Mr. McCANN:

In refutation of that charge, and in view of the not infrequent recurrence during recent months of inquiries relating to the fluctuations of total personnel in the civil service since 1939, it was felt that a brief but comprehensive review of the situation might

contribute to a better understanding of this whole question by hon. members as well as by the general public. The reason I speak as I do, Mr. Speaker, and in this capacity, is that I was chairman of a committee of a cabinet which investigated the matter of civil service reduction.

During the war years the civil service grew from 52,000 in 1939 to a peak of 142,000 at May 1, 1945. This increase was largely due to the creation of purely wartime departments such as munitions and supply, wartime prices and trade board, national war services, and to the civilian complement of our greatly augmented armed forces. Part of this increase can alsc be attributed to the additional war duties that were undertaken by many of the old established departments. It must be further borne in mind that during this period the total strength of the so-called servicing departments such as finance,, comptroller of the treasury, public works, civil service commission and so on, was necessarily in direct proportion to the over-all strength of the service.

Following the cessation of hostilities in Europe in May, 1945, there was a steady decline in the number of civil servants to a total of 129,000 in January, 1946. This period of retrenchment was followed by one of expansion until, in October, 1946, the total strength of the civil service had all but reached the wartime peak of 1945. Anomalous as this may appear on the surface, there is a logical explanation in fact. As a result of new legislation and post-war reorganization, new departments such as national health and welfare and veterans affairs were being organized and staffed more quickly than certain war departments could be contracted. Further, a more rapid rate of demobilization than had been anticipated in the armed forces necessitated in many instances the taking on of civilians to fill posts normally held by military personnel.

It was at this time, in September of last year, that the civil service reduction programme which had been instituted in the early summer of 1945, was reorganized under the immediate direction of a special ministerial committee. Surveys, conducted by competent authorities, indicated that if vigorous and determined steps were taken by the various departments, reductions of from 15,000 to 20,000 might be effected by the end of the fiscal year without impairing efficiency or interfering unduly with the performance of necessary services.

The objective set for April 1, 1947, has in fact been exceeded since the total net reduction during this six-month period has been slightly more than 21,000 or, on a percentage basis, approximately fifteen per cent.

The Budget-Mr. McCann

Total staff fluctuations since 1939 have therefore been as follows:

1939 52,000

War peak (May, 1945) 142,000

January 1, 1946 129,000

October 1, :1946 142,000

April 1, 1947 121,000

Mr. FLEMING:

Will the minister permit a question?

Mr. McCANN:

It should be noted that the figures I have quoted represent, as accurately as possible and to the nearest thousand, the total number of civil servants on the government payrolls at a given moment, and that they do not include casual employees paid by the hour, revenue postmasters, and crown companies personnel.

With the consent of the house I propose to place on Hansard a detailed table showing, in parallel columns, the wartime employment peak in all government departments and the total staff in these same departments on April 1 of this year.

The table follows:

Total number of civil servants by departments I. Government departments in existence prior to the war

April 1, 1947

190 612 5,342 571 287 6,317 781

82

10

39

16.496

4,950

7,498

3,314

18

55

1,227

425

7,306

3,998

3,658

2,119

War peak

(a) Servicing

Auditor General 386

Finance 758

Compt. of Treasury 9,352

Civil Service Commission. 733

Royal Canadian Mint.... 296

Public Works 6,058

Printing Bureau 821

(b) Administrative

House of Commons 301

Senate 88

Library of Parliament.... 27

Chief Electoral Officer.... 23

Governor General's

Secretary 14

Privy Council 52

Int. Joint Commission..., 6

(c) Revenue departments

Post Office 14,495

Customs and Excise (NR) 4,473

Income Tax (NR) 6,599

(d) Trade and diplomatic

Trade and Commerce (1) 1,775

External Affairs 436

(e) Others

Archives 46

Farmers Creditors'

Arrangement Act (Fin.) 25

Tariff Board (Fin.) 20

Insurance 61

Justice 1,216

Secretary of State 471

R.C.M.P 508

Transport (2) 8,030

Agriculture 3,867

Fisheries 979

Mines and Resources .... 3,591

National Research Council 1.486

Labour 2.813

II. New departments established since 1939

(a) Social services

Health and Welfare

2,300 2,249Unemployment Insurance. 10,185 8,077National Film Board 787 662(b) Veterans' servicesVeterans Affairs

8,102 19,253Soldiers' Settlement and Veterans' Land Act.... 641 1,716(c) Air Transport Board.. 54 41

III. War departments being consolidated or liquidated

(a) Defence Depts. (3).... 68,376 15,762(b) National War Services. 2,041 4

(e) Wartime Prices and

Trade Board

5,726 3,920(d) Reconstruction and Supply

14,540 902Total

(4) 120,946(1) Includes Board of Grain Commissioners, Canadian Government Elevators.(2) Includes Board of Transport Commissioners.(3) Includes Army, Navy, Air Force Inspection Board.(4) In view of the fact that various departments reached their respective employment peaks on different dates, the sum total of this column would be greater than the over-all civil service employment peak, which never exceeded 142,000.

