September 25, 1945



On the orders of the day:


Major James William Coldwell

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

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

I should like to ask the Minister of Justice if he has received a telegram from Saskatchewan inquiring about the dates of the filing of the petitions for the disallowance of Saskatchewan acts, and indicating that Saskatchewan's first notice was received on September 20?

Hon. L. S. ST. LAURENT (Minister of Justice): No; no such telegram has yet been brought to my attention.


Major James William Coldwell

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


I will send the minister a copy of it; I received one.




On the orders of the day: Mr. ANGUS MacINNIS (Vancouver East); I should like to ask a question of the Minister of Labour. Has he asked the provincial governments to agree that the present federal labour code make provision for full union security to certified unions upon request, pending disposition of jurisdiction on the subject at the forthcoming dominion-provincial conference?


Humphrey Mitchell (Minister of Labour)


Hon. HUMPHREY MITCHELL (Minister of Labour):

I should like to thank my hon. friend for giving me notice of the question. No such representation has been made to the provincial governments in the matter referred to by my hon. friend, but representations have been received from the Trades and Labour Congress of Canada, the Canadian Congress of Labour, and other labour and employers' organizations, with regard to amendments to the code generally. All those representations have been sent to the provincial governments. The representations received from the employers have been sent to the trade unions, and those received from the trade unions have been sent to the employers for their information.

Parliamentary Assistants




On the orders of the day:


William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)


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

Mr. Speaker, I should

like to table orders in council passed to-day appointing certain parliamentary assistants.

Mr. R. W. Mayhew, the hon. member for Victoria, has been appointed parliamentary assistant to the Minister of Finance (Mr. Ilsley).

Mr. W. C. Macdonald, the hon. member for Halifax, and Mr. Hugues Lapointe, the hon. member for Lotbiniere, have been appointed parliamentary assistants to the Minister of National Defence (Mr. Abbott). As the house is aware, the Minister of National Defence has responsibility for naval services as well as for the army. Mr. Macdonald will be concerned particularly with naval services, and Mr. Lapointe with the army.




The bouse resumed from Monday, September 24, consideration of the motion of Mr. W. M. Benidickson for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the amendment thereto of Mr. Bracken, and the amendment to the amendment of Mr. Hansell.


John Horne Blackmore

Social Credit

Mr. J. H. BLACKMORE (Lethbridge):

Mr. Speaker, either this parliament will discover and apply a solution to the dismaying problems confronting the Anglo-Saxon world, or it will fail to discover and apply that solution. Either this parliament will redeem democracy and parliamentary governments generally from the siloughi of despond and contempt into which they are rapidly descending all over the world, or it will drag still deeper into the mire the reputation of parliament. The matter rests in the hands of members of this parliament.

There is in this parliament I am sure a knowledge of how to obtain a solution of the prohlems of the world. If the government would call together the representatives of the various parties in a round table conference in a non-political manner and1 discuss earnestly for whatsoever time was necessary this matter of a solution, I am confident that a solution could be found. .

We shall never be able to find a solution by sneering at each other's ideas as did the hon. member for Winnipeg South Centre (Mr.

Maybank) the other night when he referred to Social Credit as funny money. We shall never do it by indulging in outbursts of fantastic misrepresentations as did the hon. member for Montmagny-L'Islet (Mr. Lesage) last night, or in bursting forth into ecstatic paeans of glorification of the present obviously hopeless orthodox system of finance, as did the Minister of Agriculture (Mr. Gardiner) last night in his otherwise excellent speech. We may be able to find a solution by approaching the situation with humility and a disposition to be open-minded, to consider and weigh and assess the value of the various arguments as did the hon. member for Grey North (Mr. Case) on September 21. At that time the hon. member said as recorded on page 369 of Hansard:

-I do not think Canada, of all countries in the world, is in a position to give leadership in monetary reform. We produce a tremendous volume of goods in this country, and we must find a market for tnem in the markets of the world.

Mr. Kuhl: How about the home market?

Mr. Case: The home market could never

consume the amount of goods we produce, because we produce enough for 50,000,000 people. The productive capacity of this nation during the war absolutely staggers human imagination. If those with whom we seek to trade were to discover that we were using a monetary base which resulted in subsidizing our goods to the detriment of their standard of living, I am sure they would soon find means of applying dumping duties or an embargo to prevent us from finding our way to their market. The whole matter is greatly involved. I am glad that there are those who have the courage to come forward with these ideas. I like to think of myself as being a student of monetary reform -sometimes I think our system should be reformed-but I have yet to be convinced that Social Credit policies will fit in with our plan of world affairs.

The hon. member's words indicate a somewhat sincere desire to know something about social credit, why it is called social credit and the basis of facts upon which it founds its philosophy. What is its philosophy? What is the basis of fact upon which it founds its technique? What is the technique which social credit proposes? How shall social credit deal with the great problems which confront us at the present time, the great phenomena such as the surpluses in Canada and- in other nations-wheat for example-and the deficiencies in other nations, such as are found in a country like Jamaica; inflation or boom, deflation or depression; monopolies and cartels; foreign investments in Canada which upset our trade balances or balances of payment; Canadian investments abroad; international debt and adverse trade balances; international commercial rivalry or trade wars? How would

The Address-Mr. Blackmore

social credit enable Canada to sell her goods on the world markets? How would Canada protect her economy against foreign goods seeking to enter her market in competition with Canadian goods? Would she use the tariff under social credit, or exchange control, or quotas, or embargoes, or just how would she proceed under social credit? How would Canada attain monetary stabilization, first of all in Canada and then internationally?

