Mr. Abbott:

I rise to a question of privilege. I challenge my hon. friend to point to any place in Hansard where I made any such statement; and unless he is prepared to quote Hansard I ask him to withdraw.

Mr. Cockeram:

That is not a point of privilege at all; the minister is making a speech.

Mr. Abbott:

Of course it is a question of privilege.

Withdraw.

Mr. Cockeram:

Why should I withdraw? I certainly do not intend to withdraw. You can take a jump in the lake. Perhaps the minister will let me get on and not interrupt me any more. I say I am correct in that statement; but I shall come back to the minister later on. In 1946, when existing conditions were recorded in a straight, factual manner-I am now talking about this political report of the foreign exchange control board-we had a net capital inflow on the sale and purchase of securities of $134-6 million for all countries, and a favourable balance with the United States of $170-2 million. In 1947 we had an outflow of capital from Canada amounting to about $18 million, in spite of the figures that appear in the report of the foreign exchange control board. That report does not show this result, but it is shown by the figures of the bureau of statistics. In the first eleven months of 1948 the outflow of capital amounted to $17-6 million. Yet the minister talks, as he did very glibly this afternoon, of all the risk money coming into Canada. When we get into committee I think he should produce figures to show just how he arrives at that conclusion, and just how much of that money was put into bricks and mortar.

Here is the case of a board acting under power and authority delegated by this parliament, and this resolution asks that we delegate that power for a further period of two years. The minister gave no reasonable statement as to why a period of two years was selected, but it does seem to me this board has just dug itself in and proposes to stay dug in. Instead of the one-year period they have had up to the present, they now ask for two years and sixty days so they can be sure of their jobs for an extended period of time. The foreign exchange control board submit to this parliament, through the Minister of Finance, a report prepared from a political angle by a supposedly non-political board in order to justify its actions in the past; and I say that without reservation. As one who has been interested in the question of exchange for some years, who as a young man came back from the first war and served in New York in the foreign exchange branch of one of the Canadian banks, I think I know a little about exchange. At a later date I shall

have something to say about the size of the staff required to carry out the work of this board. I do submit, Mr. Speaker, that the the political complexion of the 1948 report of the foreign exchange control board is something that goes far beyond any powers ever conferred upon that board or ever intended to be exercised by the board at the time parliament established it in the first place.

There is one other aspect of this report which transcends even the injection of politics, and which in effect strikes at the very root of our parliamentary system of government. I refer to what is apparently becoming a practice in this country of boards and commissions, acting under powers delegated by parliament, actually laying down government policy. This is one of those boards. Very often you see Donald Gordon or Graham Towers or somebody else making speeches that should be made by the minister in this house, just as we find officials of the Department of Finance going around making speeches about things which later become government policy. It would not surprise one if the article in this evening's Citizen about a budget leak is not a true statement.

The objections I have raised already to this report indicate in no uncertain terms the bureaucratic domination of the government by the foreign exchange control board. The report of the Bank of Canada for 1948 is another glaring example. It is in a form entirely different from the reports of other years. I remember saying two years ago that the report of the foreign exchange control board was made up in such a way that, while it may not have been intended to actually deceive members of parliament, it did get them all muddled up so they could not find anything at all in it. This inroad of bureaucratic domination, which is becoming more evident all the time, calls for this parliament to exercise its responsibility to the Canadian people and call a halt to the powers given this department and this government.

This afternoon the minister said something in reference to the gold bonus. I had not intended to touch on that subject at all. I think the minister well knows that the gold mining industry has no desire to be a bonused industry in Canada. In the past they have fought their own battles, and the troubles with which they have been beset during the last few years have been brought upon them by the actions of this government. I am sure the Minister of Trade and Commerce (Mr. Howe) knows as well as I do that when this government needed gold during the war, before the United States came in, he was one of the ministers who approached the gold mining people and asked them to

Foreign Exchange Control produce to the very maximum. The industry responded to the request he made and saved Canada's finances at that time, but at great expense to itself mining companies mined their higher grade ores and as a result paid taxes on fictitious profits as they did not carry on the development work they are now called upon to undertake.

