Mr. Coldwell:

That is an old Tory talking. That has always been done and therefore it always has to be done. I intend no reflection on the Progressive Conservative party; I said "Tory". May I say that we were treated this afternoon to a great deal of information regarding what is happening in other countries. I remember that the Minister of Finance took me to task because I said that certain people I had met in this country recently had stated that our cost of living was the highest of any country they had visited. I do not want to put on the record who they are but I would not mind telling the Minister of Finance afterwards. Incidentally, they were not Britishers. The minister said that no good could be done by discussing what was happening in other countries. This afternoon we heard a great deal about what was happening in the United States and in the United Kingdom.

Mr. Abbott:

That was not quite what I said.

Mr. Coldwell:

Pretty close to it.

Mr. Abbott:

I compared the results, and, I said that having said that I did not think there was anything to be gained by further discussion.

Mr. Coldwell:

That is right.

The Address-Mr. Coldwell

Mr. Abbott:

I was limited to a fifteen minute broadcast.

Mr. Coldwell:

So was I.

Mr. Abbott:

I could have said a lot more.

Mr. Coldwell:

I say that the people in the lower income brackets are rationed out of the market by high prices, but those who have money can still buy goods. That is why we suggest in our amendment that we should have certain controls and subsidies in order to equalize the sacrifice that we are called upon to make at this time. Under the present system there is inequality. Goods in short supply are denied to one group and they may be obtained by another. In my opinion that in effect is class legislation of the worst type. The budget emphasized the policy of the government. When it wanted to restrict the manufacturing of stoves, washing machines, automobiles and so on it rationed the supply through a special excise tax and through increasing the sales tax by 25 per cent. In other words, as I understand it, taxes were increased and therefore prices were increased in order to cut down consumption.

Mr. Macdonnell (Greenwood):

And the

revenue was increased.

Mr. Coldwell:

And the revenue was

increased as well. As has already been mentioned this afternoon, hundreds of thousands of Canadians are in the direst possible need of homes. I think perhaps the need today is greater than it has ever been, but what does the government do? It takes deliberate steps which in effect ration our less fortunate citizens out of the market, and generally inflate the prices of housing accommodation both for sale and for rent. We take direct issue with the government in these matters. We are convinced' that if under a system of price controls any essential commodities were in short supply the Canadian people would rather have rationing by tickets than rationing by the purse, and incidentally our view coincides very closely with that expressed in October, 1941, by the late Mr. Mackenzie King. I am going to quote from his radio address on that occasion, when he said:

Rising prices unless controlled will make it more costly and therefore more difficult to finance the war.

All we have to do is substitute the word "defence" for "war".

Rising prices, unchecked, will spread confusion and uncertainty in industry and trade. They will hinder production and the proper distribution of supplies. They will make the cost of living rise more rapidly than wages and salaries. The value of savings will be materially lessened. The result would be hardship to nearly everyone, and hardship in very unequal measure.

And again:

Rising prices, a rising cost of living, do not have the same effect on all households. The smaller the family income and the larger the family, the more serious the hardship imposed. For those with small incomes, rising prices of clothing, food and other necessities may mean serious hardship, while for those with larger incomes only luxuries and small comforts may have to be given up.

Rising prices thus serve to aggravate the inequalities in society, and to throw the heaviest burdens on those least able to bear them. Wartime experience has shown that prices rise faster than wages or salaries, and bear more heavily still on those who live on small pensions or life savings.

The truth is that all but an insignificant minority of the population would be worse off as a result of rising prices, if prices were permitted to rise unchecked, and in general the relatively poor would suffer more than the relatively well-to-do.

I know that my hon. friends will say that was wartime, but Mr. King had some good advice to give the parliament of Canada and the people of Canada for the post-war period when he said the following in an article which appeared in Maclean's magazine in 1945:

Immediately after the war the dangers of inflation may be even greater than they are now. The Canadian people cannot afford to sacrifice the benefits of wartime stabilization by relaxing controls too soon.

That is precisely what parliament did. We sacrificed the benefits of wartime stabilization by relaxing controls too soon. Apparently the Minister of Finance (Mr. Abbott) did not like my statement, as he indicated in a radio broadcast the other evening, that powerful newspapers and prominent industrial and financial leaders had joined in the campaign demanding the removal of all controls. I say that the Canadian consumer is paying through the nose as a result of the policies demanded by powerful interests, supported by all other political parties, and made effective by the Liberal government of Canada. As I have already remarked, these high prices have been accompanied by the highest corporation profits in our history.

