Mr. George A. Drew (Leader of the Opposition):

Mr. Speaker, since this bill first came before the house a number of things have occurred which have some bearing on the effect of the bill itself, if and when it becomes law. The Prime Minister (Mr. St. Laurent), in words that have already been referred to today, indicated that any controls which might be considered or introduced by the government would be dealt with under this act. Having regard to what has occurred since the bill was first introduced and the last discussion took place, it does seem to me that there are certain considerations which should be in the minds of members at this time and which, even at this stage of the bill, should be presented to the government as reasons for a clearer statement of government intention.

We have been told that it is the intention of the government not to introduce price or similar controls at this time. In fact less than a week ago the Prime Minister made a speech in which it was indicated that the government would be unlikely to introduce controls of that nature unless we were in something approaching an all-out war. Since that time we have had before us the defence production bill, and we have heard certain discussions of that bill which certainly gives most sweeping powers to the government over various commodities, supplies and requirements of the people which do affect the cost of living.

In discussing this subject again today I wish to emphasize one fact. In advocating the adoption of some measure of control which will meet the immediate inflationary pressures I do so in the belief that we should

Emergency Powers Act do all we can in this country to preserve a free economy. I have sought to make it clear that I am convinced that unless something is done to restrain the mounting spiral of inflation there will be a diminishing measure of confidence in the minds of the people of Canada in the ordinary operation of that free economy.

I have said on an earlier occasion, and I repeat today, that the sooner appropriate steps are taken to exercise that measure of control which is needed to balance the sudden and unusual inflationary pressures created by government spending, the sooner we may hope to return to a really free economy. It seems to me that to those who believe in a free economy the proposition before us is simple.

A free economy must depend upon free production and free distribution. Where there is free production and competition in production, which through skill and design and efficiency bring about a reduction in cost, then that competition in itself can reduce the ultimate price of the article. It is only

where there is a possibility of reduction in cost by competition, and competition within a free economy, that there will be offered any measure of protection to the general public.

However, once there is a broad and substantial restriction of free production I submit it is perfectly clear that you cannot have free and unrestrained distribution unless there is a large measure of danger that the public will pay the price of quick and easy speculation in those articles which are then in short supply.

Those who listened to an interview over the radio last night with the Minister of Trade and Commerce (Mr. Howe) heard this very point mentioned. He pointed out that at the present time there is a serious shortage of a number of basic commodities and important supplies. He pointed out the basic consideration that should be in the mind of everyone discussing this subject at this time -the abnormal demands of the government for all kinds of supplies for defence equipment, limiting the amount of those supplies available for ordinary civilian consumption, and therefore creating the most inflationary kind of pressure that there can be.

It is in the presence of such a situation that we see in the last month a jump in the cost of living to the highest point in Canadian history, and we realize today that the Canadian dollar is only a fifty-seven cent dollar based on its value ten years ago. What is more, we know that the food dollar, which is the most important dollar in every household, is today well below fifty cents. That is the situation with which we are

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Emergency Powers Act confronted, and it is to meet it that I have urged in this house that the government, supporting the proposition that a free economy is what we wish to preserve, should maintain confidence in that free system by balancing in some way the immense pressures that have already been created and the far greater pressures that are going to come within the next few months. To use a colloquial expression, but one that everyone understands and will come to understand in relation to this subject, we haven't seen anything yet. It is the immense expenditure contemplated by the defence production bill now before the house that is going to create inflationary pressures far beyond anything we have yet known.

We have sought some information from the government as to positive steps that might be taken by them under this bill. Before we pass the bill I would point out that in presenting this argument I was careful to emphasize my own belief that we should not simply adopt measures that had been tried once before. I suggested rather that, with all the accumulated skill built up as a result of the administration of other control measures, there should be devised in Canada the most flexible and most effective type of control, the type of control best designed to preserve our free economy. I used the expression that I thought it was possible for the Canadian people, young and vigorous as they are, to devise a system of control which will meet the emergency pressures until civilian and military production going side by side are capable of meeting the demands in both fields.

