Hon. Robert H. Winters (Minister of Resources and Development):

On April 7, 1952, as indicated in Hansard at page 1163, the hon. member for Mackenzie (Mr. Ferrie) requested me to table the correspondence between the government of the province of Saskatchewan and the federal government with regard to No. 35 highway from Nipa-win to Flin Flon in the years 1951 and 1952.

There has been no correspondence during this period' on the highway from. Nipawin to Flin Flon as such, but there has been an exchange of correspondence on that portion of the road between Flin Flon and Denare Beach.

I beg leave to table this correspondence.

Mr. James Sinclair (Parliamentary Assistant to the Minister of Finance):

Hon. Robert H. Winters (Minister of Resources and Development):

I beg leave to table parliamentary return No. 18, moved by Mr. Fulton, correspondence exchanged between the dominion government and the government of the province of British Columbia concerning the trans-Canada highway agreement and regarding the removal of tolls.

I might say here, Mr. Speaker, that there have been some exchanges with respeot to various details which are not included in this correspondence because of the relatively large amount of work involved in reproducing the documents. I have, however, spoken to the hon, member on this point and I believe he will find in the correspondence I am now tabling all the information he requires.

Mr. P. C. Black (Cumberland):

I should like to direct a question to the Minister of Resources and Development. Is any headway being made in the matter of entering into an agreement with the province of Nova Scotia for the construction of the trans-Canada highway through Nova Scotia and Cape Breton island?

Hon. Robert H. Winters (Minister of Resources and Development):

I have had

discussions recently with the minister of highways and public works for Nova Scotia. I can report only that I believe the government of Nova Scotia is giving favourable consideration to signing an agreement.

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

should like to direct a question to the Prime Minister. Will the government give immediate consideration to giving financial support to the dominion drama festival in accordance with the suggestion made by the Massey commission? I am asking this because of reported offers of sponsorship which many people consider to be undesirable.

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

The government has been giving, and is giving, consideration to all the recommendations in the Massey report, and as policy is formulated with respect to them it has been, and will continue to be, announced. But the hon. member knows that it has not been the custom to announce policy of that kind in reply to questions in the house.

1592 HOUSE OF

The Budget-Mr. Blair THE BUDGET

Mr. W. G. Blair (Lanark):

Mr. Speaker, the debate on the budget affords me an opportunity to bring to the attention of this house the serious situation which is now threatening the stability and welfare of the entire dairy industry. Matters of grave concern have now *reached a crucial point, and for that reason it is urgent that a review be made of the position of this industry which is so important in our Canadian economy.

In this same debate a year ago I pointed out dangers threatening the prosperity of this industry, which since that time have contributed to a situation which demands prompt action on the part of the government.

Dairying is one of the most important industries in Canada, and provides two million Canadians with either all or part of their livelihood. This number includes those who are engaged in production, processing and distribution, as well as supplying equipment and various services. Of the farm population in Canada, 450,000 farmers are dependent on receipts from the dairy industry as a source of income. It contributes more than $600 million to our national commerce. A large area of Canada is peculiarly suited to this form of farming. On many of these farms dairying is the only type of f arming that will provide sufficient cash income to maintain families. If the dairy industry is not prosperous, then these farms will be abandoned. Many of these farmers are in districts some distance from other milk markets, which limits their production to either cheese or butter.

Not only is it an important branch of agriculture, but it is an industry which is important to mixed farming. Conservation of soil is dependent to a large degree on a healthy dairy and livestock industry. The upkeep of dairy herds is one of the most important factors in soil conservation and fertility maintenance.

There is a great lack of understanding between the consumer public and those engaged in the industry. It is a year-round business providing considerable employment for hired labour and a cash return throughout the year. It is not generally realized that

it requires years of labour to build up a good dairy herd, and long hours of work to secure high production. It is an expensive proposition, as the purchase price of a good dairy stock and upkeep of barns and silos requires considerable outlay of cash. It is an industry of long hours, as cows must be tended and milked twice daily through seven days in the week, and there is added to this work the care of milk in order that it may reach the market in a satisfactory condition. When prices are high, consumers are more conscious of food prices, and there is an inclination on their part to blame rising costs on the farmers.

Some seem to forget that the dairy farmer begins his work early in the morning and finishes late at night for six days, with another four hours on Sunday. On the basis of a 12-hour day-and many farmers work over this time-with four hours additional on Sunday, the total amount of time adds up approximately to a 75-hour week. There is no arrangement made for overtime in this industry. These actual facts as to food costs and the price received by farmers for their products should be considered. Dairy farmers to the number of 450,000, together with their families, and all the people from whom they buy, consume large amounts of manufactured products. If the income of this large group is so reduced that their buying power is impaired, it will have a marked effect on the manufacturing industry.

A comparison of prices between the years 1939 and 1951 is interesting. In 1939 it took the average man 15-6 minutes of labour to buy one quart of milk. In 1951 it took only 10-1 minutes of labour. On the basis of 100 in August 1939, the index of consumer prices of milk products was 125-4 in October 1941; of meat and eggs, 130-6, and of all foods, 124-1. In the latter part of 1951 milk products stood at 213-4, meat and eggs, 354-9, and all foods, 251-5. It is to be noted that dairy foods have not increased in price proportionately. At the same time the cost of labour to the dairy farmer increased 181 per cent from 1941 to 1951, and in that period his own food costs were 82 per cent higher. Dairy farmers are now in a position where they have to compete with industry for labour.