Although the present total number of civil servants substantially exceeds the 1939 total, this is to a large extent an inevitable consequence of many factors, amongst the more important of which are the following:

1. The implementation of new legislation since the beginning of the war. The unemployment insurance commission, the Department of National Health and Welfare, the national film board, the air transport board and the Department of Veterans Affairs are virtually new departments which have come into being as a direct consequence of new legislation. Indeed, the total personnel employed in those departments on April 1 this year numbered 31,998. This is an increase of 28,515 over the 3,483 persons employed in related services in 1939. The departments then were pensions, national health, and the national film board.

2. In several instances new or amended legislation has also resulted in the creation of new branches or divisions in old established departments, such as the citizenship branch in the Department of the Secretary of State, certain branches of the Department of Agriculture, and so on.

3. There have been considerable increases since 1939 in the staffs of the Department of National Revenue, the Post Office Department, the Department of National Defence, the Department of Trade and Commerce and in external affairs. These increases, however, are governed by uncontrollable factors of revenue, national security, foreign trade and

The Budget-Mr. McCann

international relations, the requirements for all of which have grown substantially since the beginning of the war.

4. As I have pointed out, the size of the servicing departments such as public works, comptroller of the treasury and the civil service commission is mathematically related to the size of the civil service as a whole.

These are but a few of the reasons that illustrate the difficulty of estimating even approximately the normal peacetime strength of the public service. The civil service will continue to be reduced on a graduated scale, largely through diminishing veterans' requirements and the final liquidation of remaining wartime departments.

In the table which I have placed on the record, showing the total number of civil servants by departments, and giving the war peak and personnel as of April 1, 1947, it will be noted that the war departments which are being consolidated or liquidated include the defence departments, which had a civilian war peak of 68,376, and today have 15,762, including army, navy, air force and inspection boards. The further war departments being liquidated include national war services, which at the war peak had a personnel of 2,041 and now has four. During the war the Department of Munitions and Supply had a peak personnel of 14,540; today the Department of Reconstruction and Supply has a personnel of 902.

Therefore I submit, Mr. Speaker, that this statement is a complete refutation of the accusation made by the hon. member for Dufferin-Simcoe (Mr. Rowe). I suggest that the charge he made had no basis in fact, and has been entirely answered by this statement.

Mr. FRASER:

On a question of privilege, Mr. Speaker, the minister said my figures were wrong but if he will look at page 29 of the estimates for 1947-48 he will see that the 1947-48 estimate for the film board is given as $2,078,874, while the amount for 1946-47 is shown as $1,259,465. The increase, as shown in these estimates, is $819,409, which was the figure I gave. I want to say this is just a sample of what happens in connection with the film board.

Mr. SPEAKER:

I would like to remind the hon. member for Peterborough West that an hon. member has not the right to speak twice on the same matter.

Mr. FLEMING:

I wonder if I might ask the minister a question before he takes his seat. Has he the figure of the number of

employees of boards outside the government departments, including those of crown companies?

Mr. McCANN:

If I had them I would have given them.

Mr. FLEMING:

Why were they not

included? The figures are incomplete without them.

Mr. T. L. CHURCH (Broadview):

Mr. Speaker, I am not going to take time this afternoon to reply to the Minister of National Revenue (Mr. McCann). We all listened to the presentation of a budget which had been very carefully prepared by the young and popular minister, and which has been received with applause by some and disappointment by others. However, I congratulate also the minister's predecessor, Right Hon. J. L. Usley, who brought in a surplus from war assets of $372 million, and the two ministers a surplus of $352 million.

The other evening we had a splendid reply by the financial critic of the opposition, the member for Muskoka-Ontario (Mr. Mac-donnell), who was ill. As you will understand, Mr. Speaker, I am acting this afternoon in a sort of utility role, to fill in on the budget. Yesterday afternoon very little interest was taken in the debate, so much so that I thought many of the members were attending the gymnasium proposed by the hon. member for Fort William (Mr. Mclvor). I thought perhaps the hon. member for Temiscouata (Mr. Pouliot) and the hon. member for Laval-Two Mountains (Mr. Lacombe) might be working out on the parallel bars. However, I want to say right here and now that the speech of the minister, giving all these surveys and reports, was the usual budget statement containing very little comfort for the country. We have squandered our resources at a great rate, and as a result we are now part and parcel of the United States economic system. If history repeats itself in connection with financial matters I am afraid that before long they may be in a very difficult position, and I believe that will have a very serious effect on Canada.

Certainly after the years of war the people were looking for some relief from the present intolerable taxes, but I suppose as long as we have over-government and over-taxation there is not much hope. Look at the provincial parliaments; in my opinion they simply duplicate the municipal system, and never should have been created. They were just an afterthought in the minds of the fathers of confederation. That is why we have such heavy

The Budget-Mr. Church

taxes. Let me remind hon. members that the last year Sir Charles Tupper was here, when Sir Wilfrid Laurier came in, they required only $36,000,000 to operate the whole country. Now we are spending about Sl,-700.000,000. Then look at the provinces. Ontario used to get along with $6,000,000 a year. Today Ontario expenditures total $127,000,000. Then you go on to the municipalities, and where it is all going to end I do not know.

