April 22, 1952

CCF

Major James William Coldwell

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

Mr. Coldwell:

I put it that way; I said that the Minister of Finance had demonstrated the government's disregard of the expressed wishes of the House of Commons.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

And what did you say after that?

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CCF

Major James William Coldwell

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

Mr. Coldwell:

That is exactly what I said.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

What did you say after that?

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CCF

Major James William Coldwell

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

Mr. Coldwell:

I said that just two weeks prior to the introduction of the budget the House of Commons unanimously adopted a resolution which would, in effect, permit taxpayers to deduct-

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

"which would, in effect"- those are the words to which I take exception.

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CCF

Major James William Coldwell

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

Mr. Coldwell:

Oh, that is quibbling; that is really quibbling.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

The Minister of Finance never refuses to consider any suggestion, whether it is from the House of Commons or from any other place. That was the reason that resolution was not voted down.

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CCF

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

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

Mr. Knowles:

You voted down my motion for the deductibility of trade union dues a year ago

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CCF

Major James William Coldwell

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

Mr. Coldwell:

As a matter of fact, what I say is perfectly clear-

Topic:   THE BUDGET
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

I want my hon. friend to be fair.

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CCF

Major James William Coldwell

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

Mr. Coldwell:

Let no one quibble over the matter; the House of Commons expressed the desire that this should be done. And that desire was-

Topic:   THE BUDGET
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

The House of Commons

expressed the desire that this should be considered by the government.

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CCF

Major James William Coldwell

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

Mr. Coldwell:

As a matter of fact-

Topic:   THE BUDGET
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

And the parliamentary assistant, who spoke on the motion, made it perfectly clear that that was the case. I heard my hon. friend on the radio misrepresenting it, as he is doing now.

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CCF

Major James William Coldwell

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

Mr. Coldwell:

The minister should not lose his temper. I have not lost mine.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

I am not losing my temper.

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CCF

Major James William Coldwell

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

Mr. Coldwell:

I do not intend to lose my temper over it; but the only way in which a resolution of this description can be presented to the house is through asking for consideration, and by expressing a desire; and that is precisely what the resolution did. And I say that in this respect there is disregard by the government cf the expressed desire of the House of Commons-and that, I suggest, is a statement of fact.

The increase in the total amount of medical expenses which can be deducted, namely $750 to $1500 in the case of single, and $1000 to $2000 in the case of married people, will provide benefits to some people who are hard-pressed, but it will provide little if any benefit to those in the lower income brackets who in most cases could not afford, even if they were pressed, to pay these amounts themselves for medical aid. The removal of the four per cent floor would have benefited everyone who incurred medical expenses. I want to say-the minister may not like my saying this-that the ignoring of the house on this matter emphasizes the lack of respect the government has shown for parliament from time to time. For example, in August 1946 the house voted to ask the government to consider the continuance of the milk subsidy, but as soon as the house adjourned the subsidy was discontinued by order in council. I want to say that if we are to maintain our democratic institutions and traditions the authority of parliament must be restored by electing members who respect and believe in the authority of the elected representatives of the people.

I want now to turn to a relatively small matter, the tax reduction of from 30 to 15 per cent on soft drinks. In our opinion this was done to placate the manufacturers who, we are told, will benefit rather than the consumer. No reduction is to take place in the

tax on children's candy bars. I always thought that that was a very petty tax. The tax reduction of three cents on cigarettes will prove negligible in benefiting those who use cigarettes. While the government saw fit to change the corporation income tax in the interests of some corporations, it did not see fit to alter the sales tax which, as I have said already, hits the purchasers of large groups of commodities and is especially burdensome to people in the low salary and wage brackets whose necessities of life are indeed so heavily taxed.

I regret to say that the minister gives us no other alternative but to conclude that the result of this budget will be to militate against the interests of those in the lower salary and wage brackets and the farm groups. We find that in some parts of Canada very few farmers have incomes which place them in taxable brackets. I say that this aspect of the budget is most unfortunate. We had hoped that the lower income groups who have suffered the main burden of taxation, the weight of the special excise and sales taxes, who are unable to save little if anything as insurance against sickness or other unforeseen events, would have been given a much better break than the government has seen fit to give them in this budget.

