Mr. Mackenzie King:

Those opposed say, "nay".

(No replies)

Mr. Mackenzie King:

I declare the motion

carried unanimously.

The conference adjourned immediately after the statement by the very distinguished premier of Nova Scotia that he assumed this conference was going to meet again. We all had a right to assume that conference was going to meet again, but it did not. When there is any suggestion that the proposals were rejected, I say that simply is not so. There was no chance of rejecting or accepting because the next thing that happened was that this government, with the typical course of action that they have been following right through-a course of action referred to by Premier Campbell of Manitoba last week- acted on their own. Mr. Ilsley, without any further inquiry of the provinces, or consultation, placed before the house a statement as to what the government was going to give in the way of allowances to provinces that were prepared to accept an agreement. There was no basic agreement with the provinces. It was simply a case of "Big brother has decided, and those who are not trying to make things difficult will immediately comply". That is the way this government has been dealing with these problems right along. That conference was not reconvened, and the only reason those agreements were not reached at that time was that this government refused to meet again. Do not let the Minister of Justice continue the kind of statements he has been making outside because in here we can challenge their accuracy in a more formal manner.

As far as those agreements were concerned, not only was there tacit understanding on the part of many provinces as to that, but there was a strong urge that they be carried into effect without any further delay as soon as the facts were obtained; but this government did not have the facts then, and as the minister of finance himself said, they were going to take into consideration the proposals that had been made, and that is the way we were dealt with. No, Mr. Speaker, this government scuttled that conference. That is what happened, and it has remained in that sunken condition ever since.

The conference which met on an earlier occasion was not a continuation of that conference; it was a conference presumably

called to discuss the constitution. It is still in the air, too. As far as any of these matters are concerned, this government apparently believes that all it has to do is to call a conference, make a series of statements in regard to which they have not the basic facts, leave the whole thing in the air and then employ their expensive propaganda machine to assert that those on the other side disagreed with what they said. That has been the whole course of these proceedings.

Since this impression has been so assiduously disseminated, Mr. Speaker, and carried forward even today, that in my capacity as premier of Ontario I was an unwilling attendant at those conferences, I am going to place on record something that has not previously been placed there. I trust that the minister is unaware of this because his conduct would be surprising if he were aware of the fact that the initiation of that conference started by a request communicated on behalf of the government of Ontario, over my signature in January, 1944. I am going to place that on the record. Of course the Minister of Justice knows this because he received a copy of the letter afterwards.

Mr. Ferguson:

He may still not know it.

Mr. Drew:

Well, I am going to remind him. On January 6, 1944, as premier of Ontario, I wrote the following letter:

Right Hon. W. L. Mackenzie King,

Prime Minister of Canada.

House of Commons,

Ottawa, Ontario.

Dear Mr. King:

Since returning to my office. I have had the opportunity to read a number of speeches made by dominion cabinet ministers referring to plans that are being made for post-war employment and reconstruction. I find that in most cases they refer to fields of activity which would ordinarily be under the exclusive jurisdiction of the provincial governments.

Family allowances.

Mr. Drew:

The mythology still persists.

I need not say that we are most anxious to co-operate in every practical measure which will assure effective post-war planning and the prompt rehabilitation of the members of our armed forces. I believe it is extremely important, however, that where it will be necessary to obtain the agreement of the provincial governments in regard to the joint occupation of fields of legislation ordinarily under their exclusive jurisdiction, there should be previous discussion so that any measures introduced will be on a basis agreed upon in advance.

At present, there are agreements in regard to health and education awaiting adjustment between the dominion and provincial governments. I believe that it is very difficult to deal with these or with any other similar agreements until we have reached some understanding in regard to the present and future constitutional relationship of the various governments.

I would therefore urge that a dominion-provincial conference be called at the earliest possible date to consider the broad question of post-war planning

The Budget-Mr. Drew

and reconstruction. Not only is this necessary for the purpose of determining the basis upon which the dominion and the provincial governments will co-operate, but it is also necessary for the purpose of considering the subject of taxation in relation to these measures.

