Hon. F. G. Bradley (Secretary of Stale):

have done my best to hurry the preparation of the answers to these questions, but I find that in some of the departments the work is

exceedingly complicated, and up to the present I have had no report from two departments. I am trying to get the returns as quickly as possible. I shall make a further effort to expedite them.

Mr. Graydon:

Which departments are in default?

Mr. Bradley:

I could not be sure at the moment.

Right Hon. C. D. Howe (Minister of Trade and Commerce) moved

the second reading of Bill No. 252, to amend the Canadian Wheat Board Act, 1935.

Mr. J. A. Ross (Souris):

Mr. Speaker, I desire to offer a few remarks on this bill. As you know, this is the outcome of an experiment we have been conducting for the past four or five years. Since the summer of 1946 the wheat agreement between the United Kingdom and Canada has been debated in this house on various occasions; and in order to clarify some of the statements that have been made I should like to point out that the agreement was first announced in this house on July 25, 1946, by the then minister of trade and commerce. On July 30, 1946, speaking of that agreement, at page 4037 of Hansard the minister said:

There is no question that the wheat producers have made possible the success of domestic price control by immediate sacrifices in their 1945-46 and current export prices. These sacrifices have also assisted in overseas rehabilitation. The government is convinced that the outlined policy will give fair and comparatively stable returns to the producers, so far as it is within the power of the government.

There, I think, we have the nucleus of the whole control system from that time on as far as prices to consumers in this country were concerned, and to a large extent as far as prices to consumers in Great Britain were concerned.

Later another measure was introduced having to do with agricultural support prices, and so on. It was the Minister of Agriculture (Mr. Gardiner) who negotiated this agreement on behalf of the then minister of trade and commerce, and he was given full credit for it at that time. Several times since then the Minister of Agriculture has indicated that the prices of other agricultural products were more or less determined on the basis of the price of wheat, which has been controlled and is still controlled.

As I have said on other occasions, there was no opportunity to debate that announcement at that time. It was put through by

order in council; and when the leader of the opposition at that time asked when it might be debated, the reply of the then minister of trade and commerce was that on his estimates, which were still to come before the house, there would be an opportunity to discuss the contract. It was discussed to a certain extent later that year, in the following month, and I am going to quote what the Minister of Agriculture had to say on August 14, as it appears at page 4810 of Hansard:

When we are at the end of the four-year period, if in the last six or twelve months we find ourselves in the position that world markets, so-called, are not offering as much for wheat as we are getting for it, I hope people will still stand behind us to the extent they are standing behind us now. Even if wheat stays above $1.55 during the whole period, I hope people will still feel that it was worth while trying. If we are successful in this experiment, then we can talk to the grain trade people with some assurance. If they are able to show us at the end of the five-year period that we were all wrong, that over the length of time the farmer got less than he ever got before under similar circumstances and that the other system would have brought him more, then we shall be in a position to discuss the matter with them on an even footing. I am sure anyone who has taken this position and finds himself wrong will be quite prepared to discuss it from that point of view. In the meantime we are convinced that this is the best thing for the farmer. As long as we are convinced of that, and having another four years in which to try it out, we can put the policy into effect in a way that will at least help us to determine how this long argument between farmer and grain trade in western Canada ought to be settled in the interests of the great masses of the people.

On August .15, 1946, at page 4848, the minister put on the record in detail the terms of this contract. In one of the paragraphs there is this statement:

In determining the prices for these two crop years, 1948-49 and 1949-50, the United Kingdom government will have regard to any difference between the prices paid under this agreement in the 1946-47 and 1947-48 crop years and the world prices for wheat in the 1946-47 and 1947-48 crop years.

That is termed the "have regard to" clause, and is significant. In the same contract it was set forth that the United Kingdom might resell any of this wheat or flour to any country at any price they desired. The entire agreement is there; anyone who wishes to refer to it may do so.

