April 25, 1955

LIB

George Prudham (Minister of Mines and Technical Surveys)

Liberal

Mr. Prudham:

Mr. Speaker, you just cannot produce electricity economically with $11 coal at the pithead.

Topic:   REPORTED CLOSING OF NOVA SCOTIA MINE
Permalink
CCF

Clarence Gillis

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

Mr. Gillis:

May I ask the minister a supplementary question? Is it correct to say that in so far as the government is concerned, jurisdiction over this matter that the Leader of the Opposition is inquiring about is in the hands of the provincial government? Second, I should like to ask the minister whether the provincial government of Nova Scotia has made any representations to his department with respect to relinquishing control of the industry in order that the federal government might take some action?

Topic:   REPORTED CLOSING OF NOVA SCOTIA MINE
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LIB

George Prudham (Minister of Mines and Technical Surveys)

Liberal

Mr. Prudham:

No, Mr. Speaker.

Topic:   REPORTED CLOSING OF NOVA SCOTIA MINE
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LIFTING OF ALLEGED EMBARGO ON MOVEMENT TO THE LAKEHEAD


On the orders of the day:


CCF

Hugh Alexander Bryson

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

Mr. H. A. Bryson (Humboldi-Melfori):

Mr. Speaker, may I direct a question to the parliamentary assistant to the Minister of Trade and Commerce? Has the embargo on Saskatchewan grain moving to the lakehead been lifted?

Topic:   LIFTING OF ALLEGED EMBARGO ON MOVEMENT TO THE LAKEHEAD
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LIB

John Horace Dickey (Parliamentary Assistant to the Minister of Defence Production)

Liberal

Mr. J. H. Dickey (Parliamentary Assistant to the Minister of Trade and Commerce):

Mr. Speaker, the hon. member was kind enough to send over a notice of his question. In answer, I may say that there never has been any embargo by the transport controller. The railways had too many cars on track at the lakehead, and accordingly would not move any further cars to that destination. The situation has come to an end with the settlement of the strike and the opening of navigation on the lakes, and there should be normal movement from now on.

Topic:   LIFTING OF ALLEGED EMBARGO ON MOVEMENT TO THE LAKEHEAD
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ADMINISTRATION OF JUSTICE

RESPONSIBILITY FOR LOCATING AND DETAINING UNDESIRABLE ALIENS


On the orders of the day:


PC

William McLean Hamilton

Progressive Conservative

Mr. W. M. Hamilton (Notre Dame de Grace):

Mr. Speaker, may I ask the Minister of Justice whether the Royal Canadian Mounted Police will continue to leave to the Montreal police the responsibility for locating and detaining undesirable aliens, such as Michael Joseph Consolo, who was turned

over to the immigration department this afternoon by the Montreal police?

Topic:   ADMINISTRATION OF JUSTICE
Subtopic:   RESPONSIBILITY FOR LOCATING AND DETAINING UNDESIRABLE ALIENS
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LIB

Stuart Sinclair Garson (Minister of Justice and Attorney General of Canada)

Liberal

Hon. Stuart S. Garson (Minister of Justice):

Mr. Speaker, ordinarily, in those provinces in which the enforcement of the law is carried out by the provincial and municipal police forces, as in Quebec, the apprehension of criminals is the responsibility of those police forces.

With regard to my hon. friend's question, of which he did not give me notice, I shall be glad to discuss the matter with our own officers of the Royal Canadian Mounted Police to see whether there is anything further that I need to add to what I have just said.

Topic:   ADMINISTRATION OF JUSTICE
Subtopic:   RESPONSIBILITY FOR LOCATING AND DETAINING UNDESIRABLE ALIENS
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THE BUDGET

ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


The house resumed, from Wednesday, April 20, consideration of the motion of Hon. W. E. Harris (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell, and the amendment to the amendment of Mr. Coldwell.


SC

Frederick George Hahn

Social Credit

Mr. F. G. J. Hahn (New Westminster):

Mr. Speaker, the budget debate so far has proven, among other things, that the Conservatives are bankrupt of ideas. Certainly, there is a marked resemblance between the amendment that they proposed to the speech from the throne and the amendment they moved in this budget debate. I also note that the leader of the socialist party, the C.C.F., did not at this time propose any socialistic means by which he could cure the ills of the nation. That certainly is a step forward.

The Minister of Finance is a charming man, but he is a Conservative wearing a Liberal mantle. His budget is a palliative, not a cure. It reminds me of an injured man who is given a cane and who is so badly injured that he requires a crutch for support.

