Mr. SPEAKER:

I call the attention of the hon. member to the fact that it is against the rules of the house to read his speech.

Mr. HOMUTH:

He is using copious notes.

Mr. McCUAIG:

I thank you, Mr. Speaker; I shall do the best I can.

Mr. SPEAKER:

Order; I must call the attention of the hon. member for Waterloo South (Mr. Homuth) to the fact that neither is it in order to smoke in the chamber.

Mr. HOMUTH:

I humbly apologize. I wanted to speak to the hon. member for Muskoka-Ontario (Mr. Macdonnell) before going to a committee meeting, and had forgotten that I was smoking. I assure Your Honour my breach of the rules was inadvertent.

Mr. McCUAIG:

Good homes and healthy families are the foundation of the nation. Can any man stand in parliament and say that we are not far behind in these things? Hon. members of the C.C.F. have repeatedly asked the government to continue wartime economies, or at least until such time as parity is reached between production and wages. The more scientific method has never been even attempted by the government. The whole economy of Canada has been thrown back into the lap of monopolistic institutions. The government should have known better. Those institutions have used this privilege both before and during the war, and parliament is well aware of what has gone on since that time. Those institutions-

Mr. SINCLAIR:

You lost your place, did you?

Mr. McCUAIG:

No one knows this better than the Prime Minister, who has said this:

The war has shown us that the way of monopoly, of unrestricted power, is a way that leads to destruction, desolation and death.

Those are the Prime Minister's words as they appear in his speech delivered before the convention of the American Federation of Labor at Toronto on October 9, 1942.

The Prime Minister said this further, as reported in the press:

I do not believe you can settle the labour question, the question of the relation of capital and labour, until you give the man who invests his life in industry the same say in control as you give the man who invests his money.

Those are the Prime Minister's words as reported in the Regina Leader-Post of October 10. 1935. The Prime Minister knows the score. And if all the things he had in mind are contained in his resolution of January, 1948, I shall be one of the most pleased men in parliament.

Let me repeat that if ever Canada is to become a prosperous and wealthy country, a more equitable distribution of wealth will have to be made. Certainly we do not have that equitable distribution in Canada today. The best evidence of this is found in the words of the Minister of Finance (Mr. Abbott), as they appear in his budget address of 1947. This was what the minister said:

The exemption levels established last year are high enough to exempt completely from tax more than half the people earning incomes in Canada.

This is on the basis of $750 for a single man and $1,500 for a married man. If this shows anything it is that more than half the people of Canada, our producers, our workers and those who provide service for the public, are getting less than $750 a year. Over half of our population of workers are receiving less than the minimum required for personal and living expenses in 1944, according to the Toronto Welfare Council. In that year they *set the figure at $1,850 and today it is close to $2,300. There is nothing left to build houses, to educate children and to provide for old age. The moment a married man gets above that figure it is taxed away from him. He can never build a modern house on what is left of $1,500; it is all taken up by his living expenses. It is only by our people having good homes and good health that we can become a nation with economic security.

I earnestly ask the government to raise the income tax exemptions to $1,000 for a single person and $2,500 for a married person. I am sure that if that question was put to the people's representatives in this parliament it would be carried on all sides. When it comes to a real issue like this, democracy does not work. Parliament is powerless.

I should like to deal now with agriculture, the most important industry' in Canada. The weal or woe of agriculture affects every industry and every person in Canada. The Minister of Agriculture (Mr. Gardiner) has taken a lot of credit for the wheat agreements,

The Address-Mr. McCuaig

and I am willing to let him have all the credit he deserves for what he put into the four-year agreement with the United Kingdom and the five-year agreement between the producers and the government. For a long time the producers, through their organizations, have been asking for stabilized prices for farm products and that the wheat board should market all grain. In my opinion the stabilized wheat price that has been provided carries with it too great a sacrifice in price. It amounts to a direct tax on the farmers or the wheat growers amounting to millions of dollars.

