Mr. Peters:

Mr. Chairman, before the business of the house was interrupted at five o'clock the hon. member for Skeena (Mr. Howard) proposed an amendment and the Minister of Fisheries (Mr. MacLean) offered an alternative. The member for Skeena was not feeling well and was not sure he would

be in attendance this evening. He asked me on his behalf, to withdraw his amendment. He was of the opinion that the amendment proposed by the minister would be satisfactory.

The Chairman:

Has the hon. member leave to withdraw the amendment?

Agreed.

Amendment withdrawn.

Mr. MacLean (Queens):

We had a useful discussion regarding this matter before five o'clock. I will ask my colleague, the Solicitor General, to move the following amendment:

That clause 1 be amended by striking out in line 11 the words "an individual resident" and substituting therefor the words "a person resident and domiciled".

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

Mr. Chairman, I so move.

Mr. Speaker:

When shall the bill be read a third time, now?

By leave.

Mr. MacLean (Queens) moved

the third reading of the bill.

Motion agreed to and bill read the third time and passed.

Hon. Gordon Churchill (for the Minister of Agriculture) moved:

That the standing committee on agriculture and colonization be empowered to continue its inquiry into the question of prices of farm machinery as recommended by the said committee in its fourth report presented to the house July 28, 1960, and that the committee's minutes of proceedings and evidence with regard to this inquiry at the last session be referred to the said committee.

Mr. W. H. Jorgenson (Parliamentary Secretary to the Minister of Agriculture):

I am

sure that all hon. members are aware of the widespread interest in this question of farm machinery prices. No member representing a rural constituency could possibly avoid hearing the discussion of this subject. Farmers realize the necessity of keeping production costs down to a minimum in order to compete not only in the export market but in their own domestic market, and have expressed their concern regarding the rise in the price of farm machinery since 1955. The increase in production efficiency on the part of farmers is invariably lost because of the high cost of farm machinery.

On Monday, June 6, 1960, the house ordered that the standing committee on agriculture and colonization be empowered to inquire into the prices of farm machinery and to report to the house thereon. The committee held three open meetings and the persons appearing before the committee at the last session were as follows: Mr. A. D. Holmes, Director, Prices Division, Dominion Bureau of Statistics; Mr. R. A. Stutt and Mr. G. Haase, Department of Agriculture; Messrs. D. W. McGill, Director, and J. J. A. Lefebvre, Machinery Section Head, Appraisers Branch, Department of National Revenue; and Mr. J. T. Wimble of the Appraisers Branch, National Revenue and Mr. W. Kalbfleisch, Chief of the Engineering Research Service, Department of Agriculture.

The chairman gave the following report to the house on Thursday, July 28, which reads as follows:

Your committee has noted the wide-spread interest in the subject of farm machinery prices.

Your committee held four meetings on this order of reference. It heard representatives from the dominion bureau of statistics on farm machinery prices; from the Department of National Revenue on farm machinery tariffs; from the engineering research service of the Department of Agriculture on the different types of farm machinery.

Your committee has found that interested persons or organizations would like more time to prepare presentations.

Your committee recommends;

1. That the subject of farm machinery prices be referred to it as soon as possible after the opening of the next session of parliament.

2. That the ministers of the different government departments concerned, instruct their officers to offer every assistance to the persons designated by the committee to procure and compile all available facts regarding farm machinery prices.

During the recess a summary of statistics relative to the inquiry into the price of farm machinery, under the direction of Mr. Gordon Haase of the economics division of the Department of Agriculture, has been prepared. Copies of this report will be made available to the members of the committee both in English and in French as soon as possible, when the committee is prepared to resume its investigation.

No one at this time is prepared to say just where the responsibility lies for the price increase. It is to be hoped that during committee sessions an investigation in this regard will take place following which recommendations will be made as to how to minimize the present increase and prevent any further increase.

I do not think it is necessary for me to indicate the nature of the inquiry which should take place, but I am sure that the committee

Farm. Machinery Prices will investigate that which they may deem necessary, whether it be in the manufacturing, distribution or retail field.

I might also add that the interest in all phases of the industry has been shown by the people concerned. It is expected that their views will be heard, in addition to the representations by labour and agriculture. I hope that this motion will be passed today and that the committee will be able to resume its inquiry at the earliest possible opportunity.

(Translation):

Mr. Jean-Paul Racine (Beauce):

Mr. Speaker, we welcome the statement just made by the parliamentary secretary to the Minister of Agriculture (Mr. Jorgenson). I want to assure him that we welcome this opportunity of looking again into this matter, because we believe that this study is necessary on account of the questions that are being asked by many farmers and all those concerned with every aspect of agriculture.

