April 27, 1954


Robert Ross (Roy) Knight

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

Mr. Knight:

-if I say that other people have told me they are getting accustomed to his cyclical budgeting. Some people have even ventured to say his are political budgets. People naturally supposed that this was not a year in which anything might be handed out to the Canadian people. When I say "handed out to the Canadian people", that is not a proper term to use because we know that any relief we get at budget time is as a result of money which we have already contributed to the public purse. A government has no money except what it extracts from its people.

At any rate, we were faced with a budget of $4,600 million, of which 43 per cent was allocated to defence. Even while the minister was speaking with his usual optimism-it is a great thing to have optimism, and I wish we could have it with some justification at the moment-I could not help but think about the state of the country. This was brought to my attention when I was at home during the Easter recess. One could not help but notice that it was not a spirit of optimism which prevailed.

One or two of my bank manager friends talked very seriously about the situation, and pointed out how slow business was, and how credit had been curtailed, particularly at the country points which are serviced by the wholesalers in my city. This curtailment of credit had forced the merchants to go on a cash basis, and their customers were suffering a great deal because they did not have money to purchase things. Many farmers had the equivalent of money, for in many cases their granaries were bulging with wheat, but as this house knows very well it has been difficult to sell that commodity in recent times.

At one point during the journey home I saw twenty railroad workers who had been discharged on that particular date getting off the train. My own city is rather susceptible to that sort of unemployment because it is a railway centre. Business conditions in the country are generally reflected by the business that the railroads are doing. Of course, this extreme optimism, which is characteristic of the Minister of Finance, is not confined to him. I suppose the Minister of Trade and Commerce (Mr. Howe) might be called the supreme optimist of Canada. One or two other cabinet ministers are optimists too.

I recall certain optimistic speeches that were made by cabinet ministers in my city just before the election. There were five of them who visited my town in the period before the election, and with my usual modesty may I point out that I am now returning their visit. They were very optimistic at that time, and could see no reason for gloom. I notice the Secretary of State (Mr. Pickersgill), our new and junior cabinet minister, is also optimistic. I note in a clipping I found this morning in a Vancouver paper that they actually call the junior cabinet minister the prime minister "designate". The article says he is in no hurry to take over, and I would suggest that is a good idea on his part.

The Secretary of State was very optimistic about the state of the nation and particularly in regard to export trade. One comment in

reply to his optimistic remarks in this paper was to the effect that preliminary figures issued by the bureau of statistics showed that exports for the first quarter were actually down from the same period in 1953. However, the Secretary of State says this:

I am a politician, not a business forecaster, but I do not mind saying export trade is holding up very well and shows no sign of setback.

The two articles were side by side or nearly so in the same paper.

Just as a personal note, and it has no bearing on the question, I should like to comment on the statement of the minister that he is a politician and not a business forecaster. He had been talking about the hon. member for Vancouver South (Mr. Phil-pott) and the hon. member's remarks concerning radio and the private ownership of television. According to the Vancouver paper, the minister said that he and the other cabinet ministers always listened very attentively to members of parliament such as the hon. member for Vancouver South and that the government always listened to what members of parliament have to say, especially when they are members supporting the government. I would suggest that statement from the junior member of the cabinet proves that he was right when he said he was something of a politician rather than an economic forecaster. However, I did not take the statement of the minister too seriously.

I should like to comment now on the statement that export trade is holding up and the fact that our trade generally is good. We in this group, of course, have always been known as being full of gloom. If the minister would study the statistics put out by the dominion bureau of statistics he would find that the figures do not bear out his statement as to export trade, but they would bear out his statement that he is not an economic expert. This D.B.S. bulletin of April 26, 1954 in my hand has to do with the same export trade the minister was talking about. It says:

There were 66,274 cars of revenue freight loaded on Canadian railways during the week ended April 14 as compared with 73,227 in the same period of 1953, bringing the cumulative total from the beginning of the year to 969,605 cars as compared with 1,052,441 a year earlier.

Those of us from the west are interested, of course, in grain loadings. I see in the third paragraph of this same bulletin a reference to reduced loadings of grain. Well, we do not have to be told about that. The paragraph to which I refer is as follows:

Reduced loadings of grain, miscellaneous car loadings and less-than-carload merchandise contributed to a drop of 1,722 cars in the western division to 22,912 cars for the week.

The Budget-Mr. Knight

Then it goes on to say that coal shipments were up to the extent of 209 cars.

Well, that is not a particularly bright picture. Yet, our cabinet ministers go around the country trying to keep the people cheerful and to keep them satisfied with the administration that happens to be in office. For instance, during the Easter holidays the Minister of Agriculture (Mr. Gardiner) was out in the west. May I say I was pleased to see him in his seat today, and to note that he has made such a good recovery from his recent illness. He always seems to thrive on political activity, and perhaps that is one of the reasons he is looking so well after the Easter recess.

Perhaps I shall return to that point again. Meantime I should like to refer to a clipping I have obtained that deals with the subject of credit buying, and appears in this evening's issue of the Ottawa Journal. It bears the heading: "Credit Buying Hits New High at $1,836,000,000." And that is in a country, Mr. Speaker, where we are supposed to have everything, where we have more God-given natural resources than any other country in the world. Yet we cannot buy the proceeds of our own production, and have credit buying to an amount of $1,836,000,000. The article says:

The amount of money Canadian consumers owed for the things they bought on time rose by $59,000,000 to a new high of $1,836,000,000 in the final quarter of 1953.

Does anyone suggest that the people took a sudden splurge of extravagance in that particular time, or does it not indicate that they were short of purchasing power? The article says:

A Bank of Canada survey, contained in the bank's monthly statistical summary, showed that the rise in debt continued in most sectors of the consumer economy-with the exception of buying on time through finance companies which largely finance automobile sales.

Consumer borrowing from banks and other credit institutions was up, and so was buying through the use of charge accounts and instalment plans in retail stores.

I suggest that is not an indication of a very healthy state in our country at the moment.

I should like to say a word or two about the budget itself. I suppose the main feature was the reduction of the excise tax from 15 per cent to 10 per cent on certain goods, and in addition to that the abolition of the 15 per cent excise tax on some goods. This latter group consisted chiefly of luxury items such as electrical supplies, if those can be classified as luxury items. May I say that they are luxuries for a great many people in our country. Then, furs came under this same category.

