March 24, 1943

DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


The house resumed from Tuesday, March 23, 1943, consideration of the motion of Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Blackmore, and the amendment to the amendment of Mr. Coldwell. Mr. JEAN-FRANQOIS POULIOT (Temis-couata): Mr. Speaker, to conclude what I was saying yesterday, the adverse criticism of the budget by the hon. member for Rosetown-Biggar (Mr. Coldwell) was contained in six lines of the last paragraph on paage 1109 of Hansard for March 9. These were his words: My adverse criticism of the budget is that it contains no attempt whatsoever to relieve poverty and to remove trade barriers which will be a potent factor in the post-war world, nor does it prevent control of our economy by monopolistic industry and finance. Those were practically the only three counts on which my hon. friend opposed the budget. In his amendment he suggested that poverty be relieved by increasing the pensions to three categories of individuals, the old, the blind and the veterans. Nothing was said in behalf of the unemployed who are neither old, blind, nor veterans. Secondly, in his speech he mentioned trade, but that is not mentioned at all in the subamendment. Our external trade is vital to us. At the present time our exports are principally grain, foodstuffs and munitions, and we have lost the commercial exports of pre-war years. As was stated here the other day, England is keeping her markets throughout the world by sending commercial exports, while we are not doing so; and at the end of the war what will happen? Canada, which has been manufacturing munitions, will have no markets in the other countries of the world, while first place in those markets will be held by the United Kingdom. So much is this the case that whenever an hon. member asks for figures giving the details not only of our exports but also of our imports, it is impossible to get any detailed information; we are told that this information is held by the censors. I hope some day the minister who is responsible for censorship will give some explanation in that regard. In the third place, in order to improve the situation, my hon. friend, the leader of the Cooperative Commonwealth Federation (Mr. Coldwell), suggests the nationalization of our banking system in order to make full use of the Bank of Canada for the financing of the war. How will that be done? We do not know. It is easy to say "we will do this or we will do that", but the question in the minds of the Canadian people is how these marvels will be accomplished. In the last war we never heard that Sir Sam Hughes was the perpetual acting minister of finance, acting in the place of Sir Thomas White. In England the minister of war is not the acting chancellor of the exchequer. In the United States the secretary of war is not in charge of finance. I cannot conceive how the present Minister of National Defence (Mr. Ralston) can continue to be the perpetual acting Minister of Finance. The job of Minister of National Defence should be a full time job. I intend no reflection upon the minister; my remarks are directed to the fact that a man who has onerous duties to perform is appointed to fill a position the duties of which are entirely different from his own. At the time of Mr. Dunning all matters of finance were removed from the Department of National Defence to the Department of Finance. I cannot understand why the order in council has never been published in the bluebooks of the government which contain all the important orders in council. It was mentioned only casually on July 2, 1942, by the Minister of Finance. The Budget-Mr. Pouliot



The question of control is important. We have many controllers; in fact there are seventeen of them under the wartime industries control board. These controllers have no responsibility to parliament, and government business is being controlled by private industry. The duty of government is to act as a connecting link between private enterprise and the common people, but we find that private enterprise has control of government business. These dollar a year men are on the fence now. They have not indicated whether they will lean to the side of the government or to the side of my hon. friends of the Cooperative Commonwealth Federation in the next election, whenever it comes. They are trying to court each party; they are trying to find out which way the wind will blow. They are telling the members of the Cooperative Commonwealth Federation that they are the ones who can apply their theories because of the experience they have had in matters of control. But they want to retain their own power no matter what administration we may have in the future, whether this one, the Cooperative Commonwealth Federation, or a group of reformers. They are on the fence and they are waiting for the moment when they can consolidate their own strategic position. What we need is more reform. In the past the Conservative party has stolen parts of the programme of the Liberal party. This has been stated by leaders of the Liberal party. I cannot understand why they have not made one more theft and taken the old name of the Liberal party-the reform party. That is what we need' in this country. We may not need a new party, but there should be a group of independent members who are ready to think for themselves, who will be ready to put the public interest before their own. That is my idea of what a reform group should do. Ever since I have been in politics I have been opposed to the idea of a union government. Sir Robert Borden said of Sir Joseph Flavelle that he had shown bad judgment in suggesting a union government. There might be a union opposition composed of men of goodwill, men who want to bring about reform in this country. I say to my friends of the Cooperative Commonwealth Federation as well as to those who sit on the treasury benches, it is time to consider reform; otherwise parliament will fall in the mud.


