June 7, 1948

PC

Mr. CHURCH:

Progressive Conservative

1. What was the total cost to Canada for its participation in the world conference at San Francisco?

2. What has been the total cost to Canada of the united nations organization at Lake Success for (a) capital account; (b) maintenance by years; (c) the total cost by years of Canada's representatives there (permanent and temporary) and of all delegations to it?

3. What sums of money were spent on entertainments, hotel bills, dinners, banquets and other forms of entertainment for each year at the united nations organization at Lake Success?

4. Who composed these delegations each year, what were their expenses, and who appointed them?

Topic:   QUESTIONS
Subtopic:   QUESTION PASSED AS ORDER FOR RETURN
Sub-subtopic:   UNITED NATIONS-COST OF CANADA'S PARTICIPATION
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FLOOD CONDITIONS


On the orders of the day:


IND

John Lambert Gibson

Independent Liberal

Mr. J. L. GIBSON (Comox-Alberni):

Mr. ' Speaker, I should like to direct a question to the Minister of Transport. I sent him notice of it on Friday last. Can he make a statement as to the probable extent of the damage to the trans-continental railway lines through British Columbia, and when it is expected that rail communication will be reestablished with the Pacific coast?

Topic:   QUESTIONS
Subtopic:   FLOOD CONDITIONS
Sub-subtopic:   BRITISH COLUMBIA-DAMAGE TO TRANSCONTINENTAL RAILWAY LINES
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LIB

Lionel Chevrier (Minister of Transport)

Liberal

Hon. LIONEL CHEVRIER (Minister of Transport):

Mr. Speaker, I am able to make a statement concerning the two railways, the present condition of their lines, and the extent of damage to each.

The management of the Canadian National Railways inform me that on the line to Vancouver communication has been re-established as far west as Boston Bar. The expectation is that emergency restoration on the line as far west as Hope will be completed by June 10. Intermediate communication is being established at Hope in the expectation that emergency restoration from Hope to Chilliwack will be completed by June 8. Thus, by the combination of forces working concurrently west from Boston Bar and west and east from Hope, it is expected that communication as far west as Chilliwack will be completed by June 10. The line beyond Chilliwack to Port Mann is still inundated, and it is quite impossible to forecast the extent of damage in this section and the probable date of restoration of the line.

On the Prince Rupert line, Canadian National communication will be re-established as far as Tatlow, which is six miles east of Smithers, by tomorrow. With restoration of damage at Tatlow by about June 10, the line will be open as far west as Kitwanga, which is seventy-three miles west of Smithers. Concurrently, working crews from Prince Rupert have reached Salvus, sixty-five miles to the east. The condition of the section from Kitwanga to Salvus is still indeterminate, especially

Excise Tax Act

*because of conditions immediately west of Kitwanga which appear to be serious. More definite predictions as to the reopening of the line through to Prince Rupert will depend on more detailed inspection and the more authentic information as to conditions between Kitwanga and Salvus. It is not possible at this time to estimate the cost of restoration work, but we know it will be heavy and will probably involve several millions of dollars.

I am advised by the president of the Canadian Pacific Railway that they are hopeful of having, and expect to have, a complete line to Vancouver by June 15, with a complete restoration of service shortly thereafter. The line from Calgary to Hope is expected to be open any time now', and if the highway from Hope to Vancouver is opened to traffic, it would then be possible to transfer passengers and their baggage from railway to buses at that point, thus providing a combination rail-highway service from Calgary to Vancouver early this w'eek. The company at this time, without having received full engineering estimates with respect to certain parts of their line which are still badly inundated, estimate that the cost of rehabilitation of their lines in the British Columbia region will amount to slightly less than $1,000,000.

In conversation with the Canadian National this morning I was advised that their line is open as far as Kamloops from which point traffic is detoured to the Canadian Pacific line as far as Hope. Passengers, mail and express are then moved by highway from Hope to Vancouver. Yesterday the Canadian National transferred to highway services nine carloads of emergency food and supplies for Vancouver destination.

