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

Mr. Speaker, before proceeding with the remarks that I propose to make on the address in reply to the speech from the throne, may I go beyond the usual formalities and extend my congratulations to the mover (Mr. Cauchon) and the seconder (Mr. Simmons) of this address. The mover spoke of the unity, understanding and good will which he has encountered, sentiments which I am sure will be reciprocated by every member of this house. In addition he used both languages in a manner that was the envy of most of us here.

I wish also to say something about the remarks of the seconder. He spoke in terms of great optimism of the vast northern constituency which he represents. As one who

has had the privilege as a visitor of seeing extensive parts of that great northland on different occasions, I share the optimism which he has expressed about its future. I think it is a good and healthy thing to place before the young people of this country, through reports emanating from this house, some idea of the immense and untapped resources that still lie across the north of Canada.

Many people still have the idea that up above the comparatively narrow southern belt, which is more closely populated and which stretches from the Atlantic to the Pacific, there is nothing but great wastes, with little opportunity for population in the years ahead. Population goes to those places where work can be had, and work is going to be found for scores of thousands in this area where Providence has placed such immense resources for our use.

I simply wish to express my good wishes to the mover and seconder and to say that I believe they performed their task in a manner acceptable to all hon. members. In the very nature of things there were perhaps one or two remarks about which we may not be prepared to go the whole way, but I would have been a little surprised if they had been less enthusiastic about those with whom they are associated in their own activities.

I feel sure that every member of this house will join in the satisfaction expressed in the speech from the throne regarding the king's steady recovery, and the warmth of our welcome to his daughter and her husband. During the past week there has been convincing evidence of that deep and abiding affection with which the members of our royal family are regarded in their individual capacity and, more important still, as worthy representatives of that continuing monarchy, which symbolizes the freedom, tradition, unity and purpose of that great world fellowship which expresses its loyalty to one crown.

I am sure that with the facilities which science has now made available to all of us the king and queen have been greatly heartened by what they have heard of the affectionate and unstinted welcome which has been extended everywhere to Princess Elizabeth and the Duke of Edinburgh. To all of us who regard our democratic monarchy as an institution of profound and continuing importance in these uncertain days, not only to us but to the peace and stability of the whole free world, there has been a great measure of comfort and confidence in the spontaneous and unreserved expression of loyalty to our future queen.

The Address-Mr. Drew

On this subject I doubt if there is any measure of disagreement among the members of this house. On a number of other subjects mentioned in the speech from the throne there will also be general agreement. There is of course nothing really new in what it says. It is merely a government agenda of remaining business for 1951, which under our parliamentary procedure the governor general has been called upon to read.

The fact is that we should not be discussing at this time any of these subjects in relation to a new speech from the throne. We should be continuing the session which was adjourned on June 30, and for reasons which are more compelling than those we had before us at the time I expressed that opinion in June when the plans for a new session were announced.

At the time it was indicated that there would be a second full session this year. I am sure it was generally believed that there would be a second budget introduced to provide the means by which a universal old age pension at the age of 70 would be placed upon a contributory basis. I can think of no other reason which would justify the calling of a second session instead of finishing up the business of the house in resumed meetings of the same session which had been adjourned. The introduction of a second budget would at least have provided the opportunity to remove some of those taxes which have proved to be unnecessary, and to deal with the heavy and improper overtaxation which is now taking place.

This is the third successive year in which we have had a second session. A second session does not merely call for the payment of additional indemnities to the members. It calls for very large payments for the maintenance of those facilities that are required md of services that are needed for the continuance of parliament during the time it sits. In 1949 a fall session became necessary after the business of the house had been abruptly terminated at a time when the government decided, and decided correctly, that it was a good time for them to call an election, no matter how much public money was wasted by failing to complete the session which was already far advanced in its business. Nevertheless, under our parliamentary procedure, following that election a fall session did become necessary.

In the opinion of the government a special session became necessary in the late summer of last year. The regular session had prorogued in the usual way. Because of its unfortunate handling of the threatened railway strike, a situation had arisen which the government decided could only be dealt with

The Address-Mr. Drew by new legislation. Having regard to the course which the government had decided to follow, undoubtedly a short special session had become necessary.

No such situation arose this year. The speech from the throne delivered to this house at the beginning of the regular session this year adequately covered all possible legislation which will come before us, and provided the opportunity to deal with every subject we shall now be called upon to discuss. Not even the flimsy excuse that a new budget was necessary to provide the method of contribution and the complementary government financial arrangements necessary for the introduction of universal old age pensions can possibly be put forward in view of the fact that we are now informed that there is to be no budget. No matter what strong and obvious arguments there are against a second session of this kind, there might at least be some slight appearance of justification if the introduction of a second budget had provided the opportunity to review those unnecessary and inflationary taxes which were forced through this house last spring, and also to correct the serious miscalculation by which this government had already overtaxed the people of Canada by $500 million during the first five months of the new fiscal year.

There is another and very serious aspect to such a situation which it seems to me should be very much before the members of this house at this time. Parliament has been called together in a new session with every indication that it is to run its full course within the current year; yet, by the device of not introducing a budget, the government will have denied to the members the opportunity to discuss the different departments of government with the opportunity to obtain information which is afforded when each department is called on the motion to go into supply. A government which has already gone so far in denying to the members their long established rights and duties as the elected representatives of the people asks us on this occasion to approve a speech from the throne without any subsequent opportunity to deal v.'ith the business of parliament in the manner which has long been the established procedure in this house.

I can only express the hope that the Prime Minister (Mr. St. Laurent) will give us some assurance this afternoon that if the government is not prepared to reconsider its decision to introduce no budget during this session, with the resulting opportunity to discuss the affairs of each department, opportunities for such discussion will be provided by making

way for motions introduced by the opposition to produce that result. That is the practice which has long been found satisfactory at Westminster, where motions by the opposition are afforded a fixed date for consideration where those deal with major matters of public concern.

Obviously if this house is to fulfil its first duty at this time it will discuss, in much more minute detail than ever before, the present state of our defence forces and the actual position in which we find ourselves after the immense expenditures which have already been made on national defence. After an expenditure of more than $3 billion since our rearmament program began, we have surprisingly little in the way of first-line forces in being, ready to go into action. So far as our only possible enemy is concerned, it is not the glowing statements of the Department of National Defence that are going to matter; it is how many units of every branch of the service are ready to take the field.

Having regard to the repeated statements that we are now entering the most critical period of tension, and the evidence we read and hear supports that statement all too firmly, the state of our defence forces should be the first concern of every member of this house. Those Canadian forces which have gone into action on land, at sea or in the air have carried forward in the very highest measure those great traditions of military service. On the distant battlefields of Korea, imperishable pages in the history of valour and sacrifice have been written by the men of regiments which carry famous names- names made famous in earlier engagements when their fathers and their brothers took part in the battle for freedom. Canadian naval units have taken a very distinguished part in the operations in the western Pacific. The Royal Canadian Air Force has performed the tasks assigned to it with efficiency and great credit to those engaged.

