Mr. J. W. Murphy (Lambion West):

Mr. Speaker, I should like to join with hon. members who have preceded me in the debate in complimenting the mover and seconder of the address. In view of what the minister has just said in regard to capital expenditures in connection with the Polymer Corporation at Sarnia, I should like again to express the hope that the government will give additional consideration to the protection of that very important area.

In his statement the minister said that the increase in the Polymer extension would amount to some $7 million. I speak for that riding when I say to the house that in addition to that we have an increase from the Imperial Oil Company to the extent of some $14 million, representing an increase in their refining capacity from about 65,000 up to around 80,000 barrels a day. We also have now under construction by Canadian Oil Refineries extensions valued at between $18 million and $20 million, and by the Dow Chemical Company extensions valued at about $3 million to $5 million.

One or two other industries have obtained properties to conduct operations essential to the war effort. It is unnecessary for me to remind the house how those various industries contributed at the time of the last war toward our war effort, and how this increased expansion is going to further the protection which is so essential at this time.

Last session when I raised this particular question the Minister of National Defence (Mr. Claxton) stated that we were relying in that area upon air protection from Detroit and London. I say in all sincerity that because of the importance of these industries to our war effort it is my hope that the minister will give further consideration to air protection for those very vital industries. In my view we should have not only an airport in that immediate vicinity, but some part of a fighter squadron.

The Minister of National Defence has outlined for Canada a defence program which will cost this country $5 billion in three years. Speaking as a layman in military matters, speaking as an ordinary taxpaying Canadian citizen, the situation as I see it today contains a tremendous element of tragedy. The tragedy simply is that this country will have one hundred ships to guard her coasts, and forty squadrons of aircraft to protect Canada and assist in the defence of Europe-but only $5 billion worth, and three years from now.

Meantime Canada has on the minister's desk a paper army, a paper navy and a paper air force. Of necessity the Canadian people will accept the minister's program and will

bear with determination the burden of a defence scheme that will cost them $1,600 million this coming year. But I would hazard that the people of Canada would accept that burden with a great deal more grace were they not so acutely aware that this government has failed them on so many scores in the post-war period. They would accept it in a better frame of mind if they were not now so conscious of the fact that the government has frittered away millions of defence dollars this last four or five years which could have been utilized to build so much of the equipment and so much of the strength that Canada's armed services need so urgently now.

Most of all they would accept it with greater equanimity if they could but be certain that Soviet Russia will permit Canada those three years in which to reconstruct and rearm. This is the real tragedy of the defence situation today as I see it, andi I am sure as the man in the street sees it. The threat of communism, the threat of Russia's imperialism, have not been sudden developments.

The menace of communist encroachment had become so apparent two years ago that it led to the formation of the north Atlantic alliance. That alliance has been functioning now for fifteen months, as the minister has noted. Surely fifteen months ago the Minister of National Defence was aware of the deficiencies in Canada's three armed services, aware that in entering a regional defensive alliance the country would be called upon for something more than comforting ministerial speeches to the effect that no power would dare attack twelve nations united in their determination to resist aggression.

I will readily concede that the organizational details had to be worked out, that discussions on national contributions to the pact consumed time. But the fact remains that this country, as did some of the others, entered the alliance with empty hands. Only the Korean conflict stirred the government to the point where it became aware that entering alliances and making commitments meant forces in being, meant troops trained and equipped, meant ships and guns and planes. .

The explanation that it is difficult to prod democracies into defensive preparations while peace remains is one that is given altogether too much currency. It is one that even now is being debunked-has been debunked. The Canadian people have been concerned, indeed alarmed, by the complacency of their own government, in preparing this country to

defend itself from the menace that has been altogether too apparent, not for weeks, not for months, but for years.

In matters of defence and defence responsibilities, the government has lagged far behind Canadian public opinion. Instead of leading the Canadian people, it has been led. Or rather, it has been compelled to face the international situation and to decide that it is high time that Canada looked to her own security and the security of her allies.

It was only a session or two ago that the Minister of National Defence told the house that the defence forces of Canada were quite able to meet any initial attack or raid on this country. How fatuous such a statement must appear now.

Canada is to have a five billion dollar three-year program of rearmament. Canadians can only hope and pray that Russia will sit back and wait for Canada and her north Atlantic alliance partners to prepare for war, before she ignites the powder-keg that will touch off global conflict.

Canadians can do nothing but accept the rearmament drive as outlined by the minister. They understand the necessity for it. They hope, as he does, that it will achieve its purpose-to demonstrate to Russia that peace, after all, is the wiser course. But they cannot help the fearful feeling that persists, that the government has lingered too long before setting its hand to the task.