As I have said before, the most important problem facing us at the present time, into which everything fits and on which every-* thing depends, can be expressed in this way: parliamentary reform, constitutional reform, cabinet reform and law reform. Would it not be in the public interest, Mr. Speaker, if we had the municipal system, under which in committee of supply a private member could rise and move to strike so much money out of the estimates? We cannot strike a dollar off this tax rate, so that all this debate does not mean anything. If a dollar is struck off the tax rate and the government is defeated, it must resign. I say that is a wrong principle. It is my belief that we should change our committee of ways and means so that it would be something like the system they have in Washington, under which congress has some say about the tax rate. If they see fit they can reduce the amount by hundreds of millions of dollars. I believe something similar would be in the public interest in Canada. Something should be done about it.

On February 17, 1937, as reported at page 973 of Hansard, I said:

A lot of provincial legislatures were created. These are all spending money and the result is over-taxation. These provinces are nothing but a lot of Balkan states fighting 'among themselves, and the taxpayer is made to pay. The shortsightedness of this act of 1867 should not be allowed to continue any longer because it has brought about in Canada the creation of a state equivalent to slavery among our men, women and children.

And at that time I referred to the overtaxation of the workers and the toilers who have to pay taxes. In my opinion something should be done about it. The provinces of Ontario and Quebec are paying over 75 per cent of the cash taxes of the dominion. Ontario is the forgotten province in confederation. It gets little or nothing, because the Ontario members do not stand together, as do the members from the Pacific coast and from the maritime provinces.

I believe the day is not far distant when something will have to be done about it. Certainly the dominion-provincial conference

should have been reconvened long ago, and something should be done to give Ontario some assistance in this way. As hon. members know, the island of Montreal is represented by five federal cabinet ministers. Since 1935 we in the city of Toronto have not had one minister of the crown to represent us in parliament. And this is the condition, despite the fact that our taxes are going up by leaps and bounds, including income tax and sales tax. Receipts from the post office department operations in Toronto were over $13 million in one year. Consider the tax rate, and remember that we have no direct representation in the cabinet. It was in respect of that principle, taxation without representation, that the American colonies rebelled at the time of the Boston tea party, away back in the days of the American revolutionary war.

In my opinion too much of this budget-at least 50 per cent of it-is made up of indirect taxation. This comes from sales tax, and other forms of petty nuisance taxes. The other 50 per cent is from direct taxation. I believe the time is not far distant when we should have some relief from the panic of reckless expenditure whjch has been going on-spending money like water. Because, do not forget this, that considerably more of our budget should be charged to capital account, and less of it charged to income. This generation has to suffer, in flesh and blood, as well as bear the brunt of pay-as-you-go taxation. We cannot have a pay-as-you-go principle, in view of the gigantic war payment expenditures we must make, amounting to four or five billion dollars in a year.

Something should have been done to eliminate these nuisance taxes which, so far as the working classes are concerned, yield very little profit or revenue to the government. We should have drop letters at one cent in the cities and three cents in the country. Then, in addition to that the nuisance taxes on soft drinks, chocolate bars, and nuisance taxes in other forms should be eliminated almost immediately. But nothing has been done about it. The removal of many of these controls which have hamstrung the public and private business, both wholesale and retail, should have been accomplished long ago.

The key to the solution for inflation is production. Then, we are met with increased prices for coal. milk. rent, food, and many other commodities. The price of butter has gone up ten cents. The time has come when we will have to have a system of checks and balances every year. When one examines the income tax he finds that it is not a reduction of 29} per cent on the tax levied against many

The Budget-Mr. Church

The Budget-Mr. Church

were established in Canada to take advantage of the British preference. I will oppose any change in that policy. It is in this respect that the budget mainly fails.

In 1945 when Germany was beaten-the mother country with the help of the dominions which went it alone for two years was mainly responsible for the victory-the mother country was at the height of its power. We were to see the dawn of a new day for the dominions and the mother country because she then stood at the top of the world. There were certain people who thought that the empire was gone, that it would be disrupted. But in 1945 Britain was at the height of her power and the same is true of the dominions. Our other allies who came in at the end did wonderful work, but if it had not been for the mother country and the dominions they would not have had a chance to win the war. The resources of the empire are vastly superior to those of Russia and the United States because Russia and the United States are land entity propositions while the British empire is spread over the seven seas. Why should we not band ourselves together in preferential trade within the empire? How has it come about that it seems to be almost dangerous for anybody in this house to mention the word empire which has done so much for our civilization?

Are we, the Conservative party, to stand still here?-because it is the Conservative party although it is called "Progressive Conservative." We who have been with the party have supported certain principles. I believe we are making a mistake. We would sweep the country if we stood up for the mother country and advocated those principles instead of standing by and seeing the empire scuttled the way it is. How does it come about that such a thing is so? I have been bewildered when I see what is going on in the press and in other agencies about these matters, about India, Palestine and Egypt and all that kind of thing. I have been surprised at the lack of planning, not only in the budget but with regard to trade, defence and migration within the empire. I have referred before to such things as defence, migration and trade within the empire. The lack of faith which is shown in the budget is illuminating; and faith without works is dead. It seems to me we have more faith in Washington. One of the big mistakes we made in this war was when we surrendered too much political, military, economic and financial initiative to Washington. That was one of the first fatal mistakes we made.

