1928-05-22

[Stage Direction]
Bill No. 322, respecting a certain patent of Jean Baptiste Hurteau-Mr. Prevost.
Bill No. 323, for the relief of Violet Claire McCredie.
Bill No. 324, for the relief of Garnet Britten Walton.
Bill No. 325, for the relief of Rebeina Pearl Bolingbroke.
Bill No. 326, for the relief of Manassa Fretz.
Bill No. 327, for the relief of Charles Henry Clifford.
Bill No. 328, for the relief of Joseph James Harold Graham.
Bill No. 329, for the relief of Bernice Alberta Haight.
Bill No. 330, for the relief of Rose Eadie Harris.
Bill No. 331, for the relief of Mildred Florence McGowan.
Bill No. 332, for the relief of Gabrielle Norton.
Bill No. 333, for the relief of Grace Elizabeth Parker. [DOT]
Bill No. 334, for the relief of Charles St. Clair Parsons.
Bill No. 335, for the relief of Ivy Reader
International Peace
[Stage Direction]
Bill No. 336, for the relief of James Ramsey Sloan.
Bill No. 337, for the relief of Harold Wilfrid Vivian Vincent Turner.
Bill No. 338, for the relief of Gordon Thomas Wilson.
On division.

Mr. L. J. LADNER (Vancouver South):: Under the heading of motions may I, at the request of certain of my constituents, present a petition signed by 11,577 people of the city of Vancouver in protest against the action of the government in cancelling the radio broadcasting license of the International Bible Students Association?



DECEPTIVE MINING LITERATURE

[Stage Direction]
On the orders of the day:
Hon. R. J. MANION (Fort William):: Has the Postmaster General any statement to make in regard to the tipster sheet which I passed across to him the other day? I thought he might make an investigation into it.


Hon. P. J. VENIOT (Postmaster General):: I was just writing a note to the hon. gentleman. I have made an investigation. No definite conclusion was reached yesterday as a result of the investigation made, but to-day we have been able to arrive at a definite conclusion and an order of fraud in the mails has been issued and will be enforced against these sheets so that circulation in Canada will be prevented.


Robert James Manion: Just in that regard, a
friend of mine in the city of Quebec has sent me another group of the same type of sheets and he states that Quebec is being flooded with them. I am going to send them across to the minister for the same purpose.


Peter John Veniot: I received half a dozen of
them this morning from different parties.



INTERNATIONAL PEACE


[Stage Direction]
On the orders of the day:
Mr. H. B. ADSHEAD (East Calgary):: Some time ago I directed a question to the Prime Minister as to whether Canada had been asked to sign the peace treaty with the United States which Secretary Kellogg has invited the other great powers to sign. May I to-day receive a reply to that question from the Prime Minister?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Shortly after noon to-day
the minister of the United States called at my office and stated that he had been instructed to extend in the name of the government of the United States a cordial invitation to His Majesty's government in Canada to become one of the original parties to the treaty for the renunciation of war which is now under consideration. It was agreed that the text of the invitation should be made public in the United States, Canada and elsewhere in Friday morning's press. An answer has not yet been sent as there has not been an opportunity to have one prepared, but an answer to the communication will be sent very shortly.



TRADE TREATIES WITH GERMANY AND CUBA

[Stage Direction]
On the orders of the day:
Robert James Manion: Statements have appeared in some of the papers about a trade treaty being negotiated by this government with Germany, and also about the Cuban trade treaty. Has the Minister of Finance any statement to make to the house as to the progress being made with these trade treaties, and are there any particular items of them that he would like to communicate to the house?


Hon. J. A. ROBB (Minister of Finance):: We did have certain preliminary negotiations with Germany a little more than a year ago, but we did not make much progress because we concluded that what Germany was offering was not advantageous to Canada as compared with what we would be giving to Germany.
As regards Cuba, as my hon. friend knows, there is an agreement at present in force. I think I advised the house early in the session that we have a most favoured nation agreement with Cuba pending negotiations in connection with a treaty.


Robert James Manion: Do I understand the minister to suggest that the German trade treat, is called off altogether at the present time?


James Alexander Robb: There are no negotiations
whatever with Germany at the present time. Certain Canadians who have recently been in Germany have returned to Canada and they have represented to me that Germany is prepared to modify her ideas as regards tariffs, but we have been so busy during the session that we have not had time to consider the matter and we are awaiting the next move from Germany.

Steel Industry-Mr. MacDonald (C.B.)



SUPPLY-STEEL INDUSTRY

[Stage Direction]
Hon. J. A. ROBB (Minister of Finance) moved that the house go into committee of supply.
["I would call attention to the fact that it is after nine o'clock."]
Mr. FINLAY MacDONALD (Cape Breton South):: (a)	Appropriate tariff adjustments; and
(b)	Bounty.
Paragraph 25 says:
It was submitted that the tendency of the tariff, as affected by successive alterations, has been to lessen the protection upon the primary products of iron and steel and to encourage their importation from other countries as being the raw materials of iron and steel-fabricating and finishing industries in Canada.
In respect of this matter, we do not conceive it to be our duty to express any opinion, since the question is, as we were informed by the chairman of the tariff advisory board, who met us at our request, at the present moment under the consideration of that board. But we do regard it as our duty to record that the significance of this industry to the maritime provinces was forcibly brought home to us, not only in the manufacturing towns we visited in the maritimes but also throughout the agricultural districts of the martimes. We record this in order to emphasize the need for prompt action.
Then, with regard to bounties, paragraph 26 says:
It was pointed out to us that, at its inception, the Nova Scotia steel industry enjoyed national aid in the form of a bounty. This system of bounties prevailed for many years.
We were asked to recommend that a bounty should be again made avilable. In this connection we have thought it right to give consideration to a point which was emphasized in the course of thfe evidence, vi.-that a drawback of 99 per cent of the duty is given when imported coal is used for metallurgical purposes, and that this is tantamount to giving a bonus of that amount, since it means that the Dominion is yielding up money which otherwise under its general policy in regard to bituminous coal would accrue to it. While there are, no doubt, other angles from which this concession can

3250	COMMONS
Steel Industry-Mr. MacDonald (C.B.)
be regarded, it does in its operation have the effect of a bonus, and it is difficult to see how the same bonus can be denied to native coal.
Having regard to the bounty system previously applied, and to this aspect of the application of the drawback-
Then comes their recommendation:
-we recommend that a bonus should be given in respect of steel when Canadian coal is used in its manufacture, and that the bonus should be calculated on the basis of the present drawback for every ton of coal used in such manufacture.
Here we have a specific recommendation made by this commission, namely, that a bonus should be granted out of the federal treasury to the steel industry, calculated on the amount of coal that it takes to produce a ton of steel.	.
I read now from the brief supplied to the Duncan commission on which this recommendation was based:
The Steel And Coal Industries
The steady decadence of the steel and coal industries of Nova Scotia in the past four or five years has contributed far more than any other single factor to that general condition of business decline in which the recent movement for maritime rights finds economic sanction. These industries, when operating normally, support wage-earning communities comprising a quarter of the population of the province. Directly vital to six of the eighteen counties of Nova Scotia, they indirectly influence economic conditions in every part of the maritime provinces. The centres of population which have grown up around them have for many years constituted the best and most readily accessible market for the farmers and fishermen of eastern Nova Scotia and Prince Edward Island, for the fruit growers of the Annapolis valley, for the industries and mercantile houses of Halifax, Moncton and Saint John. Depression of the coal and Bteel industries must inevitably be reflected in disturbed economic conditions in the whole maritime region.
As has been said, tariff protection to Canadian industries is the approved and accepted national policy of the Dominion. It is not the purpose of this review of the situation either to defend or to criticize that policy. All that is relevant to the case is to point out that, while it is maintained, Nova Scotia industries may fairly claim to be entitled to share in its advantages to the same degree as the major industries of Quebec and Ontario. Protection, or free trade, or an exclusively revenue tariff may be advocated with some show of logic, hut surely no reasonable defence, no consideration based on equity or sound public policy, can be advanced in support of a system under which Nova Scotians are compelled to buy what they consume in a substantially protected home market, and to sell what they produce in a virtually unprotected one. Before suggesting a remedy for this anomalous condition, it is important to review the stages and retrace the steps by which it has been reached.
iMr. F. MacDonald.]
About thirty years ago the iron and steel industry was established in Nova Scotia upon a large scale and, because of its essential relation and vital importance to the coal industry, should be considered in conjunction with it. Like coal mining, the manufacture of steel at its inception was given assistance from the national treasury, both in the form of bounties on tonnage output and protective duties against. competing products entering Canada. The compelling reason for the establishment in eastern Canada of a large scale steel plant, was that here, and here alone in the whole Dominion, -were the conditions to be found which rendered possible the growth of such an industry, with its three roots in British soil. These three roots are Nova Scotia coal, Nova Scotia limestone, and Nova Scotia or Newfoundland iron ore.
The system of bounties to the steel industry was maintained from 1900 to 1911, when it was discontinued. The duties on steel and steel products, established in 1907, were, like the coal duties, specific amounts per ton. When these duties were imposed, steel prices were such that the industry then enjoyed a tariff protection ranging from 20 to 35 per cent on its various products. To-day those products have a market value of from twice to three times what it was in 1907, but there has been no upwmrd revision of the duties from then till now. The consequence is that the average duty on the output of the Nova Scotia steel industry is to-day less than 10 per cent, while many of its most important products have been placed on the free list in order to assist Ontario industries using steel as a basic material to meet American competition in central Canada.
As is pointed out in this brief, there has been a great decline in the steel industry of Nova Scotia; of that there can be no question. One of the greatest authorities probably in Oanada on the steel and coal question is Mr. F. W. Gray, and in Iron and Steel of Canada for January, 1928, there appears an article by him pointing out this fatal decline in the steel industry, and naming the various industries that have declined in production or gone out of business entirely. Let me quote from this article:
In 1913 there were in Canada twenty-two blastfurnaces, of which five had for some years been idle. In the autumn of 1927 there were in blast only four furnaces.
Following is the number and operating condition of Canadian blast-furnaces in 1913-as given by the director of the Mines branch at Ottawa-and the present conditions, as nearly as can be ascertained, viz.-
Dominion Iron & Steel Company, Sydney, Cape Breton. Six completed furnaces, two operated throughout 1913, four for 344, 334, 222 and 140 days, respectively. Condition at end of October, 1927, was one furnace in operation, and prospect of second furnace being blown in during November.
Nova Scotia Steel & Coal Co. Ltd. In 1913, one furnace at Sydney Mines, Cape Breton, operated 365 days. An additional stack was erected in 1918, but was never blown in. Both furnaces have been continuously idle since some time in 1920.

Steel Industry~Mr. MacDonald (C.B.)
Londonderry Iron & Mining Company, Londonderry, Nova Scotia. In 1913, one furnace, idle throughout that year, and since abandoned.
Canada Iron Corporation Ltd. Two small furnaces at Drummondville. Que., and one at Radnor Forges, Que., all idle throughout 1913. Two furnaces at Midland, Ont., operated for 226 and 172 days respectively during 1913. One of the Midland furnaces was in 1917 sold to the Algoma Steel Corporation, and was re-erected at Sault Ste. Marie. In 1927, all the smaller furnaces have been continuously idle since 1913 and are therefore abandoned. The single stack remaining at Midland, Ont., has been idle for yea rs.
Standard Iron Company of Canada, Dese-ronto, Ont. One furnace at Deseronto, operated for 220 days during 1913, and one furnace at Parry Sound, operated 92 days in 1913. In 1927 these furnaces stand in an abandoned condition, having been idle for years.
The Steel Company of Canada, Ltd., Hamilton, Ont. In 1913 two furnaces operated, one for 259 days and the other for 309 days. In 1927 these blast furnaces remain without addition to producing capacity, and one furnace only was in operation in October.
The Canadian Furnace Co., Ltd., Port Col-borne, Ont. One furnace, operated 95 days. This furnace has been idle since November, 1924.
Algoma Steel Company, Ltd., Sault Ste. Marie, Ont. Three furnaces operated for 361, 365 and 322 days respectively in 1913. In 1927 this company has four furnaces, including the one moved from Midland in 1917. One furnace only was in operation in October, 1927.
Atikokan Iron Company, Ltd., Port Arthur, Ont. One furnace of 100 tons capacity idle since 1911, and now presumably abandoned.
That tells the story of the decline of the steel-making industry in Canada during the last few years. What causes have contributed to this decline? As to this, we are also in possession of the opinion of a leading authority, Mr. Rosts H. McMaster, the president of T.he Steel Company of Canada. In the May issue of Industrial Canada, he writes:
Our adopted form of federal taxation derives the largest share of its proceeds from organized business, so it seems abundantly evident that industry, in manufacturing and other lines, should be preserved in a healthy state.
It should be equally recognized that, when products manufactured in Canada yield almost twenty-five cents in taxes for every dollar of added value produced, it is a poor bargain for this country to admit commodities similar to those produced at home without payment of any contribution to our federal or other exchequers.
A contrary policy, however, has been followed, as an examination of our tariff reveals that there are 55 items which admit steel and iron of various descriptions duty free, or provide a drawback of substantially the entire duty when intended for particular purposes.
I want to put on record the items in the customs tariff relating to the duties on iron and steel. Item 1002 reads:
56103-206J
Rolled iron, rolled steel and pig iron: when used in the manufacture of mowing machines, reapers, harvesters, binders and attachments for binders.
Item 1005 reads:
Steel under one-half inch in diameter or under one-half inch square: when used in the manufacture of locks and knobs.
I would refer the house to the foregoing items and also to items 1006, 1007, 1009, 1015, 1019, 1021, 1026, 1028, 1036, 1045, 1046. 1047, 1048 and 1049. Anyone who cares to look up these items will find out for himself that the steel industry of Nova Scotia has been discriminated against.
In addition to its function of producing revenue, the customs tariff is expected to give equal protection or assistance to working people in the matter of wages and continuity of employment. It is submitted that a ton of steel produced in Nova Scotia, at a cost of $40, represents about twice as much directly in Canadian labour and, indirectly in Canadian material produced by Canadian labour, as a ton of similar steel produced elsewhere in Canada, So much for the decline of this industry, and so much for the cause of it.
For some years the industry fought a losing fight in Nova Scotia and the effect was not confined to the industry itself; it extended particularly to the great coal mining industry with which it is allied. But it was felt also, as is pointed out in one of the articles from which I have quoted, throughout all the industries and all the commerce of eastern Canada, The maritime provinces, as had been frequently stated, had been going behind and for many years had been losing their population. The people, young and old', had been leaving the country; farms were being abandoned; banks were going out of business; and their trust companies tad financial institutions were gradually leaving them and going to the larger centres. Then last, but not least, came the threatened collapse of their great industry'. It was this prospect that caused many thoughtful people throughout the maritime provinces to get together some few years ago to look into the reasons for this decline with a view to suggesting the remedy to be applied. Out of this welter came the movement which afterwards was known as " maritime rights", a movement which at its inception was more or less an object of ridicule. Many people appeared to affect a sort of laughing attitude when considering this question of maiitime rights, and the poor political prophets did not see in that movement a cloud which, while no larger than a man's
3252	COMMONS
Steel Industry-Mr. MacDonald (C.B.)
hand when it first appeared on the political horizon, gradually grew in extent. They did not then recognize it. In 1921 the Liberals swept the province of Nova Scotia from end to end; not a solitary Conservative was elected to this house from that province. In the local election an almost similar result obtained, for in a house of forty-three members there were only three Conservatives. Surely, they thought, under such circumstances they could afford to ignore this movement, which some of their members designated pure propaganda. And they tried to ascribe it to the' desperate efforts of some Tories to rehabilitate themselves in political life. But it went a little deeper than that. It was not a political movement at all at its inception, nor did it become so later. But the first indication, or the first sign that should have been an indication, of the growth of this movement came in 1923 when the solid block from Nova Scotia was broken by the election of my hon. friend from Halifax (Mr. Black). Then followed the local elections in 1925. Here, of course, they felt on very firm ground. They had been in power in Nova Scotia for such a length of time that the memory of tnan runneth not to the contrary. For over forty years the Liberals had controlled the destinies of that province, and they got so at last that they could not distinguish between their own money and the people's-with somewhat disastrous results to some of them after the Conservatives came in. However, they went into the election, of 1925 with banners flying and with a very confident air of victory. But they came back with the figures reversed:	there were forty Conservatives
elected and three Liberals. That surely should have been some indication that the movement was gaining ground. Followed elections in the provinces of New Brunswick and Prince Edward Island. It should, I say, have been a lesson to those people who were paying no attention at all to this demand of the maritime provinces for recognition of their rights. But they continued to ignore the growth of that movement, and even the right hon. the Prime Minister himself (Mr. Mackenzie King), when touring the province in 1925, affected a sort of jocular attitude and asked, " What are these maritime rights?" The right hon. gentleman got his answer in the election that fallowed, because of that solid bloc, elected to support him in 1921 only two re' turned as a result of the 1925 conflict. But whatever may be said of the right hon. gentleman, no one can discount his resourcefulness; and at the opening of parliament in 1926 he inserted in the speech from the throne the 
following paragraph which he thought would certainly have some effect in placating those who came from the maritime provinces:
With a view to affording such remedies as may appear to be practical and appropriate, the government also propose to appoint a royal commission to inquire fully into the claims that the rights of the maritime provinces in regard to the operation of the Intercolonial railway have not been observed, and that in regard to transportation, immigration, and other economic factors these provinces have suffered prejudi-cally, in their position under confederation.
That idea did not commend itself to members from the maritime provinces; the history of previous investigations by commissions of this kind showed them only too well the danger which might result if that course were followed. We did oppose the appointment of any commission. In that we may have been wrong; I am not going to say now that we were not wrong, as it has turned out, but we thought at the time that before a committee of this house we could bring all the evidence of the conditions in the maritime provinces which would justify the house in believing there was something wrong with economic conditions in that part of Canada, and we thought we could suggest remedies for those conditions. The house will remember that during the session of 1926 all those who were opposed to the idea of maritime rights rose in their places and said how sympathetic they were and how much they desired to help us if only someone would tell them what maritime rights were. We thought we could tell them if we had a committee of the house, but the government thought otherwise and appointed Sir Andrew Rae Duncan, Professor Macmillan and Judge Wallace as a commission.
As soon as that commission was appointed our whole attitude changed; we loyally accepted the commission and appeared before it. Our three local governments prepared briefs in which they submitted their case to the commission; those gentlemen went into every aspect of the situation and followed up every clue which they thought might be of benefit. Let me here refer to a remark made by the hon. member for Cartier (Mr. Jacobs) in discussing the findings of this commission. He said this was an ex-parte commission, and I want to correct that impression; it was not an ex-parte commission in any sense of the term. The commission did not confine itself to the evidence laid before it by the interested parties; it went all over the country calling witnesses and seeking in every manner to obtain information which would permit of an honest and just