But there is a companion piece to this tragedy of national defence that is being enacted daily in the private homes across this country-the homes of pensioners, the homes of wage and salary earners, farm homes and city homes. It is the daily drudgery of penny-pinching to make ends meet. It is the story of the housewife in Sarnia and in Ottawa, in Winnipeg and in Vancouver, who daily is fighting a losing battle against the rising cost of living. And for the housewife with a family of small children it is a bitter struggle as the household dollar shrinks to the point where food has to be sacrificed in order to buy clothes, or clothes have to be sacrificed in order that enough can be provided the family to eat.

' Here again the federal government stubbornly refuses to translate into action facts as they exist.

In the period immediately after the last war the Progressive Conservative party advocated the abolition of controls. I believed then, and I believe now, that such a policy would have contributed to the quicker return of Canadian stability; would have eliminated artificial commodity shortages and artificial price props. Canada then was striving to return to a wholly peacetime economy.

The Address-Mr. Murphy

Now the situation has completely changed. This country no longer can pretend that its economy is on a peacetime basis. The government has launched on a program of controls in order to channel essential materials into defence production. The needs of the day and the hour dictate such a course. But, added to that, the government, with its multi-million dollar orders for supplies and for defence production, has accentuated an inflationary condition that already has become critical for hundreds, indeed thousands of Canadian families.

The Canadian government defence dollar now is bidding against the Canadian housewife's dollar. And that bidding is an unequal contest. By its bulk purchases and its channelling of materials the government is reducing the availability of goods and merchandise on the consumer market. As that availability shrinks, the cost of the items remaining climbs higher and higher. In other words, government policy today is creating and aggravating inflation. In view of this condition, it is not inconsistent now for me, as a member of the Progressive Conservative party, to take a definite stand for a system of price controls in Canada.

Indeed, in view of the tremendous volume of defence spending that now will be pumped into the Canadian economy and into the balloon of inflation, it is my personal view that a mere pegging of prices is not enough. Such a course would be too little; already is too late. I believe this government, for once, should demonstrate its oft-boasted concern for the ordinary working people of Canada and roll back, and I mean roll back, prices to the point where the Canadian dollar represents something more than a fifty-cent piece.

And this is not an irresponsible suggestion. The government has the experience of the last war upon which to draw; it has the multi-million dollar dominion bureau of statistics personnel and facilities upon which it can call for assistance. And it still possesses in the Department of Trade and Commerce a shadow controls organization to which it quickly could give substance. Undoubtedly, the machinery necessary for a selective system of price controls would cost money. But, as I see it, the well-being of the Canadian people is just as vital a matter of defence as any other phase of the national concern and the national effort. The struggle for freedom could be lost at home just as surely as it could be lost in Europe or in Asia, by neglect or lack of preparedness, or lack of intelligent and vigorous leadership.

It might be worth while to call attention to a recent speech in Montreal by Donald Gordon, president of the Canadian National

The Address-Mr. Murphy Railways and former chairman of the wartime prices and trade board. Mr. Gordon is quoted as having said:

Runaway inflation is so destructive that any method1 of stopping it, no matter how difficult or clumsy it may be, is surely the lesser evil.

And he went on to say:

The defence program already has begun to enter into the cost of living because, in a grim and very real sense, it has become part of the cost of keeping alive.

To this he added:

Clearly, our real standard of living is going to depend on the productivity of the whole Canadian economy, as it has in the past ... If prices jump upwards, no one will cheer more lustily in private, or scream more noisily in public, than our communist fifth column, and you can be sure they will work diligently to speed up the whirling spiral of wages and prices.

With those views of Mr. Gordon I am wholeheartedly in accord. Significant, I think, was Mr. Gordon's reference to the necessity for increased production. Here is a prime sore spot in the present emergency, a sore spot which a little government care and tending and encouragement could do much to relieve and to heal. Bluntly, Canadian labour-the factory worker, the office worker, the farmer, the wage earner and the salary earner of Canada-cannot reconcile a two-sided Liberal government philosophy and doctrine, which on the one hand holds to the gospel of individual economy and sacrifice, while adhering, on the other, to a "business as usual", "spend as usual" creed on the part of the government.

True, the government probably has made halfhearted efforts to economize. But the time has come when it must demonstrate the political courage to neglect its constituency fortifications, to shore up the ramparts of the nation. The time has come for real and genuine economies in the whole range of government activity, from reduction in government and government delegation journey-ings and junketings, to cutbacks on deferrable public works. The political toll on the Canadian taxpayer's dollar is altogether too high. If the Canadian people are to be called upon for sacrifices that will whittle down their standard of living, then it would seem reasonable that the government must also lower its own cost of living. And that cost is the price of patronage projects.