I was interested to note that the minister has estimated that nearly $1,000 million is earmarked this year for social security purposes. On the other hand, his estimated gross national product for the year is $22,500 million. In other words, this $1,000 million will be equivalent to approximately 4-4 per cent of the country's gross national product. This is certainly an indication that Canada is far from having become a welfare state, as some would have us believe, when such a small percentage of our total national product is used for that purpose. On this point I was interested to read an address entitled "The Pattern of Canadian Progress" which was delivered recently in Toronto by the Minister of National Health and Welfare (Mr. Martin). The minister underlined what I have just said, when he used these words:

In 1937 , 30-6 per cent of Canada's federal budget was for social security. In the fiscal year just ended, this percentage was only 22-9 per cent-a drop of 5-3 per cent since 1948. In other words, social measures today account for a smaller percentage of our federal budget than they did four years ago or fourteen years ago.

That is a statement by the Minister of National Health and Welfare. I think it is the clearest evidence possible that we are far from doing all we could to provide Canadians with decent social security. As our economy

The Budget-Mr. Coldwell expands surely we have the right to expect that the government will effect a greater distribution of this increased wealth by providing better old age pensions and, most of all, a national health insurance program. These are social measures which an expanding economy should be able to afford.

I want to turn to something that I have raised in the past and which has been raised by others, although not actually included in the present budget. I refer to the matter of farm implement prices. I make this reference particularly in view of the fact that we are witnessing a fall in farm returns and farm prices. Floor prices for cattle to be adjusted month by month were announced this afternoon by the Minister of Agriculture (Mr. Gardiner), which may be an indication that we may see falling cattle prices because of surpluses that may be piled up.

In that regard I should like to make a suggestion which I have made in the house before. In fact, I think I made it on the address. If the surpluses of beef and other meats pile up they are bound to have a depressing effect on our markets and may cause the government to lower the floor prices. I am afraid that we have lost the United States market for longer than we anticipated a short time ago since a new case of foot-and-mouth disease has been discovered in western Canada.

Consequently I think an effort should be made by the government to enter into some arrangement with the United Kingdom. We may have to finance payment to the farmers in the sale of cattle on the Canadian market or if necessary take sterling or make loans as the case may be so that we can get these surpluses into the hands of people who need them badly, people who would be glad to take these depressing surpluses off our hands should they arise. I think the government should consider a plan of that description. We have an obligation under the North Atlantic Treaty Organization to assist the economic welfare of those who are allied with us under that agreement. This might be one way of fulfilling it.

I wanted to say something about farm implement prices. I have just examined a copy of the final report submitted by the Saskatchewan legislative committee on farm implements and passed unanimously by the legislative assembly of that province on April 4. This committee was appointed to inquire into the prices of farm machinery with the object of determining the possibility of establishing parity in prices between farm machinery and the prices of farm products.

The Budget-Mr. Coldwell

Its significance can be determined when one considers the importance of machinery to those engaged in modern mechanized agriculture. The trend toward mechanized farming, not only in Saskatchewan and the prairie provinces but indeed all across Canada, has progressed with great rapidity over the years with the result that farm implements are more important than ever to the farmer. Yet despite the importance of this subject to a large section of our economy the committee reports that the four major companies of the farm implement industry, namely, John Deere, International Harvester, Cockshutt and Mas-sey-Harris, failed to provide the committee with the necessary information to carry out its inquiry. However, this did not prevent the committee from obtaining evidence which clearly indicated high prices and resulting high profits in that industry.

A provincial legislature, of course, cannot undertake investigations to ascertain whether a combine is in existence or whether a combine did exist. It is handicapped by not being able to secure certain information because of lack of provincial jurisdiction. As the committee in its report points out, a provincial authority can only act within the province, whereas a federal authority is legally entitled to obtain evidence, written or oral, anywhere in Canada. The committee recommends, therefore:

That, in view of the failure of the above companies to comply with the committee's request for information, and in view of evidence submitted indicating very high prices and proats, the federal government be urged to immediately institute an investigation of the farm implement industry by a parliamentary committee.

