Mr. St. Laurent:

In this article that was not the view, though it may have been a mistaken view that the financial critic for the opposition was expressing at that time. It may have been a mistake in appraisal at that time, but the hon. member for Greenwood in his criticism of those measures when they were brought before the house said that they were too late and should have been adopted months previously. He said it was better late than never.

I am not suggesting this for the purpose of casting blame. I am bringing this before the house for the purpose of having everyone realize that we are dealing with a difficult problem about which any of us can make mistakes. I do not believe any of us can be sure in advance that any special line of conduct will not turn out to be mistaken. We have to do our best, and that is what we have been doing. We have been doing those things referred to, and we have also been endeavouring to keep down the civilian part of our budget.

In the broadcast I made in September I said that the government had made serious and constant efforts to keep down its own expenditures. In commenting on the broadcast the Montreal Gazette said that government savings had been like a drop in a bucket full of holes. Other critics are also fond of blaming the high cost of living on the alleged extravagance of the government, and its failure to keep its expenditures within bounds. In his budget speech last spring the Minister of Finance described the efforts that were being made to keep down expenditures. From my day to day contact with my colleagues I know that each one of them is watching the various phases of the administration of his department in an endeavour to keep down expenses. Hon. members know what efforts were made to reduce expenditures in the Post Office Department. They know the kind of reception those measures received throughout the country and in this house. While each one of my colleagues is giving careful consideration to some particular phase I felt that I should like to know how our expenditures on general services compared with the expenditures that were being made before the war. I asked the officials in the department of my colleague, the Minister of Finance (Mr. Abbott)-he was not here so I did not get his permission-to get figures and to give me a calculation, as accurately as they could, so that comparison might be made. It is exceedingly difficult to make a comparison, and I myself am not convinced that these figures will be convincing to others, but I wanted to know what they were. It is not easy to make comparisons because the services have been expanded; they have been modified; and of course a great many items of substantial expenditures have been added which were not there before.

I asked them to exclude, as not being at all comparable, the items on defence, on veterans' benefits and on the service of the debt. They result largely from the last war and that made a complete change in the situation. There have been modifications in other expenditures. Before the war one of our substantial items of expenditure was unemployment relief. The comparable expenditure is not on so large a scale now; our contribution to the unemployment insurance fund replaces that expenditure. But it seemed to me that the only useful way to make a comparison would be to see what we are now spending on the services which existed before the war, although they have been expanded.

1 asked them to show me what the expenditure was in 1938-39, excluding defence,

veterans' pensions and other benefits and the service of the national debt, and to give me the estimated cost of the comparable services in the present fiscal year, excluding the same three items and all the new services or expenditures which have been established since 1939, such as, for instance, family allowances and the payment made to the provinces as a rental for their abstaining from imposing certain forms of taxation which we impose in their stead. In 1938-39 the total was $326 million or $29.20 per capita. For 1951-52 the comparable estimates total $719 million or $55.80 per capita. The increase per capita is 91 per cent. This is just over the percentage increase in the cost of living index and a little less than the percentage increase in the wage level.

I think this then would indicate that the government has held down its expenditures on these services fairly effectively. It must be admitted that, for instance, in a service like that of the comptroller of the treasury, he has four times as much to do as he had during 1939 because he has to check the proper expenditure and accounting of everything in these new services that have been established. The Department of National Revenue has at least four times as much revenue to collect and account for as it had before 1939. Though I would have been somewhat happier if the increase had been less, I feel that a fairly close tab has been kept on the general overhead that has to be provided for in order to take care of the large increase in the nation's business.

What can be done to prevent further inflation? I hope there will not be further inflation. Recently in many of our papers we have seen advertisements of cuts in prices, some of them attributable to the reference in the speech from the throne to the fact that the fixing of resale prices was going to be made illegal. I am informed that there are quite large inventories throughout the country-

Mr. Maclnnis:

Why then are prices going

up?

Mr. St. Laurent:

Mr. Blackmore:

Hear, hear.

Mr. Si. Laurent:

We cannot get away from the fact that while we are building up these combined forces of the free nations to create the kind of force that is apt to deter aggression, we are taking a certain proportion from the annual production and are not diminishing the purchasing power, except through taxation.

The situation we have to face is that this upbuilding of the kind of strength that will deter aggression is a duty for all of us. It is not something that we can leave to the other fellow. It is something we all have to provide and pay for by doing without some of the things which we should like to have and which it would be possible for us to have if we did not feel it to be desirable to devote that portion of our national production to this joint effort to maintain peace in the world.

