March 6, 1953

PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

The attitude taken is this in effect: "You waited too long; you thought you were going to be protected." The suppliers say, "We thought we were going to be protected", but now they are in the position where they are out a large amount of money. The company has flown; and, if the accounts are paid, many tens of thousands of dollars beyond the cost of the contract will be required to complete the building.

Let me give another example, the new public building at Fort Qu'Appelle, as it is described. It was to cost $132,000, and we find that $103,000 was paid to the company. I would ask the Minister of Mines and Technical Surveys (Mr. Prudham)-because, if one may judge from the notes in front of him, he will probably speak this afternoon-to tell us, as one of the great contractors in this country-

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

George Prudham (Minister of Mines and Technical Surveys)

Liberal

Mr. Prudham:

I am not a contractor.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

He can speak on the subject, because he is experienced as a contractor. I would ask him to say whether that kind of thing is justified. Where was the examination of the progress reports? Why were material suppliers not protected? The company was paid $103,000, but still owes honest, respectable people in Saskatchewan $40,000 for materials the government received. To complete the deal will require $37,700 if the accounts are paid. This kind of thing

The Budget-Mr. Diefenbaker went on for a long time. This company collected its money but it was wasted and there was no control exercised in proportion to that which should have been expected in connection with the contracts.

Here is the next one, the unemployment insurance commission office in Regina. A contract was let to this company for $215,000 and $180,000 was paid to the company on account. A total of $58,000 is still owing to the material suppliers and the government says in effect, "Well, after all, this is their look out". If this is to be completed and the accounts paid, that building will cost a further $99,000 of the Canadian taxpayers' money.

This company built three schools in the Crooked lake area. They built a residential school at Lac la Ronge; they built an Indian agency school on File hills. There too there is owing to the material suppliers on these contracts a total of $21,698, and in order to complete these particular buildings a further $20,000 will be required to be spent.

That is just an example but it is not unusual. As a result of the failure of the government to act against wrongdoers and to protect the public interest there has developed an attitude of mind in this country on the part of some who have contracts with the government. That attitude is, "Who is there to stop us? Who is there that will investigate? Where are the auditors?" There is a complete breakdown similar to what was revealed in the Currie report. There is a breakdown in accounting and, above everything else, a breakdown on the part of the government. That government had as one of its members the Minister of Mines and Technical Surveys, who would know how to go about matters such as this. He is in the cabinet and I am sure if given the opportunity he would, above everything else, have demanded that the public interest be protected.

I have given these examples, but there are others which indicate that attitude: Waste, spend and spend, and tax and tax.

The Minister of Finance (Mr. Abbott) says this budget is one that holds out hope. I think of the 70 per cent of Canadians to whom it holds out no hope. I was impressed by the minister's radio speech a few days after his budget speech, in which he held forth to the Canadian people hopes of further reductions in taxation, and said:

I felt that it was especially important to reduce those taxes which interfered with normal incentives or which placed an excessive penalty on successful effort. Relief in these directions would, I believe, contribute to a further expansion of output and in this way lay a sound basis for more tax reductions in the future.

I am going to give the Minister of Finance an opportunity to answer a question. This is an election year. The budget is what is called a cyclical budget; the cycle comes up as the election approaches. Is it the intention of the government between now and the election to use its powers under the Emergency Powers Act to reduce taxation by order in council as it did in 1945? I think that is a matter that Canadians have a right to be assured about. I do not want to refer to another debate, Mr. Speaker, but we had difficulty finding reasons for the re-enactment of the Emergency Powers Act. The Minister of Justice (Mr. Garson) did mention the election, but it never occurred to me that the emergency might have something to do with the reduction of taxes. The government reduced excise taxes in 1948. I know the minister will say immediately that those reductions were made under the powers contained in the Excise Act.

Is it the intention of the government to reduce taxation between now and the election under the Excise Act? Is it its intention to blossom forth as an apostle of free trade between now and the election? Does it intend to use the powers contained in the Emergency Powers Act to do what it did during the election period of 1945 when on May 18 of that year, after the writs for the election had been issued, order in council, P.C. 3408, came out cutting taxation in connection with a number of commodities under the powers contained in the War Measures Act. I should add that the War Measures Act contains no other powers relative to the reduction of taxes than does the Emergency Powers Act. I shall wait for an answer and I hope the Minister of Mines and Technical Surveys will be able to give it when he speaks. I hope he will be able to give the house assurance that the same kind of fiddling with the tariff and reducing taxation for political purposes will not be done in 1953, to repeat the performance of 1945.

