September 11, 1950

LIB
PC

Arthur Leroy Smith

Progressive Conservative

Mr. Smith (Calgary West):

Well, what

about the lawyers? I never knew anybody Who needed a lawyer worse than you do. I continue with the other elements. All of these added together account for the very high cost of living. Let us take the retail merchant. My friends in my own town, and there are lots of them, are not blameless.

Remember this, Mr. Speaker; during the last war we got into the habit of fixing margins of profit on the various articles of food which we were buying. Did somebody say it was in England? It was true in Calgary. The Minister of Trade and Commerce (Mr. Howe) has not discovered yet that that place is in Canada, but it is, there is no doubt about that. Then we got into the habit of mark-ups, and those in the wholesale distribution business of foods also got into the same habit. We came to the place where an article sold for one dollar, and then with inflation and one thing and another we will say the mark-up was 10 per cent. Well, when the same article sells for $2 the profit is 20 cents and that is one thing which is wrong. We are dealing with our friends, these merchants who are great friends of our wives, and who do all their business over the telephone. They do not even put the number of pounds of meat on the roast you buy these days. All you get is the price.

The other day I was doing an errand on behalf of the culinary department of my family. I went down to the Hudson's Bay Company and I bought some of these big paper bags. I was commissioned to do it. It was a very rainy day. It was these bags that you put inside your slop pail. They are using fancier names on them today, but when I was a youngster it used to be called a slop pail. Now it is called a garbage can. I priced them at the Hudson's Bay Company store and I bought fifteen of them for 25 cents. They did not last forever. In my house we have three meals a day. As a matter of fact they ran out, and my wife telephoned to our regular grocery man. I was eavesdropping; I was listening, and she wanted some of these bags. He said that he had them and that they were three cents apiece. My wife said, "That seems awfully high." And the reply came back, "Yes, but you know paper has

IMr. Ferried

gone up." As a matter of fact, they phoned back a few minutes later and said that they had made a great mistake.

But all we get out of our merchants these days is that things have gone up, and we all seem to be perfectly satisfied with it. We do not ask why. All we hear is that something has gone up and we say: "Oh, goodness, we are in for it again."

We are dealing with bills having to do with consumer credit, and the other one which under the rules of the house I dare not even mention, I cannot call it by number, but it was that bill in which the Minister of Justice (Mr. Garson) created more law than Black-stone ever did. There was no doubt about that. I love the newness of it. You like a new article; his ideas were new; but when you try them you will find that perhaps some of the well worn ones are infinitely better than this sharp blade that he put in his idea. You know perfectly well that if you ever cut a piece of soap with it there will be no blade left. That is the kind of law he produced in this house just recently. [DOT]

Coming back once more, sir, to my earlier experience, I am willing to cut down credit. I do not know enough about inflation to understand all the reasons for it; but if people, as the hon. member for Cape Breton South (Mr. Gillis) has said, are getting into the clutches of loan sharks, because I think that was the people he was talking about, I agree with him this is good peacetime legislation and it is good wartime legislation. I know a bit about that. I put two of them in jail. I have not seen them recently, and I hope they are there yet, because this business of taking advantage of people with small incomes, with chattel mortgages and every other kind of mortgage that ties them body and soul, with quick remedies against them if they happen to fail, cannot be defended.

I see women coming to the same floor on which my office is with their little pieces of money, their weekly pay in their hands, and being met by these chaps who are so smooth, so genteel, so kindly when they get them to sign on the dotted line. They stand there like Simon Legree and the little woman comes around while her husband is at work. I hate, loathe and despise them just as much as the hon. member does, yet I am not content to have the decent credit people wrongly condemned in this House of Commons.

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PC
?

An hon. Member:

Fuller brushes.

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PC

Agar Rodney Adamson

Progressive Conservative

Mr. Adamson:

Yes, but they are very useful. The other day a lawyer friend of mine said to his wife, "Take a note of what you are offered every day in a week, and indicate how much it would have cost if you had bought everything offered to you." At the end of the week it was indicated that if his wife had accepted everything offered for sale she would have had to spend almost $350.