Both railways are endeavouring to ascertain that the Great Northern is in a position to handle Vancouver traffic before issuing instructions to reroute all of this traffic over the Great Northern.

Just before I came into the house I spoke to officials of the Canadian Pacific Railway, who report that 50 carloads of freight, including foodstuffs, have already been rerouted via the Great Northern to Vancouver. It is expected it will take seven days to reach its destination.

Topic:   QUESTIONS
Subtopic:   FLOOD CONDITIONS
Sub-subtopic:   BRITISH COLUMBIA-DAMAGE TO TRANSCONTINENTAL RAILWAY LINES
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EXCISE TAX ACT


Hon. DOUGLAS ABBOTT (Minister of Finance) moved the second reading of Bill No. 332, to amend the Excise Tax Act. Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Mutch in the chair. On section 1-"Minister".


PC

John George Diefenbaker

Progressive Conservative

Mr. DIEFENBAKER:

Not having had anything to say on the budget, because I was absent when the matter was before the house, I w'ish to ascertain the minister's views on one question to which I shall refer now.

A major source of criticism on the part of the people at all times has to do with payment of taxes, and at the present time their complaints are certainly not unjustified. I realize, as the minister said in his budget speech, that the larger proportion of government expenditures consists of uncontrollable items. Social security items amount to 16-25 per cent of the total budget; veterans' pensions, 14-85 per cent; national defence, 8-87 per cent; interest and carrying charges on the national debt, 21-21 per cent. I feel that the time has come for the assumption by parliament of responsibility for the careful examination of expenditures. The suggestion has been made before, but in general terms. As I see the expansion of government expenditures from year to year, it occurs to me that the policy of the government is to spend and spend, and to tax and tax. Parliament has not taken a strong stand against over-expenditures; the result is the present situation.

If you look at Hansard over the last twenty-five years, Mr. Chairman, you will find that immediately before and after the first world war there was on the part of the House of Commons a definite desire to reduce expenditures and definite activity in the challenging of items that might be reduced; whereas in recent years parliament in the last two or three weeks of the session has passed innumerable items running into millions and tens of millions, without any examination whatsoever on the part of the house.

Throughout the country there is strong resentment against parliament because of its failure to reduce expenditures recommended by the government; for unless there is reduction in expenditure there will not be reduction in taxation. A number of years ago Sir George Foster, one of the most outstanding parliamentarians of 'his time-and his viewpoint was subsequently reinforced by an independent research investigation-suggested that there be set up a special house committee on estimates. Today we find ourselves in the position of making general attacks on every expenditure. Regardless of economic experimentation by theorists who advise the government, parliament accepts their suggestions and does little toward endeavouring to reduce expenditures. Two years ago Mr. Watson Sellar, the auditor general, asked for the setting up of special committees to comb the estimates-and I direct

Excise Tax Act

attention to the word "comb"-before they are submitted to the house as a whole. I ask the minister if such a committee would not be helpful. The other day he told us that the treasury board discharges that responsibility. Indeed, if I remember aright what he said, he actually told the treasury board that only they would in the end determine the extent of expenditures and the economies that could be effected.

Topic:   EXCISE TAX ACT
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

No, I did not tell treasury board that. I told the various departmental officials coming in with their estimates.

Topic:   EXCISE TAX ACT
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PC

John George Diefenbaker

Progressive Conservative

Mr. DIEFENBAKER:

Yes. That statement, made the other day, impressed me, indicating as it does that the House of Commons is not discharging its responsibilities. Here we have a statement by the Minister of Finance, after a year's experience in office, that the heads of departments alone act as a deterrent against over-expenditure, and that upon them alone it depends.

Topic:   EXCISE TAX ACT
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

Not upon them; treasury board is the only one that really scrutinizes the items.