In the same period the average farm price for 100 pounds of milk increased 78 per cent. The cow population has declined 2-4 per cent, and the Canadian population has increased 21-6 per cent in ten years. During the same ten years the per capita consumption of milk has fallen 18 per cent in Canada, notwithstanding the fact that the protein value of two quarts of milk equals that of a pound of choice beef at a much lower price.

Prices of other commodities have climbed in the spiral of inflation. It is admitted that the dairy farmer is receiving more for his products than he did ten years ago, yet the increase received has not kept pace with increased costs. Farm labour wages, higher food costs, maintenance of herd and buildings, competition from cheap vegetable oils, and the general increase in the cost of living, have added to his difficulties. Better public relations between consumer and producer would do much to create a better understanding.

Importation of vegetable oils into Canada has threatened the dairy industry on an increasing scale in the past three years. This is borne out by the following table of importation of vegetable oils into Canada:

Imports of Vegetable Oils into Canada

Average

Value

Quantity Value per pound

All vegetable oils (pounds) $ (cents) March 1-Dec. 31, 1949 124,289,500 17,576,955 14-1Calendar year 1950 ... 190,697,200 30,663,719 16 1Calendar year 1951 ... 158,391,500 35,057,238 22 1

The production of margarine in Canada is shown in the following table:

Thousands

Calendar year of pounds

1949 73,958

1950 94,032

1951 105,151

Not only has there been an increase in the importation of edible oils, but the prices of oils as of April 1952 show a considerable decrease. I give you the following table in pointing out the low prices for these products at the present time as compared with the existing prices last year:

Prices as of April 19 1951 1952Coconut oil

18-25 7-54Soya bean

20-5 8-5Cotton seed

23-5 10

Soya beans were imported duty free. All copra used in making coconut oil was imported duty free.

I am not entering into a controversy on the merits of these products', but I present these figures for the purpose of showing the competition which faces the dairy industry through the manufacture and sale of edible oil produced in Canada. These imported oils produced by cheap labour have replaced about one-quarter of what was once the dairy farmer's butter market. It is reported that "filled fluid milk" with the cream replaced by imported oils could be expected to find a place on the Ontario market soon.

There are other factors which have brought the present situation in the dairy industry to the point where it constitutes a national emergency. There is grave uncertainty among

The Budget-Mr. Blair dairy producers. This applies particularly to the cheese branch of the industry. The industry itself has had no control over the forces which have caused the present situation, which certainly was not of its own making. The factors which enter into the present situation are: First, the outbreak of foot-and-mouth disease in Saskatchewan early in this year; second, the loss of the United Kingdom markets, which has been our traditional market for cheese ever since confederation; third, the quota imposed by the United States which has shut off further Canadian cheese exports there and has led New Zealand exporters to enter the Canadian market; fourth, the importation of large quantities of cheese from New Zealand.

The outbreak of foot-and-mouth disease will result in more dairy cows being kept on the farms, and hence larger quantities of milk will be placed on the market. For years there has been a market for Canadian milk cows, especially young heifers, in the United States. During the periods when prices for milk products were low many farmers added to their income in an excellent market by producing a certain number of milch cows for export. Owing to the outbreak of foot-and-mouth disease there can be no further export of dairy cows to the United States until we are clear of the disease and the embargo which resulted therefrom is lifted. The unfortunate further outbreak of this disease clearly indicates that the embargo will certainly not be lifted during this dairy season. These animals retained on Canadian farms will add to the amount of milk on the market. Not only will this apply to the cheese producers, but the price structure of other milk groups will be in danger if surplus milk is backed up into their market.

Last year Canada produced about 16,400 million pounds of milk. It is estimated that this year there will be an increase of 250 to 300 million pounds. This increase would amount to the equivalent of 29 million pounds of cheese or 14 million pounds of butter. The national dairy council estimates that the problem of marketing may cause 500 million pounds of milk to back up on the Canadian market. When this surplus milk comes on the market, much of it will be manufactured into butter and cheese. The government has taken butter, but so far has not stated where the surplus cheese will be sold. More milk production will mean more dairy products produced in all branches of the industry with no outside markets to take care of the surplus.

It will be difficult to handle all this milk which would normally go to cheese plants in the flush production season. Cheese factories have been closing all over the country in

The Budget-Mr. Blair the past few years and there are indications now that many more factories will not open this season. There is a shortage of trained cheese factory and creamery operators, and farm labour has become a serious problem. There must be some outlet for the sale of the surplus milk which will be produced during the coming season.

The loss of the United Kingdom markets has been a serious blow. This has been our traditional market for Cheddar cheese for sixty years. At one time we exported over 200 million pounds of cheese to Britain, but in the last year our exports have been cut down to 29 million. During both wars the industry was encouraged to produce to capacity. It had no knowledge that this longtime market would collapse. Without export markets for our cheese products it seems absurd that New Zealand cheese was imported into this country after it had become apparent that the cheese was not needed here and would cause distress on the Canadian markets.

The loss of the United States market by the quota imposed has prevented further Canadian cheese exports to that country. If the Canadian producer cannot avail himself of outside markets, the amount of New Zealand cheese which enters Canada will not only interfere with our marketing program, but will seriously demoralize the whole industry. Much of the cheese imported from New Zealand had originally been intended for the United States market to earn dollars for New Zealand. When the United States placed a quota on further cheese imports, it became available on the open market, and a considerable quantity was purchased by Canadian firms.

On April 21 of this year, as reported on page 1427 of Hansard, I asked the following question on the orders of the day and received the following answer: