1. WThat is the Dominion Council of Health?

2. What groups or associations are represented on the said council?

3. How often does such council meet?

Mr. LUDGER DIONNE (Beauce):

Mr. Speaker, many people are asking the house to do away with controls. Some of those people think this move will favour their political publicity, some others have the intention of protecting their personal interests, and others take that stand because they think that if controls were lifted the flow of commodities would be resumed through the natural channels of trade.

In order properly to inform the fair-minded people, having in mind the welfare of the population of Canada, I have made a careful study of the subject and I shall now proceed to outline the conclusions at which I have arrived. If the government were to lift controls immediately I think everyone will admit that a large number of tenants would be thrown out of their homes. Since there exists at the present time an acute shortage of houses in this country, it does not require much imagination to foresee the perturbation which would result throughout Canada. Farmers and proprietors of houses do not realize what would be the distressing situation of tenants dislodged from their farms or homes, who would be at a loss to find shelter within the means of their pocketbooks. It is evident that the price of rent throughout the occupies rented quarters, and these people country would be increased tremendously. As a general rule it is the labouring class that occupies neeed an immediate increase in their wages to face this sudden additional increase in their budgets. It is evident that under such circumstances the cost of manufactured articles would have to be increased in proporfMr. McGarry.]

tion, and the disastrous result would be that the financial condition of every citizen in Canada would be upset.

The Labour Gazette of January, 1947, contains figures showing the cost of living in Canada as compared with that in effect in the United States since controls were abolished. The increase in the wholesale price groups from June to November, 1946, were as follows:

United Canada States

General Index

2 21Farm products

4 19Textile products

0 19Metal and metal products .... 1 4Buildings material

4 8Chemical and allied products.. 1 26Raw material

3 20Semi-manufactured articles ... 3 21Manufactured products

3 31

The same issue of the Labour Gazette contains the following statement:

The point of the two comparisons above is that while wholesale price groups moved in a parallel manner until June, 1946, there has be.en a considerable divergence since that date, with United States prices outstripping their approximate counterparts in the Canadian scene. Canadian food imports from the United States are only a small portion of the total imports from this source, so that pressure on our own food price ceilings in this particular respect is not excessive. But our imports of manufactured articles, as well as certain industrial raw or semi-processed products of iron, coal, cotton and petroleum, are very large. The increasing cost of these items places additional pressure upon our own price structure. An indirect pressure is offered by the greater disappearance of our own produce now in short supply that is sold in the United States at high prices rather than in Canada at controlled prices.

I should like to give a brief resume of another article which appeared in a prominent newspaper last week. This article stated that it is evident that business in the United States is due for a shake-down by the middle of 1947. Even the most bullish supporters of the commodity market in the United States feel that the end is in sight, and it is this feeling that is given as the reason for the stock market remaining dull. A comparison of United States commodity prices prevailing last January, this month and those being paid on September futures will show that prices are due to decline considerably. Here is the picture:

January Today September

Wheat

2-06 2-59 2-09Corn

1-34 1-62 4-54Cotton

-30 -34 -28Cocoa

-25 -27| -234Hides

-224 -254 -214Wool tops

1-514 1-58 1-29Black pepper .... -47 -57 -35Lard

-26 - 314 -24f

Emergency Powers

I sincerely believe that if we have the patience to wait a little longer before releasing more controls it will be possible to do so without creating too much disturbance of our economy. Every fair-minded member in this house will certainly realize that the government is not asking for the continuance of these controls for its own satisfaction. So far as I am concerned-and I know there are many others who share my view-I hate this interference of the government in private business.

