Mr. Browne (St. John's West):

I notice that the salaries of the ministers are fixed by statute. Would the minister consider an

[Mr. McLure.)

alteration in the law so that ministers of the crown could have their salaries fixed by themselves?

Mr. Hodgson:

Following up what the hon. member for Lake Centre said, there is no doubt that the fellow who signs the cheque always has something to say-

Mr. Fournier (Hull):

Parliament signs the cheques for the money.

Mr. Hodgson:

Parliament signs the cheques authorized by the cabinet.

Mr. Fournier (Hull):

But the estimates are approved by parliament.

Mr. Hodgson:

If you will take section 38(c) out of the act-

Mr. Fournier (Hull):

We are not discussing that.

Mr. Hodgson:

The way it is now it really puts a ball and chain on the civil service commission.

The Chairman:

Shall the section carry?

Mr. Knowles:

On division.

The Chairman:

Shall I report the bill?

Mr. Knowles:

On division.

Bill reported.

PROVISION FOR SHORT-TERM: CREDIT TO PRODUCERS

Right Hon. C. D. Howe (Minister of Trade and Commerce) moved

that the house go into committee to consider the following resolution:

That it is expedient to introduce a bill to make provision for short-term credit to grain producers in the prairie provinces to meet temporary financial difficulties, arising from inability to complete harvesting operations or to make delivery of grain, through bank loans guaranteed by the crown with limitations including a limitation to the effect that the liability of the crown to pay losses will not exceed $5 million; moneys payable under the act to be paid out of the consolidated revenue fund.

He said: Mr. Speaker, there will not be time between now and the period of recess to make my full statement. If it meets with the approval of the members I should like to call it 6.15 and make my statement afterwards.

At 6.15 p.m. the house took recess.

Mr. Howe:

Mr. Speaker, as indicated by my own statement to the house on October 30, and again by the Prime Minister (Mr. DECEMBER 14, 1951

St. Laurent) on November 5, and in a further statement by myself on November 15, the government has under consideration the question of whether financial assistance to certain producers in the prairie provinces is necessary, and if so, the manner in which such assistance should be provided. I want to emphasize that in the government's consideration of this matter we have recognized a continuously changing position and a continuously narrowing need for temporary assistance.

It was considered by the government and it is considered throughout the prairie provinces that the major problem confronting western producers who have been unable to deliver significant quantities of grain in the present crop year will be met in the distribution of surpluses from the 1950-51 oats, barley and wheat pools. These payments will be completed within a few days and, as I have indicated to the house, have aggregated about $130 million. We must not underestimate the importance of these payments from the standpoint of improving the cash position of grain producers under the circumstances which have prevailed this fall.

The problem has also changed in that threshing has been proceeding in spite of adverse conditions, and the volume of unthreshed grain has been substantially reduced in the past four or five weeks, particularly in the province of Alberta. When I was in Alberta last week it was estimated that well over one-half the Alberta wheat crop had been threshed, and threshing was proceeding in many areas. In Saskatchewan, where threshing is still going on, 75 to 80 per cent of threshing is completed; and in Manitoba threshing is finished except for an area in the northwestern part of the province. In this respect, therefore, there has been some improvement, although many producers in Alberta and to a lesser extent in Saskatchewan have crops still in the fields.

The position has been changing in another respect. Up until October 25, producers in the prairie provinces had marketed 195 million bushels of grain. As at December 6 they had marketed 291 million bushels of grain, a very substantial increase in marketings over the past six weeks. These increased marketings have been made possible largely through shipments of grain out of country elevators. Up to October 25, shipments of grain out of country elevators had amounted to 150 million bushels. Up until December 6, shipments of grain from country elevators amounted to 241 million bushels. You can see, therefore, that in the last six weeks grain shipments out of country elevators amounted

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to 91 million bushels, and these shipments mean more opportunity for producers to deliver grain.

Since mid-October it has been necessary for the railways to concentrate their shipping to some extent at least on stocks of wheat which were most readily available to the lakehead and to the Pacific coast. This was necessary in order to meet urgent export commitments entered into by the Canadian wheat board. On November 21 it was possible for the wheat board to amend its shipping instructions and give a high degree of preference to the shipment of grain from delivery points which had been congested for some time, and to the shipment of tough and damp grain which producers had not been able to deliver in volume to their country elevators. Under these shipping instructions I am quite sure the delivery opportunity of many producers in the west is improving and will continue to improve. When you look at these developments, I think members of the house will agree with me that the need for some plan of interim financing for grain producers has steadily decreased and, of course, will continue to decrease as threshing and shipping of grain proceeds.

