Mr. Green:

May I ask the Minister of

Finance why this vote for the R.C.M.P. is included in a war appropriation bill? Any information that has been given to date with regard to the deal for policing British Columbia has not been on the basis of a war measure. Why should we now have this vote in a war appropriation bill?

Mr. Abbott:

I do not know whether my

hon. friend was following me when I spoke earlier. However, I did go into that at great length. I explained that an agreement was entered into in August. When the appropriation act was passed in June it was not certain what the arrangement was going to be. It was not contemplated any additional supplementary estimates were being filed at this session, and I pointed out that this was not really related to defence but that, owing to the existing conditions of international uncertainty, it was desirable that the national police force should have an operating force in our two coastal provinces. As a matter of convenience it was included in this measure. I went into that in detail in my speech.

Mr. Green:

Just tagged that on because the government wishes to have the money passed.

Defence Appropriation Act

Mr. Abbott:

The money has to be voted and it could be included in this measure.

Mr. Coldwell:

I do not know whether the official opposition is going to open a general discussion which, I think, was more or less intended. I do not wish to usurp the first place. If they are prepared to go on I shall wait, but if not I shall proceed because there are some general remarks I should like to make.

Go ahead.

Mr. Coldwell:

I take it that I may begin them now. First of all I wish to say that I think everyone in the house, regardless of where he sits, will give general approval to the appropriation now before the committee. We should like to look into the document which is now being circulated, in order to inform ourselves as to the details. We know they are not rigid. We should like to know all about the appropriations we are asked to vote.

This is indeed a huge appropriation. My mind goes back to 1939. I well remember the appropriation on that occasion placed before the house. The special budget was for $100 million, and we authorized the raising by way of loan of another $100 million, namely a total sum of $200 million, when we declared war in 1939.

As the leader of the opposition has pointed out, the total of expenditures or commitments we shall make this year for defence is, in round figures, $1 420 million.

I should like to break that figure down so that we shall have the break-down before us. For the United Nations forces and for Korea there is $142 million. Then for arms for Europe, $300 million. Then we have defence research and development, $5 million. There are therefore appropriations of $447 million for those purposes. There are further commitments of $409 million. That makes the contemplated expenditures to be authorized at this session $856 -million. Then if we go back to the last session of parliament we find that in June we provided about $420 million cash for the current year for the Department of National Defence. There were further commitments over a period of time totalling $144 million, making the budget and commitments in June $564 million.

If we add those together we find that for the current year there will be cash expenditures and commitments for defence totalling $1,420 million, of which the cash commitments this year appear to be $872 million. Let us compare that with the total appropriation of $200 million made in September, 1939. When that is done we shall realize to what extent it is necessary to make preparations

Defence Appropriation Act for national defence at this time and in order to assist the United Nations in defending the world against the threat of aggression.

This house is entitled to the most complete statement, both as to the necessity for spending this money-to some extent that was undertaken by the minister of external affairs and the Minister of National Defence during the debate on the address-and as to how the money is to be spent. We have supported the proposal of the official opposition for the establishment of a committee on national defence. I think it is rather interesting to look over the record and note that a similar committee was suggested by the late Mr. Mackenzie King on May 20, 1940, and because of the present government's refusal to accept a similar proposal I should like to quote what he said as reported on page 49 of Hansard of that date. He was dealing with a resolution of a character similar to the one with which we are dealing, and he said:

There should be a general debate on the resolution. We can then refer the appropriation bill to a committee or committees of the House of Commons in order that there may be disclosed to the members of those committees information which would not probably be in the public interest to place on the pages of Hansard or to broadcast in debate to the House of Commons.

Further on in the same speech he said:

1 should like to emphasize that the setting up of these committees will not preclude in any way any member from debating any subject to which he may desire to call the attention of the house and the country, and I give my assurance to hon. members that the constitution of such committees will not be used as a pretext for concealing any information which it is in the public interest to disclose.

The former prime minister suggested that there might be one committee or even three committees to deal with the three branches of the armed services, army, air and navy. The prime minister added this:

-officers of the department and of the service will attend the committees when required.

On May 21 the then leader of the opposition, the late Hon. R. B. Hanson, asked for a clarification of Mr. King's suggestion because there was some hesitation on his part to accept the proposal because of the fear that certain secret information might be given and the hands of the opposition thus tied. In other words, the government might regard as secret something which the opposition might not think was of a secret nature and their hands would be tied in the house.

On May 28 I urged that the committee should be appointed and Mr. King made a further explanation. Mr. Hanson then stated that the official opposition had an open mind on the matter, but, apparently from the remarks that had been made by the prime

I Mr. Coldwell.]

minister, had come to the conclusion, and I quote from page 273 of Hansard of May 28, as follows:

-that no useful purpose will be served by referring the bill to such committees.