The Budget-Mr. Knight

However the income tax remained the same, and the 10 per cent sales tax was not changed. I thought as I read the items that some relief might have been given on the necessary articles of daily use. Anyone who will study these items, with particular reference to furs or even electrical equipment, will find that relief is given on goods that are purchased only once or twice in a lifetime, or on those which many people cannot afford to buy at all. I should have liked to see more relief on the smaller items, the day-to-day purchases of the ordinary family. These however appear to have been neglected. The items on which the excise tax has been reduced are those which people of moderate incomes either do not buy at all or buy only once or twice in a lifetime. The relief on the smaller items is so small that it will never be handed down to the consumer. For instance, let us take the small reduction on the price of the gas, or whatever it is called, that is used in the manufacture of soft drinks. The reduction is so small that it certainly will not amount to as much as one cent a bottle in the price to the consumer, and will be absorbed at some other point, perhaps in the profits cf the wholesaler or the manufacturer

As I have said, there is no relief in the income tax schedule. It remains the same; and so does the sales tax. I was glad to note that the minister saw fit to reduce the taxes on municipally purchased and used machinery. For many years in this house I have been suggesting that if we want to encourage small towns to have proper fire-fighting equipment there should be no taxes levied against those machines. I congratulate the government and the minister upon having given this measure of relief.

However I am not so happy about the sales tax on other items, because I feel it is inequitable. This is true, of course, in respect of all sales taxes. They become a heavy burden upon the people in the lower income groups. When a man is spending practically his total salary on food and clothing, when he is paying rent and raising a family, practically the whole of his income is subject to sales tax. The people of Canada generally do not know that they are paying this sales tax, at all. And that is my second objection, namely that such taxes are hidden.

Unfortunately we have a sales tax in Saskatchewan-and I hope they will be able to get rid of it some day. However there is some excuse in the provinces for putting it on, because they do not have the wide taxing powers of the dominion. But when a man pays the provincial sales tax he pays two or

IMr. Knight.]

three cents over the counter and is perfectly conscious of the fact that he is paying that tax. On the other hand he knows nothing about the dominion sales tax. He simply pays his bill over the counter, the tax having been imposed at the manufacturer's level, and he does not know that he has been mulcted of that particular amount. As I have said, this tax falls heaviest on those who are least able to pay.

Another objection I have to the budget is that there were left in the taxing structure certain injustices perpetrated the year before. One of the most amazing of these features, and one hardest to explain, because it is somewhat technical, is the fact that a man who draws his income solely from dividends on corporation shares pays no income tax at all, with the exception of the small tax he pays to the old age pension fund. That is something that is almost incredible to most people. I do not wonder that they have difficulty believing it.

The day before yesterday when I made out my income tax return I discovered that -hon. members will laugh at this; all right, let them laugh-I was able to deduct $4.40 or $8 something, I have forgotten, not, sir, as a deductible amount but I was able to deduct that amount of money actually from the tax which I was assessed. To me that was an amazing thing. I think it is wrong. The minister of course will say that the funds have already been taxed in the hands of the corporation, and that if we were to adopt my suggestion to tax it, it would be double taxation. I do not want to go into that argument although I believe that I could probably expose it as a bit of a fallacy. I do not mean it is a fallacy that the money has not already been taxed. But in its relation to individuals, when we are talking about the income coming from investment or coming from work, and showing there the contrast, then I say there is an injustice. As a matter of fact, while the man who has an income of $10,000 derived in the way in which I have indicated would pay practically no income tax, it is also true that the man who worked for an income of $10,000 would have to pay an income tax of $1,650, or something of that sort, assuming both were married and had two children.

As I say, people in the country, audiences, are simply amazed when that fact is drawn to their attention. Some alteration should be made in it. The other inequity of which I was thinking is the fact that there is a ceiling upon the amount of contribution we make to the old age pension fund. Certainly the method by which it is done is quite contrary to our own philosophy in this

particular group. I need hardly relate how it is done, although there may be a few hon. members who are not acquainted with it. Hon. members no doubt know that under the famous 2-2-2 formula the 2 per cent additional tax is put on the income of each individual paying taxes for the old age pension fund, to supply pensions for himself or for other people or for both, as the case may be. Therefore, if you have $1,000 taxable income you pay $20. If you have $2,000 taxable income you pay $40; if you have $3,000 taxable income you pay $60. Hon. members would expect it to go on and rise so that when you got to $4,000 or $5,000 taxable income you would pay a proportionate amount. But that is not how it works. In other words, there is a ceiling, and when you have $4,000 taxable income you do not pay in proportion to your ability to pay; you simply stop right there, and if you have an income of $10,000 or $20,000 it does not make any difference, you pay the little sum of $60 only into the old age pension fund, in spite of the fact that you yourself are entitled to $40, the monthly pittance, that we pay to old people who have no source of income at all.

There are those privileges to those people. I know the minister does not so consider them. He is thinking about the whole thing and the collective picture, the actuarial basis and all the rest of it. I am thinking of the human beings who are affected by that particular thing. Some provision should have been made in this budget to remove that ceiling. Along with that there should have been some remission of the sales tax with which I have already dealt.

We would have liked to see higher exemptions in the taxation of the lower level incomes. I think I remember my leader suggested $1,500 for a single man and double that for the married couple. One might say: We need the money; why should we remit taxes of that type? Well, the thought that occurred to me when I began to talk here tonight was this matter of the general picture. It seems to me that the general picture needs some expansion of the purchasing power in the hands of the Canadian people.

I do suggest that some remission of these particular taxes would give us a bit of a boost in the matter of putting extra purchasing power in the hands of the people, and it might have boosted our economy and kept it going for at least some time longer.

There is a question with which I have not yet dealt, namely, defence expenditures and the consequent or necessary taxation. I shall admit, of course, that in the present state of 83276-264

The Budget-Mr. Knight the world we must have defence expenditures, but I am just wondering whether we might not have hoped for some reduction; and the question arises in my mind as to how effective any defence expenditure can be in these days, in the light of the new and awful discoveries that science has inflicted-and I use the word deliberately-upon the world. It seems to me that if these mechanisms of science are so awful as they are said to be and if we are committed to spend as much on defence this year as we were last, then we have to face one of two things: Either we must completely change our whole method of defence, if indeed there is any good in doing that, or else we are simply pouring money down the drain by continuing to perpetuate methods of defence which were all right ten years ago but which, in the light of the discoveries to which I have already referred, may be of no value at all.