Coming to defence and migration, may I say that history always repeats itself. Yes-

terday Mr. Attlee said that we are as close to war now as we have ever been. He spoke words of wisdom when he said that. That is obvious when you look at the absolute failure of the united nations and the disappointments at its lack of action. They are holding a meeting in New York on matters which do not concern this country. These matters were settled at San Francisco when they passed the veto. We agreed to it. We had delegates down there who agreed to the veto. One of the big four can veto the other three. One of the players wants to rule the other three. Just imagine a hockey game in which the referee could not rule three players off because of a veto of the majority, 4 to 3. The referee would get the worst of it. That is what is happening in the security council.

I do not blame delegates for wanting to go to New York. We had a banquet the other night but we had only two or three courses; down there they have luxury banquets with fourteen courses and all the liquid refreshments one could desire, 50-cent and one-dollar cigars, and all that kind of thing. That is going on while people are starving. I have read about the banquets in Time magazine and The Patriot of London, England. It is no wonder that our delegates are anxious to go down there. No wonder all parties want to go down there. They can go to see a hockey game, a baseball game or to the theatres. They can go to the Knickerbocker and see oil paintings of Old King Cole while attending this Tower of Babel. All that kind of thing is going on down there while the poor people of Europe are starving. It is no wonder that so far UNO is a failure. All this is going on at a time when in Britain there is no light, no power, and a great scarcity of food.

I will admit that economics is partly the basis of w'ar. I should like to quote from the first epistle of St. James, chapter 4, verse 1:

From whence come wars and fightings among you? Come they not hence, even of your lusts that war in your members?

Only through psychology can we hope to solve all these things, these terrible problems of war which Mr. Attlee yesterday said was hanging most menacingly over us because we keep forgetting the very basis of Christianity, as I said a month ago. One thing has come out of the discovery of the atomic bomb; science and religion are coming closer together than they have ever been since the time of our Lord. The very same condition exists in the far east, in the same territory where St. James used these words, "Whence come wars and fightings among you?" All that kind of thing is going on and has been for the past two thousand years. As I said, there is one

The Budget-Mr. Church

thing about this atomic bomb; science and religion are marching more closely together, and if we are to have everlasting peace we shall have to carry out what the apostle said in the verse which I have quoted. We should send missionaries to the UNO to help change the hearts of men. The budget forgets all about these things; it says nothing at all about these things.

I hold in my hand a copy of an address given at Winnipeg by Mr. Edward Mallory, of the Department of Trade and Commerce, in which he points out the effects of preferential trade upon industry. Over 2,500 industries have come in the country because of it. As I said the other day in this house:

The Ottawa agreements increased the trade between Canada and Britain by forty-one per cent and between Britain and Canada by forty-three per cent, and we have had multilateral trade. Formerly it was known as most favoured nation treaties. We made these treaties with some thirty-two different countries between the two wars, but they brought us very little in the way of exports. What countries can afford 'an export market for Canadian goods? Upon exports we live. Markets are available w'ith respect to many things, but the only great agricultural market left in the world for Canada is Great Britain. We acquired a preference in that market for wheat at six cents a bushel, which Sir Wilfrid Laurier once said he would give almost anything to obtain. It is equally true that the preference on apples, pears and so on meant the sale of a million barrels of these fruits from Nova Scotia in one year. What we lack is markets for our exports; and if anyone thinks we are going to find in the United States a market for either our agricultural products on any substantial scale, or for manufactured goods, I am afraid he will be disappointed. The only things they will be willing to take from us are the raw materials from which to manufacture finished products, as they have done previously.

I am much disturbed at the present state of the world. I do not like the terms of the loans made by the United States. In my opinion they are much more like the ruthless and vindictive demands of a victor made upon a vanquished foe than arrangements between allies. It must be apparent by this time that, had it not been for Britain alone, and with her holding out as she did, all would have been ended, and there would have been a complete collapse of civilization.

Then again I said:

I refer to the subject of the bases. The principle of the joint Anglo-American use of bases is now in full operation. But the precedent of long-term leases of bases from Newfoundland to British Guiana, under the fifty-destroyers agreement of 1940 contains the seeds of future conflict. That agreement, which confers 99-year leases on the United States, does not provide for the British use of these bases and apparently contains no release clause in any form. If bases are to be held jointly such arrangements should be made on terms of strict reciprocity. In the present case, the use of land and the cost of bases in allied territory should be charged to 83166-187J

lend-lease account and an agreement should at the same time be made to terminate the 99-year lease and cancel it and to transfer the costs of the destroyers to lend-lease account.

That should have been done long ago. I hope it will be done later on. What Mr. Attlee said yesterday is true. Much talk has gone on about British imperialism. As Burke said, we should elevate our minds to the greatness of that trust to which the order of Providence has called us. That glorious empire has gone to the seven seas and has won the admiration of the world. In the places to which the empire has gone it has given freedom, liberty, good government and civilization. Britain went to war because of her pledge to Poland. The United States and Russia went to war because they were invaded, which is different.