I have not looked up subsequent Hansards, but as far as I can recollect no further request of that nature was made. But something else was done. A committee was established on March 4, 1941, to examine expenditure defrayed out of moneys provided by parliament. Because of the huge expenditures that are now being made I am suggesting to the house that a similar committee should be established, either at this session or at the first opportunity at the next session of parliament, to look into the expenditures by these departments and to operate very much as the war expenditures committee operated during the whole of the second great war. On March 4, 1941, Mr. King moved this resolution:

That a select committee be appointed to examine the expenditure defrayed out of moneys provided by parliament for the defence services, and for other services directly connected with the war, and to report what, if any, economies consistent with the execution of the policy decided by the government may be effected therein, and that notwithstanding standing order 65 the committee shall consist of twenty-four members as follows:

I shall not bother to give the names of the members.

-with power to send for persons, papers and records; to examine witnesses and to report from time to time to the house.

The government as well as hon. members of the house were proud of the work done by that committee, not that it discovered anything that was wrong with the expenditures but because it was felt that the fact the committee had been established and the fact that officials of the departments had come before it guaranteed to the house and to the country that there would be some supervision over the expenditures made and would help to prevent what might otherwise have been wasteful expenditures.

The amount authorized by the war appropriation bill of 1940 did not exceed $700 million but under the present legislation we are going to provide $856 million by way of cash and commitments, so if there was a need for the establishment of a committee in 1940 there is a much greater need now when we are appropriating some $156 million more than we did when the previous committee was established. That is in addition to the large amounts that were passed in the main estimates in June and to which I have already referred. I should of course like to see the original suggestion of the late prime minister put into effect and have a committee to review war expenditures. May I also say that that committee-and for some time I was

a member of it-sat not only while parliament was in session but also when parliament was in recess. I think that it gave close attention to the work of the departments and was able to bring before the house from time to time valuable information as to the manner in which the appropriations were being spent.

Having said that, and knowing that we must do our full part financially and in every other way in this United Nations attempt to stop further aggression in the world, I think there are some other matters that we must take into consideration besides the actual amounts of the expenditures. These expenditures are huge. I do not know what the Minister of Finance will suggest when we go into committee of ways and means and he brings down proposals for further taxation or something of that sort, but in spite of anything that we may do these expenditures are bound to have an inflationary effect. At the moment the country is suffering from the highest price level in the history of the land. Men and women are wondering how they are going to be able to pay their rent, clothe their children and buy the necessaries of life. May I say that even some of those who are under pension or allowances from the government are finding themselves in a very difficult position indeed.

For example, I had a letter this morning from a war veteran in my constituency-and of course I shall be taking up the case directly with the minister-who told me that his wife had been working and had been earning a small amount over and above the war veterans allowance of $70 a month he is receiving. A few days ago an inspector called and told the wife that she had better quit the job, because she was making rather more than the $260 permitted in addition to the allowance, or her husband would lose the allowance. But if you add together his pension and what she was making you will find that they were getting less than $100 a month. No matter where you live in this country today, no married couple, with or without a family, can live decently, pay rent, buy fuel, clothe themselves and buy food at the high prices now existing for anything in the neighbourhood of $100 per month.

Therefore I say to the government, and we have already ' placed our view before the house by way of an amendment to the amendment to the motion for an address in reply to the speech from the throne, that we believe that the government should take the power to institute certain beneficial controls. We voted for the amendment of the official opposition because it too protested against the inflation under which the country is now suffering, although they did not tell us exactly what steps they would take to curtail

Defence Appropriation Act inflation or to control or bring down the cost of living, as the case may be. They voted against our proposal to introduce measures of control. There is no reason why the government under such conditions should not act to protect the Canadian people from the mounting cost of living, either by beneficial controls or by subsidies, whichever may be preferable in the circumstances.

The Prime Minister excused the government the other day on the ground that a dominion-provincial conference was pending. The inference was that we should be wary lest we did anything now which would more or less annoy the provincial premiers. But people today are suffering from the inflated cost of living and they are expecting parliament to do something about it at this time because obviously the provinces cannot. I shall not refer to the judgment of our own supreme court when the government referred to it the matter of rent control and the court held that during an emergency, because of the scarcity of homes and so on in the country, parliament had the right to continue rent control, but there is recorded in Western Weekly Reports, volume 2, page 6, of the issue of May-August, 1946, the judgment of Lord Simon in the case of Attorney General of Ontario v. Canada Temperance Federation (1946). This is what Lord Simon said in the privy council:

In their lordships' opinion, the true test must be found in the real subject matter of the legislation. If it is such that it goes beyond local or provincial concern or interests and must from its inherent nature be the concern of the dominion as a whole-

Then he gives various citations.

__then it will fall within the competence of the

dominion parliament as a matter affecting the peace, order and good government of Canada, though it may in another aspect touch upon matters specially reserved to the provincial legislatures. War and pestilence, no doubt, are instances; so too may be the drink or drug traffic, or the carrying of arms. In Russel v. the Queen, Sir Montague Smith gave as an instance of valid dominion legislation a law which prohibited or restricted the sale or exposure of cattle having a contagious disease.

Then he went on to say:

Nor is the validity of the legislation, when due to its inherent nature, affected because there may still be room for enactments by a provincial legislature dealing with an aspect of the same subject in so far as it specially affects that province.