NAT

Harry Rutherford Jackman

National Government

Mr. H. R. JACKMAN (Rosedale):

Mr. Speaker, I should like to approach as sympathetically and as constructively as I can a discussion of this fifth war-time budget. No one realizes more than I the difficulties which the Minister of Finance (Mr. Ilsley) is facing during these days. The budget calls for an expenditure of $5,500 million and the collection of a gross revenue of $2,601 million, leaving a deficit of $2,899 million-approximately $3,000 million. Reducing these figures to something which we can understand, they amount to an expenditure of $487 for each man, woman and child in this country. The gross revenue which will be collected will amount to $230 per capita. The deficit, the difference between the amount that we spend and the amount we collect, will be no less than $257 per head of our population.

In the year just closing we had a deficit of $2,162 million, some $700 million less than the deficit we are facing in the coming year. Much of the deficit of $2,899 million which is forecast for the coming fiscal year will have to be raised in the form of victory loans and by the sale of war savings certificates. This same process was adopted in the year just closing, but approximately $200 million had to be borrowed from the Bank of Canada and an additional $790 million from our chartered banks. A continuance of this borrowing to finance our country's expenditures will threaten the soundness of all dollar obligations-indeed, will threaten the soundness of the whole financial structure of this country. That is what wall happen unless a halt is called in due time.

It is true that the national income has risen from $4,750 million before the war to approximately $9,000 million, an increase of no less than $4,250 million. The income has approximately doubled during the last four years. The total tax revenue we expect to bring in this year will be only $2,600 million, which is about sixty per cent of the increase in our national income since the beginning of the war. It would appear on the surface that the Minister of Finance is not facing such a difficult job when we consider that the increase in the national income greatly exceeds the total taxation which is to be collected at the present time. However, the matter is not as simple as that.

We should be able to ask: where has the national income gone? The minister's department is so poorly equipped with figures on the national income that even he does not know who receives the national income, and particularly who has received the increase which alone is greater than the whole tax bill

The Budget-Mr. Jackman

which has been, saddled on the people of this country for the coming year. If it is true that the departmental officers know who gets the national income and where the increase has gone, then surely it is their duty to acquaint the members of this house with those facts so that we shall be able to apply some reasoning to the problem of how the burden of taxation can be most fairly apportioned.

It is true that there are many new workers, particularly women, who in the days before the war did not receive directly any part of the national income, and they must be afforded a reasonable income in order to induce them to work. But I would ask the minister to tell us who gets the nine billion dollars of national income, and particularly where has the increase gone. It would also be most interesting, Mr. Speaker, if we could find out what the total dollar value of production in this country is at the present time. How much of this total production then goes for war purposes, and how much is left for civilian consumption? These figures are available for nearly all other countries of size and consequence, and particularly for our nieghbour to the south. We then should know exactly how much in the way of production is available for civilian consumption, and that can be compared with the difference between our total national income, and the amount that is available for spending after taxation. That difference is what is ordinarily called the gap which measures the inflation potential which we are facing. It also tells us in large measure just what the pressure on prices is likely to be, because the money will be spent if it is not saved and if there are not goods to go round, the only thing that can happen is that the prices of goods will go up unless the price ceiling is effective enough to resist pressure.

The money is undoubtedly there. There is sufficient money for the minister to be able to come much closer to balancing his expenditures than his present budget forecasts. It is the patriotic duty of every citizen to work and to save, and also to protect what we have, not only what we are earning to-day but what we have laid aside in the past in order to provide for the contingencies which beset every one of us.

I should like to pay a tribute to the national war finance committee, and to its chairman, Mr. George W. Spinney. There has been no more hard-working and self-sacrificing group of workers on behalf of the war effort than that organization. They have had a competitive spirit in the service of their country which has been a splendid example for all other organizations. I am glad to say that

in the city from which I come and which has made a notable record in supporting the war loans, the area which coincides with my own riding led the field in the last loan.

