November 1, 1949

ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Rowe, and the amendment to the amendment of Mr. Thatcher.


SC

Victor Quelch

Social Credit

Mr. Victor Quelch (Acadia):

Mr. Speaker, I intend to devote most of my time to a discussion of the international situation referred to by the Minister of Finance (Mr. Abbott) in his budget speech on Thursday, October 20. However, I should like first to comment briefly on the internal situation.. A nation

cannot hope to solve its international problems unless it first sets its own house in order, that is unless it first establishes a balanced economy in which the purchasing power of the people is maintained at a level sufficiently high to buy the total production of the country. Then and only then will a nation be willing to accept freely imports from other nations in exchange for its exports.

Unfortunately that has not been the situation in the past. Invariably nations have endeavoured to maintain favourable balances of trade in order to maintain a high level of employment within the country. In other words, what they have really been trying to do is to lay their unemployment problems on the doorsteps of other nations. That has created a great deal of international friction.

That was the situation in Canada and in many other highly industrialized nations prior to the war. The war created a tremendous market for practically everything that could be produced, and we had a sellers' market after the war, owing to the great backlog of demand for both capital and consumer goods. Money remained plentiful in the post-war years largely because there was an accumulation of war savings, large sums of money were being paid out for reconversion, and large foreign credits were being granted.

But today we find the situation has changed considerably for the reason that the accumulation of savings, in so far as the people in the low-income groups are concerned, have largely been spent, that the reconversion program has been pretty well completed, and that foreign credits are largely exhausted. Marshall aid ends in 1952 and we find that the nations of Europe are doing everything in their power to establish balanced economies so that when Marshall aid ends they will be in position to pay for the imports they require.

In his speech the Minister of Finance (Mr. Abbott) referred to the high level of income, production and employment, but at the same time he warned that we cannot expect that high level to continue in the future. He warned that owing to the decline in international trade the high level of activity might not be maintained. The Minister of Trade and Commerce (Mr. Howe), speaking before the annual meeting of the exporters association at Montreal on he 20th of October, issued a similar warning Both the Minister of Finance and the Minister of Trade and Commerce have pointed out that for that reason the government have measures under consideration for the purpose of maintaining a high level of economic activity in the country. We in this group agree it is most necessary that the government keep in mind and have ready a program for the purpose of picking up any slack, but we are afraid that the 45781-86

The Budget-Mr. Quelch program the government has in mind may not be adequate for the purpose of maintaining the purchasing power of the people at a level sufficiently high to buy the total production of the country and the imports that are brought in in exchange for exports. If the program is inadequate, then a recession will be inevitable.

I know that many people oppose the idea of the federal government going ahead with a program for the purpose of maintaining the purchasing power of the people, whether it be by national projects

I am not going to expand that point because the hon. member for Lethbridge (Mr. Black-more) dealt with it very fully the other night. I want to turn to the international picture that the minister drew when he spoke in the house on the budget. I think it is most unfortunate that the Minister of Finance has created the impression in the past that the responsibility for solving the dollar crisis rests predominantly on Great Britain and the sterling area. In my opinion, nothing could be further from the truth. I think that the Monetary Times in their September issue dealt with the matter very effectively on page 10, where they said:

If there is less than a complete realization of the jeopardy in which our overseas export trade stands today, the statesmen at Ottawa must assume some of the blame. Their utterances on the subject in recent months have often been less than candid.

1352 HOUSE OF

The Budget-Mr. Quelch Finance Minister Abbott's statement, following his return from London, that the dollar problem "is the problem of the United Kingdom and the other sterling countries", was more likely to lull than awaken Canadians to the fact that it affects them too. There appears to be an impression prevalent that Britain and the other countries in the sterling area must buy in North America or die. Such an assumption overlooks substantial evidence that Great Britain and her sterling associates can achieve viability by trading amongst themselves with very little dependence on North American produce. The bilateral deals which Britain has made with Australia and Argentina is positive proof of the trend in that direction. It is not wide of the mark to conclude that Canada would find it more embarrassing to lose its markets in the sterling area than it would be for other countries to forego our natural and manufactured products. It is foolhardy for Canadians to look on the dollar shortage as entirely the problem of the British and the commonwealth countries using sterling. The problem is as much ours as theirs and if this country is to avoid suffering grievously in loss of markets Canadians will have to put forth their best efforts to assist in finding a solution.

I think it is unfortunate that the government did not realize the truth of that statement in 1944 and 1945 when we were discussing port-war international trade problems. At that time the government insisted that the main responsibility for establishing a balance must rest with the debtor nation. Along with the United States of America they put heavy pressure upon Great Britain to sign international agreements which they must have known that Great Britain would never be able to comply with. Consequently step by step we have had to release Great Britain from a number of its commitments. I would say that unquestionably the main responsibility for solving the problem rests with the United States of America for the simple reason that the United States of America is the great creditor nation of the world. Unfortunately the pre-war record of the United States in this regard has not been a good one.

That was brought out very fully in 1945 in the evidence before the banking and commerce committee of the house at the time we were discussing the Bretton Woods agreement. Again quoting from the Monetary Times, page 14 of the August issue, we find a clear picture of the role that the United States has played and is playing as a creditor nation. I quote:

While Germany and Japan for the moment are prostrate, Britain is no better off since the United States has come forward to dominate the world trading scene. Larger, equally vigorous, and with infinitely superior techniques, America until very recently has been completely selfish in search of world trade, often completely ruthless. In her own way, she also is determined to rule by establishing a system which all others must adopt whether they like it or not.

I would say that was the very basis of the Bretton Woods agreement, and to a lesser

|

degree of the Geneva trade agreement. Mr. Rasminsky, when he appeared as a witness before the banking and commerce committee in 1945, frankly admitted that the record of the United States as a creditor nation in the past had not been one to create confidence, but he stated that he believed that the United States since then had a change of heart. I would point out that it will require far more than a change of heart. It will require a fundamental change in policy; it will require a policy which recognizes the fact that international trade is an exchange of goods and services between nations on a basis of mutual advantage, and not merely an exchange of goods for money.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

It will require a change of head as well as a change of heart.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
SC

Victor Quelch

Social Credit

Mr. Quelch:

One of our main reasons for opposing the Bretton Woods agreement was that it had a definite pro creditor bias. Whilst it imposed penalties upon debtor nations unable to balance their payments with the fund, it placed practically no pressure whatsoever upon creditor nations. At that time we were told, so far as that was concerned, it would be looked after later on when international trade agreements were signed. We did have the Geneva trade agreement later. There may be some advantages contained in that agreement but, on the other hand, it embodies a policy known as a policy of nondiscrimination which, in reality, is a very vicious policy of discrimination against an importing nation, especially a debtor nation. It definitely restricts that nation's right to determine its own source of supply.

