April 9, 1951

SC

Solon Earl Low

Social Credit

Mr. Low:

Mr. Speaker, at six o'clock I

mentioned that I had been very much interested in an analysis of the estimates placed before the house by the Minister of Finance (Mr. Abbott) something over two weeks ago. I have taken those estimated expenditures for the fiscal year ending March 31, 1952, and I have placed in tabular form the various departmental expenditures. I have shown them in the first table as percentages of the gross national product and, in the second, as percentages of the national income, assuming in each case that the fiscal year 1951-52 will show approximately the same gross national production in Canada and approximately the same national income as did 1950-51.

With your permission, Mr. Speaker, I should like to place these two short tables on the record, because they show in tabular form those relationships which I believe the people of the country would like to have.

Topic:   COST OF LIVING
Subtopic:   AMENDMENT, MR. DREW
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Some hon. Members:

Agreed.

Topic:   COST OF LIVING
Subtopic:   AMENDMENT, MR. DREW
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SC

DOMINION OP CANADA

SUMMARY


Of the estimated Expenditure for the fiscal year ending March 31, 1952, for each Department Gross National Product .. . . . $17,793,000,000 Per Capita $1,282.75 Per Cent of Expenditures 100 000 Per Cent of Gross National Product 100-0000National Defence . . . 1,600,000,000 115.35 44-606 8-9923Defence Production 64,212,001 4.63 1-793 *3608Finance .. . 582,758,603 42.01 16-246 3-2752National Health & Welfare . . 474,214,103 34.19 13-220 2-6651Veterans Affairs . . . 209,180,700 15.08 5-831 1-1757Public Works . . . 92,616,145 6.68 2-582 [DOT]5206All other departments .... .. . 563,934,105 40.66 15-722 3-1694Grand Total .. . $ 3,586,915,657 $ 258.60 100-000 20-1591 Population of Canada 13,870,946.



