March 21, 1957

PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

The point you are arguing for takes you that far whether you realize it or not.

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Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

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

Liberal

Mr. Garson:

Mr. Speaker, we have in this debate, however, got one or two admissions from our hon. friends of the Conservative party which are very revealing, very illuminating, and, for our party, very gratifying.

In recent years we have heard a good deal from time to time about the centralizing characteristics of the Liberal party.

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PC

Wallace Bickford (Wally) Nesbitt

Progressive Conservative

Mr. Nesbitt:

Hear, hear.

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LIB

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

Liberal

Mr. Garson:

I hear my hon. friend saying, "hear, hear". This fable has been one of their chief electoral stocks in trade. I hope the hon. member for 'Greenwood does not mind my quoting what he said in the house in this debate on March 19, 1957.

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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

If you quote him correctly.

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LIB

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

Liberal

Mr. Garson:

The hon. member said, as reported at page 2468 of Hansard:

The dominion-provincial controversy has been a long and painful process. If we carry our minds back to confederation we will remember that the "fathers", and particularly Sir John A. Macdonald, expected the provinces to play a very minor part.

As a matter of fact, I suggest that the real policy of the Conservative party, every time it has had a chance to demonstrate it, has always been a very good exemplification in practice of these ideas of Sir John A. Macdonald, who was not successful in introducing them into the confederation legislation which we have; but which ideas, nevertheless, have been sometimes put into effect by the policies of a Conservative federal government, but have not been put into effect at any time by the policies of the present Liberal federal government.

In that connection, sir, we have had some statements by our hon. friends and by their political ally, Premier Frost of Ontario, to the effect that in view of the large budgetary surpluses of Canada, the provinces of Canada have not been fairly treated. I should like to take a few moments to deal with those statements. The newspaper reports, if I may mention them without quoting them, have attributed to Premier Frost the contention that our surplus of nearly $300 million or, as he suggested, it might be as high as $500 million, is too large at the present time and that the province of Ontario and the other provinces have been treated in a niggardly fashion in the light of this budgetary surplus. He and members of this house-and, if I am not mistaken, I think the hon. member for Eglinton-said it just a few moments ago,

The Budget-Mr. Garson referred to the difficulties of the various provinces. Certainly Premier Frost referred to the $4 million deficit which apparently is now in the making under the new Conservative government in Nova Scotia at the present time, and he referred to the difficulties which are being experienced by the province of New Brunswick. Let us look at his statements for a moment.

To the extent that they were intended as a criticism-and they can have no other meaning-of the dominion-provincial tax rental arrangements at the present time with Ontario, amongst other provinces, they are to me not especially convincing. Presumably it was upon Mr. Frost's authority and advice as premier of Ontario that that province signed the tax agreement with Canada in relation to the personal income tax which is now in force. Doubtless it was because he thought that Ontario could do better by imposing double taxation itself in the corporation income tax field that he refused to take up the federal government's offer, which was accepted by most of the other provinces which are in this arrangement, of substantial payments to the provinces if they would forgo their right to impose double taxation in the corporation income tax field.

Now, sir, if Mr. Frost's argument is that he was unwise and wrong when, on his advice, Ontario signed this agreement and that he was unwise and wrong in not having the agreement cover corporation income tax as well as personal income tax, then I suggest, sir, that the further question arises as to whether Premier Frost is wise to criticize himself in this way. I do not think he is. I prefer the wisdom of Mr. Frost as a statesman to the wisdom of Mr. Frost as a self-critic. I suggest that Ontario, like the other provinces, has done very well indeed under these tax agreements, as the figures which I shall place before hon. members in a few moments will show.

If Mr. Frost, in addition to his complaints about his own predicament, goes on so eloquently to state or imply that the Conservative government of Ontario, the Conservative government of Nova Scotia and the Conservative government of New Brunswick are all in financial troubles at the present time in spite of the substantial sums which they are drawing under these tax-rental agreements, the explanation for these budgetary difficulties, I suggest, can be found in causes other than that the federal government has a large surplus, or that the payments to the provinces under these tax-rental arrangements are inadequate or unfair to anyone or to any province.

Manitoba, for example, under a Liberal government and under the same tax-rental

The Budget-Mr. Garson agreement, has been able in part with the payments which it has received under the agreement to accumulate a sufficient sinking fund completely to retire all the dead-weight debt of that province.