But to get back to Canadian labour-unionized labour and unorganized labour: Today

Canadian manpower is being utilized to the full. There are pressing shortages for men in the skilled trades-toolmakers, diemakers and so on. These shortages will become more and more acute as the national defence program gains momentum. The throne speech made two or three references to the fact that

the international situation now had created for Canada an emergency situation. With that I agree. But I believe the government now should make some effort to bring home directly to Canadian workers the urgency of the world situation and the urgency of Canada's need for more and more production. To this end, I would suggest that through its Minister of Labour (Mr. Gregg) and its Department of Labour the government appeal to Canadian unions in all lines of endeavour to suspend for the duration of Canada's national emergency working contract clauses that stipulate the 40 hour week or less, and to permit working hours to be increased 10 per cent.

My own observations in this field have led me to believe that labour would be willing to increase its working hours, and thereby its production, at regular wage rates.

I believe, on the basis of patriotism, and as a direct contribution to Canada's defence effort, that labour would make this gesture. Indeed, many of the rank and file would welcome such an opportunity to supplement their present earnings. They would regard it in a sense as a way of earning their own cost of living bonus.

There would be a double incentive to the workers of Canada if such an appeal were made and accepted. There would be for the whole labour force the satisfaction that would come from the knowledge that they were doing their bit for democracy by increasing the production of all the goods and the materials needed for defence. There would be, too, genuine appreciation of the opportunity to add to their take-home pay. Perhaps the new advisory council on manpower, which the Minister of Labour (Mr. Gregg) announced to the house the other day, will consider this possibility in its survey and review of the Canadian labour scene.

A state of national emergency, however, applies not alone to one section of the population, one part of the national economy. A call for more production from Canadian unions and Canadian workers generally should be counterbalanced with a call on big business, big industry, to play its part.

The financial statements of a whole range of Canadian corporations proclaim Canadian prosperity and unprecedented profits. While it cannot be denied that a heavy burden of taxation upon industry and upon business discourages incentive, curtails expansion, and dries up investment capital, nevertheless these enterprises should be called upon now to bear a far greater part of the tax burden than they now are bearing.

These corporations and companies today are enjoying the profits of the free enterprise

system, the capitalist system, the system which all Canadians in all walks of life now are being called upon to defend, in and out of the services, and to the tune of $5 billion in the next three years. The fight of Canada and the free nations, then, is their fight just as much as it is the fight of Canada's liberty-loving citizens generally.

To the degree that the threat of Soviet Russia and of communism constitutes a national emergency for Canada, the Canadian government should be prepared to act with courage, with dispatch and vigour to draw taut the whole fabric of the Canadian economy. There must be equality of sacrifice. Canadian determination must match Russian ruthlessness.

It must be a source of regret to the Canadian government in the present emergent situation that in the years immediately following the last war it did so little to encourage the flow of immigration to this country. Canada today stands in need of skilled labour for her defence plants, labour for her farms, for her forests and mines, and for her armed services.

The Minister of Citizenship and Immigration (Mr. Harris) in this year of crisis has announced that the government has set its sights on something like 150,000 immigrants for 1951. The minister now has announced what he has described as a balanced program to provide more hands both on the farms and in the factories.

The government has taken several steps which it hopes will help to double the 1950 immigration total of 74,000. In succession it has lifted the wartime ban on German nationals, has decided on a fare subsidy plan for those who come to Canada by air, and has decided to advance passage money to those seeking to come to Canada by ship. But even a doubling of immigration may prove insufficient because it appears possible now that the manpower shortage will become more serious than present estimates indicate.

The Minister of Citizenship and Immigration is quoted as saying that Canada must push forward its industrial and economic expansion if it is to become an effective partner in the defensive preparations of the western world. How pitifully late is this statement of government policy! Now, in a year of national emergency, the government deems it wise to bring to Canada thousands of people from Europe to plug the gaps in Canada's manpower supply. Ever since the last war other nations have been actively encouraging British and European peoples to migrate. The best of the great reservoirs of manpower in Britain have been tapped while

The Address-Mr. Murphy Canada dallied. The same applies to Europe with its potential emigrants and its thousands of refugees eager to gain the freedom and the opportunities that this young country affords.

Today Australia is competing for new citizens more energetically than is Canada, and its goal of 200,000 immigrants annually is considerably greater than that of Canada. Reports from Europe indicate that at least 200,000 suitable refugees still are homeless, and that many Germans want to emigrate.

Tragically enough, this government well may have tarried too long. The manpower problems that confront Canada in all probability will be the major problems that confront Britain and other European nations in this emergency year of 1951. Already it is indicated that Britain is becoming reluctant to part with her manpower-the skilled workmen needed just as acutely in British defence and other plants as they are required here.

