June 23, 1942


Leslie Alexander Mutch


Mr. L. A. MUTCH (Winnipeg South):

Mr. Speaker, I am not insensible of the difficulty which confronts one in attempting to follow the Minister of National Defence (Mr. Ralston), particularly in view of the fact that some of the things I desire to say closely touch his department. I should say in the beginning that on the plebiscite I personally voted "yes," and the constituents of Winnipeg South also voted "yes" by twelve to one. So that on my own and on their behalf I support this motion, and I now declare that if and

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when the time comes that it is found necessary by the government to exercise the power which the passing of this legislation will give them, I will support conscription for overseas service or the conscription of the man-power and woman-power of Canada for any purpose whatsoever.

In this debate, as in every other debate into which there enters the element of sentimentality, there has been a considerable amount of nonsense talked. In that respect it is my desire to mention one or two things which I think have not helped in deciding this issue but which have rather had the effect of disillusioning our citizens, when they consider what is being done here. We have had various descriptions of what a conscript is and what may be expected of a conscript. The general consensus, whether you take the viewpoint of the red-eyed conscriptionist or that of the dyed-in-the-wool anti-conscrip-tionist, seems to be that conscription is all right for the army; the implied suggestion is that the army is a disreputable conglomeration of people anyway, but that conscription is thoroughly impracticable for the air force or the navy, this in spite of the fact that the traditions of the navy which is described as the mother of our navy have been built up on the success of naval battles fought by sailors who had been shanghaied from every port of the island. The conception seems to have got abroad that we are still operating with a sort of bow-and-arrow army, for which any sort of mentality is sufficient.

I cannot understand why the belief is generally held that conscription is all right for the army but no good for the air force or the navy. The fact is that when a call is issued by the Department of National War Services, recruiting in the Royal Canadian Air Force, in particular, jumps by leaps and bounds. If the definition of a conscript is one who has been called by his government to do his duty, I cannot see where there is any substantial difference between a man so called up who answers the call and the man who enlists in the R.C.A.F. or the navy, or a special branch of the army, a few days before he is due to report for training. Advertisements have recently appeared in the newspapers to the effect that if a man is called up for service in the defence of Canada he will not be able to transfer to another service. The young men of Canada were told that if they had any idea of getting into the R.C.A.F. or the navy they had better do it right away. That was the type of propaganda put out by at least one of the other services. I am a little tired of this attitude, and I rather fancy

that the public of Canada are somewhat disillusioned. The idea is abroad that the man who is conscripted would be of no use to these services. If that is so, then there must be more than a few thousand of them who could be released with advantage to the army so that soldiers could be made out of them. However, my purpose is not to introduce any recrimination into this debate.

For a moment I should like to speak for the people of my constituency in connection with the motion now before the house. The majority of the people of Winnipeg South are in favour of conscription now, and I have no doubt that almost all the people of that constituency would favour conscription at any time that the government regarded it as necessary. Knowing that, I could not, even if I wished, refuse to support the motion simply because it fails to satisfy all. Those in that constituency who cry "forward" with respect to conscription, and even those who cry "back", if there be any, would turn with a unanimous voice to rend either me or anyone else who might by his attitude on this question seek to overthrow the government at the present time.

There is another matter about which I think all the people of that constituency, perhaps all the people of the province, are in agreement. We do not want any more debate on the subject of conscription. In 1935, in 1940, and again in 1942, the people of Canada asserted their confidence in this administration and in the policies of this government. Nothing that can be said or done will add anything to the authority which this government has now. Once this motion carries, the responsibility will then lie fairly and squarely upon the shoulders of the government. Any further discussion would be regarded as temporizing or evading responsibility, and in my opinion it would merit that criticism. I welcome the assurance of the Prime Minister (Mr. Mackenzie King) that the government on their own responsibility will act when and if it is necessary and stand or fall by the result. That is the practical working out of the democratic system.

In connection with man-power I should like to draw to the attention of the Minister of National Defence and of the government generally, the fact that considerable wastage is still going on in that because of lack of education or inability to take the training required to-day for troops, volunteers who have come into the service although physically fit, have had to be discharged or used in the home establishments. They have not been able to assimilate the training [DOT] which is essential if they are themselves to have a

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chance of survival or if they are not to endanger their fellows with whom they will serve. When we consider the man-power of Canada we must take into consideration the not inconsiderable numbers who, although physically fit, have not been assimilated into the armed forces. Those who have thought that men with superior education could be used in the navy or the air force and the remainder used to fill out the ranks of the army must realize that it requires just as good physical condition and just as good education to be an operator of a tank or other motorized or mechanized equipment as it does to qualify for the other services. I know of at least one man who was refused once for the army, and another one who was refused twice, who are now training as aircrew.

Before sitting down I should like to address a word to the government as a whole with respect to Canada's war effort. Canada's part is not being adequately played up in the news of the war. The responsibility to see that Canada and Canadians are played up in the news of the war is a responsibility of the government itself. The jumble of the Royal Air Force and the Royal Canadian Air Force in England has deprived Canada and Canadians of a knowledge of what our boys have been doing in the last few weeks or months. Had this information been given to us, and I think we had a right to expect it, it would have proved an inspiration to the people all across Canada.

Canada's navy is known everywhere but in Canada. I should like to suggest to the Minister of National Defence for Naval Services (Mr. Macdonald) that he discard this tradition of the navy being a silent service, that he leave that to those who coined the expression. This is a new navy in a new world. It may be well to keep the traditions which have made the British navy what it is, but we should discard some of the snobbish ideas, one of which is that the navy should be the silent service. We should be told what is being done. No matter what happens in England, or on the continent, in north America when you have something to sell, your best idea is to advertise. This is one thing the administration has failed to realize, both in time of peace and in time of war.

We in the Dominion of Canada do not seem to have grasped the significance of nationhood, and so when we argue with each other in the house, and English-speaking Canada attempts to explain to French-speaking Canada what their conception of Frenchspeaking Canada is, and French-speaking Canada gives up the almost hopeless task of explaining to English-speaking Canada what 44561-225 i

their conception of Canadian life is we are overlooking the fact that if, instead of having so much explanation, we were living and practising the idea of all being Canadians in Canada, particularly at this time when all our energies are centred upon the war, it would no doubt have more educational value than all the speeches which have been made on this subject.

I should like to make one or two suggestions to the Minister of National Defence.

It is no sign of a lack of confidence in him or a lack of appreciation of what the Canadian armed forces are doing if I take a minute or two to examine one or two things which I think are important.

As I listened to the able speeches which* have been delivered by the ministers who have spoken, I found myself sitting back in. my chair with a comfortable feeling that perhaps everything is all right, and that scares me worse than anything else on earth. Consequently if I suggest to the minister, having followed his speech with close attention, that I am still in a questioning frame of mind, not only with respect to some of his decisions but with regard to some of the advice he gets,, and certainly wdth respect to some he takes, he will understand that I am trying to keep myself from getting into a frame of mind where I shall be convinced that the Germans will be stopped before they get to Alexandria, and that they can never get to Vancouver or Seattle, and that if we just keep rolling along, the good Lord will raise up somebody to lead us to victory.

History shows that very few of the great' conquerors of the world were professional soldiers. We need only go back to the last war. I remember as I am sure the minister and many other members do, those anxious days when we did not know just what was happening before Paris, and when we learned afterwards that the man whom the French called the little tiger, with his hard hat, was riding back and forth behind the French lines in an old taxicab, saving the day, although he gave the credit to Petain. We remember these things, and also the situations that arose in Great Britain. We remember when Lloyd George was working miracles with the civilian population, and, thank God, helping to win the war, although his actions were regarded by the military men as unwarrantable interference in the administration of the army.