This does not mean, that we have yet undertaken our share of the tasks undertaken by the United Nations. If we were to go on spending as much as we have already spent for what has actually been accomplished, then in the unhappy event that we were called upon for large-scale operation we would bankrupt ourselves overnight. If this is going to be a long-term program, then in terms of simple arithmetic we must calculate what forces would be required in the event of that major disaster, and then ascertain what it would cost, in relation to the moneys we have been spending to produce the result, or lack of it, which we have already seen.

The over-all disproportion between expenditure and result can be illustrated in one case in this simple manner. During the current year Canadian taxpayers will be called upon to pay substantially more in taxes than they did during any year of the last world war when we had more than a million men and women under arms. What are we getting for it? That is what we have a right to know. That is what every member also has a duty to find out.

If as a result of the discussions during this session we can finally dispel the verbal smoke screen set up by the Department of National Defence and begin to receive statements upon which we can rely, then possibly this unnecessary second session may serve some useful purpose. Canadians have been told that we have developed the finest antitank gun in the world, that we have the world's most advanced anti-submarine vessels, that we have the world's most powerful jet engine, that we have the world's best allweather fighter, that we are ready to play our part along with the best forces from other lands to meet any threat that may come.

Canadians will be glad to claim any real achievements which Canadians have the right to claim. In two world wars Canadians have shown that in whatever service they wore uniforms there were no more efficient and effective men and women in the world. That has been proved in the air, on land and at sea. It is unworthy of their great achievements and their valour, to say nothing of their sacrifice, that the people of Canada should at any time be lulled into a state of complacent optimism by boastful statements unrelated to the facts.

Three years have passed since we were told we were starting our rearmament program. The Korean struggle is now in its sixteenth month. Where are the anti-tank guns? Where are the anti-submarine vessels? Where are the aircraft using the world's most powerful jet engines? Where are the all-weather fighters in actual service? Where are the armed forces ready to go into action for which so much money has been spent? True, we have naval units with superb personnel. That service is in fact the most advanced, although it still has many unexplainable deficiencies in equipment.

It was air power, however, that was to be the core of our defence effort. Half of our expenditure was to be on that branch of the service. What have we in actual fighting squadrons today? When the time comes for teams to play in any league, it is the teams that can play that really count, and not the teams that are still being talked about. In a

The Address-Mr. Drew recent series of responsible and, I believe, unchallengeable articles appearing in one of the most reliable newspapers in this country, it was stated unequivocally by their military writer-and he is an exceedingly competent military writer-that as of October 1 there are only two fighter squadrons ready to go into action.

The situation in regard to the land forces is equally uncertain. Figures of recruiting mean very little in themselves. They mean next to nothing in the case of the reserve forces unless we know how many of those enlisting actually trained at camp during the year. There again one of the great difficulties, in understanding what the situation is, is to be able to interpret at any particular time the explanations given by the Department of National Defence. As a reason for not using the highly-trained airborne brigade at the time we were called upon to accept a share of the responsibility in Korea, we were told in this house-and in that way the people of Canada were told-that the defence requirements of the north made it unwise to send the airborne brigade out of Canada. Now at a time when the dangers have certainly not diminished, the airborne brigade is being sent out of Canada with no trained airborne brigade to take its place. If the explanation for not sending the airborne brigade was valid in the first place, what is the reason that we do not need a trained airborne brigade at this time? It is such contradictions as these that make it difficult for the members of this house and for the people of Canada to know what is fact and what is fancy.

These are only some of the reasons why there should be the most detailed and comprehensive examination of the real state of our defence forces. It is to build up those forces that the bulk of the heavy taxes now being collected by the government are to be used. The speech from the throne indicates that an opportunity will be afforded to discuss national defence early in the session. It has been indicated by the statement in the speech from the throne that measures will be placed before the house dealing with the dispatch of the 27th brigade to Europe, although that should-and I hope it will-provide an opportunity for the most detailed discussion of national defence. I have raised this subject today because I do not think that the examination of this matter should wait for any future date when legislation limited to a particular purpose will be before the house. Once again I make the request that without waiting for the termination of this debate, a committee of this house be set up to examine defence expenditures and all related

26 HOUSE OF

The Address-Mr. Drew matters. The exceedingly limited results obtained from the enormous sums already spent surely leave no further doubt that a committee should be empowered to inquire into defence expenditures so that the elected representatives of the people-and they are the ones to have the responsibility-may have reliable information as to the results we are getting from the huge expenditures that are being made.

One thing about which the speech from the throne is strangely silent is the subject of veterans' pensions. When I raised this subject on June 30, the day on which we knew that we were going to adjourn until October, this exchange took place, as reported at page 4885 of Hansard:

Mr. Drew:

. . . I would ask the minister to dispose ot this matter by giving us an undertaking that when we meet in October he will take the proper steps to introduce legislation that will provide for a uniform over-all percentage increase to the veterans consistent with the increased cost of living.

The Minister of Veterans Affairs (Mr. Lapointe), after saying that he could not bind the government by his statement, then said:

I did state that the recommendations of the committee, which included the subject matter mentioned by the leader of the opposition, had been put before the government and will be considered by the government.

In view of that assurance that they were to be considered by the government, then if the government has any intention of dealing with -his subject we certainly had every reason to expect that the speech from the throne would include an indication of what the government intends to do. I hope the absence of any reference to this subject does not close the door to further consideration of a matter that must be one of major concern to every member of this house.

At a time when the government, at long last, is finally agreeing to remove the means test in the case of old age pensioners of 70 or over, the distasteful and unfair means test has been applied to veterans before those in needy circumstances can receive some adjustment for the loss of buying power through inflation. An adequate basic pension is a matter of right, not of charity. Pensions are not paid to every veteran on the same basis. Pensions are paid on a basis that is in accord with the degree of their injury or disability. That being so, if there is any part of the Canadian population which is entitled to an adjustment to meet a loss in dollar value through inflation it is those pensioners who, by their unselfish service to the country, resulting in their disability, are so much in need of a basic pension adjusted adequately to living costs today.

The present situation must bring a feeling of humiliation to every member of this house who is prepared to countenance such an intolerable attitude toward those who have the highest claim upon our consideration. The treatment of our veterans and the refusal to make an over-all adjustment of pensions in their case related to the cost of living is in striking contrast to what the government has done in other cases and what is obviously the only real purpose of a second session of this house. I hope that the absence of any reference to this in the speech from the throne does not indicate that the government is unwilling to correct this situation.

I do not propose to discuss in detail those subjects referred to in the speech from the throne which can obviously be more satisfactorily discussed when the government measures dealing with them are before us. As I said before, nothing new has been raised in the speech from the throne. In fact, very little information has been given in regard to the subjects which we all knew we would be dealing with.

