Mr. SPEAKER:

I have the honour to

inform the house that I have received the following communication:

Ottawa, April 4, 1941.

Sir:

I have the honour to inform you that the Right Hon. Sir Lyman P. Duff, Chief Justice of Canada, acting as deputy of His Excellency the Governor General, will proceed to the Senate chamber to-day at 3.15 p.m., for the purpose of giving the royal assent to certain bills.

I have the honour to be Sir,

Your obedient servant,

F. L. C. Pereira, Assistant Secretary to the Governor General.

Hon. R. B. HANSON (Leader of the Opposition) :

Mr. Speaker, as the house is already

aware, a motion has been passed for the adjournment of this house at six o'clock on Wednesday for a substantial period. I understand the date of the adjournment was fixed on the conditional understanding that possibly the budget would be brought down the first of the coming week. The Minister of Finance (Mr. Ilsley) has announced that this is not now physically possible. It has been represented to me from both sides of the house that a large number of hon. members would desire, if possible, to have this house adjourn to-night at six o'clock for the Easter vacation, thus anticipating the adjournment by three days.

I understand a large number of hon. members have either departed or are about to depart by afternoon or evening trains. I would ask the Prime Minister (Mr. Mackenzie King) if the government would consider making a motion that when the house do adjourn at six o'clock to-night it shall adjourn for the Easter vacation, rather than having the adjournment on Wednesday next.

Mr. M. J. COLDWELL (Rosetown-Biggar):

Mr. Speaker, may I interject that until five minutes ago I had no knowledge that this suggestion was going to be made. I should like it to be clearly understood that, so far as our group is concerned, we are not asking that this be done; indeed, we are opposed to it.

We consider that the wheat regulations require a thorough discussion before we leave this house for the Easter vacation. We have

Easter Adjournment

had no opportunity to discuss these proposals and regulations. The policy was announced on March 12, and it was discussed briefly on March 27. The regulations were distributed in our mail-boxes on the afternoon of April 2. So far as my own constituents are concerned, this is the gravest problem which confronts them, and I am absolutely opposed to leaving this house until we have had an opportunity of discussing this matter thoroughly, in order that, before they put their seed in the ground, they may know exactly where they stand.

One other suggestion I would advance is this: Owing to the economic circumstances

brought about by the agricultural situation in western Canada, the provinces of Saskatchewan and Manitoba particularly, and probably the other prairie province of Alberta, are faced with a grave relief situation which has not yet received any consideration at this session. Therefore we do not feel that we can consent to such a motion, if it is introduced by the Prime Minister.

Mr. J. H. BLACKMORE (Lethbridge):

Mr. Speaker, I am of the same opinion as the hon. member for Rosetown-Biggar (Mr. Coldwell). I have not been at all satisfied with the way in which we have been able to deal with the problems which face us this year. I do not think anyone is to blame for this, but I believe that several matters which are vital to this country at the present time should be discussed. Not only is the *wheat situation a grievous one, but the agricultural situation generally throughout the country is precarious. I see no reason why we should not stay here for three or four more days in order to let hon. members express their opinions concerning these problems, even though we do nothing about them.

When it was proposed that we Should take a recess from April 9 until April 28, I raised no particular objection, but the thought passed through my mind that we were throwing away a great deal of valuable time. When we come back on April 28, the time left to discuss vital matters will, in my opinion, be altogether inadequate. Therefore, I am inclined to disagree with the suggestion that we lengthen the recess, although I have no desire to be an obstructionist in this regard. I merely express the feeling which, I am sure, prevails throughout my constituency and province.

Right Hon. W. L. MACKENZIE KING (Prime Minister):

Mr. Speaker, as Your

Honour has just announced, the deputy of His Excellency the Governor General will proceed to the Senate at a quarter past three o'clock to give the royal assent to the bills which

have passed both houses. The proceedings of this house will be interrupted at that time. As has been mentioned, this matter of adjournment has come up rather suddenly. I think it has come up as the result of a feeling which is general with respect to the desirability, all circumstances considered, of extending by two days and a half the vacation which has been arranged for Plaster. It really means an accommodation of more than two days and a half because hon. members will be able to take advantage of Saturday and Sunday.