The two bases of Russian expansion are political and economical. As I said last year, quoting the great National Review:

There have been no public claims like Hitler's demands that people of German origin everywhere should be brought within the German sphere. But at the Paris conference there have been statements from the Russian group raising the racial issue. In arguing for the acceptance of Bulgarian claims the Polish delegate, Mr. Rzymowski, declared: "In our opinion Bulgars

should receive humane and indulgent treatment. It is the only Slav people among the ex-enemy states." While Molotov was greeted with enthusiastic applause from the Russian group when he said: "The time is past when Slav lands

were material for partition among the European powers, when Slav peoples groaned under the yoke of western or eastern invaders. It is well known that the Slav nations have now found their place in the ranks of the allied states and that political life in all Slav countries is being built up along progressive democratic lines.

The prospect for the future looks dismal. There have even been threats from the Russian group of a third world war put in typical Soviet fashion, inversely. _ Opposition to the aims of the Rnssion group is said to be due or encouraged by reactionary cliques and fascist remnants who wish to see a third world war. Must, then, the Soviets be allowed a free hand to avoid such a catastrophe?

Recent history' surely proves that opposition in time to the nazis might have averted a war which President Roosevelt once declared should be named the war of survival. Opposition now to Russian pretensions is one way in which another world war, another war of survival for our western conception of life, can be avoided.

Here is what a. great British newspaper said the other day', quoting a recent speech delivered overseas by Lord Bennett, who used to be prime minister here, in which he made reference to "those powerful factors that are at work in a conspiracy to undermine the unity and destroy the life of the British com-

The Budget-Mr. Church

monwealth of nations. For some time there has not been an imperial conference at which the various members of the British commonwealth could state their views. We have had no imperial parliament to speak for us. We are developing separate policies in the various nations of the commonwealth, and you cannot have a commonwealth that will endure if the various nations comprising it pursue independent policies."

At no time in the history of the empire has it been more necessary for the dominion of Canada to give support, even if it is only moral support, to the motherland. Our foreign policy should be wrapped up with that of the mother country. Never has it been more necessary that this should be done than now. There is no use in saying that we can depend upon pan-Americanism and the Monroe doctrine. We depended on them in the past and they were found wanting. We are entirely dependent upon the mother country for our liberty and freedom. I am surprised that something has not been said along the line of what Sir John A. Macdonald and Sir Wilfrid Laurier stated, that when England is at war Canada also is at war. I believe that if the time comes again this country will do its duty towards the motherland as it has always done in the past.

The government would be well advised to send at once all the food we can- possibly spare for the people in the old land. Instead of that, they have been begging the question all along. The strength and unity of the British empire have been built up by centuries of statesmanship. The dominions, once colonies, have become independent nations under the crown. In Palestine the situation goes from bad to worse for lack of statesmanship; while the little kingdom of Sarawak has been bludgeoned into accepting the status of crown colony in place of its former independence.

Discard preference and let foreigners swamp empire markets and you create unemployment and sacrifice one of the main factors which have welded the British empire into the greatest influence for good since the coming of Christianity. But this is exactly what the government have threatened to do.

The British empire came into being by the colonization of overseas territories and the reservation of the trade of those territories to the mother country. A strong commercial position was built up but as times changed the system was modified. Trade was extended to foreign countries but advantages were given both to Britain and to the colonies by lower rates of duty than those imposed on foreigners.

The ACTING SPEAKER (Mr. Golding):

Order. The hon. gentleman's time has expired.

Mr. CHURCH:

Well, Mr. Speaker, there will be another opportunity.

Mrs. GLADYS STRUM (Qu'Appelle):

I cannot share the enthusiasm of the Minister of Finance (Mr. Abbott) or the Minister of National Revenue (Mr. McCann) for the budget. I do not know what handling money does to people, but it makes these two ministers genial, and I suggest that it might be a good idea to try it on all the Canadian people and see what it would do for their dispositions.

We were all pleased, however, to have this statement of the Minister of Finance:

Today we have just ended a year in which our accounts show a surplus-a surplus larger than the accumulated total of all the previous surpluses in our history.

With that for a financial background you would think that something worth while for the Canadian family would be done, and yet we find that very little is proposed for the relief of the Canadian family in spite of the fact that, according to the minister's own words, more than half of the families in Canada have incomes that fall below the income tax levels, or less than SI,500 for a married couple; and that kind of family income in Canada gives rise to Health magazine, which is the publication of the Health League of Canada, pointing out w'hat the Marsh report uncovered a few years ago. In its latest issue this magazine says:

One of the largest contributions of the Marsh report was to place in the bright spotlight the shameful income situation of Canadian families. Of every three of our families, two have incomes below a level sufficient to maintain decency and health, one in three falls below even an existence minimum-an income quite insufficient to cover even the bare necessities of life. Small wonder that the giants of hunger, misery and squalor have roamed the land.

The majority of Canadian families lack protection for life and health because of inadequate family income, and they are also victims of bad housing. They have no provision for illness and no provision for comfortable old age. In fact this budget makes the rich richer and the poor poorer because of the price increases through the removal of price ceilings and through the removal of subsidies. It fails in the redistribution of national income, which is part of the Liberal platform; and I say "platform" advisedly and not "policy", because the policy is the direct opposite.