If I understand the meaning of English words-and not being a lawyer of course I do not profess to be an authority on interpreting legal phraseology-it would seem to me to mean that where the matter concerns the whole dominion, even though it touches the right of the legislatures with respect to that particular matter, the dominion would

Defence Appropriation Act have the right to legislate even if the provinces also had the right to legislate in the same field. That being the case, I think the excuse that the government makes has really very little point to it, and that it is their duty, as it is the duty of this parliament, to protect our people from the soaring price level to which they have been subjected in the last few months, and which is rising almost from day to day.

In the debate on the address various hon. members pointed to the recent increases in the price of bread, sugar and other commodities. Some commodities, such as bread and flour, are of course under the control of very powerful combines in this country. That was indicated in the two reports of the commissioner under the Combines Investigation Act. So it seems to me this parliament has a duty to protect the people against the inflation and the high cost of living under which they are suffering at this time. I repeat that our supreme court held that parliament could retain rent control in what might and should be considered to be an emergency situation due to the shortage of accommodation. When we appropriate this huge sum of money, much of which will be put into circulation in this country, even if the government intends through taxation or by compulsory savings or in some other way to withdraw as much as possible of that purchasing power, we are still in danger of further inflation. Indeed, if we turn production away from some of the basic things needed by the people of Canada into munitions of war and supplies that are needed for the armed forces, this creates further scarcities, and even if the amount of money in circulation is restricted in some way, will cause further increases in prices. Since the outbreak of the war in Korea, as hon. members from British Columbia know and as I am sure my colleague from Kootenay West could tell the committee, because of the needs of the armed forces of the United States and the demand for lumber to meet those needs, the cost of lumber, already high, has reached unprecedented heights in that province. In view of our housing shortage this is an illustration of what army demands mean to civilian supply.

So, Mr. Chairman, I think we have the right and indeed the obligation to urge upon the government with all the strength within us that they do something effective in the way of controlling the economy or, by the institution of subsidies, bring the prices of ordinary goods within reach of the average man and woman. If that is not done we shall see grave industrial unrest. There are two reasons why I do not want to see such industrial unrest in this country. One is that

fMr. Cold well.]

Mr. Low:

I too should like to make a general statement at this time, Mr. Chairman, in order to place our position clearly before the committee. I realize that the government is not asking me for advice, and that they probably will not pay me much for any that I give. I am, however, going to give them some just the same, as a result of the experiences which we have had over the years. I am going to try, if I can, to draw a few lessons at least from the experience that Canada had during the last war.

I think that everyone must realize that we cannot in this house divorce the economic considerations from the military ones. As a matter of fact, we all must realize that whenever we undertake to make large military commitments we inevitably cause some important effect upon the economy of our country. What I have to say today will in some measure touch upon the economic aspects of the whole situation as we must face it in the years ahead.

When the Minister of Finance had his estimates before the house last June, I felt that somebody was doing his level best to cut down the amounts of money which the minister must have thought he required if he were to build adequate defences for this country. I believe I said at the time in this committee that I felt that someone was doing some unnecessary cheeseparing; and I assured the minister then that the Social Credit group in the house felt that he should have more money. I told him that if the treasury board or anyone else was denying him the amounts he required, he should let us know and the members of this house would stand behind him in his demand that sufficient money be granted to make it possible for him to do the job that he thought ought to be done. I am not standing here today in a spirit of "I told you so". What I want to say in all seriousness, though, Mr. Chairman, is this. In my judgment the treasury board has been niggardly. It has

been shortsighted. It has unnecessarily pared down the defence estimates that the minister must have asked for last June, and I think that it will stand condemned before the Canadian people today because of that shortsightedness. Because of what they have done in cutting the minister's estimates back to about $425 million, as they were before us in June, I believe the treasury board have retarded beyond the safety mark the preparations for the defence of this country. If the country is to be prepared as it ought to be, in the light of all the information that has been given to us here, it looks to me as though it is going to be necessary for the government to increase those appropriations for defence purposes substantially each year perhaps until we reach not less than a billion dollars a year. I cannot see anything less than a billion a year; certainly not less and maybe more if Russia, China and other nations that are now taking a poor view of western people and western countries show an inclination to become more openly hostile to the rest of the world. If it does require a billion dollars a year for defence appropriations, then the Canadian budget will have to amount to something around $3 billion a year if we are to continue the present level of services. Well, that is an astounding amount of money. But I say, Mr. Chairman, that that sum is not beyond the ability of the Canadian people to carry for some years to come, provided that the gross national production of Canada is kept at a high level.

This year the Minister of Finance forecast that Canada would produce $16,250 million worth of goods and services. Even this vast figure is not anything like the potential of our productive capacity. If we geared our efforts to it, saw the necessity for it and took advantage of every opportunity to increase our efficiency in plants, and made full use of manpower, I am satisfied that we could bring our productive capacity up to $18 billion and more a year. It seems to us that the government must make every effort to get production of every kind of goods and services at the highest possible level, let us say, at the optimum level. I do not know how many people understand the meaning of that term, but it is a good one. It sounds good, anyway.