Indeed, the more one examines the arguments and the complaints of the Conservative premiers and the Conservative provincial treasurers, the more the suspicion grows that perhaps the budgetary problems and troubles that they seem to be afflicted with are the occupational diseases of Conservative governments. Prime Minister Bennett was always having budgetary trouble. The Hon. Mr. Stanfield hardly gets his premier's chair warm before he, according to Mr. Frost, is in such serious difficulty that he is anticipating a $4 million deficit in the current year.

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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

That is under a Liberal budget which he took over.

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LIB

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

Liberal

Mr. Garson:

I welcome my hon. friend's interjection but point out, however, that if this be so, one of the factors that brings that about is the rate of provincial expenditure, and even if these be in order, the approximately $6 million which Nova Scotia will now draw as an increase in these agreement payments will more than cover this deficit of which Premier Frost has spoken.

As a matter of fact the government of Canada is providing under these new financial arrangements a total of about $640 million to the provinces, an amount 25 per cent greater than was available in the previous year and close to double of all the provincial expenditures in 1945. In order to get these substantial sums of money the provinces do not have to levy a single penny of provincial taxes. Indeed in recognition of their need for tax equalization they get this money by agreeing not to impose taxes in the fields covered by fiscal arrangements. Moreover the amount paid at least to the provinces lacking this taxable capacity is in most cases very much in excess of what they themselves could realize from these fields. But any province that feels the need, and this apparently includes Ontario or Nova Scotia or New Brunswick, of more revenue may obtain it by raising whatever provincial taxes it has not rented or, if it does not wish to rent, by imposing its own taxes on incomes and successions, as Premier Frost has chosen to do in connection with corporation income tax. There is no coercion in these arrangements and a province is free without penalty to make use of its own taking powers in any way it sees fit.

I suggest that one reason why Manitoba and other provinces like Manitoba have done so well under these present and past

tax agreements is that they were wise enough to be a party to them from the very start. Because her Conservative politicians were slow to understand and appreciate the value of these agreements, Ontario for several years passed up hundreds of millions of dollars in rental payments that would otherwise have been available and which only in part were replaced by its own taxes in these fields. Even yet Mr. Frost seems unsure in his own mind as to his proper course. While he is willing to rent the field of personal income taxes, which he apparently regards as less popular, he is unwilling to continue to contribute his help to maintaining a stable system of single corporation income taxes. He intends to impose additional income taxes on Ontario corporations rather than sign a rental agreement with the government of Canada.

It is under these circumstances that objection is taken to the federal government surplus. It is in the light of these facts and figures which I have placed before hon. members that the suggestion is made that the federal government help to the provinces is niggardly. The clear implication is that there is no particular objection to a substantial budget on the part of the Dominion of Canada provided a more substantial portion of it is handed back to the provinces in the form of revenue which they do not have to take the responsibility of imposing a penny of provincial taxation to raise.

That raises the question of whether these fiscal payments are adequate. Of course I do not believe there is any final answer to this with which every person is going to agree. But some interesting comparisons throw light on the considerable magnitude of the provincial payments. As I have pointed out already, they are nearly double the total provincial revenues from all sources in 1945. They exceed all provincial tax sources at the present time by a very substantial amount. They provide about $40 for every man, woman and child in the provinces in which they are made. While it is true that in some provinces capital expenditures must to a greater or lesser degree be financed by borrowing, surely this is not an unusual or abnormal state of affairs. As a matter of fact it is quite in accordance with standard practices, especially in times of very substantial growth such as the present. Certainly it can be shown that provincial services have not been hindered but have been aided substantially by these federal-provincial payments.

I should like permission to table a statement showing the amount of provincial expenditures in 1945-46 and from 1951-52 to

1954-55.

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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

figures?

What is the source of the

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LIB

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

Liberal

Mr. Garson:

The Department of Finance.

The Budget-Mr. McLeod Mr. Speaker: Is it agreed?

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?

Some hon. Members:

Agreed.

: Finance. Mr. Garson: The table is as follows:

Education Highways Health and Total NetBudgets, etc. Welfare Expenditure($000) ($000) ($000) ($000)78,253 84,790 393,061301,459 265,542 1,138,591369,778 286,659 1,295,673355,273 313,743 1,311,022371,339 358,526 1,380,795

This table shows that provincial expenditures upon education, which were $70 million in the provinces in 1945-46, had increased to $196 million in 1951-52 and had increased further to $274 million in 1954-55.

