February 5, 1959

MAIN ESTIMATES, 1959-60


A message from His Excellency the Governor General transmitting estimates for the financial year ending March 31, 1960, was presented by Hon. Donald M. Fleming (Minister of Finance) and read by Mr. Speaker to the house.


PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Hon. Donald M. Fleming (Minister of Finance):

Mr. Speaker, I beg leave to table the main estimates for the fiscal year 1959-60. Following the example set by my predecessor, Mr. Abbott, in 1950, 1951 and 1954 I propose to make a statement to the house now for the purpose of drawing to the attention of hon. members certain significant features of these estimates.

The most noteworthy feature is that compared with those for the present year, 195859, these estimates provide for a decrease of $39.1 million in the non-statutory items. This decrease reverses a trend of some years' duration. I am glad to report to the house that although this reduction was not accomplished without painstaking effort it has been achieved without any reduction in essential services to the public.

The second significant feature of these estimates is that the government has maintained the level of expenditure designed to assist national development and employment opportunities. Thus it may be seen that in its approach to the financial requirements in the fiscal year commencing April 1 next the government has endeavoured to maintain and foster a high degree of economic activity on the one hand and to exercise the restraint and balance necessary in coping with the inflationary aspects of recovery on the other hand.

Total budgetary expenses contemplated in the estimates for the new fiscal year amount to $5,595,848,557. This total, which includes both expenditures already authorized by continuing statutes and moneys parliament is being asked to appropriate, is compared in the blue book with a total of $5,295.6 million which was the sum provided for in the main, supplementary and further supplementary estimates No. 1 for the current year. Since the main estimates for 1959-60 were printed there have been tabled in the 66968-9-45

house further supplementary estimates No. 2, providing for additional expenditures in the present fiscal year of $28 million, so that the comparable total for 1958-59 now becomes $5,323.6 million, resulting in an over-all increase of $272.2 million. These figures do not include amounts for deficits in the old age security fund, since it is the practice to make such provision in the final supplementary estimates.

The government's approach to the task of preparing the 1959-60 estimates may be of interest to the house. Last year in order to provide employment the government deliberately favoured expenditure which would provide work through construction programs of a capital nature. This year we have expedited and encouraged programs which will provide work this winter. But we have been careful to ensure that we do not add to or extend a program which would build up government overhead without creating immediate employment. On all other items in the estimates our aim has been to apply a firm hand in restraining controllable expenditure without sacrificing essential public services.

There is an increase of $311.3 million in the estimates in the statutory area. It is attributable substantially to two or three items. First is the sum of $160 million for payments to the provinces under the Hospital Insurance and Diagnostic Services Act. The second is an increase of $106 million for statutory public debt charges. This increase may be attributed in approximately equal measure to the increase in the total public debt outstanding and higher rates of interest. In the third place is an increase of $25 million for family allowances, due to the increase in the numbers of those eligible, and $9 million for unemployment assistance attributable to the expected lag in the settlement of claims relating to the current fiscal year.

The over-all decrease of $39.1 million in the non-statutory items was achieved in spite of an increase of $88 million in the cost of administration and operation of all departments. This increase of $88 million is attributable to four items: first, an increase of $20 million in civil salaries and wages; second, an increase of $22 million in the pay and allowances of the armed forces and the Royal Canadian Mounted Police; third, an increase of $19 million in the cost of repairs and upkeep of equipment; and

Tabling of Main Estimates fourth, smaller increases spread over a number of other items due principally to rising costs.

Notwithstanding the increases of $42 million in salaries and wages and pay and allowances, there has been no appreciable expansion in the strength of the civil service of Canada or of the defence forces. While additional responsibilities have been assumed, the overall increase in the size of the government establishment for 1959-60 will be only .4 per cent over 1958-59. This is the smallest annual growth shown since 1951. It demonstrates the government's continuing effort to increase efficiency and at the same time to economize on the use of staff.

The principal factor in the increases in expenditures for administration is the fact that, in addition to the normal effect of reclassification and annual increases, there has been a continuation of the trend toward improved recruiting into the public service and armed forces, and toward lower rates of turnover within the authorized establishment. This has been particularly noticeable in relation to technical and professional grades which are being attracted into the public service within the approved staff strength.

The third factor, namely $19 million for repairs and upkeep of equipment, reflects an intensification of government programs of maintenance and repair.

Another factor contributing to the increased cost of administration is an amount of $8.9 million for travel and removal expenses, notably in national defence. Expenditures under this head are higher in certain years to meet the requirements for larger scale movement of forces. In the forthcoming year a large part of the brigade will be replaced in Europe in the normal rotation pattern.

