Mr. PERLEY:

The minister might at this stage give us more information with respect to this proposal. Speaking generally on the measure, not exactly to the amendment, I might say that last year I opposed a similar bill, from the standpoint that I did not think it necessary, that it did not serve any useful purpose and was intended-I think the term I then used was to succour the grain trade or salvage some of those who needed help and under present conditions I think the same observations would apply. The minister might tell us how the act worked last year, how many cooperatives were set up, the number of elevators and firms that went in, and what happened to many of the small independent dealers or operators in the trade. We might also have figures with respect to the amount of wheat marketed through the cooperatives. It is important that we should have a statement as to the losses sustained in their operations and what amount the government will have to pay to make up that loss, the difference between the guaranteed price of sixty cents-was it?

Mr. GARDINER:

Fifty-six cents.

Mr. PERLEY:

-and the price at which

they sold the wheat. I should think there would not be a very great loss because it was during only a very short time in the marketing season that wheat was below fifty-six cents. That also might be stated-for how long a period was the open market price below the guaranteed price? We should also have a statement as to the effect of the competitive selling by these cooperatives of wheat against the other organizations handling board wheat, for instance. Did any direct benefit accrue to the producers generally from this legislation?

The Turgeon. report distinctly recommended that the wheat board should be kept intact ready to operate, certainly in case of an emergency or crisis; and, I believe on the same page of the report, it stated that open market or exchange could not function in the case of an emergency. Surely we have an emergency now. From the information given yesterday by the Minister of Trade and Commerce it would appear that the wheat board will be called upon this year more than ever before to operate, especially if the grain exchange is closed.

As I see it, this proposed legislation more or less continues the competition. It is not necessary; no doubt the board will handle practically all the grain. Further we have the

three western pools, one in each province, thoroughly organized to carry on the work that these cooperative organizations or groups will do. I think we should have from the minister a general statement as to the operations of these cooperatives in the last marketing season, what the loss will be, the number of bushels handled and the amount of wheat sold below the guaranteed price of fifty-six cents.

Mr. GARDINER:

I think I may say that most of the grain trade-I would be inclined to say all of it, though it is just possible that there may be a few exceptions of very small companies-has been organized under this legislation. There are nine different central selling agencies set up. There is the Grain Growers Export Company Limited, Winnipeg, which is the selling agency of the United Grain Growers; the selling agency of the Saskatchewan Cooperative Wheat Producers Limited, known as Saskatchewan Pool Elevators Limited, and there is the Alberta Pool Elevators Limited of Calgary, set up under the Alberta wheat pool. Then there are some seventeen elevator companies that have one common selling agency, the Grain Sales Agency of Winnipeg. The Searle Grain Company have their own selling agency. There is Midland Pacific Terminal Limited of Vancouver, British Columbia, which represents the Midland Pacific Grain Company, the Peace River Milling Company and the Northern Grain Company, and there is the Saskatchewan Pool Elevators Limited of Regina for the cooperative elevator associations of the Manitoba pool. They are handling the Manitoba pool wheat. Then there is the Prairie Grain Sales Limited, of Edmonton, representing the Gillespie Grain Company, the Ellison Milling Company and James Richardson and Son; and the Victoria Trading Agency Limited of Winnipeg, representing the Robin Hood Flour Mills, N. M. Paterson, Scottish Cooperative Wholesale Society, Western Canada Flour Mills Company Limited; McCabe Brothers Grain Company, Lake of the Woods Milling Company Limited, Ogilvie Flour Mills and Robin Hood Flour Mills Limited. All these have organizations set up under the act.

The information with regard to marketings by the different companies is given to us confidentially, and I think it would not be proper for me to give that information to the committee. I can only say that something over three million bushels was marketed during last season and up to the present under these different organizations.

Regarding the possible losses on the operations to date-

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Mr. SENN:

Before the minister proceeds, was any part of the three million bushels he just spoke of Ontario winter wheat?