That was the experience in only one week. Commodities were offered on long-term credit, with the option of a dollar down or five dollars down or only to sign on the dotted line. I suggest to the minister that there may be a way in which this high-pressure door-to-door selling could be restricted. The husband goes to work, and the wife is left at home alone, harassed by the daily chores of keeping house. She is subjected to pressure by door-to-door salesmen to purchase articles which, had she not been importuned, she would not have thought of buying. In consequence there must be many people in Canada today who have made purchases which can be considered only as purchases made under pressure of commodities they do not want, and which they are incapable of adjusting to their weekly budgets.

These are points which have impressed me in connection with the problems of urban dwelling. While I realize that to a degree the matter of selling comes within provincial jurisdiction, and while there is some question as to whether it would come within the currency sections of the British North America Act, the fact remains that the expansion of credit is just as inflationary as the expansion of the money base.

If this continues there will be many families who will find their obligations tremendously increased. They will find themselves obligated in the evening for things they did not want, and indeed which they did not have in the morning. Not only is this an inflationary practice, but it is infuriating to many husbands who work hard all day and return to their homes at night only to find

Consumer Credit Act

that some salesman has been around and sold something to their wives while those husbands have been out earning their daily bread. They come home to find some wretched thing in the house they did not want, and for which they will have to pay for months. I should think some sort of agreement might be arranged with the provinces by way of licensing the salesmen of these goods. I realize that under our economy goods have to be sold, and that in a normal year the salesmen must go out to make sales. We realize that the function of the salesmen is an important one. Today, however, with the tremendous inflationary pressure and the constantly rising cost of living, I do believe there might be some way in which the Minister of Justice (Mr. Garson) and the Minister of Finance might get together-and I should hope more happily than did the Minister of Justice and the Minister of Trade and Commerce (Mr. Howe) this afternoon-to see if some agreement could not be worked out with the provinces whereby this pressure to purchase unwanted goods might be restricted in this emergency.

I am very much in agreement with the bill. Debts outstanding, my own included, frighten me. I hope they frighten other people, but I find that sometimes they do not. There are many people who are paying greater and greater proportions of their incomes by way of fixed charges. In an expanding economy, with tremendously inflationary pressure being exerted, that is one of the great problems. While I will not say it will destroy our economy, I will say the average man will find it more and more difficult to maintain a home and to make ends meet at each pay period, whether it be at the end of a -week or the end of a month. I would welcome any measure which would make it easier for the average householder in this difficult time to meet the strain of the increased cost of living.

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Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Dion in the chair. On section 1-Short title.


LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Mr. Chairman, a number of questions were asked on the debate on second reading as to the manner in which the measure would be carried out. First let me say I am gratified that the principle of the bill has received such universal approval, qualified in some cases by the desire that it might have gone further. Nevertheless on all sides of the house there seems to be approval of the principle itself.

Consumer Credit Act

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Did the hon. member for Calgary West give complete approval?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

I did say that in some cases there had been qualified approval but that I had thought that the principle of the bill had been generally acceptable. The hon. member for Cape Breton South pointed out that there was some difference of opinion among the members of the C.C.F. party. I think that some of the points raised by the hon. member for Assiniboia were pretty effectively answered by the hon. member for Kootenay West and I have decided that probably I will not have to answer them.

The hon. member for Acadia asked me to indicate to what extent the bill was going to be implemented. I might say that anticipating that the house would approve a measure of this kind I asked the officials of my department to make a survey of the existing practices in instalment selling and of recent trends in the various retail businesses. When that survey is available the government will be in position to consider to what extent regulations should be introduced for the control of consumer credit.

A good many hon. members will recall that during the war we adopted this measure of control under the War Measures Act which was administered by the wartime prices and trade board. Order 225, which was the final consolidation of the consumer credit orders, is a fairly elaborate order and it is quite likely that at this time it will not be necessary to exercise as extensive control over consumer credit as was necessary during the war. It certainly is the intention of the government to do so selectively. As has been indicated by some speakers, it may be found necessary to apply restrictions to only certain kinds of goods and to vary the requirements as to down payments in terms of total cost. These questions will be settled after we have received the survey to which I have referred.

