March 24, 1943

LIB

Humphrey Mitchell (Minister of Labour)

Liberal

Mr. MITCHELL:

My hon. friend is not

serious about that, is he?

Topic:   THE BUDGET
Subtopic:   DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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SC

Norman Jaques

Social Credit

Mr. JAQUES:

I am absolutely serious;

and I say the results are a tribute to the business acumen of Sir Ernest Cassel, the German international financier, from Frankfort.

Topic:   THE BUDGET
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LIB

Paul Joseph James Martin

Liberal

Mr. MARTIN:

What about T. V. Gregory?

Topic:   THE BUDGET
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SC

Norman Jaques

Social Credit

Mr. JAQUES:

He is another.

Topic:   THE BUDGET
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LIB

Paul Joseph James Martin

Liberal

Mr. MARTIN:

Anyone who calls him a

communist is talking nonsense.

Topic:   THE BUDGET
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SC

Norman Jaques

Social Credit

Mr. JAQUES:

Then we have Sir William Beveridge and Doctor Marsh, the former a director, and the latter a graduate of the London school of economics. They represent the Ricardian school of economics.

Topic:   THE BUDGET
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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

Not at all.

Topic:   THE BUDGET
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SC

Norman Jaques

Social Credit

Mr. JAQUES:

Yes.

Topic:   THE BUDGET
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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

Marsh does

not represent the Ricardian school of economics.

Topic:   THE BUDGET
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SC

Norman Jaques

Social Credit

Mr. JAQUES:

Social security does. Just

as Ricardo invented or discovered the iron law of wages, and went on to say that a labourer without work had no right to exist, his modern counterpart says in social security that freedom from idleness is more important than freedom from want. He assesses the necessities or, if you like, the wants of those who are not working, so far as food is concerned, at SI.70 a week for a man and $1.30 for a woman. I would call that the Ricardian economics of scarcity. It is nothing else.

If you like you can take these three men, Doctor James, the gold-standard; Sir William Beveridge, the Ricardian; and Professor Lasky, the Marxian. I believe that is a fair comparison. There they are-Shylock, Ricardo and Marx. They are doing the planning.

Topic:   THE BUDGET
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CCF

Thomas Clement (Tommy) Douglas

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

Mr. DOUGLAS (Weyburn):

Has the hon. member ever read either Marx or Lasky?

Topic:   THE BUDGET
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SC

Norman Jaques

Social Credit

Mr. JAQUES:

Plenty. The other day in the committee on reconstruction and rehabilitation the hon. member for Acadia (Mr. Quelch) asked this question of Doctor James:

There is one question I should like to ask Doctor James. Doctor James, you referred to

a number of programmes that had been put forward for post-war reconstruction by various organizations. You did not, however, refer to-

Topic:   THE BUDGET
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?

Some hon. MEMBERS:

Order.

Topic:   THE BUDGET
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LIB

Joseph-Arthur Bradette (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. DEPUTY SPEAKER:

The hon. member has no right to quote from a report of a committee now sitting.

Topic:   THE BUDGET
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SC

Norman Jaques

Social Credit

Mr. JAQUES:

Doctor James was asked either in or out of committee, what he thought of the report of the London chamber of commerce. And, mark you, Doctor James is chairman of our committee on reconstruction. His reply, in so many words, was, "Well, I really do not know; I have not bothered to read it or, if I have read it, I have not bothered to remember it."

I hold in my hand a copy of the report of the London chamber of commerce. In its preface it states:

The London chamber of commerce has a direct membership of 9,000 firms and companies. Thirty-nine industrial and commercial associations, with an approximate membership of

50,000, are affiliated to it and are represented on its council. The chamber is therefore vitally concerned in the nature of the framework withiu which industry and commerce will be called upon to function after the war.

This report was printed word for word in the congressional record at Washington on July 17 of last year. Upon introducing the report to congress, congressman Voorhis used these words:

I wish to draw your attention to paragraph 26.

I shall read that paragraph presently.

The distribution internally of the purchasing power necessary to consume the whole of their own production. Upon that principle the most solid hope for the future of mankind can be built, and it is applicable not only to England but to the United States and every other nation.

Let me now quote the paragraph to which reference is made:

26. The fundamental problems then, which a satisfactory system must be designed to solve are:

(1) The elimination of the fear and hostility resulting from the struggle of all nations to obtain an "active favourable balance of payments," the penalty of the vanquished being economic servitude to the victor. This struggle has resulted in attempts by all the nations to restrict imports by barriers to trade, and to increase exports by subsidies and other artificial means, and by the use of political and economic pressure.