I realize that it is often argued that nations did not have to sign the Bretton Woods agreement or the Geneva trade agreement if they did not wish to do so. They signed them voluntarily. On the other hand, let us not forget that those agreements were made the price that European nations had to pay in order to obtain post-war assistance. For instance, in order to obtain the benefits of the United States loan, Great Britain had to agree to convertibility of sterling in 1947. She had to agree to a policy of non-discrimination. I am satisfied that the people of Great Britain knew quite well they could not make convertibility work in 1947. I am certain also that the people of the United States knew Great Britain would not be able to do it.

What happened? The pound was made convertible in 1947 and in a few weeks Britain was forced off convertibility. In the meantime, serious damage had been done to her trade. So far as non-discrimination is concerned, a policy of that kind is bound to have

a restrictive effect upon trade. The London Economist puts it very clearly in the issue of August 7, 1949.

So long as dollars are a hard currency, some degree of discrimination is inevitable. To insist on complete non-discrimination is, in these circumstances, to insist that all commercial exchanges shall proceed at the pace of the slowest.

I think that is self-explanatory. If a nation has a favourable balance of trade with one nation and an unfavourable balance of trade with another nation, the logical thing for that nation to do is to restrict its imports from the nation with which it has the unfavourable balance and to expand its imports from that nation with which it has a favourable balance. Under the non-discrimination clause of the Geneva trade agreement, if that nation restricts its imports from one nation it is compelled to restrict those imports from all other nations, whether or not it has an unfavourable balance of trade. True, there are escape clauses but they expire within a year or two. The nations realize that and are doing everything in their power to get their trade balanced before that time comes.

Ever since the war this group has insisted that creditor nations must accept payment in goods. In the past we have criticized Canada's policy of demanding payment in dollars for exports to the sterling area instead of taking goods. We have warned that the result of the government's policy of insisting on payment in dollars from the sterling area was bound, in the future, to breed a policy of economic nationalism within the sterling area and a consequent loss of markets to Canada. It is interesting to note the extent to which that has already taken place. I have in my hand a copy of "Foreign Trade" dated August 27, 1949. On page 350, we find these words:

London, July 27, 1949: Results of the policy of

substituting soft currency countries for dollar countries as sources of supply for imports into the United Kingdom are apparent from the trade returns for the first six months of the current calendar year. Typical Canadian products like oats, beef, poultry, apples, canned tomatoes, canned salmon, chilled and frozen fish and linseed oil have disappeared entirely from the list of imported commodities.

Note that practically all those commodities are agricultural ones.

The same article continues:

The same influences have reduced imports of flour, eggs (shell, liquid, and dried), bacon, sausage skins, asbestos, lumber, furs, mechanical pulp, seeds, rubber footwear, leather, chemicals, paperboard, kraft paper and refined copper.

There is a list of over twenty-five commodities. Then the writer points out a list of some eleven which have increased, but the reductions are many times greater than the increases.

45781-86i !

The Budget-Mr. Quelch

Of course that situation, Mr. Speaker, was bound to develop. As long as Canada demands payment in dollars instead of being willing to accept imports, then Britain and the sterling area lacking dollars are, of course, compelled to get their imports from those countries that are willing to buy from them. In the same way, of course, either the United States will have to buy more from Canada or, on the other hand, we shall have to buy less from the United States.

I know it is argued that the United States cannot possibly consume its total production and therefore has to export more than it buys. There, again, I think the London Economist sets out that situation quite well in its issue of September 3, 1949.

If the U.S.A. insists on producing more than it consumes and investing less at home than it saves, then it should lend abroad until a higher level of consumption is attained at home.

I believe that is self-explanatory. Let me point this out, however, that foreign investment is not the long-term solution. It is only a temporary one. If you have a favourable balance of trade with a nation and you therefore carry on a large degree of foreign investment in that country, the time will come when you will actually have to accept more imports than you export in order to accept payment for the interest on your investment. The last stage, therefore, will be worse than the first. For this reason foreign investment cannot be looked upon as the solution to an unbalance of international payments.

Of course, Canada faces an entirely different situation from that of the United States. The United States has an extremely large over-all balance of payments. Last year, it was approximately six billion dollars. In a special report issued by ECA, I notice that since 1914 the United States has had a favourable balance of trade of over $108 billion. It has been the consistent practice of that country in the past to export more than she buys.

Canada is, of course, in an entirely different situation today. We only have a very small over-all balance. We have a large deficit with the United States and a large surplus with the sterling area. Apparently the government is at last beginning to realize that there is some truth in the principle affirmed by this group in the past, that Canada must be prepared to accept imports in exchange for exports instead of demanding dollars from the sterling area in order to pay our deficit to the United States. We must balance our trade unilaterally with the sterling area and unilaterally with the dollar area.

I believe the Minister of Trade and Commerce (Mr. Howe) has made that clear even though perhaps the Minister of Finance

1354 HOUSE OF

The Budget-Mr. Quelch (Mr. Abbott) does not recognize that fact. I say that, because of a speech delivered by the Minister of Trade and Commerce at the annual meeting of the exporters' association in Montreal on October 20. I quote from a report of his speech in the Montreal Gazette:

If Canada, without further loans, is to hold her current trade status with Britain after the termination of Marshall plan aid in 1952, then Canada must increase purchases from that country by an annual $365 million.

That is approximately the trade balance in Canada's favour. In the year ended last September, Canada bought from Britain $325 million worth of goods and sold $691 million.

At another point the same report reads as follows:

On the other hand, Canada's balance was adversely affected by trade with the U.S. While Canada shipped $1,550 million worth of goods in the same twelve-month period, she imported about $2 billion. The $450 million deficit was collected from the rest of the world through Marshall aid dollars.

"Obviously, our policy must be to export more to the U.S. or alternatively to buy less from that country."

He points out that in order to solve our difficulties with the sterling area we shall have to accept more imports from that area, and in order to solve our deficit with the United States we shall have to buy less from them or they will have to buy more from us. In other words, he is suggesting that we solve our balance of payments difficulties unilaterally with the sterling area and unilaterally with the dollar area; and that is the stand this group has always taken in the past.

In the past the government has always insisted on multilateral trade based upon the convertibility of currency. I notice that the hon. member for Dufferin-Simcoe (Mr. Rowe) and the hon. member for York West (Mr. Adamson) took that stand when they spoke on the budget the other day in this house. Let me point out that it is absolute nonsense to advocate the convertibility of currency until we have established a system of international trade that will ensure a balance of payments; because even if you had a balance of payments tomorrow and you decided to bring about convertibility of currency, how long could you remain on a basis of convertibility of currency if nations immediately, as a result of convertibility, insisted that other nations pay them in dollars instead of taking goods?

Unless we lay down a basis which would ensure a balance of international payments, I would say that you would not be able to have convertibility of currency for more than a few days; because just as soon as nations started to demand the convertibility of their foreign credits into dollars, you would force those nations off convertibility. How can

(Mr. Quelch.]

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

And get a great stranglehold on the world.