Steel Industry-Mr. MacDonald (C.B.)
finding. It concluded its work and filed its report with the government in September of 1926.
That report came as a great surprise to many people, who had been led to believe that there was nothing in this cry of maritime rights, that it was nothing more or less than the groans of a number of disgruntled' politicians who were looking for office. These people found from the report that there was something very wrong with conditions in the maritime provinces, so we looked with considerable anxiety to the attitude the government would take in connection with the report. On March 18, 1927, the Prime Minister made his statement with regard to maritime claims and the Duncan report. I do not propose to read it all but I will quote that paragraph which is germane to the point now under discussion. He said:
The recommendation of the commission that the tariff advisory board should be asked to give immediate consideration to the customs tariff in its relation to coal, anthracite and coke has been met. The matter is now before the tariff advisory board. It would appear desirable at this point to recall that at the session of 1925, as a means of assisting coal production in the mardtimes, the customs duty on slack coal was raised from 13 cents to 50 cents. The question of protection on the primary products of iron and steel was, as stated in the report, under the consideration of the tariff advisory board at the time of the commission's investigation. Owing to the existing uncertainty of conditions surrounding the iron and steel industry in the mardtimes. the government does not feel in a position to make at present any pronouncement with respect to the commission's recommendation of a renewal of the system of granting bounties with respect to steel when Canadian coal is used in its manufacture.
Then the Prime Minister concluded his statement in the following words:
In concluding this statement, may I say that the government hopes that, by accepting as we have, the recommendations of the Royal Commission on Maritime Claims, virtually in their entirety, parliament and the country will recognize in the attitude of the government a wish to remove this great question as largely as possible from the arena of sectional discord and party strife, and a desire to give to our Dominion in the sixtieth anniversary of its founding, a renewed expression of the spirit which animated the fathers of confederation in their efforts to construct out of British North America a federal union under a system of government devised "to protect the diversified interests of the several provinces and secure efficiency, harmony and permanency in the working of the union."
That eloquent peroration on the part of the Prime Minister appealed to many of us; we thought the government had dealt fairly generously with us. I am free to confess, however, that there was a difference of opinion
among the maritimers on that point; some of us believed that we should give the government credit for what they had done, and also make it clear to them that they were simply carrying out an instalment of the recommendations rather than virtually complying with all of them. Some others, and probably time has proved the wisdom of their prophecy, felt that the government did not intend to implement the Duncan report in its entirety, and they thought it just as well to say so frankly at the time. That difference of opinion continued until the fall of 1927, when the genial and gentlemanly Postmaster General (Mr. Veniot) appeared before a meeting at St. John and announced what we considered at the time and what we still consider to be the policy of the government. There he said that when the budget came down there would be good news for the people of the maritime provinces, that everybody would be glad, that the government had already implemented the Duncan report with the exception of the recommendations touching the Valley railways and the steel bounties, and now when the budget came down the people of the maritime provinces would see that this great paternal government here had dealt with these matters in such a way that the people of the maritimes would be glad. I am happy to see that the Postmaster General has just taken his seat. This matter has been brought to the attention of the house several times and his remarks have been quoted here. When the budget debate took place we expected him to make a clear-cut pronouncement as to what he meant at that time, when he gave that news to the people of the maritime provinces. We do hope that he was not speaking entirely without authority, and that he had something up his sleeve. He hope that the hon. gentleman is going to carry out his promises to the maritime provinces before this session closes.
Such is the position at the present time. Those of us who put confidence in the government's promises one year ago were led to expect that when the time came they would fulfil all the recommendations, not only virtually but substantially in their entirety. Here is one clearcut reoomendation: a bounty of 50 cents a ton on native mined coal, used in the production of iron and steel.
What is the attitude of the government? I presume we can take that attitude to be defined by our representative in the cabinet, the Minister of National Defence (Mr. Ralston). On March 5, when the minister spoke on the budget, regarding this question of the Duncan report, he said:
3254	COMMONS
Steel Industry-Mr. MacDonald (C.B.)
But there still remain certain things to be done. It seems to me that it is in the interest of this industry and in the interest of the Dominion that-first, there should be unity between the coal and steel businesses. Secondly, there should be a shrinkage of the capital so that the industry will have an opportunity of earning a dividend on some reasonable investment. Thirdly, the unwieldy organization should be simplified. It now consists of some fourteen companies. Fourthly, there ought to be co-operation by the provincial and municipal authorities in the work of building up this great industry. With the litigation ended and these conditions met, the way will be open for serious consideration by the federal government of the presentation of the real and legitimate needs of the industry.
That is very far from implementing the Dimoan report with regard to the bounty on steel. The Duncan report calls for a bounty, it does not call for any unity of industry, because they are all united. It does not call for any simplification, because they are all one concern now. The co-operation that the minister asks for has already been accomplished. The city has given the concern a five-year lease at a nominal rental and all these conditions were fulfilled before the minister made his speech. But if they were never fulfilled, they are conditions that should never be imposed on this industry. The Duncan commission made certain specific recommendations, and they should be carried out, or the government will have to take the responsibility.
The Minister of Finance (Mr. Robb), speaking on April 16, 1928, referring to the hon. member for Vancouver Centre (Mr. Stevens), said:
All he has done recently has been to tell the people of Canada who sometimes complain that this government have not reduced duties to the extent expected-and I am talking more particularly of the people who support this government

that by our trade agreements with other countries we have materially reduced the customs duties on goods coming into this country. I am not backing away from that point. We have materially reduced the duties. When our friends quote the general tariff as the measure of protection, they are all wrong. The duties on most of the items imported are based on the British preference or on the trade agreements which we have made with other countries, and we have exposed our own industries- I admit it frankly-to keen competition with other countries throughout the world. That is the policy of the government and the policy of the Canadian people as determined at the polls. Just as soon as they decide for a higher tariff they will elect by hon. friends opposite :o office.
The customs returns for March, 1928, show that over $260,000,000 worth of iron and steel and their products were imported into the Dominion. These goods should have been manufactured here and every dollar of that
fMr. F. MacDonald.]
money kept in the country. I received a telegram which I read in the house before showing the feelings of the men employed in this great industry. This telegram, dated February 19, 1927, is addressed to me and I will read it again:
Elected representatives of three thousand steel workers in conference this date urge that immediate action be taken by your government to adopt the recommendations of the Duncan Royal Commission on Maritime Rights.
J. J. Holmes,
Secretary
Genera] Works Committee, Dominion Iron and Steel Co. Ltd.
Our case for remedial legislation with respect to the steel industry is not based on a demand for any particular fiscal policy, but on a claim for equal treatment with other important Canadian industries under any general federal policy approved by parliament. It is repugnant to the federal idea that any province should be compelled to buy in a protected market and sell in an unprotected one. Steel and ooal represent to the people of Nova Scotia what the vast chain of industries established throughout Ontario and Quebec mean to the people of central Canada. This industry should be encouraged and conserved for the following reasons:
1.	All its raw materials are derived from British sources.
2.	It is essential to winter employment in the coal fields of Nova Scotia.
3.	Linked up with the coal industry as it is, it is by far the most important enterprise, in an economic sense, in the maritime provinces, where all classes and occupation are directly concerned in its prosperity.
4.	There can be no assured, independent industrial future for Canada., unless the basic products of iron and steel, which constitute the raw materials for so large a range of other industries, can be furnished from Canadian sources. No single case can be cited of a great manufacturing country which is dependent for its supplies of iron. Steel and ooal on the resources of its foreign industrial rivals.
5.	It would be difficult bo over-estimate the future economic value to Canada of a well established iron and steel industry, deriving its raw materials from native sources, and oapaible of expansion from time bo time to meet the requirements of the home market. In the fiscal year ended March 31, 1928, upwards of $260,000,000 worth of iron and steel and their products were imported into the Dominion. Canada is to-day the best outside market the United States has for such products, and it is a market which is inereas-

Steel Industry-Mr. Cantley
ing in capacity year after year. That the Canadian steel industry should be allowed to languish and decline under such circumstances; that Canadian plants should slow down their production below 50 per cent of their capacity at the .very peak of the home market demand, is surely notice to the whole country of the urgent need of some revision of the public policy, under which such conditions are possible.
In view of these circumstances, Mr. Speaker, I beg to move, seconded by Mr. Cantley, the amendment now in your hands.


Mr. THOMAS CANTLEY (Pictou):: Mr. Speaker, a year ago or a little more I called the attention of the house to this same subject. I did so at that time with the full concurrence and support of my then chief, the then leader of the Conservative party on this side of the house. As the hon. member for South Cape Breton (Mr. MacDonald) has stated; some of my friends differed with me in regard to the wisdom of acting as I did. Some of them then had a little more faith in the government than I then had; as a matter of fact I had very little then and I have very little still.
In dealing with the matter a year ago I referred to the various provisions of the report of the Duncan commission and I stated that they might be reduced to eighteen. There has been some little change in regard to some of these as they have to a certain extent been further implemented than they were a year ago, but in the main there is very little difference. The twenty per cent freight reduction in part, has been applied. I say in part because it has been applied only in part. What important feature of the twenty per cent freight reduction has not been implemented? I refer to the international traffic, traffic originating in Canada and destined for points in the United States. So far as that is concerned we are not getting what the Duncan commission suggested we should get, with the result that a large portion of the freight originating in Price Edward Island and the great majority in value and tonnage of the freight originating in New Brunswick and to some extent in Nova Scotia are denied the twenty per cent reduction. I am referring to potatoes and lumber. Another recommendation of the Duncan commission was the enlargement of the scope and power of the railway commission. That has not been implemented. The recommendation in regard to the horizontal war freight increases has not been implemented.
I now come to the Prince Edward Island car ferry and I will refer to what the commission stated in regard to that; they dealt at considerable length with and made some recommendations in regard to the question of transportation for Prince Edward Island Some of those recommendations have been carried out and some have not. A portion of the island railway is still a narrow gauge road and on that portion it is impossible to-day to operate the modem refrigerator or frost-proof railway cars, so that the people in that section of the country are not able during the winter months to take advantage of railway facilities as are their brethren in other portions of the island. That portion of the Duncan commission's report has not been implemented. The commission dealt at length with the question of the car ferry. They said that they had taken the matter up with the railway people and that it was admitted that the boat service was unsatisfactory. They went on to state:
The railway administration admitted that there was need for supplemental provision being made in the form either of a second ferry boat or a special freight boat. We recommend that the matter be gone into from the point of view of placing at the disposal of the island such satisfactory means of communication as will ensure as regular and complete a service as can reasonably be made. We further recommend that, so far as the ferry boat service is concerned, it should not be run as part of the railway operations-
And so on. That last recommendation is a matter in which I am not particularly interested, but much can be said in regard to the car ferry. I find that some time ago the matter was taken up and a memorial was presented to the Railway department by the producers, merchants and exporters of the province of Prince Edward Island. Among other requests which they made was one that there should at once be built and put upon the connecting route a powerful, icebreaking car-ferry steamer equal in strength, power and capacity to the steamer Prince Edward Island now used as the connecting link, thereby affording better facilities and minimizing the risk of a dislocation of traffic by accidents of navigation. That was some time ago. Then I find that the Prince Edward Island Associated Boards of Trade in August, 1927, went on record and passed a resolution in regard to the need of a second car ferry on the Borden-Cape Tormentine route as recognized by the maritime royal commission.
I find that another resolution was passed on January 18, last, as follows:
Resolved that the representatives of this county, in the House of Commons, and also the representatives of Prince and Kings counties, and the four Prince Edward Island senators be
Steel Industry-Mr. Cantley

urged to exert every effort to impress upon the government and parliament of Canada the necessity and urgency that provision be made for the immediate construction of a new steamer for the Prince Edward Island car ferry service
The hon. member for Queens (Mr. Sinclair) was present and agreed with the sentiments expressed in the resolution. Resolutions asking for a second car-ferry steamer have been passed by boards of trade on numerous occasions and sent to Ottawa. In September, 1920, the Maritime board of trade at its annual meeting in Amherst unanimously passed a resolution asking that another car-ferry steamer be provided.
I have under my hand a letter received from a gentleman who is a native of Prince Edward Island, a citizen of Charlottetown, with interests in other sections of the island and intimately connected with business and farming interests throughout the island, a man whose word would be accepted by anybody in the island who knows him. He writes as follows:
Several prominent citizens here have suggested a public meeting to urge on the government the fulfilment of the Duncan report for the island. They seem of the opinion it is better to wait until the estimates are brought down. Then we shall know if the government is serious about a second ferry boat. The Island Farmers' Association-a very large and influential organization here-passed strong resolutions recently requesting, even demanding better transportation. The Associated Boards of Trade have left no stone unterned.
Then he goes on and says further:
Here is an illustration of our need: You know that potatoes are our great commodity. Within the last year or two winter marketing of them has greatly increased because the southern traders who supply the American farmers with our seed stock do not want to keep them in warehouses there. They want them delivered only as the southern farmers need them. Go any day when the thermometer registers 20 or over, one may see hundreds of teams on our country roads. But the great difficulty is a famine for cars. The ferry cannot bring in empties-refrigerators-fast enough nor export loaded ears fast enough. At the present time the shippers are three hundred cars short, and they are half crazy to get their supply away for they fear a slump in prices and some of them would be ruined. Then the southeast section of the island which is served by a narrow gauge line are still -worse off. There are no frost proof cars for narrow gauge tracks. They have to ship in ordinary cars and many carloads have been ruined by freezing. Those farmers are moreover discriminated against by the expense of an extra handling of their shipments into broad gauge ears. And yet, John E. Sinclair will say the farmers are satisfied.
I have a further letter, dated May 5, which deals with the same subject, but I shall not burden the house with that, though it is even stronger than the other one.
[Mr. Cariiley.l
I have also a resolution which was passed unanimously by the government of Prince Edward Island on the 26th of April last, as follows:
Whereas in this province the production of potatoes for both seed and table stock is becoming annually of greater volume and value;
And whereas there is evidence that the acreage planted with potatoes in 1928 will exceed by 20 per cent the acreage of 1927;
And whereas the transportation facilities as provided were not sufficient to move the 1927 crop of potatoes at a time when they should be marketed.
Then follow a number of other "whereas" clauses, and the resolution concludes:
Resolved that this legislature now assembled hereby strongly urge the federal authorities to take immediate action for the construction of a new and suitable car ferry to be placed on the Borden-Tormentine route at the earliest possible date.
Moved by Horace Wright and P. A. Scully.
I am sorry the Minister of Railways (Mr. Dunning) is not in his place, because I would like to get some information from him in regard to the position and the condition of the three ferry boats-the Prince Edward, and the Scotia No. 1 and the Scotia No. 2. I think the house is now familiar with the situation so far as the ferry service between Tormentine and the island is concerned, and the necessity for that service. I will now refer to the character of the steam ferry boats operated by the railway department. The steamer Prince Edward Island is a boat thirteen years old. She is off that route just now, and will be off it for a month. She has been off the route every year for about the same length of time, due to the fact that she has to dry dock at Halifax and pass her annual survey. It will be within the knowledge of all my friends in the house who are familiar with shipping that all steel vessels, on obtaining the age of ten. years, have to pass what is known as their No. 3 survey, and after that undergo an annual survey and overhaul. Some of these surveys are more exacting and take a longer time than others, and in the case of a boat as old as the Prince Edward Island about one month is required to complete the inspection and overhaul. This boat is one of very considerable power. She has three sets of triple engines, two sets aft, and one set forward. She has considerable water ballast, although not as much as she should have in view of the conditions under which she has to work, the total water ballast being 689 tons. This vessel was built under special survey at Lloyd's, so far as her machinery and boilers were concerned, but so far as I can find from Lloyd's register, and I

Steel Industry-Mr. Cantley
have looked up the last volume available, which is that for the present year, nothing has been done to maintain this vessel's classification. There is no indication on the book that her classification is being maintained. I do not say that it is not; I do not know whether it is or not, but there is no information on Lloyd's register that such is the case.
Now I want to contrast the treatment given this boat, and contrast her record in Lloyd's with the record of the three boats on the Pacific coast-the Prince George, the Prince John and the Prince Rupert, which were built for and operated in connection w;ith the Grand Trunk Pacific, now the Canadian National. The record shows that the boilers of all these three boats were inspected, one in January, one in February, and one in March of last year, 1927, but there is no such record so far as the Prince Edward Island is concerned. While this boat is away from the Prince IJdward Island service, her place is taken by one of the two boats which are on station at Mulgrave to maintain the traffic between the mainland and the island of Cape Breton. I do not know which of these boats is to-day relieving the Prince Edward. I have not been able to get that information;
I have asked for it, but have not been supplied with it. The Scotia I is the older boat of the two; she is twenty-seven years old. She was built at Newcastle by Armstrong, Whitworth and Company. This boat has no classification in Lloyd's. The other boat was built in 1915, the same year as the Prince Edward Island; she is thirteen years old. She is a considerably larger boat than the Scotia No. 1, which I think is the boat relieving the Prince Edward Island at the present time, but her power is less than one-half that of the Prince Edward Island while the oldest Scotia, which is twenty-seven years old, has about one-quarter the power of the Prince Edward Island. One or other of these boats is now attempting to do what the Prince Edward Island, a much larger and much more powerful boat, cannot do, that is to give an efficient service to the province of Prince Edward Island.
The question was asked the Minister of Railways at a meeting of the special committee on railways and shipping, as to whether any arrangements had been made for building this year an additional boat for this service, and I was told by the president of the road, and also I think by the Minister of Railways, whom I now see coming into the chamber, that no provision was being made this year in that respect, and that no amount would be provided in the estimates for this
service. Now that the Minister of Railways has come into the chamber I would ask him, will any provision be made in the railway estimates this year for a new island ferry boat to supplement the work that is being done by the Prince Edward?


Mr. DUNNING:: Perhaps my hon. friend
would give me a chance to get into supply, and then we can deal with such matters as are in the estimates.


Thomas Cantley: Pardon me, but that is
not a straight answer. I will give you all the time you want to answer my question now.


Charles Avery Dunning: You are preventing me
from answering it.


Thomas Cantley: I beg your pardon; I
am waiting for an answer now.


Charles Avery Dunning: I should be pleased to
deal with the railway estimates when my hon. friend permits me to get them before the house, but if it will help him at all, I can assure him that the people of Prince Edward Island are likely to be pleased with the estimates of my department relating to that province.


Thomas Cantley: I am glad to know that. I asked a similar question at a meeting of the railways and shipping committee, and received the answer that nothing was going to be done this year in regard to that matter.


Charles Avery Dunning: From whom?


Thomas Cantley: From yourself, I think,
and also from the president of the road. Am I reporting correctly what occurred at that time?


Charles Avery Dunning: I do not think so.


Thomas Cantley: Will the minister be good enough to tell me what answer was given me?


Charles Avery Dunning: I shall be very glad
to look it up in the proceedings of the committee.


Thomas Cantley: I have given the answer
that was given to me, and I think it is correct.


Charles Avery Dunning: If my hon, friend will
quote from the proceedings of the committee in relation to that matter, then neither of us will have to rely on our memory.