Finance in this country today is a sick man, and I would say that it needs the full treatment. Time and conditions will prove that the Minister of Finance might have been the emancipator of all time. Instead of that, I think we shall have finally to record that he is just another tax collector. Instead of throwing caution to the winds, he has decided to follow the Conservative caution that I spoke of earlier. I am almost led to believe that he read some of the budgets that were brought down in the late Prime Minister R.

B. Bennett's regime, for certainly he has nothing further to offer than was offered at that time.

The Budget-Mr. Hahn I may say that I have always admired the new Minister of Finance. I have always thought of him as a man of vision. Instead of that, I find him a man of revision. He has merely revised the tax structure that has been in existence for some time. I hope the minister will be at the proposed dominion-provincial conference. I would suggest he will find in the discussions at that conference that some of the ministers of finance from the far western provinces will propose new techniques and new principles which might be able to straighten out the affairs of this country. What we require today are alternatives, not remedies. In his first budget he has failed to relieve those who need it most. The man on the low fixed income is the man who gets the least. The man on the small superannuation and on the small annuity gets nothing. I find the budget does nothing for the old age pensioner, or for the war veterans allowance man who is unable to obtain casual earnings. It does relatively little for the blind and disabled. To my way of thinking, their plight is worse than it was a year ago. It does nothing for those who are on old age security. The budget reminds me of the biblical story. When the rich were putting their gifts into the treasury a widow put in two coppers, and our Lord said that she had put in more than all of them. The same widow is still putting two coppers into the treasury, and putting in more than all the others.

It is not my intention to treat the budget with derision, but I say that it is an orthodox conservative budget. It does not go far enough. I congratulate the minister upon the tax concessions and the tax cuts that he has made. It is the purpose of the opposition to offer constructive criticism, not just criticism that will tear down the house that we have built. The leader of my group gave some constructive criticism, methodically and well. It would be presumptuous of me to review all the information that he gave. Before going on with that, let me say that the tax cut now given is too little and too late to cure depressed industry and relieve the unemployment situation as it exists at this time. The situation will deteriorate still further unless additional action is taken by the government.

What we need is an injection of more purchasing power. We must have a balanced economy. We must balance the purchasing power within the nation with the productive capacity of our workers. It is most important that this injection of purchasing power should be made where it will do the most good.

Studying the matter I would say that the quickest way to create work today would be

3072 HOUSE OF

The Budget-Mr. Hahn to create a demand for the goods in connection with which we have the heaviest turnover, such as food, clothing and automobiles. The Minister of Finance (Mr. Harris) took care of the automobile matter to some degree with his 5 per cent reduction in the excise tax, but putting money into durable goods at this point is not of as great value from the point of view of creating immediate employment for people now unemployed as other methods would be. It will not cure the problem which is quite likely to continue and grow.

The greatest market for non-durable goods is to be found among the people who have no money, those who do not pay income tax, those who do not buy automobiles. The removal of the sales tax on clothing and textiles would create an increased demand for those particular goods and this demand would be set up almost immediately. It is quite possible that it would help in offsetting the unemployment which is prevalent today in the textile industry. If we had taken the sales tax off textiles we would have done more to create jobs in this country at this time than is being done by the reductions in the income tax. It certainly would have made the dollars which these poor people have go considerably further and would have created a demand for the goods which they require so badly.

It would be better still to inject purchasing power into the hands of these people themselves. This group consists of unemployed employables, war veterans on disability pension, those who are in receipt of annuity or superannuation payments and those who cannot make money by casual work because they are handicapped or because there are no jobs available. We could create purchasing power by increasing the old age pensions paid to our senior citizens. We could increase purchasing power by giving larger old age security payments.

We could also assist materially by putting dollars into the small annuities, into all annuities for that matter, and making them worth what they were when people first purchased them. You will possibly remember, as I do, the days when we saw large signs in our post offices and banks telling people to prepare for their old age by buying annuities or pensions of one kind or another. The people who bought those annuities some years ago were led to believe that if they bought a $20, a $30, a $40 or a $50 annuity it would be worth that amount of money when they needed it most.

However, the opposite is true today. The $50 annuity is worth approximately $25 today. Let us reward these people for their

thrift and foresight ih. investing in post office annuities and.-other forms of annuities by putting dollars back into the annuity fund.