There is a little disquiet in my mind when I hear the expression so often used in this house, that the government will act on the advice of their experts. Experts is a word I am suspicious of, perhaps because I come

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from the west, where some of our people believe that an expert is somebody in Montreal or Toronto who knows somebody in Ottawa very v'ell indeed. Another definition of an expert is somebody who is a considerable distance away from home. The war situation is too serious for one to feel quite content if he thinks that the strategy which is guiding the war effort of Canada is coming from the ranks of those who were satisfied with the crumbs from the table of Canada's militia during peace years. One wonders whether men with that mentality who were content with the environment of those years are capable of being transformed all of a sudden so that they can conceive of modern warfare in global terms. The senior ranks during the period of peace had become, I am inclined to think, pretty much civil servants all [DOT]dressed up, and the changes which have been made in the selection of the senior officers who &re overseas to-day is a healthy indication of the recognition of the fact that it is not enough to leave the devising of strategy solely to men who are professional soldiers.

I should like to feel more than I do now, that the leadership of Canada's war effort from a military standpoint was being more largely directed by the ministers in council. I would be happier if I felt to a lesser extent than I do, that the ministers in council too often concern themselves only with the point of view of the professional soldier. There is no doubt that men trained in technical military proficiency should be those charged with carrying out the military policies. But if I could arouse in the minds of members of this house, and especially in the mind of the government, a sense of the danger of leaving the concept of what we might call global warfare to those limited professional minds, I would have more assurance that when the day comes that Canada's sons stand in some future Tobruk or Singapore we shall not have recriminations in Canada to the effect that those in charge of directing our military effort lack the vision to think in terms of a war which is newer and vastly different from any we have had before. I hope that we shall not find ourselves looking about as this people of England are looking about today for some explanation of another unfortunate set-back, with the half-formed and ill-expressed thought in the back of their minds that they have left the problems of to-day and the security of the future too often to men whose minds belong to yesterday.


Frederick Davis Shaw

Social Credit

Mr. F. D. SHAW (Red Deer):

Mr. Speaker, at the outset may I say that I would not be fair if I did not give expression to a thought

of mine with regard to the speech delivered this afternoon by the Minister of National Defence (Mr. Ralston). I wish to congratulate him on its conciseness, and if I am able to judge the reaction to it among the various groups in this house I would also congratulate him upon its effectiveness. With many of the things he said I am quite in accord.

My participation in this debate to-day is undertaken with two important facts firmly established in my mind. The first has to do with the critical international situation, and in that connection I can do no better than to quote the words in which the Prime Minister (Mr. Mackenzie King) referred to it yesterday afternoon. He said:

It only goes to bear out what has been said so often that no one can take too seriously both the immediacy and the extent of the danger with which all parts of the world are confronted, and at this time our own part in particular.

One needs only to reflect upon the situations which exist in four different theatres of war, if I might characterize them as such. First, we have only recently been advised of the fall of Tobruk and Bardia, and the consequent threat to all of North Africa and our position there. It has been reported, whether correctly or not, that we lost 25,000 troops in the fall of Tobruk. Second, according to a recent report the Japanese have extended their influence in the Aleutian area. Third, the Germans have driven a wedge into the defences of Sevastopol, and, fourth, and probably of greater significance to us, there is the shelling of Vancouver island. All these serve only to emphasize the seriousness of the world situation at the present moment.

In the second place, I believe I am quite fair in saying that there is strong evidence that Canadians generally are becoming very impatient with parliament, and witness with growing dissatisfaction the apparent disregard which we are showing for time and events. When I say that I have in mind the fact that for five long months we have been toying with the man-power problem in this country. I do know, as a result of discussing the manpower question with men on the street, that they wonder what in the world is the matter with us here that we are not accomplishing something definite in that regard. I am not asserting for one moment that the man on the street knows all that goes on in here or the difficulties with which we are confronted. But I personally feel that five months is too long a period of time to devote to this particular issue. The need of the hour is far too great for that. Only a day or two ago one gentleman characterized it in this way, as nearly as I am able to recall his words: "The

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whole thing is like a great poker game, with the government reluctant to bid and afraid to lay down their cards". I feel that I am able without a great deal of difficulty to concur in that comment. I think we have been doing a great deal of stalling, and the man on the street also feels that we are stalling. So that if I confine myself to a few facts and occupy less than the time at my disposal I may be setting an example which the man on the street wishes us to set.

Since the Social Credit party first became an influence in the national political life of this country we have invariably advocated a policy of construction, not destruction. Therefore I propose to be constructive and not destructive. I know I am correct in asserting that ours is the only party in the house which has not had to trim its sails according to the political winds. We get a great deal of satisfaction out of that, and I propose to show during the course of my remarks that it is a fact.

Furthermore, consistency has been the characteristic feature of our attitude towards the question of conscription, and we may go back to pre-war days in order to determine that and establish it as a fact.

With respect to the question of conscription I am afraid-I believe the Minister of National Defence made reference to this- that conscription is misunderstood. I know that it conjures up in the minds of some people the same reaction as does the word "politician." Possibly conscription is misunderstood because it has so long been steeped in politics and juggled by politicians for purposes of political expediency that the average man to-day is, and has justification for being, fearful of the implications of the word. Conscription, whether applied to the financial, the industrial, or the man-power resources of the country means nothing more nor less than the effective organization of those resources, and there is nothing sinister about that. If I go back to pre-war days and make one or two references to the stand which we took at that time and the stand which certain others took, I wish it to be known that it is only because a deliberate attempt is being made in various parts of this country to distort and misrepresent the stand we took then, which is exactly the same. stand as we take to-day.

I have in mind an English-speaking crosssection of public opinion which believed firmly in a policy of isolationism. I believe I am correct in saying that the present Minister of National War Services (Mr. Thorson) was the leading light in that particular group. In browsing through Hansard of the short war session of 1939 I find that the present Minister of National War Services spoke as follows at page 52:

There has been a great body of opinion in Canada to the effect that we should not participate in any extraterritorial war, and should keep ourselves free from any external commitments, whether direct or indirect, which might involve us in such a war. Those who have held this view have had the best interests of Canada at heart.

I do not question that, Mr. Speaker. They may have been sincere.

I have been one of the spokesmen of that body of opinion, and have not hesitated to express my views on this subject whenever the need arose, both outside and inside this house, with such vigour as I could command. I conceived this to be my duty as a Canadian whose first and undivided loyalty is to Canada.

It seems that the present Minister of National War Services, as I said a moment ago, was at that time a recognized leader of a certain cross-section of public opinion who were definitely opposed to conscription and all the implications of it, and I have not the slightest doubt that he was responsible for building up among his followers a definite prejudice against the idea of conscription.

Then of course we have our French-speaking friends from the province of Quebec. I do not undertake at this moment to condone or condemn their attitude with regard to this matter. Personally, with my limited knowledge, I would say that they have been taken advantage of for so long, that conscription has been made a political issue there for so long, that it is more a state of confusion with respect to the whole thing than anything else. The late minister of justice, the Right Hon. Ernest Lapointe, was the recognized leader of that particular cross-section of public opinion. On September 9, 1939, he stated, as reported in Hansard, page 68, these words, which have been quoted here many times before, but which for the purpose of my argument I shall repeat:

The whole province of Quebec-and I speak with all the responsibility and all the solemnity I can give to my words-will never agree to accept compulsory service or conscription outside Canada. I will go farther than that: When I say the whole province of Quebec I mean that I personally agree w'ith them. I am authorized by my colleagues in the cabinet from the province of Quebec-the veteran leader of the senate, my good friend and colleague, the Minister of Public Works (Mr. Cardin), my friend and fellow townsman and colleague, the Minister of Pensions and National Health (Mr. Power) - to say that we will never agree to conscription and will never be members or supporters of a government that will try to enforce it.