I am going to suggest that even from the point of view of defence we might be better off in the defence of ourselves by giving to the world, and particularly to some of the underprivileged countries of the world, a feeling of our sympathy and sincerity in the form perhaps of material gifts or certainly technical assistance; and that the best defence that we can have, particularly from the point of view of the Asiatic people, is to give them that knowledge of our willingness to help. We take the view that the creation of friendliness and good will in the world is of more value in the promotion of peace than is the handing out of bullets and of guns and of the implements of war.

That is all I wish to say at the moment, sir, in regard to the budget but I do want to say something about our disappointment-and this applies particularly to the Saskatchewan members of our group-that nothing is being done, and no provision is being made for expenditures in the matter of the Saskatchewan river dam. The people of the province were disappointed. I have been talking to them lately and I know that. I shall not go here into the arguments, shall not describe the drought cycles which have bedevilled our economy over the years in Saskatchewan or instance our need for a greater population, and for a greater diversification of farming, and for the consequent stability that a nation or a state or a province is assured by the residence of people upon the land. I know the right hon. member for Melville, the Minister of Agriculture, was in my own city among other places during the Easter holidays. I have always envied the minister's plausibility and his ability to convince people. It has

The Budget-Mr. Knight been one of the reasons for his political success. I noticed in my local paper, the Star-Phoenix, of April 17, a heading which says: "Outlook for dam better." Do you know why these people are convinced that the outlook for the dam is better? It is because the Minister of Agriculture told them so. All right; that proves the thing I have just said. I would point out of course that he has been telling them that for many, many years. I suppose he still thinks it is good for another election, and I would not wonder but that it is. I shall quote a line or two of this clipping:

The federal government's viewpoint toward the proposed South Saskatchewan river dam appeared to be getting "more and more favourable."

This is quoted as being the opinion of those people who are members of the institution known as the Saskatchewan river development association and who met the minister. When they went out of the meeting they said the federal government's viewpoint towards the proposed South Saskatchewan river dam appeared to be getting more and more favourable every day. What a gift the Minister of Agriculture has. I could go on and read some more of this but I do not think I will.

There is one thing here which is very interesting, and which appeared in the same newspaper. What I am referring to is not a political speech or a speech of any kind made in the heat of the moment by the Minister of Agriculture, but a deliberate statement made by the minister at an interview with, I presume, a reporter on this particular newspaper. The interview carries a very interesting headline. It states: "Ottawa Ignoring Commission's Report on Dam, says Gardiner". With you, sir, in the chair I cannot ask the Prime Minister (Mr. St. Laurent) a question but I am wondering what the Prime Minister's comment would be on that particular statement. Does that headline mean that they are going to proceed with the dam? I take it that the people of Saskatchewan in view of the minister's remarks will not be at all disappointed. I hope that the confidence of the Saskatchewan river dam association is justified.

I do not wish to go into political affairs in Saskatchewan. Certainly I never interfere in provincial-political affairs, but I believe I am entitled to speak in regard to federal-political affairs as they relate to the province of Saskatchewan.

This may be news to some hon. members, and it certainly is news to me, but I understand we have had a distinct resurgence of Liberal-political activity in that particular province. We might notice, for example, that the Minister of Agriculture was closeted with

the president of the Liberal association and what we used to call " the machine", though perhaps my hon. friends on the other side of the house prefer the word "organization". However, there have been some signs of political resurgence and particularly in the minister's sphere. I notice, for instance, that one of the chief Liberal organizers, a very fine man and a good fellow in his own right, Mr. Bird, has been put in P.F.R.A.-or is it P.F.A.A.-and then our old colleague, Mr. Dewar, who it might be recalled attained some notoriety in public affairs in this country, has now joined one of the minister's departments, and in fact I believe it is the same one. I presume of course that those gentlemen will be employed solely in the work of their department. These factors are very interesting to me, and I would also like to observe in passing that I notice the minister's picture has appeared in several newspapers including the Star-Phoenix, Yorkton Enterprise, etc. Indeed, the minister has had a very busy and active time during the Easter week. But who am I to blame him if he hopes to gather in a few votes for the Liberal cause in Saskatchewan, for goodness knows they need them badly enough.

Then there is this question of choosing a new leader and my right hon. friend has always been king of the Liberals in Saskatchewan, and he is not particularly fond of crown princes, as at least one hon. member of this honourable house is well aware. Whether the leader of that party is Dr. Thomson on the one hand, or my right hon. friend's son on the other, I would suggest that the direction of that machine will be retained here in Ottawa which, incidentally, is one of the things of which some of my young Liberal friends who are voting for his party are not too fond at the moment. They are inclined to say, rightly or wrongly, that direction from Ottawa had perhaps something to do with Liberal misfortune in both provincial and federal elections of last year. However I am not competent to judge that and I simply throw out the idea.

As I said before, I have no objection to the minister catching a few Liberal votes if he can get them by promising this dam, so long, and only so long as the dominion government finally carries out its promise and builds the dam. After all, we do not want to wait until we are all dead. We want to see the results of this project on those at times arid plains. Whatever may be the minister's motives, the main thing is to encourage construction of what I think would be a national asset, and if he does succeed in gathering in some votes, or even if he does not succeed

at all in making capital and gathering in a few extra Liberal votes, there is always the greater compensation.

I have no doubt most hon. members are acquainted with the story of Saul who was sent out to gather in his father's asses and succeeded in founding a kingdom. I hope that that is the fate which will befall my right hon. friend the Minister of Agriculture and I hope the job will be done. After all, the main thing is to found the kingdom, and I hope that that will be done in the province of Saskatchewan and water should be brought to those plains.

This has been a subject which has been discussed in this house time and again, and 1 do not wish to repeat myself, but I think, sir, having at least said a word or two in regard to the budget and as regards this irrigation project, which is particularly near to my heart, and the hearts of the people in Saskatchewan and the people in the city who are dependent upon the farm life of the province of Saskatchewan, I shall resume my seat.