I do not intend to spend any great amount of time discussing the budget, but I should like to draw to the attention of the minister the excellent way in which my leader drew attention to the relationship between agricultural production, labour and national income in the United States. I believe it was discovered that when you have a maximum of labour, farm income and production the ratio is 1-1-7. I commend my leader's address to the minister's careful attention because it is quite. possible that in this lies the key to an economic formula for full employment.

I listened with considerable interest to what the hon. member for Spadina (Mr. Croll) had to say during the course of the debate about a guaranteed annual wage. It is not my intention at this time to discuss the guaranteed annual wage because I think we can do a better job and be able to speak at greater length when the estimates are before us. However, I was struck by one point in his speech. I think he gave an excellent discourse, but then he tried, not with the same success, to make out a case against it.

There was one thing that did stick in my mind, that is his suggestion that if the auto workers were not continuously employed in building automobiles under a guaranteed annual wage they might turn to the making of cuckoo clocks. I wondered what was to happen to those who were already employed in the building of cuckoo clocks. Possibly they would be busy building something else of which somebody else had already produced too much.

As I said earlier, I would refer the minister to the address of my leader and his reference to the plight of the farmers. We have noted from time to time the fact that our labour problem depends largely on farm production. Whatever the labouring man creates is quite often the direct result of what the farmer has produced and what he has received therefor. I do not intend to debate this problem because, as I said before, there has been so much said about his plight and the effect of what he produces upon the nation as a whole.

There are other groups that could be dealt with at this time. There is the case of the old age pensioner, the blind person, the disabled person and the men and women who are receiving old age security. I am quite satisfied, as is possibly every hon. member in this house, that this problem is not being adequately dealt with today. We should spend more time studying what can be done for

these senior citizens. With automation and the fact that jobs are becoming fewer, these people have not the funds to carry on, and we must find some way of looking after them. Their plight can and will probably be discussed at the appropriate time on the estimates.

However, there is another group in regard to which I have checked the estimates carefully to see whether I can include it in the discussion on the estimates; but I cannot. Therefore I propose to tell you something about their difficulties. They play a most important part in the economy of the community and they are a most important economic group in the business of the nation. They are the forerunners of the metropolitan areas, they are the financiers of the community, and they are the hardest hit in times of depression. I refer to the small retail shopkeepers. What drew them to my attention was an article in the dominion bureau of statistics "News Notes" of April 1, 1955, from which I quote:

The number of commercial failures under the Bankruptcy and Winding Up acts increased 37 per cent last year from 1,657 in 1953 to a post-war peak of 2,278. Defaulted liabilities jumped to $53,142,000 from $32,818,000, average liability per failure increasing 18 per cent.

Now I know that this refers to commercial failures and does not necessarily include all retail merchants. However, it does include the retail merchants. They, as I said earlier, have played a most important part in the building up of our community and of our nation, and I feel that they have not been given the consideration which we are capable of giving them. The small shopkeepers in this country do approximately 60 per cent of the nation's business; the chain stores in comparison do 40 per cent.

Let us examine the significance of the statement which I have just read. It means in effect that there are 2,278 families who have become financially destitute. It means that those employed by these commercial enterprises are temporarily unemployed. It means that we are going to add all these people to the unemployed list. It means in effect that our employable unemployed list has grown by 2,278 families plus all the people whom they have employed.

That is a most discouraging state of affairs. Here we have people who have lost their life savings. They have no compensation; they have no unemployment insurance; they are destitute. They have given their all to the growth of this country and to the growth of their small communities. They are probably the greatest philanthropists within the nation, and yet there is not a place where we find we can discuss their plight. It is a tragedy of our 50433-195

The Budget-Mr. Hahn economic system that these builders of our community life should finish their business careers in this way.

There are certain factors which cause these failures. Some of them are of a personal nature over which we as a parliament have no control. However, I am not interested in their personal shortcomings. I am more interested in what we have done and what legislation we can pass in order that we might see that these continued failures should not be with us in the future, especially if they are not due to their own personal shortcomings. I speak of the economic aspect over which the small merchant has no control and all the legal technicalities which might be involved in giving him assistance.

The first of these items which I have listed is the fact that buying in quantity means that we should be able to purchase at a discount. I do not know whether hon. members are aware of what buying in quantity actually means. It means to some companies that if you buy one case of goods you are not buying a quantity but if you buy five cases of goods you are buying a quantity. Most people have the impression that one has to buy a carload lot of goods before one is buying a quantity. Does the hon. member have an observation to make?