I claim to be a practical farmer; I am not a speech maker. I learned the hard way. As I say, agriculture is the most important industry in Canada but it has never been treated as such. The government's attitude toward the farmer, the tiller of the soil, has been one of contempt and discrimination.

No.

Protection and subsidies.

No margarine.

Mr. McCUAIG:

I leave all that to hon. gentlemen over there. In the depression of the early thirties agriculture took the worst beating of any industry or business in Canada. I am speaking mainly of Saskatchewan, of which I know the most. Wheat went down to 19 cents a bushel for No. 1 at the local shipping point.

Mr. GRANT:

That was the Tories.

Mr. McCUAIG:

What about 1935 and 1936 when the Liberals were in power? The price received for coarse grains would not pay the cost of harvesting, threshing and hauling, to say nothing of operating costs, repairs and depreciation. In 1936 and 1937 there was no market for stock. The government bought carloads, even trainloads at one and two cents per pound and shipped them to the packers and later on the public paid plenty for that stuff. The farmers' co-operative abattoir at Saskatoon was bypassed, it got none of that business. I contend that the government discriminated against that co-operative and was responsible in a large measure for its going under. The government's friends, the packers, did very well, but under that kind of economy the farmers went broke and were faced with an ever-increasing burden of debt. I should like to put on the record the details of how the government came to the aid of Canada's

No. 1 industry. I have in my hand a food schedule which reads as follows:

Bureau of Labour and Public Welfare

Food Schedule

Local Improvement Districts Rural Municipalities Villages

Maximum food allowance for one month

1 $ 6.40

2 3 persons 10.30 12.40

4>

14.50

16.50

6 18.50

20.50

8 22.50

0 24.50

10 11 12 26.50

28.00

persons 29.50

That is dated September 1, 1936. The amount provided for 20 persons is $38.40 or $1,922 per person per month. Then there is another statement which is underlined and which reads:

Important

Instructions to secretary-treasurer

1. If applicant has meat, deduct 15 per cent; dairy products 10 per cent; vegetables 10 per cent.

2. Secretaries should carefully check prices charged by merchants to see that only fair and just prices are being charged for commodities provided under food schedule.

We had short crops in 1936 and 1937. According to the dominion bureau of statistics in 1936, crop district 3 yielded 4-4 bushels per acre while crop district 4 yielded 1-2 bushels per acre. In 1937 crop district 3 yielded 0-2 bushels per acre and crop district 4, 0-1 bushels per acre. There were practically no crops in those districts in those two years. There were conditions existing in those years over which the farmer had no control, but his expenses went on just the same. In the spring of 1938 the farmers had to get seed to sow their crop. The wheat board still had wheat in the local elevators. It was government wheat, bought at low prices, and it could have been supplied to municipalities for seed at cost, plus handling charges. But that was too simple a way to do business. The wheat board and the grain exchange could function in 1938, the wheat board taking delivery of wheat when the price dropped 'below 70 cents f.o.b. the lakehead. That would be 50 cents at the local point. Naturally the grain exchange operated only when wheat went above 70 cents at the lakehead; but the two

The Address-JUr. McCuaig

short crops started gamblers speculating and in February and March, 1938, wheat went up to 81.40 on the Winnipeg grain exchange, and the farmers had to pay 81.42 for their 1938 seed. It was purely a speculative market. I would1 say it was a deal between the government and the gamblers to impoverish a little more the already down and broke farmers, be-ause in June, 1938, before some of that seed was even up, wheat was back in the 50's at the local points.

I should like to make this observation. In 1942 a delegation of 400 farmers came to Ottawa with a petition signed by 185,000 farmers asking the government to raise the price of wheat from 70 cents at the lakehead to $1. The government saw fit to raise the price to only 90 cents; and it stayed at 90 cents until September 27, 1943, and then wheat went up. On the open market and on the Winnipeg grain exchange it went up to 81.35. Then the government stepped in and closed the Winnipeg grain exchange and put a ceiling price of 81.25 a bushel on wheat. I want to make this point. In 1938 when the farmers had to buy seed, in other words were in the market to buy wheat, wheat went up to 81.45 on the Winnipeg grain exchange. The government went along with them. They did1 not put a ceiling price on then. The government went along with the grain exchange and charged the farmers 81.42 for the seed.

