April 11, 1957 (22nd Parliament, 5th Session)


John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Mr. Diefenbaker:

Mr. Chairman, I rise for the purpose of discussing in general the unusual course of bringing before parliament in the last two days of a session a supply motion covering so many hundreds of millions of dollars, without any possibility of examination or critical consideration being given to such fabulous amounts which, indeed, represent as much as Canada expended in a whole year before the war.
As I look back over the records of parliament when parliament was discharging its responsibility and maintaining its prestige, when estimates were carefully examined and critically condemned if improperly included among those presented, and compare that situation with the situation today, I can only say that this method of placing so many hundreds of millions of dollars of expenditure before parliament is a further insult and humiliation to this institution and to its prestige.
Indeed, I say this. It is a contempt of parliament to deny consideration except as provided in this general manner. We in the opposition have been willing throughout to co-operate. We have done our part this session to facilitate the passage of necessary legislation, to permit an election to take place in the month of June.
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There are several matters included in the supplementary estimates, and I shall refer to them to begin with. They include increases in the family allowance, in old age security payments, in old age assistance, in aid to blind persons, in aid to the disabled, in veterans disability pensions and in the war veterans allowance. We favour the increases. We say that, generally speaking, Canadians realize that these increases are totally inadequate to meet the situation created by the failure of the government to take effective action to meet the tremendous inflationary gallop that is taking place in this country.
Indeed, the government is its own major contributor to inflation in this country. It has failed to take any action to reduce unnecessary and wasteful expenditures. These estimates this year exceed anything in the history of this country. Our effort to make a contribution by recommending the reduction of unnecessary expenditures has on every occasion been waved aside, when we have endeavoured to secure the setting up of a commission similar to the Hoover commission in the United States to make a careful, critical and complete examination of expenditures to the end that unnecessary ones shall be eliminated.
There is no adequate opportunity for discussion here. These pension increases deserve an opportunity for full discussion. They should have been placed before committees of the house in order to enable representatives of the people to attend here, give evidence and express their views with regard to the inadequacy of the increases. I say that the attitude taken by the government is a cynical disregard of the parliamentary function of careful and meticulous examination. We succeeded in having a committee set up to consider the estimates. I need not say anything as to the extent to which it has functioned this session. Indeed, there was no opportunity for an effective estimates committee to function unless that committee had the power to call witnesses and to secure the production of documents.
The expenditures today, even in this interim supply motion, amounting to hundreds of millions of dollars might as well be passed without any discussion unless that discussion would draw the attention of the Canadian people to some of these overexpenditures. For after all, whatever stand we may take and whatever desire we may have to examine the expenditures carefully, we have been denied that opportunity at this session to a degree that has not taken place in years.
In other words parliament more and more is simply becoming an instrument for the

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purpose of passing supply and having brought before it such legislation as the government in its wisdom chooses to present. As to any other matter that comes before parliament, however beneficial the suggestion may be, if it emanates from the opposition it finds itself destroyed by an overwhelming and united vote on the part of members supporting the government, who are prepared to accept any legislation introduced so long as it is recommended by the cabinet.
We have had many recent examples of the bypassing of parliament culminating in the present instance, which I need not repeat is farcical, is parliament masquerading, is simply an echo and a shadow of what parliament should be. But this is merely a step along the road. The parliament now coming to an end has seen the most extraordinary efforts on the part of the cabinet to emasculate this institution. In 1955 the government endeavoured to make permanent in this country the wartime powers under the Defence Production Act. We fought that attempt. We opposed it and we were finally successful, by the mobilization of public opinion, in limiting the period of the operation of those extraordinary powers.
I am not going to relive 1956 and dwell on the degree to which parliament was reduced to a sham by the introduction of closure and the denial of discussion. In every case the same attitude was adopted by the government, upheld by its servile supporters who, realizing that what was being done was a denial of parliament, supported the action taken to the detriment of the preservation of this institution.
In the present session we have had some recent examples of the attitude of ministers. I have often wondered what would happen if men like Laurier, Fielding, Lapointe or the late Mackenzie King were able to return to this house and see the extent to which in the present session parliament has been denied information over and over again.
Then, too, the arrogance of the government was shown in two instances in the refusal of ministers to act. In one case it was the Minister of Citizenship and Immigration who, with the support of the Prime Minister and other ministers, refused to give any humanitarian consideration to the admission into Canada of Hanna. They would have condemned him to a lifetime of going back and forth on the face of the waters. They would have refused him admission, as they did. We asked for some humanitarian action and the answer we received was a contemptuous one. Finally the courts came to the rescue of this man and gave to him that justice which an all-powerful government refused