And he asks: "Is that clear enough?"

I read that because the late minister of justice was definitely the leader of a certain

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cross-section of public opinion, and undoubtedly-I say this with all due respect-he must have been to a very great extent responsible for fostering and developing that attitude of mind among that cross-section of our Canadian public opinion.

Then we have the Prime Minister himself (Mr. Mackenzie King), speaking in the house on September 8, 1939, when he said, at page 36:

I wish now to repeat the undertaking I gave in parliament on behalf of the government on March 30 last.

That would be 1939.

The present government believe that conscription of men for overseas service will not be a necessary or an effective step. No such measure will be introduced by the present administration.

Again he was expressing the view of another cross-section of public opinion. I well recall that during those pre-war mouths and years he did his part, if I may say so. towards the development of what I call a distorted attitude to the whole question of conscription.

Then we move on to our Conservative friends, and while I have no quotations at hand at the moment, goodness knows there are many that could be given. They collaborated most fully with the Liberal party prior to the election of 1940 with respect to this question of conscription. They too must accept full responsibility for what they did in the way of giving the Canadian people a wrong slant, if I may use that expression, on the question of conscription.

It is a well-known fact, of course, that our friends of the Cooperative Commonwealth Federation were also definitely opposed to the conscription of man-power and the sending abroad of an expeditionary force. I quote all parties because it would not be fair to quote only one.

I come to the stand of the party with which I am associated. At the very time that such phrases as these were the slogans of certain groups in this country, we of this party and all those associated with it had the courage, in spite of what many suggested was political suicide, to be honest at least with ourselves and with the people, to evaluate the picture as we saw it, and to make known to the people of Canada exactly what we thought. And that is no different from what any representative of the people should do. These were some of the catch phrases found on banners and pamphlets, on walls and so on throughout the country prior to the election of 1940: "No Canadian troops to be sent overseas to take part in any hostilities, whatever the professed purpose of such hostilities may be." Here is another: "Canada .must declare herself strictly neutral in the event of another war, no

matter who the belligerents might be." And still another: "Money appropriated for national defence will surely lead to war." That was a catch phrase back in 1936, 1937 and 1938. Here is another: "We shall not fight any war proclaimed to make the world safe for democracy."

These were some of the things that were being said at the very time that we of this party, looking into the future with vision and courage, correctly determined what was going to take place within a few years. I will go back first and give the foundation of our stand, and to do so I will read part of a statement which was published in the Edmonton Journal of January 18, 1936, if you will. This is part of a statement given by the leader of this group:

The increase of armaments that is in prospect is a most disappointing development to all who want to see the reign of law established in international affairs and an end put to war. But where the responsibility lies is quite clear. No matter how peace-loving a nation may be, it has to consider the conditions which exist in the world to-day and act accordingly.

If I may interject a comment at that point, Hitler was coming to the front very rapidly at that time. He had made known his intentions, and surely any intelligent man should have been able to see what those intentions were. I continue:

Britain has been exceedingly anxious to avoid adding to their armament burdens, but in its present situation has no alternative. Nor can Canada be content with merely expressing the desire for peace. Mr. Blackmore stated that his group favoured "such steps on Canada's part as will render her powerful enough in all respects to plan an effective part in any world crisis with which the league of nations might be called upon to deal." That was why expenditures on military, air and naval forces were urged. "Is it right or just", the Social Credit leader asked, "that we should depend upon Great Britain to defend us, or on the United States?" Surely there could be only one answer to that question.

As I say, that was printed in the Edmonton Journal on January 18, 1936. I come now to

1939. In the short session following the

declaration of war by Britain against the axis, speaking in the House of Commons at that time, the leader of this group made the following statement, as recorded in the proceedings of the session of September 8, 1939, at page 48:

Therefore New Democracy declares that justice, equality and effectiveness depend upon conscription of finance, industry and man-power.

Let me make an assertion here. If anything was ever torn to pieces and put together again to suit the purposes of the one who tore it to pieces, that statement was. We went through the campaign of 1940 and we know

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what the members of all parties tried to do with that statement, and it is true they were successful in taking seven of our men. But we retained our honour just the same. Speaking in the same debate the hon. member for Acadia (Mr. Quelch) clarified that statement somewhat as reported at page 99 of Hansard of that session. He said:

On the other hand, we have advocated conscription of, first, finance; second, industry, and third, man-power. By conscription we mean a process of effective control and direction.

I well recall the vicious type of propaganda I was confronted with in that regard, but as I have said, we have nothing to be ashamed of to-day, and I dare say there are men sitting in other parties in this house who would like to be able to refer back to similar assertions as having been made by them. They did not make them, but they wish they had done so.

When it came to the election of 1940 we still stood for the conscription of finance and industry and then the conscription of man-power. It was clearly and definitely explained that the first two were to precede the third. Those who opposed us did everything they possibly could to create another impression. On September 12, 1939, this group moved in this house that a special committee of the house be set up to determine ways and means of conscripting the financial system to make for greater equality of sacrifice and service. Hansard records the fact that every party in the house voted against that motion. We were the fathers of the idea that if we are to make a maximum contribution in this war the financial resources of the country must be conscripted. And that does not mean, as we have clearly indicated time and time again, that we ever did or ever shall advocate the conscription of bank balances. It has a far broader meaning than that. Therefore when we hear people talking about conscription of finance, about a total war effort, about the organization of our maximum resources, they are doing what they should be doing, but doing it about three years too late.

Very few people will give this group any credit for the stand they took. Few, if any, will approve it publicly, although one or two Liberal members of this house have said to me in the corridors of this building within recent days that it was the only sane and sensible stand to take.

Last January we were advised in the speech from the throne that a plebiscite would be taken in this country. It is a matter of record that while we in this group believe in the general principle of plebiscites, we could not see much that was commendable about the

one that was then proposed. It is a matter of record that we condemned the wording of that plebiscite, contending that it meant nothing. We moved to have it clarified by adding the words ''in any theatre of war," so that the people of Canada would know definitely what they were voting for or against. But our effects in that direction were futile. We also moved that the conscription of finance and the industrial resources of this country be incorporated in that measure, but once again the house saw fit to defeat our suggestion. We were completely dissatisfied with the various arguments that were advanced by many hon. members on the government side who presumed to know all about the implications of the plebiscite. We contended that it was strictly political in nature. Reading the words of the Minister of Munitions and Supply (Mr. Howe) I am satisfied that we were correct in making that assertion at that time. These are his words as reported at page 3373 of Hansard of June 16:

In this country conscription is really a political issue rather than an issue arising out of the needs of the war situation.

Later he said, referring to the York South by-election:

Since that occasion conscription has persisted as a political issue, and it was to settle this political issue that the plebiscite was taken.

It is most unfortunate that the Minister of Munitions and Supply should have made this assertion. It only adds to the dissatisfaction which is prevalent in so many parts of Canada with regard to this whole man-power question that we are supposed to be discussing and to have been discussing during the plebiscite debate. There are some in certain parts of Canada-I may make definite reference to a certain gentleman who broadcasts from Calgary and whose voice reaches my constituency- who says that we did not show leadership by not giving as a party a clear-cut direction as to whether the people should vote "yes" or "no". Well, leadership is of several kinds. I have never advocated that anybody should take my advice if I were not satisfied in my own mind as to where that advice would lead him, and if that principle were more generally adopted there would be fewer people in this country. calling themselves leaders.

I can do no better than quote the words of the hon. member for Acadia with regard to our attitude in relation to this Bill No. 80 to amend the National Resources Mobilization Act. Speaking on June 15 last the hon. member said, as reported at page 3352 of Hansard:

In passing I should like to stress the fact that this group has consistently advocated the control of industry by government.