In one of my previous speeches in this house I drew the attention of hon. members to the fact that I suffer personally from these controls. I have to sell the production of rayon yarn made in one of my plants at the same prices as prevailed on October 11, 1941, namely, seventy-five cents to 81.40 a pound when I could dispose of my production on the New York market at prices varying from $1.40 to $2.60 a pound f.o.b. shipping point. We produce in another plant ladies' shoes which retail in Montreal at from $6 to $9, when the same shoes are being sold at from $20 to $25 in Washington. I use these two items as an example only because I am familiar with them. I think they prove that it is against my own interest to favour controls. On the other hand, what lasting benefit could I expect from a situation in the United States which is bound to collapse at any moment? In the fact of such a precarious and dangerous situation, I prefer to carry on business on the basis of 1941 and not expose my country to an indescribably chaotic economic situation in which I would be engulfed with the rest of the Canadian population.

The government expects to reduce its expenditures next year by $900 million. This is interesting news for the population of Canada, but what is more important is the stabilization of prices without which we would be in the same situation as now exists in the United States where the purchasing power of 1947 salaries is lower than that prevailing during the war, even though there have been substantial increases. Salaries in the United States have increased eighty per cent. Weekly wages in industry averaged $25.20 in 1940 for thirty-eight hours. At the beginning of 1945 these had increased to $47.50 for a week of forty-five hours. The increases in wages have been completely wiped out by the lifting of controls in June last, except on rent, sugar and rice. In comparing the increases which took place in the prices of commodities and wages, the United States secretary of labour

admits that the purchasing power of salaried people is seventeen per cent inferior today to what it was during the war.

Since the decrease in the expenses of running the government of Canada, as announced in the federal budget, must reflect a decrease in taxation, the normal consequence should be a decrease in prices. Instead of a decrease in the prices of the necessities of life, it seems that we are on the threshold of a new wave of increases. Some controls have been abolished on some products and prices have increased. Any overvaluation of prices would absorb at least part if not all of the benefit derived from a decrease in taxation. The salaried man would not be any better off. At a time when employment is reaching normal and products and goods of all kinds are reappearing on the market, this man would notice with consternation his diminishing buying power. By that very fact his situation would become helpless. Scarcity of goods caused by the war does not free him from purchasing the necessities of life. He would then be compelled to ask increased wages or strike.

It is easy to prove to him, with indisputable figures, that he is the loser when he goes on strike. On the other hand, increase in salary, which will serve as a pretext for an increase in prices of goods, will create inflation and by the same fact will destroy the benefit foreseen by the increased wages.

Under ordinary circumstances the increase of prices should create abundance and should thereby correct the evil through the law of supply and demand. But unfortunately this scheme cannot produce any satisfactory results to prevent inflation owing to the fact that consumers need too many things at the same time.

During the war the government has assumed control of the economy in this country. Through many mistakes, it has nevertheless brought about useful and indispensable corrections. While our war effort has created an abnormal situation, requiring controls, we have to face the same situation today which is created by an unlimited demand for all kinds of products.

It is not the proper time to relax controls which are still in existence, and it is to be hoped that the government will receive the authority to maintain this policy for a limited period. The members of this house have so fully realized the importance of this precarious situation that when a vote was taken on the transitory measure presented by the Minister of Justice (Mr. Usley) on March 18, 177 members voted in favour of the measure while only thirteen members voted against it.

Emergency Powers

In some requests which I received asking for the suppression of controls I notice there was also a demand to prohibit exportation. Needless to point out, we have an unfavourable balance of around $500 million with the United States for the year 1946. This means we need foreign currency to finance our importations. Moreover, if exports were prohibited how could we dispose of our wheat, bacon, cheese and other manufactured articles that we must sell to other countries if we want to maintain and preserve the position that this country has acquired in the world. If one takes into account the overvaluation of prices in other parts of the world compared with Canadian prices, he would certainly admit that suppression of controls would create an increase in the exports of our products and thus increase the scarcity of same on the Canadian market.

