March 30, 1957

SC

Frederick George Hahn

Social Credit

Mr. Hahn:

Your selling policy is wrong.

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Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Chesley William Carter

Liberal

Mr. Carter:

I do not know if the Social Credit party can print enough money to enable the Social Crediters to eat all the wheat. If they could do it, well then I think they deserve some attention, but personally I would like to see some proof of it.

We have heard a great deal here in recent weeks about price supports for such commodities as eggs and cheese. That does not indicate that there is any shortage of these commodities. The hon. member for New Westminster just said that in his opinion there was no shortage of consumer goods.

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

Frederick George Hahn

Social Credit

Mr. Hahn:

Right.

Topic:   THE BUDGET
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LIB

Chesley William Carter

Liberal

Mr. Carter:

Well, I do not take issue with him on that point, but I am saying the Leader of the Opposition pointed out there was too little production. I think there is too little production of certain basic metals, such as steel, which are required for heavy construction, for the building of factories.

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SC

Frederick George Hahn

Social Credit

Mr. Hahn:

I said that, too.

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LIB

Chesley William Carter

Liberal

Mr. Carter:

And means of increasing production generally; but the time will come, with our present rate of increase in population, when Canada will be able to carry economically an increased production of those commodities. At the present time, with our small domestic market, it is not economical for us to invest in the production of those commodities unless we are prepared to subsidize them.

Unlike my hon. friends opposite, I should like to assure the Minister of Finance that, despite anything Mr. Donald Gordon might say, we in Newfoundland are really thankful for small mercies. We appreciate the increases which have been granted in blind pensions, old age pensions and veterans allowances; we appreciate them all. We admire the skill with which the Minister of Finance has been able to make those benefits available to so many Canadians.

The hon. member for New Westminster, who preceded me, read a statement into the record showing comparisons between pensions

paid in the state of California and those in Canada. Comparisons of this kind are apt to be misleading to the house and to the public in general unless the complete story is told. The only point I can see that he was making was that his province of British Columbia should be doing more for needy people between the ages of 65 and 70.

I do not dispute the fact that people in California may be receiving pensions of $89 a month, but along with that we should also know two things. In the first place, I think it should be emphasized that that pension is paid not by the federal government of the United States but by the state government of California. In that connection I think the public should also be told on what basis the need was calculated before the pension was made available, and also whether the people of California paid a state income tax in addition to the income tax paid to the federal government.

Topic:   THE BUDGET
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SC

Frederick George Hahn

Social Credit

Mr. Hahn:

Mr. Speaker, I understand the state of California and the federal authorities have a joint pension scheme.

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

Alfred Johnson Brooks

Progressive Conservative

Mr. Brooks:

That is right; the state pays part and the federal government pays part.

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LIB

Chesley William Carter

Liberal

Mr. Carter:

There are two aspects of the budget which, in my opinion, deserve special consideration. The first is its emphasis on the fact that the danger of inflation is not yet over, and the second is its emphasis on the importance of personal savings. With respect to inflation, although the policies initiated by this government are showing signs of success it is well to remember that the battle is not yet won. In my opinion the greatest danger of inflation is the possibility of our adjusting our attitude toward it: that we might come to accept it as a normal condition, as something that we must learn to live with. Already there is a growing tendency in this direction, and even some economists have gone so far as to say that a little inflation cannot do very much harm. Well, such attitudes as these are not conducive to victory in the battle against inflation.

We must keep in mind, and it is our duty to keep before the public, that inflation slowly eats away the purchasing power of our dollar. It depreciates the value of our investments, of our life insurance and of our personal savings; it works hardships on pensioners and on people who have to live on fixed incomes. And, as the hon. member for New Westminster pointed out, it tends to price our goods out of foreign markets. For all these reasons we must not forget that inflation is a bad thing and something with which we must come to grips, because even in small doses it is harmful.

The Budget-Mr. Carter

Last year inflation increased by 3 per cent. If that rate of increase should continue for 20 years, then in another 20 years' time our present dollar would be worth only 40 per cent of its present value, and personal savings would be reduced in value by 60 per cent. Another thing we must also keep in mind, and keep before the public, is that inflation cannot be controlled by government action alone. It is a job for everyone, for business, for industry, for labour and for consumers. We all have a part to play and a responsibility to fight against inflation.