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To-day it is so obvious that unless we defeat the enemy overseas we shall have to defeat him at home on the American continent, that no sound argument can any longer be presented that Canada ought not to participate to the greatest possible degree in the overseas conflict. That conclusion having been reached, it becomes a question of what is the most equitable way of calling up men for military service. The voluntary system to-day as imposed by this government is a policy of flogging the willing horse. It is neither just nor efficient. A continued appeal is made to a person's sense of patriotism, to his conscience, with the result that the entire personnel of some families is wiped out, while other families make no contribution whatsoever. This policy has been maintained largely no doubt as a matter of political expediency. I would call it appeasement in its very worst form, and appeasement invariably fails. If the objective is, as we have been told, national unity, I think we can say that the government has failed to achieve its objective. If the objective has been unity within the Liberal party, I think one can also say, after listening to some of the speeches that have been made in this house, that appeasement has failed even in that direction.

If the war were a minor operation, or if we had many men wishing to volunteer for foreign service, then I would say that the voluntary system would be satisfactory. So long as we had plenty of men in this country clamouring to be allowed to go overseas I would sav that the voluntary system was satisfactory. But as soon as you had a situation where you had to badger men and resort to various questionable practices in order to induce or coerce men to enlist. I would say that the voluntary system had failed and that the time for conscription had come.

The hon. member for Acadia expressed his views in unmistakable terms when he spoke thus.

I wish, Mr. Speaker, to take the very strongest exception to some of the methods now being employed to drive men into the service by means of what we call the voluntary method. It is a fact that thousands of our young Canadians have willingly volunteered to join the various branches of the armed forces, and I say all credit is due to them. On the other hand thousands have joined the active forces for other reasons. To begin with, under the National Resources Mobilization Act we called up men by age groups for compulsory military training. In my own province we have two of those training centres, one at Camrose and the other at Grande Prairie. These boys are not taken there and trained by themselves, as trainees; mingled with them are recruits in the active forces. Several months ago I asked in this house why it was found necessary to send to these particular training centres men who had volunteered for active service, and I was told that it was because of the lack of training facilities elsewhere. I accepted that explanation, but since then I have been told by an officer, one whose word cannot be readily

questioned, that at one of these training centres definite instructions were given to the active force men to mix with the trainees, to talk about joining for active service, to shame them into it if need be, but above all not to let them gather together in small groups. If that is what we mean by the voluntary method of enlistment, when by such methods we compel our boys who have been called up under the National Resources Mobilization Act to join the active force, then I say we have very little of which we may be proud.

In the second place we have throughout this country thousands of businesses which have been slowly closing up. I have in mind the hundreds of garages throughout the country employing from five to ten young men working on the floor. Restrictions were placed on the manufacture and purchase of automobiles, on the use of tires and gasoline, and finally parts were rationed. I am not complaining about that, but hundreds of these boys were forced out of work because their employers no longer had work for them. Then a long list of restricted occupations was established, in which they could not be employed; so that in many cases where these businesses were closed up the boys have had to apply to the local office of the unemployment insurance commission, where they may be given authority to take another job or where they may be told definitely, as has happened, "You join the active force." Is that a voluntary system? I say definitely it is not. I had a letter just a few days ago from a town in my constituency. According to the letter the three boys of one family have been taken into the service, either voluntarily or otherwise. Another family has four husky sons, none of whom has taken qne day's training. It is hardly fair or proper that, as the hon. member for Acadia has said, some families should be entirely wiped out while others make no contribution at all. I question some of the methods that are employed to secure men for the so-called active force, yet I do not want to leave the impression that I am for a moment questioning the patriotism or motives of any young man who enlists for service.

There is one other matter to which I should like to refer. A few days ago I happened to read a magazine in which I noticed a pertinent statement by Doctor Padilla, the foreign minister of Mexico, who was the representative of that country at the pan-American conference. The article stated that when Doctor Padilla, representing Mexico, stood up to address the gathering, not very much attention was paid to him until he had made two or three statements which I should like

Mobilization Act-Mr. Parent

to read; for I think they are worthy of consideration by certain people in this country who still feel that the place to fight the enemy is in the streets of your own town or in your own back yard. I commend these statements to their consideration. Doctor Padilla said:

All our ideas are in imminent danger of perishing. We may no longer cherish the illusion that we are living in a quiet backwater where we shall be safe from world catastrophe. Blood flows on every side and suffering lacerates all the continents. The men who gloriously fell on Wake Island have not fallen in the defence of the honour and sovereignty of the United States alone. They have, also, met their deaths in the defence of human liberties and the free destinies of the Americas.

So I say, Mr. Speaker, that we can no longer cherish the illusion that we in Canada are living in some quiet backwater far removed from world catastrophe. We know that the vicious Jap is howling at our western gate. We know that any day the roar of his planes and the thunder of his bombs may be heard over any of our towns or cities. I hope we shall not. wait until that fateful hour to bestir ourselves. This afternoon the Minister of National Defence said, and said correctly, that any country which waited until it was invaded before putting up resistance in its own defence was subjugated, and that in short order. When I think of our boys whose blood coloured the water within the shadow of Dunkirk; when I think of the blood that is flowing to-day on the hot sands of Libya; when I cast my eyes upon the other theatres of war and see the sacrifices that are being made by thousands of our young men and thousands of young men from other countries, in defence not only of their own particular territory but in defence of the territory of all the allied countries, I say that should the day ever come when they require reinforcements it would ill behoove us to say that because of certain restrictions, self-imposed if you please, we will not give them the reinforcements they need. If that should ever happen, we will live to rue that day.

In conclusion, may I say that as a member of this house I feel called upon to assume a very grave responsibility. I do not feel that it would be proper for us to attempt to escape any of our responsibilities. The parliament of Canada engaged the people of Canada in this conflict, and we must exert every ounce of energy of which we are capable. We must so organize our resources, whatever their nature may be, as to guarantee that if victory is at all possible, it shall be ours. I trust that I shall never live to see the day when any government of Canada will again declare 44561-226



war and at the same time burden itself to the point of strangulation with self-imposed limitations, be they moral or legal. There is only one kind of effective war effort. If you declare war you must do as you would if you undertook to engage in any contest- put everything you have into it. I am not saying that that could be done at once, but it could be done under a proper system of organization.


Charles Eugène Parent


Mr. CHARLES PARENT (Quebec West and South):

Mr. Speaker, it is not my intention to speak at any great length in this debate. At the time of the plebiscite I took a definite stand in this house. I thought out the matter to the best of my ability, and I supported the motion for a six months' hoist. At the time I said that that measure constituted a breach of trust, since it was giving the majority the means of withdrawing a solemn pledge made to the minority. I campaigned in my province for a negative vote. I condemned the plebiscite as being a measure something in the nature of Doctor Jekyll and Mr. Hyde. It was stated in the English provinces that an affirmative vote would bring conscription, but in Quebec it was said that there would be no conscription. In other words, it meant nothing but chaos. It is needless to say that the man in the street immediately saw the nigger in the woodpile, and irrespective of the efforts made by a majority of the members from Quebec the people of Quebec refused to give an affirmative vote.