I have expressed that view in many places in this country. I have said in many places throughout the country that I felt that was what the people of Canada wanted us to do, and that if they did not want us to do that they should make their views known. That would not mean we would change our views, but it would mean that we would make room for somebody else who shared their views to carry on the affairs of the country in our stead. That is the situation; and again I can say that as regards immediate additional measures to curb inflation, while others may develop, the only one we are prepared to submit at this time is the one that will arise out of this report of the combines committee with respect to resale prices.

The Address-Mr. Coldwell

I do not think that is going to have a very substantial effect on the index of the cost of living; I think it is apt to bring about some change in resale prices, because I do know that there are instances where the spread between what the consumer has to pay and what goes to the primary producer seems to be inordinately large. But there is no doubt that the Canadian public has, perhaps without realizing it, demanded from the distribution trade of our country far greater and better services than those that used to be provided. Those greater and better services have to be paid for, and they are paid for out of the price that is fixed by the distributor for the item he delivers to the consumer. That is inevitable in our form of society. It may be that the establishment of those supermarkets will bring about some change. It may be that there will be devised, as the Labour party expresses its hope there may be devised, methods of distribution which will not be as costly as they are. But they are costly today. They are costly in the United States; they are costly in the United Kingdom. We are all up against the same problem and I am sure that we are, all of us, trying to meet that problem as best we can.

We are not all agreed as to what are the best methods of meeting it. I am sure that all of us will be glad to hear from other hon. members what their suggestions are, and I feel sure that their suggestions will be made in the same objective spirit in which I have tried to make clear the government's position. It is a world problem. It is a problem that is giving concern all over the world to those who have the responsibility of government, to the extent that there are some who are saying that it will be a very dubious victory for whichever party in the United-Kingdom has the responsibility for the headaches that seem to be quite inevitable for a certain period ahead of us.

Mr. M. J. Coldwell (Roselown-Biggar):

We

have heard two very interesting speeches this afternoon, and I shall find it very difficult for once to remain within the confines of the forty minutes allotted to me because the main subject is one upon which we feel rather keenly and upon which we have been quite consistent. However, before I begin to discuss the problem I want to join with the Prime Minister (Mr. St. Laurent) and the Leader of the Opposition (Mr. Drew) in congratulating the mover (Mr. Cauchon) and the seconder (Mr. Simmons) of the address in reply to the speech from the throne. In both instances they acquitted themselves well.

I should also like to associate myself with what was said regarding the satisfaction and thankfulness that are felt because His Majesty

the King has improved in health. We hope that his health will long continue to improve, because after all the monarchy is the symbol of unity that we have in this great commonwealth of nations.

I am glad too that we were able to have in Canada the presence of Her Royal Highness Princess Elizabeth and the Duke of Edinburgh. I hope the remainder of the tour, however, may be just a little closer to the people than it was in the capital city of Ottawa.

I cannot deal with everything that is in the speech from the throne. With regard to the old age pensions legislation, we shall reserve our comments until the legislation is before us. I regret, too, the omission of any mention of the need to review veterans' pensions and allowances by a committee. I think the increases in the cost of living that they have been subjected to, in common with all the rest of the people of Canada, warrant increases, or a cost of living bonus; and all of it, may I say, without a means test.

The St. Lawrence seaway is mentioned, and we shall have something to say on it later on. May I also say that I was a bit surprised when the commission was appointed to go once again into the feasibility of the South Saskatchewan river scheme. After all, we in the province of Saskatchewan had been led to believe by the Minister of Agriculture (Mr. Gardiner) on more than one occasion that the decision had been taken, and that all that was awaited was the consent of the province of Saskatchewan, and perhaps in some respects of other provinces. But now we have another commission set up to inquire into the reports that have been made by other commissions or engineers on this particular project.

I am glad that the people of the maritime provinces are to get the Canso causeway. Whether it should be a bridge or a causeway is a matter of course for expert advice to the government, and when the matter is before the house we can examine what advice the government has.

I am glad to see, too, in the speech from the throne that we are to get some legislation dealing with the railway problem. I think that what is suggested, the assumption by the dominion of part of the transportation costs over the unproductive area between east and west, is insufficient to remove the discrimination that exists; but we welcome a step in that direction.