to consider on his behalf. Only a few days ago I asked the minister whether or not Hanna would be permitted to remain in this country. It is not admitted that wrong has been done to this man: the date when he will finally ascertain whether he may remain here is to be conditional on his future conduct and is not to be decided at this time.
Then we had also the government's arrogance in connection with the Hobbema Indian case and the banishment of Indians from that reserve. What was being done made a brutal mockery of democratic freedom. We asked in this house for action. The government refused any action. Finally these wards of the Canadian people, having no votes that could possibly result in this government feeling that some action might be taken because of that fact, sought refuge in the courts; and the courts gave to them those rights and that consideration which never should have been denied them by a bureaucratic administration that places the letter of the law above any other consideration, humanitarian or otherwise.
I am not overstating the position when I say that parliament no longer governs. One of the best editorials on that subject appeared about a year ago in Maclean's magazine. I am not going to quote it in detail, although I accept every word of it. It says:
Anyone who has been glancing lately at Hansard or at a reasonably good newspaper must have been reminded that parliament has ceased to be the chief official critic of the nation's conduct and its conscience. Much worse, the parliament of Canada has ceased to be, in any real sense, the government of Canada. It still has the power to govern. Nevertheless, it continues to acquiesce blindly in all cabinet actions and pronouncements-voting almost as dependably on its party lines as that final horror of legislative horrors, the supreme soviet of the U.S.S.R.
Those are strong words, but they are the words of a national magazine of high repute pointing out the degree to which parliament has been degraded in recent years because of the overwhelming majority supporting the government. It goes on to say:
But it has also produced more than one example of the Liberal majority's willingness to be pushed around, led around and, when it suits the cabinet's convenience, ridiculously misled by the Liberal cabinet.
Finally it terminates with these words:
These remarks are not those of the habitual supporter or opponent of any particular party. Nevertheless, we are genuinely concerned-and invite others to share our concern-about what is happening in this country to the general process frequently described as good government. For our part, we are still reasonably sure it is good. We are not quite sure it is government in the sense originally intended.
We are again reminded of this fact by the submission, holus-bolus, of hundreds of millions of dollars of estimates to be examined