For the above-mentioned reasons and for many others which would take too long to enumerate, I believe that maintenance of existing controls for a certain period is not only useful but absolutely necessary if we want to maintain a sound economy in our country. I understand that proprietors deserve sympathy because they are the most affected, but in face of two evils it is natural to choose the lesser. I would rather see the proprietor rent his house on a cheap basis than witness the renters being thrown out om the street. It is to be hoped that the competent authorities will give preferred attention in the near future to the urgent ease of the proprietors.

If I listened to some of my electors who have not given much consideration to the matter I would vote against the controls. In so doing, I am sure I would please them. Unfortunately the duty of a sworn member of parliament does not consist only in pleasing electors and himself but rather to take the interest of the Canadian people at large, no matter how disagreeable his attitude might be on such an important matter.

Before taking my seat, may I draw the attention of the minister to some decisions of the officers of the wartime prices and trade board, which are unjust and detrimental to the interest of Canadian citizens. Personally, I have been the victim of one of their decisions which was far from being equitable, though the case, after different stages, had to be decided finally by Mr. Gordon himself.

Recently a firm in my constituency made application to the timber controller to extend an export permit from 1946 to 1947 because their timber could not be shipped last year, on account of the lack of cars. The permit was refused by the timber controller on the ground that it was not the policy of the board

to consider such requests. I do not know the salary being paid to this officer. I imagine he must earn many thousands of dollars yearly. What is the use of paying such a high salary to this officer if he refuses to use practical sense in face of uncontrollable circumstances? A clerk with a weekly salary of $25 could do the job. As a matter of fact, it does not require much experience to tell the people that the rules and regulations of the board must be observed. Though many additional cases could be told the house, I will not mention any more. However I will suggest to the minister that he appoint a committee composed of a few members of the house to reconsider unfair decisions of the wartime prices and trade board officers. There must be someone to judge and straighten out the actions of these officers when their decision is detrimental to the welfare of our citizens. I think this suggestion is a protection which we owe to our people when they cannot obtain justice from our bureaucrats.

I have been told by many of my colleagues that my suggestion would not be accepted by the minister because the officers of his department would not approve it. I have too much confidence in the honesty of the minister to believe this. I am convinced that if my suggestion is not acceptable to the minister, he will find some means of establishing some kind of control over the officers of the wartime prices and trade board. If he does not, I leave it to him to bear the responsibility of his inaction.

When I take the responsibility of voting for a measure of this kind wffiich is very unpopular in many parts of our country the least I can offer to my electors is that I have taken every precaution so that they may enjoy some kind of assurance that their cases will be fairly dealt with. .

Mr. L. DIONNE (Beauce):

Mr. Speaker, I shall not take up the time of the house to refute the unfounded statements which in the course of his remarks the hon. member for Pontiac (Mr. Caouette) has repeated in reading a newspaper article, but I must register an emphatic protest against the untrue statement which the hon. member made when he said that it was possible to obtain plenty of butter and sugar in the parliamentary restaurant. That is a falsehood and I ask all hon. members of this house to contradict me if I do not speak the truth.

Mr. DIONNE (Beauce):

I do not want to repeat the speeches which have been made, but I should like to move, seconded by the hon. member for Portneuf (Mr. Gauthier):

That the ways and means resolutions of June 27, 1946. respecting the Income War Tax Act be amended as follows:

1. That wherever in the resolutions the figures "1947" appear and relate to a reduction in taxation the figures "1946" be substituted therefor;

2. That m paragraph (a) of section 2 of the said resolutions respecting the Income War Tax Act the figures "$3,000" and "$1,500" be substituted for the present figures of "$1,500" and "$750";

3. That in compensation for the loss of revenue following the adoption of the preceding amendments a sales tax of ten per cent be imposed on retail sales of all merchandise at present taxed eight per cent on the wholesale price.

Mr. LUDGER DIONNE (Beauce):

Mr. Speaker, in the Budget speech which was delivered in. the House of Commons by the Minister of Finance (Mr. Ilsley) on June 27, I noticed a sincere desire to meet the conditions imposed on us by the reconversion from war to peace, but I failed to see a real effort to meet the wishes of the Canadian people.