I know what has been said and what will be said again, that you cannot have price controls unless you have wage controls and, incidentally, unless you have subsidies. Let us look first at wage controls. Hon. gentlemen will remember that in a brief presented to the government on February 10 this year the Trades and Labour Congress of Canada, the Canadian Congress of Labour, the Canadian and Catholic Confederation of Labour, and the dominion joint legislative committee of the railway transportation brotherhoods pointed out that many wage and salary rates were unduly low and that distinction should be

made between the freezing of any wages and salaries at a low level and wage stabilization. I quote from the brief as follows:

The labour movement recognizes that wages could go up fast enough and far enough to break a price ceiling, though it sees no immediate danger of anything of the sort. It believes that the proper way to deal with this question is a government-labour-management conference to work out methods of wage stabilization. This offers a prospect of a wage policy which will do two things, both essential: (a) preserve the spirit, the principle, of collective bargaining, and (b) bring the experience of labour and management into the defence effort. If our government institutes a general policy of price and production controls, labour is ready to take part in a joint government-labour-management conference to consider wage stabilization.

That is clear-cut, but it has never been accepted by the government. It discounts entirely this parrot cry that if you are going to freeze prices you must freeze wages. Many of the wages and salaries paid in this city at the present time could not be frozen at their present levels. I have been amazed in the past five or six weeks to be told by men standing behind counters, holding as I thought fairly responsible jobs, that although they were married they were earning less than $150 per month. The girls employed in some stores in this city are earning considerably less than $150 a month, as are some of the labourers. Let me repeat the word of organized labour, and I stress the word "organized". They say that if the government institutes a general policy of price and production controls they are ready to consider ways and means of effecting wage stabilization.

I would like to go somewhat exhaustively into our experience during the last war and what was said of it subsequently, but time will not permit. When we talk about controls we are led to believe that there are no controls now, but the fact that the government intends to amend the Combines Investigation Act indicates that there are controls of some description. I was quite interested on Thursday or Friday to read the reaction of the Canadian Manufacturers Association to the MacQuarrie report and to the suggestion that legislation would be brought into the house to prevent price fixing. I notice that statements in opposition were made by Mr. Norman Leach, who stated:

It is an undemocratic and high-handed move to deny a manufacturer the right to protect his goodwill right down to the consumer.

Then he added:

If all controls are removed a lot of articles will go up in price at once.

Was he referring to the people's controls? Was he referring to parliamentary controls, instituted by those responsible to the people's duly elected representatives? Not at all.

The Address-Mr. Coldwell There are controls. They are objecting to the removal of controls instituted by members of the Canadian Manufacturers Association. We have known for some time that these controls exist. It is not a question of whether we are going to have controls, it is a question of who is going to do the controlling.

Mr. Maclnnis:

These are people who are opposed to government controls.

Mr. Coldwell:

These are the people who from one end of the country to the other opposed government controls. Not only did they make speeches; they financed radio programs which I think were a contravention of our radio act when they engaged in political discussions over the air on behalf of their own Canadian Manufacturers Association controls and political views. Let us bear this in mind when we hear of opposition to government action, Let us not forget the statement made by the Right Hon. Mr. Ilsley in this house in 1947 when he said that for every $200 million we had spent on controls during the war it was estimated that the Canadian people had saved, either as consumers or as taxpayers, $2-| billion.

Mr. Sinclair:

What did he say two years later?

Mr. Coldwell:

I am saying what Mr. Ilsley said at the end of the war when the operation was in his mind.

If my hon. friend thinks that is an extravagant statement, what about this one? Mr. Donald Gordon, who was chairman of the wartime prices and trade hoard, described the operation of subsidies and controls on Nov. 4, 1946, in these terms:

The payment of subsidies has meant a real saving to the people of Canada and has not been merely a transfer from one pocket to another.

Under a price control system, a subsidy paid to primary producers prevents merchandising costs from pyramiding as the product passes through the hands of the wholesaler and retailer to the final consumer.

The net result is that subsidies have cost the people of Canada, as taxpayers, far less than the additional prices they would have otherwise paid, as consumers.

That is Mr. Donald Gordon speaking. I have not heard that he wished to change that view.

In its report to the house the wartime prices and trade board said this:

The payment of subsidies distributes the burden of rising production costs according to ability to pay, whereas inflation distributes this burden according to the strength of one's bargaining power, with no regard to the financial need.