We realize that emphasis must be placed on essentials, of course, those essentials which will be required if we are to become strong and defend ourselves against any possible aggression. That is as it should be; but even so, it appears to us, Mr. Chairman, that there is enough plant in Canada, with all of the expansion that has been going on since 1939,

and enough manpower and machinery available, to enable Canada to step up her production for defence purposes without very seriously, at least for the moment, affecting the level of most of the essentials of good living.

If we get into a full-scale war-and God forbid; I sincerely hope that no such thing will happen-then of course the situation might be essentially changed; but let me stress once again that we do feel Canada can step up her production for defence purposes to the level that I have suggested, perhaps a billion dollars a year, and without in any way seriously affecting the level of most of the essentials of good living for the Canadian people.

It is not only because we are anxious to maintain a fairly high standard of living for our people that we consider a high level of gross national production is essential; that is, higher than the present level of gross national production. There is another very good reason, namely, to provide the broadest possible tax base. I am sure the Minister of Finance will appreciate how much easier it is to extract revenue from the people of the country, so that he can do a good job not only on national defence but also on every branch of government, if the gross national production, as well as the national income, is kept at a high level. Conversely the minister, and every one of us, must know how difficult it becomes to extract sufficient revenue if we try to work on a shrinking tax base. It seems to me, when we come into a period of stress such as we now face, one of our considerations ought to be to keep our tax base as broad as we possibly can. The only way in which that can be done is to keep our gross national production at a high level together, as I said, with national income. Any policies that will induce high production of all kinds of goods and services, essentials as well as some of those that the people may wish for a good standard of living, must be formulated and applied.

On the other hand, I think it is the obligation of the government, and of this parliament, to avoid applying any policies that will discourage production. Therefore it seems to me we must be careful with any new type of taxation that the government might think it necessary to apply. It may be that at the present stage there is no serious consideration of new tax measures. I suppose the Minister of Finance may be thinking that he can use to finance our commitments for the rest of this fiscal year at least some of the substantial surpluses that have been built up during the past four or five months since the end of the

Defence Appropriation Act last fiscal year. But at the present time there are doubtless at least some tax measures in operation which do discourage all-out efforts to produce at an optimum level. I know of some, and I know of a good many people throughout the country who declare that they would and could produce considerably more of the things which they have been producing were it not for the discouragement they meet with from the high level of taxation. We believe it is almost a sacred obligation of the government to remove those tax measures which are discouraging production, or in the alternative, to modify them so as to remove what discouragement there may be in them.

While I am speaking on taxation, Mr. Chairman, let me say to the government that the Social Credit group here is absolutely opposed to the imposition of any new taxation until something effective has been done to bring the prices and the cost of living into manageable proportions, particularly for the lower income groups of our population.

For one moment I should like to draw a picture, following up what the hon. member for Rosetown-Biggar has said, and also following up what I said the other day in talking on another measure. This country has to take seriously the whole situation of the cost of living; otherwise we are going to have a long chain of disruption and difficulties, labour troubles and all that sort of thing. Let me draw the picture. I represent, as hon. members know, the Peace River constituency of Alberta, a vast area of alternate wood and rocky land, and level, fertile prairie land, an area, Mr. Chairman, that covers between one-fourth and one-third of the total province of Alberta. It is a very large country. This year the crops were late. It looked as if they had splendid prospects for a time. Then drought set in, and a good many of the crops in certain areas did deteriorate. They came along quite well as a result of late rains after July 1, but they were away behind their usual time of development. But about the time that they began to look good in the middle of July, a devastating hailstorm, eighty miles long and averaging seven to eight miles, and up to sixteen miles in width, swept across that country and simply beat the crops into the earth. I saw the result of it while I was travelling through the constituency in July. I know what a terrible thing that hailstorm was, and what prospects it causes the people to face this year. They were still counting their losses from the terrible hail, a thing which rarely strikes the Peace river country, when about the middle of August a blanket of snow, in some places four inches deep, fell over that whole area and flattened the

286 HOUSE OF

Defence Appropriation Act green crops to the earth. That snowstorm was followed by three or four nights of frost. The crops were green. They were just in the milk stage, as they call it, and of course everyone knows what that means. The farmers will probably lose a good 50 per cent, if not more than that, of all their grain crops this year.

These people have been facing terrific costs, and they have not yet been able to build up any surplus reserves since the war. The farmers have been trying to replace machinery that had been worn out and that they could not replace during the war. They have been trying to paint barns and to carry out maintenance and repairs which were deferred during a time when they could not get supplies. As a result, they are in no position to take those heavy losses and at the same time meet the terrific costs of living in Canada today.

What are they going to do, when they have to pay a dollar for a piece of bully beef that could have been bought for ten cents a short time ago? What are they going to do if they have to continue to pay high prices for almost everything that enters into everyday living costs? It is impossible for them to get along. If this country is going to be united in its effort, and if there is going to be anything like the equality of sacrifice there must be, then the government will be obligated to do' something to bring prices within manageable proportions of those people particularly in the lower income groups, and those on farms who have been stricken as they were in Peace river this year.