1356 HOUSE OF

The Budget-Mr. Quelch

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
SC

Victor Quelch

Social Credit

Mr. Quelch:

I want to say a few words about the effect of devaluation on Canadian agriculture. It would appear that if Britain sells at prices existing prior to devaluation she will have to sell in Canada approximately 20 per cent more in order to get the same amount of dollars. Naturally then she will have fewer dollars to spend. If we in Canada sell farm products at the same price they will cost Britain approximately 20 per cent more, and in all probability have the effect of reducing our sales to Great Britain. If we, on the other hand, reduce our prices to meet sterling competition then our farmers will probably receive somewhere in the neighbourhood of 20 per cent less. Therefore, from the point of view of agriculture, it is not a very happy picture.

Of course I realize it may be argued that the farmers will receive 10 per cent more for the products exported to the United States of America; but, on the other hand, machinery imported from the United States of America, or machinery manufactured in Canada with high United States content will cost the farmers of this country considerably more.

Last week I received a letter from my local dealer to the effect that since devaluation the price of tractors has already gone up $185. That is going to be quite a serious increase in costs to the farmer without any guarantee that they are going to get any increase in prices to balance these increased costs. Therefore, in view of the uncertainty of the whole agricultural picture, the government should make known to hon. members at the earliest opportunity just what their stabilization program is. I recall that in the house the Minister of Agriculture (Mr. Gardiner) stated that as a result of government policies the farmers from 1942 to 1948 received less for their produce than they would otherwise have received. I say, as a direct result of government policy. That was the statement the Minister of Agriculture made in the house. He went on to say that that was being done in the name of stabilization. Since the government's stabilization program from 1942 to 1948 had the effect of keeping agricultural prices down, the farmers are interested in knowing whether they are going to be guaranteed the stabilization of agricultural prices in the future. The only legislation on the statute books today guaranteeing stabilization is the Agricultural Prices Support Act, and the Agricultural Prices Support Act expires on March 31, 1950. Therefore the farmers are justified in having an assertion from the government as to just what their stabilization program is to be in the future.

Some hon. members may say, "Well, you have forgotten the international wheat agreement." It is true we have that, but there is no very great guarantee behind the international wheat agreement so long as we have the unhappy international trade picture, because embodied in the international wheat agreement is a section which states that if any nation is unable to purchase its quota it can be relieved of the responsibility of buying it. The only reason that Britain is able to buy our wheat today is that ECA provides the dollars. If in the future Britain is not able to find dollars to buy our wheat then, under that section in the international wheat agreement, she can be relieved of the obligation to buy it and seek it from the Argentine or Australia or from some other countries.

Some hon. members may say, "Well, you have talked about the losses that the farmers have suffered. Do they amount to very much?" I have not time to go into the whole picture, but I shall just deal with one commodity to show the losses suffered by the farmers of western Canada in particular as the result of the government's stabilization program. I hold in my hand a return that was tabled in answer to questions asked by the hon. member for Battle River (Mr. Fair) on February 28 and October 3, 1949. This return shows the quantity of wheat sold to Great Britain, the quantity of class II wheat sold, and wheat sold to the Canadian consumer, and the prices at which that wheat was sold. I note from a computation made from these figures that the total losses suffered by farmers on wheat sold to Britain in the first three years of the British wheat agreement amount to $384,935,416. The total loss suffered by farmers as a result of subsidizing Canadian consumers during those years amounts to $123,661,952. Therefore the total losses suffered by farmers as a result of subsidizing the British and Canadian consumers during the first three years of the British wheat agreement amount to $508,597,368. That is just on wheat alone in the first three years of the British wheat agreement.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Joseph-Alfred Dion (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Order. I am sorry to interrupt the hon. member but his time has expired.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
?

Some hon. Members:

Continue.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
SC

Victor Quelch

Social Credit

Mr. Quelch:

I shall conclude in a few words. Some hon. members argue that you cannot compute the losses on the British wheat agreement until the end of the fourth year, because there may be gains in the fourth year. The gains in the fourth year cannot be very great, because in the fourth year we have agreed to sell Britain 140 million bushels at $2 a bushel. During that

period wheat cannot fall below $1.68 a bushel because that is the floor price under the international wheat agreement. Suppose wheat fell to the floor, to $1.68, then we could not gain more than 32 cents a bushel. On 140 million bushels it would amount to $44.8 million. So that in the fourth year, if the price of wheat did fall down to $1.68, we would gain $44,800,000, which would mean that the net loss for the whole four years would be $463,797,368. But on the other hand there is a possibility that the price of wheat will not fall to $1.68. The price of class II wheat until very recently-perhaps it still is today-was $2.40 a bushel. Therefore instead of there being any gain in the fourth year there may be further losses, in which case the losses would be higher than $500 million.

In closing, Mr. Speaker, may I say I trust that the government will at a very early date give the house the assurance that the stabilization of agricultural prices is a permanent policy of the government for the future as well as for the present.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

William Gourlay Blair

Progressive Conservative

Mr. W. G. Blair (Lanark):

I wish to take the opportunity afforded by this debate on the budget to bring to the attention of this house a matter which vitally affects my constituency of Lanark, and which is a matter of importance to the whole of Canada. In my constituency there are eleven woollen textile mills. The effect of the devaluation of the British pound to date is that in some of these industries business is at a standstill, and the factories are now running on short time. These are days of high living costs, and it seems unfair to textile workers to be on a short week, or to be shut off night work, while those not affected by devaluation are working a full week. Customers of woollen textiles are not buying at the present time, and therefore there is not sufficient work to keep the mills running a full week. My interest in this matter is that of the representative of a constituency in which there are eleven textile mills manufacturing woollen textiles. It is a very important industry in Lanark.

I have no interest or stock in any industry of this type, and my concern is solely that of the representative of a constituency where I feel textile workers may be thrown out of work, and textile manufacturers will have difficulty in maintaining their business.

The mills in Lanark are mainly composite mills. They import wool at the same price as the English mills, and completely process the wool in their factories. Before devaluation Canadian woollen and worsted cloth mills had difficulty in competing with English prices. Even then Canadian mills were not able to run a full week. The production of

The Budget-Mr. Blair Canadian woollen and worsted cloth for the first six months of 1949 was about 10 per cent lower than in 1948.

This condition will now become worse, because since the depreciation of the currency British and foreign mills are in a better position to compete in the Canadian market. The only result of this can be lower production for Canadian mills and unemployment for Canadian textile workers.

I made the statement that Canadian production has been decreasing, and that imports are increasing. Great Britain had a very large share in this market in 1948. I give the house the following table showing the production of woven fabrics in wool, in linear yards:

Importa- Importations from tions from Canadian Great otherYear Production Britain countries1946

29,270,000 10,656,000 263,0001947

27,217,000 10,256,000 3,940,0001948

26,400,000 15,888,000 1,572,000

It will be noted that while Canadian production in 1946 was 29,270,000, in 1948 it had fallen to 26,400,000. The Canadian woollen textile industry and the Canadian textile industry have given employment to

180.000 people, and of those 180,000 people

18.000 are employed in the woollen textile industry. My colleague, the hon. member for Waterloo South (Mr. Homuth), feels somewhat diffident about speaking in the house, owing to a temporary disability in his voice. But he has spoken many times in the house about the textile industry. He is a textile manufacturer, and knows all about the trade, and assures me that this situation is so serious that not only will there be

18.000 woollen textile workers out of employment, but many hundreds of other workers in allied industries will be affected in the same way. He assures me that his own plant is on the verge of closing down. Manufacturers do not close their industries just for the pleasure of it, because it costs a lot of money to have a plant standing idle. A maintenance staff must be kept at all times. It is only because of economic difficulties that these mills are either closing down or operating on short time.

