1927-03-15

PRIVATE BILL


[Stage Direction]
Bill No. 148, respecting a certain patent owned by Chester Earl Gray and Aage Jensen.-Mr. Jacobs.

[Stage Direction]
Hon. W. D. EULER (Minister of Customs and Excise) moved that the House go into committee at the next sitting to consider the following proposed resolution:
[Stage Direction]
Importation oj Scotch Miners
That it is expedient to amend the Customs Act, chapter 48 of the revised statutes, 1906, and to make further provisions for a more adequate enforcement of the act and the prevention of smuggling operations.
He said:	His Excellency, the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the House.
Motion agreed to.

[Stage Direction]
On the Orders of the Day:
Mr. H. B. ADSHEAD (East Calgary):: I would like to ask the Minister of Labour or the Minister of Immigration if either has received from Mr. Harrington, Minister of Mines of Nova Scotia, any protest against the immigration of miners from Scotland in connection with the British Empire Steel Corporation. The report states that he is protesting to the British Empire Steel Corporation against the immigration of miners when there was so little work to be done, and also because his department had not been consulted, I presume, by the department here in connection with the immigration of those miners. Is it the policy of the government to consult with provincial officials regarding their needs in immigration matters and have they received any protest from Mr. Harrington, Minister of Mines of Nova Scotia?


Hon. ROBERT FORKE (Minister of Immigration and Colonization):: I have received
no protest of any kind in regard to the immigration of those miners. I have however been informed that as regards those miners, about whom complaint was made some time ago, their passage has been paid back to the old country, but that two of them have intimated their intention of staying where they are.


Herbert Bealey Adshead: Will the minister answer my question relative to the policy of the government in regard to consulting with provincial officials?


Robert Forke: We do not do so exactly, although we take every possible precaution to see that no labour field will be flooded with people who cannot secure employment. We find that the provincial governments are quite ready, to cooperate with us as far as possible in that respect.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the Orders of the Day:
Mr. A. E. MacLEAN (Prince):: I wish to read this telegram and to ask the Minister of Railways a question based thereon:
 .
Will you kindly use your influence with railroad officials to have refrigerator cars rushed here for shipment of seed potatoes? Over fifty wanted this station. We have only received two in two weeks. Must have supply quick or will lose heavily through cancelled contracts. February orders not filled yet. Would appreciate very much your cooperation.
This is signed by Simmons and McFarlane of Freetown, Prince Edward Island. Will the Minister of Railways be good enough to take this matter up and to see that cars are rushed there as quickly as possible?
Hon. CHARLES A. DUNNING (Minister of Railways and Canals): I shall, of course, be glad to bring the matter mentioned by my hon. friend to the attention of the management of the Canadian National Railways. I understand that the matter has been the subject of representations previously, and I am sure the railway management is doing its best to cope with the situation, but I diall be pleased to bring the representations of my hon. friend to their attention.



QUESTIONS OF PRIVILEGE


[Stage Direction]
On the Orders of the Day.
Sir GEORGE PERLEY (Argenteuil):: I rise to a question of privilege. Yesterday evening the hon. member for Winnipeg North Centre (Mr. Woodsworth) read some extracts from a newspaper giving a list of companies and of men who were directors in them, and he referred to this as interlocking interests. This article went on to say:
The political expression of these interests in the Dominion House of Commons is Sir George Perley and the Hon. R. B. Bennett, both of whom control the E. B. Eddy Paper Company at Hull.
Unfortunately for me, I have no interest nor have I ever had any in the E. B. Eddy Company. Further, I am not a director of the E. B. Eddy Company, nor of any other paper company, nor of any other of the power companies in the Dominion.



MR. MCPHERSON

[Stage Direction]
On the Orders of the Day:
Mr. E. A. McPHERSON (Portage la Prairie):: , I wish to refer to an editorial in yesterday's Ottawa Evening Citizen, under the heading the "Western Members on Trial." I have no complaint to make against the general remarks there made, as apparently it is purely a matter of opinion, and I understand that this paper as a rule is very fair, but there is one statement to which I take exception, and that is this:

Special War Revenue Act
Only an inexperienced member would make the mistake of repeating the lobbyist's brief, almost for word, in the House.
I shall not even contest the inexperience; I admit that. But I am in a different position apparently from most members here; I was not consulted and I never saw a brief on behalf either of those favouring the bill or those opposing the bill. I never saw any documents at all except those that were in the House and the original statute and its amendments. I did receive what I understood was a circular letter written on behalf of those who were supporting the bill, but I merely read the title and not a single paragraph beyond. My whole remarks in the House were based upon the act itself. If they happened to coincide with any brief that other hon. gentlemen were using, I can only say that in my judgment they were good arguments, and they have not been replied to.



ENTERPRISE AND YARKER POSTMASTERSHIPS

[Stage Direction]
On the Orders of the Day:
Hon. J. W. EDWARDS (Frontenac-Addington) :: Mr. Speaker, I desire to call the attention of the Postmaster General (Mr. Yeniot) to answers which he gave on February 28th to questions I have put regarding the Enterprise and Yarker post offices. The replies state that the Enterprise postmastership was advertised from the 22nd to the 29th of January last and the Yarker postmastership from the 16th to the 25th of November last. I wish to ask the Postmaster General why these positions have not yet been filled, or will he be good enough to look into the matter?


Hon. P. J. YENIOT (Postmaster General):: I could not answer offhand, but I shall be glad to look into the matter.



WAYS AND MEANS


[Stage Direction]
The House in committee of ways and means, Mr. Johnston in the chair.
The CHAIRMAN:: The resolution will be found in the Votes and Proceedings of February 17th. It reads as follows:
Resolved, That it is expedient to introduce a measure to amend The Special War Revenue Act, 1915, and to provide:-
1.	(i) That the stamp tax on cheques, bills and notes, receipts for money paid by a bank, bills of exchange drawn upon persons outside of Canada according to the tenor of the bills, money orders and travellers' cheques, and post office money orders, shall on and after the first day of July, 1927, be-
Two cents in respect of each such instrument for an amount in excess of ten dollars.
(ii)	That on and after the first day of July, 1927, the stamp tax on matches shall be as follows:

On each package of matches manufactured or sold, three-fourths of one cent for each one hundred matches or fraction of one hundred
matches;
On each package containing not more than sixty and not less than thirty matches, three-eighths of one cent per package;
On each package containing less than thirty matches, three-sixteenths of one cent per package.
(iii)	That from and after the sixth day of July, 1927, the following stamp taxes be abolished, namely,-
On advances made by a bank, as imposed by paragraphs (c),	(d), and (e) of subsection
three of section twelve of the said act;
On overdrafts, as imposed by paragraphs (f) and (g) of said subsection three;
On advances by any person not being a bank, as imposed by subsection 19 of said section twelve.
2.	That the rate of consumption or sales tax be reduced to four per cent and that any enactment which may be founded on this resolution number two shall be deemed to have come into force on the eighteenth day of February, 1927, and to have applied to goods imported or taken out of warehouse on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
3.	That said section nineteen BBB be further amended by providing that, for the purposes of the said section, printers, publishers, lithographers and engravers shall be regarded as producers or manufacturers, and that any enactment which may be founded on this resolution number three shall be deemed to have come into force on the eighteenth day of February, 1927.
Section 1 agreed to.
On section 2.


Mr. BOURASSA:: During the debate on
the budget I called the attention of the Finance minister to a promise that was made last year by the late Minister of Customs to exempt from the operation of the sales tax small local manufacturers of sash and doors, and so forth. Under the present law, paragraph 5 provides that there shall be collected only 50 per cent of the normal tax upon the following:
Boots and shoes, including rubber footwear; biscuits of all kinds; goods enumerated in customs tariff items 86, 105 and 106: creosoted railway ties.
Under paragraph 14,-
Retail lumber dealers, who do not manufacture lumber, or who do not sell lumber to other lumber dealers, or to other licensed manufacturers, need not take out a sales tax license.
Small sawmillers, selling exclusively by retail and whose total sales are not in excess of $5,000 per year, are classed as exempt from consumption or sales tax.
Special War Revenue Act

Then, under paragraph 15,-
The following classes of small manufacturers, when selling exclusively by retail, are regarded as exempt from consumption or sales tax on the sale of their products:-Picture framers, druggists, shoemakers, upholsterers, dentists, har-nessmakers, plumbers, opticians, blacksmiths, tinsmiths, show card and sign makers.
The kind of small manufacturers that I recommended last year as entitled to exemption, and that I again recommend to the Minister of Finance, are surely just as useful and interesting as these other small industrialists, only that instead of simply sawing logs into planks and lumber, they do a little more work upon them, and sell them in a purely retail trade to the farmers and villagers around them. The late minister was so impressed with the justice of the claim that he told me he thought he could apply the exemption even under the present law, but I observe that it has not been done in the case I have in mind. The department has been demanding the tax from the small dealers to whom I referred in the budget debate some time ago. In this instance, the small local dealer, the father of twelve children, carries on, with one of his sons, a small industry; he purchases logs from the farmers and turns them into sashes and doors, which he sells to the villagers and the farmers in his neighbourhood. Out of the profits on $2,200 worth of goods which he sold in the retail trade, he supported his family and paid a salary to his son. A demand was made upon him from the government for $110 sales tax. I claim that this demand was unfair, and surely such a proceeding was not in the mind of the government when this tax was imposed. In my opinion such small industries are entitled to the same exemption as is allowed to the sawmillers who conduct business in the same way, with the only difference that the millers render less service to the small community where they operate. I am quite sure that it is sufficient to remind the minister of this matter to induce him to insert a few words in the clause, placing these small industries on the same footing as the industry to which I have referred. I was told in the department last year that they thought the present law covered those cases.


Mr. ROBB:: If I-understand the act correctly, the minister has certain discretionary powers which might enable him to do what my hon. friend desires, if he could be convinced that it was quite right and equitable. Of course my hon. friend will understand that every day, and sometimes three or four times a day, people come to the office and desire to be exempted from taxes for one reason and

another. I have just spoken to my colleague, the Minister of Customs, and we will go into this matter very carefully, and if we feel that it is right in equity, and that the law is wide enough now for us to do as my hon. friend desires, we will do it. I should not like to make any further commitment. My hon. friend will also understand that the Minister of Finance desires to obtain all the revenue he can, but I realize that in the case presented by my hon. friend of the small business such as he has referred to, the tax may be more irritable to the person concerned than it is worth to the government.


Joseph Henri Napoléon Bourassa: If the government and
parliament thought fit to do it in these cases, I cannot see why it should be considered a matter of favour.


James Alexander Robb: No, it is not a favour.


Joseph Henri Napoléon Bourassa: It should not be regarded as a favour or as an exceptional case. There are many such cases in the district of northern Quebec, northern Ontario and New Brunswick. Such small industries are essentially useful to the districts in which they are located and encourage the industrial life of the community. They complain, and quite rightly, in the province of New Brunswick that the large industry has swallowed up the smaller one. People have to build houses in the rural districts as well as in the towns or cities, and some encouragement should be given to the small local industries. If it is proper to do it in the case of the saw millers, why not give the same concession to the small manufacturers of doors and sashes? What advantage is it to the farmer, after he has had his logs sawed into lumber, if he cannot use it to put up his house or repair it? What I suggest would be simply carrying out what already appears in the law. My proposition is that the government should deal with the small industries in the same manner as they do with the large industries. If it is fair to exempt the boot and shoe industry to the extent of a fifty percentage of their sale taxes, why not exempt these small industries of a portion of their taxes, just as is done with the picture framer? I do not think the picture framer is of greater advantage to the community than the man who supplies the doors and sashes. If it be proper to exempt those industries I have referred to, why not make an exemption in the case of the manufacturer of doors and sashes? I know there are eight or ten cases of this kind in my own constituency and there are others in the northern part of the country. Why not put all the small industries on exactly the same footing?

Special War Revenue Act
The principle is exactly the same. They make use of the same raw material, purchased from the same class of people, and they render a great service to the community where they sell those produlcts at a much cheaper price than other concerns would. Jt is merely putting small, local industries of exactly the same character on an equal footing.


James Alexander Robb: I hope my hon. friend will
not press that too far. Give us an opportunity to do something next year, after my hon. colleague has reorganized his department and looked carefully into it. In some of the cases mentioned by my hon. friend the sales tax has already been paid by the picture framer. It is just a question of where we shall draw the line. Hundreds of industries throughout the country have put up just as good a claim as my hon. friend, but we will give it careful consideration and do something later.


Joseph Henri Napoléon Bourassa: I have known all about
careful consideration by ministers for twenty-five years. Such consideration was promised last year by the Minister of Customs, and we know that goods kept in cold storage do not improve. It cannot be said that this is a matter which has not been 'Considered by the government and I am asking for the same application of the principle contained in the law to two industries of a like character. Why should the department favour one and demand a tax from the other? There is no reason and no justice in that. I protest against it in the name of all these small communities in those colonization regions in the northern part of the province of Quebec, extending from Timiskaming along the northern borders of the St. Lawrence valley. This is an easy way to encourage our village people to develop small local industries by making use of the raw material within the district, and it will be a practical means of preventing the exodus of our rural population to the urban centres and in turn to the United States rather than by encouraging the establishment of large manufacturing industries in our urban centres.


Mr. ARTHURS:: Last session I called the attention of the Minister of Finance to the fact that the owners of small portable mills doing a very moderate business in country districts had been forced to pay sales tax upon the sawing of logs for farmers. The minister then told me that there was no intention on the part of the government to collect the tax in such cases, and that if any had been collected it was a mistake. Is there any chance of these men being given a rebate for the taxes already collected?


James Alexander Robb: As to taxes already collected,
I must inform my hon. friend that "what we have we hold." But we will give very careful consideration to his observations.


Mr. BENNETT:: I know that was the
promise last year, but I am informed that the owners of some of these small portable mills have been compelled to pay sales tax regardless of the extent of their business. I had a letter to this effect the other day.


James Alexander Robb: The regulations provide very
clearly that small sawmillers selling exclusively by retail and whose total sales are not in excess of $5,000 a year are to be exempt from sales tax.


Richard Bedford Bennett: The $5,000 maximum
caused the trouble. In some small communities that is not a very high figure for the year's business done by the owner of one of these small portable mills, especially where lumber is high priced, it being roughly only about $400 a month. I would suggest that if the figure were doubled it would not work a hardship to anyone and at the same time would meet with general approval.


James Alexander Robb: It is rather hard for me to
oppose my hon. friend from Labelle (Mr. Bourassa) and my hon. friends opposite, because I recall that when Sir Thomas White was bringing in the sales tax legislation I myself took the ground that lumber mills might be excepted from its operation. We will look carefully into this matter.


Mr. McGIBBON:: The Wx is collected on
custom work, not on lumber sawn for farmers, which is really not a product of the mill at all.


Richard Bedford Bennett: I know that the collection of the tax concerns the Minister of Customs (Mr. Euler), but I draw this to my hon. friend's attention. In the community where I live it was complained in the case of a man who failed that one of the preferential claims was that of the government for sales tax. It is suggested that a better method should be devised for the collection of sales tax, and that rather than extend leniency beyond a given date it would be better for the man himself in the long run if you said, "We will not give you credit beyond that date; then you stop business or you pay." The present system involves considerable hardship on other creditors.


James Alexander Robb: I think the Minister of Customs has that under consideration and is in agreement with my hon. friend.


Richard Bedford Bennett: At this stage I do not
want to go into the details of unpaid sales taxes, the subject having been discussed in
Special War Revenue Act

this House on more than one occasion, but it is known to the minister that many millions of dollars are in arrear, some extending over a very long period of time. This lends itself to very great abuse. Once you lay down a fixed and settled rule that if taxes are in arrear beyond a given date certain results will follow, then you attain the object you have in view. The result would be much easier for the minister, much better for the country, and in the long run exceedingly beneficial to the person in default. In response to a question from one of the hon. members for Toronto the House has before it a list of unpaid sales tax, the total running into millions of dollars. I am sure the minister will agree with me that the amount involved being so large some action should be taken to prevent a recurrence of a similar condition. Therefore I press the minister to make a declaration that this sort of thing is to be put an end to. It may be said, "some of your friends have received leniency in that regard." But that is not the question. This leniency is a distinct disadvantage to those who promptly pay their taxes, and I think the minister should take action along the lines I have suggested.


Mr. EULER:: Two or three weeks ago I
made some comment on this matter in the House. I think every hon. member knows the difficulty we have now in collecting arrears of sales tax, but I do not think any good would result from my discussing that matter on this occasion. Let me answer my hon. friend's inquiry with regard to current taxes, which I think is what he is referring to particularly.


Richard Bedford Bennett: Yes.


William Daum Euler: Very definite instructions
have been issued that henceforth all current taxes must be collected by a certain date, and I think I may assure the committee that in future there will not be any aecretion to the present arrears.


Richard Bedford Bennett: What do you propose to do?


William Daum Euler: One of the difficulties in the prompt collection of the sales tax has been the fact that we have had no power to charge interest on overdue payments, due to an oversight in the drafting of the original act. We have this power of collecting interest on overdue income tax. The omission is to be rectified by legislation in the present session, and I think it will be a very powerful incentive for the prompt payment of sales tax. Under the present conditions many of these defaulters
TMr. Bennett.]
have practically made the government their bankers, withholding payment of their sales tax and thus keeping the money in their business free of interest. We are making every effort to collect the arrears. Those hon. gentlemen who have been in the department know how difficult it is to put every account for arrears into the hands of the law for collection. We are doing that as far as possible, but my hon. friends will know that in all cases it is not advisable to take this course even in the interest of the government itself. However, so far as the future is concerned I can assure the House that there will not be much of an addition made to the present arrears of sales tax.
As to the question raised by my hon. friend from Labelle with regard to the exemption of certain industries, after all it is very difficult to distinguish between those who in a real sense are manufacturers and those who are not. When do we arrive at a distinct dividing line between those who merely make things in a small way and those who are manufacturers on a more or less large scale? Wre have the same difficulty in the printing trade, where the exemption from sales tax is granted to those printers who produce less than $10,000 worth of business a year. Some say that that figure is too high, that it ought to be $5,000. Here is where the practical difficulty arises. Frequently we get a protest from the man who produces $10,500 worth a year on the ground that the man who produces annually only $9,999 worth escapes the sales tax. The former says he is discriminated against. And so he is. The same difficulty arises where the exemption is put at $5,000; immediately the man whose turnover amounts to $6,000 a year complains that he is being discriminated against. I merely point out these cases to show the difficulties that confront us in the practical application of any such rule.


Mr. MANION:: Within what time will the collection be made? The minister said that a certain time had been fixed.


William Daum Euler: It will be a matter of regulation.


Richard Bedford Bennett: At the present time it is sixty days.


William Daum Euler: The payment is supposed to be made at present by the end of the month immediately following that one in which the sale is made.