What is social credit's attitude toward international trade? What is social credit's attitude toward the Atlantic charter? What is social credit's attitude toward war, its causes and the remedy for those causes and provision against war? What is the social credit attitude toward the British commonwealth and the empire? What is the social credit attitude toward world organizations such as were attempted in San Francisco? What is the social credit attitude toward the world as it is to-day? How do they interpret the world? Why is it we have people pitted against each other in great organizations ready to fly at each other's throats? Is Canada of all countries in the world in a position to give leadership into social credit? These seem to be some of the major questions in the mind of the hon. member for Grey North.

These questions are all fair and reasonable, and they require to be answered. Any sound economic system ought to be able to answer them. The proposals necessary to answer them should be definite, consistent, realistic and logical. Can social credit answer these thirteen questions definitely, consistently, realistically and logically? If it can, and to the extent to which it can, then social credit has a valid claim to careful consideration as the possible technique to be used in establishing a new world order of freedom from want and fear, together with freedom of speech, worship and choice.

Can social credit answer these questions with definiteness, consistency, realism and logic? Let us see. Consider, first, the meaning of social credit, the first question the hon. member wanted to get clear in his mind. The credit of a nation is like the credit of an individual. It is of three kinds. There is the credit of honour, whether or not a man's word is any good, and this applies also to nations. There is the credit which means the ability to produce and deliver goods as, when and where required. This is called the real credit of the individual and it is the real credit of a people. Finally there is the financial credit, which means the ability of the individual or the ability of a nation to produce as, when and where required, money, which is a quite different thing.

Social Crediters maintain that the financial credit of a nation should reflect the real credit of the nation and correspond to it. They believe that when there are more goods and services on a nation's markets than the consumers of that nation are financially able to buy, then the people's representatives in parliament should lay down a financial policy under which a national finance commission or authority would create and distribute scientifically to the people money tokens or dollars enough to enable those so-called surplus goods and services to be bought and consumed by the people of the country in so far as the people can use them, or perhaps by the peoples of other countries in so far as the people of this country cannot use them. Under such a policy the national money authority would render available to all the people of our nation their real credit, the goods and services they produce. The social credit movement favours rendering the people's real credit social through the creation and use of financial credit to represent or correspond to that real credit, that is, the creation of enough tokens or dollars to make it possible to distribute to all consumers in Canada that portion of our goods and services which otherwise would be wasted.

One of the great faults we have to find with the members in this house who undertake to criticize or sneer at social credit is this simple fact-they never do take the trouble to find out what social credit claims to be, and consequently they have not the slightest idea what they are criticizing. So they make the most idiotic statements and say the most stupid things, simply because they do not know what it is. I have made that completely clear. I have given the facts concerning the social credit concept.

What is the basis of fact upon which social credit philosophy is founded? First, we as a people and as a world have solved the problem of production. That is, we have now got to a position in this world where mankind can produce more goods than mankind is at present able to buy. Consequently there are more goods than mankind is at present able to sell, and this is one of the major causes of depressions and war.

Second, machines have displaced men so that production has increased and jobs have decreased, and consequently wages have decreased, the result being that there is ever present a deficiency of purchasing power in the hands of the people which renders it quite impossible for them to buy the goods which they are able to produce in normal

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so that there is no scarcity of goods of any kind, you cannot have a rise in price, consequently you cannot have inflation, no matter how much money you bring into circulation; for the people will be able to buy all the goods they want, and will certainly call for no more. This is one of the great truths which must be learned by this parliament and by this generation if it is to solve the problems which confront it. Inflation is a rise in price which results from scarcity of goods. It has nothing to do with money in this modem age.

How do you overcome inflation? The first thing is to see that you have an abundance of production of all kinds so that, no matter how much people want to buy of coal and milk and cream and cheese and sugar and a thousand other things, there will be always more than they require, and prices will not rise. Such a condition can certainly be brought about in a land of abundance like ours.

Next, look after your prices. Social credit has a technique which we call the compensated discount. It means this, that the financial authority, the monetary authority, pays part of the price of goods. For example, if a pair of shoes is being sold for S5 and it is deemed advisable in the interests of Canada that these shoes shall sell at $-4 a pair, the financial authority will pay one of the dollars, enabling the consumer to buy at S4. This device brings the price down, and it can be used in the national economy all over the country. The only limit beyond which it cannot go is the amount of goods and services you have in the country: those are what make you rich and strong. This compensated discount, if applied throughout the economy of the country, will completely prevent inflation. Furthermore, credit can be and should be regulated, and would be, under a social credit regime. Finally, if necessary, if some difficulty should arise, such as a great crop failure, say of apples or something of that sort, we would have to ration that particular commodity.

What would social credit do about deflation? First of all, what is deflation? Deflation is a fall in price. Why a fall in price? Because there are more goods on the market than there is money coming into the markets to buy goods with; consequently there is a glut of goods and the prices of goods go down. Under the law of supply and demand that will always tend to happen. The present government has already introduced a system of floors under prices, which indicates that they are already beginning to see the light. Social credit will introduce floors under prices, and the^ money required will be paid from the national credit without new taxation or debt.