It is true that we cannot do much about inflation which is caused by conditions outside of Canada in other countries with whom we have dealings and particularly those with whom we trade; but by all working together with a singleness of purpose there is much we can do to control those inflationary causes which originate inside of Canada. We must stop thinking negatively about inflation and start thinking positively, not in defensive terms, of adjusting ourselves to it or protecting ourselves against it, but in terms of reversing inflationary trends. I should like to point out that the reversal of inflationary trends does not necessarily mean deflation. We should be thinking more in terms of purchasing power and less in terms of dollars.

Some time ago I came across a story which I think gives some indication of what can be done.

In Holland several years ago a businessman who manufactured foodstuffs called his employees together and told them he would like them to assume equal responsibility with him in serving the people of Holland. From the discussions that followed it evolved that his employees thought it would be possible to increase production by 20 per cent, but before doing so they wanted to know what he would do if that 20 per cent increase in production was brought about. They wanted to know whether it would be distributed in the form of dividends to shareholders or whether the savings would be passed along to the people of Holland in the form of lower prices for the commodities produced. This manufacturer agreed to take the second course, and he and his employees working together were thus able to make an important contribution to the stabilizing and appreciation of the Dutch currency, as well as to lowering the cost of living in Holland.

That is a simple story but it is true. I think it is worth noting, because it demonstrates the pattern of statesmanship which must be forthcoming from business and labour and government. We must all work together if we are going to be successful in this fight

The Budget-Mr. Carter against inflation. If we follow that example, think of the benefits that will result. Instead of decreasing, the value of our dollar will increase and it would have more purchasing power. We will be in a better competitive position in foreign markets, and there will be an improved standard of living for old age pensioners and those who must live on fixed incomes. In fact everybody will be better off and nobody worse off.

The second aspect of the budget which deserves special consideration is the incentive it offers for personal savings. The Minister of Finance is to be congratulated upon emphasizing and encouraging this old fashioned virtue. When we disregard it, either on a personal or national level, we do so at our peril. Personally I would like to have seen the Minister of Finance go a step further and place restrictions on instalment buying.

Instalment buying serves a very good purpose and benefits a good many people, particularly those in the lower income brackets, but like all good things it can be overdone. When instalment buying reaches the point where goods can be purchased with no down payment and three years in which to pay it is certainly not conducive to personal saving. Unless some limitation is imposed I believe the point will be reached eventually where it will become harmful to our economy.

In days gone by it used to be considered wise to save money in order to purchase higher priced articles at a discount, and business firms encouraged this by offering discounts for cash. However, today many firms prefer to give credit rather than to get cash. This practice cannot be said to be economically wise, because this form of instalment buying, with no down payment and payments spread over a period of three or four years, together with a continuing increase in the consumer price index, means that it no longer pays to wait and save in order to purchase at a discount.

Let me give a concrete example. Suppose a consumer wishes to purchase a bedroom suite, a television set or something costing around $300. Under instalment buying he would have no down payment to make and three years in which to pay, which is roughly $100 per year. Let us say the firm charges 10 per cent for carrying charges. At the end of three years that man has paid $330. If he had waited and saved his money the actual increase in the consumer price index, even if it was at the average rate, would still bring the cost of that article up to about $330. Under instalment buying he would have had the use of it for three years for nothing.

There are many cases where the price of goods has increased even more than the

average rate, and in those cases it is much cheaper to buy under the instalment plan than to pay cash. This sort of thing in time must produce inflation. If 25 or 30 per cent of a man's income is tied up in long-term payments for the purchase of his house; if another portion of his income is tied up in the purchase of a car; if another portion is tied up for three or four years in the purchase of household articles, there eventually comes a time when there is a serious reduction in the number of dollars available for consumer spending, and this in turn will have a harmful effect upon our economy.

I was amazed at the total increase in savings of $1,052 million in 1956 and that it had been distributed so evenly throughout the nation. The budget tells us that it was 37 per cent for corporations, 33 per cent for government, and a little over 25 per cent for personal savings. This in itself is an indication that the tight money policy is proving effective and producing good results. But it seems to me that the tight money policy is a rather blunt instrument for such a delicately balanced economy as we have in Canada.

The disadvantages of the tight money policy are that it works a hardship on small businesses which do not have the financial resources available to larger firms, and it affects adversely regions like the Atlantic provinces where development needs to be accelerated rather than retarded. In my province, especially in the St. John's area, it is creating a severe handicap for the home building industry. I know these restrictions on home building are based on the assumption that the workers employed in that industry can be diverted to other types of building construction. That may be true as far as the mainland is concerned, but it does not apply to any extent in my province. The expenditures being made there on public buildings by the federal government this year will not affect to any extent the economy of Newfoundland. In the main the contracts for this work will go to mainland firms, and to a large extent the materials will be brought from the mainland. Many of the skilled workers will be brought from mainland communities.