Joseph Henri Napoléon Bourassa: The explanation given by the minister is somewhat strange in view of what is contained in the law itself. It cannot

Special War Revenue Act
be difficult to draw a distinction between labourers on a small scale such as I have described inasmuch as there already exists that very distinction. It is no more difficult to draw the line between jobber and manufacturer engaged in the making of sashes and doors than between the man engaged in the sawmill business and the harness maker, and so on. The limitation is there in the law; it relates to those selling exclusively by retail and whose total sales are not in excess of $5,o0o per annum. That means that the manufacturer is limited in the first place as to the amount of his sales in the entire year, and secondly, as to the nature of his commercial operations. If he supplies goods to commercial houses, or if he sells more than So,000 worth per annum, he is taxed. You have two limitations there, and all I ask is that two industries which are in every respect similar, which are operated in the same manner, in the same community and which serve the same purpose, with the exception of a little more service rendered in one case, should be put on precisely the same footing If the minister is so embarrassed about exempting the small sash and door dealers, why is he not embarrassed in the case of small sawmillers? I take the law as it is; I am not suggesting anything new. I therefore move, seconded by the hon. member for Comox-Alberni (Mr. Neill):
That the exemption of the sales tax for small sawmillers should extend to small sash and door makers under the same limitations.


Mr. CHAPLIN:: Is the resolution in-order?


John Frederick Johnston: I was just going to call the attention of the hon. member to Sir Erskine May's Parliamentary Practice, thirteenth edition, page 511. There is a paragraph of considerable length bearing on the point, but the following extract will cover it:
Nor can a member other than a minister move for the introduction of a bill framed to effect a reduction of duties, which would incidentally effect the increase of an existing duty, or the imposition of a new tax, although the aggregate amount of imposition would be diminished by the provisions of the bill.
And further on:
Nor can the amount of a tax proposed on behalf of the crown be augmented, nor any alteration made in the area of imposition.
Under that authority the amendment moved by the hon. member for Labelle (Mr. Bourassa) must be ruled out of order.


Joseph Henri Napoléon Bourassa: I would ask you, Mr. Chairman to study the point somewhat more carefully. I looked it up this morning myself with some of the authorities and I found that
so long as a private member proposing such an amendment remained within the scope of the legislation brought down by the government, and did not suggest any new tax or the substitution of one tax for another, it is competent for that member to submit any change, modification, or even increase in the application of the tax as proposed by the government. I should like to know whether the rules that apply in England apply here as well. There are hon. gentlemen who are prone to quote English precedents, and I want to retain such of them as will make for the preservation of the rights of private members. I appreciate the fact that the government should assume the responsibility for the introduction of money measures; it would be incompetent, inasmuch as it would lead to disorder, for any private member to suggest any form of taxation in substitution for another. If I proposed the imposition of a customs duty in place of this or a modification of the income tax, I can readily understand that I should be out of order. But when I merely suggest that a particular tax should be so interpreted by the government as to alleviate the burdens of a certain number of taxpayers, if I have not the right to make such a suggestion I do not know why I am here.


John Frederick Johnston: Bourinot in the fourth edition would rather confirm the position taken by the hon. member for Labelle. But in view of the fact that he comes into conflict almost directly with the authority I have cited from May, and in view of the practice of this parliament, in cases of doubt, to be guided by British procedure, I fear I shall have to rule the amendment out of order.


James Alexander Robb: As the amendment is ruled out of order, all I have to say in connection with it is that the hon. member must not be discouraged, nor suppose that we shall lose sight of his observations.


Mr. EVANS:: I support the views expressed by the hon. member for Labelle. It seems to me that the answer given by the Minister of Customs (Mr. Euler) is one grand argument for the income tax. Here is a man with $2,200 of a total income, paying $110 in taxes. He has no right to be taxed while we have eased the taxation 10 per cent in the case of much bigger incomes. The whole thing is a condemnation of the reduction of the income tax on the big men while we are taxing the small producer.


[Stage Direction]
Section agreed to.
Special War Revenue Act
[Stage Direction]
On section 3.
James Alexander Robb: This section is designed to remove doubt as to the interpretation of the words "producers" and "manufacturers". A court in Quebec held that printers, publishers, lithographers and engravers were not manufacturers or producers, while the Exchequer court held that they were. This section is to remove that doubt.


Mr. NEILL:: Does it or does it not remove the exemption of $10,000?


James Alexander Robb: No.


[Stage Direction]
Section agreed to.
Resolutions reported.

[Stage Direction]
Hon. J. A. ROBB (Minister of Finance) moved for leave to introduce Bill No. 149, to amend the Special War Revenue Act, 1915.
Motion agreed to, bill read the first and second time and the House went into committee thereon, Mr. Johnston in the chair.
Alan Webster Neill: What is the number of the
bill?


John Frederick Johnston: It is not numbered;
it has just been read the first time and has not been distributed.


Richard Bedford Bennett: Presumably the bill will
have to be moved out of committee if it is not printed, and it will be finished at some other time. The question of the sales tax as it affects printers came before me in a very concrete way the other day when I received a letter in connection with the payment of sales tax on cases printed for the Supreme Court of Canada or the appellate division of our own court. In the one case the printer did a business of over $10,000 and the sales tax was payable, but the other party had his book printed in a small town where the printer did not do that much business and sales tax was not payable. That is a concrete case which came before me in actual business, and I do think when you deal with matters of job printing it would be very desirable to have everyone on the same basis or to raise the figure above such an insignificant amount. The figure of $10,000 represents a very limited business for a jobber in a large city, but for a man in a small village $10,000 is more than he would ever dream of doing. That is hardly fair; it is discrimination. The one man is paying large taxes, doing a large business and employing many people, while the other man is doing a smaller business and employing fewer people. I would suggest

that the amount be raised to something that would represent a real figure or that all be placed on the same basis. I mention this to the minister because it was communicated to me by an old country solicitor who had experienced it. He was very distressed because he had to pay sales tax in Calgary while another legal gentleman was not called upon to pay sales tax because his work was done in a smaller place.
Progress reported.	[DOT]




[Stage Direction]
The House in committee of ways and means, Mr. Johnston in the chair.
Resolved, that it is expedient to amend The Income War Tax Act, 1917, to provide that the rates of tax be reduced by ten per centum.
Mr. HANSON:: I am not rising for the
purpose of opposing this resolution, but I desire to make a few observations in this connection since I believe it will be the only opportunity open to me of referring to a discussion which took place in this House during the session of 1926, with reference to family or personal corporations. I desire to call the attention of the government to a pledge given at that time by the then Minister of Customs, to the effect that if the law as then enacted should prove a hardship, at the very first session of parliament the government pledged itself to remove that hardship. In this connection I desire to quote the remarks of the late Minister of Customs made on June 10, 1926, and found at pages 4335 and 4336 of Hansard. The 80 per cent clause was under discussion, and in reply to some observations made by the hon. member for St. Lawrence-St. George (Mr. Cahan), the then minister stated:
What I am prepared to say to my hon. friend is this: We do not want to create any hardship. We do not want any concern which in reality is a partnership, which has been formed into a corporation for legitimate reasons, to suffer under the terms of this act and if any such case as that suggested at this moment as an example by my hon. friend is brought to our attention during the course of the present fiscal year, instructions will be given to the Commissioner of Taxation to withhold the levy, and at the next session of parliament this clause will be amended in a way which will meet that particular case.
I take it that that was a very definite pledge on the part of the government, and on that understanding the legislation was allowed to go through. May I call the attention of the minister to the fact that there are corporations which have been penalized by reason of the fact that the percentage is

Income War Tax Act
so high. I do not intend to go into details but I have given one particular case to the minister privately. That was the case of a corporation in which three partners owning equal shares in the business turned it into a joint-stock company for purposes of convenience only, long before the section was enacted. Two of the partners were permanent employees of the concern while the third, the president, acted in an advisory capacity only and drew no salary. Consequently that concern does not come within the law as it is at present. I submit that that is a case of very considerable hardship, and I ask the minister to be good enough to amend the law to meet cases of that kind, in accordance with the definite pledge given to the House in the words I have quoted.


Joseph Henri Napoléon Bourassa: Last year when the income tax proposals were before the House I called the attention of the government to the importance of encouraging the taxpayers with large families by extending the exemption of $500 for each child to the age of twenty-one years. The reasons then given apparently struck the minister as being cogent and proper, because in three or four instances the late minister, who had charge of that part of the resolution, promised that when the Income Tax Act was next amended, this would be the first amendment taken up by the government. Therefore I am quite sure that it was merely an oversight on the part of the minister when he brought down those resolutions without regard to the promise made last year by his colleague. No promise was made of a general reduction of 10 per cent of the income tax, but a definite promise was made for the further extension of the children exemption clause. It seems to me it is not necessary to develop at length the reasons. First, as everybody knows, children kept at school-and I suppose we ought to encourage parents to keep their children at school as long as they can-are more costly to their families between eighteen and twenty years of age than they are when they are youngsters. Second, twenty-one years of age is the legal age, the age of emancipation.


Some hon. MEMBERS:: Oh, oh.


Joseph Henri Napoléon Bourassa: Yes, of legal emancipation. A child of nineteen or twenty years of age under our civil law-and I think it is the same throughout the Dominion-is not absolute master of himself until he has reached his majority. Of course, if children are earning their living, I quite admit that the exemption should not apply, but it does not apply at present. Supposing a child at sixteen 32649-77
years of age earns his living, works for himself, he does not come in under the exemption granted by law. But a child of nineteen or twenty years of age kept at school by his parents is a heavy charge upon his family, and moreover he is not considered by the government in giving exemption from taxation. It seems to me obvious from a social as well as from a sound economic point of view, that the exemption should be extended to the parents in such a situation rather than that a general exemption of 10 per cent should be granted to all taxpayers, whether they would feel the burden of paying that 10 per cent or not.
It would be quite easy to cite many concrete cases. For instance, take the father of no family with a revenue of $100,000 a year.
I have not looked this afternoon at the scale to see what he would pay, but his income tax was already largely reduced last year. He is again favoured this year by a further reduction of 10 per cent on the total amount he should pay. On the other hand, we have the father of a family of ten children earning an annual revenue of, let us say, $7,000 or $8,000. He receives an exemption for those children that are under eighteen years of age; but if he keeps two of those children at school between the ages of eighteen and twenty-one; if he wants to develop their education, if he is prepared to endure sacrifices to make them better citizens of Canada, the government disregards his sacrifices. He is struck precisely at the moment when he is making the greatest financial outlay to give a better education to his children. That is unfair, and in fact the suggestion I now make was considered so equitable last year that there was no discussion. The only reason given by the then Minister of Customs, the late Mr. Boivin, was that as the government had already made large curtailments, it was not proper to make any more that year, but that the following year, if any changes were made in the income tax, so far as he was concerned he pledged himself to see that this would be the first modification.
It is suggested that this would mean a decrease in revenue. I have already stated that the revenue derived from income taxation could be largely increased from various sources. First, this 10 per cent exemption which we are now asked to vote, could be granted only to taxpayers who have less than a certain annual revenue. I do not see why a man who has a revenue of $50,000 should receive the exemption proposed under this resolution. Surely he is not in such a position that the government is bound to take
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care of him. I have suggested also that we could tax the yearly values of household property over and above a certain amount, to be determined as the reasonable rental value of the property. In that way, we could receive far more than would be compensated to fathers of families by granting that exemption from eighteen to twenty-one years of age.
Third, during the budget debate I mentioned the fact that a very large amount of revenue derived from coupons on debentures escaped taxation altogether. Last week I met in Montreal a man who deals in financial matters on a very large scale. He told me that from his experience, from the relations he had in the financial world in Montreal, he was led to believe that millions of dollars escaped taxation because of two things-that the debentures are not inscribed but are payable to bearer, and that there is no tax on the coupon. Last year I suggested that if a stamp tax were imposed on the coupons, most of which, if not all, are paid through the banks, we could increase our income tax revenue at a very small charge to the taxpayers, and thereby reach a class of taxpayers most capable of increasing their contributions to the state.
At the present time you reach easily the employee of a company because his name figures on the payroll of the company and be- . cause the list given by the manager to the income tax branch is on file to prevent that employee from defrauding the federal treasury. You reach the shareholder because companies are obliged to publish their lists of shareholders. But we do not reach one-tenth of the debenture holders because the debentures are not inscribed.


Richard Bedford Bennett: I think one-tenth would
be too large.
Mr. BOURAjSSA: Perhaps. I am not at all in that sphere of life, but I give the information as I have received it, not from opponents or partisans of any government but from business men. I give it as I had it from some of the most experienced officials of the income tax branch who tell me that they cannot and do not reach a large proportion of the biggest income of the country, an income which should 'be but which is not taxed. Surely a little attention should be given by the government to those features of the income tax, a little more added on to taxpayers capable of paying the taxation, and a little more consideration given to the father of a large family who, I repeat, is the best contributor to the development of Canada that we have. It is all very well to gather money and to pay subsidies to companies or to
fMr. Bourassa.]
charitable associations, to bring children from Europe to fill up the gaps in our country; but surely native-born Canadians are the best citizens we can have. To help fathers of families in this country to keep their children at home and to give them a proper education is far more important than to devise all sorts of plans to bring foreigners' to Canada to take the place of native sons of the land. Therefore, from a social point of view and from a sound economic point of view, I most strongly urge upon the government that they implement the promise that was made last year by one of their members. I hope the government will accept this suggestion without my being obliged to move it as an amendment, because I know that a good many of their followers in the province of Quebec at least, in endeavouring to point out to the people reasons why they should vote for the Liberal government, gave this one among others, and surely it is a good one. One of the reasons for which I upheld the government at the last session was the tendency I thought I saw in their budget proposals to come nearer to what I considered sound economics and social justice in matters of taxation, but this year I am sorry to say I do not find the same evidence. A general reduction all round of ten per cent in the income tax has been proposed without any consideration as to the means of the taxpayers and the charges that the family has to bear. That proposal is not inspired by the same spirit as was behind the proposals of last year, and if my suggestion, which I make in the most friendly spirit is accepted, it will help to correct the impression that is getting abroad that this government, after securing the favour of the people by showing itself friendly to the people, is now trying to come a little nearer to those influences that so frequently have more to do with the policy of governments-I am not speaking particulary of this or of any other government-than the real good of the people. I therefore hope that the government will accept this suggestion and implement the promise that was made last year by one of their colleagues, and upon the strength of which a large number of electors in the province of Quebec voted for the government last fall.


Richard Burpee Hanson: Before the minister replies to the hon. member for Labelle, I do not propose to allow him to get away-I am not saying this offensively at all-from the point I was trying to make in regard to these family corporations. This question has raised a good deal of difficulty and caused a good deal of distress. There was a definite pledge on the part of the late Minister of Cus-

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toms that this condition would be remedied at this session of parliament. I have already read his statement to the minister. The Minister of Customs shakes his head, so I will read it again. He said:
We do not want any concern which in reality is a partnership, which has been formed into a corporation for legitimate reasons, to suffer under the terms of this act and if any such case as that suggested at this moment as an example by my hon. friend, is brought to our attention during the course of the present fiscal year, instructions will be given to the Commissioner of Taxation to withhold the levy, and at the next session of parliament this clause will be amended in a way which will meet that particular case.
Surely that is a definite pledge. I want to tell the minister that in the case I mentioned the levy has not been withheld. I believe the commissioner takes the ground that he is only the officer administering the law, and that he is not bound by any expression of the minister on the floor of the House of Commons; I think he is quite correct in that. But here is a definite pledge that in the event of hardship being found to exist, the levy will be withheld. The levy has not been withheld, and I ask the minister to redeem the pledge of his late colleague.


Mr. LAVIGUEUR:: I listened with great
interest to the remarks made by the hon. member for Labelle, and I was reminded of the effort that was made in 1921 by the then member for Chiambly-Vercheres, Mr. Areham-bault, to get the government to grant an exemption of $200 for each child. He was successful in this, and later the exemption was increased to $500. I also remember that a demand similar to that which is being made to-day was made upon the Minister of Finance last year, and I remember well the reply of the Minister of Customs at that time. He said that as soon as -the finances of the country would permit, the first reduction that would be made in taxation would be in that direction. I think -it is only fair, Mr. Chairman, that the father of a family of -ten or twelve children Should be granted some consideration, and should not be placed on the same footing as the father of a family that is composed of the father, the mother, and a pet dog. So I wish to approve what has been said by the hon. member for Labelle in this regard, and I would urge upon the Minister of Finance to give consideration to the suggestion that has been made.


Robert James Manion: I was just rising to say a few words in support of the earlier remarks of the hon. member for Labelle when my good friend from Quebec-Montmorency rose, and knowing his very fine record I felt 32649-774
that he had much more claim to the floor than I had. At the same time I say in all seriousness, Mr. Chairman, that I wholly agree more particularly with the earlier remarks made by the hon. member for Labelle. If we are not going to throw education into the discard entirely, if we are -going to take the attitude Which mosit reasonable people take, that education is an advantage to our children, then certainly it seems to be an extraordinary thing that a man's income should be exempted for -a certain amount only up until the time his Children reach the age for going to college, and then the exemption ceases, and he is penalized for sending them to college. I -have in mind at the moment an instance where two boys are going to the university. Up to their going to the university, the usual exemption was allowed, but now that they are at university -and their father is- put to greater expense, the income tax exemption is removed, and the father is paying a -larger tax at the very time Ms expenses, on account of these boys, are heaviest. It certainly seems a most ridiculous attitude for any of us to take to say that parents who make the effort, as most ambitious parents do, to give their children a higher education should -be penalized for so doing. I submit that the hon. member for Labelle, so far as I have ever been able to judge, is absolutely right on the matter. I have thought of it many times myself, -although I have never spoken of it publicly before, and I hope the minister will even at this stage in connection with this resolution accept the recommendation that has been made by the hon. member for Labelle, and so make it easier for ambitious parents to give their children a higher education.


Mr. CAMPBELL:: While I -agree with the last three speakers, the people I am most concerned about are those who do not have an income sufficient to pay am income tax. I have read in the papers -and heard it said in the House that farmers are not paying any income tax. It is obvious why they are not; they are not getting the income on which to pay -the tax. One of the hon. members for Toronto last night repeated the figures he had quoted in the House before in an attempt to prove that Toronto and Montreal are paying nearly all the -taxation, and that -the prairie provinces are paying little or nothing. But there is one fact he has not taken into consideration, and that is that the farmers of western Canada, and I presume tMs also applies to the farmers of Ontario, Quebec, and the maritime provinces, buy hundreds of millions of dollars worth of goods manufactured
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in Toronto and Montreal, and added to the price of these goods are -the taxes the manufacturers pay. Naturally ait the ports of entry the customs receipts will roll up high, but these receipts are -simply added to the cost of the goods when they are distributed throughout the country. I say again that I am particularly concerned with these people who have not suffioienit -income on which to pay income tax. It seems to me it is an economic law, when you reduce the income tax, that you either put more taxes on those people, or you lose the opportunity of reducing other taxes, -and I think it is absolutely unfair that there should be a drastic reduction in these taxes, without there being at least a corresponding reduction in the taxes paid by the ordinary people.


John Wesley Edwards: Following
the war came responsibilities and obligations which necessitated new forms of taxation. Some of those forms of taxation have rightly been referred to as "nuisance taxes". I trust the time is not far distant when all such will be eliminated. I believe of all the forms of taxation that we adopted the most logical and reasonable was the income tax properly graded. I do not know how much will be lost to the revenue of Canada by this proposed reduction of ten per cent all round, but I will venture to say that the total amount of reduction in the revenue caused by this cut of ten per cent will remain in the pockets of those who are well able to pay that money towards the revenue for the running expenses of the country. This cut of ten per cent in my judgment is a step in the wrong direction. I believe the minister and the government would have been well advised, if, instead of making a cut of ten per cent in the income tax, they had made a further reduction in the sales tax. That reduction would have reached every person to a certain extent. There is absolutely no question about that. There can be no disputing the fact that this reduction of ten per cent does not relieve in the smallest fraction the poor people of the Dominion of Canada. They get no relief whatever from it. The only persons who do and who can get any relief from this reduction of ten per cent are those who are best able to contribute to the revenues of the country and who, because of their personal wealth and influence, ought to contribute. They have a bigger interest than the mere individual who has nothing. There are other forms of taxation which might be imposed by the Minister of Finance to take the place of this one.