In the first part of my remarks I shall deal with the unsuccessful results of the dominion-provincial conference. Has the federal government the right to tax the population to meet its obligations without asking the consent of the provinces? It w'ould seem that the federal government has this privilege, if one may judge by the legislation which the minister is submitting for the consideration of the members of this house. If the federal government can tax the population without the consent of the provinces, why then consult the provinces? No doubt I shall be answered that the federal government is trying to avoid double taxation on the population, namely, taxation by the federal government and taxation by the provinces. This scheme is an economical and practical proposition, but as the provinces do not want to accept such an agreement, I do not understand the reasons for the federal government insisting so much.

The system of direct taxation followed by the federal government is disagreeable to the Canadian people. Why then insist on the provinces collecting their taxes directly from the people and then giving it back to them on the basis of $12 to $15 or $20 per capita? Why relieve the provinces of this unpleasant job? Why not let the provinces tax their own people in the manner they think fit and forget about this? In other words, why not mind our own business? I think we have enough to do here without doing the work of the provinces against their own will.

Personally, I am sick and tired of this bargaining with the provinces which, owing to the influence of the press in each province, is detrimental to the constructive ideas which this house has in mind. What have we gained to date with the provinces? Nothing practical. The federal government has been

accused by the press in practically every province of aiming at centralization and monopolization of the privileges of the provinces, to their detriment. Our ministers have done a tremendous amount of work on this problem, but it has proved fruitless. I submit that we have devoted too much time already to this matter. On the other hand, df we do not have the right to tax the people under the heading of income tax, succession duties, et cetera, we should take some means to legalize this form of taxation or to enter other taxation fields so that we may obtain the results wre are seeking.

I should like to refer now to the items of taxation which appear in the budget. I contend that our system of taxation is unjust and unfair to our people. In analysing our income tax legislation from a practical point of view I notice that only part of our population pay any income tax, namely, the working class and commercial institutions. Labour cannot escape this tax because it is deducted at the source, and commercial institutions who have to keep complete sets of books with accountants and auditors must pay it. But what about the thousands of other large and small businesses, those in the professions and many other classes of citizens too numerous to mention? How are taxes collected from these people? Most of them pay no tax. Those who do pay a tax are at the mercy of the income tax collector, or the inspectors must accept whatever they can get from them. It is a direct invitation to dishonesty. Most of these people are dreaming of nothing else but ways and means to hide their income. If they are successful in this they must live lives of fear of being caught and penalized. I know of no better way to educate our population to become professional scoundrels and rascals.

Is this the kind of people we want to have in Canada? Certainly not. If we want to avoid this calamity we shall have to change our methods of taxation. Remember that we have exacted enormous sacrifices from our people during the last five or six years. Are the people not entitled to fairness and equity from their leaders? This exploitation of the classes who do pay taxes, in faxrnur of other classes who do not pay any, or pay only part, must cease. The present budget submitted to the house is inviting criticism and evading our responsibility. We must be honest with our people and with ourselves. We must be bold enough to tell them that we must get revenue to face our obligations and are prepared to enact whatever legislation is necessary to achieve this objective by fair and equitable means.

The Budget-Mr. Dionne

The mass of the Canadian people would like the exemption on salaries of single men raised to $1,500 and married men raised to $3,000. Why not accept this proposition? How many people earning $1,500 and $3,000 respectively do pay income tax honestly? I repeat, the workman because his tax is deducted from his weekly pay by his employer. How many other citizens are there who are earning similar amounts or more from whom the government collects nothing. Hon. members will admit the exactness of this declaration because their own experience tells them it is so. Is such a method of taxation fair and equitable? I leave the answer to them. If it is not, as every hon. member will admit, why not change it?

In most of the communities of this country we hear the same language, namely, that the cost of living has increased and is increasing; that labour is asking for increased wages, et cetera. This situation should not exist with the strict controls of the wartime prices and trade board. The increase in the cost of living is caused directly by the black market. Why not curb it? What is the use of having price control by the wartime prices and trade board if it does not achieve its purpose?