I fully agree with what was said by the hon. member for Rosetown-Biggar. The people in the country expect the government to take some effective action with respect to the cost of living so as to make it possible for them to meet the new sacrifices they will be called upon to make while at the same time living at a reasonable standard of comfort. It should be obvious to anyone that if the gross national production of Canada is kept at a high level, let us say for the sake of argument at $18 billion a year, which is not out of the question, then a total budget of $3 billion which includes $1 billion for defence would not be excessive, for a few years at least. The $3 billion out of $18 billion total gross national production represents a budget of about 16| per cent of the gross national production.

From what reading I have been able to do I understand that Russia's budget for military purposes has continued at about 13 per cent of the national income, and has been that for some time. That is a very large proportion,

[Mr. Xow.l

and we shall have to do something compar able if we expect to be able to defenc ourselves against aggressors of the type wt face.

However, it is also obvious that if we le1 the tax base shrink, or even if we allow the national production to remain at the $H billion present level, then the percentage required by the federal government coulc easily become excessive and more oppressive to the people of this country.

I note that in the resolution certain power: are provided for borrowing by the government. The limit is set at about $300 million I think the minister said this afternoon thai this provision concerning the borrowing powei was not directly related to the defence appropriation; it may be for the refinancing of bond issues which become due. If that i: so, then what I shall now say might no' entirely apply; but we shall run into a time when borrowing for defence purposes may become not only necessary but imperative

If we come to the stage where it is necessary to do some borrowing for anti-inflationary purposes, then I strongly advocate that the borrowing be not done from the chartered banks. When the hon. member foi Greenwood was speaking the other day in the debate in reply to the speech from the throne, I believe he said it was anticipatec that the government would be borrowinj from the banks. That would be the wors kind of inflation, because when the government borrows from a bank the bank create: new money and issues it to the governmen in return for the bonds of the governmen left on deposit with the bank.

Certainly that would be a most inflationary process and, so far as we are concerned would not fill the bill at all. If there i: to be any borrowing for anti-inflationary purposes, then it seems to me we should no commit ourselves to an arrangement witt the chartered banks of this country for ; service which the government's own treasury or, in the alternative, the Bank of Canadi could render just as well, and at a mucl lesser cost.

If the government finds it necessary ti reduce the potential purchasing power so a: to prevent inflation, then we suggest tha they think of applying a compulsory saving: program to be made effective on those income: above the level of the present income taj exemption. Certainly it would not be wis< to impose any compulsory saving schemi on those incomes less than the income taj exemption level, because those people in the lower brackets are having a hard enougl time now to meet the high living costs, with out the addition of any compulsory saving:

program. Certainly those above that level may be able to carry some of the burden at least of an anti-inflationary policy.

We say that an anti-inflationary policy of compulsory savings of the type I have suggested would be preferable to any policy of heavy taxation the government may have in mind.

We favour the setting up of a defence committee such as has been suggested. We voted for the amendment proposed by the leader of the opposition because we felt that a committee of the kind suggested would be most essential. We feel that is the only way members of the House of Commons can be kept in close touch with the expenditures to be made out of the appropriations, and also keep in close touch with the whole situation as it develops in the days ahead. We feel we are entitled to a committee, and we ask that the government give serious consideration to the request for one.

The minister said in his initial statement today something like this: "We cannot escape the real cost involved in the present preparation for our defence. We must all revise our plans in some way." That is true; anyone who realizes the seriousness of the present situation must admit that to a very large degree the minister was correct in that statement. Our effort will have some adverse effects; it is bound to have adverse effects upon the living standards of every Canadian, and we have to adjust our thinking to that level and that reality. All must admit, too, that we shall have to buckle down and get ourselves ready for the real business, calling off any holidays we have been having since 1945.

But, having said that, I would say also that is no reason why the government should be sadistic in any way in subjecting the people of Canada to unnecessary austerity. We have had examples of such all too often in the past. We will support the government in applying those measures which will establish in this country, in reality, equality of sacrifice, and nothing less will satisfy us. I do not see why in the world it should be considered that the common, ordinary run of Canadian should have to put his nose to the grindstone any more than the fellows who are uncommon, and who are not the ordinary run of Canadians. We must all be in the same boat. It seems to me every policy laid down that has an effect on the Canadian economy and upon our defence position must be devised with that principle in mind, namely to distribute so far as possible the burden of sacrifice, so that there may be equality.

We say, and we say it in all sincerity and earnestness, that we do not want to see applied in this country any foolish sugar

Defence Appropriation Act policy such as we had in the last war. We do not want any S. R. Noble put in the position of dictatorship where he can deny Canadians the right to produce their own sugar. That was done in the last war, and was done unnecessarily, and in the sole interests of those few people who wanted to profit out of the war, and who did profit out of the war. We are asking that that sort of thing shall not be done in the present crisis. We say that the people of Canada should be induced to produce to the utmost of their ability all the sugar that Canada requires. That can be done without diverting manpower or effort from the essential defence efforts.