So floors under prices and floors under wages will be maintained, and credit will be regulated. If the banks fear to lend and begin to draw in loans, the government comes in with an agency through which it begins to lend until the banks are encouraged to go forward. Thus deflation would be checked.

Fifth, monopolies. Social credit first of all believes it can control any monopoly for the simple reason that it has control of price. All it needs to do is to tell monopoly it will not give it the advantage of price, and I think that any monopoly with any sense will come into line. If monopoly chooses to be disobedient-"uncooperative" is the word we like to use-it becomes very easy for the government monetary authority to advance money to private companies to establish businesses,-say, to produce aluminium, or whatever it happens to be; and with government bonuses and assistances that little company could cut into the markets of that big monopoly and utterly destroy it, and it would be impossible for that monopoly to avoid it. There is no need for the government to take over the monopoly and thus have a government monopoly.

Now as to the matter of cartels. There is only one really safe solution to the problem of cartels, and that is to make the country as nearly as possible self-sufficient. In this day of remarkable scientific advancement, of the development of plastics and the like, together with the vast resources which we possess, we can become very nearly self sufficient. If there were difficulties with a few cartels we would probably have to resort to some sort of international agreement, but the general attack would be as I have described it.

With respect to foreign investments in Canada, these cause a great deal of difficulty. There is altogether too much foreign capital investment in Canada. Social credit would make it the government's business to see that these great interests which have investments in Canada were encouraged to sell. The government could lend money to private interests to buy these people out and send them home with their money. That can be done, and it is going to be done; it will -have to be done. Mexico had to resort to that device in 1938 with respect to United States interests in her oil industry. It will be found as the days go by that it will be necessary for that device to be applied generally throughout the world, otherwise how can a nation govern itself, when it cannot be master in its own house?

With respect to Canadian investments abroad, such investments would not be encouraged by social credit, for the simple reason that Canadian investments abroad

The Address-Mr. Blackmore

would be unwelcome, just as foreign investments in Canada would be unwelcome. Some people will say-and I can almost see my Conservative friends thinking it-"We had to have foreign capital come in to develop this country." Yes; that was done when you still thought that you had to have money come in from outside. But we have learned that we can create our own money; we have no further need at all of foreign capital coming in.

What would we do with international debt? First, it must be agreed that any debt should be payed in goods and services, which is the only way such debts can be paid. The sooner all nations come to realize this, the better. Today the United States is rapidly coming to a realization of this truth in her arrangements with Great Britain. AIL nations will have to realize that international debt must be paid with goods and services. Then we would stimulate our own production, and we would lower our own prices in Canada by the method of the compensated discount, which would encourage people to buy Canadian instead of buying foreign; that would enable us to have a favourable trade balance. It should not be difficult at all in a country like Canada. In fact it would not be difficult if we were using a social credit system.

What shall we do about international commercial rivalry? This is one of the problems in the mind of the member for Grey North, who asked that question with, great sincerity. He is much troubled about how Canada would get her goods into foreign countries. Well, Mr. Speaker, the day has to come when we must realize that we must not force our goods into a foreign market in competition with other people's goods or in competition with the goods of that country in its own market. If we persist in so forcing our goods we shall disrupt the economy of the country concerned and begin to sow the seeds of war.

All wars are the result of hot commercial rivalries-successful commercial rivalries. That principle was definitely enunciated by Woodrow Wilson, who was one of the men who in their time knew these things. Social Credit- would trade not on a competitive basis but on a mutual aid basis. If we are financing mutual aid to various nations, why should those nations not finance mutual aid to us? If we can provide them with the things that they are unable to produce, why should they not provide us with the things that we ourselves are unable to produce? Surely they should not hesitate to do that, and I am certain, that- they would not. Imagine Britain refusing to send us good's which we cannot produce in return for

goods that we have sent to her which she could not produce! It is not conceivable; neither would it be conceivable in the case of Australia, New Zealand or any other country under intelligent government.

And so we would trade not on a competitive basis but on a mutual aid basis. We would trade the goods we have, such as aluminum, copper, wood pulp, lumber, the products of wheat, salt fish, sugar, rubber, machinery and all sorts of things which we are able to produce. We would trade all these commodities for such products as bananas, oranges and other things we need from abroad.

There would be no attempt to "blast our way" into the world's markets in any shape or form. We could reduce our price-as the member for Grey North conceived we would -by means of a subsidy, to enable other nations to buy our goods, but we would not force those goods on those nations. We saw an illustration of this concept in operation in the statement on wheat which the Minister of Trade and Commerce (Mr. MacKinnon) gave to the house recently. He pointed out definitely that we must keep the price of wheat down so that the British people could buy it. Under social credit that could be done with any commodity. If a nation wanted to buy our goods we could bring down the price of the goods by a subsidy to producers so that other nations could buy those goods without reducing the price received by farmers and other producers. That could be done on a world-wide scale, especially by a nation as fortunately endowed as Canada is.

