March 19, 1956

LIB

Gordon Timlin Purdy

Liberal

Mr. Purdy:

You would do away with the rugged individualists. I know that the hon. member for Cape Breton South comes from a great race of rugged individualists, but you would do away with the type of people who have helped to make Canada and Nova Scotia what they are. At the present time the free world is fighting a cold war with those behind the iron curtain. If we took that attitude and said to labour and management that we were going to tax them and put them out of business in order to build up an organization such as I visualize, it would be a great step toward losing the cold war because we have to have initiative, the strong individualist and the work of every Canadian and other person outside the iron curtain to withstand the attacks that are being made on us today.

I know the hon. member for Cape Breton South has vivid recollections of the many once prosperous mining towns in Cape Breton which are now ghost towns. But I suggest

Economic Rehabilitation that the history of the world shows that a large percentage of our mines are expendable, as are similar industries. When our people went into those communities they knew what they were going up against.

Following the hon. member's argument a little further, I am suggesting that if the government were to take the responsibility of looking after all these problems which arise, then the government would be obliged to take the responsibility for saying whether new industries could start or new mines could open. There would have to be an over-all power that would say, "No, you cannot start a mine there or you cannot start that industry there because it is going to peter out in such and such a number of years and you are going to be a problem to our fund and our fund is not going to be able to carry it". I say that you cannot have the one thing without the other. I am suggesting that such interference by government with industry would mean the downfall of this country.

As I mentioned before, the hon. member for Cape Breton South has had a great deal of experience. The records show that the hon. member was born in Londonderry, Colchester county, which is part of my constituency, and more commonly known as Acadia Mines. I do not know at what age he left that area. If he had chosen to remain there I suppose he would probably have been the hon. member for Colchester-Hants today. Nevertheless he was born in a great part of our province, called after Londonderry, Ireland. It is a little late for St. Patrick's day, but the tradition is still there. I suppose he recalls, as I do, that at the turn of the century Londonderry or Acadia Mines was a thriving community with a population of something like 2,500. At night the sky would be red with the reflection from the blast furnaces. All in all there was a tremendous amount of activity around that settlement at the base of the Westchester mountains.

Today it is not a ghost town. However, it would have been a ghost town if the hon. member had had his say at that time and the people had been moved out holus-bolus when industry closed up shortly after the first world war. Today we have not a community of 2,500 but we have one of about 500. It is true that not many new houses are being built. There are a number of old houses falling down, and more being destroyed by fire and time. Nevertheless in that little community we have a great community spirit. There are good schools. The people have a fair number of automobiles, radios and television sets. They have a great community spirit. They have one of the best baseball teams in Nova Scotia. But if my hon. friend

had had his way these people would have been moved out holus-bolus when that industry went down and what is now Londonderry would have been again just a wilderness.

There is one other thing, Mr. Speaker, that I would say and it is this. While many of the mechanics and artisans from that plant which closed were scattered to various parts of Canada, they took with them the skills learned there and they made a great contribution to Canada, as I know my hon. friend did with respect to Cape Breton when he left Colchester county in order to go to there.

There is another thing I should like to say. I do not think that Londonderry is done. I believe time will show that in regard to the mines. They were not really mines; they were merely very rich pockets of ore which were possibly worked out. There is plenty of ore in those hills. I believe that the knowledge that was gained by the people who worked in those diggings, which was passed on to their sons and which is retained in that community by the people not being evacuated, as has been suggested, is going to bring to the fore the possibilities which are there. I believe that once again the smoke will belch from a great industry in what is now that quiet little village.

Of course I could go on to mention several other places in my constituency where similar circumstances exist. I could mention the village of Kempt Town. There is a coal mine there; and with all respect to the Cape Breton people and those of Pictou county and Cumberland county, may I say that the Kempt Town seams are the one spot in Nova Scotia where we really have what is practically anthracite coal. Unfortunately the seams are thin. The mine was closed, and it is closed today. Nevertheless there is a great deal of information possessed by the people whom my hon. friend would have moved to Ontario under his scheme. As I say, there is a great deal of information still held by the residents of that community. As a result of this information which is passed on from father to son, I believe that in time, that mine will again be opened and that we shall have mined in Nova Scotia a type of coal which is comparable to Pennsylvania coal.

What I have been saying, Mr. Speaker, has perhaps not too much to do with the whole problem. There is one point on which I should like to correct the hon. member for Digby-Annapolis-Kings. This afternoon he stated that the Nova Scotia Light and Power Company used coal entirely in firing their boilers for the production of electricity. Unfortunately I am afraid that is not the fact. I visited one of their plants when they broke

in a new unit last fall. There were two immense furnaces side by side. I was told that one was fired by coal and one was fired by oil. As I recall it-I may be wrong in this-the information I obtained was that the cost was approximately equal.

I expressed the idea then, and I do it again now, that if that was the case, why would it not have been better to have used coal entirely? On the other hand, as was brought out this afternoon, we have a great refining plant across the harbour, and if they could not get use for part of their fuel oil I presume they would have to cut down the refining operations. It is therefore sort of a toss-up between the two.

