Mr. Ilsley:

Does not my hon. friend agree that at the present time the construction of houses is in no way limited by financial considerations? Does he not agree that it is limited purely by physical considerations?

Mr. Ilsley:

They are not limiting the construction of houses at this time at all. The limitation at the present time is physical, and is found in the present capacity of the country to produce materials.

Mr. Speaker, I have just quoted at length what was said on that occasion to illustrate that in 1945 it was suggested we could not build houses because we were short of materials. In 1957 we are told we cannot build houses because we are short of money, though we have an abundance of materials. In conclusion, Mr. Speaker, I suggest that by using in housing the methods we used during the war and mobilizing our credit behind the full resources of this country we could provide the lower income groups in Canada with all the houses they require on a very sound basis.

I just forgot this, Mr. Speaker: I had intended before sitting down* to bring to the attention of the minister the fact that there are certain people who are trying to do their best in present circumstances. Does the minister realize that there are small lumber operators in the interior of British Columbia who are working on a very small margin of profit and have been doing so for the whole of this year, although in a good number of cases these are efficient and well operated 96698-1621

National Housing Act

mills. Some of them, indeed, have been running at a considerable loss. At the same time there are employees in the lumber industries in the interior of British Columbia who have voted not to accept a 6 per cent increase in wages to which they were entitled under a two-year contract, in order to help keep the lumber industry going. These people have been shipping lumber to the prairies, particularly No. 1 common fir, in log lumber, two by four, two by six, two by eight and two by ten, shiplaps, sidings, boarding materials generally, at prices f.o.b. southern interior of British Columbia points-I can see the parliamentary assistant pricking his ears up as he hears me speak of this-ranging from $57.50 to $62 a thousand. I think the parliamentary assistant should be asked to find out what the lumber yards are charging to persons who wish to build homes with this same lumber after making allowance for the cost of transportation and so on.

In conclusion, Mr. Speaker, I suggest that now is the time for an examination to be made of all aspects of this problem-the need for providing an adequate fund, sound methods of financing the cost of materials, the type of materials and the services to be provided. The average man earning a low income cannot afford to pay more than $6,000 for a home. I say that from my personal experience. I think a great deal more could be done to provide the type of house necessary to a person in the low income group. Could not some further study be undertaken, particularly with respect to the possibility of the owner-building of homes and the possibility of using more of the procedures and methods which have been used so successfully under the small holding section of the Veterans Land Act.

Hon. J. L. Ilsley (Minister of Finance) moved

that the house go into committee to consider the following resolution:

Resolved, that it is expedient to introduce a measure to provide:

Then there are four paragraphs. The Speaker was in the chair and Mr. Ilsley, the minister of finance in Mr. Mackenzie King's government, stood up and said:

Mr. Speaker, I propose to make a statement to the house on this resolution while Your Honour is in the chair.

Seventeen days after Mr. Speaker Glen had ruled that the debate on that occasion should be directed to the negative-and you can bet your boots that Mr. Ilsley did not speak to the negative of his resolution-he spoke to the affirmative with great vigour and at considerable length.

Mr. Ilsley:

No; it does not take that into account. Taxation was part of the stabilization policy.

We in this group recognize that.

High income taxes were probably the most powerful factor in the anti-inflation policy. In short, if prices had risen as they did in the last war and its aftermath, the consumers would have had to spend $1J billion more than they actually did.

It should also be noted that the general stabilization program held down the cost of munitions and other military expenses, thereby saving a further large addition to the already heavy national debt.

1 am sure that sentence will appeal to the Minister of National Defence (Mr. Claxton), in view of the statement which I understand he made at some public gathering quite recently. I continue:

It is estimated that government expenditures averaged $4 billion a year between 1942 and 1946. Without price control this cost might have been at the very least twenty-five per cent higher. I think that twenty-five per cent is based upon the other figures which I have given with regard to the additional percentage which the consumers would have been obliged to pay; and the stabilization program has thus meant a saving of another billion dollars a year. From these estimates it is possible to see that the cost of the control program was under $200 million a year, while the savings to the consumer purchasers and government as a buyer were on this hypothesis possibly $2J billion a year. The figures are tentative but do give some idea of the relative magnitude of the cost of and the savings effected by the government price control program.

Here we have, Mr. Speaker, from the highest authority-the minister of finance of the day, who had the portfolio during the greater part of the war period-proof as to the value

Cost of Living

of price control and subsidies in savings to the government and people, and definite proof as to the cost of those price controls and subsidies to the Canadian people. We have that on the highest authority. Yet, Mr. Speaker, in reading the Canadian papers recently, I note that one Liberal member of parliament gives as his reason for opposing the policy of price control and subsidies, and for supporting the government's policy in that connection, that price ceilings would be more costly than inflation to the Canadian people. I just wish to read from the Nelson Daily News of March 31, which reports a meeting of the East Kootenay Liberal Association at Cranbrook on March 29. It has this to say in part, in reporting the speech of the hon. member for Kootenay East (Mr. Byrne):

He supported the government in its stand against price controls establishment and its alternate policy of credit control to reduce buying power on the grounds that enforcement of resulting rationing and price ceilings would be more costly to the public than present inflation.

