Mr. Knowles:

My hon. friend is no doubt referring to the statement the minister made to me when I questioned him on March 12,

1952, as reported at pages 356 and 357 of Hansard. I was coming to that matter in just a moment but, since the hon. member has asked that question, I will reorganize what I was starting out to say.

Last June when we were discussing the Old Age Assistance Act I asked the minister specifically whether those on the former pension would be free from recoveries after the end of December, 1951. As recorded at page 4587 of Hansard for June 23, 1951, the minister replied:

That Is a matter that will have to be decided in the future. I cannot decide it now.

On the basis of that, and on the basis of discussions of this matter that to my knowledge have taken place in at least some of 55704-35

The Address-Mr. Knowles the legislatures, I raised the matter during the course of my remarks earlier in this debate, on March 10. Having discussed the matter at length on that occasion, I followed it up on March 12 by putting to the Minister of National Health and Welfare (Mr. Martin) the question to which the hon. member for Spadina (Mr. Croll) now has reference, and the minister's reply was:

I can only say that the whole matter is one that is governed by the existing law.

Mr. Croll:

May I put another question to the hon. member? A speaker for the government in the Ontario house has indicated that for all purposes the debt was wiped out following what the minister had said.

Mr. Knowles:

All right. We are making headway, and I appreciate the assistance the hon. member is giving. He draws attention to what has been said in Ontario. I know too that the responsible officials in Saskatchewan have taken the view that they are not obligated to make any further recoveries under the former act, but the minister of health and welfare in the province of Manitoba, when asked on the floor of the legislature not only to cancel liens as Manitoba has done-and I commend that government for doing so-but to cease making recoveries, said they had no alternative but to continue making recoveries under the terms of the agreement with the federal government, made under the provisions of the federal act. I know from consultation with some legal friends of mine in Winnipeg-and I do have some legal friends there-that there are cases right now in which recoveries are being made because this position has not yet been made clear. The statement which was made in the legislature of Manitoba is reported in the Votes and Proceedings of the legislative assembly of that province for Tuesday, February 12, 1952. The statement was made by Mr. Schultz, minister of health and welfare, and part of it reads:

In regard to the collection of claims against the estates of deceased pensioners in this group, the legislation of the federal government and the obligations under the agreement submitted for signature by the federal government compel this province in accordance with similar agreements with every province, to collect from the estates of deceased pensioners where the estate is over $2,000 net. Neither Manitoba or any other province has any option in this matter at the present time.

It was precisely because of that position being taken by the responsible minister in the province of Manitoba-

Mr. Martin:

Of course Mr. Schultz knows that is not a correct statement, as does my hon. friend.

Mr. Knowles:

I am glad to get further assistance from the Minister of National

The Address-Mr. Knowles Health and Welfare. Perhaps before we are through he will make the statement I asked him to make when I put my question to him on the orders of the day on March 12. This is what I asked:

Has the federal government received a request from the government of Manitoba, and possibly from other provinces as well, that the provinces be relieved forthwith of the necessity of making recoveries from the estates of persons who were paid pensions under the former old age pensions act up to December 31. 1951? Will the government advise the provinces that henceforth they need not-

Then Hansard records some hon. members as saying "Order paper", and I never did get out the rest of that question. That is a common practice here, of course. It is obvious what I was seeking to ask, namely that the minister make a clear statement to the effect that the provinces are under no obligation to make any further recoveries with regard to pensions paid prior to December 31, 1951.

Mr. Marlin:

Does my hon. friend wish me to deal with that now?

Mr. Knowles:

Gladly, so long as I still have the floor.

Mr. Marlin:

My hon. friend knows perfectly well that neither the federal government nor the provincial government nor the minister can do that. There is the existing law; and until that law is repealed no one can take that position. I can tell my hon. friend that I have written each of the provinces on this matter-

Mr. Knowles:

What did you tell them?

Mr. Marlin:

I am sure my hon. friend will realize that until I have heard from them as to the course I have suggested, I cannot take any action. This is a matter that does not depend, as Mr. Schultz has erroneously said in Manitoba, upon the federal government. This is a matter determined by existing law and on the basis of agreements between the federal and provincial governments; and until we know the attitude of all governments in respect to this matter we cannot take any action with regard to the existing law. Surely that is the situation, and I should think my hon. friend would be the first to agree that I have correctly stated it.

Mr. Knowles:

I will agree that in part what the minister has said indicates the situation, but it does not tell the whole story. The minister suggests that the federal government has no responsibility at all for this. In the first place the whole problem of recoveries against estates arose out of a provision in the federal act. It was in the first act that was drawn up back in the middle twenties, and it was in the new version that

fMr. Knowles.]

we got in 1947. The provincial authorities are acting on the basis of what they believe to be the interpretation of that act and of the agreements they signed. Some of the provinces take one view of that agreement while some take an opposite view.

This is not the first time this issue has come up. It came up back in 1943 and 1944 in particular. I know whereof I speak; I was here at the time, and I had something to do with it. At that time Mr. Ilsley, as Minister of Finance, was responsible for old age pensions. Together with others I was pressing him for an end to this policy of making recoveries from the estates of deceased old age pensioners. As a result of those efforts and as a result of representations made to Mr. Ilsley by some of the provinces, the federal government finally took a stand. That stand was expressed in a letter written on March 23, 1944, and addressed to each of the provincial governments. On the same date the present Minister of Finance (Mr. Abbott), who was then parliamentary assistant to Mr. Ilsley, answered questions I had placed on the order paper, and in so doing told us what the government had done. I am looking at Hansard for March 23, 1944, pages 1742 and 1743. The questions are in my name; they relate to the filing of liens and the making of recoveries. The answer given by the then parliamentary assistant was rather lengthy. In it he quoted subsection 3 of section 9 of the Old Age Pensions Act, which said in part:

A pension authority shall be entitled to recover out of the estate of any deceased pensioner, as a debt due by the pensioner to such authority, the sum of the pension payments made to such pensioner-

Then the present Minister of Finance went on to say this, which is extremely significant:

There has been some legal doubt as to whether this clause was mandatory or permissive in its effect. For some time the dominion has followed the legal opinion that the section indicated an intention of the part of parliament that recoveries should be made and that as a matter of sound administration, it should be regarded as a statutory direction to the pension authorities to make recoveries in the ordinary course.