Thomas Cantley: I think I am usually able to rely fairly satisfactorily on my memory.	.
Perhaps the house would like to have some idea of how the Island people themselves
Steel Industry-Mr. Cantley

regard the matter. I have here a copy of the Charlottetown Guardian of February 11, 1928, in which reference is made to the Canadian Press report from Ottawa of February 8, and it credits the Postmaster General with the following:
Mr. Veniot declared that the recommendations of the Duncan report had been fully implemented with respect to Prince Edward Island, and this fact had already been pointed out by one of the members from that province.
The article continues:
Hon. Mr. Yeniot is evidently acting on the previous statement and assurance given in the house by Hon. John E. Sinclair, that he was entirely satisfied with the way the government had carried out the Duncan report recommendations in so far as it was possible to do.
Such an admission as this sent broadcast throughout the Dominion leaves a false impression and will do the ease of Prince Edward Island incalculable injury. As an instance, look at the interpretation the Hon. Mr. Veniot has placed on Mr. Sinclair's statement when he announces "that the recommendations of the Duncan report had been fully implemented with respect to Prince Edward Island."
Is Mr. Sinclair advancing the interests of Prince Edward Island by permitting such unjustifiable statements to be sent broadcast absolutely contrary to the facts? Will any prominent shipper, business man, or farmer in this province endorse Mr. Sinclair's statement ?
I will not detain the house by reading the remainder of the article. The matter is again taken up on March 11, when reference is made to the second car ferry and information requested. In the main it follows along the same lines as the preceding article from which I have quoted. I find a third article in which the members for Prince Edward Island on the government side are referred to as " rubber stamps." I will not weary the house by quoting it. It is in short a bitter complaint in regard to the way in which the island has been treated with respect to a second car ferry and the further extension of the standard gauge to the island railway.
Now, I cannot get the minister even to suggest that this year the department will provide an additional boat. Perhaps he will remember at this stage that two additional ferries are proposed for lake Michigan in connection with the western Grand Trunk division of the Canadian National Railways. Perhaps he will inform the house if those boats will be built this year, and if he thinks the interests of our American friends which would be served by those boats are more important than the interests of the people of Prince 'Edward Island.
One of the observations made by the Duncan commission is:

The outstanding fact, it seems to us, is that the maritime provinces have not prospered and developed, either in population, or in commercial, industrial and rural enterprise, as fully as other portions of Canada.
I propose to give lion, members some figures in regard to the increase in the population of the maritime provinces since confederation. I am going to contrast, in this respect, the three maritime provinces with Newfoundland. It is often said, particularly to our people of Nova Scotia: Had you not come into confederation, what would have become of you; what could you have done outside of confederation? Well, I desire to draw the attention of the house to the facts. In 1861, the year of the last census enumeration before confederation, Newfoundland had a population of 124,288; Prince Edward Island, 80,857; Nova Scotia, 330.857; New Brunswick, 252,047. The three maritime provinces combined at that time had an aggregate population of 663.751. In 1868, the year after confederation, it was estimated to be 771,799, and in 1921, 900,000. Now let me contrast with these figures the population of Newfoundland. In 1861, it was, as I have said, 124,288; in 1888, 131,000; and in 1921, 263 038. In other words, the percentage of increase over the same period in the case of Newfoundland was 112 per cent, while in the case of Nova Scotia it was under 60 per cent, and of New Brunswick under 54 per cent. Prince Edward Island actually lost population to the extent of 5 per cent as against Newfoundland more than doubling their population. The aggregate increase of the three maritime provinces was 36 per cent, contrasted with the 112 per cent increase of Newfoundland. Don't you think wTe could have got along had we of Nova Scotia remained without the Dominion of Canada? I make the assertion that the Dominion could not have been possible without the province of Nova Scotia; but Nova Scotia could have got along and done very well without confederation, measured by the experience of Newfoundland, where their resources are in no way comparable with those of my native province. Sir Andrew Rae Duncan refers to the fact that the people of Nova Scotia were able to take their place in regard to intelligence, energy and ability with the people of any of the other provinces. Reference has been made to the number of leading statesmen and professional men which Nova Scotia has supplied to the Dominion.
Now, a few weeks ago the Minister of the Interior (Mr. Stewart) made a considerable hullabaloo with reference to what one of his departments was doing in scientific research in the use of powdered fuels. I then

Steel Industry-Mr. Cantley
called his attention to the fact that that was an old story in Nova Scotia, where we had been using powdered fuel commercially and in an ordinary manufacturing way for at least fifteen years. Apparently in some directions about all that the minister's department does is to follow up, fifteen years later, work which has been successfully done by commercial companies and manufacturing institutions in other parts of the country. That is notably so with regard to the mining department of this government. A little later some reference was made in this house to a 6teamer which had made a round voyage from the United States to the old country under powdered fuel. That boat was the first boat in the world to be equipped with boilers fitted to burn powdered fuel. She is owned by the United States Shipping Board, but is operated by a private corporation. Now I hold in my hand a copy of the Morning Chronicle, of Halifax, the Nova Scotia organ of my good friends opposite, in which there appears a report of the trial trip of the steamer Lingan, owned in Nova Scotia by one of the coal companies, and recently equipped with a powdered fuel boiler installation. She is the first boat in the British Empire to have been so equipped, and the second in the world. The first boat so equipped, and to which I have already referred, was equipped by J. F. Page, the manager of the company operating the vessel. J. F. Page was the former superintendent of the Halifax shipyards, and is a son of Captain Page, a well known former shipmaster of River John, Pictou county and at one time in the employ of the Scotia Steel Company, New Glasgow. As I say, he is the man responsible for the first successful operation in the world of such an installation. The outcome of this venture, I have not the shadow of a doubt, will be that the cost of operating these coal boats will be considerably reduced, with this further advantage, that they will be operated entirely on slack coal which, as everyone knows, is today a more or less undesirable product. We use it of course in coking, but for powdered fuel it must be specially treated in exhaust-tube mills and reduced to a very fine powder about the consistency of talcum, with which some of my friends are perhaps familiar. I refer to this matter simply to show that we in Nova Scotia are not backward in any walk of life, and it is not to be suggested that for that cause the maritime provinces have occupied the position which they have unfortunately held for a considerable time.
The Duncan commission made a recommendation in regard to an additional payment, by way of subsidy, of the sum of $870,000.
This, they recommended, should be paid forthwith. The Prime Minister (Mr. Mackenzie King) last year told the house that he accepted that recommendation. The house rose in the latter days of April but the Minister of Finance (Mr. Robb), with his Scotch caution, did not pay the amount forthwith; he paid one-half in July and the other half he paid only after some of those participating in the interprovincial conference, which met in the city of Ottawa, had protested against the non-payments of the money. And then, instead of paying the balance which was overdue, he wrongfully, in my judgment, withheld $130,000, being an amount in dispute in regard to a claim which then was and still is sub judiee. Are we not justified in Nova Scotia in feeling that we are not fairly treated? I put ft to the house, I put it to the minister himself: if he were in our place would he not complain? I take it he would.
My hon. friend from Cape Breton South (Mr. MacDonald) has referred to the iron and steel industry; he has also made some reference to coal and coking plants. I told the house a year ago that the government's proposal in regard to a coking plant was of no use whatever to us. I repeat that statement, and I now wish to point out to hon. members what is taking place in Montreal. A large caking plant is being built there. Now, if the builders of that plant had had any intention of using domestic coal in connection with that installation they would have built the plant in or adjacent to the harbour of Montreal. But what have they done? They have built it on the canal bank where American coal can go directly to the plant, but where it is impossible to bring a ton of maritime coal except by transshipment by barges or railway cars. There is no possible doubt as to what their intention was; they located the plant in a place where it is practically impossible, due to transport charges, to use Nova Scotia coal. And that is all that this legislation will do in the way of assisting the coal industry of Nova Scotia. I pointed that out at the time, and my remarks in that regard have been amply justified by the evidence as stated.
So far as the iron and steel output of the country is concerned, it is unfortunately dwindling. Our March output was about 4 per cent below the output of the previous month. Our entire production of pig iron was only 74,000 tons, and of basic iron only 52,000 tons. In basic iron the amount was 22 per cent less than that of the previous month. The point to be noted is this: foundry iron is used simply for castings of various kinds-machinery castings,
Steel Industry-Mr. Cantley

stoves and goods of that sort. The progress of the steel industry is measured by the production of basic pig iron, which is used entirely for the production of steel; and the reduction in output of basic pig iron is, as I have stated, 22 per cent. It has been gradually falling off, while the importations of steel from the United States are increasing year by year and month by month.
I wish to make another appeal to the Minister of Finance to remedy the idiotic customs tariff schedule to which I called attention fifteen months ago. We have seventy items on the free list or with a 99 per cent rebate. Now what is the tariff board doing?-this precious tariff board appointed on the same day as the Duncan commission. What have they reported? If they have made a report the minister has not translated it into legislation. Let me point this out. The minister when appointing the Duncan commission told them that they might consider any extraneous related matter, that the door was wide open so fas as their investigation was concerned; they were not to regard it in any narrow or restricted way. They proceeded with the investigation and after it had been carried on for some time in Nova Scotia they came to Ottawa and were told by the then chairman of the tariff board that, so far as tariff matters were concerned, his board had charge of that feature and that the Duncan commission were not to be allowed to investigate anything touching the fiscal phase of the maritime question. I am disappointed that Sir Andrew Rae Duncan submitted to that attitude and to the curtailment of the scope of the inquiry; he should not have done so in view of the terms of his commission. However, he did, with the result that so far we have had no statement of any kind as to how tariff matters have affected the maritimes. We have no report, so far as we know, from the tariff commission to the minister. If they have reported, the minister has not so intimated to the house; and although the Duncan commission's report has been in the hands of the government since September, 1927, we still have no action as regards the iron and steel tariff or bounties as suggested by the Duncan commission. The hon. member for Cape Breton South (Mr. MacDonald) made reference to the question of the tariff and the bounty called for by the Duncan commission, which would be equivalent to the rebate of the duty on American fuel used in iron and steel making. Why has not that recommendation been implemented? A great deal has been said about the unrest in Nova Scotia.


Mr. DEPUTY SPEAKER:: I must inform the hon. member that his time is up.


Thomas Cantley: Then I want to say that the incident of a couple of days ago-


Some hon. MEMBERS:: Order.


Thomas Cantley: -is further evidence that there is no intention on the part of this government to treat Nova Scotia as it should be treated.


Mr. T. E. SIMPSON (West Algoma):: The amendment proposed by the hon. member for Cape Breton South (Mr. MacDonald) deals particularly with the implementing of the Duncan report and refers especially to the maritime provinces, but one part of that amendment deals with the iron and steel industry and has a much wider application than the remainder of the amendment. It is that particular section of the amendment to which I desire to refer. I do not intend to detain the house at any length, because I spoke on this question in the early part of the session and placed my views as fairly and as clearly as I could before the government. However, I feel that I would not be properly representing my constituency if I did not take advantage of this opportunity to express my regret that the government have not seen fit to bring in legislation at this session to improve the condition of the iron and steel industry in this country.
Some time ago I directed a question to the Minister of Finance in this connection, and his reply was that the matter was still under investigation by the tariff board. If that is the case it appears to me that it shows an amazing lack of interest on the part of someone . in not dealing with this matter more speedily, because it is more than two years since the question of iron and steel was submitted to the tariff board and surely in that period they have had ample time to conduct an investigation and make a report if they propose to do so.
In my opinion, Mr. Speaker, there are aspects of this question with which the government should be able to deal without waiting for any report from the tariff board. I referred to some of these points when I spoke on the matter earlier in the session. For instance, the question of spring and axle steel is one which could be so considered; that steel is used in the manufacture of automobiles in this country and is being imported in very large quantities. We make spring and axle steel in Canada equal to that made in any

Steel Industry-Mr. Simpson
other country in the world, but the automobile manufacturers are allowed a drawback of 99 per cent of the duty paid on importations of that article, notwithstanding the fact that they enjoy a protection of from 20 per cent to 27-J per cent on their finished product. Surely it is not necessary to await the report of the tariff board to determine that that situation should 'be remedied. The minister has already admitted the principle, in speaking on the budget resolutions. The question of a certain grade of cotton yarn was under consideration; it had been free formerly but this year had a duty imposed upon it, and the minister was asked the reason for putting a duty on this article. His answer was that, this was the finished product of a certain factory and that finished product was the raw material of another factory in Canada which was enjoying protection, so his point was that this concern manufacturing the yarn should be entitled to a proportion of the protection. Why not apply the same principle to the spring and axle steel which is used in the manufacture of automobiles? That is all we are asking.
Another point which I brought to his attention at that time was the question of structural steel. At present structural steel weighing over 35 pounds to the yard is subject to a duty of 15 cents per hundred pounds, while structural steel weighing under 35 pounds to the yard is subject to a duty of 35 cents per hundred pounds. The steel weighing over 35 pounds is the larger shapes, and at the time that tariff item was framed none of those larger shapes were made in Canada, so we can readily understand the reason for the difference in the duty. To-day, however, several of these larger shapes are made in Canada, and some of our steel plants are prepared to manufacture practically all the larger shapes required in Canada if given reasonable protection. If the same degree of protection is afforded the larger structural shapes that now applies to those under 35 pounds to the yard I think we would speedily see activity in some of our steel manufacturing centres.


Mr. RALSTON:: My hon. friend is referring now to the Algoma Steel Company, is
he not?


Thomas Edward Simpson: Yes, for some time they
have been making preparations along those lines. I do not think it is necessary to wait for a report from the tariff board in order to determine a matter of this kind. Then there is another question which has been brought to the attention of the government on several occasions in the last few years, action in regard to which would be of material assistance to the steel industry of Canada;
I refer to a bounty on iron ore. The tariff board have nothing to do with that; they have not been asked to investigate that matter, but it has been looked into by a commission appointed by the Ontario government, a commission composed of competent and experienced men, who have made their report. I am not going into details at the moment; that matter has been placed before the government on several occasions in the past.


James Layton Ralston: Would my hon. friend
permit a question just there? Some time ago another hon. member mentioned that commission, and I then asked if he could tell us how much had been paid by the Ontario government in bounties under the legislation or under whatever action was taken following that report. That hon. member could not tell me; does my hon. friend know?


Thomas Edward Simpson: The legislation was made subject to the Dominion government making provision for one-half the bounty.


James Layton Ralston: Then no bounty has been paid by the Ontario government?


Thomas Edward Simpson: No. Until the Dominion government makes provision for one-half of the bounty I understand that the Ontario legislation does not become effective.
These are some of the conditions under which the steel industry is labouring to-day. One particular instance comes to my mind, that of Baldwin's Limited, one of the largest steel manufacturing concerns in the British Empire, who built a factory at Toronto for manufacturing certain classes of steel. Although they presented their case to the government at different times they received no assistance, and as a result closed their factory A little later on I will tell you where they are operating to-day.
Let us see what one of our sister dominions is doing in this regard. The Commercial Intelligence Journal of January 7, 1928, has the following article:
Australian Duties on Iron and Steel Products
In Commercial Intelligence Journal No. 1235 appeared a review of the principal Australian iron and steel industries down to a comparatively recent date. These companies have, for some time, contended that competition, particularly from the continent and to a lesser extent from the United Kingdom, was causing it to he unprofitable-under existing labour and wages conditions-to produce iron and steel products on the basis of a fair return for the capital invested.
The companies stressed that at least some of their processes of manufacture must perforce be discontinued, and many operatives thus thrown out of employment at a time when the country was experiencing the utmost difficulty in finding work for large numbers of men at
Steel Industry-Mr. Simpson


James Alexander Robb: Last evening at the adjournment of the house the Prime Minister (Mr. Mackenzie King) announced that to-day we would go into supply and that among other departments we would take up the consideration of the estimates of the Department of Railways and Canals. I need not remind hon. gentlemen that the estimates of the Department of Railways and Canals contain some items that are of great importance to the maritime provinces. My hon. friend (Mr. Cantley) who seconded the resolution this afternoon devoted considerable time to finding fault with us for what we had not done and he desired certain information from the Minister of Railways and Canals. In so doing he himself contributed for almost an hour to delaying the securing of the information, because the Minister of Railways and Canals when he comes down with his estimates will be prepared to give the house information that I am sure will not be opposed by the people of the maritime provinces. My hon. friends the mover and the seconder of the resolution laboured long and hard to convince themselves that they really have a grievance. They know better than that; they know that the people in the maritime provinces are not in sympathy with all these continual whinings for something more to be done in addition to what has already been done. I do not think they are helping their position very much with the electors of Canada, if we bear in mind all that we have already done in implementing the Duncan report, to delay continually the proceedings of parliament by harping upon this particular question.
The resolution presented to-day is in striking contrast-and I will come to that later- with the resolution on fiscal policy of the Tory party as presented at the Winnipeg convention. They are bolder to-day than they were when they were out on the prairies and I fancy they are bolder to-day even than they would be when they get down to the maritime provinces. The resolution centres about two particular items. One is an increased tariff, a higher duty on steel. I do
not think I am misrepresenling their position when I say that. The other is a bounty on steel and a bounty on coal. I am not very sure whether the hon. member for West Al-goma (Mr. Simpson), who presented, very fairly I am bound to say, the position of the great industry in his part of the country, is altogether in sympathy with the speeches delivered by my hon. friends from Nova Scotia. I am not sure that he is in favour of a bounty on coal going into the manufacture of steel. I should like the hon. gentleman, or someone else speaking for him to come out now and say whether he is in favour of a bounty on Canadian coal going into the manufacture of steel. I should like to have that point cleared up because it might help me later on to reach a conclusion when representatives of the different industries come before the Minister of Finance and the tariff board, as they came before. What did Sir Andrew Rae Duncan say in regard to the tariff on steel and the tariff on coal? Sir Andrew Rae Duncan knew his position; he knew that he was not the tariff commissioner for Canada, and he was very careful to state his position regarding the question of tariffs. I have under my hand the statement made by Sir Andrew Rae Duncan's board and in it I note the following:
Several features of the customs tariff in its relation to coal were brought to our attention, both by the government of Nova Scotia and by the operators of the coal mines.
Keep in mind that it was the government of Nova Scotia and the operators of the coal mines who brought this to their attention.
These we feel ourselves precluded from dealing with, since they are a matter properly to be considered by the tariff advisory board; but we may be permitted to say that we are' impressed with the need for reconsideration of the customs tariff in its relation to coal, anthracite and coke, and we recommend that the tariff advisory board should be asked to give immediate consideration to the subject.
That is as far as Sir Andrew Rae Duncan went in his report. He recommended that the tariff advisory board should give immediate attention to the question.


Thomas Cantley: Have they done so?


James Alexander Robb: I will come to that in a
moment. Sir Andrew Duncan stated further:
It was submitted that the tendency of the tariff, as affected by successive alterations, has been to lessen the protection upon the primary products of iron and steel and to encourage their importation from other countries as being the raw materials of iron and steel-fabricating and finishing industries in Canada.
Steel Industry-Mr. Robb

What did Sir Andrew Duncan say about
that? He said:
In respect of this matter, we da not conceive it to be onr duty to express any opinion, since the question is, as we were informed by the chairman of the tariff advisory board, who met us at our request, at the present moment under the consideration of that board.


Mr. HANSON:: How long ago was that?


James Alexander Robb: This is from the Duncan
report.


Richard Burpee Hanson: That is two years ago.