As the proceedings of the house may be interrupted at any moment, I was going to suggest that this matter might stand until after the deputy of His Excellency the Governor General has given royal assent. Possibly in the intervening period one or two of my colleagues could hold a conference with the hon. members who have spoken and, if thought advisable, I could, later on, introduce a motion which would permit adjournment to-day until the time fixed for reconvening after Easter. May I point out to my hon. friends who have taken some exception to a longer recess, that by the rules the matters which would come up for discussion next week would be the motion of the hon. member for Haldi-mand (Mr. Senn) in the nature of amendment to the house resolving itself into a committee of supply. In all probability the debate on that particular motion would not be concluded by Wednesday afternoon, and there would not be a chance for the Minister of Agriculture (Mr. Gardiner) to go on next week with the matters to which my hon. friend has referred. The minister is, I understand, quite prepared to go on with those matters this afternoon. So far as the government is concerned, we have no desire to press consideration this afternoon of the other bills on the order paper. By having the Minister of Agriculture go on immediately with his estimates, by having a full discussion on the matters referred to, I would hope that it might be possible to meet the objections which hon. gentlemen opposite have raised and bring about a general agreement as to adjournment at six o'olock to-day. I shall have something more to say on this after the royal assent has been given.

The house in committee of supply, Mr. Fournier (Hull) in the chair.

DEPARTMENT OF AGRICULTURE Special

422. To provide for payments on reductions in wheat acreages, under conditions prescribed by the governor in council, for administration expenses in connection therewith, and for tem-

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Wheat Acreages

porary appointments that may be required notwithstanding anything contained in the Civil Service Act, $35,000,000.

Mr. LEADER:

I am sure that my constituents will expect me to have something to say on this vital question of reduction in wheat acreages. Having spent all my life on the farm, for over half a century working and tilling the soil, I should know something about farming; and so far as the wheat problem is concerned, I have solved that problem for myself. Years ago we decided to curtail our wheat acreage and to go into more diversified farming, and I am glad to be able to say that after twenty-two years in the cattle business, the wheat problem does not worry me at all. I believe that the same thing could be said of thousands, yes thousands, of farmers in the Canadian northwest, that those who have taken up diversified farming have been able to stand up in the trying times that we have endured in the last ten years.

The memories of hon. members may go back to November 21 of last year to the speech I made in this house outlining what I thought the government should do with regard to the wheat problem. At that time I took the stand'that we had come to the position where the farmers themselves must realize that we cannot continue to raise wheat in this country to the same extent that we have done in late years. This huge surplus must be reduced if we are to have any hope of ever getting the price up to where it should be.

When the proceedings were interrupted for the royal assent, we were considering item 422.

Mr. LEADER:

Mr. Leader: Eighty-five.

Mr. McNevin: We will discuss that suggestion later, but for the purpose of this illustration I will say 75 cents.

I believe-and I am now talking right at the Minister of Agriculture-that if the government had been bold enough to say, "We will pay 85 cents a bushel on 230,000,000 bushels," that proposal would have carried in this house. I firmly believe the Ontario members, realizing our disabilities out west, with their desire to help, would have said, "We will support that suggestion." I wish now to ask why the government did not bring in that recommendation. That is what the people of this country asked for; and I believe-I speak subject to correction-that every member of this house would have supported it. It is only right and just that the western Canadian farmers should have this concession, if that is the proper term for it.

May I now discuss the proposed bonuses. I contend, Mr. Chairman, that they will not benefit the average farmer. They may be of assistance to the man operating a large, mechanized farm; but, do you know, sir, that is the very guy who brought this problem upon us. I say that without intending to be disrespectful. I have just as much regard and good-will for the large farmers as I have for the smaller ones; they have just as much

right to live in this country, but they are the people who have heaped up this huge surplus. The smaller farmers and their families, living on the land, are the greatest asset of the nation. Many hon. members representing rural constituencies have said to their electors that the farmers are the backbone of this country. I have made that statement; and I have declared that agriculture is the basic industry of the country. Therefore the smaller farmer and his family, making a living on the land, is really the one who should be considered. What percentage of the population of this country live on the farms? I am informed that it is at least one-third.

In that connection I should like to repeat some figures which I placed on Hansard on a previous occasion. According to the table which I placed on record at that time, thirty-five per cent of the farmers in the three prairie provinces sow less than fifty acres of wheat a year; that is according to the 1935 census. Those farmers have a slim chance of reaping any benefit from this bonus, after having, had no wheat for perhaps three or four years. Why, I know several farmers who have not sown wheat for the last ten years, and they do not come into the picture at all, although I believe some regulations will be drawn up to take care of them. Further than that, sixty-two per cent of the farmers of the west sow less than one hundred acres of wheat a year. Therefore I think there is truth in the statement that this policy will not benefit the smaller farmers of this country.