These statements are authoritative. They are not my statements, nor the statements of the C.C.F. party. They are statements of the

The Address-Mr. Coldwell Minister of Finance, the chairman of the wartime prices and trade board and the wartime prices and trade board itself. We say, therefore, that the use of subsidies can be warranted. Moreover, if subsidies now were accompanied by a reimposition of the excess profits tax, which brought in something like $460 million the last year it was in operation, most of the money required to meet the cost of subsidies on basic things like milk and so on could be obtained.

We are engaged in a democratic struggle to preserve those freedoms which we all value. It is an incontrovertible fact that one of the weapons of communism is inflation. It was used by the communists after the Russian revolution to bring about the downfall of governments in Europe. Even today their followers in this country have passed resolutions opposing price controls and subsidies and have forwarded them, incidentally, to some of the members of this house including myself. Why? Because Stalin and his friends know that they are not going to destroy the western democracies by war. They are going to destroy, if they can, by undermining our economies and bringing about the collapse of our economic and social institutions.

I am not pretending, and I say this to the Prime Minister, that everything can be done within the boundaries of Canada. It cannot. I believe this requires international action as well. There is some action which we can take within our own boundaries. The situation today is very different from that of 1939, when we had idle factories and hundreds of thousands of unemployed in the country. When we began our rearmament program early this year our factories were employed to capacity, and there was a shortage of labour. This, in part, accounts for the inflationary atmosphere at the present time in the western world.

There was recognition of this fact when the North Atlantic agreement was made. Our members will recall that we were insistent that, in addition to the military provisions of that pact, there be economic provisions for the integration of the economies of the co-operating nations. We were delighted when Canada suggested that, and subsequently it was put in the treaty. I am proud of the fact we suggested it. Now the north Atlantic alliance has recognized the need for economic integration, if you like, but has done very little about it. They did set up an international materials conference for the procurement and allocation of strategic materials to the free world. The purpose, of course, was to prevent stockpiling by any one nation, but unfortunately it failed in its objectives.

Mr. Sinclair:

Not all of them.

Mr. Coldwell:

Not wholly, no, but to a very large extent. The seriousness of this problem was brought home to us after the outbreak of the Korean affair. The consequences to the economies of the western European nations, the British and ourselves, we know or should know. This stockpiling has been undertaken largely by the United States, but we have not been innocent. The prices offered and demanded by the United States for certain basic materials soared, as did the prices of some of our materials like nickel and newsprint. Those who controlled the tin cartel, the British and the Dutch, also saw that the price soared, defeating the very purpose of article 2 of the North Atlantic agreement. We say that we should now insist-I am glad that Canada raised this at the recent NATO meeting-on the proper planning of our resources and greater economic co-operation among the nations of the free world. No nation, not even the United States, is self-sufficient.

I was going to make some remarks on the extent to which the United States is not selfsufficient, but I cannot do so because of the lack of time. I am going to say that this lack of co-operation hampers our joint defence. This is unfortunate because we are, in so many respects, complementary to the United States and the United States is complementary to us. On another occasion I shall have something to say about the failure to bring about a balance in the defence purchases of our two countries. I shall also have something to say about the Geneva trade agreement and the United States unilateral action restricting imports of cheese, about which I was pleased to note the member for Coast-Capilano (Mr. Sinclair) had something caustic to say the other day.

If we are to solve the economic problems that arise out of the present international situation, there must be closer co-operation in the allocation of raw materials among the democratic nations. This requires both national and international planning, pooling, and hence intelligent and democratic controls. I said a moment ago there are some who resist controls because they say it is an interference with private enterprise. When we enact any law it is an interference with someone's private affairs. In this time of crisis it seems to me we have a right to protect our own people, and we have an undeniable right-indeed an obligation-to associate with our other friends in the north Atlantic alliance with a view to protecting the economies of the whole of the western world.

I must finish now; but let me say, as I have often said, that this is a matter of

urgent concern to all of us when we see the conditions in some of the western European countries today as the result of inflation. In France wages are lagging far behind and there is grave unrest. It is true, as the Prime Minister (Mr. St. Laurent) has said, that the British workers have shown a tremendous amount of restraint in not pushing wage demands which they could have done during this period. I believe it is a great tribute to them. The same thing applies to workers in other .parts of the world, but we cannot expect that kind of thing to continue indefinitely. Ultimately the struggle for progress will depend on the co-operative use of our resources and the standards of living everywhere, as well as the removal of poverty, misery and want wherever they exist. So I am going to put these considered views forward from our party on the international side:

1. That Canada press in the North Atlantic Treaty Organization council for greater attention to the economic consequences of rearmament.