James Alexander Robb: Two applications were made
to the Minister of Finance to consider the iron and steel duties and the coal duties. One was made by that great corporation of the maritime provinces known as Besco, the British Empire Steel Corporation. The other was made by that company in the riding of the hon. member for West Algoma, the Algoma Steel Corporation. Those applications were made to the Minister of Finance in May, 1926, and at that time the first hearing was had on the applications. At the first public hearing the applicants appeared before the tariff board and they represented that they were under severe competition, particularly from overseas countries. Representatives of the tariff board were sent out to inquire into the allegations made before the board by these two great steel companies, the British Empire Steel Corporation and the Algoma Steel Corporation; but what happened? It was not very long after that until the British Empire Steel Corporation got into litigation; they became involved in a lawsuit, and the tariff board realized, from the attitude of the companies, the division of opinion that existed between the different parts of the companies, that they could not get very far and that no good purpose could be served by continuing the inquiry until after the question was settled. The question was prolonged for some time in the courts and eventually it was settled. The British Empire Steel Corporation was put into the hands of a receiver and under the receiver the management of the company has been so much better that the company is making greater progress than it did under the old management. I am not prepared to say that this is all due to the more efficient management because, as operators of the plant in Nova Scotia, they had pretty efficient management; but the receiver employed good salesmen who went out after business, and I am going to be able to show in a few moments that they secured more business. The tariff board has been waiting until this question was settled

to have a further inquiry before it on the applications of the two great companies, the British Empire Steel Corporation and the Algoma Steel Corporation.
But they started something larger than they had imagined. When their application for a higher tariff on iron and steel and coal came before the tariff advisory board for a first hearing, then all the other industries throughout Canada that were interested in that question began to send in requests to the Minister of Finance for a hearing before the board, and the result is that there are now throughout Canada 350 firms interested in this application which originated in May, 1926, and they all want to get a hearing before the tariff board. I can quite understand how my hon. friends argue this afternoon that they would like to have this question settled here in parliament, rather than have to go before the tariff advisory board. I think they ars speaking by the book. I think they are speaking perhaps for some of these big corporations, because no later than April 19 of this year the chairman of the tariff advisory board was advised by the receiver for Besco that they were not interested very much in pushing this tariff application at the present moment. That is why the delay is taking place. The tariff advisory board is anxious to go on with the inquiry, and the government are anxious for the inquiry to go on because we want to get this question cleaned up, but the original applicant, the Besco, I say to my hon. friends who come from that part of the country, have declared that they are not just ready to go on with the inquiry, and they are not pressing the application before the board at this moment. That is why the board has not yet reported.
My hon. friend from West Algoma this afternoon presented the situation as it exists in Australia, with regard to the tariffs which they have recently introduced on iron and steel. But Australia has had a high tariff on iron and steel for some years, and the industry of Australia to-day is suffocated because of the high tariff they have on iron and steel and on other products, and the great mining industry of Australia has been practically standing idle for some time. I observe that my hon. friends hope that by higher and higher tariffs they are going to resuscitate this great industry in Australia, but if I read the press of Australia correctly, the Australians are beginning to think that they are top-heavy with tariff, and that their industries are suffering more from high tariff than from anything else.

Steel Industry-Mr. Robb


Thomas Edward Simpson: Then can the minister explain why Baldwin's, Limited, have closed their factory in Canada and gone to Australia, if high tariff is a deterring factor?


James Alexander Robb: Baldwin's got hold of a plant in Canada that was used for making munitions; they got it at a bargain. They had made a lot of money out of it during the war, but I do not think they ever opened that plant since. They had bought it for a song, thinking that they might operate it, but after looking into the matter, they decided not.


Mr. WHITE (London):: They operated for a year on sheets.


James Alexander Robb: My hon. friend knows, and I will accept his statement.
The Duncan commission in its survey of the iron and steel industry of the maritime provinces had before them the statistics of that industry for the year 1925, because the commission was sitting during the summer of 1926, and it was only reasonable to suppose that when they were inquiring into that industry they would look up the general statistics of the iron and steel industry of Canada, because my hon. friends must remember that there are other provinces in Canada that are interested in the iron and steel industry besides the province of Nova Scotia. Now, what were the conditions in 1925? I find from the reports of the Bureau of Statistics for the year 1927 that the number of employees in the iron and steel industry increased from 1925 by 15 600; in other words, there are 15.000 more employees in the iron and steel industry throughout all Canada than there were in 1925.


Thomas Cantley: Will the minister allow me to correct him? I am quite sure he does not intend to mislead the house, but the figures that he is giving take in all the subsidiary industries that use iron and steel. They do not deal simply with the primary products.


James Alexander Robb: Certainly, and the government has to do with all the iron and steel industries throughout this great Dominion. We cannot legislate for one industry alone.


Finlay MacDonald: You
have done it in the past.


James Alexander Robb: Well, we are not doing it now In 1925 the total number of employees in the iron and steel industry, as given by the Bureau of Statistics, was 90,125.


Thomas Cantley: That includes all subsidiary iron and steel working and fabricating shops small and large through Canada.


James Alexander Robb: Taking in all the industries, and in 1927 the number was 105,782. The selling value of the products of the iron and steel industry in 1925 was $411,378,640, and in 1927, $515,971,445.
My hon. friend a few moments ago complained of conditions in the coal industry in Nova Scotia. Well, in 1928, when the Duncan commission were considering the coal industry, they had before them the statistics for 1925, and I find that there were engaged in the coal industry of Nova Scotia-I am quoting now the sort of figures that will please my hon. friend from Pictou (Mr. Cantley)-8,333 employees and in 1927, there were 13,975 employees in that great industry.


Finlay MacDonald: There
was a strike in 1925.


Thomas Cantley: Quote a normal year.


James Alexander Robb: I am quoting the year which the Duncan commission had before them But I will take another year. The number of employees in that great industry in 1926 was 12,100, and in 1927, 13,975.


Robert James Manion: While my hon. friend is quoting statistics, will he give the importations of iron and steel into this country?


James Alexander Robb: I have not that before me. but my hon. friend will find it on the record; it was quoted a moment ago.


Robert James Manion: I know it quite well. It was $250,000,000 in one year.


Mr. LAPOINTE:: Then why ask the question?


Robert James Manion: The minister is putting on the record figures that suit him, and I would like the other side put on the record at the same time.


James Alexander Robb: There are more people engaged in the iron and steel industry throughout Canada to-day than there were in 1925.


Robert James Manion: And more people engaged in foreign countries producing the same kind of products.


James Alexander Robb: As I said a moment ago, you are getting pretty far away from the Winnipeg convention. You had at the Winnipeg convention a few sane men who were determined not to get the great Conservative party into a position where they would be strangling the industries of this country, and they framed a resolution. I think I know who framed this particular resolution. I did not sit oprevised EDITION
Steeh Industry-Mr. Robb

posite that gentleman for a few years without being able to recognize his style. Here is the resolution:
This convention desires to record its feeling of pride in the growth and progress and prosperity of Canada, under the historic fiscal policy of the Liberal-Conservative party.
It affirms its adherence to the principles of that policy in its declared objects of stimulating the development of the natural resources of the Dominion: preserving and enlarging the market for Canadian farm products; building up the industries of Canada, and thus creating employment for our workmen, promoting interprovincial trade, and generally providing a diversified economic life -which will be effectual in retaining Canada's sons and daughters within our own boundaries.
As to tariff revisions the convention declared :
In such revisions regard should be had not only to the objects of fiscal policy herein enumerated, but to the welfare of the consumer, and it is desirable in the national interest that in such revisions the cost of living and the cost of the implements used in production, of whatever nature, should be given special and attentive study with a view to the reduction of such costs to the extent practicable.
That is a pretty sound position. Now my hon. friend a moment ago advocated bounties. He said: We want higher duty and bounties, but if we cannot get both we want bounties. I recall the attitude of the Conservative party on bounties. I have before me a speech made by a pretty good minister of finance, Sir Thomas White. In his budget speech of 1914 he said:
My own view is that bounties are justifiable to call into being new industries where capital, which is always timid as to experimental ventures, requires special inducement to enter upon their development, but after such enterprises have been called into being and firmly established, it is difficult to justify further aid of a direct character.
That was the view of Sir Thomas White when he was Minister of Finance.


Robert James Manion: What was Mr. Fielding's
view?


James Alexander Robb: Mr. Fielding introduced
bounties for this parent industry to get it started, but as the years progressed he allowed them to lapse, and he had exactly the same view as Sir Thomas White, that when an industry got going it should be able to stand on its own feet.
My hon. friends have referred to the question of reciprocal trade, and although they have not emphasized it very much to-day, I observed from some of the preceding speeches that they were very strong on doing something for the maritime provinces by way of getting larger and better markets for their

natural products. I wonder what their policy is to-day. I know the voters in the maritimes are sound on this; they have learned a lesson. But what is the attitude of the Tory party? Is it the same attitude as the party had in 1911? I think it is important that before this debate closes we should know just exactly where the Tory party stand on this question.


Mr. SPOTTON:: Mr. Speaker, I rise to
a question of privilege. I belong to the Liberal-Conservative party.


James Alexander Robb: There were a good many
people in the constituency of my hon. friend who were not just sure where he belonged during the election.


Robert James Manion: They know now.


James Alexander Robb: I am not going over the
various votes that have been put through to implement the recommendations of the Duncan report, but I observe that the supply bill is practically padded with votes for the maritime provinces.


Richard Burpee Hanson: Not in my county.


James Alexander Robb: I do not know what county
my hon. friend comes from; but notwithstanding the complaints made this afternoon regarding certain warehouses down in Prince Edward Island, I observe that for Georgetown we voted $54,000 odd for the reconstruction of a wharf and frostproof warehouse; for dredging $16,448, and for additional dredging $7,650. With respect to Summerside there has been voted for reconstruction of wharf, $58,497, for dredging $4,972, and for additional dredging $5,400. For Charlottetown there has been voted for the reconstruction of wharf, contract now awarded, $136,000 and for dredging $63,000 odd. So I submit to my hon. friends that the little province of Prince Edward Island has not been badly treated by this government. We have gone a long way, as my hon. friend the Minister of Railways (Mr. Dunning) will prove in a few moments, to implement the recommendations of the Duncan report.
What about the recommendations in that report with regard to the ports in Nova Scotia and New Brunswick? Surely hon. gentlemen opposite have not forgotten their own obstruction when my colleague the Minister of Marine and Fisheries (Mr. Cardin) was trying to put through the different bills for harbours.


Richard Burpee Hanson: There was no obstruction.

Steel Industry-Mr. Robb
Mr. ROBB. There was obstruction in dealing with the Quebec harbour bill which delayed us getting down to the bills relating to St. John and Halifax harbours.


Finlay MacDonald: No, no.


James Alexander Robb: Eventually we got down to
the ports of the maritime provinces, and there we advanced $500,000 to one and $5,000,000 to the other.


Mr. SPEAKER:: May I remind the hon.
minister that I have upheld the ruling made by those who have preceded me in the chair, that an hon. member cannot accuse another hon. member of obstructing.


James Alexander Robb: I bow to your ruling, Mr. Speaker, I shall have to use the word "delay". Now, a moment ago my hon. friend complained regarding the additional vote for subsidies to the maritime provinces. As hon. gentlemen will recall, in the estimates last session there were provided additional votes of $875,000 to Nova Scotia, $600,000 to New Brunswick and $125,000 to Prince Edward Island. Similar amounts are in the estimates this year to be again voted. My hon. friend complains because the Department of Finance did not go directly contrary to the statute and pay out these votes in a lump sum. We paid out these subsidies as we always do, semi-annually. We made the first payment regularly, and when the representatives of the interprovincial conference met here in Ottawa I think two of them made this representation to us:	Our annual year
ends the last of November:	We wonder if
you could let us have that money before the first of January. They recognized that it was not due until that date. They were reasonable men. We said:	Yes, we have the
money and we will make the payments a few days in advance to help you out. But those gentlemen recognized that the Dominion treasury was under no obligation to make the payments earlier than we had made the preceding payments.


Mr. MACDOUGALL:: What was the wording of the Duncan report in that regard; was it not that an immediate iilterim lump sum should be paid?


James Alexander Robb: No, the word "immediate"
was not there. Another point hon. members from the maritimes might very well keep in mind. At the interprovincial conference to which I have referred not one of the representatives of the larger provinces made any objection to giving this additional grant to the maritime provinces.


Mr. SHORT:: Because they had no right
to.


An hon. MEMBER:: Why should they?


James Alexander Robb: Not one had any objection.
An hon. MEMBER. Why should they?


James Alexander Robb: The government intend to
reconsider these subsidies and place them on a proper basis. What more need I say? My hon. friend finds fault because the tariff advisory board have not yet reported. The fact of the matter is that the main industry in his own province is delaying the inquiry by the board. No one could be more anxious to go on with the inquiry and clean up the matter before next session than the members of the government and of the tariff advisory board.


Mr. EVANS:: May I ask the minister a
question on the steel industry? The Financial Post of April 20 contains a news item that the government had given a promise to the steel industry that if they could get past the gauntlet of western criticism the government would give them something next year on which the industry could be built up.


James Alexander Robb: I read that article, and if my recollection is correct the article did not state it in the words my hon. friend has indicated. It was a feeler", put out as an ordinary news item; it was a feeler, I admit. But they did not say specifically that the government had made any promise to them, and if they made that statement they are wrong; the government has made no promise to them. The government has referred this steel inquiry to the tariff advisory board. Some 350 other firms throughout Canada have said, "We want to be heard on this; we are interested. We employ more labour in the steel and iron industry than do the two large steel industries, and we want to be heard". As a matter of fact, in the steel and iron industry of Canada, but 4 per cent are employed in the province of A ova Scotia. I ask, has the government to give no consideration to the other 96 per cent? Have we not some interest in doing what we can, what is reasonable, what the country will support, to keep these other industries throughout Canada employing labour, paying good wages, and thus keeping them as prosperous as they are now?
In conclusion, all I have to say is this. The government are sympathetic to the great iron and steel industry of Canada. We have shown that sympathy, having due regard to all other industries in Canada. And the steel
3268	COMMONS
Steel Industry-Mr. Smith (Cumberland)
industry themselves having elected to go before the tariff board, we say to them, "Gentlemen, you must appear before that board and have this inquiry made before next session".


Herbert Bealey Adshead: Is my hon, friend aware that the Halifax Herald advertised and asked us to visit the prosperous province of Nova Scotia?


Mr. R. K. SMITH (Cumberland):: It is not my purpose to detain the house very long in the few remarks I wish to make. Miay I say, first, that I associate myseilf with the mover and seconder of this amendment.
Before taking up what I had in mind discussing in this connection, may I refer for a minute or two to some observations made by the Minister of Finance (Mr. Robb), who has just taken his seat. Towards the end of his address he was asked by the hon. member for Inverness (Mr. Macdougall) whether the word "immediate" was not in the Duncan report in reference to the lump sum payments recommended to be paid the maritime provinces; and the Minister of Finance said that the word "immediate" was not in the report. I have in my hand a copy of the report and at page 19 I find this:
And accordingly we recommend that immediate interim lump-sum increases-
The Minister of Finance said the word "immediate" was not there.


James Alexander Robb: Read the whole thing.


Charles Avery Dunning: Immediate increases.


Robert Knowlton Smith: Exactly; but the Minister of Finance said that the word "immediate" was not there.


Charles Avery Dunning: He said "immediate payment" was not there.


Robert Knowlton Smith: That is a rare variety of quibbling with which I am not acquainted. The report states:
We recommend that immediate interim lumpsum increases should be made in the payments to the three maritime provinces as follows:


Ernest Lapointe: That was done.


Robert Knowlton Smith: Not only that, but the Minister of Finance misled the house with reference to what the Interprovincial conference did with regard to the non-payment of these subsidies. My information is that the Minister of Finance was called before the conference, because those who were there, from all over the Dominion, resented the fact that these subsidies had not been paid in full.


James Alexander Robb: Will my hon. friend let me nail that right now. It is but fair to the ministers from Nova Scotia and New Brunswick to say that there was nothing of the kind. They came to me quietly and wanted to know whether we were in funds and could let them have the money, so that their books would make a beter showing at the end of the year.


Robert Knowlton Smith: I accept the minister's word immediately. My information was to the contrary.


Charles Avery Dunning: Where from?


Robert Knowlton Smith: From those
who came representing the province of Nova Scotia.


Charles Avery Dunning: From the ministers concerned?


Robert Knowlton Smith: You look at the records, as you said to someone else this afternoon, and you will find the names of those representing Nova Scotia at the Interprovincial conference.


James Alexander Robb: Does my hon. friend say that either Premier Rhodes or Mr. Harrington made that statement?


Robert Knowlton Smith: I have made the statement and I leave it to the Minister of Finance to put whatever interpretation he likes on it. The statement stands.
Now, the Minister of Finance seemed to be annoyed and agitated at the fact that we were holding up the house for a few hours to discuss the question of steel and coal in the province of Nova Scotia. We have been waiting since confederation for fair play in Nova Scotia, and neither the Minister of Finance nor any other member on the other side of the house has any right to get up and complain because we occupy a few hours in order to put our claims before this honourable body. Another point the Minister of Finance made was that we were whining with regard to what had not been done. If we are whining-


Some hon. MEMBERS:: Hear, hear.


Robert Knowlton Smith: Someone on the other side say "hear, hear". If we are whining, the boards of trade all over Nova Scotia are whining. They have sent resolutions to every member from Nova Scotia complaining that the Duncan report had not been implemented in full; and I am sure the bouse will be surprised to know that one of these resolutions was signed by the president of the Liberal association of Nova Scotia.

Steel Industry-Mr. Smith (Cumberland)
If we are doing a little whining in connection with the matter, whining has been done by others in Nova Scotia as well.
The Minister of Finance also went into the question of the high tariff wall on iron and steed in the commonwealth of Australia and stated that they were ready to abandon that high tariff because they thought it was interfering with their business in that country; and he made some odious comparisons between Australia and Canada. If you want to get at the basis of the development of the steel industry in any country, the most glowing example is the United States. When they established their steel industry they put their tariff high enough to shut out all competition. And what are we up against in Canada? A few days ago I saw in the newspaper that we imported $300,000,000 of iron and steel products in the last year, while our own steel industry, one of the primary industries in this country, is idle-t'he foundries in Sydney and other places in Nova Scotia, for instance. It does not seem to me that the policy of this government is one that is of much benefit to the steel and iron industry or to the Dominion of Canada, when we have to send three hundred millions of our good dollars annually over to the United States, importing steel and iron products into this country.
There is another point in connection with this steel industry. The primary steel industry of Canada enjoys a protection of less than 10 per cent, while the other steel industries-the finished product-enjoy a protection of around 30 per cent. We are trying to struggle along with a protection of under 10 per cent; and the way we are struggling is tragic, sending $300,000,000 a year to other countries for iron and steel products.


Herbert Bealey Adshead: Are the dollars there?


Robert Knowlton Smith: I suppose they are there; they were sent there. I think they usually keep what they get.


Herbert Bealey Adshead: That is more than all
Canadian currency.


Robert Knowlton Smith: You can suit yourself if you can get comfort out of that. Now, we in supporting this amendment are not merely speaking our own minds when we advocate the implementing of the Duncan report in toto; we are voicing the sentiments of the people of the maritime provinces. We are not at all ashamed to come forward and say that we were promised that this report would be implemented in full, and we certainly know in the maritimes that it has not been implemented in full. The Prime Minister (Mr. Mackenzie King), making a statement in
the house last year, implied that the report, with regard to steel and coal, would be implemented in full as soon as the big steel and coal company question was decided and the lita-gation settled. These things have all taken place, yet we are nearing the end of another session of parliament with no legislation brought down and nothing done to implement the Duncan report in that particular. The Postmaster General (Mr. Veniot), speaking in the city of St. John last fall, said that what the government was going to do for the steel industry in the province of Nova Scotia during the coming sesssion would make every citizen of the maritime provinces proud. Well, we have waited to see what was to be done, but up to the present nothing has been done and from the remarks of the Minister of Finance I judge that nothing will be done, because I rather took it from his remarks that he considered we were getting more than we were entitled to at present.


Mr. QUINN:: They will recommend it to
the Civil Service Commission.