I believe that it is of the utmost importance that such a conference be held before any measures are introduced either in the dominion parliament or the provincial legislatures, which call for ultimate agreement between the dominion and the provincial governments. We will be prepared to send representatives to a conference of this nature at such time as will be convenient to you, but I do urge that the conference be held at the earliest possible date.

Yours sincerely,

To that, Mr. Speaker, I received the following reply on January 13, 1944, from Mr. King.

Hon. George A. Drew, M.L.A.,

Premier of Ontario,

Toronto, Ontario.

My dear Premier:

I wish to acknowledge your letter of January 6, regarding the calling of a dominion-provincial conference to consider questions of post-war employment, reconstruction and the financial relationships between the dominion and the provinces.

At the close of the dominion-provincial conference on January 15, 1941, I indicated that my colleagues and I would be ready to meet the provincial governments at any time they were generally agreed that a further conference would be in the national interest.

I am pleased to note from your letter that the province of Ontario is prepared to take part in such a conference at the earliest possible date. By direction of the government, the clerk of the privy council is today sending a copy of your communication to the premiers of the other provinces, with a request for an early expression of their views as to the holding of a dominion-provincial conference.

Yours sincerely,

W. L. Mackenzie King.

There was the beginning of the whole exchange of discussion that led up to that conference. Mr. King had no hesitation in saying that he had forwarded the letter I had sent to him as the basis of suggestion to the other premiers, and upon that basis the conclusions of the suggestions were brought together which were then followed up at a later time, and we kept pressing for a conference throughout a great many communications, copies of which I have in my hand, up until the time that the conference was finally called on August 6, 1945. That letter was the basis of the whole agenda, and it will be recalled that the name used for the conference was the conference on reconstruction, which was the name suggested in my letter to Mr. King at that time.

I do think it is about time that we should be able to discuss these things without the suggestion that these proposals were rejected or otherwise. There is the Hansard

The Budget-Mr. Drew record. The conference adjourned with a statement on behalf of the dominion government that they were going to be considered, and we never met again, only because the dominion government was not prepared to call a conference, although it was requested over and over again by myself as premier of Ontario and by other premiers right across Canada.

This is something that every member should be prepared to examine objectively. We have another conference under way. Members of parliament are those who must accept responsibility for their willingness, if they indicate that willingness, to let this government leave the whole thing in the position where their attitude is described by words used earlier this afternoon, "take your choice, George." No; surely hon. members opposite, who must claim some success out of this beautifully published book, are the very ones who have the highest degree of obligation to see that these undertakings are planned, and that we do know where we stand. After all, we very frankly indicated doubt that the government had any intention of carrying it out, and we were certainly right on that occasion. We are not dealing with mere questions of agreement or disagreement, we are dealing with the human problem of hundreds of thousands of unemployed people who today are desperately anxious about the future. We are dealing with the problem of what answer is going to be given by the husband who comes home to his family and is asked, "Have you got work?" We are dealing with the problem of the housewife who wants to know where the money for the next meal is coming from. We are dealing with the deepest and most fundamental problem of all, the maintenance of the households of the people of Canada.

It is this human problem which is incorporated in this situation because we have been told by this government through the Prime Minister that the proposals they put forward should not be called proposals because they were not definite enough and in any event that they have not the facts on which to proceed. Let us have the facts. We have been in the position where we have two sets of figures in regard to the unemployed. We have a set of figures given on March 17 in regard to applicants for employment showing a total of 632,913. Those were the figures given to us by an agency of government. Then we are told that those are not the right figures, that the other figure is just over 400,000. If they are over 400,000 they are far too high. Which figure is correct?

In any event the government does not know. The government has not the facts and there

are a lot of facts to find out. How is this divided as between married and unmarried people? How is it divided as between the young and the old? How is it divided as between husbands and wives where both are employed? Those are all factors in a problem of this kind. They are all factors in regard to which every single detail should have been obtained long ago by this government under the pressure which has been exerted in this house.