2. That Canada, in partnership with the United States of America, greatly increase her direct contribution to economic aid to Europe and Asia.

3. That Canada should, under present conditions, oppose increased military burdens which are likely to cause economic distress and international collapse, and which would thereby defeat the whole purpose of the alliance.

4. That economic co-operation be promoted by Canada, under article 2 of the treaty, particularly in the pooling of essential raw materials and supplies, leading to a closer integration of the economies of the allied countries.

May I say that what I have said does not in any way imply that Canada should not fulfil her obligations under the North Atlantic treaty. Indeed, quite the contrary; although I saw in one of the newspapers this morning criticism of this statement, on the ground that the C.C.F. was going back on the position that it has taken hitherto. Not at all. What we are saying here is that there are nations which are less able to bear the impact of the burden of the defence of the democratic world than are the United States and Canada, and in order that we do not destroy the very basis of their defence-namely, their

economies-that when it is necessary and if it is necessary we should assume a larger share of that international burden for the defence of the free institutions that we have in common.

What we say is that more attention must be given to article 2 of the treaty, which

The Address-Mr. Low visualized the integration of the economies of the democratic nations in order that economic stability and progress might maintain the strength of the democratic alliance to resist threats of both economic collapse and of military aggression.

We believe that a real danger to the western democracies is the possibility that the present rearmament burdens and the high prices of basic materials caused by inflation, generated largely in North America, will weaken our European allies and undermine their determination to resist totalitarian aggression.

These, Mr. Speaker, are the main reasons I have emphasized the need for the control of basic materials and domestic supplies and have urged once more upon the government a consideration of intelligent controls and beneficial subsidies in the light of our experience during the war; because while we are not at war now, we are spending hundreds of millions of dollars on defence, a fact which makes this economy more like that of wartime than of peacetime.

Mr. Solon E. Low (Peace River):

Mr. Speaker, I should like to join with those who have preceded me in this debate in complimenting the hon. member for Beau-harnois (Mr. Cauchon) and the hon. member for Yukon-Mackenzie River (Mr. Simmons) on the exceedingly high quality of their efforts in moving and seconding the address. I should also like to join with those who have preceded me in expressing our sincere hope that His Majesty the King will continue to improve and that he will soon regain completely his health and strength. We are quite sure the Canadian people feel that it is a high honour to have amongst them at this time, and to enjoy their presence, Their Royal Highnesses The Princess Elizabeth and the Duke of Edinburgh. These young people are endearing themselves to the Canadian people wherever they go. The enthusiasm with which they are greeted bespeaks the firm attachment to the British crown which exists everywhere amongst our people. We sincerely hope that the remainder of their tour will be most pleasant for everybody and will be without unpleasant incident of any kind.

Mr. Speaker, we heard here this afternoon some very interesting addresses. I have been keenly interested right from the first words that were spoken by the leader of the opposition (Mr. Drew). With a great many of the things he said I find myself in full agreement. He covered nearly the whole field of important things that should be considered in this debate. I will not have as much time to

50 HOUSE OF

The Address-Mr. Low speak as he had; therefore I shall have to be more careful in my selection. I will not have a chance to speak about all the matters I should like to discuss. I therefore will cover some of the things that those who preceded me have dealt with; but if I do so, it certainly is not with any desire to repeat but rather perhaps to underline or to emphasize some of the matters and their importance, and to indicate that the position we take as an opposition in this house is indeed the position which the people of this country are taking. I believe that the opposition parties are much closer to. the people than the government appears to be. I believe that we are saying here today exactly what the people of Canada from one coast to the other would say if they were here. I think that unanimity is something which the government ought to take into consideration; and if it does not do so, of course it will be to their detriment.

In his address the leader of the opposition again asked for a committee of this house to be set up to examine into defence expenditures. We have taken our position with respect to that demand on several occasions before. We think that the government should be ready, by all means at their disposal, to reveal to us in this house all of the information that we require to enable us properly to determine the real situation with respect to our defence position. Whether that is by committee or whether it is by some other means, I am not prepared to try to determine this afternoon. We certainly support the request for the fullest possible information concerning our defence preparations and the costs thereof.