The new Minister of Citizenship and Immigration perhaps is to be congratulated that he has been able to persuade the government to enunciate a program of 150,000 immigrants for this year. But the uncertainties of the world picture now have created new difficulties which may prove far greater obstacles than any that have existed since the war with nazi Germany ended. Now, when the government apparently is sincere in its desire to increase Canada's population by immigration, it may find desirable immigrants far more difficult to obtain. As in the matter of national defence, the Canadian government now can but scramble to overhaul lost time, can but seek to repair damage already done.

About a year ago the defence minister told the house, when he was presenting his estimates, that:

Our planning must look several years ahead. On the one hand, we must start to work in time to produce the results in personnel and equipment when they are likely to be needed. On the other hand, we must avoid starting things now which might involve us in future commitments for the expenditure of money which might be needed for other defence purposes of greater priority.

Within months came Korea. It was immediately -clear to all Canadians that its government had not been looking ahead to such an eventuality. Personnel and equipment were not there to match Canadian ministerial speeches at home, at the United Nations and in the councils of the north Atlantic alliance. It would seem that the government now is looking three years ahead. But there have been dangerous delays. Canadians are ready to play their full part. But they look to the

The Address-Mr. Riley government now to demonstrate a degree of foresight and of leadership that hitherto has been conspicuous by its absence.

For the government's military preparedness program there will be general public sympathy and support. In the meantime there will be, too, the prayerful hope that once again the government has not been too late; that Soviet Russia will give Canada three years of grace in which to knit her economy for the strains of war, perhaps a war of nerves but nonetheless war, three years of grace in which to recruit, train, equip and field Canada's fighting contribution to the cause of freedom and democracy.

Mr. D. A. Riley (Saint John-Alberl):

Mr. Speaker, before I launch into the main topic of my remarks today I should like to apologize for not having been present here for a short time yesterday afternoon. With some of my constituents who had journeyed here from afar I was attending to the business of my constituency. I especially regret my absence because I was thereby denied the rare privilege of being mesmerized by the golden voice of a great speaker, one who awakens reminiscences of the grand old days when oratory flourished in this land and in this very house. As the logical utterances of this hon. member are carried about the commons as in a silvery chariot guided by his dulcet tones-

Mr. Graydon:

You are doing pretty well yourself.

Mr. Riley:

Thank you-one can fairly

envisage the spirits of Macdonald, Laurier and McGee gazing down with benign approval from the linen ceiling of this chamber. Some hon. members of the C.C.F. party are apparently aware of whom I speak, because I see signs of great enthusiasm over there. He is a kindly man, a great champion of the downtrodden, a friend of labour, a man of letters, a bachelor of arts, a teacher of man, an Ichabod Crane, a moulder of little minds. On those occasions when I see the hon. member for Saskatoon (Mr. Knight) part the curtains on the opposite side of this chamber and stride confidently to the seat which he occupies with such an air of wide dignity and legislative resolve I confess to a feeling of envy and wish secretly-to myself, mind you -that we could have such a giant on this side of the house so that I and some of my associates might look to him at times to guide our awkward steps as we bumble about in the dark recesses of the back benches. When I am lulled into revery by this soothing voice, this man with a heart so filled with the milk of human kindness, a heart which like that of St. Philip Neri well nigh bursts the

frail casement which encloses it, I say to myself, "Here is a noble man whose very soul would rebel in horror at the thought of stooping to mean, cheap, contemptible political advantages."

Like him, and following him I feel like a frail skiff wallowing in the foaming wake of a giant leviathan of the deep; like him, I must administer a gentle rebuke to the hon. member for Prescott (Mr. Bruneau). So in all kindness, having the highest regard for the Saskatoon Star-Phoenix, I must attempt to straighten out the question of how the hon. member for Saskatoon stands on price controls. Of course the hon. member has spoken at a number of meetings recently at which he expressed himself in favour of price controls, fixed ceiling prices on all commodities including-and the hon. member will correct me if I am wrong-labour, the price of wheat, and all other agricultural products. I would point out to the hon. member for Prescott that he might well take a lesson in unselfishness from the hon. member for Saskatoon when the latter thus tells the farmers of his own province that the prices of the commodities they produce must be pegged in safeguarding the interests of the common weal.