In bringing this subject before the house again at this stage of the discussion, I wish to say that there is no single country in the world, including the United States, which can hope to stem inflation as well as we can in Canada. I make that statement because there is no country in the world today which has the opportunity and the ability to expand its production in the way we can to meet both civilian and defence requirements. The moment that we can meet both civilian and defence requirements in any line of production, then the need for control over that particular article or commodity disappears.

It is while there is a short supply that the need exists, and the shorter the supply of any article as a result of defence spending the greater the inflationary pressure on that particular article or commodity. I was careful to point out that we were simply asking that, with all the experience that has been gained, this government introduce the most flexible and effective method of controls which would meet the situation.

It will be recalled, Mr. Speaker, that when I urged that the house be informed as to anything that was contemplated by the government under this measure to deal with this subject, we were told that the government had nothing to place before us. For that reason I was interested to learn that the Minister of Trade and Commerce was prepared to make a statement on this subject last night. As reported by the Canadian Press, the Minister of Trade and Commerce last night informed the people of Canada over a national radio network that control of profit margins is being considered by the government to meet the situation which I am now discussing. In view of the requests we have made in the house, I suggest that the appropriate place for such information to be conveyed is in the House of Commons where we are discussing this subject.

In the Canadian Press report of the statement by the Minister of Trade and Commerce last night, as contained in today's Globe and Mail, I find these words under dateline of March 5:

Trade Minister Howe said tonight the government, still opposed to a general price freeze, is considering commodity margin of profit control as one of several weapons to fight price inflation. "We'll have something to say on that before many weeks go by" . . .

This subject, Mr. Speaker, has been under consideration for many months. It was discussed in the House of Commons last September. At that time I introduced an amendment to the motion for the adoption of the address in reply to the speech from the throne expressing regret that the government had not taken appropriate steps to deal with inflation and the cost of living. The subject was then discussed in some detail, and obviously the government has had it under consideration all this time. I suggest that before the house gives third reading to the bill, without debating the contents of the bill which has now been dealt with so far as the principle is concerned on second reading and so far as detail is concerned in committee, the house should be informed exactly what the government intends to put into operation when the bill becomes law. If the government has in mind the introduction of control of profit margins, then may I urge upon the Prime Minister the desirability of the people's representatives in the House of Commons being informed today just what the plans are which were referred to last night by the Minister of Trade and Commerce.

There is one more reason why we should be informed, and why the people of Canada should be informed, through the press and over the radio, what the plans are. The

Minister of Trade and Commerce, no matter what his views may be on other subjects, is not so innocent of ordinary practices in this country to be in any doubt as to what will happen if it is believed there is going to be control of profits and nothing is done. He has already indicated what happens in cases of that kind, and we would assume, in view of his association with price controls on earlier occasions, that he would speak with some knowledge on this subject. He pointed out that one of the difficulties in dealing with controls at this stage is that the government did not move in as they did when price controls were introduced before. He explained that the element of surprise was lacking, and for that reason he said adjustments had already been made to meet the situation. Then, he used those words which the house is not likely to forget, "They are all set."

If the people to whom the minister was referring on that occasion were set, they are going to take care that they are even more set if they think controls over profits are to be introduced. This is simply another inflationary pressure created by the government itself. The minister, who seems to have such an influence over most departments of government, has said that within a couple of weeks we may expect further information. I suggest that the time for that information to be received by this house is now, and before this bill receives third reading.

There is one other consideration that should be in the minds of the members in dealing with this subject. The Prime Minister indicated some of the reasons why this bill was being drawn in such general terms. He also indicated that he thought there should be some limitation on the scope of the bill when it becomes law, because he believed it was desirable to impress upon the people of Canada the fact that we are not in a period of war; that we are in fact striving for peace, and that is the idea that should be emphasized in the public mind. I believe there was general agreement with that proposition. What was emphasized in relation to that subject, however, was the fact that there is a long period of emergency ahead of us, and that it would be desirable to retain as much as possible of our ordinary peacetime atmosphere and ordinary peacetime arrangements as we would be able to carry forward over an extended period with as little strain as possible upon our economy and upon our people. It is for that reason that concern should be felt about wide powers of this kind unless the full intention of the government under those powers is indicated to members of parliament.