There is one subject, however, which although rather casually dealt with in the speech from the throne is by far the most urgent and important subject, along with national defence, which the members of this house will be called upon to discuss. It goes hand in hand with national defence, involves our real capacity to maintain our defence program, and is, in fact, part and parcel of the problem of defence itself. It is referred to in these words in the speech from the throne:

The concern of our people over the rising cost of living resulting from international and domestic inflationary pressure is fully shared by the government. Every measure will be taken which my ministers believe will be effective in counteracting inflation without impairing our free institutions.

Hear, hear.

Mr. Drew:

I am encouraged to hope that the hon. members who say "hear, hear" will be prepared for that very reason to support the amendment which I will introduce at the end of these remarks.

The anti-inflationary measures already in force have checked the upward trend of prices of goods and services affected by their operation.

I might say I am of course still quoting from the speech from the throne, because otherwise I am sure that many hon. members would wonder where that statement had come from.

The fact that the concern of the Canadian people about inflation is fully shared by the government will I hope bring some measure of reassurance to many Canadians who had been given the contrary impression by recent

statements made on behalf of the government. I trust there may be some belated hope in the statement that the government intends to take every measure that will be effective in counteracting inflation without impairing our free institutions. Mr. Speaker, it is most significant that the government itself says effective measures will be taken and does not for a moment imply that they have been taken.

Most certainly we all wish to conserve our free institutions. The thing that would be most likely of all to destroy our free institutions would be inflation itself, if it is not brought under control. Now that the government indicates that it intends to do something to protect our free institutions by effective measures to combat inflation, the question naturally arises, When and how?

There is no subject calling for more urgent consideration by the members of this house than that of inflation. Even if our defence efforts are brought into some sort of order and expenditures on defence properly supervised and allocated, our efforts along that line can be defeated unless the dreadful economic disease of inflation is finally checked. I borrow the words of the Prime Minister himself when I say that inflation in this country has already reached calamitous proportions.

When we introduced an amendment to the motion adopting the speech from the throne on September 1, 1950, more than thirteen months ago, we expressed regret that the government had failed to take steps to deal with inflation and the rapidly rising cost of living. Discussing that motion and referring to what I had said about the dangers of inflation at that time, the Prime Minister indicated his own belief that it would be difficult for us to have less inflation than the United States, an opinion not commonly shared by all members of this house. But holding that opinion he then used these words, as found in Hansard at page 118 of that date:

So far it has not outrun anything that has taken place south of the border.

It might. It would be disastrous if it did. It would be calamitous if it did; and we certainly must do everything within the ingenuity of man to prevent it.

I accept these words of the Prime Minister in so far as the extent of the seriousness of our inflation outrunning that of United States is concerned. Now inflation in Canada has outrun anything that has taken place south of the border. It has outrun it more than the cost of living index really indicates, because, as all hon. members are aware, these things which are not sufficiently regarded as basic necessities to be included

The Address-Mr. Drew in the cost of living index do not show the same difference as do some of these other things which most people regard practically as necessities, but which still are outside of the articles included in the cost of living index itself. If these other things were included the disparity between our cost of living and that of the United States would be still greater than is shown by the cost of living index. The Prime Minister said on September 1 last year that it would be disastrous, that it would be calamitous if that happened. It has happened, and therefore by his own definition we are now called upon to discuss what should be done about a calamity with which we are already confronted.

In the same speech the Prime Minister said on September 1 last year:

I can say to the house at this time that we are not planning at this session to ask parliament for any enabling legislation which would empower us to impose a general system of controls on wages and prices.

In accordance with that assurance the legislation which was introduced did place some limit upon what the government could do by order in council.

Last spring, however, at the regular session, new legislation was introduced replacing that which had been adopted last September. The explanation given for introducing that new legislation was that the time had now come when the emergency made it necessary for the government to have power to introduce such controls at the time it deemed them advisable. I think this should be remembered at a time when the government seems to be claiming some measure of virtue in the fact that it has refused to adopt controls at the upper level as well as the bottom level.

Now this being so we may well ask ourselves why such wide powers were needed, and why it was that this government, with the support of its followers, obtained the most sweeping and arbitrary powers ever possessed by any democratic government in time of general peace.

In recent speeches on this subject different members of the government have sought to convey the impression that we were trying to convince the public that there was some easy way to deal with inflation. They claim that we have attributed some magic powers to price control. That was precisely what we did not say. We said the very contrary. Since some of the statements which have been made on this subject bear so little resemblance to what actually was said, I should like to place on record once again part of

The Address-Mr. Drew what I said on April 9 of this year, as reported at page 1730 in Hansard. I said this:

It is only natural that in the discussion of a subject of this kind there should be some tendency to oversimplify the issue and suggest that one particular remedy or another will solve the whole problem. At no time in this house or outside it have I ever suggested that this problem can be overcome by any one simple solution. On the contrary I have contended that there is no simple solution, that there are many aspects to this problem.

Then, after discussing the subject further, I went on to say this:

There are a number of things that we have urged the government to do:

First, substantially reduce all non-defence expenditures by the government.

Second, encourage the production of every line of civilian requirements so that increased production of these things may ease the strain and pressures which cause inflation.

Third, encourage immigration which will bring to our country vigorous people with the skill and character which will make them useful members of the Canadian community.

Fourth, remove all restrictions which will discourage the building of new houses urgently needed for the steady increase of population by our own normal growth and by immigration.

Fifth, take effective steps to make sure we get full value for every dollar spent on defence.

Sixth, restrain inflation through the control of currency by the Bank of Canada, and by other monetary controls available to the bank under the act which gives it its powers.

Seventh, introduce emergency controls immediately to the extent that they are required to deal effectively with the cost of living and inflation.

In the explanation which I gave of those recommendations I pointed out that in our opinion production was the one long-term answer to inflation, but that the first and most direct way to tackle this problem was for the government itself to economize and to reduce non-defence expenditures.

In view of the fact that the Prime Minister stated more than a year ago, when this subject was under discussion, that it would be a calamity if inflation in this country exceeded that in the United States, and that everything within the ingenuity of man must be done to prevent it, it is necessary to point out to the government that the ingenuity of this government was not sufficient to prevent it, and that obviously there are things which should be done immediately under the immense powers which they obtained from parliament to deal with the calamity which is already upon us.

It is not enough to be told by the government-and the speech from the throne is the statement of the government

that the government does share the concern of the people of Canada about inflation. We should be told, and through the reports of the proceedings in this house the people of Canada should be told this afternoon, what the ingenuity of this

government does suggest as an effective way of dealing with this calamity at this time.

