Mr. Jackman:

The hon. gentleman who has just taken his seat has remarked that there were many things on his mind which he would like to take up on behalf of his constituents. I am sure if he were to examine the desires of his people at home he would find that they have a slight interest at least in the expenditure of some $400 million for which the Minister of Finance (Mr. Abbott) is now asking by way of interim supply.

I am sure that practically all members of this house would like to have some investigation of the estimates and the expenditures and some examination of the budget before this parliament dissolves. It is hard to believe, Mr. Chairman, that Canadians are living in the year 1949, in a country which is governed by British institutions. When was there a case where a budget was brought down, where estimates were tabled, where a public accounts committee was set up to examine the expenditures of the previous year, and parliament dissolved forthwith?

When this house voted interim supply on March 29, the Minister of Finance said, at page 2148 of Hansard:

As I have said, the form of this bill is exactly the same as in previous years, and the passing of the bill does not prejudice the rights and privileges of members of the House of Commons to criticize any of the individual items in the estimates. And I give the usual undertaking that such rights and privileges will be respected and will not be curtailed or restricted in any way as a result of passing this interim supply measure.

What do we find, sir? We find what is perhaps one of the finest examples of hair-splitting ever witnessed. The Minister of Finance says that that undertaking is just the usual undertaking of a minister of finance when he asks for interim supply. He goes on to explain that, when he said that members of parliament would have an opportunity of investigating the various expenditures, he meant not necessarily the members of this parliament but the members of some subsequent Canadian parliament.

What do we find the situation to be? This government has not given the members of this parliament an opportunity, on behalf of their people at home, to investigate the expenditures of the previous year. The public accounts committee which has been called has had one meeting-I think only one. No opportunity has been afforded the members

Interim Supply

of this parliament to examine the expenditures, and I was going to say the proposed expenditures for the coming year, but we are already well into the fiscal year. If this interim supply is granted, six months of the present fiscal year will have gone by before the people's representatives will have any opportunity whatever of examining the purpose for which the money is being spent.

As my leader has just said, there are items such as Canadair and many others concerning which this house and the people of Canada would like information before the items are passed. What is the result of this government calling for dissolution at this time and in the precipitate manner in which it has? The result is that an election will be held towards the end of June and people will be asked to vote for the various candidates. We suppose the government will have candidates running, and it is a fair assumption that they will ask for support on the basis of their record. What opportunity has there been to examine the record of this government so far as the expenditures of the previous year are concerned or the proposed expenditures for the fiscal year in which we are now? In other words, the government has said, "We will go to the country and if we are returned by any possible chance, then we ourselves will examine our own estimates." Is that the way the Canadian people feel that they should be treated, that their money should be so callously disregarded that they have no control whatever over the expenditures of the government?

If the budget amounted to only a small part of the total national income, the matter might not be so important, although the principle would be just as important as it is for the greater amount. We know, however, that the national budget today is a very large proportion of the total national income of this country. Yet no opportunity is to be given to the members of parliament, the members representing the people of Canada, to examine how the government proposes to spend that money, which is already being disbursed. We find ourselves in a constitutional position which is not only grotesque, but is a travesty on all British institutions; for a Prime Minister asks the Governor General for dissolution when we have not had an opportunity of examining the record and the proposed expenditures of this government.

There has been, Mr. Chairman, no opportunity to discuss the budget resolutions. It is utterly impossible for us to have any opportunity of discussing the budget resolutions between now and the proposed dissolution either today or tomorrow. What is the result of that? It means that the deductions are being made from pay rolls, that taxes are being collected, that customs duties are being

levied for perhaps six months, without any of these particular exactions having passed the parliament of this country. This is a very peculiar position.

May I say a word or two about the budget which has been brought down but which has not been endorsed by parliament. In general, I cannot say that I disagree with many of the items in the budget itself. The tremendous surplus which the government has been exacting from the people over and above the necessary expenditures has been returned in part; so that in place of a surplus of approximately $600 million which we had in the last fiscal year we are, according to the government estimates, now budgeting for a surplus of $87 million. I do not think that they can be criticized for budgeting for so little in the way of a surplus. Indeed, it is only a token surplus, and I do not know whether, with the added expenditures, some of which I shall refer to later, that surplus will be adequate to cover the additional expenditures which are being made.

I should like to point out that the so-called cyclical budget theory to which the government subscribed for several years has now gone by the board completely, and we are wondering just what has happened to the principle which the government said was a good one when that idea of cyclical budgeting was first put into effect. One thing that I should like to point out to the committee with regard to this idea of a cyclical budget is this. During the years when the great surpluses were accumulated and taken from the struggling taxpayers, there never was at any time in the original budget estimate any substantial surplus to be compared with the surplus which resulted at the end of the fiscal year. In other words, it would seem that the tremendous budget surpluses which we have had were largely fortuitous. The government never expected to have them. They happened more by accident, because of the great volume of business which was transacted in the country, all of which was in one form or another subjected to taxation. Indeed, as to the main items in the present budget I can only say that I, and I am sure many others in the Progressive Conservative party, feel much like the salesman who has been trying to land an order for four or five years and has at last succeeded in getting a fairly good one. Many of the main items in the budget are things which we have been petitioning for on behalf of our people for four or five years.