Robert Knowlton Smith: Yes, or perhaps to the tariff board. Now, Mr. Speaker, I have to refer to only one other matter, and that is the question of coal. During the present session I placed a question on the order paper asking if the Canadian National Railways owned a coal company in the United States. The answer was that they did, that it was taken over when the assets of the Grand Trunk Railway were taken over by the Canadian National Railway. In that same answer I found that this company supply coal to Canada to the extent of about 300,000 tons annually. It seems to me that this government has not grasped the true national spirit with respect to coal and steel in Canada. I have given the figures with respect to the money sent to the United States to bring steel to this country, and it is well known that a tremendous sum of money, over $100,000,000 yearly, is sent to that country to bring coal to Canada. It is also a well known fact that many of our coal miners and steel workers are out of employment but still the Canadian National Railways, which is a branch of this government, owned by the Dominion of Canada, operates a coal mine in the United States and sells coal back to our Canadian people; probably it is used on the Canadian National railway. I believe that in justice to the people of this country the Canadian National Railways should be instructed by this government to dispose of property of that kind in the United States, which is being operated in direct competition with our own coal mines and to the detriment of our coal miners in Canada.
$270	COMMONS
(Steel Industry-Mr, Macdonald (Kings)


Hon. J. A. MACDONALD (Kings):: 
Charles Avery Dunning: And they handled more business than ever.


John Alexander (1874-1948) Macdonald: Yes, I would like to quote from a report given out on April 3 by W. U. Appleton, general manager of the Atlantic region:
From the date of the opening of the shipping season in October last to the 31st of March, this year, the Canadian National Railways car ferry has moved from Prince Edward Island to the mainland over 1,000 more carloads of potatoes than were carried across in the season of 1926-27. Up to March 31st, inclusive, there were 3,832 carloads of potatoes ferried from the island province; for the same period last season there were 2,781, thus an increase of 1,051 carloads. Before the shipments of this season are completed the total will have reached 4,000, if not exceeding that number.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



[Stage Direction]
On the order:
Second reading of Bill No. 42, to incorporate the Port Huron and Sarnia Bridge Company.- Mr. Odette.
Hewitt Bostock: I have been informed
by the hon. member that this bill is to be dropped.


Mr. E. G. ODETTE (East Essex) moved:: That the order for the second reading of Bill No. 42, to incorporate the Port Huron and Sarnia Bridge Company, be discharged and the bill be withdrawn, and that the fees and charges paid thereon be refunded less the cost of printing and translating the said bill.
Motion agreed to and bill withdrawn.


CANADIAN-AMERICAN INTERNATIONAL BRIDGE COMPANY
[Stage Direction]
On the order:
Second reading of Bill No. 47, to incorporate Canadian American International Bridge Company.-Mr. Edwards (Ottawa).
Hewitt Bostock: I have also been informed that this bill is to be dropped.


Mr. A. J. MACDONALD (Glengarry):: moved:
That Bill No. 47, to incorporate Canadian American International Bridge Company, be discharged and the bill be withdrawn, and that the fees and charges paid thereon be refunded less the cost of printing and translating the said bill.
Motion agreed to and bill withdrrawn.


ST. CLAIR TRANSIT COMPANY
[Stage Direction]
The house resumed from Friday, April 13, consideration of the motion of Mr. Goodison for the third reading of Bill No. 23, to incorporate the St. Clair Transit Company.
Motion agreed to and bill read the third time and passed.

[Stage Direction]
The house resumed from Tuesday, April 17, consideration in committee of Bill No. 56, respecting the Sun Life Assurance Company of Canada-Sir Eugene Fiset-Mr. Johnston in the chair.
On section 1-Increase of capital.
Leon Johnson Ladner: This bill has been
thoroughly considered by the banking and commerce committee, whose function it is to go into the details of all the sections. Certain compromises were arrived at and the vote resulted in an overwhelming majority for the passing of the bill. The bill was likewise considered in committee of the house on one occasion for nearly an hour and in view of the general knowledge of the bill and its purpose I move that it be now reported. An opportunity for discussion can no doubt take place on the third reading.


Mr. CHURCH:: The other night when the bill was in committee I had the floor and I had not concluded my remarks.
Sun Life Company


John Frederick Johnston: The motion is not debatable.


Mr. SPENCER:: I rise to a point of order. This Bill has never been reprinted as it came from the committee and therefore I do not see that we are in a position to discuss it.


John Frederick Johnston: The point raised by
my hon. friend is not well taken. There has been no order issued that the bill should be reprinted. The motion for reporting the bill is carried.
Motion agreed to and bill reported.
Sir EUGENE FISET moved the third reading of the bill.


Henry Elvins Spencer: Next sitting.


Some hon. MEMBERS:: Carried.


Thomas Langton Church: When the house was in committee the other night I spoke for about five minutes in opposition to the bill. This bill has been a football in parliament for some years. When the bill was reported back to the house, we had quite a debate on it. This particular company has been coming to parliament for many years seeking favours. In my opinion this bill is a sample of the way in which insurance companies have been playing fast and loose with the legislation of the country and the sooner we have a new insurance act making it compulsory for all these companies to be under sound public control, the better. This particular company came to parliament first away back in 1865 and got a charter under chapter 43 of the statutes of that year. It came back in 1870 and got another act passed, chapter 58, along the same lines. Not satisfied with that it came back again in 1871 and got another act passed, chapter 53. It came back again in 1882, when chapter 100 of the statutes was passed and again in 1897 when chapter 82 of the statutes was passed. Now it comes along with this bill No. 56, section 1 of which reads:
The capital of the company shall be five million dollars, and the unissued portion thereof may be issued from time to time by the directors in such amounts as they may deem in the interests of the company.
Clause 2 of the bill provides:
Except as hereinafter provided no sums in excess of twenty-five per cent of the amount subscribed thereon shall be called by the directors or received by the company as payment on account of any shares of the capital stock which may be hereafter issued, except under the authority of and in accordance with the terms of such general enactment, if any, as may be passed by the parliament of Canada dealing with all life insurance companies which have
TMr. Church.]
a capital stock and derive their powers from the said parliament of Canada, unless the capital of the said company should at any time become impaired, as defined in subsection two of section seventy of the Insurance Act, or the company should in any year fail to declare dividends to the holders of its participating policies.
In the explanatory note on the opposite page of the bill it is pointed out that subsection 2 of section 70 of the Insurance Act reads as follows:
The capital of a company shall be deemed to be impaired when its assets, exclusive of its paid-up capital', are less than its liabilities calculated according to the requirements of this act.
I would point out, Mr, Speaker, that the Superintendent of Insurance was opposed to this bill. Then by clause 3 it is provided that the par value of the shares shall be $10. We all know what an increase that will mean.
Then clause 4 distinguishes between different classes of shares, and provides for the approval of the transfer of the shares.
Clause 5 deals with the surrender or exchange of the shares, and the underlined portion of clause 5 reads:
as many fully paid shares of "Class B" stock as may be by said by-law provided, but the paid-up value of the shares of "Class B" stock which may be so given as payment or in exchange shall not exceed by more than twenty-five per cent the paid up value of the shares surrendered. The shares thus surrendered shall ipso facto become "Class B" stock and may be reissued as such by the company.
So by legislation they are going to change one class of security for another, and we are being asked to interfere with the ordinary commercial transactions of the sales of the shares of this company.
Clause 6 deals with the sale of shares to employees and policyholders, and according to an explanatory note in the bill as reprinted the words " but not more than one hundred of such shares may be so sold to any. one person," at the end of section 6 are omitted, at the expense, no doubt, of the policyholders, as has been done before, and for the benefit of the shareholders.
Clause 7 provides that the stock qualification of a director shall be twenty-five shares of the capital stock.
I wish to protest, Mr. Speaker, against the passing of this bill. I do not think it is in the public interest that this house should lend itself to passing this class of legislation. I have a motion of which I have given notice already for the six months' hoist. Canada has been a very happy hunting ground for the Sun Life Company. Talk about what the Sun Life has done for Canada; what has Canada done for the Sun Life? The com-

Hun Life Company
pany has taken away the premiums paid in by those policyholders who have allowed their policies to lapse. If a soldier who has come back from the war finds himself out of work and unable to pay his premiums, then the company, if his policy has not run for three years, keep all the money he has paid in, and what this and other life companies receive in this way runs into hundreds of thousands of dollars. The Sun Life is not investing its money to develop Canada alone, but it has investments all over the civilized world. The, company is a law unto itself. It comes to parliament and gets amendments to its charter which are not within the four corners of the general Insurance Act or sound insurance. There should be a national policy evolved with respect to insurance and for the regulation of insurance companies. A resolution was introduced into this house two years ago with regard to the way in which not only this company but many other insurance companies are able to evade the law not only with regard to lapsed policies, but in regard to their general business policy all along the line we need a national insurance policy. More restrictions should be placed in the Insurance Act, or the act will be more effective than the Bank Act was some years ago. I do not suggest that this particular company is to blame, because it is in a good financial position and I believe it is well managed, but I do object to this parliament passing legislation of this kind for the benefit of a company which utilizes its money, not for the development of Canada alone particularly, but for investment purposes all over the world to suit its own purposes.


Henry Elvins Spencer: I
had little idea that this bill would come up so soon this evening, and little idea that it *would come up in the way it has. I did expect to see a reasonable discussion upon it, because it is not only an important bill but a very contentious one. The hon. member who moved that the bill be reported knew perfectly well not only that the bill was a contentious one, but that amendments have been proposed against it, and therefore I wish to protest vigorously against this sort of procedure.
Vn e all admit that the Sun Life is a very large company, and that it has done well for its policyholders, but I do not know that it has done more for its policyholders than many other companies; in fact, I do not think it has done quite so much.
We are also told that this company is a great asset to this country. I would like to ask, what makes a company of any description a great asset to any country? I would think that it was because of one of three things. I would say that this company was a great asset to this country if it insured a large number of our citizens at a reasonable rate. Or it might be a great asset if it distributed profits to a large number of shareholders. Or it might be a great asset to this country if it invested a large amount of its money in Canadian industry. If any of these three things were true with regard to the Sun Life, I would say that it was a great asset to this country, but what do we find? With regard to issuing insurance at reasonable rates, I am informed on the best of authority that its terms are no better than those of the average life insurance company, and not as good as some. Furthermore, instead of insuring the Canadian public in large numbers, I find that only a very small percentage of this company's business is done in Canada. According to a statement of my hon. friend who sits near me, the hon. member for 'St. Lawrence-St. George (Mr. Cahan), which will be found at page 2412 of Hansard of 1927, sixty-three per cent of the business of this company was at that time done outside of Canada, and possibly seventy-five per cent of its business will be done outside this country within a year's time. According to correspondence now made public between the president of this company and the Insurance department, an even greater percentage of the business of this company is done outside Canada.
With regard to distributing its profits to its shareholders, here again we find a weakness, because the shareholders are not so very many after all. Out of 20,000 shareholders, we find that 51 shareholders control no less than 13,928 shares, while 524 shareholders control only 6,074 shares. So on that ground the company falls down in being a great asset to this country. In the third place, how much of this company's money is invested in Canada? This is a very important point, because we are everlastingly hearing of the need of bringing capital into this country. With regard to the capital of this company and its investments, I was surprised to find that although it claims to be such an asset to Canada-it has invested its funds very largely in other countries. Now, if the company has so much at heart the interests of Canada, why does it not invest its capital in Canadian industries? Instead of doing this, we find that in the United States alone the company is interested in no less than 233 American concerns, and its foreign investments total over two hundred million dollars.
Sun Life Company


Mr. HAY:: May I ask the hon. member
how much of the company's insurance is written in Canada and how much in other countries?


Henry Elvins Spencer: According to the president of the company, not more than 15 per cent of its insurance is written in Canada.


Mr. YOUNG (Saskatoon):: How much of
the company's capital is invested in this country?


Henry Elvins Spencer: I have informed the house how much the company has invested outside -two hundred million dollars. I have not under my hand the total of its Canadian investments. I understand the main purpose of this bill is to enable the company to increase its capital. Why is this desired? Because, say those who represent the company, the directors are afraid of Americans buying up sufficient of the stock to secure control. But the directors are not at all timid of investing millions and millions of dollars in American concerns. As to the bogey of Americans getting control, I would remind the house that out of twenty thousand shares of stock Americans hold only 2,058 shares. So there does not appear to be much danger of control of the company passing into the hands of United States interests.


Mr. McGIBBON:: Where does my hon. friend get his figures?


Henry Elvins Spencer: From blue books, from
the evidence taken by the banking and commerce committee, and from the department of insurance.


Peter McGibbon: Of what date?


Henry Elvins Spencer: I cannot give the exact
date, but they are the latest figures that I could secure. With regard to the capital of ;he company, there is a difference of opinion imong the legal lights. In the early days the company had a life branch and a general oranch, and two million dollars capital was allocated to each. In the course of time one of these branches was dropped and the company carried on with just two million dollars capital. This was ample, for as with all good insurance companies, the capital eventually became infinitesimal as compared with- the total assets. As to whether the capital is actually two million dollars or four million dollars, I have seen a copy of a letter from the Justice department stating that' the correct figure is two million dollars. It is interesting to note how the capital of two million dollars was paid up. To the end of last year cash payments were made to the amount of

$305,000. plus stock bonuses of $845,000, plus premiums of $120,000. As against this they have built up from the premiums paid by the policyholders a huge investment of nearly 8500,000,000. I understand that the original charter of the company gave the directors complete control over the transfer of shares unless they were fully paid up.


Mr. IRVINE:: Mr. Speaker, I rise to a
point of order. On April 13, during the hour devoted to private bills, Bill No. 23, to incorporate the St. Clair Transit Company was before the house, and I moved an amendment to the bill-


Hewitt Bostock: The hon. gentleman will
be in order in raising his point after the debate on this bill is concluded.


Henry Elvins Spencer: I understand that up till
January 1 this year the shares were not fully paid up, with the result that the directors had it entirely in their own power to prevent control of the company passing into the hands of Americans. But about that time it is said the directors invited the shareholders to pay up the balance owing on their stock. The stock being now fully paid up, the directors have lost, voluntarily, the only means they had of retaining the shares absolutely in the hands of Canadians. That seems to me to be a complete answer to their expressed fear of control of the company passing into American hands unless this increase of capital is granted.
I am opposed to the bill being passed in its present form because the proposed increase of capital would be a decided hardship on the policyholders. To-day the company is paying to its shareholders 25 per cent. An increase of capital is not needed. If authority is granted for the proposed increase, the proceeds will have to be reinvested, and even if the directors succeed in finding securities to return as high as 6 per cent, the policyholders will have to make good the balance of 19 per cent to continue the dividend at 25 per cent. Naturally the shares of the Sun Life Company have become very valuable. To-day I understand they are over the two thousand dollar mark. Therefore it looks very much as though this were another of those beautiful companies who largely water their stock, buying new stock at par and making a very good rake-off for the present shareholders-to the loss, of course, of policyholders. One shareholder alone, I understand, controls 2,441 shares.
An hon. member when in committee claimed that the company needed to increase its capital because, without increased capital, it would

Sun Life Company
not be able to sell insurance. I have a splendid answer to that argument. I have before me a statement in regard to ten of the largest American insurance companies, eight of which are mutual companies. For the benefit of the house I am going to give the totals of these insurance companies, and I will give the mutual companies first. The total assets of these companies are, respectively :
Equitable, New York	? 966,825,151
Mutual Benefit	 483,871,975
Mutual Life, New	York	 861,924,534
New York Life	 1.401,076,822
Northwestern Mutual	 781,604,915
John Hancock	 451.006,878
Metropolitan	 2,388,647,636
Prudential	 1,789,266,620
I have given	the	mutual companies. The
next two, both stock companies, are:
Aetna Life	 298,071,087
Travelers	 393,630,498
You will observe that the two last concerns, stock companies, are smaller than any of the other eight I have given, which are all mutual. I contend therefore that it is no argument to say that the Sun Life needs this extra capital to enable it to sell life insurance.
As I understand that some hon. members wish to speak on the bill I will not take up further the time of the house except to move an:	amendment. Before submitting this
amendment, however, I notice that the Minister of Finance, speaking in the house a year ago, in reply to some criticism that had been made against the Superintendent of Insurance of the Dominion, made the following statement:
Mr. Chairman, I do not rise to offer any defence of the Superintendent of Insurance. That gentleman requires no defence from any person in the insurance field of Canada. He is recognized as a fearless official who is afraid neither of the wealthy company nor of the company on the verge of bankruptcy.
Later on he said:
We will take care of the policyholders, for after all it is their money that provides the capital. I want to say that the policyholders' investigations into the Sun Life Company have been well managed and I am proud of the company. At the same time I believe that 15 per cent is not an ungenerous interest on the investments.
I am very keen on opposing this bill for another reason. In my seven years' experience in this house and in the banking and commerce committee we have found the members of that committee always very ready to listen to the Superintendent of Insurance. They look upon him as a man on the top of the tree of insurance, a man thoroughly to be relied on, a man whom the government of any country can be proud to have in the civil
service. His opinion has always been taken, except in this one instance; he has always been listened to with deference by the committee. But what do we find with regard to the Sun Life bill? After watching the committee for seven years I find now, that notwithstanding that the Superintendent of Insurance-a man, I say, at the top of his profession-has warned us against this bill and shown us its weakness, giving the various reasons why it should not be passed, he has been ridden over roughshod. I say therefore that we have a just right on these grounds to oppose the bill being rushed through the house, and I move, seconded by the hon. member for Peace River (Mr. Kennedy) :
That the said bill be not now read the third time but that it be referred back to the committee of the whole for the purpose of amending
That section 2 be deleted and the following substituted therefor:
. (1) The shares of the capital stock hereafter issued shall, to the extent of at least ninety per cent thereof, be allotted fully paid to the policyholders directors of the company, to be held by them in trust for the participating policyholders of the company, and an amount equal to the par value of the shares so allotted shall be charged to the participating fund of the company.
(2)	The said shares hereafter issued shall
^uk equally as to dividends and otherwise with the shares of the capital stock heretofore is-Sne(Ji	dividends payable on the shares
allotted m trust as aforesaid shall be credited
,Se Par^c^Pa^nS fund of the company.
(3)	At any annual or special general meeting of the company the shares so allotted in trust may be voted by the policyholders' directors of the company.


Sir EUGENE FISET:: Is not the amendment which my hon. friend has just read exactly the same amendment he proposed in committee and which was refused by the committee?


Henry Elvins Spencer: What on earth has that to do with it?


Herbert Bealey Adshead: I was paired with the hon. member for Cartier (Mr. Jacobs). Had I voted I would have voted for the amendment.


Hewitt Bostock: The question is now on the third reading of the bill.


Eugène Fiset: Next sitting of the house.


Mr. GARDINER:: I would call attention to the fact that it is after nine o'clock.



BUSINESS OF THE HOUSE


William Irvine: Mr. Speaker, I rise to a point of order. I wish to direct your attention to the fact that on April 13 I moved an amendment to Bill No. 23, to incorporate the St. Clair Transit Company, which was then up for discussion during the hour devoted to private bills. My amendment was discussed and when the hour for private bills expired it was still under discussion, and no vote had been taken. Tonight this bill came up again and was passed through the house without the amendment having been put. I therefore move, seconded by Mr. Jelliff:
That the order for the third reading of Bill No. 23 and act to incorporate the St. Clair Transit Company, be rescinded, and that the said bill be placed on the order paper together with the amendment thereto by Mr. Irvine for consideration at the next sitting of the house.


Hewitt Bostock: I must explain to the house that when I took the chair at eight o'clock the first three private bills on the orders of the day were called and then the house proceeded to consider Bill No. 23, to incorporate the St. Clair Transit Company. There was nothing on the order paper to indicate that there was an amendment to the bill; I looked around the chamber at the time because I had a vague recollection that an amendment had been moved to this bill some weeks ago by the hon. member for Wetaskiwin. The hon. member was not in his seat, however, and as I have already said the amendment was not indicated on the order paper. I have ascertained since that the hon. member did move an amendment, and the question should have been put on that amendment first. Therefore, in fairness to the hon. member, I may say that his motion is in order, and the order for the third reading of Bill No. 23 should be rescinded. Mr. Irvine moves that the order for the third reading otf Bill No. 23, an aict to incorporate the St. Clair Transit Company, be rescinded, and that the said bill be placed on the order paper, together with the amendment thereto by Mr. Irvine, for consideration at the next sitting of the house. The house will under-

Steel Industry-Mr. Macdonald (Kings)
stand that there is a place where one must apply fairness, and there is evidence of a mistake due to an error made by the clerk who prepares the orders of the day.