Tom Goode


Mr. T. H. Goode (Burnaby-Richmond):

Mr. Speaker, I am not going to make a political speech as did the hon. member who has just resumed his seat, but I have two items of interest to my constituency which I wish to bring to the attention of the house. One is firmly entrenched in the political life of British Columbia though I believe it should not come under a political heading, and that is the question of the years-old problem of the Marpole bridge. My riding is on the south end of what perhaps can be considered the terminal for that bridge, and if you visit in the Vancouver, Burnaby or Richmond areas you will find a different rumour at every corner of every street in the riding to the effect that the provincial government of British Columbia is going to do one thing and the federal government is going to do another.

The truth of the matter is this. I sincerely believe that the Social Credit government of British Columbia intends to build a bridge at Marpole, and I believe, although 1 did doubt it for some months, that they are genuine in the news they are giving to the people of British Columbia in regard to the bridge.


An hon. Member:

They are all genuine.


Tom Goode


Mr. Goode:

That may be so, I do not know, but in this case I believe they are sincere. However, I believe the provincial government of British Columbia cannot build that bridge alone, nor do 1 think it is entirely a British Columbia responsibility. Today I received the latest report of the North Fraser harbour 83276-264J

The Budget-Mr. Goode commissioners, a federal body the majority of whose members are appointed by the federal government, and on page 5 of their 1953 report they state:

The Marpole bridge suffered considerable damage throughout the year as a result of collision by scows and log booms. The most serious disruption occurred during the month of December when road traffic was closed off for a period of eight days for replacement of one of the truss span piers. The movable span opened for river traffic 6,691 times during the year,-

That is the year 1953.

-an average of 558 openings per month. 664 openings were recorded in October, the highest month of the year.

Then they go on to say this, and this is a federal commission reporting to the parliament of Canada:

A company of consulting engineers was commissioned by the provincial government in November to make preliminary studies for a high level highway bridge over the north arm of the Fraser river, approximately 270 feet east of and parallel to the existing B.C. Electric Railway bridge, crossing near the foot of Oak street.

And it goes on to say that the commissioners have given certain permission to the provincial government to do their preliminary that the bridge will be built if the province of British Columbia receives financial help from this parliament. Some time ago hon. members from British Columbia discussed this matter in brief and it was said by a gentleman on this side of the house that there had been no contact between the British Columbia government and the federal government with regard to the cost of the Marpole bridge. I find out that that is true. I spoke at Sea Island last Saturday night and I said certain things to the people there whom 1 represent in this house. In part this is what I said. I said that I would support a financial contribution to the bridge from the federal government if certain things were done. These were the specifications with which I qualified my statement: (1) that the bridge be built at Oak street and nowhere else; (2) that the bridge be not a toll bridge; (3) that the provincial government submit to the federal cabinet at the earliest opportunity full plans, specifications and firm costs of the structure; and (4) that the bridge be constructed by the firm giving the lowest tender.

I support in this house at this time, if these particulars are carried out, a contribution on the part of the federal government of one-third of the construction cost. I believe that the provincial government has a financial responsibility in the matter. I also think that the city of Vancouver has a responsibility. I would suggest to the federal cabinet that negotiations be started just as soon as the

The Budget-Mr. Goode provincial government of British Columbia bring forth specific plans for the structure. At that time I will support in this house again, should the necessity arise, a contribution from this house of one-third of the cost.

I wish to bring to the attention of the house one other matter which also interests the municipality of Richmond. The Minister of Public Works (Mr. Winters) will remember that in 1948 a disastrous flood struck the Fraser valley country in British Columbia. When the water had receded and the people had been sent back to their homes with those homes repaired, the cost to the people of Canada was $8jr million, and the cost to the government of British Columbia was an additional $2J million, a total of $11J million altogether. The minister will know of the final report of the Fraser valley diking board, dated March 1, 1950. In that report they make two very definite statements. On page 11 the board suggested that it would provide rockwork on the river banks where the dikes were in jeopardy from river erosion for five years after the date of the report; and on page 17 they say:

Every winter and every spring there exists in the Fraser river basin enough snow to cause a disaster. The timing of the melting of this snow is in the hands of Providence, and engineers can only be guided by the law of averages.

I bring this report to the minister's attention because the municipality of Richmond, which I have the honour to represent in this house, has for the last three or four years made representations to the Minister of Public Works pointing out to the department that the dikes in that municipality could not withstand a serious spring freshet. On February 11, 1952, the reeve and council of the township of Richmond sent a brief to the then minister of public works in which they outlined their concern over the serious dike break that had taken place on January 14, 1952, in the municipal dike in that area. They pointed out that serious erosion was evident along the north bank of the south arm of the Fraser river, which is the main channel. When the dikes were originally constructed by the municipality they were built 100 to 300 feet back from the river and now in many places the foreshore has entirely disappeared and the dike is now on the edge of deep water. In other places the existing foreshore is being rapidly eroded.

The house will please understand that practically the whole of the area called Richmond is under high water level, and forty years ago the people of that municipality built the dikes to protect themselves against a spring freshet. These dikes were then, and still are, owned by the municipality; and it is to the credit of this government

that some thousands of dollars have been spent on rockwork facing the river to protect the dikes. I wish to present to the minister today my sincere concern and the concern of the municipality that the time is coming when the Richmond municipal dike will not hold and a break will occur. If that happens, a disaster of serious consequences will have hit British Columbia, and many millions of dollars will have to be spent by this government to protect the investment by many small householders and farmers in Richmond.

The diking board says that "every spring there exists in the Fraser river basin enough snow to cause a disaster". I have repeatedly warned in this house that one of these years the freshet on the Fraser river will be of such density and force that the old municipal dike will not hold. Because we have built first-quality dikes in the upper Fraser valley the seriousness of the situation in my riding is more pronounced because now extra pressure will be put on the dikes in the delta of the Fraser river. Should the weather in British Columbia turn exceptionally warm, as it did in 1948, then the present protection cannot defend against a disaster of the first magnitude.