I was delighted to learn that the hon. member for Saskatoon had been in the maritimes, even in my own city. Though I had no word of his visit, I must confess I should have realized that the healthy glow which suffuses his cheeks bespeaks contact with the salt tang of the broad Atlantic. And witness his use of the word "fathom". It has a distinctly nautical flavour. I should have liked to introduce the hon. member to our dock workers. I should have liked to escort him down into the pit of our drydock. I should have liked to take him down into my own ward, where his soft and delicate hand, might have tingled from the healthy handclasp of the workingman. And I should have enjoyed even more taking him out for a short trip on the tossing waters of the bay of Fundy. I am sure the experiences thus gained by him, albeit new, would have been of inestimable value in his sincere effort to improve the lot of those of us who make up the proletariat of this country. He might have found that we maritimers, in our ignorance, I must admit, refer to his doctrines - perhaps erroneously - as the impracticable and meaningless theories of long-haired idealists; and he might have discovered how the misguided workingman of my own city seems intent only upon gaining for himself a decent standard of living and for his children an opportunity to fit themselves into society as useful Canadian citizens.

I agree that the hon. member might have found in my city some elderly folk living in rather modest circumstances. He neglected to add-and of course I do not accuse him of wilful neglect-that these people are very proud that, pitifully small though their means may toe, they have been rescued from an even worse fate by the sound administration which has been in power in this country, by the will of the people, since 1935.

My hon. friend referred to the slums of Saint John and mentioned having seen elderly folk living like rats in the garrets of those slums on an income which he gave as $42.50 a month. This comes as somewhat of a revelation to me, in that previously I had been under the impression that elderly people who existed on an income, not of $40 a month as we have for the elderly people of New Brunswick but of $42.50 a month, lived not in the unpretentious though solidly constructed houses of Saint John but in the shanty jungles within easy reach of his own home.

(Translation):

A few years ago, one of his colleagues, who has no longer the honour of sitting in the house, mentioned the slums she had seen from afar, in my city, during a whirlwind trip through the maritimes. Were she here today, she could repeat his remarks and they would be in harmony with what my hon. friend has said. Unfortunately, she had to go back before her electors, who are apparently fickle for they refused to repose once more their trust in her. I hope, and I believe, that with the decline and disappearance of socialist theories in our country, my hon. friend's career will come to an equally abrupt end.

This eager representative of the people who, in the past, filled his leisure deluging our legislators with countless pages of his turgid oratory for which he took inspiration in the warmth, safety and comfort of his quarters in parliament, had occasion, while on a tour of the maritime provinces, to come in contact with people whom he only knew, until then, from his perusal of books on socialism. I hope the experience he gained during that trip will encourage him from now on to support any government bill aimed at ensuring a more equitable distribution of that wealth which, thanks to Divine Providence, is so plentiful in this country, instead of cluttering up Hansard with senseless and groundless diatribes.

The Address-Mr. Riley

I hate referring to my good friend in such terms, but I know he will accept my remonstrances leniently and in the same spirit that prompted them.

(Text):

Mr. Speaker, I wish to congratulate the mover (Mr. McMillan) and the seconder (Mr. Breton) of the address in reply to the speech from the throne. I wish to extend also sincere congratulations to the Secretary of State for External Affairs (Mr. Pearson) who, with a number of his colleagues, has made such outstanding contributions in an honest and healthy endeavour to bring about peace among all men of all nations. The people in my part of the country look to the Secretary of State for External Affairs with unswerving confidence, conscious of his ability to exert an effort beyond the ordinary in bringing about the fulfilment of Canada's great role at the conference tables of the nations. In common with the people in other sections of Canada, we too are proud of him.

The Minister of National Defence (Mr. Claxton) must still recall the expressions of confidence accorded to him, and the enthusiasm with which he was greeted in the course of his recent tour of the maritimes. The citizens of my own constituency, and they but reflect the feeling of their neighbours across the land, are girding themselves for great sacrifices if such must be made for the preservation of our democratic way of life.

Today as I gaze over the heads of the executive who guide Canada's destiny I cannot help but refer to another man who seems to me to be somewhat like Gunga Din. I liken him in some respects, but not in all, to that famous Kipling character. From time to time he is literally belted and flayed by both friend and opponent, but when there is a job to be done requiring tremendous effort, wise and quick decision, and almost superhuman perseverance we look to him with deep respect, and we solicit the services of the right hon. Minister of Trade and Commerce (Mr. Howe) to perform another mighty task for our country.

We are about to embark upon a vast program of defence. Industrial Canada is prepared to increase production to an almost unheard-of degree. Defence orders have begun to pour out from Ottawa in an ever-increasing flow. We find that if we are to maintain our production schedule it may even be necessary to import labour from other lands. It is amazing for me to view and to hear about the vast expansion which industry in Ontario and Quebec, and in some of our western provinces, is undergoing now. I am proud

194 HOUSE OF COMMONS

The Address-Mr. Riley when I reflect that my country is well on the way to becoming one of the largest producer nations in the world.