Since that time the Minister of Agriculture has on various occasions said there has not been a world price for wheat. The hon. member for Calgary West (Mr. Smith) and I pinned the Minister of Agriculture down during the course of a debate, and he and the then minister of trade and commerce admitted that the Canadian wheat board, in arriving at the Canadian price for class II wheat, used the American grain exchange as a yardstick, along with other factors. The admission can be found in Hansard. I believe

Canadian Wheat Board Act everyone in the grain trade throughout the world, as well as those holding official positions, recognize that the price for class II wheat is the world price.

I have recited the argument of the Minister of Agriculture that this was an experiment for four or five years. Certainly it is explicit in his argument that on behalf of this government he was taking a long gamble in assuming that at the end of the contract period the bottom would have fallen out of the wheat market and Britain would have to pay more under that contract than the prevailing world price. As I have stated before, no one in the world ever took as long a gamble in selling wheat as was* done under that contract, because the government contracted to sell 600 million bushels of wheat over a four-year period, and the greater part of the wheat had not even been seeded. You talk about the grain exchange! I am not saying anything in favour of the grain exchange, because I have always argued in favour of the Canadian wheat board. But I do believe we should be fair, and listen to all the arguments on both sides.

The very opposite to what the Minister of Agriculture set forth in his argument at that time has happened. He said that if wheat were selling for much less than the contract price after the war, he hoped we would stand behind the contract. Since then there has not been a day When the world price for wheat has not been considerably above the contract price. I am sure that on July 31 of this year, when the contract ends, the wheat producers of Canada will have suffered a loss amounting to many hundreds of millions of dollars. They have not only lost money on the 600 million bushels sent to Britain, but for some years the price of wheat made into flour in Canada was tied to that price. Roughly there is about 70 million bushels of wheat annually used that way in this nation. The price for that 70 million bushels of wheat bore a relationship to that contract, so that over these years the farmers have suffered a loss in subsidizing the consumers of Britain and Canada. I do not wish to labour this point, but there are many new members of this house who are not conversant with the contract and with the debates which took place at that time.

On May 30 of this year, when the Minister of Trade and Commerce returned from discussing this situation in Britain, he made a statement. I asked him this question, which appears at page 2985 of Hansard:

Mr. Speaker, may I ask the minister if at this conference a basis of settlement under the "have regard to" clause was discussed for the great loss suffered] by Canadian wheat producers as a result of these United Kingdom-Canada wheat contracts?

Canadian Wheat Board Act

Mr. Howe:

I understand the wheat board act will be discussed later In the session, and I do not care to amplify this statement at the moment.

He pointed out that the matter of wheat had been discussed by him with the Canadian wheat board officials and the proper officials in Britain. The Minister of Agriculture has stated that within the last six months of the experiment we might be in a position to decide the matter. We are now within a period of weeks of the termination of the final contract. Surely the minister is now prepared to tell this house the result of the discussions on the basis of the "have regard to" clause. The final settlement on the basis of the "have regard to" clause has been postponed until July, 1950. I have pointed out, as have other people more conversant with the subject than I, the great loss, running somewhere between $500 and $600 million, that has resulted to date. The year's business is not completed; therefore no one will know the exact figure until July 31 of this year. Surely the minister will say at least on what basis the United Kingdom proposes to make up this gigantic loss. The Minister of Agriculture pointed out that the wheat producers would not suffer any great loss, because if the United Kingdom failed to make up the loss-he was then referring to the matter of these contracts', and the fact that if Britain did not take as much wheat under the contract this year she might take timber, salmon, and other things-then the federal treasury of this country would make that loss good.

Mr. Howe:

The hon. member has quoted the Minister of Agriculture. Will he tell me on what page of Hansard I can find that quotation?

Mr. Ross (Souris):

I shall get it for the minister. I have not got it before me at the moment.

Mr. Howe:

I have never heard him make that remark.