This vote meant not only that the people of Quebec did not want conscription; it meant that Baptiste was fed up with broken pledges. He recalled the pledge made that the amounts voted for armaments for the defence of Canada were to be used exclusively in the defence of Canada, yet when he looks around to-day he asks himself where are those armaments. He recalled also the references made to the declaration of the Prime Minister of Australia that the day when we would be called upon to send an expeditionary force overseas was past history. He recalled also that he accepted the mobilization act with a smile because he was told that it was for the defence of Canada. He recalled that he was brought into the military camp for a one-month training period in order to give him an idea of what military life was like. Then he was notified that he would be a better soldier for the defence of his country if he stayed there for four months, and he accepted that change with a smile because it was for his country. He recalled also that after four months he was told that he must stay for the

Topic:   REVISED


Mobilization Act-Mr. Parent duration of the war, but that there was nothing to be alarmed about, because he was protected by section 3 of the National Resources Mobilization Act which guaranteed that no man would be sent away from Canada unless he was willing to serve of his own free will. From these facts you will understand why it was not difficult for the eleven Liberals who voted against their party to bring home the fact that the plebiscite meant a change in the views of the government with regard to the sending of men overseas. It was not simply a ease of untying the hands of the government; the fact is that there were influences in the cabinet which were so strong, even though they were in the minority, as to influence the government to a point where it had to amend this act and send overseas those men who had been brought into the camps under the solemn pledge that they would not be sent overseas against their will. This is why the people in the province of Quebec went to the polls and voted "no". Their own common sense told them what was behind this plebiscite I should like to pay a tribute to the former minister of public works (Mr. Cardin). We fought against him, but we realized that he was sincere. He was appealing to the people of his province, but from my experience in this house since early in 1935 something told me that he was so near to the picture that he could not see the wall. It sometimes happens that in a classroom a student at the back is able to point out an error which the professor has made on the blackboard, but that does not take away at all from the qualifications and ability of the professor. We are here being called upon to amend a solemn pledge that was given, not under menaces at all, but through cooperation and understanding, and that understanding was ratified by the people of Canada in the election of 1940. The then Minister of Justice carried the flag of unity from one coast to another. He spoke not only in the province of Quebec, but in Ontario, British Columbia and, indeed, throughout the whole dominion and said that because of national unity there would be no conscription in this war. That pledge was renewed time and time again. Furthermore, in Australia, when Prime Minister Curtin defeated Mr. Menzies, his first declaration when he took office was that the question of conscription would not be raised in Australia in this war because it would mean disunity in Australia. If such a declaration was good in Australia why should it not be good in Canada? Is it because there is a province of Quebec? Conscription is a national issue. It concerns not only the province of Quebec. Other countries do not have conscription. Africa does not have conscription; India does not have conscription; Ireland does not have conscription. The Minister of National Defence for Naval Services (Mr. Macdonald) told us that those countries were comparatively insignificant. But the principle remains the same. Those countries rejected conscription, and yet we never hear the people of Australia called quislings or quitters. We do not hear anyone call the people of Northern Ireland quislings or quitters. Those are words which one hears only in reference to the people of the province of Quebec, but be sure that no inferiority complex is being created by such slanders. Far from it. We are, on the contrary, stimulated by such slanders to fight on. The fight will go forward and to a better end. We will take our hats off to no one; be sure of that. I am pleased to say, Mr. Speaker, that I shall vote, and if I had two votes I would give two votes, against Bill No. SO. Stripped of all the Prime Minister's eloquence in his three-hour speech, this bill is a measure for conscription. We are told that only the province of Quebec is against conscription, but let me remind the house that for the first time in the history of England the word "conscription" was brought before parliament in 1915 by Lord Middleton in the House of Lords, and although Great Britain was then at war, the mention of conscription created an uproar. It meant imposing on the liberty of Englishmen something they had never thought of, and although France, Great Britain's ally, had had conscription for over 125 years, and almost every other nation in Europe had conscription, conscription was not introduced in England at that time. When the Minister of National Defence for Naval Services says that they had conscription in these other countries, we are not told how conscription works there, because that would be giving out military secrets. In 1938, at a time when the European volcano was rumbling and smoking, when Hitler was marching into one country after another and France was calling for help, when her armies and air force and navy were not considered sufficient, Prime Minister Chamberlain had to reaffirm, and reaffirm time and again in order to satisfy British opinion, that never would conscription be imposed if Britain went to war. That is history. The reason was that conscription would have destroyed national unity at that time in Great Britain. But afterwards Prime Minister Chamberlain had to fall into line, and introduce conscription, although we do not know with what success. No one Mobilization Act-Mr. Cloutier has ever accused England of being quitters or quislings, because for hundreds of years they did not have conscription. We are told now that conscription is not an end in itself but a means to an end. We are also told that it may not make better soldiers and that probably they may never be sent overseas, but that conscription would mean equality of sacrifice. Equality of sacrifice! Mr. Speaker, the province of Quebec average five children per family, as compared with one to one and a half in the other provinces. Equality of sacrifice 1 Again, wages and salaries in the province of Quebec, which are governed by the dominion government, are from 20 to 30 per cent lower than in the other provinces. Equality of sacrifice! Although Quebec represents one-third of the population of Canada, we have only from 15 to 19 per cent of the positions under the federal government and only 11 per cent of the total salaries paid by the federal government. Yet we hear talk of equality of sacrifice! Mr. Speaker, may I ask that, if this principle of equality of sacrifice is to be adopted, it be applied in a spirit of British fair play. Raise the standard of wages in my province to compare with that of the other provinces. Give up, to those who are entitled to them, a fair proportion of the positions in this dominion, and do not ask that they be qualified 99 per cent in order to occupy a position when you are satisfied to give the same type of position to others who are qualified only 60 per cent. I believe it is necessary that these remarks be made after all that has been said against the province of Quebec. I was reading lately in the Ottawa Journal, wherein, referring to the recent speech of the Minister of Justice (Mr. St. Laurent) they extracted from it a declaration which is absolutely untrue, namely, that the province of Quebec would be satisfied to defend its own borders. Let me state in this forum once and for all that we of Quebec consider the Dominion of Canada, the whole dominion from Vancouver to Halifax, the sacred soil of Canada; that we are ready to help and to fight on the shores of Vancouver island or British Columbia as well as on those of Nova Scotia; that the land of Canada is sacred to any Quebecker as well as his own province. The declaration made by this newspaper is the most unfair and untrue that could be made by a journal of its standing. We are ready to defend our shores. We are also ready to help in the war overseas, but to do it of our own free will, because we have been told, we have been educated not only in our province but in this House of Commons, in the presence of every hon. member, whether of English, Irish or Jewish nationality, 44561-2261 that our effort in this war was to be a free effort in so far as it was concerned with sending men overseas. Yesterday morning, while reading the Montreal Star, my attention was attracted to a cartoon showing a man on the cliffs of Canada's seashore. He was holding a gun aimed towards the sea; in the clouds were written the words "invasion threat," and above the sketch were inscribed the words, "Look at it this way." That means, Mr. Speaker, think of Canada first; the danger sign is ahead, defend and protect Canada. "Look at it this way." That is the way in which all the people of Quebec are thinking and doing.


Armand Cloutier


Mr. ARMAND CLOUTIER (Drummond-Arthabaska) (Translation):

Mr. Speaker, I followed with attention the splendid speech delivered by the hon. member for Quebec West and South (Mr. Parent), and in the name of my electors, I wish to congratulate him warmly.

I also listened most attentively and, I may say, not without some emotion to the speech delivered in this house on June 11 by the hon. member for Richelieu-Vercheres (Mr. Cardin). A descendant of that proud line of pioneers who brought civilization to this country, he spoke as a true Canadian should. The hon. member for Richelieu-Vercheres is the very symbol of French Canada. He is a loyal gentleman, respectful of laws, but the law which comes first with him is that of his word of honour.

I consider him as the prototype of the French Canadian, Mr. Speaker, and here is the reason why. Although I have had neither the benefit nor the honour of sitting in this house for long years, I have been interested in politics for over a quarter of a century, and the hon. member's various campaigns always held my attention. He knows the mentality of his people, he knows their rights and has always defended them. His responsibilities do not escape him and he has often stated them. Canadian in his very soul, Canadian first and always, the problem of national unity has commanded his constant care. A noble ideal shaped his words and deeds. He can be said to represent the true Canadian spirit.