I think there is one tax he might impose which would perhaps be received with genera approbation throughout the country. He might put a fair tax upon bachelors.


Richard Bedford Bennett: For instance the hon.
member for West Middlesex (Mr. Elliott).


John Wesley Edwards: There would be a great joy in contemplating such a tax and in seeing whom it would hit. Apart from joking, I wish to place myself on record as saying that I believe this proposed reduction of ten per cent all round in the income tax is a step in the wrong direction, and that reductions might be made in other taxes which would be far more in the interest of those who need reductions.


Mr. WOODSWORTH:: I should like to endorse the position taken by my hon. friend from Labelle. The hon. member for Frontenac has proposed a tax on bachelors. It seems to me that that would be no more ridiculous than it would be to put a tax, as we do, upon families. It would seem to be quite in keeping that the man who has a large income and no family responsibilities should be taxed more heavily than the man who has a family and who is in every way contributing definitely to the national wealth of the country. But at present we are taxing that man most heavily. I do not know that I can say anything more than has been well said by the hon. member for Labelle. We all recognize that this reduction of ten per cent is a very uneven reduction. Ten per cent may be a comparatively small thing for the man with a small income, but a very heavy reduction for the man with a larger income. Therefore, I beg to move:
That the resolution be amended by inserting after the word "tax" in the second line the words "on incomes under $10,000".


Richard Bedford Bennett: As one of the two who
would be subject to the tax as proposed by the hon. member for Frontenac (Mr. Edwards)-


An hon. MEMBER:: How about the member for Southeast Grey (Miss Macphail)?


Richard Bedford Bennett: Three, the Prime Minister, the member for Southeast Grey and myself. I might observe that my hon. friend from Winnipeg North Centre (Mr. Woods-worth) has overlooked, I think-I submit, at least-the discussion that took place last year. When the income tax was graded as it was last year, there was no provision made to overcome double taxation and I am sure that

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a student of economics, such as my hon. friend from Winnipeg North Centre, will admit that double taxation is always bad. The taxation of last year imposed upon those who received dividends from companies a double taxation, the dividends being taxed nine per cent in the possession of the company, and in the hands of its shareholders-at rates varying from ten to fifty per cent. This merely remedies the injustice then done. I daresay it is within the memory of the members of this House that their late Minister of Customs said he realized and felt the extent of that unfairness, but that it could not be dealt with at that time, and I am quite certain that the Minister of Finance has been endeavouring to ascertain what percentage of reduction would make a fair adjustment of the difficulty of double taxation. You have no justification for double taxation. For instance, if my hon. friend from East Calgary invests in a company whose net income is $5,000 per annum, that company pays a tax of $450 to the exchequer, being nine per cent of his income, and the money that is left to be divided among the shareholders is thereby lessened by $450 and becomes $4,550 instead of $5,000. Under the existing law that $4,550 is taxed to its full extent, without making any allowance for the fact that in the hands of the company it has already paid nine per cent, and this measure-a tardy measure of justice to those who pay upon the dividend *-is endeavouring-it does not do it amply, it does not come near doing it-to place it upon some basis of fairness or justice. That is the position, and I am satisfied that my hon. friend who comes from my own province and those who do not come from that province, who sit to the left, desire to be fair and just. To make money is not a crime. It is not an offence to honestly toil and get the recompense for it. Toil is not an offence, and never should be an offence in any country, time or place, and the state depends largely on the revenues it can collect, so far as income tax is concerned, from those who, by their enterprise, by their ability, their perseverence, their energy, and their hard work, have been able to accumulate incomes from which the tax can be collected. I am sure that my friend from Rosetown (Mr. Evans) who spoke a few moments ago will say that he desires to be fair and just to all men. Then if money in the hands of a company is taxed, why should you have double taxation imposed upon it? I put that case to the House last year. The Minister of Finance said that it was worthy of consideration In one instance I pointed out that
money was taxed three times, and the minister said that the difficulty must be overcome. This deduction of ten per cent is merely an endeavour to adjust the taxation so as to prevent money being taxed twice. In England and in all other countries where income tax is collected it is imposed on the principle that money shall not be taxed twice for income tax purposes. This is an endeavour on the part of the minister to carry into effect the suggestion made by the late Minister of Customs himself.
May I go a step further and deal with the matter touched on by the hon. member for Labelle, which I deem of very considerable importance? Ten days ago I heard the case of a gentleman in receipt of a small professional income who has three sons at the university. He and his wife are denying themselves actual necessaries in their endeavour to give their children a chance in life. I do submit to the minister that the exemption should be extended to cover such a case. I agree heartily with the observations made by the hon. member for Labelle and the hon. member for Quebec East. The fact that there are twelve cases of $200 exemption has nothing to do with the matter at all. Where the family revenue is being diminished by reason of the effort made to support a child, whether he be eighteen or twenty years of age in order that that child may be the better able to serve the state, is something that should find recognition on the part of the minister, and I do hope that it is not yet too late for him to take action. When I talked to that gentleman the other day I made up my mind that at the first opportunity I would again urge the minister, as the hon. member for Labelle has so well done, that this exemption should extend to the time while the children are being fitted by their fathers and mothers to become useful citizens of the state. I am sure that to carry the exemption from eighteen up to twenty-one will not involve the sacrifice of much revenue. No one suggests that it should be extended beyond the age of twenty-one, although we all know that the man who sends his boy to a medical school has to support him until he is twenty-five or twenty-six years of age, for during the intervening holidays he is unable to earn any money as he usually goes into a hospital where he gets nothing more than his board. I think the matter is of such importance to the state and to the welfare of families that the suggestions made by the hon. members for Labelle and the county of Quebec as well as by the hon. member for Winnipeg should
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receive the hearty support of the House. Let it not be regarded as a contentious political matter. Let us deal with it as something that affects the state as a whole and therefore commends itself to the judgment of every hon. member whether Liberal or Conservative or affiliated with any of the other groups.


Miss MACPHAIL:: I am opposed to any further reduction in the income tax. I do not think for one moment that the sacrifice of the man who is striving to send three boys to university is to be compared with the sacrifice of the fathers and mothers who are struggling to give their children decent food and clothing. One is almost afraid to mention the name of mother here since men preen themselves so much on having large families.


Some hon. MEMBERS:: Oh, oh.


Agnes Campbell Macphail: I am deeply angered- not for myself, but for the sake of motherhood. This is a masculine House, so masculine that sometimes I resent it from the very depths of my soul. The size of the family is not something for men to boast of. No woman should be asked to bear very large families. It is the men and women who have moderate families and who try to give them decent food and clothing and some education on very slender incomes that I represent here and that I am concerned with. I must take exception to the statement made by the man who has just taken his seat-whom I respect very much personally-that people of great wealth are necessarily good citizens. Very often they are anti-social in all their tendencies and actions, and they are the people responsible for conditions that make it impossible for many boys and girls to ever get a university education. They are the people who will benefit by a reduction in the income tax. So I stand in my place once more to say that I oppose any reduction of the income tax with all my strength. Supposing all our boys and girls go to university and become doctors and lawyers, under heaven what kind of country would we have 1 Sometimes the intellectual snobbishness of people who have received a university training makes me thankful that I have never been able to attend university, much as I have wanted to. If a boy has reached twenty-six or twenty-seven years of age, and has never supported himself, he will not be as good a citizen as if he had at least assisted his parents part of the time in maintaining him. Therefore I repeat, we should not further reduce the income tax. We must have revenue, and if

we do not take it from the people who are able to pay we will have to take it in increasing measure from the people who are not able to pay.


John Frederick Johnston: The hon, member for
Winnipeg North Centre has moved in amendment to the resolution now before the committee to insert after the word "tax" in the second line the words "on incomes under $10,-
OOO." I regret that I must rule this amendment out of order because it interferes with the scope of the resolution, and no such amendment may be moved by other than a minister of the crown.


Mr. GARDINER:: Will the Chairman state his authority?


John Frederick Johnston: I am quoting the same authority as that which I relied on in connection with the amendment moved by the hon. member for Labelle.


James Shaver Woodsworth: May I point out
that if this amendment is adopted, instead of decreasing it will increase the revenues of the country?


John Frederick Johnston: To that extent it interferes with the scope of the resolution.


James Shaver Woodsworth: Mr. Chairman, I rise to a point of order. I submit that this is an altogether new type of ruling. We have had the rule invoked in the past that a private member is not competent to introduce a resolution which would lessen the national revenues; but it has always been held that it is open to a private member to cut down estimates or to do anything else that would not reduce the revenues of the country. In this particular case the purpose of the amendment is to increase the revenue. If such a ruling as this is to prevail, why, we may as well leave this cpmmittee for it will be absolutely useless to remain here. I challenge the ruling of the chair.


Joseph Henri Napoléon Bourassa: Mr. Chairman, while I
have not consulted the authorities for some years, I still recall some of the rulings of old, and having received within the past two hours advice contradictory to your ruling, I am beginning to ask myself if the rules are to be interpreted according to the convenience of the government or not. I notice that Bourinot is quite clear on this point. For many years he was the respected Clerk of this House, and I think he is just as good an authority as any other that can be cited. I have noticed that at times Bourinot is invoked when his opinion coincides with the interests of the govern-

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ment, but otherwise he is ignored. But even May contains a precedent that I think is applicable to the amendment that I proposed. Let me read it.
The principle, that the sanction of the crown must be given to every grant of money drawn from the public revenue, applies equally to the taxation levied to provide that revenue. No motion can therefore be made to impose a tax, save by a minister of the crown, unless such tax be in substitution, by way of equivalent, for taxation at that moment submitted to the consideration of parliament; nor can the amount of a tax proposed on behalf of the crown be augmented, nor any alteration made in the area of imposition.
In support of the last sentence May quotes this precedent:
On the 14th March, 1844, Mr. Howard Elphin-stone proposed a committee of the whole House to consider the Stamp Acts, with the view of imposing the same amount of probate duty on real estate as was paid on personal property.
There we have a very different case. Suppose we had proposed to extend the sales tax upon certain merchandise not already taxed, we should be increasing the area of imposition within the meaning of this opinion. Or suppose we proposed to extend the income tax to certain incomes not already taxed; that, again, would come under this rule. Let us now take our dear friend Bourinot:
If the government approve of any plan of taxation suggested by a private member, it is the constitutional course for them to propose it themselves in the committee of ways and means. This was done in the English House in the ease of a resolution to extend the probate duty upon property above the value of one million. If the government object, that a motion imposing a tax is not required by the exigencies of the public service, the member offering it should at once withdraw it. All the authorities go to show that, when the government have formally submitted to the House the question for the revision of customs and excise duties-*


Mr. GUTHRIE:: I rise to a point of order. There can be no discussion on a ruling of the Chair: if any discussion were allowed the debate might be interminable. When the Chairman makes a ruling his duty is to leave the chair immediately if any exception is taken. I submit that the hon. member is out of order.


John Frederick Johnston: The point raised bv
the leader of the opposition (Mr. Guthrie) is well taken. No debate may ensue on a ruling of the Chair, but an appeal may be taken from it to the House.


James Alexander Robb: Having reached that conclusion, Mr. Chairman, if we may now come back to the bill under consideration-


Some hon. MEMBERS:: No.


James Shaver Woodsworth: I appeal from the
ruling of the Chair.
Mr. SPEAKER resumed the chair and the Chairman having reported the question, Mr. Speaker submitted it to the House in the following terms:
Whilst the committee of ways and means was considering the following resolution:
Resolved, that it is expedient to amend the Income War Tax Act, 1917, to provide that the rates of tax be reduced by ten per centum.
Mr. Woodswortih moved the following amendment:
That the resolution be amended by inserting after the word "tax" in the second line the words "on incomes under $10,000".
The Chairman ruled the amendment out of order on the ground that no private member can move to impose a tax, nor can any alteration be made in the area of imposition proposed by a minister of the crown. The question now is, is it the pleasure of the House that the Chairman's ruling be confirmed?


James Alexander Robb: I would not like the House or the country to be left with the impression, which some of us seem to have this afternoon, that this government have not made any concessions to those who have dependents When the income tax was first introduced I was a member of this parliament and my recollection is that the exemption was $200 for dependents of eighteen years of age and under. This government increased that exemption to $300 and later we increased it to $500. In addition we increased the exemption to the individual so that a married person had an exemption of $3,000 and if there were four children in the family the total exemption would be and is $5,000 to-day. Therefore, if a married man with a family of four children has an income of $5,000 he has no income tax to pay.
In that connection may I give a comparison between the federal government, the different provincial governments that have income taxation and the United States where they have income taxtion? It is true that the exemption under the United States federal act is $3,500 for a married person, but their exemption for dependents is only $400, while ours is $500. The Ontario government have given notice of some changes recently, but they are not applicable on this year's income, and according to our records, in Ontario, for married persons the exemption is only $2,000 and for dependents, $400. In Manitoba the exemption is $2,000 with an exemption for dependents of $300.
Mr. R1CKMAN: The province of Ontario does not collect income tax. The municipalities do so.


James Alexander Robb: The province of Ontario
through legislation enables the municipalities to tax incomes. In British Columbia the total exemption for a married person is $1,500 and for dependents, $200. In the state of New York the exemption for dependents is $400 and in the state of Massachusetts it is $250, so that we are somewhat in advance of them in our exemptions.
Some hon. gentleman has referred in this debate to the question as to who pays the taxes, and it has been represented to us that the 10 per cent reduction we are now giving will go more largely to the rich man. According to the records which we have in the department where they collect the tax and have statistical records of those who pay taxes, it will be interesting to know that for the fiscal year 192o-26, it is really the employees

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who comprise the greatest number of taxpayers. Whoever may dodge taxtion, the employees cannot dodge taxes, because under the law the employer must send to the department a record of his employees with their salaries so that the government is able to check them up. The total number, not incorporated, who paid taxes in the fiscal year 1925-26 was:
Agrarians		.. 3,643
Professional men		.. 17,559
Employees		.. 158,253
Merchants		.. 14,136
Manufacturers		.. 2,543
All others		.. 19,143
While the employees constituted about 73 per cent of the taxpayers, they paid not quite 24J per cent. The merchants paid almost 12 per cent; the manufacturers, 28 per cent, and all others, 30 per cent. The agrarians paid about one-half of one per cent. It is interesting in that connection to remind hon. gentle-ment what I said a few days ago, namely, that the corporations have also paid a considerable amount in taxes and that is not limited to one province. I have already placed that on record.
Some person during the debate suggested that many people were dodging taxes through coupon bonds. That is perfectly true and we know it, but the difficulty is to reach those tax-dodgers. If you put a tax on the coupons, you cannot put a tax on the man who is dodging or trying to dodge taxes without penalizing the honest man as well, because you must tax all coupons. According to the present legislation coupons up to $10 are exempt, so that it is pretty hard to reach that class. My hon. friend is quite right; we know there are people who are dodging some taxes, but, generally speaking, they are paying fairly well.
Just one word in regard to the so-called wealthy individuals who are exempt from this income tax. I think I pointed out to the House during the budget debate that very strong pressure had been brought to bear upon the government from people throughout Canada representing hospitals and other institutions, that we should make exemptions for those who contributed towards hospitals. The ten per cent reduction on the income tax was given as a concession towards that application, and also as a concession, as was represented by the hon. member for West Calgary, the ex-Minister of Finance (Mr. Bennett), to those who complained that there was double taxation in the legislation of last year. To that extent we have reduced it. But to come back to those who contribute to hospitals, there is at present in Montreal a united campaign being carried on for all their
hospitals. The other day there was brought to my attention the case of a gentleman- and I suppose there are many others-who had contributed $150,000 to this hospital campaign. This sort of thing is going on throughout Canada. These hospitals are maintained not only for the wealthy and other city people who are able to pay, but for those who are not able to pay. It is therefore a little unreasonable always to attack that class of individuals.
I do not want to delay my own legislation; but to come to the observations of the hon. member for Labelle (Mr. Bourassa), the exMinister of Finance, and the hon. member for Fort William (Mr. Manion), who have urged us to make this further exemption in regard to those who are attending schools or colleges,
I do not know where we are going to reach the limit. We must have revenue from some sources, and the government must have money to carry on and administer the affairs of the country, and to pay the interest on the war debt. I was not very much impressed with the argument of selecting certain persons who were attending college. I was somewhat inclined towards the view expressed by the hon. member for Southeast Grey (Miss Macphail) that there are other people in this country who deserve consideration. But this appeals to me in the observations of the hon. member for Labelle, that after all, under the law, a Canadian is only legally responsible when he reaches the age of twenty-one years. I will admit, as was stated by the hon. member for Fort William, that as regards some professional men who are sending their children on to higher colleges, we come in under the law and tax them a little more perhaps when the young man or woman is going on to college in order to be equipped to become either a doctor or a lawyer, if you will, I think we have about all the lawyers we can get along with in this House now. I have had an experience of some years in connection with the public schools of our country, and I think people are going into the teaching profession just a little bit too young. I think it might be in the interests of the country if they attended college just a little longer. I have read the record of what my former colleague the Minister of Customs said last year, and while he was very careful and did not make any direct commitment, there was an inference that the government would give consideration to this matter, and so my hon. friend from Labelle will be glad to know that I propose now, Mr. Chairman, to move this amendment.
Resolved that section 4. subsection (1A) (c) be amended by striking out the v'ord "eighteen" therein contained, and inserting the

Income War Tax Act
words "twenty-one", and that this amendment be made applicable to the income period 1926.


Peter McGibbon: I have not anything
particular to oppose in this amendment, although on general principles I am opposed to class legislation; I do not think it is right. I think we are on the wrong track when we give special privileges to certain classes of individuals. But what I rose to impress on the minister was this: He has not justified, at least to my mind, his action in taxing gifts to hospitals, and such like. I would like to remind him of the fact that there is hardly a hospital in the country that pays its way, and of the further fact that the people who can pay to go to a hospital are taxed far beyond the actual cost of nursing and medical attention in the hospital. These institutions are run primarily for the benefit of the poor. The nurses in these institutions get practically nothing but their board and lodging and their uniforms, and the medical men and surgeons give their time and their services practically for nothing. That is certainly true with regard to the ward patients. Now the Minister of Finance comes along and instead of relieving these hospitals which are financially embarrassed, he taxes the donations that are made to them. I submit that there is no justification for any such action, which is bound to be reflected in the workings of these institutions. It is going to affect charitable donations to these institutions, which are veiy much in need of help to-day. If these hospitals are to be maintained, they must have the means to carry on, and I submit that this legislation is bad, and it is bound to be reflected in the carrying on of the work of these institutions. I believe the minister should have a better reason than he has given the committee yet for maintaining this tax.


Herbert Bealey Adshead: If I gathered the hon.
member's remarks aright, he says that the hospitals are carried on mostly in the interests of the so-called poor people, and that the rich largely contribute out of their means for the maintenance of these hospitals for the benefit of the poor. We in this comer of the House believe and have maintained that the so-called poor man has just as much right to health and the best medical attention as any other citizen of Canada. That is his birthright. We have also maintained in times past, and we do now, that a part of his birthright is a common school education provided out of the taxes upon the community. No doubt in days gone by when schools were not public, philanthropic people gave out of their purse* to maintain private schools and give

the poor an education. But we maintain that the poor people have a perfect right to health and the best medical attention irrespective of their financial condition. My hon. friend's remarks remind me of the statement that was made by a certain gentleman that the Lord created the poor in order that the rich should shower upon them their philanthropy. W'e dissent from that, and I maintain that the day will come when the hospitals will be tax-maintained, and when every man will have the right to the best medical attention without being called poor.