Mr. Ross (Souris):

I do not know whether the minister was in the house at the time. I had the page marked; I shall give it to the minister before we pass from the committee stage. Not only that, but the Minister of Agriculture said that the Prime Minister had requested him to make the statement. I cannot give the exact wording, but I can give a rough approximation of it. He said that the federation of agriculture and other officials had visited the cabinet before the opening of this session, and the matter had been discussed. The minister prefaced his remarks by saying the Prime Minister had asked him if he was going to

speak in the debate-I think it was the debate on the address in reply to the speech from the throne, but I would not be sure. The Prime Minister said that if he did intend to speak, the government's intention in this regard should be cleared up. Roughly, that is what the Minister of Agriculture said, but I shall give the minister the proper page reference in Hansard.

I should think that in fairness to those who spoke when we entered into that contract the minister should at this stage tell us the basis of the discussion with the United Kingdom for settlement of this contract, and, if there is to be no settlement by the United Kingdom, then on what basis the government proposes to make up the loss to those producers. It has been intimated that we could properly discuss this subject when the bill was before the house.

Mr. H. R. Argue (Assiniboia):

Mr. Speaker, I have a few short comments to make at this time. I can say that the members of this group, as did other members of all parties, supported the original United Kingdom wheat agreement. We believed at that 'time, and we believe today, that such long-term agreements, which enable us to have a market for a large quantity of wheat, are in the interests of our producers. I cannot see how any hon. member could now go back and criticize that agreement, and at the same time complain that a new agreement similar to that one has not been signed. My only wish is that the Minister of Trade and Commerce (Mr. Howe) could have announced a further United Kingdom wheat agreement to provide for the sale of the same large quantities of wheat as were provided for in the first agreement.

The farmers believed that they were being given protection as to price, not only during the period of that agreement but over a longer period after that agreement came to an end. Our producers also felt that because of the "have regard to" clause, if they did make great sacrifices within that four-year period, those sacrifices would not have been in vain, but would have been made up either by the United Kingdom government or through a continuing price stabilization policy carried on by this government, a policy which would take that great sacrifice into consideration.

I must say, Mr. Speaker, that we in this group, today as in the past, support the continuation of the Canadian wheat board as the sole marketing agency for wheat. In that stand we believe that we have the support of the organized farmers of western Canada. If there is any criticism as to the extent of the wheat board's operations at this time, it comes from the fact that the wheat board is

not the sole marketing agency for all grain produced in western Canada. We hope that the time is not far distant when this government will extend the operations of the Canadian Wheat Board Act so that all grains may be included under it. At the same time we should like to see the wheat board engaged not only in the buying, but also, as the sole agency, in the selling of oats and barley. We object to the grain exchange being used for the sale of oats, barley, rye and flax at this or any other time.

I believe that the wheat picture is not nearly as bright as some might have us believe. When the Minister of Trade and Commerce the other day assumed that the rock bottom floor under the amount of our shipments to Britain this year would be 100 million bushels, I think he demonstrated how serious may be the market situation for wheat in the future. During the last four years we sold, on the average, 150 million bushels of wheat to the United Kingdom each year. During the present year our contract calls for the sale of 140 million bushels. We therefore see the prospect of losing the United Kingdom market for wheat to the extent of between 20 million and 40 million bushels. I am afraid we may have great difficulty in replacing that market with other markets in other countries.

If I read correctly the reports from the Department of Trade and Commerce, we are likely to have a large carry-over of wheat at the end of July; in fact, I believe it will be a much larger carry-over than we had a year ago. According to a report issued by the dominion bureau of statistics, on May 18 we had in Canada a visible supply of wheat of 117,500,000 bushels of wheat; on May 19 of last year, almost one year ago to the day, we had on hand only 99,800,000 bushels. On May 18 of this year the visible supply of wheat in Canada exceeded the visible supply of a year ago by 17,700,000 bushels. All I can say is that if that trend continues we may wind up at the end of this crop year on July 31 with a carry-over of between 90 million and 100 million bushels of wheat. That carry-over- exceeds the normal carryover in pre-war days, and it is a carry-over that might well become unmanageable if it continues to grow. In the face of that possible large carry-over, I think the Minister of Trade and Commerce should have endeavoured to obtain a further United Kingdom-Canadian wheat contract.