I should like to give an example of how this policy will work. When some people speak of summer-fallowing, and being paid a bonus for it, it occurs to me that they think we can summer-fallow for nothing. It costs money to summer-fallow. As a rule, in farm leases in Manitoba they allow $5 an acre for any summer-fallow the tenant has not done, but I am going to be conservative and place the figure at $2 an acre. That is not all velvet. I can assure you, Mr. Chairman, that it costs a great deal more than $2 in my district if you do the summer-fallowing right, but we will put it at that figure. The bonus on one hundred acres of wheat at $4 an acre will be $400. The cost to the farmer would be at least $200, which would leave him a net revenue of $200 from his summer-fallowing.

This is what I would do; this would be my alternative. ' I would take that one hundred acres and sow it in wheat if the government had a policy that would allow me to do so. It is a poor field of summer-fallow that will not produce at least twenty bushels to the acre. That would give me two thousand

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bushels from the one hundred acres. Of that two thousand bushels the government will take only two-thirds, or 1,333 bushels, which at 15 cents a bushel would amount to $199.80, or almost equal to the summer-fallow bonus. This will leave me 666 bushels, which the government does not want. What is the farmer going to do with those 666 bushels of wheat? Well, he will just put them in his granary. Can you think of any form of crop insurance, Mr. Chairman, that would stand a man in better stead than a binful of wheat; and can you think of anything that would bring this problem to the mind of the farmer more vividly than to find himself with a binful of wheat which he could not deliver? The next year he would hesitate before putting in much more wheat.

The coarse grain bonus is, I think, the most attractive of the three proposals. If I have to make a decision between summerfallowing, sowing to grass or sowing to coarse grains, I will sow to coarse grains. If I take one hundred acres of summer-fallow, I can produce forty-five bushels to the acre. We usually sow barley on the second crop, some of it on the poorest land we have; but if we sow barley on the good summer-fallow, we can just double the bushelage of barley in this country right under this very plan. If we do that, what will be the result? We are just going to have the wheat problem transferred to a barley or some other coarse grain problem. That result is inevitable.

I believe the bonus relative to pasture land has some merit, but it is a long-range programme. It is something which cannot be of much benefit to the farmers this year, beyond the $2 bonus which is to be paid. There is certainly room in Canada for more grass land; that is where diversified farming comes in. We could develop our cattle industry and our sheep industry away beyond its present size, if that development were permitted. The other evening and afternoon when I listened to some of my good friends on the Conservative side of the house arguing that there should be more restrictions on trade with the United States-they referred particularly to fresh fruits-and when they were told by the Minister of Finance that such restrictions would endanger the Canada-United States trade agreement, I could not help thinking they had not realized what that agreement meant to western Canada- yes, to the whole of Canada.

In these days, statesmen do not talk about restrictions in trade. The tendency is altogether the other way. Men are talking about cooperation, and the possibility of removing

barriers of trade between nations. The United States trade agreement of 1936 and again renewed in 1939, proved a godsend to the cattle raisers of Canada. Where would we be to-day, with our markets across the ocean shut off, were it not for that trade agreement? Now that we have not the market in the old country, where would we be if we did not have that outlet to the south? Some will argue, "You cannot even fill your quota." No, we cannot; but that outlet is removing the surplus from the domestic market, and assures us of a higher price all round. There is no doubt about that.

It is wrong, therefore, for us to suggest anything which would interfere with the Canada-United States trade agreement. That arrangement stands out as an oasis in a desert, so far as the legislation of this government is concerned. The farmers' position is not good, and I am satisfied it is not going to be any better under this new policy. The farmers are willing to shoulder their responsibilities in this war. They are willing to pull more than their weight, and, indeed, they are doing so. But why should farmers be asked to be the shock-absorbers of the whole nation? That is what has happened. All other prices are rising. Look at the profits being paid by every company in Canada, and then look at the position of agriculture, the basic, backbone industry of the country.

Farmers cannot do other than keep on tilling the soil; that is their occupation. We cannot pull up stakes and go somewhere else. We just have to keep on going, whether we do or do not receive a fair price, and take our chance on the next crop. I find, upon looking into figures received by farmers in recent years, that although those living on the land comprise one-third of our population, they enjoy only ten per cent of the national income. Nevertheless, while agriculture is not prospering, many secondary industries, founded upon the work of the agriculturists, are making money.

I shall mention some of those industries. Take the meat packers, the milling companies, the farm machinery companies and the grain trade. Each of those industries is dependent upon agriculture, and to-day each is prospering. Why? Because they can transfer their energies to something else.

I have before me figures showing that in 1939 Canada Packers had a net surplus of $1,238,736, and, in 1940, a net surplus of $1,667,809. In 1939 Swift Canadian had a net surplus of $376,598, and in 1940, $394,109. Lake of the Woods Milling company is a firm which has suffered in recent years, but,

Supply-Agriculture-Wheat Acreages

on account of the war, its business is improving. In 1939 that company had a surplus of 8596,691, and, in 1940, 8476,601. The Massey-Harris companjq too, suffered in past years, but now they are making money, and they made money for several years before the war. In 1939 they had a surplus of 8705,337, and in 1940 they had an operating surplus of 83,132,158. But through their method of bookkeeping, which no doubt is a correct one, they show, in 1940, a net income of 8805,568.