Now listen to this:

More recently we have been advised that while the drafting may leave some legal doubt, nevertheless the subsection is, strictly speaking, permissive. The provincial pension authorities have, as indicated in the answer to question 1. followed different policies, some have refused to follow the administrative requirement of making claims against the estates of deceased pensioners, others have suggested that it might be desirable either to discontinue making claims in all cases or to limit claims to the larger estates. In view of this situation, the provincial pension authorities are being advised that whether or not recovery should be made from estates where the net value does not exceed two thousand dollars will be left entirely to their discretion.

As I say, that was the answer given in this house to my questions as recorded in Hansard for March 23, 1944.

I now have in my hand sessional paper No. 89K, dated June 13, 1944, which was brought down in response to a motion of mine dealing with this matter. It includes a copy of a letter from Dr. Clark, the deputy minister of finance, to every province. I am sorry to tire the house with a good deal of the language I have just quoted, but it is important to get this matter straightened out. This letter says in part:

There has always been some legal doubt whether subsection 3 of section 9 of the act was mandatory or permissive in its effect. This department has, for some time, been following the legal opinion that the subsection indicates an intention on the part of parliament that recoveries should be made and that for administration purposes it should be regarded as statutory direction to the pension authorities to make recoveries in the ordinary course. Recently we have been advised that while the drafting may leave some legal doubt, nevertheless the subsection is, strictly speaking, permissive although the principle of sound administration may involve an obligation to make recoveries in the cases covered by the subsection.

Then, the last paragraph goes on to repeat much of what I have just quoted from the answer given in Hansard, which indicates that the federal government reached the conclusion that since the wording of that section was permissive rather than mandatory it was therefore saying to the provinces, "so far as we are concerned from now on you do not have to make any recoveries from estates where the value is less than $2,000." If the wording of that section of the federal act was found to be not mandatory but permissive, and on the basis of that situation it was possible for the federal government to say to the provinces, "you can ignore that part of the agreement, on estates of less than $2,000," I say that the federal government could say the same thing to the provinces today with respect to all estates.

The wording of the act is quite clear. In its original form, as it was enacted back in 1926 or 1927, it said:

A pension authority shall be entitled to recover out of the estate of any deceased pensioner . . .

and so on. It was thought for a time that that provision was mandatory, but it was finally ruled that it was permissive. The act was rewritten in 1947, and the phraseology was changed slightly. It was made to read along these lines.

An agreement made pursuant to section three of this act shall include an undertaking by the province that the pension authority will be authorized to recover out of the estate of any deceased pensioner . . .

It is mandatory that there shall be this provision in the agreement, but the provision 55704-35J

The Address-Mr. Knowles in the agreement is a permissive one, namely that the pension authority will be authorized to recover-authorized, but not compelled. I shall go along with the Minister of National Health and Welfare (Mr. Martin) this far, in that I think Mr. Schultz has put too strict an interpretation on the section in the act and the section in the agreement. I suppose what he is relying on is that letter received in 1944 telling them what they could do with estates of less than $2,000. He feels that until he gets a ruling from the federal government, he must abide by that ruling. Nevertheless, I feel that Mr. Schultz is not under any obligation to continue making these recoveries and I believe the minister agrees with me.

The whole section in that act was permissive, and the agreement under it was permissive. The legal opinion, as set out in Dr. Clark's letter of March 23, 1944, confirms the fact that it was permissive. I know from contacts I have had with members in different legislatures that in some other provinces the opposite view to the one taken by Mr. Schultz is being taken. In the meantime a great many old age pensioners in Manitoba are greatly worried. I think there should be the feast possible delay in clearing up this position. I am glad to know the minister is having this correspondence with the provinces. He might have told me that when he answered my question on March 12. Just telling me I had made a fine speech on the subject on the previous Monday was not a great deal of help, true though his comment may have been.

Mr. Martin:

Did I say that you made a fine speech?

Mr. Knowles:

Does the minister now say that I did not?

Mr. Martin:

I am not saying whether or not you made a fine speech, but I am doubting whether I said that you made a fine speech.

Mr. Knowles:

Just to have the record clear, what the minister did say is recorded on page 357 of Hansard for March 12 as follows:

I can only say that the whole matter Is one that IS governed by the existing law, as the hon. member so well pointed out in his speech on Monday last.

All I am asking now is that the Minister of National Health and Welfare point out with equal clarity, and in the strong way that he can when he wants to, that so far as the federal government is concerned it does not expect any further recoveries from estates of persons who were receiving pensions prior to December 31, 1951, regardless of the value of these estates. I know that it is a cause of deep concern to many of our people in

The Address-Mr. Knowles Manitoba, and I hope the minister will make such a statement to this house, to the country, to the provincial governments, and to Mr. Schultz in particular, at the earliest possible opportunity.

I should now like to speak on another matter. There has been a sharp [DOT] debate between the Liberal party and the C.C.F. during the last couple of weeks with respect to NATO. I do not wish to extend the debate on that question at this stage of our proceedings, but I believe it should foe pointed out that there is a great deal of unhappiness and uneasiness in the country over the secrecy that enshrouds the commitments made by NATO at Lisbon as well as at earlier meetings of that body. A good deal of the difference of opinion that has arisen in the course of this debate seems to stem from the fact that we do not yet know what the commitments were that this house allegedly supported a year ago, nor do we yet know the commitments that we will foe called upon to support at this session.

The minister has suggested to us that we supported such and such last year, and he frankly states that we have not yet been told what it was that we supported, particularly in terms of manpower. We now come to the situation this year, and when we question the advisability of the figure of $300 billion that is NATO's proposed military expenditure, he asks us where we got that figure. He knows that we got it from responsible newspapers which are being permitted to suggest that figure as the NATO goal. He questions it, yet he will not tell us what the precise goal is. I call upon the minister of external affairs to break through this secrecy. He owes it to this house and he owes it to the Canadian people to take us into his confidence and tell us what it is that is being planned so far as NATO is concerned. We feel that we have this coming to us in order that we might know precisely what is envisioned before we vote our share of any financial commitments, and also in order that we might be able to discuss the merits of one division or another as between money spent on military preparedness and money spent on economic aid to other countries.

I plead most strongly with the minister that he break through this secrecy and give us precise information about NATO just as soon as he possibly can. He must be aware of the fact that we are not the only ones asking for that information. He must be aware of the fact that members of all parties in this house are hoping he will give full details. He must be aware of the fact that

newspapers and magazines, even some periodicals that are critical of the stand we have taken, agree with us that we should have full information before we are asked to make commitments, and also in order that we may assess the division as between military preparedness and economic aid.