Ernest Lapointe: In order to be fair to the promoter of the bill, I suggest that this bill be put first on the order paper.


Hewitt Bostock: The 'bill should be restored to first place on the order paper, and I will give the necessary instruction. The clerk who prepared the order paper did not mention the amendment, and therefore we were all induced to error. Strictly speaking, notice of motion should be given, but I think both sides of the house will understand that in fairness to the hon. member for Wetaskiwin this motion should carry.


Eugène Fiset: I would call attention to the fact that when the hon. member rose to a point of order during the discussion on the Sun Life bill, I lost about two minutes of the time left for the discussion of that bill. I ask you, Mr. Speaker, to report the bill at the next sitting of the house, and I think in fairness to the Sun Life bill that the hon. gentleman's bill should come first and that the Sun Life bill should keep its place on the order paper and come second on the list of private bills.


Hewitt Bostock: As I have stated, it was due to a mistake by the clerk who prepares the orders of the day, that the bill was read a third time, and that bill must be put exactly where it was. Is it the pleasure of the house to adopt the motion?


Some hon. MEMBERS:: Yes.


Some hon. MEMBERS:: No.
Motion agreed to on division.



PRIVILEGE-MR. KAY

Mr. W. F. KAY (Brome-Missisquoi):: I
rise to a question of privilege. In to-night's Ottawa Journal I find the following report of what occurred this morning in the committee on immigration and colonization. The headlines read:
McMurray "Astounded and Stunned" by the Coldwell Charges. Not Sworn in Giving Evidence.
Further down is another headline: "Not Under Oath," and then follows:
Mr. McMurray did not give his evidence under oath. This fact was pointed out by Hon. J. W. Edwards.
I wish to state, Mr. Speaker, as chairman of that committee, that Mr. McMurray was sworn by myself in the same manner as every
other witness is usually sworn. The hon. member for	Frontenac-Addington	(Mr. Edwards) asked if Mr. McMurray had been sworn, and I informed him that he had. I trust the Ottawa Journal will publish this denial and give it as much prominence as was given to the statement to which I have just referred.


Mr. EDWARDS (Frontenac):: I may say, Mr. Speaker, that the statement made by the hon. gentleman is absolutely correct.



SUPPLY-STEEL INDUSTRY

[Stage Direction]
The house resumed consideration of the motion of the Minister of Finance (Mr. Robb) for committee of supply, and the proposed amendment thereto of Mr. MacDonald (South Cape Breton).
['With the permission of the house and in compliance with the wish expressed by the leader of the opposition and other hon. gentlemen opposite, I beg to lay on the table the report of the commissioner appointed by His Excellency the Governor General in Council under the Inquiries Act to investigate and report upon all claims which might be submitted, for the purpose of determining whether they were within the annex to section 1 of Part VIII of the treaty of Versailles, and the fair amount of such claims.']
John Alexander (1874-1948) Macdonald: When the house rose at six o'clock I was discussing the royal commission's report. I was showing how the transportation recommendations in connection with Prince Edward Island had not been carried out, particularly in regard to the standardization of the roadbed, and the ferry steamer. I was arriving at the point where I was endeavouring to show the increased traffic which had taken place during the past few years, and emphasizing the fact that the need for a second car ferry had arisen on account of the increase in traffic itself, regardless of any other condition.
Prince Edward Island was induced to go into confederation by the promise of a continuous and efficient steam service-mark the word "efficient"-being established and maintained between the island and the mainland winter and summer, thus placing the island in continuous communication with the railway systems of the Dominion. Until this car ferry went into service about the year 1915 no reasonable attempts had been made by the various governments to implement this promise. For five, six, seven and eight weeks we had been isolated from the mainland, without any connection whatever by steam, as promised under the terms of confederation. The car ferry did very well for a time, and gave what might fairly be regarded as efficient service. After all, "efficient" is a comparative term, and what might be efficient to-day might not be efficient to-morrow. That is what has happened to the car ferry; she was efficient when she undertook this service, but the traffic has increased to such an extent that it is physically impossible for one boat to handle it. Consequently the need for a second car ferry, as recommended by the Duncan commission, has become acute.
3278	COMMONS
Steel Industry-Mr. Macdonald (Kings)
In addition to the fact that the need is quite apparent from the standpoint of increased traffic, there is another aspect of it which is perhaps even more important. This matter was referred to by the hon. member for Pictou (Mr. Cantley) this afternoon, and I will not attempt to cover the ground he did in connection with the danger to a single boat. This boat has to fight heavy ice day and night for months at a time, and every person will realize the great strain which that causes. The boat is now thirteen years old, and is liable to accident at any time.
This is the only channel of communication with the island, and the matter, therefore, is vital. Should anything happen in the-winter time which would result in the interruption of communication we might reach the point where we would have to face cold and hunger on Prince Edward Island. Before this car ferry was put into operation the merchants all over the province stocked up big sheds full of coal and warehouses full of foodstuffs of all kinds to carry through the winter, in anticipation of being tied up from six to eight weeks. That system is now a thing of the past. We no longer stock up for winter needs; we depend on having a steady stream of coal cars, flour cars, feed cars for our stock, and all other necessities coming through day by day on this car ferry. It an accident happened to that boat we would be faced with cold and hunger. I do not think I need go any further along this line; but in view of the large expenditures which are being made by the government in various directions, some of which are not at all necessary or at all events not nearly so necessary as this, the government should at this session of parliament have inserted in the supplementary estimates an item which will take care of the needs of Prince Edward Island in this regard.
The car ferry steamer cannot be built in a month or a year. Supposing an item is inserted in the estimates this session, the earliest date at which we could expect to have a second boat would be probably the fall of 1929. I am not speaking in any critical or political sense; I have already expressed my appreciation of the work that the railway management has done, and before closing I wish to finish a quotation, which I had started to read before six o'clock, from a statement made by Mr. Appleton, general manager of the Atlantic region, in connection with the difficulty of serving the province under present conditions. Mr. Appleton said:
Everything that is at all possible is being done to facilitate the movements of potatoes

from Prince Edward Island and the shipments by the car ferry of the Canadian National this year are greater than at any time in the history of the road.
He went on to say:
Whatever shortage of cars there may have been at times they W'ere caused by such circumstances that were quite beyond our control.
He said further that during the present season more than 4,000 empty refrigerator cars had to be ferried across in order to carry away potatoes from Prince Edward Island. He said further:
While providing this service for Prince Edward Island we were also endeavouring to meet demands for refrigerator cars from Nova Scotia, New Brunswick and Quebec which demands in the aggregate are equal to the requirements of Prince Edward Island.
That will give hon. members some idea of the situation with which a single car ferry has to cope. According to Mr. Appleton, as many refrigerator cars are required in Prince Edward Island as in the three large provinces of Nova Scotia, New Brunswick and Quebec combined.


Hewitt Bostock: Perhaps the hon. gentleman will explain what relevancy his remarks have to the amendment before the chair. I should think they would be more relevant in a debate that might take place on the items in the estimates when considered by the committee of the whole house. I do not just at present see the relevancy of his remarks.


John Alexander (1874-1948) Macdonald: The Duncan
'Commission which was under discussion this afternoon gives as one of its recommendations:
Prince Edward Island car ferry.-The terms and conditions upon which Prince Edward Island was admitted into confederation in 1873 contained the following provisions: -
"Efficient steam service for the conveyance of mails and passengers to be established and maintained between the island and the mainland of tile Dominion, winter and summer, thus placing the island in continuous communication with the Intercolonial railway and the railway system of the Dominion".
It goes on to say:
The present car ferry affords a much improved service as compared with that which the island formerly enjoyed, but in recent years traffic and freight have considerably increased, and will continue to increase, particularly at certain seasons of the year.
An so on. I was discussing the car ferry service.


Hewitt Bostock: Of course the main argument was about the steel industry. The hon. gentleman was discussing the Duncan report generally. That explains the relevancy of his remarks.


John Alexander (1874-1948) Macdonald: I understood that the amendment referred to the report

Steel Industry-Mr. Church
of the Duncan commission. I was discussing the demands on the car ferry. Mr. Appleton further stated that at one time there were 400 unfilled requisitions for refrigerator cars for potatoes. Hon. members will realize that when there is a ready and good market for perishable products, if you cannot get them moved the chances are that you will lose heavily, and that is what has happened.
As I said a moment ago, I am not speaking in a critical or political sense; I am speaking for the purpose of making as sincere, honest and earnest a request as I can to the Minister of Railways and to the government to provide those much needed facilities and, as regards the car ferry, a vital need for the people of Prince Edward Island, not only because of the recommendations of the Duncan commission but because the honour of the parliament of Canada in regard to the terms of confederation is at a stake. If there had neveT been a Duncan commission, we would have had a right to insist on account of the terms of confederation itself.


Thomas Langton Church: The resolution of the hon. member for South Cape Breton (Mr. MacDonald) calls upon the government to implement in full the recommendations contained in the Duncan report, particularly the recommendation relating to the steel industry. That hon. gentleman in my opinion is correct in the statements that he has made. This is not the first time that we have had a recommendation from a commission or a committee of this house; we had commissions or coal committees appointed in 1923, 1924, 1925 and 1926 to consider the industries of steel and coal in the maritime provinces. Those industries in the maritime provinces are in a precarious and withering state. The coal and steel industries all over the whole world are in a precarious state to-day owing to the disturbance of the industrial equilibrium after the war and owing to economic conditions. The maritime provinces have been suffering for many years on this account and hon. members on this side have been for five or six years bringing this coal and steel matter to the attention of parliament. Recommendations have been made but not one of them has been implemented.
You cannot deal with the steel industry in the maritimes without considering the allied coal industry; they are one. The amendment calls for implementing in full the recommendations of the Duncan report, particularly in regard to the steel industry. There is only one way in which to solve the ills of those two basic industries in this country and that
is the way in which they solved them in England after the war. When England found that she was losing to the Hamburg yards the steel, coal and ship building orders, what did the Baldwin government do? They adopted exactly what those on this side of the house have been arguing for in season and out of season, namely, a safeguarding of industries act in the way of subsidies, bonuses and subventions, so as to give proper protection for those two industries. That is a system of subventions, subsidies and bonuses, which is the backbone of the Duncan report for the relief of the maritime provinces. Coming from Ontario I may say that central Ontario is clamouring for steel and coal from the maritime provinces, but owing to the difficulty of transportation and the high freight rates on the water and rail or all-rail routes for the cartage of coal and steel to central Canada, the maritime provinces are losing hundreds of thousands of dollars' worth of tenders. In the city from which I come they found in some cases that these commodities in parts could be brought in duty paid cheaper than they could be brought from the maritime provinces owing to the heavy freight rate, both by all-rail or water and rail routes.
When this report was before the house last year I understood that the house was unanimous in regard to it. It was not looked upon as a party matter; everybody felt that some degree of protection should be given to these industries to put them on their feet. So far as the maritime provinces are concerned they are basic industries and we should adopt a principle of protection, of subventions, subsidies and bonuses to put those industries on their feet and let them weather the storm once and for all time. Is it not better to do that than to have the men in these industries go to the United States? It is the same with the shipbuilding industry. We have had information recently with Tegard to a shipbuilding firm in Collingwood and the maritimes. The men in the shipbuilding industry in this country have had to go to the United States to earn a living, and that is a condition of affairs that should not be. We entered into a contract with the maritime provinces at confederation, and no matter what the cost may be, no matter whether it be borne wholly or in part by this country, I say that we should go to the help of the steel industry, just as Stanley Baldwin did in England. In England they spent $100,000,000 a year to put one of these industries on its feet-the coal industry-rather than have strikes and labour difficulties, and have the industry go to the wall. I urge upon the government to do

Steel Industry-Mr. Dunning
something for these two particular industries. We have had committees of the house inquiring into the coal question and into the steel question, and they recommended the encouragement of the movement of coal from the maritime provinces by rail and water during the season of navigation of central Canada. The committee adopted the principle, and the house accepted it, and voted $150,000 in subventions to help in the movement of coal from the maritime provinces to central Canada, but the navigation season ended before all that money was spent. But I repeat, the house had adopted the principle of that form of assistance for the coal industry. I say to the people of the maritime provinces that the people in the central provinces of Canada are just as much interested in putting the steel and coal industries on their feet as are the people of the maritime provinces, and are just as much interested in solving the problems of those industries as in solving those of central Canada. I do hope that all parties in this house will get together and give to the maritime provinces what is long overdue, something in the way of a safeguarding of industries act, to place these native industries on their feet for all time to come.
Hon. CHARLES A. DUNNING (Minister of Railways and Canals): I think it ia great pity, Mr. Speaker, that the opposition members from the maritime provinces should paint such a picture of blue ruin as relating to that part of Canada. I appreciate, of course, the fact that they are in this house largely through the clever exploitation of the legitimate grievances of the people of that part of Canada, and through the invention by hon. members opposite of grievances that had no foundation in fact, and their great fear to-day is that in consequence of the manner in which the present government has implemented the recommendations of the Duncan commission they will lose that political grievance which has hitherto been so fruitful to them. I offer in evidence against their contention of ruin in the maritime provinces a wrapper, covering the chief Tory paper in the province of Nova Scotia, and in large type, for everyone to read, at the top of the wrapper appear these words:	"Halifax the capital city of the prosperous province of Nova Scotia." I wonder whether the newspaper published in the interest of hon. gentlemen opposite is more to be relied upon than some of the statements to which we have been listening this afternoon and this evening in relation to that part of Canada? As a matter of fact, looking back, my hon. friends opposite were not always as fond of the Duncan commission as they appear

to be now. I well remember that when it was proposed to appoint a commission to look into the grievances of the maritime provinces, my hon. friends opposite condemned the proposal utterly, and would have none of it; in fact, they talked very plainly about refusing to have anything to do with the commission when it was appointed. But to-day on every occasion when a maritime province Tory gets up to address the house, he uses the Duncan commission report as if it were holy writ. They want now every inch of it in every particular.


Thomas Cantley: Why not?
Mr. McGIBBON * It was a stolen Conservative policy.


Charles Avery Dunning: Well, if my hon. friend
thinks that one of the Conservative policies has been stolen by this government, that is at least evidence that something very substantial has been done in carrying out the provisions of the Duncan report; otherwise, the policy could scarcely be a stolen policy.
This afternoon my hon. friend from Pictou (Mr. Cantley) was labouring hard to inflate this grievance again and give it force in the maritime provinces, and in order to do so, he very dramatically asked me a question and sat down on his chair to wait for my reply. It was a question which he knew perfectly well would be a proper one for me to deal with when the estimates of the Department of Railways and Canals were before the committee, and he was in fact, by taking up the time of the house, preventing the Department of Railways and Canals getting its estimates before the committee of supply for consideration. With regard to the matter to which my hon. friend referred, he stated that during the proceedings of the special committee on railways and shipping owned and controlled by the government of Canada he had asked me a question, and had asked the president of the road a question, with regard to a new ferry for Prince Edward Island. My hon. friend stated that the answer he received on that occasion was that nothing would be done this year. He plainly stated that this afternoon. I have in my hand the stenographic printed report of the proceedings of the special committee on railways and shipping, and I am sure that what I am about to read as an extract from those proceedings can be confirmed by the hon. member for Queens (Mr. Jenkins), who is a member of that committee. I read from page 47 of the report of the proceedings of that committee:
Mr. Cantley:	What are you doing about a
new ferry for Prince Edward Island?

Steel Industry-Mr. Dunning
Sir Henry Thornton:	These ferries are
owned by the government, but we have the strengthening of our ferry service under consideration, but we have not determined definitely with the government what to do. There has been a good deal of talk, and with some merit, that there should be an additional ferry, not only to take care of the increased business, but to provide a more positive service in the event of one ferry going out of service for some unanticipated reason.
Mr. Cantley:	I would like to know what
you are doing about it. Have you ordered another boat, or are you going to?
Sir Henry Thornton: I do not know whether we are going to order one or not; that is under consideration.
Mr. Cantley:	Who will know, the minister?
Sir Henry Thornton:	The minister and I
will probably talk about it, and decide what we had better do.
Mr. Cantley:	Have you talked about it?
Sir Henry Thornton:	Oh, yes.
Mr. Cantley:	What has been, done?
Sir Henry Thornton:	Nothing as yet. May
I round up the situation by saying this; the traffic to and from Prince Edward Island is increasing.
Mr. Cantley:	This ferry boat is 13 or 14
years old and she may break down at any time, and the island is dependent on one boat.
Sir Henry Thornton:	It is not quite as bad
as that, but there is a measure of truth in what you say. The situation is receiving serious consideration, and is not going to be overlooked.
Mr. Cantley:	But nothing was done this
year?
Sir Henry Thornton:	Nothing this year.
"Nothing this year"-referring to the year that has passed.


Thomas Cantley: No, no.


Charles Avery Dunning: The whole matter under discussion before the committee that day was with reference to the work done by the Canadian National during the past year. As a matter of fact, my hon. friend well knows, and the members from Prince Edward Island on this side of the house are in the best position to confirm it, that the question of a second car ferry for Prince Edward Island has been receiving the attention both of the Canadian National Railways and of the department for more than one year past. The members who sit on this side from the Island have on several occasions waited upon myself, and have waited upon the management and officials of the Canadian National Railways, in connection with that matter, and were always given to understand that determination with respect to the matter would be reached by the goverment before the supplementary estimates were presented to the house. That was the information given on every occasion when representations were made tp me with regard to the matter.


Thomas Cantley: Will the minister allow me a question?


Hewitt Bostock: Order.


Charles Avery Dunning: My hon. friend made his speech this afternoon.


Peter McGibbon: Surely the minister is not going to refuse to answer a question?


Charles Avery Dunning: Oh, is it a question?


Thomas Cantley: Yes.


Charles Avery Dunning: If it is a question, all right.


Thomas Cantley: Does the minister not
know that my question referred to this year, not last? I was not foolish enough to ask whether the government were going to provide a boat last year when I knew they had not.


Charles Avery Dunning: I leave my hon. friend's language to the judgment of the house. This is his language:
Mr. Cantley:	But nothing was done this
year?
"Was done this year."


Thomas Cantley: Exactly; you made-
Mr. SPEAKER.: Order.


Charles Avery Dunning: My hon. friend can explain that as much as he likes, but he well knows, as other members from the maritime provinces know, the matter of the second car ferry has been under consideration by the government during the whole period.


Thomas Cantley: I am perfectly able to
correct your answer.


Hewitt Bostock: Order.


Charles Avery Dunning: I will let my hon. friend make another speech.


Thomas Cantley: I will make another speech
when I wish to.


Charles Avery Dunning: I was about to say that Sir Henry Thornton on that occasion could not make a more definite reply than he then made.


Thomas Cantley: Not- so ambiguous as
your own.


Hewitt Bostock: Order.


Charles Avery Dunning: Sir Henry Thornton could not on that occasion make a more definite reply than he had made, because the decision of the government in regard to the matter had not then been reached. And I can tell my hon. friend that the tactics followed by him and his associates do not in general tend to induce a government to do the things they ask for.