Peter McGibbon: I do not know what
relevance these remarks have to my argument. I am talking of things as they exist to-day. There is no doubt at all that the poor people are being given practically free treatment in the hospitals to-day, and nobody is complaining about that. What I am saying is that these institutions must have financial support, and when people give donations to these hospitals the minister comes along and taxes those donations. I maintain that he has no right to any part of that money.


Mr. HEAPS:: I do not know what the
hon. gentleman is getting at. He has not shown how much private individuals contribute to the upkeep of hospitals. I can speak with a little knowledge of what is taking place in Winnipeg. Practically all the hospitals in Winnipeg are maintained out of taxes on the community, and I believe that applies to most of the cities in western Canada. Only a very small percentage of the amount of upkeep is contributed by men inclined to give to these institutions. In the case of a poor person who is unable to pay, the municipality is responsible for the amount to the hospital. I believe the very same thing applies in most of the provinces of Canada. I do not believe that five per cent of the amount required for the upkeep of the hospitals is contributed by private individuals in western Canada, and in Winnipeg the facts are exactly as I have stated.


Peter McGibbon: I can also speak with a
little knowledge of Winnipeg, for I lived there at one time. I say that the municipal tax does not cover the nursing and medical attention. It possibly covers the board bill, and that is about all.


Abraham Albert Heaps: For a number of years I was on the board of the General hospital in the city of Winnipeg, and also on the city council, which had to deal with this question. I know the number of appeals that the hospitals make in the city of Winnipeg. Only a couple of weeks ago the city granted an amount in the

Income War Tax Act
neighbourhood of $20,000 to make up the deficit on one year's operation of the General hospital. The municipal hospitals of Winnipeg, which take care of tubercular casesiSome hon. MEMBERS:	Order.


Abraham Albert Heaps: -are maintained entirely out of the taxes levied on the people of the city of Winnipeg, and if my hon. friend from Muskoka-Ontario had become a little better acquainted with the workings of the hospitals in Winnipeg he would not have made the statement he has made about the extent of philanthropic donations to these institutions. There may be some cities where large grants have been made, but generally speaking, the maintenance of these hospitals comes from the revenue derived from general taxation by the municipalities.


Mr. COOTE:: I desire to make a protest against any proposal to exempt from income tax any gifts of wealthy people to hospitals or bo universities, particularly to the universities. Hospitals should be maintained by the municipalities. I think that is almost ' invariably the practice in western Canada. We have hospitals in our rural districts which are maintained by the municipalities. The universities should be maintained by the state and Should not be dependent in any degree upon private subscriptions. It is the duty of the.state to educate our young. Universities should be open to our boys and girls at as low a fee aa possible.
I would not support the amendment with any degree of enthusiasm. I have had to earn my own living since I was sixteen years of age. Many of those boys going to universities would be benefited if they had to go out and earn* the money to enable them to go through the university. I think it might be just as valuable to them in after life as the training they receive in the university itself. Although I am not going to oppose the amendment, possibly the minister would have been well advised to have left it out of the resolution altogether. I hope the time will come-it may be a long time coming-When boys and girls in the keen age, having put in four or five years either on the farm or in the factory, and having a good record from their employers, will be given a chance to go to a university at a cost which they can afford to pay out of the earnings they have made during those years.
hon. members of the House, I have been through a university, and I know that a vast number of the boys and girls put themselves through the universities. I have a boy attending university, as many of us in this House have. A great many of these boys are doing as we did in former days, endeavouring to put themselves through, and instead of getting up and finding fault with the boys and girls who are attending the the universities we should commend them for doing the very thing which will fit them to become good citizens. I am convinced that the vast majority of students contribute largely to their own maintenance while attending university.


George Gibson Coote: Could my hon. friend quote anything I said that would in any way be a reflection on any boy or girl going through the university? If I said anything of that kind it was unintentional.


John Frederick Johnston: The discussion is Wholly irrelevant to the matter before the committee.


Milton Neil Campbell: Will this amendment
(apply irrespective of whether these boys and girls are under the care of their parents? I think it would be an anomaly if a father, having several children who were out earning their living, possibly a't eighteen years of age, could until they were twenty-one claim the exemption for dependent children.


James Alexander Robb: There is no change whatever in the regulation as applied to the age of eighteen years. It applies to dependents.


Richard Bedford Bennett: I did point out to the
minister the difficulties experienced by those who carry on business in partnership as distinguished from those who have companies. The contention is made that two gentlemen across the street carrying on business in partnership pay no income tax in connection with their enterprise, except such sums as are individually drawn out, whereas if two persons link themselves together as a joint stock company, wiith the aid of one other, they have to pay mine per cent of their revenue. I brought this matter to the attention of the government a few minutes ago and I have not received an answer. The minister was looking into it, and I would like to know his conclusion upon that matter.


Mr YOUNG (Saskatoon) :: I do not think Mr. EULER:	I may say for'the mforma-
,v hon. friend who has just spoken should tion of my hon friend-although he knows.it rat any reflection on the boys and girls who probably as well as I do-that the ^tement o through the university. Like many other he made is not borne out entirely. Two men
PaLents of Albert P. Frigon

across the street form themselves into a limited liability company. If they come under the head of "family corporation" they may elect to be taxed as if such corporation were a partnership.


Richard Bedford Bennett: But the partnership
makes no contribution by way of income tax at all.


William Daum Euler: The partners individually
do.


Richard Bedford Bennett: Only on what they draw out.


William Daum Euler: Oh, no.


Richard Bedford Bennett: Is that clear?


James Alexander Robb: Whether withdrawn or not.


Richard Bedford Bennett: That has not been done. My attention has been directed to a concrete case.


James Alexander Robb: I am told by an officer of
the department that the members of the partnership pay on the profits whether they are withdrawn or not. I have had some personal experience where profits were not withdrawn.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Resolution reported, read the second time and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 150, to amend the Income War Tax Act, 1917.	'
Motion agreed to and bill read the first and second time, and the House went into committee thereon, Mr. Johnston in the chair.
James Alexander Robb: I move that the committee
rise, report progress and ask leave to sit again. By way of explanation I may say that the bill will have to be reprinted to meet the amendment which I introduced this afternoon.


Richard Bedford Bennett: Would the minister also
consider the question raised by the hon. member for Labelle, to which one of the members from Toronto would like to speak, as to whether or not coupons should be required to bear a two cent stamp?
Progress reported.


RULES OF THE HOUSE
Mr. SPEAKER:: 
John Frederick Johnston: Section 1 has been
amended by changing the word "fifteen" in the sixth line to the word "ten".


Herbert Bealey Adshead: I thought that this bill
was to be reprinted as amended. There were so many changes in the original bill that we [DOT] do not know just where we are.


John Frederick Johnston: The bill cannot be reprinted without an order from the House.


Mr. YOUNG (Saskatoon):: Drastic amendments were made in the original bill.


John Frederick Johnston: There is another amendment to section 1. In the sixth line on page 2 the word "forty-one" has been changed to "thirty-six."


[Stage Direction]
Section agreed to.
Sections 2 and 3 agreed to.
Alexander MacGillivray Young: The preamble
was considerably altered, was it not?


John Frederick Johnston: The first three lines of the preamble stand:
Whereas Albert P. Frigon of the city of Montreal, province of Quebec, has by his petition set forth that he is the owner of certain patents-*
The word "being" in the seventeenth line is struck out and in the twenty-fifth line the word "forty-one" is changed to the word "thirty-six."


[Stage Direction]
Preamble agreed to.
John Frederick Johnston: Shall I report the bill?


Herbert Bealey Adshead: Do I understand your
ruling to be, Mr. Chairman, that a bill so radically amended as this one has been cannot be reprinted without an order of the House?

Georgian Bay Canal Company


John Frederick Johnston: That is the rule; unless the private bills committee moves for an order to do so-and that was not done in this instance-the bill cannot be reprinted.
Bill reported, read the third time and passed.


MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
[Stage Direction]
The House resumed from Monday, March 14, consideration of the motion of Mr. Chev-rier for the second reading of Bill No. 78, respecting the Montreal, Ottawa and Georgian Bay Canal Company, and 'the proposed amendment thereto of Mr. Guthrie.
Mr. G. R. GEARY (South Toronto):: Mr. Speaker, I find myself in the happy if somewhat unusual position of being in agreement, with the hon. member for Rosetown (Mr. Evans) and the hon. member for Winnipeg North Centre (Mr. Woodsworth). As they have put it, the question is simply whether this House will support the principle of public ownership of public utilities or will sanction the transfer of public utilities to private interests.
I take it that the appropriate time to deal with such a matter as that now before the House is on the second reading of the bill. The leader of the opposition (Mr. Guthrie), who is entitled to great consideration when he enunciates points of procedure, has put very clearly before the House the position which the House may and should take on the second reading of a bill such as this. Not only is he entitled to receive the greatest attention, but he is supported by the greatest authority having .to do with parliamentary procedure. More than that, what the leader of the opposition has said and what May in his work says will appeal to this House on another ground even more strongly, and that is that it is common sense; it is the sort of deliverance which will appeal to the wayfaring man as showing the only proper and right course to take.
My friend the Minister of Railways (Mr. Dunning) cited the case of divorce bills, an unhappy illustration I should think for his side of the question. Of course when we pass the second reading of divorce bills we accept the principle of divorce; it was accepted a long time ago, and whether or not he who votes in favour of the second reading of a divorce bill believes in divorce, he certainly does sanction the approval long ago given to the granting of divorces by this House. The bill then goes to committee, where it is decided whether the standard set up in regard to that matter has been met in that particular bill, but no one would think for a moment that in committee on a divorce
bill that bill should be thrown out because the committee did not approve of the principle of granting divorces.
If we are determined not to give these public rights to private interests, why send the matter to a committee? That would be simply a gesture and' a waste of time, the matter having already been decided by the House. If on the other hand you are ready to grant these public rights to private interests, then by all means send the bill to a committee, because there you can settle the details and terms of the surrender. It would seem certain that if a bill is sent to a committee you adopt the principle of the bill, and how anyone can arrive at any other conclusion or make any sense of an opposite view is not understandable. So I say that this House is perfectly within its rights and is doing the proper thing in fighting out on the second reading of this bill the broad principle contained therein.
As the debate has proceeded and as the various arguments' have been advanced on both sides of the House it becomes more apparent that the line of division between the supporters of public ownership and those who would give public utilities to private interests runs down the centre of the aisle of this House. I have to go back only to the other day when my friend the Secretary of State (Mr. Rinfret) prevented the hon. member for Bow River (Mr. Garland) from making a speech on this very matter. He did it with all the urbanity possible, and possibly had in his mind at the time those words by Lewis Carroll:
"I weep for you," the Walrus said;
"I deeply sympathize.
With sobs and tears he sorted out
Those of the largest size,
Holding his pocket-handkerchief
Before his streaming eyes.
That indication came from that quarter; another came from the Minister of Railways (Mr. Dunning) and then we come to the hon. member for Marquette (Mr. Glen) and the hon. member for Portage la Prairie (Mr. McPherson), both bringing specious arguments directed mainly against the province of Ontario and its public utilities, but showing underneath them all that while they were struggling hard to find an excuse they felt in their own hearts that they were doing wrong, and that they were striking a blow against a principle which they have advocated throughout their constituencies. I fancy, Mr. Speaker, that the hustings of Portage la Prairie resounded with declarations in favour of public ownership during the last election campaign; I can imagine that the halls of Marquette re-echoed
Georgian Bay Canal Company

with the same sentiment, and that in the wide open spaces of those constituencies now represented by my Liberal-Progressive friends the air was filled with the determination of these candidates who now sit in the House to uphold this great principle at all costs. Well, the hustings and the halls are waiting; the wide open spaces are still there, and there remains only the home-coming of these gentlemen, to make some explanation of why, on the first opportunity of striking a blow for a principle they had advocated, they were recreant to their promise.
The hon. member for Winnipeg North Centre in his remarks last night said that the Minister of Railways had removed a good deal of the camouflage which had surrounded this bill. If I may be allowed to say so, Mr. Speaker, I think that is exactly what he did not do; in my humble opinion the Minister of Railways devoted his attention to laying on a particularly thick coat of camouflage. He was debating the amendment before the House, and with the comparatively insignificant omission of any reference whatever to the subject under debate, he made a very good campaign speech. He is not in the House, but I would like to say to him very kindly that during the course of that address it seemed to me that he missed most deplorably the town hall audience which is so admirable a target for such an address. The Minister of Railways wants this bill to go to committee; why? So that the whole question may be before the House. What whole question? Mr. Speaker, the question forsooth of the fight between certain interests known as the Sifton and the Holt interests; that, he said was the bone of contention. I cannot think he is on solid ground there; what business is it of members of this House how Sifton and Holt get on? What have we to do with the gang warfare of private concerns like that? For all we care they may both suffer from their quarrels, the fate of Kilkenny cats. We are here to decide a question which has nothing whatever to do with Sifton or Holt; it is the broad general question of whether we are to control for the people the public utilities of this country.
The Minister of Railways wants the bill to go to committee; why? So that he may commence an expose of some alleged wrongdoing on the part of the late government. If there has been any wrong-doing, by all means bring it out. If the Carillon order in council contains matters that require explanations, let those explanations be made. There are ways of doing this. Let it come up in the proper way; let the House have the

whole matter before it, and if there was any wrong-doing on the part of the previous Conservative government, let it be brought out. No one will welcome that more than those who sit on this side of the House. We do not believe from what we hear there is anything in the one-sided story which the Minister of Railways has given to us; but be that as it may, I still say that it has no relevancy whatever to the discussion in which we are engaged at the present moment. May I suggest in all kindness that the reason why the Minister of Railways, speaking for the government, wants this bill to go to the committee, is that he may, by calling witnesses for this and that, by raking up scandals and old political scores, endeavour to evolve political material for the next occasion on which he may hope to use it.
The government has deliberately, so he says, brought up this matter. If that be so, I wonder at their bringing it up by way of a private bill advanced by the hon. member for Ottawa (Mr. Chevrier). If they want to make the fight and bring the whole matter up for discussion and settlement by the House, let them come at it direct and unafraid and not shelter their attack behind a private bill introduced by a private member. The speeches of hon. gentlemen opposite seek to divert the attention of the House from the real issue. It is all very well to speak of the northern part of Ontario and its power problem, to talk of the Gatineau, to hold out fears of this and that; but the purpose underlying all the addresses made on the opposite side of the House is manifest to everyone who is here, namely, to divert our attention from the matter that is really before the House for discussion. The Minister of Railways made an admirable speech of its kind; but, as I say, it had absolutely nothing to do with the matter under discussion. If we analyze it in its application to what we are discussing, and if it is an argument at all, it is that sort of argument which is variously described from the "tu quoque" of the erudite down along the line to the equally understandable colloquialism of "so's your old man." In other words, it is that sort of argument that finds its ultimate conclusion in this and in this only: "If we are doing wrong, we are excused because you also did wrong."
I shall not pause to consider longer the red herring which has Ibeqn attempted to be drawn across the trail, the red herring of the Carillon order in council. But this side of the House is, I am assured, ready and willing to meet any discussion on that matter when it is brought up for discussion. I mistake very much if the most thorough search

Georgian Bay Canal Company
amongst the proceedings taken by the late government will show that there is any deep-dyed villain in the plot; that there has been any plan which has a bearing directly or indirectly upon the question of the Ottawa and Georgian bay canal. Be that as it may, if the government be sincere in what the Minister of Railways has said, let it open up the matter as soon and as widely as it can.
The government may have a suspicious mind; it seems to have imagination. A theory is propounded that strikes one as being the sort of stuff that dreams are made on. The same suspicion seems to have been aroused in the mind of the hon. member for Marquette (Mr. Glen); but strangely enough that suspicion did not first find expression in this House. It found expression first in an interview granted by one of the Siftons, I think Mr. Harry Sifton, and quoted in this House not long ago, when he said that the whole secret of the opposition to the bill lay in the fact that the St. James street interests, or the "crowd", or whatever the words were, had tried to run Canada and, failing in that, they were now endeavouring to run the House of Commons. That is the genesis of the whole argument. That is where it sprang from. If it has been adopted by the government or by the Liberal Progressives, so much the worse. Any member who is swayed by such clap-trap as that is welcome to the sensation.
Are we to renew this charter which is now thirty-four years of age, with nothing as yet accomplished, nothing attempted to be done? Is it to be forever rejuvenescent? Are we to be met every year or every two or three years, or whatever the terms of the extension may be, by the Siftons holding for ransom one of the most valuable rights that Canada can give away. This is the time and this is the place when we should strike a blow that will deliver us from this threat now and for all time to come.
A great deal has been made by the interests who are supporting this bill of an amendment which was introduced into a renewal act dated in 1912, whereby the price of power was to be fixed before sale by the Board of Railway Commissioners for Canada. The literature of parties supporting this bill, sent out from time to time, has made a great deal of capital of the statement that Sir Adam Beck agreed that the bill might go through provided only that this clause were inserted. It is within the memory of man that that is not the case; it is not true. Sir Adam Beck was here in 1912 fighting this bill as hard as he knew how. He was overcome; the bill was going through and he saved what he could. He accepted the clause which the committee
offered to put in, fixing the price of power by a reference to the Board of Railway Commissioners; but to say that he consented to the bill then or at any time before or after, is an absolute untruth. He did not consent to the bill; he opposed it to the best of his ability, and as the result of his fight he only managed to have that clause, a futile clause,
I may say, inserted in the bill.
Can we consider that as some sort of clause which will help us in the sale of power? What is to be the price of power? To begin with, the Board of Railway Commissioners has no facilities whatever for determining what shall be the price of power, and the price of power generated in the Ottawa river will be the price not only of the power itself but of the canals and other works that go to make up that scheme. The board has announced the policy and it has adhered to it in case after case that on all common stock of companies, like the Bell Telephone Company, which handle public utilities, there shall be an 8 per cent dividend and over and above that a 2 per cent allowance on capital stock for profit. That means a 10 per cent return on all the company's stock, watered as it may be. You would have something that people would find absolutely impossible to overcome in purchasing power. The owners would have along the Ottawa river a monopoly that could not be met by any development which the Ontario hydro has. What the traffiic will bear will govern the price.
I believe Quebec is just as much interested in having its industries along the Ottawa river maintained as is Ontario, and the rights of these two peoples, on either side of that great interprovincial stream with its unlimited water-powers, are to be sacrificed to the demand of politicians, whether associated with the government or not, who seek to get this great heritage for their private and personal ends.
This is ostensibly a canal, Mr. Speaker. Very well, then; if it is a canal, why have it built by private enterprise? The day of the toll gate is past. We can remember roads than ran through Ontario, and hon. gentlemen will no doubt remember them in every other province, where you had to pay at a gate every now and then for the privilege of travelling over that road. That is a thing of the past, and yet this bill proposes to -make a great national waterway, something of infinitely greater importance than a road, subject to tolls at the instance of a private corporation. But we need not concern ourselves muich in regard to the canal or the canalization part of this bill. The Minister of Railways and Canals who spoke
Georgian Bay Canal Company

on behalf of the government the other evening said that this is not a canal scheme but a power scheme, and the whole question is as to who shall have the control of this vast reservoir of power. Then are we here, I ask once more, to determine a fight between two rival interests, or are we to determine a fight between private enterprise on the one side, and on the other the control by the people of this Dominion of their own great natural resources in order that they may develop them for the public good?
The maritime provinces have grievances, Mr. Speaker. Out in the western provinces the question of the natural resources being returned to the provincial government has become an active issue, and we hear that claims are being made in British Columbia for the return of what they consider themselves entitled to. Here we in the central provinces are asking at the same time for something of the same sort. We do not claim anything positive. All we say is that the Dominion government must keep its hands off our natural resources, that this great anter-provincial river, with its almost undreamed of power possibilities, shall be preserved to the people of these two provinces, so that they may develop their resources as they see fit.
One hon. gentleman opposite the other evening was quoting from an editorial in a Cochrane paper. The editorial, as far as I heard it read-it was not all read-was complaining that the Ontario government or the Hydro Electric Commission of Ontario would not step in and relieve the people of that district from the imposition of tremendously high power charges, charges that were being imposed by a private company. If anything were needed to sustain the position of the province of Ontario as to the wisdom of putting into the hands of public enterprise the development of electrical energy throughout the province, then that agitation in Cochrane is sufficient. My own personal view -I do not say that it matters what my view is, but I am one of those who believe that the province of Ontario made a great mistake When it did not go into that northern country with its hydro enterprise. We should have introduced hydro-electric power under the Hydro Electric Commission of Ontario into that northern country. Perhaps it seemed too big a thing. Whatever the reason was, and what it was I do not exactly know, we refrained from going into that northern countiy.
[Mr. Geary. J


Robert James Manion: They have power at
Nipigon.