It is the utmost importance, in our opinion, that the committee be once more authorized to continue its inquiry into the question of farm machinery prices; besides, the committee included such a recommendation in its fourth report to the house.

I shall speak very briefly tonight because I do not want to anticipate the results of the inquiry that will be conducted by the committee on agriculture and colonization.

This is not the first time, however, that we have been hearing about this committee and I should like to refer to the statement made by the former minister of agriculture on June 6, 1960, as reported on page 4571 of Hansard:

Mr. Speaker, during the past 10 years, the most frequently heard general complaint on the part of farmers has been over the cost price squeeze. This arises from the fact that during this period the prices received by farmers for their products either have not increased or have not increased in anything like the proportion of the increase in cost of the goods and services farmers have to purchase.

Nothing could be more to the point, Mr. Speaker, and if we refer to D.B.S. figures, for instance, we note that the price index of goods and services purchased by farmers reached 255.9 in 1957; 259.9 in 1958; 269.5 in 1959; 274.4 in 1960. Therefore, from 1957 to the end of 1960, we note a 14.5 increase in the price index of goods and services purchased by farmers.

If, on the other hand, we refer to the same statistics, we find that the retail price index of farm products for 1956, was 234.6 and that it was 234.7 for the first 11 months of 1960.

Farm Machinery Prices

So, in four years, from 1956 to 1960, the percentage increase of the retail price of farm products was only 0.01.

This inquiry is a must, no doubt, and we, in the committee will give it all our attention but that does not seem to be the main cause of the cost-price squeeze. There may be deeper causes that could warrant a more objective investigation. For instance, what about the farm product marketing organization in this country? Nothing has been done in that field, although our economists have been discussing the problem and have recommended a study of marketing methods by a research committee.

After the then minister of agriculture, on June 6, 1960, had instructed the committee on agriculture and colonization to inquire into farm machinery prices, we hoped that the committee would get to work immediately. But it was not until July 12 next that the first meeting was held. It was followed by three more, on July 19, 26 and 27, 1960. At those meetings, evidence was heard from officers of the departments of agriculture and national revenue, and also from the dominion bureau of statistics. And it was only at the last meeting that we were given questionnaires.

And I think that all the members of the committee had copies distributed to the farmers in their ridings in order to find out what they thought of this price margin on farm machinery.

In 1960, that is during the last session, the committee on agriculture and colonization had this to say in its fourth report:

(Text):

Your committee has found that interested persons or organizations would like more time to prepare presentations.

Your committee recommends:

1. That the subject of farm machinery prices be referred to it as soon as possible after the opening of the next session of parliament.

(Translation):

Who is to blame, Mr. Speaker, we do not know or perhaps we do know it only too well. Still, certain questions remain unanswered in our minds. We wonder what caused the Minister of Agriculture and the government to delay for four months this year the opening of the inquiry by the committee on agriculture and colonization. Even if we blamed the committee for not having met more often last year to consider this matter, I think we must once more blame the government and in stronger terms for this year's four months delay.

Does the government feel that this matter is not important? Does it think that the situation which the farmer must face, as far as

the purpose of this inquiry is concerned, is not important? We do not know. And I would not like to put words in the mouth of the minister. However, we cannot help wondering whether the delay suffered in this matter is not deliberate.

We are really wondering whether the new Minister of Agriculture considers what the situation will be at the time of the next general election when the farmers will remind him that the price spread still exists.

The minister might then tell the farmers that his government has foreseen this development and that an inquiry is in progress. Unfortunately, since this government came to power, we have too often seen similar electoral tactics whose only aim is to create a smokescreen to cover the true situation.

However, we on this side do wish that the committee on agriculture and colonization will make haste in order that a report may be submitted to the house before the end of the present session. That is what we hope for and, therefore, we wish the committee to be called as soon as possible.

In closing, I should like to tell the Minister of Agriculture, or, in the circumstances, his parliamentary secretary, that if it so happens that the committee is unable to examine fully this whole question this year, we on this side of the house would suggest that a commission be established to complete the inquiry.

May I repeat that the announcement by the parliamentary secretary of the establishment of this committee is most welcome. We on this side of the house who are members of the committee on agriculture and colonization assure him that we will fully co-operate in order to inform not only the house but in particular our farmers who will know at last what to believe in this matter.

(Text):

Mr. Hazen Argue (Assiniboia):

Mr. Speaker, the whole question of prices of agricultural machinery is an exceedingly important one as far as some 600,000 farm families in Canada are concerned. There is probably no item going into the farmer's cost of production that is larger, more necessary or causes him greater concern than the cost of agricultural equipment.

