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


Victor Quelch

Social Credit

Mr. Quelch:

The hon. member for Winnipeg North Centre (Mr. Knowles) points out that the price of food has gone up to 220. That is especially hferd on low income groups. Many people without thinking blame the farmers for that situation. They say that the prices of farm produce have gone up considerably and that the farmers are profiteering. I believe all hon. members received a copy of a pamphlet entitled, "Labour Research," containing a good article which I think all hon. members should note, headed, "Is it the farmer's fault?" This reads:
Some might rashly assume that these figures are evidence of the irreconcilability of workers' and farmers' interests. But they aren't. In September last, the dominion Department of Agriculture published a report on Marketing Margins for Selected Canadian Agricultural Products, 1935-1949. The products are potatoes, eggs, fluid milk, creamery butter, cheese, beef (commercial quality), wheat flour, white bread and canned tomatoes.
The results are very carefully qualified and hedged about with warnings that they must be used only with the greatest care, and with full allowance for all the qualifications. But one fact does stand out, unmistakably: That the farmers''
share of the retail price in 1949 was not, in most cases, substantially different from what it was in 1946. The only notable exception is potatoes, where the farmers' share fell off 20-8 per cent. In five of the other eight cases, also, it fell off, but only by much smaller percentages:
That shows that any increase that has taken place since 1949 in the price level is not due to any increase in the prices paid to the farmer but is the result of increases in the price spreads. Of course that is something that should definitely be dealt with at the earliest opportunity. In his speech in

The Address-Mr. Quelch 1941 the minister referred to the fact that at that time they had heavy taxation, but in spite of that heavy taxation they were not able to keep prices from rising. Taxation may have been heavy in the minds of the people in 1941, but taxation is also quite heavy today. I notice that in 1941 the total revenue from taxation was $771,540,000 or a per capita tax of $67. In 1942, the year in which really heavy taxation was introduced, the revenue had increased to $1,360,913,000 or a per capita tax of $120. In 1949 the revenue had gone up to $2,436,142,000 or a per capita tax of $180.
Some will say that we should not forget that the national income has also gone up. That is quite true, but the value of the dollar today is only fifty per cent what it was in those days. I simply want to point out that the arguments used by the Minister of Finance at that time to justify the introduction of price controls are equally applicable to the present situation. I would like hon. members to note the similarity in the other inflationary pressures that were referred to. The minister stressed the fact that we had full employment at that time. This afternoon the Minister of Trade and Commerce (Mr. Howe) told us that we have full employment in the country at the present time. He pointed out that we were havirfg to divert goods from the channels of consumption to wartime needs. The Minister of Trade and Commerce also stressed the fact that a greater percentage would have to be diverted in the future.
Then there is another psychological effect that exists today as it existed then. It is true that we were at war in those days, but today the government is continually stressing the seriousness of the international situation. If the situation is as serious as it is said to be, then no doubt we are going to have to make great sacrifices in the future, sacrifices that will greatly increase the inflationary pressure. Therefore, if the argument of the Minister of Finance in 1941 was sound and justified the introduction of price controls, then I would say that there is even greater justification today for the introduction of price controls.
Some people seem to fail to realize that great changes have taken place in the general economic picture since 1945 and more especially since June of 1950. Let me review briefly those changes. It will be recalled that at the end of the second war there was a strong inflationary pressure in this country, due mainly to three things. The first was the accumulation of war savings which then became a demand against goods. The second was the fact that we were reconverting war industries to peacetime production and the