in a matter of two days, a task beyond any probability of achievement. This is one more example of the degree to which a great majority will abdicate from parliamentary procedure in the interests of a strong and powerful cabinet.
I am not going into particulars, because I do not intend to speak at length; but even at this session we have been denied over and over again information to which the Canadian people are entitled. Sometimes with a smirk, sometimes with a smile of triumph, ministers look upon our right to ask for information to which the Canadian people are entitled as though we are under their control when they decide it is not in their interests to reveal this information. I say again what I said a few moments ago, that one has only to read the debates in parliament during the days of Laurier, Borden, Meighen, Bennett and King to see how far parliament has departed from its traditional role and has become merely a puppet in the hands of a cabinet which today vouchsafes to parliament such information as, in its magnanimity, it desires to give.
A moment ago, sir, I mentioned some of the matters connected with pensions which should have been brought before the house. We believe that many of our senior citizens, who today are dependent upon old age security payments, are suffering untold hardships as a result of the increased cost of living. We believe the Canadian people as a whole demand that there be reasonable and proper increases; that the amount of the proposed increases does not meet the situation in any way, and does not meet the aroused conscience of the Canadian people. In saying that, I must add that I do not believe in promising tremendous increases such as have been suggested, of $35 per month. I do believe that the government of Saskatchewan, in its wisdom, placed a limitation on what old age pensions might reasonably become when they stated they were prepared to make the necessary contributions to raise old age assistance payments to $60 per month.
I will say, too, that the Disabled Persons Act needs to be reviewed. The interpretation of the qualifications under the regulations needs to be reconsidered. I know recent changes have been made or recommended, but I believe many hundreds, if not thousands, of citizens of this country who should be entitled to receive disabled pensions are being denied them today because of the degree to which the regulations have changed the qualifications which parliament intended should exist. The question of pensions will be further dealt with by my hon. friends, and I am not making extended reference to
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it. The same thing applies to war veterans pensions. The war veterans allowance should have been extended to provide for payments to those who, in the first great war, served for a period of at least one year in England. This recommendation was made by the Canadian Legion, and I think Canadians as a whole would have accepted with pleasure an increase to that extent.
I come now to one other matter dealing with national development. We are coming to the end of the session. Some slight changes were made in the general taxation situation in this country, but nothing has been done to remove the inequities and unfairness that today prevail, which give to United States people coming into Canada to engage in extractive industry an advantage over Canadian investors. Over and over again we have asked for action in that connection.
I am not going into particulars today concerning the extent to which some of our great extractive industries are becoming more and more the property of United States citizens. We have welcomed, and intend to welcome, foreign investment in this country. We believe, however, that foreign investment should not enjoy a taxation advantage over Canadians. If we allow an advantage to United States business over Canadians in this regard, we turn over to a foreign country the control of our vast resources which are so necessary to the world today. Our vast mineral resources, our oil resources and those things without which freedom cannot march have come and are coming, as a result of the policy of this government, under the control of another country.
We believe in foreign investment, but we also believe that investment in Canada should provide for Canadian considerations first.
We have had an example of that in the last few days. For the last several years we have been saying that Canada should take a firm stand in regard to the intrusion of the United States into Canadian affairs. I am not going to deal with the Norman case in that connection, but I point out that in 1951, when the allegations were first made by the subcommittee of the Senate of the United States, instead of the Canadian government standing up and asking for proof rather than suspicion it took the action of transferring Mr. Norman from the United Nations in New York to far-off New Zealand. That was not the course of courage; that was not the course that should have been taken, if the United States committee was to be made to realize that Canadians believe that the responsibility of looking after Canadians and their interests is for Canadians alone.
I mentioned those tax laws. Why they are not changed I cannot understand. They are

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restrictive in their application. We find ourselves in the position where, in so far as extractive industry is concerned, they are restrictive as compared with the United States, the United Kingdom and the legislation of the republic of France. At the rate we are going, unless action is taken in this regard we shall find ourselves very soon in a position where Canada's heritage of vast natural resources will become the reserve of another country.
Do not tell me that Canadians will not invest. What about the recent opportunity that was offered in the province of Alberta for investment in a local pipe-line proposition? Ninety thousand people in Alberta applied for the opportunity to invest. What about the degree to which interest was recently shown in the issue of Trans-Canada pipe line stock? Well, Canadians applied but did they get it? They got merely a very token share, because a large portion of the stock was made available to three United States companies under the option agreements which were in effect and which parliament did not see because the matter was not submitted to a committee of parliament.
In the last two days we have had the example of pulp and newsprint. We find very strong criticism being made in one of the congressional committees against Canadian pulp producers for having raised the price of newsprint by $4 a ton, which is a very small increase when compared with the percentage of increase on the part of industries producing steel and the like. Canadians are singled out for criticism. Their actions are condemned because Canadian industry endeavoured to protect its own integrity and to assure jobs in Canada for Canadians. We find that this committee of the United States Senate bitterly condemned what they called skyrocketing of prices by Canadians, and even suggested that the time would come when some alternative markets would be secured, thereby depriving Canada of markets in this regard.
That is the way Americans speak. As we have lost our markets throughout the world because of the give-away policies of the United States the Canadian government has protested in a voice that could not be heard. On the other hand we in Canada, with our vast forest resources, are being told by this committee that unless we act as they desire us to act alternatives will have to be found. Several of these companies are American-owned, and the increases that took place applied as well to companies in the United States. I think Canadians as a whole will not view with pleasure the condemnation by such a committee of Canada's economic right
[Mr. Diefenbaker.l
and the right of Canadian industry to act as it pleases to provide for the benefit of that industry and of Canada.
Sir, yesterday, in the city of Montreal Mr. P. M. Fox, president of the St. Lawrence Corporation, referred to this criticism as doing great harm to Canadian-United States relations. I say it goes further than that; it indicates the degree to which we in Canada are more and more becoming subordinate in our extractive industries and in pulp production and the like to the demands and the whims of another country.
When we have pointed this out-and the former leader of the opposition dealt with this on a number of occasions-our criticisms were ridiculed. It was stated that there was no basis for them. I believe, sir, at this session action should have been taken to revamp the tax structure of our country, to overhaul it with a view to providing encouragement for the promotion of primary and secondary industries in this country.
We do not expect Canadian investors to enjoy special advantages over foreign investment, but we have the right to ask that Canadians be enabled to compete in extractive industry and in the development of our hidden resources on equal terms with foreign companies and corporations. We believe that promoters and investors in extractive enterprise and in risk enterprises in this country should have precisely the same advantageous treatment in regard to taxation that exists in the United States. To provide that will permit of a very considerable investment volume in our country being made available to Canadians. It will encourage the development of our hidden resources, and that encouragement will enable Canadians, out of the taxation that comes from the profits of successful enterprise and other taxation, to provide a social security program in keeping with modem concepts.
I said a moment ago that Mr. Drew dealt with this matter over and over again. He was ridiculed for the stand he took, but the events of the last few days have underlined once more the foresightedness and prevision he displayed in that regard. Finally, however, the Canadian government decided last fall to warn United States investment in Canada of the necessity of being for the benefit of Canadians first. The views expressed by the opposition were emphasized and re-emphasized in the Gordon report.
I have before me the Atlantic Monthly of March, 1957, which contains an article written by a Canadian, James H. Gray, who was editor of the Farm and Ranch Review and is today the editor and publisher of the Western Oil Examiner of Calgary.