I have rambled on at some length-

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?

An hon. Member:

Hear, hear.

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LIB

Gordon Timlin Purdy

Liberal

Mr. Purdy:

I agree that it has been at some length, but I have heard the hon. gentleman talk longer and say less than I have said. As I say, I believe that the best way to meet this problem-and it is a problem-is to follow out the program laid down by the Minister of Labour. I agree with him 100 per cent when he says that in those places where there is depression owing to the closing down of industry, they will do everything they can to put the people through vocational training and train them for other positions. But I do not think you can take people holus-bolus from their heart-roots and from the graves of their ancestors and move them from one place to another in a democracy.

Now, Mr. Speaker, with respect to the maritime provinces I am one of those who believe that although we have had some rather difficult times, we are doing something. There is the fighting will to win in that part of the country, and I think we will win through. I was going on to say that I believe the problem is being reasonably well handled at the present time. I would not want to be branded as one who would even suggest we refused to help communities which are absolutely down and out, and where the people have done their very best. I would certainly support any legislation introducing any scheme that would aid such a community. However, if it were of general application I do not think it would work out. I take the same attitude toward these communities as I would to an individual who came to me for help. If I were sure he had tried hard and could not make a success, I would give him some help. I would certainly support the government if they took the same stand. I am of the opinion, however, that we cannot, as a nation, legislate ourselves into prosperity. I am afraid this program would be leading up to that.

Economic Rehabilitation

In so far as most communities are concerned, I think the solution of these problems will be brought about by a continuation of the type of government we have had in this country since 1935. You will recall that figures show that our gross national product was $4 billion in 1931 and today it is $26,600,000,000. This, of course, is the result of Liberal policies.

In support of my statement concerning the solution of these problems, which will recur at a few points in the future, I should like1 to quote one paragraph from the submission of the Canadian Manufacturers Association to the royal commission on Canada's economic prospects. It is under the heading of "Population and Employment". Under the subheading "Population" it has this to say:

In its vision of a greater Canada, the association has examined the studies of a number of recognized Canadian authorities as to what the population and gross national product of Canada will probably be in 1980. Obviously, any prediction is subject to a rather wide margin of error, based as it is on certain assumptions such as no major war occurring in the next 25 years, birth rates continuing at, or close to, present levels, low death rates as now, substantial immigration, and continuing technological improvement. Our considered estimate, taking the foreign factors into account, is that the population will be from 26 million to 28 million in 1980 and the gross national product will be from $68 billion to $72 billion (at present prices). As regards the gross national product especially, this estimate is likely on the conservative side.

On the basis of past experience the Canadian labour force in 1980 might be from 9 to 10 million. The association believes firmly that the most important single task of the people and government of Canada is to make as adequate provision as possible for the economic and steady employment of this labour force.

It has been noted that the percentage of the labour force employed in the primary industries is decreasing whereas the percentage employed in manufacturing is increasing. This trend will continue. It is the manufacturing industry that must provide a great deal of the employment for an increased population.

In conclusion, Mr. Speaker, I would say this. I noted in one of our newspapers the other day that the wife of an ambassador who had been assigned to Ottawa had this to say: In her experience the women of the

world were very much alike. They wanted to look after their families and their homes. Now, I would say that I believe the interests of the men lie along the same lines. They want to look after their families and their homes, and they are willing to work to do that. If we all get behind the problem in Canada and in Nova Scotia and apply ourselves, I do not think there will be any necessity for the program requested in the hon. member's resolution.

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SC

John Horne Blackmore

Social Credit

Mr. J. H. Blackmore (Lethbridge):

It may

seem presumptuous on my part to enter the

Economic Rehabilitation debate when there are so many members here from the maritime provinces who are ready and willing to rise and express their feelings concerning their own area. However, I believe it is fitting that some speaker from the west should participate, and some speaker from the Social Credit group of which I have the honour of being a member.

I would say in a general way that I cannot see how we could possibly improve conditions in the maritimes if we continue to follow the same general policy which has caused so serious a deterioration in the maritimes ever since they entered confederation in 1867. The number of commissions that have been set up to examine into the situation in the maritimes is very considerable. We have had the Jones commission, the White commission, the Duncan commission and several others. Every one of those commissions has found a most undesirable state of affairs existing in the maritimes. Every one of them has found that condition exists because of certain other conditions which ought not to be there. But somehow or other nothing has ever been done about the situation.

I feel that it is idle to hope to have a sound and prosperous Canada unless we have a great and prosperous maritime section. I am convinced that something more has to be done than has been done in the past. I do not propose to go into this matter to any great extent tonight, but I may say I have been arrested by certain things which have come into my hands within the last few days. I have before me the statement of the city of Halifax to the royal commission on Canada's economic prospects, dated October, 1955. At the same time I have in my hands a copy of the statement by the government of Nova Scotia to the royal commission on dominion-provincial relations dated February, 1938. I have in my hands also the letter of transmittal by the Halifax city solicitor, Mr. C. P. Bethune, Q.C., dated October 18, 1955.