I cannot refrain from reporting to the committee two or three descriptions of the budget which I received from people in humble circumstances the morning after the budget was presented, because we on this side of the

house have been striving for these reductions and for this return of the excess taxation taken from our people for these many years. One person said to me, Now we shall be able to start living again. Another said, I could not sleep last night thinking about it. A third one said, At last we can live decently after all these years.

That, Mr. Chairman, is no exaggeration when you consider the position of many of the people with ordinary incomes in this country. To take by way of a surplus over and above vast expenditures no less than $50 for every man, woman and child is a tremendous amount of money. In my riding, to have that much extra would mean that the people could not only pay their bills and meet their taxes, but would be able to look after some of those things which we no longer consider to be luxuries but rather to be part of the ordinary amenities of living on the North American continent. But I will take this opportunity of saying that I approve of many of the reductions which the government has made in the taxation on lower incomes, because not only are some people being relieved of taxation but, in place of having a steeply-graded tax on the comparatively small incomes, which discouraged production, there is now a considerable mitigation having regard to the progressive rate of taxation on the lower incomes.

It is my belief that that change in our tax law will have a considerable effect on production; because if one went through the factories of this country one would find that nearly every worker there knew exactly when he emerged from one tax bracket into another where he had to pay a higher rate, and he had his eye in many cases on that break-even point. That fact undoubtedly had an effect upon production. The same thing applies to people in the higher brackets. They felt that there was no use in putting in additional hours of effort beyond the ordinary round of duty, in working overtime or working on holidays if twenty-five per cent or fifty per cent of the reward went to the government.

It is nothing less than fundamental dishonesty to bring down a budget and to have no opportunity of examining it, and to ask for supply. It is contrary to parliamentary practice. We should at least have been given the opportunity of examining the estimates of expenditure. Indeed, it is the only real control which parliament has had over the generations since we have fought for and established a workable parliamentary system, a system of democratic government for our people so that we might govern ourselves in an orderly fashion and not have to resort to the methods either of dictatorship or of force which are prevalent in certain other countries.

Interim Supply

Is it that the government is afraid of the public accounts committee which has just been set up? No reason has been given for the strange action of the Prime Minister (Mr. St. Laurent) in asking for dissolution at this time. Indeed we may well wonder if his haste to go to the country is inspired by the fact that business in many places is getting a bit spotty, to say the least. No longer are the reports of businesses and companies the same glowing accounts which we have seen over the last few years. The same thing applies to the producers of our raw materials on the farms, in the mines, and in the forests of our country. No doubt the government have said to themselves that now is the time to go to the country before conditions get bad. Perhaps it is because the condition of subsoil moisture in western Canada is now the poorest it has been in a number of years; and the possibility of a crop less bountiful than we have had in the past will greatly reduce their chance of being re-elected. Or perhaps it is because there is an indication of a grasshopper plague in parts of the west. One does not know what these reasons are and they have not been divulged to this committee. Perhaps of even greater importance is the fact that, as my colleague the hon. member for Lake Centre (Mr. Diefenbaker) pointed out the other day, our markets abroad are fast disappearing.

In a country where no less than 37 per cent of the total production must be exported, if we cannot find export markets, markets where we get paid in goods or in money for the materials we send over, we can be sure that this country is not facing a period of prosperity. There has been no answer by the government as to where we shall be able to export our surplus products. Most of the products which we do export are surplus. We cannot begin to consume more than one-third of our wheat, or a mere fraction of our newsprint production and lumber production, or of our base metal production, or of many other items. We must have export markets for these materials if we are to maintain our standard of living, and if we are to pay the workers in those industries and keep any semblance of a high level of business activity.

No doubt great problems are staring the government in the face today. It is no wonder that they wish to go to the people before some of these problems come home to us in all their austerity. But perhaps the chief reason why the government wants to go to the country is that the leader of this party (Mr. Drew) has not only put new ginger into the Progressive Conservatives, but has made a great change in the complexion of this whole house. For confirma-

Business of the House

tion of this fact I do not need to look on my own side alone, because Liberal members have said, and their statements have appeared in the press, that there is a great change here and that the leader of the opposition has not only justified all that was expected of him by his supporters, but has proved himself to be one of the greatest political leaders that Canada has ever seen.

Every day in this house we have seen the faults and the errors of the Liberal party exposed. Is it any wonder then, Mr. Chairman, that the government do not wish to see this political strength built up on this side of the house? Therefore they scurry away from parliament, away from answering for their misdeeds and their wrongs, and they seek to go to the country without revealing their situation or giving the elected representatives of the people an opportunity of going into their record.

Mr. Jackman:

He did not mention safety.

Mr. Jackman:

That would be satisfactory.

Progress reported.

Mr. Jackman:

It must be Liberals.

Mr. Jackman:

If the hon. member is correct in saying that there is an apparent cost of $981 million incurred by the foreign exchange control board, how much is the active asset carried against that cost? When we revalued the currency we lost the premium of ten per cent which we had paid out to acquire some of those assets. What was the profit when the foreign exchange control board took over all the gold holdings of the banks of Canada, and perhaps any private holdings as well? I think the take-over price was at the old rate of $20 an ounce, and then it was revalued upward. The board would have a fortuitous profit there at the expense of the banks and the holders of gold in Canada. Will the minister tell us what the active asset is against this $981 million exchange, and how much profit was made by the board when gold was taken over?