As I have said before, I am not at all happy about the reduction in the initial price for wheat. I believe that it represents a serious blow to western Canada. A year ago

Canadian Wheat Board Act the farmers received a further payment of 20 cents a bushel, amounting to $213 million. They are not receiving any large further payment at this time, and the initial price or initial payment will be lowered by 35 cents a bushel on August 1. If the farmers market a normal crop of some 300 million bushels this year, they will sustain a drop in income, because of the lowering of the initial payment, of approximately $100 million. That will add up to a drop in income to western farmers during the coming year, on account of wheat sales, of something in the neighbourhood of $300 million.

Unless something is done to increase the income of western farmers, our people will not be able to purchase all the farm machinery, manufactured goods and lumber that they have been purchasing in the last few years. Western Canada has proved to be the best market for manufactured goods produced in our country; and in my opinion to allow this substantial drop in income is not in the best interests of any part of Canada.

There has been a great deal of discussion as to what happened to the agricultural producer over the last four or five years, and as to what sacrifices he has made or losses he has sustained because of the government's wheat policy. I have before me the last report of the Canadian wheat board. It shows that in the first three years covered by the United Kingdom wheat agreement, class II wheat sold for $2.39 a bushel. During the period of the United Kingdom wheat agreement, up to that date, we had sold to the United Kingdom 339 million bushels at $1.55 a bushel, or 84 cents a bushel less than the average price for class II wheat. During the same period we sold 146 million bushels to the United Kingdom at $2 a bushel, 39 cents a bushel less than the price of class II wheat. That represents a substantial contribution by the agriculture producers of our country. Moreover, not only were our farmers called upon to make sacrifices because of the United Kingdom contract, but they were called upon to make sacrifices because of the domestic price of wheat set by the government from time to time.

According to the same report of the wheat board, during the first three years covered by the United Kingdom wheat agreement, the Canadian consumer obtained 38 million bushels of wheat at $1.25 a bushel, $1.14 a bushel less than the average price for class .II wheat. The consumer obtained 112 million bushels at $1.55 per bushel, 84 cents less than average price for class II wheat. The Canadian consumer obtained 52 million bushels at $2 a bushel, 39 cents less than the

Canadian Wheat Board Act price received for our class II wheat. According to those figures, that represents a contribution by the wheat producers of western Canada to the Canadian consumer within that three-year period of $159 million. Because of that great sacrifice, and because of the contribution made by the wheat producer to the Canadian consumer, the farmer believed-as did I up until the last few days-that funds would be made available for the support of wheat prices if that action became necessary in order to provide stability.

Speaking in the house on May 30, the Minister of Trade and Commerce made it perfectly clear that under the present bill setting out the wheat board policy for the next three years the government does not intend in any way to support the price of wheat. He went over the history of pooling arrangements, and said that the only way pooling arrangements could be sound was to establish an initial price for a given year at 60 per cent of the July cash price for wheat.

The minister should not forget that during those pooling periods farmers were pooling their own grain on a voluntary basis, and of course it was in their own interests to have a sound pooling arrangement. But now the government is doing the pooling, and has done it for a number of years. According to the annual statement of the wheat board, during the last three years the Canadian consumer received wheat at a price which meant that the farmer of western Canada contributed to the consumer to the extent of $159 million.

In my opinion, if there is any equity and any fairness, that contribution by the wheat producer to the Canadian consumer should now result in the government guaranteeing a substantial initial payment to the wheat producer, so that his standard of living may not be allowed to drop, even though such procedure might cost the public treasury some money.

The farmer has made his contribution to the Canadian consumer, and now the consumer should be prepared to make his contribution to the agricultural economy, if such contribution became necessary because of falling prices. But under the present bill each pooling period is to stand on its own feet-and when I say that, I am using the minister's own words. In other words, under the present bill the farmer is not going to recoup a single dollar of the loss he sustained in the last four or five years. Moreover there is no guarantee that even with the lower floor price he will be able to sell all the wheat he produces.