The home building trade reaches out to almost every sector of the community. I do hope the Minister of Finance will be able to devise some means of modifying the tight money policy so it can be adjusted to meet differing conditions and wielded with greater precision.

Another feature of the budget for which the government deserves commendation is the special attention it has given to problems of

the maritimes. We rejoice with our colleagues from the maritime provinces at the offer the government has made to finance thermal power stations in Nova Scotia and New Brunswick, and also at the increase in freight rate assistance under the Maritime Freight Rates Act. As a representative of Newfoundland I wish to voice special appreciation of the government's intention to undertake a fresh and comprehensive examination of the entire transportation system of the Atlantic provinces.

We welcome this assistance, which will make our products more competitive in mainland markets. Our most urgent need, however, is some relief from the excessive cost of transporting goods coming from the mainland into the province, which has such an adverse effect on our cost of living. I would point out to hon. members that freight rates do not constitute the only transportation cost. There is also the excessive cost of packaging, because goods shipped from the mainland to Newfoundland must be packaged as if for export, and the increased cost of doing so is also reflected in our cost of living. That is one reason a standard gauge railway is so necessary in our province.

Before I resume my seat, Mr. Speaker, I would like to bring to the attention of the government the problem of fluorspar producers in my riding. To the best of my knowledge the only fluorspar mines in all Canada are located in the town of St. Lawrence in my riding. There are two companies operating mines there. One is a subsidiary of the Aluminum Company of Canada, and they produce fluorspar for their own requirements; not, of course, their total requirements, but only a small fraction of them. The other company is a private company which has been producing for export. Some years ago this company was fortunate in being awarded a contract by the United States government, but that contract is just about to expire and unless the company can get a share of the Canadian market the mine will have to close down, with the result that some hundreds of miners will be unemployed.

Mr. Speaker, it is impossible for this company to compete with ore coming in from Spain and Mexico. This ore comes in to Canada completely free of duty. Our miners at St. Lawrence get between $10 and $14 a day in wages while their counterparts in Spain and Mexico receive between 80 cents and $1.00 a day.

Mexican fluorspar coming into Sydney can be brought in for around $22 or $24 a ton. It costs that much to produce a ton of fluorspar at St. Lawrence, and in addition there is a freight charge of $3 or $4 a ton between

The Budget-Mr. Rea

there and Sydney. That still leaves no provision for a fair margin of profit on the operation. The same is true of fluorspar destined up the river to the Algoma Steel Company and other places. Unless something is done to enable this company to compete in the Canadian market this little industry, which is the only one of its kind in Canada, will be forced to curtail its operations and may even have to close down all together.

I do hope the minister and his colleagues will be able to do something about this, by tariff protection, freight subsidy, or even by imposing import quotas to alleviate this situation and enable this industry to survive.

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PC

Charles Edward Rea

Progressive Conservative

Mr. Charles E. Rea (Spadina):

Mr. Speaker, in rising to enter this debate on the "dribbling" budget which has been introduced, or we might call it the "jack of all trades" budget because it contains a little bit of everything but not much of anything, I wish to say that it shows up just one thing, the fact that the people of Canada were overtaxed. That is what the surplus means, overtaxation of the people.

The embarrassment of having so much money left over presents an awkward problem for the government, and apparently they have not known what to do with the surplus. I am sure there are many hon. members here on both sides of the house who received many letters from old age pensioners before the budget came down, telling them their problems. I know I had a lot of them, and I know other hon. members had a lot, too. Hon. members over there on the other side must have had them. Can you imagine how ashamed those government members must have felt when, after the budget came down, they had to go back to these senior citizens and say, "We can give you only $6 more a month."

Six dollars. That is less than 20 cents a day, or about three-quarters of a cent per hour. That is all the government is going to give them, with a surplus amounting to close on $500 million. What is going to happen to these old people? I wonder whether supporters of the government have visited these people in the homes where they are living, and talked to them about their difficulties. I want to tell you, Mr. Speaker, that they are one of the responsibilities this parliament should assume. The conditions in which some of them are living now are terrible.