In 1943, as I said, wheat went up to 31.35, and for the first time the farmers had a chance to make something on their wheat, but the government put a ceiling on it. That is the way the government dealt with the farmers.

Hon. members have heard about the 1938 wheat scandal. When the C.C.F. got into power in Saskatchewan the first thing they did was to cancel on their own responsibility 50 per cent of the 1938 seed debt, knowing, as they did, the practical side of this business and the ordeal that the farmers had come through, and they asked the federal government to cancel the other 50 per cent. Did the federal government do that? No, they did not. They held on to the last cent with five per cent interest, and are still trying to collect, and have collected up to now, 100 per cent on this seed grain debt. Let me say further that this same government are still holding out for a 1914 seed grain debt on grain that was delivered from 1914 to 1923. Ninety per cent of the original recipients have gone, but they are still trying to squeeze it out of somebody else.

Compare this treatment with the hand-outs given to the big fellows, the manufacturers, 5849-89

transportation companies and finance companies, steel subsidies of millions of dollars, coal subsidies, aluminum subsidies, oil subsidies, farm machineiy subsidies, and so forth. The manufacturers of farm machinery were permitted to raise their prices 12i per cent at a time when their financial statements showed that they were making good money. A subsidy of 8400,000 was given to the people who had a monopoly on bathtubs and toilet fixtures; a 860,000,000 loan to the C.P.R. was guaranteed by the government; subsidies were given to the gold mines and millions of dollars were given to the financial institutions through the issuing of currency privileges. The wheat deal was made with the same kind of discrimination, absolutely without soul, and I would say without human consideration. First the government took approximately 320 million bushels of wheat through the wheat board and sold it to the Canadian domestic trade for 81.25 a bushel, or 30 cents a bushel under the export price of 81.55.

If Canadian consumers should have cheap wheat then let all of Canada pay for it, and not make it a direct tax on the producer, which actually amounted to 8300 on every 1,000 bushels of the 320 million bushels sold to the domestic users in Canada, who are the millers, the feeders and the distillers. The same thing can be said with regard to the deal with the United Kingdom. In the years 1946 and 1947 the government sold 160 million bushels in each year, or a total of 320 million bushels, to the United Kingdom at a price of $1.55 a bushel. This was well over $1 a bushel below the world price, because the world price had risen to $3.35 a bushel on the outside markets. If the United Kingdom was to have cheap wheat, again I say that all of Canada should provide it. It should not be a direct tax on the farmer and the wheat grower who pays all other taxes, a direct tax of $1,000 on every thousand bushels sold to the United Kingdom. What do you call that?-confiscation, taking it directly from the farmers? We hear about dictatorship in Russia. What would you call this?

I want to go back to the income tax business. I have reviewed the low prices and the crop failures through the thirties, and the discrimination in wheat prices. The farmer piled up a debt of operating costs and depreciation, losses on farm machinery, car and truck, unpaid interest on bank borrowings and mortgages, insurance, oil bills, store bills, doctors and hospitals, and back taxes. He got a crop in 1942. The proceeds of that crop have long been spent. It was not his money.

The Address-Mr. McCuaig

It was trust money 'belonging to the men who trusted him and carried him over the bad years, through bad conditions over which he had no control. But what happens? When he sells his 1942 crop he is told that he can deduct only the current operatiug expenses for income tax purposes; that none of his previous losses, operating losses, depreciation, or any other expenses of the low crop and the low price years can be carried forward.

I would ask the Minister of National Revenue to make a statement on the floor of this house to justify such a policy towards the farmer. I would ask him to name any other industry in Canada which has been dealt with in the same way.

Then the Minister of National Revenue comes along with his income tax guide and income tax form. I contend that not ten per cent of the farmers can fill out this form without help. I. object to such questions. In plain farmers' language it means this: "How much money have you in your pocket? How much have you hidden away? What kind of stocks and bonds have you? Name them."