A plan was discussed last November before the food and agriculture organization of the United Nations by which surplus food commodities might be moved to needy countries from the countries in which those surpluses occurred. The proposed arrangement may have had some faults, but the fact is that our government blocked any consideration of it as it was placed before the organization at that time. Speaking for the government, the Minister of Agriculture said that national policies would be able to deal with surplus commodities. Well, I hope the government will now act on that statement and take every bushel of wheat the western farmers produce. The government had a chance to support an international pooling arrangement for the sale of agricultural surpluses, but in its wisdom it decided that national policies were the best means by which to deal with surpluses. So now it is the responsibility of the government to make sure that wheat surpluses are either disposed of or stored, and that the farmer is not asked to bear a disproportionate share of the government's wheat policy in the future, as he has been asked to bear it in the past.

Mr. Ross (Souris):

Mr. Speaker, on a question of privilege, the Minister of Trade and Commerce (Mr. Howe) asked me a question, but because I did not have Hansard before me at that time I was not in a position to answer. I have now before me the page of Hansard in question, and from it I should like to quote the words of the Minister of Agriculture (Mr. Gardiner) as they are found at page 569, the issue of March 8, 1950. Then there is another matter of privilege-

Mr. Howe:

Would you mind reading it?

Mr. Ross (Souris):

Yes, but it is lengthy. The Minister of Agriculture is reported to have said:

What I want to say Is what the Prime Minister (Mr. St. Laurent) said to the farm delegation when that point was raised at the time the Canadian Federation of Agriculture met us a short time ago just before the opening of the session.

I shall read it all, so that no one can say that I have left some out. It continues:

When the remark was being made the other day the Prime Minister asked me if I intended to speak -and I said that I probably would-and suggested that that matter ought to be answered in the house just as he answered it to the farmers.

There is another reason that I am referring to it. It has not particularly to do with the affairs of my department; it has to do with the Department of Trade and Commerce. But the Minister of Trade and Commerce (Mr. Howe) was not here at the time that the farm delegation met the government and he therefore was not a party to the discussion. But he was here when the discussion took place as to whether or not the exchange would be made. What I wish to say to this house, and through this

house to the country, is that the Prime Minister stated to the farmers that it was decided during the first discussion that every dollar the wheat pool was entitled to as a result of the British agreement would be paid into the pool by the end of this crop year, on the basis on which the British agreement called for the deliveries, and that therefore there would be no possibility whatsoever of any loss being taken by the farmers of western Canada as a result of that exchange. The money will be paid into the pool by the government of Canada and any loss which is taken-if any loss is taken; and we do not expect that there will be any-would naturally be taken by the treasury or by a settlement that we get from the British under the "have regard to" clause rather than by the farmers themselves. I thought it was necessary that that matter should be cleared away at this time in order that we may avoid discussion of the idea in the future.

I think that is clear. Then, another point-

Mr. Howe:

It may be clear to you, but it

is not clear to me. The minister was talking about exchange loss, was he not?

Mr. Ross (Souris):

We had expected that

this amendment to the Canadian Wheat Board Act would not be brought up in the house while the committee on agriculture was sitting, as it is this morning, to discuss the Prairie Farm Assistance Act, in which many of us are vitally interested. The result is that we cannot have the members in the house. Indeed, the Minister of Agriculture himself is tied up in that committee and cannot be here to discuss a bill which is most important, and an arrangement which on behalf of this government he negotiated back in 1946. It is unfortunate that the government cannot arrange the business of the house so as to meet the convenience of members.

Mr. Howe:

We are not discussing past

negotiations in wheat. We are discussing a bill to amend the Canadian Wheat Board Act. If we could keep to that it would save a good deal of time, and also leave my hon. friend free to go to the committee on agriculture.

Mr. Robert Fair (Battle River):

Mr. Speaker, I am sorry that it has been found necessary to have the committee on agriculture and colonization sit this morning at the same time Bill No. 252 is being discussed in the house. Apparently that was unavoidable, but it has meant that those of us who belong to small groups have had to split up into still smaller numbers in order to be represented in both places.