The question which is perhaps most often asked me when I go round my riding, particularly in the southern section of it, which runs down to the bay in the city of Toronto, and where in April, 1940, no less than ten thousand people were forced to accept relief, is this: Why, if we can find all this money for war, could we not find it during the depression? Or, now that they have jobs and have enough to eat, they say: Is it not terrible that we had to have a war to bring back prosperity? The answer to that, sir, is not simple. But what are some of the facts we should look in the face to see just what the answer is, or what light can be thrown on the solution of this very difficult question with which I am sure every member of this house is faced from time to time?

Last year we spent $4,470 million and collected in revenue only $2,209 million, with a resulting increase in our direct debt of $2,261 million. We increased our debt by more than we collected in revenue. The state, cannot, any more than the individual can, continue to live beyond its income. At some time a halt must be called. Much of this $2261 million which we spent but did not tax from our people was provided by the people through loans, and to some extent through leaning on the Bank of Canada and on the chartered banks. But as the minister has said, this process of leaning on the banks is a most unhealthy one and one which is fraught with danger to our country. In effect the people who bought the war loans and the war savings certificates subjected themselves to an extra tax. Certainly they deprived themselves of spending their money and instead lent it to their country. How did they do this? First of all through direct subscription to the victory loans and to the war savings certificates; and second, indirectly, through savings deposits and premiums on life insurance, which in turn were paid over to the government in exchange for securities. We must ask ourselves why were they willing to subject themselves to this extra tax. Why did they not spend their money? It is the old reason most of us have been brought up to understand, namely, putting aside something for a rainy day, to look after sickness or unemployment or old age. But these people who have lent their money to the government so that the war effort could be carried on want it back with the purchasing power that it had when they lent their money to the government. That is the reason why we must

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by merely debating them in full parliament; we must be able to get information of a detailed nature and1 get the value of economic opinions from different sources.

Why was the sales tax not increased? At present there is a sales tax of eight per cent on the wholesale price of many articles, some essentials being excluded. In the year just closing, the revenue from this source amounted to $230 million or 10-42 per cent of the total revenue collected. In the forthcoming year we expect to get only $225 million, or $5 million less than last year. The minister pointed out some of the virtues of an increase in the sales tax, namely, that it would mop up excess purchasing power and would help in the orderly distribution of scarce supplies. He said, however, that it might give an advantage to long purses. We know that taxation has hit those who formerly might have been considered to have long purses. Those who to-day have long purses, namely, those enjoying a higher income than they did before the war, are the very ones who the minister is willing should pay more of their share of the war burden. He has not seen any difficulty in adding five cents to the cost of beverages, such as tea, coffee and milk. Let me point out the incidence of a small tax like that-an apparently small tax-on a single person with a minimum- income-and we tax them when they get even as low as $660 which affords a living which, can scarcely be called decent. The cost of that extra five cents to a person who must get three meals a day out is $54.60, and1 when we consider that that increase is added to the base price of five cents it means another $54.60 or a total of $109.20 a year in order that one of these young people getting a minimum income shall be able to have some form of beverage with their meals. If tea, coffee and' milk can be subjected to what is the equivalent of a 100 per cent tax, surely there are many articles not half so essential that could bear an increased tax. There are many people in our society who could much better afford to pay this tax than these minimum income people who must get their meals outside and have , some form of beverage at least three times a day. If the minister was worrying about the welfare of the restaurant keepers, I should suggest, looking at his deficit, that he worry a little more about his own business.

If the sales tax were increased, I should suggest that the minimum exemptions of $660 for a single person and $1,200 for a married person be increased, and also the allowances for children, because we cannot reduce the minimum brackets lower than they are today ; in fact, in view of the cost of living they

should be raised. But there is a great class above that who could well afford to pay more because of increased incomes.

This would also prevent an increased sales tax bearing more heavily on those with subsistence incomes, and produce a fair tax return from those bent on spending rather than saving. No one knows better than the minister that the money is there and that it is being spent.