Cost of Living


DOMINION OP CANADA-SUMMARY-ESTIMATES


Of the estimated Expenditure for the fiscal year ending March 31, 1952, for each Department Per cent of Per cent of National Per Capita Expenditures Income National Income $14,164,000,000 $1,021.13 100-000 100-00National Defence 1,600,000,000 115.35 44-606 11-30Defence Production 64,212,001 4.63 1-793 -45Finance 582,758,603 42.01 16-246 4-13National Health & Welfare .. 474,214,103 34.19 13-220 3-35Veterans Affairs 209,180,700 15.08 5-831 1-47Public Works 92,616,145 6.68 2-582 -65All other departments 563,934,105 40.66 15-722 3-98Grand Total $ 3,586,915,657 $ 258.60 100 000 25-33 Population of Canada 13,870,946. When one takes a look at the estimated expenditure of more than three and a half billion dollars for the ensuing fiscal year, and realizes that those dollars will go out and compete with the expenditures of 13,870,000 individual Canadians, one begins to wonder just exactly what is going to happen to prices unless something very effective is done, and that very soon, to prevent any further inflationary rise. On the present basis, with the cost of living index at 179-7, according to the return for the month of February-and I think it will be much higher when the March figures are made known-what does this huge sum in the estimates do to our people? Here is what I think it will do. The budget estimates of $3,586,915,657, recently tabled by the Minister of Finance, have a total purchasing power today of only $1,996,061,172, in terms of the dollar in the base period 1935-39. That means that the purchasing power lost to the Canadian people through runaway prices will be no less than $1,590,854,485, on the estimates of the Minister of Finance alone. This means that every man, woman and child in Canada will be deprived of $114.69 in purchasing power through inflation of prices on the cost of living index of 179-7, on the government estimated expenditures alone. And of course in addition to that we will have to calculate what the loss in purchasing power for each individual in Canada would be on the expenditures of provincial governments, and on their own behalf when they attempt to buy food, eggs, meat, cheese, pay the rent, buy replacements, make repairs, buy clothing and all that sort of thing. When all those things are calculated, then I would ask the house what kind of future for the Canadian people those figures presage. That is the question which every serious-minded person in Canada will have to ask himself. Is it going to be possible for the Canadian economy to right itself, or is it going to be necessary to have government action to bring prices under control and to stabilize our Canadian economy? Evidently the government has had faith in the ability of our economy to right itself, but I say to you that government policy has failed. Even fiscal measures the government took as anti-inflationary measures have failed, as witness the recent heavy jump of over four points in the cost of living, within one month. It must be kept in mind that the present situation has arisen only partly as a result of economic affairs. I was talking during the dinner hour with a member of the house who expressed a thought with which I can agree. He does not happen to be a member of the opposition, but that does not make any difference; he is right, just the same. He says, and I agree with him, that to a certain extent the present situation has arisen because of psychological factors. That is perfectly true. So that We have to keep in mind economic factors, some of which I have stated, as well as a number of psychological factors, which have placed a terrific pressure upon prices. When I refer to psychological factors I have in mind the fear of war, which is one, and the fear of shortages, which is another. Those fears have compelled men throughout the country to do much more buying and much more hoarding perhaps than they should be doing. I believe that situation can be well illustrated by looking around and asking oneself how many 1951 automobiles people own today. It might be interesting to note that the statistical review published a short time ago indicates that there was an increase in motor car purchases in Canada between 1949 and 1950 to the extent of 60 per cent. What does this mean? It simply means that the people of Canada who can get hold of the money to buy cars are trying to get under the wire so as to have the latest possible model. They fear they will not be able to get new cars for a long time. That is one of the psychological factors we have to keep in mind. No one knows how long the present condition of cold war will last. But if it should last for a number of years, then it is conceivable that our economy could be shot to pieces by runaway prices-unless of course proper remedial action is taken at once. That is exactly what Stalin wants. At one time he and his communist pais throughout the world predicted that the free economies would fall into devastating depression and ruin themselves that way. World circumstances prevented that. Now it is very likely that those same enemies firmly believe that they can make inflation do for them what depression failed to do, or what they failed to get depression to do. International communism will do its utmost to wage for many years, just as long as it is possible for them to wage, a war of economic attrition which will revolve around the continual shrinkage in the value of our currency and the currencies of all the democracies. Stalin knows that our economy and the economies of the free democracies can be wrecked just as effectively that way as by an all-out shooting war. It is likely that he will follow the cold war method just as long as he can, feeling that we have not the brains nor the will to make the necessary financial and economic changes to ward off disastrous economic break-down. If we allow ourselves to be further weakened economically the chances of our ultimate victory over communist imperialism certainly will become quite uncertain. It is obvious that something will have to be done immediately to bring runaway prices under control. The questiop is what? That is the big question. We believe that in normal times when economic laws are allowed to operate a free economy is the best economy. We do not advocate a system of direct government controls as a permanent part of the type of economy that we would like to see, but we are not now living in normal times. I must emphasize that. Therefore we will have to adopt policies designed to meet the present difficult conditions and to get us out of these present difficult conditions. On one or two occasions since the session opened in January the Social Credit group have put on the record what we consider to be the necessary short-time requirements to stabilize the Canadian economy in these Cost of Living times and to make certain that we are not destroyed economically. I shall take just one or two brief moments to review the outstanding phases of the proposal which we have put forward. We think that it will be necessary for the government suddenly, overnight-it should not be done in a long drawn out way, a matter of invitation, such as has been suggested in the past-to impose over-all price and wage controls. That does not mean the freezing of prices by any means. When you have applied over-all controls overnight, then of course you have to set about an adjustment of prices to provide a fair profit and an adjustment of wages perhaps to conform with the adjusted price levels about which I have spoken. If we make this effective and complete I am satisfied that it will be possible to hasten the time when our economy can be free again to operate according to well defined fundamental economic laws. Farm prices will have to be adjusted to provide for a parity with the adjusted price levels. This may require a certain amount of subsidizing. We advocate that that be done wherever necessary in the interests of parity for the farming population of our country. The next thing is to see that every possible encouragement is given to increase the production of the required goods and services in our country. I do not think we can stress this point too strongly. The best cure for inflation, the best remedy for rising prices, is the production of the necessary volume of goods and services. We believe that it may be necessary to use producer's subsidies and various other kinds of inducements to get this all-out productive effort. If it is necessary, let us get it done because there is no better way of meeting the situation than through an all-out productive effort. The third important step is to maintain ihe purchasing power of the low income groups in our country to enable them to buy the necessities of life. The hon. member for Rosetown-Biggar (Mr. Coldwell) and the hon. member for Carleton (Mr. Drew) have pointed out the tragic circumstances of a good many of the low income groups in Canada as a result of runaway inflation and runaway prices. We feel that it might be necessary- if it is necessary we will certainly support the government in doing it-to introduce consumer subsidies on certain selected items, perhaps on quite a number of items that go into the everyday cost of living. If commodities do become scarce then we feel it may even be necessary to introduce rationing in order to see that there is an equitable distribution and therefore some sort of equality of sacrifice in whatever effort we



Cost of Living have to make. As a larger percentage of the production of the nation is diverted to war purposes, thereby intensifying inflationary prices; as increasing government expenditures compete with individual expenditures, then we may have to adopt a number of other important fiscal policies to meet the situation. In brief, that is what we are proposing as a short-term policy. That does not say by any means that we believe that this is all that will be required. But we do think that if that policy is adopted it will go far toward bringing the present dangerous situation under control. In times past when the Social Credit group in this house have placed before hon. members proposals for scientific financial and economic reform we were often met with derisive shouts of, "Oh, yes, those are Social Credit rubber dollars" and the like. I should like to introduce the members of this house to a perfect example of a rubber dollar. This is an anaemic, emaciated entity that one might call a shivering skeleton of a Liberal dollar that has a hard time today to buy fifty cents' worth of anything.