There is one thing of which I am very proud in connection with our woollen textile mills and that is that they were developed by families in a small way, in the beginning. I think all of them today are still owned by those families. In these circumstances the head of the industry takes a personal interest in all his employees.

In my constituency, with the eleven woollen textile mills, a large number of people receive

The Budget-Mr. Blair employment. One can readily understand that these eleven mills constitute a very important industry, when concentrated in one constituency. The industry has been built up over a long period of time, and has had to meet difficult competition because Canadian tariffs have not always offered sufficient protection.

In spite of the difficulties this industry has had, and which it has faced, it has made progress to the point where it is now one of the important industries in Canada. I quote from a review published in the Globe and Mail of October 1949 with respect to the woollen textile industry in Canada in 1947. This is a review of a government publication entitled "Woollen Textile Industries in Canada". The review in the Globe and Mail from the Canadian Press under the heading "Textile Industry Has Busy Year" states:

In a busy booming year, the Canadian woollen textile industry produced goods worth $125,039,169 in 1947, the bureau of statistics reported. Production was 16 [DOT] 3 per cent higher than in 1946.

The industry comprised 206 different plants, employing 18,593 persons with a total pay roll of $29,371,352 during the year. The year before, 208 plants in the industry employed 17,620 persons who were paid $24,418,748. Production in 1946 was valued at $107,539,253.

Biggest item in the industry was the production of woven suitings, dress goods, overcoatings and cloakings, and the output of 26,022,348 yards was valued at $53,185,146. The production was slightly lower, but the value $6,554,428 higher, than in 1946.

Greater quantities of carpets, mats and rugs were produced, the value being $8,687,766. The bigger production during the year involved higher imports of wool, yams, and piece goods. Total imports jumped from $61,451,933 in 1946 to $77,923,937 in 1947. Exports declined from $5,317,000 in 1946 to $3,772,240 in 1947.

So it is very apparent that this is an important industry. I bring the seriousness of the situation in the textile industry to the attention of the house without any desire to create the impression that we should revert to a system of high and unwarranted tariffs. I would point out however one thing the government should do to encourage a healthy and stable woollen textile industry in Canada, and that is to open discussions with the British government with the object of facilitating the purchase by Canadian manufacturers of British textile machinery needed in our textile industry so that it may compete with the great outside competition.

During the war years the textile industry of Canada contributed much to the war effort. This was made possible through the co-operation and skill of both employees and management, and the full capacity utilization of the machinery for production. In some cases today that machinery is obsolete or practically worn out as a result of having been used 24 hours a day during the war. Many of the

companies that desire to replace their machinery find they are unable to purchase it in the British market, notwithstanding the fact that British exports of textile machinery in 1948 increased by approximately 54 per cent in volume as compared with 1938. Exports of British textile machinery to Canada increased only 12 per cent in volume in the same period. I find on reviewing British trade figures that the exports of British textile machinery to Sweden increased by 367 per cent in volume in 1948 as against 1938. The volume of exports to Denmark increased 342 per cent in the same period, and the exports to Portugal were up over 497 per cent. My source for this information is from the accounts relating to trade and navigation of the United Kingdom for each month during the year 1948 covering British exports of textile machinery. With the permission of the house I should like to place further figures on Hansard.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Joseph-Alfred Dion (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Has the hon. member the permission of the house?

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
?

Some hon. Members:

Agreed.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

William Gourlay Blair

Progressive Conservative

Mr. Blair:

The table follows:

British Exports Textile Machinery

Volume (Tons) Value (Pounds)To 1938 1948 1938 1948Canada . 1,818 2,039 307,403 791,482Sweden . 631 2,949 114,560 1,282,132Denmark . 255 1,127 46,488 514,990Netherlands .. . 1,960 5,236 258,002 1,818,518Portugal . 430 2,570 52,006 769,624Turkey . 173 669 24,484 272,044United States. . 1,049 2,403 222,150 1,244,322Mexico . 373 1,642 64,004 639,273Chile , . 276 1,623 28,907 538,953Brazil . 5,048 9,094 502,801 2,936,728Argentine . 1,177 4,780 173,337 1,461,706I believe everybody in Canada is sympathetic toward any trading program that will help the people of Great Britain establish themselves as one of the great nations of the world, but the livelihood of 180,000 textile workers in Canada is dependent upon the success of the textile industry in this country. One of the main exports by Great Britain to Canada is woollen textiles and these are being imported into Canada in increasing quantities to replace Canadian-made woollen textiles. British textile products and those from European countries are manufactured with lower labour costs than are similar products in Canada. It is possible also that the Canadian textile manufacturer may have to compete against some form of subsidization which will mean still less business for the Canadian textile mills. The result will be that the whole textile industry in Canada will suffer.

The standard of living in Canada is today at the highest point in our hislory and our

customs tariff should be adequate to maintain that standard of living. The duty on imported woollen textiles is now lower than when our standard of living was at a lower level. Not only are these goods produced in Great Britain for lower wages than are paid in Canada; food subsidies are also paid which reduce the production costs of British textiles.

Before devaluation the wages paid for the production of Canadian woollen textiles were 170 per cent of the British rates; they are now 220 per cent. This more than balances any advantage the Canadian textile producers might have through buying wool in sterling areas. Most of the raw wool used by both the British and Canadian textile producers originates in sterling areas, principally New Zealand and Australia. With the currencies of those countries being devalued it meant a cut of 23 per cent in the cost of wool imported into Canada, but that did not make any change in the price of wool going into Great Britain.

Since devaluation there has been a rise of over 23 per cent in the price of wool in the sterling areas which in fact wipes out any advantage to the Canadian purchaser from the devaluation of sterling. When the Canadian government devaluated the Canadian dollar 10 per cent in terms of the United States dollar it modified the sterling devaluation in terms of Canadian funds. Great Britain is now able to cut the prices of the textiles she sells in Canada.

Even before devaluation British textiles held a strong position in the Canadian market when the sales were about three and a half times greater than pre-war in terms of value and were much greater in terms of volume. On the pre-war market British textiles made up 36 per cent of British sales in Canada, whereas in 1948 they were 48 per cent. This was the result of a concentration of exports to one area. Imports of British textiles are in direct competition with types made in Canada. There should be a greater diversification of British trade in Canada and, as I have mentioned before, it should be sought through textile machinery which the Canadian industry is trying hard to secure.