Mr. MARTIN:

Have they paid dividends recently?

Mr. LEADER:

Just to the preferred shareholders, I believe. If hon. members wish, I could give the source from which I have obtained these figures.

I should like now to say something concerning the grain trade. Before dealing with that trade, may I correct a statement I made in the speech I delivered last November. At that time I said that the storage paid to the line elevator companies was three-quarters of a cent a bushel. That was an unintentional mistake, and I am glad to correct it at this my first opportunity. Instead of stating that it was three-quarters of a cent, I should have said it was two-thirds of a cent. This amounts to one cent a bushel per annum. This does not look like very much, but on hundreds of millions of bushels on which storage is paid, it can be readily understood that the total amount involved will be considerable.

The grain trade have been pretty well looked after by the parliament of Canada. I refer not only to recent years. They have been looked after as long as I can remember, and they are being well looked after to-day. They are making money; in some departments they never made as big dividends as they are making at the present time, right in the midst of this war. The charges the nation will have to pay the line elevator companies-and in that I include the pool elevators and the United Grain Growers-to carry the surplus will amount to approximately $65,000,000 a year.

When the Minister of Trade and Commerce made his announcement he said, speaking of the surplus and the problem of taking care of it:

To meet this situation the government entered into an arrangement with western elevator companies for the construction of approximately

50,000,000 bushels of temporary terminal storage space at Fort Willian-Port Arthur. The arrangements made were approved by order in council of February 19, 1941. I am assured a large part of this new space will be ready by July 31 of this year and the remainder in August and September. These facilities are being constructed by the elevator companies. The government has agreed to maintain all elevator tariff charges now prevailing without reduction until July 31, 1943. and to allow the companies to write off as depreciation for income tax purposes 50 per cent of the actual cost of construction in each of two successive years.

The point I make is this, that the government of Canada have guaranteed to the elevator companies two years' storage, whether we get rid of this surplus or not. Someone has said that the old country will be bombed, that the wheat fields will be set on fire, that the grain will be destroyed and that this wheat will be needed. If that comes true, it means that we have entered into a contract, if not written, at least oral, by which we undertake to continue paying these storage elevators for the next two years at the rate of approximately $65,000,000 a year. The minister goes on to say:

It is further agreed by the companies that after the 31st day of July, 1943, they will, upon request, each enter into agreements (upon the basis of payment of reasonable remuneration for each operation) as may be mutually satisfactory in the light of the operating experience gained during the jjeriod up to July 31, 1943, for the operation of its temporary facilities during the balance of the time such facilities are needed.

There are hon. members who will argue that it will be four years before we can get rid of our surplus wheat, so this will be rather an expensive proposition for the government and the people of this country. A meeting was held at Portage la Prairie and a resolution was passed asking the government to provide some means of assistance, even if only to aid us in providing storage facilities on the farm where this is needed. Of this $65,000,000 that we are paying out to the elevator companies, not one dollar is going to the farmer. There was a time when we hoped that we were going to get another ten cents a bushel on our 1939 crop, but we did not get it. Why? Because it had been eaten up in the payment of these storage charges. I know this may be something the government cannot help at the present time, but they seem to have slipped a cog in this connection by not paying attention to the necessity of providing more storage facilities on the farm where this is needed. We need these granaries, and we need them filled with grain as a security against crop failures.

Mr. WOOD:

Does the farmer of the west really believe that it is an obligation of the government to build granaries on the farms?

Mr. LEADER:

No, he does not, but the

suggestion was made that loans should be made to the farmers or they should be provided with lumber for that purpose. Then

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storage charges could be paid to them instead of to the line elevator company, and the government would get their money out of the storage charges when the wheat was sold. That is all we are asking for.

Mr. WOOD:

It is a wonderful thing if

you can get it. We in Ontario do not take eagerly to having the government provide granaries for the farmers in the west. We have had to erect expensive buildings to carry on our operations, and we are always glad to have a little wheat in our granaries. We do not expect the government to lend us money. We find it somewhere.

Mr. LEADER:

I am sure the hon. member for Brant is one of those who would be willing to cooperate with western members in order to try to understand our problems and to arrive at some solution which would be beneficial both to the east and to west. We do not want the government to build our granaries; all we ask is that it be made a little easier for us, especially when they are ready to pay out this money to the line elevators.