In these three documents one can find some most impressive reading. May I quote three or four statements from Mr. Bethune's letter. On page 2 I find this paragraph:

In the alternative, the only way in which such fair contribution by the government towards the cost of municipal services can. be reduced is by the promotion of private business enterprises in this city which will contribute to the city's costs.

The government to which he is referring there is the dominion government.

In this, we believe, the government should assume some responsibility.

The next paragraph is most striking.

So far as Halifax is concerned, it is submitted that the city's natural endowment calls for the development of trade through the port. This will necessitate the provision of greater pier and storage [Mr. Blackmore.l

facilities, such as those proposed as far back as 1913, when plans were made by the federal government to develop the port on both sides of the harbour by the construction of the sea wall and piers. Certain land was then earmarked for improvement but unfortunately the plans were not proceeded with.

The question that every member of this house ought to ask himself, Mr. Speaker, is, why were the 1913 plans not proceeded with, and why have they not been proceeded with up to the present time? That seems to be the difficulty in respect of all the maritime provinces. There seem to be a great many promises and commitments on the part of the federal government, either explicit or implicit, but never anything done. It reminds me of the story of a certain British leader who was said to be always on horseback but never going forward. In my judgment it is high time we began to go forward.

Let us follow through in respect of this dock at Halifax, and the plans for making this port a good port. Anyone would say that the very first thing that could be done and should be done by the dominion government is to build that dock and make the port of Halifax so that it will take care of the needs of all commerce today. I do not suppose that even such an apologist as the hon. member who just took his seat, who seemed to spend all his time trying to make it appear that Nova Scotia was in fact doing all right, that they did not have anything to worry about, really believes that. I suggest that he ought to be ready to explain why that port has not been made as it ought to be, and he should be here on his feet demanding that that port should be made as it ought to be. Yet he comes up here and apologizes for what is going on down there.

Let us just consider another statement or two from this same letter:

Much of the land so earmarked has now gone to other uses, and unless immediate attention is given to the matter, all that remains will be otherwise occupied, and the costs of acquiring the same for port development will be prohibitive.

That will mean that the port of Halifax, in all probability, will never be made the port it ought to be as the eastern seaboard port of Canada; yet nothing is being done, and the hon. member for Colchester-Hants rises in his place here and apologizes for what is going on.

Let me read another paragraph:

Another essential is the improvement of transportation facilities serving the port, both highway and railway, in order that this Canadian port may be able to meet the competition of foreign Atlantic ports.

Surely the federal government can take care of these highway needs. Let no one rise in his place here and pretend that it cannot

be done. But why is it not done? The writer of the letter mentions both highways and railways. Surely we can build highways suitable for the servicing of a Halifax that will be the finest port on the whole Atlantic seaboard. If the government can build the St. Lawrence seaway, do not let anyone tell me that it cannot build the port of Halifax if it chooses to do so.

Let me read a little more:

Physical facilities, however, are not, in themselves, enough, though they will be of value in developing port trade. The value of such nonphysical facilities was recognized by governments, prior to 1935-1936, by the granting of special tariff concessions to those who imported goods through Canadian ports.

Note these words with particular care:

This tariff preference resulted in retaining for those ports more than 90 per cent of Canada's overseas import trade. It was destroyed by a trade treaty-

By whom? Not the Conservative party, but the Liberal party. Notice what it goes on to say: .

This tariff preference resulted in retaining for those ports more than 90 per cent of Canada's overseas import trade. It was destroyed by a trade treaty with the United States in 1936, which treaty had the effect of opening the ports of that country to Canadian business. As a result there was a heavy diversion of traffic from Canadian ports.

No Liberal can escape the blame which is attached to the present administration in Canada for that trade treaty, or for permitting that trade treaty to stand. In a general way one would say that any government of Canada which would sign a treaty which would do that kind of thing to the city of Halifax was utterly unfit to govern the country.

Topic:   ECONOMIC REHABILITATION
Subtopic:   REQUEST FOR PROVISION OF ALTERNATIVE EMPLOYMENT WHEN PRINCIPAL INDUSTRIES CLOSE
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?

Some hon. Members:

Oh, oh.

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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

Oh, I do not think there is any doubt about it. After all the promises that were made to the maritime provinces before confederation and since confederation, to have a thing like that done constitutes worse than an abject betrayal, and there can be no other way of putting it.

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LIB

Henry Joseph Murphy

Liberal

Mr. Murphy (Westmorland):

Halifax is the only prosperous place down there.

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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

You had better tell that to Halifax.

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LIB

Henry Joseph Murphy

Liberal

Mr. Murphy (Westmorland):

If you would sit down I would tell you the truth about Halifax.

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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

If one cannot rely on the solicitor for the city of Halifax in preference to the hon. member for Westmorland with respect to this situation it would be a most amazing thing. Let us go on. The hon. member for Westmorland will have time to

Economic Rehabilitation rise in his place and talk, so let him please let me say what I have to say. I do not care whether he does or not; I am going to say it.