Higher income taxation will hamper war production. If the people have the money in their pockets, the great majority will spend it and the government will get the revenue through the sales tax. As long as the worker can handle the money, as long as he can jingle it in his pocket, his incentive to work is not likely to be destroyed. The increase in the exemptions if the sales tax were increased should permit a restatement of the cost of living bonus policy or a reconstitution of the cost of living index, as was done last year in the case of the increase in the tobacco tax, which was not allowed to enter into the cost of living index.

In Great Britain the purchase or sales tax is graded according to the utility of the article purchased, and runs as high as 66% per cent of the wholesale price. Furniture is one of the articles subjected to a fairly high sales tax, and priority to newly-married couples is given in the purchase of furniture.

The granting of subsidies, which is growing apace, is the very opposite of a sales tax, although the two may go hand in hand. There is no question, however, that in many cases these subsidies are becoming a great burden. The price of articles is bonused for people many of whom can well afford to pay the real cost.

I had the privilege of speaking on the RumI plan some weeks ago before the minister brought down his budget, but I should like to say a few words as to the plan which he has brought down and the difference between it, which I think could well be termed a half-way plan, and the Ruml plan.

The principle underlying the Ruml plan was one of debt forgiveness. People who owed money to the government by way of taxes found themselves in a most embarrassing position, and those who were not already in an embarrassing position were likely to find themselves in such position if they lost their jobs or had sickness or should retire or die. So that the underlying principle of forgiveness, if I may use that term, which is not strictly accurate to describe it, was carried out to a large extent.

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The minister said that half of last year's taxes would not have to be paid, inasmuch as we were going on a current basis and would pay full taxes, or at least ninety-five per cent of the total 1943 imposition every week or month. I do not think it was ever the intention as far as Canada was concerned that the whole of the 1942 taxes should be forgiven, but only that part of them which remained a debt. But the minister, in place of going the full way and forgiving that part of the taxation still owing, drew the line at fifty per cent, whereas a great many people in Canada, perhaps the majority, still owe approximately sixty per cent rather than fifty per cent. A very great hardship is being imposed upon these people, because not only do they have ninety-five per cent of their full taxes deducted from their current pay cheques, but in addition they owe five and ten per cent, and in some cases considerably more, of last year's taxes, and their cash position has become a real hardship. Under the plan recommended by the government half of last year's taxes are no longer a debt; but, as I have said, the amount which will be collected by the government without any increase in rate will be $105,000,000 more than last year, and a great part of this increase will be on account of the fact that people still owe money on last year's taxes, even though fifty per cent of them may be forgiven. I think the minister might have been well advised to set the figure at sixty per cent rather than fifty per cent as far as forgiveness of last year's taxes was concerned.

The second instance in which the minister strayed from the principle of the Ruml plan in his recommendation to this house was in making an invidious distinction between so-called earned and investment income. One-half of the tax is to be forgiven on all income except investment income over $3,000; and the tax remaining in that case is to be due and payable at death. Everyone recognizes the principle of raising necessary revenues by taxation according to ability to bear the load, but there are limitations. The minister himself admitted them in giving his reasons for not increasing the already high income tax. Income taxation according to ability to pay was accorded thorough recognition in the tax schedules brought down last year. Indeed, the minister knows that in effect his schedules are in part a capital levy. Furthermore, investment income is already subjected to an additional tax of four per cent above the ordinary rates enforced.

The fact that the remaining half of the 1942 taxes, which everyone else is forgiven, is not due until death, obviates the need of considering this tax as a war measure. It is nothing more or less than the singling out of a particular class in the community for special punishment, and without reason. Wherein lies the minister's logic when he says that the half way plan, or the Ruml adaptation that he has presented, might never have been adopted had all incomes been investment incomes, for then the burden of debt would not be the paralysing load it is to most taxpayers? If we admit that, how does it follow that one class should be singled out for special treatment, -with that treatment having no relation whatever to the necessities of the day, which are surely the basis of our extraordinary taxation? The collection of the unremitted half of the 1942 taxes will take place over a period of from one to fifty years from to-day. Where is the fairness in forgiving half of the 1942 tax to a man with an earned income of $50,000 and not similarly forgiving a man with an investment income of $5,000? It might also be called a special tax on widows and fatherless children, for many widows have only investment incomes. I might point out also that salaries are a first charge against corporation income, while those who receive investment income through interest or dividends come last.