The committee further recommends in its report that the federal government take the necessary steps to prevent additional increases in the price of farm implements or, failing this, to increase the price of farm produce to offset the present adverse effect of high machinery prices on the farmer. This report calls to mind the inquiry that was made by a select special committee of this house, of which I may say I was a member, appointed on February 1, 1937. The authority given the committee was-

-to continue and complete an inquiry begun by the standing committee on agriculture and colonization, pursuant to a resolution of the house on March 2,

1936, into the causes underlying the high prices of farm implements-

It is interesting to note that the conclusion reached by the parliamentary committee in

1937, fifteen years ago, with regard to the prices of farm machinery, coincides with the conclusion of the Saskatchewan legislative committee of 1952, namely that prices on farm implements are out of proportion to

the returns received by the farmer on his produce. The parliamentary committee in its report of 1937 declares that it-

-is of the opinion . . . that there is competition in the matter of securing sales but little or no effective competition in the matter of prices as between companies. It is true that one company cannot increase its price unless other companies, particularly the larger ones, follow suit but, as illustrated in January, 1936, and throughout the period, increases in the prices or maintenance of prices when a decrease should have been expected, occurs simultaneously in all the companies. The companies insist that no understanding existed between them in the matter of the January, 1936, increase and that the increases resulted from the same conditions arising in each company. It is extremely difficult for the committee-

So the committee reports.

-to understand the remarkable coincidence of the increase occurring in the same month of the same year and, generally speaking, on the same implements and to the same extent. The companies state that it is the practice in the industry to exchange price lists, and it may well be that this practice enables the companies to quickly gain uniformity in the matter of price levels.

In one of its findings the parliamentary committee says:

-that over the period 1891 to 1936 retail prices of farm implements have been maintained at too high a level as shown by the financial returns to the companies engaged in the industry during that period.

It should be noted that shortly after the report was tabled in this house in 1937 the companies showed their contempt for it by further increases in implement prices. When one turns to the present report of the Saskatchewan legislative committee on this subject, one finds evidence to the effect that the farm implement industry continues to be guilty of maintaining too high a level of prices, and prices that bear little or no relation to the prices the farmer receives for his products. The parliamentary committee of 1937 recommended that since such corporations tend to limit free competition in so far as prices are concerned-

-a well managed, well financed and independent co-operative movement might be encouraged by the consumers.

Interestingly enough, the report of the Saskatchewan legislative committee notes that Canadian Co-operative Implements Limited, created by the farmers after the 1939 inquiry of the Saskatchewan legislature, found retail prices of farm implements and repair parts to be excessively high, and had-

-succeeded in establishing efficient manufacturing operations and were producing implements which were closely related to the needs of prairie agriculture.

The committee goes on to point out that with regard to the whole question of distribution and the larger and more important

question of the contribution of Canadian Cooperative Implements Limited to the Saskatchewan economy-

-it was apparent to the committee that this organization had afforded large savings to its members. This was indicated in the submissions by C.C.I.L. representatives which showed that a minimum dividend of 18 per cent had been realized by members in the period 1946-51.

I should add that the dividend referred to, of course, was the patronage dividend, not profit or return on capital but a return of what are in effect overpayments for farm machinery made by members. In view of the serious nature of this problem and the difficulties encountered by the Saskatchewan legislative committee as a result of its legal limitations we of the C.C.F. urge-and I want the government to note this-that the federal government immediately undertake to complete the inquiry begun by Saskatchewan into the oauses underlying high prices on farm implements. We further recommend that if a parity cannot be established between prices of farm implements and the prices the farmer receives for his products, the government assist farmers in the implementation of the recommendation made in 1937 by a select committee of this house pertaining to the establishment of a nation-wide co-operative movement in connection with the farm implement industry.