I wish to follow along my argument with a description of what is happening from the gulf of Georgia eastward to the city of New Westminster. There is no doubt that New Westminster will become one of the greatest fresh-water ports in Canada. It is not unknown for four hundred deep sea ships to berth there in one year, and we in Burnaby-Richmond rejoice that this should be so. I point out to the minister that the work that is progressively being done from the gulf of Georgia to New Westminster is being done to protect that New Westminster harbour. The Fraser river channel has shifted many times in the last fifty years; and to make sure that deep sea boats could enter the port of New Westminster it has been the policy of the public works department to close in the shores of the river to maintain density of current that will carry with it to the sea the silt that has been building up over the years, and that which comes down from the headwaters every year. Actually what the department is trying to do is to scour the river bottom so that our costs of dredging will not be, as they were for so many years, millions of dollars per year.

And so the department has embarked upon a policy on the south bank of the main channel to put a rock embankment up to the height of 12 and 14 feet in some places, not only to protect that shore but to keep the current in a confined area. I say this is all

being done to enable the city of New Westminster to fulfil its destiny as the greatest fresh-water port in Canada. I support that idea and I believe that any moneys that can be spent on the main channel of the Fraser river to enable boats to enter the New Westminster harbour should be spent-always remembering that Richmond, too, has deep water anchorage-and it will always receive the approval of the people of Richmond and the member for that riding.

However, in building up the south bank of the main channel the department did not figure that the current of the river would be changed, but it has changed and now the north bank, that which borders the municipality of Richmond, from Woodwards Landing west is receiving most of the force of the current and gradually that shore is being eaten away, in some places to the extent of 300 feet. It can be noted here that 25 foot depth channel markers have in the last ten years moved 400 feet closer to Lulu island, proving my point that the shore of Richmond is taking the full force of the current in certain places because of the policy of the department in building strong rock protection on the southern shore.

I have no argument with the work being done by the department. I believe that the sooner they confine the main channel of the Fraser river to a static position the better it will be for everyone concerned, but I do report that the Richmond shore is taking the full brunt of the current at this time. The department has also constructed wing dams along the river which are assisting the rock protection on the south bank to throw the force of the current into Richmond and, as I have said, I doubt that the municipal dike will hold for too many more freshets.

I readily agree that considerable rockwork has been done on the Richmond shore, to the credit of the department, but for another $1 million spent now full protection could be afforded the people whom I represent and their homes would be secure from a serious flood in some spring that will come just as surely as will come tomorrow morning. We have been doing some patching on my side of the river acknowledging, I think, that we have a federal responsibility to the people of Richmond to protect them against a flood. I do submit to the minister that it is essential that rockwork protection be done to complete a 14 foot rock wall the entire length of the Fraser river shore where it contacts my municipality.

From Steveston to the gulf of Georgia we have constructed two jetties, again attempting to confine the river to allow the silt to move into the gulf. We believe that this work was

The Budget-Mr. Goode well done and that the jetties will serve their purpose, that of confining the river in a narrow space, but those two jetties again are going to throw more current force against the Richmond dikes should a serious freshet occur this year or next year.

It seems that it is the destiny of the Fraser valley that when the freshet occurs in late April or early May we also have very high tides, the tides working in a narrow space between the two jetties at the delta and the freshet trying to force itself westward from the headwaters of the Fraser river. The two forces meet between the city of New Westminster and the city of Steveston, British Columbia, and the minister will know that most of this space is occupied by Lulu island, proving again, I think, that now the Fraser valley is protected Richmond too should be protected by a comparatively small investment now, instead of ten times the investment should the dike break down.

In January, 1952, I met the council of Richmond and some of the federal engineering staff at the council chamber when the reeve said:

I do not want to be an alarmist, but I anticipate trouble down there if something is not done before the freshet.

Mr. Miiavsky, a member of the public works staff, said that the federal government were only interested in the river from the point of view of navigation, and that they placed rock only to the extent that it protects the river depth. At that time the official might have been correct. That is certainly not the case now because since then the department has spent many thousands of dollars on channel maintenance and rock protection for Lulu island. The sandbars in my municipality are practically all gone. Some of the rock protection has dropped four or five feet, and had done so at the time we met the public works official in the Richmond municipal hall.

It was pointed out to him then that the increased current in the river was causing undermining of the south arm dikes and, I believe, because of the opinions offered at that meeting someone in the engineering branch changed his mind and the dominion government started doing more extensive rockwork along the north side of the main channel of the Fraser river from Woodwards Landing down to Steveston. The channels between Rose island and Number One island and between Number One island and Woodward island have been closed off, all helping to make the river self-dredging. All this has been done, of course, to increase the flow of the river and not to protect Lulu island.

On March 8, 1954 the reeve and council again wrote to the chief engineer, Department of Public Works, pointing out that the dike

The Budget-Mr. Pinard had now been damaged in three other sections, and I understand that one of these sections is to be protected by rock at the earliest possible moment. But these complaints come in from the council periodically because no policy has been laid down with regard to the south side of the main channel, and I warn the house that before many years are over, and unless considerable money is spent, we will have to undertake a bill of repairs and rehabilitation on Lulu island that will cost millions of dollars.

Finally, may I point out, Mr. Speaker, that the provincial government of British Columbia issues a snow survey every month which gives the condition of the snow in the mountains that feeds into the Fraser river. When visiting the river last week we noticed that none of the snow water had started down from the headwaters at this time, and in looking over the provincial report for this month I find that not only is the snow in the mountains much heavier than it was in 1948 but that the water content of that snow is over 23 per cent heavier than it has ever been before. I ask the Minister of Public Works to send his officials to Richmond at the earliest possible moment so that the freshet, if it comes this year, will not flood my municipality.



Roch Pinard (Parliamentary Assistant to the Secretary of State for External Affairs)


Mr. Roch Pinard (Chambly-Rouville):

Mr. Speaker, when the Minister of Finance (Mr. Abbott) made, a few days ago, his important speech, which contains a statement of the financial policy of the government for the current year, it seemed to me, as it did to others I am sure, that his general considerations on the economic situation and the forecast of budget amendments were of secondary importance, on account of the important decision regarding federal-provincial relations, and in particular relations between the federal government and the government of the province of Quebec, a decision which the minister then made known to the members assembled in this house.

For the past few years, the Minister of Finance had devoted an important part of his speech to an examination of these complicated matters of federal-provincial relations. But the statement of principle which the minister made the other day did have the result of placing in its true light this important problem with which the people of Quebec are now faced.

Canadian citizens living in any of the ten provinces of our confederation, who have at heart the common good, who want this country to continue prospering and developing, who want this nation to prosper in har-

mony, well-being and, at the same time, unity, are now going through a period of anxiety because of this conflict between the government of this country and one of the most important provincial legislatures.