Steel Industry-Mr. Dunning
Their manner of proceeding is not that which usually produces the result desired. We are giving consideration not to the request of my hon. friend-


Thomas Cantley: I am not going to be
lectured.


Hewitt Bostock: Order.


Charles Avery Dunning: -but to the representations which have been continuously and courteously made by the hon. members who sit on this side of the house representing three-fourths of the seats in that province.


Mr. BENNETT:: Shame.


Hewitt Bostock: Order.


Charles Avery Dunning: I may say quite frankly that I have, as Minister of Railways and Canals, recommended to my colleagues a provision in the supplementary estimates for the sum of one million dollars for a new car ferry for the Prince Edward Island-mainland service.


Richard Bedford Bennett: Mr. Speaker, it is not customary to disclose discussions between a minister and his colleagues antecedent to the estimates being introduced in this house.


Charles Avery Dunning: My hon. friend is quite correct; but I may tell him that the cabinet to-day decided I should make the statement that I have just made.


Richard Bedford Bennett: They cannot do it. It is against the oath of office which the minister takes.


Mr. CANNON:: Why did they ask you this afternoon?


Charles Avery Dunning: I am surprised at my
hon. friend's attitude in view of the fact that hon. members opposite were asking me to answer the question all the afternoon; now I am wrong because I have answered it.


Peter McGibbon: You are wrong because you have violated your oath of office.


Hewitt Bostock: Order.


Thomas Cantley: It is good news anyway.


Charles Avery Dunning: They object for one very good reason:	it removes one more of the
political grievances to which they owe their seats in this house. As I said at the outset, they hold their seats by virtue of the exploitation and the exaggeration of grievances,-


Some hon. MEMBERS:: Oh no.


Charles Avery Dunning: -and they are fearful lest those grievances will be removed to an extent which will prevent them ever coming back here again.
Now with respect to the coal matter. This afternoon my hon. friend from Cumberland (Mr. Smith) introduced the question of the ownership by the Canadian National Railways of a coal company in the United States -which ownership, by the way, was mot acquired by the Canadian National Railways as such, but by the old Grand Trunk during the period of private ownership, and the property came to the Canadian National Railways with the rest of the assets of the Grand Trunk system. My hon. friend complains because the Canadian National Railway retains that property and so obtains coal from its own subsidiary in the United States. If his argument means anything, it means that he believes that it would be good business for the Canadian National Railways to take coal from Nova Scotia even further west than it does now for railway use. That is what his argument means if it means anything. As a matter of fact, the retention of the ownership of this coal company by the Canadian National Railways is fully justified if only for the purpose of supplying coal to the United States lines of the system.


Robert Knowlton Smith: If the minister will permit mes Is there not more coal supplied by that company to the Canadian side than to the American side?


Charles Avery Dunning: I have not the figures in my mind.


Robert Knowlton Smith: There is, according to the return.


Charles Avery Dunning: According to the return there well may be. But I would point out- this is a matter of good business as well as justice to the maritime provinces-that the Canadian National Railways to-day uses Nova Scotia coal as far west as Belleville in Ontario and as far west as Cochrane in northern Ontario. If the Canadian National Railways was a privately owned concern, most certainly that would not be done. And it is a very grave question, Mr. Speaker, as to how far we should insist on discharging our national obligations through the medium of a publicly owned business institution instead of through this parliament. If we have national obligations toward the maritime provinces-and I for one have always admitted that we have national obligations of a peculiar and distinctive character-then I say those obligations should be discharged by this parliament through the medium of the government, and

Steel Industry-Mr. Dunning
we should not load those obligations upon an institution like the Canadian National Railways, which we are trying to have conducted in a businesslike manner to enable it to compete with other institutions doing a similar business in a similar way.


Peter McGibbon: When did you change your mind?


Hewitt Bostock: Order.


Charles Avery Dunning: I have not changed my mind, Mr. Speaker. That is the view I have held of Canadian National Railway operation, and the best proof of this is found in the Maritime Rates Act of last session, introduced by me on behalf of the government, which contains that principle very plainly.


Peter McGibbon: May I ask the minister a question?


Charles Avery Dunning: Yes.


Peter McGibbon: Will he deny that he did not condemn that very thing in his campaign speeches during the last two elections?


Charles Avery Dunning: No.


Peter McGibbon: I will produce the proof in parliament.


Charles Avery Dunning: I shall be very glad to have the proof produced, that I at any time advocated a different principle.


Peter McGibbon: I will produce it in parliament.


Charles Avery Dunning: I should like my hon. friend to produce it now if he is so sure.


Peter McGibbon: Your leader did the
same thing.


Hewitt Bostock: Order, please.


Ernest Lapointe: What is he talking
about?


An hon. MEMBER:: He doesn't know What he is talking about.


Charles Avery Dunning: It is always easy to tell when an argument is getting home to my hon. friends; they interrupt with a question which is not a question, but designed to throw one off the track, to upset the tenor of one's discourse. I will enunciate the principle again. It does not much matter whether I ever advocated anything different; I have no recollection that I ever did. The principle is sound: If this country has obligations towards the maritime provinces, those obligations should be discharged through the medium of this parliament and this government, and should not be laid on the Canadian National Railways. That is the principle in brief.
The Duncan report in the matter of railways makes a recommendation with respect to the St. John and Quebec railway in the province of New Brunswick, and also another recommendation that negotiations be reopened in connection with the Kent Northern railway in that province. When the Dom-inionnprovincial conference was held last year a number of the provinces had problems to present having to do with the ownership of railways by the provinces-railways which had proven to be a burden to their owners, and which they desired should be taken over by the federal government and made a part of the Canadian National Railway system. It was then understood that the Dominion government would give consideration to the needs of the provinces in connection with this particular matter. It is interesting to note that no one of the provincial railway problems is exactly like any other one of them. There are great diversities in the nature of the problems presente<I. As a result of consideration by the government, Sir Henry Thornton, the president of the Canadian National Railway system, was authorized to negotiate with the governments of the various provinces affected, and also with respect to some privately owned railways which, in the opinion of the governments of some of the provinces, it would be in public interest for the Canadian National system to take over. These negotiations, in the nature of things, are complex; they cannot be concluded in a moment. Very naturally each province wants to make the best possible deal that it can; and, on the.other hand, the president of the Canadian National system is concerned to have in mind always the interests of that system in dealing with the provinces or with anyone else in a matter of this sort. The negotiations are not yet completed with respect to any one of these properties, but I am hopeful that they will be completed and that the government will be able to give consideration, during the recess, to these particular railway acquisition problems, with a view to some action (being taken at the next session of parliament. It may even be possible that under existing legislation something may be done during the recess with respect to some of these properties.
Now, with regard to the Maritime Rates Act, I desire to give the house some information touching the operation of that legislation. A few weeks ago supplementary estimates were presented to the house for the fiscal year 1927-1928, which ended on the 31st day of March last. The supplementary estimates

Steel Industry-Mr. Dunning
which passed this house prior to the end of last fiscal year had to do with the operation of the Maritime Rates Act for a period of only six months. It will be remembered that the Maritime Rates Act became operative on Dominion Day last year, so that there were exactly six months, from July 1 to December 31, to be provided for during the last fiscal year. The supplementary estimates were set out exactly in accordance with the terms of the Maritime Rates Act, and provided for $421,654.56 to be paid to eleven different railways other than the Canadian National, and $931,809.89 to be paid to the Canadian National on account of the 20 per cent reduction which had been in effect for six months. In other words, the Dominion government paid to the railways, for the first six months' operation of the Maritime Rates Act, on account of the 20 per cent reduction alone, a total sum of $1,353,464.45. What does that mean? It means that the people of the maritime provinces paid $1,353,000 less freight rates during that six months than they would have paid had the Maritime Rates Act not been passed. That is exactly what it means. It means that the people of Canada paid, on account of freight charges due in the maritime provinces under the normal rate, a contribution of $1,353,464.45 during that period of six months.
Now, I do not want anyone to accuse me of regarding this as charity. I have stated in this house, and publicly outside, that I do recognize, that the government recognizes, that the Maritime Rates Act was based upon a principle of fundamental right; and this amount paid by the Dominion government on account of maritime province freight bills is paid, not a a matter of charity, but as a matter of right, having regard to the national and strategic considerations surrounding confederation, mentioned and dealt with so fully in the report of the Duncan commission.


Finlay MacDonald: If it is a matter of right, does the minister not think that the government should extend it some years back?


Charles Avery Dunning: 
Isaac Duncan MacDougall: Mr. Speaker, I do not intend to follow the Minister of Railways (Mr. Dunning) in all his mental contortions and acrobatics, at which I will admit he is very adept. However, I feel that I am voicing the sentiments of the people of the maritime provinces when I publicly congratulate the hon. gentleman upon having experienced a most remarkable change of heart, of mind, and of disposition, in reference to the maritime provinces. Not very long ago we heard from the mouth of the hon. gentleman words concerning the maritime provinces which do not very well fit in with his pious professions to-night. Not many months ago, in the city of Regina, as quoted by one of his own newspapers, he publicly declared that the only rights the people of the maritime provinces possessed Svere the rights to be born, to have a free ride on the Intercolonial Railway, to be married and to die. I congratulate my hon. friend, for whom I have the highest regard-

Steel Industry-Mr. Macdougall


Charles Avery Dunning: On a point of order,
Mr. Speaker, I must again insist on the opportunity to deny the statement just attributed to me by my hon. friend.


Isaac Duncan MacDougall: I shall certainly
accept the word of my hon. friend, because there are very few gentlemen in this house for whom I have an equally high regard. But I must tell him that he should carry that correction to that newspaper in Regina which is supposed to be one of his best supporters.


Charles Avery Dunning: I did.


Isaac Duncan MacDougall: However, my hon.
friend has said that we who come from the province of Nova Scotia owe our positions in this house to the fact that we have exploited maritime grievances. I wish to disagree slightly with the phraseology employed by my hon. friend. We owe our positions in this house to the fact that we stood up for maritime rights and condemned the conditions under which the maritime provinces laboured, while the hon. gentleman and his party were ridiculing and abusing us for saying that the maritime provinces had any rights at all under confederation. It is to that we owe our positions in this house, and that is why we will hold those positions for many long years to come.
Now, sir, before coming directly to the resolution before the house I wish to deal, and perhaps with some feeling, with the remarks made by the Minister of Finance (Mr. Robb) in the very spavined intellectual performance to which he treated this house before dinner. In the course of that belaboured speech, which for some years to come will be the very best campaign material we on this side of the house could desire, he declared that we from the maritime provinces who press for one hundred per cent fulfilment of the Duncan commission report are whining. Let me tell my hon. friend-and I do not make this a party issue

that every man and every woman in the maritime provinces, irrespective of creed or political belief, Liberal, Conservative, Progressive and Labour alike, demand and expect to-day that the Duncan report will be implemented to the extent of one hundred per cent. When he declares that we who voice the sentiments of these people, Liberal and Conservative alike, are whining, he indirectly says that the people of the maritime provinces are whiners. Let me say, Mr. Speaker, that I fling that insult back in his teeth. Let me say that we who come from the province of Nova Scotia come here representing a province which has honourably performed an honourable part. We come
'Air. Macdougall.]
from a province which has the distinction of being the first province on British North American soil to introduce the principle of responsible government. We come from a province which in the days that have gone made vast sacrifices to act as the buffer between Upper and Lower Canada on which was to be broken racial and religious prejudices. We come from a province which by dint of self-sacrifice made possible the consummation of Canadian confederation.
I want to say to the Minister of Finance, and I am glad that he is now in his seat, that when we come asking for a one hundred per cent implementation of the recommendations made by a tribunal appointed by this very government, an impartial tribunal which adjudicated upon our claims and brought in a report in our favour, we do not come to this parliament as mendicants or beggars. Wp do not come to this parliament begging the crumbs that may fall from your legislative table; we come as self-respecting people spurning your charity and your pity. We come asking for justice.


Hewitt Bostock: I do not wish to interrupt the hon. member, but he has used an expression which is unparliamentary, and imputed an insult to the Minister of Finance. Bourinot says that no hon. member is allowed to attribute to other hon. members the intention of insult.


Isaac Duncan MacDougall: Ever since I came into the parliament of Canada, whatever distinctions I may have had in other regards, I have always attempted to be amenable to the rules of parliament. I certainly shall submit to your Honour's ruling in this matter, but when the Minister of Finance (Mr. Robb) refers to the people of the maritime provinces as whiners, in my judgment it is an insult to those people who have played an honourable part in confederation.


James Alexander Robb: I said I was sure the electors of the maritime provinces did not share the views advanced by the hon. gentleman.


Isaac Duncan MacDougall: I shall leave my hon. friend in the judgment of Hansard to-morrow morning.
I agree with your ruling, Mr. Speaker, and I submit to it. I feel that at the next election the people of the maritime provinces will vindicate the position I have taken.
In reference to the resolution introduced by the hon. member for South Cape Breton (Mr. Macdonald), I rise to give it my support. I believe it has behind it one hundred per cent of the public sentiment of the maritime prov-

Steel Industry-Mr. Macdougall
inces. It deals with the fact that this government appointed a commission to investigate maritime claims; that they promised one hundred per cent implementation of the recommendations of that commission, and that they have failed to implement to the extent of one hundred per cent the recommendations of the commission. It deals specifically with the question of the Nova Scotia iron and steel industry. That question is one of vital importance, and one which must be considered not only on provincial grounds but also on national grounds, and on the ground of empire considerations as well. On provincial grounds it is of very great importance to Nova Scotia, because around and about that industry there have grown up many of the most populous centres in that province. The city of Sydney, and the towns of North Sydney, Sydney Mines, New Glasgow, Trenton and Stellarton, with very substantial populations, are all entirely dependent for their very existence on the success or failure of the Nova Scotia steel industry. They furnish the principal home market for the agricultural products of the farmers for many miles surrounding these towns.
May I point out also that there is an interdependence between the Nova Scotia steel industry and the Nova Scotia coal industry. When working at full capacity the Nova Scotia steel industry is capable of consuming, and does consume, over a million tons of Nova Scotia coal per year. You can see, Mr. Speaker, how very important to the province of Nova Scotia is the welfare of this industry in respect of which we are asking the government for assistance. We are asking not for any special assistance but for that assistance which was recommended by a tribunal of their own creation.
This is a question which should appeal to every hon. member of this house on national grounds. If you will look into the industrial history of those nations which are to-day pre-eminent in wealth, in power and in population, you will find that every one of them owes that pre-eminent position to a careful fostering of its coal and steel industries. We in this country in the years that are to come, no matter what government may be in power -although the continuation in power of my hon. friends opposite may somewhat retard industrial progress-are bound to achieve a great industrial expansion. In not so many years we will have a highly industrialized country. Wei will have opportunities for employment, not for ten million but probably for one hundred million people. We will have myriads of opportunities for employment for our own sons and daughters, and for many others who come from foreign lands. We must be careful, therefore, to foster and protect those industries which are of national and basic importance, which are wrapped up with the industrial future of this country.
We who sit in these seats to-night are not legislating merely for our own generation, nor for this year; we must not look through the eyes of years or of decades. In dealing with national problems we must look through the eyes of centuries; we must follow those policies which, while at present involving perhaps some sacrifice, in the course of years will redound to the industrial and political advantage of our country. No nation which has attained a pre-eminent position in respect of population or wealth or power has done so by ignoring its coal and steel industries. This question is one not only of national but of empire importance. I do not know whether some hon. gentlemen opposite take much stock in that statement or not. Amid all this din and clatter and idle chatter about a new status being achieved, about Canada being at last a sovereign state, about our having wrested, as it were, a Magna Charta of Canadian liberties as if from some foreign and tyrannical power; amid all the signs and portents which indicate that this country is slowly and surely but blindly drifting towards independence from the motherland, there be those of us in this country who, yclept old-fashioned if you will, still think that there is something of value and virtue not only in strengthening the bonds that bind this great young nation to this great old empire, but in attempting also to foster and develop industries which are of empire importance. The Nova Scotia steel industry is an industry of that character. It is the only steel industry which has its roots in British soil, whose roots are indigenous to the British Empire. We have no other of the same nature in the empire. Should we not from empire considerations do what is fair, reasonable and just to see to it that this industry, so vitally important to Nova Scotia, to our nation, and to that great empire to which it is our priceless'privilege to belong, should not be allowed to deteriorate and to die?
There is more than that concerned in this matter. We have had a commission investigating maritime claims, a commission which was appointed by the sheer force of public opinion, a public opinion created by members on this side of the house and by the Conservative party in the maritime provinces. We had that commission go down to the mari-

Steel Industry-Mr. Macdougall
time provinces where it held many hearings and I greatly regret the fact that the eloquent voice and the great intellectual gifts of the Minister of National Defence (Mr. Ralston), who represents Nova Scotia in the cabinet, were not used before that commission. I greatly regret the fact that the hon. member for, Hants-Kings (Mr. Ilsley) did not appear before the commission and I still more deeply regret the fact that no outstanding Liberal in the maritime provinces appeared before the commission to give evidence. But leaving that aside for the moment, may I point out that as a result of the evidence submitted to that commission, as a result of the masterly case presented to them by the Hon. Gordon S. Harrington, the best and, indeed, the only real minister of mines we have ever had in Nova Scotia, the commission on page 38 of the report made a specific recommendation in regard to the Nova Scotia steel indusirj There is no equivocation, qualification or camouflage about that recommendation There is no way of getting out of it at all except to ignore it altogether and unfortunately that is what the government has so far done. That recommendation is definite. It does not say that this thing should not be done until a year hence. It does not say that this thing should not be done because of the supposed abuses in the capitalization of the company. It does hot say that this thing should not be done because there was litigation pending. It says simply that this should be done, and so far. the Prime Minister and his government have refused to do it.
But the situation is worse than that. The Prime ; Minister and many of his supporters promised the people of the maritime provinces one hundred per cent fulfilment of the Duncan report. One of the most novel experiences I ever had in my life was during the last federal election. I came to address a meeting in the town of Port Hawkesbury the very next night after the Prime Minister was there, and in going up to the hall I was compelled to walk under a banner bearing this strange device: " The Liberal party under Mackenzie King stands for protection for steel and coal I am not accusing my right hon. friend of putting the banner there, but it was there just the same. That was certainly a banner with a strange device, if we are to take into consideration the way in which my hon. friends opposite have used these industries in the past few years. Some hon. gentlemen may think it is unimportant, trifling, for a government to pledge its plighted word and then to go back on it. I do not see eye to eye with that view. There are in this country, as there are in other countries, men

who are ever willing to ridicule and to bring into disfavour constituted authority, and one: of the best ways in which to have constituted authority degraded, detested and despised is to have those who are responsible for enforcing that authority violate their plighted word to the people to whom they have given it. That is the situation in regard to the bfova Scotia steel industry. No quibbling, no delving into the mists of political antiquity will obscure that fact. It is there in the commission's report. No one can obscure it and no one can deny it. We stand for one hundred per cent implementation of the Duncan report.
I was interested in the speech delivered on the budget by my very excellent friend, the Minister of National Defence. At this point let me say that I admire the hon. gentleman very much. I say in all sincerity that my hon. friend has had a distinguished record both in peace and in war. For a number of years he has been a luminary of the Nova Scotia bar. He is a credit to himself and a Credit to the province whence he came. But the speech which he made on the budget, in which he dealt with the steel industry of Nova Scotia, was no credit to him. I was sorry to see such a worthy man attempting to uphold such an unworthy cause. Instead of coming out man-fashion as has been his wont, and saying to us, "I tried to get this thing through, or I did not; I am in favour of this thing, or I am not," he delved into the mists of political antiquity and went back to tell us of the Hon. W. S. Fielding and what he had done over thirty years ago for the Nova Scotia steel industry. We in Nova Scotia appreciate what that great old statesman from the province of Nova Scotia did for us. We honour and revere his memory, but every schoolboy in Nova Scotia, if it is a question of who first did something for the Nova Scotia steel industry, will answer that the first assistance ever given to the Nova Scotia steel industry was given by a Conservative government under Sir Charles Tupper. But I wish to tell my hon. and excellent friend, the Minister of National Defence (Mr. Ralston) that the men who are without work in Trenton, the men who are without work in New Glasgow, the men who are without work in Sydney Mines and the city of Sydney, are not very much interested in what Mr. Fielding and Sir Charles Tupper did thirty-fiye years ago. We are no longer living in the past in the province of Nova Scotia. Not the spell of the setting of yester's sun, but the vision of the dawn of a new day-that is the inspiration of our little province by the sea. I do not wish to criticize my hon. friend at all, but it is well known

Steel Industry-Mr. Ralston
32S9
that evil communications corrupt good manners, and my hon. friend was for some time in local politics, fortunately not for very long, but for some little time he was in the school of Murray and of Armstrong, a school of evasion, where you could not get a direct , answer to a direct question if circumlocution could be used. He was trained in that school for years until the people of his native county, Cumberland, realizing his sterling worth and his great ability, charitably turned him down at the polls that he might not follow those people any longer. But, sir, I fear that that school of evasion has had some little effect on my hon. friend, because instead of coming right out here and saying, "The government is going to do this thing for Nova Scotia, or it is not," he made a laboured speech in which he attempted to show that thirty-five or forty years ago the Liberal party had done so-and-so for Nova Scotia.
Let me repeat, we in Nova Scotia are not any longer interested in what happened thirty-five or forty years ago. A commission has been appointed to deal with the rights of the province of Nova Scotia and the other maritime provinces within confederation. It took three years of agitation, three years in which to crystallize public opinion before that commission was appointed. Their recommendations have been favourable to the maritime provinces. We in the maritime provinces have played an honourable part ever since we entered confederation. We played a worthy part in the consummation of confederation itself. and now we come to this parliament, not as suppliants, not as mendicants, not as beggars, but as the representatives of a free people asking that justice be done; asking that the recommendations made by an impartial tribunal. the creation of this government itself, shall be fulfilled to the letter. For that the representatives of the maritime provinces on this side of the house stand. For that no reasonable man can criticize us, and for that we shall stand until these recommendations are implemented one hundred per cent by the parliament of Canada.