The Secretary of State for External Affairs knows quite well that we in this group support the principles of NATO; the house knows it; the country knows it. As a matter of fact, Mr. Speaker, even the Winnipeg Free Press knows it. I mention the Winnipeg Free Press in particular because of a gross distortion in which that newspaper indulged on its editorial page on March 15. I do not have the page before me at the moment, but I have read it and I know what is there. We in Winnipeg are never surprised at any ideas that the Winnipeg Free Press may express in its editorial columns; but it is a matter of real amazement to me that on its editorial page the Winnipeg Free Press could run down those three centre columns material which it entitles "The Record", allegedly setting out clearly the statements that have been made by the various parties that have been discussing this matter, and yet so distort its presentation of that material. When you read something under the heading "The Record", you presume that if tells the whole story. And yet as one examines those three columns of material which are supposed to contain the record he finds, for example, that the statement issued by the C.C.F. national council has been decimated. The reference to our continuing support of NATO is deleted, our references to the need of economic aid, of what we are prepared to do in that field, are all wiped out. True, the Free Press protects itself by putting in a series of little dots here and there wherever omissions are made, but the end result is to completely distort the statement issued by the C.C.F. national council. As a matter of fact, the Free Press did the same thing with the remarks made in this house by the leader of the opposition (Mr. Drew). They quote just part of what he said. They show by a few dots that they have left out something else that he said, but, as a matter of fact, to do so is to distort the impression that was given by the leader of the opposition to this house. It did the same with the remarks made by the hon. member for Rose-town-Biggar (Mr. Coldwell) and the remarks made by the Secretary of State for External Affairs. Again, great sections are omitted and little dots are put in to indicate that to the reader of these three columns. That, I say, is a distortion of what is called "The Record", and I say to Mr. Grant Dexter, I am amazed that he has resorted to distortion

of that kind. I hope that at the earliest opportunity he will correct that, at least so far as this party is concerned, by reprinting on his editorial page in full the statement issued by the C.C.F. national council.

As I have already indicated, and as the Secretary of State for External Affairs knows, we support the principles of NATO. We accept the responsibility that it is laid upon us as a North Atlantic nation, within the framework of the United Nations, to build up defensive strength and at the same time to make arrangements for economic aid to the other members of the North Atlantic community, as well as to other countries throughout the world, with a view to achieving and establishing permanent peace. But surely it is our responsibility as members of this parliament, the parliament of one of the member countries of NATO, to consider very carefully the extent to which huge commitments for armaments and defence preparations might have a bearing on the economy of our country and of the other countries concerned. Surely it is up to us to discuss the extent to which we should spend money on armaments, as compared to the extent to which we should spend money on economic aid. Where we differ with the government, where we differ with the present NATO proposals, is in that division. We believe that too much is being spent on military preparations, and not enough on-economic aid to needy countries.

Now that the smoke of the smears and the slanders has been cleared away, we are asking that this house be given an opportunity to discuss this issue on its merits. I earnestly hope that in the debate on external affairs, which it is anticipated will commence as soon as this debate on the address in reply to the speech from the throne is over, the minister, in his very first statement, will take the house fully into his confidence and give us the facts so that we can deal with this important question in its proper light.

I want to say that although the minister's offer to hon. members who wish to have the figures at their disposal, to see those figures in confidence, was a thoughtful gesture on his part, I do not think it is the proper approach to this matter. I do not agree with the suggestion made in some newspapers that we should have a secret session. Rather, I think that any information that we are entitled to, on the basis of which we as members of this parliament should make our decisions, should be information available to the country as a whole, and I hope that something along that line will characterize the debate on this aspect of external affairs when we reach it after the end of this debate.

18, 1952

The Address-Mr. Knowles

Surely it is clear to all of us, Mr. Speaker, that the nations which belong to the North Atlantic Treaty Organization have had laid upon their shoulders one of the greatest responsibilities that has ever confronted any group of nations in the history of mankind. We have been called upon by events over which we have no control to go in for huge defence preparations. We have asserted that in building up these defence preparations it is our aim that they shall be purely and only defensive. We know, however, that never in the history of mankind has it been possible to build up huge armaments and prevent the outbreak of war. To avoid- such an outbreak is our task, and that is. the job that is laid at the door -of this nation and of all the nations that comprise the North Atlantic Treaty Organization. We must find a -balance between the amount of military preparation that will be defensive, and effectively defensive, without going so far as to cripple the economies of our nations and invite attack, and without establishing a military set-up that will provide the kind of provocation that leads to the war we seek to avoid.

Let us not forget that that is the aim of NATO: defensive preparation, but with it the idea set out in article 2 of the North Atlantic treaty, which calls- for the full use of that other weapon against aggression, which calls for that other means of building peace, namely, economic aid.

I hope that the Secretary of State for External Affairs and the other ministers of the cabinet paid some attention to what their Prime Minister (Mr. St. Laurent) said in his speech over the week end. We were all interested in the simile that he drew upon when he said that NATO was a matter of insurance against war and that we should be prepared to pay the premium for such insurance. The Secretary of State for External Affairs kn-ows as well as we do-he has said it time and time again-that you do not fight communism only with bullets. You have got to fight it also with ideas; you have got to uproot the conditions that lead to communism; you have got to spread economic well-being throughout the world. That is one of the premiums that we have got to pay. How much willingness has this government shown to pay that premium? What support is the Secretary of State for External Affairs getting on that aspect of the matter, from his colleagues, the Minister of Trade and Commerce (Mr. Howe) and the Minister of Finance (Mr. Abbott)? So far as the proposals that he brings forward are concerned, it would look as though he is not getting any support at all on that score. It appears to us that his colleagues are not prepared to pay that part of

The Address-Mr. Courtemanche the premium for the insurance that we seek. But unless we do pay that premium the peace of the world is in jeopardy.