I want to say that the responsibility should be laid squarely where it belongs, on the doorstep of this present government. Yet the government turned away and abolished the tax on soft drinks. Does anyone imagine that the soft drink manufacturers are going to make larger bottles so consumers will

The Budget-Mr. Rea

get an ounce more, and that the advantage of the tax concession will be passed on to the public? No, Mr. Speaker; the public will get just the same as they got before the tax was taken off.

One hears a lot of talk about tight money. Certainly money is tight, but the government is controlling it like a man turning a faucet on and off. It says, "You can have money today, but you cannot have it tomorrow." This creates great difficulty for small businessmen and those in similar positions. A man who owns a little store, for instance, will wish to buy some clothes or merchandise, and his banker is willing to advance the money necessary. But a little later, when he wants to do the same thing again, the banker says, "Not today. The faucet's off." I want to tell you, Mr. Speaker, that this situation is very serious, and that it is having an adverse effect on our whole economy.

The people of Canada, especially the working people and the white collar men, are almost round shouldered because of the rate of taxation. They are carrying a terrific burden, and they don't know what to do to make both ends meet. The prices of food and clothing, rent, and the cost of money have all gone up, yet there have been no income tax exemptions in favour of such people. These people are in a tough and bad situation, especially white collar workers who do not have a union to help them obtain pay increases when they think they are entitled to them.

Families who live in cities today may not have more than two children, and even then they hope these will be both of the same sex. If not, when the children become older it means having another bedroom, and this involves paying more rent or getting a bigger house. The way rents are today that presents quite a problem.

I had a chap call me the other day. Three years ago he bought a little house, a new one. He has a $6,600 first mortgage, and in order to secure a $2,500 second mortgage he had to agree to sign a mortgage for $4,000 before he could get the house. He now has four children, and he is steadily going into debt. Last week the quarterly payment on the second mortgage came due. All he could do was pay the interest of $55; he could not pay the $75 off the principal. The people who hold the second mortgage told him that if he did not pay by this coming Monday they would pick up the first mortgage and foreclose on him.

What is that chap going to do if he loses his house? There is only one answer. He will go back into rooms again with his wife and four children, and I do not suppose he will ever be able to raise enough money to

make a down payment on a house. But just think what a higher exemption on his income tax would have meant to him. He would be all right today with only a small additional exemption on his income tax. It would have helped him out of his present difficulty. I am almost sure that Central Mortgage and Housing Corporation is beginning to hear many stories similar to the one I have related.

I should like to speak for a moment about the indecent literature that is coming into our country. We hear a lot about it and I had received many letters about it, but I did not know how bad the situation was until I made an investigation in Toronto. I went to several newsstands and bookstores, and all I can say is that it is a shame that anybody old enough to read can buy the trash I found there. I could not believe it was as bad as I found it to be. I realize, of course, that the Minister of National Revenue cannot spend all his time reading everything that is published or that comes into this country and be a one-man censor, but the government has to do something about the situation. Just because there seem to be many aspects to the problem the government sits back and does not tackle it because it looks too big, and there is this, that and the other thing to worry about. The problem is not a simple one, and when a problem is not simple the government does not want any part of it.

There is also a problem arising in the city of Toronto having to do with transportation. Toronto, like many other cities in Canada, is growing quickly and with this growth comes growing pains. Some time ago a subway was built on Yonge street and it has been very helpful in relieving the traffic situation in that area. It resulted in the old street cars being removed from Yonge street and automobile traffic can now move more freely. We are now faced with the situation that we need an east-west subway for the very same reason. People get off the Yonge street subway and they have to fight like mad during rush hours to get on the street cars.

It will cost a lot of money for an east-west subway, but I think the project could be financed by the metropolitan council paying 50 per cent, the provincial government 25 per cent and the federal government 25 per cent. Right away someone will ask why the federal government should be concerned. The particular reason is that a subway comes under civil defence activities. What would have happened in London, England, during the war if they had not had the subways? Think of the additional loss of life involving children, women and teen-agers if they had not had the subways in which to take shelter. We may need such protection some

time in our big centres, and I think we all realize that the civil defence problem in such places is very hard to overcome.

Not long ago I had the opportunity in Toronto to see some movies on civil defence, and a physical demonstration. It was an exceptionally good performance, and in my opinion many of us have not realized how important civil defence is and how much we may need it almost in the twinkling of an eye. I should like to give credit to the thousands of people who are really doing a job so far as civil defence is concerned, perhaps without any thanks from the rest of us who take so much for granted.