Mr. Speaker, each time a great national problem or a difficult situation has arisen, the French Canadian has given ground, often in spite of his legitimate and admitted rights. He has given an example of generosity and patriotism in order to ensure the maintenance and strengthening of the bonds uniting the two main racial groups in this country.

But however much one may cherish a principle as important and vital as that of national unity, there comes a time, a tragic moment

Mobilization Act-Mr. Cloutier

when it is no longer possible to give ground without abdicating. For the individual, abnegation may take the form of an almost divine generosity, but in a nation it can only be construed as cowardice or treachery.

A great deal has been asked of French Canada since confederation, and a great deal received. But it must be understood that her racial survival is a thing she prizes above all-, that national pride fills her heart, and that in her veins runs the blood of heroes who sacrificed everything save honour.

The French Canadian is loyal, faithful to his principles as well as to leaders who do not betray him. Long since has he recognized in the Liberal party that spirit of justice, of harmony, of Canadianism and of unity, embodied in the confederation pact. French Canada has pinned her faith, her hopes on the Liberal party, because to all appearances its leaders had never betrayed her.

The province of Quebec has willingly participated in the present conflict. She has accepted in many fields, and without grousing, the principle of compulsion, because her leaders had promised that such compulsion would never apply to military service overseas.

She had faith in the future of this country and every confidence in her political leaders; she believed in democracy and firmly relied on sacred pledges. Such has been the background of the French-Canadian effort, about which many people were dubious at the beginning of the war, but which can only be questioned by fanatics to-day. The character of the average French Canadian will never change. No shirker, he insists on being treated with frankness, honesty and respect. The French Canadian is smart enough to realize that if national unity means sacrifices on one side only, it is no longer unity but tyranny. He has never felt that the association of a rider with his horse can be unity. He will never accept to be led like a tamed animal.

In relinquishing the important post he held in the government, the hon. member for Riehelieu-Vercheres exemplified the spirit of the French-Canadian people. Ever loyal to his leader, giving ground, sacrificing some principles in the interest of national unity, he had to withhold his cooperation when there arose the tragic question of breaking his pledged word.

Such is also my own stand and no French Canadian will ever do otherwise.

Since 1938, the imperialists in the government have been proceeding very gradually. There was first our rearming which was accepted though reluctantly by all Canadians. From session to session, the nilitary estimates were increased. I do not wish to criticize that policy, Mr. Speaker, for in that field

tMr. Cloutier.]

the democracies made a mistake in failing to prepare early enough and on the same scale as Hitler and Mussolini. But, good heavens, why proclaim on every side that Canada would not participate again in outside wars while larger and larger estimates were being voted for military purposes.

The French Canadians accepted the principle of rearmament along with the policy of non-participation advocated by all political leaders at the last election. War came in Europe and without any hesitation those same imperialistic leaders launched Canada into that adventure.

I do not wish. Mr. Speaker, to criticize Canada's declaration of war on the axis powers, but why should there have been such eagerness to foster a paeifistic state of mind while preparations were then being made for war, and to-day, for total war?

In order to ward off popular resentment and to keep the confidence of the electorate, those same leaders suggested a compromise: "We will wage war, we will accept many sacrifices, but conscription will never be enforced".

Came 1940 and national registration followed by conscription for home defence. That was a logical move but why should it have been taken while opposite principles were being advocated?

A further compromise was suggested: "The conscription of national resources for the purpose of a total war effort, with the understanding that conscription would never be enforced for overseas service".

The French Canadian already felt, indeed quite deeply, that he had not been treated frankly, but the danger threatening his country brought about a unity of purpose and silenced a feeling of indignation which in normal times would have surely become vocal. Even though he hated constraint, he accepted it because it was intended for the defence of Canada. And believe me. Mr. Speaker, conscription is useless, unnecessary and futile. History is there to prove it. If Canada has remained under British rule, it is due to the loyalty, gallantry and military valour of the French Canadians. Once conscription for military service in Canada had been accepted, everyone sincerely believed that the government's policy in that field had reached its extreme limit.

The voluntary system of recruitment was tried out. and Quebec did more than her share. French Canada supplied the first regiments which went to the assistance of European democracies. Our young men overseas have shown heroic courage in every theatre of war and they continue to do so.

Mobilization Act-Mr. Cloutier

Our men are fighting for the principles of freedom, the respect of minorities and the sovereign right of nations. Those principles for which their forefathers so staunchly fought, are inherent to all French Canadians.

While the voluntary system was proving fully adequate, imperialistic s'ooges were heard demanding conscription for overseas service. The people became uneasy for it seemed that the limit had not yet been reached. It became necessary once again to reassure them and to adopt indirect methods. Then came the plebiscite 1 I do not oppose consulting the people on an important issue, Mr. Speaker, but why spend millions, open the door to bitter argument, trouble the population in the midst of its war effort, when the question cannot be put to them frankly?

The Prime Minister (Mr. Mackenzie King) in this very house, and his ministers over the radio and elsewhere, throughout the plebiscite campaign or before, stated in evident good faith: "There is no connection between the plebiscite and conscription." It was merely a matter of releasing the government from a pledge to which our allies seemed to take exception. United in a common belief in a sacred principle, French Canadians throughout the country refused to release the administration ; to allow the government to break a solemn pledge.

I could not have said that the government would construe a "yes" vote as favouring conscription for service overseas since I had faith in my leaders, but I had my doubts and could not urge my constituents to release me from a solemn pledge taken at election time. I was fully aware of my duty and responsibility as I went to meet my electors, despite the handicap of illness from which I suffered throughout the plebiscite campaign, and to explain that this was a free and popular vote, that they were free to hold whatever opinion they wished on the matter, but that their member could not take the responsibility for an affirmative vote and that he would vote "no". My personal opinion was the same as that of nearly 98 per cent of the people in my constituency. The province of Quebec, by an overwhelming majority, refused to release the government from its given pledge.

But the plebiscite was hardly over when a bill was introduced in this house calling for conscription for service outside of Canada. We are told that this is the outcome of the plebiscite vote. This faltering explanation does not agree with the meaning given to the plebiscite by the Prime Minister himself, to wit that the question of conscription was not an issue. But suppose conscription had been the issue, how could the government feel released from

their pledge when the very people to whom this pledge was given definitely refused to allow it? Thus spoke Quebec.

Bill No. 80 is intended to delete section 3 of the act. When that is done, compulsory military service for any theatre of war or, in other words, conscription for service outside of Canada will be the law of the land. But it is explained that conscription is not necessary-now and that it may never be. For my part, I refuse to be led blindly in this direction on, the question before the house.

The principle of this bill is the enforcement by order in council of conscription at any time it is deemed necessary to do so. But the people were given the solemn assurance that never would this measure be enforced without first consulting parliament. If section 3 is repealed never again will hon. members of this house have the opportunity of expressing their views on the question of conscription. I cannot agree to the principle of governing merely by order in council in a matter of such vital importance.

In opposing this bill, 1 am simply adhering to the political will of the great Canadian statesman who was Sir Wilfrid Laurier: "Ever against conscription." The original of this testament is in the hands of the right hon. Prime Minister who, in accepting Sir Wilfrid Laurier's successorship, pledged himself to respect it. For the last quarter of a century, every Liberal candidate received a copy of the political will of that great patriot and it was used as a guide to every speech made in all election campaigns. The repeal of section 3 would mean destroying this precious document. Never shall I have anything to do with the imperialists in the government and be a traitor to the memory of Laurier, and to my constituents who elected me on the basis of that platform.