The tremendous difference between bringing down your price-may I impress this upon the hon. member for Grey North-so as to enable other nations to buy, and bringing down your price in order to force your goods upon other nations, is a difference that must be apparent to all. The first is a blessing; the second is a curse which must result in war.

How would social credit protect Canada's economy against foreign goods-by using tariff, exchange control, quotas and embargoes? Each of these could be used, but the social credit technique is that of price discounting. If goods were coming from a foreign country underselling ours by fifteen or twenty cents per unit, all we would have to do would be to subsidize our own producers to bring down our own price to enable that article to be sold under the goods coming in. That can be done and has been done; I could point to plenty of instances in which it has been done. We need have no use of a tariff. If we could not get along without one we might

The Address

Mr. Blackmore

have to have one, and we would use it only under those circumstances; but there is no need of one, so far as I can see.

How would social credit attain monetary stabilization? First, in Canada, it would lower the price structure by subsidies to producers or compensated discount to consumers. The lower the price structure in a country, the higher the value of that country's dollar, which means that by means of the compensated price you can raise the value of your dollar in the world to any desired standard. That is the technique we would use, in that way stabilizing our own dollar, so that we would know exactly what it would be worth, and everyone else would also know. In a similar way the other nations could do the same thing. We would have to agree on prices. Social credit is absolutely opposed to having any fund, such as the Bretton Woods agreement envisages, set up with the power to dictate to a nation how its money shall be managed. What a nation shall do with its money is that nation's business and nobody else's. If they do not choose to trade with us, that is their lookout; we will get along anyhow.

The next question is, what is social credit's attitude to international trade. I have already stated that social credit is prepared to trade with any nation on a mutually advantageous basis. It will trade what others need for the things which Canada needs.

What is our attitude to the Atlantic charter? Social credit is the only known system on the face of the earth under which the Atlantic charter can be established so that there can actually be freedom from want and fear among the nations of the earth and all the earth's peoples. I defy any economist anywhere in the world to show any other system whereby that can be done. The only system under which it is possible is social credit.

What is our attitude to war? We hold that the cause of war is economic; it is fear and want. The system of mutual aid which I have indicated would entirely remove fear and want and thus remove in a large measure the cause of war. We would trade through a mutual aid arrangement instead of having competition, and thus go far towards removing the cause of war. And if after that there were still people who wanted to fight-we!!, there is only one thing to do and that is to see that our walls are strong. Social credit would see that that was the case, and it has taken that attitude ever since coming into public life. We would see that we had a

strong economy, strong armaments, strong and healthy people, well educated, strong through exercise and strong in morale.

What is our attitude to the British commonwealth and the empire? We believe that the British commonwealth is the greatest and most dependable guarantee of freedom of every kind thus far developed in the world. The greatest demonstration of democratic strength, through decentralization, is found in the commonwealth. We favour full understanding and wise cooperation with the British peoples. We insist that local sovereignty be completely and unchallengeablv guaranteed. We insist that Canada, while being daughter in her mother's house, shall be mistress in her own, with all that term implies. We believe that, with respect to the British peoples, united we stand, divided we fall.

The British have a great responsibility to discharge in the world, and the British commonwealth, on a social credit basis, could withstand any enemy on earth or any combination of enemies. No combination could then destroy it politically or economically.

We favour putting the British empire and British commonwealth on a social credit basis, and then, under God, going forth facing the future without wavering. The British commonwealth can be economically self-sufficient.

What is the social credit attitude to world organization? We are ready to cooperate. We are ready to discharge our full responsibility. But we are not willing to surrender our sovereignty to any international or other external force on earth.

What is the social credit interpretation of the world situation? It accepts God, it accepts Jesus Christ, it believes that there is a struggle between the powers of righteousness and the powers of evil -waging in the world to-day. Evil is forever seeking to enslave men, to centralize power and destroy men's freedom, politically, economically and financially. Good is with equal determination struggling to free men and to guarantee their freedom, politically, economically and financially.

The powers of evil are headed up by certain international bodies or powers. Among those powers we consider international finance to be one of the foremost.

Is Canada fitted to take the lead in the social credit movement in the world? The member for Grey North asked that question, and it was a good one. Let us see: Canada is rich in resources. She has very varied resources, almost inexhaustible resources, and she could be almost completely self-sufficient. She has industrial equipment of a very high order, and industrial skills coming out of this

The Address-Mr. Harkness

war of first-rate quality. She has administrative skill of the first order. She has scientists of high quality, as witness the great developments in plastics on a commercial scale. She has hundreds of thousands of people already enlightened in social credit, and hundreds of thousands more much interested in it, as the hon. member for Grey North indicated1 the other day. Her people believe in individual enterprise; her people are a freedom-loving people, very brave and dreaded in war. She is a part of the British commonwealth of nations and is therefore protected through that association. She is a part of the North American continent and derives protection from that relation.

She is eager to find a solution to the economic difficulties which confront her; she is eager to find a solution to the problem of war; she is fearful of failure. Where could you possibly find a nation more admirably fitted, apparently more designed and destined by Almighty God, to take the lead in the world in the solution of the world's economic problems? I commend the whole system of social credit to the most earnest consideration of all hon. members in the house and of all the people in the country as the only means whereby we can emerge from the old order of doubt, insecurity, irregularity, injustice and war, into the new order where there shall be actually guaranteed freedom from want and fear, and where people will be able to enjoy freedom of religion, of speech and of choice.