The same thing can be done with fats. During the last war we allowed ourselves to get into a very bad position in regard to essential oils. We foolishly allowed shortages to creep upon us when there was no need. We were shortsighted and there was some sadistic fellow in a position of importance who was inflated by his own ego and who imposed the most unnecessary austerity on the Canadian people. The research council has discovered that Canada can produce all the essential oils and edible fats she needs from such lowly plants as rape and stink-weed, or what they call pennycress. We should begin to give serious consideration to the advice of the research council scientists and prepare ourselves in every way possible by scattering the necessary information among our producers so that when the time comes we can have the seed available. The farmers will be ready to produce fats that are now brought in from other countries. The same thing can be said of many other essentials of life.

In conclusion I want to say that we support the government in asking for this appropriation for defence in order to make Canada as nearly secure as our resources and our manpower and our own efforts can. possibly make us. The Social Credit group will back up the minister in the request he makes, but we do ask him to support our request for a committee so that we can constantly scrutinize expenditures in the interests of efficiency and also to be sure that in the interests of the people we have all the information that is necessary to make wise decisions.

Mr. Brooks:

Mr. Chairman, I am not going to presume to speak for my party as the leader of the C.C.F. has suggested that someone might do. I did not take part in the debate on the address in reply to the speech from the throne but there are a few things I should like to say at this time. I would point out that the people in my constituency and province are much concerned with the

Defence Appropriation Act situation that exists at the present time. I feel quite sure that as usual they are determined to do their full share whenever the necessary occasion may arise.

They perhaps have felt the results of the Korean war a little more than most other parts of Canada because one of the first casualties in the Canadian forces was a young man from my own constituency. We all read with regret the account of how four young men had lost their lives a few days ago at Petawawa and, as I say, one of those young men lived quite close to my own home town. I have written a letter of sympathy to his parents and I know it would be the wish of all hon. members to extend their sympathy not only to his parents but to the parents of all the young men who lost their lives at that time.

This resolution calls for a large expenditure of money. After listening to the debates of the last few days I am satisfied that hon. members from all parts of Canada are behind the government in the expenditure of large sums of money, but they feel that care should be taken to see that that money is properly expended and that a dollar in value is received for every dollar spent.

The leader of the C.C.F. referred to the situation that existed in 1939 just before the last great war. I was a member of the house at that time and I recall the debates that took place. There was considerable isolationist feeling in those days in different parts of Canada. The leader of the C.C.F. expressed doubts as to whether money should be voted at that time for military expenditure. After the debates of the last few days I am sure we must all come to the conclusion that there is little isolationist feeling in Canada today. I could not understand how there could be any isolationist feeling with the threat that exists against our freedom.

The leader of the Social Credit group has referred to equality of sacrifice. I am sure that anyone who has read the history of the last two great wars will admit that there was no equality of sacrifice in Canada in those days. If Canada is again called upon to bear the terrific burdens that it has borne in the past two wars there must be equality of sacrifice, not only with regard to the things mentioned by the leader of the Social Credit group but also with regard to many other matters.

We have been discussing the war in Korea and today we are greatly concerned with the situation there. We do not know from hour to hour whether things will continue to get

worse and whether there will be another Dunkirk there. We hope that that will not happen, that the beachhead will be held and that the United Nations may be able to go on and liberate South Korea. But whatever happens I feel that the Korean war will not have been in vain. I believe that we shall have obtained much benefit from it even though it should be an immediate failure.

There were many lessons that we had to learn and I do not think this country or any other democratic country would have learned those lessons without their being brought to their attention in the way they have been in Korea. The first lesson we have to learn perhaps is that the communist countries with Russia at their head are prepared to fight anywhere and everywhere and that the democratic nations must be prepared to meet them anywhere and everywhere.

We have learned also that the United Nations as such is of very little good unless it has an army or a police force to carry out its ideas and oppose aggression wherever it may occur. I think we were all happy and proud in 1945 and 1946 when the United Nations was formed, but since the trouble has occurred in Korea we have realized the weaknesses in that organization. I am satisfied that had the Korean war not occurred we would not be prepared today to offer a defence against communism which we have great fear may advance against us. I think we have also learned from the experience of the Korean war that the equipment of the forces of the communist nations, supplied mostly by Russia, is not inferior to that of the democratic nations. Unfortunately the experience has been that Russian equipment used by the North Koreans in the present war is superior in many ways to United States equipment. Russian tanks have proved to be better than United States tanks. It is surprising to me that with this knowledge, and it was known months ago, there was not a greater improvement in tanks manufactured in the United States, Canada and other countries.

We have also learned that the bazooka, the defence which the United States forces used in the early part of the war, was not equal to the task of stopping the tanks which the North Koreans brought against them. These points only emphasize to us at this time, when we are voting many millions of dollars, that the investment we make must not be made in armament of inferior quality, whether it be tanks, guns, aeroplanes or anything else. We must obtain the very best to compete

with nations which, if they go to war, have shown us that they intend to have the very best.

I think this war has also taught us more than any other that the people of Asia, whom we more or less despised in our ignorance, the people of China, Korea and these other nations, are not the inferior men physically or in fighting qualities that we thought they were. This is a lesson which it is very wise to learn. I listened to the Secretary of State for External Affairs say the other day that we should know our enemy, or at least know the communists. We certainly should know the communists, and we should also know the valour of the men whom we may have to fight in Asia, Africa, or wherever it may be.