Recently I was told of the case of a man who had retired, who is now serving his brother man and receiving his reward in the good opinion of his fellows, who had given up an attractive salary and was living on the income from his savings. He is now singled out for special punishment. On the other hand a man who kept on working for himself and did not feel the call to public service receives preferential treatment. All retired people are not loafers. Some may even serve the people in a public capacity. The minister suggested that if those who still had this tax to pay when they died wished to do so-and he made the remark rather facetiously-they could take out insurance to cover it. May I point out to him that most of the people in this category are probably not in physical condition to take out insurance. Furthermore, if they do so they are faced with increased succession duties. I have not much objection to making the rich poorer if that will benefit someone, but when it will benefit no one it does seem useless to adopt a dog-in-the-manger attitude, particularly when it may bring about some danger to all our people. The failure to treat the tax on investment income in the same way as the tax on all other incomes constitutes in this case a third succession duty, the provinces and the dominion already each having one. In the first place the amount of the tax is not fixed, though in his budget ad-

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dress the minister said the amount was fixed. That is quite true in a sense, but not in any true sense. It is absurd to say that a dollar owed to-day is the same thing as a dollar owed fifty years from now. In the first case it is one hundred cents; in the other case, namely, after fifty years, discounted at even 3 per cent interest it is 23 cents. Not only are investors singled out as a class; they are discriminated against as individuals within the class, according to their age. In other words, this new canon of income taxation introduced by the minister, and I presume concurred in by the Minister of National Revenue (Mr. Gibson), is that the older you are, the higher should be your income tax. Surely such a tax determinant belongs to succession duties and not to the income tax. I appeal to this house against the imposition of a third succession duty.

The membership of this house should also ask what will be the effect on the incentive to save if the special taxation against investment income is carried too far. What will be the reaction of people who have lived thriftily through the years and have built up an investment income? Putting a premium upon a spendthrift and a penalty upon a thrifty man will have only one inevitable result, which will be in complete opposition to the minister's appeal to buy victory bonds.

Although the minister is doing considerable preaching about saving, I doubt if he really knows what saving can do for one. It is sometimes said that the only magic in finance is compound interest. A dollar at three per cent will in fifty ye are amount to $4.38. In one hundred years it amounts to $19.21. A dollar at six per cent will in fifty years amount to $18.42, and: in one hundred years to the staggering sum of $339.30. Thus are some fortunes built up through savings. Surely an investment income of $3,000 on which the income tax is approximately $900, leaving $2,100. will not be a maximum that one can provide for a couple's old age. If not, then why does the minister draw the line at $3,000, and why does he penalize those who have saved?

On the one hand the minister pleads with the people to save, while on the other hand he shows them that they are very foolish to save. In the meantime he finances nearly half of the war cost out of savings. Some of it was saved in the past. Physically we all pay for the war as we go; but financially the burden is distributed, perhaps with some recognition of ability to bear, but with little recognition of the sacrifices made in the past, or the incen-

tive or risk shown or undertaken by those who have been the creative spirit behind our industrial economy.

Mr. Speaker, I shall not further trespass on the time of the house. There are other subjects about which I should like to speak, but since there will be other opportunities, during the discussion on the resolutions, I shall reserve what I have to say until that time. I wish then, to thank you, sir, and the membership of the house for the courtesy extended to me.

Mr. GORDON B. ISNOR (Halifax): Mr. Speaker, I rise to take part in the debate chiefly because I wish to place before the house, before members of the cabinet and particularly members of the war cabinet, a problem facing the city of Halifax. I feel justified in introducing the matter in the budget debate, because it is a condition which flows directly from our war effort.

Before dealing with this special subject, however, I should like to compliment the hon. member for Rosedale (Mr. Jackman) upon his well prepared and excellently delivered paper in respect of finances. I. cannot very well agree with much of what he said. I was surprised to hear an hon. member from Rose-dale advocating an increased sales tax, because I am reasonably sure that that would not have been the position taken either by a great many of his past leaders or by the majority of those in his group in the house. I was unable to follow his reasoning with respect to the sales tax, because all hon. members know that as that tax is pyramided the cost to the storekeeper is increased, and naturally this adds to the cost paid by the individual consumer, the average taxpayer. For this reason I was surprised that the hon. member, with his financial training, should have advocated such a measure.