George Reginald Geary: I am speaking of that
part of northern Ontario, around Cobalt and Cochrane. We refrained from going in there, and that editorial that was read from the Cochrane paper was, as I say, proof of the great mistake that was made not only by the government of Ontario but by the people of that district, in not insisting that electrical energy should be developed from the water-powers of that part of the country for the benefit of the people at cost. They are suffering from high charges now, owing to somebody's fault, and if we had to do it all over again we should introduce hydro-electric power all through that part of the country.
.Reference has been made to the Gatineau. The gentleman who made that reference adduced it as evidence that Ontario was not sincere in its development of hydro-deotrie power. The difficulty in Ontario is that we have exhausted all our available power. We are facing a shortage of power. We cannot get power from the St. Lawrence development for many years to come, and long before that power is available we shall have suffered a shortage running to something like 100,000 horse-power per year. Something had to be done, and the commission, according to their best judgment, did as they did at the very inception of the enterprise; they bought blocks of power from private enterprise, and then distributed that at cost, as though they had developed the power themselves from our own resources. It is not that Ontario in any sense is going back on the hydroelectric policy, and my hon. friend who voiced the dread the other night that perhaps we might be led from that path need have no fear. It is not the government of Ontario, but the municipalities of Ontario, that have put up their money; it is their enterprise and their money that built it. All that the government does is to endorse our cheques; it is the municipalities that are responsible. We have $290,000,000 invested in that enterprise now, and we are not going to see it fail; so my Mend from the west need have no fear.
I do not inltend to detain the House at any length on this matter, except to try and impress once more that if you do not kill this bill, and kill it at the first opportunity you have, it will drag on subject to ail sorts of pressure, influences, arguments and persuasions, until goodness knows where we shall get with it. Now is the time to deail with it when we can administer the final death

Georgian Bay Canal Company
blow to the enterprise, and leave that whole territory with its vast potentialities, that rich source of power, the Ottawa river and the French, open to the people of this province to develop as they have developed other resources in the many years during which we have had the hydro; and open too, on the other side, to the province of Quebec, so to utilize their own natural resources that they will not be hampered by their being placed in the hands of private interests, who naturally will, as they always have done, farm those natural resources, exact high rates through monopoly control, and 'bring about the very state of affairs which Ontario had to get out of years ago.
Let me tell the House the origin of the hydro-electric power enterprise of Ontario. It was just because private enterprise had their hands upon the supply of power, with the government of the province of Ontario session after session giving away new power advantages to these private corporations, the rates the people were being charged became unendurable. The people were being milked Moneys were exacted from them till they rose as a unit and said: "No more of this. This private control of public utilities without which we cannot do must no longer remain in the hands of private corporations to be exploited only for their own selfish interests. It must be in the hands of the people who originally held this water-power tumbling over falls in the course of nature. It belongs to the people of the country, and it should be utilized for them alone." And we in Ontairio rose to the occasion. We had the courage of our convictions, and in town after town, township after township, city after city, we put up tens of millions of dollars, and in Toronto tens upon tens of millions of dollars, backing our faith with our money. And we .are successful. We are meeting all our obligations, and the people are getting what they are entitled to-power at cost, free from all the unrighteous demands that private enterprise from time to time has put upon them.
I have judt this word to say in 'conclusion. We must not be criticised for fighting this bill at this stage. We have got to take every opportunity to strike a blow for the principle that underlies our opposition to this bill. If hon. gentlemen opposite can convince themselves that, they should allow the Ottawa river to be given to private enterprise, let them pass this bill. If, on the other hand, they believe as we do, that the power belongs naturally to the peajff'e of this country, and should be developed by the people for the people, and at cost, free from all the un-32649-78
righteous profits made by private enterprise, they should determine at this stage to cast a vote in favour of this amendment, and thus do away with any possibility of this interprovincial stream, with alii its potentialities being diverted from the uses of the people to the uses of private interests.


Mr. BENIAH BOWMAN (East Algoma):: It has been interesting, Mr. Speaker, to listen to the discussion upon the bill before the House respecting the Georgian bay canal. We in northern Ontario are vitally interested in this matter, because a waterway from the Atlantic to the head of the lakes that would pass by our front door would mean something to northern Ontario. It would mean a great deal to the district of East Algoma, which I have the honour to represent in this House.
Listening to the discussion as it has proceeded I could not help wondering whether we were afraid that the canal would not be built, or whether the fear wras that the canal might be built. Frankly I almost think the apprehension is that the canal might possibly be built. I am convinced it would be of great advantage to the Dominion of Canada. It could not help but prove of wonderful advantage to northern Ontario to have this great waterway pass along just where it is needed in order to benefit that section of the country. During the past number of years that district has made rapid progress. For a long time it has been asking for hydro development and it is greatly interested in this scheme. It is true that in old Ontario the hydro-electric has made wonderful progress because of the fact that behind the project are strong municipalities that are able to give their bonds under the guarantee of the government of Ontario. That is the system on which the Hydro Electric Power Commission is able to function in Ontario.
The discussion so far, rather than following along the line of the canal, has drifted into a discussion of power development; I wish, therefore, to speak for a few minutes on that phase of the question. Northern Ontario has not. had the advantage of hydro-electric development. I think I am correct in saying -and someone will correct me if I am wrong -that there has been only one power development in northern Ontario by the Hydro Electric Power Commission, and that development would not be possible were it not for the cities of Fort William and Port Arthur. Northern Ontario is a new country and it has not been possible for the hydro-electric commission to develop those powers, owing to the lack of municipalities strong enough to get



Georgian Bay Canal Company
behind the scheme; and so the developments in northern Ontario have been made by private concerns and private capital. Were it not for the private capital expended in northern Ontario that country would not be developed to the extent that it is to-day. Where is the government, where is the parliament, that would pass estimates for large, untried developments when the public does not know whether or not they would be a success? Private enterprise has gone into northern Ontario and made that country what it is to-day, and, Sir, this House is not in a position to vote 3100,000,000 to go on with the project. I feel quite sure that unless this development is undertaken by private enterprise) the Georgian bay canal will not be built. I do not know whether or not the Georgian bay canal is feasible. I do not know whether or not this is the right company to develop that project, but I do say that this bill should go to committee, and in the committee we ought to have an opportunity of gathering the facts and hearing the different people who are interested in it so that we may form an opinion and decide whether or not the bill should be passed.
It is said that this development ought to be carried, on by the government, and that is quite true; that would be the proper course if the government were in a position to go ahead with it. But I say, Mr. Speaker, that it is not going to be very long until this House will have to decide upon another development, namely, the development of the St. Lawrence. I am satisfied that the government will not be prepared to find the money for both of them in the near future.
We fin northern Ontario, I repeat, .are vitally interested in the bill which is now before the House. It is true the charter was granted a long while ago and has been renewed time after time, and apparently nothing has been done. But conditions have changed, and I think it is only right and proper that we should ascertain at this time whether this company is prepared to proceed with (his development or whether it has something else in view. If the company intends to develop the power and does not intend to go on with the canal, we should know it. On the other hand if we do not allow this or some other private company to go on with this development what guarantee have we that these powers will be developed by the province of Ontario or the province of Quebec? Judging from the discussion which we have had in this House it would seem to be the

view of some that if these powers were developed by private enterprise they would be of very little use to the province of Ontario or the province of Quebec. But these powers are still in Ontario and in Quebec, and I feel quite sure that the power would be used here and not transported to a foreign country. So that if this power is developed, even by private enterprise, it will be here to be used by the people who need it.
I say further that if the reported arrangement with the Gatineau Power Company for current at SI5 per 'horse-power is correct, the rate is about as cheap as the Hydro Electric Power Commission can furnish power. I am not arguing in favour of the hydro buying power from private concerns, but it will be difficult for the Hydro Electric Power Commission to furnish power very much cheaper than that $15 per horse-power.


Abraham Albert Heaps: Can the hon. member give
his authority for the statement that he has just made? I know we are developing power out west for as low as $10 per horse-power.


Beniah Bowman: I think you have cheaper power out west than we have in Ontario.


Abraham Albert Heaps: It is generated 70 miles
away.


Beniah Bowman: If I remember aright,
Winnipeg has about the cheapest power on the North American continent, certainly cheaper than we have in Ontario. The very same argument quoted from the Cochrane newspaper has been used in connection with the Hydro Electric Commission. It is true that the large centres are receiving their power-cheaper than the smaller places, and many complaints have been made by the latter that, the price they are paying is too high. I do-not want to be misunderstood. I am strongly in favour of the hydro-electric power development wherever it is possible, and I believe the hj'dro commission has been doing its very best for the province as a whole, but the fact remains that the outlying districts feel they are being charged rates that are too high. The reason is, of course, the cost of the powerlines, which are expensive to construct.
I say again, Mr. Speaker, that we in northern Ontario feel that the only way in which this development will ever be proceeded with will be through private enterprise, and undoubtedly such a development-

Supply-Mines and Geological Survey
would be of great benefit not only to the north country but to the Dominion as a whole. For that reason we are anxious to see all the facts brought out so that we may be in a position to judge the matter on its merits.


Hon. E. B. RYCKMAN (East Toronto):: I find myself, Mr. Speaker, very much in the plight of the Minister of Railways (Mr. Dunning) when he said last night that he intended to speak upon this question without very much preparation. However, having lived in the city of Toronto, and being familiar with the great benefits that the Hydro Electric Power Commission has conferred upon Ontario, I feel that this is an opportunity to declare the faith that is in me, a faith that I believe is held pretty generally throughout the country by all who know what the development of hydro-electric power under public ownership has meant for this province.
But what troubles me is that we are dealing with a bill that, mark you, does not mention a single word about power. This bill which we have so long discussed is a pure sham. I-n support of that statement I appeal to the recollection of the House as to what the Minister of Railways said last night when he jumped into this fight. He stated: Now, we all acknowledge that the bone of contention with respect to this bill is which of two private interests shall control the Carillon power. The first bill incorporating this company was passed thirty-four years ago when our predecessors had not the slightest thought of the development of the water-powers of this country. What do we find to-day? By a fluke and a side issue what never was in the minds of the original incorporators is now, according to the Minister of Railways, the chief consideration upon which hon. members are asked to decide whether or not this bill shall be given second reading.
It is plain that what is involved in this bill is not the construction of a canal but the acquisition and development of very valuable water-powers that the promoters-and I have no doubt there are more than two parties-would like to secure, and therefore I say it is time for us to pause before we take further action. I am satisfied that nothing in the nature of a canal is contemplated by those who are seeking a renewal of this charter. It it were possible to test the real opinion of hon. members, I feel certain that everyone in whatever quarter of the House he sits would acknowledge that there is not the slightest chance of a dipper of water being turned into any canal that 32649-7SJ
will ever be built under this legislation. But we find northern Ontario declaring: Oh, the north needs a canal. I am confident that it does, and I would welcome the construction of a canal for the benefit of the people there who might have occasion to use it with profit. But the bill is so framed that there can be no possible prospect of a canal ever being built under it.
This measure, Mr. Speaker, reminds me of a bill that was before this House in 1925 to sanction the Petersen contract. That contract was signed by the then Minister of Trade and Commerce on behalf of the Dominion. The preamble of the bill with a great flourish set out that it was important in the interests of Canada that the Dominion should control ocean freight rates. But having read that contract, it was apparent to me, as it must have been to anyone who read it intelligently, that instead of giving to the Dominion the control of ocean freight rates, it placed that control absolutely in the lap of the late Sir William Petersen. That was the contract which the Prime Minister supported.
On motion of Mr. Ryckman the debate was adjourned.


Hewitt Bostock: The hour for private
bills having been exhausted, the House will now revert to supply.


MINES AND GEOLOGICAL SURVEY
[Stage Direction]
The House in committee of supply, Mr. Johnston in the chair.
For investigation of mineral resources and deposits; of the mining and metallurgical industries, and of mineral technology; wages, expenses of testing and research laboratories, investigations by Dominion Fuel Board, including salaries and all
ether expenses	$192,000
For publications, English and French, purchase of books, laboratory supplies, instruments, miscellaneous assistance and contingencies	 40,000
For transportation charges from outlying provinces on ore shipments which may be sent to the ore dressing plant of the Mines branch at Ottawa for testing purposes, under regulations approved by the Minister of Mines	 1,000
To compensate J. H. Fortune for quarters, fuel, light and water supplied him as resident caretaker of the Mines branch building, Sussex st., vacated because of the necessity of utilizing the caretaker's quarters for storage and laboratory space	 400
[Stage Direction]
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Mr. SIMPSON:: How much of this amount was spent in actual field investigation, and how much in Ottawa?


Hon. CHARLES STEWART (Minister of the Interior):: Not much of this vote is spent in field investigation; that comes under the vote for geological surveys, for which $205,000 is asked. The vote covers chemical analyses in the laboratories. It is largely for the purpose of fuel testing, ore dressing and work in the metallurgical, ceramic and mineral product testing laboratories. In investigations of this character $192,000 is spent.


Mr. FRASER:: Is that spent in Ottawa in the Booth street works?


Charles A. Stewart: Yes.


John Anderson Fraser: Have you any plans for the extension of those buildings or would that come under some other vote?


Charles A. Stewart: That is a separate vote. Buildings come under the Public Works department. We had an extension last year and it is planned to extend the Booth street laboratories still further.


John Anderson Fraser: Does the minister consider such extension necessary?


Charles A. Stewart: Yes.


John Anderson Fraser: Is a vote being asked for this year for the purpose?


Charles A. Stewart: We have not asked for one yet, but we expect to do so.


Hugh Guthrie: The whole vote for geological surveys and for mines is some $600,000, of which, according to page 92 of the estimates, $571,085 goes in salaries. There is an increase of six in the number of civil servants in the Mines department. How is this increase explained?


Charles A. Stewart: Perhaps my hon. friend will wait until we come to civil government, when I shall be glad to give the information in regard to the staff.


Mr. PARENT:: Has any report been made by the officers of the department regarding the Labrador survey?


Charles A. Stewart: I cannot answer that question, but I do not think so. If hon. gentlemen will confine themselves to the item under discussion I can give at the proper time a detailed report of the geological survey work being done in each of the provinces.


Robert James Manion: Has the minister any statement to make regarding investigations carried on in the development of the lower grade iron ores? I understand that the department, under Doctor Camsell, the deputy minister, has been looking into this important matter, and we ought to have a statement from the minister.


Charles A. Stewart: 
Robert James Manion: I appreciate what the
minister has said, of course; no real result has been obtained as yet, but at the same time on the American side, especially in Minnesota, I believe they are working very successfully on low grade iron ore judging from reports I have received. Of course it is not the duty of the minister to know all the details, but his deputy is probably familiar with them and I would like to impress upon the minister the fact that this is of vast importance. I have considered the matter and have given a great deal of study to it, and

Supply-Mines and Geological Survey
I know of no question the solution of which would be of more importance to this whole Dominion than the question of the development of our low grade iron ores on a commercial scale. Probably it will be impossible ever to develop those ores in such a way that they can compete with the higher grade ores of the United States without assistance in some form, but I do wish to impress upon the minister the importance of giving every attention to this matter. I hope he will personally look into it, because it is really of grave moment to Canada. The solution to that question would put us in a position to use the thousands of millions of tons of iron ore which we have in this country, and it would mean a vast industrial development in Canada.


Charles A. Stewart: We are veiy much alive to the importance of scientific research in this direction, and we are watching every development and keeping in close touch with every move made by the Bureau of Minos of the United States, the Mining Institute of England and similar institutes throughout the world where a study of this question is being made, because without doubt it is one of the most important matters confronting Canadian industry. One rather pleasing feature is that the high grade ore in the United States, as my hon. friend knows, is rapidly nearing depletion as is fheir anthracite coal, and the problem of our low grade ores, which I think are quite comparable to theirs, will! then be brought very much to the fore. So I think we all realize the importance of discovering processes and methods which can be commercially applied.