At this time I should like to pay a tribute to those inspired Hungarians who tried so vainly last fall to overthrow the yoke of communism. When one goes back and reads their history one finds that in March of 1848 the famous March laws were enacted. Imagine seeing in that year such things as responsible government, popular representation, the right of public meetings, absolute religious liberties, universal equality before the law and universal taxation. Can you imagine such laws being put into force 109 years ago? Does this not show that these people really know what democracy means? No wonder they fought so hard for these things. We are very proud to welcome these people to our country, and in that regard may I say once again that we need more immigrants. However, nobody knows what the policy of the immigration department is. I hope the department will bring more people here not only from Europe but from other commonwealth nations.

Once again, as I did last year, I want to draw the attention of the government to the importation into Canada of electrical equipment that does not come up to the standards required of such equipment manufactured in this country. As most hon. members know, a plant in Canada manufacturing fixtures and appliances must first get approval to sell these articles, and to get that approval the articles must measure up to very high safety standards. The materials must be approved. They must be of high quality. Yet similar lamps and appliances can be brought into this country and they do not have to meet the rigid inspection and conform to the rigid regulations required in the case of the Canadian products. Therefore the imported articles are a lot cheaper.

But that is not the worst feature. These imported fixtures and appliances cause loss of life through fire. Do hon. members realize that in the last six years damage to property caused by fires due to electrical defects has amounted to over $55 million, 82715-183

The Budget-Mr. Rea

and that hundreds of people have been disabled and dozens of people killed? Why cannot something be done to stop these articles coming into the country? All the provincial departments concerned have indicated that they want something done, and the only reason nothing has been done is that this government will not take the lead to bring together the provinces and the manufacturers' association representing those who make these things in order to work out something so these appliances and fixtures cannot be brought into Canada unless they conform to our safety regulations.

There are many things to worry about in connection with the problem. The ten provinces have to be brought together and the details have to be worked out, but the federal government cannot be bothered doing it. They are too complacent. They have not the energy they had 20 years ago. Old age is beginning to show, and you can see the results all the time. Therefore they do not do anything about the problem.

Many people in my riding are very much interested and concerned about the situation in the Middle East. For the life of me I cannot understand why anyone with any intelligence-and we expect that the average man and woman over 21 has some intelligence-can place any faith in anything dictator Nasser says or does. Let me give you the reason. Let us review for a moment some of the things he has said. Here is one statement Nasser has made:

The war between us and Zionism has not yet ended, and perhaps has not yet even begun. For us, this war of tomorrow or of the near future means the ending of a disgrace, the realization of a hope and the regaining of rights.

Those words are taken from Nasser's introduction to the book entitled "This is Zionism", published in Cairo in 1955. We will recall that several years ago we heard a lot about another book written by a man named Hitler. I would now like to read a comment by the Egyptian minister of state, who said:

Wait and see, Ben Gurion! Soon will be proven to you the strength and will power of the Arabs. Egypt and the Arab nations will teach you a lesson and quieten you forever. Egypt will grind you to the dust.

Those words of the Egyptian minister of state were taken from the official newspaper of the Egyptian government published in April, 1956. Another comment made by him over the radio in a "Voice of the Arabs" broadcast in April, 1956, was:

There is no reason why the faithful fedayeen, hating their enemies, should not penetrate into Israel and transform the lives of its citizens into a hell. Yes, brother and sister Arabs! The fedayeen will be victorious because their motives are holy

The Budget-Mr. Rea

and their aims are the highest. They will be victorious because they are more diligent in death than Israel is in life.

In another broadcast on January 12, 1956, he said:

Peace between us and the Jews is impossible. As far as we are concerned, it is a matter of life and death, not a dispute over frontiers or interests. Nor is it a difference over viewpoints which require mediation for settlement. The Middle East cannot hold both of us. It is either we or them. . . . There is no other solution . . . Steel and bullets will realize our objectives.

Yet, knowing all these things, the Minister of External Affairs helped to put the pressure on Israel to withdraw from the Gaza strip without any definite guarantees. You know what is going to happen as well as I do.

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LIB

Marie Ann Shipley

Liberal

Mrs. Shipley:

Nonsense. How silly can you get?

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LIB

Joseph-Alphonse-Anaclet Habel

Liberal

Mr. Habel:

Would you sooner declare war?

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PC

Charles Edward Rea

Progressive Conservative

Mr. Rea:

Declare war?

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LIB

Joseph-Alphonse-Anaclet Habel

Liberal

Mr. Habel:

Yes.

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PC

Charles Edward Rea

Progressive Conservative

Mr. Rea:

No, I did not say anything about war; that is your problem, not mine. Has Egypt the right to return to Gaza? We heard something about that the other day in this house, and I would like to tell you something more about that situation. We have heard a great deal of the armistice signed in 1949.

Egypt originally gained possession of the Gaza strip by its invasion of Palestine, which was intended to prevent by force of arms the implementation of general assembly and security council resolutions. This military occupation was acknowledged more than nine months after the invasion by the terms of the Israel-Egyptian general armistice agreement of February 24, 1949. Since the territory is not Egyptian, the inhabitants not Egyptians, and since Egypt itself continued to regard the strip as an occupied territory, any claim to return to it would be derived exclusively from the armistice agreement.

The main purposes of the armistice agreement were to end any warlike or hostile acts between the parties, and to facilitate the transition to permanent peace. These purposes were fully endorsed by the security council in its resolution of August 11, 1949, which was not challenged by either party at the time.

The subsequent claim of Egypt that a state of war continued between the two parties, in spite of the armistice agreement, and the claim that Egypt was entitled to exercise belligerent rights, were categorically rejected by the security council in its resolution of September 1, 1951, and the continued validity of this resolution was reaffirmed by the president of the security council on January 13, 1955.

Egypt refused and still refuses to renounce her unilateral claim to a state of war and bel-

ligerency, while at the same time claiming that Israel remains bound to implement armistice provisions selected by Egypt.

By the armistice agreement Egypt retained occupation of the Gaza strip as a non-belligerent. Egypt now seeks to regain possession of that territory outside her borders but in her self-assumed capacity as a belligerent power. There is no such right under the armistice; in fact such a right is not within the letter or spirit of that treaty, and is not compatible with the decisions of the security council. During the Rhodes armistice negotiations the Egyptian representatives did not put forward the contention that a state of war would continue to exist after the signing of the treaty. Had they done so it is certain that the 1949 agreement would not have been signed at all, as no Egyptian rights in respect of Gaza would have come into existence. The claim to return and the claim to a state of war therefore cannot coexist, and nobody can assume that Egypt has any automatic or unqualified rights to the Gaza strip.

According to a report I read in a recent issue of a local newspaper the secretary general of the United Nations who visited Nasser called in the president of the Chase National Bank for discussions. I wonder just what that means. I wonder how much more money we are going to give to Nasser. Is he going to receive all the money he wants with which to build the Aswan dam, in addition to collecting tolls from ships that pass through the canal? It rather appears that it pays to be a dictatorship instead of a democracy, because other countries seem to take more interest in you.

On the basis of all we have heard and seen, the discussions we have had on the budget and all the little dribbling things this government is giving out to the people-of course it is election time-and on the basis of the talk we have heard about inflation and the attitude of this government and events of recent days there is only one conclusion to which one can come. What this country needs is not a good 5-cent cigar but rather a darned good Conservative government.

Topic:   THE BUDGET
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?

Some hon. Members:

Oh, oh.

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LIB

Robert Henry Winters (Minister of Public Works)

Liberal

Mr. Winters:

There is no such thing.

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LIB

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

Liberal

Mr. Dickey:

That is a contradiction of terms.

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CCF

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

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

Mr. Knowles:

Is the Tory party an alternative to a 5-cent cigar?

(Translation):

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LIB

Joseph Louis Rosario Fontaine

Liberal

Mr. Joseph Fontaine (St. Hyacinthe-Bagot):

Mr. Speaker, the people of Canada are now aware of the contents of the budget so brilliantly brought down on March 14th last by the Minister of Finance (Mr. Harris).

I believe that in all fairness we can say that the policies contained in the budget are satisfactory to the Canadian people since they benefit every class of the general population. In the field of social security legislation, the increase made, slight though it be, will, in the first place, bring some solace to old age pensioners.

Many had looked forward to a larger increase in this pension, and had hoped it might be $10 instead of $6. However for my part instead of the present increase I would have preferred that the age limit, which is now 70, according to our present old age pension act, be lowered to 68. As I said here on January 15 last, I would have preferred an extension in the scope of the act rather than an increase in the pension in effect at that time.

Had this lower age limit been provided, it would have been of greater benefit to more people. As it happens, a great many people between the ages of 65 and 69, who do not now qualify for old age assistance because they are in receipt of some revenue, find it hard to maintain a decent standard of living, in keeping with the fruits of their labour. I can understand that my suggestion was not entertained by the minister, but I do take some comfort in the thought that perhaps the next amendment to be brought to our old age assistance act will be such as to implement the suggestions I have put forward.