Now I go on to the bottom of page 3, and I quote these words:

Therefore, it is submitted some adjustment should be made in the tariff system, or some other measures should be taken to ensure that the protected industries, if they are to enjoy that protection, should channel the shipments of their goods over Canadian railways and highways and through Canadian ports.

I left off certain words about Canadiaii industry which would have connected up with the part I quoted, but the general idea is that protected Canadian industries in our central provinces were beginning to ship their goods down to United States ports to the neglect of the Nova Scotia port of Halifax. He points out the fact that those industries could at least take the trouble to channel their trade to the port of Halifax if they want to be anything like square.

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CCF

Alexander Malcolm Nicholson

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

Mr. Nicholson:

He will agree with that.

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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

You would think so. One of the reasons the maritimes have never got anywhere, let me submit, is that they have sent to parliament members not to fight for them, as the member for Cape Breton South has done, but to rise in their places and excuse the neglect which those provinces have suffered down there for these many years. They rise in their places as proponents against their provinces and not for them.

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LIB

Henry Joseph Murphy

Liberal

Mr. Murphy (Westmorland):

I would not say that.

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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

Well, it is time you did, because you stand condemned. A lot has been said about the amount of time that has been spent on the wheat question. Do you think that if we had Liberals and Conservatives sitting where the C.C.F. and the Social Credit groups are sitting you would have had the case for the prairie grain growers put in the way in which it has been put in the last few years? The only thing that caused the Liberals to talk in favour of wheat farmers was the fact that they were being put to shame by the work being done by these two independent parties. That is all right; just do not make smart retorts to explain the situation. You just cannot explain these things. Why in the world the electors down in those maritime areas do not become awakened to this thing I cannot understand.

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CCF

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

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

Mr. Knowles:

They will be.

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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

It is just about time they began to realize they have been standing in their own light for years and years by sending up men here to parliament who were committed to support the government instead of the maritime provinces.

Economic Rehabilitation

Let me go on with a quotation from the submission of the city of Halifax to the royal commission on Canada's economic prospects in October, 1955. I read from page 27, division 9, on the port of Halifax, which indicates that Mr. Bethune was quite in line with the people who prepared the submission. I quote:

References to port facilities in this memorandum include berthing facilities, sheds, both transit and storage, railway facilities, loading operations, manpower, and all matters relating to the efficient operation of a modern port.

In this he mentions berthing facilities, sheds, loading operations and manpower, and railway facilities. Apparently there is a deficiency in Halifax in reference to every one of those essential items. To tell me that the federal government cannot take care of these matters is simply to make the person who tells that ridiculous. They go on to say:

Many millions of dollars have been expended by the government of Canada, both through national harbours board and departments of the government, to improve the port facilities at the inland ports of Montreal and Quebec. No criticism of this is offered by the city of Halifax, even though the ports are useful for only seven months of the year because of ice conditions in the St. Lawrence river. It is. however, submitted that sufficient expenditures should also be made at the port of Halifax provide adequate facilities even if this port nas the past been considered a "winter port" and used as a substitute for the above mentioned inland ports during the season of the year in which these ports are unavailable.

Anyone with any kind of tendency to reason will say, "Why when Halifax is an all-year port, are there not sufficient port facilities in that city when we spend vast sums of money on port facilities in Montreal and Quebec which are usable only seven months in the year?" You would think that anyone with any sense of reality at all would see the absurdity of that sort of arrangement.

I do not feel that I should spend very much more time on this particular matter, and I do not propose to do so.

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?

An hon. Member:

Hear, hear.

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SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

Someone apparently wants me to stop talking. This is another man from the maritimes who was sent up here to look after the interests of the people of the maritime provinces, and he is trying to shut up a person who is trying to help them.

The question has been raised as to what can be done about the whole situation. I say that there is only one way in which you can put the maritimes on a going concern basis, and that is to introduce economic conditions under which they will be able to carry on prosperously.

When the house was dealing with another resolution about two weeks ago I said that

what any area must have is control of its credit. Conditions must be such that the people within the area are able to borrow money when they want money, and get it at reasonable interest rates. I referred to the treasury branch system which was set up in Alberta by Social Credit, as a result of which the people were able to borrow money at 3 per cent less, and under far more lenient conditions than they could borrow from the banks. I said at that time that this provision was the first step in the rehabilitation of Alberta.

I submit that until you have a measure similar to that in the maritime provinces you will have no chance of prosperity. Yet, as I pointed out two weeks ago, credit facilities in the maritime provinces are controlled by banks whose headquarters are in Montreal and Toronto and whose managers are not in the least concerned directly in the welfare of the maritime provinces, except in so far as it might possibly help the industries of Ontario and Quebec.

So the very first thing we will have to do is make arrangements whereby the people of the maritime provinces will be able to borrow money with which to produce any kind of thing that needs to be produced; pigs, chickens, cattle, sheep, anything they want to produce. Let them be able to borrow money at low rates of interest so they can produce; then that money will go out into circulation and thus enable them to sell their goods.