In contrast to what we have done for the Canadian family I want to point out what

The Budget-Mrs. Strum

we have done for Canadian business. On page 2552 of Hansard we have an interesting table giving a forecast of the fiscal year 1947-48 as compared with the fiscal year 194647. We find there that the biggest reduction in taxation comes in the category "excess profits tax". We intend to reduce the excess profits tax to the extent of $279 million. That is the biggest drop in any of the items in the national income forecast for next year. The excess profits tax drops from S449 million to $170 million, or $279 million.

Not only do we reduce the excess profits tax, but we remove subsidies, thereby removing their responsibility to help protect the family incomes of those people who drop below $1,500 a year. In addition to that, we remove the price ceilings so that, through sales of manufactured products, excess profits can be maintained. Now what have we done for the family?

Not we; the government.

Mrs. STRUM:

The government, pardon

me. I wish to dissociate myself from this action. Looking at page 2557 of Hansard, let us consider the family to whom the Minister of National Revenue referred-the $1,800 a year man with two children. True, he has a reduction in taxation. True, he is down to $16 a year and next year he will be down to $10 a year. The drop is $10. The 1947 tax rate forced him to pay $20. Next year he will pay $10, or he will save $10. But he has two children and they are supposed to drink milk; they are supposed to be drinking a quart of milk a day. That means that his children are supposed to drink 365 quarts of milk each per year, or 730 quarts for two. Through the removal of subsidies, milk has gone up from ten cents to fifteen cents a quart, so that for 730 quarts of milk he pays an extra five cents each, or $36.50. On the one hand, he saves $10, and on the other hand he pays out $36.50; or, in other words, he is $26.50 in the hole. Then, of course, he himself is supposed to drink a pint of milk, and his wife is supposed to drink a pint of milk, but this figure is just for their children. Actually, through the removal of subsidies, even though we have given him $10 off .his income tax, he is really $26.50 in the hole; or, if he pays sixteen cents a quart, as many people do, it will cost him $43.80 and he will be $33.80 in the hole, on this new budget.

The great majority of our families fall below $1,500 a year. Not only does this man lose out on his milk, but he loses out on his butter and shoes which are now out from under the ceiling, and on many other articles which go 'nto the cost of daily living. His rent has

increased. In many ways his real income does not go nearly as far as it did a year or two ago, so that he is really worse off than ever.

The people with under $1,500 a year are, of course, completely vulnerable. Lack of income puts them in a completely unsheltered position in regard to the paying of rent, the buying of things like milk, butter and shoes, and the many other things that go into the cost of living. As we stated earlier, and as the minister himself pointed out, the majority of the Canadian families are in that unenviable position. No wonder that our health records are bad. No wonder that our crime records are bad. No wonder that we are ashamed of many things in the field of national health and housing.

There are many social costs which do not appear in the budget and which are the result of the failure to provide for the protection of our Canadian families. I should have hoped that, with our surplus which the government is so proud of, we might have undertaken a large-scale public housing project. In any country where this has been undertaken the results have been surprising indeed. I want to quote now from the report of the lieutenant governor's committee on housing conditions in Toronto in 1934. This is what the report says:

Doctor Chalmers, medical officer of health, Glasgow, is overwhelming in his indictment of had housing. At a time when sixty per cent of the population lived in one or two-room apartments Doctor Chalmers wrote:

"In one-roomed houses the death rate was 29-9 per thousand.

In two-roomed houses the death rate was 16-5 per thousand.

In three-roomed houses the death rate was 11-5 per thousand.

In four-roomed houses the death rate was 10-8 per thousand."

Doctor Chalmers goes on to say that, "Bad housing increases the incidence of all infections, contagious and verminous conditions, of respiratory diseases, and of anaemia, debility and constitutional maladies. The worse the housing, the higher the death rate."

After the reconstruction of slum areas in Edinburgh, the death rate of these areas fell from 45-5 per thousand in 1892 to 15 per thousand in 1910, or reduced it by two-thirds.

This, to me, is significant, and it was significant enough to be included in the lieutenant governor's committee's report on housing conditions in Toronto; and the bad conditions which were found in Toronto are duplicated right across the country in all our Canadian cities. We find that the infant mortality rate is high. We find that all the things which go to break up families are prevalent in those areas. We find that people are paying out far too much of their income for rent. In the report of the advisory committee on recon-

The Budget-Mrs.. Strum

struction, housing and community planning, our own government has this to say about rents in relation to family income:

On the basis of $20 a month being a desirable rent, nearly 40 per cent of the tenant families in the low-wage group at present pay more than they can afford. Nearly one-third of them pay rents of between $20 and $35.

These figures are significant in showing the proportions of wage-earner tenants who would be satisfactorily accommodated if it were possible to provide new housing renting at $20 a month. Only in Toronto, London and Windsor would this provide for half of the population in this group . . .

Allowing not $20 but one-fifth of their normal budget the percentage of families paying disproportionate rent is not 40 per cent, but more than twice as much 88-7 per cent. The city percentages range from 06'5 per cent in Halifax to 92 per cent in Winnipeg.

In the absence of any changes in basic incomes throughout the country, this is tantamount to saying that three-quarters to four-fifths of this lower third of city families depend on a public low-rent housing programme if they are to be provided with proper housing accommodation.