Incidentally I may say at this time that it would be appropriate for trade associations and others who may be familiar with the technical problems involved to make representations to me or to the officials of my department in order that we may have the advantage of whatever assistance they may be in a position to give in the drafting of these regulations. I do not think that I would be in position to indicate now in detail just how and to what extent the enabling powers under this legislation will be applied, but the broad principles will be those which were applied in the similar control measure which was in effect for four or five years during the last war. tMr. Abbott.]

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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

Would the minister be in position to indicate what sort of organization within his department he proposes to have to administer this legislation?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

I can give a general idea as to that. When we were administering this particular order during the war the maximum staff was something in the neighbourhood of 30 to 40 employees. We had in Toronto a main office which consisted of a director, four investigators, legal counsel and a small stenographic and clerical staff. Other officers, principally investigators, were employed in the larger centres such as Halifax, Saint John, Quebec, Montreal, London, Winnipeg and so on. From the preliminary discussions that I have had with officers of my department who were familiar with this matter during the war I should think that at the outset it will not be necessary to establish a very large organization. There will probably be a limited number in the Department of Finance in Ottawa with a certain number of investigators in some of the larger centres to which I have referred.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. Knowles:

To what extent is this legislation tied to the bill that was before the house this afternoon by virtue of the fact that the preamble to this bill seems to rely on what is contained in the preamble to the other bill? In asking that question I have in mind the fact that we had quite a discussion this afternoon as to the constitutional validity of measures of this kind. I also have in mind the fact that this afternoon it was stated that the test of the kind of materials that would come under the other bill would be defence. The preamble of this bill ties it to the other bill and I should like to know if there is any significance in that. Will the classes of goods covered by this bill have the test of defence applied to them, or what is the situation?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Answering the first part of my hon. friend's question with reference to the preamble of the bill which was discussed this afternoon, the preamble to this bill was worded as it is in order to eliminate the necessity of reciting the circumstances which were set out in the preamble to the other bill and which have a similar application to this bill. Answering his second question as to the goods that will be dealt with here, that is to say, consumer goods with respect to which credit will be restricted, they would not be, either generally or particularly, the same class of goods as would be dealt with under the allocation bill which was discussed this afternoon.

The main purpose of this bill, as the preamble indicates, is to deal with the inflationary forces which now exist and which may become considerably stronger. This is one of the

weapons which the government is suggesting should be used to damp down those inflationary forces. My hon. friend will have seen in reading the preamble to this bill that reference is made to the preventing of inflationary expansion of currency and credit. Under the British North America Act the federal government is given responsibility with respect to currency.

I am not going to go into the constitutional aspects of this bill. I am not a specialist in constitutional law; taxation is more in my line; but I will say that constitutional law offers a wonderful opportunity to make assertions because it is most difficult for anyone to prove you wrong. In the case of a good many other branches of law you have to establish in the courts at an early date that you are either right or wrong, but that is not true in constitutional law. You can assert with a good deal of boldness that a thing is either constitutional or unconstitutional and it is very unlikely that you will be checked up in the very near future.

I prefer in a case of this kind to follow the law and take the advice, which I am bound to take, of the law officers of the crown that the bill which I am presenting is within the legal competence of parliament, and I have been so advised.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. Knowles:

I am reminded that the Minister of Finance has complained about arguments from this side of the house on the ground that they were arguments by assertion. We now seem to have a new type of legislation, legislation by assertion. I am interested in the preamble to this bill for at least two reasons. One is that we seem to be getting in these bills today a new basis for legislation. If the government is not satisfied that it has authority to go into a certain field, and if on the other hand the government does not want to declare an emergency and base its legislation thereon, it would seem that they are now trying to get by with a special kind of preamble. The preamble becomes the basis for the legislation the government wants to bring in.

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PC
PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

You have the word of the Minister of Trade and Commerce that it is good law. What more do you want than that?

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. Knowles:

The Minister of Finance is a lawyer and he says that it is just a matter of asserting that the government is right.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

I said that I was relying on my constitutional right to take the advice of the law officers of the crown as my legal 69262-38

Consumer Credit Act

counsel in this case that the bill I am presenting is within the powers of parliament.

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PC
PC

Gordon Graydon

Progressive Conservative

Mr. Graydon:

Is it the Minister of Justice you are speaking about now? Better be careful.

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September 11, 1950