Emergency Powers Act

In regard to the sweeping nature of the powers, the Prime Minister had something to say which I thought did not receive sufficient attention at the time, and which should be in the minds of the members before this bill becomes law. Referring to the reason for the powers which, with few exceptions, are as wide as the powers under the War Measures Act, the Prime Minister had this to say, as reported at page 807 of Hansard for March 1:

With respect to the extent of the powers, it would be a much easier thing to do if we could come here and say: This is what is going to have to be done and nothing more is required.

A little later on the same page he had this to say:

But with the possibility of various things that we just cannot determine at this time having to be done, in order to meet the changing conditions, I suggest that the powers have to be drawn in fairly broad terms. We did not want them any broader than the Department of Justice told us was enough. But what they say is this: These things mean

restrictions on some individuals and they are subject to contestation before the courts. It is therefore important to have the language so broad that the courts will not say: "You have gone beyond what

parliament authorized you to do."

Parliament, Mr. Speaker, has not authorized the government to do anything, because we have not been told what the government intends to do. Therefore, this would be an utterly meaningless statement unless it were intended by the wording of this bill that the government, by order in council, from time to time may do things far beyond anything that has been suggested in this chamber during the discussion of the bill. We have asked the government to tell us a single thing they intend to do, and they have not told us one thing. Therefore the suggestion that parliament is going to say what the government can do, and that the government is only going to do what parliament has said it can do, is meaningless and will be misleading to the people of this country if they accept it as the limitation under which the government legislates by order in council within the terms of this bill when it becomes law. It is for that reason, Mr. Speaker, I repeat my request that the Prime Minister inform us fully as to what these controls of the profit margin are to which the Minister of Trade and Commerce has referred, so that there may not be further inflation by procrastination; further inflation by invitation; further inflation simply because someone is trying to get set. In using those expressions I am only using the words that have been employed by the Minister of Trade and Commerce, who has had wide experience in dealing with the subject matter that might be contemplated by this bill.

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Emergency Powers Act

I know, sir, that the Prime Minister, in his own mind, would have no thought that we should abandon our democratic parliamentary procedure. He has had too long and too intimate an experience with the profession with which he has been so prominently associated in distinguished capacities to be willing to contemplate a situation of that kind. But may I point out to him that the pages of history all too frequently record cases in which freedom was surrendered in the name of efficiency in the face of an emergency. Over and over again throughout history there have been tragic examples of free legislative bodies handing over their authority to meet an emergency and then not being able to recapture that authority at some future time when those with a different point of view were unwilling to surrender those powers.

To the statement that I have just made the Prime Minister can answer that this bill will terminate next year. In that respect may I point out, Mr. Speaker, that if in the present emergency this bill is necessary, then it will be necessary next year to renew the measure, or an even stronger one, because we are passing a complementary measure, the Defence Production Act, which is to continue for five years and which obviously will go in double harness with this bill now before us. Therefore unless the government is going to introduce or bring into effect by proclamation a still stronger bill, this legislation will continue for some years, and there may come a time when, through pressures, through force of circumstances that we cannot now envisage, a government of another day might be unwilling to abandon the powers so obtained.

The Prime Minister may also say: This is in the hands of parliament. In answer I would say that we have not seen too much evidence, during this session or preceding ones, that there is that measure of independent expression of opinion by the large number of supporters of the government in this house which would suggest to those who are concerned about the trend we now see that we might hope that within this house there would be a vote which would place any effective restraint upon a government which commanded a majority of that kind. Unless we return to established and tested principles of parliamentary democracy we may in fact at this hour be in the twilight of freedom here in Canada, no matter how much we believe in freedom itself. We Canadians can pay the penalty of surrender just as other people have paid the penalty of surrender of those principles which protected the freedom in which they believed.

I suggest, sir, that at this time the Prime Minister should inform us as to the subject matter of the statement made by the Minister of Trade and Commerce last night; and also that at this stage the Prime Minister should give us sufficient indication of what is intended so that we who represent the people in all parts of Canada may know in fact what it is that parliament is really being asked to do and what powers we are in fact conferring upon this government.