After dealing with the extent to which the Canadian heritage is being maintained as the Canadian heritage, but not by Canada for Canadians, Mr. Gray refers to the speeches made last October by the Minister of Trade and Commerce in Milwaukee and Chicago, and says in part:
His speeches were appeals to Americans to try to understand Canada and Canadians. That he should have felt the need to make such speeches is an indication of the work that is required on Canadian-American relations.
Mr. Gray then speaks of the power vested in the Minister of Trade and Commerce and then quotes what he refers to as "Mr. Howe's appeal to American business".
Anyone who does business in Canada should reckon with the pride, and the legitimate pride, of Canadians in their country. In other words, they should reckon with the normal feeling of nationalism which is present in Canada, just as it is in the United States.
I wish to underline the word "nationalism". The minister was using it as I am using it, not in the sense of acute fanaticism but rather in the sense of pride in one's country that is common to citizens throughout the free world. Quoting the minister the article proceeds:
Canadians do not like to be excluded from an opportunity of participating in the fortunes, good or bad, of large-scale enterprise incorporated in Canada but owned abroad. They may not buy many shares, but they resent the exclusion. They do not like to see large-scale Canadian enterprises entirely dependent upon foreign parents for their research and top management.
I underline the last sentence I read. Many of my hon. friends sitting around me in this chamber have pointed out over and over again the need for United States corporations operating in Canada to provide research opportunities in this country for Canadians, instead of spending the major part if not all of their research expenditures in the United States. The minister's comments continue:
They do not like to see the financial results of large-scale Canadian enterprises treated as if they were the exclusive concern of the foreign owners.
Mr. Chairman, those words epitomize what we in the opposition have said time and time again in the last few years, while the government has blindly denied that this situation had any basis in fact. The minister is then reported as saying:
I make bold therefore to offer three suggestions for the consideration of United States corporations establishing branch plants in Canada or searching tor and developing Canadian natural resources:-
The minister's suggestions are then set out as follows:
X. Provide opportunities for financial participation by Canadians as minority shareholders in the equities of such corporations operating in Canada.
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Those are almost the exact words we in this party have used on numerous occasions during the past several years.
2. Provide greater opportunities for advancement in United States-controlled corporations for Canadians technically competent to hold executive and professional positions.
We have said that numerous times, and in the last year or so there has been a commendable advance in that regard.
3. Provide more and regular information about the operations of such corporations in Canada.
Sir, I cannot understand the government's attitude. These corporations of United States parentage operating in Canada deny Canadians the right to invest in Canadian industry. Take any of these large corporations of United States parentage and you will find that the profits from Canada are sent to the United States.

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