(2) The distribution internally of the purchasing power necessary to enable the nations to consume the whole of their own production; if this were done they could equally consume the goods of other nations which they might exchange for their own production. This problem is closely connected with (1) because an excess of exports over imports furnishes an excuse for increasing effective demand within a country (through the distribution of wages)

The Budget-Mr. Jaques

without increasing the number of goods awaiting consumption in the domestic market.

(3) The unwillingness, consequent upon their industrialization, of primary producing countries to receive, after the war, imports of certain manufactured goods which previously they had imported freely.

(4) Nations with different internal economic systems must be enabled to live in the same world without those differences constituting a threat to the continued existence of one another's internal systems.

(5) The movement of people from overpopulated to under-populated countries. The objection of the latter to receive immigrants is due to the unemployment of their own people and will disappear when that problem is solved, assuming, of course, that the would-be immigrants are of the right type.

I could read more, but I shall not take up the time of the house in doing so. The London school of economics was founded by international socialism and was financed by international finance. There is no possibility of contradicting that statement. Why is it that their ideas and planning are accepted when the ideas and wishes of 50,000 business firms and manufacturers in Great Britain are entirely ignored? What can be the reason? There can be only one. It is that the new order is to be an international dictatorship by finance. That dictatorship will not be concerned with the welfare of the people; its concern will be money, usury and debt, whereas the London chamber of commerce is concerned with real wealth, real profits and real thrift. Many members of this house, especially in the Conservative and Liberal ranks, have within the last two or three weeks criticized the ideas of my hon. friends to my right. Many of them seem only too glad to swallow any idea provided there is a sufficient amount of gold on it, as long as it is gold-plated. That is what the gold standard means.

The world is coming to a state of financial feudalism. That is the new order we are promised. It is suggested that we should surrender our sovereignty, the British crown; rather than continue to look to the crown as the symbol of our sovereignty we should look to Shylock's three brass balls, the symbol of pawnbroking and poverty the world over. To show where this group stands on these matters, I should like to read two resolutions which were passed in Edmonton at a joint caucus of the federal and provincial members of the Social Credit movement. The first one on "Union Now" reads:

Whereas sovereignty of the people is the most precious heritage of this and every other British nation; and

Whereas democracy cannot exist without the effective sovereignty of the people; and

Whereas the British crown is the heart and the symbol of the British commonwealth of free and sovereign people; and

Whereas His Majesty's fighting forces exist to preserve the aforesaid essential sovereignty and democratic liberties of the British people and are engaged at present in war against the forces of enemy powers threatening those constitutional rights; and

Whereas in our modern economy control of money means control over every aspect of national life and is an essential sovereign power for the people to retain as the basis of their democratic authority; and

Whereas the closest possible understanding and cooperation between the British peoples and the people of the United States of America is vital to the future welfare of humanity; and

Whereas the scheme commonly known as "Union Now" proposes;

(a) That a federation of the British empire, the U.S.A. and other democracies be consummated;

(b) That the nations entering into such a union set up an international authority in which would be centralized control over:

i. The armed forces of all the nations entering into the union.

ii. The financial system of the entire union; and

iii. The rights of citizenship of the nations entering into the union.

(c) That the nations involved would surrender their sovereignty over the aforesaid functions, thereby centralizing power in the hands of the international authority by giving them absolute control over every aspect of national life through financial control and of citizenship rights, and by placing the armed forces and armaments under their control;

(d) That the entire British empire shall have minority representation in the international federal legislature;

Therefore be it resolved that we condemn the open advocacy, particularly during this struggle for the preservation of democracy, of a scheme which would divest the people of Canada of all essential sovereign authority, destroy effective democratic government, submerge the British empire in a conglomeration of countries dominated by an international totalitarian authority, render the British crown meaningless and sweep away everything for which the British people are fighting at the present time.

That leaves no doubt as to where this group stands on "Union Now", on the British crown and on international finance, even though the latter may be gold-plated. The next one on national socialism reads:

Whereas Canada in partnership with the other nations of the British commonwealth is fighting for the preservation of its democratic institutions against the threat of national socialist domination; and

Whereas the menace of state socialism lies in the evil principles of its supreme state doctrine, irrespective of the labels, often harmless sounding, under which it masquerades; and

Whereas in a democracy the state and all its institutions should exist to serve the people in obtaining the results they want from the management of their affairs, in contrast to the state socialist concept that the people exist to serve and submit to the dictates of a supreme state authority and its institutions;

The Budget-Mr. Nicholson

Therefore be it resolved that we oppose as anti-democratic, the national socialistic policies being advocated and adopted (under cover of a professed adherence to democratic principles) for increasing the arbitrary power of a vast government bureaucracy to dominate and regiment the people, thereby crushing initative, destroying free enterprise and robbing the individual citizen of his rightful liberties and privileges under our democratic constitution.