Bill No. 252 will prolong the life of the wheat board until the end of July, 1953. Lest there be any mistake about it, I want to state again that we Social Crediters are in favour of the wheat board continuing in operation. While many people who do not understand the functions of the wheat board have blamed t for some of the things that have occurred

Canadian Wheat Board Act in the past, as a grower of grain I am quite satisfied that the wheat board is the best organization we have had up to date.

The hon. member for Souris (Mr. Ross) and the hon. member for Assiniboia (Mr. Argue) have covered many of the points that I had intended to deal with, and it would be needless repetition for me to go over them again. But I do want to stress the fact that the wheat growers of the prairie provinces have been subjected to unnecessarily heavy losses because of the operation of the British wheat agreement and the supplying of cheap bread to the Canadian people for the past number of years. Many people do not realize this, nor do they realize that because of the concessions made to the Canadian people the wheat growers of the three prairie provinces lost approximately $600 million in the crop years 1946, 1947, 1948 and 1949. That was quite apart from losses that were suffered on other agricultural products because of government policy.

I submit that there should be some settlement of the losses that have been sustained. The quotations read by the hon. member for Souris, as well as one I intend to read in a moment, should definitely prove the fact that these losses have been suffered by the farmer and that at least certain ministers of the government agree that that is so. The Ottawa Journal of February 10, 1949, contained the following article:

War sacrifices of farmers entitle them to fair prices.

Canadian farmers were "entitled now" to prices which would justify their wartime sacrifices, agriculture minister Gardiner said last night. He was speaking to the annual meeting of the Ontario Concentrated Milk Producers Association at the Chateau Laurier. More than 150 delegates are attending the two day session, the largest in several years.

"Because there have been declines in the United States, people here are suggesting that food prices should drop to that level, forgetting that prices there rose during the war to a peak never experienced here."

The whole idea in preventing high food prices in Canada during wartime was to allow a "levelling out" afterwards, Mr. Gardiner remarked.

He was "inclined to agree" with the popular statement that consumers did not appreciate what farmers did during the war in keeping the cost of food down. Mr. Gardiner said he was "surprised that farmers had not been able to sell that idea fully."

To reduce the cost of food would mean "bringing down returns to farmers".

"People are inclined to forget that farmers, and dairy farmers in particular, were asked to hold their hand on prices during the war-at a time when they might have charged almost what they wanted."

That statement was made by the Minister of Agriculture, who I believe knows agricultural conditions in Canada as well as or better than any of us. I am sorry to see that no steps are being taken by the government to settle up the losses sustained in the past. On

Canadian Wheat Board Act different occasions during the first few sessions, particularly on the last day of the session before the last general election, I have asked the Minister of Trade and Commerce, the Minister of Agriculture and the Prime Minister (Mr. St. Laurent) what the government intended to do about making good those losses, but up to the present time no statement has been made. I hope the Minister of Trade and Commerce will tell us what the government policy is, so that we may know whether the farmers will be asked to continue to carry these heavy losses.

I should like to know why the price of wheat has dropped the way it has. We find that today the cost of living index is at the highest point on record, 164, and we know that after the last war when the wheat board was established, we received an average price of $2.63 for wheat under wheat board operations. At that time the farmer's costs were not half what they are today. Over the past four year period the initial and interim prices have amounted to only $1.75.

The setting of an initial payment of $1.40 for next year is one method of inducing people to bid lower prices for our wheat. It is an admission by the government that the price of wheat should come down. As far as I know, the prices of most of the things the farmer must buy are still climbing; in only a very few cases has there been a drop in prices.

Many people realize that this question is of interest only to the farmers or grain growers, and I have been trying for some time to show that when the farmer has money, then Canadians as a whole are prosperous. Just as soon as the farmer is prevented, either by lack of crops or by poor prices, from having sufficient money to buy the products of industry, then the workers will find themselves on the street because there will be no jobs for them. This should be taken into .consideration by the government when dealing with agricultural products.

I want to say again that I am glad that the life of the wheat board is being prolonged. While the government and the wheat board have been doing a good job in getting rid of our wheat, I do not think sales should be pushed without adequate prices being received. It would be much better for us to grow a smaller amount of grain and sell it at prices which have a proper relationship to the things we have to buy.