James Layton Ralston: I am sure, Mr. Speaker, that I am only voicing the sentiments of everybody who has listened to him when I congratulate the hon. member for Inverness (Mr. Macdougall) most sincerely on his very eloquent and very high-spirited deliverance. The fact that it ha3 not very much to do with the subject in hand I do not think troubles him, and as a matter of fact I shall not attempt in the short space of time which I have to follow him in the ramifications of his speech. I shall try, however, to satisfy his desire that there be no
evasion in connection with this matter, and I shall endeavour to deal with a few facts in connection with the Duncan commission report which seem to have been left out by him and by the other speakers who preceded him.
I admire the hon. gentleman who moved this resolution (Mr. MacDonald). Compliments are flying thick and fast to-night, and I want to say that in this house, at least on the other side, I do not know of any fairer gentleman than the hon. member who moved this amendment to the motion to go into supply. I do believe that few public duties which he, with his fair-mindedness, has ever performed have been more distasteful to him than the motion which he moved this afternoon, because I know perfectly well that when he sets out in a resolution the statement and regrets that the government has refused to implement in full the recommendations of the Duncan report- mark you, has refused to-my hon. friend must know that he is travelling on very thin ice indeed.
I want to deal with only three or four matters in connection with the Duncan report. First, let me say one word with regard to the steel industry, which is tacked on at the end of the amendment but which, after all, is only intended to give some foundation for the genera! motion of censure and want of confidence which is contained in the resolution. The recommendation of the Duncan commission with regard to the steel industry is a recommendation-it has been read half a dozen times in this house to-day

in two branches. One is a statement that the steel and customs tariff has been submitted to the tariff advisory board, and that the commission were notified by the chairman of the board that it was under consideration, and the commission say with respect to this, that they regard it as their duty to record that the significance of this industry to the maritime provinces was forcibly brought home to their attention, not only in the manufacturing [DOT] towns they visited in the maritimes, but also throughout the agricultural districts of the maritimes, and they say they record this in order to emphasize the need for prompt action. The second branch is that there is a recommendation, as has been suggested, that a bounty be paid on the manufacture of steel, based on the amount of Canadian coal used in its manufacture.
As I pointed out only a very short time ago, at the time this recommendation was dealt with by the house the steel industry in Nova Scotia was in the throes of litigation. Two parties were fighting for the control of that industry, and that condition of affairs continued up until some time in March of this year,

Steel Industry-Mr. Ralston
when a third party stepped in, according to the newspapers, and made their own arrangements. These arrangements had not been completed at the time of the budget debate, and at that time it was pointed out that it was felt that some conditions should be required before anybody could fairly and properly and intelligently deal with the steel industry. Some of those conditions have been mentioned by my hon. friends opposite. One condition was that there should be unity between the steel and coal industries. Those who do not come from Nova Scotia may not understand that reference. For their benefit I want to say that there was considerable antagonism apparently between those who held control of the company engaged in steel operations, and those who held control of the company engaged in coal operations. It was felt that the steel and coal industries should be put on some basis whereby they would be unified, because as one of my hon. friends has quite properly said to-night, those two industries are allied, and can best work together as a united industry. The steel industry forms the main market for the slack coal of the coal industry. So one of the suggestions was that there should be an assurance of unity between the two, also that there should be some rearrangement with regard to the capitalization, running up to over one aundred million dollars. With regard to the wage disputes arising from time to time, suggestions were made that dividends were being paid on watered stock to the detriment of the workmen, and that there should be a readjustment whereby the capital would be reduced so it culd be ascertained what was the proper amount on which dividends should be paid. It was further proposed that the unwieldy organization of, I think, fourteen different corporations should be reorganized, and that there should be co-operation both _ provincial and municipal. Those suggestions were made in March of this year.
.When the right hon. Prime Minister (Mr. Mackenzie King) made his announcement in this house last year, the newspapers, as I had occasion to state a few weeks ago, commended the government for the decision arrived at and found ample justification for the delay in dealing with the industry in view of the uncertaintly which existed at that time. I Want to say to my hon. friends that only within the last few weeks did the local legislature of Nova Scotia pass an act incorporating a brand new company called the Dominion Coal and Steel Corporation, with a reduced capital. That was the first definite step towards reorganization. But my hon. friends

are a bit impatient with regard to the steel industry. I think if they followed the order paper at the present time they would find that either in the senate or in this house there is at least one bill which has to do with this very industry, indicating that not yet has the matter of capitalization and the reorganization of those companies been completed. Further, I want to say to them that this new corporation has not made any application to the tariff advisory board, and it has been represented that the situation is considerably changed in view of certain opinions held by those in control of the new corporation. Consequently there may be a substantial change in the application to the tariff advisory board so far as the steel and coal industry is concerned. Bounties and tariff are all bound up together. My friends opposite are a little too anxious to make political capital out of this particular point, instead of having due regard to the benefit of the industries involved. Who is there who would know more about the steel industry or who would be more desirous of having it properly dealt with when the time comes than the people who have put their money in it and now own it? To my mind it.might fairly be left to them to present their case to the tariff advisory board. I rather expect we will find my good friend from West Algoma (Mr. Simpson), who so splendidly presented his case this afternoon, coming along with his friends whom he represents and joining in an application to the tariff advisory board on behalf of the steel industry, instead of there being, as at the present time, three or four conflicting applications, plus representations from some three hundred and fifty other interests who feel that they are affected. In a word, I expect there will be some unanimity of endeavour to bring about an adjustment of tariff or bounty which will redound to the benefit of the steel industry. I do think my hon. friends might have a little patience until this matter has shaken down. As they know, only a very few weeks ago an arrangement was arrived at whereby the new wage agreement will be continued over a certain period. With these various matters adjusted the industry may have an opportunity, which it has not had for some time, to proceed under normal conditions in order to ascertain just exactly what its needs are.
I am sure my hon. friends, if they speak frankly and in the interests of the industry, will declare that what they want done, whether it happens to be in the Duncan report or not, is that this industry be put and kept fairly on its feet. To give just the

Steel Industry-Mr. Ralston
specific bounty mentioned in the report may not be the way to accomplish this. In fact is has been represented to me and to others from time to time that that was not all that the steel industry desired or that was necessary in order that this great imperial industry, as my hon. friend described it, should prosper. Therefore I think my hon. friends ought to give us credit for endeavouring to deal with this matter intelligently with a view to ascertaining what the industry needs, instead of proceeding blindly simply because it happens to be in the letter of the Duncan report, and then have parliament snap its fingers later and say: Well, we have done what the Duncan report said we should do; now let the industry take care of itself. I do not believe that is the best way for us to proceed, and I do not think that my hon. friends opposite, unless inspired by the eloquence rather than the logic of my hon. friend from Inverness would desire to see the industry so dealt with. My hon. friend is quite right. It is not a matter of months or of years, it is not even a question of getting something done this May or June. If the industry is worth saving the endeavour should rather be to put it on such a basis that it will be a national asset for our Canadian people.
I make no apology to my hon. friend from Inverness or to other hon. members for having on a previous occasion said that the fact that we have any steel industry to talk about at all is not due to my hon. friends opposite who now shed crocodile tears about the steel industry, but is due to the Liberal party in 1897 having taken steps to put the industry on a solid basis. When my hon. friends came into power in 1911 we did not find them taking the attitude that they take to-night. Not a bit of it. In 1911 the steel bounties expired. Did the Conservative party show the same solicitude for the steel industry that they do now? Not at all; the bounties were not revived. And later on they granted a drawback on steel used in the manufacture of wire, thousands of tons of which are imported into the province of Nova Scotia itself. This is the party which is now advocating that the steel industry should be protected, and is posing as its champion. I think it was in 1912-it is on Hansard-that some 75,000 tons of steel rails were required for the Canadian Pacific Railway and for the Grand Trunk Pacific. What happened? Our friends who to-day are so keen to have the steel industry protected, particularly my hon. friend from
Toronto, at that time granted an application for a rebate of duty in order that that 75,000 tons of steel rails should be brought in from the United States in competition with the steel industry of Nova Scotia. So I do feel that my hon. friends ought not to take too much unction to their souls as being the only friends of the steel industry; they may safely leave it to the tariff advisory board and to the government to give reasonable and serious consideration to this matter.
So much for the steel industry, Mr. Speaker. Now I want to deal with one or two other matters An hon. member opposite had a word to say with regard to subsidies. Do you know, sir, the only complaint that our friends of the opposition had to make was that the additional subsidy of $875,000 recommended 'by the Duncan report was not paid- mark you-in one lump sum, but in two lump sums. We are getting down as fine as that. If it is on an item of that kind that the alleged refusal of the government to carry out the Duncan report is based, then it seems to me that my hon. friends, as the Minister of Railways said, are not going very long to be able to derive comfort from the alleged failure of the government in implementing the Duncan report. But even in that I would point out to hon. members, to use the phrase of my hon. friend from Inverness, that the government has " implemented one hundred per cent "-that- is his expression-the recommendation of the Duncan report. The report was submitted in September 1926-not 1927, as someone suggested this afternoon. Parliament was not in session at that time. The report was eventually laid on the table of the house and the government announced its policy. That policy was to implement the recommendation of the report in regard to the matter of subsidy. What was the recommendation of the report in respect of subsidy? It was this:
And accordingly we recommend that "imme-.diate interim lump-sum increases should be made in the payments to the three maritime provinces."
What were the "payments" referred to? Subsidies were being paid at that time-how? Under the statute they were being paid every six months, on July 1 and January 1. How would you make interim lump sum increases in the payments that were being made? The Minister of Finance might have said, "I am going to wait until the first of January to pay the whole 8875,000"-according to my hon. friend's argument. But he did not do that. He said, "I will pay the $875,000 as an increase
Steel Industry-Mr. Ralston

in the payments now being made. There is a payment due, half of the subsidy on July 1, and I will pay half of the increase then; the other half of the subsidy is due on January 1, and I will pay the other half of the increase then.'' The minister, who is not generally very soft-hearted in the matter of finances, meets the representatives from Nova Scotia and they ask him whether, in order to enable them to balance their books, he would not pay the last half, the 1437,500, due January 1, a little ahead of time. He agrees and pays it on November 17; and my hon. friend from Cumberland (Mr. Smith) takes occasion to suggest that the Minister of Finance was "called down"-those were the words he used-at the interprovincial conference for not paying the subsidies as they were due. If my hon. friend takes the responsibility for making that statement on behalf of the ministers from Nova Scotia-and I can hardly credit that the ministers from Nova Scotia took such an attitude-then I suppose the Minister of Finance cannot be blamed if he says, "We will stick to the letter of the bond and after this pay on July 1 and January 1." I do think it is unfortunate, to say the least, that quibbles should occur about a matter as simple as this, and that an endeavour should be made to show that the government has not implemented this recommendation in the Duncan report, when as a matter of fact it has fulfilled the very letter of the bond. So much for the matter of subsidies. The increase has been paid for last year and it is in the estimates for this year.
My friend the Minister of Railways (Mr. Dunning) has already dealt with the question of railway rates, but there is a matter which be did not emphasize and to which I think it well to call the attention of the house, in order that there may be no misunderstanding as to what this government has done regarding railway rates. Implemented the report 100 per cent? Yes, and a good deal more than 100 per cent so far as the amount is concerned. The house will find a recommendation in the report, with regard to railways, to the effect that there shall be a 20 per cent decrease in the rates on government railways in the maritime provinces. This recommendation appears at page 22:
We recommend, therefore, that an immediate reduction of 20 per cent (so that 192 will become approximately 155) be made on all rates charged on traffic which both originates and terminates at stations in the Atlantic

division of the Canadian National Railways (including export and import traffic, by sea, from and to that division), and that the same reduction be also applied to the Atlantic division proportion of the through rates on all traffic which originates at stations in the Atlantic division (excluding import traffic by sea), and is destined to points outside the Atlantic division.
The Minister of Railways has pointed out that not only has the government put into effect the 20 per cent reduction in local rates on the Canadian National Railways and 20 per cent on through traffic on the Canadian National as recommended, but hon. members do not realize that there has been paid in six months over $421,000 to other roads which were not covered by the Duncan report. And there is in the 1929 estimates a sum of $1,050,000 to be paid to these same roads. My hon. friends may say that there is a reference in the Duncan report to other roads. They will find that the only time it is suggested that the government shall pay to any other railway is when that railway is prejudiced by the reduction of Canadian National rates; in other words, they shall pay only to a railway which is in competition with government railways. And there, as the Minister of Railways points out, it is only to the Canadian Pacific Railway, inasmuch as the report refers to "the other great railway system.-' So that if the government stuck strictly to the letter of the report as brought down, and which hon. gentlemen desire to have implemented 100 per cent, the farmers shipping apples from Kentville to Halifax would get no 20 per cent reduction on the Dominion Atlantic Railway, because that railway is not prejudiced by the reduction on the Canadian National lines, which are not in competition with it. My hon. friends forget these things when talking about implementing the report 100 per cent. The government has endeavoured to see that there shall not be in the same province or territory one railway operating 20 per cent less than another, even though they may not be in competition.
Let me now point out what some people in the maritime provinces think of the question; let me show that there are people there who realize what is being done. The statement is made by Mr. A. P. Patterson, president of the transportation commission, Maritime board of trade, published in Halifax Herald of May 17, 1928:
Maritime shippers benefited to extent of $2,400,031.27 in eight months as a result of

Reparations Commission-Report .
reduced freight rates in line with the recommendations of the Duncan report. This is the saving in that period through the operation of the Maritime Freight Rates Act.
It seems to me that this testimony from the maritime provinces is worth something, and I fancy that if my hon. friends had desired to be quite fair in the matter they would have admitted as much. My hon. friend from Cape Breton South (Mr. MacDonald) in his introductory remarks did admit that something had been done in the matter of freight rates; nevertheless his resolution proceeds to condemn the government for its "refusal" to implement the Duncan report 100 per cent. Although in the instance I have given the government went far beyond the report.
I,	with others, desire to point out to the house and to the country this fact: that it has not been demonstrated that the contribution made by the Dominion in order to pay that 20 per cent reduction will necessarily mean forever a loss to the country. I hold in my hand a copy of the Financial Post of April 27, 1928, in which there appears an article published just after my colleague the Minister of Railways had brought down his estimates indicating the amount required this year in connection with the Maritime Freight Rates Act. This is what this article states:
When the report of the National Railways, covering the operation in the Maritimes is studied closely it is found that there is much to warrant an optimistic view of the future. Indeed it may well he that the Canadian people once more are proving that a reduction in rates is, in the long run, a profitable policy. The postal rates were reduced from three to two cents and after a short period of deficits the post office department is now in a fair way to produce a surplus for the first time in many years.
The analysis of freight movement in the maritimes proves that with the aid of the reduction the volume of traffic commenced to expand. In 1926, 2.854,328 tons of freight were handled and in 1927, 3,000,615 tons, an improvement of 7 per cent. Anyone conversant with the principle of the increase in efficiency resulting from greater volume, knows that it would require only a comparatively moderate increase in freight to place the maritime lines upon an even footing. Should freight advance another 7 per cent in 1928, it would he reasonable to expect a 10 per cent increase in earnings, which would reduce the deficit by more than $1,000,000. If the betterment continued the deficit would disappear entirely within three years.
So I do suggest that this legislation does not necessarily represent a loss eventually to the Dominion, but the article does absolutely contradict the spirit of this amendment now before the house.
While I am dealing with the matter of freight rates may I touch on one other matter which was not mentioned by any of my hon. friends. I am surprised that they did not discover that the Duncan report recommended something else. My hon. friend from Toronto Northwest (Mr. Church), who has an eagle eye for these things, came close to it when he said something about subventions. The Duncan report recommended that a system which had been in force in 1924 or 1925, whereby a subvention was paid on coal taken by rail from Nova Scotia to Quebec, should be renewed. That recommendation appeared at page 35 of the report; I will not trouble to read it all, but will just place the particular sentence on record;
A committee of parliament which sat during the session of 1926, recommended that early consideration should he given by the government to the advisability of renewing the subvention, and we would respectfully support that recommendation.
Coming from the maritime provinces, and having some regard to the interests of the coal industry, I considered that recommendation to be of some importance. I just want to remind the house that on March 30th of this year the government passed an order in council, I think P.C. 539, which again has gone far beyond the recomendations of the Duncan report; not one hundred per cent but one hundred and fifty per cent at least. The old subvention provided that a 50 cent per ton reduction should be made in the freight rate on coal hauled from Nova Scotia to Quebec.
On motion of Mr. Ralston the debate was adjourned.



Hon. FERNAND RINFRET (Secretary of State):: With the permission of the house and in compliance with the wish expressed by the leader of the opposition and other hon. gentlemen opposite, I beg to lay on the table the report of the commissioner appointed by His Excellency the Governor General in Council under the Inquiries Act to investigate and report upon all claims which might be submitted, for the purpose of determining whether they were within the annex to section 1 of Part VIII of the treaty of Versailles, and the fair amount of such claims.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Private Bills
[Stage Direction]
Wednesday, May 23, 1928