Douglas Scott Harkness

Progressive Conservative

Mr. D. S. HARKNESS (Calgary East):

Mr. Speaker, I should like at the outset of this, my first speech in the house, to add my congratulations to the many which you have already received on your election to your high office. I also wish to congratulate the mover (Mr. Benidickson) and the seconder (Mr. Langlois) of the Address in reply to the speech from the throne, first on the excellent addresses they gave, and second because they are representatives of the air force and the navy respectively. I think it was fitting that those services should have been honoured in this way.

At this point I should like to pay a tribute to the men of the particular arm of the services with whom I served, namely, the Royal Canadian Artillery. I believe few will dispute the statement that, with the exception of the infantry, the gunners were more responsible for winning all our battles than any other arm of the ground forces. I am proud to have served with such a fine body of men, and I was anxious to have this tribute to them put on the record.

I should like to make a plea here for the' foot soldier. Throughout the war he was the lowest paid of any service man, and during the earlier years of it was the least regarded, because it was commonly believed that technological advances had outmoded him, and that the gun, the tank, the signals, the repair services, and so forth, were much more important. Yet on the actual field of battle it was found that the infantryman was still the most important and necessary man there. He . had the worst conditions under which to live, suffered the most privations, took the greatest risks, and incurred the highest casualties; yet his pay remained lower than that of the motor mechanic working in comparative safety some thirty miles behind the battlefield. I maintain that this was all wrong, and I hope to see this parliament authorize a complete change in the scale of pay of the services, so that it will bear a much closer relationship to the risks run, and to the conditions endured, than has been the case in the past. I feel very strongly on this matter because of my personal experience. As a result of the man-power policy of the present government the artillery regiment which I commanded spent three and a half months of last winter acting as infantry. During that time many men came to me and remarked that they had never before appreciated the difficulties and hardships of the infantry, and reckoned that they should be paid two or three times as much in that role as they were paid as gunners.

In the short time I have been in this house I have observed that it is customary for a new member to say something of the glories of his own constituency. In the constituency of Calgary East, which I have the honour to represent, we have a post office and a polling division called Bragg Creek. Do not be alarmed that the name is indicative of what is to come. In fact there is no need to advertise Calgary East, because, I believe, it is known to practically every person throughout Canada, because of two things. First, it is the site of the Calgary stampede, and second it contains Turner valley, the only large producing oil field in the dominion. At this point I will do a little advertising. I earnestly recommend to all hon. members that they make use of their travelling facilities to come out and see either or both of these attractions. For my own part I propose to do the same thing in eastern Canada. I am sorry to say that I have not seen anything of Quebec and the maritime provinces. I believe it is my duty to do so, and I intend to do so as early as possible.

What is not so well known as the Calgary stampede and Turner valley, is the fact that

The Address-Mr. Harkness

Calgary East is a representative cross-section of Canadian life. It takes in most of the central or business district of Calgary, and embraces residential areas representing all levels of income, and people of nearly every racial origin and religion to be found in Canada. These people are engaged in most of the occupations followed in this country with the exception of those connected with the sea. The rural part of the constituency runs from twenty-five miles south of the city, west to the British Columbia boundary. In it there are found dairy farms, mixed farms, wheat farms, cattle ranches and the odd small saw mill, and on the outskirts of the city a large number of small holdings, where people are engaged in vegetable growing, fur farming and other rural enterprises of a small kind.

As a result of fairly close contact with a large number of these people, of all conditions of life, I assure you, Mr. Speaker, and hon. members of this house, that the three things uppermost in their minds are those with which the amendment proposed by the leader of this party deals. They want their men now in the services back home and into civilian life as rapidly as possible; they want houses for these men and for themselves to live in, and above all, they want jobs and the assurance that these jobs will continue.

These subjects of demobilization, housing and jobs have been dealt with by many other speakers in this debate; therefore I do not propose to say anything further on them except that I believe any hon. member of this house who has these matters sincerely at heart cannot conscientiously do otherwise than vote for the amendment proposed by the leader of this party. [DOT]

I should like now to touch briefly on certain other matters. Because of the nature of my constituency, and because the prosperity of Calgary and of Alberta is very closely connected with the prosperity of the beef producers, I am very deeply interested in that industry. Some ten days ago the hon. member for Calgary West (Mr. Smith) and I, had several long talks with Mr. George Ross, chairman of the Council of Western Beef Producers, and a large rancher in southern Alberta. From their contacts with cattle men in the United States, his organization is convinced that unless at least token shipment of beef are allowed to go from Canada to the United States shortly, we will lose that market, which meant so much to us in the pre-war years in the matter of disposing of our surplus beef cattle, and thus in keeping prices of beef at a level which made it possible for cattle producers, and beef producers particularly, to i [Tf

operate at a profit. Mr. Ross states that beef producers are not interested1 in the three to four cents a pound more which can be obtained on the United States market. They are quite content to let the government take this in the form of export licence fees, or in any other way that it sees fit. But the beef producers are very anxious that this market be not lost in the future, and to ensure this they believe, with their expert knowledge of the situation, that some shipments of beef to United States markets are essential at the present time. To use Mr. Ross' words, "We have to keep the ditches wet-, or there will be no flow in the future". I earnestly recommend to the Minister of Agriculture (Mr. Gardiner) that this matter receive his immediate attention.