Mr. GARDINER:

Not to my knowledge, although I would not like to say definitely that none of it was.

I was about to say that all these organizations made an initial payment of fifty-six cents a bushel on wheat which they took in under the act. The act provides that they may not pay more than sixty cents a bushel advance. In setting up their organizations to take delivery of grain from farmers during this year they found it necessary to provide for an average of about four cents a bushel for cost of carrying grain for the period that it has to be carried, so that they said the only price at which they would be safe would be about fifty-six cents. We agreed with that position, and the fifty-six cents per bushel advance was made. Some time ago, I have not the date at the moment, most of these organizations, I think all of them that had wheat, applied for permission to make an additional interim payment of fourteen cents. This additional payment has been made by some of them, if not all. So that the advance which has been paid on that wheat up to date is seventy cents a bushel, or the same advance that has been made to the wheat growers on all the wheat taken in by the Canadian wheat board. The statements that were presented to the government at that time showed that on the wheat which had been pooled until the recent pegging of the price the government was not likely to take any loss. As a matter of fact the wheat had been disposed of at a price which enabled these pools to pay their advance without much possibility of the government having to take a loss. At the present time, so far as I know-it cannot be stated definitely and finally, of course, until the end of the crop year on July 31 next-it is not thought that there will be any loss on the wheat which has been marketed under this legislation.

Mr. PERLEY:

What was the exact number of pools or cooperatives set up?

Mr. GARDINER:

Nine, I think.

Mr. PERLEY:

The statement we have

just heard from the minister is a positive admission that there is no need for this measure at all. Nine pooling agencies, including most of the elevator firms and many members of the grain exchange, handled only

3,000,000 bushels out of a crop of 375,000,000 bushels. I think we will require something more substantial from the minister to justify the government coming to the rescue, so to speak, by guaranteeing *hese companies in

this way in competition with the board and the regular pools of the west. These pools under this legislation paid an advance of 56 cents and then made an interim payment of 14 cents, equal to the total payment under the wheat board act of 70 cents. It resolves itself into this: they have made practically the same payment as was made under the wheat board, except that they did not make the entire payment at once. This interim payment was held up; these pools had the use of that money for a certain length of time, and I think they should be required to account for it.

It seems to me the minister's statement is a definite admission -that no useful purpose is being served by this measure, and I think he should move that it be repealed. Allow these people to wind up their affairs with respect to the handling of the 1939 crop; then repeal .this measure and continue under the system we had previously.

Mr. DOUGLAS (Weyburn):

If I remember correctly, on April 5 of last year, when the Minister of Agriculture was introducing his bills regarding the marketing of wheat, he stated that he was carrying on something in the nature of an experiment; that is, that there were three ways in which wheat could be marketed under the legislation he was setting up. First there was the open market; second, there were the facilities set up under this bill, by which a farmer might sell to a pool or association; and, third, there was the wheat board, to which the farmer might sell his wheat and secure a minimum advance price.

I agree with the hon. member who has just taken his seat that even on the basis of the experiment it would seem pretty plain now that the contention we made at that time has been justified by what has occurred; in other words, that the best way to handle the marketing of wheat is through a wheat board giving the farmer a guaranteed minimum advance price commensurate with the cost of production. But something has happened since that time. Since then war has broken out, and the best proof that war is no time for experiment with different marketing policies is the fact that just a few days ago the government itself had to intervene and peg the price in order to prevent a very serious collapse in the marketing of wheat.

In view of the fact that it would involve another of his colleagues as well as the policy of the government I do not suppose the minister can make any statement now, but I wonder if he would take under advisement and press upon the government the need for a wheat policy based on the fact that this

Wheat Cooperative Marketing

country is at war and that speculating in food products in time of war can lead to nothing but instability. I believe the government should very seriously consider the closing of the Winnipeg grain exchange, at least for the duration of the war, and the marketing of our wheat through the Canadian wheat board, dispensing with the facilities under this act and with the open market while Canada is at war. It seems to me that is the only way we can hope to have anything resembling a stable agricultural life in this dominion. If at the present moment we are straining every nerve to mobilize our industrial reserve it would seem very unwise to allow the marketing of wheat to be carried on under what the minister himself said was really an experiment. Within a very few days or weeks the government ought to bring down in this house a definite policy for the marketing not only of wheat but of all agricultural products.