With respect to veterans' pensions, already mentioned by the two preceding speakers, may I say that we have always advocated that an escalator clause should be inserted in the Pension Act-we think that should have been done at the last session-which would keep pensions in line with the cost of living. We are pressing strongly that that be done at this session.

I should now like to say a few words about that part of His Excellency's address which has to do with old age security. The address declares that the primary reason for meeting in this session is to give consideration to increased security for our senior citizens, through universal pensions without a means test for those Canadians over seventy years of age. That may have been the primary reason for the government calling a session, but I think there are other matters that will have to be considered-matters that perhaps rank at least equal in importance with old

age security, important as we believe that to be. However, we are well pleased that government and public consciousness of the need and desirability of greater old age security has finally crystallized into action by this parliament. We are happy that at long last measures are to be enacted which will improve the lot of most of those Canadians over seventy years of age. It has been a long time coming. Many of the members of this house have been pressing for this type of legislation and these improvements for a good many years. The members of the Social Credit group, of which I have the honour to be the leader here, are among those who have been struggling for greater old age security for going on twenty years, and have made their demands well known inside and outside of this house. While we rejoice over the progress that has been made in this field, our satisfaction is tempered somewhat when we think of what happens every time a new social security measure is adopted by the federal government.

Old age security measures are just one phase of a war against poverty. Some of us at least-and I count myself and my fellow members of the Social Credit group here among them-have long since set our hearts on completely abolishing poverty from amongst Canadians, and nothing less will satisfy us. We are firm in our conviction that any country that is endowed with the wealth of resources, both natural and human, that Canada has been blessed with, need not be plagued with poverty amongst any group of our population. We can-and I think we have demonstrated it in the past-produce in quantities sufficient to guarantee a high standard of living for all our people, but we have not yet by any means solved the faults and the problems of distribution. Our failure to do so has been very largely because so many of our people, including those in high positions in government, and in the civil service-perhaps I had better say especially those in high places in government and in the civil service-have clung tenaciously to outmoded ideas.

I find myself in quite thorough agreement with what Bertrand Russell had to say in one of his broadcasts recently from Britain. I do not remember exactly the words he used, but he expressed the thought that most of the trouble in the world today could be traced to hanging on to ideas that no longer fit the situation. Our whole economic system is based on a philosophy of scarcity. This we have brought before the house on numerous occasions prior to today. The truth is that the whole idea of scarcity throughout the whole world, and particularly right here

in America, exists only in men's minds. There is not the slightest well-founded reason for scarcity at all. The only real scarcity that does exist is due to plain stupidity and nothing else.

I know it is difficult to change the thinking of individual people, and particularly individuals in high places in government and in the civil service. The attempts that we make, we people who call ourselves reformers, are made a lot more difficult because so many of the educators who mould the thinking of the people, and particularly young people, always teach admiration for the type of character who would be successful in commerce. I have had it drawn to my attention ever since I started school. It has been said to me: What you ought to become, young man, is the kind of character who is successful in business, in commerce. Bertrand Russell says that that is the type of character who would make a successful bandit leader. When I look over the situation in Canada today I am compelled to agree that Bertrand Russell was almost completely correct. The thinking of individuals will have to be changed if the threat to our security from false ideas is ever to be removed.

Specifically, this idea of scarcity must be replaced by more realistic thinking in terms of abundance if we are to abolish poverty from amongst the Canadian people without enslaving them in the process. I want to emphasize the latter part of what I have said: if we are to abolish poverty from amongst the Canadian people without enslaving them in the process. I want to ask this question: Is it not a fantastic thing that whenever the government is pressed into taking a step that is designed to abolish some of the poverty existing amongst any section of the Canadian society, they cannot think of any way to do it except by piling on heavier and more ruthless types of taxation. The power to tax is the power to destroy. Taxation never at any time stimulated increases in productive effort. On the contrary, it encourages, and has always encouraged, less productive effort. It discourages all-out productive effort. By taxation men are progressively becoming slaves to a super state. Does it not seem queer that Canadian scientists and engineers have conquered the forces of the earth, the sea and the air, and have performed miracles such as would astound our fathers if they were here to see them, but no one in a responsible position has as yet successfully bent his efforts to the task of abolishing poverty from our midst without enslaving the Canadian people? That is a question we should ponder very carefully in the days to come.