Another thing which exercises the beef producers is that the Income War Tax Act places them at a disadvantage as compared with people in any other business. The proceeds from any cattle sold by cattlemen are considered as income, and taxed. But a cattleman's breeding stock, his cows, are actually his capital, or his tools, comparable to a grain farmer's machinery or a manufacturer's plant.

A cattleman normally runs let us say 300 head of breeding cows. If, owing to a dry year or adverse conditions of any kind, he is unable to carry those cows through the winter and has to sell off, we will say, half of them, along fkith his normal turn-off of beef cattle-say 250 head-with income tax at present levels it means that he gets practically nothing back for those 150 cows. He is in a position where he has lost his capital, or his tools, and is not able to go back into production on anything like his former scale. Surely this is an injustice which parliament should redress by a provision in the Income War Tax Act to the effect that a farmer or rancher's normal breeding cows, brood sows, and the like, shall be regarded as capital, and not have to pay income tax upon the sale thereof.

I should like to compliment the Minister of Agriculture, who, I am sorry to see, is not in the house at this time, upon his eloquent dissertation of last night. I am certain he convinced himself and hon. members on his side of the house that the government's bonus on coarse grains and the price ceiling set on hogs has not been responsible for the marked decrease in the number of hogs produced. I am equally certain that he did not convince the men whom I was glad to hear him credit with knowing more about farming than any other group, that is, the men who milk the cows and feed the hogs. In this I refer more particularly to Alberta;

The Address-Mr. Harkness

and the fact that the farmers in that province were not, and are not, convinced of this, is amply demonstrated by the very large decrease in hog production which has taken place in that province, despite the fact that these farmers had plenty of feed.

I can assure the minister, too, that from conversation with large numbers of men who formerly produced hogs, but who are not now producing them, it is clear that the sole reason they stopped such production was that it paid them much better to sell their grain. They maintain that they will not go back into hog production unless the price of hogs is raised. I can also assure the house that, so far as my constituency is concerned, hog production at the present time is falling from month to month.

I was glad to hear the hon. member for Medicine Hat (Mr. Wylie) discuss the question of irrigation for southern Alberta, when he addressed the house on Thursday last. I join with him in the hope that this question will not be made a political football, and that the government will proceed immediately with at least one of the irrigation schemes surveyed and talked about so much in Alberta.

I do not purpose at the moment giving the house any of the mass of facts and figures which is available to show the tremendous benefits which the construction of irrigation systems in western Canada would produce for the whole dominion. The hon. member for Davenport (Mr. MacNicol) has already done a great deal along this line, and on behalf of Alberta I should like to thank him for his work, and for what he has accomplished in bringing to the attention of the house and of all Canada the possibilities of irrigation, and of many other natural resources in western Canada.

I was pleased, too, to hear the Minister of Agriculture state in his speech last night that the government proposes to go ahead with irrigation schemes, and I trust it proposes to do so immediately-not three or four years in the future.

During the debate several hon. members have discussed the subject of immigration. I hope this is an indication that there is an increasing interest in this matter, and that the fear-begotten closed-door policy, and ideas of the kind which were prevalent in the pre-war era, are disappearing. While we had hundreds of thousands of people on relief rolls, anyone who proposed an immigration policy or made the suggestion that we should bring more people to this country was looked upon as a lunatic. Such an attitude of mind was quite

understandable at that time. Now, however,

I think we should go back to the basic truth that we just have not enough people in Canada to make our great transportation systems economically sound, to make for a well-balanced economy, to develop properly our natural resources, or to support our multitude of governments-municipal, provincial and dominion-in the manner to which they have become accustomed.

To elaborate on the last point: our taxes are too high, but I see no good prospect of reducing them materially except by getting more people into the country, producing more wealth, and thus spreading the load.

However, I would not be in favour of a policy of unrestricted immigration. I believe the test as to whether a man should be admitted to Canada should lie in the answer to this question: can we readily and rapidly assimilate him? If the answer is no, then he should be excluded. Our experiences in the past fifty years should be a good enough guide to us in deciding as to whom we can or cannot readily assimilate. Certainly in that class would come all orientals. I believe we should rigidly close the doors against them. When I take this stand I trust that hon. members to my left will not accuse me of racial prejudice. My views are not founded upon racial prejudice, or racial grounds at all, but rather on common sense, observation, and a strong desire to build a great and united Canada.

I believe that even hon. members of the C.C.F. will admit that more than ninety-nine per cent of the white population of Canada will not intermarry with orientals. Those few who do, and their children, are exposed to all the cruelties, hardships and humiliations of social ostracism. I think it is only honest to make this admission, and to admit also that these oriental people cannot be assimilated into the broad stream of Canadian life. They cannot be made into thorough-going Canadians, and therefore it is better for them, as well as for us, to keep them out of the country.

Throughout the debate I have been glad to hear a large number of speakers say something on the subject of national unity. I think this is basically the greatest problem we have in Canada to-day. If we are to make this the great and united country which it is possible for us to build, we will all have to pitch in and work to that end. National unity has had a great deal of lip service in the past, but as far as I have been able to find out very few people have really worked actively and in a practical manner in order to get results.