While in the west I also had a viewpoint expressed to me by producers themselves that while they have had an unfortunate fall in so many respects, they are able to carry on without difficulty after having experienced a series of fairly good crops and good prices for grain and livestock and livestock products.

In spite of all I have said there are producers who, because of delayed uncompleted threshing, have been able to deliver little or no grain this year, and there are also some producers whose deliveries have been restricted by lack of available storage space in country elevators. Therefore the government feels that a restricted problem does exist, and has decided to make advances available to producers in these circumstances. These advances will be made through the chartered banks. In seeking the proper course of action, discussions were held with country elevator operators in the three prairie provinces. The elevator companies were most helpful in their consideration of the problem, but the government has decided that it would be more appropriate to use existing financial institutions whose business it is to lend money rather than to ask the elevator companies to assume the responsibility of lending money provided under a government guarantee.

Under the plan which the government is proposing the banks will operate under an arrangement similar to the Farm Improvement Loans Act. That is, they will make

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loans on their own account to farmers, and the government will stand prepared to meet losses up to 25 per cent of the loans made. This guarantee is larger than under the Farm Improvement Loans Act because the risks are greater, and about the same as under the Veterans Business and Professional Loans Act. The banks will be able to call upon the government to implement its guarantee on October 1, 1952, after there has been an opportunity for deliveries to be made from the 1952 crop as well as the current crop. The loans should, however, be fully repaid out of the proceeds of the 1951 crop.

Since the loans are intended only to provide some cash for a limited period to those farmers who have been unable to deliver any significant volume of grain, it is proposed that the limit shall be $1,000 to any one farmer. In making individual loans, the banks will take into consideration the quantity of unthreshed or threshed grain which producers will have for delivery when their threshing is completed or when elevator space is available. The banks will also take into consideration deliveries which producers have already made in determining the amount of individual loans. Within the maximum provided, the amount of money which will be loaned in each individual case will be determined by the banks on the basis of their experience and judgment, and of course the banks will bear in mind the considerable guarantee which is being provided by the government of Canada. It is the intent of the plan that these temporary loans will be repaid just as fast as producers can deliver their grain.

May I conclude this explanation by saying that these loans are not in any sense to be regarded as a form of relief. They are interim advances made available at commercial rates of interest to producers who have grain on their farms or who have crops which they have every reason to believe will be harvested in due course.

I hope and believe that the provisions of the bill that will be founded on this resolution will solve the financial difficulties of those producers who have been unable to harvest and market sufficient of their crop to provide for their interim living expenses. I am happy to say that the number of producers in that position is growing smaller each day, but there are still certain areas where the credit to be made available will relieve a situation that might otherwise result in considerable hardship during the coming winter.

Mr. J. G. Diefenbaker (Lake Centre):

Mr. Speaker, the statement made by the minister respecting the advances to be made to

IMr. Howe.]

western farmers has been long anticipated and long delayed. While welcoming the general principle in connection with the basis upon which these advances are to be made, having regard to the situation on the prairies, I think the amount of the guarantee by the government, $5 million, is palpably and obviously inadequate to meet the situation that exists. The maximum of $1,000 would appear to be fair and proper. However, the total amount of $5 million to be guaranteed to the extent of 25 per cent will not, as I see it, meet the situation on the prairies.

The minister is in a better position than a member of parliament, without the statistical and other information available to him, to see what the situation is. The minister has said that approximately 80 per cent of the crops on the prairies have been threshed in the province of Saskatchewan. I think the situation generally is this. The total percentage of grain that has been threshed is approximately 72 per cent, and about 28 per cent still remains either standing or unthreshed, about 13 per cent in the swath and 15 per cent still standing.

The minister has indicated that conditions have improved, and that as the weeks have gone by the situation, to use his words as I took them down, has been continuously changing and the need has been narrowing. True enough, the payment on account of the 1950-51 pool has been helpful in relieving the situation in many parts of the western provinces. But one cannot expect that the threshing will continue at the rate it has been proceeding in recent weeks. If my figures be correct they mean that almost 30 per cent of the wheat in the province of Saskatchewan, and I think generally speaking on the prairies, is unthreshed.