Mr. QUELCH:

I find myself wholly in accord with the hon. member for Weybum (Mr. Douglas). When this bill was up for consideration last year I stated that in my opinion the correct way to market our crop was through the wheat board; and I think the majority of the farmers of western Canada are in agreement with that idea. If that is sound in time of peace it is even more sound in time of war. Not only should we have a wheat board; in my opinion it should be a one hundred per cent compulsory wheat board, which would market all our wheat. I think we have a very undesirable state of affairs at the present time, in that we have a number of organizations selling wheat apparently to only one man in England. Certainly that must be to his advantage and to our disadvantage. I know if I were buying horses I would much prefer to buy them from a number of people rather than from one man who might hold me up for any price. Naturally the man in England is at an advantage when he is able to buy wheat from a number of organizations instead of from a central selling agency such as the wheat board.

So far as any changes in the measure go, apparently they will make no difference in the price of wheat. I think if any change is to be made at all it should be made in the method of calculating the initial price; and the only fair method would be to take into consideration the actual physical cost of producing that wheat so that the farmers might receive a price commensurate with the prices of other commodities. Especially is that so when we have a government which says, as this government said last September, that it will insist upon equality of sacrifice during the war. There can be no equality when the farmers

have to sell wheat for less than the cost of production while on the other hand they are paying gradually rising prices for the things they have to buy. That is indicated veiy clearly in the last issue of the Searle index, from which I should like to read a few words:

The Searle index of the price of " Things Farmers Buy" (147 items) now stands at 135, 1913-14 equals 100, which means that these things cost farmers in the west, at the present time, 35 per cent more than they did in 1914 before that Great War. The price of wheat- No. 1 Northern-as of April 23rd, basis the open market price, is now 24 per cent lower than it was in 1913-14. This means therefore that a bushel of wheat in western Canada now has a purchasing power in relation to " The Things Farmers Buy " of 56 per cent in comparison with the purchasing power of 100 that it had before the war.

Certainly it does not look as though things were getting any better; as a matter of fact they may get a great deal worse. Therefore I think the farmers have every right to request that the government take immediate steps to institute a one hundred per cent wheat board and guarantee a price that has some relation to the prices of other commodities at this time.

Mr. CHURCH:

In view of the war, in my opinion the resolution should be referred to the committee on agriculture. It is of tremendous importance to the people of Canada that this great basic industry, the grain-growing industry, one which the minister understands, be placed on a sound basis. It was urged for many years that free trade should be practised, and that the grain trade was a north and south industry, and not an east and west one to the markets of the world. To-day, however, we have to face the fact that we are at war, and that to a great extent markets have vanished owing to war problems, transportation difficulties and the submarine menace.

To-day we are faced with a grave situation, and we must consider the ability of the country to pay all these bonuses, subventions or subsidies such as the minister and the Liberal party have contended for years were, under free trade, unnecessary. In many respects the principle behind the Wheat Cooperative Marketing Act is satisfactory in times of peace and plenty, but it must be remembered that to-day we are faced with a world war which has brought with it losses of markets all along the line for everything in trade and commerce and industry. In addition to that we are confronted with transportation difficulties, and the dangers consequent upon enemy submarines. We do not know what the cost of the operation of legislation founded upon the resolution will be,

Wheat Cooperative Marketing

and in my view the Minister of Finance should report to the committee on agriculture respecting that phase of the matter.

