March 9, 1953

PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

What I said was that the Minister of Finance (Mr. Abbott) spread his tax benefits so thinly that they really do no good to the great majority of people in the country. I did not say there were none. I said they were spread so thinly they were practically valueless. I think perhaps that is enough time to spend-

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An hon. Member:

Read some more.

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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

Keep your promise. Send the text to me. Send it over here. You promised.

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PC
LIB
LIB
PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

The great basic weakness of the budget is that the tax cuts proposed are based on hopes for an increased national product instead of on the sound ground of economy and reduced expenditures. The budget actually proposes increased expenditures in nearly every department, and the minister relies on an increase in the gross national product to cover those increases and at the same time enable him to cut taxes. .

Personally I do not believe this is sound financing, because the gross national product may be seriously reduced below the minister's expectations by events which are completely beyond his control. To mention just one, a poor grain crop in western Canada this coming year would knock the minister's calculations for a loop, and instead of getting

The Budget-Mr. Harkness the income he expects he would get considerably less. Of course a poor grain crop in western Canada this coming year could very easily develop, particularly in view of the extremely dry fall and the very small snowfall this winter, resulting in a much below normal moisture content in the soil.

It is on incalculable factors of that sort that the Minister of Finance has based his calculations and has decided that he can cut taxes and at the same time increase his collections. Apparently he refuses absolutely to face what I would call the realities of the situation and go after tax reductions by the means he should make them, by a drive for economy and the reduction of inefficiency and waste. As a matter of fact the budget demonstrates once more what has been the outstanding characteristic of the government since the war, its unwillingness or inability to curb extravagance and waste in public spending. I am not going to put on the record once again the numerous examples which have already been cited by speaker after speaker in this debate which show the enormous increases that have taken place in expenditures in the past ten to fifteen years, expenditures which in many cases cannot possibly be argued to be essential.

I refer particularly to such things as the terrifically increased expenditures for travelling, telephones, postage, printing, advertising and things of that kind. The extravagance, waste and inefficiency which have been displayed in our rearmament program are of course the outstanding examples of all. So much has that been the case that it has now become something in the nature of a national scandal. Nearly every day brings to light new instances of terrific extravagances and waste in our defence effort. We are getting many of them in the committee that is considering this matter-

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LIB
PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

-and as the result of answers to questions. They are found generally throughout the country. I will not go into detail on that. I just stopped in time, Mr. Speaker.

I should like to turn now to the Minister of Agriculture (Mr. Gardiner). Speaking in this debate he attempted to show that there was no justification for the amendment moved on behalf of this party which condemns the government for its failure in the budget to-

-offer any encouragement to Canadian farmers in meeting the serious consequences of lost markets and lower prices resulting from the government's agricultural and marketing policies.

That was part of our amendment. The Minister of Agriculture attempted to show

that there were practically no surpluses of farm products for which we were searching for markets, and thus of course by inference was attempting to show that we had not lost markets. As a matter of fact his own figures which he placed on the record confound him.

I should like to deal with those figures which are found at page 2663 of Hansard for March

5. First of all I shall read the short statement he made preparatory to introducing them. It is as follows:

I give those figures in order to emphasize the position I took a few moments ago, namely that there is not a decrease in the quantity of farm products being produced in this country, either in the last years as compared with the last three years of the war or in the six years since the war as compared with the last six years before the war.

Note this, Mr. Speaker:

Our production is going up, and going up continuously: and while it is going up prices are increasing and therefore the returns to the farmer are increasing from year to year.

The rest of it does not matter. After having made that statement, the minister put the table on Hansard and I should like to comment on it. Quite contrary to what the minister said, the chart which he himself placed on Hansard shows that in the period from 1949 to 1951 production was considerably less than it had been in the period from 1943 to 1945, the two periods he deals with in the chart. That is true of all the major commodities he lists except wheat, and I shall mention something about that later.

If we refer to the chart we see that from 1943 to 1945 20 million hundredweight of cheese were produced and from 1949 to 1951

II million hundredweight, just a little more than half as much cheese. That is a big reduction. Taking butterfat, from 1943 to 1945 production amounted to 437 million pounds and from 1949 to 1951 to 386 million pounds, another considerable reduction. From 1943 to 1945 13 million hundredweight of hogs were produced and from 1949 to 1951 10 million hundredweight, another considerable reduction. Turning to cattle, from 1943 to 1945 19 million hundredweight were produced and from 1949 to 1951 17 million hundredweight.

I come now to apples, and this is one of the few cases in which there was an increase. From 1943 to 1945 there were 12 million bushels and from 1949 to 1951, 15 million bushels. There were 350 million dozen eggs produced from 1943 to 1945, and 305 million dozen from 1949 to 1951. Coming to potatoes, once more there is an increase from 71 million bushels to 78 million bushels.