This is from the report of our own department of reconstruction. There is one place where the government could put some of the surplus revenue, because their own reports indicate that these people will never have adequate housing unless we institute large-scale, low-cost housing projects, financed by this government. Up to this time we have had housing projects that benefit mainly the insurance companies. I was disappointed to see that the Minister of Reconstruction and Supply (Mr. Howe) in his latest statement points out that under the new plan which we intend to institute, or which the government intends to institute-again I wish to dissociate myself from this-we are going to double the depreciation; we are going to help them acquire land and then we are going to talk about four-roomed units which will rent for not more than $70. A four-roomed unit renting at $70 will not meet the needs of these people who must be assisted because their incomes will not allow them to pay economic rents.

What about the health facilities of our people? Well, there is not any Canadian standard at all for health. There is not any Canadian standard for pensions. There is not any Canadian standard to take care of widows. There is not even any Canadian standard to take care of the people who are on relief. Much to my surprise today I found that only three provinces have legislation under which the province is responsible for relief. The other six provinces leave it to the municipality, which means that these people who are out of work are completely without protection, except, of

course, the limited protection of unemployment insurance, which does not begin to cover all the people who are out of work. So I would urge the government that when we have these substantial surpluses we should not wait for all the provinces to come in before beginning to plan for the protection of the Canadian family.

In this house we are horrified at the divorce rate. We say, "We do not believe in divorce." None of us wants divorce. I do not believe we should ever permit conditions to exist that break up family life; yet here we have low incomes, bad housing, no provision for health, no provision for the widow other than what the provinces choose to give, and so on. We have inadequate provision for the arthritics, the cripples, the people who cannot look after themselves.

Would divorce cure those?

Mrs. STRUM:

All these conditions put a strain on family life, as I think the hon. member will admit. Anything that can take the strain off family life, anything that can house our people under conditions of health and decency and comfort will add to the permanency of family life and will help cut down our divorce rate.

Mr. GRAYDON:

How do you explain Hollywood on that basis?

Mrs. STRUM:

Perhaps you know more about Hollywood than I do. I just happen to know about normal people, such as I think I represent.

In closing, I merely wish to urge the government to make use of the excellent material for which they themselves have paid. I am amazed at the wealth of material that comes from the bureau of statistics and government departments. If I want something my secretary comes up with armloads of stuff that the government themselves have prepared, as to which the government departments have already done the groundwork and made the surveys. We know what is the matter; we know how to cure it; we know what the government intends to do. Let us do it now.

Mr. L. D. TREMBLAY (Dorchester):

Mr. Speaker, often while listening to some speakers in this house I have felt that if an outsider were to attempt to assess the true economic, political and social situation in Canada with regard to the past, and more particularly with reference to the future, he would soon have the feeling that he might as well attempt to square the circle. Truly, is there any other place, with the possible exception of the law courts, where one may sit and listen to an

The Budget-Mrs. Strum

intelligent man assure you that such and such is white, and then hear another prove a moment later that the same thing is black? This is a daily feature of our proceedings, and I suppose it would be childish to attempt to do away with it in this honourable chamber. After all, is not freedom of expression, whether it be of sentiment or of principle, the very essence of a democratic system?

Having said this, without malice toward anyone, I shall proceed immediately with the remarks I wish to offer for the consideration of the house. Obviously I have no intention of touching on all aspects of the budget, but this heartening speech contained features I wish to underline. The first is that in accordance with Liberal tradition it brings substantial relief to the classes of our population most in need of it, the middle class and the small wage-earner. A mere glance at the tables to be found at pages 2556 and 2557 of Hansard shows how successful the minister was in giving concrete expression to his concern for the small wage-earners. It should be pointed out that the average reduction of twenty-nine per cent is spread in such a manner that small wage-earners will benefit by an income tax reduction of more than fifty per cent. Naturally it would have been more gratifying if all of us could have enjoyed such a substantial reduction, but the pressing consideration is to ensure more humane living conditions to those whose incomes are low. Let us remember, on the other hand, that the new budget grants an income tax reduction of from forty-seven per cent to thirty per cent to families with incomes ranging between $2,000 and $5,000, and that nine out of ten taxpayers will find that their income tax has been reduced by twenty-nine per cent or more as of July 1. This year, less than two years after the end of the war, the government is in a position to grant relief to Canadian taxpayers, in respect of personal income tax alone, to the extent of approximately $110,000,000, which will reach $175,000,000 for the full year. Would it not be fair to say, particularly in regard to the province of Quebec, that, while the King government is removing taxes, the Duplessis government is piling them on? But this is another matter altogether; figures speak louder than words, and in any case, "Verba volant, scripta manent."

We were told by the Minister of Finance (Mr. Abbott), with his characteristic virile optimism, that today Canada enjoys a degree of prosperity never exceeded in living memory, and he adds that he anticipates high production and high revenue for the coming year. If one stops to think that in many lines

demand is still ahead of production, that our exports are being maintained at a very high level, limited principally by production, and that imports from overseas flow into the country in impressive volume without impairing the demand for domestic products, it would seem that there is ample justification for the fine optimism displayed by the comptroller of the national exchequer. It is to be hoped that industrial, financial and trading companies which have not benefited by such substantial tax reductions as have individuals will be able to find the sources of supply they so sorely need.