The Address-Mr. Quelch and as a result of subsidizing the consumers in this country, should be made up out of the general revenues of the government. The Alberta wheat pool has suggested that this payment should be 25 cents a bushel. Let us not forget that even if a payment of 25 cents a bushel is made, the farmers will still be standing approximately 50 per cent of those losses. That is all a 25 cents per bushel payment would represent. It has been stated by the Minister of Agriculture (Mr. Gardiner) and others that the interim payment of 20 cents a bushel on the 1950 crop is helping to alleviate any difficulties the farmers may be having in meeting their present obligations. That is only partly true. Unquestionably it helps the farmer who threshed a crop, and who was able to sell that crop. We must not forget, however, that many farmers who raised crops in 1950 still have those crops under the snow. In the constituency which I represent I should say, as a conservative estimate, that at least 50 per cent of the crops east of Hanna are still under the snow. You are not helping those farmers a bit by making an interim payment of 20 cents a bushel on a crop which has still to be threshed. Then again there are those in the more fortunate position of having threshed their crops, but who have been unable to sell them owing to the congestion at the elevators. I was told by certain officials in Alberta that generally speaking the wheat has been pretty well cleared away along the Canadian National lines, but that there is still a tremendous amount of congestion on the main C.P.R. line in Alberta. Those farmers face a very serious situation. Not only have they not been able to sell their wheat, but unless those crops, which in many cases are very damp, are moved at a very early date, there is great danger of spoilage. So I believe that as rapidly as possible the government should increase drying facilities, because we are continually running into this difficulty of handling our grain in a tough or damp condition.
I think it is high time the five-year pool was cleaned up. I listened to the Minister of Trade and Commerce (Mr. Howe) speak to the farmers' union of Alberta in Calgary last December, and he left the very definite impression that the final payment would be made in January. He did not give very much encouragement to the farmers as to what the amount might be, but certainly they got the impression that the payment would be made in the very beginning of the year. Then in January the Minister of Agriculture spoke to the convention of the Canadian Federation of Agriculture, and he made the whole picture very cloudy indeed. He said the Prime [Mr. Quelch.J

Minister (Mr. St. Laurent) was conversing with Mr. Attlee in an attempt to get more money under the "have regard" clause of the British wheat agreement and that now the whole question was up to Mr. Attlee. The minister did not know when Mr. Attlee would come through, and until such time as he did there could be no final payment under the five-year pool. So the matter was left in a very unsatisfactory position. However, today I was glad to hear the Minister of Trade and Commerce say he would do everything in his power to see that the payment was made before the beginning of spring seeding.
Another question I want to touch upon today is the price of wheat. Hon. members will recall that we signed an international wheat agreement, which received the support of the house. At that time I warned of the danger of trying to guess what the price of wheat or any other commodity would be in the future. I stressed the fact then that it was quite easy to establish a fair price for the current year, but that when you tried to say what that price should be, one, two, three or four years hence, you were guessing and the government might very well guess wrong, as they did under the British wheat agreement. Therefore at that time I urged that instead of adopting the policy outlined in the international wheat agreement we should first of all set the price for the current year at what we considered a fair level, and then tie the price of wheat to the general price level, so that if in future the price level of the importing country went up 10 per cent the price of wheat to it would also go up 10 per cent. If on the other hand the price level went down 10 per cent the price of wheat would go down by the same amount. In other words you would be establishing a parity price on an international basis. Apparently the government did not consider that proposal worth while, so today we are faced with the fact that there is a ceiling of $1.89 on wheat. No matter what happens to the general price level, even if it goes up another 50 per cent, the price of wheat is tied down.
Does anyone suggest that the farmers should have a ceiling on wheat when everything else is allowed to go free? Then in addition we arbitrarily reduced the floor under wheat by 10 cents a bushel a year. Why? Would anyone suggest any reason why the floor price under wheat should be reduced by 10 cents next year, 10 cents the year after and 10 cents the year after that, when the prices of everything else are going up? That is why I argued at that time that the basis for payment under the international wheat agreement was not fair, and that we

The Address-Mr. Thatcher
would never get a fair base until we tied the prices of farm commodities to the general price level on both a national and an international basis. In other words I was asking for parity prices both nationally and internationally.
In conclusion I would say it is high time the government brought in a long-range policy for agriculture based on parity. Only in that way can we assure the most efficient operation of agriculture in order to help provide the supplies of food so urgently required in many parts of the world today. The Secretary of State for External Affairs (Mr. Pearson) stressed the fact that we cannot hope to defeat communism by the force of arms alone, that we will also have to provide economic aid to the backward countries. The sort of aid most urgently needed in the world today is food. Therefore it is up to us to maintain our agriculture at the highest possible state of efficiency, so that we may make our greatest contribution to good will and contentment in the world.

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