At page 559 of Hansard a question was asked whether Canada was losing her domestic textile market to Great Britain owing to devaluation, and if there had been any layoffs in Canadian textile factories or wage reductions owing to devaluation. The parliamentary assistant to the Minister of Trade and Commerce stated in his answer that there was no evidence to show that the Canadian textile industry was losing its domestic markets to Great Britain, and that there had been no layoffs or wage reductions reported.

The Budget-Mr. Blair

I should like to quote from an article appearing in the Toronto Telegram of September 29, 1949, in which Mr. K. L. Markon, vice-president and general manager of Monarch Knitting Company, supported the claims of union leader Sam Baron that the devaluation of the pound is menacing the jobs of thousands of people engaged in Canadian textile industries. The heading of the article is:

Pound devaluation seen hitting jobs "thousands" here

The article reads:

K. L. Markon, vice president and general manager ol the Monarch Knitting Company Limited yesterday supported claims of union leader, Sam Baron, that the devaluation of the pound is menacing the jobs of thousands of people engaged in the Canadian textile industry. In a prepared statement Baron, Canadian director of the textile workers union, C.I.O.-C.C.L., called for the immediate establishment of a royal commissio'* to investigate conditions in the industry and possibly offset a major layoff. Markon believed this to be a sound idea.

Claiming that the industry is the largest single employer of labour in the dominion, engaging 100,000, Baron produced figures to support his fears of mass unemployment.

Then there is a subheading reading:

Costs are lower

The article continues:

In the cotton industry, Baron claimed British exporters are offering cotton yarns on the Canadian market at roughly 10 per cent below the price on the home market. The effects will be greater in cotton piece goods and knit goods, he predicted.

"For instance, a British line of underwear that was being sold wholesale at $6.25 a dozen only a week ago is now being sold at $5 a dozen. The same applies throughout the woollen industry," he continued. "The most striking example of this is the hosiery industry where, even before devaluation, the majority of plants were working only two or three days a week because of British exports."

Markon said the information given by Baron was "substantially correct, particularly in regard to the woollen industry."

Head of one of the largest companies of its kind, manufacturing woollen, worsted and cotton knit goods, including hosiery, Markon said the woollen industry was in a "difficult position" before devaluation.

Then there is a further subheading reading:

Tariffs too low

The article continues:

"That difficulty was partly caused by various means used by British authorities to stimulate exports to Canada, such as indirect subsidies and export quotas, also by the fact the American economy was protected by tariffs while ours was not protected as much."

Markon, whose firm engages 1,100 workers, explained that prior to the devaluation, the company because of competition from Britain was forced to lay off some employees, particularly in the hosiery department, "and is going to be worse now."

"The textile industry seems to be bearing the brunt of things and this doesn't seem to be fair particularly in view of the fact the industry is the largest employer in Canada," he concluded.

The Budget-Mr. Simmons

I agreed with the Minister of Finance (Mr. Abbott), when he said there would be some dislocations in Canadian industry as a result of the unexpected degree of devaluation of the British pound. I question, however, the wisdom of any policy that asks any industry to bear the full brunt of the effects without making any evident effort to fully appraise the situation in the light of recent events. How often have we heard from our western representatives the story of the sacrifice they made in wheat. I agreed with them. Why should the wheat farmer stand the full cost of our assistance to Great Britain? I say now: Why should the textile industry be placed in the same position?

We must build up our Canadian economy. We cannot have social security without taxes. We cannot have taxes without employed people to tax. What good is it for us to have busy textile workers in Yorkshire, England, when our own textile workers are walking the streets? The Canadian textile industry, operating in a less protected market than manufacturers in the United States, has even before devaluation been subjected to such competitive stimulants as indirect subsidies and export quotas by the British government. Now they are to be faced with additional competition arising from advantages accruing to British manufacturers as a result of devaluation of the pound. This industry is one of the largest employers of labour in Canada, and many Canadian homes are dependent upon it for their very existence. This industry played a most important part in the war effort of Canada, and in my opinion it is essential that it be maintained as a healthy, virile industry as part of our economic defence plans of the future.

To the degree that the Canadian market can absorb British textiles, I agree that every encouragement should be extended as a means of helping Great Britain earn dollars to buy our primary products. I submit, however, that it is not in the national interest for the textile industry to be forced to close its doors, and for workers, who have given many years of their lives to developing this trade, to be thrown out on the street to look for work wherever they can find it. Unless external conditions and factors today threatening this vitally important industry are closely studied, and their effect constantly observed by the government, the conditions I have just warned about are not beyond the realm of possibility.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

James Aubrey Simmons

Liberal

Mr. J. A. Simmons (Yukon-Mackenzie River):

Mr. Speaker, my riding is in the eyes of the world today because it constitutes the northwest frontier of our nation. It looks out upon the old world of Europe and the more ancient world of Asia across the Arctic

ocean. The constituency of Yukon-Mackenzie River is much larger than the territory of Alaska which will, we are told, soon be the forty-ninth state of the United States of America. It is an area in size nearly equal to all of British Columbia, Alberta and Saskatchewan. It is one-fifth as great in area as continental United States of America.

With this vast region as a background, I hope that I may be pardoned if I take some time of the house to convey to you the hopes and aspirations of our people, and something of their handicaps and difficulties. My address must be heard in the light of the status of our constituency of Yukon-Mackenzie River. It is in Canada but is not a province of Canada. It is for the most part a vast unorganized domain. It is a land of opportunity. Down north we have a land which should present great opportunities for the youth of Canada. You will note, Mr. Speaker, that I say "down north". Yes, all our rivers run down towards the north, the mighty Yukon river and the still mightier Mackenzie river. I am amazed to hear in this house and various cities in the east expressions of fear and despair when our great northland is mentioned. If eastern Canadians, especially the hon. gentlemen of this house, could travel with me throughout the length and breadth of my riding, they would realize that in Canada we have only made a beginning upon the development of our natural resources.

When it is realized that in the riding which I have the honour to represent, much of it unexplored, there is such a small scattering of people and so little industrial development as compared with the possibilities, it will become apparent that this house should concern itself with a more intensive policy of northern development and also with a sane project for moving numbers of people into the northland to places where they could live and thrive. In addition to this, a substantial increase in population in these areas is a direct contribution to the defence of Canada.

Originally, the Northwest Territories covered all that portion of the country from the Hudson bay westward within Canada outside of the provinces. Then in the nineties, upon the discovery of gold in the Klondike valley, the Yukon Territory was established under the Laurier government. It is governed by a commissioner, appointed, and a territorial council of three elected members who have a three-year term of office. The seat of government is at Dawson, Yukon. The Department of Mines and Resources at Ottawa is responsible for the business arising from the general administration of the territory under the Yukon Act and ordinances passed by the territorial council.