?

An hon. Member:

Throw it over.

Topic:   DOMINION OP CANADA-SUMMARY-ESTIMATES
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An hon. Member:

Pass it over.

Topic:   DOMINION OP CANADA-SUMMARY-ESTIMATES
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An hon. Member:

Send a million over.

Topic:   DOMINION OP CANADA-SUMMARY-ESTIMATES
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SC

Solon Earl Low

Social Credit

Mr. Low:

We all want to get hold of more of them. We have to if we are going to survive. This has plenty of rubber in it. It has stretched considerably. When the pressure was let go it bounced back and is only half what it was at one time. I cannot think of anything more rubbery than that. There is a rumour abroad that the Liberal government is going -to ask the Canadian Bank Note Company to run off another bill, a two dollar bill to commemorate this marvellous new age, this brave new situation into which we have got ourselves. This new two dollar bill is to be called the St. Laurent dollar.

Topic:   DOMINION OP CANADA-SUMMARY-ESTIMATES
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IND
SC

Solon Earl Low

Social Credit

Mr. Low:

The Aberhart dollar was never like that. These people who have talked of rubber and stretching in the past had better just turn the spotlight on themselves for a little while in order to see what is happening. As I see it, the best evidence in the world is this shivering skeleton, the thing we call a dollar, which is having such a hard time today to buy more than fifty cents' worth of anything.

To be serious, and in conclusion, the government simply must set about putting "sense" back into the dollar that they have allowed to depreciate so seriously, and you

can spell that "cents" or "sense", whichever way you prefer. We are asking on behalf of the people of Canada for lower living costs. We ask also that whatever controls are found necessary to accomplish that result be accompanied with safeguards so that the individual freedom of the Canadian people can be preserved.

Topic:   DOMINION OP CANADA-SUMMARY-ESTIMATES
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LIB

Joseph-Arthur Bradette

Liberal

Mr. J. A. Bradette (Cochrane):

Mr. Speaker, I am taking this opportunity to present in these precincts some of the reactions that I received from my constituents during the Easter recess. Every member of parliament, no doubt every senator, and certainly the Prime Minister (Mr. St. Laurent) and every member of the cabinet are fully aware of the high cost of living at the present time. They have felt it themselves and they were told by their constituents. Everyone now listening to me no doubt has received since the beginning of the session a nice white square card on which there are words to the effect that members of parliament should see to it that the cost of living is drastically reduced. I am going to speak my mind openly as I always have, and I believe I will be expressing the sentiments of the people whom I have the honour to represent. However, even a member of parliament has to be guarded at times, and the leader of the opposition (Mr. Drew) this afternoon, and also the leader of the C.C.F. party and the leader of the Social Credit party, were guarded to some extent in the statements they made on this very important subject.

I qualify my remarks by stating that during the last war I was a member and vicechairman of the war expenditures committee. At one of its sittings-and I knew that goods were being rationed and there was control on the commodities of life-very innocently I had the audacity to state that I thought there was too much advertising in the press of the country, not only of the commodities of life but also of some of the luxuries. I also mentioned the fact that large catalogues of hundreds of pages were still being issued, and the housewife would only get an average of about one article out of six when she ordered. You should have seen the kind of press I received and the kind of unfavourable publicity my remarks gained1 for me in every section of Canada.

I do not know why it should not be possible for a member of parliament to try to represent his riding sincerely and honestly and to speak the truth as he sees it. Before I proceed any further 1 must make one point very clear. There are three newsprint and sulphite industries in my constituency and I know that the government is now going to carry out some kind of control on the export price of

that production. If we are going to have controls on commodities we must have control of wages also. You cannot separate the one from the other. Any man who knows anything about elementary mathematics should realize that two and two make four and nothing else, no matter what some leaders may say.

I was astonished this afternoon when the leader of the C.C.F. party, for whom I have a high personal regard and respect, kept away from that situation. Again let me make the situation very clear to parliament and to the people whom I represent at the moment. You cannot have price control unless you also have wage control. I make that statement very deliberately indeed because there is no other way to deal in a practical and logical manner with the problem that is agitating the minds of the people of Canada at the moment. The leader of the C.C.F. party made a special appeal at the end of his speech to the Liberal representatives in the house. I am going to vote against the amendment. I am going to vote with my party, and I am not ashamed of doing so. I am proud of it.