I spoke to the hon. member for Cape Breton South just before I began speaking, and by the way I was not prepared to speak on this subject because I did not expect it would come up. I asked the hon. member how much it cost for money in the maritime provinces, and he told me about 5J per cent. I would say that 51 per cent is 2 per cent too much. There is no conceivable reason in these modern times why anybody who wants to produce goods should have to pay 5i per cent interest to get money, especially in the maritime provinces where there are such a small number of markets, where conditions are so depressed, where there is so little over-all purchasing power. I asked the hon. member if it cost the merchant or the manufacturer the same rate, and he said it did.

You can see how the cost of production is increased in the maritime provinces by the interest rate on the money they borrow. I asked the hon. member if it was easy to borrow money, and he indicated it was just as easy to borrow money down in the maritimes as it was in Alberta before we brought in the treasury branches. At that time the

banker in Alberta sat behind his desk and ruled like a king dealing with poor subjects or slaves, when a person came in to borrow money. But he changed his ways very rapidly after the treasury branches came in. I think if we had treasury branches in the maritime provinces the banker down there would become a little bit more sociable too.

That is the answer; money must be available to everybody who is at all creditworthy to enable him to produce goods. He must be able to borrow it at reasonable rates, which I maintain should never be more than 3J per cent.

I asked the hon. member for Cape Breton South some other things. I am relying upon him to a considerable extent because he is the one man from the maritimes who ever talks for the maritimes. If the maritimes want people to talk more on their behalf they should send up men like this man, who is not bound hand and foot to a party machine, who is able to get up and speak for his country instead of for his party.

I asked the hon. member how much the maritime people were buying from the central provinces, and he told me that Mr. Waldo Walsh, deputy minister of agriculture for Nova Scotia, had said that they buy $100 million worth of goods a year from the central provinces. What are the central provinces buying in return? How in the world, using just plain common sense, do you think the maritime provinces can be successful and prosperous when they are buying $100 million worth of goods from the two central provinces and are able to sell back only a very trifling amount of goods in return?

If the maritime provinces are going to have any chance in the world they ought to have their own markets available to their own production. It is just as simple as A, B, C. If they cannot sell $100 million worth of goods to the two central provinces to pay for the $100 million worth of goods they buy from the two central provinces, something will have to be done to keep goods from the two central provinces from going down into the maritime provinces and monopolizing the market.

Someone will say, "How could you do that in a free country?" Apparently we can do pretty nearly anything when the four western provinces or the four maritime provinces are not concerned. Pretty nearly everything can be done for Ontario and Quebec, but apparently very little for either of these other two groups. If we make up our minds to do this thing, we can do it. Is there any reason at .all why we should not have a sort of gentleman's agreement or arrangement under which the producers in the two central provinces

Economic Rehabilitation would agree that they would not sell goods in the maritime provinces beyond a certain point unless the maritime provinces so requested?

That would enable the maritime producers to keep the maritime markets to themselves. You would very soon find that they were prosperous. Otherwise just continuing the conditions they are now operating under, with the financial circumstances prevailing and the trade circumstances prevailing as at present, they will continue to be hewers of wood and drawers of water for the next thousand years.

If we want to do anything that is worth thinking about we must take care of these two matters. Do not tell me that the Liberal government cannot do it, not for a minute. These are two things that may be done. I could go on and say a great deal more, but I fancy that is enough for one time. I say the time has come to begin to do something. We have dawdled and callously ignored the rightful demands and requests of the maritime provinces quite long enough.

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LIB

Allan Joseph MacEachen

Liberal

Mr. A. J. MacEachen (Inverness-Richmond):

Mr. Speaker, this is the third debate that has occurred in this house this session that has brought forward the broad problem of economic development. In each of these debates there was a high degree of participation by members of all parties representative of the Atlantic provinces, and it was my belief that these members had approached the problem of economic development for that area with moderation and insight, and in a manner that would appeal to the house and to public opinion as a whole. I believe the participation in the debate today illustrates quite clearly that the representatives of the Atlantic provinces from all political parties are not derelict in their duty in presenting to this house the peculiar problems of that region of Canada.

Just three weeks ago I had the privilege of attending a seminar in Boston on the subject of economic development as applied to the province of Nova Scotia. I wanted to connect the remarks I intended to make on that occasion on economic development in Nova Scotia with the current thinking in so far as international economic development in general was concerned, and for that reason I went into some of the studies the United Nations conducted on general economic development throughout the world, a subject that is of interest and concern to everybody.

There were two main elements in the discussion of economic development in so far as it applied to what are known as the underdeveloped countries. The first element of development was the provision of technical services or technical information, not only in the form of guidance but also in the form of

Economic Rehabilitation technicians of all kinds. The second element in the international economic development was the lack of capital in the countries concerned, arising from the low incomes and inability to save and consequently to accumulate moneys as capital to invest.