We find in the resolution provision for the calculation of initial payments paid to selling agencies, and provision for granting authority for payment of liabilities of the minister under any agreement and of administrative expenses. No one can calculate what those provisions and calculations may or will cost Canada. Last year we spent almost six weeks in discussing agriculture; it was virtually a Saskatchewan session. At that time, early in 1939, the minister said, as is indicated in the copy of Hansard which I have before me, that the government was going to get out of the grain and market industry; that .it was going to stop subventions and bonuses, and that it would go back to the old principle. That was not done. Later the government recommended the passage of the Wheat Cooperative Marketing Act, 1939, and other measures providing additional bonuses, stabilization funds, subventions and subsidies to the grain-growing industry.

What is the minister doing about the orderly marketing, if possible in time of war, of north American wheat? Has he had any conferences with Henry A. Wallace, Secretary of Agriculture of the United States, regarding the orderly marketing of wheat by Canada and the United States under war conditions? Then, is the government going to consider the preference afforded under the Canada-United States treaty, which as I understand will terminate some time in June? Is it the intention of the government to continue the operation of that treaty?

Under the Ottawa agreements Canadian grains enjoyed a six-cent preference when carried on Canadian or British ships to Great Britain, a preference since also given to the United States. In view of the war is it the intention of the government to continue the treaty with the United States for another three-year period? I believe we should have some report as to what a measure founded on this resolution would cost, because in the present circumstances we are asked to consider calculations that in the end may be just a gamble. Wheat may sell at forty cents, fifty cents or sixty cents; no one can tell what the price may be during the war months of this year yet to come. In this year the war, alone, will cost the country, before we are through, almost a billion dollars, and I say we should not pay the losses just in the marketing of the products of one basic industry at the expense of loss of markets in all others.

I do not want hon. members to think that I object to this industry, getting substantial aid as in the past, or to according it a good measure of protection. I have been a consistent protectionist friend of the grain industry since I came here, although I have not acted the way some hon. members in the prairie provinces have acted. I have been a consistent protectionist for the grain-growing industiy of Canada, and ever since I entered the House of Commons I have supported advanced protection for that industry. We were told years ago by free-traders in the prairie provinces that the United States was our logical market. They were opposed to any form of protection, and were in favour of complete free trade. However, after that they came along and supported bonuses, subventions, subsidies and stabilization funds of all kinds, and since then we have had all kinds of bonuses, subventions and subsidies for this one industry.

The grain-growing industry is not the only one in Canada which has lost its markets. What industry has not, as a result of this awful war? If we are beaten in the war, everything is gone; industry generally will be ruined and will lose markets. The industrial workers in our cities and towns in the east will lose their work, and many have. Were it not for the British fleet we would be blackened out. We must yet face the war submarine menace and loss of markets, a very serious thing so far as trade is concerned.

In my view Nos. 26 and 27 on the order paper referring to the Wheat Cooperative Marketing Act, 1939, and the Agricultural Products Cooperative Marketing Act, 1939, respectively, should be referred to the agriculture committee. We have many calculations, ail of which may be out in fact and only a guess. The committee should have the power to go into the whole question, and it should have the advantage of hearing the Minister of Agriculture and the Minister of Finance, who is responsible for the tax-rate in the country. How he is going to raise all the money required, I do not know. Industrial workers can pay no more of these bonuses, subventions and subsidies; they are not content to pay bonuses to some and not to others. There should be equality of treatment. I am for protection for all the people, all the time, and not just for some of them. I do not know on what foundation the calculations respecting this resolution are based, and I believe the committee on agriculture should have the advantage of all details, and make their report accordingly.

Wheat Cooperative Marketing

Mr. FAIR:

I only wish the hon. member who has just taken his seat would go out west and work on a prairie farm for as long as he has attended in the House of Commons. If he did that, he would be in a position to come back and educate those of his friends who are taking the same stand as he has just taken, namely, that industry is bearing all the taxes and all the load.