The capital program reveals an over-all decrease in contemplated expenditure of $65 million. However, it is anticipated that the level of capital expenditure achieved in the current year by most of the civil departments will be maintained, particularly in those areas where expenditures are related to resource development and to employment, such as the departments of agriculture, mines and technical surveys, and northern affairs and national resources. The capital provision for the Department of Public Works is reduced in consequence of the accelerated completion of many public buildings and the inevitable time lag in the completion of plans for new projects. The provision in the Department of Transport, however, will remain at the present high level which has been established to meet the urgent requirements of civil aviation. The decline in the capital program of the public works department is largely offset

by the provisions for the Department of Transport. Thus the government is maintaining a high volume of national works to continue the battle against unemployment.

The requirements of the Department of National Defence on capital account are also reduced. Expenditures in this area, apart from new requirements, are governed by the progress of various long-term defence projects.

Parliament is being asked to provide for loans, investments and advances-which add to the government's active assets-totalling $122,887,799 in addition to those for which continuing authority exists.

Not included in the figures I have thus far mentioned, but noted in the volume of estimates for consideration, are the forecast amounts for old age security pension payments totalling $577,600,000. These payments are not treated as budgetary expenditures since they are payable out of the old age security fund.

The house will see that in planning its spending program for 1959-60 the government sought, within the limits of controllable expenditure, to restrain inflation while at the same time assisting employment and the development of resources.

Mr. Speaker, I move, seconded by the Minister of Trade and Commerce (Mr. Churchill):

That the message of His Excellency, together with the estimates presented this day, be referred to the committee of supply.

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Motion agreed to.


LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Hon. L. B. Pearson (Leader of ihe Opposition):

Mr. Speaker, not having had the advantage of an opportunity to study the minister's statement and the estimates which have just been tabled, it is impossible for me to comment at any length at this time on those estimates. But in view of what the minister has said perhaps it is appropriate for us on this side of the house to point out that the amount of the decrease in controllable expenditures, which seems to be about $32 million-

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinton):

It is $39.1 million.

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LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

-as the minister points out, $39.1 million, is a small amount indeed compared with the figure of $500 million which we used to hear advanced by those now on the other side of the house as to what could be done about reducing controllable expenditures without interfering with essential services. While, of course, we welcome that reduction if it does not interfere with any essential services, it is only fitting to point out that in these estimates, which I think are the highest peacetime estimates in our

history-and the minister will correct me if I am wrong-there is an increase of $272 million over last year, not taking into account the increase of $22 million in expenditures from the old age security fund.

The minister has also emphasized, Mr. Speaker, that the civil service salaries and allowances have been kept well in check. I would point out, however, that during the year there has been an increase of some 4,000 in the number of civil servants, a fact which also is interesting in the light of what hon. gentlemen opposite used to say about reducing the number of civil servants.

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinton):

The hon. member is confused there.

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LIB
LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

I suggest that these estimates which have been put before us emphasize the desirability of the budget being brought down in order to deal with them at the earliest possible moment.

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CCF

Hazen Robert Argue

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

Mr. Hazen Argue (Assiniboia):

Mr. Speaker, like the Leader of the Opposition (Mr. Pearson) we did not have the estimates before us until just a few minutes ago. I would make the suggestion to the government that in future, when the minister makes a very long and comprehensive statement on this subject, it would be a common courtesy if we could have a confidential advance copy of the estimates, as we are given by courtesy an advance copy of the speech from the throne as delivered by His Excellency. I believe somebody said, "The same courtesy as the press". Of that I have no knowledge. But I think it is only fair that when the minister makes a very long statement-something of a preliminary statement to his budget address-the members of the opposition parties should have the opportunity of seeing the estimates in advance.

I think the Leader of the Opposition made some very important points in his short statement. I noted that the minister forecast a decrease in ordinary expenditures of just $39 million, which is a very small amount in relation to the very vigorous statements that we had over the years as to the hundreds of millions of dollars which could be saved if the government squeezed out expenditures which were wasteful and extravagant. The cold, hard fact is that the government has been able to save only a small proportion of that amount it said it would save when it was in the opposition.