It would be incorrect to say that the government has done nothing about inflation. It has done a number of things. Most of them have been disastrously wrong; some of them have greatly aggravated the situation. As an example, the government increased the sales tax by 25 per cent last spring and put a special excise tax on a number of articles that are real necessities. We pointed out at that time that those taxes were unnecessary; and that, as they were increased hidden taxes on things which people needed to buy, the taxes were restrictive, unfair and inflationary. It will be recalled that by arguments and by resolutions as well we sought to prevent the imposition of those unfair and unnecessary taxes.

It will be recalled by hon. members who were present that the Minister of Finance (Mr. Abbott) set up his estimates and was unwilling to concede that his budget would really provide more than was necessary for the purposes set out by the department. Now we have ample proof that those taxes were not only unfair but, to a substantial extent, were unnecessary. The $500 million surplus in five months demonstrates how unnecessary they were and how little reliance hon. members can place upon the estimates presented by the government. Even though no provision has yet been made for any procedure which would repeal those taxes, I trust that the government will take steps to repeal them at this session and relieve the inflationary pressures which they create, as well as the hardship they have produced to consumers of all those things affected by them.

Now, the one answer given, when the attention of the government is called to this enormous surplus in five months, is that it is a wise thing to be able to pay off our debts. That is always sound, at the proper time; but there are things which parliament should be asked to approve. If it is the intention of the government to tax the people for the purpose of paying off debts, then that should be indicated to hon. members of the house at the time the budget is placed before them. And it is not only not good practice, but it is contrary to every principle of parliamentary procedure and every recognized principle of government, if the Minister of Finance has, in fact, intentionally overbudgeted for purposes which he did not disclose to members of the house. The $500 million is there as evidence of the extent to which this government has taken out of the

people's pockets dollars which were not needed, in addition to the very large number of dollars it needed for the tasks which lie before us.

The government has also restricted credit. Certainly some limitation on the pumping of new currency into circulation by the government was urgently needed; but that was a very different thing from suddenly reversing the whole course of government policy and imposing at the same time extremely severe credit controls on purchasers, and also severely limiting the bank credit of manufacturers, distributors and retailers providing those things upon which the purchasing power of the public had also been so greatly reduced. It was a double squeeze; it was a squeeze on those producing and on those receiving. While the same restrictions on credit do not apply to those purchasing food, they did apply to the farmers, in so far as the extension of credit to the farmers of this country at this time was concerned.

This double squeeze had other consequences, in addition to the difficulties it presented to the people who needed those things. It has also had a very serious effect upon building new homes, and the furnishing of homes, both new and old. The credit restrictions, at the level at which they were imposed, and under the terms under which they were imposed, did place restrictions upon very real necessities such as washing machines, refrigerators, automobiles and other electrical and mechanical equipment of that kind. It made it extremely difficult for many people to proceed with their building. In certain statements made on behalf of the government recently I have noticed references which conveyed the impression that automobiles were luxury equipment. In a great many places in this country today automobiles have become an absolute necessity if people are going to get to their work. There is no other way by which they can get to the jobs which need to be done in the interests of the whole defence production of this country. When we are emphasizing the desirability of electrifying homes both urban and rural it hardly seems to be the time to make it difficult to furnish these homes with the one means of heat and power that most of these homes have available.

What is a more important proposition in its immediate effect is that it has created very serious areas of unemployment throughout this country. This is a positive result that the government certainly has achieved. I am not suggesting for one moment that this was the result the government intended, but a government which has been pumping inflation

The Address-Mr. Drew into this country through currency and otherwise for years suddenly reversed its course and went to the extreme the other way, and we are feeling the consequences right across Canada today. What is the government's answer to this situation? The government tells the people that they must produce more to meet inflation. What is the use of telling a worker in Windsor, Vancouver, or any other city in Canada today where he is now out of work that he must produce more? What chance has he to produce more? He has not even got a job at the moment in the place where he has been working. What is the use of telling him that inflation is the result of too many dollars chasing too few goods? They know that in their particular occupations there are too many goods waiting for dollars that are not at the moment available.

While there are areas of unemployment throughout the whole of Canada as a result of the government's action, it is most acute in Windsor, and what has happened there illustrates in a very forceful way what is happening in many other parts of Canada now. In Windsor of course, with its great concentration of factories producing automobiles and automobile parts, they have felt the impact of this restraint more severely perhaps than in any other one part of Canada. What answer does the government give to their problem? What hope do they offer people affected in that way? They make the suggestion that they will be generous enough to ease the facilities provided at the border so that these people who are out of work in Canada can leave the country to go to the United States. That is the solution they offer to people who are out of work as a direct result of the misapplied policy which this government has adopted.

No matter how little this may affect any other part of Canada, it can surely be a source of very little pride or satisfaction to any Canadian that the best suggestion the government can make to those it has put out of work is to tell them that the solution is to leave their own country. We have been told that we need more people in Canada. I believe we do. The minister of immigration says that we do. If this is the best the government of Canada can do to deal with the hardship resulting from its own action, then the least that can be said is that it illustrates very forcefully the conflicting ideas within the government itself and the state of utter confusion in which it finds itself in tackling the most serious domestic problem we face.

If anything could more emphatically emphasize the necessity for a removal of these restrictions, it is the shameful situation in regard to housing which has resulted from

30 HOUSE OF

The Address-Mr. Drew the severity of the credit restrictions imposed. The minister of immigration announces with pride that within the first eight months of this year more immigrants have come to Canada than in any similar period since the war, and yet at the very same time we see a steady and alarming reduction in the construction of new houses. If there is one place above all others where all artificial barriers should be removed, it is in the case of housing. We are desperately short of houses for the people already here, never more desperately short of them than we are right at this hour. They are needed for the people now coming here and for those we are inviting to come. We have the raw materials in Canada. We have the skill. Additional workers are available as a result of the unemployment which the government has created and other workers are coming to this country. Many thousands are being brought here by the government itself. What is necessary therefore is that the government remove the obstructions it has raised, change the mortgage provisions under the National Housing Act, and give the green light to a real and comprehensive building program of new houses throughout the whole of Canada.

The Minister of Finance has a formula for fighting inflation. It sounds good. It gets back to old and earthy principles. Speaking to the annual convention of one of our most important women's organizations in Montreal not long ago he emphasized the importance of saving as one way of fighting inflation. He said that the amount might not seem large in any particular case but that an accumulation of many little savings would produce a very real result.

Is it too much to hope that in this case the Minister of Finance was speaking on behalf of the government and that this does represent a change in the attitude of the government? After all, that is what we have been seeking to impress upon the government in regard to government expenditures for some time. On each occasion that we have urged that a committee of this house or a commission be set up to examine the cost of government and the business organization of government itself, we have been asked to say where the savings would be made. We have pointed out where many savings could be made. We have pointed out-and I point out again-that millions of dollars could be saved simply by the device of closing down on the unnecessary propaganda organizations maintained by the government and letting the government rely on what it actually does instead of what its paid propaganda says that it does.

