March 20, 1946 (20th Parliament, 2nd Session)

Hon. C. D. HOWE (Minister of Reconstruction) :

Mr. Speaker, in rising to take part in this debate I wish to join with previous speakers in expressing regret at the departure of Lord Athlone and the Princess Alice and to express my appreciation of the work that they did while here. As Minister of Munitions and Supply perhaps I saw a side of their activities that others may have overlooked. They were tireless visitors to war plants. I can say that walking through a war plant is a tiresome business. I have done it occasionally, but the governor general and his gracious consort visited almost every war plant in Canada at least once. Their visits invariably resulted in an inspiration both to the management and to the workers, and had a great deal to do with the pleasant relations that were maintained in the war plants of this country. I am sure every Canadian feels a sense of loss at their departure and we all wish them good health and happiness in the future.
I should like to say a word of congratulation to the mover (Mr. Viau) and the seconder ' (Mr. Winters) of the address in reply to the speech from the throne. I was not in the house when their speeches were made but I have read them with great interest.

The Address-Mr. Howe
To-day I wish to speak particularly with regard to the remarks of the leader of the opposition (Mr. Bracken) to the effect that reconversion had bogged down and that the labour situation in Canada to-day is similar to that of the early 1930's. It has always been a mystery to me why members of the opposition feel that, in describing the present and future situation in this country, they must invariably picture both in a gloomy light. I have listened to speeches in this house predicting wide-spread unemployment, not only after the war, but during the war.
I have never heard anyone express the hope and expectation that after the war we would have reasonable employment conditions in this country.
The first two or three years of the war were occupied by parliamentary committees sitting continuously devising public works in great numbers which could be put into construction immediately after the war to take up the inevitable unemployment that would come at that time. In 1943 I ventured to make a prediction of my own. Speaking before the Canadian club in Toronto I predicted that this vast accumulation of public works would not be needed. I pointed out that every returned man would not be a construction man. I pointed out that the expansion that was taking place in industry would find means of absorbing war workers and the returned men without excessive resort to public works. I was accused by a very large portion of the press of Canada of being a super-optimist. I was called an optimist at first, and then I was promoted to superoptimist. I never was as optimistic as the present position would justify.
I have recently made a trip to the Pacific coast, the first time I have been there in morq than six years. I used to live in western Canada. I lived there, and practised my profession there, for some twenty-five years. I have lived in Saskatoon, Calgary, Vancouver, Regina and for many years in Port Arthur. I have seen western Canada in good times and in bad times, and I think I know what good times look like and what bad times look like in that country. But I have never seen western Canada in the state of prosperity in which it is to-day. I tried to meet in my travels a fair cross-section of each of the communities I visited, and I came away from western Canada convinced for the first time that perhaps our efforts toward reconstruction are meeting their objective.
There is a good deal of work in reconstruction that does not meet the eye. When V-E day came there was a cut-back of about thirty-five per cent in munitions production,
so that we could have a more or less gradual change-over from war to peace production in certain of our manufacturing plants. But on V-J day there was a complete cut-off of all war contracts except in the few cases where examination indicated that there would be more salvage value by completing production than in cutting it off. Before a war plant can change over to a peace-time plant, many things must happen. The surplus inventories in the plant must be moved. An adjustment must be made on the contract. There must be a cut-off and an adjustment made of the amount due the contractor and proper means found of paying the contractor. Those adjustments relate to several thousand contracts and the work involved is tremendous. I worked fairly hard during the war years, but I never worked as hard in my life as I have in the period since V-J day, and I think that is true of the staff of' my department
The termination of the contracts is handled by the contracts settlement board. It has a large staff. That staff goes into each factory, makes a rough determination of the amount due, arranges for immediate payment for a portion of it so that the contractor can have funds to start his reconversion work, and then follows that up with auditors who make the final adjustment. In the course of that adjustment the profits that have been made by the operation are studied and, if the profits seem excessive, a renegotiation is undertaken. That may seem a minor operation, but I can say to hon. members that these renegotiations to date have resulted in a recovery to the crown of some $365,000,000, of which about thirty per cent represents money that would not have been recovered through taxation in the ordinary course.
The custody of surplus materials from war plants, as well as the custody of all war materials surplus to the requirements of the armed forces, is handled by War Assets Corporation. That corporation is responsible for movement of materials out of the plants, for holding custody of government-owned machinery and equipment, and for disposing of that equipment in a way that will make the maximum contribution to the cause of reconversion. About 4,000 men are now engaged in the custody of equipment, in moving equipment out of plants and arranging for storage, and in guarding the equipment pending its sale. The total staff of War Assets Corporation, including the custodian branch, now exceeds 5,000 men and women. That staff has been built up within a very short time. The task of War Assets Corporation really began shortly before V-J day and is growing in size as each day passes. To date
The Address-Mr. Howe