I suggest, Mr. Speaker, that this is a subject of importance second to none to all of us in Canada and to the whole world. I believe that the discussion which has arisen out of the statement made by the C.C.F. national council and the speeches made thus far by my leader, the hon. member for Rose-town-Biggar, will in the end serve well the cause of peace, for what we are doing is asking that there be a critical examination of the whole situation, and in particular a critical approach to the whole question as to how we should divide our resources between military preparations and economic aid. We believe NATO's present spending is out of balance. At any rate, let us go into this question fully here in this parliament. Let us be met not with cocksureness on the government side that everything is right, particularly when we are not being told the full details of NATO's goals. Rather, let us have an honest consideration of the points we are making.

As I said before-and with this I close- we support the principles of NATO. We believe that it is the function of the North Atlantic treaty nations within the framework of the United Nations, within the framework of a world community, to do everything possible to prevent an outbreak of military hostilities, but we also believe it is their duty to go further and to build those social and economic conditions which will make possible the establishment of permanent peace.

(Translation):

Mr. Henri Courtemanche (Labelle):

Mr. Speaker, not long ago, the Canadian Chamber of Commerce, a body representing Canadian businessmen, industrialists, merchants, and heads of business concerns, submitted a brief on taxes to our government. Their brief, directed chiefly to the Minister of Finance (Mr. Abbott) and the Minister of National Revenue (Mr. McCann), was a protest against the disheartening level of income and corporation taxes, as well as against those excise taxes which, for some time, have been a main cause of the rise in the cost of living.

I do not know if the government experts will take heed of those protests. I say government experts because our public affairs are more and more in the hands of ministers who blindly follow the advice of so-called scientists who are in fact but mere theorists isolated in their ivory tower of pretentiousness and half-science. These advisers, who

in. many cases have taken refuge with the federal government after having failed in their own endeavours, will not stop at simple, practical and logical reasoning. They would rather resort to involved theories that have never been put to test, theories which have resulted in budget surpluses 25 or 30 times greater than the amounts forecast.

I am not sure, therefore, if these allpowerful gentlemen will give heed to the warnings of those who have to work and struggle without any respite to prevent their business concerns from being crushed by the burden of federal taxes, requirements and restrictions. These technicians, whom the mayoress of Ottawa has denounced in no uncertain terms, usually hold in sovereign contempt those who, not being learned enough to be constantly devising new taxes, are good only to pay those taxes to Ottawa, to the tune of millions of dollars. I am afraid, therefore, that these recommendations and warnings from the chamber of commerce will too soon be forgotten.

And yet the situation is serious, very serious indeed. It was Thomas Jefferson who said that the power of taxation is also the power of destruction. We do not seem to realize that taxes have reached a point where they can only become destructive.

The Bell Telephone Company sought recently to obtain an additional $7 million in order to meet increasing costs. But because of income tax, the company was compelled to ask $15,765,000 from its subscribers which was more than double the amount necessary. One need not hold university degrees in economics to realize that we have gone beyond the limits of common sense and that we have reached the point, as Jefferson said, where taxation becomes destructive.

Talk with the head of any business concern. You will find that he has lost all enthusiasm, that he has forsaken certain projects or that he looks after his business only halfheartedly, having been taxed and overtaxed by the government to a point where it becomes ludicrous and tragic.

We, who sit in the House of Commons, who have accepted to defend and to protect the nation's interests, must not forget that prosperity was brought to this country by those business heads who had generally started in a modest way. Those men were not afraid to work or to take risks. They built up business concerns which gave work first to a few dozen, and later to hundreds and even to

thousands of Canadians. What does the future hold in store for them? These leaders in the economic field are now convinced that the government wants to take all they have, or that the state wishes to punish them as if they had committed some odious crime.

It is obvious that the workman, the small wage earner, the small depositor, know that their fate is closely related to that of big business, to the destiny of the businessman. But we must, moreover, admit that they too are already suffering from excessive taxation by the federal government. I shall even go as far as to say that they are suffering very much more from it than the businessmen I just mentioned.

Today, some people have to run into debt in order to pay the taxes that are demanded of them. Personal income tax has a most disastrous influence. Why not frankly admit that, nowadays, each and every one-including the members of this honourable assembly -tries to resort to tax evasion?

Is it taxable? As a general rule this is the very first thing one is inclined to ask oneself when confronted with a possible new source of revenue. One should therefore not be surprised if that question is foremost in the mind of those who try to increase their revenues without paying more taxes. Let the sociologists discover what state of mind will spring from all that! Today the workers are no longer interested in putting in working hours; they know very well that if they are uncautious enough to work a little longer than usual, the taxation department will not lose any time in grabbing at their pay-envelope and appropriating a few extra dollars. So that it is not advantageous any more to work hard. If however, one is obstinate enough to indulge in hard work because he likes it, or because he is ambitious, or again because he hankers after success and wants to accomplish something useful, the revenue officials will step in and punish without remorse the fellow who still dares to believe in work and thriftiness. If we continue to bully and penalize the elite of our citizens, what will become of Canada? I dare scarcely think of it.

There is nevertheless something more iniquitous again than this orgy of taxes and surtaxes and that is the means taken to hide them.

I would hardly be surprised to learn, one of these days, that among the advisers to the Minister of Finance or to the Minister of National Defence there has been found a camouflage expert from the second world war.

18, 1952 551

The Address-Mr. Courtemanche

Last year the Minister of Finance had led us to believe that he was expecting a surplus of revenue over expenditure amounting to some $30 million. This surplus now amounts to approximately $700 million. As we have seen, several Liberal members, including the Minister of Finance himself, rejoice at this state of affairs and go so far as to find it most encouraging.

Let us not forget, however, that this extraordinary surplus conceals, camouflages an amount of at least $650 million in overtaxation. Dollar by dollar, the government have taken $650 million away from the people, quite often from small wage earners or worthy farmers. These $650 million could have been put to good use, for savings or investment or simply for the purchase of essential goods the public is deprived of uselessly and without reason.

The Minister of Finance knows very well that so large a surplus cannot but harm the nation's economy. We do not want to believe that, deliberately, just for sport, he has sought to overtax the Canadian people by some $650 million which he knew he would not need. If he did so unwittingly, he has been clumsy, very clumsy. His employer, the people, will certainly not be able to give him a certificate of competence for his foresight.

He should simply admit that he was wrong and not try to hide his mistake by making it appear as a service to the country, which is, besides, quite the opposite of the truth.

Camouflage is also resorted to with regard to personal income tax, a tax which is abominable, harmful, depressing and immoral in many respects. Formerly, as the first of May drew nearer, the taxpayers unanimously rose up against the government which, not being satisfied to dig in their pay envelopes each week, required, at the close of the year, another small ransom representing the difference between the amount already paid and the total tax payable.