The minister mentioned that there are areas in which the farmers have been able to market but a small part of their production, first because their threshing or harvesting is not done, and second because of the shortage of available storage. That is true. While this is a step in the general direction that we on this side of the house have been advocating for the last two or three months, it does not go far enough and does not meet the situation that exists. I can see no risk in connection with loans on wheat in storage on the farms. Wheat is wealth. It is good security. That security can be taken by the bank at any time once the loan is made. There is no risk in the guarantee by the government of loans against wheat that is in storage.

For the last several months Mr. Alvin Hamilton, the leader of the Progressive Conservative party in Saskatchewan, has been advocating something very similar to what is now adopted by the minister, with this

exn-ption: that the amount should be at least twice if not three times that now to be guaranteed by the government in order adequately to meet the challenge to the economic solidarity of the western provinces.

The minister has mentioned that promises have been made from time to time that the problem would be considered. This is not a problem that has originated in the last few weeks. It is due in large measure-that is, excepting for climatic conditions that have prevented the harvesting of the crop in many areas-to the failure of the wheat board to realize that with over 100 million bushels of damp wheat in storage on the prairies from the 1950-51 crop, when this fall's crop became marketable there would be no available facilities for storage. The responsibility cannot be placed on the shortage of box cars, nor on any other explanation that has been made. It is not because of a shortage of railway transportation. I make that statement because of a joint statement that was issued on the tie-up in the movement of the present record crop, issued about September 20 by Mr. George Mclvor, the chief commissioner of the wheat board, and Mr. R. W. Milner, the federal transport controller. In that statement the railways were not held responsible for the congestion. The railways were exonerated in these words:

Full use cannot be made of presently available transportation and lake tonnage.

Then it points out:

There is no lack of box cars.

The reason for the congestion is the large quantities of the 1950 frozen, low-grade wheat lying in the country elevators and in the terminal elevators at the head of the lakes, Montreal and Vancouver. Because of the unavailability of storage which should have been provided, farmers found themselves unable to market that which they had harvested, and climatic conditions accentuated the condition in that it prevented harvesting, threshing or combining in many areas on the prairies.

While a step has been made in the right direction, I feel that the amount of the guarantee holds out a greater hope than will be realized when the matter is actually applied and the loans given in accordance with the terms announced by the minister. I can see no reason why there should have been a restriction to $5 million; for, I repeat, I can see no risk so long as the advance-and I used the minister's word "advance"-is expressly made applicable to threshed and stored wheat.

Mr. Howe:

I suggest to the hon. member that the full amount will not be used.

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Mr. Diefenbaker:

That is possible because, after all, the banks are the ones that will determine whether or not any advances are made to the farmers; and if the banks have not felt like making advances up to the present time against the security, the 25 per cent guarantee will not result in the acceleration of any desire on the part of the banks to make loans at the present time. What the minister says may be perfectly true; no doubt it is.

I now come to another matter with which I had hoped the minister would deal, although he has denied on more than one occasion that the government had any intention of making payment to the farmers for the storage of wheat on their farms. Since he made those statements he has visited the western provinces. He attended the farmers union convention in Saskatoon. According to the press, he met them in a most congenial manner, and in keeping with his best tradition when meeting farm delegations. The farmers ask that payments be made for the storage of wheat on the farms. There would be no cost to the Canadian people in accepting that idea. After all, if it were not for the fact that the storage facilities in both the line elevators and the elevators at the head of the lakes were congested by unmarketable tough or frozen wheat of the 1950 crop, most farmers who did their threshing or combining this fall would have hauled their wheat to market immediately. I repeat that it was not a shortage of box cars but the allocation of available cars that resulted in the wheat being piled up on the farms.

If the wheat had been stored in the elevators the price the farmer would ultimately receive would have been subject to the deduction of the monthly amount allowed for storage. If the farmer stored the wheat on his farm he should be paid what otherwise would have been paid to the elevator companies. I know the government is adamant in this regard, but there is a strong feeling everywhere on the prairies that even at this late date something should be done to provide payment to the farmers for the storage of wheat on the farms.

I now come to the third matter, and that is in connection with the farmer who has not been able to thresh his crop, whose crop today is either standing in the fields or lying on the ground in swaths. I am not suggesting and I have not at any time suggested that there should be loans made on crops under those conditions, for there would be a considerable risk.

Mr. Howe:

Yet we are doing it.

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