Mr. R. R. Knight (Saskatoon):

Mr. Speaker, I hope to relate my discussion of this bill to the matter of the high cost of living and the matter of price control. It is, of course, true that this matter has been discussed before. I cannot at the moment think of anything that has not been said about it before. But I am hopeful that the constant dropping of water may help to wear away the stone, and that finally this government may come to the realization that the members of this house and the' people whom they represent in the country are thinking seriously about this thing.

As to my attempt this afternoon to move that the house be adjourned while the matter be discussed, I of course bow gracefully to the ruling of Mr. Speaker, who is always so fair in his decisions. I should like to point out that since the Herridge-Knight amendment-if I may call it that-was moved things have progressed in the matter of the high cost of living, as has been mentioned on an occasion or two here this afternoon. That is the reason why I thought there was sufficient urgency in the matter for it to be brought before the house and the country without any delay. The rise in the cost of living is a source of continual agitation to the public mind. Everywhere it is a subject of private conversation and of public protest. Everywhere people are finding difficulty in purchasing the necessities of life without going into debt. The situation is only tolerable to those who have sufficiently high incomes as not to be too badly affected by it; that is, those people with respect to whom a high proportion of their income is not spent upon their living. Even those whose wages have been increased in some conformity with the increase in the cost of living are waging a losing battle in that their wages and salaries cannot keep pace with increased costs. Even the farmer, whom we have usually been accustomed to regard1 as a person who can live in any case because he is more selfsufficient than most of us in town, is having his.own troubles. In fact, I think that he is particularly hard hit, so great has been the rise in the cost of the production of the commodities by the sale of which he earns his bread). Indeed, while the cost of his living

has been going up, the price index of what he has to sell has been going down somewhat during the last two years.

But it is the people on small fixed incomes who are the greatest sufferers. First in that class come the old age pensioners. We as members of parliament come in contact with many of these people and we know exactly the conditions in which they live. Any increase they have had in pension, either in the form of the basic pension or in bonuses, has been long ago wiped out and absorbed, and their standard of living is going down in proportion to the extent to which prices have been rising. The same is true of those veterans who are on disability pensions. It is true of superannuated people, including civil servants and the rest.

The urgency of this matter is emphasized by a consideration of the cost of living index. As at January 1 we were told that this had reached the hitherto astounding figure of 172.5; but statistics published within the last few days show that the general index now is 175.2, as has been mentioned here today by the leader of the opposition (Mr. Drew). That represents an increase of 2.7 in a single month. What will it be a month from now is the question we might ask, or a year from now, unless something is done now to check it.

It is fitting that a protest about this matter should be made by a member of this C.C.F. group. For six years we have been pleading with this government, almost daily during the sessions, to do something about it. That is one of the reasons why, as I mentioned before, there is little new to be said about it or little new in the way of argument that we can advance today.

This government has done nothing about it; in fact, the attitude of the government has been negative rather than positive. They have adopted a wait-and-see policy. They talk of mark-up control perhaps, but not price control. To sum it up, one might say that they fiddle while Rome burns. The Minister of Finance (Mr. Abbott) has from time to time tried to lull us into a state of passivity by telling us that the situation will remedy itself. Prices will level off, he said, with the increased production, and he was sure that business and manufacturing people generally would not take undue advantage of the situation in order to raise prices. Well, that hope, like certain other hopes the minister had, proved to be badly founded.

Again the government, by its talking of :ontrols and its refusal to do anything about [hem, has itself given an impetus to the very rise in prices which they desire to check.

Emergency Powers Act The bill before the house at the present time is one under which price controls can be imposed if the government so desires. The very existence of that bill, which would furnish the machinery for such control, is itself a hint to certain business interests to put up their prices while yet they may. There are two attitudes which I think I can discern on their part: (a) let us make what we can while the opportunity exists; and (b) let us get the prices up to a point at which they will still be profitable, and very profitable, even if they are frozen.

My Liberal friends, who support this government, continue to support it just as 'loyally in its attitude on price controls as they do for everything else, despite the fact that they must have been showered by resolutions, wires, letters and cards and other expressions of opinion asking for a price control policy, and in spite of the publication of the results of a poll, which in so far as such polls are accurate, show the vast majority of the people in this country in support of some form of price control now.