The Minister of National Revenue, a great psychologist I admit, now proceeds differently. He is even more exacting each week but when the time comes to settle with the income tax division-it is by no means easy to escape this settlement-instead of requiring an extra amount from most taxpayers, he hands out a reimbursement to two taxpayers out of three. We see some poor chaps brimming over with joy because the government owes them money. They tell us that the government will give them money. The trick is simple enough but one had to

552 HOUSE OF

The Address-Mr. Courtemanche think of it. This is called painless taxation, but it is a mere illusion since one way or the other the huge appetite of the treasury is eventually satisfied. It is camouflage at its best but also a practice of dubious ethical value, one, anyhow, which is extremely costly to the country.

Let us think but one moment of the work, the red tape, and all the expenses made necessary by these refunds, which will be more or less general. It is worth mentioning that Ottawa does not pay interest on the money it has thus been able to use, money which the taxpayers could have used themselves much more profitably.

Would you like another example of camouflage? Take this whole string of hidden taxes on a large number of necessities of life. When you buy a cake of soap you have to pay, I understand, some 150 different taxes before you pay a single cent to the manufacturer or pay to the retailer his legitimate profit. If we were to extract from the cost of all commodities we purchase the series of well hidden taxes involved, we would sometimes be in for quite a surprise. Today the case of cigarettes is well known. There is the sad example of an industry being ruined through excessive taxation. I could mention the case of all those commodities, all those appliances necessary to any household today, which are classified as luxuries for taxation purposes, whether they be a refrigerator, a washing machine or something else.

And what is most unbelievable in this matter is that the Minister of Finance pretends to levy taxes in order to fight inflation, whereas the more he adds to taxation, the more he promotes inflation and the more he increases the cost of living.

I very much admire some people's knowledge, but I would like them to come and convince my electors that by increasing the price of all sorts of goods and by levying new taxes, they are trying to prevent a rise in the cost of living. I believe, anyhow, that the cost of living index in its almost steady climb has proven how false and dangerous were the theories propounded by the Minister of Finance, the Minister of National Revenue and their experts.

Let us, for instance, look into the unemployment situation. For months on end, the number of unemployed has been increasing. Because of the taxes I just denounced, industries have to lay off workers. This takes place for instance in the tobacco industry, for the sales of Canadian cigarettes are decreas-

ing constantly. It is the same in the field of textiles, because the authorities refuse to protect this vital industry against dumping or semi-dumping practised by some foreign nations. Confronted with those facts, what explanation does Ottawa offer? "Seasonal unemployment"! They speak of seasonal unemployment in industries where seasonal fluctuations are not experienced. Could anything be more tragically ridiculous? And can one really believe that the public will accept this type of explanation merely because it comes from some high official, or even, for that matter, from a minister?

We realize that the government is in a rather difficult situation. They open the doors of Canada to an ever-renewed influx of immigrants. But, once in our midst, those people are unable to find work to support themselves and the Canadian taxpayers have to pay their living expenses. On the other hand, if the immigrant finds a job it so happens that he often replaces a Canadian workman, who does not find this at all to his liking. In brief, nobody is satisfied, neither the immigrant nor the Canadian.

Moreover, at St. Paul 1'Ermite, near Montreal and at Ajax, in Ontario, there have been riots and hunger strikes. Stalin's picture has even been displayed. All this is disquieting, all the more so since, on the one hand, there is talk of a certain racket as far as Italian immigration is concerned and, on the other hand, of corruption among the employees of the Canadian department of immigration in Germany.

All the while, moreover, we hear an evergrowing number of protests against excessive immigration originating from labour unions. I do not think that we are entitled to overlook them entirely. I know that in Montreal, on the very same evening, that is on January 10, 1952, two different organizations, the central council of the national syndicates of Montreal, an affiliate of the Canadian and Catholic Confederation of Labour and the Montreal labour council, affiliated with the Canadian Congress of Labour, adopted resolutions against too large an influx of immigrants into Canada.

The latter organization, it was stated in Le Devoir of January 11, 1952, protested against the fact that too large a number of immigrants are now being brought into the country. It voted in favour of moderate immigration, but it feels it is unnecessary to bring to this country people who will have to undergo hardships worse than those they left in their own country. The council is

also of the opinion that the arrival of too many immigrants can only increase unemployment in this country and worsen economic conditions here.

In Montreal again, emergency measures had to be taken to assist certain French immigrants who were unable to find any kind of a job.

A few weeks ago, I was walking down St. Catherine west, in Montreal, in the department store district, when I noticed a crowd assembled at a street corner. I walked up and there, on the snow-covered grounds of a church, I saw a man carving in the snow and ice a moving biblical scene, the descent from the cross.

I stood there for several minutes admiring the cross, the tomb, the well and, more particularly, the figures, Christ, His mother, the apostles, all carved in a manner bearing the hall-mark of genius. Near the sidewalk, the artist had carved a nice little angel holding out to the interested spectators a little collection-box for their offerings.

The following day I read in the newspapers that this sculptor was a German who had come to this country a few weeks ago and had been unable to find work. Now penniless he had conceived this idea of carving in public out of the snow and the ice scenes from the Bible, in order to get enough money to go back to Germany!

I know that there are plenty of sound arguments in favour of immigration. But nobody can furnish me with a sound argument when it comes to immigration which is carried out in an irrational way, without any system, in a haphazard manner, as it is carried out by the government of this country.

This man who left his country because he had been told what a brilliant future this country held in store for him, this man who was compelled to beg in a disguised way in order to obtain enough money to go back home, what impression will he have of Canada? And what will become of those who cannot even raise the funds to go back to their native land?

Some may say that I am exaggerating. I would be only too happy if it were so. I am afraid, unfortunately, that this is an understatement. If our ministers took the trouble to discuss the matter with the labour union leaders, they would find out some pretty things about the consequences of our immigration policy. Our cattle are now affected by foot-and-mouth disease and all indications are that this disease was 55704-36

The Address-Mr. Courtemanche brought to this country by immigrants. There is talk about fumigating the clothes of these newcomers, etc. But why is that not done when the immigrants leave their country or arrive here? Must we conclude that our officials overseas carry out no inspection, that they show a lack of carefulness?