Also the amendment made to the Family Allowances Act, which, as a whole, is the equivalent of an increase of 15 per cent will surely be beneficial to our large families, especially among the labouring and agricultural classes. The increase in these two items of our social legislation will mean an extra expenditure of $132 million for the Department of National Health and Welfare.

The budget also refers to a new project, that is a hospital insurance plan which is now being submitted to every Canadian province. In my view, that bill will mean for Canadians a measure of security which they have never known. Up to now, five provinces have shown their willingness to take advantage of that proposal. As far as my province is concerned, I wish, as do all well-meaning Canadians of the province of Quebec, that the provincial government will come to an understanding with the federal government on that matter which, in my humble opinion, is, I repeat, of vital importance to our population.

On February 11, 1957, in a televised broadcast, the Prime Minister of this country (Mr. St. Laurent) announced that his government had offered to co-operate with the ten Canadian provinces in the introduction of a hospital insurance plan which would protect Canadians 82715-183J

The. Budget-Mr. Fontaine against those heavy expenses. These bills, as many of us know from experience, are sometimes a crushing burden for families unprotected by any private insurance plan.

The federal government's proposal takes into full account the provincial responsibilities in the field of public health and welfare. That is why the central government has no intention to substitute itself to provincial authorities in the administration of this plan.

The purpose of the government is to assist provinces which so desire to protect Canadian citizens against hospitalization costs and diagnostic services costs for in-patients. On the same occasion, the Prime Minister stated the following:

I am confident that the day is not very far when a sufficient number of provinces will have evidenced their desire to avail themselves of the federal offer, so that it can be implemented. Already five provinces have indicated their intention to accept the federal proposal and negotiations are continuing with other provinces.

Mr. Speaker, since the beginning of the budget debate, we have heard some members of the opposition criticize the budget and say that it was unrealistic, since it brought no reduction of taxes. I believe it is fair to say that if there is no substantial reduction for the taxpayers, the Canadian people in general will enjoy certain benefits which, to my mind, are much more necessary and certainly will be more appreciated by the people than the slight reduction which could have been granted in the circumstances.

I am sure that the people will be more appreciative of the hospital insurance plan, of the increase in family allowances and of the increase in the rate of old age pensions than it would have been of a slight income tax reduction such as was claimed by the opposition. Personally, I am not opposed to a lowering of the income tax and I even believe that it would be advisable to review the case of wage earners. For instance, the basic exemption for a married man, which is $2,000 at the present time, in my opinion should be increased by $500 in view of the high cost of living, that is to say that the worker should normally and in all justice have a basic exemption of $2,500. I think, Mr. Speaker, that of all classes of taxpayers in this country it is the one I have just mentioned which is discriminated against.

So I would suggest to the Minister of Finance that he give serious consideration to my request on behalf of these wage earners, and I am convinced that after a careful study of their case he will come to the conclusion that their lot should be improved.

In another sphere I feel I should bring up a matter pertaining to agriculture and which I think is of vital importance for all specialized farmers, in my region as well as in the

The Budget-Mr. Fontaine areas around Montreal. This project, Mr. Speaker, which I discussed some weeks ago in this house, implies the construction of the Montreal metropolitan market. This market would,-as I explained before to some cabinet members,-not only serve the population of that city, but all people in Canada. It will have a national character and should, I think, be called "National Metropolitan Market".

A few years ago, Mr. Speaker, the federal government, in its foresight, favoured the establishment in the western provinces, of an institution similar to the market now advocated; this institution is called the Wheat Pool. At that time, the whole Canadian people, from east to west, rejoiced because of this federal action and, now more than ever, we loudly agree that this farm body saved the situation for the western wheat producer.

Today, a similar organization, though not quite as big I admit, might be set up in the eastern provinces, that is to say in the Canadian metropolis of Montreal. I submit, Mr. Speaker, that this government should pay as much attention to the setting up of this farm organization, which would contribute tremendously to the betterment of the farmer's condition.

It has always been claimed, and rightly, that to keep our country on a sound economic basis, a prime requisite is to keep our agriculture prosperous, and I am more than ever convinced that financial assistance from federal authorities in this undertaking is indispensable and would be fully justified.

The Metropolitan Central Market Company holds, in the city of Montreal, a splendid site of approximately 110 acres, located close to both the C.P.R. and C.N.R. tracks.