I do not want to take too much time, but I would like, during the next few moments, to review briefly the facts in the light of which I will be able later on to lay the responsibility where it belongs, and explain the stand I have chosen to take in the present situation.

Since 1867 Canada has enjoyed a federative system of government. That system, which does not offer as many advantages in a compact country whose territory is limited, constitutes, I think, the only system suited to a country like ours where many problems of all kinds-political, geographical, and economic-arise and must be solved in the general interest of the people of this country.

That is no doubt what our predecessors understood when they decided, one day, to unite the pioneer provinces of this country in one whole which at the present time can be described as one of the most perfect examples of a federative state.

Was it a real treaty between the races making up our nation at the time or was it purely and simply an act of the imperial parliament? I will not attempt to discuss the merits of those questions at this time. This seems to me to be a rather useless controversy, one which has so far led us to little else than an exchange of views devoid of much constructive value. Yet I think we should subscribe to the view, and state our belief in this connection, that the British North America Act was born of an agreement between the original provinces, even though it was impossible at the time to provide against every likely contingency.

In any event, this agreement was definite as far as certain essential rights of the French-speaking minority were concerned. It should be impossible to infringe upon these rights even though the language of the constitution could give rise to ambiguities or different interpretations. Those rights, all legislators, whether they be in Ottawa, Quebec, or in any other section of this country, are under the obligation to respect them strictly, to defend them and to protect them in their letter as well as in their spirit.

To those who would challenge the value of the texts themselves, or to the others who would only see therein the guarantee of inviolable rights of the French minority in this country, I shall recall the statement of principle made in 1950 by our present Prime Minister (Mr. St. Laurent), when he said

before the prime ministers of the other legislatures who had met here in this capital, and I quote his words:

That in no wise runs counter to the firm belief of so many of us that there is something stronger than any legal safeguard, and that is the good faith, the mutual tolerance, and the common understanding which are the highest glory of most Canadians, regardless of whether English or French happens to be their mother tongue.

In that security which is much more reassuring and which springs from a generous and loyal acceptation, by all those who live on our Canadian soil, of that common obligation towards the minority group in this country, Canada has been able to move forward and to grow in concord and harmony.

But I do not want to stray from the subject which is in our minds today and relates to that conflict between the federal government and the Quebec legislature. Let it be sufficient, on concluding those brief remarks concerning the vital rights of the French minority, to reaffirm that this is a sacred trust bequeathed to us by our predecessors and which no legislative power has the right to deny, to scuttle or to destroy.

However, like those who came before us, we want to continue to live under the federative system since it is the sole means for the Canadian people to keep moving forward towards progress in unity, concord and mutual respect.

Our main concern in the present conflict opposing the two governments is the delimitation and the application of fiscal privileges arising from the Canadian constitution.

Any federative system, although it may provide, as ours does, unquestionable advantages, nevertheless gives rise to problems which must be approached calmly and in harmony, but which must also be studied on the sole basis of common interest.

Even though the British North America Act does not make up the whole Canadian constitution, it must nevertheless be recognized that it is in the light of its text and of the application of its spirit that we must examine the various aspects of this disagreement between the Quebec legislature and the Canadian government.

After a serious study of the matter, any unbiased person will necessarily come to the conclusion that although, in the Canadian constitution, provincial rights are set out and clearly determined in a restrictive and complete way, the federal parliament, whose powers are also enumerated, also has a

The Budget-Mr. Pinard further right to legislate about any matter that is not specifically defined and which remains unallocated. This time, it is a general and exclusive power which is contained in this residual clause which makes up the preamble of section 91, wherein it is prescribed that the federal legislature must enact legislation for the peace, order and good government of Canada. Under the circumstances, it is then clearly a power and truly an obligation devolving upon the federal legislature, because there can be no prosperity or true progress in the country unless the federal government fulfils that obligation. The federal authority must necessarily fulfil that obligation if we want the system to be workable.

In any federative system, it is undoubtedly important, I would say, that it is even essential and indispensable that the local governments be in a position to benefit from the advantages granted them and that they be able to legislate as they see fit, without having the federal government interfere with their legislative enactments. But, on the other hand, it is also essential that in a federated state the central power, the federal government, should be able to legislate so that the legislatures do not permit anarchy to take root in the country.

Therefore, if it is the duty of the federal government-and such is the case-to legislate for the peace, order and good government of the country, it shall necessarily have to ensure uniformity in the progress and development of each of the provinces that make up confederation.

It should not follow, for instance, that certain conditions obtaining in one part of the country should be prejudicial to another part of the country. For instance, if a certain group of people enjoy certain advantages and certain privileges, it is up to the federal government to intervene, so as to ensure uniformity, an essentially identical standard of living, an equitable apportionment of benefits throughout the country.

For instance, if because of circumstances of time and place, one part of Canada happens to be more industrialized, with heavily populated centres, thus preventing otherwise desirable migrations to other parts of the country, the federal legislator must provide, through sound measures, for more adequate distribution, decentralization of wealth, more equitable apportionment of the benefits which the nation must offer not only to one but to all

The Budget-Mr. Pinard parts erf the country. We have there the structure and the object of the social security legislation implemented by the government, that is to say, old age pensions and family allowances and national health measures which it has agreed to adopt in order to distribute in a more rational and more uniform fashion the advantages resulting from the prosperity which this country enjoys.

It is clear that such measures entail huge expenditures. The federal government must therefore be in a position to obtain the necessary revenue it needs to implement them. A very large proportion of the national revenue has been devoted to this social security legislation and I do not believe that the people of the province of Quebec-the people from any other province, for that matter-would be willing to see the federal government put an end to these measures which have allowed for a fairer distribution of the wealth of this country and through which the Canadian people have been enabled to advance more rapidly and to progress in a more orderly fashion.

Secondly, the federal government has obligations which are perhaps even more serious in the wider field of foreign relations.

Canada, which is essentially a producing country with a great many natural resources and which gets every year a substantial surplus of production, has the duty to facilitate the disposal, the distribution and profitable sale of its products by creating new markets abroad for its commodities.