The Address-Mr. Harkness

We have had far too much sectionalism and distrust and suspicion in each part of the country toward every other part of the country. Provincialism too often has been fostered and encouraged for political reasons, which is one of the chief reasons it still exists to the extent it does at the present time. I trust that this sort of thing will soon become a thing of the past. We cannot afford to gamble with the future of Canada for political ends on this issue.

I think we must start a hard-pushed publicity campaign to foster Canadianism. We should make full use of our schools, our radio and our press to do this. People in this country to a large extent are Scotch-Canadians, Irish-Canadians, French-Canadians, Poldsh-Canadians and every other sort of hyphenated Canadians. What we need in place of that are just plain Canadians, and in order to get that we must teach Canadianism. The thing will not come of itself. The proposal of the government to adopt a Canadian flag and Canadian citizenship is a step in the right direction. That will help materially in getting people to think of themselves as Canadians. There has been too much harking back in this country to racial origins, and this has retarded the growth of a national spirit.

I know this from my own experience. I am of Scotch descent, and although my forefathers came to this country well over a hundred years ago, as a boy I was taught to think of myself as a Scotsman. Until the age of nineteen or twenty years I referred to myself as a Scotch Canadian whenever the matter came up. That sort of thing is fairly typical of the majority of people in Canada, but it is an attitude of mind which must be broken down if true national unity is to be secured.

Before concluding, there is another question about which I should like to say a few words, the trans-Canada highway. The hon. member for Medicine 'Hat introduced the subject in his speech a few days ago and said that he hoped the hon. member for Calgary West and I would support the project. I want to assure him that we support him most strongly, and will press for the adoption by this house of the ideas contained in a report on the subject prepared by the Calgary board of trade, from which I should like to read a few extracts, as follows:

Canada requires an adequate highway system built around a hard-surfaced trans-Canada highway equal to any one of the many excellent transcontinental highways in the United States, otherwise Canada stands to lose her favourable balance of trade and economic world position through the loss of tourist traffic.

Past experience has taught us that many provincial governments are not financially able to construct highways of such high standards

through sparsely populated areas, and if we depend op the provinces to build such a highway system it is not likely same will ever be completed.

And again:

We propose that the dominion government should embark on a programme similar to the United States federal aid programme, providing approximately ten per cent of the money being spent in the states, namely $50,000,000 a year, for a number of years, on a dollar for dollar basis with the provinces, and thus guarantee the expenditure of at least $100,000,000 a year on approved hard surfaced highways in Canada. We believe an adequate system of highways including a trans-Canada highway w-ould not only satisfy and keep a large percentage of Canadian motorists at home, but attract sufficient motorists from the United States annually to more than repay our annual expenditure for such highways.

The Calgary board of trade is preparing a brief on this subject of a trans-Canada highway. When it is presented to the government I hope its recommendations will receive very serious consideration.


Hazen Robert Argue

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

Mr. H. R. ARGUE (Wood Mountain):

Mr. Speaker, in rising to take part in the debate on the address in reply to the speech from the throne I want to say what many hon. members have said, that I too am a new member. As some of the other new members have had difficulty in speaking, I am sure I shall be excused if I have even more difficulty, because I happen to be the youngest member in this house. I hope I shall be able to equal the enviable record set by the other honourable young members. Those young members who have spoken have given the lie to the contention held in many quarters that a man must have graying hair and must limp in here on a cane before he is sufficiently mentally developed to make a real contribution.

A number of hon. members have referred to their constituencies, and I trust I shall be pardoned if I give the house some information about the constituency I represent. I represent the constituency of Wood Mountain which is situated in southwestern Saskatchewan. This constituency is composed of people of many nationalities. I was somewhat taken aback when I heard reference made to the apparent conflict between the different nationalities in Canada. I should like to tell the house that the people of all nationalities living in my constituency have learned to live harmoniously together.

I am afraid I shall not be able to boast of the great grandeur of my constituency or of the metropolises situated therein. It is largely an agricultural constituency, and there are only two towns, Assiniboia and Gravelbourg, which can boast a population of over one

The Address-Mr. Argue

thousand people. The constituents of Wood Mountain are not wealthy, and I think hon. members will have guessed the reason why. They are largely farmers, and the farmers of Canada have never received their fair share of the national income.

Another reason is that we are situated in what might be called the dry belt of the west. Because of climatic conditions we suffer periodic crop failures. But let us have no illusions; that part of the west is still a great agricultural area. It has contributed in no small measure to the large quantities of meat and butter and grain that have been used to feed our gallant allies. Wood Mountain constituency can boast of one of the largest credit unions in Canada, the Lafleche credit union. Credit unions in Saskatchewan are growing up like mushrooms because the banks have failed to satisfy the needs of the farmer.

I should like to digress for a moment and say something about banks. As most hon. members know, the banks have the privilege, and they follow it in practice, of lending ten times as much in bank credit as they have in actual cash. Chartered banks also have the privilege of discounting so-called gilt-edged securities with the Bank of Canada. By this means they are able to lend many times the amount of bank credit compared to their actual cash. In 1893 bank assets in this country totalled 302 million dollars; bank assets in 1943 totalled 5,150 million dollars. Bank assets for the last fifty years have increased at the rate of 35 per cent per year.