Richard Bedford Bennett: I desire to make some
few observations with respect to this department generally. For a few weeks-it is a pity it was not longer-I was acting minister of this department, which is manned by a number of very efficient, hard-working and not over-paid officials. In the main they are endeavouring to do a great service to this country, but the real fact is that a very great proportion of this amount asked for is money absolutely lost. Why? Because in the first place in each province there is at least one university undertaking to do some of this work; then again the province is endeavouring to undertake some part of it, and there is also the Research Council which desires to take its share of this obligation. Unless and until there is coordination of the efforts of the provinces, through the universities and through the departments of government, the Research Council and this Dominion, I am
bound to say that the federal Department of Mines becomes more or less the fifth wheel on the coach. What is the sum total of the real services rendered by this department to the Dominion of Canada during the past twelve months? Just sit down and consider that question. We spent over half a million dollars in this department; what is the sum total of ita contribution to the wealth of the nation?
The great problem now confronting us is how most readily to create new wealth, and mining offers a very ready means to that end. Last year we created new wealth through mining to the extent of something over S242,-000,000. I use the word "create" perhaps not in the exact sense; we took that amount of new wealth out of the earth and converted it into products which were convertible into money to the extent of nearly a quarter of a billion dollars, the largest amount we have yet succeeded in realizing in this way. What contribution was made by this department? What did it do to make it easier for the men who labour this year to win from the soil its precious minerals in order to make new wealth, as compared with the preceding s^ear? From the closest study I have been able to make, and I have looked into it carefully, I submit that we have not coordinated as we should the efforts of this Dominion in this direction. I find a university doing something; the Research Council wants to do the same thing. Take for instance a matter of which I was speaking to the minister only the other day. South of Calgary we have large pools of natural gas, and great efforts have been made to utilize these for the public good; they supply Calgary with heat but not with light. In addition to that, after the crude naphtha is taken from the wet gas which comes from the earth, a large proportion of this gas is lost or burned up, and the question of what can be done with it is engaging the attention of scientists. Up to the moment no one has been able to arrive at a conclusion, but instead of having a.real coordination of effort on the part of the departments and services interested, that is the universities, the provinces, the Research Council and the Dominion, separate efforts are being made with a result that nothing is achieved.
We know that carbon black can be taken from that natural gas after the crude naphtha has been removed, but we also know that carbon black, or lamp black as we used to call it as boys, is only available to the extent to which a market can be found for it. There is a market for this product in Canada:	it is
used in the rubber business. It is also used
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Supply-Mines and Geological Survey
in the printer's ink business, but under existing tariff conditions that lamp black could not be made a valuable item of commerce. It would require some measure of protection. The Alberta government looked into the matter, but I find that nothing has been done by this department in order to arrive at a definite conclusion with respect to it. I expect the federal Department of Mines to be able to assist affirmatively and constructively with regard to matters of that kind where the question of a market depends upon the economic conditions in the country, the demands of foreign countries, and the prevailing prices at which the commodity can be manufactured in )ther places with which we compete.
There was another matter in connection with the peat bogs at Alfred; I had occasion to look into that. There was another in connection with the Fuel board-about which I fancy the minister proposes to speak at length in a few moments-and another mentioned by the hon. member for Fort William (Mr. Manion), the utilization of low grade ores. That is secondary to the question of the utilization of high grade ores. I urge upon the minister that an earnest effort in that regard be made not on paper, but in fact, because I have seen memoranda prepared from time to time. Men lose their imagination, their constructive power; they become mere writers of memoranda which circulate from one branch of the service to another and which are ultimately printed in book form. Last year we had 223 employees in this branch; this year we have 229. Last year we spent $548,000; this year the amount is $571,000. I ask: What is the sum total of the achievement in the department last year toward making it possible for new wealth to be created or won by Canadians out of the soil as compared with the preceding year? That is the test of usefulness in this department. I suggest that the proper thing to do is to link its activities up with the activities of the universities, the provinces and the research council. It is in that sense that I offer these suggestions to the minister at this time, because I feel sure there are many who are thinking in the same terms.


Charles A. Stewart: My hon.
friend had an opportunity of looking into the Mines branch while he was minister.


Richard Bedford Bennett: A few weeks.


Charles A. Stewart: I think he missed a good deal-


Richard Bedford Bennett: Oh, yes.


Charles A. Stewart: -because
my hon. friend will admit, as a clever lawyer, that experimental work does not immediately show results. All experimental work must of necessity take time and money if results are to be obtained. May I point to a single instance, that of the discovery of Marquis wheat? One individual worked here for several years before making that discovery.


Richard Bedford Bennett: That was not in this
branch.


Charles A. Stewart: May I point to others in this particular branch, for instance, in the fuel branch? Very valuable information has been obtained in connection with the utilization of fuel. It would take a good deal of time to explain just how much has been done in that regard. If experimental work must immediately show results in dollars and cents, then we shall not get very far with that work. During the regime of the government previous to ours, experimental work was carried on in fuel testing and in the development of a process for dealing with low grade coal in Saskatchewan. W e all decried the efforts and deplored the fact that they spent $1,000,000 with apparently no results. As a matter of fact, this led to results ultimately and they are able to get a successful fuel which they can put on the market to-day.


Richard Bedford Bennett: To what extent?


Charles A. Stewart: To the extent that they can sell it successfully. Of course the Alberta fuel is a strong competitor.


Richard Bedford Bennett: Then the economic value is very small.


Charles A. Stewart: The economic value is great and the work can be done. While the board turned this plant over to private individuals who are not altogether satisfied with the process discovered and who have been working on a German process, nevertheless-


Richard Bedford Bennett: A process which existed
before our efforts were made.


Charles A. Stewart: Not altogether. It rather was a process going on at the same period that ours was in progress. I question very much whether the German process is as valuable as ours. Perhaps we should not say that it is altogether our own because a fair proportion of the discovery was made in the United States at the university of North Dakota.
As regards the other aspect of the matter, my hon. friend will not for a single moment

Supply-Mines and Geological Survey
denounce the work of the geologists, the field men who are doing geological survey work in Canada. They have been of immense advantage to the mining industry of this country, as my hon. friend will admit at once. That makes up $205,000 worth of the appropriation and these men are operating in every province in Canada.


Richard Bedford Bennett: They duplicate the
efforts of the province of Ontario in its mineral branch.


Charles A. Stewart: Not that I
know of. In the geological work?


Richard Bedford Bennett: Yes.


Charles A. Stewart: Not so far
as I know. The laboratory work is not overlapping to-day to the extent that it was in former days. Since coming to Ottawa I have had the satisfaction of getting cooperation between the Research Council and the officers of our department so as to prevent overlapping in the experimental work and technical and scientific investigation. In other words, in Ottawa we are not duplicating what is being done in Alberta or Saskatchewan.


Richard Bedford Bennett: Oh, oh. I do not want
to interrupt the hon. member. I will explain later.


Charles A. Stewart: fuel testing
is being done here, and no fuel . esting work is being done in Canadian unive.sities. The wood-testing laboratory situated in the university of McGill in Montreal is carrying on a very important work, work so important that gentlemen interested in the same class of work as that in which my hon,. friend is interested, namely, the. paper-making industry, have thought fit to advance the sum of $3.50.000 this year for the purpose of constructing a building which they will turn over to McGill university. That shows how important they consider the wood-testing plant to the pulp and paper industry of this country.


Richard Bedford Bennett: The paper industry is
doing that itself.


Charles A. Stewart: They have
invested that money in the construction of a building in order that experimental work may be carried on.


Richard Bedford Bennett: But the government is
not doing it.


Charles A. Stewart: The govern-men has supplied the staff and it is the government staff who are doing the work. The government is paying the staff as it has been doing for several years.


Richard Bedford Bennett: Only partly. The hon.
member knows that.


Charles A. Stewart: I point
these instances out to my hon. friend simply to show him that these great industries are so interested in scientific research that they are willing to invest these sums of money in it. If my hon. friend asks them what particular branch of their industry they think this has benefited, they might answer in a very offhand way: Well, not anything of a very definite character, but scientific research is so important in regard to many of our problems that are giving us trouble that we want investigation carried on in the laboratories in connection with them. I might mention the extraction from jack pine of the resinous content, the handling of the cottonwoods, the high grade treatment of pulp manufactured even from our best grade spruce. These are all problems that can be worked out in the laboratory. I mention these in passing to show the importance of this wrork.
The hon. member for Fort William has touched upon another important problem. If my hon. friend would ask me what the United States, who are spending millions of dollars instead of thousands, and rightfully so, have accomplished in securing a better process for the treatment of their low grade ores, I would say that they have made no greater progress than we have. Our chemists are working on this problem, just as they are on oil problems and on the treatment of the gases which my hon. friend mentions. Three years ago a company was given a lease in Alberta for the manufacture of carbon black. They never went into business. Why? For the simple reason that I would not give them a lease in the areas contiguous to railways, but only in the areas where gas was escaping anyway. That was in the Pelican rapids field, a long distance from the railways. My hon. friend knows that the very rapid development in the southern states brought into the market tremendous volumes of gas which was turned into carbon black, with a consequent reduction in price to about six cents a pound, so that this company could not hope to exist.
So far as all these problems are concerned, may I say to my hon. friend that a very real effort is being made to prevent overlapping by the universities, the National Research Council, and government departments. I have on my desk in my office a list of the problems that the council have announced they are now investigating. They are not all in Canada, but the council is watching" every one of these problems. I might add
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Supply-Mines and Geological Survey
that, in order that we might have information, I have sent Mr. Camsell to Germany on two occasions to study processes for the better securing of oil from our oil sands. Subterranean mining and all that sort of thing has been investigated by this department for the benefit of the mining industry of Canada. As to the amount of money expended, I believe that the people of Canada will get more results in a monetary way from this technical research work than they could get from any other expenditure except upon like objects.


Richard Bedford Bennett: I just want to make clear one thing. I suggest that a particular branch of that work be taken by this department, leaving to the universities another branch, and to the provinces another branch, rather than that an effort be made by the three to undertake this work jointly; and the same with respect to research. With respect to the paper industry and what has been done as a gift, surely my hon. friend was not here the other day when Dean Hibbert of McGill made his address, a most amazingly interesting address it was too, with respect to the utilization of scientific research in industry. But as perhaps my hon. friend knows, the chair that Dean Hibbert occupies was established through the benevolence of the late Mrs. Eddy, who left $200,000 to the university for that purpose. That is how the chair came into being, and the paper industry put up $350,000 for the purpose of providing a building for McGill.
The hon. gentleman knows that I share his views with respect to the value of research. All I was endeavouring to make clear to him was this: Could we not make it certain that the university, the province, the Research Council, and this department should each pursue definite lines of action so as to prevent the possibility of duplication? I think the minister has endeavoured to do that, but it has not always been done, I regret to say. If he exercises firmer control over that matter we should get better results.
I know what research means. All one has to do to appreciate its value is to remember what the Germans have done with respect to research. Take, for instance, the specific known as 606, which has been so valuable in disease. It represented 606 different experiments, any one of them taking sometimes months to carry out, with measurements and everything of that sort; hence the name, 306. That gives one some idea of what research means. On the [DOT]other hand, I think it is desirable that one body should be pursuing one definite course 
of experimental work and another body another line, in order that there might not be duplication, and in order that there might be a correlation of their effort when they finish their experiments.


Robert James Manion: I think my hon. friend from West Calgary is right in his contention that there should be probably more cooperation than there has been, only, between not the universities and this department but also between the universities and the provincial departments. I have a great deal of sympathy with the minister in regard to the work that has been done by the Mines branch. I remember during the past year some friends of mine basing their explorations in a new mining section of this country absolutely upon reports made years before by some mines branch-I do not know whether it was of this government or of a provincial government. But these men actually went out and searched for minerals basing their explorations entirely on this report, made many years previously, and they found veins in the Woman lake and Red lake country which promise to be immensely rich. I have a very great deal of respect for the work done by the Mines branch, and I agree with the minister that its value cannot be estimated except over a period of years.
I wish to come back for a moment to the iron question. It is of so much importance that this government might well consider the advisability of adopting the report made in 1923, I think it was, by the committee appointed by the Drury government. In that report, as I mentioned in my remarks on the budget, it was recommended that the provincial and federal governments combine in a bounty system to develop the iron ore resources of this country. I pointed out at that time that Mr. Corliss, of the Mond Nickel Company, had quoted American geological survey experts as saying that we had 9,000,000,000 tons of low grade iron ore, 35 per cent ore, in this country, which could be developed if a plan were evolved for that purpose. Obviously 35 per cent ore cannot compete with 45 per cent ore without assistance of some kind from either the Dominion or the provincial government. I remember in 1924 putting a question on the order paper addressed to the present minister, then Minister of Mines, asking him what was being done in regard to that report, and he said that it was under consideration. That was three years ago.' The Minister of Finance told us this afternoon that several matters were still

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under consideration, and I presume this iron ore report is still under consideration-or perhaps it has passed out of consideration altogether. The minister might be well advised, however, even with his more or less pronounced free trade views, to consider on behalf of his government the possibility of adopting that report and cooperating with the provinces of Ontario and Quebec. The province of Quebec, in view of the immense deposits of titanic iron ore discovered around Chicoutimi, put through a resolution in 1925 advocating a bounty system. If the minister would come forward with a bounty system for developing our iron ore deposits that would prove a success, as I believe it would, its value to this whole country would be such that nothing could pry this government loose from its seats for many years.


James Alexander Robb: Nothing can anyway.


Robert James Manion: The minister said that last year, but we pried him loose for a few months at least, and then somehow they sneaked in again. But I would be willing for the good of my country to see the government come forward with a proposition to cooperate with the provinces of Ontario and Quebec, and other provinces in which there are iron ore deposits, and if the results were attained which I believe could reasonably be anticipated, this government might easily stay in power for a long time, and deservedly so. I think the minister might well give that suggestion much more consideration than he has in the past on behalf of the country as a whole, because there is no doubt that the iron and steel industry is the basic element -in the commercial progress of any country. The progress of every country which has made important commercial advancement has 'been based on a foundation of the development of iron and steel. I could give a list of the countries, but I have done it in the past and I shall not do it to-night. Of course coking coal enters into the development of iron and steel, and we have I think the second greatest deposits of coal in the 'world. We have the iron ores, and we have large quantities of the limestone which is necessary to this development. I hope, therefore, that the minister will seriously consider the remarks I have made in reference to this matter and will take some action in order to keep this moribund government in power for a few years.


Peter McGibbon: I wish to commend the government for this vote, but I also wish to condemn it for its action in another regard-


An hon. MEMBER:: Hear, hear.


Peter McGibbon: Someone says "hear, hear". I quite agree with the minister that there is no department of the government that offers such possibilities for scientific research as this one. But I want to bring home to them the fact that the action they have taken is hopelessly inadequate to the requirements of the country. We have an advisory council on scientific and industrial research, but it has been practically starved for years. When the Department of Health came into existence some years ago a special condition stipulated was that there was to be a department of scientific research, but such a department has not yet been formed. We are leaving this matter, which is after all one of federal concern, tu universities and to private individuals and companies, and any result we have got has been practically the result of private research. In the realm of medicine the discovery of insulin was made by Doctor Banting, who, we are told, spent practically his last dollar before he succeeded. He got no help from any government and is not getting it to-day. We are turning these matters over to universities, which I think is a mistake. Of course the universities should take them up but after all the object of universities is to train men in fundamental science, which is a different thing. This department should be fostered and maintained by the government not only in this branch, but in every branch. As we look over the countries of the world and see what they have done, and as we look over the possibilities of scientific research in Canada, I say we have starved the department. I hope the government, the Finance minister and the Minister of the Interior will loosen up their exchequer a little' bit and give this department the money it ought to have. With the great natural resources we have in this country, the possibilities of multiplying our national wealth not only ten or twenty but a hundredfold are immense. I repeat that I hope the government will give these departments a little better financial support in the future than they have in the past. I make these comments because I desire to say a word on behalf of two great departments, that of scientific and industrial research and that of health, which have been in existence for some years but which have been poverty-, stricken to such a degree that their efforts have been almost futile. I heartily support the minister in this vote, but I say the government are not living up to their duties as a government in this matter, and I can only hope that in future they will do better.
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John Anderson Fraser: I understand the depart-1 ment has been carrying on exploratory work in the iron ores of British Columbia. I should like to know if it is still being carried on or if it has been completed. If it has been completed, what, in a general way, is the result of the work that has been done?


Charles A. Stewart: I am told that the report has just been completed and published, and my hon. friend can get a copy of it.


Mr. TOLMIE:: Does that include the iron ore on Vancouver island? We have large deposits there; we have iron, limestone and coking coal within reach of one another on tidal waters. Does it include any of these?


Charles A. Stewart: I am told it includes a portion of the island, I do not know how much.


Mr. BANCROFT:: Has the minister's
department any recent report of the quantity and quality of the ore at Belcher islands?


Charles A. Stewart: I am told that Doctor Young spent one season there and has one report on that island.


Robert James Manion: Not only Doctor Young, but a Mr. Flaherty or O'Flaherty who was sent up there some years ago by Mackenzie and Mann, investigated thoroughly the iron ore deposits on Belcher islands. An English company has recently taken a shipload of ore from the Belcher islands and sent it across to England for smelting purposes, and if this project is successful they are thinking of shipping the ore across the ocean for smelting and development.


Mr. McKENZIE:: Is there any provision in this estimate for assisting in the experimental work and the testing that is going on in the research laboratories in connection with the power development at Bienfait and Estevan?


Charles A. Stewart: There is provision made.


Robert McKenzie: I would draw attention to the fact that a few years ago, as mentioned by the minister, some money was spent in connection with a briquetting process there which was not as successful as we had hoped it would be, although it was not without some measure of success. There is now, I believe, a process for briquetting being worked on which is more or less a success, and I think as time goes on it will prove more successful than it has in the past. I am pleased to find that there is some provision made for assisting in the development of the work, because there
|Mr. McGihbun.]
are vast quantities of coal in that area-some hundreds of millions of tons available-^and it is of a quality which does not stand shipping *for very long distances. I believe the power development that is going on in the laboratories may point the way to the production of great wealth. The federal government, as I understand it, accepts some of the responsibility in the matter, arising out of the fact, no doubt, that they own the natural resources of those provinces. It is well, therefore, that they accept the responsibility of assisting in this development work. I think the time will come when there will be vast wealth found to be available from the coal resources in that area.


Mr. McQUARRIE:: Has the minister made any provision in these estimates for sending out prospectors? I quite appreciate the valuable w'ork which is being done by the scientific departments of the government and I have great respect for their head; but as I see it the most valuable work must be that done by the prospector. We know that most of the great discoveries of minerals made within recent years were more or less accidental. When not only this government but the provincial governments boast of the important work that they are doing in developing our mineral wealth, I think they are overlooking the most essential feature-the finding of valuable deposits by prospectors. I hope the minister has made provision for doing this work on a more or less wholesale scale, because it would be money well spent, and the money should be spent if we are to develop our mineral wealth.


Charles A. Stewart: We have
eight parties of trained geologists in British Columbia, four in Alberta, two in Saskatchewan, three in Manitoba, nine in Quebec, seven in Ontario, two in New Brunswick, three in Nova Scotia, and one in the Arctic. My hon. friend is quite correct, many of the more important mineral finds have been made by the ordinary everyday prospector with his pack on his back. But these parties now go out after the topographical work has been performed. They make a thorough investigation as to the mineral possibilities of certain areas. I am informed that this work is very valuable to the mining industry.


William Garland McQuarrie: Investigating deposits
which have already been discovered, or searching for new deposits?


Charles A. Stewart: In some
cases investigations are asked by parties who have made discoveries of minerals.

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Richard Bedford Bennett: They report on the geological formation primarily.


William Garland McQuarrie: I do not mean that at all. I mean searching for individual veins.


Charles A. Stewart: Staking
claims?


William Garland McQuarrie: No, I would not expect that to be done. I am urging the department to employ practical prospectors to go over country which is more or less unexplored for the purpose of hunting for mineral deposits.


Charles A. Stewart: We are not doing that.


William Garland McQuarrie: That is done in other
countries and important results have been obtained. I think the minister will find this matter worthy of consideration.


Charles A. Stewart: I am afraid my hon. friend from West Calgary (Mr. Bennett) has left the impression on the committee that there is no cooperation between the Mines branch and the Council for Scientific and Industrial research.


Richard Bedford Bennett: Not to the extent that
I should like.


Charles A. Stewart: Mr. Camsell,
the deputy minister, is a member of the Research Council.


Richard Bedford Bennett: I know that.


Charles A. Stewart: I shall be
glad to put into the hands of my hon. friend from Muskoka (Mr. McGi'bbon) the many questions that this board have considered in carrying on research work. I admit that to a limited degree this work has been carried on in the universities. I do not pretend to 'be an educationalist, but I am rather pleased that the universities are becoming a little more practical in their system.


Richard Bedford Bennett: So am I.