The Prime Minister blandly told us the other day that it was perhaps a good thing that there had not been agreement, that they may have been too optimistic in those 1945 proposals. That is poor solace to the unemployed who have been hoping that out of these meetings would come something to meet their situation. We should have known that long ago if the government thought this had been a fortuitous breakdown, with the resultant refusal to call another conference. Perhaps that was the reason they did not call another conference. I wonder. The Prime Minister now says that it was fortunate they did not reach agreement. Perhaps they made sure that they never reached agreement and that is the reason we were not called back. It is the first reasonable explanation I have heard on the part of this government in this respect.

Then the Prime Minister speaks about the heavy burden of war, or perhaps I should correct that and say heavy expenditure for defence preparations.

The cold war.

Mr. Drew:

I hope no hon. member

opposite will object-someone just now objected to the use of the word "war", but to the young men who fought in Korea it was a very real war, whether a hot war or a cold war. The Prime Minister very properly pointed out that large expenditures are being made for defence. That is true, but let us look at the situation as it is.

In 1944, which was the base year upon which these proposals were made, the gross national product was $11,954 million. In 1954, which is the base year upon which the present proposals were based-I should not use the word "proposals" because there were not enough facts to justify that name, according to the government-the gross national product had more than doubled to a total of $23,985 million. If the gross national product is twice as much, why cannot they deal with these proposals on the basis they put forward? How much further do they need to go?

In 1939 the percentage of the tax dollar which the dominion government took was

48 per cent; the provincial governments got 22-3 per cent and the municipal governments 29-7 per cent. Last year the dominion government took 77 cents of every tax dollar, leaving 23 cents to both the provinces and the municipalities, less in percentage than what the municipalties were getting in 1939.

If the dominion government has to have a higher concentration of the tax dollar than they now have, all the authority of the provincial and municipal governments will be gone entirely. That is what this statement is reduced to; that is what it means. I hear an hon. member suggesting that that is what they want. Everything that they have done indicates that step by step they have forced the provinces into the position where they are going to find it most difficult to carry on.

I was interested in the interjection by the Minister of Justice (Mr. Garson). I should like to hear the Minister of Justice tell us whether he approves of the present proposals put forward by the Minister of Finance (Mr. Harris), because the Minister of Justice has been going all over the country saying that the agreements and the agreements alone must be preserved, and nothing else. Anything else would be almost disloyalty.

Yet the Prime Minister and also the Minister of Finance have announced that they are going to have a dual system. They are going to have a system of agreements and a system of tax exemption; if some province becomes sufficiently noisy about its position, or should I say sufficiently vigorous in its demands, may we not have another system? Certainly the principle, enunciated by the Minister of Justice, of agreements only and nothing else has gone. As he knows, that has gone in the proposals put forward by the Minister of Finance. I have no doubt that the Minister of Justice intends to support them because they are put forward by the Minister of Finance.

If with the concentration of funds now available this government cannot carry out its undertakings, then they never could have carried them out. Therefore we are in the position that the only way in which anything can be done would be by a still greater grasping of provincial and municipal funds and for all practical purposes the extinction of provincial and municipal rights.

I might point out another rather significant fact, referring again to the book I had in my hand earlier this afternoon.

Read it.

Mr. Drew:

I cannot help pausing for a moment to hear the remarks from the other side as hon. members express their approval

The Budget-Mr. Drew of this book and its contents and yet repudiate it. I urge them to reread the book, particularly the statement in regard to the implementation of the 1945 proposals. When the Prime Minister tells us that it is rather difficult because of the expenditures on national defence, I need not remind hon. members that in 1953 when the election was under way the expenditures on national defence were far higher. If there was any honesty of purpose behind that declaration in 1953, then they are better able to fulfil that obligation today than they were in 1953.

Mr. Ferguson:

Do not remind the Prime Minister of those election promises. It is not fair. Oh, that is mean.