The Address-Mr. Low

I want to warn all my fellow Canadians, including those here in this house, that if they want to preserve their liberties they will have to go slow in their demands for further social security until some of the outmoded ideas have been knocked out of the heads of some of the stinkers in high places, in government circles. We probably will have much more to say about this whole matter when the old age security measure is before the house.

I should now like to turn for just a few minutes, Mr. Speaker, to a consideration of the question that has been uppermost in the minds of all the speakers in the house today, namely, the question of the high cost of living. I was delighted with the contributions made by the various speakers, including that made by the Prime Minister (Mr. St. Laurent), because he certainly gave us something to think about this afternoon. In view of his position I must compliment him because he rose and dug into the task as he did. He got down and swam right around in detailed information which this house should have. I quite agree with him that we should not attempt to deal with these things unless we have all the information before us. For that reason the Prime Minister's contribution was quite significant to me.

I think perhaps the major plague of the Canadian people today is the high cost of living. His Excellency's address makes reference to it in one short paragraph, which has already been quoted by the leader of the opposition (Mr. Drew), in these words:

The concern of our people over the rising cost of living resulting from international and domestic inflationary pressures 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. The anti-inflationary measures already in force have checked the upward trend of prices of goods and services affected by their operation.

Well, now, I think the government is concerned, but not nearly as much about the rising cost of living as about maintaining the status quo. That has been my conclusion as a result of studying what they have done. They are certainly concerned about maintaining the unimpaired status of certain institutions in Canada, and about preserving unchanged a thoroughly discredited financial system. They are much more concerned about these things than they are about getting at the root causes of our ever-increasing cost of living and doing something effective about it. I think I am perfectly correct in saying that maintaining the position of certain institutions and systems in our country seems much more important to the government than does the welfare of individual human beings.

The Address-Mr. Low

The last part of the paragraph I quoted from His Excellency's address is, I think, a complete misstatement of the fact. The fiscal measures to combat inflation which were adopted by the government have been a dismal failure in so far as controlling prices is concerned. Since the Minister of Finance (Mr. Abbott) announced the first of these fiscal measures, the cost of living index has zoomed up no less than 18%o points. That, it seems to me, ought to be evidence enough that the government's fiscal measures have failed utterly to check the steady rise in consumer prices, much less to bring prices under control.

It is a fact that certain aspects of the antiinflation program have contributed directly to higher selling prices, as well as to the highest cost of living index in our history. A case in point is Mr. Abbott's commodity taxes. He gives them that genteel name "commodity tax", but the fact is that they are hidden taxes. They are known by such names as the sales tax, the excise tax, and perhaps customs duties. By applying these taxes at the manufacturers' level the government pushed prices up. And that is not all; in many cases they pyramided prices beyond all reason.

I should like to point out to the house that the net effect of the 10 per cent sales tax is to cause the consumer to pay up to 60 per cent more in taxes than would be necessary if the same rate of tax were applied at the retail level. I am prepared to use specific examples which I have obtained from manufacturers to prove the case, if that statement is challenged.

I should like to repeat, because it is significant and important for the Canadian people to know, that the net effect of the 10 per cent sales tax is to cause consumers to pay up to 60 per cent more in taxes than would be necessary if the same rate of tax were applied at the retail level. That can be proved.

A look at the progressive rise in the cost of living index shows that immediately after the introduction of the 1951 budget, that is during the months of May, June and July when the budget provisions were being applied to the Canadian economy, the cost of living index rose by 7 points. The excise tax increases and the 25 per cent increase in the sales tax provided the main pressure for the price rise during those months; I think there is no question about it.

The government has chosen to rely almost exclusively upon taxation to combat inflation; and that in the light of the fact that many economic authorities think that taxation, unaccompanied by subsidies and, perhaps, rationing, cannot possibly check price rises under conditions such as those in Canada

today. This was drawn to the attention of the Minister of Finance during the budget debate last spring. I did so, and I recall that at that time other Social Credit speakers did so, and perhaps others as well. The Minister of Finance chose to ignore this fact, and proceeded to put his whole trust in his taxation measures. He created an extraordinary measure of discomfiture and suffering on the part of many thousands of Canadian people.

Another budget provision which has contributed to the increase in the cost of living since last spring is the unabated corporation income tax increases. The Minister of Finance was warned by a great many in the house that if an abatement provision was not provided, those corporations classified as utilities, such as railway companies, telephone companies and power companies, would be forced to apply for increased rates. The minister failed to keep his promise to insert an abatement clause in his budget. Consequently, almost immediately after the budget was introduced in the House of Commons utility companies did apply for higher rates, and gave as one of their reasons that they were forced to do so in order to pay the increased taxes imposed upon them.