In contrast to what the hon. member has said, may I point out that the taxes paid by industry are unloaded on to the shoulders of the producers and the consumers, particularly those in western Canada. On different occasions I have given figures showing where the markets of eastern Canada are to be found. On different occasions we have heard hon. members, particularly those of his majesty's loyal opposition, supporting higher tariffs, and from those hon. members we have heard strong objection to any help being given to the wheat producers in the west. Perhaps they will remember that for the only year concerning which we have information respecting tariffs, every man, woman and child in Alberta paid $26.93 to satisfy tariff impositions.

If we were to get back that amount, by way of payments on our wheat crop, we would not need to come to Ottawa to fight our battle each year, as we have been doing in the past. Perhaps hon. members will realize that in the past ten years farmers have not been receiving much more than fifty per cent of the average cost of growing their wheat, and yet we are expected to continue to be patriotic-not in a profitable way-and to supply Canada and other countries as well. Countries across the ocean are being subsidized in the production of their wheat, and yet we have to come here and listen to speeches such as the one just delivered by the hon. member for Broadview (Mr. Church).

Yesterday the Minister of Agriculture (Mr. Gardiner) told us that supplies of farm products on May 1 were greater than on the same date in 1938 or 1939. But this is no indication that these products were produced at a profit. Last year he told us that if a man gets over twenty bushels of wheat to the acre, he can produce it at from thirty cents to forty cents a bushel. With that statement I do not agree, either. Hon. members in this corner of the house have produced figures proving definitely that over a period of years wheat cannot be raised for less than ninety-five cents a bushel at the farm. I believe that fact is borne out if we look up the operation of the Farmers' Creditors Arrangement Act, a

measure made necessary through debts piled up because of poor prices received by the producers.

I believe the amendment now being sought is about as necessaiy as a second tail for a horse or a cow; there is absolutely no need for it. We have on the statute books other legislation which, if properly used, would remove the necessity for the measure suggested. I refer to the Canadian Wheat Board Act and the Prairie Farm Assistance Act. If those measures are used as they should be, and as it was intended they should be, the amendment now before us could be scrapped.

I would suggest consideration by the government of the permanent closing of the Winnipeg grain exchange. After war started, the grain exchange in England was closed. Passing through Winnipeg a few weeks ago, I had a look round the exchange for the first time. One of the officials pointed out to me and to others with me the benefits being derived by farmers from the operation of the exchange. He told us we could not get along without it, and so forth. I asked him if the grain exchange was operating in England. He said, "I do not think it is just now." I told him that it was closed because the government of the old country found it necessary to close it, and I believe the grain exchange in Canada should be closed and left closed. I believe the wheat board should be used and a decent price based on cost of production guaranteed to the farmers.

Mr. DOUGLAS ( Weybum):

What is the estimate of the selling price of these selling agencies which are disposing of the wheat or have disposed of it?

Mr. GARDINER:

All I can say at the moment is that the sale price has been more than sufficient up to date to pay the 70 cents; that is, after paying the carrying charges, the 4 cents we are allowed for that. I do not think it would be proper for me to go further even if I had the information here because it would be dealing with business information of_ these companies which still hold some of this wheat.

In reply to some of the points that have been raised, I would say that this legislation makes provision for carrying on for this year. It is most necessary that this legislation should be on the statute books to make provision for carrying out this year what we provided for last year. If this amending legislation were not passed and there happened to be a loss-at the moment we do not think there will be-we would not be in a position to make payment to the different concerns which have

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Wheat Cooperative Marketing

taken delivery of this wheat from the farmers. That covers the first point raised, that the legislation should be dropped altogether.

So far as this amending legislation is concerned, it is necessary that we should have it on the statute books so that it will operate in connection with over 3,000,000 bushels of wheat this year, in order that w'e may be able to make effective use of its provisions in finally disposing of that quantity of wheat.