I join with him however in congratulating and complimenting the national war finance committee, an organization which has done excellent work in the past and which I have no doubt will continue to render splendid service when the next victory loan campaign is launched.

I could not follow the hon. member's argument in connection with deficits. In one breath he stated that in past years we looked upon deficits with a certain amount of dread, and he wondered whether it was sound financial policy to permit deficits to exist. At one time I found myself thinking as the hon. member appears to be thinking. Sitting on an opposition bench in the Nova Scotia legislature I often wondered whether the government was wise in permitting a deficit to remain. I

The Budget-Mr. Isnor

pointed out it was unsound business, that the garment should be cut according to the cloth. It was my view that expenditures should be kept within the bounds of revenue. Those were the views I voiced, and I have no doubt the hon. member had the same thoughts in mind. In the next breath the hon. member said, "It is a wonder the Minister of Finance does not do something this year to reduce the deficit." These two suggestions, to use a common expression, just do not add up, they do not make sense. The views of the hon. member come to me as a surprise, having in mind his vast experience and broad training in financial matters.

More than once during the debate we have heard it said that we are now asked to pay two and a half years' taxes in two years. This statement is unfair. The hon. member for St. Paul's (Mr. Ross) made a similar suggestion. It would be just as fair to say that the taxpayer under present circumstances pays only one and a half years' taxes in two years. We cannot get away from the fact that we are being forgiven six months' taxes. I say we should accept that explanation, and be fair when we discuss the matter. The fact is that the average taxpayer has been forgiven six months' taxes; in other words he will have to pay a tax smaller to the extent of that traceable to the six months' period than ordinarily he would have to pay.

May I now deal with a problem facing Halifax. In doing so I am pleased to note that the Minister of National Defence (Mr. Ralston) is in his seat, because I am going to place responsibility directly upon his shoulders, or the shoulders of the war cabinet. I do not apologize for taking that stand, because anyone who understands the situation in Halifax will appreciate that I am on sound ground.

Had I the time I could give the background of the situation which developed in Halifax in December, 1917, when two ships met in the harbour, causing fire and explosions and resulting in the loss of 1,700 lives. I do not wish to go into that, but it is because of what happened then that in my view a responsibility is placed upon the government to do something which would bring about more adequate protection from fire. The government should do something too about the expense the city of Halifax faces because of the great influx of people, -which is owing largely to the place Halifax occupies in the war effort.

May I place before the government certain facts upon which I base my contention that it is the responsibility of the government to

give some assistance. In normal times Halifax has a population of about 70,000. As to the present figure, apart from the armed forces, some have given it as 135,000, but it is certainly fair to say that we have at least

115.000, because we issued 115,000 sugar rationing cards. Subsequently we issued over 85,000 ration books, so that I think I am on safe ground when I say that we have 115,000 people as compared with our normal population of

70.000. This additional population has added to the cost of financing the city. The city is unable to tax these additional people and thus increase its revenue, and for that reason the people of Halifax feel that the government should do something to help out this situation. The influx of population, as I say, is largely due to Canada's war effort. Halifax is not asking for assistance; it is asking for compensation because of the additional outlays which are necessary.

I should like to pause here to extend my thanks to the government, and particularly to the Minister of Pensions and National Health (Mr. Mackenzie), for the recent gesture of good will that has been made in the form of an item of 830,000 in the estimates in connection -with the new hospital. This is to be paid for the duration, and this year an additional amount of $15,000 is being allowed for maintenance. This matter has been touched upon by other speakers. It is the outcome of a survey made by the Rockefeller Foundation. It has been found necessary to make extensive plans to take care of the health of the citizens of Halifax. I would point out to the minister and to the government that this does not take care of the ordinary increase in our health expenditures which are estimated to be something like 845,000. In connection with internal health it is estimated that this year an addiitonal amount of 825,000 will be needed because of our increased population.