I doubt if there is a single member of this house, in his contacts around this building and elsewhere throughout Canada, who does not know some place where some saving could be made. Possibly it might be relatively small. That is the very thing the Minister of Finance has pointed out, but with a multitude of government activities, such a multitude of activities as would never be known by the careful housewife, the point which the Minister of Finance so aptly made at Montreal surely does apply with immense force to the government itself.

Even if the individual items of the saving here and the saving there are small in proportion to the billions spent, even with a government that can say, what does a million matter, the accumulation of many savings in many departments of government would undoubtedly reach a very substantial figure. That would be tackling inflation at its very base. Under the unusual procedure adopted for this session it may not be possible to introduce a motion which would once again give the members an opportunity to vote on the question of setting up a committee to inquire into the cost and operation of government. But if the Minister of Finance thought his advice was good when it was directed to those who are called upon day by day to exercise the utmost care in their own spending, then it should be many times as good when directed to an organization which spends such enormous sums of the people's money, and in this case the advice does not have to go to somebody else. It can be accepted by the person who has put it forward.

If the government believes that saving will help to fight inflation, then it must believe that saving of public money by the government itself will be effective in fighting inflation. For that reason I do hope that in the face of such a calamity, to use the Prime Minister's own word for it, the government will be ready to follow a course which would be followed by any business of any substantial size which hoped to keep in operation in this country in these difficult days.

The Minister of Finance has every reason to know that in these particular days those companies Which have to adjust themselves to the economic pressures of the moment are examining every single department of their businesses to see whether even the most, efficient staffs have permitted duplications and inefficiencies to creep in which waste some unnecessary money, perhaps just the small savings such as he has mentioned.

The government has also placed great emphasis on production as the answer to-inflation. In that I am sure the government

is sound. But if the government believes that production really is the answer to inflation, then I hope it will immediately take steps to encourage production instead of discouraging it. I hope that as a first step it will announce that it is prepared to introduce legislation to repeal the 25 per cent increase in the sales tax and the wholly unnecessary increases in excise tax which were introduced last spring. Certainly the government can do that.

If the government believes that inflation threatens our defence effort, and more than one member of the government has said that it does, then I hope the government will take the necessary steps to make sure that every dollar spent on defence produces the best possible results. The way to do that is clear. May I repeat what I said before. The best way to assure effective defence production is to set up a committee to examine defence expenditures and provide for the first time some reliable and understandable information for hon. members of this house and the people of Canada about what is happening to our defence dollars.

If we are going to make those little savings which the Minister of Finance now recognizes as being so important the government should accede to the request previously made and which has been accepted in other jurisdictions and appoint a committee or commission to examine the business of government and the cost of operation of government. The minister himself should welcome the advice of independent experts as to ways of preventing duplication and unnecessary complicated services.

The government may have some other plan for dealing with this calamity. I hope it has. Unless inflation is tackled and overcome the consequences are far too serious to contemplate. The main thing that hon. members of this house should seek is positive action. That responsibility rests upon every member of this house, no matter to what party he belongs. If there is in fact some method which has not yet been employed, let us know what the method is. Confidence that this situation is going to be faced is almost as important as evidence that steps have already been taken. The situation is so serious that I am confident the government will receive support for any sound measures it may now put forward which show any real hope of tackling this problem effectively at this time.

I have used the word calamity. I hope there is no hon. member of this house who considers that the inflation which has already taken place is not already a real calamity for many thousands of Canadians. I am

The Address-Mr. Drew indebted to the Prime Minister for the particular word; but call it what you will the present value of the dollar in actual purchasing power has placed our disabled pensioners, our disabled veterans, our old age pensioners, our blind pensioners, our industrial pensioners, those who have invested in endowment policies for their old age, those who have sought to protect themselves by investing in bonds, and those with low incomes, in a position where they simply do not know today how to make ends meet.

If any member of the government wants to know what is happening all he needs to do is speak to the bank manager in any of the smaller banks who is dealing directly with people in this country who are receiving smaller incomes. I am almost certain that any inquirer will be told that one of the great concerns of the banks today is the extent to which people are encroaching upon their savings and pledging the holdings which they were putting aside for their own protection in an effort to meet the necessary demands of daily life at this time.

We have all acclaimed the fact that at last there is to be a universal pension for all our people reaching 70 years of age. Even before the legislation is passed we are bound to recognize that the $40 a month which will be paid is not worth much more than $20 a month compared with pre-war dollars when $20 a month was not thought to be sufficient by anyone. That is a calamity in itself.

Even if our hopes are realized and the increasing strength of the free nations does prevent a general war, this is likely to be a long and sustained struggle for peace during which we must be constantly arming and renewing our arms. Our ability to maintain that effort and therefore our ability to preserve peace depends on the extent to which we avoid the ravages of inflation.

The urgent, critical and compelling task before parliament, not just the government alone, is to protect the economy upon which our whole effort for self-preservation is going to depend. It is of equally great importance, and closer to us in human terms, that those who are in no strategic position to protect themselves against the heartbreaking effects of inflation, and most certainly not in a position to take advantage of it as some are, will be given not only immediate relief but also some ground for confidence that they will be able to meet the simple demands of their daily lives.

In addition to the very real hardship which is already being suffered and the increasing hardship which would accompany any further rise in the cost of living, there is the fact that in this country, where most people

The Address-Mr. Drew believe that success through free enterprise should be encouraged, we would find the seeds of that distrust between people of different occupations which has been the unhappy heritage of conditions in some older nations when inflation brings hardship to most but advantage to the few who are in a strategic position to take advantage of inflation itself. This problem should not be allowed to get any further out of hand, nor should it be allowed to become a bogey. It can and must be tackled or we face a major defeat in this long struggle in which we are now engaged.

Since production is the answer and since no country has greater undeveloped resources to put into production than Canada, it can be said without any careless optimism that no country in the world is better able to fight the battle against inflation than we are in Canada. It is with confidence that this is so that I am going to move a motion which I hope on this occasion will be dealt with not upon the rigid basis of division between parties in this house.

Oh, oh.

Mr. Drew:

There are those who will be interested to know that the effects of inflation in this country are a laughing matter to some members of this house.

It is with that confident belief, and with the conviction that all else depends upon our successfully tackling this problem, that I propose to introduce an amendment which will simply call upon the government to take immediate action to deal effectively with this problem. Do not let anyone say simply that something needs to be done. The speech from the throne says so, and it says that the government is going to do things. I am asking the members of this house, therefore, to say that they should be done without further delay. The motion has been framed in words which make it possible for every member of this house to ask for such action without being called upon to censure the government for its failure to deal effectively with this problem. So often members say, "Oh, I would have voted for that amendment if there had not been included in it a number of details with which I do not agree, although I agree with the main purpose of the motion." The motion I am about to move leaves no such possibility, and I hope that the members will vote upon it recognizing that fact. I hope that the members of all parties in this house who believe that something effective should be done will support the motion. It carefully avoids all other controversial issues, and asks the members for a vote on no other question than whether or not the government will now tackle the

problem of inflation in a way which will assure the general welfare and security of all Canadians.