Farmers have faced many grave problems since the end of the war. One has been a failure to obtain markets for agricultural production. Another has been a failure to obtain relatively good prices for agricultural commodities, and a third and very important one has been the almost astronomical increase in the price of agricultural machinery.

According to the statistics which are available prices of agricultural machinery have increased by almost two and a half times since the beginning of world war II. Farm cash income since the end of the war has remained relatively stable, with a small percentage increase over that period of time. In the farmers' view agricultural machinery is a fixed cost over which he has no control, and it is a burden that is resting very heavily on the agricultural industry.

There is a move for expansion and consolidation of farms in Canada and there is tremendous pressure to force farm populations off the farms. I do not think any item has contributed more to the depopulation of agricultural areas than the impossible burden of agricultural machinery prices for most farmers. Since this is such an important matter one would have thought the government would have taken early action to do something about it.

We are dealing with this matter on March 14. It was first raised in the House of Commons on June 6, 1960, and a report was made to parliament by the agricultural committee on July 28, 1960. This report recommended that the subject of farm machinery prices be referred to that committee as soon as possible after the opening of the next session of parliament.

The Minister of Agriculture (Mr. Hamilton) has failed to carry out the recommendation of the committee. He has failed to bring this motion before the house at an early date in the session. Parliament opened on November 17. It is almost four months since this session began. It has taken the government four months to get this resolution on the order paper, even in the face of a recommendation from the agricultural committee that the question of farm machinery prices be referred to it as soon as possible after the opening of the next session of parliament.

I suggest that the government, by its procrastination and delay has been blocking its own inquiry and has been making it more difficult for the committee to bring forward recommendations at an early date. I suggest that the government, by these delaying tactics, has shown that its well-known promises to bring about a balance between prices of agricultural products and the cost of agricultural machinery have gone by the board and have been repudiated. I suggest that this committee may well provide a great deal of window-dressing and very little action.

The question of agricultural machinery prices is of tremendous importance because according to dominion bureau of statistics figures farmers spent just under $55 million on farm implements in 1944 and $251 million

Farm Machinery Prices in 1959. That is an increase of five times in the amount of money spent on agricultural machinery. Yet in the face of this tremendous problem and the urgency to do something about it the government has long delayed bringing forward this important motion.

I think there are many items which should be brought before the committee. I think we should bring witnesses before the committee from the main agricultural implement companies in this country. We should ask them to appear before the committee and explain, if they can, why they have done such a poor job in maintaining reasonable prices for agricultural machinery. This spells a difficult problem for Canada because most of the farm implement companies have their head offices located outside our country. It is a question of whether or not we can get witnesses from the majority of these companies- I hope we can, but it does present a problem-since their head offices are located outside this country.

A few years ago the legislature of Saskatchewan undertook an inquiry into the farm implement industry. The inquiry was held in 1952, I believe, and it was a rather exhaustive one. Witnesses from the various agricultural implement companies were asked to come before the committee. The farm implement companies, with the exception of Canadian Co-operative Implements Limited, boycotted the committee, refused to appear and therefore made the work of the committee very difficult.

I trust we will exercise our authority where possible, and our influence where our authority does not extend, to have the representatives of the main agricultural implement companies in Canada appear before our committee. I think we should have representatives from Canadian Co-operative Implements Limited, the Massey-Harris Company, which in substantial part is a Canadian company, and from Cockshutt Farm Equipment Limited, which is also a Canadian company. We should also request the attendance of witnesses from companies situated in the United States. I refer to such companies as the John Deere Company, the International Harvester Company, the Minneapolis Moline Company, the Case Company, the Oliver Company, and any others we think should appear before the committee.

There are a number of questions we should ask them. I think we should ask them why we have such a conglomeration of models with modifications in agricultural machinery. I think the farm implement industry is getting almost in the position of the automobile industry. Through an excessive advertising campaign the implement companies have been trying to sell streamlined tractors with special

Farm Machinery Prices gadgets. They are following the plans of the automobile companies in this regard, not with the objective of making durable implements that will last for a long period of time, but to bring forward farm implements that fall into the category of having been produced and distributed on the basis of planned obsolescence. Then within a few years, by large scale promotion they hope to again sell these implements to agricultural producers.

In addition to planned obsolescence, there is the question of the power content of many farm implements. I think the companies are promoting power in agricultural implements in exactly the same way as automobile companies have been promoting power in automobiles. I think there is a rather important question as to whether or not they have overdone the feature of power with, of course, a very large increase in cost.