Mr. Drew:

I should like to point out one further significant and important fact. The proposals put forward by the government of Canada at the conference last week were proposals to deal with unemployment at an unnamed time and on the basis of unknown facts. But what the people of this country want to know is not only what this government is prepared to do now in regard to those who are actually unemployed, whichever figures of their own they use; we want to know what this government is prepared to do now to stimulate this country so that there can be employment. What we should be talking about is the creation of employment. No country in this world has it within its power to create employment and expand production as we have here in Canada, with sufficient vigour and energy on the part of the government and its people.

We have heard already during the course of this debate that the government has confidence in the country, leaving the implication that others have not. Mr. Speaker, we have confidence in this country, and we have confidence that we have to encourage the development of the limitless resources we possess, and for the production and fabrication of which we have such enormous resources of industrial energy in the form of hydroelectric power, coal, oil, gas, uranium- all these things. We say that, with the development of these, there is full employment for all here and full employment for millions more in the years immediately ahead.

All we need is a new government.

Mr. Drew:

All this calls for action. The Minister of Finance gave a rather schoolmasterly bit of advice to the manufacturers. He told them that they had better pull up their socks and meet the situation. This

The Budget-Mr. Drew demands more than action by the manufacturers. It demands action by everyone. It demands action by this government, by the provincial government, by municipalities, by employers and employees, and by all Canadians. The outstanding fact with which we are confronted today is that Canada is no longer selling abroad in a sellers' market. We are up against the keenest competition this country has ever known.

The miracle of recovery in Europe is something of significance to every one of us. Out of the ravages of war 300 million people have rebuilt their economy in a way that has not been equalled in the whole history of mankind. It is only a few years ago that in a patronizing manner we talked about Britain and said that Britain was through, that the British were tired and really did not have the energy. Yet today Britain, with nearly four times the population, has only a fraction of our unemployed. Britain today is more prosperous than it has ever been in its history. France, with all its difficulties, is immensely prosperous. Italy has made a recovery that is beyond the imagination. West Germany has made the most incredible recovery of all. Out of the very ashes of the greatest destruction ever visited upon any nation has developed one of the great production areas of the world and, as we now know, they have moved even within these past few years into the third trading place in the world, although only six years ago we were insisting upon the destruction of many of their plants in the Ruhr and in the Rhineland. This is one of the most unbelievable recoveries. The same is true of Holland-gallant Holland, which Canadians know and admire-Denmark, Norway, the Baltic states, Switzerland; yes, and in Spain and Portugal, right through the whole of Europe, there is a level of production such as has never been known. Let us not forget our debt to the United States, because in very large measure that great recovery has been due to the unparalleled generosity of our friends in the United States and the money they have given for the reconstruction of Europe.

Having said that, then let me say most emphatically that that is not the most important by any manner of means. It is the spirit of the people. It is the spirit of the people of Britain that you see emerging out of all this effort. It is the spirit of the people of the different countries of Europe, and there today among those 300 million people, so closely akin to us in the ideas of society and of the good and decent things of life, we see production, we see skill, we see a mounting prosperity which is of importance to every one of us. Let us thank God that they have

been able to recover in this way from the destruction which had taken place. But let us also remember that we should be very thankful that that great area stands prosperous and firm in the defence of the same freedom for which we are struggling at this time. Moreover, it presents a great market into which we can sell, if only we vigorously recognize the demands that are before us. Therefore, let us do everything we can to stimulate this activity. But the first place for this sort of action to come from is the government itself. The government has put forward a proposal that there be a commission to inquire into the broad economic future of this country. That is a fine thing; but, if it is a good thing to appoint a royal commission for that purpose, then that knocks into a cocked hat all the nonsense we have heard about royal commissions destroying the authority and responsibility of government. Every time we have put forward a proposal that there be a royal commission to inquire into waste and extravagance in the government, which incidentally has been found every time there has been an inquiry-

Mr. Rowe:

It is getting worse.

Mr. Drew:

-we have been told that it is contrary to our constitutional system and it would be a denial of the rights and responsibilities of parliament. But these people now put before us a royal commission to inquire into our economic system. We want something to be done right away to deal with this problem of unemployment. We want something done now to deal with the unemployed; and we want the government itself to do something that will stimulate the sense of economy and efficiency in this country.

Therefore, as we approve of the setting up of this commission, I repeat our request that a royal commission be set up to inquire into the operation and organization of all government departments and all agencies of government. We have heard these pious assurances about efficiency and the things they are doing. I shall close these remarks by saying to the Minister of Finance, in the ancient biblical words, "Physician, heal thyself".

A great speech, George.

Hon. Paul Martin (Minister of National Health and Welfare):

I am sure, Mr. Speaker, that we will all agree with the observation of the amiable gentleman who just intervened and say that, from the point of view of delivery and the renewal of old-time vigour, "That was quite a speech, George." I may say to the Leader of the Opposition, before I cross swords with him this afternoon, that I am very glad, as everyone in the house is, that during the past month or so, he has

shown increasingly if not his old-time form of exactitude, his old-time form of vigour.

Sir, I rise primarily today to answer the observation made by the Leader of the Opposition in the early part of his speech, when he took issue with the implication of my question that the 1945 proposals of the federal government have in the field of health and welfare been implemented to the extent of over two-thirds. The Leader of the Opposition contradicted that statement and said it was not true. I now propose among other things to deal with that particular aspect of the question and show that my statement is fully substantiated by the evidence I am now going to offer.

It will be understood and remembered that the 1945 proposals were a series of integrated proposals the implementation of which depended upon the finding of agreement with the provinces on fiscal measures. It was clear at all times that the several and individual proposals could not stand by themselves. The federal government offered to bring in certain measures in consideration of particular agreements, mainly in fiscal matters, with the provincial governments. My hon. friend has said it was this government that scuttled the conference of 1945. I do not know whether he meant or hoped to indicate by that statement a suggestion that we had done the same last week or were proposing to do so next fall. But I want to say-

Mr. Drew:

On a question of privilege, Mr. Speaker, may I say that in my remarks there was no suggestion, so far as last week's preliminary meeting was concerned, of any such thought or any such indication. The fact is that so little was done that it would not have been possible anyway.

Mr. Martin:

I thank my hon. friend for saying that his reference was to the 1945 conference and not to the conference of last week. As one of those who participated in last week's conference, one of the sessions of which-and I think it was the most important one-was a secret session by agreement, I may say that there was a disposition on the part of everyone, from the Prime Minister of Canada (Mr. St. Laurent) down to every premier and delegate, to deal in a spirit of understanding and co-operation and by means of constructive effort, with the difficult problems that face Canada. I am sure that spirit will prevail under the Prime Minister of Canada, who we all know is capable of nothing but understanding and co-operative effort.

The premier of Ontario-and he disagrees with the Leader of the Opposition-in commenting on the conference of last week said it was a most helpful one on the part of all

The Budget-Mr. Martin parties to the conference. I believe the way to bring about good government in Canada is by so conducting oneself as to make it possible for all those taking part in a dominion-provincial conference to say that what we have done has been done in a co-operative and understanding spirit.

I shall not say to the Leader of the Opposition that he did not approach the problems in 1945 as sincerely as did anyone else. The hon. gentleman is a sincere-minded gentleman. While we may differ on issues, I shall never be found accusing him of want of sincerity. However, I say to him in all earnestness, that my reading of the record of the 1945 conference suggests that, notwithstanding the fact that the hon. gentleman may have been acting, as possibly he thought he was, in the interests of his province-and for that I give him credit-his attitude was one of the main factors why that conference did not succeed.

You will recall, Mr. Speaker, that in 1945 no agreement was reached on fiscal affairs. So the federal government has never at any time since that date been committed or obligated to carry out the 1945 proposals, since the conditions on which they were based have never been fulfilled. Despite this fact, the federal government has actually gone ahead on a unilateral basis with such portions of the 1945 program as it seemed possible from time to time to implement. The result is that 10 years later, in 1955, we find that most of the proposals have, in fact, been implemented to a degree far in excess of the levels suggested at the 1945 conference.