While we are on the subject of gold-and it all comes under this exchange regulation- the minister has stated many times in the past that there is no free market for gold the world over. I would like to show him a couple of letters that I have, one from Denmark and the other from another country, asking for quotations on gold, to be paid for in United States dollars on the presentation of documentary evidence to a Canadian bank. So there is a market for this gold at higher prices than the gold mines are receiving today, and I think the minister might at least take cognizance of that fact. I realize, Mr. Speaker, that this foreign exchange control bill is now on the books and that it has a few days to run. I think the minister should explain to us why he needs that additional year-two years all told. He should explain why Mr. Towers, Mr. Rasminsky and these other high officials in the foreign exchange control board believe they should have two years instead of the one year. After all, this is an election year.

Mr. Mitchell:

How do you know?

Mr. Cockeram:

The appearances are all there. A bonus has been declared to the poor fellows from Hong Kong who should have had that money a long time ago. However, Mr. Speaker, when this measure comes up for second reading I shall have more to say.

Mr. David A. Croll (Spadina):

Mr. Speaker, I quite agree with the hon. member who has just sat down that the Minister of Finance (Mr. Abbott) did a superb job in presenting the case for the government. As a matter of fact, he went a little bit too far and presented an even better case for the opposition than any of them have been able to present. Then he took the occasion to kick it full of holes, so much so that I thought the member for Muskoka-Ontario (Mr. Macdonnell) would throw his notes out of the window.

It will delight the house to know there is a member from Toronto who does not agree with the other members from Toronto as to what should be done about gold mines. It is crystal clear that devaluation of the Canadian dollar, or whatever you wish to call it, has become a plank in the platform of the party opposite. The party would adopt that favourite if somewhat clumsy description used by hon. members up until today, "to let the

Foreign Exchange Control dollar find its own level", as if they were not talking at all about a standard of values but rather about a septic tank. Today, the term used was, "the true economic level". I see from a report of an interview with the leader of the opposition, dated last Friday, the term he uses is "an honest level". This much we can say, that from the suggestions made by the opposition this afternoon one would gather that the remedy is ^n automatic, selfadjusting, Drew's patent dollar. My own opinion is that, if he were fortunate enough to secure office, after he had been in office about three or four years these dollars would have about as much value as Bennett's buggies.

He asserts that the Progressive Conservative party says that is the way they want it. If they ever succeed, it will mean a good deal to a number of chosen people in Toronto. It will mean joy in the brokerage rooms, but it will mean hardship in the kitchens.

And work in the mines.

Mr. Croll:

Since the kitchens outnumber the board rooms about a thousand to one, I suggest that in a democracy they are far more important.

There are two possible explanations for our friend's espousal of the present policy. I assume it is honestly advanced as a solution of a difficult problem, the existence of which no one denies; that is one thing. If, on the other hand, it is cynically advanced to satisfy those who give to their party its greatest political support, then that is another matter entirely. If it is honestly advanced, the kindest thing I can say for it at the present time is that they are not thinking this problem through. If it is cynically advanced, there are in the dictionary no words I could possibly use to apply to that particular policy.

I think we can sum up the effect of the policy by saying it will increase the price of both gold and oranges. As everyone in this house knows or should know, a few very powerful people in this country, particularly in my own province, are in the gold-selling business and, as a useful sideline, they run political parties. As everyone also knows, a great many people in this country, undoubtedly the majority of the people in this country, are in the orange-buying line, particularly if they have young children to feed. If you balance the effect of this policy, you will see it means greater wealth for those citizens who happen to be in the gold-producing business and heavier budgets for those citizens who happen to be buying oranges and imports from the United States.

I do not suggest for a moment that these two groups of citizens do not overlap. Gold

miners and their supporters, their political spokesmen, also have children and they do buy oranges. I think a word of commendation may be due to them for their willingness to pay an additional ten per cent or whatever it may be for the oranges that come from the United States, provided that they get an additional ten per cent or whatever it might be for the fine ounce of their gold. In the political language of some of my friends opposite, this is known as equality of sacrifice.

Our friends might say that may be a very narrow view of the matter; it may even be a distorted view. A dollar that was officially worth perhaps ninety cents in United States funds, would help not only the gold mining boys on Bay Street and St. James Street-

You are on Bay Street yourself.

Mr. Croll:

-they say it would help a lot of other people in the export business. It would enable Canadians to compete with their United States rivals because Canadians could offer their products at ten per cent, or whatever percentage it turned out to be, cheaper. They could undersell the United States competitor and they would pay their operating costs in the depreciated Canadian dollars, including of course what has already been pointed out to this house, the big item of labour costs. There would be no suggestion of a compensatory rise in wages so that the worker's family could meet the increased price of oranges, coal and other imported goods they need. That would ruin everything; after all, a company executive would also be confronted with higher coal costs and higher prices for oranges. So it would be a matter of equality of sacrifice and share and share alike.

It would seem that this is the proper place to mention the small point of percentage of income required for living costs. I think that what we have failed to grasp up till now-and, Mr. Speaker, it cannot be denied -is that when you impoverish the Canadian dollar you impoverish the Canadian worker and the Canadian farmer.

Let us examine for a moment this idea of Canadian competition. At first it sounds highly attractive. With a ninety-cent dollar we could step into the markets of the world and undersell the Americans who would have to quote in one-hundred-cent dollars. At least, we could do that in cases where the Canadian firm was independent, or where the Canadian producer was not forbidden by his head office to export, or where the American head office had figured it would be good business to shift its export operations to the Canadian subsidiary. There we are with Canadian-

produced goods entering world markets with a ten per cent price advantage over American goods.

I am sure that by now members of this house are beginning to murmur to themselves that the competition is not entirely American. There is British, Scandinavian and Swiss competition; and what is more, on top of all that we are beginning to get a little bit of Japanese and German competition. That is all quite true; I shall deal with it in just a moment, and explain why the result of other competition makes still more questionable the proposition put forward by the opposition.

For the moment, let us adhere to the American competition which is, after all, the big competition in the free markets of the world.

We would have, let us say, something like a ten per cent advantage over our American competitors; but for almost everything we export, for the raw materials that form the bulk of our sales abroad, there is a world price set daily on the commodity markets in New York, or established by private negotiations between the big producers and the big consumers. These world prices are established in American dollars which are, after all, the world currency. Let me ask my friend for an honest answer to this question: Would that price in American dollars for, say, copper or lead or newsprint, be affected one whit by the process of devaluing our dollar? Or would it simply mean that the Canadian producers of these commodities would get a higher profit in terms of Canadian dollars, provided their wage rates stayed down, despite the higher living costs which devaluation would impose upon the wage earners?

Then, to meet the objections that have been raised by the champions of the debased dollar, let us turn to the exporters of Canadian manufactured goods for whom the hon. member for York South (Mr. Cockeram) attempted to say a few words. They are having a hard time of it today. Let us consider their case as sympathetically as we can. They are pioneering for Canada as a world trader in new and distant fields. Will the ninety-cent dollar help them to market their finished goods against their competitors not only from the United States but from every other industrialized country in the world?

I ask the house this question: Will it help them to sell Coleman lamps in South Africa, or Moffat stoves in Bolivia, or O'Keefe's beer in Pakistan, to mention only three of our major exporters and to keep it as close to home as possible for gentlemen opposite? Of course the answer is no. The trouble with ninety per cent of the markets which would

Foreign Exchange Control normally be open to Canadian producers of finished goods is not a shortage of cash but a shortage of the right kind of cash. It would not matter particularly to importers in most countries if they could get a bargain in terms, of Canadian dollars as against American dollars. They have not either kind of dollars and they simply could not buy on dollar terms. One after another Great Britain, Sweden, South Africa and Mexico have run out of dollars, any kind of dollars, and so they have closed their doors to imports of goods for which the sellers required payment in dollars. This, as my friends well know or should know but refuse to admit, is our dilemma today as a trading nation, as a nation which must trade abroad to maintain prosperity. If any problem surmounts party lines, I think this one does. But what have my friends to offer? Have they any sort of solution? So far, they have not suggested a solution.

Mr. Manross:

Have you?

Mr. Croll:

We have.

Mr. Lennard:

What is it?

Mr. Croll:

Keep the government in office. If my friends opposite have a solution to offer, it certainly would not be the cheap-dollar solution so glibly advanced by the gentlemen in the opposition today and so glaringly designed merely to increase the wealth of those who have a surfeit of wealth at the expense of those who face a weekly problem with the food budgets of their families.

Mr. Lennard:

The same old stuff.

Mr. Croll:

It is worth while perhaps to note-

Mr. Jackman:

You will get elected.

Mr. Croll:

While you are around, I will not get licked, and you know that too well.