I think there is another important question which the committee should study in its inquiry. I refer to the question of providing spare parts for repairing agricultural implements. It seems to me that farm implement companies do not keep on hand a stock of spare parts for a sufficient number of years. After a few years it is difficult to obtain parts for the implements that have been sold, and farmers must travel 50, 75 or 100 miles or more to a large centre in the hope that they can get repairs made. Even in my part of the country, if they travel to Regina they may be told: we shall have to send to Winnipeg, or we shall have to send to the factory. I think the companies have done a very poor job, a very inadequate job, with regard to providing a complete stock of spare parts likely to be required for their machines over the probable life of the farm implements. I think this is a question into which the committee should make a full inquiry.

I do not know why the government has set up the committee or why they are proposing this motion. They say-the parliamentary secretary has said-it is an endeavour to prevent farm implements costing more or, even better, that it is an endeavour to reduce the price of farm implements. These are certainly laudable objectives. But every time one asks the government to do something about the way in which the great corporations of this country are operated, every time you ask them to plan production or to control prices, what does the government say? It says: we cannot touch free enterprise; it is beyond our control and beyond our jurisdiction. So I would be anxious to learn from the parliamentary secretary just in what way this government feels it can exercise any control over the farm implement companies of this country. I suggest that the government has abandoned responsibility with regard to the

operation of these companies, because the Prime Minister (Mr. Diefenbaker) has told us very often that the government has no authority over private business and its operations. When we ask in this house whether or not, for example, General Motors is going to close down a plant in Windsor, the answer is: we have no control; it is beyond our jurisdiction. Very often the government will not even go as far as to make inquiries. If the government takes the attitude that it has no control over the auto industry, how does it expect to bring about the laudable objectives mentioned in connection with this particular committee?

There is the question of price spread, the difference between manufacturing costs and retail cost. There is the great problem of the price spread in the food industry. We had a royal commission set up under this government which brought in a report, but instead of price spreads being narrowed they continued to increase. One can only wonder whether there is a conscientious endeavour on the part of this government to bring about some revision in farm implement prices or whether this is just another case of window dressing, a case of holding a talk-fest and doing nothing about the problem. We have, I think, in Canada an oportunity to do something about farm implement prices because, unlike certain other countries we do have a native farm implement industry. We have the Massey-Harris Company, the Cockshutt Company and Canadian Co-Operative Implements Limited. I suggest that this committee should consider the financial support and encouragement of the co-operative production of farm implements and there should be a full inquiry as to whether we should use to a much greater extent the facilities of CoOperative Implements Limited so as to bring about a reduction in prices. I think we should consider the possibility of public ownership in the field of farm implements.

Mr. Speaker:

I think the hon. member is straying a little far afield. The subject matter to be referred to the committee is the only relevant subject matter for debate.

Mr. Argue:

I am pointing out some of the problems in the farm implement industry, some of the things into which I think inquiry should be made. I think the whole question of the kind of production we should have in the farm implement field is certainly an area into which the committee should make inquiry.

There is another area in which I think the committee should make inquiry. I would ask the parliamentary secretary if it is the intention that the inquiry should proceed along these lines, namely, an investigation into the costs of the various components

which make up the prices of farm implements such as the cost of salaries, wages, overhead, profits and materials. I should like to see appearing before this committee not only experts from the farm implement industry but experts from labour and management to put before the committee information as to the various component costs going into the price of farm implements.

I have in my hand a survey which has been made relating to these costs. This survey is contained in a publication put out by the farm-labour co-ordinating council, which is a body composed of representatives of labour, the Canadian Labour Congress and its affiliated unions, and representatives of the farm unions of Canada. This body found that, comparing 1957 costs with 1945 costs, there has been an increase of 8 per cent in the cost of salaries, an increase of 7.5 per cent in overhead and profits, a reduction in the cost of fuel and electricity by .4 per cent, an increase in the costs of material by 3.1 per cent and a reduction in the cost of labour amounting to 11 per cent. In 1957, wages accounted for 22.9 per cent of the final price of farm implements as compared with 33.9 per cent in 1945.

The bogey has been raised that the higher prices of farm machinery can be attributed to higher labour costs. Let us find out if this accusation can be substantiated. According to this source of information, that is not the case. Increased efficiency and automation have resulted in the reduction of the percentage of cost attributable to labour, and there has been a substantial increase in such things as overhead, profits, salaries and materials.

We trust that the committee will do something about reducing farm implement prices and that it will not be just another talk-fest, another inquiry bringing in another report to gather dust while farm machinery prices continue to rise.