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

James Allen (Jim) Byrne

Liberal

Mr. Byrne:

You are selling a fine bill of goods.

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

Frederick George Hahn

Social Credit

Mr. Hahn:

Thank you. I hope to continue selling it too. Most people have the impression, as I said, that in order to buy a quantity one must buy in carload lots or at least in multiples of ten. Such is not the case. I am thinking of a particular item which you would be buying in quantity if you bought five items; but you have to buy ten to get a further increase in discount. If you buy 25 you are buying actually at carload lot prices. A particular firm may have 25 different items, and does not care which one of the items you buy. You can buy one of each, which means that it takes just as much bookkeeping and there is just as much trucking involved to pick up each one of the 25 items. You are supposedly buying in quantity, but in effect you are not buying in quantity in the true sense of the word. However, you are getting the advantage of a 25-case purchase. That is one of the reasons why we find that chain stores are possibly able to undersell these smaller retail merchants who are trying to be competitive with them. The man who is helping to build the community contends, and I contend, that buying in quantity should mean certainly buying more than one item, or one per article, not

3074 HOUSE OF

The Budget-Mr. Hahn 25 items each of one different article, especially when the same amount of bookkeeping and the same trucking and so forth is involved in carrying out such a transaction.

To illustrate my point further with respect to the sales made by the small retailer as compared with the chain store, I would say this. If the chain stores were to purchase all their goods from the one wholesaler and were to get the chain store price, the wholesaler would in all likelihood go bankrupt. Today the small merchant is in effect subsidizing the chain store. The small merchant is buying 60 per cent of the wholesaler's product, as against 40 per cent by the chain store. In effect it means this. For purposes of illustration, we will use a lot of 100 cases of goods which are sold on the national basis of 40 to a chain store and 60 to the small retail merchant. If each of those pieces of goods is worth $7-assuming it is the net cost-the net cost of that parcel of goods would be $700. If the wholesaler is willing to sell that commodity to the chain store at 10 cents less than cost and to the small retailer at 10 cents more than cost, the price will then be $6.90 to the chain store and $7.10 a case to the small retailer. The 40 cases of goods which the chain store buys at $6.90 would return to the wholesaler 40 times $6.90 which would be $276. The 60 cases of goods which are sold to the small retailer at $7.10 would, in effect, give the wholesaler $426. That would be his net return. The wholesaler then, adding those two figures together, would receive for his goods $426 plus $276 or $702 in this transaction.

In effect what has happened is that the wholesaler has sold his commodity for less than cost to the big chain store and for more than cost to the small retailer, and has still wound up with a $2 profit on the whole transaction. That is something that is being done. For that reason I say that the small retailer is subsidizing the chain store today.

I contend that that is not fair business practice. I contend that we in this parliament should take action to see that no commodity is offered for sale, unless it is on a clearance basis, at a price less than wholesale to any particular group of merchants or individuals. The small merchants of this country should not be discriminated against.

A second factor in this matter is the unethical practice of coupon disposal. I am satisfied, Mr. Speaker, that each hon. member from time to time has seen the coupons that are offered by certain firms in this country and that are put out as an introductory offer. In one instance I am thinking of a soap firm in the city of Edmonton. I think it was called Soapone. Those people issued thousands

and thousands of coupons to the merchants in western Canada. Then after the merchants had given the 10 cent value per coupon, they failed to recover them. The firm went bankrupt.

A coupon is a form of money and its use should not be permitted in that particular sense. If those companies are willing to sacrifice 10 cents per box as an introductory offer, I would say they should be compelled to issue box lots or case lots to the merchants at a discount sufficient to enable them to quote their price 10 cents below what would be the normal price at a later date. That would be the fair way of doing things instead of what is being done now where, because some particular lady happens to bring along her coupons or because she has an accumulation of them from her neighbours who do not use that particular brand of soap, she has an advantage over the other ladies. That part has nothing to do with the actual merchandising of it. The fact remains, though, that here we have coupons being given to the merchants who take them in good faith and, having taken them, find that they cannot recover their money from the firms in question because they have either gone bankrupt or are unwilling to accept responsibility for the issuance of those particular coupons.

Then there are other unethical practices in respect of this coupon letting. I remember a particular instance-and it also took place in western Canada-in which the small merchants were going to be the outlet for a new brand of soap. The purpose was to introduce a new type of soap of one of the larger soap companies. In this instance the merchant was approached by the supervisor of the soap company and it was proposed that if he bought, let us say, five cases of soap, which would be 60 packages, he would be given 60 coupon cards. On each one of those cards he would have to put the name of one of his customers. Then it had to be sent through the mail to this particular customer. The customer in turn was to return it to the storekeeper and it could be retrieved on that basis.