Here again the Minister of Finance was hiding a tax so the Canadian people could not see it. That is, he simply compelled the utility companies to collect taxes for the government which the government was afraid to apply directly to individual citizens in this country. Increases in telephone rates, and in electric power rates as well as freight rates, do contribute to price increases throughout the country. They have already contributed to increased prices by the fact that the railways were recently granted a 12 per cent increase in freight rates.

Another way the government has contributed to the high cost of living is that it has failed to adopt an effective policy covering investment and expansion and development in Canada. At least some of the expansion and development of Canadian industry and resources during the past few years has had about the same effect on prices in Canada that war has had upon them. Whenever huge profits are plowed back into plant expansion without soon bringing an increase in consumer goods available to the people of Canada, it is inevitable that inflationary pressures are set up which push up the cost of living. The immediate effect of capital plant and resources development is to divert materials and power from ordinary consumers, and it raises either prices or taxes, or both. But of course development differs from war in that ultimately it does raise the standard of living, if the government does not discourage the

increase of consumer goods production which that development makes possible.

I would say that a good deal depends upon the word "ultimate". Some expansion projects give returns within a relatively few years, and they can be justified; others are likely to be of use only to future generations, and are therefore a dead loss so far as this generation is concerned. This generation of Canadians-you and I, and our fellow Canadians-has inherited rich assets in the form of abundant resources. It is only right that we pass on to our children and grandchildren an increase in those resources, wherever possible, but it is not necessary or desirable that the increase should be very great in so far as it is done at the uncompensated expense of this generation. I believe there is a reasonable rate at which development and expansion should be undertaken. An excessive rate is plain robbery of the community, because while the development is going on our people are forced to pay higher prices for their living and higher taxes to government, without getting any benefit of increased production of consumer goods at all.

The Liberal government has failed dismally in its responsibility to the Canadian people with respect to the management of investment for expansion and development. I brought forward at the last session what I thought, and what many people thought, was a perfectly sound suggestion, by which some of those undistributed profits of corporations might not be plowed back immediately into expansion. But the suggestion was turned down. I presume the government had other ideas. The fact is that since 1946 the rate of increase of prices in Canada has accelerated out of all reason. Much of this increase in prices has come from the unnecessary exploitation of the Canadian people through the very process of taking large profits and plowing them back into expansion and development, without giving the Canadian people the benefit of increased production of consumer goods.

I maintain that it is an urgent matter now that some specific policy be laid down governing future development and expansion programs. The criterion by which they should be judged, in my opinion, would be this, that any development program should be authorized only after a proper analysis of its purpose and cost has been made, and after it has been determined that one of its results, at any rate, will be an early reduction in the general price level, at least until that level has been brought down to or near the 1939 level.

The government tries to excuse its comparative inaction by saying that the present

The Address-Mr. Low price situation is a world-wide phenomenon. Up until late spring I noticed that many of our cabinet ministers were quite ready to blame high Canadian prices on those in the United States. A good deal has been said this afternoon by way of comparison of prices in Canada with those in the United States. I was keenly interested in what the Prime Minister (Mr. St. Laurent) had to say in reply to the statement of the leader of the opposition (Mr. Drew) that the Canadian price index has increased above that of the United States. I believe him, and I have reason to believe him. I think it was very unfortunate that the Prime Minister (Mr. St. Laurent) did two things this afternoon. First of all he selected a centre in the United States that represents perhaps the very highest price centre that you can get anywhere in that country, and used it to compare with prices here. I am sure if he had selected an average of prices across the United States he would have found quite a different level.

I had the privilege of travelling across the United States twice this summer, and while I travelled through the east, middle west and western United States I took the trouble to investigate prices for myself. I did not depend on newspapers at all. I investigated prices in the stores, bought things to eat for myself and priced things in which I was interested. I think the second unfortunate thing that the Prime Minister did today was that he only selected foodstuffs for comparison. If he had gone to the trouble of selecting other things such as machinery, tools for making repairs, clothing, furniture, household equipment, and all those things to which in Canada have been applied such dreadful and foolish commodity taxes, he would have found quite a different story.

