Mr. Blackmore:

I shall endeavour to confine my remarks within the scope of the bill and within the scope of the government's financial policy, part of which the bill embodies.

Mr. Maclnnis:

Some scope.

Mr. J. H. Blackmore (Lethbridge):

Mr. Speaker, in the first place I should like to commend the hon. member for Acadia (Mr. Quelch) for the remarks he made. I say to the house, the government and the country that if the recommendations of the hon. member for Acadia are adopted in toto, no one in this country will ever be sorry that it was done, but if the recommendations of the hon. member for Acadia are disregarded in any particular, everybody in this country will have cause to be sorry to the extent to which they are not adopted. They represent the very finest constructive set of suggestions that can be offered at the present time. I think the Minister of Finance (Mr. Abbott) must realize that. If he does not he soon will.

If I may do so, I wish to refer for a minute or two to certain remarks that were made just before we adjourned at one o'clock. I wish to do so in order to show the kind of thing this country is heading towards unless the very wisest policies are pursued.

In his remarks in committee the Minister of National Revenue (Mr. McCann)-and I am quite certain his remarks have a direct bearing on the bill-used words which I am sure he will not be sorry to have repeated. He made his pronouncement with such solemnity, such warning, and it was so much applauded by his followers that I am sure

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he would like to have it repeated a dozen times. This is what he said:

Not at all; but I can tell the hon. member that before this thing is over-

He was referring to the war situation.

-we shall go back to a whole lot of things we used years ago. If we have to spend billions of dollars for war purposes, which produce no revenue, we shall have to be prepared to accept a measure of austerity in this country that we have not had for a long time.

I take it that is the considered opinion of the Department of Finance. The other day the Minister of Trade and Commerce (Mr. Howe) made an excellent speech from which I quoted several excerpts yesterday. He told the house, as found on page 448 of Hansard, that if individuals and governments co-operated there was no reason whatsoever why the Canadian people should not be able to take in their stride their increased preparedness and still have enough to supply them with a high standard of living. Hon. members can put the summary I have given of the remarks of the Minister of Trade and Commerce alongside the statement of the Minister of National Revenue, and can accept the one they consider the most authentic on the subject under discussion. I maintain that the Minister of Trade and Commerce made a good case when he pointed out that this country is able to produce far more goods of every kind than ever before. He pointed out that we shall require only a very small percentage of our productive capacity to meet our military obligations, as compared with the tremendous percentage we had to take from our production during the peak of the last war; and in several other ways he indicated that there was simply no excuse whatever for the adoption and implementation in this country of a policy that means scarcity and austerity, for the simple reason that our actual production now is so great and our productive capacity is capable of such a tremendous expansion.

For those who desire to get the gist of what the minister said I gave a number of quotations yesterday, which will be found at page 665 of Hansard. By reading those statements hon. members and the country at large can get the actual picture. It seems to me, Mr. Speaker, that there is a deliberate design on the part of a good many people in this country to sell the people of Canada the idea that we have to tighten our belts and go through the miseries of austerity and restriction in order to fight a war. As a matter of fact the very opposite is the case; the stronger we get our general economy, the higher the standard of living our people have, the more joyfully will they go out and meet the dangers and sacrifices which will come to us in plenty, in spite of anything we can do. As I see it, this is the question that faces the members of this

[Mr. Blackmore.l

house and the people of this country right now: Shall we submit to the imposition of a

regime of scarcity, or shall we insist that in a country with such abundant resources as Canada we shall enjoy a high standard of living and take this war in our stride?

Much has been said about inflation, and I should like to say a word about it as well. The hon. member for Kootenay West (Mr. Herridge) mentioned a number of articles the prices of which had increased in Toronto within the last two or three days. I ask any member of this house, any member of the government or anyone in the country: Do you believe any one of those increases was the result of too much money or of a scarcity of goods? Or were those increases the result of direct and in many cases mischievous manipulation on the part of those who found themselves in a position to manipulate? I challenge any one of the interested persons who increased prices as the hon. member for Kootenay West indicated to show that they had any justification at all for doing so. Certainly they are not justified on the ground of inflation resulting from too much money or the scarcity of goods. Imagine increasing the price of bread, of milk, of sugar or of similar commodities in Canada, because there is too much money! Why, that is enough to cause a person to have a nightmare. To suggest it is nonsense; yet an attempt is being made to sell that very idea to the people of Canada. If the members of this house permit themselves to be indoctrinated with that theory they will have cause for deep regret, and so will all the people who entrusted them with responsibility.

So much for inflation. I say that if we can increase our production sufficiently to keep ahead of the expenditures necessary for the conduct of the war effort, there need be no rise in the price of any commodity, and there need be scarcity in respect of only a very few commodities. There need be no rise in prices such as is ordinarily called inflation. In the light of that, just let us see whether there is any validity in the proposal I made when we were considering the excise tax resolution, that the amount of money which would ordinarily be collected under those excise taxes could have been created by the Bank of Canada just as well, with no ill effects. On the other hand the imposition of the excise tax will force up prices in respect of every single commodity affected either directly or indirectly.