For administrative purposes the Northwest Territories were divided into three districts, namely, Mackenzie, Keewatin and Franklin, by order in council of March 16, 1918. In accordance with the Northwest Territories Act, the Northwest Territories are governed by a commissioner, a deputy commissioner and five councillors appointed by the governor in council and operating from this capital. The commissioner and council has power to make ordinances for the government of the territories under instructions from the governor in council or the Minister of Mines and Resources, subject to any act of the parliament of Canada applying to the territories. The future I eventually see for the Mackenzie River district is an entirely new set-up with an elective body. Our people feel that, while the present administrations are good, and while able men are giving of their best efforts, sooner or later we should have responsible government throughout in keeping with the Canadian tradition of responsible government.

Let me say and repeat that we believe the present executive officials are doing excellent work. Yet, the north wants to have a thoroughly elective government and, sooner or later, I am hoping to see it brought about. We advocate nothing new in this regard. You had the same request a century ago when the wilds of Upper Canada came under responsible government; later when, in 1905, Alberta and Saskatchewan came into being as provinces; before that when a provincial capital was set up at Winnipeg. Representation by population was an early battlecry in this country and along with it went "no taxation without representation."

I should like now, Mr. Speaker, to say a few words in regard to the electoral district of Yukon-Mackenzie River. At the last session of parliament the Mackenzie River district in the Northwest Territories was annexed to the Yukon electoral district, notwithstanding the many protests by the peoples of the Mackenzie River district and the Yukon territory. They did not want it and still do not want it and have a legitimate cause for complaint. The communities are scattered and there is little community interest between the peoples of the Mackenzie River district and the Yukon Territory-no more than as between the St. Lawrence river watershed and the Columbia river valley in British Columbia. If I might give an illustration: It is my opinion that the present federal riding is too large and unwieldy, and that it was a mistake to make such a large electoral district. A candidate travelling about it at election time must use aircraft almost exclusively and the cost is exceptionally high.

45781-87i

The Budget-Mr. Simmons

I believe you will agree that, in view of the circumstances I have outlined, it would be well to amend the redistribution act to provide for subdividing this vast riding and allowing two members-one for the Yukon proper and one for the Mackenzie and eastern sections of the Northwest Territories from the Mackenzie mountains to the Hudson bay. It might be argued that the population does not justify this adjusted representation, but it must be borne in mind that the populations of both areas are rapidly increasing and the economic conditions must necessarily always be different.

The future of Yukon Territory and Mackenzie River district is dependent upon the development of its mineral resources. These are among the last remaining reservoirs of minerals on the North American continent. As the minerals in the older areas become depleted and as the demand increases, it will become imperative that the mineral wealth of our north country should be developed. Portions of the Pre-Cambrian shield lie within the Mackenzie district and geologists claim untold wealth is still to be taken from this source. So far, this area has only been scratched. Indications are that vast sections of it are mineralized and present favourable opportunities for the prospector and developer.

In 1896 the fabulous Klondike gold discovery was made. This was the poor man's opportunity because he could begin to produce gold from the placer workings by his own strength and effort and with little or no capital. Perhaps because of this and the remoteness of the area placer mining remained the prime mining interest in the Yukon Territory for many years. Since then, many opportunities for lode mining have been discovered. One of the most important of these lies in the silver-lead-zinc deposits of the Mayo-Keno area in the Stewart river district. Some of the ore from this district is so rich in silver and lead that it can be shipped to the smelter at Trail, British Columbia, in the same condition in which it is taken out of the ground without being put through the concentrator. I would ask you to consider how rich this ore must be when it can stand the cost of transportation and the many handlings by truck to Mayo Landing; by river boat to Whitehorse; by train to Skagway; by boat to Vancouver and thence by rail to the smelter at Trail, British Columbia, in its raw state and without concentrating.

I am now informed that the mining company at Mayo Landing expects to ship 15,000 tons of silver-lead ore and concentrates next year, the largest amount ever to be shipped from this district in any one year. This means employment for men. It means an

*362 HOUSE OF

The Budget-Mr. Simmons added market for the goods from the warehouses in Vancouver and other places. It means adding millions of dollars to the silver treasury of the world. Mr. Speaker, it surely does not sound like depression.

I note, Mr. Speaker, that in 1948 several million dollars' worth of silver bullion was shipped to the United States of America. Some of this goes to other countries where they use our silver for coinage and for jewelry; and right here I would suggest that it would be a nice gesture on the part of the Department of Finance to strike off a few Canadian silver dollars-not a few but let us say $1 million a year for a few years, to make the people of this country more silver conscious, but not enough to upset our currency here. In a country like Canada, with silver mines in Ontario, British Columbia, Quebec and the Yukon which in all produce many million dollars' worth of silver each year, surely we should have a larger silver coinage in our country.

The development of this area has only begun. There are many other areas of equal importance in the Mackenzie district and Yukon Territory awaiting development. There are indications that one of the largest iron ore deposits in North America lies in the Selwyn mountains of central Yukon. Prospectors and geologists have found indications of widespread deposits of lodegold, tungsten, copper, tin, molybdenum, silver, lead, zinc, antimony and coal. It i's known that the huge copper deposits of southeastern Alaska extend into the Yukon. At Whitehorse there is an interesting copper belt which was mined during the first world war. To date Yukon Territory has produced nearly one-third of a billion dollars in gold and silver-I repeat, one third of a billion dollars of new wealth.

Now, Mr. Speaker, let me say something about the mineral potentialities of the Mackenzie river district. It is known that a great part of the Northwest Territories is covered by Pre-Cambrian rock. This same rock formation supports the mining industry of Quebec, Ontario and Manitoba. Its potentialities in the Northwest Territories, where it has hardly been scratched, are immense. So far we have the pitchblende and the radioactive mineral deposits at Port Radium on Great Bear lake. The magnitude of this operation is known throughout Canada. We also have the lode gold operations of the Yellowknife mining district on the north side of Great Slave lake. Tremendously interesting deposits of lead and zinc are being investigated on the south side of Great Slave lake, at Pine Point, and of radioactive minerals in widely scattered areas to the northeast of the same lake. Copper deposits along the

Coppermine river near the Arctic coast have been known for many years. Let me here, Mr. Speaker, pay my tribute to Gilbert La Bine, the Canadian prospector who discovered uranium ores in my riding, whose work was so valuable to Canada and the world in strengthening the bonds which make democracy and the democratic countries of the west a subject which is so much discussed among the nations today. And when I pay tribute to Mr. La Bine I do so because he is typical of the whole race of prospectors who are finding the hidden wealth of the northland, and making it possible for great industries to be built and great new sources of revenue to be created for our country.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

He is a distinguished resident of Eglinton riding.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

James Aubrey Simmons

Liberal

Mr. Simmons:

That is fine. Yellowknife in the Northwest Territories and Dawson in the Yukon Territory are centres of revived gold mining activity. Yellowknife is the hub of the mining industry in the Northwest Territories and today is a flourishing and thriving modern town. Three important gold mines are operating in this vicinity: the Con-Rycon mine, the Negus mine and the Giant Yellowknife.

The first gold brick was produced in the Northwest Territories and poured at the Con mine of the Consolidated Mining and Smelting Company in September, 1938. Yellowknife mining district has produced to date well over $25 million in gold. These mines and others under development contain vast quantities of gold. Engineers have blocked out ore which assures operations for many years to come. At present more than one thousand men are employed in the gold mines there. There is every indication that production will be increased as further properties are being prospected and developed.