Provincial expenditures on highways in 1945-46 were $78 million; in 1951-52, with the assistance of the tax rental agreements, they had gone up almost four times to $301 million-odd, and in 1954-55 had increased to $371 million.

Provincial expenditures on health and welfare were about $85 million in 1945-46; in

1954-55 they had gone up to $358 million.

The total of all net provincial expenditures was $393 million in 1945-46, and these had increased considerably over four times to $1,380 million in 1954-55.

I suggest that in the face of these figures there is no possible basis whatever for Premier Frost's claim, or the claim of the hon. member for Eglinton (Mr. Fleming) or of the hon. member for Greenwood (Mr. Macdon-nell), that the development and progress of the provinces have been hindered by these fiscal arrangements which have been entered into freely by all the governments concerned. I suggest that the tax agreements and their most recent development under the Federal-Provincial Tax-Sharing Agreements Act have proved among the most beneficial and outstanding of state documents that have ever been produced in this country.

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SC

George William McLeod

Social Credit

Mr. G. W. McLeod (Okanagan-Revelsloke):

Mr. Speaker, we have listened this afternoon to quite a lot of newspaper comment in connection with this budget, especially during the past few minutes. I can assure you that whatever ideas I put forward will be my own.

A week ago tonight we heard the Minister of Finance describe in glowing terms the great wealth producing era we have gone through, especially in the past year, and in some such words as these he said: "The farmers also shared in the general properity. Better crops and greater sales and deliveries have greatly improved the farmers' income." 82715-163

We take no exception to that, Mr. Speaker, because it is a fact, but we note in table two of the budget that was presented to us, where the inventories of the farms are given, that the goods on the farms have decreased by $42 million, showing that the increased income is due in large measure to selling, or to a decrease in the assets of the farms; and I would like to ask the minister if this is a sign that the farmer is making more money. After all, income, or the amount of dollars that comes in, is not necessarily a gauge of the profit being made by farmers, or of the earning power of farmers in a particular area.

The big problem facing the farmer today is to bring the cost of production and the value of the goods produced to such a ratio as will permit a profit, and I am sorry to see that in the budget which has been presented to us there is no sign of assistance and no policy or suggestions of policy set forth that would assist in solving this problem. The hon. member for Acadia (Mr. Quelch) has spoken at length on this subject, and he has set forth policies and suggestions which I am sure would help solve the difficulties which farmers are facing today if the government would heed and follow that advice.

In this budget I do notice one thing, however, that will be of assistance to a certain class of farmers in my own province of British Columbia, and I refer to the fruit and vegetable growers. It is a promise, nothing more than that, but I do hope the consideration that is to be given to the question of tariffs and dumping duties on fruit and vegetables coming into this country from the United States will prove to be advantageous, and I hope the decisions reached will be brought down in the very near future so that any benefit, if there is to be a benefit, will accrue to our growers in that part of Canada in time for the coming crop year.

I am glad to see that a committee has been set up to study land use in Canada. I hope it will gather information quickly and present its findings this year so that

The Budget-Mr. McLeod the next government of Canada will be able to deal with it in the coming year. I am sure we shall find, as a result of the study of that committee, that thousands of acres of land are being cultivated that should be used for grazing and ranching. We shall also find, I am sure, that good land where rainfall and climatic conditions are suitable for grain growing could be opened up in our central and northern areas. I believe we shall also find, Mr, Speaker, that thousands of acres of arid and semi-arid land can be made productive by irrigation, and would provide homes for thousands of new Canadian farmers. I am not forgetting, when I refer to this, the large area that could be watered by the south Saskatchewan river; but I am thinking more of the thousands of acres in my own province that could be made highly productive.

Since coming to this house I have advocated on many occasions a national system of federal-provincial assistance for irrigation as carried on under P.F.R.A., and I would say: why not amend this act by striking out that word "prairie" and substituting therefor the word "national", making it truly national in its scope? I hate the discriminatory policies and the sectionaliz-ation that apply to so many of the projects of this government. Let us get away from this, and foster a spirit of co-operation and fair play from one side of Canada to the other wherever a problem may exist.