On the question whether it would be wise under war conditions to have the legislation on the statute books at all, I would point out that if what has been suggested were to take place, namely, if it became advisable for the government of Canada to take control of all the wheat of Canada and deal directly with the British government, then not only this legislation but all the other acts having to do with the handling of our wheat as they now stand on the statute books would simply have to stand by until the end of the war. There would be no possibility of continuing to handle wheat under the provisions of legislation, for instance, for the proper operation of the grain exchange, or under the provisions of the wheat board act as we now know it, or under this or any other legislation relating to grain which was passed before the war started, so I do not think anyone needs to worry about what would happen in the event of our having to take the action which has been proposed from the other side of the house. On the question whether we should take such action I am not in a position to say anything at the moment. As was suggested by one hon. member who spoke, it is a matter for the consideration of the government, and any final announcement of policy would be for the leader of the government or the Minister of Trade and Commerce, under whom -the wheat board is operating.

I would suggest, therefore, that in passing this amending legislation we are providing to make the present legislation operative to take care of the wTheat which has been delivered under the act.

One further point. It has been suggested that the act has served no good purpose. Well, the greater part of the wheat which has been handled under this act has been handled by the Saskatchewan pool. They were the first to ask to have the act brought into operation. Most of the wheat which has been delivered under the act to anyone has been delivered to the Saskatchewan pool, and I think the experience gained already in the handling of even

3,000,000 bushels is sufficient to have warranted the act's being brought into effect this year, if for no other reason than that it 'has made it possible for at least a small group delivering

[Mr. Gardiner.l

grain under it to determine what they think of a measure of this kind as a future method of marketing grain. We are not always going -to be at war. We are going to get back to normal conditions some time, and I do not think the experience that we shall have had under this legislation will prove otherwise than beneficial to the western farmers.

I therefore suggest that the resolution be allowed to pass so that the bill may be presented to the house for consideration and the necessary amendments made in order to carry out the terms of the act.

Mr. PERLEY:

The minister has just stated that the Saskatchewan pool handled the great bulk of this wheat. He will recall that when the western committee was down here last year, the Saskatchewan pool was represented on it, and its representatives opposed the passing of the bill of last year. They presented an argument, in their second submission I think, opposing the act.

There was a reason for the pool coming in on it. Not only had they their pool operations, but they are now doing a business similar to that of other grain firms, and naturally they would come in to accommodate certain of their customers -who were not putting their grain through their pool; that is, they conducted open market operations just like other companies are doing. I think that is the reason why the Saskatchewan pool came in.

Again, if they handled the great bulk of the

3,000,000 bushels, that is another reason why the bill is not necessary. The minister has not yet stated w-hat was the effect, from a competitive point of view, of the selling of the grain by these cooperative organizations. I -grant that it could not have been a very large amount and that the pools handle most of the wheat. The minister has not yet stated what the exact loss is. He said that it was more or less confidential.

Mr. GARDINER:

There is no loss yet.

Mr. PERLEY:

That is fine. Then there is hardly -any necessity for this amendment. In reply -to the minister's argument, I would say that section 4 of the bill of last year gives the .minister almost unlimited power to prescribe regulations to deal with various matters and to make almost any kind of agreement with -the cooperatives. If there is no loss, I think the minister already has sufficient power under section 4 of last year's legislation to wind up the business of the cooperatives.

Mr. GARDINER:

I am very sorry that neither myself as minister nor the member for Qu'Appelle (Mr. Perley) can determine the question as to just what legal powers I have.

Supply

The Department of Justice informs me that under the legislation as it is now drafted, if we did have a loss, I have not the authority to pay what the act provides shall be paid, and the department says that .this amendment is necessary to give me the power to pay what the act provides shall be paid. If there is no loss, there will be nothing to pay. Up to date there has been no loss. But if there is a loss, then this legislation simply gives me the power to pay what other provisions of the legislation say ought to be paid and require to be paid.

Mr. PERLEY:

I would ask the minister to use some of the powers delegated to him in one or two of these bills. At least he might try to do so. In certain bills passed last year, wide powers were given, and I suggest that the minister try out some of those given him in this particular bill.