As I have already said, in view of the situation developing in the diairy industry and in the cattle industry, and since we cannot know what kind of world agreement there will be on the price of wheat, I think it is particularly important that every possible step should be taken not only to find markets but to see to it that the implements of production are available to producers at reasonable and proper prices.

Now I wish to move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):

That the amendment be amended by adding thereto the following words:

"This house further regrets that the government has ignored the wish of this house, as expressed by a unanimous vote on March 26. that the 4 per cent floor under medical expenses deductible for income tax purposes should be abolished."

There is one other matter I would like to discuss particularly, since it affects not only my own province but my own constituency. I want to say a few words about the South Saskatchewan river project. I think there is an urgent need not only to come to a decision but to undertake this important project as quickly as possible in order to provide water for irrigation and reclamation purposes for a large area in the province. This spring we have seen an unprecedented demonstration of the tremendous flow of water that occurs;

The Budget-Mr. Coldwell yet perchance in the course of a few weeks the land will lack moisture. By that time the water will have gone down the river to the sea, having done incalculable damage as it moved on. It is expected that the project would provide for the irrigation of approximately 431,000 acres of land, thereby improving agricultural conditions in a large area of central Saskatchewan. It has been estimated that the productivity of the land to be brought under irrigation may be more than doubled with a consequent major increase in farm revenue. It is also expected that, as a result of this irrigation, the number of farms in the district would more than double. I believe that is a very conservative estimate. I would say that they would multiply because there are some very large farms in that area, and under irrigation those farms would be divided up into much smaller acreages. Instead of a declining population in those areas, as has been the case, both rural and urban populations should show some substantial increase.

Of course, in addition the irrigation project might also-and I say might also because I think that this is incidental to the plan- provide electric power to supplement the electric power that may be generated by gas, oil or steam, and thus provide cheaper and more abundant power to the people on the farm and the rural and urban centres. I hope that the commission will soon complete its inquiry and make its recommendations, and that those recommendations will be favourable to the undertaking. I do not think I have had the opportunity of saying this before, but I believe the government chose a very able irrigation expert from Salt Lake City to advise them in this regard. I hope that if the advice the expert on irrigation gives is favourable, the undertaking will be proceeded with at a very early date. As a matter of fact I think perhaps the time has come when, not only in the interests of the area to which I have referred, a great part of which is in my own constituency, but of Saskatchewan, the whole of Canada should receive consideration. We know quite well that periods of dry weather occur in that part of Canada. We know that this involves not only suffering to the people who live in the area but also often involves the country in large expenditures of money. It seems to me that this is one of the forms of insurance that could be undertaken by this parliament against the recurrence of the conditions that we knew in the thirties. I know that all the available information has been placed before the commission by the government of Saskatchewan, and that the commission itself said it required no further submission from that government until the public hearings

The Budget-Mr. Low

were held across the province. I know that the people oi the area wish to co-operate in every possible way with the federal government in this regard.

Before I sit down, Mr. Speaker, I merely want to say, as I said earlier in my address, that we are disappointed with the budget. We think it emphasizes inequities in the imposition of federal taxation. We believe that the expenditures that are to be made should be very carefully scrutinized by this parliament. I cannot deal with the matter at any length, but I want to add to what the hon. member for Greenwood has said regarding the necessity of looking carefully into military expenditures. I was in Pembroke last night and met a group of prominent citizens there. My mission was a non-political one. Afterwards I had the privilege of chatting with them for a couple of hours, and they told me that they believe that the matters that are now under investigation should not be the only matters investigated, but that the accountants and so on should inquire into expenditures that have been made on equipment that has gone on over the past number of years. Apparently the common rumour in Pembroke, which is in the neighbourhood of Petawawa, is that what has been uncovered lately has been going on for a considerable time. I hope, therefore, that every effort will be made by the government to investigate this matter at Petawawa, and indeed at other military establishments from one end of this country to the other.

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SC

Solon Earl Low

Social Credit

Mr. Solon E. Low (Peace River):

Topic:   THE BUDGET
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Not this year.

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April 22, 1952