Then, our great supply of water in British Columbia, Mr. Speaker, which makes irrigation possible and profitable, also creates the serious problem of erosion. I am thinking of the great damage that has been done in my riding by the Columbia river. This river flows through the city of Revelstoke where old protective walls have rotted or been worn away, and I noticed very recently that a representative of that riding in the provincial legislature in Victoria claimed it was even possible that in the not too distant future there would be a danger that the court house in that city would sink into the Columbia river. He referred to an old wing dam erected by the federal government in 1907 which has rotted away and which was no longer serving any useful purpose.

To the south of Revelstoke we have a serious problem where, slowly but surely, another small townsite, the townsite of Arrowhead, is disappearing beneath the waters of the river. Here a retaining wall which had been built by the federal government has been destroyed by the water and ice of the river during the past several years, and the river has cut a second channel as it enters into the Arrow lake, as a result

of which it is flowing back and slowly damaging the townsite of Arrowhead.

At the present time the Department of Public Works refuses to accept responsibility for this. 1 have brought this matter to their attention on several occasions, and have tried to get their co-operation, but so far the effort has been without avail. However, I would mention the fact that in former years they did assume the responsibility for erecting retaining walls, dams and other protective measures on that river, and the responsibility which they assumed in 1907 has not, I say, lessened since, and I maintain that it is the duty and responsibility of this government to maintain and keep in order these preventive dams or other structures which they have created in past years.

But this is just one more example of the need for a national policy on erosion-a policy that will apply to all parts of Canada. I am in complete agreement, Mr. Speaker, with the planning of measures to reclaim and protect the marshlands of New Brunswick, because I realize it is in the national interest.

At the same time I am, as I said, violently opposed to any policies that discriminate between different parts of the nation and I simply stress the fact again that it is high time that the government placed the whole problem of erosion and reclamation on a national basis.

I am glad to see that the government has decided to assist the Atlantic provinces to overcome the problems of excessive freight rates, lack of transportation facilities and lack of electric power. This is long overdue and such action is needed if this part of Canada is going to take its rightful place in the development of our country. But why just the Atlantic provinces? Again I say, why not look at the problems as they exist from a national point of view, and again I come back to my own province of British Columbia. We have our excessive freight rates. We have our long hauls of manufactured goods from the east. Then we have the excessive mountain rates. We have excessive freight rates in shipping British Columbia fish, fruits, vegetables and lumber to the prairie and eastern markets. Why forget the British Columbia manufacturers and producers as they struggle to overcome the high freight rates that face them in their efforts to enter the markets of Canada?

We also have our transportation problem. We have a growing need for trunk roads. We have a great need for access roads to our undeveloped forests, our mines, our agricultural lands and our power sites. But here I would be remiss if I did not express my

appreciation of the fact that the Department of Northern Affairs and National Resources has agreed to come to the assistance of the province and share part of the cost of the development road in the northwestern section of the province. However, we know that road construction in our province is far more expensive than anywhere else in Canada. Yet the returns for every dollar spent in developing the natural resources of that great part of Canada will pay large dividends to our national economy.

We need railroads. The provincial government is alive to the need and the P.G.E. now connects Prince George to the coast. In less than two years' time the line will be extended 360 miles farther north. The cost will be about $135,000 per mile. Do you know what the federal government has decided to contribute towards the cost of the road? $25,000 a mile and not for the full length but for a mere 50 miles north of Prince George. That represents a total of approximately $1J million for a project that will cost the province of British Columbia $48J million. Again I say that we need a national policy on freight rates and transportation that will apply to the west coast as to the east and to all points in between.

What about power? Industries looking for power have their eyes on the province of British Columbia. I need not tell you what opportunities we have for power development. I think all members are aware of the potential that exists in that province. In fact engineers have not yet been able to assess the true power potential in that part of the country. Again I understand that the Department of Northern Affairs and National Resources is doing something about surveying and making a preliminary examination of the rivers in that part of Canada, and we appreciate that.

We are also glad to know that the international rivers problem is being studied. I trust that the proposed discussions between the Canadian and British Columbia governments on the one hand and the government of the United States on the other will take place in a spirit of friendly co-operation to resolve the many vexing problems. When the discussions are completed I trust that the same friendly co-operation will prevail between the government of British Columbia and the government of Canada to see that the rich power resources of that part of our country are properly developed.