To my mind, we have gone far enough along the lines of compulsion when we consider the size of our population. Since the voluntary system admittedly gives satisfactory results, why risk dividing irrevocably two main groups of Canadian citizens by passing a conscription measure for overseas service.

The voluntary system is already far from being such. Judging by the means employed to force our young men to enter either the active force or the war industries, I refer to the order prohibiting the employment of men between the ages of 17 and 45, which has seriously affected war production and may even have disrupted it in certain cases.

How is this problem to be solved? Where are we to look for a palliative? Female labour night and day? This is now being attempted. No public man, no citizen hav-

Mobilization Act-Mr. Cloutier

ing at heart the welfare of his fellow human beings and actuated by patriotic feelings can thus countenance the destruction of a whole race by ruining the health of its young girls. The factory girl of to-day is the mother of to-morrow and if she has to overwork herself, the very vitality of the race is threatened thereby. No doubt this will please Mr. Carson and his fellow-members of the Grand Lodge of Orange who view with alarm the "miracle of the cradles" in French Canada. But no one who is the least bit scrupulous will accept the responsibility for such a crime by either encouraging or tolerating night labour for young girls. I take the liberty of drawing the attention of the government to this matter.

Mr. Speaker, if, in spite of everything, we continue to long for the fullest cooperation, particularly with a view to national unity, knowing the price we have paid so far for that amity, it is for the sake of our native land and because we are of good heart. Because of this price we paid for national unity, I cannot allow it to be sabotaged and threatened with destruction through the enactment of conscription for overseas service.

If the question of the plebiscite had been squarely put to the Canadian people-"For or against conscription for overseas service"- one may well wonder if the result would have been the same. At a time when the enemy is sinking our ships in the St. Lawrence, attacking our Pacific coastline and landing troops on the North American continent, I wonder if there are still many Canadians who favour sending our best men overseas and running the risk of being unable to cope with the enemy's attack.

The French Canadian does not shirk from doing his share in our war effort and, despite the shameful innuendoes of a handful of Toronto imperialists, the province of Quebec is as anxious to win this war as any other province.

We can rightfully be proud of our war effort, and we shall further it with pride and patriotism, but let us be granted at least the right to safeguard a principle based primarily on the country's best interests and our home defence needs.

My own constituency set an example which might well have been followed in others reporting a majority of affirmative votes. Every appeal on behalf of war loans has met with the most gratifying response. Most of our quotas were oversubscribed to the extent of 140, 150 and 160 per cent, even though my own county of Drummond-Arthabaska is peopled entirely by farmers and labourers. It is no centre of great wealth and national revenue authorities would vainly seek there

an opportunity of lining their coffers out of large income taxes. In the last Red Cross campaign, our objective was reached almost a whole week before the closing date.

In terms of military service, our cooperation has been no less full and unstinting. Our young men have readily responded to compulsory training and many of our volunteers are now fighting on all theatres of war. Some fifteen Drummondville youths were among the heroes of Hong Kong and, only recently, the county of Arthabaska lost three of its bravest young men, one of whom died on duty with the Canadian navy while the second, Sergeant-pilot Tourville, gloriously laid down his life in Libya, and the third, Pilot Dionne, lost his life in a flying accident. May I be allowed a word of tribute to the memory of those heroes and of gratitude and sympathy for their families.

All of which, Mr. Speaker, but serves to emphasize the fact that, in opposing conscription for overseas service, we have no wish to impede the country's war effort. On the contrary, we believe that, because it provides better soldiers, the voluntary system is likely to give better results.

Once again, I regret this lack of frankness toward my fellow citizens and deplore the breach of trust in the pledged word. To sum up briefly, I may say that I shall oppose Bill No. SO and in so doing remain true to my word, comply with the views of my electors and serve my country by working for the preservation of national unity and better understanding between the two main ethnical groups in Canada.

On motion of Mr. Mulock the debate was adjourned.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

Topic:   EDITION




James Lorimer Ilsley (Minister of Finance and Receiver General)


Hon. J. L. ILSLEY (Minister of Finance) moved:

That Mr. Speaker do now leave the chair for the house to go into committee of ways and means.

He said: Mr. Speaker, as we approach the end of a third year of war, we find ourselves in the midst of undertakings vaster than we ever hoped to assume for the defence of the world's freedom. We are surrounded by united nations more numerous and powerful

The Budget-Mr. Ilsley

than we ever dared to expect to be allied with us. Our war programme is great and growing in size and effectiveness. More and more of our national strength is being absorbed into it. The programmes of the united nations are daily becoming more closely knit in mutual aid. Yet to-day it is bitterly plain that we have far to go before victory is in sight.

The financial task of facilitating and safeguarding these developments has also grown in size and difficulty, but in the record and plans disclosed in this fourth war-time budget speech, it has become simple and direct in principle, though increasingly difficult of execution.



The budget proposals which I shall present to the house necessarily grow out of the experience of the past and are shaped by what we know of the work ahead. Let me first recall some of the economic and financial events and policies of the past fiscal year. It was marked by great shifts and increases in production, employment, income, and private spending. The prime movers in our war economy are, obviously, our sales of goods abroad and our own government expenditures. Taking the twelve months to the end of March as a basis of comparison, our exports to the United Kingdom increased by 36 per cent, our exports to the United States by 41 per cent, our total exports by almost 50 per cent. In the face of restrictions abroad on non-essential buying and the use of transport facilities, these increases, much greater in amount than in any preceding year may be taken as evidence of our greatly enlarged contribution of war supplies and essential goods to allied and friendly countries. For our own war programme, in the first quarter of this calendar year, our war direct expenditures were $500 million as compared with $275 million in the same months of last year, that is, more than 80 per cent higher. General employment at the end of the fiscal year was up 22 per cent over the level of preceding March and employment in manufacturing was up 30 per cent. From the beginning of the war, employment in manufacturing has expanded by more than 80 per cent. Average weekly earnings of employees rose throughout the year. Retail sales at the close of the fiscal year were running about 20 per cent above the previous year's level, more than 50 per cent above the pre-war level, and showed few signs of slackening. Making allowance for the differences in prices, the quantity of goods being sold (aside from automobiles) appeared to be from 20 to 25 per cent above pre-war volume.


As the year passed, numerous and marked shortages became apparent. The mounting war output of the united nations, greatly accelerated by the entry of the United States into the war, created scarcities of one strategic material after another. The widening of the area of conflict, the submarine menace on our coasts, and the loss of sources of supply in the far east shut off or reduced many imports on which we were accustomed to depend. The widening scope, the increasing speed of our own war programme, both in the armed services and in production, made heavy demands on our man-power until no one any longer denies the scarcity of labour. To these have been added shortage of power, congested transportation facilities, and widely ramifying limitations of productive capacity. It has been clear these many months that our economy is in the zone of full employment, a condition in which it is still possible to expand our programmes for production and the armed services but only if we are prepared to make careful and wise choices as to what is urgent, what is more urgent, and what we can do without. This is not an unexpected nor wholly unwelcome situation. It was clearly forecast in the budget speech, which I delivered in September, 1939. For the most part, it is reassuring evidence that we, as well as other nations associated with us, have so set the scale of our war programme that it will engage our full strength and more than we knew we had. A clear sign of developing scarcities was provided in the rapid rise in prices in the summer of 1941. By October, 1941, the index of wholesale prices had risen by approximately 22 points since the beginning of the war. Of that, 10 points of rise occurred in the four months of 1939 when our exchange rate changed and shipping rates increased. Of the remaining 12 points of rise, 8 occurred between March and October of 1941. In living costs, half the full rise of the war period occurred between March and October of 1941. These accelerating changes in production, employment, supplies and prices produced by October of last year a situation which was substantially different in degree from that which could be discerned on April 29, 1941, when the budget of that year was presented The Budget-Mr. Ilsley