I understand that the wartime pricae and trade board cannot control the situation alone. It needs support. Here is what I suggest to help them. Let us impose an additional sales tax of ten per cent on the retail price of goods. Such tax would be paid by the manufacturer and recharged to the retailer and the consumer. The manufacturer would buy stamps and stick, sew, or stamp them on the manufactured article itself. This stamp of ten per cent would be a sure indication of the value of the article bought- by the consumer. Let me illustrate my thought by an example.

Suppose I am a shoe manufacturer. I know by experience that a pair of shoes which I sell to the merchant at $2.25 plus eight per cent sales tax, retails at $5, so that I will insert in the shoes a 50-cent stamp. I will charge this stamp to my customer in. addition to the price of the shoes, namely $2.43 plus a 50-cent stamp. When those shoes are bought by the consumer he will have the assurance, in looking at the 50-cent stamp, that the ceiling price of the shoes is $5. No salesman, merchant, or peddler can overcharge or cheat him. Every consumer will act as a policeman. Recently I was in Washington with some friends of mine. A lady in the group wanted to buy a pair of shoes. She returned to the hotel with a pair of shoes for which she had paid $23. She was elated with her purchase because similar shoes in the shoe case were

priced at $34. I examined the shoes and realized that they were similar to those manufactured in Canada to sell at around $2.50 by the Canadian manufacturer to the Canadian merchants. If these Shoes 'had borne a 50-cent stamp the lady would have realized that they were $5 shoes and would not have allowed herself to 'be robbed of the difference, $18. What applies to shoes applies also to dhirts, hats and other commodities of life.

Do you not think, Mr. Speaker, that the consumer would be satisfied and pleased to pay ten per cent more for the necessities of life and have the assurance that he is protected? It would cost the government nothing to collect this tax, with the exception of the cost of the stamps. On the other hand, look at the thousands of employees whom the government will have to hire to enforce the law as it is drafted and you will realize the saving the government will make. Do you not think we have enough bureaucrats in Ottawa? Many people talk of economy. I approve. But I am not satisfied with words only. I would like to get some action.

In accepting the increase of exemption of income tax on salaries to $1,500 for single men and $3,000 for married men, the government would, I will admit, lose many million dollars of revenue, but look at the revenue they would get from this ten per cent sales tax. The actual sales tax of eight per cent based on manufacturers' prices gave $404 million revenue to the government last year. A tax of ten per cent on the retail price of goods would yield at least one billion dollars and probably much more. This amount would certainly compensate for the loss the government would suffer in raising the exemption of single men to $1,500 and married men to $3,000. In accepting this suggestion the government would satisfy the Canadian people with fair and equitable treatment and would protect them from the black market which is spreading rapidly across our country.

This legislation should be enforced by drastic measures. In other words, if a merchant is caught selling goods at prices higher than ten times the amount of the stamps or selling goods without stamps', let him go to gaol. It would be better to put a few men in gaol for a month or two and protect our people from these exploiters. We may rest assured that not many people wdll risk being gaoled. If some are caught, they will take great care not to repeat the offence. Some will no doubt mention that this tax of ten per cent will be detrimental to large families. I am of the opinion that the family allowance and exemption granted in the present income tax for

The Budget-Mr. Cockeram

every child will more than offset this objection. Furthermore, these people will be so happy to get rid of the income tax that they will gladly accept the change. I had an opportunity of discussing the proposition outlined above with many prominent people around Quebec and Montreal this last weekend. After having thought the matter over, there was not one person who did not wish that this measure be accepted by the government.

There is only one way to handle the matter. We must protect our people against the black market by all means, and we must give the same fair treatment to everyone of our citizens without fail. If we forget this grave responsibility, I for my part, do not deserve to sit in this house any longer.