There is also a need for additional police and fire protection, which will mean the expenditure of another 825,000. Because of additional fire protection needed on the water front, we are paying out an additional $12,000. There has been an increased expenditure in connection with our public schools, amounting to $10,000. Here is another important item. The government has taken over a number of dwelling houses, apartment houses and small hotels, and the loss in assessable value amounts to $375,000, representing $16,000 in revenue. These items add up to something like $133,000.

In addition to the figures I have mentioned, fifteen additional policemen will be required at a cost of $21,000, and fifteen additional

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firemen, with some equipment, at a cost of $21,000. The additional expense in the cost of public health has been referred to, amounting to $25,000. The carrying charges in connection with the new fire station will amount to $3,000. This makes a total of $203,000. There has been very heavy traffic on our streets through the movement of military trucks, and so on. It is estimated that the maintenance charges and cost of repairs at the termination of the war will amount to $25,000.

In presenting this claim to the government I think the city of Halifax is well within the figure when it suggests that compensation should be paid to the extent of $200,000. I could give the background of certain of these items but I do not think that is necessary. I am going to leave the record with the government, particularly with the war cabinet, and ask that they consider the granting to the city of Halifax of the sum of $200,000 for the purposes I have indicated.

Hon. members will recall the terrible disaster of 1917 with its great losses of life and property. I suggest to the Minister of Munitions and Supply and the Minister of National Defence that they assume the responsibility of installing additional fire fighting facilities so that the present fresh water supply may be left available for other purposes. If anything serious should happen we should have an auxiliary water supply upon which to draw. It has been suggested that in order to protect the many defence projects which extend from the extreme south of the city to the extreme north, a pipe-line should be laid from the quarters occupied by the air force in the south to those occupied by the naval services in the north. This pipe line, which would draw upon the salt water in the harbour, would require about ten pumps. The total cost of the installation would be around $100,000-not a large amount when you consider what the disaster of 1917 cost the government and the people of Canada and the people of Massachusetts. I urge in all sincerity that the government give this question serious consideration and do something for the city which I, along with my colleague (Mr. Macdonald) have the honour to represent.

There is one other matter to which I should like to refer. I spoke about it last year when the defence estimates were being considered, and I can remember the kindly manner in which the minister of defence turned and said he would give the matter his consideration. If he has given it consideration, nothing has resulted. I refer to something with which he is familiar, and with which I think almost every citizen in eastern Canada is familiar,

certainly everyone who has entered the city of Halifax-the entrance known as the bottleneck. I may not have made my point quite clear to the minister of defence last year. Perhaps I did not present as good a case as he would have presented. As I see it, the problem is quite simple.

There is an entrance to the city known as the bottleneck. I asked the minister of defence what would happen if the city of Halifax were attacked. How would troops be brought in from Debert or any other place? How would the people get out of the city? In times of flood I have seen this bottleneck under seven or eight or nine feet of water. I am glad the Minister of Transport (Mr. Michaud) is in his seat because he also should be interested in this bottleneck. Perhaps he could cooperate with the minister of defence in providing an underground as well as an overhead pass at this point. We fear that a serious situation might arise if it became necessary for people to enter or leave the city in any considerable numbers. I am going to ask the minister of defence to give this matter more consideration this year than he did last year when I placed it before him, and perhaps he will accede to our request.

I should like to compliment the Minister of Finance (Mr. Ilsley) on the splendid presentation of his budget. It is not an easy task to present a budget of the size which Canada has had to face in the last two years. In my remarks on the budget of last year I referred to the budgets of former years presented by the late Hon. W. S. Fielding, the late Hon. E. N. Rhodes, Sir Thomas White and others. I showed that the budget of last year was something like a hundred times the size of former budgets, and1 this year it is still greater. To be able to present a budget of such magnitude and have the people say it is a splendid budget, and at the same time instil into the people a willingness to do everything possible, is something which could have been achieved only by one who knows how to present a budget in the manner in which the Minister of Finance presented his. But as I said last year, that is only to be expected, because he comes from Nova Scotia and he is careful of the dollars-he knows how to collect them' and how to take care of them.