Like most Canadians, Mr. Speaker, I am concerned about the growing deficit in our international trade. It is true that this has been caused in large measure by purchases of steel and heavy equipment not produced in 82715-1631

The Budget-Mr. McLeod Canada. But why have they not been produced in Canada? Why has the government not given encouragement to many of our plants that a few years ago were looking for avenues in which to expand after the end of the war? Why was encouragement not given to them at that time to enter these fields? Why have steel and rolling mills not been established in Canada to process our vast stores of iron ore that are now being sent across the border? Would not encouragement and leadership by the government in the years not too far behind us have paid great dividends to our economy at the present time and thus have prevented in large measure the deficit which we now have?

As the hon. member for Acadia (Mr. Quelch) pointed out the other night, there is one redeeming feature about the deficit, namely, that foreign investors are pouring their money into this country thus offsetting the millions required to meet the deficit. But when I hear discussions about the high interest rates rampant in the country today I sometimes wonder whether there is not method in the madness of our financial and government leaders who are encouraging the high interest rates that we face at the present time. I am satisfied that these investors who are seeking to place their money in this country are doing so in large measure because they are lured by the high interest rates that are available to them here, and I think it is possible that that is the thinking of the government of the country when they encourage high interest rates at the present time.

But our trade deficit is not alone due to the purchase of heavy goods. It is also due in great measure to our failure to sell a fair share of goods in the markets of the world. There must be a reason for this. It is not that Britain and Europe do not want our lumber, bacon, cheese, fruits, fish and raw materials generally. The reason they are not able to buy is simply that they cannot find the dollars with which to pay the price tags we have on our goods. Therefore they are buying where their own money is accepted and where the exchange rates are more favourable.

Years ago, Mr. Speaker, we started to build a curtain around this country when we signed the Bretton Woods agreement. The curtain is getting harder and harder to penetrate as the premium on our dollar rises. That is a problem we must face, and I maintain that we should start now to consider ways and means to promote the freer exchange of the pound sterling and other European currencies for Canadian dollars. We read about the iron curtain around Russia and the bamboo curtain around China that hamper international

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?

An hon. Member:

Not at all.

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SC

George William McLeod

Social Credit

Mr. McLeod:

When the Minister of Finance (Mr. Harris) finished his presentation the other night, the words of that great master of expression, Sir Winston Churchill, came to my mind: Never was so much owed by so many, to so few. Slightly altering it, I would say: Never has a nation owed so much to its people and done so little to repay the debt.

(Translation):

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IND

Paul-Edmond Gagnon

Independent

Mr. Paul E. Gagnon (Chicoutimi):

Mr. Speaker, the eloquence of the Minister of Finance (Mr. Harris) and the learned report he submitted to the attention of the hon. members last Thursday have not met with as enthusiastic a reception among the Canadian people as he might rightfully have wished on the eve of an election. I would like to spend a few moments to give the house my impression of certain figures quoted by my hon. friend.

For instance, early in the new fiscal year the government will pay over to the Canada Council $100,000,000 to be used in further widening the existing breach in our national constitution. This amount of $100,000,000 is meant to further enthrall and enslave the provinces. It will be handed over to a chosen few who will be able to rule the roost in the field of Culture (with a capital C) and whose dictates will set the standards of thought and of science in this country.

To be up to date in matters artistic we will henceforth have to bow to the rulings of these gentlemen designated by the gov-

The Budget-Mr. Gagnon ernment as beacons on the course of higher learning. They will point the way and steer us clear of the rocks. This is what caused the newspaper Le Soleil, a Liberal party organ, to write as follows on November the 22nd 1956:

It is therefore proposed to set up a new commission, with a chairman, a vice-chairman, a secretary and a host of civil servants, yet another administrative bureau which, each year, will eat up a goodly portion of the budget placed at its disposal. It will be readily understood how things cannot be otherwise since we must needs have somebody who will control the administration of the funds set aside for the enrichment of our cultural life. Inevitably-

Mind you I am quoting from Le Soleil- -a few friends of those in power, a few obscure persons will thus be provided with the fairest of havens. This is the inevitable consequence of each new step taken by our governments, with this result that even the most praiseworthy of these cannot always be unreservedly accepted by public opinion.

And so it is that each year sees the growth of its privileged castes, its jobholders-or plain civil servants.

Today, alongside the legislative executive and judicial powers, the civil service constitutes the administrative power, often more important than the others. Civil servants represent the element of stability in government. Ministers come and go but civil servants remain. They exert a daily influence on the destinies of the nation and the mentality of our people. They are all the stronger for their being constantly behind the scenes, reaping no glory for the good that they do, nor shame for the wrongs laid at their door. Their work, always done on behalf of someone else, is seldom known to the public. If they are stupid their errors vanish under mountains of papers and, if they are brilliant, the details of an anonymous, complicated and elusive administration allow them to achieve only partial usefulness.