Again I say, why this immigration at all cost, at the cost even of aggravating our economic problems, of bringing about unemployment? Why bring here people for whom we have no work, no jobs? I feel, Mr. Speaker, that we should revise thoroughly our immigration policy with a view to fulfilling our needs first. It should be practised with great care so that the immigrant coming into our country will be glad to live with us and will not curse the day he fell for the line handed out by some publicity agent of the immigration service at work in Europe either for the Canadian government or for some private concerns which are apt to benefit from large scale immigration.

I am glad to see the Secretary of State for External Affairs (Mr. Pearson) back in Canada. He probably played an important part in the North Atlantic Treaty Organization conference, and is even said to have refused an important post in that organization, in order to devote himself entirely to his duties as minister of external affairs. I congratulate him, but I am nevertheless worried about the cost of our commitments with the United Nations Organization and NATO. I am, however, pleased to see that we are now playing a prominent part on the international stage.

But I wonder why Canada goes on ignoring the existence of the Vatican, where the other great nations of the world, nations which sometimes only count an infinitely small minority of Catholics, make it a point to be represented by an ambassador or other official envoy.

Last October, answering a question asked by the member for Chicoutimi (Mr. Gagnon) the minister of external affairs stated that the government was studying from time to time the problem of the representatives Canada might send to those sovereign states which have no diplomatic ties with our country; he said that among those sovereign states, one should naturally include the Vatican. That answer appears in Hansard of October 24, 1951. But what has been done since? Do we plan to remain

554 HOUSE OF

The Address-Mr. Dube forever in the background, with the sole intention of appeasing the clamours of a handful of sectarians, clamours to which our gracious queen paid no attention whatsoever since, some months ago, she visited the Vatican and was officially greeted there by the Pope.

We spend millions in our attempt, as we say, to foster the cause of peace. But, according to Pius XII, quoted by the L'Action Catholique of Quebec, on February 18, 1952: "The Vatican is the bastion of peace and of reconciliation". Nobody is afraid of its army; the territory of that state is but an invisible speck on the map; but it might be truly said that its influence is unrivalled in the whole world.

I adjure our government to do as our queen did, to disregard the fanaticism of certain people and to act according to logic if we want to continue taking some part in international affairs.

Mr. P. L. Dube (Resiigouche-Madawaska):

Mr. Speaker, it is a very great pleasure for me to take part in this debate on the address in reply to the speech from the throne. I wish to congratulate the Prime Minister (Mr. St. Laurent) for having been so kind as to honour my province, New Brunswick, by requesting the member for Westmorland (Mr. George) to move the address in reply. I also congratulate this young member for having acquitted himself so well of that duty.

I must also congratulate the member for Lake St. John (Mr. Gauthier) for having so well discharged his duties as seconder of the address in reply to the speech from the throne.

Mr. Speaker, since I have had the pleasure of sitting here, I have noticed that, at the beginning of each session, we express the sorrow we all feel at the fact that one or two seats are left empty through the death of their occupants. This year the member for Victoria-Carleton. (Mr. Hatfield) and the member for Brome-Missisquoi (Mr. Gosselin) have left our midst. To their bereaved families I extend my most heartfelt sympathy.

Mr. Speaker, I believe it is my duty, during the present discussion, to deal with a matter of concern to quite a number of retired railway employees. For years, these men have sacrificed a part of their wages to contribute to a pension fund. Their pension, at a time when the cost of living was lower, could then be considered to be sufficient. Today, however, when the cost of living

has officially doubled and when, as a matter of fact, it is even three times what it was, these people are in a very unfortunate position. The pension which, in 1935, would have enabled them to live decently, if not in luxury, is not enough today even to pay their grocery bills. Because of their age, these people are often unable to go back to work and yet they must live.

However, there are people, who draw from this pension fund sizeable amounts, from $450 to $500 a month and even $800 a month. Our pensioners list includes a group of 450 persons who receive a pension of $30 to $50 a month and another group of 650 who draw a pension of $50 to $90 a month. In my opinion the head of a family who does not receive more than $100 a month nowadays cannot possibly meet the necessary living expenses for his family.

May I be permitted to request the Minister of Transport (Mr. Chevrier) to kindly investigate whether it would be possible to increase the minimum pension to $100 a month, in order to compensate those employees who have been ignored, since they retired, when bonuses or other raises in wages were being granted.

While I am dealing with this matter, I wish to call the attention of the Minister of Transport to the fact that in New Brunswick we have much difficulty in securing our share of promotions from the Canadian National Railways. Would it not be possible to require that each vacant position be filled by employees working in the division concerned instead of being filled by men from other divisions? It is a fact that in our city of Edmundston we have never obtained our share of the promotions. We can prove on the other hand that we have the necessary qualifications to hold those positions as officers.

Two positions of assistant to the superintendent are filled by men taken from the head office of the Atlantic region. I want to show that we have at home employees much better qualified to hold those positions than those who have been chosen through favouritism.

I would ask the Minister of Transport to make an inquiry about certain appointments which have been made without due regard for some of the most faithful employees of the company. If I protest so strongly against those appointments it is because I have

received many requests to do so. I hope that in the future we shall fare as well as employees of the other terminals.

I must add that we had with us a young engineer, a graduate of l'Ecole Polytechnique of Montreal, who was attached to the engineering section in Edmundston. The chief engineer and his assistant did everything they could to get rid of this young man. The reason was, in my opinion, they feared that in the space of only a few years, that young man would have enough experience to fill the position of chief engineer of one of the divisions of the Atlantic region. They made life so unbearable for him that he was compelled to resign. That was unfortunate, for he liked his position very much. Marine Industries Limited offered him a position which he accepted. He has been employed by that company for only two years and already he has been promoted twice, which is tangible proof that this young man would have been a valuable asset to the Canadian National Railways.

Last year, I asked the Minister of Agriculture (Mr. Gardiner) to give careful consideration to the complaints and representations of the farmers of my county in order to secure subsidies for their potato crop. I regret to say, however, I received no satisfaction in this regard.

A delegation from New Brunswick came to Ottawa in order to ask the competent authorities of the department for subsidies to assist the farmers who were unable to find markets for their products. After some lengthy discussions, the department decided to pay a subsidy of $300,000 to those farmers who would deliver their potatoes to the starch company. But, I am sorry to say, only a few farmers were favoured. A farmer who had failed to buy his fertilizer from that starch company was unable to make them accept his product. He was therefore deprived of his share of the federal grant meant for the protection of New Brunswick potato growers.