I want to deal with two questions which were raised last Thursday evening by the hon. member for Yorkton (Mr. Castleden). I am pleased that he is in his seat because I like to face an hon. member when I have anything to say in reply to him. I like the style of delivery of the hon. member for Yorkton. No doubt he always wants to be fair, but last Thursday evening I think he

The Budget-Mr. Isnor

was not entirely fair when he dealt with the victory loans nor was he entirely clear in Tegard to free enterprise.

I shall deal first with his remarks on free enterprise. I asked him the other evening when he was speaking for a definition of free enterprise, and he gave me one. I suppose it was his own interpretation of free enterprise. Certainly it differs from my interpretation, nor was it the definition of free enterprise which the Right Hon. Winston Churchill, Prime Minister of Great Britain, gave when he spoke on that subject last Sunday.

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CCF

George Hugh Castleden

Co-operative Commonwealth Federation (C.C.F.)

Mr. CASTLEDEN:

He is a Tory, is he

not?

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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

It would not matter to me whether he was a Tory or not.

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CCF

George Hugh Castleden

Co-operative Commonwealth Federation (C.C.F.)

Mr. CASTLEDEN:

But you would not expect me to agree with him entirely.

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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

I would agree with the hon. member if he was right. I am going to agree with the hon. member for York-Sunbury (Mr. Hanson) in his stand on free enterprise. I am even going to agree with the present leader of the Progressive Conservative party, Mr. John Bracken, in his stand on free enterprise, and I believe I have the support of the very great majority of the members on this side of the house.

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CCF

George Hugh Castleden

Co-operative Commonwealth Federation (C.C.F.)

Mr. CASTLEDEN:

I am glad I differ from them.

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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

I hope there is no question in the mind of the hon. member for Yorkton as to where I stand on free enterprise. I am for free enterprise. I should hate to see the day when we should lose that incentive; for free enterprise has been the backbone of Canadian-ism right from our earliest days. The hon. member for Yorkton, in his definition of free enterprise the other evening, and I take it he is utterly opposed to free enterprise, as were all members of his group-

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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

It all depends upon

how you define it. The present system prevents it.

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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

I have a definition here

which I shall give, but I take it for granted that - the hon. member for Yorkton and his group are opposed to free enterprise as expressed by him.

Mr. COLDWELL r By whom?

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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

By the hon. member for

Yorkton the other evening.

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CCF

George Hugh Castleden

Co-operative Commonwealth Federation (C.C.F.)

Mr. CASTLEDEN:

No. The hon. member asked me for my definition, and I said that we want to have this particular right.

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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

The hon. member asked for

an expression of opinion from this side of the house on free enterprise, and I am pleased to let the hon. member know where I stand. I have in my hand a clipping from, the Ottawa Journal of Thursday, February 25, which expresses my views on free enterprise perhaps better than I could myself. It is an. editorial headed, "About 'Leaning on the State'." After referring to Mr. John Bracken's statement as to free enterprise, it says:

In the current print of that very sane, distinguished weekly, the San Francisco Argonaut, there appeared eight points which this country at this time might well ponder. These:

You cannot bring about prosperity by discouraging thrift.

I am in accord with that. It goes on:

You cannot strengthen the weak by weakening the strong.

Think that one over! In other words, build on solid foundations, instead of tearing down and destroying the results of the efforts of those who have built up this country. Next:

You cannot help small men by tearing down big men.

That would be applicable to the hon. member for Yorkton. I do not say this unkindly, and I do not want to be misunderstood; it is just a difference of opinion.. The hon. member for Yorkton the other evening built up a case against interlocking directorates, but he forgot that free enterprise takes in not only those who do big business, but also every storekeeper, every country merchant, every town merchant, every city merchant, irrespective of whether he is doing a big business or a small business. That is why I say the hon. member is going very far out of his way to hunt trouble. When you are opposed to those classes, the country merchant, the town merchant, the city merchant-

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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

Nobody does oppose

them.

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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

Yes, according to the definition that was given. You are against profit. But eveiy one of these men is in business for profit.

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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

Define profit.

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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

No one disguises the fact that we are all in business for profit. We could not pay our taxes and serve the community if we were not in business for profit.

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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

You probably never

make a real profit.

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March 24, 1943