Charles A. Stewart: My hon.
friend says that this ought all to be done at Ottawa. In the United States, after careful thought, instead of establishing a central bureau of mines the government have scattered thirteen stations throughout the country, all doing extensive work. I hate to talk about medical affairs because I admit that I am not competent to do so. I do think that to a limited, perhaps even to an extended, degree medical research may be very helpful, but I am very anxious that there shall not be any overlapping, because in the long run it means an added burden upon the shoulders of our tax payers. I agree entirely with my hon. friend from Muskoka that we are not spending enough money on scientific research. It is the fault of the government and the parliament of Canada that proper laboratories have not been erected to give the council an opportunity to function effectively. I am confident that one of the most important things we can do is to establish in Ottawa a central organization to coordinate scientific work all over the Dominion. I should like to see a real start made at once, because I believe we have the men available for the work.


Hugh Guthrie: Why blame parliament?
Parliament has never refused any money that I am aware of for scientific research. Why not blame the government?


Charles A. Stewart: On every
occasion since I have been a member of the government I have stressed the importance of scientific research, and I am bound to say that with the exception of an odd member here and there not very much interest has been evinced in the subject. Apparently we must first bring home to the people a realization of the value of scientific research in industry, both manufacturing and agricultural, before we shall be able to get the money required for this work. We need two or three million dollars to make a beginning, and the expenditure will run into a very considerable amount to meet the requirements of scientific research even to a limited degree.


Peter McGibbon: I submit that in the first place the services have been starved, and in the second place that there has been no directing force. I think we should have in Ottawa a central force which would form the nucleus *of a scientific industrial research council. It might be all right for the universities to look after this work, but I do not think that is their function. The universities should train men in scientific research so that they may be available to the government. I agree with the minister that we cannot look for results immediately, probably we would not get any for years, but in the process of solving various problems unexpected discoveries might be made. In fact that is how all the great discoveries of science have been made: scientists have been looking for one thing and have discovered another. These discoveries have been of immense value to the country, but there should be a central directing force in Ottawa to whom all departments might look for guidance. I do not say that this body should necessarily do the work, but certainly there should be some central authority to assign various subjects to the different departments, or the universities, if you will.
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Mr. JELLIFF:: The hon. member for West Calgary asked an important question and one which is of considerable interest to the people of Alberta. I wiish the minister woulld answer 'that question. A>t present there is a lamentable waste of gas in the oil fields. If the gas which is allowed to escape were converted into power it would be sufficient to supply all the needs of the city of Calgary. This is a practical matter which, it seems to me, calls for action by the department. It is imperative that something should be done to stop this waste, because the people of Alberta are suffering a great loss in consequence.


Charles A. Stewart: We control, of course, only the wells on crown property; those that are private lands are not under our jurisdiction. It is true we have the power under the terms of our leases to close down any well if need be, but as my hon. friend knows, I think, there is very little waste of gas now so far as the large producers in the province are 'concerned, whereas two years ago a considerable quantity of gas was dissipated. A very large proportion of that gas is now piped into Calgary and utilized there. I agree that if piping were put down i still 'larger quantity of gas, at present eseap-ng from wells on privately owned properties, tould be converted into power for use in Calgary. But, as I say, we have no control over w'ells other than those situated on crown lands.
Mr. MaeLEAN (Prince): I wish to place myself on record in support of the minister's request for a larger vote. I had the pleasure a few days ago of listening to Doctor Hibbert of McGill university who delivered an eloquent lecture bearing on this subject. Doctor Hibbert occupies the Eddy chair in the university in question, and speaking in the Chateau Laurier he gave a most instructive address on Borderland Sciences, in which he showed the correlation of one- science to another. It was one of the finest addresses to which one could possibly listen, and it revealed the extensive work which may be done in the line of scientific research. He told us what the universities were doing, and pointed out vividly what the Dominion and provincial governments should do in this direction. Not only in relation to the subject of medicine, to which he referred, did he reveal some of the most startling facts, but as regards the treatment of products in everyday use he gave some arresting information. There is a great field for development not only in minerals but in every other line. I had a conversation the other day with Doctor Gussow of the Dominion experimental farm

here in connection with the growing of potatoes, which is a matter of considerable importance to my own province. Doctor Gussow is an ardent advocate of scientific research and development generally, He thinks that the Department of Agriculture should bring in from Europe some of the best trained men to demonstrate the uses to which some of our surplus products may be puit. For instance, in Europe at the present time many valuable commercial products are made from potatoes, but so far in this country we have not developed their use for these purposes. Valuable results might be obtained in this way and I desire, as one member at least, to support the minister's request for -a larger vote to promote scientific research along various lines.


Mr. LANG:: I would not have said anything on the subject but for the suggestion made by an hon. member that the Department of Mines should send out prospectors. In my opinion, speaking from experience, the very best work that could be done for prospectors generally is being done by the geological parties which are sent out by the federal and provincial governments. The geological surveys which they make are eagerly looked forward to by all prospectors year by year. The prospectors know where these survey parties operate and they try to get the newest geological maps available for the various areas. Every prospector to-day realizes the great value to them of these geological surveys, and you cannot meet one on the trail who is not equipped with the latest map of the particular country he is prospecting. The map discloses the geological characteristics of the country, with marks indicating what veins have been found, together with information relating to the assays that have been made. Practically all of the geologists sent out by the Department of Mines to-day are excellent prospectors as well as scientific men, and the work they are doing is certainly wonderful. Their surveys have made the work of the prospector so much easier that all mining men sending out prospecting parties to-day first study the geological surveys that have been made. Indeed, the prospector is obliged to familiarize himself with the findings of these geologists, whose maps are invaluable.


Mr. MACDOUGALL:: In view of the new uses to which bituminous coal is being put, is the department conducting a research into what is known as the low carbonization process for the coking of bituminous coal particularly of the lower grades? If so, what report is there on the subject?

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Charles A. Stewart: We are very much interested in low temperature carbonization and have been watching closely for developments in this regard. We have also been doing work ourselves. This work presents one of the widest fields for the treatment of coal. In my opinion, research work in low carbonization, and the treatment of iron ores, are two problems of paramount importance at the present time.


Mr. LUCAS:: On that point I would ask the minister if he has investigated the process used in Great Britain, which I think is known as the Ulingsworth process, for the low carbonization of coal?


Charles A. Stewart: Yes, we are keeping very closely in touch with every development in England in this connection, as well as those in Germany and Belgium.


Mr. BIRD:: I wish to make a few remarks, but not of a critical kind, because I ' realize that the department has been doing good work under somewhat restricted circumstances. I would refer particularly to northern Manitoba, where nature has been very lavish but at the same time very perverse in the intricate manner in which the elements have been mixed together. The question of copper mining in northern Manitoba is a standing challenge to the scientific minds of Canada, and I am curious to know just how far the department has been addressing itself to these problems which loom very large to us in that part of Canada. I think it will not be denied that there we have some of the finest copper deposits on this continent, but these are awaiting the discoveries of our scientists. I understand that with regard to the well-known Flin-Flon property, an American firm has been experimenting there for some two or three years; I think it somewhat of a humiliation to us as Canadians that the solution of these immensely important problems should] be left to the enterprise of scientists outside our borders, but so it has been in this regard. I do not know just what progress they are making along these lines, but I wonder if the department knows; I wonder if there is any cooperation and if our Department of Mines has been keeping track of the work undertaken by this private enterprise. If that has not been the case, perhaps a little criticism might be expected. It seems to me that a process which is fraught with such tremendous importance to the northern part of Manitoba and to Canada as a whole should be followed carefully by this department. Personally I am not much concerned about geological exploration; I think perhaps that has gone almost as far as
it can go with any practical benefit at present in any of these areas. I quite realize its importance, but I also realize that the scientific efforts of our geologists are complementary to the work of our prospectors and that emphasis should be laid upon the metallurgical problems involved in some of the finds already made and blocked out, which are understood to be of immense importance. I do not know what eventual success this American firm will have, but I would like to know just what is the attitude of the Department of Mines towards this important process, which if successful will be of such immense economic importance to western Canada. I am not introducing this matter in a critical mood at all, because I know that the parsimonious attitude of this parliament towards these things has cramped the efforts of that department, and that under the circumstances the department has done good work. I would like to know, however, just what has been done, and I would ask the minister to address his mind to that aspect of the question for a few moments.


Charles A. Stewart: I am very
glad to be able to inform my hon. friend that this particular difficulty, the separation of these ores, has been under review and test in about a dozen different laboratories, but the process to be tried out by the company now, and the one which they feel has the greatest chance of success, is the discovery of our own officers made in our own laboratories here. Of course we cannot say that it will be successful, because it has only been tested, but it will be tried out this year.


John Anderson Fraser: The minister has given a good deal of interesting information to-night but I would like to know how he explains the fact that in 1925, according to the public accounts, we spent $237,000 under this vote; last year only $200,000 was provided, and now we are only asked for $192,000. What is the reason for the decrease in this very important item? Will it continue to decrease as the production of minerals in this country increases? Three years ago the mineral products of Canada amounted to $214,000,000; last year they amounted to $228,000,000 and the figure for this year is $242,000,000, so it will be seen that though the production is increasing, the amount of money set aside for this very important work is decreasing. Having brought these facts to the attention of the minister, is it too much to expect that he will provide some supplementary amount to increase the vote asked for at present?


Charles A. Stewart: I might explain that by the fact that we were using a
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considerable portion of this money in the research work carried on by the Fuel board. Some of these problems are out of the way now, and we do not require as much money. Of course there are other problems which we could take up, but we are trying to be as economical as possible without starving any of the very important projects. We did have an increased vote for the purpose of research by the Fuel board into the coking problem, and it will be necessary to have an increased amount in the supplementary estimates for the continuation of the investigation into the peat fuel problem. But that is the reason the amount is less in the estimates now before us.


John Anderson Fraser: The second to the last item in this vote is to cover transportation charges from outlying provinces on ore shipments to the ore dressing plant at Ottawa, Last year that vote amounted to $3,000, but this year it is reduced to $1,000.


Charles A. Stewart: I can answer my hon. friend in a word. That item was included originally to encourage prospectors to send their samples from British Columbia; they have never done so to any extent, and we have never used the money, so I cut the appropriation down. We would be very glad if they would send in their samples; these samples come from other parts of Canada, but we felt that we wanted to put the prospectors in British Columbia in the same position as those in Quebec and Ontario, who were close to our laboratory, and in order to do so we offered to pay the transportation cost on their samples for the purpose of inspection.


John Anderson Fraser: In the plant which the
department has in the city of Vancouver, is any assay work carried on for the prospector?


Charles A. Stewart: No. That assay office is purely for the purchase of gold.


John Anderson Fraser: I understand if a prospector in British Columbia wants to send his samples to Ottawa, the freight on those samples is paid?
Mr. STEA\TART (Edmonton): That is what the item of $1,000 is for.


George Gibson Coote: I would like to refer to the
question raised by the hon. member for Lethbridge, (Mr. Jelliff) in regard to the wastage of natural gas that is at present taking place in Alberta and to direct the attention of the minister to that problem. Let me quote just a few paragraphs from the High River Times in regard to this matter. It says:
That there is a big wastage of natural gas in Alberta made necessary by the exploration 
for oil is one of the statements in the annual report of the Scientific and Industrial Research Council of Alberta just handed in to the legislature. This section of the report, written by Dr. John A. Allan, professor of geology at the university of Alberta, says that figures indicate that in 88 wells of Alberta there is an available daily supply of natural gas amounting to 480,000,000 cubic feet. The most complete figures available for natural gas sold in Alberta in 1925 was 9,115,500,000 cubic feet representing an average daily consumption of 25,000,000 cubic feet.
Then the report goes on to deal with the *wastage of this gas and it sas^s:
The greatest wastage to-day is undoubtedly taking place in Turner valley where the average daily consumption amounts to about 7,000,000 cubic feet whereas the daily production amounts to approximately 45,000,000 cubic feet. Most of the wastage in Turner valley is necessary if exploration for petroleum continues. It seems inevitable that if oil development is going to be permitted in Turner valley, we must expect a considerable wastage of gas for some time to come.
Then Dr. Allan goes on to say, according to this report:
Dr. Allan, however, emphasizes the point that adequate regulations must be enforced to prevent unnecessary wastage of gas in drilling wells and cites a bad example, "Due to lack of supervision", he says, "wells were drilled in the Peace river district and from at least two of these water and gas have been flowing for many years. They are now 'running wild' and the chances are that this uncontrolled water has probably ruined the possibility of getting oil from at least the higher horizons in that district."	[DOT]
Attention i| also drawn to the very important fact that the Dominion government regulations apply only to Dominion lands, and these regulations do not apply to free-hold lands which include those lands held privately by the Canadian Pacific Railway Company and by the Hudson's Bay Company.
Any regulation that is made to cover the development of petroleum or natural gas in Alberta should apply to all lands, irrespective of ownership.
The reason I am bringing this matter to the attention of the minister and the committee is to ask whether any research work is being carried on by the department looking to the prevention of this wastage, and whether the government are carrying on any investigation as to the possibility of capping new wells *which may be brought in. Probably forty new wells are at present being drilled in that area. If even one-half of these should be brought in during the coming year, there is going to be a heavy flow of gas from them. I have been much interested in the remarks made by many hon. members to-night regarding the development of the mineral resources of Canada. It is quite right that we should develop these resources. The

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fact, however, is that this natural gas which is being wasted can never be replaced. The minerals as long as they lie in the ground are not at any rate being wasted, but this natural gas is in many cases being burned to get rid of it and wt are wasting a very valuable natural asset. It is important that the department should carry out any investigational work which may appear possible to them looking toward the control of the flow of natural gas from those wells and also towards the utilization of the gas which is now flowing from them, because I understand it has been found impossible to cap some of them. Possibly, if it is not already being done, the department might investigate the cost of producing electric energy from this gas which is now going to waste. It seems to me that it would not cost any more to install internal combustion engines near this gas field and to produce power in that way than to install turbines in hydro-electric power plants. I would be glad if the minister would inform the committee, particularly for the benefit of the people of Alberta, whether any investigational work along this line is being carried on, and also whether they have in mind any way of preventing the wastage of gas especially from new wells which may be brought in.


Charles A. Stewart: About a
year ago, we employed an English engineer, probably one of the most outstanding men in his profession, for the very purpose of preventing what has happened on one or two occasions, if not more-and I know of at least three-where wells, when they struck the heavy flow, blew everything to pieces, twisting their casings and running wild for weeks at a time, the flow of gas from them being wasted. If my hon. friend will remember, about eighteen months ago I came in for some severe criticism when w'e were insisting on cementing the pipe in rock when wells were being drilled in heavy gas strata. The result was that when gas was struck we could cap the well, if need be, and preserve that gas, shut it off completely. That has not been the case where we do not control the property. My hon. friend has mentioned the fact that many of those lands are privately owned and the federal government has no jurisdiction in that case. The control of property and civil rights is primarily a provincial matter. But where the lands are owned by the federal government and leased by them, we have absolute control and we are seeing that proper precautions are taken to prevent that heavy flow of gas from throwing the casing out of the well and causing a great deal of trouble. In
the north I do not know how that gas can be shut off, because there is no rock strata and this wastage has been going on there for a number of years. Wherever there is a rock strata we have shut off the flow at considerable expense to the federal government. In addition we have Mr. Elworthy working continuously on the development of processes for the utilization of the gas, and any of the small municipalities such as High River might very well utilize that gas for the purpose of securing power for the generation of electricity. There is no necessity of research for that; all they have to do is to pipe the gas to a given point and generate electricity from that gas.
As regards federal property we are very much exercised about this matter and we are giving it a great deal of consideration and careful thought. For that reason we have employed this gentleman, who has had a wide experience in drilling for oils and in the proper care of the drilling process to preserve this great natural product if it is found.


George Gibson Coote: Is it possible to procure
naphtha from those wells without allowing the gas to escape?


Charles A. Stewart: We have not any process yet other than that which is being used.


George Gibson Coote: Just another question in
regard to those lands in which the mineral rights are no longer held by the Dominion government. I always understood the province had no control whatever of these mineral rights, that any control that might exist over the minerals underlying the Hudson bay and Canadian Pacific railway lands remained in the Dominion government, and that that was one of the reasons why the Alberta Mineral Tax Act was disallowed a few years ago.


Charles A. Stewart: Oh no, as
applied to federal lands only.


Abraham Albert Heaps: All the oil and gas wells are not necessarily to be found in Alberta. We had an oil well discovered recently at Grand View, in Manitoba. Can the minister make any statement to the House as to the result of any investigations his department may have held there?


Charles A. Stewart: I would like to be very -Chary in any statement I make with regard to that, because there seems to be a wide difference of opinion as to whether oil is there or not. Our own officer who visited the well suggested that it first be cleaned out in order that a proper examination might be made. I do not know if that has been done up to date.

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George Gibson Coote: Is this department doing
anything to investigate the possibility of controlling the big flow of gas while at the same time allowing these wells in the Turner valley to produce?


Charles A. Stewart: We are
working on that problem all the time, but so far we have not discovered anything better than the process now in use for the separation of the wet gas.


Herbert Bealey Adshead: My hon. friend was
speaking of the development of power from gas. I might say that proposals were made to the city of Calgary by certain interests in the Turner valley. One was to pipe the gas to Calgary, and another ito develop electricity at Turner valley, but so far _ I understand no arrangement has been entered into, nor have the rates been able to compete with the hydro-electric system.


George Gibson Coote: Is any investigational work
being carried on in connection with the production of carbon or any other substance from this gas in the Turner valley?


Charles A. Stewart: Carbon
could be manufactured if it were profitable, but it is not profitable at present prices. My hon. friend from West Calgary was suggesting that some protection should be given, but as I pointed out a moment ago, the reason for the low prices was the very large volume ol natural gas discovered in the southern oil fields that have come into production in very recent years.


[Stage Direction]
Item agreed to.
James Alexander Robb: If the committee is agreeable,
there are some small supplementary estimates for the fiscal year ending March 31, 1927, that I should like to have cleaned up so that the accounts can be paid before the end of the present fiscal year. Hon. gentlemen will find these estimates on their files. They total $575,204.22. The larger items are $232,000 odd for the Customs inquiry, a'llso certain items in connection with the national parks, and an item for the payment to members of the House of Commons and the Senate for additional travelling expenses on account of the Christmas adjournment. There are some smaller items that I do not need to enumerate.
General
To provide, notwithstanding anything contained in the Senate and House of Commons Act, for the payment to each member of the Senate and of the House of Commons who attended the first part of the present session of an amount representing the actual moving or transportation expenses and reasonable living expenses of such member while on the journey
	.
between Ottawa and his place of residence after the adjournment of parliament on December 15, 1920, and on the return journey from his place of residence to Ottawa at the end of the recess which commenced on the said date, or in case any such member did not return to his place of residence during the said recess an amount equivalent to what -would have been his travelling expenses if he had returned to his place of residence during the said recess-The Senate, $3,075; House of Commons, $15,000; total, $18,075.


Richard Bedford Bennett: Would the minister explain this? Are the exact expenses being paid?


James Alexander Robb: I understood that the clerk was paying only the exact expenses and that vouchers would be required, but my idea is that there should be paid just a duplicate of what the members disburse when they come to attend the regular session. That is the idea.


[Stage Direction]
Item agreed to.
Mail subsidies and steamship subventions.- Mulgrave and Canso, steam service between- additional amount required, $4,625.
Mr. MACDONALD (Richmond):: Would the minister explain what this item is for?