Dawson city is the hub of gold mining in the Yukon territory. It is probably the oldest producing placer gold mining camp in the world. This year the production of gold has been very active as it has been in the past for many years. This summer's operations alone produced well over 50,000 ounces of gold up to the end of August. By the end of the dredging season this fall there will be many more thousands of ounces of gold to be added to the quantity given here. Eight dredges are being operated by the Yukon Consolidated Gold Corporation in the Dawson district.

Oil resources along the Mackenzie river at Norman Wells are deserving of attention and are considered to be very important. Oil reserves in the Norman Wells area, estimated by United States government experts and checked by Canadian authorities, are placed

The Budget-Mr. Simmons

at 60 million barrels. There are sixty productive wells in this area and from 1942 to the end of 1948 they produced nearly 3 million barrels. There is a small refinery at Norman Wells which turns out the fuel requirements for the Mackenzie river district.

I have told you something about the mineral resources of my constituency. We have sufficient indications to know that there lies a practically untapped reservoir of mineral wealth awaiting development for the benefit of the area and of Canada as a whole. Its development will depend upon the provision of adequate transportation facilities and cheap power.

In the Yukon Territory the Department of Mines and Resources have undertaken the construction of an all-weather highway from the Alaska highway near Whitehorse to Mayo and Dawson. A good start has been made and it looks as though the Carmacks-to-Mayo section will be completed this fall.

I would call attention to the urgent need of having the remaining sections of the road between Whitehorse and Dawson completed by the end of the 1950 construction season. I would also call attention to the urgent need of the early provision of cheap power for the Mayo-Keno mining area so that the mineral resources of the district may be adequately developed.

Electricity for operating the mines is now produced by diesel engines, and the diesel oil is brought in from the outside at high cost. Transportation also complicates the shipping and storage problem. If the mineral wealth is to be exploited at depth, it will require cheap power. This can only be provided by means of hydroelectricity. I understand that the Department of Mines and Resources during the past summer has been investigating the possibility of hydroelectric development in the Mayo river canyon. I hope that the government will be able to push this project through in the same manner as was done on the Snare river project for the benefit of the Yellowknife mining district in the Northwest Territories, which has proven of great benefit to that district.

The needs of the Mackenzie river district for the development of its mineral resources are similar to the Yukon Territory. They are the provision of adequate transportation facilities, the lowering of present transportation costs and the provision of cheap power. A good start has been made by the construction of the Mackenzie highway, by which freight can be hauled both incoming and outgoing between the Northern Alberta Railway at Grimshaw, Alberta, and Hay River, Northwest Territories. What is now urgently needed is the extension of this highway to

give year-round communication with Mills lake and Yellowknife; and also to put the Alberta section of the Mackenzie highway in good repair so that there will not be a repetition of the difficulties encountered by truckers this past season, which proved so very disastrous to the fishing industry on Great Slave lake.

One of the present main difficulties in getting supplies to Yellowknife and down the Mackenzie river is the lateness in which Great Slave lake gets free of ice. When the river is open in the late spring the ice remains in the lake and piles up at the outlet. In addition, winter travel over the ice is made hazardous by pressure ridges. The construction of an all-weather road to Mills lake will detour the ice piled up at the outlet to Great Slave lake, and the rapids at Fort Providence, and extend the shipping season on the Mackenzie river by at least six weeks each year.

The present costs of transportation into the Mackenzie river district are too high. This affects the cost of living and the cost of mining. Everything which can be done to lower these costs will encourage the development of mining and other industries and raise the standard of living of the people. The mining companies and the stores and trading posts have large amounts of capital tied up in maintaining large stocks of supplies on hand because of the shortness of the navigation season, which necessitates stocking about nine months' supplies each year. This increases the cost of operation of the mines. If an all-weather road was constructed into Yellowknife via Mills lake it would enable the mining companies, stores and trading posts to maintain lower inventories of supplies and thereby reduce costs of operations. This would be the equivalent in one way of raising the price of gold. Therefore for the good and welfare of the Mackenzie river district something should be done to lower the present freight rates either by improving transportation facilities, providing more competition or competitive routes or by means of a subsidy. It is hoped that the government will take the matter of constructing the all-weather highway to Mills lake into immediate consideration, so that an early start can be made on construction next spring.

Now, Mr. Speaker, I desire to tell you something about the economic plight of the natives, both Indians and Eskimos of Yukon Territory and the Mackenzie river district. In this modern day when we are giving Indians in some sections of the country the ballot, it is only fair that the Eskimos should receive the same consideration. Great work can be done for the native peoples of our land.

1364 HOUSE OF

The Budget-Mr. Simmons

In this connection I wish to commend the church organizations in my riding, and also the lands and development services branch and the Indian affairs branch of the Department of Mines and Resources and the Department of National Health and Welfare, for the great work they are doing among the native population. But still greater work can be accomplished. In my journeys through the riding last summer as far north as Aklavik, Northwest Territories, I observed that the church was extending a helping hand to the natives of this country in leading these people to better standards and citizens. They are dependent entirely upon trapping and hunting for a living. You will understand in many areas something of what has happened, Mr. Speaker, when I tell you of the recent decline in fur prices. Silver fox pelts have dropped from $20 to $5 and even as low as $3. Muskrat skins have dropped from $3 to 80 cents, and may go lower. Other furs have declined in price in a similar manner. To make matters worse the hunting in some areas has also declined. As a result of these conditions the natives of the north are now experiencing exceptionally hard times, and I must say that the family allowance has been, and will be, a godsend to them.

It is hoped that the government will continue to deal sympathetically and helpfully with these matters and extend relief to these unfortunate people where necessary. It would be best, where possible, to give them opportunities of earning what relief is given. In this connection I would like to see them given employment on the various construction projects in the northland. Very often when government contracts are awarded to construction firms, labourers are brought in from distant places to do the work. Many of our Indians and Eskimos are excellent workers, and if encouraged and treated as Canadians they would perform valuable services wherever such projects are carried on. It may interest the house to know that some of these Indians and Eskimos are splendid mechanics. I have found many of them to be energetic, thrifty men, good businessmen and good Canadians.

The time has come when racial discrimination in the north should be put aside and all our citizens who obey the laws and help to build up a better country may be treated with equality. Many of the settlements in the north could be improved by the provision of graded roads, ditches, sidewalks, better water supplies, and sanitary arrangements; in other words a general tidying-up. It would be an opportune time to provide these facilities so that the natives could improve their

communities and at the same time work for wages to supplement their incomes from trapping.

As I have said before, in districts where roads, airfields and weather stations and other projects have been or are being built a greater proportion of native people should be engaged on the work, as many of them are good mechanics and operators and they should be given every encouragement to acquire and practise trades.