Fifty million dollars will go into the superannuation fund of these gentlemen, and a like amount into the reserve. And so a hundred million dollars are being camouflaged so as not to display an exorbitant surplus of nearly 400 million dollars. The tax is off on bubble gum but not on children's shoes. Crumbs are handed out to the small fry, in a would-be Santa Claus gesture, while on the q.t., a slice is taken off the parents' pay cheque.

The government, while appearing to fight inflation is actually favouring it by its mania of accumulating surpluses, of forcing the Canadian citizen to tighten his belt and of extracting from the worker taxes which allow the government to indulge in expenditures and gifts which are often extravagant.

Whether it is the people who have too much money or the federal treasury which

The Budget-Mr. Gagnon collects so much that it does not know what use to make of it, the result is the same. There is danger of inflation one way or the other.

But in the mind of our administrators as in the opinion of our centralizing experts, money must be drained away from the taxpayer so that he will be left without anything, if possible. Especially must the income tax never, on any account, be reduced. Everything must be retained, everything must be set aside so that our leaders may be considered cautious and able, be looked upon as philantropists, munificent dispensers of grants and subsidies.

The state has confidence in no one but itself to "develop" the national economy and to direct it along proper channels. We are all aware of the success it has obtained in the field of international trade. We know what markets it has lost and how our export trade deficit is growing constantly.

In spite of promises of financial assistance extended to the Maritime provinces, promises which are meant to correct the unfortunate impression left by the Gordon commission report, in spite of subsidies to fishermen and farmers, and expressions of friendship for everybody, the budget introduced on the 14th of this month is not even a good election budget.

It is the budget of an administration forever surprised by events, whether in the national field or in the international field, as is evidenced by inflation and the Middle East crisis at this time.

Having lacked foresight, having failed in its primary duty, having been unable to foresee the effects which its shortsighted policy was sure to bring about in due course, the government at this time seems utterly at sea.

It is largely responsible for our financial troubles, and the credit restrictions it has seen fit to impose are the result of its record in the past.

What prosperity this country has enjoyed since the war is far more attributable to the vast natural resources of our country and to the work of our people than to the party which governs our destinies. The bounties of Providence must not be ascribed to our present leaders.

The fact that the old age pension has been raised from $40 to a mere $46 shows with what parsimony public monies are being used to relieve public hardship. Millions have been spent for the Colombo plan, for the police operation in Egypt, for the purchase of paintings for the gallery, for television programs, but mere pennies are set aside for the poor, for those who are suffering.

The average increase of $1.40 per month in the family allowance is also quite inadequate. It answers neither the demands of the people nor their needs. It corresponds neither to the unceasing rise in the cost of living nor to the social ends towards which it was originally instituted.

With a surplus of $282 million and a prospective surplus of more than $300 million for the next fiscal year, the government should have been more generous to the mothers of this country, fairer in its estimation of the means and the rightful demands of the people.

The small cuts in indirect taxes announced by the Minister of Finance will be of no benefit to most of our people. These cuts will be absorbed by the wholesaler or lost en route between the manufacturer and consumer.

We are told that each year Canadians spend more than 2 billion dollars on superfluous goods or amusements such as alcoholic beverages, tobacco, horse races, etc.

It would be closer to the truth to say that Canadians are spending part of their revenue on these luxuries and are paying a tremendous amount in taxes for the privilege of doing so. Everybody knows, for instance, that the extremely high cost of any bottle of alcoholic beverage is explained by the fact that on each drink absorbed by the customer, the federal government levies a profit which puts it in a position to be the main beneficiary of this highly dangerous business. The same holds true for the cigarette smoker who pays 17.7 cents tax on each pack of 20 cigarettes, that is 54 per cent of the usual retail price, 117 percent of the retail price minus taxes, and 192 per cent of the manufacturer's price. In the United States the tax is only 8 cents per pack of 20. The smoker is better treated south of the border, and there is no cigarettesmuggling there.

On the other hand I am not convinced that, as stated by the Minister of Finance in his speech, the farmer has benefited from the general rise in national revenue. His bank account, if we are to go by the reports of agricultural groups, has not appreciably increased in 1956, at least not in eastern Canada.