Wheat increased from 339 million bushels to 461 million bushels, but I might point out that the amount of wheat produced had

nothing to do with the Minister of Agriculture. It depends entirely on the weather, and it happens that the weather was considerably more favourable in the years 1949 to 1951 than in the years 1943 to 1945. Therefore we produced a great deal more wheat. In addition, during the period 1943-45 the Minister of Agriculture was paying people not to produce wheat. Now he is trying to use those figures of low production to bolster his argument that production is greater now. Surely that is a most ridiculous argument and situation.

We come to oats, and there are 454 million bushels as against 408 million bushels; barley, 189 million bushels as against 179 million bushels. In other words, Mr. Speaker, in connection with all the important items except wheat which the minister lists and says form part of the economy of this country, we produced less on a volume basis in 1949-51 than we did in 1943-45. When the minister put this table on the record just after saying we had produced more and we find the table proves decisively that we produced less, I think it must indicate that he is losing his grip.

I should like to point out, Mr. Speaker, that during those years for which we have had these statistics for the main agricultural products, our population increased from 12 million in 1945-I am taking the end year in each period

to 14-5 million people today. This is an increase of 18 per cent. We had 2-5 million more people to feed this year than we had in 1945, so naturally we needed a great deal more food. The necessity for that amount of food, plus the decline in production which is shown in. the minister's table, of course1 reveals only one thing. It shows quite definitely the large loss in overseas markets. One does not need to prove in this way the loss of overseas markets. One does not need to use the minister's own figures to prove it, because everybody in the country knows we have had an extremely large loss in overseas markets.

Let us take one example. In 1944 we exported 695,750,000 pounds of bacon and pork products. By 1947, only three years later, this had dropped to 235,750,000 pounds, which is approximately one-third. At that time I well remember standing up in this house, as did many other members of the opposition, and warning the Minister of Agriculture and the government that they were losing our overseas markets at an alarming rate. They pooh-poohed the idea. The minister gave all kinds of reasons why we would not have as much pork. He said we had not had as big coarse grain crops as we had in 1943-44, and would not admit that we

The Budget-Mr. Harkness were losing the overseas markets. What is the situation we find at the present time? We have no overseas markets for bacon or pork; they have just disappeared. Of course the minister has to admit that we have lost that market.

The same story is told by the statistics for other products, if anyone wants to take them in the bald form in which they are found in the Canada Year Book. This is a handy little reference book, of which every member has been supplied with a copy. Take the Canada Year Book and look over the statistics given there. You will see that they show the same story. These statistics show that so far as cheese, butter and nearly every other agricultural product is concerned, we were exporting large quantities. You will see that the figures taper down year after year until you get to the present time, when you find that we have lost these markets almost entirely.

The minister attempts by a long detailed speech and the quoting of a lot of statistics, which are not applicable at all, to prove that we have not lost the overseas markets, that farmers are much better off, and that they are producing more and getting bigger prices for their production. If the minister thinks he can fool Canadian farmers and Canadian citizens generally on this matter of having lost markets and the general prosperity of farmers, he is deluding himself miserably. When he goes about the country or stands up in the house and says the members of the opposition should not think the farmers are not supporting this government because most of the farmers are still supporting it, he is deluding himself even more miserably. He is engaged in a form of self-hypnosis in order to keep up his own courage.

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An hon. Member:

You should have a cowbell.

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

If I had a cow-bell I would know what to do with it. I would not have to hang it around my neck the way some of you people do. I do not think even the Minister of Agriculture will argue that we could not have kept our agricultural production at the high level it was at in 1943-45. I do not think even he will argue that. As a matter of fact we could have greatly increased it during that period. The reason we did not increase production in the period 1949-51 was to a large extent because we lost our markets for our production. The farmers realized we had lost our markets, and of course they cut down production accordingly. They knew they would not be able to sell a lot of the stuff they had been producing, so they deliberately cut down their production.

2768 HOUSE OF

The Budget-Mr. Harkness

My own case is a good example of that. For several years my farm was producing a large number of pigs, and we had litters between two and three times a year from some 40 to 70 sows. A year ago last November I still had 67 sows producing pigs, but today I have not one. That is a fairly typical example of what a large number of farmers in this country have done. They could see that there were going to be no markets for these products, and in order to avoid taking great losses they cut down production.

In addition to the loss of our markets, another reason for the reduced production- a reason which the minister glossed over very quickly in his speech-is the fact that farm costs have been rising faster than prices for farm products. The minister admitted that implement costs had increased from being 3 per cent to 6 per cent of the cost of operation in 1936 to 8 to 9 per cent of the cost today. What he did not mention was that all other costs had increased. The cost of labour, the cost of fuel, taxes, fuel oil, gasoline, everything the farmer uses, has skyrocketed to great heights. The general picture we get is that a large number of production costs have risen so much more than the prices of farm products that it has become unprofitable to produce these products.