A new era is dawning for the north. It is going to be opened and its resources developed, and the pace is going to be accelerated. Therefore let us see that the native inhabitants also benefit from these developments. We must help them wisely and sympathetically to adapt themselves to these changed conditions, and we must provide better hospital and medical care. We must also see that the game, wildlife and forest resources of the north are properly managed and protected. Do we know as much about these resources as we should? Do we know why the game and fur have been so depleted in certain areas? Have we figured out how to improve this situation? I would ask the government these questions. The mines and settlements in the Yukon and Mackenzie river districts look to the forests for building logs, lumber and fuel. The forests give protection to watersheds and wildlife; therefore our forest resources must be adequately protected and managed for they are vitally essential to the economic life of the northland.

At this time I wish to thank the right hon. Minister of Agriculture (Mr. Gardiner) for the attention being given food production in the Yukon and Mackenzie river districts. As you know, we pay heavy freight rates on food products and other commodities brought in from the outside. Therefore if we can produce some of the staples within the northland, we add to the prosperity of the people.

All along the Yukon and along the mighty Mackenzie are scores of settlements which buy meats, flour, butter, lard and the many products of the farm. All must come in at great cost to the consumer. At Fort Simpson, Northwest Territories, there is an experimental farm operated by the Department of Agriculture; but long before it was established the Roman Catholic mission there had conducted a successful farm like any farm one would see in the Ottawa valley. This farm has been in operation for nearly sixty years, and has been engaged in dairying, and the production of pigs, poultry and grain.

Yes, grain ripens there at Fort Simpson, junction of the Liard and Mackenzie rivers, north of the 61st parallel and slightly west of the 120th meridian. At Fort Good Hope,

slightly south of the Arctic circle, there are records of grain being matured; certainly there are fine potatoes and root crops, lettuce and many garden varieties.

At Aklavik in the Mackenzie river delta, within the Arctic circle the Anglican mission maintains a garden and has a few cows, a tractor, plows and other farm gear and has cultivated fields of oats-not always successfully but well enough to provide local fodder supplies for the livestock.

At Pine creek in the Yukon Territory, 100 miles northwest of Whitehorse on the Alaska highway, there is an experimental farm operated by the government. This farm was established a few years ago under the expert management of Mr. J. W. Abbott, formerly of Fort St. John, British Columbia. The first year, 1946, witnessed a very poor crop indeed -spuds the size of marbles, turnips all tops and no body, barley very short and poor, and oats a failure.

In 1947, the crop of potatoes was fairly good, showing improvement as the soil was opened to the sun and cultivation. In 1948 several hundred dollars' worth of garden stuff was sold to the local merchants in Whitehorse, besides keeping a good supply for the farm and employees. Now in 1949 Mr. Abbott is buying livestock for the farm which is producing hay, oats, root crops and vegetables and promises to be quite productive.

I do not say this is a ranching country, but if we can produce a tonnage of food there on the land one hundred miles northwest of Whitehorse and at various places along the Mackenzie river, what a benefit it will be to the economy of the north! At all events these experiments are revealing the possibilities and we are getting exact data on weather, hours of sunshine and soil conditions.

A number of farms have been successfully operated for some time on a small scale at other places in the north, such as at Yellowknife, Dawson, Stewart City and various other places in the Mackenzie river district and the Yukon. On the Pelly river a farm has been operated successfully for many years, and one year as much as 2,300 bushels of oats were harvested.

This is a bright picture for the future of the north, and it may well be that a large population can eventually be established on lands north of the Peace river block in British Columbia and in the Yukon and Mackenzie river areas. These experiments will give us some guide as to the feasibility of settlement, and I hope that there may be larger grants next year for the experimental work now undertaken in the north.

If time will permit, Mr. Speaker, I should like to mention one or two other matters

The Budget-Mr. Simmons which are also of prime importance to the economy of the northland. The commercial fishing industry on Great Slave lake, 340 miles south of the Arctic circle, in the Northwest Territories, has become one of the world's greatest inland commercial fishing areas. This lake is the fifth largest on the continent and commercial fishing in this area was first started in 1945.

The commercial catch limits for trout and whitefish together from Great Slave lake were increased in June of this year to a total of five million pounds for the summer fishery and to a total of four million pounds for the winter fishery. During last winter season well over four million pounds of fish were taken by 302 licensed fishermen under special catch limits. A high standard of quality is maintained and all shipments are inspected at Lower Hay river. Importers in Chicago, New York and Detroit speak highly of the fine quality of the whitefish and trout from Great Slave lake. This industry is dependent upon the proper maintenance of the Mackenzie highway to transport their products to the railhead at Grimshaw, Alberta.

Before closing, Mr. Speaker, I should like to say a few words about the great Alaska highway which you have all read so much about. In travelling about the country I find that there exists in certain quarters an apparent misconception of the value of this highway from an economic point of view, and I should like to take this opportunity to correct this erroneous impression, and point out that the Alaska highway and its feeder roads, such as the Haines cut-off and the Atlin road are vital to the defence and economy of the north and to the North American continent as a whole.

The Alaska highway supplies a main trunk road which is of major importance in opening up the country and from an economic and defence point of view that is of paramount importance. In addition to its value to industry and defence the Alaska highway and its feeder roads provide a tourist attraction equivalent to any place on the North American continent. I may tell the house that the Alaska highway, so important in a defence way, is, in these times of peace, a busy commercial thoroughfare, and is opening up a great new country throughout its 1,600-mile length from Dawson Creek, British Columbia, to Fairbanks, Alaska.

It is indeed a credit to Canada and also to our good friends from the United States of America who made such a wonderful job of constructing it. It is a great scenic highway, and you have magnificent lakes and rushing rivers, mountain peaks and ranges, and everything that delights the lover of the

The Budget-Mr. Simmons outdoors. There are good stopping places at intervals along the highway, gas stations and garages, and the traveller need have no fears.

The Canadian portion of the Alaska highway from Dawson Creek, British Columbia, to the Alaska-Yukon border, a distance of 1,223 miles, is maintained by the northwest highway system of the Canadian army and I wish, at this time, to commend them for the excellent job they are doing under the command of Brigadier Connelly, in keeping this highway open.

The hon. the Minister of Mines and Resources (Mr. Gibson) recently made a trip to the Yukon and Mackenzie river district. I would assure him that the people of the north were deeply gratified by his visit and feel that he will now be able better to understand their problems.

I also wish to compliment the hon. me Minister of Finance (Mr. Abbott) upon his excellent budget. It means a great deal to us because of the large appropriations which are essential in so vast a riding. With an able and experienced man bringing down such a budget the people of the north have the utmost confidence in this government and in the future of the nation.

On motion of Mr. Knight the debate was adjourned.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink

BUSINESS OF THE HOUSE

LIB

Alphonse Fournier (Minister of Public Works; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Fournier (Hull) moved

the adjournment of the house.

He said: Tomorrow we hope we may be able to conclude this debate.

Motion agreed to and the house adjourned at 10.55 p.m.

Wednesday, November 2, 1349

Topic:   BUSINESS OF THE HOUSE
Permalink

November 1, 1949