The government is now proposing nothing tangible to put the eastern farmer on a par, financially, with his western counterpart.

One word in passing on a subject which is of particular interest to my constituents.

The dairy industry is the very basis of our agriculture. It represents more than one third of the revenue of the farms of the province of Quebec. It is the main occupation of more than 100,000 farmers. The government should

therefore be most mindful of the security of this industry which is vital to the future of our country.

Millions of Canadians are dependent on its prosperity for their own. Everybody uses its products in one way or another.

In order to protect it adequately and to allow farmers and breeders to make ends meet, the federal government should have appreciably increased the tariff on powdered milk and cheese from Australia and New Zealand.

A revision of the 1931 and 1932 agreement and a substantial increase of tariffs would be helpful to the agricultural class which today, because of the high cost of feed, labour and equipment, is in a deplorable position.

The average income of farmers is not on a par with that of other groups of workers. Their loss of buying power is one of the weak spots of the Canadian economy. A sustained attention and a wise and far-sighted agricultural policy should maintain the existence of our farmers on the same level as that of city workers, tradesmen and professional men.

Apart from measures taken in fields of provincial jurisdiction, the St. Lawrence seaway project and some more or less fortunate contributions in international affairs, it is regrettable that the government should have revealed itself so much of an opportunist, so unmindful of the welfare of the working classes, particularly with regard to the unemployment prevailing to an alarming degree every winter.

Jobs must be found for seasonal workers who are idle during off seasons.

Unemployment means the loss of considerable production which impoverishes the victims and upsets our economic system. I urge greater respect and more consideration for workers, farmers and taxpayers, a good will expressed not merely in words but also in concrete deeds.

When it is suggested to the Minister of Finance bilingual cheques should be mandatory, he protests and talks of the expense which such procedure would involve. Does he not think that with the surpluses he boasts about this year he could have agreed to that justified claim? Does he not think that he should have announced a reduction of the income tax, which heavily burdens so many people?

I hope that the next time the Minister of Finance will remember the needs of the people and that he will evidence more generosity towards the Canadian taxpayers.

The Budget-Miss Aitken

(Text):

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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Miss Margaret Aiiken@Y ork-Humber

Mr. Speaker, will you call it six o'clock?

At six o'clock the house took recess.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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AFTER RECESS The house resumed at eight o'clock.


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Miss Margaret Aiiken@Y ork-Humber

Mr. Speaker, there are three things about which I should like to speak briefly. First, I believe that thousands of Canadians were bitterly disappointed in the meagre increase in pensions. My particular interest is in old age pensions because there are many older citizens in my constituency. Since becoming a member of this house I have received scores of letters containing personal stories and highlighting the hardships of trying to live on $40 a month. I do not believe $46 a month is going to do much to relieve these hardships.

During this debate we have heard a great deal about tight money, about credit restrictions, about inflation and about income taxes, but those are mere words to pensioners trying to live on $40 a month. Some time ago I attended a meeting of old age pensioners and one gave me a pitiful list of figures which comprised her budget and which I want to put on the record. To me those figures were far more startling than the $5,170 million the Minister of Finance (Mr. Harris) is demanding this year from the Canadian taxpayer.

Her budget for one week was $3.69 for food, which included 67 cents for meat; two loaves of bread totalling 38 cents; 41 cents for tea; 20 cents for sugar; 1 bunch of carrots at 15 cents; and then followed a list of other grocery purchases. She had an amount of $2.90 for drugs which included things like aspirin and a doctor's prescription. Then as extras she showed a pair of shoes at $3.45 and a pair of stockings at 79 cents. This meagre budget totalled $10.83 for the week, or $43.32 for the month, and this did not include shelter or rent.

I shall never understand why the Minister of Finance was so parsimonious with his pension increases. Apparently the minister had to do some pretty fast financial manipulating to reduce that embarrassing surplus. He allocated $50 million to bolster the civil service superannuation fund; $50 million to

The Budget-Miss Aitken create a new reserve account to meet possible future losses on government assets and $100 million for culture. There have been increases for practically every government department with an over-all budget increase of more than $400 million over last year.