I therefore move, Mr. Speaker, seconded by the member for Lake Centre (Mr. Diefen-baker), that the following be added to the

address:

We respectfully represent to Your Excellency that in the opinion of this house adequate steps should be taken to combat inflation and deal effectively with the high cost of living.

Right Hon. L. S. St. Laurent (Prime Minister):

Mr. Speaker, it is indeed a pleasure for me to join the leader of the opposition (Mr. Drew) in extending the usual congratulations to the members who moved and seconded the address in reply to the speech from the throne. The hon. member for Beauharnois (Mr. Cauchon) and the hon. member for Yukon-Mackenzie River (Mr. Simmons) are among the more recent members of this house, having come into parliament for the first time in the last general election. I believe we can all say that as their colleagues we are proud, and I believe their constituents have reason to be proud, of the admirable way in which they conducted themselves in moving and seconding the address. The speeches reflect credit upon them and upon those who sent them here, as well as upon this House of Commons.

The hon. member for Beauharnois (Mr. Cauchon) spoke both in French and in English. Those of us who had the privilege of following all of his remarks heard, I think it is fair to say, an address of high merit, although I am sure that many of you felt as I did that he was overly generous in his references to the Prime Minister. All I can promise him in that regard is that the Prime Minister will continue to do his best, and trust that his efforts may not be too disappointing.

(Translation):

The hon. member for Beauharnois (Mr. Cauchon) did not have to wait until the 1949 general elections to be entrusted by his fellow citizens with public office.

Originally in his capacity as alderman, then as mayor of Valleyfield, and also as vice-president of the Union of Municipalities of the province of Quebec, he had already acquired an enviable reputation for devoted and useful public-mindedness. I am convinced that the experience and knowledge gained by him in the municipal field constitute a factor of success which we may put to good use here in the discussion and solution of the various federal problems.

I believe the citizens of the constituency of Beauharnois can be proud of the member they chose in 1949 to represent them in this house.

(Text):

Those of us, and there are many, who know something of the background of the hon. member for Yukon-Mackenzie River, Canada's largest and still most remote constituency, were not surprised to hear him extol the part of the country from which he comes, its rugged beauty and its rich resources. With the exception of the years when he served overseas in the Canadian expeditionary forces in world war I, he has spent most of his life in the Yukon Territory. Before running for parliament in 1949 he was the collector of national revenue, immigration inspector, magistrate, judge of the juvenile court, and had been president of the Whitehorse board of trade and member of the Whitehorse hospital board. The hon. member made a speech which I feel sure we all listened to with interest and, I may add, with gratification. We, too, believe in the future of our north country. We all feel that it is fortunate for the people of the whole of Canada that their representatives in parliament continue to be men and women who not only have a broad grasp of current public affairs, but are men and women of vision who have confidence in the future of our country. With this in mind I repeat I am very happy to extend sincere congratulations to the mover and the seconder of the address.

We have also listened with interest to the speech by the leader of the opposition. I am not sure that, in spite of what he has said, he has succeeded in making his motion anything but a motion of no confidence. That, Mr. Speaker, will be for you to consider. If it is not a motion of no confidence it probably is not in order at this time. I believe it would be unfortunate to have the discussion of the matter which occupied a substantial portion of the hon. member's time, that of inflation, dealt with in the context of a motion of no confidence, because it so happens that this is a matter which is giving us all grave concern. There are many of the hon. member's friends who, for other reasons, perhaps, do not choose very often to assert confidence in this government, but who feel that the policies we have been following are in fact the right policies at this time. I must confess that there are many of our friends on this side, and in that other corner of the house near Mr. Speaker, disturbed at the fact that the government has not been able to devise any more effective measures of combating inflation than those which have been so far proposed to parliament.

The Address-Mr. St. Laurent

This is not a matter upon which there have been the usual divisions between those who support one party or another, those who support the C.C.F. party or the Social Credit party; but it is a situation in which all of us feel the pinch of these higher prices and none of us likes it. Now, with regard to those who have been suggesting that the government's refusal to introduce direct price controls is a matter of stubbornness or a surrender to vested interests, let me say this. I do not often have the opportunity to go to the Globe and Mail for authority for any of the positions taken by the government. But it so happens that on September 27 last, in an article which is entitled "Cold Common Sense," the Globe and Mail-which I am sure for that reason has not lost its liking for the leader of the opposition-had this to say:

It was not a statement of policy that Finance Minister Abbott made this week in his radio talk on price control. It was a statement of fact. He was not merely saying that the federal government would not control prices. He was saying-and he was perfectly right-that the federal government could not control prices. Neither could the Conservatives if they were in office. And neither could the C.C.F. Nobody could.

The article went on to say:

On the face of it, it is most unfair and unreasonable to suggest . . . that the government's refusal to introduce price control is a matter of stubbornness, or a surrender to vested interests. Such criticism not only misleads the public, but misrepresents the government. The government's refusal is a matter of cold common sense. It is taking the only rational attitude there is to take. It will not attempt to do what cannot be done. It will not embark on a program which at this time and under these circumstances can only succeed by destroying the last vestige of personal liberty.

With respect to the assertion that the Conservatives, if they were in office, could not do it, and the C.C.F. could not do it, they

say:

Mr. Abbott rightly drew attention to the British experience. That country has a highly organized system of price controls, subsidies and rationing. And what has happened? Prices have risen faster in Britain, during the last six months, than they have risen either in Canada or the United States. Government leaders admit that the system, long overburdened, has broken down.

I do not want to criticize what has been attempted elsewhere, but I think we are entitled to examine the results that have been achieved elsewhere and to determine, in the lights that are ours, whether we could expect to realize from the same methods better results than others-who, I am sure, have been operating with as great ingenuity as we could display and with as great devotion to the public weal as we could display- have found it possible to achieve. That is the situation in the United Kingdom, and it has been the situation for many months.

The Address-Mr. St. Laurent

I do not know how many hon. members have given themselves the benefit of the interesting and valuable study that would come from the perusal of this discussion pamphlet issued by the Labour party last January and which is entitled "This Cost of Living Business", in which they attempt to explain why it is that they have not been able to keep prices down in spite of their rationing, their direct controls and the other methods they have endeavoured to employ.

From page 9 of the pamphlet I cite this paragraph:

One big element in the cost of living, the prices we have to pay for imports, is outside the control of the government.

That is true here as well as: it is in the United Kingdom; and in this country there is not only the prices we have to pay for the goods we import but the prices our Canadian producers can obtain for the goods they export, unless we prevent them from exporting them and force them to take from the Canadian market for their labours less than they can obtain by exporting. The pamphlet goes on to say:

Britain has to import about half its food and many raw materials. Both food and raw materials are far more expensive than before the war. And prices have taken another steep rise since the outbreak of war in Korea.

