February 8, 1951 (21st Parliament, 4th Session)


Victor Quelch

Social Credit

Mr. Victor Quelch (Acadia):

Mr. Speaker, I listened attentively to the Minister of Trade and Commerce (Mr. Howe) when he spoke this afternoon. It was my feeling that his speech was a strong argument in favour of the immediate introduction of an over-all system of price controls.
I jotted down a number of points he made when he was speaking-that our economy was operating at full capacity; that there were limiting factors in export trade, namely supplies; that the full impact of the defence program is yet to come; that the defence
The Address-Mr. Quelch program will disturb our way of living; that there will be shortages. All these point to an increase in the inflationary pressure.
He said there is no intention to impose an over-all system of price and wage control at this time, but that it may be necessary in the future. He does not rule out that possibility. He made it clear that the success of the overall system of price control in the last war was due to the fact that it was brought into operation overnight. I could not help thinking that if I were a businessman in this country, with no greater principles perhaps than many others, after hearing the minister's speech X would say to my colleagues, "Gentlemen, you have heard the program. The best thing for us to do is immediately to increase prices as other businesses are doing, or we will be left holding the bag." Judging by what is happening in Canada today, no doubt there are many businessmen who feel that way, and who perhaps will direct their energies to an even greater extent in that direction after reading the speech delivered by the Minister of Trade and Commerce.
We have before us a subamendment moved by the C.C.F. and reading as follows:
That the following words be added to the amendment, immediately after the words "rising cost of living" in the last line thereof:
"such as the immediate reimposition of price controls, and the payment of subsidies where necessary, so as to protect the health and living standards of the Canadian people."
That is an amendment to the amendment; if it were not I would offer an amendment to insert the words "and wage" after the word "price". However, I do not think that is really necessary. One may well take it as written, because surely no thinking person today would suggest for one moment that we could have an over-all system of price controls without at the same time controlling costs in that price structure. I understand the C.C.F. fully appreciates that fact. Therefore we can take it as though that were written into the amendment. Let me make it clear that in supporting the subamendment we do so on the definite understanding that an overall system of price controls would include control of all costs incurred in that price .structure, including of course wages.
When the Prime Minister (Mr. St. Laurent) *spoke in this debate with reference to controls he said, as reported at page 29 of Hansard: There cannot be enforcement in a country like ours against the feeling of a majority of the people of what is right and what is wrong.
Surely no one would suggest that today the majority of the people would not support a system of over-all price control. I do not think anyone would argue for one moment,

for example, that labour would oppose it. Labour has taken a strong stand in support of over-all price controls. I doubt very much if anyone would suggest that the general consumer in Canada would oppose it. Stop people on the street and ask them if they are in favour of price controls, and in ninety-nine cases out of a hundred they would say that they are.
Speaking as a farmer I would say the farmers would not oppose the introduction of price controls. I noticed that when the leader of the C.C.F. party was speaking, the hon. member for Mackenzie (Mr. Ferrie) said that the farmers were opposed to it. The farmers are not opposed to price controls, so long as they are brought in in an equitable manner. That was made clear in a resolution passed by the Canadian Federation of Agriculture in Calgary last month. A report of that convention, as it is contained in the Manitoba Co-Operator of February 1, 1951, states in part:
Producers were concerned with inflation and controls, and on this subject gave unanimous support to a resolution requesting that if anti-inflationary measures, taken by the government of Canada, include price control, these controls should not be first levied against foodstuffs, but should go into effect simultaneously with wage controls, industry profit controls and that any controls on foodstuffs be imposed on a proper relationship and costs of production.
I believe that is the general attitude of all farmers. They want price controls on all commodities. They are quite prepared to have the prices of agricultural products controlled, too, so long as the prices of those products are controlled at a parity with the general price level.
Certain people in the country today and certain members in the house are warning of the dire consequences of introducing an over-all system of price controls. The hon. member for Vancouver-Burrard (Mr. Mac-Dougall) adopted that attitude when speaking in the house on February 6. He quoted from the Financial Times of British Columbia and, in making the quotation, said he thought it was a sound and sensible argument.
Let me quote one part of the quotation to which he referred with approval in the house:
There is really no choice. Comprehensive direct controls would defeat the purpose in the following ways: They would drive the economy into a
regime of black markets and administrative paralysis: would destroy public morale and the incentive to produce, and would conceal inflation, without preventing it. They would in any event require crushing taxation to be practical at all.
This article states that price controls would destroy the incentive to produce. Would anyone suggest that the over-all system of price controls during the second world war

destroyed the incentive to produce? We know very well that during that war our production increased at a record pace, and to record levels. Furthermore when the hon. member suggests that price controls would require crushing taxation it must be obvious that if we do not have price controls we will have to have even heavier taxation. That was realized when price controls were introduced during the second world war.
These arguments and warnings against price controls are similar to some of the arguments we heard in the early stages of that war. For instance, on November 21,
1940, as reported at page 286 of Hansard, the minister of finance of that day, Mr. Ilsley, replying to a suggestion from this group that an over-all system of price control should be introduced, had this to say:
Price fixing of a few commodities, indeed rationing of a few commodities, is possible and need not have a very serious effect, but price-fixing and rationing on a general scale have at least two disadvantages. In the first place this would call for bureaucratic interference in the private affairs of all Canadian citizens.
After that he allowed his imagination to run riot and said that if we had price controls we would have to put a spy in every grocery store in Canada. He said that kind of thing might be all right for nazi Germany but that the people of Canada would not tolerate it. That was the statement of the minister of finance of that day. It is interesting to note however that he did a backward somersault in the following year, because within less than a year he had completely changed his mind. .
On November 6, 1941, he v|jis commenting on the government's proposal \o bring down an over-all system of price control.
This is what he had to say, and I quote from page 4148 of Hansard of November 6,
1941, as follows:
But there is no doubt that when the resources and labour of the country are pretty fully used, when we reach a stage of full employment, and are making more and more war materials, devoting a larger and larger proportion of our human and material resources to the production of war equipment and war materials, there is no doubt that inflationary forces of a very powerful type are at work.
And again:
One will see at once that, unless curbed, forces will push the price levels up and up and up. How can that be stopped? Since the beginning of the war we have pursued a severe taxation policy. We have tried to tax as much as possible of the purchasing power back into the exchequer. We have gone all across the country and combed it for small subscriptions to war savings certificates. We have sold bonds to the people. In these ways, namely by taxing and by borrowing, we have tried to get back from the people a large amount of this purchasing
The Address-Mr. Quelch power. We believed that this was a right policy and we believed that it was anti-inflationary. To a large extent it was.
And he goes on to say:
Therefore, in this war, no matter what the course has been in previous wars, so far as I know all countries have come to the conclusion that they must resort to direct measures of limitation and control of production, and price control.
Hon. members will notice that in those statements the minister stresses the fact that prices were steadily rising in spite of heavy taxes and fairly heavy borrowings of the savings of the people and for that reason price control was necessary. It is interesting to note what the price level was at that time when the minister drew attention to the way it was going up. He stated a serious situation had developed at that time. The price level had gone up from 108.2 in March 1941 to 115.1 in October, 1941. If the fact that the price level had gone up from 108.2 to 115.1 was then a justification for price control, then how much more justification there is today for price control when the cost of living index has gone up to around 172.5?

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