I therefore ask the Minister of Agriculture to make representations to that firm, so that justice may be rendered to all those who were unable to market their products.

Moreover, all potato growers were to benefit equally from the generosity of the government, which had earmarked a rather large amount to assist them and alleviate their losses.

I think I am also duty bound to draw the government's attention to another shortcoming. I am speaking of the Canadian

55704-36^

The Address-Mr. Blackmore National Railways, when the time comes to haul the goods. It has always been difficult to persuade the railway company to make available enough cars to ship those perishable goods. I am inclined to believe that the officials of the Canadian National Railways do not study the problem seriously enough or that they are not endowed with sufficient ability. I also think that one should put an end to a shortage for which it is hard to account, when one considers that numerous complaints are filed every autumn. The foot-and-mouth disease is by no means the only scourge which rages in Canada. We may boast of a great many varieties. The western provinces have the knack to attract the pity of the government each time they incur some misfortune. But the people from New Brunswick are left aside and treated like poor relations. Do we not have to pay taxes like everyone else? Last year, the Restigouche river went on a rampage and the victims of that flood were mostly those Restigouche county people whose farms border on the river. They were obliged to erect retaining walls at their own expense, especially in the parish of Charlo. I wonder if an investigation by engineers from the Public Works Department is not called for in this instance so that appropriate measures may be taken to protect the properties of these farmers who, each spring, are threatened with serious damage.

I therefore request the Public Works Department to be so kind as to correct this state of affairs so as to assist those farmers; as a class, they certainly deserve the attention of our people.

(Text):

Mr. J. H. Blackmore (Lethbridge):

Mr. Speaker, I desire to discuss the question of getting the maximum of Canadian security out of Canada's NATO defence dollars.

First, in order to get clearly before us the situation with which we are confronted I should like to quote from two or three documents. One of those is a statement which appeared in the Ottawa Journal on February 23, 1952. It is headed, "Anti-Red Arms to Cost NATO $300 Billions". The article reads:

Lisbon, Feb. 23-The Atlantic allies lay down today a carefully drawn plan to tap western taxpayers for $300 billion for anti-communist arms-a sum they believe can be scraped up without bringing economic ruin.

The cost will be spread over the three years ending with 1954 and is equal to $750 apiece for each of the 400 million people in the 12 original Atlantic treaty nations.

The Address

Mr. Blackmore

The council of the North Atlantic Treaty Organization, under chairmanship of Canada's external affairs minister, L. B, Pearson, is expected to give final endorsement to the plan today.

Months of intense study by economic experts- the so-called 12 wise men-went into its preparation. All the governments involved were consulted repeatedly.

The plan forms an economic tightrope for many of the hard-up European nations. Many had to increase their arms spending, and the 1954 armament goals were reduced slightly, to make ends meet under the plan.

It set down ways and means to finance an army that is meant to include 30 front-line divisions and 20 in immediate reserve by the end of 1952, with planned expansion to some 88 divisions by the end of 1954.

Included in the plan is a network of air bases reaching from the Arctic to the equator, communications, ships, tanks, guns, ammunition, uniforms, barracks and the like.

The plan also provides:

NATO governments must put airfield construction ahead of many other budgetary items to make sure the nearly 200 air bases in west Europe are finished on time.

Arms production is to be speeded.

There has been a considerable amount of disagreement, at least implied, in the house because of the assumption which the member for Rosetown-Biggar (Mr. Coldwell) and the C.C.F. council apparently made based on this report. I think it is fitting that this report should appear in our records so that we shall be able to keep the record straight.

What is the over-all seriousness of this NATO proposal? Whether or not we assume the position the C.C.F. took or whether we assume the position the minister took, we must be prepared to face that; otherwise, we are going to be irresponsible in this parliament.

In order to help us get some idea of the over-all effect of this proposal, I believe it is fitting that we should read into the record an article appearing in the Ottawa Journal on March 17 at page 10. It bears the heading, "Harold Wilson says that U.S. putting pressure on Europe." It reads:

London, March 17-(Reuters)-Harold Wilson, a leading left-winger in the Labor party, Sunday accused the United States of putting pressure on Europe to adopt rearmament programs beyond her economic capacity.

He said American aid depends too much on approval of her military leaders, that the U.S. does not appreciate Britain's position as a member of the commonwealth and that some Americans would like to see the sterling area broken up.

Wilson, an economist, resigned his cabinet post as president of the board of trade last year to support rebel Aneurin Bevan's opposition to his party's official approval of the big rearmament scheme.

"Marshall aid was one of the most statesmanlike decisions undertaken in international trade", he said. "Practically the only strings attached to it were strings necessary to ensure the object of selfhelp. Now you have American aid almost entirely military and given only in conditions which the Pentagon approves."

The U.S. has two obligations as a creditor country -to make it easy for other nations to earn currency by a policy of low tariffs or no tariffs at all and to lend on a considerable scale, he said. Britain carried out these obligations in the 19th century, but one factor causing present world economic troubles is that the U.S. does not do likewise today.

Wilson was speaking on Anglo-American economic relations at a national peace council conference.

Now, there are several rather serious statements in that news item. It says that the United States is putting pressure on Europe to adopt a rearmament program beyond her economic capacity. That seems to speak for itself. Then, Mr. Wilson says that American aid is granted only to those who obey the Pentagon, which I understand is the higher military command in the United States. He goes on to say that the United States does not appreciate Britain's position as a member of the commonwealth, and that some Americans would like to see the sterling area broken up. I believe that statement is well founded. While I have no desire to offend any particular officials in the United States, I do feel bound to suggest that public men charged with the responsibility of conducting the affairs of the United States must banish from their minds attitudes of that sort if they are going to be characterized by the responsibility men ought to be characterized by in the position they occupy.

Mr. Wilson says that some people in the United States would like to see the sterling area broken up. We have had too much evidence since 1942 that this is true. United States administrators, and I believe our minister of external affairs, have a responsibility to face up to that situation and to demand that adjustments be made in United States policy which would remove all suspicion of any ulterior motives on the part of United States government officials to destroy the British commonwealth.

Another passage, I think, is worthy of note; that is the one in which it is said that the United States, as a creditor country, has two obligations; one, to make it easy for the other nations to earn currency by a policy of low tariffs or no tariffs at all, and the other to lend on a considerable scale. Britain carried out those obligations in the 19th century.