This government has produced a budget indicating the biggest peacetime spending spree in Canadian history, but all that it can do for old age pensioners is to provide an increase of 20 cents a day in their pensions. The Advertiser, a weekly newspaper published in Toronto, last year carried a series of articles on the plight of old age pensioners. Case histories were reported to show the difficulties of trying to live on $40 a month. An extra 20 cents a day or $6 a month is obviously not going to do anything to help these people. There was one rather ironical paragraph in this series which I should like to place on the record for all hon. members to digest. It reads:

How to live on $40 a month in four easy lessons. Don't eat. Don't go anywhere, because that will wear out your shoes. Sit around and read, if you have anything to read. Go to bed early so that you don't get hungry.

While still on the subject of pensions, may I say that I am disappointed the government did not include a guiding allowance in the blind pension. Representations have been made more than once in this regard by the Canadian Council of the Blind and the Canadian National Institute for the Blind. I should like to indicate one or two of the pleas made by these organizations. The first one is:

In addition, there should be a special cost of blindness allowance free of the means test paid by the federal government to all Canadians.

The next one is:

Basically, an allowance which would assist blind people in meeting the expense of their blindness would help to equalize their position in society with their sighted competitors.

There are 21,000 blind persons in Canada and I do not believe any group of citizens command greater respect from the rest of us because of their courage, their independence, their self-reliance and their determination to be useful citizens in their communities. The very least a rich and prosperous country like Canada can do for such worth while citizens is to give them a helping hand toward greater independence. The one point program of these two organizations representing the blind states that a special government allowance can provide this assistance. By providing this assistance the government would be giving these people a helping hand toward their own assistance. The program also contains this:

Blindness is serious enough, the blind should not pay for the handicap they carry.

It would take only a small part of the government's vast surplus to implement this humane suggestion. My final point has to do with succession duties. In his budget speech the Minister of Finance said that he hoped to be able to introduce a bill to amend the Dominion Succession Duty Act. I do not know what stopped him from introducing such a bill because there is certainly one gross injustice or more, in the act. During this session representations have been made by several responsible groups urging that changes be made in the succession duty act. I have a brief here from the Weston auxiliary of the local council of women containing the following four suggestions:

1. That the exemption of $50,000 on estates be made a true exemption deductible from the value of the estate before the calculation of duties.

2. That a wife's contribution in the marriage partnership and to the building of the family estate be recognized by exempting from succession duty up to one-half of a deceased husband's estate passing to his widow; likewise, that only one-half the value of a gift from a husband to his wife be subject to gift tax.

3. That a life interest or pension be not subject to succession duty, as this results in double taxation-succession duty and income tax on the same money.

The Canadian Federation of University Women with a membership of 7,000 women has also presented a similar brief to the government, and the Canadian chamber of commerce similarly protests against the federal government levying succession duty not only on the amount in excess of $50,000 but on the initial $50,000. The chamber of commerce describes this as inequality of exemption, and the setting up under the Succession Duty Act of a discriminatory provision. I hope the Minister of Finance will heed these protests and adopt the suggested changes, not at some nebulous future date but now.

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

Gordon Timlin Purdy

Liberal

Mr. G. T. Purdy (Colchesler-Hanis):

Mr. Speaker, in rising to take part in this debate I am reminded that this will be the last opportunity during this session, in fact, during this parliament, when one will be able to discuss matters not definitely related to the problem under review. Today, therefore, I propose to deal with several matters of interest to my constituents and to my province in addition to the budget.

The press has already dealt extensively with the proposal submitted by our Minister of Finance on March 14, and I wish to associate myself with the many who have congratulated him on what his address contained and the manner in which he delivered it. While the proposals did not offer a great deal to any specific section of our population, there is something for almost everybody, in addition to special benefits to the Atlantic provinces,

fully in keeping with the slogan of the Liberal party-Unity, Security, Freedom.

Is it any wonder, therefore, that the official opposition, try as they may, from their financial critic to those who have most recently spoken, have been exceedingly weak in their criticisms and lacking in constructive alternative proposals. Again they have adopted the old line of trying to make the people believe that if put in power they would pay out more and collect less and still present a balanced budget, or even reduce the debt as the present administration has done. To my way of thinking, such claims are absurd and I am satisfied that the intelligent electors of our country agree with my views.

The hon. member for Greenwood (Mr. Macdonnell) has accused the Minister of Trade and Commerce (Mr. Howe) of having a war mentality. I am sometimes of the opinion that the hon. member for Greenwood must have a worm mentality. As regards the C.C.F. party, I do not believe that our people want state controlled industry or dictatorship such as would, of necessity, come out of such control.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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Some hon. Members:

We cannot hear you.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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March 21, 1957