And be it further resolved that the people be aroused to the peril of this trend towards a totalitarian national socialist state before it becomes entrenched as the basis of the post-war order and we find, too late, that while fighting German national socialism overseas we have become enmeshed in its destructive toils at home under cover of some other label.

Such as social security and other schemes emanating from the London school of economics.

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CCF

Alexander Malcolm Nicholson

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

Mr. A. M. NICHOLSON (Mackenzie):

Mr. Speaker, although the Minister of Finance (Mr. Ilsley) has urged that this debate be concluded as soon as possible, I think that a budget calling for expenditures of over fifteen million dollars a day requires careful consideration by the representatives of the people sitting in this house. Speaking on Monday, the minister mentioned that he had received cooperation consistently from the beginning from the great majority of the members, I think he said from all the members of the Progressive Conservative party and from most of the members of the house generally. It is unfortunate, I think, that the minister left the rest of us who sit on this side of the house under a rather dark cloud. Just as the minister himself objects to sweeping condemnation of his boards, so members who are included in a category of that sort must naturally object.

Judging by the standards of other constituencies, those of us who come from rural communities have not as spectacular a record for great victory loan contributions as others have set. I received a letter just yesterday from an old age pensioner in my constituency who is now over eighty years of age. He wrote on the 17th of this month saying that he had been very ill and had been unable to get down to the bank to cash his cheque. Then he went on to explain that every month he buys a war savings stamp for each of his eighteen grandchildren. In other words, he spends on the war $4.50 each month out of a cheque of $20. It appears to me that a contribution of that sort from an old gentleman who understands fully the issues which are at stake in this war is wonderful.

My riding has never established any high records for large individual subscriptions to the victory loans or for large totals, but I should like to mention that I represent a con-

stituency of 57,000 people, in which there are only three dentists, or one dentist to serve every 19,000 people. It is true that economic conditions are better to-day than they have been in the last ten or fifteen years; but when hon. members consider that there are ninety-two post offices in the riding and sixty-nine different railway shipping points where people ship their produce, and that we now have only three dentists to look after 57,000 people, compared with five dentists or one dentist for every 11,500 before the war, they will get some idea of the depressed conditions in that area. The reason why we have so few dentists to-day is that those who lived in these communities were unable in the years before the war to send their sons to dental college, and those who were fortunate enough to be able to send a son or a daughter to a university saw the young people, when they got through college, establish themselves in Toronto, Montreal, Winnipeg or in some of the larger centres in our own province where they could establish a home and become self-supporting. Our people have been forced to accept low standards of living, and it cannot be expected that we could equal a record in victory loan subscriptions such as that set up by the constituency represented by the hon. member for Rosedale (Mr. Jackman).

The members of this group have not supported the _ view expressed by the previous speaker (Mr. Jaques) who criticized the government for the controls that have been introduced. We have advocated social planning. The senior lion, member for Halifax (Mr. Isnor) gave the impression that we have advocated giving people something for nothing, making possible in Canada a very high standard of living for everyone without anyone having to work. Nothing could be further from the truth. We said1 before the war that if Canada had full employment, if she used her resources and put her people to work, she could give her people a very high standard of living. The estimated national income of $9 billion for this year would provide over $700 for every man, woman and child in Canada, or an income of $3,500 a year for each family of five people. In spite of the fact that we have three-quarters of a million of the strongest and ablest of our citizens in uniform who are not producing any consumer goods but are being maintained in the national interest; in spite of the fact that we are providing equipment to carry on the war and to equip, clothe and' feed our forces, the Canadian people on the whole are to-day enjoying a higher standard of living than ever before in the history of this country. So that I think it is clear that if we had been planning

The Budget-Mr. Nicholson

in peace time as we now plan in war time we could have ended unemployment in the thirties and given our people comfortable homes, good furniture and clothing, and the necessary medical and dental services so that it would not be necessary for 57,000 people to live in any part of this country where they have to travel, in some instances, a hundred miles to visit the nearest dentist, and where there is only one dentist for every 19,000 people.