The minister, as he has done every year since I have been here, and generally several times a year, tried to draw a comparison of conditions now with those in the period 1930-35, and to place the responsibility for the low prices of that period and the hard times which prevailed upon the Conservative government of R. B. Bennett. What he did not say, what he never says and what I am sure he never will say is that Mr. Bennett succeeded to a mess which had been created by the Liberal party in the five years preceding.

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LIB
PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

Having inherited that mess at the start of the worst depression the world has ever seen, he struggled through the midst of that depression and took very definite steps to improve the position of the farmers as well as the lot of other people in this country. The steps which he took bore fruit, and from 1932 onward conditions gradually improved. They did not improve very much from the time he left office in 1935 until the war broke out. They improved very little; but what improvement did take place was due to policies which had been introduced by Mr. Bennett in that period from 1930 to 1935. The Minister of Agriculture and all the other members of the Liberal government have ever since been taking credit for the improvement in conditions.

As I say, that improvement was not due to anything they did. It was due to what Mr. R. B. Bennett did.

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Some hon. Members:

Oh, oh.

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

What the Liberal government which came into power in 1935 did was merely carry on the new trade and agricultural marketing structure which the Bennett government had created.

In his speech the Minister of Agriculture (Mr. Gardiner) made much of the increased prices which the farmers are now receiving as compared with what they received before the war; but he did not mention that this increase in money return is in 50-cent dollars. He did not point out that the farmer who is now getting $1.50 a bushel for his wheat- which the minister himself said is the average price on the farm-is exactly the same position as was the farmer in the thirties who was getting 75 cents a bushel.

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LIB
PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

He is no better off at all as far as real wages are concerned. If he is getting $1.50 now, he is getting exactly the same as in the thirties when he was getting 75 cents. As a matter of fact, during a certain part of the thirties the farmer was getting more money in real wages for his wheat and other farm products than he is getting now; considerably more.

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LIB
PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

In certain periods he was getting less. Nobody disputes that fact.

The new Canadian consumer price index chart shows the position quite clearly. I should like to refer to this chart briefly, and then to relate the figures in this chart back to the figures in the chart which the Minister of Agriculture put on the record.

This particular copy was put out by the Bank of Montreal and it comes along with their weekly or monthly supplement. This is the new Canadian consumer price index. It shows an index price in 1913, of nearly 50- 49 point something-and in 1932 to 1939 it shows the index varying between from just above 60 to below 60. During that period it went along almost on a straight line. Then when we come up to the present time, in 1951, we find that this index is up to almost 120. In other words, during the period from 1932 to 1940 the index was at approximately 60 and in 1951 it was approximately 120, or twice as much.

If we look at the index for 1945, which is the one I want to relate particularly, we find that it was at 75; that is, the consumer price index was at 75. If we go back to the minister's chart and relate that figure with an

index of 75 to the index of 120 in 1951, and if we correct the figures the minister gave by making reference to that figure, we get a totally different picture from the one that he presented.

In other words, the money price which the minister has given as the average annual farm value, in terms of the 1945 dollar, is approximately two-thirds of the amount he has listed. We correct this and we take, for example, cheese. In 1943-45 the farmers received an average of $38 million a year. In the same kind of dollars, in 1949-51 they received $19 million a year, not the $28 million the minister mentioned; they received $28 million worth of 1951 dollars, but in 1943-45 dollars-and surely if you are going to compare one figure with another you have to compare its spending value-they received only $19 million.

For butterfat they got $187 million in 1943-45. In these last three years they got $158 million; for hogs, $225 million in the former period as against $200 million. In cattle there was an increase, $187 million in the former period as against $256 million. That and wheat are the only two cases in which there are increases.

For apples they received $18 million as against $13 million; eggs, $107 million against $91 million; potatoes, $78 million as against $56 million; wheat, $441 million as against $522 million. The only reason they got more for their wheat in these last three years was that they produced about 30 per cent more than they did in the previous period. If they had produced the same amount they would have obtained less for it. For oats they received $249 million as against $211 million, and for barley $131 million as against $156 million. That is another increase, and the only other one.

What all that shows, Mr. Speaker, is that during that period the minister's chart demon-strates^ quite clearly that first of all production is down in the period 1949-51 as compared with 1943-45. In the second place it shows that the return to the farmers in dollars-[DOT] real dollars, as far as value is concerned- is down also, and down considerably. Their real purchasing power is reduced.

As I said before, I really do not know why the minister put this chart on the record, because it shows these things so clearly. I think I should take this opportunity of thanking him for putting such a convenient chart on the record in order to show the real situation. Certainly I would be greatly surprised if the minister himself ever used it again.

The Budget-Mr. Arsenault

The hon. member who preceded me in this debate and a considerable number of other members have had something to say about free trade, and we have had mention of free trade by various people. It was spoken of as a desirable thing.

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LIB

March 9, 1953