We note that total expenditures are going up. Most of those increases we support. As a matter of fact we have played a very active part over the years in promoting some of the increases we have here. I refer particularly 66968-9-45J

Tabling of Main Estimates to the $160 million that will be an additional expenditure to provide hospitalization insurance in various provinces. Although this is an increase in expenditure, and although this would result, normally at any rate, in a similar increase in taxes, we in the C.C.F. feel that this increase is an excellent expenditure and a good investment by the Canadian public. We go further and say that we think the estimates now before us demonstrate once again that no matter what may be the public statements of the party in power to the effect that the government should have a small role in the economic field, the modern trend is for government expenditures to increase and for the government's role in the economy to be expanded. Even under a Conservative government we see that this is the case.

I would suggest that there are other increases and expenditures at this time that the Canadian public would support, and support cheerfully, and I would suggest for one the provision of a comprehensive national health insurance plan. I believe the Canadian nation would support such a program. We do not support the increase that has been made necessary because of increased interest charges on the government debt. We feel that this is an expenditure that was not necessary, an expenditure that should not have been incurred, and a surprising expenditure in light of the Conservative party's record over the years in advocating loose money and lower interest charges instead of the present tight money and high interest policy. We will in the days ahead study these estimates thoroughly and make our detailed contributions on their various aspects.

On the orders of the day:

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L L

William Moore Benidickson

Liberal Labour

Mr. W. M. Benidickson (Kenora-Rainy River):

Mr. Speaker, I wonder whether the Minister of Finance will inform the house as to whether or not prior to the opening of the house he gave to anyone, other than the government, copies of the estimates and copies of the written statement which he proposed to read and did read to the house when it opened.

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Hon. Donald M. Fleming (Minister of Finance):

The practice that was followed today is the practice that was established by my Liberal predecessors and was followed by them for years, including the time that my hon. friend was parliamentary assistant to the minister of finance. He is well aware, Mr. Speaker, that it has been the practice for some years to have a confidential briefing of the press similar to that which occurs at budget

Tabling of Main Estimates time. Representatives of the press were prepared to give the required undertaking to maintain in confidence the information they receive until it is released in the house, and they were permitted to be given the information and be briefed upon it prior to the session. That was done today from twelve o'clock on, and I have not the slightest doubt that the confidence that was reposed in the members of the press was fully respected by them. I do not think my hon. friend is any person to pretend not to know about this, because he was parliamentary assistant to the minister of finance while this practice was carried on for years.

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L L

William Moore Benidickson

Liberal Labour

Mr. Benidickson:

Mr. Speaker, on a question of privilege, the minister himself has indicated that this afternoon he has followed a procedure that has not been used for some years, namely that of a lengthy statement in connection with the tabling of the estimates. It has not been done since 1954. It is true that I served both his immediate predecessor and Mr. Abbott as ministers of finance. My recollection is very clear that with respect to the statement that Mr. Abbott had in mind, by courtesy a copy was sent to the leader of the opposition, just as it has been the practice to send shortly, before the speech is delivered, the budget speech on budget night.

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinton):

Mr. Speaker, on the point of order, it is not and has not been the practice to send a copy of the budget speech to any person before it is delivered. The practice is to send a copy of the budget speech to the leader of the opposition and to the leaders of groups in the house after the minister has begun to deliver it, not before.

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?

Some hon. Members:

No.

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CCF

Hazen Robert Argue

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

Mr. Hazen Argue (Assiniboia):

Since this statement and the opportunity to comment on it are a great deal different from the statement given in advance or at the beginning of the debate on the budget, I would ask the Minister of Finance in a friendly and sincere way whether he would give consideration to the suggestion that leaders of opposition parties be given an advance copy at approximately the same time as the press is given such a copy in a confidential way. I think it is only common fairness to the members of the house.

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PC

Daniel Roland Michener (Speaker of the House of Commons)

Progressive Conservative

Mr. Speaker:

Part of this discussion relates to the business of the house, but I think the question of delivery of a statement prior to the sitting of the house is really a matter between the leaders of the opposition parties and the Minister of Finance and should not be dealt with in open session.

[Mr. Fleming (Eglinton) .1

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CCF

Hazen Robert Argue

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

Mr. Argue:

On the point you have raised, sir, I would suggest that it opens up the question of a point of order, if this is not done, whether the Minister of Finance should have the right to make a long statement, particularly since he has given it in advance to the press without allowing members of the opposition to have the opportunity to see it and study it so they can be in the same position as the Minister of Finance to make comments on the estimates themselves.

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinton):

Mr. Speaker, if I may repeat what I said before, it has been the practice for years to give to the press in the course of the briefing conference that precedes the tabling of the estimates in the house a statement explanatory of the estimates. The statement I read today, Mr. Speaker, simply followed the practice that was followed by Mr. Abbott-

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February 5, 1959