I have mentioned orders in council reducing taxation. You may ask why I did that. I did that because this is an election year. Last evening we had a speech by the Minister of Agriculture (Mr. Gardiner) that had all the earmarks of a campaign speech during the coming election. As I listened to him and read his speech I realized that we were hearing the same old arguments and seeing the same old strategy. Talk depression, talk of the days of 1930 to 1935 and blame it on the Conservative party when every country in the world, free enterprise or socialist, had the same or lower prices.

Talk protection and say how this party is allied with great interests, with silk hats and striped trousers. Mr. Speaker, if it were

not that I did not want to quote Mr. King, who today as far as the Liberal party is concerned is almost the non-speakafole Canadian -if it were not for that I would suggest that they should look up one of Mr. King's speeches of 1935 when he read the list of members in the Senate and their directorates. I do, for the benefit of my hon. friends opposite, ask them to do that at the present time when they speak of such alliances.

I ask them: Why is it that while they talk of tariff reductions, protection is being given in this budget to the electrical industry? Some days ago there was an interesting question asked by the hon. member for The Battlefords (Mr. Bater), in which he asked the Minister of Finance (Mr. Abbott) whether there was going to be any additional tax on tires and tubes for vehicles attached to tractors and the like; and the Minister of Finance said no. My hon. friend the member for Greenwood (Mr. Macdonnell) asked, in effect, "Are you going to announce some more changes?"

The facts are that about eight or nine months ago the tariff board found that farmers were not liable for any tax on replacement tires and tubes. As soon as that was found out this government, the friend of the farmer, brought in a last moment amendment to the law, in June of last year, to provide for a 15 per cent tax; but they forgot to include tubes and tires on accessories attached. They have been charging the tax since illegally, and what has been done in this budget is to ratify what has been done-the taking from the western farmer and the Canadian farmer in general a 15 per cent tax on replacement tires and tubes on accessories connected to tractors.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

If my hon. friend wants to be accurate, the tax has not been changed. He said we have been collecting it illegally, but he is mistaken.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

Then we are going to start to charge it.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

No, we are not.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

That is a most interesting thing.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

We never intended to.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

The minister says we are not going to do something that we have not been doing. Well, why put it in the budget at all?

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

It is not in the budget.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

Then it is in the attachments to the budget.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

No.

The Budget-Mr. Diefenbaker

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

Yes, it is. The Winnipeg Free Press and the western Liberal press were not unaware of that fact. If I am correctly informed the minister was approached by some of the western Liberal members who wanted to remedy what they thought was unjust and unfair treatment of the western farmer.

This is an election year, with millions of dollars to go to the western farmer under the 20-cent payment. I asked the Minister of Trade and Commerce (Mr. Howe) the other day if that money is held to the credit of the western farmer. Certainly the farmer is entitled to that 20 cents; but when I asked the minister if he had it to the farmers' credit his answer was in effect: "If we have not, we will borrow it". That is what they did in 1949, Mr. Speaker. They borrowed the money in order to make advances to the western farmers; then they charged the farmers' account half a million dollars in interest on the money advanced and distributed just before the election.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Robert James Wood

Liberal

Mr. Wood:

Have they not made that payment every year?

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

Well, what my hon.

friend says is right; but they borrowed it and charged the interest to the western farmer.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
?

An hon. Member:

What about succeeding years?

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

In the succeeding years I know of no interest being charged; and if my hon. friend does see that I give him the opportunity of saying that they charged the farmers interest in succeeding years.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
?

An hon. Member:

You cannot see it.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

No, you cannot see it; but the point I am making is that that magnificent gesture was just coincidental with the election of that year.

There is another sign, Mr. Speaker. The government is starting now to distribute the amount overcharged, or the amount taken in excess of what was proper with respect to income tax from workers and employees.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
L L

William Moore Benidickson (Parliamentary Assistant to the Minister of Transport)

Liberal Labour

Mr. Benidickson:

Did they not do that last year?

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink

March 6, 1953