to the house. It was clear to the government that new fiscal measures, which could be adopted when parliament met, would be too late in effect and not sufficiently specific in application to meet the situation. It was, therefore, decided that direct controls should be established promptly over prices, wages and salaries, and that controls over production and supplies should be extended and made more rigorous. The government's policy of over-all control on prices, wages, and salaries has already been discussed at length in the house. I would point out here four things: (1) the policy has in fact worked and has won support at home and admiration and emulation abroad; (2) though increases in some wage rates have been severely restricted, the earnings of labour have not been "frozen". On the contrary, depressed wage rates have been, and are being, adjusted by the war labour boards, while the Dominion Bureau of Statistics reports that for its sample of over a million and a half employees, weekly earnings per employee which reflect more continuous employment and overtime, increased nearly 8 per cent since October last. This increase in the average took place, despite the introduction of many women and other inexperienced production workers into industry; (3) thegovernment by guaranteed prices, minimum prices, and export prices, which could not have been so high except for the terms of the War Appropriation (United Kingdom Financing) Act, and the intervention of the government, has contributed to a desired improvement in farm income while endeavouring to direct farm efforts to the most needed products. In the calendar year 1941, with relatively poor crops in many localities cash income from the sale of farm products was only 17 per cent below the income of 1928, the year of the biggest crops in our history. Good crops in 1942-43, with assured prices, will bring cash farm income close to the best records of Canadian agriculture. Excluding wheat, which has been in surplus supply since the beginning of the war and has required special measures, the prices of farm products on the average are now about 2 per cent above the level of 1926 and prices of animal products on the average are relatively still higher. Farmers are assured of these prices on a wide range of this season's crops, and will receive, by government action, higher prices than those on last year's crops for wheat, flax, soy beans, sugar beets and apples; (4) price and income control are essential weapons in combating inflation. They must be used, however, in close coordination with direct control of supplies and productive equipment, (Mr. Ilsley.] with direction and management of man-power, with consumer rationing, where necessary, and with fiscal policy. No one of these instruments is itself powerful and pervasive enough to do the whole job of directing our resources to the end desired. Measures for the direct control of supplies multiplied during the year. The Minister of Munitions and Supply and the Wartime Prices and Trade Board have ordered the discontinuance or curtailment of manufacture of a large and growing number of non-essential products using metals and other scarce materials. Building construction and the installation of equipment, other than for war production, were more severely curtailed. The Wartime Prices and Trade Board is rapidly extending its orders on simplified practice to effect reductions in costs and provide the most ample supplies of essential products that the fundamental limitations will permit. Though dealers' stocks are large, it simply will not be possible during the present fiscal year for consumers to obtain the quantities of goods which they have been purchasing during the past year. Restrictions on civilian industry to save materials and manpower will unavoidably multiply. We need not anticipate severe haidship; the government will do all it can to ensure equitable distribution of essentials. There must be, however, rigorous economy in consumption if the necessary materials, productive capacity, and labour are to be available for the winning of the war.


Since the Dominion-Provincial Taxation Agreement Act has been debated and passed by parliament and the agreements tabled, I need do no more than remind the house of the tax agreements with the provinces. In my budget speech of April 29, 1941, the provincial governments were offered compensation in respect of personal and corporation income taxes and the guarantee of gasoline tax revenues, if they would vacate the personal and corporation income tax fields for the duration of the war. This offer was accepted by the provinces, and I should like to pay tribute to the patriotic and constructive spirit in which the provincial governments cooperated in bringing the long and involved negotiations to a successful conclusion. The effect is that I am now free to recommend such tax changes as appear to the government necessary and equitable, and parliament is free to enact such changes, knowing that persons and corporations affected will be paying the same tax on similar incomes in no matter what province they are located. These are war-time agreements, and their duration is limited, but they make a The Budget-Mr. Ilsley great contribution to the possibility of an effective and equitable tax policy during the war.


Concerning our exchange problems as they affect the finances of the past fiscal year. I need speak only briefly. In the last three budget speeches, they were dealt with at length because they then were to a degree separate problems requiring measures peculiar to them. They have now, by reason of events and measures taken, become merged with the general budget problem. In introducing the resolutions on the War Appropriation (United Kingdom Financing) Act. on March 18 last, I explained fully the ways in which the government financed the United Kingdom's deficiency in Canadian dollars since the beginning of the war. During the fiscal year, 1941-42. the entire deficiency amounted to approximately $1,100 million and was financed by Canada. Of this total, slightly less than $48 million was financed by private repatriation of securities, gifts and other private transactions. Of the remaining $1,050 million, which required government financing, $365 million was financed by repatriation of government and government guaranteed dollar securities (including $223 million of the repatriation of $295 million provided for under the Act). The remaining sum, $685 million, represents sterling accumulated to our credit during the year. Such part of this as is not required for working balances, together with accumulations of $215 million prior to March 31, 1941, is being taken care of by the remainder of the $295 million repatriation, by the $700 million loan and to the extent of $76 million by a charge to the $1,000 million gift provided in the War Appropriation (United Kingdom Financing) Act. This act, in addition to the real advantages and essential rightness of its principles which were recognized by the house, has the minor advantage of removing from our financial picture an element in our national finances, which was very confusing to the layman. For the fiscal year, 1942-43, the financing of the United Kingdom's deficiency in Canadian dollars will appear as an integral part of Canadian war expenditures. I turn now to the problem of United States exchange which has occupied a good deal of attention since the beginning of the war and has required special legislation and administrative action from time to time. Our imports of war materials from the United States have increased from month to month; recorded imports from the United States for both war and non-war purposes during the past fiscal year amounted to over $1,100 million, the highest figure for any twelvemonth period on record. Faced as we were with this growing need for United States dollars, our resources would not have been: sufficient to meet the calls on them, had it not been for the Hyde park agreement, especially the sales of munitions of war to the government of the United States under it. and for the legislative and administrative steps taken to conserve United States exchange to which I have referred. As I informed the house in introducing the United Kingdom War Appropriation Bill on March 18 this year, liquid reserves of gold and United States dollars held by the Foreign Exchange Control Board and the dominion government declined by $142 million during 1941. In the first quarter of 1942, there was a marked, though in part a temporary, improvement. As a result, the decline in our liquid reserves for the fiscal year 1941-42 was only about $50 million. This welcome change was due to two factors: purchases of Canadian securities by investors in the United States, a method of obtaining exchange which cannot be depended on for really substantial amounts in view of the limited supply of securities available in Canada payable in United States dollars; and payments for sales of munitions under the Hyde Park agreement including some substantial advance payments. While we have reason to believe that these sales will increase, as new contracts are arranged and as larger deliveries are made under existing contracts, the advance payments are, of course non-recurring. The outlook for the fiscal year, 1942-43, is distinctly more cheerful than the results of the calendar year 1941. We cannot expect, however, the full improvement which took place from January to March to continue. Other unfavourable factors have entered the picture, particularly the adverse effect on the tourist trade of the necessary restrictions on the use of gasoline and rubber and the recent decline in newsprint exports. Nevertheless, I look forward with reasonable assurance to transactions under the Hyde Park agreement being sufficient to safeguard our exchange position during the present fiscal year. The various measures which we have taken since June, 1940, have been sufficient to restrict what I may call our "civilian imports" from non-sterling countries to limits well within our ability to pay. The uncontrollable item is imports for war purposes which for the calendar year 1942 it is estimated will total approximately $500 million, of which about The Budget-Mr. Ilsley

June 23, 1942