures for 1946, the year following the war, and the latest figures I have been able to obtain for 1950. In the United States between 1946 and 1950 there were certain significant price movements. Wholesale prices over there increased by some 26 per cent in that time, whereas wholesale prices in Canada during the same period increased by 47 per cent. As one would expect, extending from the
increased wholesale prices, the cost of living was affected. However in the United States it was up only to the extent of 20 per cent while in Canada it was up by 33 per cent. Let it be remembered that in Canada wages have not kept pace with this increase.
The real wages of American workers increased in that period by some $2.46 a week whereas the real wages of Canadian workers have increased by only about $1.25 per week. It may be argued that in those four years we saw the greatest increase in wages that Canadian workers had yet received. That is true; I will not deny it. The average hourly earnings of a man in 1946 were about 70 cents whereas in 1950 they were $1.02, or an increase of roughly 45 per cent.
But when we say that the income of the wage earner increased we must remember that unearned income also increased. The profits of the 450 corporations mentioned in the Bank of Canada statistical summary increased altogether by some 66 per cent. If there is going to be justice in this country in a common effort, then the taxation of corporations must be such as to let the average individual feel that unearned income is not being given preference over earned income.
Along with that it is in the opinion of our party essential that price controls be reinstituted, not in the sense of the rigid controls mentioned today by the hon. member for Edmonton West (Mr. Prudham), but in a much more selective sense than was necessary in the early days of the war. Not only should price controls be instituted for, let us say, the necessary commodities of life, but subsidies might also have to be granted.
The argument against that is that we lack the constitutional power. The question arises: Are we or are we not at war? To the legal mind it may be argued that our action in Korea is merely compliance with United Nations obligations on the part of Canada, and that technically we are not at war. However, I feel that the brigade going to Korea may see neither the difference nor the distinction in the legal technicality. That is a point which perhaps the courts might consider.
But if we are not at war, then according to the motions which the government is going to present to us, we are assuredly in a state of apprehended war, and certain action will have to be taken for the peace, order and good government of the country. I find it difficult to believe that any court in Canada or outside Canada would reject legislation if, in the face of apprehended war, this parliament decided that it would be advisable to reintroduce price controls and subsidies. I do not think
The Address-Mr. Poulin the constitutional question is a barrier today. I believe the real barrier is a lack of desire on the part of the government to institute these very necessary controls. This is all most regrettable because the people of Canada must have some protection, and they can have that protection only from their own democratically-elected government.
Whether or not we are concerned about the costs of an apprehended war, no matter how real the apprehension may be, we must not permit those costs to blind us to the fact that there is a great group of people in this country, our old age pensioners, our senior citizens, who still lack security-and security is the right of every person in a democracy.
I hope the coming appropriations will not be used as an excuse to prevent the removal of the means test, and some amelioration in the conditions of the older people in this country. The responsibility is that of the government. They will take the odium or they will take the praise. But I know that their share will be odium if they do not give protection to the people of Canada from an unseemly rise in the cost of living, by the institution of controls and the provision of necessary subsidies.
Subtopic: CONTINUATION OF DEBATE ON ADDRESS IN REPLY