James Alexander Robb: This is for a daily service, Sundays excepted, between Mulgrave and Canso. For some years Hugh Cann and Son have received a subsidy of $13,500 per annum for this service, but representations were made to the effect that in order to develop the fish business at Canso it was necessary to get a larger boat for the winter months and also to decrease the rate on fish of all kinds from Canso to Mulgrave from the old rate of 20 cents per hundred pounds to 6 cents per hundred pounds. Arrangements were consequently made with the Lovat Steamship Company to place the steamship Lovat on this service from January 1, 1927, for a three months' period, at a subsidy of $6,000 per month.


Finlay MacDonald: Who
comprise the Lovat Steamship Company?


James Alexander Robb: I cannot tell you.


Finlay MacDonald: For the benefit of this House, I may say that the Lovat Steamship Company have also another large subsidy of some $50,000 per year for the service on the Magdalen route, from Pictou to the Magdalen islands.


James Alexander Robb: It is not the same service.


Finlay MacDonald: But they are paid for the yearly service $50,000, which is a very substantial sum. The boat was taken off that service and placed on the Canso

Supply-Mail Subsidies
route, and she receives for that her portion, of $13,000, with an additional $6,000 a month. Considering the amount of money for our services throughout the country, that is an exorbitant sum.


Richard Bedford Bennett: Double payment.


Finlay MacDonald: Yes, not only that but over-payment. I understand that the people who are concerned in the Lovat Steamship Company are people who have been very close to this government in the county of Pietou. So far as my information goes-I may be wrong, but I think the minister should have the information at his finger tips-the relatives of a former minister of the crown from the county of Pietou are shareholders in this company and were shareholders when this government began paying 850,000 for this service to the Magdalen islands, I would ask that this additional sum be struck from this vote.


James Alexander Robb: I am quite in accord with my hon. friend when he brings up generally the question of reducing subsidies down along the coast, but when he brings it up as a reason that they happen to be relatives of some particular gentleman, that is not a good reason. Hon. members will observe that this service has nothing whatever to do with the Magdalen island service. I admit that was a high price, but we had some difficulty in getting a boat placed there for that particular service. We asked for tenders for it. When I was in the Department of Trade and Commerce representations were made to us that those islands were far out; they had no railways and no transportation. We had to give a suitable service for the fishermen and the people living on the island, and they were producing great quantities of fish that were going to the western parts of the Dominion. In connection with this particular service for the winter months, the smaller boats that were there would not undertake to do the work. We had to get a better boat. That boat was available. It was not given as a subsidy to these particular people, but it was so that we might provide a service for the fishermen coming into Canso, and the conditions were that the rate should be reduced from 20 cents a hundred pounds to 6 cents a hundred pounds. That rate is very small and I think my hon. friend will have to give a much better reason before he asks us to reduce the service. However, if he wants to go into the whole service along the coast in Nova Scotia, and cut it all down, I will be with him.


Finlay MacDonald: As one
of the maritime men, coming from Nova Scotia, I say that there are a good many services in Nova Scotia that should be very thoroughly gone into, and I think it should have been the duty of this government for the past five years to go thoroughly into some of them. It should not be for the hon. member for Richmond or the hon. member for Guysborough, or the hon. member for Antigonish, or the hon. member for any other constituency to take it up; it should be for the hon. minister in whose department these transactions occurred. I say that the very first subsidy that should be gone into and examined is the contract with the Lovat Steamship company for the service to the Magdalen islands. I would advocate, as was done in the case of subsidy in the county of Richmond during the last few weeks, that tenders should be called for and that the contract should be given to the lowest tenderer, first for the Magdalen island service, and secondly, before we vote the additional money for the Guysborough route, that tenders should be called for the Mulgrave and Canso route.


James Alexander Robb: This is a contract; we are
now near to the end of March, and the contractors have been providing the service during the winter and have given the reduction from twenty cents to six cents. They have carried out their part.


Hugh Guthrie: How long is the contract to run?


James Alexander Robb: It runs out in three months.
It was for a three months' period at a subsidy of $6,000 per month. I am not sure when it was made. It might have been made by my hon. friends, but I do not think so. Service was for the winter months, January, February and March-


Peter McGibbon: Have you any figures
as to the value of the fish exported?


James Alexander Robb: No.


Finlay MacDonald: Might
I ask the hon. minister when tenders were called for, and if tenders were called how many were received?


James Alexander Robb: Not for this particular service. This vessel was the one available.


Finlay MacDonald: Tenders were never called for.


James Alexander Robb: I have a record here of the
subsidy paid, the traffic returns since 1908, and the trips made. In 1908 they were making 286 round trips, and in 1926, 300 round trips


Richard Bedford Bennett: A year?

Supply-Mail Subsidies


James Alexander Robb: I think for the season. That is not this particular service; that is the general service on the other contract. The other contractors continued up to the end of December and stopped, and we did not have any transportation at all for the winter months.


Peter McGibbon: What size boats?
Mr .ROBB: The other steamer employed on the route was the Robert Cann, a vessel of 111 net and 265 gross tons, with capacity for about 200 tons of freight and 100 passengers and with a speed of 11 knots.


Richard Bedford Bennett: The department had been paying $200 a day for the last three months?


James Alexander Robb: We would not have had any service at all without her.


Hugh Guthrie: Is this the first year this winter service has been provided?


James Alexander Robb: Yes.


Finlay MacDonald: Is the steamer Robert Cann receiving $13,000 per year for an all year service?


James Alexander Robb: I do not think it is an all
year service. I think we have been paying for the season of navigation, from the opening, about the 1st of April to the end of December.


Finlay MacDonald: I might say for the benefit of the House that previous to last year this very steamer the Robert Cann, had been receiving $13,000 for an allyear service, and that she had performed the all-year service previous to 1926, but now on account of her age and certain other reasons it was thought she would probably not be a good winter boat, and the Lovat was substituted in her stead. I think if the Robert Cann was not able to give an all the year round service tenders should have been called for before the Lovat was put on at an additional $6,000 a month. It would have been good business. We are paying the Robert Cann for performing an all the year round service although for four or five months she is not doing anything, while we are paying the Lovat $50,000 besides provincial subsidies for an all the year round service, and then we turn around and give her an additional $6,000 a month, practically $200 a day, for the winter service. The department kicked at paying $13,000 subsidy for a similar service at the other end not later than the 30th of March last. I claim that this is unfair discrimination and a squandering of public money.


James Alexander Robb: My hon. friend is in error
in saying that we pay the Robert Cann $13,500 odd for this service for the year round, although the boat is not giving us that service. The record shows that the Robert Cann from April 1 to December 1 received a subsidy of the old rate amounting to $10,125. So there was $3,375 available towards the subsidy for the winter service. The fishermen complained that that boat was not able to give a satisfactory winter service. Let me repeat, we secured a reduced rate for the transportation of the fish.


Hugh Guthrie: Were tenders advertised
for when this agreement was made?


James Alexander Robb: No, but there is much in
what my hon. friend says for the all-year round service. This was a service provided for the fishermen to enable them to send their catch to market during January, February and March of this year. The moment the Robert Cann stopped running her subsidy ceased.


Hugh Guthrie: What negotiations took
place when the new arrangement was made? Were tenders asked for, or was there any correspondence, or on whose advice was the arrangement made?


James Alexander Robb: I am advised that the department investigated through our officer down there, Mr. Tupper, and this particular boa,t was recommended as the only boat available.


Peter McGibbon: Has the minister any
information of the quantity of fish carried?


James Alexander Robb: The returns are not in.


Mr. SHORT:: This is the $10,500 item?


James Alexander Robb: No, the vote is for $4,625,
the additional amount required. The hon. gentleman will recall that we had available out of the original subsidy voted some $3,000 odd, which added to this will be sufficient to pay for the winter service.


Harry Bernard Short: I think this item should
go through. I know something about the service down there. My friends look at me, but perhaps they are not as familiar with the local conditions as I am. Canso is one of the most important fishing points in Nova Scotia. They have had an inadequate steamship service for several years. During the winter of a year ago traffic was held up in that section for a week at a time on account of ice conditions and the boat not being suitable to meet those conditions. I understand this item is to provide for better steamship service. Many of the places along the coast

Supply-Mail Subsidies
require better steamship service, this one particularly, and I think the money is well spent. I do not say that other services down there should not be attended to as well, but more fish is shipped out of Canso than out of any other port in Nova Scotia excepting Halifax. Consequently they are entitled to a good steamship service, and I support this item with pleasure.


Finlay MacDonald: The
district of Canso is probably one of our largest fishing sections, but I may tell 'the hon. member for Digby that there are other important fishing sections, for instance, Petite de Grat. We are not receiving the same service on the other side of the coast, and I see very strong reasons why my friend from Digby advocates this vote. Of course, he was not a representative of the county of Guysborough-Antigonish in 1925-26 when our
would be incurred. I believe that by putting the Lovat on that route rates on the transportation of 'the fish from Can60 have been reduced twenty to six cents per hundred pounds. I am in favour of this vote or of any other vote that will give added transportation facilities to the fishermen of Nova Scotia.


[Stage Direction]
Item agreed to.
Mail Subsidies and Steamship Subventions- Mulgrave and Canso, steam service between- additional amount required, $3,000.
Finlay MacDonald: Have
tenders been called for in the last few months for this service?


James Alexander Robb: I am sure my hon. friend will not object to this vote.


Finlay MacDonald: No, certainly not.
Pictou friends had their boat put on the Canso-Guysborough route. I am not interested personally either in the Maritime Fish Corporation or in any other corporation in Guysborough township. I am speaking for the interests of the fishermen and the public treasury. We want service at the lowest possible cost, with no discrimination in any shape or form, and we do not want favours to be handed out to the friends of this government.


Mr. ROSS (Moose Jaw):: Mr. Chairman, I think that is an unwarranted attack on the hon. member for Digby. During the Christmas recess I had occasion to travel into Nova Scotia, and I saw what the fishermen and the fishing companies were doing in Canso. I reached the conclusion that what Nova Scotia lacks is adequate transportation facilities for fish. They appear to be in the same position as we were on the prairies some time ago when we did not have proper elevator facilities for our grain. To-day the fishermen along the coast have no means of transporting their catch as fresh fish, and therefore they have to dry and salt it, which yields them a net return equivalent to only a cent or a cent and a half a pound on the weight of their catch when sold fresh. If these fishermen could have their fish taken to Canso and other places to be marketed as fresh fish they would double their earnings, and I believe the government should spend money to that end. The service given by the Lovait I found to be first class. When I was there a good deal of fresh fish was being shipped from Canso by the Maritime Fish Corporation, and of course being perishable it had to be transported quickly or great loss


James Alexander Robb: The financial statement furnished by the contractors, the Arichat Steamship Company of Sydney, covering the last eight years, shows that the service has been unprofitable. The loss between 1917 and 1924 amounts to $31,000. The contractors say they are unable to continue the service without a substantial increase, and point out that in view of the fact that this is a daily service, except Sunday, throughout the year, they receive possibly less than any other subsidized service in the vicinity. They are willing to continue the service with an increase of $3,000. If my hon. friend desires to have tenders called for I have no objection.


Finlay MacDonald: I understand that a service has been going on for a number of years. This is in the county of Richmond and it is in a different position from the service at Canso. It serves an important fresh fish section, but there are no cold storage facilities such as there are at Canso. Fish must reach the cold storage plant within at least twenty-four hours of being caught, and these people are entitled to a very good service. They have approached the government in the past and this is the first vote I notice for an increased subsidy. I see that so soon as the additional appropriation was placed in the estimates tenders were called for by the department on March 7. Are all the tenders in and to whom has the contract been awarded?


James Alexander Robb: No contract has been awarded.


Richard Bedford Bennett: But have tenders been
called for?


James Alexander Robb: Ye*.
1252	^	COMMONS
Supply-Northwest Territories- Yukon


Finlay MacDonald: Has any new contract been awarded?


James Alexander Robb: No.


Finlay MacDonald: Will
the same people have the contract?


James Alexander Robb: I do not know; the tenders
have not yet been examined.


Harry Bernard Short: Are there any further sup-plementaries to come down in connection with steamship services?


James Alexander Robb: I hope not.


Harry Bernard Short: Then I want to point out
that the government has omitted a service that should be provided for, namely, that between Bridgetown and Saint John. It has been in operation since 1910 and the subsidy was dropped last year. While the present minister was acting as Minister of Trade and Commerce I took the matter up with him, as he remembers very well. And when the estimates were going through the House in December last I was given to understand that a supplementary would come down later on. 1 have taken up the question again with the present Minister of Trade and Commerce who informed me that something would be done. If I am to understand now that no subsidy is to be given I must note a protest against the discontinuance of it. I see no reason why this particular service should not receive the same consideration as is given the other steamship lines running into the bay of Fundy. Here we have a subsidy which has been granted ever since 1910 and which is suddenly dropped, and no reason is offered. Some sort of explanation was offered last year to the effect that the company had been making a profit and were therefore not entitled to a subsidy, but this year the statement they have submitted to the department shows a loss. There are two other lines of steamers subsidized, one from Annapolis and the other from Bear river to Saint John. The Bridgetown Steamship Company runs twenty miles further up the river than either of the others, covering the same route, but its subsidy is cut off while the other two are continued. Can the minister not explain this?


James Alexander Robb: These items are for the current fiscal year ending March 31 instant. I am willing to give my hon. friend credit for having done his duty last year, so that if no subsidy was given then the fault is not his. I understand from my colleague the Postmaster General that the Minister of Trade

and Commerce has the matter under consideration and is favourably disposed to it, and if he recommends it it is quite possible a vote will be brought down next year.


Harry Bernard Short: That is the very reason I wanted to know whether there were any further supplementaries to come down in connection with steamship services.


[Stage Direction]
Item agreed to.
Government of the Northwest Territories- salaries and expenses connected with the administration of the territories, etc. Further amount required, $15,000.
Richard Bedford Bennett: What is this?


James Alexander Robb: I have not the information. I am not sure that this is not to complete a certain amount required for fire purposes.


Richard Bedford Bennett: I do not think so. I had a letter in regard to this matter and I promised to find out what the item was for when it came up. However, when the bill i3 in committee the minister can give the information.


[Stage Direction]
Item agreed to.
Government of the Yukon Territory-amount required to pay compensation to John Mclver in connection with the purchase of placer mining claims situated on Poker creek, Yukon Territory, $3,000.
Richard Bedford Bennett: What is this?


James Alexander Robb: I have not the information but I will get it.


[Stage Direction]
Item agreed to.
Adjustment of war claims-Department of the Secretary of State. Further amount required, $5,000.
Richard Bedford Bennett: An hon. member is
anxious to have information regarding this vote, but if later on in' committee an explanation can be given, that will be satisfactory.


Robert Gardiner: Many of the items in
this list of supplementaries were passed with no explanation given, and before the list was distributed to the committee. I wonder if the minister would go back to item 385 and give an explanation of how it came to be included?


James Alexander Robb: This item is to authorize and provide for Mr. Meighen's indemnity as leader of the opposition from January 1, 1922 to March 7, 1922, at $10,000 per annum. My hon. friend understands that the leader of the opposition is entitled to that salary. The Right Hon. W. L. Mackenzie King was paid as leader of the opposition to December 31,

Supply-Secretary oj State
1921, and Mr. Meighen was paid as leader of t'hc opposition from March 8, 1922, the day the House opened, and the present item is to cover Mr. Meighen's indemnity as leader of the opposition in the interval.


Robert Gardiner: Why is it necessary to
place it in the supplementaries at this late hour, and who was responsible for placing it there?


James Alexander Robb: I think the reason was that
we did not have the figures until that time. As a matter of fact, we really did not know until later, that Mr. Meighen had not been paid.


John Gordon Ross: Is not the real
explanation the fact that until March 7 of that year we did not know who was going to be leader of the opposition, Mr. Crerar or Mr. Meighen, and as a matter of fact until that date there was no leader of the opposition?


James Alexander Robb: No, that was not the reason.


Mr. MACKENZIE KING:: I think I can
give my hon. friend the explanation. When Mr. Meighen's government resigned and the present administration assumed office in October last, Mr. Meighen continued as leader of the opposition until the time my hon. friend opposite (Mr. Guthrie) was chosen leader of the opposition. Unfortunately immediately after we came into office, Mr. Meighen was informed that no salary cheques could be paid to him as leader of the opposition, or to his secretaries and that he was not entitled further to the use of the frank. When I learned of this, I expressed considerable indignation and said I thought it was quite wrong. It seemed to me that the House would not desire the leader of the opposition to be treated with discourtesy of the kind. I was informed that there was no legal authority to pay Mr. Meighen as leader of the opposition, that the law required that to be recognized as the leader of the opposition he must be a member of parliament, and at the time Mr. Meighen had not a seat. I discussed the matter with Mr. Meighen personally and said I would take the responsibility of seeing that matters were properly adjusted. It was then that Mr. Meighen informed me that he had received no salary as leader of the opposition for the period here mentioned though he had acted as such during that time. I said if that were the case I thought it was equally a mistake; that if he was entitled to the salary he should receive it, and that I would ask the House to vote it, this I now desire to do.


Robert Gardiner: I am glad we have received this explanation because we in this group were wondering why it was included in the supplementary estimates when the salary of the leader of the opposition is provided for in the House of Commons Act. I would like to go a little further than (that and point out that there is another circumstance which the Prime Minister evidently has not taken into consideration. The government of which the Prime Minister is now head took office on December 29, 1921, if I am not mistaken, and after the general election prior to that Mr. Meighen did not have a seat in the House and had to wait until such time as a seat was opened to him dn order to enter the House. Another circumstance which we must remember is the fact that the party led by Mr. Meighen was not the second largest party in the House and could not claim in any way to be the official opposition. The Conservative party had something like fifty-one members whereas the Progressive party had about sixty-three, and it was not determined until March 6 or 7 which of those two groups would form the opposition. Under no circumstances could Mr. Meighen and the Conservative party claim the opposition benches until such time as the Progressive group had made a decision as to whether or not they would form the opposition. I think it was on March 6 that the Progressive group decided not to become the official opposition, and that information was transmitted not only to the Prime Minister but to Mr. Meighen as well, as leader of the Conservative party. Under the circumstances Mr. Meighen never was the deader of the official oppposition at that particular time. I am not objecting to the amount of the vote, but 1 do think at this late hour of the day and in view of these circumstances it is pretty small to include that sum of money in the estimates.


[Stage Direction]
Item agreed to.
Resolutions reported, read the first and second time and concurred in.


[Stage Direction]
Hon. J. A. R.OBB (Minister of Finance) moved that the House go into committee of ways and means.
Motion agreed to and the House went into committee, Mr. Johnston in the chair. .
Supply Bill
James Alexander Robb: Resolved that towards making good the supply granted to His Majesty on account of certain expenses of the public service for the fiscal year ending 31st March,- 1927, the sum of $575,204.22 be granted out of the consolidated revenue fund of Canada.


[Stage Direction]
Motion agreed to.
Resolution reported and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 151, for granting to His Majesty a certain sum of money for the public service of the financial year ending March 31, 1927.
Motion agreed to and bill read the first and second time and the House went into committee thereon, Mr. Johnston in the chair Section 1 agreed to.
On section 2-$575,204.22 granted for 192(5-27 Mr. GUTHRIE : The arrangement was -that we were to receive certain information when this bill reached the committee stage, -and I assume that the Minister of Finance will move that the committee rise now.
James Alexander Robb: I move that the committee rise, report progress and ask leave to sit again. Progress reported.
On motion of Mr. Mackenzie King the House adjourned at 11.25 p.m.
Wednesday, March 16, 1927