I presume that report is correct, because I read the same sort of report, in almost identical words, in the Cranbrook Courier of March 29. When the hon. member made that statement, I think he was unaware of the statement of the former minister of finance with regard to the relative cost of price controls and subsidies, and the savings effected for the Canadian people. For every dollar spent on price control and subsidies, according to the statement of the highest authority, the saving to the average Canadian consumer was between $12 and $13. Surely it is time the government acted in. this situation.

As I said before, I certainly am aware of its difficulties, its ramifications and the complications attending it under this system. But the government could act in the sphere of food, clothing and shelter, these three things that so seriously affect the lives of the people who have the lower incomes in this country. I am not personally concerned about the price of liquor, or the price of luxuries, or things of that sort. But I do think that this government should act in the field of food, clothing and shelter, and act now. If we are to protect the living standards of the families of this country, particularly of people raising families at this time, something must be done to protect those who are in receipt of fixed incomes, because they are in a very difficult position. I realize it is difficult to remedy the situation, and, shall I say, place them in a satisfactory position in relation to other groups in the community. We will have to roll back prices where possible after investigation. Those who are living on small pensions and fixed incomes find themselves in

Cost of Living

very difficult circumstances. Then there are those who are anxious to build houses. I believe the very foundations of democracy are built and maintained by people who own or desire to own their own houses. In my personal experience from dealing with people I have noticed that a change in the attitude of some men toward life takes place when they are able to build or own their own homes and have a little plot of ground around them to cultivate. These three things-food, clothing, shelter-should be given very serious consideration and action should be taken by the government now.

I realize that the present inflation is not all the government's fault. I think every fair-minded person realizes that. Some of it has been the result of human nature and of human greed. I know of many storekeepers who are very much perturbed by the constant rise in prices. They have shown me their invoices and have explained to me how much concerned they are about the situation. They know of its effect on their customers. But I know of other storekeepers who are storing supplies in their basements and are working havoc with prices just because they can take advantage of the Canadian people's circumstances at this time. Some manufacturers are raising prices unduly. There is no question about that.

Some manufacturers in this country have an excellent reputation, and are willing to accept a reasonable standard of profit. We realize that under this profit system a reasonable standard of profit is necessary if the system is to continue to function; but I know personally of individuals who have taken an exceptional advantage of present circumstances and shortages.

I come finally to the question of lumber. Lumber is a very important thing in this country in connection with the building of houses. There are lumber manufacturers in this country who have done their best to maintain a reasonable price throughout the difficult years; but owing to the competition for lumber from the United States, lumber prices have risen almost dramatically in the last two or three years, and to such an extent that at the present time there are thousands of Canadians who even a year ago were considering building a house, but owing to the increased cost of lumber, the increased cost of hardware and other things, are denied that opportunity and privilege at this time. I suggest, Mr. Speaker, that the government could well make certain that the Canadian requirements are met by a quota on the export of lumber, and establishment of price control on the lumber sold in the domestic

markets. The return from lumber sold to the export market is quite sufficient to secure for any lumber company an adequate profit in relation to the lumber they would have to sell on the domestic market. I think control of lumber is a very necessary step at this time.

I have made some investigation of the prices of lumber in this part of Ontario. I have heard references made to the prices charged by the lumber industry in British Columbia. I can say this in all truthfulness, and I am sure in this I shall be supported by other British Columbia members, that the prices that are charged for lumber in the city of Ottawa are simply out of this world as compared with the prices being charged for comparable grades in my own district of British Columbia.

I want to bring another thing to the attention of the; minister. I know a little about lumber grades. I have an interest in a little tinpot mill, and we grade very strictly. Everything that goes out of the mills in our district for export is good quality lumber and timber. I think that is generally the practice throughout British Columbia.

Mr. Ilsley:

I wish to point out that we never

devoted more than fifteen per cent of our resources to the war in any year of world war I, whereas in world war II, in some years, we devoted approximately fifty per cent of the production of the country to the war. And economists have always told me that that is the main factor in driving

prices up-the proportion of output that you shoot away and send away, leaving in the country the purchasing power that was paid out to produce it, and nothing to spend it on. That is a powerful inflationary influence. It must be remembered that in many countries where there existed no effective control, prices were going up 100, 200 and 300 per cent, and I am not talking of wild inflations such as occurred in China and other places. But if we assume that prices would have risen, and the inflationary factors were more powerful in the last few years than in the years between 1914 and 1920, much more powerful-if we assume, I say, that prices would have risen, without control, just to the same extent proportionately, year by year, as they did in the period from 1914 to 1919, then these are the results you get: the consumers would have had to spend an average of nearly $8 billion between 1942 and 1946.