The Korean war has also taught us that the atomic bomb, of which the United States was supposed to have the sole possession for such a long time, is no defence against war. No atomic bombs have been used in the Korean war. Although we do not know in what quantity, we have learned that Russia also has the atomic bomb. Therefore it would be most unwise for Canada or any other democratic nation to depend on the atomic bomb for protection.

Listening to the debates I think we have also learned that the spending of large sums of money does not necessarily mean that a country is prepared for war. I do not wish to repeat the arguments that we have heard during the last few days except to say that in the last few years we have spent a billion and a half, and when war came we had practically nothing to show for it. For that reason I say that the billion and a half we intend to spend must be spent with economy and efficiency, and must be spent with an eye to the things that are needed, if indeed we should need them at a later date.

In the matter of munitions and supplies what I am about to say may seem like an old story to the Minister of Trade and Commerce. I mentioned it during the last war. Now we are preparing to expend another billion and a half. In the past I have asked the Minister of Trade and Commerce to see that there was equal distribution of the money expended on war munitions and supplies in all parts of Canada. I cannot help but remember, as the people of the maritime provinces remember, the great neglect from which we suffered during the last war. We do not want another war to take place but we know from the moneys we are voting that there will be many millions of dollars expended in Canada. I believe that some of that money should be spent in the maritime 69262-19

Defence Appropriation Act provinces and in western Canada rather than so much of it in the provinces of Ontario and Quebec.

Possibly the minister will tell us that we have not the hydroelectric power to supply the energy or the necessary factories to provide facilites in the maritime provinces. I should like to point out to the minister that since the last war we have increased our supply of hydroelectric power in the maritime provinces. I would also point out to him that during the last war many millions of dollars were spent by the government in the province of Quebec to develop hydroelectric power in order to produce munitions. It is not for any selfish reason that we ask for the manufacture of munitions in the maritime provinces. I believe it is a good sound principle in these times, when it is possible that there may be bombing in different parts of Canada, that our arsenals and the manufacture of various munitions should be widespread and not concentrated all in certain large towns and cities. Spread them across Canada and there will be less danger of all of them being destroyed.

I might also mention the effect of the last war on the development of trade and business after the war was over. Large factories and plants in Ontario and Quebec were bought for a song by different commercial businesses. As a result these provinces were provided with a further opportunity to develop, and the other provinces of Canada were placed under a greater handicap. Therefore I hope the minister will bear these matters in mind when he makes his plans for the manufacture of further munitions and supplies with the money to be voted.

After the last war we all hoped that there would be no further wars, although I sometimes think we must have been a little blind in the last three or four years in not noticing the developments in Russia and other communist countries. The result was that most of the camps throughout Canada were torn down and dismantled. We have learned that the armies of China and Korea are using war supplies supplied to Russia in the last war by Great Britain, Canada and the United States. The communist countries saved all these munitions of war while we in Canada got rid of them. So far as the camp at Sussex, my home town, is concerned, there is still a nucleus of a camp, and something can be salvaged at Debert, Windsor, Fredericton, and probably other places across Canada. I think the government would be well advised to investigate what the situation is with respect to these different camps and see if something cannot be salvaged.

Defence Appropriation Act

As I said, Mr. Chairman, it is not my intention to make any extended remarks, but I wished to call these few matters to the attention of the government. I can assure them that as far as my constituents are concerned, and I feel that I can speak for the people of my own province of New Brunswick, they are prepared to do anything and everything they can to further this effort in opposition to the threat of communism facing us today.

Mr. Ross (Souris):

I should like to endorse the remarks of the two previous speakers, my colleague from Royal and the leader of the Social Credit party, the hon. member for Peace River, in regard to equality of sacrifice. I would also join in what they said, and what is being said by a great many people throughout this country as to the disappointment we all felt when, after having voted vast sums of money last session, we learned that we were not better prepared to meet this great threat at this time. That was a great disappointment to the people.

This question of equality of sacrifice can be played upon in many ways, and it can also be misunderstood. I know there is no comparison whatever between sacrifice of those young men who fight on land, on sea and in the air and the sacrifice of those of us who stay at home and endeavour to support them. I must say, however, that I believe there was great inequality of sacrifice during the last war, and it is still fresh in our memory. Certainly there was no equality of sacrifice among the various groups within our own country. I know how difficult it is to control the economy of a nation in time of war, but many inequalities were allowed to develop during the last war, and as a matter of fact some of them were permitted by the government to continue during the years following that war.

The measure before us today will provide a very large amount of money. The resolution is divided into five paragraphs, and provides for a total of $858,768,021. It is with the fourth paragraph of the resolution that I should like to deal at the moment. I notice that on each page of this break-down with which we have been supplied mention is made of foodstuffs, and that is the matter to which I want to devote some little time.