As to the next fiscal year, assuming that the national income remains at its present high level-which the minister hopes will be the case-he anticipates that government revenues will fall from $2,984 million to $2,450 million, still leaving a surplus of $190 million if the provinces of Ontario, Quebec and Nova Scotia do not sign agreements with the federal government, and $80 million if they do. I leave it to the experts in this house, or those who believe they are experts, to assess the economic merits of the budget I wish to discuss the serious question of dominion-provincial relations. In this respect I wish to deal particularly with the interests of my own good, dear old province of Quebec, and with the systematic, deliberate and calculated misunderstanding with the government of Canada nurtured by the camouflaged Tory who accidentally and temporarily happens to be at the head of the government of the province of Quebec.

(Translation):

Mr. L. D. TREMBLAY (Dorchester):

Mr. Speaker, I shall now proceed in the tongue spoken by my paternal forbears. Indeed, I do not hesitate to proclaim in this house, when the occasion arises, the ocial bilingualism of Canada.

In referring to the statement of the hon. the Minister of Finance (Mr. Abbott) on this subject, I find in Hansard the following words he uttered. They are those of a man of spirit, of a statesman who has the real interest of the whole of Canada at heart and who wishes to ensure understanding and peace between the various groups forming part of our country. On this subject, I shall quote from the budget speech of April 29 last, the words of the Minister of Finance:

The stability of revenues assured by the guaranteed minimum payments represents one of the chief advantages of the plan to the adhering provinces.

The Budget-Mr. Treviblay

Far from weakening their autonomy or sacrificing any of their constitutional rights, they have merely found a method of utilizing one of these rights . . .

And, farther on, he said:

With this assurance of stable and rising revenues, they are for the first time in a position to plan with courage and confidence and a sense of real independence, programmes for the efficient discharge of their constitutional responsibilities.

The government of Canada looks forward to the day when the agreement of all or substantially all the provinces will make possible the achievement of the great national purposes which impelled the dominion to make its comprehensive proposals of August, 1945.

And further:

Nevertheless, we do not ask any province to accept a tax agreement unless it believes such agreement to be in its own interest as well as that of the country as a whole. We did our best to shape the offer of last June in such a way as to make it possible and satisfactory for any province to remain out of the agreement if it wished to do so, and we would far prefer to have a province remain out indefinitely than to endeavour to persuade it to come in against its own judgment of where its true interests lie.

As I shall have to refer to this point later, I beg the house to notice particularly the date of the minister's statement, namely, April 29.

I now wish to quote the opinion of a newspaperman whose independence, good faith, talent or patriotism will not be questioned since I refer to Mr. Eugene ITIeureux, editor of I'Opinion Libre who, on February 7 last, expressed himself as follows with reference to the dominion proposals which were submitted to the provinces. I quote:

Each province has two alternatives: a grant of $12.75 per person based on the province's population in 1942, plus one half the provincial revenue derived from personal and corporation income taxes in 1940, plus also, the statutory grants; or, a $15 grant per capita based on the province's population in 1942, plus statutory grants. In either case, the amount thus calculated would represent the income guaranteed each province by the Dominion government.

The capitations in the amount of $12.50 and $15 would be multiplied each year by the total number of persons comprising the province's total population. Under the said proposals the amount of the capitations would increase in proportion to the national production. Therefore, the provinces are assured of an, annual guaranteed minimum subsidy which, in the case of the province of Quebec, would amount to $56,383,000 in 1947. According to statistical estimates, it may even reach $63,011,000.

The 1942 Dominion-Provincial agreement provided for a revenue of $22,000,000 to the province of Quebec.

The margin between $22,000,000 on the one hand, and $56,383,000 or $63,011,000, on the other hand, is in. round figures $34,000,000 or $41,000,000.

No such amounts have ever been placed at the disposal of the province. They would supplement most opportunely the aggregate income derived from various sources and could be used at the will of the legislature for improving education, public health and all the services required by modern standards.

Mr. L'Heureux concludes as follows:

Those who regard such proposals as encroaching upon provincial autonomy should ask themselves whether such a system would not, by coordinating tax collection methods and granting more funds to the province, provide it with the necessary incentive to modernize its whole organization.

Such is the opinion expressed by an absolutely independent writer, following the statement made by the Minister of Finance.

Now, what answer was made to those proposals not only by the premier of Quebec but by the leader of the neighbouring province^ Let me give you an idea. Here, on page 14 of the excellent newspaper put out by our French-speaking compatriots of Ontario, Le Droit of May 7th, are purple headlines which I now place before you. Allow me to read them: "The Dominion proposals are unacceptable." This is the hon. Maurice Duplessis speaking. In the next column: "Drew charges the Dominion with

blackmail" and finally, to dress up the page, here is a picture bearing this caption: "John Bracken, leader of the opposition, supports Premier George Drew of Ontario at the Young Conservatives' banquet held in Ottawa. From left to right: Mr. Drew, Mr. So-and-So and

the leader of the opposition," forming a happy group.