I must tell the leader of the C.C.F. party that there must be very rigid controls so far as their whip is concerned. I have been a member of parliament for many years, and I have not heard a single word from any of the Liberal whips who have served over those many years as to the way that I should vote. I was never told how to vote on any question.

Topic:   DOMINION OP CANADA-SUMMARY-ESTIMATES
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LIB
LIB

Joseph-Arthur Bradette

Liberal

Mr. Bradette:

I am sure the whip will

follow the same course on this occasion. We are here as free people and as members of a national party. We will vote according to our conscience and according to what we believe is best for the Canadian people as a whole and the people of our own constituencies. We enjoy the benefits of a free democracy in this country. Under such a way of living no doubt we reap wonderful benefits but at the same time there are also weaknesses in the system that must of necessity be overcome not only by the effort of the government, but also by every citizen. No government would be strong enough to overcome a situation like the present one by itself unless it has full co-operation by all. Every citizen of the country who is worthy of the name must make the necessary sacrifices in order that the system we cherish, our freedom and democracy, our parliamentary system, our right to free expression, may be preserved.

That does not mean regimentation. It means the free will of a free people to do

Cost of Living

things according to their conscience. It means the freedom of a member of parliament to vote according to his own conscience in the best interests of his friends, his constituency and the country as a whole. The easiest way for the government to settle the question of the high cost of living would be to impose controls all across the board. That would be the easiest way, but would it be a really democratic way? Would it really be a solution? Under the present circumstances will the Canadian people be ready and willing to accept such a method of governing the country and regulating the actions of our people at the present time? Personally I would say absolutely no, that it would not be acceptable to the Canadian people.

It is true that during time of stress, time of war, when our young men and women are willing and ready to make the greatest sacrifice that human beings are called upon to make, to give their lives for their country because of certain ideals, then the citizens as a whole are willing to make certain sacrifices, and controls will then work. However, some people must have short memories when they clamour for controls such as we had during the last war. How many times have I seen newspapers and periodicals cursing controls and criticizing Donald Gordon! How many times have I had private conversations with representatives of industry and others who were maligning the name of the man who administered controls and his personnel, although he made a marvellous job of it and was a fine Canadian. It was not always pleasant for him. How many times have I heard my own family, relatives and friends in my own constituency abusing the system and the government of the time although they were doing a magnificent job!

When we speak of controls let us be careful about it. Does anyone in the house want control now all across the board on all commodities, control that will affect our exports and imports? Certainly people are not ready for such a situation. I notice that the amendment moved this afternoon by the leader of the opposition is well guarded in its language. You heard it, and I will read it again. It is as follows:

This house is of the opinion that in view of the announcement made on Wednesday last of the greatest monthly increase in Canadian cost of living during the month of February to the disastrously high level of 179-7, immediate consideration should be given to the adoption of appropriate measures to hold down the cost of living and halt inflation.

There is no mention of control there. I can only see one primary reason why control is not mentioned. I refer to what the leader of the opposition said in the House of Commons on February 21, 1949. I will read

Cost of Living

his words in French because at the moment I only have the French copy of the speech that he made. He said:

(Translation):

Mechanism of a dictatorship:

I do again urge members, and particularly those on the government side, to read carefully these arbitrary powers, these orders in council carried forward by statutory enactment, and which we are asked again now, in 1949, four years after the termination of hostilities, to renew. There you will see the mechanism of dictatorship. There you will see power to exercise almost unlimited authority over agriculture, over industry and over the economy of our country. Wider powers could hardly be imagined. And those pokers are exercised, not under the direct authority of parliament, but under the executive power of the government itself, without any clear definition of their limitations or purpose.

I remember perfectly that during the last federal elections, my Conservative opponent went around my riding saying that the leader of the opposition . . .

(Text):

During the last election the leader of the opposition was saying that controls should be abolished immediately. I do not know how the leader of the C.C.F. party could interpret the amendment moved this afternoon as involving absolute controls so far as Canada is concerned. It certainly is not there. If the amendment carried, there, would be no implication of such a scheme. If you read the amendment you will see that the word "control" is not even mentioned.

In this country the cost of living is affected in two different ways. We are a great exporting country, I believe the fifth in the world, and for that reason our national economy of necessity must be very sensitive to the export trade. We have to buy raw rubber from the United States, for instance. In January, 1950, rubber stood at 44; in December of 1950 it was 164. We have to buy raw wool from the United States, Australia and Britain.

Topic:   DOMINION OP CANADA-SUMMARY-ESTIMATES
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PC

William Joseph Browne

Progressive Conservative

Mr. Browne (St. John's West):

We can still send some to Poland, though.

Topic:   DOMINION OP CANADA-SUMMARY-ESTIMATES
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April 9, 1951