I have received letters from many farmers. I have here a letter from a farmer in my own constituency. It is first-hand evidence and I would like to read it:

Dear Sir:

No doubt you have already seen the new income tax forms T-l prairie farmers 1947, and if not it will do you good to have a look at one soon. Most farmers thought that the old forms were complicated enough, but that was before the minister came out with this new masterpiece incorporating a quiz contest and a nightmare.

They require a complete opening and closing inventory for the year 1947. This information was not required before this and very few farmers if any will be able to go back a year and give an accurate and correct account of all grains on hand and the disposition thereof for the full year, including the exact numbers of bushels used for seed, feed, etc., number of bushels on hand at beginning and end of year, and it asks you to place a valuation on it all. I would suggest that the farmers engage the services of a teacup reader to determine what will be required of us next year so that we will not be again caught in a similar predicament, and perhaps a crystal gazer will be able to tell us too what amounts of grains we will require for seed and feed out of grains on hand. It wants to have you state separately the number of bushels of grain held for sale and for seed, and place a value on it. This will be rather tricky, as five days ago a bushel of barley was worth roughly 15 or 29 per cent more than at present, and what price basis are we to use in valuing it? At present few farmers have completed their seeding plans, largely due to the failure of our government in establishing a stable market for all farm produce, and especially coarse grains, yet the income tax department expects us to state the number of bushels

and the value of it, of all grains we will be using for seed and feed for the entire year ahead, as well as for the past year.

I am surprised that our farm organizations have not taken this up already, as this is one thing that should be corrected and soon.

I am not capable of expressing myself well enough to do this thing justice, but I wish you would do what you can to have this mathematician's nightmare simplified.

This is a sample of the letters I have received. Many farmers are up in the air about the whole approach to the income tax situation as set out in this income tax form, and I hope that something will be done to provide a more workable one. If this procedure gets going in the west it will take more than inspectors to handle it.

On page 6 of "The Farmers' Income Tax Guide", prepared by the Minister of National Revenue, you will find the following questions and answers:

Question: What is farm income? On what

theory is it worked out?

The answer is:

There is a great mass of laws about income, and an answer which will meet all varieties of cases is not a simple matter. However, in general, it is the difference between the annual receipts from all the work done on the farm and the expenses of doing the work. Personal and living expenses of the farmer's family cannot be included as expenses.

All the work done on the farm! All the garden work, milking cows, feeding calves, feeding pigs, chickens, and a dozen other jobs- all this is done before breakfast and after supper by the farmer and his family. It is not a matter of an eight hour day. It is a matter of putting in the hours that will get the work done, and no allowance is made for this. This shows how impractical the Minister of National Revenue is in making these laws.

The coarse grain received about the same treatment. When sixty per cent or more of the coarse grains were marketed the government took the ceiling off. The grain exchange took over, and overnight these fellows made more money than the farmers did in the whole year. The farmer took it for granted that the government would not change their policy.

The ACTING SPEAKER (Mr. Golding):

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

Go on.

Mr. McCUAIG:

Have I consent?

The ACTING SPEAKER (Mr. Golding):

The hon. member may continue only with the permission of the house.

He has it.

The Address-Mr. Jaques

Mr. McCUAIG:

May I ask the Minister of Agriculture and the member for Rosthern this question: Who is going to reimburse the farmers for this loss on coarse grains? When will it be done, and how?

The stockmen got the same kind of deal. First, without warning, the subsidy was taken off, and then ceilings. The farmers found themselves in a business that did not pay. Young pigs went down to $1 or even fifty cents each. The farmers shipped all their breeding stock, pigs in all conditions, to the market, and as soon as this was done we heard that the price of pork and livestock had gone up, but too late for the farmers to take any advantage of this. It seemed to me that this was an organized deal. According to one report I heard, the abattoirs, the packers, made $10,000,000 on the quantity of stock they had at the old prices.