Mr. Jackman:

Would the minister have the figures for 1947?

Mr. Abbott:

In 1947 there was no assistance from ECA funds, of course. The assistance was largely out of our own credits, the exact figure as to which I cannot give the hon. member. But speaking from memory again I think it was somewhere between four and five hundred million dollars in that year.

Mr. Cockeram:

Will the minister be able to get those figures for us?

Mr. Abbott:

Foreign Exchange Control exchange, and we claim sole credit for the beneficial results which the Canadian people have experienced from the change in the exchange rates made in July, 1946.

Mr. Speaker, that change in exchange rates is now being criticized by a good many of my hon. friends on the opposite side of the chamber. It is held up by some as a prime example of what is described as economic lunacy. The air is thick with all kinds of dire forebodings of the grim consequences which will befall as a result of it, if they have not already happened, by the obstinate decision of the government to stick to this decision which was made in July, 1946. I have not a doubt in the world but what some of my hon. friends opposite will have something to say along these lines. I hope they will take advantage of this debate to inform the house and the country of their views on this very important question.

In that connection, I want first to remind the house that when the exchange rate was changed in July, 1946, that move was hailed with satisfaction by virtually every section of the country without regard to party affiliation. Even the newspapers which have since been most critical of the government's action in that regard joined in the chorus of approval. The house might be interested if I were to read an extract from an editorial which appeared in the Globe and Mail of July 8, 1946. It was headed, "A one hundred cent dollar," and this is what the editorial writer of that journal said on that date, two days after the action to which I have referred:

It is our opinion that had there been a free play of exchange, our dollar would have returned to parity with the United States dollar long ago. It was designedly kept at ninety cents for several reasons, not least among them the protection of our future competitive trading position. It is, therefore, somewhat silly for some quarters to attempt to make political capital of the government's action as a "masterstroke" of economic strategy.

Mr. Jackman:

Ha, ha.

Mr. Abbott:

My hon. friend from Rosedale laughs.

The return to parity must be read as an accurate indication of the impact of United States conditions on our economic structure. The change was forced on us by the inflationary trend within the United States.

Mr. Speaker, that is fairly characteristic of the editorial comment which appeared in the press of Canada at that time.

I have some diffidence in quoting anything that may have been said by the leader of the opposition, who, I understand, is now very critical of the action the government took at that time, because I am quite sure one could quote something in the opposite sense. I

should like to point out that on this point, too, his consistent record of inconsistency remains unbroken. I am sure my hon. friend will not mind if I refer at this time to a subject which I know is very close to his heart, namely, the dominion-provincial conference of 1945. If hon. members will take the trouble to look up page 33 of the printed booklet entitled, Dominion-Provincial Conference (1945), Submissions by the Government of the Province of Ontario, which was issued in January, 1946, they will find the following:

What are you trying to do, spike his guns?

Mr. Abbott:

No, I would not try to do that. The following is the quotation to which I referred in this booklet issued by the province of Ontario:

The foreign exchange control board of Canada was created by an order of the Minister of Finance on September 15, 1939, authorized under the provisions of the War Measures Act. The board has power to fix the rates at which foreign exchange, in such currencies as the board may designate, can be purchased or sold. The buying rate of eleven per cent and the selling rate of ten per cent established on United States currency on September 16, 1939, have remained constant during the war.

In these circumstances, it is urged that the dominion government make available to provincial and municipal governments the foreign exchange required to meet their external obligations at parity of exchange. To obtain this agreement, the provinces and municipalities should accept a ruling whereby future provincial and municipal borrowing would be restricted to Canadian currency.

Mr. Drew:

Mr. Speaker, I would point out that that in no way suggests the course that was followed, but merely points out the situation that obtained so far as the municipalities were concerned.

Mr. Abbott:

I have no doubt that my hon. friend will avail himself of every opportunity of making a speech-

The Acting Speaker (Mr. Golding):

Order. I must request that when the hon. leader of the opposition rises to address a question to anyone who has the floor, he address the Chair.

Mr. Drew:

I opened my remarks with the term, "Mr. Speaker."

Mr. Abbott:

As I was saying, I do not think my friend was asking a question; he was making another speech.

Mr. Drew:

I was correcting you.

Mr. Abbott:

If my hon. friend will listen, he will hear a little more about his position back in 1946. The then premier of Ontario, the hon. leader of the opposition (Mr. Drew), as I have indicated, urged the dominion government to make available to provin-

cial and municipal bodies at parity the necessary foreign exchange to meet their borrowings. This proposal was repeated at the plenary session of the conference on April 29, 1946, only seven weeks before the restoration to parity. This proposal will be found in the proceedings of the dominion-provincial conference of that date. I have not searched the record exhaustively, but I think I am right in saying that the premier of Ontario was alone in putting forward that proposal.

The leader of the opposition, Mr. Speaker, has at great length made it clear that all his actions at the dominion-provincial conference were based upon considerations of high principle and not merely upon a desire to get more money for his own province. The claim which he put forward for parity of exchange to which I have just referred must, of course, be based on some principle. I wonder what that principle might be? Could it possibly be that the principle which the premier of Ontario had in mind on the 29th of April, 1946, was that parity with the United States dollar was the proper exchange rate for the Canadian dollar? Offhand, I cannot think of any other logical principle, unless he was trying to secure a special privilege for his own province. I therefore find it difficult to understand, and I shall be interested in his explanation, why at the same time he would believe that the decision of the government of Canada which was made on July 5, 1946, was based on what he euphemistically described as economic lunacy.

Mr. Jackman:

Not even interested.

Mr. Abbott:

I gather from the press

accounts of some of the recent statements made by the leader of the opposition that it is his policy and the policy of his party to restore the quotation of the Canadian dollar to what he describes as a realistic level. In fact, there is a plank in the platform of his party to that effect. It seems that is what my hon. friend had in mind when he told the press on February 24 that was what he proposed to do, if and when he got the chance.

"Realistic" is one of those nice words which have a pleasant sound and a very favourable emotional appeal. It can be used very conveniently to conceal a lack of concrete thought or any definite views as to just what should be done. I am sure my hon. friend had no intention of doing that. The leader of the opposition and those who sit around him will, I hope, during the course of this debate give a full exposition of the reasons which led them to the conclusion that the present exchange rate is not realistic. I shall listen to those reasons with a great deal of interest.

Foreign Exchange Control I am sure they will not confine their exposition to a mere assertion, but will let the house have an explanation of the criteria which they believe should be applied in order to achieve the realistic rate.

Sometimes it looks and sounds as though the only thing some of them have in mind when they talk about a "realistic" exchange rate is one which will result in a substantially higher price for gold in Canada. Let me say this at once. We all appreciate that the government's decision to raise the exchange value of the Canadian dollar by ten per cent in July, 1946, had the effect of reducing the price of gold in Canada from $38.50 to $35 an ounce; and it is true that that reduction in price came at a very difficult time for the gold-mining industry, which was faced with rising costs and reduced profit margins. But I want to say this. So far as this government is concerned, the main economic policies of the country-those policies like the exchange rate policy which affect the well-being and the standard of living of the people of Canada-are not going to be determined to suit the convenience of any single economic interest, whether that interest is the gold-mining industry, the stock promoters, the wheat farmers, the manufacturers or any other single group. The main economic policies of this government are going to be determined in the light of the interests of the community as a whole, and not those of any single group.

Having said that, Mr. Speaker, let me say this. The gold mining industry has, naturally, just as much claim to consideration as has any other group in this country; and the government and this house have recognized that claim in tangible form. The gold-mining industry, as everybody knows, tends to have a normal cycle of prosperity which is exactly opposite to that of most industries. When business conditions are active and there is an upward pressure on prices, costs go up while the price of their product, gold, does not do so. On the other hand, it frequently happens that, when other businesses are depressed, the costs of gold production go down, and since the price remains the same the margin of profit is of necessity increased. All of that is of course the logic of a monetary system which is based on gold. However, it is cold comfort to the gold-mining industry, at a time when other industries are very profitable and it is not, to think back to the days when the situation was reversed. Consequently last year the government recommended and this parliament approved a measure under which each gold mine is compensated for part of the increase in its costs of production above a certain level. Thanks

Foreign Exchange Control to these bonus payments and to some improvement in the labour supply, I am glad to be able to report a very considerable improvement in the industry last year and an increase in total production of something like fifteen per cent.

I feel sure that hon. mfembers generally will share our gratification over this improvement in an industry which has been going through an extremely difficult period, which means so much to the prosperity and to the development of the great northern areas of this country, which has made such an important contribution to our national strength in the past, and which will, in my judgment, continue to do so in the future.

I have had estimates made, and I am informed that these special assistance payments to the gold-mining industry will amount to about $10,250,000 in respect of production during 1948, the first year of operations under the program. It is perhaps interesting to note that this works out at approximately $3.26 per ounce on each ounce of gold produced from the straight gold mines; that is to say, excluding any produced as a by-product of base metal mines, which is not eligible for assistance under the plan. In other words, our gold-mining industry proper, taken as a whole, is now receiving, from gold production, revenues which work out at about $38.26 per ounce, or very close indeed to the same price they received before the change in the exchange rate. Of course the marginal mines, the higher-cost mines, are receiving a substantially higher price.

Mr. Knowles:

Has the minister any figures on that?

Mr. Abbott:

I have not a breakdown here, but in due course they will be available for the different sections of the industry.

Mr. Knowles:

That would mean that the average would be higher than $38.26.