At the same time it grieves me to have to state that in the course of a recent review of employment figures across Canada I have been shocked to learn that unemployment in some of our most important maritime centres extends far beyond the ten per cent mark. I am, therefore, impelled to urge once again, as I have urged before from the floor of this house, that a real effort be made to bring about some degree of decentralization of industry in our country. In my own city of Saint John the unemployment figure is down somewhat in comparison with last year's figure. This has been due in part to an accelerated movement of freight through our port during the course of the past few weeks, but it is also due in part to an accelerated movement of our skilled, semiskilled, and even unskilled labour to the booming industrial centres in the provinces of Quebec and Ontario.

Every day from all over the Atlantic provinces this movement continues. Maritime labour is once again answering the call of industry further inland. If our labour continues to thus migrate to the central provinces-

Mr. Wright:

Hear, hear.

Mr. Riley:

I am speaking also for the western provinces, as my hon. friend is well aware.

Mr. Wright:

I agree with you.

Mr. Riley:

It is fine to hear his voice raised occasionally in the House of Commons, because I have sat here for the last few days wondering when he was going to make, not a simple ineffective speech in opposition but one of those mighty speeches that we have heard him deliver in the past. I am keenly disappointed that this hon. member, who must definitely be aware of the great role which he must play if he is conscious of his responsibilities in parliament, has not given more effective opposition to this government which he persists in criticizing by means of catcalls in a sotto voce.

Mr. Knowles:

Somebody must have sent you a dictionary.

Mr. Wright:

He must have swallowed it.

Mr. Riley:

The catcalls are coming from the hon. member speaking at the moment, and it is so interesting to see him with a smile on his face that I do not deign to answer.

Mr. Knowles:

It is not a smile, I am laughing.

Mr. Riley:

It is even nicer to see you laughing. I am surprised that your face did not crack.

If our labour continues to thus migrate to the central provinces, I am afraid we are going to find ourselves in an even worse position that ever before in our history after the present crisis is over. The only profitable business venture in which we shall be able to engage will be the retailing of cheap cardboard suitcases. I do not want to give to hon. members the impression that I have come here to give voice to a plaintive wail, nor do I wish to convey to hon. members of this house the idea that I or the people whom I represent are looking to the government to create vast industrial centres in the Atlantic provinces. I want to point out, however, that the defence program on which we are now embarked, calling as it does for the expenditure of billions of dollars, provides for the government of this country a ripe opportunity to stimulate the development of the far east and the west, by assisting and encouraging both the establishment and the expansion of small industries.

I have taken the time to discuss our problems with many of my constituents and they consistently ask me to make known to the government that they are willing and ready to build and to manufacture whatever the government might suggest for them so to do. They would prefer, of course, to manufacture commodities which could be produced by small, light industries.

I have here on my desk a letter from a young man in my constituency. He is the type of young man who is intensely interested in the development of his own province. He is a member of a family which has built up several small industries and who himself sees for the Atlantic provinces a great future looming on the horizon. In this letter he makes an offer to supply the necessary land, buildings and operation for any type of industry for the manufacture of defence needs. The land and buildings which he makes available are in a favourable locality, close to facilities for shipment by water or rail. He has in mind that when the present crisis is over this plant could be used to house a stable peacetime industry.

I also have here on my desk another letter from one of our younger citizens who is intent upon merchandizing a commodity considered to be the best in quality and the most practical of its kind manufactured in this country. It is a commodity which is now being manufactured almost exclusively in the United States for the government of that country. The raw material is in such great

demand by the American manufacturers that the producers will have to curtail delivery in Canada unless the manufacturer here is able to get defence orders. That manufacturer himself, a ranking air force ace of the first great war, can increase his production to meet any government needs in this country. Despite our efforts to interest government officials in this commodity over the past few months we have not yet been successful. There is in my constituency a group of men who are at present preparing to found another industry. They have at their disposal an excellent plant for the type of commodity which they propose to produce. In addition, they have a great deal of extra floor space available, and1 they have asked me to in turn ask the heads of our government what they would like them to produce with this extra space. I had in Ottawa with me the other day one of these men, a highly skilled technical man who during the last world war managed several industrial plants engaged solely in the manufacture of defence items. I hope that his visit here will not have been in vain. Several other industries, already established, have sent representatives to me asking for direction on how they could best serve defence requirements, and they have stated their willingness to expand their plants to take care of whatever orders might be forthcoming. I have sent the names of these firms to the government agencies which might be interested and again I am hopeful that orders will be forthcoming. In checking over the lists of orders placed by Canadian Commercial Corporation since November 20, 1950, it has been a source of keen disappointment to me and to my constituents to note that orders going to the Atlantic provinces have been so pitifully small, so pitifully few and have amounted in value to such a meagre sum of money that I would be ashamed to place the figures on the record of this house.