As to my Liberal friends, the hon. members from Saskatchewan, they will remember that in that province a number of meetings were held months ago to which they were invited to discuss this very question. They saw fit not to attend those particular meetings.

Mr. Ferrie:

C.C.F. propaganda.

Mr. Knight:

My hon. friend, whose only contribution to this house ever since he has been here is unmannerly interruptions, might make a speech on this question one of these days and give us some of his opinions, rather than maintaining that intelligent silence which does not befit him-or does it?

I was proceeding to say that the Liberal leader in the province of Saskatchewan was induced to attend one of these meetings in my own city, sponsored by the trades and labour council. He could go to that one because it was not sponsored by the C.C.F. There the Saskatchewan Liberal leader opposed price control and defended the inaction of this government in regard to it.

I said that my Liberal friends show a lack of interest in this matter, but that is not altogether a new thing; for I must remind this government of an occasion when the hon. member for Rosetown-Biggar (Mr. Coldwell) moved an amendment in this house asking for the imposition of price controls and the provision of subsidies. My hon. friends explained the unfavourable vote on that motion to their constituents by saying that the matter involved a vote of confidence and would bring about the ultimate catastrophe which in their opinions would be

Emergency Powers Act the defeat of this government. I want to remind them that this occurred on September 2, 1950, and there appear to have been 110 Liberals absent from the house when the vote was taken on that question. There was no question there, sir, of a lack of confidence in the government. Were they not interested in this question? At any rate they were not here. In view of the importance of the subject, that does not seem to me to be too creditable a performance. All this in spite of the fact that in the election campaign of 1945 the Liberal party promised not only to retain the price controls which were then in existence, but in some cases even talked about rolling back prices to the level of 1941. The country may judge today how these promises have not been kept.

At this session of the house even the members of the Conservative party and the Social Credit party have asked for some form of price control. The leader of the opposition (Mr. Drew) has said I think today and also on a previous occasion in my hearing that while he made it abundantly clear that he believed generally in a free enterprise system, things in this particular regard have reached such a stage that something must be done about price control, and it must be done at once.

In conclusion, sir, may I say that this present inflation is a threat to our whole economy. It is confiscating the savings of our people; it is reducing the real value of bonds and insurance funds. It is enemy action of the most potent kind, and it can scuttle the defence program on which this government is embarked at the present time. It is the greatest domestic problem which confronts us at the moment.

Once more I indict the government for its apparent callousness in regard to it and demand that even at this late hour they put a stop to it. They will have taken one allimportant step in that direction when they have restored the excess profits tax, controlled and rolled back the cost of living, and resumed whatever payment of subsidies is necessary in order to allow the people to purchase the basic commodities of life at reasonable prices.

Once more 1 urge these steps upon the government of the day.

Mr. Ferrie:

May I ask the hon. member a question? Will he answer a question?

Mr. Knight:

Yes.

Mr. Ferrie:

Will he kindly name where he wants the controls and how he wants to put them on?

{Mr. Knight.]

Mr. Knight:

If my hon. friend were listening to my statement as assiduously as he interrupts these debates he would know.

Mr. Ferrie:

Answer the question.

Mr. Knight:

I do not have to answer any questions of the hon. gentleman.

Mr. Ferrie:

All right; sit down and don't answer.

Mr. Knight:

I would suggest to my hon. friend that had he attended some of the meetings in Saskatchewan which he was invited to attend he could have put forward his views to the people of the country and compared them with ours.

Mr. Ferrie:

They were too red.

Mr. Knight:

My hon. friend refused such an invitation.

Mr. Warren:

Answer him more quickly.

Mr. Knight:

If my hon. friend invites me to go into the history of those meetings in Saskatchewan I can do it. I have it all, word for word.

Mr. Deputy Speaker:

Order.

Mr. Knight:

I think I shall spare my hon. friend's feelings in the matter. I might be able to tell him something that he would not [DOT]like to hear.

Mr. Ferrie:

I should like to ask another question.

Mr. Knight:

Make a speech.