This policy has always been followed, or rather applied by the party to which I belong, and it can be said that it is because of the action of former Liberal governments who have succeeded each other for many years in this country, or, at least partly because of their action, that Canada is now experiencing such a degree of prosperity. The central power owes it to itself to create and preserve markets abroad, so as to ensure a profitable distribution of our surpluses.

It was Laurier who said, when introducing a measure of trade reciprocity with our neighbours, that it was proper for Canada to create and maintain markets abroad if this country wanted to grow and prosper. It is the very essence of economic progress in this country.

It is undoubtedly what was in the mind of the fathers of confederation because in the Canadian constitution the federal government clearly has the authority, as defined in fMr. Pinard.]

subsection 2 of section 91, of regulating trade and commerce. The policy of the federal government in that matter will be the very cornerstone of true prosperity in our country and, as a result, in each of our provinces. Again, since it behooves the federal government to formulate the economic policy of our country, this entails large administrative expenses and, in some cases, important capital expenditures, so as to manage this economic planning which comes within the jurisdiction of federal authorities. For that purpose, we must maintain trade missions in other countries, take part in the international monetary and economic conferences, so as to keep informed of the needs of world markets and organize our production accordingly. Here again, we have to draw upon a very large portion of the national income.

But the parliament of Canada must also ensure the security and the defence of the country. I do not think it is necessary to emphasize here how serious is the tension in international relations and how necessary it is for Canada to keep ready at all times to protect and defend itself. Canada, in that respect, cannot live in isolation. It is bound by international commitments, either as a member of the United Nations or as a signatory to regional defensive pacts such as NATO, and our country, on account of that, is forced to earmark an important part of its revenue not only for its territorial defence, but also for the fulfilment of its commitments to the countries with which it has contracted alliances.

Even though a substantial reduction of our defence expenditures would have been very desirable, in order to devote our national revenue to peaceful activities, there is not the slightest doubt that this is impossible for the time being, and that as long as the free world is threatened with another war, as long as our country is open to aggression, we will have to continue to devote a large portion of our national revenue to these purposes. As it is, almost half of our expenditures are used for the defence of our own territory as well as for that of friendly nations with which we have entered into alliances.

Now these obligations of which I have spoken do result from a strict interpretation of section 91 of the British North America Act and more particularly of the residual clause of that section where the

taxation powers of the federal government are defined as unlimited so that our country may be in a position to fulfil such obligations.

The provincial legislatures also have their obligations and in order that they may fulfil them the constitution provides for the method of taxation which they must use. The federal government, according to the constitution, is entitled to use any mode of taxation direct or indirect, that is, any method which it may choose to resort to in order to obtain the money it needs to administer the country. However, according to the terms of the Canadian constitution, the legislatures must levy money through direct taxation, as long as this is only for provincial purposes.

For me it is unquestionable that there is common jurisdiction on direct taxation, that there is concomitance of both governments, but there cannot be, for either system of government exclusive jurisdiction or, if you prefer, prior jurisdiction. There is jurisdiction for the federal government in every case, but it is imperative, in the case of legislatures, that this power of direct taxation be used for provincial purposes only.

The issue therefore is to determine if, in this disagreement between the federal government and the Quebec legislature, the stand taken by the provincial government is not only constitutional but also, and I say especially, really within the spirit of the con-federative system under which it is important that we may continue to live.

Nobody denies to the province of Quebec, to its legislature, nor to any of the other legislatures in this country, the right to impose a tax on the income of its taxpayers, for provincial purposes. In the same realm, as I said a while ago, nobody can deny the same prerogative and the same right to the federal government. I cannot see why, for instance, when a provincial legislature would have accepted to invade a field of direct taxation, the federal government should evacuate it.

But since we live in the same country, since we must, as legislators, use the right of taxation but within the limits of necessity, since serious abuses may spring from an abusive mode of taxation or from the method of double taxation, it is important therefore and it is appropriate, whether in the case of the federal government or in the case of a provincial legislature, to accept to make laws 83276-265

The Budget-Mr. Pinard only after reaching an agreement, or at least after consultation, so that the taxpayers may not have too heavy a burden to carry.

What has been, in this connection, Mr. Speaker, the attitude of the federal government? I think that, such being the circumstances, it has retained, at all times, a sane point of view. It has always preferred consultation with the provincial legislatures before attempting to use any particular method of taxation. It is for this reason, for example, that it has called federal-provincial conferences where its representatives, having convened the representatives of these legislatures, have explained to them the reasons for which such or such a method of taxation was to be resorted to.

I have no wish to recount the whole history of these conferences. But should those who are interested in this problem, and who are really desirous of resolving the present difficulties, have occasion to speak to the delegates which have sat in at these conferences, these federal-provincial gatherings, they will learn of the care which the representatives of the federal government have always taken to make these legislatures and their representatives understand the needs of this government so as to justify the recourse to the means of taxation chosen by it.

If we examine the proceedings of the last federal-provincial conference we find that before making the federal proposals to the provincial representatives, the then prime minister took care to ascertain that they could understand the obligations the federal government had to fulfil. That is why several representatives of the federal administration took turns to explain, as heads of departments and ministers of the Canadian government, the obligations their respective departments had to meet.

We saw the Secretary of State for External Affairs (Mr. Pearson) explain to the provincial delegates the heavy burden of our international obligations and present a picture of the international situation, in order to make them understand the part that our country had to play in the troubled post-war world and Canada's obligations, not only as far as the defence of our own territory was concerned, but also in connection with the defence of other free nations.

Then, in the field of social security, we saw the Minister of National Health and Welfare (Mr. Martin) explain to the provincial representatives the legislation he in-


The Budget-Mr. Pinard tended to submit to the government in order to improve social conditions and the special program he intended to propose in the field of national health.

We then saw the Minister of Finance (Mr. Abbott) explain carefully to the representatives of the legislatures the financial obligations of the Canadian government and the revenues required to enable our country to fulfil all the obligations I have just mentioned.

What has been, on the other hand, the attitude of the Quebec legislature and of its representatives and what has been the position of the legislatures of the other provinces? Some of them made counter-proposals. Then, they consented to ratify fiscal agreements. After these negotiations, eight and, later on, nine provinces consented to conclude agreements with the federal authorities.

I do not question the right of the government authorities of the province of Quebec to levy an income tax, but I question the way they did it, that is, without first informing the federal government, the government of the country, of the Canadian nation.