I know that during the past two years some authorities here in Ottawa have at the instance of the Minister of Trade and Commerce (Mr. Howe) and the ministers representing the Atlantic provinces made extensive studies with a view to stimulating our economic development; but I again regret to say that the subjects of these studies have not yet tasted the fruits of their findings. I repeat that if ever there was an opportunity for the federal government to infuse a real stimulant into the economic life of our lagging provinces, that opportunity presents itself today. I should hate to have to thank those responsible a couple of years from now for an abundance only of sympathy received by our people. I would rather be able to say 80709-13a

The Address-Mr. Riley that the twenty-first parliament marked a milestone in the growth of the Atlantic provinces, the beginning of a realistic exploitation of their resources of materials and manpower.

It was a source of great satisfaction to me, as it was to many of my fellow easterners, to read the speech delivered by the premier of Ontario at the conference of federal and provincial governments here in Ottawa a short time ago. Speaking to the assembled delegates he expressed on behalf of his government a real appreciation of the problems which confront provinces other than his own. In the course of his remarks he directed attention to conditions in some of these other provinces, and I quote:

Problems associated with large concentrations of industry, are, however, in the main incidental to these areas having such industrial development. What I have said makes evident the desirability of an even development of Canada. Large concentrations of industry in particular places in Ontario have created large provincial problems. A development of Canada with large concentrations of industry in particular provinces and little industry elsewhere creates like problems.

Perhaps it would be well if this conference, as part of its work, would consider ways and means of providing for a more even industrial development across this country. It is very heartening indeed to see the expansion in the two far western provinces of British Columbia and Alberta.

May I say just here that I had hoped that when the welfare state had been introduced into Saskatchewan there might have been a better measure of industrial development there; but apparently it has not taken place. I continue with the quotation:

It is to be hoped that the other provinces may show a like development, and we here should do everything possible to stimulate such development. The more even the development of this country the better it will be for all of us.

I hope that the words of the premier of this great province reflect the general feeling of her people; for what he said on that occasion can bode well for the future of those provinces in less favourable geographic locations.

Mr. Victor Quelch (Acadia):

Mr. Speaker, I listened attentively to the Minister of Trade and Commerce (Mr. Howe) when he spoke this afternoon. It was my feeling that his speech was a strong argument in favour of the immediate introduction of an over-all system of price controls.

I jotted down a number of points he made when he was speaking-that our economy was operating at full capacity; that there were limiting factors in export trade, namely supplies; that the full impact of the defence program is yet to come; that the defence

196 HOUSE OF

The Address-Mr. Quelch program will disturb our way of living; that there will be shortages. All these point to an increase in the inflationary pressure.

He said there is no intention to impose an over-all system of price and wage control at this time, but that it may be necessary in the future. He does not rule out that possibility. He made it clear that the success of the overall system of price control in the last war was due to the fact that it was brought into operation overnight. I could not help thinking that if I were a businessman in this country, with no greater principles perhaps than many others, after hearing the minister's speech X would say to my colleagues, "Gentlemen, you have heard the program. The best thing for us to do is immediately to increase prices as other businesses are doing, or we will be left holding the bag." Judging by what is happening in Canada today, no doubt there are many businessmen who feel that way, and who perhaps will direct their energies to an even greater extent in that direction after reading the speech delivered by the Minister of Trade and Commerce.

We have before us a subamendment moved by the C.C.F. and reading as follows:

That the following words be added to the amendment, immediately after the words "rising cost of living" in the last line thereof:

"such as the immediate reimposition of price controls, and the payment of subsidies where necessary, so as to protect the health and living standards of the Canadian people."

That is an amendment to the amendment; if it were not I would offer an amendment to insert the words "and wage" after the word "price". However, I do not think that is really necessary. One may well take it as written, because surely no thinking person today would suggest for one moment that we could have an over-all system of price controls without at the same time controlling costs in that price structure. I understand the C.C.F. fully appreciates that fact. Therefore we can take it as though that were written into the amendment. Let me make it clear that in supporting the subamendment we do so on the definite understanding that an overall system of price controls would include control of all costs incurred in that price .structure, including of course wages.

When the Prime Minister (Mr. St. Laurent) *spoke in this debate with reference to controls he said, as reported at page 29 of Hansard: There cannot be enforcement in a country like ours against the feeling of a majority of the people of what is right and what is wrong.

Surely no one would suggest that today the majority of the people would not support a system of over-all price control. I do not think anyone would argue for one moment,

for example, that labour would oppose it. Labour has taken a strong stand in support of over-all price controls. I doubt very much if anyone would suggest that the general consumer in Canada would oppose it. Stop people on the street and ask them if they are in favour of price controls, and in ninety-nine cases out of a hundred they would say that they are.