This afternoon once again the question of the marketing of the new crop was before us. As hon. members will recall, last spring we

urged the appointment of a transport controller. That has been done much too late, and while. I think the present transport controller is doing a moderately good job toward giving service to the country, I am convinced that something more must be done so the farmers may be assisted in either holding the crop on the farm or having storage space provided and payments made for the amount of grain that they find it necessary to store.

There is one other point that I should like to refer to briefly, namely, the Massey report. I am glad to see that we are going to get legislation on the Massey report. May I just say that I think in its conception, in the matter of the language that it uses, it is not only a great report on a great national problem or a group of national problems, but a contribution to the general literature of Canada, a splendid report in every respect.

I want to deal with a topic that has been under discussion this afternoon, namely, the increase in the cost of living. The amendment moved by the leader of the opposition is of course in very general terms. Because we have been consistent first of all in resisting the removal of beneficial controls and subsidies and subsequently in urging that where controls can be beneficial and subsidies useful to bring down the high cost of living they should be re-adopted-that has been our position in this house ever since 1946, and today we offer no apologies for that position -I think that I should be very specific.

I can understand some hesitation in this regard on the part of the leader of the opposition (Mr. Drew) and of the party he leads because I am not forgetting that it was largely because of the insistence of the Progressive Conservative party in this House of Commons and across the country, as well as that of the powerful press of the country and of the financial institutions and other interested people, that controls were removed. At least the speed with which the controls were removed was accelerated by that propaganda.

On the other hand we have been consistent. Therefore I am going to move a subamendment, seconded by the hon. member for Vancouver East (Mr. Maclnnis):

That the amendment be amended by adding thereto, immediately alter the words "high cost of living," the following words:

such as the making of provision for price controls and the payment of subsidies, where necessary, so as to equalize the sacrifices our people are called upon to make at this time.

That leaves a fairly wide area within which the government can bring before the house the proposals to make this equalization effective.

The Prime Minister (Mr. St. Laurent) says of course that this cannot be done at the

The Address-Mr. Coldwell present time. He says that neither the government nor the Progressive Conservative party nor the C.C.F. could control prices. I am going to ask this question: Why does the government say it will do it when and if it becomes necessary?

Mr. Abbott:

It does not. It has never said any such thing.

Mr. Coldwell:

It has said it, over and over again.

Mr. Abbott:

Rubbish.

Mr. Coldwell:

If I have understood what the Minister of Finance (Mr. Abbott) has said on more than one occasion-and I think I understand the language fairly well-then certainly we have been told that measures will be taken which are necessary to bring about a better condition for the Canadian people in regard to prices, and so on.

Mr. Abbott:

Oh, that is different. We will do what is possible; but we will not attempt to achieve the impossible.

Mr. Coldwell:

That they will do what is possible; and the Prime Minister says it is impossible. So we might as well know and admit where we stand at the present time. We know now where the government stands at the present time in relation to this matter. The Prime Minister spent a great deal of time this afternoon reading from a Labour party pamphlet. It is a pamphlet which I myself read, and the contents of which I have noted very carefully. But let us remember that while the cost of living did rise in the British isles in the first six months of this year by a percentage greater than in Canada in the same period, it rose from a base which was very much lower than the cost of living in Canada. The Minister of Finance-

Mr. Abbott:

The index rose less, not the cost of living.

Mr. Coldwell:

All right-"the index". The minister has just returned from London-

Mr. Abbott:

Paris.

Mr. Coldwell:

Paris. He knows that in London today the cost of bread is a fraction of what it is in Canada.

Mr. Abbott:

How much is the subsidy on bread?

Mr. Coldwell:

I will deal with that. He knows that the cost of meat in London is a fraction of what it is in Canada.

Mr. Abbott:

Only you don't get the meat.

Mr. Coldwell:

On the amount of meat

that is rationed. I know, of course, that the quantity is small. But let me say that the British are not rationing people by the length

44

The Address-Mr. Coldwell of their purses. Everybody gets his share, even though that share is small, and at a price within his reach.

One could go down the list and refer to milk and all the other basic commodities in that country. True, they had to release some of their controls; but why? They had to release some of their controls because of the point made by the Minister of Finance a moment ago; because they have had to pay increasing subsidies for these basic supplies from overseas. And why have they had to pay increasing subsidies? Why have they had to pay more for their supplies from overseas? Because countries like Canada and the United States have allowed inflation to run wild wflthin those countries.