Planning is essential if the democratic nations are to stand up against the forces of fascism. In Great Britain very early in the conflict rationing was introduced. The reactionary forces in Great Britain protested and said: This is socialism; it is regimentation; it is not in the best interests of the country. But in spite of their protests rationing was introduced. In Canada we are introducing rationing as goods become scarce because we recognize the principle that ability to pay should not be the deciding factor as to the amount of goods that citizens may buy. Is it not significant that in Great Britain, the best fed people, next to those in the armed forces, are the seamen, and the second best fed are either the miners or the workers in heavy industries, or the children of Great Britain? I wish we could say in Canada that our soldiers, sailors and airmen and seamen are the best fed, and that next come the workers in our steel industries and in our mines, and the little children. But that cannot be said in Canada. In Great Britain, in 1940, Robert Boothby, parliamentary secretary to the ministry of food, was able to say:

An expectant or nursing mother and any child under school age can now obtain for the asking milk at 2d. a pint. It is scarcely possible to exaggerate the importance of this scheme. I regard it as one of the most notable measures of social reform which has been carried through in recent years. It has taken a world war to make our dreams come true.

The Minister of Finance mentioned that there had been little criticism of his taxation policy. It is my opinion that the government lias not gone far enough in taxing those with high incomes. I realize the predicament of the administration. Unfortunately, there are still some in Canada who share the views of Arthur Meighen, who spoke in the other chamber in 1940, as follows:

I do not exaggerate at all when I say I have had business men by the dozen tell me that they have been leaning on their oars, they have nothing to work for. They say, "We might just as well take it a little more easily now for we are only working for taxes anyway."

A serious problem presents itself to any administration when men like Mr. Meighen 72537-97

express these views. It is true that their number is not large, but they exercise a tremendous influence on the economic and political life of this country, or any other country, and through, their interlocking directorates they could seriously cripple the country's war effort if they were to do what Mr. Meighen's friends apparently were doing in the fall of 1940, namely, resting on their oars.

I must urge again that the administration also take into consideration the large number of Canadian people who have made and are making very real sacrifices and who are going to make every sacrifice which is necessary to carry this conflict to a successful conclusion.

I have here a table of tax deductions prepared by the Minister of National Revenue (Mr. Gibson). Different income tax groups are listed, and there are 127 groups of married people with 3 children receiving incomes, after they have paid all their income tax, of amounts ranging from approximately $100 to $1,000 a month.

In 1936, when the late Norman Rogers was acting Minister of Trade and Commerce, he was responsible for setting up a special committee to prepare statistics of family income and expenditure in Canada. The report of this committee was published in 1941. It is available from the bureau of statistics for fifty cents, and should be read by every Canadian. This committee surveyed a group of 1,439 representative families in Canada. They did not go to the relief areas or the depressed areas; they tried to get representative men from the working classes and the salaried groups in receipt of earnings between $450 and $2,500 per family a year. After compiling their information they found that the average expenditure for the group was $1,453.90, divided on the following basis:

Per cent

Food 31-3

Shelter 19-1

Fuel and light 6-4

Clothing 11-7

Home furnishings 8-9

Health 4-3

Personal care 1-7

Transportation 5'6

Recreation 5'8

Life insurance 5-2

It could not be argued that every citizen in Canada should spend his income in exactly this way, but if one considers the spending of this representative group he gets a fairly good break-down on how a family income should be spent.

In the last group which the Minister of National Revenue discusses in his pamphlet, it will be found that, after paying the highest

Questions

income tax ever known in Canadian history, a man, his wife and three children are able to spend per month, if they spent according to the percentages I have just mentioned, as follows:

Food $310

Shelter 191

Fuel and light 64

Clothing 117

Home furnishings 89

Health 43

Transportation 56

Recreation 58

Life insurance 52

Personal care 17

Can it be argued that during this critical period any family of five should be allowed to put pressure on the price ceiling to the extent of $310 a month for food, or $117 a month for clothing, or $89 a month for home furnishings? It can be claimed no doubt that people in these brackets are taking out large subscriptions in the victory loan campaigns. I am not in a position to know how much they take. But the demand for luxury goods and the spending on non-essentials indicate that there is a very large amount of money which could be diverted into the treasury by either higher taxation or compulsory loans on a much more ambitious programme than we have hitherto produced.

On motion of Mr. Nicholson the debate was adjourned.

Topic:   THE BUDGET
Subtopic:   DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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At six o'clock the house adjourned, without question put, pursuant to standing order. Thursday, March 25, 1943


March 24, 1943