Banks were first organized for the business of making loans. When they were in business in the early years of this country their assets were composed almost entirely of loans, but starting about the year 1930 the structure of bank assets has changed enormously, until to-day, of the over 5,000 million dollars of bank assets, something over 2,700 million dollars are invested in government bonds and industrial stocks. The banks have not been able to survive in what we have been led to believe to be free enterprise. They are to-day a leech on all the people of Canada to the extent that they have that amount of investments in dominion government bonds and industrial stocks. The banks are no longer content to control merely the currency, the lifeblood of the nation; they want to own and control the whole Canadian economy. We of the C.C.F. believe it is time that the people of Canada owned the banks, and not the banks own the people as they do at the present time. For that reason I would suggest to the government that they take into very serious consideration the question of giving to the credit unions the full privileges

and rights of the chartered banks. If that is done the people of Saskatchewan will have their own banks and will no longer have to go hat in hand to the banking institutions of Canada.

I might add that the banks are not to-day satisfying and have not satisfied since 1930 the credit needs of the people of Saskatchewan, and in particular the farmers. In 1926 there were 427 branches of the chartered banks in Saskatchewan. According to the 1943 report in the Canada Year Book, the branches of the chartered banks in Saskatchewan number now 213. That is, over half of the banks in Saskatchewan have closed their doors since 1926. The people of Saskatchewan are not sorry that they have closed their doors, but we do want to have banks of our own, and we can have them if the credit unions are given the full privileges of the chartered banks.

There is one part of government financial policy to which I should like to refer, and that is income tax. First I want to assure this house that we in this group are not opposed to the principles of income taxation. We believe that those best able to pay should pay. But we believe that the burden of the income tax has become too difficult to bear for those in the lower income brackets. Consequently, as the leader of this group suggested in his first speech in this new parliament, we feel that the income tax exemptions should be raised to $1,200 for a single man and to $2,000 for a married man.

A word as to how the income tax affects the farmers. In 1939, when war broke out, the farmers of Saskatchewan and of almost all parts of Canada had just come through a very serious economic depression. Consequently the farmers of Saskatchewan have been labouring under a terrific load of debt. According to the present income tax law, a man cannot count as an exemption from his income the amount he pays off on his mortgage. We believe, Mr. Speaker, that the difficulties and hardships and the economic depression which the farmers suffered in the hungry thirties should be considered in the income tax law, and that the law should be revised so that the amount of principal which the farmer pays off his mortgage shall be exempt from taxation.

There is another aspect. We believe very strongly, particularly those of us who come from areas in which crop yields fluctuate tremendously, that the average farmer's yield for one year or even two years is not good enough as a base for calculating income tax. The farmer's yield should be averaged over a period of at least five years, and on that

The Address-Mr. Argue

basis the income tax should be calculated. I am sure I speak for all the members of this group when I say that we intend to do everything in our power to see that the inequitable income tax laws are amended so that the common man in this country shall have a chance to make a living and maintain his family in decency.

A word about professional agriculturists. We have from time to time in this debate heard that many of our scientists are underpaid, and that there is great danger that we shall lose them to the United States. I assume that the scientists spoken of were chemists, physicists and engineers. I want to put in a plug for agricultural scientists. I happen to be myself, a graduate of an agricultural university. We in Saskatchewan know in a very real sense the benefits that come from research in agriculture. Professional agriculturists have recently given to us rust-resistant wheats, smooth-awned barleys, and royal flax. We now anticipate that in the -not distant future we shall have a sawfly-resistant wheat. I would suggest to the government that the salaries of agricultural scientists be increased so that we may retain in Canada those now here and give some encouragement to young farmers to follow what I believe to be an essential and noble profession.

I should like at this time to express my pleasure at the unanimity shown by all speakers in the hope that we shall get a real measure of social security. There should be .ncreased benefits in the way of provision for aealth, old age pensions, jobs for the workers and houses for the people. I am sorry to say, however, that the government's method of handing over the house-building programme to private enterprise has already failed. We in the C.C.F. believe the measure of prosperity which Canadians have had during the war, when two millions of our best workers were taken out of the production of consumer goods, gives an insight into the kind of Canada we can have if our economy is organized and planned so that its basis is production for use and not for profit. I would press for a comprehensive house-building programme, and in doing so may I suggest that all the slum conditions are not in our largest cities. I venture to say that every town in Canada has a shortage of houses. I protest against the slum conditions in which many farmers are forced to live. The government should formulate a comprehensive housebuilding programme which will guarantee to every family a decent house compatible with the real wealth which Canada can produce.

I want now to make reference to the newly announced government policy of a floor price on wheat basis No. 1 northern at Fort William. The Minister of Agriculture (Mr. Gardiner) assured the house that the SI per bushel for wheat is but the initial price, but the history of floor prices of agricultural products has been that the floor price becomes in effect the price the farmer receives. I am sure the government believes that the price of wheat in the near future will fall to $1 a bushel, or if not, why was the floor set so low?


James Garfield Gardiner (Minister of Agriculture)



I do not want to interrupt, but may I just make this correction? I did not say one dollar was the initial price. I said one dollar is the lowest initial price that can be set under the policy. At present the initial price is SI 25.


September 25, 1945