What it was, in effect, was a grandiose scheme to force the small merchants to buy cases and cases of soap that they did not require. I had occasion to go into one merchant's store subsequent to the offer of this particular deal. Two years later he still had that particular soap in the warehouse. Because he had 500 customers, he obtained 500 boxes. But the soap men knew full well that only about 10 per cent to 15 per cent of these coupons are ever recovered. By this means they were able to get rid of their commodity, get the finances from the merchant who was obliged to pay for this product, and the result was

that the merchant became, in effect, an unloading centre for the manufacturer of this particular soap product.

Then there are certain other unethical procedures that are being followed in today's merchandising. We have deals between manufacturing firms and particular chain stores whereby a chain store is given a certain sum of money for a display in their store. The offer is this: If you give us this particular spot-let us say in a window-for advertising purposes, you will get $2 from our firm. But no little merchant is given the advantage of that same deal. He is never given the same offer. If he inquires about it, he is merely told that it is not open to everybody. Mr. Speaker, if it is right for a chain store to be given this particular treatment-and I call it unfair treatment as far as the small merchant is concerned-then the small merchant should be given the same treatment. We should have the same treatment for the chain store and the small merchant if we are going to keep our equal tenor of good feeling in the business world today.

I also find that if you take five cases of a particular product, possibly you get less in the way of advertising allowance than if you take ten cases, or if you give them a particular spot near the cash register which seems to be one that most of them want.

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

An hon. Member:

It is another form of

discount.

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

Frederick George Hahn

Social Credit

Mr. Hahn:

It is, in effect, another form of discount that the small merchant is not being given the privilege of enjoying. I say that the same offer should be open to the small retailer. I say that if he is willing to devote a space in his small store to the advertising of a particular product, he should be given an equal discount for it. We have the small merchant, in effect, first subsidizing the price to the chain store and, second, subsidizing the advertising of the chain store.

Then there is one other factor-and I think this is a fairly well established one-namely that no cost price is established for certain of the products that are for sale today. If it is established, certainly nobody is aware of it. We have instances were you buy five cases of a particular brand of soap. I am using soap again as an example because it is one of the most culpable in this instance. You buy five cases at a price discount. You devote a certain store space to it. You can just about guarantee that another of their products of a similar line will be down 20 cents a case the following week or even 40 cents a case. Thereby they are setting no cost value or no price value on it. Possibly between the two levels there is a cost, but because the demand 50433-195}

The Budget-Mr. Hahn is less for one product they immediately cut its price in order to increase demand, with the result that they have the small merchants coming and going in trying to arrive at an equalized price. The small merchant is always on the short end of the stick because he never has a chance to become and remain competitive with these large chain merchants who are only concerned with one thing, the elimination of the little man.

I charge that there is virtually a combine among the soap companies. They control the soap business of the country. They control soap supply. I am speaking of Lever Brothers and Procter and Gamble. There should be an examination into their unfair practices and it should be determined whether or not the same rights are being extended to the little merchant as are being given to the big merchant. It should be determined by what form of advertising or other method the soap companies are letting the little people know that the same rights are afforded to them.

This is the type of economic practice that is today killing the small retailer. As I said earlier, the little merchant is subsidizing the chain stores. Canada is today losing a share of income tax from the large wholesale outlets of these chain stores by reason of the fact that we find so frequently the wholesale firm has its own retail outlet with the result that there is not sufficient profit to require the payment of a large amount of income tax. There would be sufficient under ordinary circumstances with smaller retailers because the shareholders would require it. In the case of such large firms as Macdonalds Consolidated, Safeway and others I am not satisfied that a large enough amount of income tax is payable. I am not satisfied that is so in the case of Macdonalds Consolidated at the present time, certainly compared with legitimate wholesalers who do nothing but wholesale.

Business and salesmanship in this country should depend upon service, quality, personality, cleanliness, incentive, initiative and their related factors. It should not depend upon special privileges, agreed charges and unethical practices. The purpose of these big firms appears to be to eliminate competition and ultimately to set up a monopoly. We are unalterably opposed to monopolies. These little men are important to our country, and I say that we should examine the matter and see how we can keep them with us.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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April 25, 1955