I found, for example, in my travels across the United States, taking an average of different areas, that most foods would average about the same price in the United States as in Canada, although I was quite surprised to note that I could buy grade A eggs at 54 cents a dozen just ten days ago as I came through the middle western United States. I could not help thinking of the 84 and 86 cents my wife was paying in Ottawa. Butter was approximately the same price. I admit that what the Prime Minister said about milk is probably true. The average across the United States was around 20 cents as I found it, because I do buy milk to drink, and of course that would be about 24 to 25 cents here.

That is quite correct, but when I got into other fields like fruits and certain vegetables I found that prices there were much lower than they are here. Furthermore, when I investigated the price of clothing I got the

The Address-Mr. Low shock of my life. If you want a real comparison just take a look at the prices of cotton goods in the United' States and compare them with prices here. Take the prices of men's shirts. If you want another shock take a look at the tools used by farmers and mechanics to make repairs'. They are 20 to 25 per cent lower in the United. States than they are here. Electrical goods run up to 75 to 80 per cent lower than they are in Canada, and there are so many other things I could quote which enter into the day to day cost of living in the United States. I am satisfied that what the leader of the opposition (Mr. Drew) has said is quite true, that the cost of living index today in the United States is lower than it is in Canada.

Mr. Knowles:

And wages are higher.

Mr. Low:

Wages are higher. I do not think there is any question about that when you consider the whole range of things that enter into the cost of living index. The government sort of excuses its position on the ground that the cost of living index in Canada is no higher at any rate than it is in the United States, and they say further that this is no time to apply a system of direct price controls. They go further and say that it would have to be an over-all system including wage controls, and that even such a comprehensive system would not work now. I am not going to quarrel with that declaration by the government, but I want to set out our position quite clearly.

We Social Crediters are convinced that a system of over-all direct price controls, with all the regimentation and restrictions it entails, is the very negation of the democratic way of life. That is the first point. We further believe that as long as Canada continues to participate in the numerous international organizations to which she is now committed, such as NATO, Bretton Woods, the United Nations, the Colombo plan, and so on, the cream of Canadian production is likely to be given away externally, leaving in our country effective demand for which there is no balancing supply of consumer goods. In that situation pressures for price rises are inevitable, particularly if large corporations continue to pile up inventories so that those goods are not released to the Canadian public. It is our conviction too that as long as we continue to operate under the present financial and economic system this country cannot maintain a condition of full employment, even in peacetime, without some price control arrangements. Until proper financial and economic reforms are established in Canada to take care of the situation on a long-term basis, it may be necessary to adopt certain price controls, as has been advocated

by both opposition speakers who have preceded me this afternoon. We would support such a temporary measure, and note that I say "temporary"; I am quite sure that the leader of the opposition at any rate, and I think perhaps even the hon. member for Rosetown-Biggar (Mr. Coldwell), would agree that it should be a temporary measure, to bring our people relief from the present terrific high cost of living until we can get things balanced down to a decent level.

In my judgment there are other perfectly scientific and economically sound things the government can do to ease the cost of living burden and bring relief to millions of our Canadian people. We strongly advocate the following measures:

1. Overhaul of the taxation structure. We feel that the government ought to abolish or reduce in rate those taxes which are found to pyramid consumer prices. Particularly we advocate removal of the sales tax, an abatement in income taxes on public utility corporations, and the reform of the fiendish income tax enforcement policy as it has been applied to western farmers. Wherever any tax policy is found to discourage all-out productive effort, it should be revised to remove the discouragement.

2. We advocate holding out every possible inducement to all sections of Canadian society to increase their productive efforts. We believe that the greatest single factor in bringing down the general price level is a plenteous supply of consumer goods for home consumption. Let me make that clear; a plenteous supply of consumer goods for home consumption, not piled up in somebody's inventory, not produced to send to some other place, but a plenteous supply of consumer goods for home consumption.

3. We believe we should couple with a wise taxation policy a system of consumer price discounts or subsidies on selected items which enter into the daily needs of the majority of Canadian people. The Prime Minister said something today about the history of subsidies in the United Kingdom. Again I think it was rather unfortunate that he did not say at the same time that the subsidies applied in Great Britain are largely on things which they have to import, of which they produce not enough for their own people. It is a different matter when you apply subsidies to things you have to import than it is to apply subsidies to things that you produce in your own country and can produce in abundance. Let us take eggs, for example. I think it is certainly a reflection on the intelligence of the Canadian people today that we find ourselves in the position that we have to import eggs into Canada for the first time in our lives.