When we attempt to apply this approach to the economic development of Nova Scotia, or the Atlantic provinces in general, we find that these prevailing concepts are just not applicable at all. First of all, in so far as technical personnel is concerned, the Atlantic provinces likely have the highest concentration of institutions of learning of any part of Canada. It is true that many of the graduates of these institutions move to other parts of Canada, but it is still true that of the maritime universities for which I have data, approximately 40 per cent of the graduates have remained to pursue their occupations in the Atlantic provinces. The result is an abundance of highly trained and highly literate people to participate in the development of our part of the country.

The second problem that concerned the people interested in international economic development was the low rate of savings occasioned by low incomes. I must confess that my investigations show that Nova Scotia, for example, has one of the highest rates of savings of Canada, and I was told by one of the experts from the Arthur D. Little Company in Boston, which is currently studying the economy of Nova Scotia, that the rate of saving in Nova Scotia was higher than in certain developing parts of the United States.

We have the technical personnel and we have the savings, but we have not produced economic opportunities of sufficient appeal to bring these two decisive elements together for the development of the Atlantic provinces of Canada. I mention these two considerations because, in talking about regional economic development, we do not really get much assistance from the thinking that is going on in the United Nations and other vorld organizations.

Of course our attention is brought to bear upon economic development in the Atlantic provinces not because the Atlantic provinces are not developed nor because the Atlantic provinces are remaining stagnant. These provinces are moving ahead in certain areas, and moving ahead very constructively. The problem that agitates the minds of residents of those provinces is that our rate of growth is slower than the rate of growth for the rest of Canada. That is the cause of great concern. If we take such important economic indices as income per capita, or income per member of the labour force; if we take per capita investment or average weekly wages

[Mr. MacEachen.l

or average weekly earnings, we find that in each of these categories the Atlantic provinces are lower than the average for Canada as a whole.

The disparity in economic development causes international tensions; for the same reason disparities in economic development in the country are bound to breed domestic disagreements of various kinds. That is why this problem-though certainly I do not intend to bring forward tonight concrete recommendations for its solution-is a subject very worthy of debate, and that is why it requires the attention of this house.

We know that part of the reason for our slower rate of economic development is the location of the Atlantic provinces, meaning distances in the geographical sense and accompanying transportation costs. We also realize that the trade policies necessary for the development of the nation-and this has been highly documented-have adversely affected the economic development of the extremities. The national policy of 1878, designed to create a new national market for the inland industries of central Canada, completely changed the orbit of commerce and trade in which the maritime provinces lived and the conditions existent at that time have never been completely restored.

We know, too, that the national effort involved in two wars served to accentuate the economic concentration in the central regions of Canada. We know also that the branch banking system in its very organization has served better the credit requirements of the central regions of the country.

The purpose of mentioning these influences is simply to indicate that the development of Canada as a whole has not been left entirely to the natural operations of economic laws but has been affected, and affected decisively, in certain areas of development through either explicit or implicit government direction and policy. It is for that reason that I feel we are really following a great historical tradition in this house when we talk about policies that may serve to build up areas of Canada which up to the present have not participated in our prosperity in the manner that we all desire.

The hon. member for Cape Breton South has mentioned the threats that are occurring in the coal industry. The past year has been a good year in that industry, but the long-run picture is uncertain and it may be that such activities as the dieselization of the Canadian National Railways, the completion of the St. Lawrence seaway and the projected pipe line may have a harmful effect on the coal industry of the province of Nova Scotia. If such a harmful effect occurs, then it means a very

serious blow to the economy of the areas which the representative for Cape Breton South and myself have the honour to represent in the house. These and other areas throughout the province of Nova Scotia will be affected.

The federal government has an interest in the coal industry and in its rehabilitation because we have made very generous provision through legislation in this house for the assistance of the coal industry. The annual subsidy payments, the coal mining assistance act and certain important research are representative of the interest the federal government has taken in the maintenance of this industry which is so vital to the economy of Nova Scotia. For that reason it should be a concern of the House of Commons to assist, through discussion and helpful suggestions, in the provision of alternative industries in the event that further declines occur in the industry.

A similar situation was brought about by the construction of the strait of Canso causeway. The unemployment problem has been handled very successfully by the Canadian National Railways and by the temporary construction activity in this area. There is insecurity and uncertainty among the community leaders, however, because of the decline in real estate values, and because of fear of the future as it will affect these communities.

I think it is clear that in all the cases I have mentioned things are occurring in the economy that are helping the people as a whole. We are hopeful that all these projects will be thoroughly beneficial to all the people of Canada, but we are also hopeful that no part of Canada will be expected to bear too great a sacrifice in the development that is so beneficial to all.

I think this debate has brought out some very important things for the province of Nova Scotia. I was glad that both the hon. member for Cape Breton South and the hon. member for Digby-Annapolis-Kings mentioned that the resources of Nova Scotia are limited. In comparison with other provinces of Canada we have modest economic resources. We are a mature economy, and in the future our development must depend upon a greater and more intensive utilization of mineral wealth, forest wealth, fisheries and the tourist industry.