Topic:   EXCISE TAX ACT
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PC

John George Diefenbaker

Progressive Conservative

Mr. DIEFENBAKER:

I am not playing with words. I am stating in substance what the minister has placed before the house. I ask him whether consideration has been given to Mr. Sellar's suggestion and if so, why it has not been carried beyond consideration. Why should members of this house not be divided into committees, as suggested by Mr. Sellar, to the end that expenditures shall be reduced where they ought to be reduced. Unless something is done, there will be no improvement. If the heads of departments, as a result of the failure of the House of Commons to challenge the estimates, are unable to resist the demands made upon them, they are given an incentive to increase expenditures; they realize that the house as a whole will not challenge their recommendations to treasury board, which recommendations are passed on to the house.

On a previous occasion, when mention was made of a suggestion not the same as this, the minister passed it off in a manner which, while it could not be described as flippant, did not do justice to the seriousness of the problem. To continue to tax and tax- with the load that today rests on the person in the low-income brackets, caught as he is between the rising cost of living, about which little or nothing has been done by the government, and an income little increased since the end of the war-is a policy against which resentment is generally felt. We in this house should do our part to be of assistance

to the minister in reducing unnecessary expenditures and preventing administrative officials from joining in what finally becomes an orgy of over-expenditure unless departmental officials and others feel that their estimates will be challenged by the house as a whole.

This is not a new suggestion. It was made as far back as 1910, when expenditures totalled about $100,000,000. Today, with expenditures amounting to many times that total, the necessity of some such action is even more apparent. In reading Hansard for those days, as no doubt the minister has, one is particularly struck by the fact that then, and indeed until about 1925 or 1926, the House of Commons as a whole in committee seemed to be seized of its responsibility toward the people to pare down if possible and challenge where necessary over-expenditure or over-generous expenditure.

Is the minister prepared to consider the setting up of committees along the lines suggested by Mr. Sellar? If he is, parliament would not have to sit as long, and the house would be discharging its major responsibility, that of acting as watch dog of the treasury. The advantage would pass to the taxpayers in the reduction of controllable expenditures.

Topic:   EXCISE TAX ACT
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

I did not want to interrupt my hon. friend, because I know he was not able to be here during the main budget discussion. It is customary to permit general remarks on the first section of a bill, but I think the ordinary rule is that they should relate to the bill in question rather than to broad topics. However, I did not interrupt my hon. friend because I realized that in the circumstances it was desirable for him to make his remarks; but I hope the practice will not be followed by other hon. members, and that my failure to raise any protest will not be treated as acquiescence in a complete revival of the budget discussions.

I should like to reply briefly to one point raised by the hon. member, in connection with the committees he mentioned. I have done so before, I think on an earlier occasion this session. I believe the view I expressed was that the creation of functional committees of the kind is foreign to our parliamentary system. Whether or not that is true, my personal view is that the job of scrutinizing the detailed estimates is one which should not be delegated to a small committee of the house. Traditionally this House of Commons has considered it to be its right to discuss each item of the estimates. As I said before, my own experience has been that discussion does not always relate directly to the item of expenditure which is under consideration, but frequently to general matters

Excise Tax Act

having to do with the department. I may be wrong, of course, but I question very much whether the adoption of the system which has been suggested by Mr. Sellar, high though my respect is for that very capable official, would result in any reduction in expenditure. After four or five years of close association with the Department of Finance I have come to the reluctant conclusion that the only real check on expenditures lies with the Minister of Finance first, and the treasury board second. I hope I am wrong in that, but I do not think I am. Human nature being what it is, I believe the general tendency on the part of members of parliament and a great many others is to be generous with the public money. They know the Minister of Finance has to be tough in these things, and that treasury board has to look pretty carefully at the larger expenditures; and in my not too lengthy experience here I have not heard many suggestions for a reduction in expenditure.

I do not believe the formation of such committees would really produce the result I know we would all desire, the elimination of unnecessary expenditures. I am afraid that is a responsibility which must be assumed primarily by the government, with parliament discharging its traditional responsibility by looking at the items of expenditure and deciding whether or not it wants to approve them.

I point out, too, as I have done before, that the estimates are brought down early in the session, with itemized details showing exactly how it is proposed that the public money be spent. These are before the house for months. It is true that in some respects the formality of passing some of the expenditures item by item is left until late in the session, but that does not mean every member of the House of Commons has not ample opportunity to give careful scrutiny to all proposed expenditures.