Let us face the facts just as they are; let us be sane and calm and realistic about these matters, and we will come out of this struggle a happier, more prosperous and more powerful country. If I may I should like to

quote some words uttered this morning by the parliamentary assistant to the Minister of Finance (Mr. Sinclair); I am quite sure he will be happy to have these words repeated. He said:

I quite agree, and I think every member of the house, no matter what his financial theories or beliefs are, will agree, that so far as this $18 million is concerned, the printing presses of the Bank of Canada could turn out another $18 million to be put into circulation, and it would not make much more than a little ripple on the actual price structure of the country.

May I commend the brilliant young assistant on that remark. That is the most honest statement I have heard from anyone connected with the finance department in the fifteen years I have been in the House of Commons. It is entirely factual and accurate. I want to offer one suggestion to the young parliamentary assistant, whose intelligence and ability to conduct his affairs in the house I greatly admire, in spite of the fact that he made a mistake the day before yesterday, I think it was. I suggest to him that if there are more goods in Canada than the $18 million would buy without creating a scarcity, there would not be even "a little ripple" on "the price structure". I think the hon. member will readily recognize that as a statement of sound, simple, conservative fact.

Just to fortify the hon. member in his opinion, and to fortify me in mine, I would refer to the budget speech of the Minister of Finance (Mr. Abbott). He said something very good when he pointed out, as clearly as words could indicate, that the amount of money safely possible of being in circulation in a country is governed by the amount of goods and services available to be purchased with that money. In accordance with that statement the position of the parliamentary assistant was perfectly sound, and I entirely agree with him. But now may I go on to read a little more of what he said:

Of course if that is a good policy for pop and candy, we should do the same thing in respect to corporation taxes, excise taxes, customs duties, and so on.

There the parliamentary assistant made a very serious blunder. Just because it would be a good thing for you to take a pint or a quart of milk a day it does not follow that it would be equally good to take a gallon or two gallons a day. The point is that the amount of money which could be created and put into circulation depends entirely on the goods you have in the country to be bought with that money. Just as soon as the amount of money you issue exceeds the amount of goods available, there will be inflationary pressure which is likely to cause a rise in prices.

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Louder.

Mr. Blackmore:

I shall endeavour to speak loudly enough so that hon. members who are doing me the great compliment of listening closely, which I appreciate, may be able to hear.

I say the amount of money in circulation in a country should depend entirely upon the amount of goods available to be purchased. No matter how much money may be put into circulation, if the goods available to be purchased are equivalent to that amount of money there will be no inflationary pressure on prices. This is the fundamental principle upon which the whole concept of monetary reform is to be based. The Minister of Finance laid that principle down in unequivocal terms in his budget speech, which I would have quoted in this debate if it had been in order.

Consequently, if we say that this $18 million which would be raised by taxes on candy, pop and other things should be remitted and the $18 million printed by the Bank of Canada and put in the place of that tax, we are not arguing that you should not have a corporation tax or any other kind of taxes whatever. We are discussing this particular item. I do not know how much money could be safely created, and put into circulation in Canada today. It would depend upon how much production we have, and what productive capacity we have readily available for the distribution of consumer goods. This would have to be determined by a most careful study by the best experts available in the country. As the member for Peace River (Mr. Low) pointed out we would then be able to determine how much money could be issued. Our general contention, Mr. Speaker, is that, having discovered how much money could be so produced without creating a ripple in the price structure, that amount of money should be counted upon as part of the revenues of the country annually. It should be entered into the estimates annually by the minister. It should be discussed and voted upon by the house annually so that the whole subject would be under the control of this parliament, and we would be able to make what is physically possible in Canada actually financially possible.

Now that is reasonable, moderate and it is strictly in accordance with the principle laid down by the Minister of Finance. May I just read one more statement from the young parliamentary assistant, and then I close. He goes on:

Then we should recall also that at the peak of our war expenditures during the last war we were spending $6 billion a year. If we start turning out $6 billion a year in the Bank of Canada to meet these expenditures, then I say-and I

Excise Act, 1934

may be wrong but. I think we have some pretty good authorities to back me up-that we would be following exactly the same course as was followed by Germany after the first great war.

The last part about Germany is not completely accurate, but it is near enough for the minister's purpose. I would say that I would back the parliamentary assistant up, too, and every Social Crediter would back him up. We could not issue all of $6 billion of that money without drawing any off. The principle laid down by the member for Acadia (Mr. Quelch) shows that he fully comprehends the facts in relation to these matters. So, Mr. Speaker, I do urge on the government, and the members of the house, that they take into the most careful consideration immediately the use of Canada's credit as a means of supplementing income which they could use in creating good conditions in Canada and also in conducting a war.

Mr. Speaker:

Is it the pleasure of the house to adopt the motion?

Mr. Speaker:

When shall this bill be read a third time?

Mr. Abboii:

Now.

Mr. Knowles:

By leave.

Mr. Abboii moved

the third reading of the bill.

Motion agreed to and bill read the third time and passed.

Hon. Douglas Abboii (Minister of Finance) moved

the second reading of Bill No. 9, to amend the Excise Act, 1934.

Mr. Diefenbaker:

There were some questions asked of the parliamentary assistant this morning which I hope he is in a position to answer now.

Mr. Sinclair:

Mr. Chairman, it is for that reason we are calling the Excise Act before the Excise Tax Act. The Excise Act is the liquor tax bill, and when the other tax bill comes before the house I have a table available to answer those questions.

Mr. Speaker:

When shall this bill be read a third time?

Mr. Fournier (Hull):

Now.

[Mr. Blackmore.l

Mr. Knowles:

By leave.