First, however, I should like to endorse the remarks of the previous speaker, when he pleaded with the Minister of Trade and Commerce in carrying out his responsibilities in connection with the purchase of defence supplies to use his influence to distribute industry across this country, and in so doing to decentralize it. We all remember that under this government during the past war great sums of money were voted for industrial

assistance and expansion, and that the great bulk of that expansion took place where the great concentration of population exists; that is, in the two provinces of Ontario and Quebec. I can assure the minister, however, that there are many points in western Canada where we have side by side both the raw materials and the electric power for their development. That used to be the stock argument as to wtif a greater industrial development did not take place in the west. Now we have both materials and power in western Canada, so I hope the responsible ministers will keep this in mind and take every opportunity to decentralize industry. As has been said many times, apart from being sound economics, with the type of warfare we are liable to have if there should be another war, which God forbid, it is even more important than ever that your population and industry be decentralized.

Coming back to the question of foodstuffs, I realize that it does not go down so well to remind this house that the agricultural producers of this country subsidized the consumers of both Canada and Great Britain to the extent of more than twice the amount of this appropriation resolution, both during the later years of the war and the years following, up to 1948. That constituted a great inequality in itself. Then following the war we had this government gambling with what I regard as the greatest food item we produce; that is, wheat. I have heard the Minister of Agriculture many times argue that there is more food value in cereal wheat than in any other foodstuff in the world, and that it is easier to handle; and I agree with him. On behalf of this government and acting for the Minister of Trade and Commerce, the Minister of Agriculture negotiated an agreement with Great Britain covering a period of four years, which was to be carried out by means of a five-year pool. Certainly that was a gamble against the production of future years, for most of the six hundred million bushels involved had not been produced, and the greater portion had not been even seeded.

The government and the minister do not argue today as they did at that time. I do not agree with everything printed by the Winnipeg Free Press, but its weekly issue of July 26 carries an article containing a resume of all the speeches made on this subject by the Minister of Agriculture and others concerned with it, year by year from 1946 on, the year the contract was signed. The article is headed "The last of the bilateral wheat agreements," and without reading it I can say it reveals very interesting circumstances.

Mr. Howe:

If I may ask my hon. friend one question, I would remind him that the contract in question covered the sale of the crops of 1946, 1947, 1948 and 1949. How does he relate this to a war sacrifice?

Mr. Ross (Souris):

I am coming to that, if I am in order. I would have been very much in order had the Speaker been in the chair, and that was the point I tried to make this afternoon. More than that, the minister has promised a settlement of that five-year pool during this calendar year. I do not know how he is going to bring that about, but I shall have a question to ask him in that connection later on. I point out, however, that the minister said that contract was made possible by the sacrifices of the Canadian wheat producers. That statement can be found in Hansard.

Mr. Howe:

Were those war sacrifices?

Mr. Ross (Souris):

Some were and some were not. I do not know whether the minister was in his seat when I commenced to speak, but I referred to the later years of the war and the years following the war; I made that quite clear. In any event we had this agreement, which has to be dealt with by the government this fall, and the right hon. gentleman will be the responsible minister. I do not know how he is going to make this settlement. We do know that the pool showed a balance of five or six cents a bushel remaining at the end of the last crop year, July 31, 1949. In addition we have the past crop year of 1949-50, which will have to be taken into account, and I imagine there will be some profit from that crop to add to what is in the fund already. I will sit down now if the minister wishes to rise and tell the committee that nothing will be added by the government to the money of the producers remaining in that pool at the end of the year. I should be glad to have a statement from the minister.

Mr. Howe:

If my hon. friend can relate his remarks to the resolution in any way I should be very glad to deal with the matter at some length.

Mr. Ross (Souris):

On June 5 of this year, just three months ago today, we passed Bill No. 302, giving the minister great powers in connection with defence purchasing. In that bill animals, agricultural products and foodstuffs were mentioned; I do not think the minister will deny that. Then in this bit of a break-down we were handed today, which I have in my hand, the item "food supplies" appears on every page, in connection with each branch of the service. I think the minister will admit that.

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Mr. Howe:

We will try to spend the money as well as we can.

Mr. Ross (Souris):

I am not arguing about that. I am arguing that because of the great trimming the wheat producers have taken in the past many of them, including myself, are fearful of the future under this government, with the way they are handling wheat today. I am pointing out that during the pool period to which I have referred the producers took a loss amounting to hundreds of millions of dollars. There should be some adjustment.

Mr. Howe:

How much did they lose from 1930 to 1935?

Mr. Ross (Souris):

I have not those figures before me, but I am dealing with this which the minister himself had a hand in, and now it is his responsibility, because the Canadian wheat board is under the Department of Trade and Commerce for which the minister is responsible. I have told you where you can find copies of quotations of the Minister of Agriculture on many occasions: at Portage la Prairie in 1946, at Dauphin in 1947 and in this House of Commons on several occasions; and the minister himself who has just taken his seat, last June, when he said that the contract with Britain had been disappointing and that there would be no further settlement from there. Without quoting further from the Free Press, I may say that they have many articles blaming the wheat pool and others for having asked for this contract. I am not in a position to say whether they did ask for it or not, but an editorial is published here in The Country Guide of August 1950. I know the editor well.