Then a little further down:

Dearer imports are not due only to the war. There are other, more fundamental causes. Standards of living in many countries are higher now than they were before the war and as a result the great food-producing countries are eating more of their own food. There is, consequently, less for importing countries like Britain.

Then at page 13:

About 60 per cent of the value of the nation's output is the cost of wages and salaries. Changes in wages and salaries therefore have a profound effect on prices unless the higher wages are matched by higher productivity, or are met from profits.

With respect to profits they give this explanation:

Profits cater for the creation of reserves to pay for expansion and re-equipment and the additional money manufacturers want to pay dividends to their shareholders. The more money firms put aside to develop new methods of production, the more consumers have to pay now for goods. But new equipment and better laid-out factories mean more efficient production, lower costs, and the possibility of lower prices in the long run. If the money to pay for this were not raised from profits it would have to be raised in some other way.

On page 14 we find this:

Can we, then, cut profits?

First, it has been explained that, to the extent that profit makes provision for re-equipment and new building, it is an element in increasing efficiency in industry which, in the long run, should make price reduction possible. This leaves then that part of the profit which is distributed to shareholders.

A reduction in distributed profits could do little to reduce prices.

fMr. St. Laurent.]

That is not my statement. It is the statement of the Labour party in England after years of experience with their controls over the industry of the United Kingdom.

Then they go on to say, as to profits:

They are a very small part of the cost of any item so, although there are very many excellent reasons for dividend limitation and profit control, their effectiveness as a means of reducing the cost of living is not one of them.

On the same page they explain what inflation is:

Inflation is an increase in spending money without a corresponding increase in the supply of goods and services. The effects of inflation are higher prices or a shortage of goods, or both. A country which has full employment must face the problem of inflation. When there is plenty of work for everyone, there is more money to spend. The more money there is to spend, the more demand there is for goods. Prices tend to go up, and goods sell out quickly. If incomes go up faster than prices or production, there is even more competition to buy goods, prices rise again, and there is pressure for further income increases. The cost of living then begins to rise really fast.

Then they go on to make this statement which is a truism for all of us:

The first and most obvious thing to do in these circumstances is to increase production and productivity as outlined previously. While this is being done the other main anti-inflationary safeguard is to restrict the supply of money available so that it matches the amount of goods and services.

If you want two things to be equal in weight and one is heavier than the other, you have to lighten the one or increase the weight of the other. There are several ways of doing this. One is to put a stop to increases in wages, salaries and profits. Another is to tax away the surplus money. That is not a popular way, but the Labour party in the United Kingdom recognizes, as do all economists, that it is an effective way. They go on to say that they have used these ways, and at the same time the government has taken more from the people in taxes than it has spent on running the country and providing the social services. This has taken money out of circulation and has reduced the inflationary pressure. They go on to say:

This looks like a paradox.

Probably it does look like a paradox.

It seems difficult to believe that higher taxes prevent prices from rising. But it is still true that the use of higher taxes and budget surpluses prevents inflation, preserves the value of our money and prevents the cost of living from getting out of control.

On page 12 they deal with the cost of distribution and with the effect of resale price fixing, and they say:

A great deal more evidence is needed before all the various aspects of the problem of distribution can be tackled.

But with respect to retail price maintenance they explain that once a merchant or manufacturer has created a demand for his goods by brand name he is in a position to

lay down conditions on which he will sell, and most branded goods are in fact offered for sale at a fixed price. On page 20 they deal with the conditions of sale that are imposed by the manufacturers and show that competition between retailers is reduced as well. They say:

If all shopkeepers have to buy at the same prices and sell at the same prices there can be no price competition, so shopkeepers have to offer more elaborate services, credit or delivery services, or chromium-plated shop fronts in order to attract customers. These things again have to be paid for and again have an effect on the cost of living.

Then they go on to explain that the Labour party has promised to deal with the problem of preventing manufacturers and traders from stopping supplies to retailers who cut prices. They go on to say that when this has been done the interest of customers will depend on there being sufficient retailers enterprising enough to accept the challenge. They say that price competition is one of the most effective ways we have of counteracting the tendency of private traders who sit back and take easy profits from the country's prosperity.

Well, even on that there is no agreement between people on the basis of their allegiance to one political party or another. This problem has been carefully studied by a committee appointed to do that job, a committee composed of highly respected persons felt to be qualified to examine the problem objectively and to make a report upon it. They have done so, and that report is now before parliament, but I am sure that when any legislation based upon that report is being considered there will be arguments pro and con the probable effects of interfering with this so-called right of the producer of an article to determine the price at which it will be resold to the ultimate consumer.

I am not sure myself that that is not already contrary to provisions of the Combines Investigation Act, because the act defines a combine as a conspiracy between two or more persons to fix the resale price of commodities. As to why that should not apply to an agreement between a producer and a distributor to fix the price at which the distributor will resell the goods is a question to which I have not yet been able to find a satisfactory answer; but that act has been there for many years, and in spite of it we all know that there is a large variety of commodities for which the resale price is fixed by the producer.

Some people think that is detrimental to the public interest, some contend that it is otherwise; but it is certainly a problem which is being considered by those who are really concerned with such measures as can be effective in curbing the high prices consumers have to pay for the goods they require.

The Address-Mr. St. Laurent

Mr. Diefenbaker:

Have there ever been any prosecutions for price fixing under the combines act?

Mr. St. Laurent:

I do not know of any prosecution based upon an agreement between a producer and a distributor; I do not know that any have been instituted on that aspect. It seems to have been considered that because the word "conspiracy" was used it had to do with something which, irrespective of a definition of the combines act, most people would regard as wrongful, and I do not think that there has been any recourse to the Combines Investigation Act to attempt to curb this practice of fixing resale prices when they result solely from an agreement between the producer and the distributor. Whether that should be done or not I am sure the hon. gentleman will be giving us the benefit of his views when the matter is up for consideration in the house.

Now, with respect to the situation in the United Kingdom, where the chancellor of the exchequer has recently warned that any further attempt to hold prices down by increased subsidies would require subsidies of such an extent that it would wreck the economy of the country, the fact is that with their controls, with their subsidies, which have been continued through the whole period since the cessation of hostilities, as the hon. gentlemen of the C.C.F. party think should have been done in this country, the increases in prices have been faster in the United Kingdom in the last six months for which there are reports than they have been either in the United States or in Canada.

Referring to the report issued for the six months from mid-February to mid-August -it is not exactly from the 15th of one month to the 15th of another month, as I understand it; it is a certain day in the week which may be the 13th, or the 14th, the 16th or the 17th; it is close to the middle of the month. From mid-February to mid-August, which is the latest United Kingdom figure, the increase shown in their cost of living index, which of course is not strictly comparable to ours, because it probably comprises fewer items than ours does, has- been 7-6 per cent; and in the same period, or a comparable period, from March 1 to September 1, which is the last available figure for Canada, it has been 5-6 per cent.