I believe that one of the serious factors in our present international situation is that our government officials are failing to recognize these two obligations of the United States, her failure to honour them and the dangerous world consequences which result from her failure. All through the planning of the United Nations Organization, and all through the planning of the Bretton Woods agreement, there was a complete disregard of that element of United States responsibility

for either buying goods from other countries or providing them with the United States moneys with which to buy United States goods, that is, in effect, the responsibility of lending on a large scale to other nations.

At some future time I shall probably discuss this matter in greater detail. It is ijot my purpose to spend much time on it today, but therein is to be found one of the fundamental fallacies underlying the whole attitude which nations are taking to the international situation today.

When Great Britain was the world's banker, and was the leader in world trade and was carrying the responsibility of policing the world, Great Britain accepted goods in almost any quantity from almost any nation in the world. The result was that it was possible for peoples to obtain British pounds, and that made it possible for those peoples to live.

United States has thrust herself into the position which Britain formerly occupied, and she refuses utterly to accept goods from any other nation unless she sees fit to do so. The goods which are offered for sale to the United States which would compete seriously with United States products are shut out of the United States market. I am not saying there is anything wrong with that. I believe the United States is acting soundly when she does it. Where the United States is making her ghastly blunder is in assuming that she is able to protect all her producers and at the same time to function acceptably as world banker. It is this assumption which is rendering it utterly impossible to carry on the financial and international trade agreements which United States leaders deem necessary in the world.

At six o'clock the house took recess.

Mr. Blackmore:

Mr. Speaker, at six o'clock I had been discussing how Canada should proceed in order to get the maximum security value from her defence dollar. In order to give a general picture of the situation which confronts us, I had read two newspaper reports, the second one of which I gleaned from the Ottawa Journal of March 17, 1952, at page 10, a statement made by Harold Wilson of Britain. I had read several excerpts from that passage. One of these I will read once more. He says:

The United States has two obligations as a creditor country-to make it easy for other nations to earn currency by a policy of low tariffs or no tariffs at all and to lend on a considerable scale, he

18, 1952

The Address-Mr. Blackmore said. Britain carried out these obligations in the 19th century, but one factor causing present world economic troubles is that the United States does not do likewise today.

Now, any ordinary individual in charge of a nation like the United States will say: Can we afford to import any given product such as cheese which competes with the product which our own producers are manufactur

ing? And the answer, I believe, by almost every intelligent person will be: No, you cannot afford to do that. If that is the case, and the United States is now in the position to produce practically all of her needs of nearly every commodity that she requires, will someone tell me how in the world the United States can make dollars available by reducing tariffs or having no tariffs at all? It simply cannot be done, which simply means that the United States and the world face a situation which, according to the principles which men have put into practice for centuries, is utterly impossible of solution. At the same time the world needs United States dollars. The United States needs to have the world have her dollars. United States can better afford to give dollars to nations abroad, with which to buy her goods, than she can afford to import foreign goods to compete with her industry and put her producers out of business.

The next question is: Can she afford to tax money from her people, with which to give dollars to enable other people to buy her goods? And the answer, I believe, by every realistic individual would be: No she cannot. Well, then, how is the United States going to discharge the responsibility which Britain discharged for a hundred years and do so under the conditions which face the United States?

Britain was a "have not" nation, a manufacturing nation. She could afford to import almost any kind of goods from outside countries to pay for her own manufactured goods, and she profited both by the import and the export of goods. Britain was in a position altogether different from the position the United States faces today. Now, as Harold Wilson indicates clearly, here is a contradiction, a fallacy, which faces the world, which must be overcome or the world is headed for inevitable disaster: how to get United States dollars into the hands of people who need the dollars and whom the United States needs to have obtain her dollars to buy her goods when the United States cannot afford to import their goods to let them earn dollars, and she cannot afford to tax her people for enough money to let them have the dollars without importing goods. If we want to know why it is that we are getting into financial difficulties of the very first

The Address-Mr. Blackmore magnitude today in the world, there lies a potent reason. Harold Wilson states it clearly. May I read the words again? They mean far more than 99 per cent of the people on the American continent realize. He says:

One factor causing present world economic troubles is that the United States does not do likewise today.

First, she does not render United States dollars available by buying outside goods; and second, she does not render dollars available by granting foreign loans.

I believe hon. members will be pleased to read the introduction to a book called "The Washington Loan Agreement" by L. S. Amery, one of the greatest economists in Britain. This book was published in 1946 and dealt with the Washington loan, which the United States advanced to Britain under very difficult conditions for Britain. I am going to read a considerable portion from the book because I believe it sets forth the difficulty that was forced upon Britain better than it is set forth in any words I have ever read. I am reading from the introduction:

My purpose in writing this book has been to draw attention to the gravity of the issues raised by the conditions which the United States administration has seen fit to impose on this country as the price of a loan. I am not concerned with the question of our moral claim to consideration for the sacrifices which we have made to the common cause, sacrifices which are necessarily continuing long after the last shot has been fired. Business is business, between nations even more than between individuals, and we shall be wise to regard the loan itself as a purely business transaction. As such it seems to me to be a perfectly reasonable bargain both from the point of view of this country, which urgently needs many things that America can most easily supply, and from that of America which, in the present world situation, can only export her goods if she herself, whether through public or private channels, advances the dollars to pay for them.

The terms of interest and repayment are in themselves moderate. I see no reason why we should find any serious difficulty in paying it off, and, indeed, in far less than fifty years, provided we remain a free people, retaining control of our own monetary and trade policy, free, in co-operation with our partners in the empire, to develop our common resources, free to make businesslike trade agreements with foreign countries.

What we are entitled to object to are the conditions attached to the agreement. They are conditions which have nothing to do with the loan itself.

And may I point out here that the "conditions" he mentions are the fundamental basic causes of the troubles in which the world finds itself right now. I go on:

They amount to an attempt to force the whole life of our country and of the British commonwealth into a pattern dictated by the out-of-date theories of the present American administration and by short-sighted American exporting and financial interests, and to compel our government to join, as satellites, in the task of persuading other nations to fall into line. The object of American policy is perfectly simple. It is to clamp upon the

IMr. Blackmore.]

world, and in particular upon the British empire, the obsolete economic system of the last century. It is to set up, once again, money and money power outside national control as the dominant factor in world economy.