I am completely out of order in discussing this matter here, I am afraid; but since my hon. friend brought it up, and since it is a very important question, I felt that I should be permitted to answer his statement.

Topic:   EXCISE TAX ACT
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PC

John Thomas Hackett

Progressive Conservative

Mr. HACKETT:

I should like to add just a few words at this point concerning a matter on which I have said something on two or three previous occasions. The day will come when spending on the basis on which it is now proceeding will come to an end. I do not think there is any doubt about that. At present we are indulging in the experiment of management, and for the time being we are producing that which enables us to spend accordingly; but some day soon a re-establishment of real values will take place. When that day comes, reductions in taxation will have to be made; and I am asking the minister,

as I did the other night, to set up a committee or to cause his officials to study the matter with a view to bringing about reductions without great and irreparable loss. When taxes are imposed on commodities, they are collected and received by the government. When taxes are taken off, however, the purchaser or consumer will not pay them, even though they may have been paid by the manufacturer or importer. I suggest to the minister that it is the part of prudence and justice to examine carefully the procedure which should be followed when war taxes are abandoned, as they must be, in order that their abandonment may not cause grave and unnecessary harm to the people who paid them in the first place and who must recoup themselves or be greatly injured. I would therefore ask the minister to have the question examined by his departmental officials and, if possible, to provide an opportunity to members to assist the government in the study of a measure which is bound to have such far-reaching consequences.

Topic:   EXCISE TAX ACT
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

May I again point out that there is little use in setting up a committee of the house to revise the rules if we are not prepared to stick as closely as possible to the rules we already have. I submit it is completely out of order to discuss topics relating to general taxation when we have before us section 1 of a bill to amend the Excise Tax Act. I would ask hon. members to co-operate in this regard and to stick to the section. We have had a pretty full discussion on general topics.

Topic:   EXCISE TAX ACT
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LIB

Leslie Alexander Mutch

Liberal

The ACTING CHAIRMAN (Mr. Mutch):

When the minister rose I was on the point of saying that this discussion has been of a general nature, and that a general debate on the budget is not in my view permissible in respect of this specific bill. I have desired not to be hasty, but the statement I have made indicates no temerity on my part. Shall section 1 carry?

Mr. DIEFENBAIvER: No. With all due respect, we are discussing taxation. This bill has to do with amendments to a taxing act known as the Excise Tax Act. When the minister talks about getting along, may I point out to him that this year he has got along so fast that a record has been established. I believe that in the last twenty-five years no finance minister has had his budget resolutions considered as quickly as they were this year, having regard to the resentment felt by the people of Canada against high taxation.

Topic:   EXCISE TAX ACT
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

Order. Can we not abide by the rules of the house?

Excise Tax Act

Topic:   EXCISE TAX ACT
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PC

John George Diefenbaker

Progressive Conservative

Mr. DIEFENBAKER:

Since when has a minister been able to say that to condemn a government for high taxation, when a discussion of excise tax amendments is in progress, is against the rules of the house?

Topic:   EXCISE TAX ACT
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

I do not mind how much time we take, and I was endeavouring to be courteous. However I must insist upon strict enforcement of the rules. The rules with respect to consideration of a bill in committee are quite clear. Discussion must be relevant to the clause before the committee-not the whole bill, but the particular clause. By a sort of tradition, general discussion has been allowed on section 1. But that is only through tolerance; it has no support in the rules; indeed it is an infraction of them. I do not wish to raise any disturbance, but when my hon. friend asks me to be patient I would answer that I have listened without interruption; and I think, you, sir, should enforce the rules.

Topic:   EXCISE TAX ACT
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PC

John Thomas Hackett

Progressive Conservative

Mr. HACKETT:

Let us not get into a discussion about how we are going to proceed. We are anxious to get on with the work, and the best way to get on with it is to proceed in the manner to which we have become accustomed. Discussion of the general terms of a bill has always been allowed on the first section. If the minister would smile, perhaps we would get on faster.

Topic:   EXCISE TAX ACT
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June 7, 1948