Speaking as a farmer I would say the farmers would not oppose the introduction of price controls. I noticed that when the leader of the C.C.F. party was speaking, the hon. member for Mackenzie (Mr. Ferrie) said that the farmers were opposed to it. The farmers are not opposed to price controls, so long as they are brought in in an equitable manner. That was made clear in a resolution passed by the Canadian Federation of Agriculture in Calgary last month. A report of that convention, as it is contained in the Manitoba Co-Operator of February 1, 1951, states in part:

Producers were concerned with inflation and controls, and on this subject gave unanimous support to a resolution requesting that if anti-inflationary measures, taken by the government of Canada, include price control, these controls should not be first levied against foodstuffs, but should go into effect simultaneously with wage controls, industry profit controls and that any controls on foodstuffs be imposed on a proper relationship and costs of production.

I believe that is the general attitude of all farmers. They want price controls on all commodities. They are quite prepared to have the prices of agricultural products controlled, too, so long as the prices of those products are controlled at a parity with the general price level.

Certain people in the country today and certain members in the house are warning of the dire consequences of introducing an over-all system of price controls. The hon. member for Vancouver-Burrard (Mr. Mac-Dougall) adopted that attitude when speaking in the house on February 6. He quoted from the Financial Times of British Columbia and, in making the quotation, said he thought it was a sound and sensible argument.

Let me quote one part of the quotation to which he referred with approval in the house:

There is really no choice. Comprehensive direct controls would defeat the purpose in the following ways: They would drive the economy into a

regime of black markets and administrative paralysis: would destroy public morale and the incentive to produce, and would conceal inflation, without preventing it. They would in any event require crushing taxation to be practical at all.

This article states that price controls would destroy the incentive to produce. Would anyone suggest that the over-all system of price controls during the second world war

destroyed the incentive to produce? We know very well that during that war our production increased at a record pace, and to record levels. Furthermore when the hon. member suggests that price controls would require crushing taxation it must be obvious that if we do not have price controls we will have to have even heavier taxation. That was realized when price controls were introduced during the second world war.

These arguments and warnings against price controls are similar to some of the arguments we heard in the early stages of that war. For instance, on November 21,

1940, as reported at page 286 of Hansard, the minister of finance of that day, Mr. Ilsley, replying to a suggestion from this group that an over-all system of price control should be introduced, had this to say:

Price fixing of a few commodities, indeed rationing of a few commodities, is possible and need not have a very serious effect, but price-fixing and rationing on a general scale have at least two disadvantages. In the first place this would call for bureaucratic interference in the private affairs of all Canadian citizens.

After that he allowed his imagination to run riot and said that if we had price controls we would have to put a spy in every grocery store in Canada. He said that kind of thing might be all right for nazi Germany but that the people of Canada would not tolerate it. That was the statement of the minister of finance of that day. It is interesting to note however that he did a backward somersault in the following year, because within less than a year he had completely changed his mind. .

On November 6, 1941, he v|jis commenting on the government's proposal \o bring down an over-all system of price control.

This is what he had to say, and I quote from page 4148 of Hansard of November 6,

1941, as follows:

But there is no doubt that when the resources and labour of the country are pretty fully used, when we reach a stage of full employment, and are making more and more war materials, devoting a larger and larger proportion of our human and material resources to the production of war equipment and war materials, there is no doubt that inflationary forces of a very powerful type are at work.

And again:

One will see at once that, unless curbed, forces will push the price levels up and up and up. How can that be stopped? Since the beginning of the war we have pursued a severe taxation policy. We have tried to tax as much as possible of the purchasing power back into the exchequer. We have gone all across the country and combed it for small subscriptions to war savings certificates. We have sold bonds to the people. In these ways, namely by taxing and by borrowing, we have tried to get back from the people a large amount of this purchasing

The Address-Mr. Quelch power. We believed that this was a right policy and we believed that it was anti-inflationary. To a large extent it was.

And he goes on to say:

Therefore, in this war, no matter what the course has been in previous wars, so far as I know all countries have come to the conclusion that they must resort to direct measures of limitation and control of production, and price control.

Hon. members will notice that in those statements the minister stresses the fact that prices were steadily rising in spite of heavy taxes and fairly heavy borrowings of the savings of the people and for that reason price control was necessary. It is interesting to note what the price level was at that time when the minister drew attention to the way it was going up. He stated a serious situation had developed at that time. The price level had gone up from 108.2 in March 1941 to 115.1 in October, 1941. If the fact that the price level had gone up from 108.2 to 115.1 was then a justification for price control, then how much more justification there is today for price control when the cost of living index has gone up to around 172.5?

Mr. Knowles:

The food index is 220.