In each of these categories there is a great deal that government can do, both federal and provincial, through acceleration of mineral exploration and through the provision of services like the forest inventory, in which this government participated and which is now opening up one of the most promising

Economic Rehabilitation areas of development in Nova Scotia, namely the possibility of paper mills in the strait of Canso area and elsewhere. It is through acceleration, with present government services directed with greater intensity to what might be called special areas, that much can be done.

Several of those who have participated in the debate have mentioned the difficulties of establishing secondary industries in the maritime provinces. The hon. member for York-Scarborough, and the hon. member for St. John's East in a previous debate, outlined very valid economic forces that serve to select areas for the development of industry. There is one type of industry that is supply-directed. It locates near valuable raw materials. There is another type of industry that is market-directed, which locates near the greatest concentration of people. Neither type of industry is well suited to the Atlantic provinces because of the economic factors that have already been brought out. But there is a final type of industry that the economist calls a footloose industry, which is well suited to location in this part of Canada. Footloose industries are those industries about which there is considerable indifference as to location. They do not go to the market. They do not go near the source of supply. Characteristic of these industries are the textile industry, the refining of crude oils and other industries of this type.

Here, the people who participated in the seminar at Boston were quick to point out, lay the greatest possibility for the development of secondary industries in the province of Nova Scotia. The development of this type of secondary industry combined with the proper, intelligent utilization of the modest resources we possess should, I think, allow the citizens of Nova Scotia and the other provinces to live the satisfactory life that has been characteristic of our part of Canada.

We are conscious of many non-economic qualities of life in the Atlantic provinces. We, Mr. Speaker, were the seat of responsible government. The island of Cape Breton was the seat of industrial trade unionism in Canada. These are among the types of development that do not occur or are not mentioned in a debate on economic development. I believe that the development of the resources we have, combined with wise selection of secondary industries and intelligent co-operation and the will to survive, is part of the formula for success.

We want easy access to the Atlantic provinces and easy egress from the Atlantic provinces. We want economic opportunities for a growing number of people, but we do not want to keep people in the Atlantic

Economic Rehabilitation provinces if they thereby depress incomes and standards when migration would suit them and suit the areas best.

For some of the reasons I have mentioned I think the resolution put forward is extremely interesting, and I think it will be useful in forming public opinion on a very important issue of special interest to the Atlantic provinces.

Topic:   ECONOMIC REHABILITATION
Subtopic:   REQUEST FOR PROVISION OF ALTERNATIVE EMPLOYMENT WHEN PRINCIPAL INDUSTRIES CLOSE
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PC

John Angus MacLean

Progressive Conservative

Mr. J. A. MacLean (Queens):

Mr. Speaker, I have listened with a great deal of interest to the remarks of various hon. members who have taken part in the debate, but more particularly to those of the hon. member for Inverness-Richmond and the hon. member for Mackenzie. In a very clear way the hon. member for Inverness-Richmond gave us an economist's analysis of the situation in the maritimes.

I might say here that I am grateful to the hon. member for Mackenzie for some of the things he put on record which have to do with my own province and even with my own riding. It is not entirely accidental that he saw fit to do this because after all he is, I believe, a fourth generation islander, or a four times removed islander. His ancestors came from my riding, and he himself is now a resident of Saskatchewan. He is perhaps an example of the very thing we are talking about. His ancestors found it economically necessary to move from the maritimes to what was then Upper Canada. Then at a later stage people from the older parts of Canada were persuaded, chiefly for economic reasons, to migrate to western Canada where opportunities were said to be greater.

Continuously, at least since confederation, there has been an economic pressure which has forced the people of the maritimes to emigrate and seek their livelihood elsewhere. At the moment I might say that1 great numbers of maritimers helped to develop the newer parts of Canada, especially the four western provinces. As a matter of fact I think the migration is almost entirely one way. At the moment I can think of only one case of someone migrating from the prairies to Prince Edward Island. That particular case was my wife. She assures me that her considerations were other than economic ones when she took that course.

I think the hon. member for Cape Breton South should be congratulated on bringing this topic before the house for discussion. I feel that he had in mind this chronic state of depression, in varying degree, which has existed in the maritime provinces for many years.. We find always that most of our young people are forced to migrate. The unemployment figures for the maritime provinces are in reality greater than one would suspect,

[Mr. MacEachen.l

because they show only those people who are unemployed and who have not yet emigrated. The result is that when a disproportionate number of our young people move elsewhere or join the services, the mean age of the average maritimer becomes greater than that of people in the other provinces of Canada.

This and many other facets of this problem tend to create a condition in which commerce and development stagnate. Small industries are continually dying off. They are being bought up by larger competitors from some other parts of the country and, after a few years, are closed down because it is not felt that they are economic.

Last year I sought from the dominion bureau of statistics figures with regard to the number of industries in the maritimes which over the years have been forced to close because they were unable to compete with their larger counterparts in central Canada. I was told that the dominion bureau of statistics kept no record of this sort of thing, and that figures along that line were not available from them. If they were available, I think they would give some very enlightening information.