How can we conceive, Mr. Speaker, in this country in which we want to live in harmony, that the spokesman for a legislature could negotiate with the central power through press conferences? On the international level, representatives of nations irrevocably pitted one against the other, are still able to take part in conferences like that now being held at Geneva to discuss the possibility of alleviating the present international tension. Is it possible to conceive that in our country, where we are all Canadians with the same ideals, the ten heads of provincial governments could refuse to get together in a conference? Is it conceivable that the prime minister of one province would not also accept to attend such a conference and even to negotiate with the prime minister of the country to which he belongs?

My principal objection, Mr. Speaker, the main reproach I am now addressing to the representatives of the Quebec legislature is directed against the way they chose for dealing with the central authority through the channel of press conferences. The Quebec taxpayers will challenge such an attitude on their part. They should have agreed to inform the representatives of the central government, and of the Canadian nation, otherwise than through a press conference, of their wish to obtain the deduction of the provincial


Jean-Paul Stephen St-Laurent

Mr. Si. Laurent:

Mr. Speaker, it is because of the absence of the Leader of the Opposition (Mr. Drew) that I abstained from voting on this amendment.


Louis-René Beaudoin (Speaker of the House of Commons)


Mr. Speaker:

Is it the pleasure of the house to adopt the main motion?


John Horne Blackmore

Social Credit

Mr. J. H. Blackmore (Lethbridge):

Mr. Speaker, it must be a cause for general concern for members, even of the government, to contemplate the gathering unemployment problem which confronts Canada. It must moreover give them little satisfaction to reflect upon the meagre allowances we are granting to our old age pensioners and to the many other people who have a right to assistance at our hands, such as superannuated civil servants and other classes whom we could readily bring to mind. It must be vexatious in the extreme for them to think about the fact that we are accumulating in this country surpluses which we at the present time see no way of disposing of at home or abroad, while the United States is doing a similar thing. I am sure all these matters have been disturbing the members of the government just as they have been exercising all the other members of this house. We now have another problem which threatens to give the government a real and immediate headache, namely, the refusal of the province of Quebec to attempt to carry on any further with the amount of revenue that is left to it after the dominion government gets through taxing.

What can be done about all these problems? Is there nothing that can be done? Are we to confess ourselves beaten in the presence of such superabundance as Canada is capable of bringing into existence? Are we to raise idle

The Budget-Mr. Blackmore and helpless hands and rail against the powers that be when in all probability we have in our own control the means of going forward towards remedying the evils which basically are the cause of these regrettable features in our economy?

Eighteen and a half years ago we in the province of Alberta elected a Social Credit government under William Aberhart, one of the very greatest statesmen to arise in the Dominion of Canada. We were filled with the conviction that we need not rely entirely for our revenue upon money that we could extract from the pockets of the citizens of the nation. We saw no reason why, since the kings of England for centuries created all the nation's money-and it was good money, sound money-someone representing the king in our day should not be able to create money just as good and just as sound as king's money. Whereas the king normally had to have gold or some other precious metal out of which to create money, and inasmuch as we had learned to use paper instead of specie for money and are now finding that we can get along very well without even specie backing behind the paper, we saw no reason why it should not be thoroughly feasible and acceptable and in every way advisable for the nation of Canada to contemplate the creation of money debt free.

We had proposals for the use of that money after it was once created. In the first place we said the all-important thing to do with the money was to bring about a price structure as fair and equitable as it could possibly be made considering the production of which the nation is capable. The first use to which that money would be put would be the bringing down of consumer prices in accordance with the amount of surplus production at that time existing in the country. This would be done by the use of what we would call a compensated discount. I shall not go further into that matter at the present moment except to point out that that would be the first use that would be made of this money created debt free.

We proposed that after the price structure had been modified by discounts to what seemed to be a desirable extent, additional money which the king then found in his possession should be used in issuing to consumers a consumer credit somewhat resembling the cost of living bonus with which everyone became familiar during world war

II. We called this cost of living bonus a dividend. We saw no reason why it should not be called a dividend because it constituted a share of the national income, of the national production which actually of right belonged to every citizen in the nation because either as producer or consumer every person in the nation contributed directly or indirectly to the producing of the goods which formed the backing of the money which the king could produce debt free.

We were greeted with a wide variety of receptions. Almost no one thought we were using any kind of sense. I remember the volumes of abuse that were hurled against Premier Aberhart by the capitalist press from coast to coast in this nation, abuse which it was a disgrace to hurl against any good and honourable man, such as he was, desiring to make conditions better. We were called crackpots, funny money artists, scrip teasers and all those other epithets which ignorance and prejudice generally apply to all people who attempt to improve conditions.

We were not abashed; we were not dismayed; because we remembered similar things were hurled against Wilberforce when he set out to free the slaves and against every other reformer who ever set out to reform existing conditions, especially if it looked as though he were going to be able to succeed. So we came to the House of Commons, to set before members of this honourable house those principles which we believed would help constitute a solution to the serious unemployment problem confronting Canada in 1935, a problem of poverty in the midst of plenty, a paradox, a monstrosity, something not to be seriously considered or contemplated by any sane man.

The favourite phrase that was applied to us then was that we believed in "funny money". It is my purpose tonight, during the time which remains at my disposal, to give some consideration to this matter of funny money and in doing so to go back into the financial history of Canada to the passage of the Dominion Notes Act in 1868, then to follow on down to the passage of the Finance Act of 1923 and on down to the passage of the Bank of Canada Act of 1934, and to show members of the house and the people of the country that practically every single dollar this nation operated on from 1868 down to 1934 was, or was backed by,

funny money, exactly the kind of money that the Social Credit proposal envisaged.


Louis-René Beaudoin (Speaker of the House of Commons)


Mr. Speaker:

As it is now ten o'clock, will the hon. member be kind enough to interrupt his speech at this point?

On motion of Mr. Blackmore the debate was adjourned.

Business of the House BUSINESS OF THE HOUSE


Walter Edward Harris (Minister of Citizenship and Immigration; Leader of the Government in the House of Commons; Liberal Party House Leader)


Mr. Harris:

We shall continue this debate tomorrow and if it is completed take the resolution with respect to the trade agreement with Japan.


At ten o'clock the house adjourned, without question put, pursuant to standing order.

Wednesday, April 28, 1954

April 27, 1954