That location, being close to the future Metropolitan boulevard and the contemplated Montreal-St. Jerome highway, will certainly be of easy access and will solve all parking problems. Montreal is the central receiving and distributing market for fruits and vegetables in Canada. This trade, as a matter of fact, has not only a local and provincial activity, but also a national and even international activity. Indeed, according to the monthly report of the arrivals of fruits and vegetables in 1955, the volume of arrivals would amount to 24,865 carloads from six Canadian provinces and 15 British countries or colonies. This operation of import, export or forwarding to other Canadian provinces amounts to an average yearly value of several million dollars. This trade will expand further when wholesalers, retailers or producers will be provided with modern facilities for unloading, storage and forwarding. The Metropolitan Central Market Company has been organized especially to meet those needs.

At present, the fruit market located in the western part of the city is the only reception centre for vegetables and fruits coming in by railroad. Bonsecours market, in the eastern part of the city, is the only wholesale market available to the farmers of the province of Quebec. This division of the wholesale trade results in price fluctuations which contribute significantly to the increase of distribution costs in the eastern part of the country. As a result, the producers in Quebec, as well as in other provinces, suffer an important loss, as they can hardly compete with prices of vegetables imported from the United States, because of the difficult access to Bonsecours market, while farmers have no access to the Canadian National Fruit Market, where the preference often goes to imported products.

It will also be beneficial to wholesalers and jobbers. The establishment of a central market will give a new expansion to that trade since handling, reception and shipping will cost less. Contacts between all those concerned will be made easier and thus great variations in prices will be less likely. As a result, wholesalers and jobbers, their risks of losses being diminished, will be able to sell at lower prices, which is not the case today.

It will be easier to supply small towns in eastern Canada and, also, exportation should be made easier and more economical.

As a matter of fact, there are no parking facilities at Bonsecours market and most dealers feel that it is practically impossible to buy their supplies there. They prefer to go into the city market halls to buy imported fruits and vegetables while similar products equal in quality and cheaper could be bought at home.

Truck gardeners will be able to use this market, which will be open at fixed times. This will result in stabilizing the exaggeratedly large variations in prices during a single day.

Obviously those who will benefit most from this project will be the producers and, to almost the same extent, the consumers since the fact that truck gardeners will be able to set up shop in a convenient location, providing all the space and room required to move, and where they will be adequately protected in the physical sense, will enable them to set out and grade their products satisfactorily. This will no doubt bring about the establishment of more reasonable prices for them as well as for all those who have a hand in this trade.

Everybody knows that, under present conditions, a gardener who wants to sell directly to the trade has to drive to market either the day before or at daybreak, if he wants to get

space; otherwise, he will have to wait for hours and, being discouraged and seeing no chance to get a location on the market, he will sell at a loss. Speculators will then buy this produce and later resell it on small town or big village markets at prices equal to and often higher than those prevailing in Montreal.

It also happens that market wholesalers are practically forced to get rid of their surplus of imported fruits and vegetables on the Montreal market and that farmers are again left with their production.

As regards the consumer, he will benefit by the savings that may result from a more rational, convenient, economical distribution, and a faster one. The produce they will be offered will be fresher and the savings resulting from decentralization of that business will mean lower retail prices. Consumption of fresh fruits and vegetables will increase and contribute to that extent to the maintenance of national health.

Therefore the construction of a central market in the Montreal region is important for producers as well as for retailers, wholesalers and consumers, who in the end have to pay for the excessive costs of distribution of fruits and vegetables, no doubt arising from present conditions. Besides, the Canadian Horticultural Council has made many protests against the poor conditions prevailing on the present market. At one of its meetings that organization unanimously supported a resolution recommending and approving the steps taken by the Central Metropolitan Market Company Limited. I might add that the producers of Ontario, Quebec and the other provinces are all agreed on that point.

The initial cost of that project would exceed $4 million. Already producers, retailers and wholesalers have invested a substantial amount in the project.

The provincial government has granted a subsidy of at least $1 million, part of which has already been paid to the company.

The city of Montreal has granted a similar subsidy for this project.

Better distribution facilities in the main centres of the country are of the greatest importance to Canadian producers. A modern system of distribution is as necessary in Canada as in the United States where the building and development of markets is taking place at an ever-growing pace.

As it is absolutely impossible to create market centres without financial assistance, it seems only fair that the federal government consider the opportunity of legislation providing a generous grant for the promotion of this project.

The Budget-Mr. Fontaine

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Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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March 30, 1957