Now, I am not claiming any credit for that; I am just putting it before the house as one of the facts that have to be taken into consideration when attempting to formulate a policy with any expectation that it is going to be effective.

I have considerable pride in what I believe to be fact, that up to the present time this

The Address-Mr. St. Laurent government has been looked upon as frank and fair and as trying to do a good job. I do not think it would be right for us to put before the public anything we ourselves did not believe in. It is human for us to make mistakes, but they must be honest mistakes. I think it would be wrong for us to try to put into effect measures that would turn out to be mistaken, and that we ourselves did not believe in when putting them before the public. That is something this government does not intend to do.

They have not been able to do it in the United States, any more than they have been able to do it in the United Kingdom. The hon. member for Rosetown-Biggar (Mr. Coldwell), in a recent broadcast, said that they had put into effect more efficient controls-I am not using his exact words, but I hope I am correctly paraphrasing them-more efficient controls than they had in effect during most of the time during the last war. Well, that does not speak very highly for those which were in effect during the last war-if we are to judge them by their effect on prices at the present time.

There has been an assertion that the Bank of Canada admitted in its July publication that the cost of living in Canada had become higher than the cost of living in the United States. Well, that was the interpretation put upon it by the Canadian Press-"Canada's living costs higher than U.S.; Bank of Canada survey shows reversal of historic pattern". And the leader of the opposition has asserted that we now have inflation in this country to a greater degree than they have in the United States.

Well, I asked to be shown just what this Canadian Press dispatch was based upon, and I found that it was based upon a diagram of cost of living indexes where, for the first time, the Canadian curve crossed the American curve.

These cost of living indexes are based on statistics showing changes in prices; but they are not exactly the same thing as the actual cost of living. Some say that they do not reflect the whole cost of living, while others say that they do show more than the actual cost of living. That is a matter of opinion. But, whatever one's opinion may be In the matter, the fact is that the housewife does not support her family upon a cost of living index: she supports her family upon what she pays in the shops for the articles she has to buy.

Now, from a distance pastures always look green. However, I happened* to be in Washington on September 28. I had gone down to that city to confer with the President of the United States about the measure that it

might be proper to put on foot to try to bring about speedy development of the St. Lawrence waterway. Naturally, I picked up a Washington newspaper. As a matter of fact, I brought it back with me.

This paper showed the ceilings that were going into effect in the United States on their beef prices on October 1. Those are the prices in effect, with the direct controls that have been resorted to in the United! States. I am told there are others charged on the black market which go beyond these prices. These, however, are the prices authorized by government action. They dealt with retail stores, groups 1 and. 2; retail stores, groups 3 and 4, and certain small stores; and then retail stores groups 3-B and 4-B, which include supermarkets, chains and independents. This latter group has lower ceilings because it provides less service than do the other shops.

The first item shows porterhouse steak at $1.34 a pound; tenderloin, $1.81 a pound; sirloin, boneless, $1.34. Well, I do not' do the marketing myself. But I have a family, in which there are representatives of three generations, from whom I hear something about the high prices that have to be paid. I know that none of them is paying those prices.

I picked up a paper in Ottawa last week. This happened to be a copy of the Ottawa Citizen, and in it I found advertised porterhouse steak, with the cuttings taken off, at $1.05 a pound, instead of the $1.34 set out in the Washington paper. Those are the actual prices which prevail.

On another page of that issue of the Washington Post of September 28, there was a news item stating that the price of grade A milk was to be raised one cent a quart on the following Monday, with three dairies fixing the price at 23 \ cents a quart. That is for the American quart, which is about one-fifth less in volume than ours. That means that the price would be more than 28 cents for an imperial quart of milk.

I find upon inquiries made through our consular office in New York that the prices there are a little higher even than those indicated for the A & P, Safeway and Supermarkets in Washington. I found that while the retail price was 23J cents for an American quart at the A & P supermarket at 2141 Wisconsin avenue on October 2, 1951, or the equivalent of 28 cents for an imperial quart, the price prevailing on October 12 at an A & P store here in Ottawa was 19 cents for an imperial quart. It may be 20 cents now; I understand there has been a move to add an additional cent to the price. However, it was 19 cents on October 12.

Then, as to the price of bread: in Washington, for a 24-ounce loaf of white bread, sliced, the price was 19 to 21 cents. To buy it from the same firm-the A & P store-here in Ottawa, the 24-ounce loaf was 15 cents.

Mr. Diefenbaker:

But the farmers get higher prices down there.

Mr. St. Laurent:

I am comparing actual prices at the present time to see whether or not, all things considered, it is proper to say that we have here in Canada a greater degree of inflation than they have in the United States. I am not trying to defend the government; I am not trying to make an argument; I am just stating to the House of Commons such facts as we have been able to ascertain, and upon which we have to base conclusions.

What about cigarettes?

Mr. SI. Laurent:

Well, here I get the indication that while in 1939 it took half an hour's work, at prevailing wage rates, to buy a package of twenty cigarettes, at the present time it takes only twenty minutes' work.

I have dealt with bread; let us now turn to butter. Creamery butter in Washington is quoted at 78 cents, while the price in the A & P store in Ottawa is 68 cents. For eggs', grade A large, the Washington price is 83 cents, and for the same grade in Ottawa, 84 cents. Turning to cheese, the price for American cheddar mild is 55, medium 59 and sharp 63, whereas Canadian cheddar cheese is 49. Maine or Long Island potatoes are 10 pounds for 39 cents, and the Ottawa price for Ontario potatoes is 35 cents for 10 pounds. I am sure a good many would feel that Ontario potatoes are just as good as Maine or Long Island potatoes. I know I got some from northern Ontario, from a friend of mine who was kind enough to send a bag to 24 Sussex street, and they are as nice potatoes as I have ever seen anywhere in the world. Taking canned salmon, pink, at Washington for one pound net the price is 65 cents per can, and at the A & P store in Ottawa a one-pound can of pink salmon is 45 cents. Eight-ounce packages of Kellogg's corn flakes, the same corn flakes in both countries, are two packages for 29 cents in Washington, 14J cents each, and in Ottawa 14 cents a package. Chase and Sanborn coffee is 94 cents in Washington and 92 and 94 in Ottawa.

Mr. Coldwell:

How much?

Mr. St. Laurent:

92 and 94.

Mr. Coldwell:

Not Chase and Sanborn.

Mr. St. Laurent:

Chase and Sanborn coffee at the A & P branch.

Mr. Coldwell:

It is $1.08.

Mr. St. Laurent:

I did not make up the list. I was supplied with it.

The Address-Mr. St. Laurent