There are, of course, several ways of looking at this problem. The economists may look at it purely from the cold economic point of view and say that if an industry is not profitable, if it is not self-sustaining, it should not exist. They do not concern themselves with the humanitarian and other problems which may develop as the result of such a failure to carry on. There is perhaps a philosophical point of view which considers the humanitarian problems, the social effects that economic depression may have on an area. But there again that thinking may be circumscribed so that the whole picture is not seen. There is also a military viewpoint. From the military viewpoint it can be argued soundly that if our industry is to survive indefinitely in this atomic age, it should be dispersed, that it should not be allowed to congregate in a few large areas where it presents attractive targets for atom bombs. But, Mr. Speaker, I think it behooves us to take a wider view. The political view should be one which embraces all of these factors.

I think it is nonsense to say that central Canada goes along and prospers because it is economically sound and can stand on its own feet, and that its prosperity is not caused by any artificial stimulants which may have been given it. Nothing could be further from the facts. If the tariff protection which exists in this country for Canadian industry were to be totally removed, I am quite sure that many of our industries in central Canada would melt away in a short time. If some of the

uneconomic or temporarily uneconomic great projects which were brought forward by governments in this country through the years had not ben carried out, I am convinced that great areas of this country would not have been developed. An example of such a project, of course, is the building of the first transcontinental railway. More up to date examples are the St. Lawrence seaway and the gas pipe line that is under discussion. Many of these things are not strictly economically sound.

As I said, we should also consider the view that the philosopher would take. After all, we must attach some importance to the social effects that economic depression has created in certain parts of our country. How can we be proud to be Canadians if we know that in certain areas of this country there are people who are in dire financial straits through no fault of their own? We should recognize also that there is definitely a military problem involved here. We should look rather carefully at the possibility of stemming this trend toward having our key industries concentrated in a small area. We should make sure that encouragement is given to developing a dispersed industry in all parts of the country. Such an industry would help to revive the small towns in many areas, and would be a stimulus to agriculture, transportation, service industries and all business firms in those areas.

The government has a responsibility here that it cannot avoid. The government should give serious consideration to this resolution. I particularly approve of the last part of it, which says:

-such rehabilitation to be achieved through direct government assistance for the establishment of additional or alternative industries in the areas concerned-

There is one reservation, however, in that I should like to be able to put my own interpretation on what direct government assistance means. The resolution goes on to suggest that if that fails, means should be found for transplanting the people concerned to some other part of the country. I think that is a course which should be followed only as a last resort, but it would be unavoidable in some cases such as mining towns which were built on resources that had been exhausted.

There are many ways in which the government could take action to improve the situation in some of these depressed areas. There are tariff adjustments which might be made which would benefit them. There are freight subventions which might be considered. There is defence expenditure and government buying generally. It might be said that these suggestions are not practical, that they are

Economic Rehabilitation suggestions that are not really feasible. It might be well for us to look briefly at what our neighbour to the south is doing in this connection.

In the United States it is recognized that governments now do a great deal of the business of the country directly. Defence production and other government purchasing is really big business. In the United States they see to it that some effort is made to even out the effect of government buying. They have a system which gives to areas where there is considerable unemployment a preference in government purchases. They have a differential advantage of 6 per cent on government contracts for the supply of material, and a differential of 12 per cent where their competitors are foreign firms. This is a principle which might very well be considered for Canada. It has the advantage of tending to disperse vital industries across the country so they are not so vulnerable from a military point of view.

There are many other ways in which the United States government tries to relieve this problem. For instance, I have with me a publication of the United States department of commerce which has the title, "What will New Industry Mean to my Town?" In this publication they study the effect of the establishment of new industries in two small towns in two entirely different parts of the United States. They point out that such developments increase employment, stimulate business and have many other beneficial effects. They also point out that this creates certain problems for the small towns concerned, and that the effects of the creation of new businesses in small communities are not all on one side of the ledger.

Then, too, the United States government is very careful to try to assure that small businesses get their share of government contracts. There is a publication here from the small business administration of the United States government entitled, "U.S. Government Purchasing Directory". In it they point out that in various ways they encourage small businesses to tender for the supplying of materials to the defence department and other departments. In the foreword to this publication I find the following statement:

One of the major responsibilities of the small business administration is to carry out the policy of congress, as stated in the small business act of 1953, as amended, that small business concerns should receive "a fair proportion of the total purchases and contracts for supplies and services for the government".

This is a concrete illustration that our neighbour to the south finds it not only possible but advantageous to try to encourage

2292 HOUSE OF

Economic Rehabilitation small businesses in the extremities of the country to get their fair share of government contracts, and in that way share equitably in whatever prosperity their country may enjoy.

It is not my intention, Mr. Speaker, to take up any more time of the house, except to say that in principle I heartily support the resolution before us.

Topic:   ECONOMIC REHABILITATION
Subtopic:   REQUEST FOR PROVISION OF ALTERNATIVE EMPLOYMENT WHEN PRINCIPAL INDUSTRIES CLOSE
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March 19, 1956